As filed with the Securities and Exchange Commission on May 8, 2014March 21, 2018

RegistrationNo. 333-            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORMS-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

TRICO BANCSHARES

(Exact name of registrant as specified in its charter)

California602294-2792841

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

63 Constitution Drive

Chico, California 95973

(530) 898-0300

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Richard P. Smith

President and Chief Executive Officer

TriCo Bancshares

63 Constitution Drive

Chico, California 95973

(530) 898-0300

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

With copies to:

David Gershon, Esq.

Renee E. Becker, Esq.

Manatt, Phelps & Phillips, LLP

One Embarcadero Center, 30th Floor
San Francisco, California 94111

(415) 291-7400

Michael J. Cushman

Chief Executive Officer

North Valley Bancorp

300 Park Marina Circle

Redding, California 96001

(530) 226-2900

Joseph G. Mason, Esq.

Glenn T. Dodd, Esq.

Dodd Mason George LLP

1740 Technology Drive, Suite 205

San Jose, California 95110

(408) 452-1478

Approximate date of commencement of proposed sale of the securities to the public:

As soon as practicable after this registration statement becomes effective and upon completion of the merger.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer¨Accelerated filerx
Non-accelerated filer¨Smaller reporting company¨

If applicable, place anx in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)

CALCULATION OF REGISTRATION FEE

Title of each class of

securities to be registered

Amount

to be

registered

Proposed

maximum

offering price

per unit

Proposed

maximum

aggregate

offering price

Amount of
registration fee

Common Stock, no par value (and associated preferred stock purchase rights)(4)

6,779,460 (1)N/A$160,053,621 (2)$20,615 (3)

(1)Represents the maximum number of shares of TriCo Bancshares common stock issuable in the transaction described herein, based on (x) the exchange ratio in the merger of 0.9433, and (y) an amount equal to (i) 6,836,463 shares of North Valley Bancorp common stock outstanding as of May 2, 2014, plus (ii) 350,498 shares issuable upon exercise of stock options.
(2)The proposed maximum aggregate offering price of the registrant’s common stock was calculated based upon the market value of shares of North Valley common stock (the securities to be cancelled in the merger) in accordance with Rules 457(c) and 457(f) under the Securities Act based on the product of (i) $22.27, the average of the high and low prices per share of North Valley common stock as reported on the NASDAQ Global Select Market on May 2, 2014 and (ii) 7,186,961 the estimated maximum number of shares of North Valley common stock that may be exchanged for the merger consideration (including outstanding options for North Valley common stock, on an as-converted basis). Estimated solely for the purpose of calculating the SEC filing fee.
(3)Computed pursuant to Rules 457(f)(1) and 457(c) of the Securities Act, based on a rate of $128.80 per $1,000,000 of the proposed maximum aggregate offering price.
(4)Prior to the occurrence of certain events, the preferred stock purchase rights will not be evidenced separately from the common stock.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


Information contained herein is subject to completion or amendment. A registration statement relating to the shares of TriCo Bancshares common stock to be issued in the merger has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This joint proxy statement/prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS

DATED MAY 8, 2014, SUBJECT TO COMPLETION

LOGO

Dear Shareholders of TriCo Bancshares:

On January 21, 2014, TriCo Bancshares, which we refer to as TriCo, entered into an agreement and plan of merger and reorganization, which we refer to as the merger agreement, to acquire North Valley Bancorp, which we refer to as North Valley, in an all-stock transaction. If the merger agreement is approved and the merger is subsequently completed, North Valley will merge with and into TriCo, with TriCo as the surviving entity.

In the merger, each share of North Valley common stock owned by a North Valley shareholder (including the associated preferred stock purchase rights) will be converted into the right to receive 0.9433 shares of TriCo common stock, which we refer to as the exchange ratio. A North Valley shareholder will receive any whole shares of TriCo common stock such holder is entitled to receive and cash in lieu of any fractional shares of TriCo common stock such holder is entitled to receive.

You should obtain current stock price quotations for TriCo common stock and North Valley common stock. TriCo common stock is traded on the NASDAQ Global Select Market under the symbol “TCBK,” and North Valley common stock is traded on the NASDAQ Global Select Market under the symbol “NOVB.”

We expect the merger to be generally tax free to North Valley shareholders for U.S. federal income tax purposes, except for taxes on cash received by North Valley shareholders in lieu of fractional TriCo shares.

Shareholders of TriCo will vote upon the proposed merger and related matters at TriCo’s annual meeting of shareholders at which TriCo will also vote upon proposals to elect TriCo directors, reapprove the existing performance criteria under the TriCo 2009 equity incentive plan, approve an advisory vote of executive compensation and appoint its independent auditor. North Valley will hold a special meeting of shareholders to consider the proposed merger and related matters. TriCo and North Valley cannot complete the proposed merger unless TriCo’s shareholders vote to approve the merger and approve the issuance of TriCo common stock in connection with the merger. This letter is accompanied by the attached document, which TriCo’s board of directors is providing to solicit your proxy to vote for approval of the merger and the issuance of TriCo common stock in connection with the merger and other matters in connection with its annual meeting.

The accompanying document is also being delivered to North Valley shareholders as TriCo’s prospectus for its offering of TriCo common stock in connection with the merger, and as a proxy statement for the solicitation of proxies from North Valley shareholders to vote to approve the merger.


Your vote is very important. To ensure your representation at the TriCo annual meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or through the Internet. Whether or not you expect to attend the TriCo annual meeting, please vote promptly. Submitting a proxy now will not prevent you from being able to vote in person at the TriCo annual meeting.The TriCo board of directors has unanimously approved the merger agreement and the transactions contemplated thereby and unanimously recommends that you vote:

“FOR” approval of the merger and approval and adoption of the merger agreement and approval of the issuance of TriCo common stock in the merger;

“FOR” the election of TriCo’s director nominees;

“FOR” the reapproval of the existing performance criteria under TriCo’s 2009 equity incentive plan;

“FOR” the approval of an advisory resolution concerning the compensation of TriCo executives;

“FOR” the ratification of Crowe Horwath LLP as TriCo’s principal independent auditor for 2014; and

“FOR” any adjournment of the TriCo annual meeting, if necessary or appropriate, including to permit further solicitation of proxies in favor of the above-listed proposals.

This document provides you with detailed information about the proposed merger. It also contains or refers to information about TriCo and North Valley and certain related matters. You are encouraged to read this document carefully.In particular, you should read the “Risk Factors” section beginning on page 23 for a discussion of the risks you should consider in evaluating the proposed merger and how it will affect you.

Sincerely,

Richard P. Smith

President and Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger, the issuance of the TriCo common stock in connection with the merger or the other transactions described in this document, or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

The securities to be issued in connection with the merger are not savings accounts, deposits or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

This document is dated [], and is first being mailed to shareholders of TriCo and North Valley on or about [].

ii


LOGO

To the Shareholders of North Valley Bancorp:

On January 21, 2014, TriCo Bancshares, which we refer to as TriCo, entered into an agreement and plan of merger and reorganization, which we refer to as the merger agreement, to acquire North Valley Bancorp, which we refer to as North Valley, in an all-stock transaction. If the merger agreement is approved and the merger is subsequently completed, North Valley will merge with and into TriCo, with TriCo as the surviving entity.

In the merger, each share of North Valley common stock owned by a North Valley shareholder (including the associated preferred stock purchase rights) will be converted into the right to receive 0.9433 shares of TriCo common stock, which we refer to as the exchange ratio. A North Valley shareholder will receive any whole shares of TriCo common stock such holder is entitled to receive and cash in lieu of any fractional shares of TriCo common stock such holder is entitled to receive.

You should obtain current stock price quotations for TriCo common stock and North Valley common stock. North Valley common stock is traded on the NASDAQ Global Select Market under the symbol “NOVB” and TriCo common stock is traded on the NASDAQ Global Select Market under the symbol “TCBK.”

We expect the merger to be generally tax free to North Valley shareholders for U.S. federal income tax purposes, except for taxes on cash received by North Valley shareholders in lieu of fractional TriCo shares.

North Valley will hold a special meeting of shareholders to consider the proposed merger and related matters. Shareholders of TriCo will vote upon the proposed merger and related matters at TriCo’s annual meeting of shareholders. TriCo and North Valley cannot complete the proposed merger unless TriCo’s shareholders vote to approve the merger and approve and adopt the merger agreement and approve the issuance of TriCo common stock in connection with the merger. This letter is accompanied by the attached document, which our board of directors is providing to solicit your proxy to vote for approval of the merger and the approval and adoption of the merger agreement.

The accompanying document is also being delivered to North Valley shareholders as TriCo’s prospectus for its offering of TriCo common stock in connection with the merger, and as a proxy statement for the solicitation of proxies from TriCo shareholders to vote for approval of the merger and the approval and adoption of the merger agreement and approval of the issuance of TriCo common stock in connection with the merger.

Your vote is very important. To ensure your representation at the North Valley special meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or through the Internet. Whether or not you expect to attend the North Valley special meeting, please vote promptly. Submitting a proxy now will not prevent you from being able to vote in person at the North Valley special meeting. The North Valley board of directors has unanimously approved the merger agreement and the transactions contemplated thereby and unanimously recommends that you vote “FOR” approval of the merger and approval and adoption of the merger agreement, “FOR” the advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of North Valley in connection with the merger and “FOR” any adjournment of the North Valley special meeting, if necessary or appropriate, including to permit further solicitation of proxies in favor of the preceding votes.

iii


This document provides you with detailed information about the proposed merger. It also contains or refers to information about North Valley and TriCo and certain related matters. You are encouraged to read this document carefully.In particular, you should read the “Risk Factors” section beginning on page 23 for a discussion of the risks you should consider in evaluating the proposed merger and how it will affect you.

Cordially,

J.M. (“Mike”) Wells, Jr.

Chairman of the Board

Michael J. Cushman
President and Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger, the issuance of the TriCo common stock in connection with the merger or the other transactions described in this document, or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

The securities to be issued in connection with the merger are not savings accounts, deposits or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

This document is dated [], and is first being mailed to shareholders of North Valley and TriCo on or about [].

iv


WHERE YOU CAN FIND MORE INFORMATION

Both TriCo and North Valley file annual, quarterly and special reports, proxy statements and other business and financial information with the Securities and Exchange Commission, which we refer to as the SEC. You may read and copy any materials that either TriCo or North Valley files with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. Please call the SEC at (800) SEC-0330 ((800) 732-0330) for further information on the public reference room. In addition, TriCo and North Valley file reports and other business and financial information with the SEC electronically, and the SEC maintains a website located at http://www.sec.gov containing this information. You will also be able to obtain these documents, free of charge, from TriCo at www.tcbk.com/about/investor-relations/sec-filings/ or from North Valley by accessing North Valley’s website at http://www.novb.com/shareholderrelations.aspx.

TriCo has filed a registration statement on Form S-4 of which this document forms a part. As permitted by SEC rules, this document does not contain all of the information included in the registration statement or in the exhibits or schedules to the registration statement. You may read and copy the registration statement, including any amendments, schedules and exhibits at the addresses set forth below. Statements contained in this document as to the contents of any contract or other documents referred to in this document are not necessarily complete. In each case, you should refer to the copy of the applicable contract or other document filed as an exhibit to the registration statement. This document incorporates by reference documents that TriCo and North Valley have previously filed with the SEC. They contain important information about the companies and their financial condition. For further information, please see the section entitled “Incorporation of Certain Documents by Reference” beginning on page 156. These documents are available without charge to you upon written or oral request to the applicable company’s principal executive offices. The respective addresses and telephone numbers of such principal executive offices are listed below.

TriCo Bancshares

63 Constitution Drive

Chico, California 95973

(530) 898-0300

North Valley Bancorp

300 Park Marina Circle

Redding, California 96001

(530) 226-2900

To obtain timely delivery of these documents, you must request the information no later than[] in order to receive them before TriCo’s annual meeting of shareholders and no later than[] in order to receive them before North Valley’s special meeting of shareholders.

TriCo common stock is traded on the NASDAQ Global Select Market under the symbol “TCBK,” and North Valley common stock is traded on the NASDAQ Global Select Market under the symbol “NOVB.”

v


TRICO BANCSHARES

63 CONSTITUTION DRIVE

CHICO, CALIFORNIA 95973

NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON [], 2014

NOTICE IS HEREBY GIVEN that the annual meeting(Exact name of the shareholders of TriCo Bancshares, which we refer toRegistrant as TriCo, will be held at 63 Constitution Drive, Chico, California at [], Pacific time, on [], 2014, for the following purposes:

1. To approve the merger and to approve and adopt the Agreement and Plan of Merger and Reorganization, which we refer to as the merger agreement, dated as of January 21, 2014, by and between TriCo and North Valley, as such agreement may be amended from time to time, a copy of which is attached as Appendix A to this document, and to approve the issuance of TriCo common stock to North Valley shareholders pursuant to the merger agreement, which we refer to as the TriCo Merger proposal;

2. To elect nine directors for terms expiring at the 2015 annual meeting of shareholders;

3. To reapprove the existing performance criteria under the TriCo 2009 equity incentive plan;

4. To approve an advisory resolution concerning the compensation of TriCo executives;

5. To ratify the selection of Crowe Horwath LLP as TriCo’s principal independent auditor for 2014;

6. To approve one or more adjournments of the TriCo annual meeting, if necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the above referenced proposals, which we refer to as the TriCo Adjournment proposal;

7. To attend to any other business properly presented at the meeting.

TriCo will transact no other business at the annual meeting, except for business properly brought before the annual meeting or any adjournment thereof.

The TriCo Merger proposal is described in more detail in this document, which you should read carefullyspecified in its entirety before you vote. A copy of TriCo’s Annual Report on Form 10-K is enclosed. TriCo is mailing these proxy materials to its shareholders beginning on or about [].

The TriCo board of directors has set [] as the record date for the TriCo annual meeting. Only holders of record of TriCo common stock at the close of business on [] will be entitled to notice of and to vote at the TriCo annual meeting and any adjournment thereof. Any shareholder entitled to attend and vote at the TriCo annual meeting is entitled to appoint a proxy to attend and vote on such shareholder’s behalf. Such proxy need not be a holder of TriCo common stock.

Your vote is very important. To ensure your representation at the TriCo annual meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or through the Internet. Whether or not you expect to attend the TriCo annual meeting, please vote promptly. Submitting a proxy now will not prevent you from being able to vote in person at the TriCo annual meeting.charter)

 

By Order of the Board of Directors,

Craig Compton

Secretary

Chico, California

[], 2014

 

vi


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

TRICO BANCSHARES ANNUAL MEETING TO BE HELD ON[]

TriCo’s Annual Report on Form 10-K for the period ending December 31, 2013 and the 2014 joint proxy statement/prospectus are available atwww.tcbk.com/about/investor-relations/sec-filings/.

PLEASE VOTE YOUR SHARES OF TRICO COMMON STOCK PROMPTLY. YOU CAN FIND INSTRUCTIONS FOR VOTING ON THE ENCLOSED PROXY CARD. IF YOU HAVE QUESTIONS ABOUT THE PROPOSALS OR ABOUT VOTING YOUR SHARES, PLEASE CALL TRICO INVESTOR RELATIONS AT (530) 898-0300.

vii


NORTH VALLEY BANCORP

300 PARK MARINA CIRCLE

REDDING, CALIFORNIA 96001

NOTICE OF THE SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON [], 2014

NOTICE IS HEREBY GIVEN that a special meeting of the shareholders of North Valley Bancorp, which we refer to as North Valley, will be held at [TIME, Pacific time] on [DAY], [DATE], in the Administrative Offices of North Valley at 300 Park Marina Circle, Redding, California, for the following purposes:

1. To approve the merger and to approve and adopt the Agreement and Plan of Merger and Reorganization, which we refer to as the merger agreement, dated as of January 21, 2014, by and between TriCo Bancshares and North Valley, as such agreement may be amended from time to time, a copy of which is attached as Appendix A, which we refer to as the North Valley Merger proposal;

2. To approve, on an advisory (non-binding) basis, specified compensation that may become payable to the named executive officers of North Valley in connection with the merger, which we refer to as the North Valley Advisory (Non-Binding) Proposal on Specified Compensation; and

3. To approve one or more adjournments of the North Valley special meeting, if necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the North Valley Merger proposal, which we refer to as the North Valley Adjournment proposal.

North Valley will transact no other business at the special meeting, except for business properly brought before the special meeting or any adjournment thereof.

The North Valley Merger proposal is described in more detail in this document, which you should read carefully in its entirety before you vote.

The North Valley board of directors has set [] as the record date for the North Valley special meeting. Only holders of record of North Valley common stock at the close of business on [] will be entitled to notice of and to vote at the North Valley special meeting and any adjournment thereof. Any shareholder entitled to attend and vote at the North Valley special meeting is entitled to appoint a proxy to attend and vote on such shareholder’s behalf. Such proxy need not be a holder of North Valley common stock.

Your vote is very important. To ensure your representation at the North Valley special meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or through the Internet.Please vote promptly whether or not you expect to attend the North Valley special meeting. Submitting a proxy now will not prevent you from being able to vote in person at the North Valley special meeting.

The North Valley board of directors has unanimously approved the merger and the merger agreement and the transactions contemplated thereby and unanimously recommends that you vote “FOR” the North Valley Merger proposal, “FOR” the North Valley Advisory (Non-Binding) Proposal on Specified Compensation and “FOR” the North Valley Adjournment proposal (if necessary or appropriate).

By Order of the Board of Directors,

Leo J. Graham

Corporate Secretary

Redding, California

[], 2014

viii


PLEASE VOTE YOUR SHARES OF NORTH VALLEY COMMON STOCK PROMPTLY. YOU CAN FIND INSTRUCTIONS FOR VOTING ON THE ENCLOSED PROXY CARD. IF YOU HAVE QUESTIONS ABOUT THE PROPOSALS OR ABOUT VOTING YOUR SHARES, PLEASE CALL NORTH VALLEY INVESTOR RELATIONS AT (530) 226-2900.

ix


TABLE OF CONTENTS

 

California
6022
94-2792841

QUESTIONS AND ANSWERS ABOUT THE SHAREHOLDERS’ MEETINGS

1

SUMMARY

9

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR TRICO

17

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR NORTH VALLEY

18

UNAUDITED COMPARATIVE PER COMMON SHARE DATA

19

COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

20

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

21

RECENT DEVELOPMENTS

22

RISK FACTORS

23

INFORMATION ABOUT THE COMPANIES

28

NORTH VALLEY SPECIAL MEETING OF SHAREHOLDERS

29

NORTH VALLEY PROPOSAL: MERGER

33

NORTH VALLEY PROPOSAL: ADVISORY VOTE CONCERNING SPECIFIED COMPENSATION

33

NORTH VALLEY PROPOSAL: ADJOURNMENT

33

SHAREHOLDER PROPOSALS FOR NORTH VALLEY ANNUAL MEETINGS

34

TRICO ANNUAL MEETING OF SHAREHOLDERS

35

TRICO PROPOSAL: MERGER

40

THE MERGER

40

THE MERGER AGREEMENT

80

LITIGATION RELATED TO THE MERGER

99

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

99

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

101

COMPARISON OF SHAREHOLDERS’ RIGHTS

107

EXPERTS

112

LEGAL AND TAX OPINIONS

112

TRICO PROPOSAL: ELECTION OF DIRECTORS

113

CORPORATE GOVERNANCE, BOARD NOMINATION AND BOARD COMMITTEES

116

COMPENSATION OF DIRECTORS

121

EXECUTIVE OFFICERS

124

COMPENSATION OF NAMED EXECUTIVE OFFICERS

125

COMPENSATION DISCUSSION AND ANALYSIS

142

REPORT OF THE COMPENSATION AND MANAGEMENT SUCCESSION COMMITTEE

150

REPORT OF THE AUDIT COMMITTEE

151

TRICO PROPOSAL: REAPPROVE THE PERFORMANCE CRITERIA UNDER THE 2009 EQUITY INCENTIVE PLAN

152

TRICO PROPOSAL: ADVISORY VOTE CONCERNING EXECUTIVE COMPENSATION

153

1


(State or other jurisdiction of

TRICO PROPOSAL: RATIFICATION OF SELECTION OF PRINCIPAL INDEPENDENT AUDITORincorporation or organization)

 

(Primary Standard Industrial

154

OTHER INFORMATION

155

OTHER MATTERS

156

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

156

APPENDIX AClassification Code No.)

 

Agreement and Plan of Merger and Reorganization(I.R.S. Employer

A-1

APPENDIX BIdentification No.)

Opinion of Sandler, O’Neill & Partners, L.P.

B-1

APPENDIX C

Opinion of Keefe, Bruyette & Woods, Inc.

C-1

APPENDIX D

Form of Shareholder Agreement – TriCo

D-1

APPENDIX E

Form of Shareholder Agreement – North Valley

E-1

2


QUESTIONS AND ANSWERS ABOUT THE SHAREHOLDERS’ MEETINGS

The following are answers to certain questions that you may have regarding the shareholders’ meetings. We urge you to read carefully the remainder of this document because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the appendices to, and the documents incorporated by reference in, this document.

Q:WHAT IS THE MERGER?

A.TriCo and North Valley have entered into a merger agreement, pursuant to which North Valley will merge with and into TriCo, with TriCo continuing as the surviving corporation, in a transaction which is referred to as the merger. A copy of the merger agreement is attached as Appendix A to this document. Immediately upon the closing of the merger, North Valley Bank, a wholly owned subsidiary of North Valley, will merge with and into Tri Counties Bank, a wholly owned subsidiary of TriCo, with Tri Counties Bank being the surviving entity, which transaction is referred to as the bank merger. In order for us to complete the transaction we need not only the approval of our respective shareholders but the approval of both these mergers by the banking regulators of TriCo, North Valley, Tri Counties Bank and North Valley Bank.

Q:WHY AM I RECEIVING THIS JOINT PROXY STATEMENT/PROSPECTUS?

A.Each of TriCo and North Valley is sending these materials to its shareholders to help them decide how to vote their shares of TriCo or North Valley common stock, as the case may be, with respect to the merger and other matters to be considered at the shareholders’ meetings.

The merger cannot be completed unless TriCo shareholders approve the merger and approve and adopt the merger agreement and approve the issuance of TriCo common stock in the merger and North Valley shareholders approve the merger and approve and adopt the merger agreement. At each of the shareholders’ meetings, TriCo and North Valley shareholders will vote on the proposals necessary to complete the merger. Information about these shareholders’ meetings, the merger and the other business to be considered by shareholders at each of the shareholders’ meetings is contained in this document.

This document constitutes both a joint proxy statement of TriCo and North Valley and a prospectus of TriCo. It is a joint proxy statement because each of the boards of directors of TriCo and North Valley is soliciting proxies using this document from their respective shareholders. It is a prospectus because TriCo, in connection with the merger, is offering shares of its common stock in exchange for outstanding shares of North Valley common stock in the merger.

Q:WHAT WILL NORTH VALLEY SHAREHOLDERS RECEIVE IN THE MERGER?

A:In the merger, each share of North Valley common stock owned by a North Valley shareholder (including the associated preferred stock purchase rights issued pursuant to the Amended and Restated Shareholder Protection Rights Agreement dated as of March 26, 2009, as amended, between North Valley and Computershare, Inc., as Rights Agent) will be converted into the right to receive 0.9433 shares of TriCo common stock. A North Valley shareholder will receive any whole shares of TriCo common stock such holder is entitled to receive and cash in lieu of any fractional shares of TriCo common stock such holder is entitled to receive, without interest.

Q:WHAT HAPPENS TO NORTH VALLEY STOCK OPTIONS IN THE MERGER?

A:Immediately prior to the effective time of the merger, each outstanding option to purchase shares of North Valley common stock, whether or not then vested and whether or not then exercisable, will be cancelled and the holder of the option will be entitled to receive, subject to any required tax withholding, an amount in cash, without interest, from North Valley equal to the excess over the exercise price per share, if any, of 0.9433 multiplied by the weighted average of the closing price for shares of TriCo common stock as quoted on the NASDAQ Global Select Market for the 20 consecutive trading days ending on the trading day immediately prior to the closing date.

1


Q:WHEN WILL THE MERGER BE COMPLETED?

A:TriCo and North Valley are working to complete the merger as soon as practicable. If the shareholders of North Valley approve the merger and approve and adopt the merger agreement and the shareholders of TriCo approve the merger and approve and adopt the merger agreement and approve the issuance of shares of TriCo stock in connection with the merger, the parties currently expect that the merger will be completed in the third quarter of 2014. Neither TriCo nor North Valley can predict, however, the actual date on which the merger will be completed because it is subject to factors beyond each company’s control, including whether or when the required regulatory approvals will be received. For further information, please see the section entitled “The Merger Agreement—Conditions to the Merger” beginning onpage93.

Q:WHO IS ENTITLED TO VOTE?

A:TriCo Annual Meeting. Holders of record of TriCo common stock at the close of business on [], which is the date that the TriCo board of directors has fixed as the record date for the TriCo annual meeting, are entitled to vote at the TriCo annual meeting.

North Valley Special Meeting. Holders of record of North Valley common stock at the close of business on [], which is the date that the North Valley board of directors has fixed as the record date for the North Valley special meeting, are entitled to vote at the North Valley special meeting.

Q:WHAT CONSTITUTES A QUORUM?

A:TriCo Annual Meeting. The presence at the TriCo annual meeting, in person or by proxy, of holders of a majority of the outstanding shares of TriCo common stock entitled to vote at the TriCo annual meeting will constitute a quorum for the transaction of business. Abstentions and broker non-votes, if any, will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.

North Valley Special Meeting. The presence at the North Valley special meeting, in person or by proxy, of holders of a majority of the outstanding shares of North Valley common stock entitled to vote at the North Valley special meeting will constitute a quorum for the transaction of business. Abstentions and broker non-votes, if any, will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.

Q:WHAT AM I BEING ASKED TO VOTE ON AND WHY IS THIS APPROVAL NECESSARY?

A:TriCo shareholders are being asked to vote on the following proposals:

1.to approve the merger and to approve and adopt the merger agreement, a copy of which is attached as Appendix A to this document, and to approve the issuance of TriCo common stock, no par value per share, pursuant to the merger agreement, which is referred to as the TriCo Merger proposal;

2.to elect nine directors for terms expiring at the 2015 annual meeting of shareholders;

3.to reapprove the existing performance criteria under the TriCo 2009 equity incentive plan;

4.to approve an advisory resolution concerning the compensation of TriCo executives;

5.to ratify the selection of Crowe Horwath LLP as TriCo’s principal independent auditor for 2014;

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6.to approve one or more adjournments of the TriCo annual meeting, if necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the TriCo Merger proposal, which is referred to as the TriCo Adjournment proposal.

Shareholder approval of the TriCo Merger proposal is required to complete the merger. TriCo will transact no other business at the TriCo annual meeting, except for business properly brought before the TriCo annual meeting or any adjournment or postponement thereof.

North Valley shareholders are being asked to vote on the following proposals:

1.to approve the merger and to approve and adopt the merger agreement, a copy of which is attached as Appendix A to this document, which is referred to as the North Valley Merger proposal;

2.to approve, on an advisory (non-binding) basis, specified compensation that may become payable to the named executive officers of North Valley in connection with the merger, which is referred to as the North Valley Advisory (Non-Binding) Proposal on Specified Compensation;

3.to approve one or more adjournments of the North Valley special meeting, if necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the North Valley Merger proposal, which is referred to as the North Valley Adjournment proposal.

Shareholder approval of the North Valley Merger proposal is required for completion of the merger. North Valley will transact no other business at the North Valley special meeting, except for business properly brought before the North Valley special meeting or any adjournment or postponement thereof.

Q:WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AT THE TRICO ANNUAL MEETING?

A:TriCo Merger proposal: The affirmative vote of a majority of the outstanding shares of TriCo common stock entitled to vote is required to approve the TriCo Merger proposal.

Election of Directors: The nine nominees for director who receive the most votes will be elected.

2009 equity incentive plan proposal: Assuming a quorum is present, the affirmative vote of a majority of the shares of TriCo common stock represented (in person or by proxy) at the TriCo annual meeting and entitled to vote on the proposal is required to reapprove the existing performance criteria under the TriCo 2009 equity incentive plan.

Advisory vote on executive compensation proposal: Assuming a quorum is present, the affirmative vote of a majority of the shares of TriCo common stock represented (in person or by proxy) at the TriCo annual meeting and entitled to vote on the proposal is required to approve the advisory vote on executive compensation proposal.

Ratification of principal independent auditor proposal: Assuming a quorum is present, the affirmative vote of a majority of the shares of TriCo common stock represented (in person or by proxy) at the TriCo annual meeting and entitled to vote on the proposal is required to approve the principal independent auditor proposal.

TriCo Adjournment proposal: Assuming a quorum is present, the affirmative vote of a majority of the shares of TriCo common stock represented (in person or by proxy) at the TriCo annual meeting and entitled to vote on the proposal is required to approve the TriCo Adjournment proposal.

Q:WHAT DOES THE TRICO BOARD OF DIRECTORS RECOMMEND?

A:

After careful consideration, the TriCo board of directors unanimously recommends that TriCo shareholders vote“FOR” the TriCo Merger proposal,“FOR” the election of TriCo’s director nominees,“FOR” the

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reapproval of the existing performance criteria under the TriCo 2009 equity incentive plan,“FOR” the approval of TriCo’s executive compensation program;“FOR” the ratification of Crowe Horwath LLP as TriCo’s principal independent auditor for 2014, and“FOR” any adjournment of the TriCo annual meeting, if necessary or appropriate, including to permit further solicitation of proxies in favor of the above-listed proposals.

Q:WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AT THE NORTH VALLEY SPECIAL MEETING?

A:North Valley Merger proposal: The affirmative vote of a majority of the outstanding shares of North Valley common stock entitled to vote is required to approve the North Valley Merger proposal.

North Valley Advisory (Non-Binding) Proposal on Specified Compensation: Assuming a quorum is present, the affirmative vote of a majority of the shares of North Valley common stock represented (in person or by proxy) at the North Valley special meeting and entitled to vote on the proposal is required to approve the North Valley Advisory (Non-Binding) Proposal on Specified Compensation.

North Valley Adjournment proposal: Assuming a quorum is present, the affirmative vote of a majority of the shares of North Valley common stock represented (in person or by proxy) at the North Valley special meeting and entitled to vote on the proposal is required to approve the North Valley Adjournment proposal.

Q:WHAT DOES THE NORTH VALLEY BOARD OF DIRECTORS RECOMMEND?

A:The North Valley board of directors unanimously recommends that North Valley shareholders vote “FOR” the North Valley Merger proposal, “FOR” the North Valley Advisory (Non-Binding) Proposal on Specified Compensation and “FOR” the North Valley Adjournment proposal (if necessary or appropriate).

Q:WHAT WILL HAPPEN IF NORTH VALLEY’S SHAREHOLDERS DO NOT APPROVE THE NORTH VALLEY ADVISORY (NON-BINDING) PROPOSAL ON SPECIFIED COMPENSATION?

A:The vote on the North Valley Advisory (Non-Binding) Proposal on Specified Compensation is a vote separate and apart from the vote to approve the North Valley Merger proposal. You may vote for this proposal and against the North Valley Merger proposal, or vice versa. Because the vote on this proposal is advisory only, it will not be binding on North Valley or TriCo.

Q:WHAT DO I NEED TO DO NOW?

A:After carefully reading and considering the information contained in this joint proxy statement/prospectus, please vote your shares as soon as possible so that your shares will be represented at your respective company’s shareholders’ meeting. Please follow the instructions set forth on the proxy card or on the voting instruction form provided by the record holder if your shares are held in the name of your broker, bank or other nominee.

Q:HOW DO I VOTE?

A:If you are a shareholder of record of TriCo as of [], which is referred to as the TriCo record date, or a shareholder of North Valley as of [], which is referred to as the North Valley record date, you may submit your proxy before your respective company’s shareholders’ meeting in one of the following ways:

use the toll-free number shown on your proxy card;

visit the website shown on your proxy card to vote via the Internet; or

complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope.

You may also cast your vote in person at your respective company’s shareholders’ meeting.

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If your shares are held in “street name,” through a broker, bank or other nominee, that institution will send you separate instructions describing the procedure for voting your shares. “Street name” shareholders who wish to vote at the meeting will need to obtain a proxy form from their broker, bank or other nominee.

Q:HOW MANY VOTES DO I HAVE?

A:TriCo Shareholders. You are entitled to one vote for each share of TriCo common stock that you owned as of the record date. As of the close of business on [], there were approximately [] outstanding shares of TriCo common stock. As of that date, approximately []% of the outstanding shares of TriCo common stock were beneficially owned by the directors and executive officers of TriCo.

North Valley Shareholders. You are entitled to one vote for each share of North Valley common stock that you owned as of the record date. As of the close of business on [], there were approximately [] outstanding shares of North Valley common stock. As of that date, approximately []% of the outstanding shares of North Valley common stock were beneficially owned by the directors and executive officers of North Valley.

Q:WHEN AND WHERE ARE THE TRICO AND NORTH VALLEY SHAREHOLDERS’ MEETINGS?

A:The annual meeting of TriCo shareholders will be held at TriCo’s headquarters at 63 Constitution Drive, Chico, California at [], Pacific time, on [], 2014. Subject to space availability, all TriCo shareholders as of the TriCo record date, or their duly appointed proxies, may attend the TriCo annual meeting. Since seating is limited, admission to the meeting will be on a first-come, first-served basis. Registration and seating will begin at [], Pacific time.

The special meeting of North Valley shareholders will be held at [] at [], Pacific time, on [], 2014. Subject to space availability, all North Valley shareholders as of the North Valley record date, or their duly appointed proxies, may attend the North Valley special meeting. Since seating is limited, admission to the meeting will be on a first-come, first-served basis. Registration and seating will begin at [], Pacific time.

Q:IF MY SHARES ARE HELD IN “STREET NAME” BY A BROKER, BANK OR OTHER NOMINEE, WILL MY BROKER, BANK OR OTHER NOMINEE VOTE MY SHARES FOR ME?

A:If your shares are held in “street name” in a stock brokerage account or by a bank or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or other nominee. Please note that you may not vote shares held in street name by returning a proxy card directly to TriCo or North Valley or by voting in person at your respective company’s shareholders’ meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank or other nominee.

Under the rules of the NASDAQ, brokers who hold shares in street name for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not allowed to exercise their voting discretion with respect to the approval of matters that the NASDAQ determines to be “non-routine” without specific instructions from the beneficial owner. It is expected that, other than the proposal to ratify TriCo’s independent auditor, all proposals to be voted on at the TriCo annual meeting and the North Valley special meeting are such “non-routine” matters. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power.

Assuming a quorum is present, if you are a North Valley shareholder and you do not instruct your broker, bank or other nominee on how to vote your shares:

your broker, bank or other nominee may not vote your shares on the North Valley Merger proposal, which broker non-votes will have the same effect as a vote“AGAINST” such proposal;

your broker, bank or other nominee may not vote your shares on the North Valley Adjournment proposal or the North Valley Advisory (Non-Binding) Proposal on Specified Compensation, which broker non-votes will have no effect on the vote count for such proposals.

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Assuming a quorum is present, if you are a TriCo shareholder and you do not instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee may not vote your shares on the TriCo Merger proposal, which broker non-votes will have the same effect as a vote “AGAINST” such proposal.

Q:WHAT IF I DO NOT VOTE OR ABSTAIN?

A:For purposes of each of the TriCo annual meeting and the North Valley special meeting, assuming a quorum is present, an abstention occurs when a shareholder attends the applicable meeting in person and does not vote or returns a proxy with an “abstain” vote.

If you are a TriCo shareholder and you fail to vote or fail to instruct your broker, bank or other nominee how to vote on the TriCo Merger proposal, it will have the same effect as a vote cast “AGAINST” the TriCo Merger proposal. If you respond with an “abstain” vote on the TriCo Merger proposal, your proxy will have the same effect as a vote cast “AGAINST” the TriCo Merger proposal.

If you are a North Valley shareholder and you fail to vote or fail to instruct your broker, bank or other nominee how to vote on the North Valley Merger proposal, it will have the same effect as a vote cast “AGAINST” the North Valley Merger proposal. If you respond with an “abstain” vote on the North Valley Merger proposal, your proxy will have the same effect as a vote cast“AGAINST” the North Valley Merger proposal.

Abstentions will have no effect on the TriCo proposal for the election of directors.

Abstentions will have no effect on the proposals to reapprove the existing performance criteria under the TriCo 2009 equity incentive plan; the TriCo and North Valley advisory proposals concerning executive compensation, the ratification of TriCo’s principal independent auditor for 2014, and the TriCo Adjournment and the North Valley Adjournment, unless there are insufficient votes in favor of these proposals, such that the affirmative votes constitute less than a majority of the required quorum. In such cases, abstentions will have the same effect as a vote against these proposals.

Q:WHAT WILL HAPPEN IF I RETURN MY PROXY OR VOTING INSTRUCTION CARD WITHOUT INDICATING HOW TO VOTE?

A:If you sign and return your proxy or voting instruction card without indicating how to vote on any particular proposal, the TriCo common stock represented by your proxy will be voted as recommended by the TriCo board of directors with respect to that proposal or the North Valley common stock represented by your proxy will be voted as recommended by the North Valley board of directors with respect to that proposal. Unless a TriCo shareholder or a North Valley shareholder, as applicable, checks the box on its proxy card to withhold discretionary authority, the proxy holders may use their discretion to vote on other matters relating to the TriCo annual meeting or North Valley special meeting, as applicable.

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Q:WHAT IF I OWN SHARES THROUGH TRICO’S OR NORTH VALLEY’S EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST (“ESOP”)?

A:Participants in the TriCo ESOP and North Valley ESOP will be entitled to direct the plan trustee as to the manner in which their shares are to be voted.

Q:MAY I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PROXY OR VOTING INSTRUCTION CARD?

A:Yes. You may change your vote at any time before your proxy is voted at the TriCo or North Valley shareholders’ meeting. You may do this in one of the following ways:

by sending a notice of revocation to the corporate secretary of TriCo or North Valley, as applicable;

by logging onto the Internet website specified on your proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card, in each case if you are eligible to do so and following the instructions on the proxy card;

by sending a completed proxy card bearing a later date than your original proxy card.

If you choose any of these methods, you must take the described action such that the notice, Internet vote or proxy card, as applicable, is received no later than the beginning of the applicable shareholders’ meeting.

You may also change your vote by attending the TriCo or North Valley shareholders’ meeting, as applicable, and voting in person.

If your shares are held in an account at a broker, bank or other nominee, you should contact your broker, bank or other nominee to change your vote.

Q:DO I NEED IDENTIFICATION TO ATTEND THE TRICO OR NORTH VALLEY MEETING IN PERSON?

A:Yes. Please bring proper identification, together with proof that you are a record owner of TriCo or North Valley common stock, as the case may be. If your shares are held in street name, please bring acceptable proof of ownership, such as a letter from your broker or an account statement showing that you beneficially owned shares of TriCo or North Valley common stock, as applicable, on the record date.

Q:WHAT ARE THE MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER TO NORTH VALLEY SHAREHOLDERS?

The merger is intended to qualify, and the obligation of TriCo and North Valley to complete the merger is conditioned upon the receipt of opinions of their respective legal or tax advisors to the effect that the merger will qualify, as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the Internal Revenue Code. In addition, in connection with the filing of the registration statement of which this document is a part, each of Manatt, Phelps & Phillips, LLP and Crowe Horwath LLP has delivered an opinion to TriCo and North Valley, respectively, to the same effect.

Accordingly, based on the opinions delivered in connection herewith, North Valley shareholders generally will not recognize any gain or loss, except with respect to the cash received instead of a fractional share of TriCo common stock.

For a more detailed discussion of the material United States federal income tax consequences of the transaction, please see the section entitled “Material United States Federal Income Tax Consequences of the Merger” beginning on page 99.

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The consequences of the merger to any particular North Valley shareholder will depend on that shareholder’s particular facts and circumstances. Accordingly, you are urged to consult your tax advisor to determine your tax consequences from the merger.

Q:WHAT HAPPENS IF THE MERGER IS NOT COMPLETED?

A:If the merger is not completed, North Valley shareholders will not receive any consideration for their shares of North Valley common stock in connection with the merger. Instead, North Valley will remain an independent public company and its common stock will continue to be listed and traded on the NASDAQ Global Select Market. Under specified circumstances each of North Valley and TriCo may be required to pay the other party a fee with respect to the termination of the merger agreement, as described under the section entitled “The Merger Agreement—Termination; Termination Fee” beginning on page 94.

Q:SHOULD NORTH VALLEY SHAREHOLDERS SEND IN THEIR STOCK CERTIFICATES NOW?

A:No. North Valley shareholdersSHOULD NOT send in any stock certificates now. If the merger is approved, transmittal materials, with instructions for completion, will be provided to North Valley shareholders under separate cover and the stock certificates should be sent at that time.

Q:IS MY VOTE CONFIDENTIAL?

A:Proxy instructions, ballots and voting tabulations that identify individual shareholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within TriCo or North Valley or to third parties except:

as necessary to meet applicable legal requirements,

to allow for the counting and certification of votes, or

to help our boards solicit proxies.

Q:WHOM SHOULD I CONTACT IF I HAVE ANY QUESTIONS ABOUT THE PROXY MATERIALS OR VOTING?

A:If you are a TriCo shareholder and have any questions about the proxy materials or if you need assistance submitting your proxy or voting your shares or need additional copies of this document or the enclosed proxy card, you should contact TriCo Investor Relations at (530) 898-0300.

If you are a North Valley shareholder and have any questions about the proxy materials or if you need assistance submitting your proxy or voting your shares or need additional copies of this document or the enclosed proxy card, you should contact North Valley Investor Relations at (530) 226-2900.

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SUMMARY

This summary highlights selected information included in this document and does not contain all of the information that may be important to you. You should read this entire document and its appendices and the other documents to which we refer before you decide how to vote with respect to each of the proposals. In addition, we incorporate by reference important business and financial information about North Valley and TriCo into this document. For a description of this information, please see the section entitled “Incorporation of Certain Documents by Reference” beginning on page 156. You may obtain the information incorporated by reference into this document without charge by following the instructions in the section entitled “Where You Can Find More Information” in the forepart of this document. Each item in this summary includes a page reference directing you to a more complete description of that item.

Unless the context otherwise requires, throughout this document, “TriCo” refers to TriCo Bancshares, “North Valley” refers to North Valley Bancorp and “we,” “us” and “our” refers collectively to TriCo and North Valley. Also, we refer to the proposed merger of North Valley with and into TriCo Bancshares as the “merger,” the proposed merger of North Valley Bank with and into Tri Counties Bank as the “bank merger” and the Agreement and Plan of Merger and Reorganization, dated as of January 21, 2014, by and between TriCo and North Valley as the “merger agreement.”

The Merger and the Merger Agreement (pages 40 and 80)

The terms and conditions of the merger are contained in the merger agreement, which is attached to this document as Appendix A. We encourage you to read the merger agreement carefully, as it is the legal document that governs the merger.

Under the terms of the merger agreement, North Valley will merge with and into TriCo with TriCo as the surviving corporation. Immediately upon the closing of the merger, North Valley Bank, a wholly owned subsidiary of North Valley, will merge with and into Tri Counties Bank, a wholly owned subsidiary of TriCo, with Tri Counties Bank being the surviving bank.

Merger Consideration (page 40)

In the merger, each share of North Valley common stock, no par value per share, owned by a North Valley shareholder (including the associated preferred stock purchase rights issued pursuant to the Amended and Restated Shareholder Protection Rights Agreement dated as of March 26, 2009, as amended, between North Valley and Computershare, Inc., as Rights Agent) will be converted into the right to receive 0.9433 shares of TriCo common stock, no par value per share. A North Valley shareholder will receive any whole shares of TriCo common stock such holder is entitled to receive and cash in lieu of any fractional shares of TriCo common stock such holder is entitled to receive.

Based on the closing share price of TriCo common stock of $27.93 on January 21, 2014, the last trading day before the announcement of the merger, the value of the merger consideration was $26.35 per share. The value of the TriCo common stock on [], the most recent day for which information was available prior to the printing and mailing of this document, was [] based upon the exchange ratio.The share price of TriCo common stock will fluctuate and accordingly, the value of the merger consideration you receive may be different than either of these amounts.

Immediately prior to the effective time of the merger, each outstanding option to purchase shares of North Valley common stock, whether or not then vested and whether or not then exercisable, will be cancelled and the holder of the option will be entitled receive, subject to any required tax withholding, an amount in cash, without interest, from North Valley equal to the excess over the exercise price per share, if any, of 0.9433 multiplied by the weighted average of the closing price for shares of TriCo common stock as quoted on the NASDAQ Global Select Market for the 20 consecutive trading days ending on the trading day immediately prior to the closing date.

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Recommendation of the North Valley Board of Directors (page 29)

After careful consideration, the North Valley board of directors unanimously recommends that North Valley shareholders voteFOR” the North Valley Merger proposal,FOR” the North Valley Advisory (Non-Binding) Proposal on Specified Compensation andFOR” the North Valley Adjournment proposal (if necessary or appropriate).

Each of the directors of North Valley has entered into a shareholder agreement with TriCo and North Valley, pursuant to which they have agreed to voteFOR” the North Valley Merger proposal andFOR” the North Valley Adjournment proposal (if necessary or appropriate). For more information regarding the shareholder agreements, please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96.

For a more complete description of North Valley’s reasons for the merger and the recommendation of the North Valley board of directors, please see the section entitled “Reasons for the Merger and Recommendation of the North Valley Board of Directors” beginning on page 45.

Recommendation of the TriCo Board of Directors (page 35)

After careful consideration, the TriCo board of directors unanimously recommends that TriCo shareholders vote“FOR” the TriCo Merger proposal,“FOR” the election of TriCo’s director nominees,“FOR” the reapproval of the existing performance criteria under the TriCo 2009 equity incentive plan,“FOR” the approval of TriCo’s executive compensation program,“FOR” the ratification of Crowe Horwath LLP as TriCo’s principal independent auditor for 2014, and“FOR” any adjournment of the TriCo annual meeting, if necessary or appropriate, including to permit further solicitation of proxies in favor of the above-listed proposals.

Each of the directors of TriCo has entered into a shareholder agreement with TriCo and North Valley, pursuant to which they have agreed to voteFOR” the TriCo Merger proposal and “FOR” the TriCo Adjournment proposal (if necessary or appropriate). For more information regarding the shareholder agreements, please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96.

For a more complete description of TriCo’s reasons for the merger and the recommendations of the TriCo board of directors, please see the section entitled “Recommendation of the TriCo Board of Directors and Reasons for the Merger” beginning on page 59.

Opinion of Financial Advisors (pages 48 and 60)

North Valley Financial Advisor

On January 21, 2014, Sandler O’Neill + Partners, L.P., North Valley’s financial advisor in connection with the merger, rendered an oral opinion to North Valley’s board of directors, which was subsequently confirmed in a written opinion dated the same date that, as of such date and subject to and based on the qualifications and assumptions set forth in its written opinion, the merger consideration (defined as the 0.9433 exchange ratio) in the proposed merger was fair, from a financial point of view, to the common shareholders of North Valley.

The full text of Sandler O’Neill’s opinion, dated January 21, 2014, is attached as Appendix B to this document. You should read the opinion in its entirety for a description of the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Sandler O’Neill in rendering its opinion.

Sandler O’Neill’s opinion is addressed to North Valley’s board of directors and the opinion is not a recommendation as to how any shareholder of North Valley should vote with respect to the merger or any other matter or as to any action that a shareholder should take with respect to the merger.

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The opinion addresses only the fairness, from a financial point of view, of the merger consideration in the proposed merger to the common shareholders of North Valley, and does not address the underlying business decision of North Valley to engage in the merger, or the relative merits of the merger as compared to any strategic alternatives that may be available to North Valley. Sandler O’Neill will receive a fee for its services, portions of which have been paid, and a significant portion of which will be payable upon consummation of the merger.

For further information, please see the section entitled “The Merger—Opinion of North Valley’s Financial Advisor” beginning on page 48.

TriCo Financial Advisor

Keefe, Bruyette & Woods, Inc., which we refer to as KBW, TriCo’s financial advisor in connection with the merger, provided a fairness opinion to the TriCo board of directors in connection with the merger. At the January 21, 2014 meeting at which TriCo’s board of directors considered and approved the merger agreement, KBW delivered to the board its oral opinion, which was subsequently confirmed in writing, that, as of such date, the exchange ratio was fair to TriCo from a financial point of view.

The full text of KBW’s opinion, dated January 21, 2014, is attached as Appendix C to this document. You should read the opinion in its entirety for a description of the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in rendering its opinion.

KBW’s opinion is addressed to TriCo’s board of directors and the opinion is not a recommendation as to how any shareholder of TriCo should vote with respect to the merger or any other matter as to any action that a shareholder should take with respect to the merger.

For further information, please see the section entitled “The Merger—Opinion of TriCo’s Financial Advisor” beginning on page 60.

North Valley Special Meeting of Shareholders (page 29)

The North Valley special meeting will be held at [], Pacific time, on [], 2014, at [], located at []. At the North Valley special meeting, North Valley shareholders will be asked to approve the North Valley Merger proposal, the North Valley Advisory (Non-Binding) Proposal on Specified Compensation and the North Valley Adjournment proposal.

North Valley’s board of directors has fixed the close of business on [] as the record date for determining the holders of North Valley common stock entitled to receive notice of and to vote at the North Valley special meeting. Only holders of record of North Valley common stock at the close of business on the North Valley record date will be entitled to notice of and to vote at the North Valley special meeting and any adjournment or postponement thereof. As of the North Valley record date, there were [] shares of North Valley common stock outstanding and entitled to vote at the North Valley special meeting held by [] holders of record. Each share of North Valley common stock entitles the holder to one vote on each proposal to be considered at the North Valley special meeting. Each of the directors of North Valley has entered into a shareholder agreement with TriCo and North Valley, pursuant to which they have agreed, solely in their capacity as shareholders of North Valley, to vote all of their shares of North Valley common stock in favor of the North Valley Merger proposal and the North Valley Adjournment proposal to be presented at the special meeting. As of the record date, directors and executive officers of North Valley owned and were entitled to vote [] shares of North Valley common stock, representing approximately []% of the shares of North Valley common stock outstanding on that date. North Valley currently expects that North Valley’s executive officers will vote their shares in favor of the proposals to be presented at the special meeting, although none of them has entered into any agreements obligating them to do so (other than one executive officer who is also a director). As of the record date, TriCo beneficially held [] shares of North Valley’s common stock.

Approval of the North Valley Merger proposal requires the affirmative vote of a majority of the outstanding shares of North Valley common stock entitled to vote on the proposal. Approval of the North Valley

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Advisory (Non-Binding) Proposal on Specified Compensation and the North Valley Adjournment proposal each require the affirmative vote of a majority of the shares of North Valley common stock represented (in person or by proxy) at the North Valley special meeting and entitled to vote on the proposal.

TriCo Annual Meeting of Shareholders (page 35)

The TriCo annual meeting will be held at [], Pacific time, on [], 2014, at TriCo’s headquarters located at 63 Constitution Drive

Chico, California. At the TriCo annual meeting, TriCo shareholders will be asked to approve the TriCo Merger proposal, the electionCalifornia 95973

(530)898-0300

(Address, including zip code and telephone number, including area code, of TriCo’s directors, the 2009 equity incentive plan proposal, the advisory vote of TriCo’sRegistrant’s principal executive compensation, the ratification of the selection of TriCo’s independent auditor and the TriCo Adjournment proposal.

TriCo’s board of directors has fixed the close of business on [] as the record date for determining the holders of TriCo common stock entitled to receive notice of and to vote at the TriCo annual meeting. As of the TriCo record date, there were [] shares of TriCo common stock outstanding and entitled to vote at the TriCo annual meeting held by [] holders of record. Each share of TriCo common stock entitles the holder to one vote on each proposal to be considered at the TriCo annual meeting. As of the record date, directors and executive officers of TriCo owned and were entitled to vote [] shares of TriCo common stock, representing approximately []% of the shares of TriCo common stock outstanding on that date. Each of the directors of TriCo has entered into a shareholder agreement with TriCo and North Valley, pursuant to which they have agreed, solely in their capacity as shareholders of TriCo, to vote all of their shares of TriCo common stock in favor of the TriCo Merger proposal and the TriCo Adjournment proposal to be presented at the annual meeting. TriCo currently expects that TriCo’s executive officers will vote their shares in favor of the proposals to be presented at the annual meeting, although none of them has entered into any agreements obligating them to do so (other than those executive officers who are also directors).

Approval of the TriCo Merger proposal requires the affirmative vote of a majority of the outstanding shares of TriCo common stock entitled to vote on the proposal. Approval of the other TriCo proposals (other than the election of directors) requires the affirmative vote of a majority of the shares of TriCo common stock represented (in person or by proxy) at the TriCo annual meeting and entitled to vote on the proposal. In the election of directors, the nine nominees who receive the most votes will be elected.

North Valley’s Directors and Executive Officers Have Certain Interests in the Merger (page 72)

Certain of North Valley’s executive officers and directors have financial interests in the merger that are different from, or in addition to, the interests of North Valley’s shareholders. The merger would constitute a “change of control” for purposes of the North Valley Salary Continuation Plan and payments under the Salary Continuation Plan would be due North Valley executive officers at the effective time of the merger. Further, the payment of benefits to executive officers under the North Valley Executed Deferred Compensation Plan would be accelerated upon a “change in control,” if that had been elected by the executive officer, and otherwise would be paid by TriCo following the effective time of the merger in a lump sum or in installments, in each case according to the election made by each executive officer; and the payment of benefits to non-employee directors under the North Valley Director Deferred Fee Plan would be accelerated upon a “change in control” if that had been elected by the director, and otherwise would be paid by TriCo following the effective time of the merger in a lump sum or in installments, in each case according to the election made by each director. In addition, each of North Valley’s executive officers and directors hold equity awards, the treatment of which is described below under “Treatment of North Valley Stock Options”. Under the terms of the merger agreement, three individuals will be designated by the board of directors of TriCo to join the board of directors of TriCo. The designated individuals must be approved by the Nominating and Corporate Governance Committee of the board of directors of TriCo. TriCo and North Valley currently expect to select such individuals shortly prior to the consummation of the transaction. The members of the North Valley board of directors were aware of and considered these interests, among other matters, when they approved the merger agreement and unanimously recommended that North Valley shareholders approve the North Valley Merger proposal. These interests are described in more detail under the section entitled “The Merger—Interests of North Valley Directors and Executive Officers in the Merger” beginning on page 72.

Treatment of North Valley Stock Options (page 41)

Immediately prior to the effective time of the merger, each outstanding option to purchase shares of North Valley common stock, whether or not then vested and whether or not then exercisable, will be cancelled and the holder of the option will be entitled receive, subject to any required tax withholding, an amount in cash, without interest, from North Valley equal to the excess over the exercise price per share, if any, of 0.9433 multiplied by the weighted average of the closing price for shares of TriCo common stock as quoted on the NASDAQ Global Select Market for the 20 consecutive trading days ending on the trading day immediately prior to the closing date.

offices)

 

12


Regulatory Approvals Required for the Merger (page 77)

Completion of the merger and the bank merger are subject to various regulatory approvals, including approvals from the California Department of Business Oversight, which we refer to as the Department of Business Oversight, the Federal Deposit Insurance Corporation, which we refer to as the FDIC, and the Board of Governors of the Federal Reserve System, which we refer to as Federal Reserve Board. Notifications and/or applications requesting approval for the merger or for the bank merger may also be submitted to other federal and state regulatory authorities and self-regulatory organizations. We have filed, or are in the process of filing all notices and applications to obtain the necessary regulatory approvals. Although we currently believe we should be able to obtain all required regulatory approvals, we cannot be certain when or if we will obtain them or, if obtained, whether they will contain terms, conditions or restrictions not currently contemplated that will be detrimental to or have a material adverse effect on the combined company after the completion of the merger. The regulatory approvals to which completion of the merger and bank merger are subject are described in more detail under the section entitled “The Merger—Regulatory Approvals Required for the Merger” beginning on page 77.

Conditions to the Merger (page 93)

The obligations of TriCo and North Valley to complete the merger are each subject to the satisfaction or waiver of the following conditions:

 

approval of the TriCo Merger proposal by the TriCo shareholders

Richard P. Smith

President and approval of the North Valley Merger proposal by the North Valley shareholders;

Chief Executive Officer

the receipt of all regulatory approvals required from the Federal Reserve Board, the FDIC and the Department of Business Oversight, subject to the limitations set forth in the merger agreement;

(i) no order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition (an “injunction”) preventing the consummation of the merger or any of the other transactions contemplated by the merger agreement shall be in effect; (ii) no statute, rule, regulation, order, injunction or decree shall have been enacted, entered, promulgated or enforced by any governmental entity which prohibits, restricts or makes illegal consummation of the merger; and (iii) no proceeding initiated by any governmental entity seeking an injunction to prevent the consummation of the merger or any of the other transactions contemplated by the merger agreement shall be pending;

as of the last business day of the month reflected in the closing financial statements and prior to implementation of the plan of integration, the adjusted shareholders’ equity of North Valley shall not be less than $95.074 million;

the effectiveness of the registration statement on Form S-4, of which this document is a part, and the absence of a stop order or proceeding initiated or threatened by the SEC for that purpose;

approval for the listing on the NASDAQ Global Select Market of the shares of TriCo common stock to be issued in the merger;

the accuracy of the representations and warranties of each party as of the closing date of the merger, other than, in most cases, those failures to be true and correct that would not reasonably be expected to result in a material adverse effect on the other party;

13


performance in all material respects by each party of the obligations required to be performed by it at or prior to the closing date of the merger;

written certifications as to certain factual matters shall have been delivered to each party; and

receipt by each party of an opinion of its legal or tax advisors as to certain tax matters.

No Solicitation (page 88)

Under the terms of the merger agreement, North Valley has agreed not to solicit, initiate or knowingly encourage inquiries or proposals with respect to, or engage or participate in any discussions or negotiations concerning, or provide any confidential or nonpublic information or data to, any person relating to, any acquisition proposal. Notwithstanding these restrictions, the merger agreement provides that, under specified circumstances, in response to an unsolicited bona fide acquisition proposal which, in the good faith judgment of the North Valley board of directors, is or is reasonably likely to result in a proposal which is superior to the merger with TriCo, and the North Valley board of directors determines in good faith (and after consultation with North Valley’s outside counsel) that failure to take such actions would reasonably be expected to be a violation of its fiduciary duties under applicable law, North Valley may furnish information regarding North Valley and participate in discussions and negotiations with such third party.

Termination; Termination Fee (page 94)

TriCo and North Valley may mutually agree at any time to terminate the merger agreement without completing the merger, even if the North Valley shareholders have approved the merger and approved and adopted the merger agreement and the TriCo shareholders have approved the merger and approved and adopted the merger agreement and approved the issuance of TriCo common stock in connection with the merger.

The merger agreement may also be terminated and the merger abandoned at any time prior to the effective time of the merger, as follows:

by either TriCo or North Valley, if a required governmental approval is denied by final, non-appealable action, or if a governmental entity has issued a final, non-appealable order enjoining or otherwise prohibiting the closing of the merger, unless such denial or order is due to the failure of the party seeking to terminate the merger agreement to perform or observe the covenants and agreements of such party;

by TriCo if any requisite regulatory approval includes, or will not be issued without, the imposition of a burdensome condition;

by either TriCo or North Valley, if the merger has not closed on or before January 21, 2015, except that a party that is then in material breach of any of its covenants or obligations under the merger agreement is not entitled to terminate the merger agreement for this reason;

by either TriCo or North Valley, if there is a breach by the other party that would, individually or in the aggregate with other breaches by such party, result in the failure of a closing condition, unless the breach is cured before the earlier of January 21, 2015 and 30 days following written notice of the breach (provided that the terminating party is not then in material breach of the merger agreement);

by either TriCo or North Valley, if (1) the North Valley shareholders have not approved the merger at the North Valley special meeting or any adjournment or postponement thereof, or (2) the TriCo shareholders have not approved the merger and approved the issuance of TriCo common stock to the shareholders of North Valley in connection with the merger at the TriCo annual meeting or any adjournment or postponement thereof; or

by TriCo, if the North Valley board of directors (1) submits the merger agreement to its shareholders without a recommendation for approval, or otherwise withdraws or materially and adversely modifies its recommendation for approval (or discloses an intention to do so), or recommends to its shareholders an alternative acquisition proposal other than the merger agreement, or (2) materially breaches its obligation to call a shareholder meeting, to prepare and mail to its shareholders this document, to include in this document its recommendation that its shareholders vote in favor of the approval of the merger, or to refrain from soliciting alternative acquisition proposals.

14


North Valley may be required to pay TriCo a termination fee of $7.6 million in certain circumstances. TriCo may be required to pay North Valley a termination fee of $3.8 million in certain other circumstances. For more information, please see the section entitled “The Merger Agreement—Termination; Termination Fee” beginning on page 94.

Material United States Federal Income Tax Consequences of the Merger (page 15)

The merger is intended to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. Assuming the merger qualifies as such a reorganization, a shareholder of North Valley generally will not recognize any gain or loss upon receipt of TriCo common stock in exchange for North Valley common stock in the merger, except with respect to cash received in lieu of a fractional share of TriCo common stock. It is a condition to the completion of the merger that TriCo and North Valley receive written opinions from their legal or tax advisors to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.

Tax matters are very complicated and the tax consequences of the merger to each North Valley shareholder may depend on such shareholder’s particular facts and circumstances. North Valley shareholders are urged to consult their tax advisors to understand fully the tax consequences to them of the merger. For more information, please see the section entitled “Material United States Federal Income Tax Consequences of the Merger” beginning on page 15.

Litigation Related to the Merger (page 99)

On January 24, 2014, a purported shareholder of North Valley filed a lawsuit in connection with the merger. CaptionedSolak v. North Valley Bancorp, et al., Case No. 179099, the suit was filed in the Superior Court of the State of California, Shasta County, against North Valley, its directors, and TriCo. For more information, please see the section entitled “Litigation Related to the Merger” beginning on page 99.

Comparison of Shareholders’ Rights (page 107)

The rights of North Valley shareholders who continue as TriCo shareholders after the merger will be governed by the articles of incorporation and bylaws of TriCo rather than by the articles of incorporation and bylaws of North Valley. For more information, please see the section entitled “Comparison of Shareholders’ Rights” beginning on page 107.

Information About the Companies (page 28)

TriCo Bancshares

63 Constitution Drive

Chico, California 95973

(530)898-0300

(Name, address, including zip code, and telephone number, including area code, of agent for service)

with a copy to:

David Gershon, Esq.

Sheppard Mullin Richter & Hampton LLP

Four Embarcadero Center, 17th Floor

San Francisco, CA 94111-4109
Telephone: (415)434-9100

Joseph G. Mason, Esq.

Glenn T. Dodd, Esq.

Dodd Mason George LLP

1840 41st Avenue, Suite 102-175

Capitola, CA 95010

(408)452-1478

Approximate date of commencement of proposed sale to the public:

As soon as practicable following the effectiveness of this Registration Statement, satisfaction or waiver of the other conditions to closing of the merger described herein, and consummation of the merger.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐


If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule12b-2 of the Exchange Act. (Check one):

Large accelerated filerAccelerated filer
Non-accelerated filer☐  (Do not check if a smaller reporting company)Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

Calculation of Registration Fee

 

Title of Each Class of

Securities to be Registered

 

Amount

to be

Registered (1)

 

Proposed

Maximum

Offering Price

Per Share or Unit (2)

 

Proposed

Maximum

Aggregate

Offering Price (2)

 

Amount of

Registration Fee (3)

Common Stock, no par value per share

 7,744,194 N/A $302,537,220 $37,665.88

 

 

(1)Represents the maximum number of shares of common stock of TriCo Bancshares, or TriCo, estimated to be issued pursuant to the Agreement and Plan of Merger and Reorganization dated as of December 11, 2017, by and between TriCo and FNB Bancorp, or FNBB, based on (a) 7,477,518 shares of FNBB common stock outstanding, (b) 424,721 shares of FNBB common stock issuable pursuant to stock options and (c) an exchange ratio of 0.98 shares of TriCo common stock for each share of FNBB common stock. Pursuant to Rule 416 under the Securities Act of 1933, this Registration Statement also covers additional securities that may be issued as a result of stock splits, stock dividends or similar transactions.
(2)Pursuant to Rule 457(f) under the Securities Act of 1933, and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is the product of (a) $38.285 (the average high and low prices reported for FNBB’s common stock on the NASDAQ Global Select Market on March 16, 2018) and (b) 7,902,239 (the maximum number of shares of FNBB common stock expected to be exchanged for the common shares being registered).
(3)Calculated by multiplying the proposed maximum aggregate offering price by .0001245.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold prior to the time the registration statement becomes effective. This document shall not constitute an offer to sell nor shall there be any sale of these securities in any jurisdiction in which such offer or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

PRELIMINARY—SUBJECT TO COMPLETION—DATED MARCH 21, 2018


The information in this joint proxy statement/prospectus is not complete and may be changed. We may not offer or sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MARCH 21, 2018

LOGO

63 Constitution Drive

Chico, California 95973

Dear TriCo Bancshares is a bank holding company registered under the Bank Holding Company ActShareholders:

On December 11, 2017, TriCo Bancshares, which we refer to as TriCo, entered into an agreement and plan of 1956, as amended,merger and reorganization, which we refer to as the BHC Act. merger agreement, to acquire FNB Bancorp, which we refer to as FNBB. If the required shareholder and regulatory approvals are obtained and all closing conditions are satisfied or waived, FNBB will merge with and into TriCo, with TriCo as the surviving corporation, which we refer to as the merger. Immediately after the merger, FNBB’s wholly-owned bank subsidiary, First National Bank of Northern California, will merge with and into Tri Counties Bank, the wholly-owned bank subsidiary of TriCo, with Tri Counties Bank as the surviving bank.

You are cordially invited to attend a special meeting of shareholders of TriCo to be held at [●], Pacific Time, on [●], 2018 at 890 Fortress Street, Chico, California 95973. At the special meeting, TriCo shareholders will be asked to consider and vote upon a proposal to approve the merger agreement, including the merger and the issuance of shares of TriCo common stock in connection with the merger, which we refer to as the merger proposal. FNBB will also hold a special meeting of shareholders to consider the proposed merger agreement and related matters. TriCo and FNBB cannot complete the proposed merger unless TriCo’s shareholders vote to approve the merger proposal. This letter is accompanied by the attached joint proxy statement/prospectus, which TriCo’s board of directors is providing to solicit your proxy to vote for the approval of the merger proposal.

If the merger is completed, each outstanding share of FNBB common stock will be canceled and converted into the right to receive 0.98 shares of TriCo common stock, which we refer to as the exchange ratio. Cash will be paid in lieu of any fractional shares.

As described in the attached joint proxy statement/prospectus, the exchange ratio is subject to potential adjustment. The exchange ratio could change depending on the weighted average closing price of TriCo common stock reported on the Nasdaq Global Select Market over the 20 trading days ending five business days prior to the completion of the merger, which we refer to as the TriCo average closing price.

If the TriCo average closing price is $33.18 or more and $49.78 or less, the exchange ratio will remain unchanged at 0.98 shares of TriCo common stock.

However, FNBB is entitled to terminate the merger agreement if the TriCo average closing price (i) is less than $33.18 per share and (ii) represents a percentage change, relative to an initial value of $41.48 per share of TriCo common stock, that is more than 20% below the percentage change in the KBW Nasdaq Regional Banking Index, measured by comparing the average closing value of that index over the 20 trading days ending five business days prior to the completion of the merger to an initial value of 109.24, unless TriCo agrees that the exchange ratio will increase as provided in the merger agreement.

Conversely, TriCo is entitled to terminate the merger agreement if the TriCo average closing price (i) is greater than $49.78 per share and (ii) represents a percentage change, relative to an initial value of $41.48 per share of TriCo common stock, that is more than 20% above the percentage change in the KBW Nasdaq Regional Banking Index, measured by comparing the average closing value of that index over the 20 trading days ending five business days prior to the completion of the merger to an initial value of 109.24, unless FNBB agrees that the exchange ratio will decrease as provided in the merger agreement.

On [●], 2018, the actual closing price for TriCo common stock reported on the Nasdaq Global Select Market was $[●] per share. If the merger had been completed on that date, the TriCo average closing price would have been $[●] and the exchange ratio would have remained unchanged at 0.98 shares of TriCo common stock. The actual exchange ratio will not be known until the merger is completed.


Based on the closing price of TriCo common stock as reported on the Nasdaq Global Select Market of $41.64 as of December 31, 2013, TriCo had consolidated total assets8, 2017, the trading day immediately preceding the public announcement of the merger, the implied merger consideration that an FNBB shareholder would be entitled to receive for each share of FNBB common stock owned would be $40.81 with an aggregate transaction value of approximately $2.7 billion, total gross loans$315 million. Based on the closing price of TriCo common stock as reported on the Nasdaq Global Select Market of $[●] as of [●], 2018, the latest practicable date before the date of this joint proxy statement/prospectus, the implied merger consideration that an FNBB shareholder would be entitled to receive for each share of FNBB common stock owned would be $[●] with an aggregate transaction value of approximately $1.7 billion,$[● ] million. The value of the merger consideration will fluctuate based on the market price of TriCo common stock.

Consequently, the value of the merger consideration will not be known at the time you vote on the merger proposal. Based on the current number of shares of FNBB common stock outstanding, TriCo expects to issue approximately [●] shares of common stock in the aggregate upon completion of the merger and FNBB’s current shareholders would own approximately 24% of the combined company.TriCo’s common stock is listed on the Nasdaq Global Select Market under the symbol “TCBK.”FNBB’s common stock is listed on the Nasdaq Global Select Market under the symbol “FNBG.” You should obtain current market quotations for TriCo common stock and FNBB common stock before you vote on the merger proposal.

Based on our reasons for the merger described in the accompanying document, including the fairness opinion issued by our financial advisor, Stephens Inc., our board of directors believes that the merger is fair to and in the best interests of TriCo shareholders.Accordingly, the TriCo board of directors unanimously recommends that you vote “FOR” the merger proposal. The accompanying joint proxy statement/prospectus gives you detailed information about the special meeting, the merger and the issuance of shares of TriCo common stock in connection with the merger and related matters. In addition to being a proxy statement of TriCo for the solicitation of proxies from TriCo shareholders, this document is also the proxy statement for the solicitation of proxies from FNBB shareholders to vote to approve the merger agreement including the merger and is the prospectus of TriCo for the shares of its common stock that will be issued to FNBB shareholders in connection with the merger.

We advise you to read this entire document carefully, including the considerations discussed under “Risk Factors” beginning on page 29, and the appendices to the accompanying joint proxy statement/prospectus, which include the merger agreement.

Your vote is very important. The merger cannot be completed unless the holders of a majority of the outstanding shares vote in favor of approval of the merger proposal. Whether or not you plan to attend the special meeting, please take the time to vote by completing and mailing the enclosed proxy card or by following the instructions to vote via the Internet or by telephone indicated on the proxy card.

We appreciate your continuing loyalty and support and, should you choose to attend, we look forward to seeing you at the special meeting.

Sincerely,

Richard P. Smith

President and Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the shares of TriCo common stock to be issued in the merger or determined if this joint proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

The securities to be issued in connection with the merger are not savings accounts, deposits or other obligations of approximately $2.4 billionany bank or savings association and shareholders’ equityare not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

This joint proxy statement/prospectus is dated [●], 2018 and is being first mailed to shareholders of approximately $250.9 million. TriCo had 733 full-time equivalent employees of December 31, 2013.and FNBB on or about [●], 2018.


The information in this joint proxy statement/prospectus is not complete and may be changed. We may not offer or sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

15SUBJECT TO COMPLETION, DATED MARCH 21, 2018

LOGO

975 El Camino Real

South San Francisco, California 94080

Dear FNB Bancorp Shareholders:

On December 11, 2017, TriCo Bancshares, which we refer to as TriCo, entered into an agreement and plan of merger and reorganization, which we refer to as the merger agreement, to acquire FNB Bancorp, which we refer to as FNBB. If the required shareholder and regulatory approvals are obtained and all closing conditions are satisfied or waived, FNBB will be merged with and into TriCo, with TriCo as the surviving corporation, which we refer to as the merger. Immediately after the merger, FNBB’s wholly-owned bank subsidiary, First National Bank of Northern California, will merge with and into Tri Counties Bank, the wholly-owned bank subsidiary of TriCo, with Tri Counties Bank as the surviving bank.

You are cordially invited to attend a special meeting of shareholders of FNBB to be held at [●], Pacific Time, on [●], 2018 at The Basque Cultural Center, 599 Railroad Avenue, South San Francisco, California 94080. At the special meeting, the FNBB shareholders will be asked to consider and vote upon a proposal to approve the merger agreement and the merger. You will also be asked to approve, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and to approve adjournments of the special meeting, if necessary, to permit further solicitation of proxies in favor of the foregoing proposals. TriCo will also hold a special meeting of shareholders to approve the merger agreement and the issuance of shares of TriCo common stock in connection with the merger. TriCo and FNBB cannot complete the proposed merger unless FNBB’s shareholders vote to approve the merger agreement and the merger. This letter is accompanied by the attached joint proxy statement/prospectus, which FNBB’s board of directors is providing to solicit your proxy to vote for the approval of the merger agreement and the merger.

If the merger is completed, each outstanding share of FNBB common stock will be cancelled and converted into the right to receive 0.98 shares of TriCo common stock, which we refer to as the exchange ratio. Cash will be paid in lieu of any fractional shares.

As described in the attached joint proxy statement/prospectus, the exchange ratio is subject to potential adjustment. The exchange ratio could change depending on the weighted average closing price of TriCo common stock reported on the Nasdaq Global Select Market over the 20 trading days ending five business days prior to the completion of the merger, which we refer to as the TriCo average closing price.

If the TriCo average closing price is $33.18 or more and $49.78 or less, the exchange ratio will remain unchanged at 0.98 shares of TriCo common stock.

However, FNBB is entitled to terminate the merger agreement if the TriCo average closing price of TriCo (i) is less than $33.18 per share and (ii) represents a percentage change, relative to an initial value of $41.48 per share of TriCo common stock, that is more than 20% below the percentage change in the KBW Nasdaq Regional Banking Index, measured by comparing the average closing value of that index over the 20 trading day ending five business days prior to the completion of the merger to an initial value of 109.24, unless TriCo agrees that the exchange ratio will increase as provided in the merger agreement.

Conversely, TriCo is entitled to terminate the merger agreement if the TriCo average closing price (i) is greater than $49.78 per share and (ii) represents a percentage change, relative to an initial value of $41.48 per share of TriCo common stock, that is more than 20% above the percentage change in the KBW Nasdaq Regional Banking Index, measured by comparing the average closing value of that index over the 20 trading day ending five business days prior to the completion of the merger to an initial value of 109.24, unless FNBB agrees that the exchange ratio will decrease as provided in the merger agreement.


North Valley BancorpOn [●], 2018, the actual closing price for TriCo common stock reported on the Nasdaq Global Select Market was $[●] per share. If the merger had been completed on that date, the TriCo average closing price would have been $[●] and the exchange ratio would have remained unchanged at 0.98 shares of TriCo common stock. The actual exchange ratio will not be known until the merger is completed.

300 Park Marina Circle

Redding, California 96001

(530) 226-2900

North Valley Bancorp is a bank holding company registered underBased on the BHC Act. Asclosing price of December 31, 2013, North Valley had consolidated total assetsTriCo common stock as reported on the Nasdaq Global Select Market of approximately $917.8 million, total gross loans of approximately $509.2 million, deposits of approximately $787.8 million and shareholders’ equity of approximately $93.4 million. North Valley had 297 full-time equivalent employees$41.64 as of December 31, 2013.8, 2017, the trading day immediately preceding the public announcement of the merger, the implied merger consideration that an FNBB shareholder would be entitled to receive for each share of FNBB common stock owned would be $40.81 with an aggregate transaction value of approximately $315 million. Based on the closing price of TriCo common stock as reported on the Nasdaq Global Select Market of $[●] as of [●], 2018, the latest practicable date before the date of this joint proxy statement/prospectus, the implied merger consideration that an FNBB shareholder would be entitled to receive for each share of FNBB common stock owned would be $[●] with an aggregate transaction value of approximately $[●] million. The value of the merger consideration will fluctuate based on the market price of TriCo common stock. Based on the number of shares of TriCo common stock outstanding as of the date of this document, TriCo expects to issue approximately [●] shares of common stock in the aggregate upon completion of the merger.TriCo’s common stock is listed on the Nasdaq Global Select Market under the symbol “TCBK”. FNBB’s common stock is listed on the Nasdaq Global Select Market under the symbol “FNBG.” You should obtain current market quotations for TriCo common stock and FNBB common stock before you vote on the merger proposal.

Based on our reasons for the merger described in the accompanying document, including the fairness opinion issued by our financial advisor, The Courtney Group, LLC, the FNBB board of directors believes that the exchange ratio is fair to and in the best interests of FNBB shareholders.

Accordingly, FNBB’s board of directors unanimously recommends that you vote “FOR” the merger agreement and the merger, “FOR” the proposal to approve, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and “FOR” the proposal to approve adjournments of the special meeting, if necessary. The accompanying joint proxy statement/prospectus gives you detailed information about the special meeting, the merger and related matters. In addition to being a proxy statement of FNBB, this document is the proxy statement for the solicitation of proxies from TriCo shareholders to vote to approve the merger agreement and the transactions contemplated therein, including the merger, and the issuance of shares of TriCo common stock in connection with the merger and is the prospectus of TriCo for the shares of TriCo common stock that will be issued to the FNBB shareholders in connection with the merger.

We advise you to read this entire document carefully, including the considerations discussed under “Risk Factors (page 23)” beginning on page 29, and the appendices to the accompanying joint proxy statement/prospectus, which include the merger agreement.

Before votingYour vote is very important. The merger cannot be completed unless the holders of a majority of the outstanding shares of FNBB common stock vote in favor of approval of the merger agreement and the transactions contemplated therein, including the merger, at the special meeting. Whether or not you plan to attend the special meeting, please take the time to vote by completing and mailing the enclosed proxy card or by following the instructions to vote via the Internet or by telephone indicated on the proxy card.

We appreciate your continuing loyalty and support and, should you choose to attend, we look forward to seeing you at the special meeting.

Sincerely,

Thomas C. McGraw

Chief Executive Officer


Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the shares of TriCo common stock to be issued in connection with the merger or determined if this joint proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

The securities to be issued in connection with the merger are not savings accounts, deposits or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

This joint proxy statement/prospectus is dated [●], 2018 and is being first mailed to shareholders of FNBB and TriCo on or about [●], 2018.


TRICO BANCSHARES

63 Constitution Drive

Chico, California 95973

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To be held on [], 2018

To the shareholders of TriCo Bancshares:

We will hold a special meeting of shareholders of TriCo Bancshares, or TriCo, at [●], Pacific Time, on [●], 2018 at 890 Fortress Street, Chico, California 95973, for the following purposes:

1.Approval of Merger Agreement. To consider and vote upon a proposal to approve the agreement and plan of merger and reorganization, dated as of December 11, 2017, by and between TriCo and FNB Bancorp, referred to in this notice as the merger agreement, pursuant to which (i) FNB Bancorp will merge with and into TriCo, with TriCo as the surviving corporation, which we refer to in this notice as the merger, and (ii) TriCo will issue shares of TriCo common stock in exchange for outstanding shares of FNB Bancorp common stock in accordance with the merger agreement, all of which we refer to as the merger proposal. A copy of the merger agreement is attached as Appendix A to the accompanying joint proxy statement/prospectus of which this notice is a part.

2.Adjournment. To consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the TriCo special meeting to approve the merger proposal.

No other business may be conducted at the special meeting.

We have fixed the close of business on [●], 2018 as the record date for the determination of shareholders entitled to notice of and to vote at the special meeting. Only holders of TriCo common stock of record at the close of business on that date will be entitled to notice of and to vote at the special meeting or any adjournment or postponement of the special meeting.

The TriCo board of directors has unanimously approved the merger agreement and the transactions contemplated therein and has determined that the merger is in the best interests of TriCo and its shareholders, and unanimously recommends that shareholders vote “FOR” approval of the merger proposal and “FOR” approval of the proposal to adjourn the TriCo special meeting to a later date or dates, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the merger proposal.

If you have any questions concerning the merger or the joint proxy statement/prospectus, please contact Richard P. Smith, TriCo’s President and Chief Executive Officer, at (530) 898-0300. If you would like additional copies of the joint proxy statement/prospectus or if you need help voting your shares of TriCo common stock, please contact Craig Compton, TriCo’s Corporate Secretary, at (530)898-0300.

Your vote is very important. Whether or not you plan to attend the TriCo special meeting, please promptly complete, sign, date and return your proxy card in the enclosed envelope or vote via the Internet or by telephone pursuant to the instructions provided on the enclosed proxy card.

By Order of the Board of Directors

Craig S. Compton

Secretary

Chico, California

[●], 2018


FNB Bancorp

975 El Camino Real

South San Francisco, California 94080

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To be held on [], 2018

To the shareholders of FNB Bancorp:

We will hold a special meeting of shareholders of FNB Bancorp, or FNBB, at [●] p.m., Pacific Time, on [●], 2018 at The Basque Cultural Center, 599 Railroad Avenue, South San Francisco, California 94080 for the following purposes:

1.Approval of the Merger Agreement. To consider and vote upon a proposal to approve an agreement and plan of merger and reorganization, dated as of December 11, 2017, by and between TriCo Bancshares, or TriCo, and FNBB, which we refer to in this notice as the merger agreement, pursuant to which FNBB will merge with and into TriCo with TriCo as the surviving corporation, which we refer to as the merger. A copy of the merger agreement is attached as Appendix A to the accompanying joint proxy statement/prospectus of which this notice is a part;

2.Advisory(Non-Binding) Vote on Certain Compensatory Arrangements. To consider and vote on a proposal to approve, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and the agreements and understandings pursuant to which such compensation may be paid or become payable, as described in the section entitled “The Merger—Interests of Certain FNBB Officers and Directors in the Merger—Merger-Related Compensatory Arrangements for FNBB’s Named Executive Officers” beginning on page [●]; and

3.Adjournment. To consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the merger agreement.

No other business may be conducted at the special meeting.

We have fixed the close of business on [●], 2018 as the record date for the determination of shareholders entitled to notice of and to vote at the FNBB special meeting. Only holders of FNBB common stock of record at the close of business on that date will be entitled to notice of and to vote at the FNBB special meeting or any adjournment or postponement of the special meeting.

The FNBB board of directors has unanimously approved the merger agreement and the transactions contemplated therein. Based on FNBB’s reasons for the merger described in the attached joint proxy statement/prospectus, the FNBB board of directors has determined that the merger is in the best interests of FNBB and its shareholders, and unanimously recommends that shareholders vote “FOR” approval of the merger proposal “FOR” the proposal to approve, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and “FOR” approval of the proposal to adjourn the FNBB special meeting to a later date or dates, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the FNBB special meeting to approve the merger proposal.

If you have any questions concerning the merger or the joint proxy statement/prospectus, if you would like additional copies of the joint proxy statement/prospectus or if need help voting your shares of FNBB common stock, please contact Thomas C. McGraw, FNBB’s Chief Executive Officer, at (650)588-6800.


Your vote is very important. Whether or not you plan to attend the special meeting, please promptly complete, sign, date and return your proxy card in the enclosed envelope or vote via the Internet or by telephone pursuant to the instructions provided on the enclosed proxy card.

By Order of the Board of Directors

Edward J. Watson

Secretary

South San Francisco, California

[●], 2018


TABLE OF CONTENTS

WHERE YOU CAN FIND MORE INFORMATION

1

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS

2

SUMMARY

8

SELECTED HISTORICAL FINANCIAL DATA

19

Selected Consolidated Historical Financial Data of TriCo

19

Selected Consolidated Historical Financial Data of FNBB

20

UNAUDITED CONDENSED PRO FORMA COMBINED CONSOLIDATED FINANCIAL DATA

22

UNAUDITED COMPARATIVE PER SHARE DATA

28

RISK FACTORS

29

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

36

GENERAL INFORMATION

38

THE TRICO SPECIAL MEETING

39

Time, Date and Place

39

Matters to be Considered

39

Recommendation of TriCo’s Board of Directors

39

Shares Outstanding and Entitled to Vote; Record Date

39

How to Vote TriCo Shares

39

Revocation of Proxies

40

Quorum

40

Vote Required

41

Solicitation of Proxies

41

Attending the TriCo Special Meeting

41

Adjournments and Postponements

42

Questions and Additional Information

42

THE FNBB SPECIAL MEETING

43

Time, Date and Place

43

Matters to be Considered

43

Recommendation of the FNBB’s Board of Directors

43

Shares Outstanding and Entitled to Vote; Record Date

44

How to Vote FNBB Shares

44

Revocation of Proxies

45

Quorum

45

Vote Required

45

-i-


Shares of FNBB Subject to Voting Agreements

46

Solicitation of Proxies

46

Attending the FNBB Special Meeting

46

Adjournments and Postponements

47

Questions and Additional Information

47

THE MERGER

48

Structure of the Merger

48

Background of the Merger

48

TriCo’s Reasons for the Merger and Recommendation of TriCo’s Board of Directors

53

FNBB’s Reasons for the Merger and Recommendation of FNBB’s Board of Directors

54

Opinion of TriCo’s Financial Advisor

56

Opinion of FNBB’s Financial Advisor

62

The Merger Consideration

71

FNBB Stock Options

73

Procedures for Exchanging FNBB Common Stock Certificates

73

Conditions to the Merger

74

Bank Regulatory Approvals

76

Business Pending the Merger

77

FNBB Board of Directors’ Covenant to Recommend the Merger Agreement

80

No Solicitation

81

Representations and Warranties of the Parties

82

Effective Time of the Merger

83

Amendment of the Merger Agreement

83

Termination of the Merger Agreement

83

Termination Fee

84

Certain Employee Matters

85

Interests of Certain FNBB Officers and Directors in the Merger

86

Material Federal Income Tax Consequences

90

Accounting Treatment of the Merger

93

Expenses of the Merger

93

Listing of the TriCo Common Stock

93

Resale of TriCo Common Stock

93

Shareholder Agreements

94

Dissenters’ Rights

95

-ii-


MARKET FOR COMMON STOCK AND DIVIDENDS

96

TriCo Market Information and Dividends

96

FNBB Market Information and Dividends


96

INFORMATION ABOUT TRICO

98

General

98

Management and Additional Information

98

INFORMATION ABOUT FNBB

99

General

99

Business

99

Effect of Existing or Probable Governmental Regulations on the Business of FNBB and First National Bank

102

Properties

112

Legal Proceedings

113

Selected Financial Data

113

Supplementary Financial Information

114

Changes in and Disagreement with Accountants on Accounting and Financial Disclosure

114

FNBB’S QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

114

FNBB MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

115

CERTAIN BENEFICIAL OWNERSHIP OF FNBB COMMON STOCK

132

DESCRIPTION OF TRICO CAPITAL STOCK

135

Common Stock

135

Preferred Stock

135

COMPARISON OF THE RIGHTS OF SHAREHOLDERS

137

LEGAL MATTERS

142

EXPERTS

142

FUTURE SHAREHOLDER PROPOSALS

143

TriCo Annual Meeting

143

FNBB Annual Meeting

143

DOCUMENTS INCORPORATED BY REFERENCE

144

-iii-


Appendix A—Agreement and Plan of Merger and Reorganization

Appendix B—Opinion of The Courtney Group

Appendix C—Opinion of Stephens Inc.

Appendix  D—FNB Bancorp’s Report of Independent Registered Public Accounting Firm and Audited Consolidated Financial Statements as of December 31, 2017 and 2016, and for the Three Years in the period ended December 31, 2017.

-iv-


WHERE YOU CAN FIND MORE INFORMATION

Both TriCo Bancshares, which we refer to as TriCo, and FNB Bancorp, which we refer to as FNBB, file annual, quarterly and current reports, proxy statements and other business and financial information with the Securities and Exchange Commission, which we refer to as the SEC. You may read and copy any materials that either TriCo or North Valley shareholders’ meeting, you should carefully considerFNBB files with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. Please call the SEC at(800) SEC-0330 ((800)732-0330) for further information on the public reference room. In addition, TriCo and FNBB file reports and other business and financial information with the SEC electronically, and the SEC maintains a website located at http://www.sec.gov containing this information. You can also obtain, free of charge, documents that TriCo files with the SEC at www.tcbk.com under the tab “About Us” and then under the heading “Investor Relations” or documents that FNBB files with the SEC at www.fnbnorcal.com under the link “Investor Relations.” The information provided on (or accessible through) the TriCo and FNBB websites is not part of this joint proxy statement/prospectus and is not incorporated herein by reference unless specifically stated. Copies of the documents that TriCo or FNBB, respectively, files with the SEC can also be obtained, free of charge, by directing a request to TriCo or FNBB at the following respective addresses and phone numbers:

TriCo Bancshares
63 Constitution Drive
Chico, California 95973
Attn: Shareholder Relations
(530)898-0300
FNB Bancorp
975 El Camino Real
South San Francisco, California 94080
Attn: Thomas C. McGraw
(650)588-6800

TriCo has filed a registration statement on FormS-4 to register with the SEC the shares of TriCo common stock as specified therein. This joint proxy statement/prospectus is a part of that registration statement. As permitted by SEC rules, this document does not contain all of the information included in the registration statement or in the exhibits or schedules to the registration statement. You may read and copy the registration statement, including any amendments, schedules and exhibits, at the addresses set forth above. Statements contained in this document as to the contents of any contract or incorporated by reference intoother documents referred to in this document are not necessarily complete. In each case, you should refer to the copy of the applicable contract or other document filed as an exhibit to the registration statement of which this joint proxy statement/prospectus is a part. This document incorporates important business and financial information about TriCo that is not included in or delivered with this document, including the risk factors set forth in the section entitled “Risk Factors” beginning on page 23 or described in TriCo’s and North Valley’s Annual Reports on Form 10-K for the year ended on December 31, 2013 and other reportsincorporating by reference documents that TriCo has previously filed with the SEC,SEC. See “Documents Incorporated by Reference.” These documents are available without charge to you upon written or oral request to TriCo’s principal executive offices listed above.

If any TriCo shareholder or FNBB shareholder would like to request documents, please do so by [], 2018, which is five business days prior to the date of the special meetings, in order to provide sufficient time receive them before the special meeting of TriCo shareholders, which we refer to as the TriCo special meeting, or the special meeting of FNBB shareholders, which we refer to as the FNBB special meeting, as the case may be. You will not be charged for any of these documents.

QUESTIONS AND ANSWERS

ABOUT THE MERGER AND THE SPECIAL MEETINGS

The following are some questions that you may have regarding the merger and the special meetings, and brief answers to those questions. TriCo and FNBB advise you to read carefully the remainder of this joint proxy statement/prospectus because the information in this section does not provide all of the information that might be important to you with respect to the merger and the special meetings of TriCo and FNBB. Additional important information is also contained in the documents incorporated by reference into this joint proxy statement/prospectus. Please seeSee “Where You Can Find More Information” beginning on page v.

[] and “Documents Incorporated by Reference” on page [].

Q: What am I being asked to vote on?

16


SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR TRICOA:

The following table summarizes consolidated financial results achieved by TriCo forand FNBB have entered into an agreement and plan of merger and reorganization, which we refer to as the periodsmerger agreement, pursuant to which TriCo has agreed to acquire FNBB. If the required shareholder and at the dates indicated and should be read in conjunction with TriCo’s consolidated financial statementsregulatory approvals are obtained and the notesmerger is subsequently completed, FNBB will be merged with and into TriCo with TriCo continuing as the surviving corporation. Immediately thereafter, FNBB’s wholly-owned bank subsidiary, First National Bank of Northern California, which we refer to as First National Bank, will merge with and into Tri Counties Bank, the consolidated financial statements contained in reports that TriCo has previously filed with the SEC. Historical financial information for TriCo can be found in its Annual Report on Form 10-K for the year ended December 31, 2013. Please see the section entitled “Where You Can Find More Information” beginning on page v for instructions on how to obtain the information that has been incorporated by reference. You should not assume the results of operations for past periods indicate results for any future period.

Year ended December 31, 
(in thousands, except per share amounts) 
   2013  2012  2011  2010  2009 

Interest income

  $106,560   $108,716   $102,982   $104,572   $112,333  

Interest expense

   4,696    7,344    10,238    14,133    20,615  
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net interest income

   101,864    101,372    92,744    90,439    91,718  

Provision for loan losses

   (715  9,423    23,060    37,458    31,450  

Noninterest income

   36,829    37,980    42,813    32,695    30,329  

Noninterest expense

   93,604    97,998    82,715    77,205    75,450  
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Income before income taxes

   45,804    31,931    29,782    8,471    15,147  

Provision for income taxes

   18,405    12,937    11,192    2,466    5,185  
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net income

  $27,399   $18,994   $18,590   $6,005   $9,962  
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Earnings per share:

      

Basic

  $1.71   $1.19   $1.17   $0.38   $0.63  

Diluted

  $1.69   $1.18   $1.16   $0.37   $0.62  

Per share:

      

Dividends paid

  $0.42   $0.36   $0.36   $0.40   $0.52  

Book value

  $15.61   $14.33   $13.55   $12.64   $12.71  

Tangible book value

  $14.59   $13.30   $12.49   $11.62   $11.71  

Average common shares outstanding

   16,045    15,988    15,935    15,860    15,783  

Average diluted common shares outstanding

   16,197    16,052    16,000    16,010    16,011  

Shares outstanding

   16,077    16,001    15,979    15,860    15,787  

Loans, net of allowance

  $1,633,762   $1,522,175   $1,505,118   $1,377,000   $1,460,097  

Total assets

   2,744,066    2,609,269    2,555,597    2,189,789    2,170,520  

Total deposits

   2,410,483    2,289,702    2,190,536    1,852,173    1,828,512  

Debt financing and notes payable

   6,335    9,197    72,541    62,020    66,753  

Junior subordinated debt

   41,238    41,238    41,238    41,238    41,238  

Shareholders’ equity

   250,946    229,359    216,441    200,397    200,649  

Financial Ratios:

      

For the year:

      

Return on average assets

   1.04  0.75  0.82  0.27  0.48

Return on average equity

   11.34  8.44  8.93  2.94  4.89

Net interest margin1

   4.18  4.32  4.43  4.45  4.77

Net loan losses to average loans

   0.23  0.82  1.37  2.07  1.53

Efficiency ratio1

   67.32  70.19  60.88  62.49  61.53

Average equity to average assets

   9.21  8.91  9.15  9.25  9.73

Equity to assets

   9.15  8.79  8.47  9.15  9.24

Total capital to risk-adjusted assets

   14.77  14.53  13.94  14.20  13.36

1Fully taxable equivalent

17


SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR NORTH VALLEY

The following table summarizes consolidated financial results achieved by North Valley for the periods and at the dates indicated and should be read in conjunction with North Valley’s consolidated financial statements and the notes to the consolidated financial statements contained in reports that North Valley has previously filed with the SEC. Historical financial information for North Valley can be found in its Annual Report on Form 10-K for the year ended December 31, 2013. Please see the section entitled “Where You Can Find More Information” beginning on page v for instructions on how to obtain the information that has been incorporated by reference. You should not assume the results of operations for past periods indicate results for any future period.

   Year ended December 31,
(in thousands, except per share amounts)
 
   2013  2012  2011  2010  2009 

Income Statement

      

Total interest income

  $32,213   $33,731   $37,145   $38,922   $43,955  

Total interest expense

   1,618    3,525    5,786    8,985    12,721  
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net interest income

   30,595    30,206    31,359    29,937    31,234  

Provision for loan losses

   —      2,100    2,650    7,970    26,500  
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net interest income after provision for loan losses

   30,595    28,106    28,709    21,967    4,734  

Total noninterest income

   14,137    16,419    14,365    12,944    14,010  

Total noninterest expense

   39,513    39,979    39,715    42,144    53,990  
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Income (loss) before (benefit) provision for income taxes

   5,219    4,546    3,359    (7,233  (35,246

(Benefit) provision for income taxes

   1,594    (1,744  312    (985  (9,394
  

 

 

  

 

 

  

 

 

  

 

 

  

Net income (loss)

   3,625    6,290    3,047    (6,248  (25,852
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Preferred stock discount

   —      —      —      (18,667  —    
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net income (loss) available to common stockholders

  $3,625   $6,290   $3,047   $(24,915 $(25,852
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Income (loss) per share (1)

      

Basic

  $0.53   $0.92   $0.45   $(6.42 $(17.24

Diluted

  $0.53   $0.92   $0.45   $(6.42 $(17.24

Statement of Condition

      

Total assets

  $917,764   $902,343   $904,966   $884,941   $884,362  

Investment securities and federal funds sold

  $319,847   $301,686   $352,421   $274,655   $194,594  

Net loans

  $499,943   $481,753   $443,559   $498,473   $583,878  

Deposits

  $787,849   $768,580   $766,239   $753,790   $787,809  

Stockholder’s equity

  $93,429   $96,161   $89,465   $83,978   $52,302  

Common Stock Data

      

Shares outstanding

   6,836,463    6,835,192    6,833,752    6,832,492    1,499,163  

Book value per share (2)

  $13.67   $14.07   $13.09   $12.29   $34.89  

Cash dividends per share

  $—     $—     $—     $—     $—    

Dividend payout ratio

   —      —      —      —      —    

Performance Ratios

      

Return (loss) on average assets

   0.40  0.69  0.34  (0.69%)   (2.85%) 

Return (loss) on average equity

   3.78  6.70  3.54  (8.03%)   (34.92%) 

Capital Ratios

      

Risk based capital:

      

Total (8% minimum ratio)

   19.04  18.28  19.53  17.63  12.19

Tier I (4% minimum ratio)

   17.79  17.01  17.99  15.94  9.09

Leverage ratio

   12.16  11.77  11.82  11.48  7.16

(1)Earnings per share amounts have been adjusted to give effect to a one for five reverse stock split on December 28, 2010.
(2)Represents stockholders’ equity divided by the number of shares of common stock outstanding at the end of the period indicated.

18


UNAUDITED COMPARATIVE PER COMMON SHARE DATA

The following table shows per common share data regarding basic and diluted earnings, cash dividends, and book value for (a) TriCo and North Valley on a historical basis, (b) TriCo on a pro forma combined basis, and (c) North Valley on a pro forma equivalent basis. The pro forma basic and diluted earnings per share information was computed as if the merger had been completed on January 1, 2013. The pro forma book value per share information was computed as if the merger had been completed on the dates presented.

The following pro forma information has been derived from and should be read in conjunction with TriCo’s and North Valley’s audited consolidated financial statements as of and for the year ended December 31, 2013, incorporated herein by reference. This information is presented for illustrative purposes only. You should not rely on the pro forma combined or pro forma equivalent amounts as they are not necessarily indicative of the operating results or financial position that would have occurred if the merger had been completed as of the dates indicated, nor are they necessarily indicative of the future operating results or financial position of the combined company. The pro forma information, although helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings, opportunities to earn additional revenue, the impact of restructuring and merger-related costs (except merger costs are reflected in the Unaudited Pro Forma Combined Condensed Balance Sheet), or other factors that may result as a consequence of the merger and, accordingly, does not attempt to predict or suggest future results. The information below should be read in conjunction with the section entitled “Unaudited Pro Forma Combined Condensed Financial Statements” beginning on page 101.

   TriCo   North Valley   TriCo
Pro Forma
Combined
  North Valley
Pro Forma
Equivalent
Per Share(1)
 

Per Common Share Data:

       

Basic Earnings

       

Year ended December 31, 2013

  $1.71    $0.53    $1.39   $1.31  

Diluted Earnings

       

Year ended December 31, 2013

  $1.69    $0.53    $1.38   $1.30  

Cash Dividends Paid(2)

       

Year ended December 31, 2013

  $0.42    $—      $0.42   $0.40  

Book Value

       

December 31, 2013

  $15.64    $13.67    $19.29(3)  $18.20  

(1)Computed by multiplying the “TriCo Pro Forma Combined” amounts by the exchange ratio of 0.9433.
(2)“TriCo Pro Forma Combined” cash dividends paid are based only upon TriCo’s historical amounts.
(3)Based on pro forma shares outstanding of 22,155,818 as of December 31, 2013 (using the average shares outstanding and not as of the end of the period). Such pro forma share amount is based on (a) 16,045,141 average common shares outstanding of TriCo common stock at December 31, 2013, plus (b) the product of (x) the exchange ratio of 0.9433 and (y) 6,477,978 average common shares of North Valley common stock outstanding at December 31, 2013.

19


COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

The table below sets forth, for the calendar quarters indicated, the high and low sales prices per share, and the dividend paid per share,wholly-owned bank subsidiary of TriCo, common stock, which trades onwith Tri Counties Bank continuing as the NASDAQ Global Select Market under the symbol “TCBK,” and North Valley common stock, which trades on the NASDAQ Global Select Market under the symbol “NOVB.”surviving corporation.

   TriCo
Common Stock
   North Valley Common Stock 
   High   Low   Dividend   High   Low   Dividend 

2012

            

First Quarter

  $17.67     14.22     0.09    $12.44     9.39     —    

Second Quarter

  $17.71     14.84     0.09    $15.00     12.24     —    

Third Quarter

  $16.81     14.76     0.11    $14.41     13.00     —    

Fourth Quarter

  $17.14     14.73     0.11    $14.41     13.65     —    

2013

            

First Quarter

  $17.90     16.31     0.11    $19.00     14.00     —    

Second Quarter

  $21.75     15.77     0.11    $18.00     16.22     —    

Third Quarter

  $23.07     20.50     0.11    $20.00     16.49     —    

Fourth Quarter

  $28.76     22.50     0.11    $20.24     18.56     —    

2014

            

First Quarter

  $28.37     23.87     0.11    $24.64     18.83     —    

Second Quarter (through [], 2014)

            

The following table sets forth the closing sale prices per share ofIf you are a TriCo common stock and North Valley common stock on January 21, 2014, the last trading day before the public announcement of the signing ofshareholder, you are being asked to vote to approve the merger agreement and on [], 2014, the latest practicable date before the date of this document. The following table also includes the equivalent market value per share of North Valley common stock on January 21, 2014 and [], 2014, determined by multiplying the closing share price of TriCo common stock on such dates by the exchange ratio for the merger of 0.9433.

   TriCo
Common Stock
   North Valley
Common Stock
   Equivalent Market
Value per Share of
North Valley
Common Stock
 

January 21, 2014

  $27.93    $19.15    $26.35  

[], 2014

  $     $     $   

20


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This document, including information included or incorporated by reference in this document contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 giving TriCo’s and North Valley’s expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects,” “projections” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could” or “may,” or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. Forward-looking statements speak only as of the date they are made and TriCo and North Valley assume no duty to update forward-looking statements.

In addition to factors previously disclosed in TriCo’s and North Valley’s reports filed with the SEC and those identified elsewhere in this filing (including the section entitled “Risk Factors” beginning on page 23), the following factors among others, could cause actual results to differ materially from forward-looking statements or historical performance:

ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by TriCo shareholders and North Valley shareholders, on the expected terms and schedule;

delay in closing the merger;

difficulties and delays in integrating the TriCo and North Valley businesses or fully realizing cost savings and other benefits;

business disruption following the merger;

changes in asset quality and credit risk;

inability to sustain revenue and earnings growth;

changes in interest rates and capital markets;

inflation;

customer acceptance of TriCo and North Valley’s products and services;

customer borrowing, repayment, investment and deposit practices;

customer disintermediation;

diversion of management’s attention from ongoing business operations and opportunities;

the introduction, withdrawal, success and timing of business initiatives;

competitive conditions;

economic conditions;

the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board, the Department of Business Oversight and the FDIC, and legislative and regulatory actions and reforms;

the outcome of any legal proceedings that are or may be instituted against TriCo or North Valley;

21


liquidity risk affecting Tri Counties Bank’s and North Valley Bank’s ability to meet their obligations when they come due;

price risk focusing on changes in market factors that may affect the value of traded instruments in “mark-to-market” portfolios;

greater than expected noninterest expenses;

excessive loan losses; and

other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.

RECENT DEVELOPMENTS

TriCo Results for Quarter Ended March 31, 2014 (Unaudited)

On April 29, 2014, TriCo announced its unaudited consolidated financial results for the quarter ended March 31, 2014. TriCo’s net income for the three months ended March 31, 2014 was $7,365,000, or $0.45 per diluted share. These results compare to earnings of $8,477,000, or $0.53 per diluted for the three months ended March 31, 2013.

TriCo’s total assets increased $142,751,000 (5.5%) to $2,755,184,000 at March 31, 2014 from $2,612,433,000 at March 31, 2013. Total investments increased $296,854,000 (192%) to $450,955,000 at March 31, 2014 from $154,101,000 at March 31, 2013. Total loans increased $154,690,000 (10.1%) to $1,687,052,000 at March 31, 2014 from $1,532,362,000 at March 31, 2013. Total deposits increased $125,570,000 (5.5%) to $2,411,120,000 at March 31, 2014 from $2,285,550,000 at March 31, 2013.

Net interest income on a fully-taxable equivalent (“FTE”) basis for the first quarter of 2014 increased $1,524,000 (6.2%) from the same period in 2013 to $26,154,000. The increase in net interest income (FTE) was due primarily to a $242,907,000 (147%) increase in the average balance of investments to $407,848,000, and a $122,666,000 (7.9%) increase in the average balance of loans to $1,671,231,000 that were partially offset by a 54 basis point decrease in the average yield on loans from 6.22% during the three months ended March 31, 2013 to 5.68% during the three months ended March 31, 2014. During much of 2013 and the three months ended March 31, 2014, TriCo used a portion of its Federal funds sold to buy investments. The increase in average loan balances was due to organic loan growth and the purchase of $62,698,000 of loans during 2013. The decrease in average loan yields was due primarily to declines in market yields on new and renewed loans compared to yields on repricing, maturing, and paid off loans. The increases in average investment and loan balances added $1,780,000 and $1,907,000 to net interest income (FTE) while the decrease in average loan yields reduced net interest income (FTE) by $2,241,000 when compared to the year-ago quarter. During much of 2013 and the three months ended March 31, 2014, TriCo deployed some of its excess Federal funds sold into some higher yielding investments while trying to maintain an appropriate level of interest rate risk.

TriCo benefited from a $1,355,000 reversal of provision for loan losses during the three months ended March 31, 2014 versus a benefit of $1,108,000 during the three months ended March 31, 2013. The reversal of provision for loan losses during the first quarter of 2014 was primarily the result of improvements in collateral values and estimated cash flows related to nonperforming originated loans and purchased credit impaired loans, reductions in nonperforming originated loans and purchased credit impaired loans, and decreased loss histories for performing originated loans.

Noninterest income decreased $1,923,000 (18.8%) to $8,295,000 in the three months ended March 31, 2014 compared to the three months ended March 31, 2013. The decrease in noninterest income was due primarily to a $1,830,000 (79.9%) decrease in gain on sale of loans to $464,000, and a $450,000 (14.3%) decrease in service charges on deposit accounts that were partially offset by a $676,000 (123%) increase in gain on sale of foreclosed assets to $1,227,000. The decrease in gain on sale of loans was primarily due to the increase in residential real estate mortgage rates that occurred in 2013 that resulted in a significant decrease in mortgage refinance activity, and thus a significant decrease in newly originated mortgages for TriCo to sell. The decrease in service charges on deposit accounts was primarily due to reduced customer overdrafts and a resulting decrease in non-sufficient funds fees. The increase in gain on sale of foreclosed assets was due to a general increase in property values and sales activity from their lows during the financial crisis that started in 2008.

Salary and benefit expenses increased $342,000 (2.6%) to $13,303,000 during the three months ended March 31, 2014 compared to the three months ended March 31, 2013. Base salaries increased $518,000 (6.2%) to $8,866,000 during the three months ended March 31, 2014 versus the year ago period despite a 1.5% decrease in the average number of full time equivalent employees from 743 to 732. The average number of full time equivalent employees decreased primarily due to the reductions in staff from the closing of five branches since December 31, 2012 that was partially offset by increases in full time equivalent back office staff and management. The salary expense attributable to the newly added back office staff and management outweighed the reduction in salary expense from the branch closings. Annual salary merit increases of approximately 2.5% also contributed to the increase in base salary expense. Incentive and commission related salary expenses decreased $163,000 (12.7%) to $1,123,000 during three months ended March 31, 2014 due primarily to decreases in production related incentives tied to reduced residential real estate mortgage loan originations and sales. Benefits expense, including retirement, medical and workers’ compensation insurance, and taxes, decreased $13,000 (0.4%) to $3,314,000 during the three months ended March 31, 2014.

Other noninterest expenses increased $1,374,000 (15.9%) to $10,014,000 during the three months ended March 31, 2014 compared to the three months ended March 31, 2013. The increase in other noninterest expense was due primarily a $303,000 (18.3%) increase in occupancy expense to $1,962,000 that included $238,000 of accelerated depreciation expense of leasehold improvements related to the closing of two branches in the quarter ended March 31, 2014, a $255,000 (58%) reduction in reversal of provision for losses on unfunded commitments to $185,000 from $440,000, a $228,000 (44.8%) increase in professional fees to $739,000 that included $296,000 of legal and consulting fees related to the proposed merger with North Valley, a $147,000 (29.6%) increase in ATM network charges to $643,000, and a $100,000 (9.3%) increase in data processing and software expense.

TriCo’s unaudited consolidated financial statements for the quarter ended March 31, 2014 will be included in TriCo’s Quarterly Report on Form 10-Q for the year ended March 31, 2014, which will be filed with the SEC and incorporated by reference into this joint proxy statement/prospectus.

North Valley Results for Quarter Ended March 31, 2014 (Unaudited)

North Valley reported net income for the quarter ended March 31, 2014 of $919,000, or $0.13 per diluted share compared to net income for the quarter ended March 31, 2013 of $1,261,000, or $0.18 per diluted share.

North Valley did not record a provision for loan losses for the quarters ended March 31, 2014 and 2013. The allowance for loan losses at March 31, 2014 was $9,058,000, or 1.78% of total loans, compared to $9,301,000, or 1.83% of total loans, at December 31, 2013 and $9,651,000, or 1.98% of total loans, at March 31, 2013.

At March 31, 2014, North Valley’s total assets were $918,972,000, an increase of $8,238,000, or 0.9%, from $910,734,000 at March 31, 2013. The loan portfolio totaled $508,056,000 at March 31, 2014, an increase of $19,450,000, or 4.0%, compared to $488,606,000 at March 31, 2013. The loan to deposit ratio at March 31, 2014 was 64.7% as compared to 63.0% at March 31, 2013, and 64.6% at December 31, 2013. Total deposits increased $9,897,000, or 1.3%, to $785,817,000 at March 31, 2014 compared to $775,920,000 at March 31, 2013. Available-for-sale investment securities totaled $273,143,000 at March 31, 2014, a decrease of $10,578,000 from the total at March 31, 2013. When compared to December 31, 2013, total assets increased $1,208,000 from $917,764,000, while loans decreased by $1,188,000 from $509,244,000, and deposits decreased $2,032,000 from $787,849,000. Available-for-sale investment securities decreased $6,336,000 from December 31, 2013 to March 31, 2014, while Federal funds sold increased $6,615,000 from December 31, 2013 to March 31, 2014.

Nonperforming loans (defined as nonaccrual loans and loans 90 days or more past due and still accruing interest) decreased $1,644,000, or 25.5%, to $4,805,000 at March 31, 2014 from $6,449,000 at March 31, 2013, and decreased $288,000 from the December 31, 2013 balance of $5,093,000. Nonperforming loans as a percentage of total loans were 0.95% at March 31, 2014, as compared to 1.00% at December 31, 2013 and 1.32% at March 31, 2013.

During the first quarter of 2014, North Valley identified five loans totaling $1,669,000 as additional nonperforming loans. The additions were offset by reductions in nonperforming loans totaling $1,957,000 due primarily to the transfer of one property to Other Real Estate Owned (“OREO”) totaling $1,231,000, and secondarily to collections received on certain loans and charge-offs. Of the five loans totaling $1,669,000 identified as nonperforming loans during the first quarter of 2014, two relationships make up $1,526,000 of the balance. The first relationship is for a commercial real estate loan totaling $865,000 located in Stanislaus County. There is no specific reserve required for this loan. The second relationship consists of two loans totaling $661,000 for residential income property located in Solano County. North Valley has recorded a $215,000 charge-off for these loans and there is no specific reserve required. The remaining two loans of the five identified as nonperforming loans in the first quarter total $143,000. Charge-offs of $34,000 were recorded against one of the loans and there were no specific reserves required.

Gross loan charge offs for the first quarter of 2014 were $298,000 and recoveries totaled $55,000 resulting in net charge offs of $243,000. Gross loan charge offs for the first quarter of 2013 were $1,056,000 and recoveries totaled $249,000 resulting in net charge offs of $807,000.

Nonperforming assets (nonperforming loans and OREO) totaled $7,438,000 at March 31, 2014, a decrease of $20,376,000 from the March 31, 2013 balance of $27,814,000, and a $1,109,000 decrease from the December 31, 2013 balance of $8,547,000. Nonperforming assets as a percentage of total assets were 0.81% at March 31, 2014 compared to 3.05% at March 31, 2013 and 0.93% at December 31, 2013.

North Valley’s OREO properties decreased $821,000 to $2,633,000 at March 31, 2014 from $3,454,000 at December 31, 2013. The decrease in OREO was due to the sale of three properties totaling $2,227,000 (a gain of $175,000 was recorded on the sale), which was partially offset by the transfer of one property to OREO totaling $1,231,000. Subsequent to March 31, 2014, North Valley sold an OREO property located in Shasta County at its recorded value of $2,154,000 resulting in no loss on the sale. The transaction closed on April 4, 2014.

Net interest income, which represents North Valley’s largest component of revenues and is the difference between interest earned on loans, investments and other earning assets and interest paid on deposits and borrowings, increased $326,000, or 4.4%, for the three months ended March 31, 2014 compared to the same period in 2013. Interest income increased by $251,000, or 3.2%, primarily due to an increase in average earning asset balances. The Company had foregone interest income of $10,000 and $85,000 for the loans on nonaccrual status for the three months ended March 31, 2014 and 2013, respectively. Average loans increased $22,734,000 in the first quarter of 2014 compared to the first quarter of 2013, while the yield on the loan portfolio decreased 22 basis points to 5.11% for the quarter ended March 31, 2014. Interest expense decreased $75,000, or 17.4%, due primarily to a decrease in the rates paid on deposits for the quarter ended March 31, 2014 compared to the same period in 2013. Overall, average earning assets increased $41,029,000 to $838,890,000 in the first quarter of 2014 compared to the first quarter of 2013. Average yields on earning assets decreased 9 basis points from the quarter ended March 31, 2013, to 3.94% for the quarter ended March 31, 2014 while the average rate paid on interest-bearing liabilities decreased by 5 basis points to 0.23%. North Valley’s net interest margin for the quarter ended March 31, 2014 was 3.77%, a decrease of 4 basis points from the margin of 3.81% for the first quarter in 2013 and an increase of 6 basis points from the 3.71% net interest margin for the linked quarter ended December 31, 2013.

Noninterest income for the quarter ended March 31, 2014 decreased $1,899,000, or 43.9%, to $2,430,000 compared to $4,329,000 for the same period in 2013. Service charges on deposits decreased by $254,000 to $698,000 for the first quarter of 2014 compared to $952,000 for the same period in 2013. Other fees and charges decreased by $108,000 to $1,012,000 for the first quarter of 2014 compared to $1,120,000 for the first quarter of 2013. North Valley recorded gains on the sale of mortgage loans of $184,000, and gains on the sale of SBA loans of $45,000 for the first quarter of 2014 compared to gains of $757,000 and $168,000, respectively, for the same period in 2013. North Valley did not record a gain on the sale of investment securities for the first quarter of 2014 compared to gains on the sale of investment securities of $543,000 for the same period in 2013. Other noninterest income decreased $298,000, to $491,000 for the quarter ended March 31, 2014 compared to $789,000 for the same period in 2013.

Noninterest expense decreased $1,132,000, or 11.5%, to $8,756,000 for the first quarter of 2014 from $9,888,000 for the first quarter in 2013. Salaries and employee benefits decreased $139,000, for the first quarter of 2014 compared to the first quarter of 2013. Occupancy and furniture and equipment expense decreased $14,000 for the first quarter of 2014 compared to the first quarter of 2013, OREO expense decreased $366,000 to $10,000, for the first quarter of 2014 compared to $376,000 for the same period in 2013, and FDIC and state assessments decreased $77,000 to $141,000 for the first quarter of 2014, compared to $218,000 for the same period in 2013. Other expense decreased $536,000 to $2,743,000 for the first quarter of 2014 compared to $3,279,000 for the same period in 2013. For the three months ended March 31, 2014, North Valley had approximately $290,000 of merger related expenses resulting from the pending merger with TriCo Bancshares, included in other noninterest expenses.

North Valley recorded a provision for income taxes for the quarter ended March 31, 2014 of $517,000, resulting in an effective tax rate of 36.0%, compared to a provision for income taxes of $616,000, or an effective tax rate of 32.8%, for the quarter ended March 31, 2013.

North Valley’s unaudited consolidated financial statements for the quarter ended March 31, 2014 will be included in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, which will be filed with the SEC and incorporated by reference into this joint proxy statement/prospectus.

22


RISK FACTORS

In addition to the other information contained in or incorporated by reference into this joint proxy statement/prospectus,transactions contemplated therein, including the matters addressed under the caption entitled “Cautionary Statement Regarding Forward-Looking Statements,” North Valley shareholders should carefully consider the following risk factors in deciding whether to vote for approval of the merger and approval and adoption of the merger agreement, and TriCo shareholders should carefully consider the following risks in deciding whether to vote for approval of the merger and approval and adoption of the merger agreement and approval of the issuance of the shares of TriCo common stock in connection with the merger. North Valley andmerger, which we refer to as the TriCo should also considermerger proposal. If you are an FNBB shareholder, you are being asked to vote (1) to approve the other information in this documentmerger agreement and the other documents incorporated by reference into this document. Please seemerger, which we refer to as the sections entitled “Where You Can Find More Information” beginningFNBB merger proposal, and (2) to approve on page van advisory(non-binding) basis, the compensatory arrangements between FNBB and “Incorporationits named executive officers providing for compensation in connection with the merger and the agreements and understandings pursuant to which such compensation may be paid or become payable. As a result of Certain Documents by Reference” beginning on page 156.

Because the market pricemerger, FNBB will cease to exist and FNBB shareholders will have the right to receive in exchange for each of their shares of common stock of FNBB, or FNBB common stock, the merger consideration consisting of 0.98 shares of TriCo common stock, will fluctuate,or the valueexchange ratio, as further described in “The Merger—The Merger Consideration” beginning on page [●].

Each of the TriCo and FNBB shareholders is also being asked to consider and vote upon a proposal to grant discretionary authority to adjourn the special meeting of their respective shareholders, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of either or both special meetings to approve the matters being presented at such special meetings.

In addition to receiving the necessary regulatory approvals, the merger considerationcannot be completed unless the TriCo shareholders vote to approve the TriCo merger proposal and FNBB shareholders vote to approve the FNBB merger proposal. At each of the respective shareholders’ meetings, TriCo and FNBB shareholders will vote on the proposals necessary to complete the merger. Information about these shareholders’ meetings, the merger agreement and the merger and the other business to be receivedconsidered by North Valley shareholders may change.at each of the shareholders’ meetings is contained in this document.

Upon completionThis document constitutes both a joint proxy statement of TriCo and FNBB and a prospectus of TriCo. It is a joint proxy statement because each of the boards of directors of TriCo and FNBB is soliciting proxies using this document for their respective shareholder meetings. It is a prospectus because TriCo, in connection with the merger, is offering shares of TriCo common stock in exchange for outstanding shares of FNBB common stock in the merger.

Q: What will FNBB Shareholders Receive in the Merger?

A: In the merger, each share of North ValleyFNBB common stock (including the associated preferred stock purchase rights issued pursuant to the Amended and Restated Shareholder Protection Rights Agreement dated as of March 26, 2009, as amended, between North Valley and Computershare, Inc., as Rights Agent)owned by an FNBB shareholder will be converted into the merger consideration consisting of a fraction of a shareright to receive 0.98 shares of TriCo common stock pursuant to the terms of the merger agreement. The exchange ratio will not be adjusted for changes in the market price of TriCo or North Valley common stock prior to the closing. The closing price of TriCo common stockbased on the date that the merger is completed may vary fromexchange ratio.

Based on the closing price of TriCo common stock on December 11, 2017, the date TriCo and North Valley announcedvalue of the per share merger consideration payable to holders of FNBB common stock was $40.51. Based on the date that this document is being mailed to each of the TriCo and North Valley shareholders, and on the date of the shareholders’ meeting of TriCo and North Valley shareholders. Any change in the marketclosing price of TriCo common stock prior to completionon [●], 2018, the last practicable date before the date of the merger may affectthis joint proxy statement/prospectus, the value of the per share merger consideration that North Valley shareholders will receive upon completionpayable to holders of FNBB common stock was $[●].

Q: Is the merger. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in our respective businesses, operations and prospects, and regulatory considerations, among other things. Many of these factors are beyondexchange ratio subject to change?

A: Yes. While the control of TriCo and North Valley. North Valley shareholders should obtain current market quotations forexchange ratio is generally fixed at 0.98 shares of TriCo common stock, before voting their shares at the North Valley special meeting.

North Valley shareholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

North Valley shareholders currently have the right to voteagreement includes a trading collar that could result in the election of the board of directors of North Valley and on other matters affecting North Valley. Upon the completiontermination of the merger each North Valley shareholder who receivesagreement or a change to the exchange ratio. In particular, TriCo can elect to terminate the merger agreement if both (i) the average share price of TriCo common stock for the20-day period up to and including the fifth day prior to the closing date of the merger (the “TriCo average closing price”) is greater than $49.78, which equals 120% of the average share price of TriCo common stock for the 20trading-day period up to and including December 8, 2017, which was $41.48, which we refer to as the “initial TriCo trading price”, and (ii) TriCo common stock outperforms the KBW Nasdaq Regional Banking Index by more than 20% since December 8, 2017, unless FNBB agrees to decrease the exchange ratio to cure the deficiency so that fewer shares of TriCo common stock will becomebe issued to FNBB shareholders on a shareholderper share basis. Conversely, FNBB can terminate the merger agreement if both (i) the TriCo average closing price is less than $33.18, which equals 80% of the initial TriCo trading price, and (ii) TriCo common stock underperforms the KBW Nasdaq Regional Banking Index by more than 20%, unless TriCo agrees to increase the exchange ratio to cure the deficiency so that more shares of TriCo withcommon stock will be issued to FNBB shareholders on a percentage ownershipper share basis.

If the average closing share price of TriCo thatcommon stock is smaller$33.18 or more and $49.78 or less, the exchange ratio will remain unchanged at 0.98 shares of TriCo common stock. For more information concerning the potential change to the exchange ratio, see “The Merger—The Merger Consideration—Potential Adjustment to Exchange Ratio” on page [●].

Q: How will the parties decide whether to adjust the exchange ratio or allow the merger agreement to terminate?

A: If TriCo elects to terminate the merger agreement because the TriCo average closing price is greater than such shareholder’s percentage ownership of North Valley. It is currently expected that$49.78 and TriCo common stock outperforms the former shareholders of North ValleyKBW Nasdaq Regional Banking Index by more than 20%, FNBB can elect to prevent the termination by allowing the exchange ratio to adjust downward as a group will receive sharesprovided in the merger constituting approximately 28.6%agreement. FNBB’s board of directors would decide whether FNBB will make this election. Conversely, if FNBB elects to terminate the merger agreement because the TriCo average closing price is less than $33.18 and TriCo common stock underperforms the KBW Nasdaq Regional Banking Index by more than 20%, TriCo can elect to prevent the termination by allowing the exchange ratio to adjust upward as provided in the merger agreement. TriCo’s board of directors would decide whether TriCo will make this election. The boards of directors of TriCo and FNBB will evaluate various factors at the time of closing in determining whether to exercise any termination rights TriCo and FNBB may have and whether to prevent any termination by allowing the exchange ratio to adjust. Following the time of closing, TriCo will file a Current Report on Form8-K with the SEC that will disclose the exchange ratio that will apply in the merger.

Q: Will FNBB shareholders be able to trade the TriCo common stock that they receive in the merger?

A: Yes. The TriCo common stock issued in the merger to FNBB shareholders will be listed on the Nasdaq Global Select Market under the symbol “TCBK.” Unless you are deemed an “affiliate” of TriCo, you may sell or transfer the shares of TriCo common stock you receive in the merger without restriction.

Q: Why is my vote important?

A: The TriCo merger proposal must be approved by the holders of a majority of the outstanding shares of TriCo common stock immediately afterand the merger. BecauseFNBB merger proposal must be approved by the holders of this, North Valleya majority of the outstanding shares of FNBB common stock. We cannot complete the merger without these shareholder approvals. TriCo shareholders may have less influencewill vote on the managementapplicable proposals necessary to complete the merger at the TriCo special meeting and policies of TriCo than they now havethe FNBB shareholders will vote on the managementapplicable proposals necessary to complete the merger at FNBB special meeting. Information about the TriCo special meeting and policiesthe FNBB special meeting, the merger and the other business to be considered by shareholders at each of North Valley.the special meetings is contained in this document.

The market price forIf you are a TriCo or FNBB shareholder and you do not vote, it will have the same effect as a vote against the merger agreement. Holders of [●] shares of FNBB common stock, may be affected by factors different from those that historicallyrepresenting approximately 20% of the outstanding shares of FNBB common stock, have affected North Valley.

Upon completionsigned shareholder agreements with TriCo agreeing to vote in favor of the merger holdersagreement.

Q: Why must the TriCo shareholders approve the merger agreement and the issuance of North Valley common stock will become holdersshares of TriCo common stock. TriCo’s business differs from that of North Valley, and accordingly the results of operations of TriCo will be affected by some factors that are different from those currently affecting the results of operations of North Valley. For a discussion of the business of TriCo and North Valley and some important factors to considerstock in connection with the business, seemerger?

A: TriCo shareholders are required to approve the section entitled “Information About the Companies” beginning on page 28merger agreement and the documents incorporated by reference in this joint proxy statement/prospectus and referred to under the section entitled “Where You Can Find More Information” beginning on page v.

23


TriCo may fail to realize the anticipated benefitsissuance of shares of the merger.

The successTriCo common stock, which is estimated to equate to approximately 24% of TriCo’s issued and outstanding shares of common stock. Because TriCo will likely issue in excess of 20% of its outstanding shares of common stock to the FNBB shareholders in connection with the merger, the California General Corporation Law, or the CGCL, requires that holders of a majority of the merger will depend on, among other things, TriCo’s ability to combine the businessesoutstanding shares of TriCo and North Valley. Ifcommon stock approve the merger agreement.

Because TriCo is not ablelisted on the Nasdaq Global Select Market, TriCo is subject to successfully achieve this objective, the anticipated benefitsNasdaq’s listing rules. Nasdaq’s listing rules similarly require the shareholders of TriCo to approve the issuance of shares of TriCo common stock in connection with the merger may notbecause TriCo will likely issue in excess of 20% of its outstanding shares of common stock to the FNBB shareholders in connection with the merger. By voting to approve the TriCo merger proposal, TriCo shareholders will be realized fully, or at all, or may take longervoting to realize than expected.

TriCo and North Valley have operated and, until the consummation ofapprove the merger will continue to operate independently. It is possible that the integration process or other factors could result in the loss or departure of key employees, the disruption of the ongoing business of TriCo or inconsistencies in standards, controls, proceduresagreement and policies. It is also possible that clients, customers, depositors and counterparties of TriCo could choose to discontinue their relationships with the combined company post-merger because they prefer doing business with an independent company or for any other reason, which would adversely affect the future performance of the combined company. These transition matters could have an adverse effect on each of TriCo and North Valley during the pre-merger period and for an undetermined time after the consummation of the merger.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.

Before the transactions contemplated in the merger agreement, including the merger and the bankissuance of shares in connection with the merger for purposes of the Nasdaq’s listing rules.

Q: What do each of the TriCo and the FNBB boards of directors recommend?

A: The TriCo board of directors unanimously recommends that TriCo shareholders vote“FOR”approval of the TriCo merger proposal and“FOR” approval of the proposal to adjourn TriCo’s special meeting, if necessary, to solicit additional proxies in favor of the merger proposal.

The FNBB board of directors unanimously recommends that FNBB shareholders vote “FOR” approval of the FNBB merger proposal,“FOR” the proposal to approve, on an advisory(non-binding) basis, the compensation that may be completed, variouspayable to FNBB’s named executive officers in connection with the merger, and “FOR” approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies in favor of approval of the FNBB merger proposal.

Q: Will I have dissenters’ rights in connection with the merger?

A: No. Neither the holders of TriCo common stock nor the holders of FNBB common stock will have the right to dissent from the merger and assert dissenters’ or appraisal rights.

Under the CGCL, shareholders are generally entitled to dissent from a merger or consolidation and obtain payment of the fair value of their shares when a merger or consolidation into another company occurs. However,

the CGCL provides that appraisal rights are not available for shares that are listed on a national securities exchange where the merger consideration is stock of a publicly traded corporation. FNBB’s common stock is traded on a national security exchange and the merger consideration, comprised of TriCo’s common stock, is also traded on a national securities exchange. As such, neither FNBB’s shareholders nor TriCo’s shareholders are entitled to appraisal rights in connection with the merger.

Q: Are there any risks I should consider in deciding whether to vote for the matters required to be voted on by the respective shareholders of TriCo and FNBB?

A: Yes. Set forth under the heading of “Risk Factors,” beginning on page [●], are a number of risk factors that each of the shareholders of TriCo and FNBB should consider carefully.

Q: When do TriCo and FNBB expect to complete the merger?

A: The parties expect to complete the merger during the second quarter of 2018. However, we are unable to assure you whether or when the merger will occur. Prior to the consummation of the merger, FNBB shareholders must approve the FNBB merger proposal at the FNBB special meeting, TriCo shareholders must approve the TriCo merger proposal at the TriCo special meeting all required bank regulatory approvals must be obtained from the bank regulatory and other governmental authorities. These governmental entities may impose conditions onto the granting of such approvals. Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying completionconsummation of the merger must be satisfied.

Q: What happens if the merger is not consummated?

A: If the merger proposal is not approved by the TriCo and FNBB shareholders or of imposing additional costs or limitations on TriCo followingif the merger. The regulatory approvals maymerger is not be received atcompleted for any time, mayother reason, the merger will not be received in a timely fashion,occur and may contain conditions on the completionFNBB shareholders will not receive any consideration for their shares under the terms of the merger that are not anticipated or cannotagreement. Instead, FNBB and TriCo would remain independent public companies and the common stock of FNBB would continue to be met. It isoutstanding and traded on the Nasdaq Global Select Market. Under specified circumstances, FNBB may be required to pay a conditionfee to closing the merger that no regulatory approval shall contain or shall have resulted in, or reasonably be expected to resultTriCo in the imposition of, any burdensome condition on TriCo asevent the surviving company following the merger.

The merger agreement may be terminated in accordance with its terms and the merger may not be completed.

The merger agreement is subjectterminated as described under the caption “The Merger—Termination Fees” beginning on page [●].

Q: When and where is the TriCo special meeting?

A: The TriCo special meeting will be held at [●], Pacific Time, on [●], [●], 2018 at 890 Fortress Street, Chico, California 95973.

Q: Who is entitled to vote at the TriCo special meeting?

A: The holders of record of TriCo common stock at the close of business on [●], 2018, which is the date TriCo’s board of directors has fixed as the record date for the TriCo special meeting, are entitled to vote at the TriCo special meeting.

Q: When and where is the FNBB special meeting?

A: The FNBB special meeting will be held at [●], Pacific Time, on [●], [●], 2018 at The Basque Cultural Center, 599 Railroad Avenue, South San Francisco, CA 94080.

Q: Who is entitled to vote at the FNBB special meeting?

A: The holders of record of FNBB common stock at the close of business on [●], 2018, which is the date FNBB’s board of directors has fixed as the record date for the FNBB special meeting, are entitled to vote at the FNBB special meeting.

Q: What do I need to do now?

A: After you have carefully read this joint proxy statement/prospectus, indicate on your proxy card how you want your shares of FNBB common stock or TriCo common stock, as the case may be, to be voted. Then sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible or follow the instructions to vote via the Internet or by telephone indicated on the proxy card.

Q: If my shares are held in street name by my bank, broker, or other nominee will my bank, broker or other nominee automatically vote my shares for me?

A: No. Your bank, broker or other nominee will not be able to vote shares held by it in street name on your behalf without instructions from you. You should instruct your bank, broker or other nominee to vote your shares by following the directions your bank, broker or other nominee provides to you.

Q: What happens if I abstain from voting or fail to instruct my bank, broker or other nominee?

A: If you are a numberholder of conditions which mustTriCo common stock or FNBB common stock and you abstain from voting or fail to instruct your bank, broker or other nominee to vote your shares and the bank, broker or other nominee submits an unvoted proxy, referred to as a brokernon-vote, then the abstention or brokernon-vote will be fulfilled in order to completecounted towards a quorum at the merger. Those conditions include: approval ofTriCo special meeting or FNBB special meeting, but it will have the merger agreement by North Valley shareholders,same effect as a vote against approval of the merger agreement and, if you are an FNBB shareholder, against approval of the issuanceadvisory(non-binding) proposal regarding the compensation that may be payable to FNBB’s named executive officers in connection with the merger.

Abstentions and brokernon-votes of shares of TriCo or FNBB common stock will not have any effect on the proposal of the TriCo or FNBB board of directors to adjourn the special meeting if the number of affirmative votes cast for the adjournment is a majority of the votes cast and such affirmative votes constitute a majority of the quorum required to transact business at the special meeting. However, if the number of affirmative votes cast for the adjournment proposal is a majority of the votes cast, but such votes do not constitute a majority of the quorum required to transact business at the special meeting, then abstentions and brokernon-votes will have the same effect as a vote against the proposal of the TriCo or FNBB board of directors to adjourn the TriCo or FNBB special meeting.

Q: Can I attend the special meeting and vote my shares in person?

A: Yes. While not required, all TriCo shareholders are invited to attend the TriCo special meeting. Likewise, all FNBB shareholders are invited to attend the FNBB special meeting. Shareholders of record can vote in person at their respective special meeting. If your shares are held in street name, then you are not the shareholder of record and you must bring a legal proxy from your broker, bank or other nominee confirming that you are the beneficial owner of the shares in order to vote in person at the applicable special meeting.

Q: Can I change my vote?

A: Yes. Regardless of the method used to cast a vote, you may change your vote at any time before your proxy is voted at the TriCo special meeting or the FNBB special meeting. You may do so in one of the following ways:

if you are an FNBB shareholder, by delivering to FNBB, which must be received by FNBB prior to the FNBB special meeting, a written notice of revocation addressed to Edward J. Watson, Secretary, FNB Bancorp, 975 El Camino Real, South San Francisco, California 94080;

if you are a TriCo shareholder, by delivering to TriCo, which must be received by TriCo prior to the TriCo special meeting, a written notice of revocation addressed to Craig Compton, Corporate Secretary, TriCo Bancshares, 63 Constitution Drive, Chico, California 95973;

by logging onto the Internet website specified on your proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card, in each case, if you are eligible to do so and following the instructions on the proxy card;

completing, signing and returning a new proxy card with a later date before the date of the applicable special meeting, which will automatically revoke any earlier proxy; or

attending the TriCo special meeting or the FNBB special meeting, as the case may be, and voting in person, which will automatically revoke any earlier proxy. However, simply attending the TriCo special meeting or the FNBB special meeting, as the case may be, without voting will not revoke an earlier proxy voted by you.

If you have instructed a bank, broker or other nominee to vote your shares of either FNBB or TriCo common stock, you must follow directions received from the bank, broker or other nominee to change your vote. If you fail to comply with the instructions of the bank, broker or other nominee, your vote will not be changed because the bank, broker or other nominee is the record holder of such shares.

Q: Will FNBB be required to submit the merger agreement to its shareholders even if the FNBB board of directors has withdrawn, modified or qualified its recommendation?

A: Yes. Unless the merger agreement is terminated before the FNBB special meeting, FNBB is required to submit the merger agreement to its shareholders even if the FNBB board of directors has withdrawn, modified or qualified its recommendation, consistent with the terms of the merger agreement.

Q: What is the procedure for sending in FNBB stock certificates?

A: Promptly following the closing of the merger, FNBB shareholders will receive a transmittal letter instructing FNBB shareholders to surrender their FNBB common stock certificates or shares of FNBB common stock that are held in book-entry form, in exchange for the merger consideration. FNBB shareholders should follow the instructions in the transmittal letter for how to deliver their FNBB common stock certificates or book-entry shares of FNBB common stock in exchange for the merger consideration.You should NOT send yourFNBB common stock certificates with your proxy card now. Instead, follow the instructions in the transmittal letter and use the separate envelope specifically provided with the transmittal letter for returning the FNBB stock certificates.

Q: Who should I call with questions?

A: If you are a holder of FNBB common stock and you have any questions concerning the merger or this joint proxy statement/prospectus or if you would like additional copies of this joint proxy statement please contact Thomas C. McGraw, FNBB’s Chief Executive Officer, at (650)588-6800.

If you are a holder of TriCo common stock in connection withand you have any questions concerning the merger byor this joint proxy statement/prospectus, please contact Richard P. Smith, TriCo’s President and Chief Executive Officer, at (530)898-0300. If you would like additional copies of the joint proxy statement/prospectus, please contact Craig Compton, Corporate Secretary, at (530) 898-0300.

SUMMARY

This summary highlights selected information from this joint proxy statement/prospectus and may not contain all of the information that is important to the shareholders of TriCo and the shareholders receipt of requisite regulatory approvals subject to certain limitations set forth inFNBB. To more fully understand the merger and for a more complete description of the legal terms of the merger, you should read carefully this entire joint proxy statement/prospectus, including the merger agreement absence of orders prohibiting completionand the other documents included with this joint proxy statement/prospectus. See “Where You Can Find More Information” on page [] and “Documents Incorporated by Reference” on page []. Page references are included in this summary to direct the reader to a more complete description of the topics.

Throughout this joint proxy statement/prospectus, “TriCo” refers to TriCo Bancshares and “FNBB” refers to FNB Bancorp. Also, throughout this joint proxy statement/prospectus, the Agreement and Plan of Merger and Reorganization, dated as of December 11, 2017, by and between TriCo and FNBB, is referred to as the “merger agreement.” The merger effectiveness of FNBB with and into TriCo is referred to as the registration statement of which this document is a part, approval of“merger” and the shares of TriCo common stock to be issued to North ValleyFNBB shareholders in consideration for listing on the NASDAQ Global Select Market, the continued accuracy of the representations and warranties by both parties and the performance by both parties of their covenants and agreements, and the receipt by both parties of opinions from their respective legal or tax advisors. These conditions to the closing of the merger may not be fulfilled and, accordingly, the merger may not be completed. In addition, if the merger is not completed by January 21, 2015, either TriCo or North Valley may choose not to proceed with the merger, and the parties can mutually decide to terminate the merger agreement at any time, before or after shareholder approval. In addition, TriCo and North Valley may elect to terminate the merger agreement in certain other circumstances. If the merger agreement is terminated under certain circumstances, North Valley may be required to pay a termination fee of $7.6 million to TriCo. If the merger agreement is terminated under certain other circumstances, TriCo may be required to pay a termination fee of $3.8 million to North Valley. Please refer to the section entitled “The Merger Agreement—Termination; Termination Fee” beginning on page 94 for a fuller description of these circumstances.

Termination of the merger agreement could negatively impact North Valley.

North Valley’s business may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger, and the market price of North Valley common stock might decline to the extent that the current market price reflects a market assumption that the merger will be completed. If the merger agreement is terminated and North Valley’s board of directors seeks another merger or business combination, North Valley shareholders cannot be certain that North Valley will be able to find a party willing to offer equivalent or more attractive consideration than the consideration TriCo has agreed to provide in the merger. If the merger agreement is terminated under certain circumstances, North Valley may be required to pay a termination fee of $7.6 million to TriCo. Please refer to the section entitled “The Merger Agreement—Termination; Termination Fee” beginning on page 94.

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North Valley will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainty about the effect of the merger on employees and customers may have an adverse effect on North Valley and consequently on TriCo. These uncertainties may impair North Valley’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with North Valley to seek to change existing business relationships with North Valley. Retention of certain employees may be challenging during the pendency of the merger, as certain employees may experience uncertainty about their future roles. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the business, TriCo’s business following the merger could be negatively impacted. In addition, the merger agreement restricts North Valley from taking certain specified actions until the merger occurs without the consent of TriCo. These restrictions may prevent North Valley from pursuing attractive business opportunities that may arise prior to the completion of the merger. Please see the section entitled “The Merger Agreement—Covenants and Agreements” beginning on page 80 for a description of the restrictive covenants applicable to North Valley.

North Valley directors and officers may have interests in the merger different from the interests of other North Valley shareholders.

The interests of some of the directors and executive officers of North Valley may be different from those of other North Valley shareholders, and directors and officers of North Valley may be participants in arrangements that are different from, or are in addition to, those of other North Valley shareholders. The merger would constitute a “change of control” for purposes of the North Valley Salary Continuation Plan and payments under the Salary Continuation Plan would be due North Valley executive officers at the effective time of the merger. Further, the payment of benefits to executive officers under the North Valley Executed Deferred Compensation Plan would be accelerated upon a “change in control,” if that had been elected by the executive officer, and otherwise would be paid by TriCo following the effective time of the merger in a lump sum or in installments, in each case according to the election made by each executive officer; and the payment of benefits to non-employee directors under the North Valley Director Deferred Fee Plan would be accelerated upon a “change in control” if that had been elected by the director, and otherwise would be paid by TriCo following the effective time of the merger in a lump sum or in installments, in each case according to the election made by each director. In addition, each of North Valley’s executive officers and directors hold equity awards, the treatment of which is described below under “Treatment of North Valley Stock Options”. Upon completion of the merger, three individuals designated by the board of directors of TriCo will join the board of directors of TriCo. The designated individuals will be selected by the Nominating and Corporate Governance Committee of the board of directors of TriCo. These interests are described in more detail under the section entitled “The Merger—Interests of North Valley Directors and Executive Officers in the Merger” beginning on page 72.

Shares of TriCo common stock to be received by North Valley shareholders as a result of the merger will have rights different from the shares of North Valley common stock.

Upon completion of the merger, the rights of former North Valley shareholders will be governed by the articles of incorporation and bylaws of TriCo. The rights associated with North Valley common stock are different from the rights associated with TriCo common stock, although both companies are organized under California law. Please see the section entitled “Comparison of Shareholders’ Rights” beginning on page 107 for a discussion of the different rights associated with TriCo common stock.

The merger agreement contains provisions that may discourage other companies from trying to acquire North Valley for greater merger consideration.

The merger agreement contains provisions that may discourage a third party from submitting a business combination proposal to North Valley that might result in greater value to North Valley’s shareholders than the merger. These provisions include a general prohibition on North Valley from soliciting, or, subject to certain exceptions, entering into discussions with any third party regarding any acquisition proposal or offers for competing transactions. The members of the board of directors of North Valley have agreed to vote their shares of North Valley common stock in favor of the North Valley Merger proposal and the North Valley Adjournment proposal, and against any alternative transaction. North Valley also has an unqualified obligation to submit the North Valley Merger proposal to a vote by its shareholders, even if North Valley receives a proposal that its board of directors believes is superior to the merger. The shareholders that are party to the shareholder agreements described in this paragraph beneficially own in the aggregate approximately []% of the outstanding shares of North ValleyFNBB common stock, as well as any cash issued in lieu of fractional shares, is referred to as the record date. In addition, North Valley may be required to pay TriCo a termination fee of $7.6 million

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in certain circumstances involving acquisition proposals for competing transactions. For further information, please see the sections entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96 and “The Merger Agreement—Termination; Termination Fee” beginning on page 94.“merger consideration.”

The combined company expects to incur substantial expenses relatedParties to the merger.Proposed Merger (Pages [] and [])

The combined company expects to incur substantial expenses in connection with consummation of the merger and combining the business, operations, networks, systems, technologies, policies and procedures of the two companies. Although TriCo and North Valley have assumed that a certain level of transaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their combination expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. Due to these factors, the transaction and combination expenses associated with the merger could, particularly in the near term, exceed the savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the combination of the businesses following the consummation of the merger. As a result of these expenses, both TriCo and North Valley expect to take charges against their earnings before and after the completion of the merger. The charges taken in connection with the merger are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.

The merger will result in changes to the board of directors of the combined company.

Upon completion of the merger, the composition of the board of directors of the combined company will be different than the current boards of TriCo and North Valley. The TriCo board of directors currently consists of nine directors and, upon the completion of the merger, three individuals who are currently directors of North Valley will be designated by TriCo to join the TriCo board of directors. This new composition of the board of directors of the combined company may affect the future decisions of the combined company.

In connection with the announcement of the merger agreement, one lawsuit has been filed and is pending seeking, among other things, to enjoin the merger, and an adverse judgment in this lawsuit may prevent the merger from becoming effective within the expected time frame (if at all).

On January 24, 2014, a purported shareholder of North Valley filed a lawsuit in connection with the merger. Captioned Solak v. North Valley Bancorp, et al., Case No. 179099, the suit was filed in the Superior Court of the State of California, Shasta County, against North Valley, its directors, and TriCo. It is brought as a putative class action and alleges that North Valley’s directors breached certain alleged fiduciary duties to North Valley’s shareholders by approving the merger agreement pursuant to an allegedly unfair process and at an allegedly unfair price. It alleges that North Valley and TriCo aided and abetted those breaches. The suit seeks, among other things, to enjoin consummation of the merger. At this stage, it is not possible to predict the outcome of the proceedings and their impact on North Valley or TriCo. If the plaintiff is successful in enjoining the consummation of the merger, the lawsuit may prevent the merger from becoming effective within the expected timeframe (if it is completed at all).

The unaudited pro forma combined condensed financial information included in this joint proxy statement/prospectus is illustrative and the actual financial condition and results of operations after the merger may differ materially.

The unaudited pro forma combined condensed financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what TriCo’s actual financial condition or results of operations would have been had the merger been completed on the dates indicated. The pro forma combined condensed financial information reflects adjustments, which are based upon preliminary estimates, to record the North Valley identifiable assets acquired and liabilities assumed at fair value and the resulting goodwill recognized. The purchase price allocation reflected in this joint proxy statement/prospectus is preliminary and final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of North Valley as of the date of the completion of the merger. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in this joint proxy statement/prospectus. For more information, please see the section entitled “Unaudited Pro Forma Combined Condensed Financial Statements” beginning on page 101.

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The opinions of North Valley’s and TriCo’s financial advisors will not reflect changes in circumstances between the signing of the merger agreement and the completion of the merger.

TriCo and North Valley each received a written opinion from their respective financial advisors on January 21, 2014. Subsequent changes in the operations and prospects of North Valley or TriCo, general market and economic conditions and other factors that may be beyond the control of North Valley or TriCo, and on which North Valley’s and TriCo financial advisors’ opinions were based, may significantly alter the value of North Valley or the prices of the shares of TriCo common stock or North Valley common stock by the time the merger is completed. The opinions do not speak as of the time the merger will be completed or as of any date other than the date of such opinions. North Valley and TriCo do not anticipate asking their respective financial advisors to update their opinions. Consequently, North Valley’s board of directors’ recommendation that North Valley shareholders vote “FOR” the North Valley Merger proposal and TriCo’s board of directors’ recommendation that TriCo shareholders vote “FOR” the TriCo Merger proposal are each made as of the date of this joint proxy statement/prospectus. For a description of the opinions that TriCo and North Valley received from their respective financial advisors, please refer to the sections entitled “The Merger—Opinion of North Valley’s Financial Advisor” beginning on page 48 and “The Merger—Opinion of TriCo’s Financial Advisor” beginning on page 60.

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INFORMATION ABOUT THE COMPANIES

TriCo Bancshares

63 Constitution Drive

Chico, California 95973

(530) 898-0300

. TriCo Bancshares is a California-based bank holding company registered under the Bank Holding Company Act of 1956, as amended. As of December 31, 2013, TriCo had consolidated total assets of approximately $2.7 billion, total loans of approximately $1.7 billion, deposits of approximately $2.4 billion and shareholders’ equity of approximately $250.9 million. TriCo had 733 full-time equivalent employees of December 31, 2013.

TriCo’s principal business is to serve as the holding company for its bankingwholly-owned subsidiary Tri Counties Bank, a California-chartered commercial bank. TriCo’s principal asset is all of the capital stock of Tri Counties Bank. TriCo and Tri Counties Bank provides a unique brand of customerservice with solutions through 57 traditional stand-alone branches, nine in-store branches and two loan production offices in communities throughout Northern and Central California. The deposits of the bank are headquartered in Chico, California.insured by the FDIC up to applicable limits. Tri Counties Bank hasconducts a 38-year history in the banking industry. It operates 41 traditional branch locations and 22 in-store branch locations in 23 California counties. Tri Counties Bank offers financial services and provides a diversified line of products and services to consumers and businesses, which include demand, savings and time deposits, consumer finance, online banking, mortgage lending, and commercial banking throughout its market area. It operates a network of 69 ATMs and an automated Customer Service Department, available 24 hours a day, seven days a week.

TriCo’s stock is traded on the NASDAQ Global Select Market under the symbol “TCBK”.

Additional information about TriCo and its subsidiaries may be found in the documents incorporated by reference into this joint proxy statement/prospectus. Please also see the section entitled “Where You Can Find More Information” beginning on page v.

North Valley Bancorp

300 Park Marina Circle

Redding, California 96001

(530) 226-2900

North Valley Bancorp is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. As of December 31, 2013, North Valley had consolidated total assets of approximately $917.8 million, total gross loans of approximately $509.2 million, deposits of approximately $787.8 million and shareholders’ equity of approximately $93.4 million. North Valley had 297 full-time equivalent employees as of December 31, 2013.

North Valley’s primary function is to serve as the holding company for its bank subsidiary, North Valley Bank. North Valley Bank was incorporated as a California corporation in September 1972 and commenced operations as a California state-chartered commercial bank in 1973. North Valley Bank is a full-service commercial bank headquartered in Redding, California. North Valley Bank operates twenty-two commercial banking offices in Shasta, Humboldt, Del Norte, Mendocino, Yolo, Sonoma, Placer and Trinity Counties in Northern California,business including two in-store supermarket branches and six Business Banking Centers. Its operations include accepting demand, savings, and money market, rate deposit accountssavings and time deposits and making commercial, real estate, and consumer loans. North Valley BankIt also offers installment note collection, issues cashier’s checks, sells travelers checks and provides safe deposit boxes and other customary banking services. Most of Tri Counties Bank’s customers are retail customers and small tomedium-sized businesses. In addition, certain securities broker-dealerthe bank provides some specialized services to its customers. These services include courier deposit services to key locations or customers throughout its service area, SBA loans, factoring and standardized investment adviceasset-based loans and Internet banking.

As of December 31, 2017, TriCo had, on a consolidated basis, total assets of $4.8 billion, total shareholders’ equity of $505.8 million and total deposits of $4.0 billion. At December 31, 2017, TriCo had gross loans of $2.9 billion.

TriCo’s principal executive offices are made availablelocated at 63 Constitution Drive, Chico, California 95973 and its telephone number is (530)898-0300.

FNB Bancorp. Headquartered in South San Francisco, California, FNBB is the bank holding company for its wholly-owned subsidiary, First National Bank of Northern California, which we refer to as First National Bank, a national banking association headquartered in Daly City, California. First National Bank is a community-oriented financial services firm which provides banking products and services to small and medium sized businesses and consumers through 12 retail branches located on the San Francisco Peninsula.

As of December 31, 2017, FNBB, on a consolidated basis, had total assets of $1.3 billion, gross loans of $840 million, total shareholders’ equity of $119.3 million and total deposits of $1.1 billion.

FNBB’s principal executive offices are located at 975 El Camino Real, South San Francisco, California 94080 and its telephone number is (650)588-6800.



The Merger (Page [])

The merger agreement is attached to this joint proxy statement/prospectus as Appendix A, and is incorporated by reference. Please read the entire merger agreement. It is the legal document that governs the merger. Pursuant to the terms and conditions set forth in the merger agreement, TriCo has agreed to acquire FNBB in a transaction in which FNBB will merge with and into TriCo, with TriCo as the surviving corporation. Immediately following the consummation of the merger, First National Bank will merge with and into Tri Counties Bank, with Tri Counties Bank as the surviving corporation. The parties expect to complete the mergers during the second quarter of 2018.

TriCo’s Reasons for the Merger and Factors Considered by TriCo’s Board of Directors (Page [])

As part of its business strategy, TriCo evaluates opportunities to acquire bank holding companies, banks and other financial institutions, which is an important element of its strategic plan. The proposed acquisition of FNBB is consistent with this strategy. The proposed acquisition of FNBB will (i) extend TriCo’s geographic footprint into the San Francisco Peninsula, (ii) create opportunities for Tri Counties Bank to provide additional products and services to FNBB customers and other potential customers, and (iii) strengthen Tri Counties Bank’s deposit base with a mature base of North Valley Bank through a contractual arrangement with Essex Corporation, a New York corporation, and Essex National Securities,core deposits.

Based on TriCo’s reasons for the merger described in this joint proxy statement/prospectus, including the fairness opinion of Stephens Inc., an independent investment banking firm, the TriCo board of directors believes that the merger is fair to and in the best interests of TriCo’s shareholders and the TriCo board of directors unanimously recommends that TriCo shareholders vote“FOR” approval of the TriCo merger proposal. For a registered broker-dealer.discussion of the circumstances surrounding the merger and the factors considered by TriCo’s board of directors in approving the merger agreement, see “The Merger—TriCo’s Reasons for the Merger” beginning on page [●].

North Valley’sFNBB’s Reasons for the Merger and Factors Considered by FNBB’s Board of Directors (Page [])

Based on FNBB’s reasons for the merger described in this joint proxy statement/prospectus, including the fairness opinion of The Courtney Group, LLC, which we refer to as Courtney, an independent investment banking firm, the FNBB board of directors believes that the merger is fair to FNBB shareholders and in their best interests, and unanimously recommends that FNBB shareholders vote “FOR” approval of the merger agreement and the merger. For a discussion of the circumstances surrounding the merger and the factors considered by FNBB’s board of directors in approving the merger agreement, see “The Merger—FNBB’s Reasons for the Merger” beginning on page [●].

Opinion of TriCo’s Financial Advisor (Page [])

Stephens Inc. delivered its written opinion to TriCo’s board of directors that, as of December 11, 2017, and based upon and subject to assumptions made, procedures followed, matters considered and limitations and qualification on the review undertaken set forth in its opinion, the merger consideration to be paid by TriCo to FNBB shareholders in the merger pursuant to the merger agreement was fair, from a financial point of view, to TriCo.

The full text of the written opinion of Stephens Inc., dated December 11, 2017, which sets forth assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken is attached as Appendix C to this joint proxy statement/prospectus. TriCo’s shareholders should read the opinion in its entirety. Stephens Inc. provided its opinion for the information and assistance of TriCo’s board of directors in connection with its consideration of the transaction. The opinion of Stephens Inc. has not been updated prior to the date of this joint proxy statement/prospectus and does not reflect any changes in circumstances since



December 11, 2017. The Stephens Inc. opinion does not address the underlying business decision to proceed with the merger and is not a recommendation as to how any holder of TriCo common stock should vote on matters to be considered at the TriCo special meeting.

Opinion of FNBB’s Financial Advisor (Page [])

In connection with the merger, Courtney, delivered its opinion to FNBB’s board of directors to the effect that, as of December 11, 2017, and based upon and subject to the assumptions made, procedures followed, matters considered and limitations and qualification on the review undertaken by Courtney in providing its opinion, the exchange ratio was fair, from a financial point of view, to the holders of FNBB common stock.

The full text of the written opinion of Courtney, dated December 11, 2017, which sets forth the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Courtney is tradedattached as Appendix B to this joint proxy statement/prospectus. FNBB’s shareholders should read the opinion in its entirety. The opinion of Courtney has not been updated prior to the date of this joint proxy statement/prospectus and does not reflect any change in circumstance or assumptions after December 11, 2017. Courtney provided its opinion for the information and assistance of FNBB’s board of directors in connection with its consideration of the transaction. Courtney’s opinion is not a recommendation as to how any holder of FNBB common stock should vote on matters to be considered at the FNBB special meeting.

FNBB Shareholders Will Receive Shares of TriCo Common Stock for Each Share of FNBB Common Stock Exchanged in the Merger (Page [])

At the effective time of the merger, each outstanding share of FNBB common stock will, by virtue of the merger and without any action on the part of an FNBB shareholder, be converted into the right to receive 0.98 shares of TriCo common stock, which is referred to as the exchange ratio. The exchange ratio is subject to potential adjustment as set forth in the merger agreement and described elsewhere in this joint proxy statement/prospectus. Cash will be paid in lieu of any fractional share.

Aggregate Merger Consideration.

The total consideration to be paid by TriCo to the FNBB shareholders in connection with the merger is referred to in this joint proxy statement/prospectus as the aggregate merger consideration. The term aggregate merger consideration does not include the consideration, if any, payable to holders of options to purchase shares of FNBB common stock, which we refer to as FNBB options.

Upon completion of the merger and based on a $         closing price of TriCo’s common stock of $[●] on [●], 2018, the last practical date before the date of this joint proxy statement prospectus on approximately $[●] million of aggregate merger consideration consisting of approximately [●] shares of TriCo common stock will be payable to the FNBB shareholders. The foregoing sentence does not include the payment of cash to holders of FNBB options upon the closing of the merger and assumes that (i) there are [●] shares of FNBB common stock outstanding at the closing, (ii) the FNBB shareholders will receive an aggregate of [●] shares of TriCo common stock after applying the exchange ratio of 0.98, and (iii) no FNBB options are exercised prior to the closing of the merger that would result in such shares of FNBB stock being converted into the right to receive the merger consideration in the merger.

Fractional Shares.

No fractional shares of TriCo common stock will be issued, and in lieu thereof, each holder of FNBB common stock who would otherwise be entitled to a fractional share will receive an amount in cash, without interest, determined by multiplying such fractional interest by the average closing price per share of TriCo common stock, as reported on the NASDAQ Global Select Market, for the 20 trading days ending on and including the fifth trading day prior to the closing date of the merger, rounded to the nearest whole cent.



Potential Adjustment to Exchange Ratio.

While the exchange ratio is generally fixed at 0.98 shares of TriCo common stock, the merger agreement includes a trading collar that could result in termination of the merger agreement or a change to the exchange ratio if the TriCo average closing price is less than $33.18 or greater than $49.78.

TriCo can elect to terminate the merger agreement if both (i) the TriCo average closing price is greater than $49.78, which equals 120% of the average share price of TriCo common stock for the 20trading-day period up to and including December 8, 2017, which was $41.48, or the “initial TriCo trading price”, and (ii) TriCo common stock outperforms the KBW Nasdaq Regional Banking Index by more than 20%, unless FNBB agrees that the exchange ratio will be reduced in accordance with the terms of the merger agreement and fewer shares of TriCo common stock will be issued to FNBB shareholders on a per share basis. Conversely, FNBB can terminate the merger agreement if both (i) the TriCo average closing price is less than $33.18, which is equivalent to 80% of the initial TriCo trading price, and (ii) TriCo common stock underperforms the KBW Nasdaq Regional Banking Index by more than 20%, unless TriCo agrees that the exchange ratio will be increased in accordance with the terms of the merger agreement and more shares of TriCo common stock will be issued to FNBB shareholders on a per share basis.

Treatment of Outstanding FNBB Options (Page [])

The board of directors of FNBB will approve the acceleration of the vesting of FNBB options prior to the closing of the merger.

Each outstanding and unexercised FNBB option will be canceled in exchange for a cash payment equal to the number of shares of FNBB common stock that are subject to such FNBB option immediately prior to the closing of the merger multiplied by the amount, if positive, by which the product of the exchange ratio multiplied by the average closing share price exceeds the per share exercise price under such FNBB option.

Transmittal Materials (Page [])

After Computershare, which will be the exchange agent in the merger, has received and processed the transmittal materials following the closing of the merger, FNBB shareholders will be sent the TriCo common stock and any cash in lieu of fractional shares to which they are entitled. If an FNBB shareholder holds shares in street name, he or she will receive information from his or her bank, broker or other nominee advising such FNBB shareholder of the process for receiving the TriCo common stock and any cash in lieu of fractional shares to which he or she is entitled.

Each FNBB shareholder will need to surrender his or her FNBB common stock certificates or follow instructions for the transfer of shares of FNBB common stock held in book-entry form, to receive the appropriate merger consideration. FNBB shareholders should not send any certificates now. Each FNBB shareholder will receive detailed instructions on how to exchange his or her share certificates or book-entry shares along with transmittal materials promptly following the closing of the merger.

Per Share Market Price and Dividend Information (Page [])

Shares of TriCo common stock currently trade on the NASDAQ Global Select Market under the symbol “NOVB”.“TCBK.” Shares of FNBB common stock currently trade on the NASDAQ Global Select Market under the symbol “FNBG.”

Additional information about North ValleyThe following table sets forth the closing sale prices of (i) TriCo common stock as reported on the NASDAQ Global Select Market, and its subsidiaries may be found(ii) FNBB common stock as reported on the NASDAQ Global Select Market, in each



case on December 8, 2017, the documents incorporated by reference intolasttrading-day before TriCo announced the merger, and on [●], 2018, the last practicabletrading-day before the distribution of this joint proxy statement/prospectus. PleaseTo help illustrate the market value of the per share merger consideration to be received by FNBB’s shareholders, the following table also seepresents the section entitled “Where You Can Find More Information”equivalent market value per share of FNBB common stock as of December 11, 2017 and [●], 2018, which were determined by multiplying the closing price for the TriCo common stock on those dates by the exchange ratio of 0.98 of a share of TriCo common stock for each share of FNBB common stock. See “The Merger—The Merger Consideration” beginning on page v.

[●] for additional information about the merger consideration to be received by holders of FNBB common stock.

 

   TriCo
Common Stock
   FNBB
Common Stock
   Equivalent
Market
Value Per Share of
FNBB
 

At December 11, 2017

  $41.64   $35.34   $40.81 

At [●], 2018

      

28The market price of TriCo common stock and FNBB common stock will fluctuate prior to the date of each of TriCo’s and FNBB’s special meeting and the date such FNBB shareholder receives the merger consideration. TriCo and FNBB shareholders should obtain a current price quotation for the shares of TriCo common stock to update the implied value for a share of FNBB common stock before voting on the merger proposals.


Each of TriCo and FNBB has been paying a regular quarterly dividend on its common stock. Pursuant to the merger agreement, FNBB may continue to pay its regular quarterly cash dividend equal to the rate paid during the fiscal quarter immediately preceding the date of the merger agreement through the closing of the merger, with record and payment dates consistent with past practice. See “The Merger—Business Pending the Merger” beginning on page [●].

NORTH VALLEY SPECIAL MEETING OF SHAREHOLDERSMaterial Federal Income Tax Consequences of the Merger (Page [])

The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, and it is a condition to completion of the merger that TriCo and FNBB receive a legal opinion to that effect. If the merger is completed, the merger consideration that will be paid to the holders of FNBB common stock will consist of shares of TriCo common stock (and cash for any fractional shares).

Assuming the merger qualifies as a reorganization, subject to the limitations and more detailed discussion set forth in “The Merger—Material Federal Income Tax Consequences” of this joint proxy statement/prospectus, an FNBB shareholder that is a U.S. holder generally will not recognize gain or loss on such exchange, other than with respect to cash received in lieu of fractional shares of TriCo common stock.

Tax matters are complicated, and the tax consequences of the merger to a particular FNBB shareholder will depend in part on such shareholder’s individual circumstances. Accordingly, each FNBB shareholder is urged to consult his or her own tax advisor for a full understanding of the tax consequences of the merger to such shareholder, including the applicability and effect of federal, state, local and foreign income and other tax laws.



Date, Time and PlaceLocation of the TriCo Special Meeting (Page [])

The TriCo special meeting of North Valley shareholders will be held at [] at [[●], Pacific time,Time, on [[●], 2014. On or about [[●], 2014, North Valley commenced mailing this document and the enclosed form of proxy to its shareholders entitled to vote2018 at the North Valley special meeting.

Purpose of North Valley Special Meeting

890 Fortress Street, Chico, California 95973. At the North ValleyTriCo special meeting, North ValleyTriCo shareholders will be asked to:

 

approve the merger agreement and the transactions contemplated therein, including the merger and the issuance of TriCo common stock in connection with the merger; and

approve a proposal to adjourn the TriCo special meeting if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the TriCo special meeting to approve the TriCo merger proposal.

Date, Time and adoptLocation of the FNBB Special Meeting (Page [])

The FNBB special meeting will be held at [●], Pacific Time, on [●], 2018 at The Basque Cultural Center, 599 Railroad Avenue, California 94080. At the FNBB special meeting, FNBB shareholders will be asked to:

approve the merger agreement a copy of which is attached as Appendix A to this document, which is referred to asand the North Valley Merger proposal;transactions contemplated therein, including the merger;

 

approve, on an advisory(non-binding) basis, specifiedthe compensation that may becomebe payable to the named executive officers of North ValleyFNBB in connection with the merger, which is referred to as the North Valley Advisory (Non-Binding) Proposal on Specified Compensation;merger; and

 

approve one or more adjournments ofa proposal to adjourn the North ValleyFNBB special meeting if necessary or appropriate, including adjournments to permit further solicitation of proxies in favorif there are not sufficient votes at the time of the North Valley Merger proposal, which is referredFNBB special meeting to asapprove the North Valley AdjournmentFNBB merger proposal.

Recommendation of the North Valley Board of Directors

The North Valley board of directors unanimously recommends that you vote“FOR” the North Valley Merger proposal,“FOR” the North Valley Advisory (Non-Binding) Proposal on Specified Compensation and“FOR” the North Valley Adjournment proposal (if necessary or appropriate). Please see the section entitled “The Merger—Reasons For the Merger and Recommendation of the North Valley Board of Directors” beginning on page 45.

Each of the directors of North Valley has entered into a shareholder agreement with TriCo and North Valley, pursuant to which they have agreed to vote“FOR” the North Valley Merger proposal and“FOR” the North Valley Adjournment proposal (if necessary or appropriate). For more information regarding the shareholder agreements, please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96.

North Valley Record Date and QuorumVoting Rights for the TriCo Special Meeting (Page [])

The North Valley boardEach TriCo shareholder is entitled to vote at the TriCo special meeting if he or she owned shares of directors has fixedTriCo common stock as of the close of business on [[●], 2014 as2018, the record date for determining the holdersTriCo special meeting. Each TriCo shareholder will have one vote at the TriCo special meeting for each share of North ValleyTriCo common stock entitledthat he or she owned on that date.

TriCo shareholders of record may vote by mail, by telephone or by the Internet or by attending the TriCo special meeting and voting in person. Each proxy returned to receive noticeTriCo by a holder of TriCo common stock, which is not revoked, will be voted in accordance with the instructions indicated thereon. If no instructions are indicated on a signed TriCo proxy that is returned, such proxy will be voted “FOR” approval of the TriCo merger proposal, andFOR” the proposal to adjourn the TriCo special meeting if necessary to permit further solicitation of proxies on the TriCo merger proposal. TriCo shareholders who hold their shares in street name must follow the instructions of their bank, broker or other nominee to have their shares voted at the TriCo special meeting.

Record Date and Voting Rights for the FNBB Special Meeting (Page [])

Each FNBB shareholder is entitled to vote at the North ValleyFNBB special meeting if he or she owned shares of FNBB common stock as of the close of business on [●], 2018, the record date for the FNBB special meeting. Each FNBB shareholder will have one vote at the special meeting for each share of FNBB common stock that he or she owned on that date.

FNBB shareholders of record may vote by mail, by telephone or by the Internet or by attending the FNBB special meeting and voting in person. Each proxy returned to FNBB by a holder of FNBB common stock, which is not revoked, will be voted in accordance with the instructions indicated thereon. If no instructions are indicated on a signed FNBB proxy that is returned, such proxy will be voted “FOR” approval of the merger agreement,“FOR”



the proposal to approve, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and “FOR” the proposal to adjourn the FNBB special meeting if necessary to permit further solicitation of proxies on the proposal to approve the FNBB merger proposal. FNBB shareholders who hold their shares in street name must follow the instructions of their bank, broker or other nominee to have their shares voted at the FNBB special meeting.

AsApproval of the North ValleyTriCo Merger Proposal Requires the Affirmative Vote of the Holders of a Majority of the Issued and Outstanding Shares of TriCo Common Stock (Page [])

The affirmative vote of the holders of a majority of issued and outstanding shares of TriCo common stock is necessary to approve the TriCo merger proposal on behalf of TriCo. At the close of business on the record date, there were [[●] shares of North ValleyTriCo common stock outstanding held by approximately [●] holders of record. Each holder of record of TriCo common stock on the record date is entitled to one vote for each share held on all matters to be voted upon at the TriCo special meeting. If a TriCo shareholder does not vote, it will have the same impact on the proposal to approve as a vote against the merger proposal.

Approval of the FNBB Merger Proposal Requires the Affirmative Vote of Holders of a Majority of the Issued and Outstanding Shares of FNBB Common Stock (Page [])

The affirmative vote of the holders of a majority of the issued and outstanding shares of FNBB common stock is necessary to approve the FNBB merger proposal on behalf of FNBB. At the close of business on the record date, there were [●] shares of FNBB common stock outstanding and entitled to vote, at the North Valley special meeting held by [[●] holders of record. Each shareholder of North Valleyrecord of FNBB common stock entitleson the holderrecord date is entitled to one vote at the North Valley special meetingfor each share held on each proposalall matters to be considered at the North Valley special meeting.

A majority of the shares entitled to vote, represented either in person or by a properly executed proxy, will constitute a quorumvoted upon at the special meeting. Votes cast will be counted by the inspectors of election at the special meeting. The inspectors will treat abstentions and “broker non-votes” as shares that are present and entitled to vote for purposes of determining the presence of a quorum, but they are not treated as shares voted on any proposal. Broker non-votes are shares held by brokers or nominees as to which instructions have not been received from the beneficial owners or persons entitled to vote and the broker or nomineeIf an FNBB shareholder does not have discretionary voting power under applicable rules of the stock exchange or other self-regulatory organization of which the broker or nominee is a member.

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As of the record date, directors and executive officers of North Valley owned and were entitled to vote, [] shares of North Valley common stock, representing approximately []% of the shares of North Valley common stock outstanding on that date. North Valley currently expects that North Valley’s directors and executive officers will vote their shares in favor of the North Valley Merger proposal, the North Valley Advisory (Non-Binding) Proposal on Specified Compensation, and the North Valley Adjournment proposal. The members of the board of directors of North Valley have each entered into a shareholder agreement with respect to the merger and have agreed to vote their shares of North Valley common stock in favor of the North Valley Merger proposal and the North Valley Adjournment proposal. For further information, please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96. As of the record date, TriCo beneficially held [] shares of North Valley common stock.

Participants in the North Valley ESOP

If you hold shares through the North Valley employee stock ownership plan and trust, as amended and restated effective January 1, 2010, the proxy card represents a voting instruction to the trustee as to the number of shares in your plan account. Each participant in the North Valley ESOP may direct the trustee as to the manner in which shares of North Valley common stock allocated to the participant’s plan account are to be voted. Shares allocated to accounts for which no voting instructions are given will be voted by the trustee in the same proportion as the shares for which voting instructions have been received by the trustee, as provided in the North Valley ESOP. The deadline for returning your voting instructions to the trustee is [].

Required Vote

Required Vote to Approve the North Valley Merger Proposal

The affirmative vote of a majority of the outstanding shares of North Valley common stock entitled to vote is required to approve the North Valley Merger proposal.

Required Vote to Approve the North Valley Advisory (Non-Binding) Proposal on Specified Compensation and the North Valley Adjournment Proposal

Assuming a quorum is present, the affirmative vote of a majority of the shares of North Valley common stock represented (in person or by proxy) at the North Valley special meeting and entitled to vote on the proposal is required to approve each of the North Valley Advisory (Non-Binding) Proposal on Specified Compensation and the North Valley Adjournment proposal.

Treatment of Abstentions; Failure to Vote

For purposes of the North Valley special meeting, an abstention occurs when a North Valley shareholder attends the North Valley special meeting, either in person or by proxy, but abstains from voting.

For the North Valley Merger proposal, an abstention or a failure to voteit will have the same effect as a vote cast“AGAINST” this proposal.

Foragainst the North Valley Advisory (Non-Binding) Proposal on Specified Compensation andmerger agreement.

Holders of [●] shares of FNBB common stock, representing approximately 20% of the North Valley Adjournment proposal, abstentions willoutstanding shares of FNBB common stock, have no effect on such proposals, unless there are insufficient votessigned shareholder agreements with TriCo agreeing to vote their shares of FNBB common stock in favor of these proposals, such that the affirmative votes constitute less than a majoritymerger agreement.

Management of the required quorum. In such cases, abstentions will have the same effect as a vote“AGAINST” these proposals.

30


Voting on Proxies; Incomplete Proxies

Giving a proxy means that a North Valley shareholder authorizes the persons named in the enclosed proxy card to vote its sharesTriCo Owns Shares which may be Voted at the North Valley special meeting in the manner it directs. A North Valley shareholder may vote by proxy or in person at the North Valley special meeting. If you hold your shares of North Valley common stock in your name as a shareholder of record, to submit a proxy, you, as a North Valley shareholder, may use one of the following methods:

By telephone: Use any touch-tone telephone to vote your proxy 24 hours a day, seven days a week. Have your proxy card handy when you call. You will be prompted to enter your control number, which is located on your proxy card, and then follow the directions given.

Through the Internet: Use the Internet to vote your proxy 24 hours a day, seven days a week. Have your proxy card handy when you access the website. You will be prompted to enter your control number, which is located on your proxy card, to create and submit an electronic ballot.

By mail: Complete and return the proxy card in the enclosed envelope. The envelope requires no additional postage if mailed in the United States.

North Valley requests that North Valley shareholders vote by telephone, over the Internet or by completing, signing and dating the accompanying proxy and returning it to North Valley as soon as possible in the enclosed postage-paid envelope. When the accompanying proxy is returned properly executed, the shares of North Valley stock represented by it will be voted at the North Valley special meeting in accordance with the instructions contained on the proxy card.

If any proxy is returned without indication as to how to vote, the shares of North Valley common stock represented by the proxy will be voted as recommended by the North Valley board of directors. Unless a North Valley shareholder checks the box on its proxy card to withhold discretionary authority, the proxy holders may use their discretion to vote on any other matters voted upon at the North Valley special meeting.

If a North Valley shareholder’s shares are held in “street name” by a broker, bank or other nominee, the shareholder should check the voting form used by that firm to determine whether it may vote by telephone or the Internet.

Every North Valley shareholder’s vote is important. Accordingly, each North Valley shareholder should complete, sign, date and return the enclosed proxy card, or vote via the Internet or by telephone, whether or not the North Valley shareholder plans to attend the North Valley special meeting in person.

Shares Held in Street Name

If you are a North Valley shareholder and your shares are held in “street name” through a bank, broker or other holder of record, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by the bank or broker. You may not vote shares held in street name by returning a proxy card directly to North Valley or by voting in person at the North Valley special meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank or other nominee. Further, brokers, banks or other nominees who hold shares of North Valley common stock on behalf of their customers may not give a proxy to North Valley to vote those shares with respect to any of the proposals without specific instructions from their customers, as brokers, banks and other nominees do not have discretionary voting power on these matters. Therefore, if you are a North Valley shareholder and you do not instruct your broker, bank or other nominee on how to vote your shares:

your broker, bank or other nominee may not vote your shares on the North Valley Merger proposal, which broker non-votes will have the same effect as a vote“AGAINST” this proposal; and

your broker, bank or other nominee may not vote your shares on the North Valley Advisory (Non-Binding) Proposal on Specified Compensation or the North Valley Adjournment proposal, which broker non-votes will have no effect on the vote count for these proposals.

31


Revocability of Proxies and Changes to a North Valley Shareholder’s Vote

A North Valley shareholder has the power to change its vote at any time before its shares of North Valley common stock are voted at the North Valley special meeting by:

sending a notice of revocation to North Valley Bancorp, Attention: Corporate Secretary, 300 Park Marina Circle, Redding, California 96001, stating that you would like to revoke your proxy;

logging onto the Internet website specified on your proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card, in each case if you are eligible to do so and following the instructions on the proxy card;

sending a completed proxy card bearing a later date than your original proxy card; or

attending the North Valley special meeting and voting in person.

If you choose any of the first three methods, you must take the described action no later than the beginning of the North Valley special meeting. If you choose to send a completed proxy card bearing a later date than your original proxy card or a notice of revocation, the new proxy card or notice of revocation must be received before the beginning of the North Valley special meeting. If you have instructed a bank, broker or other nominee to vote your shares of North Valley common stock, you must follow the directions you receive from your bank, broker or other nominee in order to change or revoke your vote.

Solicitation of Proxies

The cost of solicitation of proxies from North Valley shareholders will be borne by North Valley. North Valley will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of common stock. In addition to solicitations by mail, North Valley’s directors, officers and regular employees may solicit proxies personally or by telephone without additional compensation.

Attending the North ValleyTriCo Special Meeting (Page [])

Subject to space availability, all North Valley shareholders asAs of the record date, or their duly appointed proxies, may attend the North Valley special meeting. Since seating is limited, admission to the North Valley special meeting will be onexecutive officers and directors of TriCo, as a first-come, first-served basis. Registration and seating will begin at [], Pacific time.

If you hold yourgroup, held shares of North ValleyTriCo common stock, or approximately [●]% of the outstanding TriCo common stock. While the executive officers and directors of TriCo have not entered into voting agreements agreeing to vote their shares of TriCo common stock in your name as a shareholderparticular manner, it is anticipated that the executive officers and directors of record and you wishTriCo will vote consistent with the recommendation of the TriCo board of directors, which is to attendvote “FOR the North Valley special meeting, please bring your proxy and evidenceTriCo merger proposal.

Management of your stock ownership, such as your most recent account statement, toFNBB Owns Shares which may be Voted at the North Valley special meeting. You must also bring valid photo identification.FNBB Special Meeting (Page []) (Page [])

If your shares of North Valley common stock are held in “street name” in a stock brokerage account or by a bank or nominee and you wish to attend the North Valley special meeting, you need to bring a copy of a bank or brokerage statement to the North Valley special meeting reflecting your stock ownership asAs of the record date. You must also bring valid photo identification.

32


NORTH VALLEY PROPOSAL: MERGER

As discussed throughout this joint proxy statement/prospectus, North Valley is asking its shareholders to approvedate, the North Valley Merger proposal. Holdersexecutive officers and directors of North ValleyFNBB, as a group, held [●] shares of FNBB common stock, should read carefully this joint proxy statement/prospectusor approximately 20% of the outstanding FNBB common stock, and all of such directors and substantially all of such executive officers have each entered into shareholder agreements with TriCo and FNBB pursuant to which they have agreed, among other things, in its entirety, including the appendices, for more detailed information concerningtheir capacity as shareholders of FNBB, to vote their shares of FNBB common stock in favor of the merger agreement. The form of shareholder agreement and the merger. In particular, holders of North Valley common stock are directedis attached as Annex A to the merger agreement, a copy of which is attached as Appendix A to this joint proxy statement/prospectus.

VoteFNBB is Prohibited from Soliciting Other Offers (Page [])

FNBB has agreed that, so long as the merger agreement had not been terminated, it will not solicit, initiate, encourage or, subject to some limited exceptions, engage in discussions with any third party other than TriCo



regarding extraordinary transactions such as a merger, business combination or sale of a material amount of its assets or capital stock.

TriCo and FNBB Must Meet Several Conditions to Complete the Merger (Page [])

Completion of the merger depends on meeting a number of conditions, including the following:

shareholders of TriCo must approve the TriCo merger proposal;

shareholders of FNBB must approve the merger agreement and the merger;

TriCo and FNBB must receive all required regulatory approvals for the merger, and any waiting periods required by law must have passed and no such approval may contain any condition (other than conditions or requirements related to remedial actions) that TriCo’s board of directors reasonably determines in good faith would materially reduce the economic benefits of the merger to such a degree that, had such condition been known, TriCo, in its reasonable discretion, would not have entered into the merger agreement;

there must be no law, injunction or order enacted or issued preventing completion of the merger;

the TriCo common stock to be issued in the merger must have been approved for trading on the NASDAQ Global Select Market;

the representations and warranties of each of TriCo and FNBB in the merger agreement must be true and correct, subject to the materiality standards provided in the merger agreement;

TriCo and FNBB must have complied in all material respects with their respective obligations in the merger agreement;

TriCo and FNBB must have received a written opinion that the merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code;

TriCo must have received an opinion from VP Tax, Inc., or another nationally recognized accounting firm reasonably acceptable to TriCo, that no agreement, contract or arrangement to which any employee of FNBB is a party will result in the payment of any amount that would not be deductible by reason of Section 280G of the Code, as determined without regard to Section 280G(b)(4) of the Code; and

as of the closing date, FNBB’s tangible common equity (as defined and subject to certain specified adjustments set forth in the merger agreement) must not be less than $119 million; and

all required regulatory approvals for the merger of First National Bank with and into Tri Counties Bank must be received, any waiting periods required by law must have passed and there must be no law, injunction or order enacted or issued preventing completion of the merger of First National Bank and Tri Counties Bank.

Unless prohibited by law, either TriCo or FNBB could elect to waive a condition that has not been satisfied and complete the merger. The parties cannot be certain whether or when any of the conditions to the merger will be satisfied, or waived where permissible, or whether or when the merger will be completed.

TriCo and FNBB Have Filed Applications Seeking Regulatory Approvals Required to Complete the Merger (Page [])

To complete the merger, the parties need the prior approval from the Board of Governors of the Federal Reserve System, which we refer to as the Federal Reserve, the Federal Deposit Insurance Corporation, which we refer to as the FDIC, and North Valley Board Recommendationthe California Department of Business Oversight, which we refer to as the CDBO, or confirmation that no application is required. The U.S. Department of Justice is also able to provide input into the



approval process of federal banking agencies and will have between 15 and 30 days following any approval of a federal banking agency to challenge the approval on antitrust grounds. First National Bank is also required to notify its primary federal regulator, which is the Office of the Comptroller of the Currency, which we refer to as the OCC, of its intention to merge with Tri Counties Bank. TriCo and FNBB have filed all necessary applications and notices with the Federal Reserve, the FDIC, the CDBO and the OCC. TriCo and FNBB cannot predict whether the required regulatory approvals will be obtained or whether any such approvals will have conditions which would be detrimental to TriCo following completion of the merger.

TriCo and FNBB May Terminate the Merger Agreement (Page [])

TriCo and FNBB can mutually agree at any time to terminate the merger agreement before completing the merger, even if shareholders of TriCo and/or FNBB have already voted to approve it.

TriCo or FNBB can also terminate the merger agreement:

if the other party breaches any of its representations, warranties, covenants or agreements under the merger agreement that (i) cannot be or has not been cured within 30 days of the giving of written notice to the breaching party or parties and (ii) would entitle thenon-breaching party or parties not to consummate the merger;

if the merger is not consummated by September 30, 2018, except to the extent that the failure to consummate the merger by that date is due to (i) the terminating party’s failure to perform or observe its covenants and agreements in the merger agreement, or (ii) the failure of any of the FNBB shareholders (if FNBB is the party seeking to terminate) to perform or observe their respective covenants under the relevant shareholder agreement; or

if any required governmental approval of the merger has been denied by finalnon-appealable action or an application for approval of the merger has been permanently withdrawn at the request of a governmental authority, provided that no party has the right to terminate the merger agreement if the denial is due to the terminating party’s failure to perform or observe its covenants in the merger agreement.

In addition, TriCo may terminate the merger agreement if the shareholders of FNBB do not approve the FNBB merger proposal and TriCo may terminate the merger agreement at any time prior to the TriCo special meeting if the board of directors of FNBB withdraws or modifies its recommendation to the FNBB shareholders that the merger agreement be approved in any way which is adverse to TriCo, or breaches its covenants requiring the calling and holding of the FNBB special meeting to consider the merger agreement and prohibiting the solicitation of other offers. TriCo also may terminate the merger agreement if a third party commences a tender offer or exchange offer for 10% or more of the outstanding FNBB common stock and the board of directors of FNBB recommends that FNBB shareholders tender their shares in the offer or otherwise fails to recommend that they reject the offer within a specified period.

FNBB may terminate the merger agreement if the shareholders of TriCo do not approve the TriCo merger proposal in connection with the merger and FNBB may terminate the merger agreement if FNBB’s board of directors has effected a permissible change in recommendation to its shareholders with respect to the merger agreement, provided that FNBB is not then in breach of any representation, warranty, covenant or agreement contained in the merger agreement and, provided further, that any such termination shall not be effective until FNBB has paid TriCo the termination fee required by the merger agreement.

TriCo may terminate the merger agreement if the TriCo closing average price is greater than $49.78 and TriCo common stock outperforms the KBW Nasdaq Regional Banking Index by more than 20%, but FNBB can elect to prevent the termination by allowing the exchange ratio to adjust downward as provided in the merger agreement.



Conversely, FNBB may terminate the merger agreement because the TriCo average closing price is less than $33.18 and TriCo common stock underperforms the KBW Nasdaq Regional Banking Index by more than 20%, but TriCo can elect to prevent the termination by allowing the exchange ratio to adjust upward as provided in the merger agreement. See “The Merger—Merger Consideration—Potential Adjustment to Exchange Ratio on page [●]

Termination Fee (Page [])

FNBB must pay TriCo a termination fee of $12.0 million if the merger agreement is terminated under specified circumstances.

TriCo and FNBB May Amend the Merger Agreement (Page [])

The parties may amend or supplement the merger agreement by written agreement at any time before the merger actually takes place; provided, however, no amendment or supplement that by law requires further approval by the shareholders of TriCo or FNBB may be made after the special meeting, of TriCo or FNBB, as the case may be, without first obtaining such additional shareholder approval.

FNBB’s Directors and Officers Have Some Interests in the Merger that are in Addition to or Different than the Interests of FNBB Shareholders (Page [])

FNBB directors and officers have interests in the merger as individuals that are in addition to, or different from, their interests as shareholders of FNBB, which are:

FNBB’s directors and officers will receive, upon consummation of the merger, cash payments in exchange for the cancellation of their FNBB options and, in addition, the vesting of their FNBB stock options will be accelerated;

the agreement of TriCo to honor indemnification obligations of FNBB for a period of six years, as well as to purchase liability insurance for FNBB’s directors and officers for six years following the merger, subject to the terms of the merger agreement;

cash payments to certain officers of FNBB in the aggregate amount of approximately $2.25 million, on apre-tax basis, pursuant to the terms of their respective employment-related severance payment or retention agreements with FNBB;

the appointment of two directors of FNBB, who are not yet identified, to serve on the boards of directors of TriCo and Tri Counties Bank effective upon completion of the merger; and

James Black, President and a director of FNBB and First National Bank, Anthony Clifford, Executive Vice President and Chief Operating Officer and a director of FNBB and First National Bank and Randy Brugioni, Senior Vice President and Chief Lending Officer of First National Bank, have entered into employment agreements with TriCo and Tri Counties Bank, each of which will be effective as of the closing of the merger, and which provide compensation for continued employment with TriCo and Tri Counties Bank following the merger.

The board of directors of TriCo and FNBB were aware of the foregoing interests and considered them, among other matters, in approving the merger agreement and the merger.

Accounting Treatment of the Merger (Page [])

The merger will be accounted for under the acquisition method of accounting under U.S. generally accepted accounting principles, or GAAP. In accordance with current accounting guidance, the mergers will be accounted for using the acquisition method. The result of this method is that the assets and liabilities of TriCo will be



carried forward at their recorded amounts, TriCo’s historical operating results will be unchanged for the prior periods being reported on and the assets and liabilities of FNBB will be adjusted to fair value at the date of the merger. In addition, all identified intangibles will be recorded at their fair values and included as part of the net assets acquired. To the extent that the purchase price, consisting of cash plus the number of TriCo common shares to be issued to former FNBB shareholders at fair value, exceeds the fair value of the net assets acquired, including identifiable intangible assets, from FNBB at the date of the mergers, that amount will be reported as goodwill. In accordance with current accounting guidance, goodwill will not be amortized but, in general, will be evaluated for impairment annually. Identified intangibles will be amortized over their estimated lives. Further, the acquisition method of accounting results in the operating results of FNBB being included in the operating results of TriCo beginning from the date of completion of the merger.

Shareholders of TriCo and FNBB Have Different Rights (Page [])

The rights of shareholders of TriCo differ from the rights of shareholders of FNBB. Following the closing of the merger, shareholders of FNBB will receive shares of TriCo common stock in exchange for their shares of FNBB common stock and become shareholders of TriCo, and their rights as shareholders of TriCo will be governed by TriCo’s articles of incorporation and bylaws rather than those of FNBB.



SELECTED HISTORICAL FINANCIAL DATA

The following tables present selected consolidated historical financial data of TriCo and selected consolidated historical financial data of FNBB.

Selected Consolidated Historical Financial Data of TriCo

Set forth below are selected historical financial data derived from TriCo’s audited consolidated financial statements as of and for the years ended December 31, 2017, 2016, 2015, 2014, and 2013. You should read the information set forth below, together with TriCo’s consolidated financial statements and related notes included in TriCo’s Annual Report on Form10-K for the year ended December 31, 2017, and the sections of such report entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” TriCo’s Annual Report on Form10-K for the year ended December 31, 2017 was filed with the SEC on March 1, 2018 and is incorporated by reference into this joint proxy statement/prospectus.

  At or for the year ended December 31, 

(in thousands, except per share data and ratios)

 2017  2016  2015  2014  2013 

Interest income

 $181,402  $173,708  $161,414  $121,115  $106,560 

Interest expense

  6,798   5,721   5,416   4,681   4,696 

Net interest income

  174,604   167,987   155,998   116,434   101,864 

(Benefit from) provision for loan losses

  89   (5,970  (2,210  (4,045  (715

Noninterest income

  50,021   44,563   45,347   34,516   36,829 

Noninterest expense

  147,024   145,997   130,841   110,379   93,604 

Income before income taxes

  77,512   72,523   72,714   44,616   45,804 

Provision for income taxes

  36,958   27,712   28,896   18,508   18,405 

Net income

 $40,554  $44,811  $43,818  $26,108  $27,399 

Earnings per share:

     

Basic

 $1.77  $1.96  $1.93  $1.47  $1.71 

Diluted

 $1.74  $1.94  $1.91  $1.46  $1.69 

Per share:

     

Dividends paid

 $0.66  $0.60  $0.52  $0.44  $0.42 

Book value per common share

 $22.03  $20.87  $19.85  $18.41  $15.61 

Tangible book per common share

 $19.01  $17.77  $16.81  $15.31  $14.59 

Average common shares outstanding

  22,912   22,814   22,750   17,716   16,045 

Average diluted common shares outstanding

  23,250   23,087   22,998   17,923   16,197 

Shares outstanding

  22,956   22,868   22,775   22,715   16,077 

Loans, net of allowance

 $2,984,842  $2,727,090  $2,486,926  $2,245,939  $1,633,762 

Total assets

  4,761,315   4,517,968   4,220,722   3,916,458   2,744,066 

Total deposits

  4,009,131   3,895,560   3,631,266   3,380,423   2,410,483 

Other borrowings

  122,166   17,493   12,328   9,276   6,335 

Junior subordinated debt

  56,858   56,667   56,470   56,272   41,238 

Shareholders’ equity

  505,808   477,347   452,116   418,172   250,946 

Financial Ratios:

     

Return on average assets

  0.89  1.02  1.11  0.87  1.04

Return on average equity

  8.10  9.46  10.04  8.67  11.34

Net interest margin (1)

  4.22  4.23  4.32  4.17  4.18

Net loan (recoveries) charge-offs to average loans

  0.08  (0.09)%   (0.07)%   (0.13)%   0.23

Efficiency ratio (2)

  6.47  67.9  64.7  72.9  67.3

Average equity to average assets

  10.99  10.84  11.01  10.00  9.21

Dividend payout ratio

  37.3  30.6  27.2  30.1  24.9

At December 31:

     

Equity to assets

  10.62  10.57  10.71  10.68  9.15


  At or for the year ended December 31, 

(in thousands, except per share data and ratios)

 2017  2016  2015  2014  2013 

TriCo Capital Ratios (3):

     

Tier 1 Leverage Ratio

  10.80  10.62  10.79  10.80  10.17

Common Equity Tier 1 to Risk Weighted Assets

  11.72  12.17  12.27  N/A   N/A 

Tier 1 Capital to Risk Weighted Assets

  13.18  13.74  13.86  14.38  13.51

Total Capital to Risk Weighted Assets

  14.07  14.77  15.09  15.63  14.77

(1)Fully taxable equivalent. Net interest margin is reported on a equivalent yield basis at a 35% rate.
(2)Represents a noninterest expense divided by the sum of fully taxable equivalent net interest income and noninterest income.
(3)TriCo adopted the U.S. Basel III capital framework effective January 1, 2015. All ratios subsequent to the effective date reflect its adoption, while ratios for the prior periods reflect the previous capital rules under Basel I.

Selected Consolidated Historical Financial Data of FNBB

Set forth below is certain consolidated financial data of FNBB derived from FNBB’s audited consolidated financial statements as of and for the years ended December 31, 2017, 2016, 2015, 2014 and 2013. You should read the information set forth below, together with FNBB’s consolidated financial statements and related notes included in FNBB’s Audited Consolidated Financial Statements as of and for the Years Ended December 31, 2017 and 2016 included in Appendix D to this document.

Dollar amounts in thousands, except

per share amounts and ratios

 At or for the years ended December 31, 
 2017  2016  2015  2014  2013 

Selected Balance Sheet Data

     

Securitiesavailable-for-sale, at fair value

 $355,857  $360,105  $329,207  $264,881  $263,988 

Other equity securities

  7,567   7,206   6,748   5,769   5,300 

Loans, net

  829,766   782,485   722,747   583,715   552,343 

Allowance for loan losses

  10,171   10,167   9,970   9,700   9,879 

Total assets

  1,265,238   1,219,394   1,124,349   917,164   891,930 

Average assets

  1,257,848   1,163,454   1,010,435   901,533   903,825 

Total deposits

  1,050,295   1,019,506   983,189   792,194   773,615 

Total borrowings

  78,750   75,350   21,950   14,550   15,000 

Total liabilities

  1,145,958   1,109,080   1,020,187   820,076   797,681 

Total stockholder’s equity

  119,280   110,314   104,162   97,088   94,249 

Average stockholder’s equity

  120,858   109,854   100,621   90,938   93,166 

Operating Data

     

Interest income

  50,218   45,513   39,282   36,859   37,389 

Interest expense

  3,871   3,069   2,597   2,093   2,395 

Net interest income

  46,347   42,444   36,685   34,766   34,994 

Provision for (recovery of) loan losses

  (360  150   (305  (1,020  1,385 

Net interest income after provision for (recovery of) loan losses

  46,707   42,294   36,990   35,786   33,609 

Service charges

  2,264   2,461   2,501   2,548   2,630 

Net gain on sale of investment securities

  210   438   339   138   324 

Earnings on bank owned life insurance

  390   402   364   359   366 

Other Income

  996   1,294   1,292   3,544   863 

Noninterest expense

  30,549   30,692   29,925   27,868   29,028 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Earnings before provision for income taxes

  20,018   16,197   11,561   14,507   8,764 

Provision for income taxes

  9,307   5,696   3,364   5,098   1,325 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net earnings

  10,711   10,501   8,197   9,409   7,439 

Dividends and discount accretion on preferred stock

  —     —     —     170   567 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net earnings available to common stockholders

 $10,711  $10,501  $8,197  $9,239  $6,872 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 


Dollar amounts in thousands, except

per share amounts and ratios

 At or for the years ended December 31, 
 2017  2016  2015  2014  2013 

PER SHARE DATA—see note (1)

     

Net earnings per share:

     

Basic

 $1.46  $1.45  $1.15  $1.32  $1.01 

Diluted

 $1.41  $1.42  $1.12  $1.28  $0.98 

Cash dividends per share

 $0.49  $0.40  $0.33  $0.27  $0.07 

Weighted average shares outstanding:

     

Basic

  7,361,000   7,233,000   7,113,000   6,999,000   6,834,000 

Diluted

  7,607,000   7,417,000   7,314,000   7,221,000   6,987,000 

Shares outstanding at period end

  7,442,279   7,280,122   7,159,500   7,044,000   6,907,500 

Book value per common share outstanding

 $16.03  $15.15  $14.55  $13.78  $13.64 

SELECTED PERFORMANCE DATA

     

Return on average assets (2)

  0.85  1.02  0.81  1.02  0.76

Return on average equity (2)

  8.86  10.88  8.15  10.16  7.38

Net interest margin

  3.97  3.95  4.06  4.21  4.31

Efficiency ratio

  60.85  65.25  72.67  71.77  72.85

Average total stockholders’ equity as a percentage of average total assets

  9.29  9.44  9.96  10.09  10.31

Common dividend payout ratio

  33.92  27.52  29.85  19.27  21.13

SELECTED ASSET QUALITY RATIOS

     

Net loan (recoveries) charge-offs/total loans

  (0.04)%   (0.01)%   (0.08)%   (0.14)%   0.11

Allowance for loan losses/Total Loans

  1.21  1.28  1.36  1.63  1.76

CAPITAL RATIOS (3)

     

Total Regulatory Capital Ratio

  12.61  12.42  12.76  14.60  14.30

Tier 1 Capital Ratio

  11.57  11.32  11.54  13.34  13.05

Leverage Ratio

  9.09  9.02  8.64  10.30  9.81

Common Equity Tier 1 Capital Ratio

  11.57  11.32  11.54  N/A   N/A 

(1)On March 31, 2017, FNBB’s board of directors declared a 3 for 2 stock split with a record date of May 26, 2017. Share and per share date has been adjusted for all stock dividends and stock splits.
(2)Calculated using net earnings available to common shareholders.
(3)Ratios are for FNBB and are substantially similar to First National Bank’s regulatory capital ratios.


UNAUDITED CONDENSED PRO FORMA COMBINED

CONSOLIDATED FINANCIAL DATA

The following Unaudited Condensed Pro Forma Combined Consolidated Balance Sheet as of December 31, 2017 combines the historical Consolidated Balance Sheet of TriCo and the historical Consolidated Balance Sheet of FNBB as of such date (i) on an actual historical basis and (ii) assuming the completion of the merger at such date, using the acquisition method of accounting and giving effect to the related pro forma adjustments described in the accompanying Notes to the Unaudited Condensed Pro Forma Combined Financial Statements.

The following Unaudited Condensed Pro Forma Combined Consolidated Statements of Operations for the year ended December 31, 2017 combines the historical Consolidated Statements of Income of TriCo and the historical Consolidated Statements of Earnings of FNBB for such year giving effect to the merger as if the merger had become effective at the beginning of such year, using the acquisition method of accounting and giving effect to the pro forma adjustments described in the accompanying Notes to the Unaudited Condensed Pro Forma Combined Consolidated Financial Statements.

Although pro forma financial information is not a measurement of performance calculated in accordance with GAAP, TriCo and FNBB believe that pro forma financial information is important because it gives effect to the merger and the transactions referenced above. The manner in which TriCo and FNBB calculate pro forma financial information may differ from similarly titled measures reported by other companies.

The unaudited condensed pro forma combined consolidated financial information included in this joint proxy statement/prospectus are presented for informational purposes only. This information includes various estimates and may not necessarily be indicative of the financial condition or results of operations that would have occurred if the merger or the other transactions referenced above had been completed on the dates or at the beginning of the periods indicated or which may be obtained in the future. The unaudited pro forma combined financial information has been derived from and should be read in conjunction with the respective period’s historical consolidated financial statements and the related notes of TriCo and FNBB. The historical consolidated financial statements of TriCo and FNBB are filed with the SEC and, in the case of TriCo, incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.” and “Documents Incorporated by Reference.” In addition, FNBB’s consolidated financial statements and related notes included in Audited Consolidated Financial Statements as of December 31, 2017 and 2016, and for each of the three years in the period ended December 31, 2017 included in Appendix D to this document.

The pro forma information, while we believe to be helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the opportunities to earn additional revenue and does not include certain assumptions as to cost savings and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the companies been combined during the periods presented.



The unaudited condensed pro forma combined consolidated shareholders’ equity and net income are qualified by the statements set forth under this caption and should not be considered indicative of the market value of TriCo’s or FNBB’s common stock or the actual or future results of operations of TriCo, FNBB or the combined company for any period. Actual results may be materially different than the pro forma information presented.

Selected Unaudited Condensed Pro Forma Combined Consolidated Balance Sheet

(Dollars in thousands)

   As of December 31, 2017  Estimated
Purchase
Accounting Entries
  Pro Forma
Combined
TriCo
 
   Historical
TriCo
  Historical
FNBB
   

Assets:

     

Noninterest-bearing cash

  $105,968  $14,086  $(9,999)(a),(d)  $110,055 

Interest-bearing cash

   99,460   4,397   —     103,857 
  

 

 

  

 

 

   

 

 

 

Cash and due from banks

   205,428   18,483   (9,999  213,912 
  

 

 

  

 

 

  

 

 

  

 

 

 

Securities held to maturity

   514,844   —      514,844 

Securities available for sale

   730,883   355,857    1,086,740 

Loans held for sale

   4,616   —      4,616 

Loans, gross

   3,015,165   839,937   (29,734)(b)   3,825,368 

Loan loss reserve

   (30,323  (10,171  10,171 (b)   (30,323

Premises and equipment, net

   57,742   9,322   16,595 (c)   83,659 

OREO

   3,226   3,300    6,526 

Goodwill

   64,311   4,580   155,250 (d)   224,141 

Mortgage servicing rights

   6,687   —      6,687 

Core deposit & other intangible

   5,174   344   17,900 (e)   23,418 

FHLB & other equity securities

   16,956   7,567    24,523 

Bank owned life insurance

   97,783   16,637    114,420 

Accrued interest

   13,772   5,317    19,089 

Investment in subsidiary

   —     —      —   

Other assets

   55,051   14,065   (2,771)(f)   66,345 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total assets

  $4,761,315  $1,265,238  $157,412  $6,183,965 
  

 

 

  

 

 

  

 

 

  

 

 

 

Liabilities:

     

Deposits

     

Noninterest-bearing non-CD

  $1,368,218  $313,435   $1,681,653 

Interest-bearing non-CD

   2,335,977   598,776    2,934,753 

CDs

   304,936   138,084   563 (g)   443,583 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total deposits

   4,009,131   1,050,295   563   5,059,989 

Other borrowings

   122,166   78,750   —  (h)   200,916 

Junior sub debt

   56,858   —      56,858 

Reserve for unfunded commitments

   3,164   177    3,341 

Accrued expenses & other liabilities

   64,188   16,736    80,924 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total liabilities

   4,255,507   1,145,958   563   5,402,028 

Shareholders’ equity:

     

Common stock (TriCo)

   255,836    276,129 (d)   531,965 

Common Stock (FNBB)

    85,565   (85,565)(i)   —   

Retained earnings

   255,200   34,654   (34,654)(i)   255,200 

Accumulated other comprehensive income

   (5,228  (939  939 (i)   (5,228
  

 

 

  

 

 

  

 

 

  

 

 

 

Total shareholders’ equity

   505,808   119,280   156,849   781,937 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total liabilities and shareholders’ equity

  $4,761,315  $1,265,238  $157,412  $6,183,965 
  

 

 

  

 

 

  

 

 

  

 

 

 

The accompanying Notes are an integral part of the Unaudited Condensed Pro Forma Combined Consolidated Financial Information.



Unaudited Condensed Pro Forma Combined Consolidated Statements of Operations

   (Dollars in thousands except share amounts) 
   Year Ended December 31, 2017  Esitimated
Purchase
Accounting
Entries
  Pro Forma
Combined
TriCo
 
   Historical
TriCo
  Historical
FNBB
   

Statement of Income

     

Equity in income of subsidiary:

     

Interest income

  $181,402  $50,218  $2,795 (b)  $234,415 

Interest expense

   (6,798  (3,871  (375)(g)   (11,044
  

 

 

  

 

 

  

 

 

  

 

 

 

Net interest income

  $174,604  $46,347  $2,420  $223,371 

(Provision) benefit for loan losses

   (89  360    271 
  

 

 

  

 

 

   

 

 

 

Noninterest income

   49,060   3,650    52,710 

Realized gains on AFS securities

   961   210    1,171 

Noninterest expense:

     

Salaries and benefits

   (82,930  (19,366   (102,296

Other noninterest expense

   (64,094  (11,183  (3,110)(c),(e)   (78,387
  

 

 

  

 

 

  

 

 

  

 

 

 

Total noninterest expense

  $(147,024 $(30,549 $(3,110 $(180,683
  

 

 

  

 

 

  

 

 

  

 

 

 

Net income before income taxes

  $77,512  $20,018  $(690 $96,840 

Income tax (expense) benefit

   (36,958  (9,307  290   (45,975
  

 

 

  

 

 

  

 

 

  

 

 

 

Net income

  $40,554  $10,711  $(400 $50,865 
  

 

 

  

 

 

  

 

 

  

 

 

 

Weighted average common shares:

     
   22,912   7,361   (68)(j)   30,205 
   23,250   7,607   (314)(j)   30,543 

Earnings per common share:

     
  $1.77  $1.46   $1.68 
  $1.74  $1.41   $1.67 

The accompanying Notes are an integral part of the Unaudited Condensed Pro Forma Combined Consolidated Financial Information.



Notes to Unaudited Condensed Pro Forma Combined Consolidated Financial Statements

Note 1—Basis of Presentation

The Unaudited Condensed Pro Forma Combined Consolidated Balance Sheet and explanatory notes as of December 31, 2017 combine the historical Consolidated Balance Sheet of TriCo and the historical Consolidated Balance Sheet of FNBB as of such date (i) on an actual historical basis and (ii) assuming the completion of the merger at such date, using the acquisition method of accounting and giving effect to the related pro forma adjustments described in the accompanying Notes to the Unaudited Condensed Pro Forma Combined Consolidated Financial Statements.

The Unaudited Condensed Pro Forma Combined Consolidated Statements of Operations and explanatory notes for the year ended December 31, 2017 combine the historical Consolidated Statements of Income of TriCo and the historical Consolidated Statements of Earnings of FNBB for such respective periods giving effect to the merger as if the merger had become effective at the beginning of such year, using the acquisition method of accounting and giving effect to the pro forma adjustments described in the accompanying Notes to the Unaudited Condensed Pro Forma Combined Consolidated Financial Statements.

Under the acquisition method of accounting, the assets and liabilities of FNBB will be recorded at the respective fair values on the merger date, including adjustments for credit quality, and no allowance for credit losses is carried over to TriCo’s balance sheet. The fair value on the merger date represents management’s best estimates based on available information and facts and circumstances in existence on the merger date. Although the purchase price is indicative of the actual purchase price, the pro forma adjustments reflected in the unaudited pro forma condensed combined financial information is subject to change and may vary from the actual purchase price allocation that will be recorded when the accounting for the merger is completed. Adjustments may include, but not be limited to, changes in (i) FNBB’s balance sheet through the effective time of the merger; (ii) total merger related expenses if consummation and/or implementation costs vary from currently estimated amounts; and (iii) the underlying values of assets and liabilities if market conditions differ from current assumptions. The accounting policies of both TriCo and FNBB are in the process of being reviewed in detail. Upon completion of such review, conforming adjustments or financial statement reclassification may be determined. In addition, certain anticipated nonrecurring costs associated with the merger such as professional fees, legal fees and conversion-related expenditures are not reflected in the pro forma statements of operations.

While the recording of the acquired loans at their fair value will impact the prospective determination of the provision for credit losses and the allowance for credit losses, for purposes of the Unaudited Condensed Pro Forma Combined Consolidated Statements of Operations for the year ended December 31, 2017, TriCo assumed no adjustments to the historical amounts of FNBB’s provisions for credit losses. If such adjustments were estimated, there could be an increase or a reduction to the historical amounts of FNBB’s provisions for credit losses presented. In addition, the fair value of the loan portfolio is not necessarily reflective of the allowance for loan losses calculated under the probable incurred loss model, as the fair value also takes into account an interest and liquidity component.

Note 2—Accounting Policies and Financial Statement Classifications

TriCo is reviewing the accounting policies of FNBB in detail. Upon completion of such review, conforming adjustments or financial statement reclassifications may be determined.

Note 3—Merger and Acquisition Integration Costs

In connection with the merger, the plan to integrate TriCo’s and FNBB’s operations is still being developed. The specific details of this plan will continue to be refined over the next several months, and will include assessing



personnel, benefit plans, premises, equipment, and service contracts to determine where they may take advantage of redundancies. Certain decisions arising from these assessments may involve involuntary termination of employees, vacating leased premises, changing information systems, canceling contracts with certain service providers, and selling or otherwise disposing of certain property, furniture and equipment. TriCo also expects to incur merger-related costs including professional fees, legal fees, system conversion costs and costs related to communications with customers and others. To the extent there are costs associated with these actions, the costs will be recorded based on the nature of the cost and in the period incurred.

Note 4—Estimated Annual Cost Savings

TriCo expects to realize cost savings following the merger. These cost savings are not reflected in the pro forma financial information and there can be no assurance they will be achieved in the amount or manner currently contemplated.

Note 5—Pro Forma Adjustments

The following pro forma adjustments have been reflected in the unaudited pro forma combined condensed consolidated financial information. All adjustments are based on current assumptions and valuations, which are subject to change. The pro forma data in this column presents the unaudited financial data for TriCo on a pro forma combined basis reflecting the consummation of the merger with FNBB, as if the merger had taken place as of the date indicated, or at the beginning of the period indicated, after giving effect to the pro forma adjustments described in the other footnotes to this table.

(a)Cash paid to cash out FNBB option holders. This is calculated based on the exchange ratio of 0.98 shares of TriCo common stock terms and as if the merger occurred on December 31, 2017, and is based on FNBB options outstanding as of December 31, 2017. Tax benefit (shown in Other Assets) is reduced by 50% for estimated Code section 162(m) limitations.

(b)FNBB loan fair value purchase discount estimated to be 3.54% (1.21% credit related ($10,171,000), and 2.33% interest rate related ($19,563,000)). Interest rate component of loan purchase discount expected to accrete into interest income over seven years using effective interest method. FNBB’s allowance for loan losses is eliminated according to purchase accounting rules.

(c)FNBB fixed assets (buildings) fair value purchase adjustment. Increased book basis to be depreciated on straight line basis over 30 years. The fair value purchase adjustment is based on TriCo’s internal appraisal estimates.

(d)Purchase goodwill is the sum of TriCo common stock issued to FNBB shareholders (7,442,276 x 0.9800 x $37.86 = $276,129,000), less all the other purchase accounting adjustments shown in the Pro Forma Consolidated Balance Sheet. ($37.86 is the price per share of TriCo common stock on December 31, 2017.) The change in Goodwill can be summarized as follows (dollars in thousands, except per share data):

TriCo shares issued to FNBB shareholders

   7,293,433 

TriCo issue price per share

  $37.86 

Value of TriCo shares paid to FNBB shareholders

   276,129 

Valuein-the-money from options

   9,999 
  

 

 

 

Total pro forma merger consideration paid

  $286,128 
  

 

 

 


Carrying value of FNBB net assets at December 31, 2017

  $119,280 

Fair value adjustments to net assets at December 31, 2017:

  

Loans

  $(29,734

Allowance for loan losses

   10,171 

Premises and equipment

   16,595 

Core deposit intangible

   17,900 

Deferred tax effect of fair value adjustments and tax benefits of option exercise

   (2,771

Other borrowings

   —   

Deposits

   (563
  

 

 

 

Total fair value adjustments

  $11,598 
  

 

 

 

Fair value of net assets acquired on December 31, 2017

  $130,878 

Excess of fair value of net assets acquired over consideration paid

  $155,250 

(e)Core deposit intangible adjustment represents estimated fair value of acquired identifiable intangible core deposit asset, calculated as approximately 2.00% of FNBB’s core deposits, less FNBB’s existing core deposit intangible, resulting in a net adjustment. The acquired core deposit intangible is expected to be amortized over seven years using a straight line method. This core deposit intangible estimate is based on data from recent acquisitions and is calculated as follows:

FNBB core deposits

  $912,211 

Core deposit intangible as percent of core deposits (estimate)

   2.00
  

 

 

 

FNBB core deposit intangible

  $18,244 

Less: Existing FNBB core deposit intangible

   (344
  

 

 

 

FNBB core deposit intangible FV adjustment

  $17,900 
  

 

 

 

(f)Purchase adjustment to other assets/deferred taxes is comprised of adjustment to deferred taxes related to fair value purchase adjustments, and tax benefit from option exercise as follows:

Fair value adjustments to net assets:

  

Loans

  $8,790 

Allowance for loan losses

  $(3,007

Premises and equipment

  $(4,906

Core deposit intangible

  $(5,292

Other borrowings

  $—   

Deposits

  $166 

Tax benefit of option exercise

   1,478 
  

 

 

 

Deferred tax effect of fair value adjustments and tax benefit of option exercise

  $(2,771
  

 

 

 

(g)Purchase adjustment to (time) deposits is based on FNBB’s December 31, 2017 fair value disclosure. This fair value adjustment is amortized over an estimated life of FNBB’s time deposits of 18 months using the straight-line method.

(h)There was no differences identified between the carrying value and fair value of other borrowings in the footnotes of FNBB’s December 31, 2017 financial statements.

(i)Purchase adjustment to equity represents addition of fair value of TriCo common stock issued to FNBB shareholders (see note (d)) less the effect of elimination of FNBB’s equity accounts.

(j)Adjustment reflects the elimination of FNBB’s weighted average shares outstanding offset by the issuance of shares of TriCo common stock.


UNAUDITED COMPARATIVE PER SHARE DATA

The following table sets forth certain historical, pro forma and pro forma equivalent per share financial information for the TriCo common stock and the FNBB common stock. The pro forma and pro forma equivalent per share information for the year ended December 31, 2017 gives effect to the merger as if the transaction had been effective on the last date of the year, in the case of book value data, and as if the transaction had been effective on the first day of the year, in the case of the income and dividend data. The pro forma information in the below table assumes that the merger is accounted for under the acquisition method of accounting. The information in the following table is based on, and should be read together with, the historical consolidated financial information that TriCo and FNBB have presented in their prior filings with the SEC and which are incorporated into this joint proxy statement/prospectus or attached hereto, as the case may be. See “Where You Can Find More Information” on page [] and “Documents Incorporated by Reference” on page [●].

   At or For the
Year Ended
December 31,
2017
 

Net Income Per Common Share (1):

  

Historical TriCo

  

Basic

  $1.77 

Diluted

   1.74 

Historical FNBB (2)

  

Basic

   1.46 

Diluted

   1.41 

Trico Pro Forma Combined (1)

  

Basic

   1.68 

Diluted

   1.67 

Dividends Declared Per Common Share:

  

Historical TriCo

  $0.66 

Historical FNBB

   0.6 

FNBB Pro Forma Equivalent Per Share (3)

   0.65 

Book Value Per Common Share (at period end):

  

Historical TriCo

  $22.03 

Historical FNBB

   16.03 

TriCo Pro Forma Combined

   25.85 

FNBB Pro Form Equivalent Per Share (3)

   25.33 

(1)Pro forma shares are calculated by adding together the historical shares reported by TriCo and historical shares reported by FNBB, adjusted for the estimated purchase accounting adjustments to be recorded in connection with the FNBB acquisition to equate to an estimated 7,293,433 of TriCo shares to be issued in connection with the FNBB acquisition based on the terms of the merger agreement.
(2)Adjusted for stock splits and stock dividends.
(3)The equivalent pro forma per share data combined for FNBB is computed by multiplying the pro forma combined amounts by the exchange ratio of 0.98.


RISK FACTORS

In addition to the other information included and incorporated by reference (or attached) into this joint proxy statement/prospectus, including the matters addressed in the section entitled “Cautionary Statement Concerning Forward-Looking Statements” beginning on page [], you should be aware of and carefully consider the following risks and uncertainties that are applicable to the merger agreement, the merger, TriCo and FNBB before deciding whether to vote for the approval of the TriCo merger proposal or the FNBB merger proposal and the approval of the adjournment of the TriCo or FNBB special meeting, if necessary, to solicit additional proxies in favor of the merger proposals to approve the merger proposals. You should also consider the risks relating to the businesses of TriCo and ownership of TriCo common stock contained in Part I, Item 1A of TriCo’s Annual Report on Form10-K for the year ended December 31, 2017 that has been filed with the SEC, as well as any subsequent documents filed by TriCo with the SEC, which are incorporated into this joint proxy statement/prospectus by reference. See “Where You Can Find More Information” on page [] and “Documents Incorporated by Reference” on page [].

Risks Relating to the Merger

Because the market price of TriCo common stock fluctuates, FNBB shareholders will not know of the value of the merger consideration they will receive in the merger at the time they vote.

Upon the effective time of the merger, each share of FNBB common stock will be cancelled and converted into the right to receive the merger consideration, consisting of shares of TriCo common stock pursuant to the terms of the merger agreement. The value of the merger consideration to be received by FNBB shareholders will be based on an exchange ratio, which is fixed at 0.98 shares of TriCo common stock for each share of FNBB common stock but subject to potential adjustment, as described in the following paragraph. Because the price of TriCo common stock could fluctuate during the period of time between the FNBB special meeting and the time the FNBB shareholders actually receive their shares of TriCo common stock as merger consideration, the FNBB shareholders will be subject to the risk of a decline in the price of TriCo common stock during this period. FNBB does not have the right to terminate the merger agreement or to resolicit the vote of its shareholders solely because of changes in the market prices of TriCo’s common stock (although the parties will have certain rights to terminate the merger agreement or adjust the exchange ratio for changes in the market prices of TriCo’s common stock as described elsewhere in this joint proxy statement/prospectus). Stock price changes may result from a variety of factors, including general market and economic conditions, changes in the values and perceptions of financial services stocks generally and TriCo in particular, changes in TriCo’s business, operations and prospects and regulatory considerations. Many of these factors are beyond TriCo’s control. For example, from December 8, 2017, the last trading day prior to the date that TriCo and FNBB announced their entry into the merger agreement, and [●], 2018, the actual closing price of TriCo common stock reported on Nasdaq ranged from $[●] to $[●] implying a value per share of FNBB common stock of $[●] to $[●], based on the exchange ratio of 0.98 shares of TriCo common stock. Accordingly, at the time of the FNBB special meeting, the FNBB shareholders will not know or be able to calculate the exact value of the shares of TriCo common stock they will receive upon completion of the merger.

Further, while the exchange ratio is generally fixed at 0.98 shares of TriCo common stock, the merger agreement includes a trading collar that could result in the termination of the merger agreement or a change in the exchange ratio. TriCo can elect to terminate the merger agreement if both (i) the TriCo average closing price is greater than $49.78, which equals 120% of the average share price of TriCo common stock for the 20trading-day period up to and including December 8, 2017, which was $41.48, which we refer to as the “initial TriCo trading price”, and (ii) TriCo common stock outperforms the KBW Nasdaq Regional Banking Index by more than 20%, unless FNBB agrees that the exchange ratio will be reduced in accordance with the merger agreement and fewer shares of TriCo common stock will be issued to FNBB shareholders on a per share basis. Conversely, FNBB can terminate the merger agreement if both (i) the TriCo average closing price is less than $33.18, which is equivalent to 80% of the initial TriCo trading price, and (ii) TriCo common stock underperforms the KBW Nasdaq Regional Banking Index by more than 20%, unless TriCo agrees that the exchange ratio will be increased

in accordance with the merger agreement and more shares of TriCo common stock will be issued to FNBB shareholders on a per share basis.

Directors and officers of FNBB have interests in the merger that are in addition to or different than the interests of FNBB shareholders.

FNBB directors and officers have interests in the merger as individuals that are in addition to, or different from, their interests as shareholders of FNBB, which are:

FNBB’s directors and officers will receive, upon consummation of the merger, cash in exchange for the termination of their FNBB options and the vesting of the FNBB options will accelerate;

the agreement of TriCo to honor indemnification obligations of FNBB for a period of six years, as well as to purchase liability insurance for FNBB’s directors and officers for six years following the merger, subject to the terms of the merger agreement;

cash payments to certain officers of FNBB in the aggregate amount of approximately $2.25 million, on apre-tax basis, pursuant to the terms of their respective employment-related agreements with FNBB;

the appointment of two directors of FNBB, who are not yet identified, to serve on the boards of directors of TriCo and Tri Counties Bank effective upon completion of the merger; and

James Black, President and a director of FNBB and First National Bank, Anthony Clifford, Executive Vice President and Chief Operating Officer and a director of FNBB and First National Bank and Randy Brugioni, Senior Vice President and Chief Lending Officer of First National Bank, have entered into employment agreements with TriCo and Tri Counties Bank, each of which will be effective as of the closing of the merger, and which provide compensation for continued employment with TriCo and Tri Counties Bank following the merger.

These arrangements may create potential conflicts of interest. These interests of FNBB’s directors and officers may cause some of these persons to view the proposed transaction differently than how other FNBB shareholders view it. The FNBB and TriCo boards of directors were aware of these interests and considered them, among other things, in their approval of the merger agreement and the transactions contemplated by the merger agreement. FNBB shareholders should consider these interests in conjunction with the recommendation of the FNBB board of directors with respect to approval of the merger. See “The Merger—Interests of Certain FNBB Officers and Directors in the Merger” beginning on page [●].

The termination fee and the restrictions on solicitation contained in the merger agreement may discourage other companies from trying to acquire FNBB.

Until the completion of the merger, with some limited exceptions, FNBB is prohibited from soliciting, initiating, encouraging or participating in any discussion of or otherwise considering any inquiries or proposals that may lead to an acquisition proposal, such as a merger or other business combination transaction, with any person other than TriCo. In addition, FNBB has agreed to pay a termination fee to TriCo in specified circumstances. See “The Merger—Termination Fee” beginning on page [●]. These provisions could discourage other companies from trying to acquire FNBB even though those other companies might be willing to offer greater value to FNBB shareholders than TriCo has offered in the merger. The payment of the termination fee could also have a material adverse effect on FNBB’s financial condition.

TriCo may fail to realize the anticipated benefits of the merger.

The success of the merger will depend on, among other things, TriCo’s ability to realize the anticipated revenue enhancements and efficiencies and to combine the businesses of TriCo and FNBB and compete effectively in a new market 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 TriCo is 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.

TriCo 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 TriCo’s 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 TriCo and FNBB during the transition period and on the combined company following completion of the merger.

The market price of TriCo common stock after the merger may be affected by factors different from those currently affecting the shares of FNBB or TriCo.

Upon completion of the merger, holders of FNBB common stock will become holders of TriCo common stock. TriCo’s business differs from that of FNBB, and, accordingly, the financial condition and results of operations of the combined company and the market price of TriCo common stock after the completion of the merger may be affected by factors different from those currently affecting the financial condition and results of operations of FNBB or TriCo on a standalone basis.

The fairness opinion received by TriCo’s board of directors from its financial advisor, Stephens Inc., and the fairness opinion received by FNBB’s board of directors from FNBB’s financial advisor, Courtney, will not be updated to reflect any changes since the date of such opinions.

Changes in the operations and prospects of TriCo or FNBB, general market and economic conditions and other factors that may be beyond the control of TriCo and FNBB may alter the value of TriCo or FNBB or the market price for shares of TriCo common stock or FNBB common stock by the time the merger is completed. Neither the fairness opinion delivered by Stephens Inc. to TriCo’s board of directors nor the fairness opinion delivered by Courtney to FNBB’s board of directors speaks as of any date other than the date of such opinions, which was December 11, 2017. The merger agreement does not require that either Stephens, Inc.’s or Courtney’s fairness opinion be updated as a condition to the completion of the merger, and neither TriCo nor FNBB intends to request that the respective fairness opinions be updated. Stephens Inc.’s fairness opinion is attached as Appendix C to this joint proxy statement/prospectus and Courtney’s fairness opinion is attached as Appendix B to this joint proxy statement/prospectus. For a description of Stephens Inc.’s opinion, see “The Merger—Opinion of TriCo’s Financial Advisor” beginning on page [●]. For a description of Courtney’s opinion, see “The Merger—Opinion of FNBB’s Financial Advisor” beginning on page [●]. For a description of the other factors considered by TriCo’s board of directors in determining to approve the merger, see “The Merger—TriCo’s Reasons for the Merger” beginning on page [●]. For a description of the other factors considered by FNBB’s board of directors in determining to approve the merger, see “The Merger—FNBB’s Reasons for the Merger” beginning on page [●].

The merger is subject to the receipt of approvals or waivers from regulatory authorities that may impose conditions that could have an adverse effect on TriCo.

Before the merger can be completed, various approvals or waivers must be obtained, including those from bank regulatory authorities. Regulatory approval or waivers are not guaranteed and even if granted, the bank regulatory or other authorities may impose conditions on the completion of the merger or require changes to the terms of the merger. Although TriCo and FNBB do not currently expect that any such conditions or changes will be imposed, there can be no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the merger, imposing additional costs on, or limiting the revenues of TriCo following the merger or causing the merger transaction between TriCo and FNBB to terminate. See “The Merger—Bank Regulatory Approvals” beginning on page [●] and “The Merger—Conditions to the Merger” beginning on page [●].

The merger cannot be completed unless the TriCo shareholders approve the TriCo merger proposal and the FNBB shareholders approve the FNBB merger proposal.

In order for the merger to be completed, the TriCo shareholders must approve the TriCo merger proposal and the FNBB shareholders must approve the FNBB merger proposal. The approval of TriCo’s shareholders is required under applicable provisions of the CGCL and Nasdaq rules in order for TriCo to be authorized to issue the shares of TriCo common stock to FNBB shareholders as the merger consideration. Approval of the TriCo merger proposal requires approval of shareholders representing at least a majority of the total outstanding shares of TriCo common stock. The approval of the FNBB merger proposal by the FNBB shareholders also requires the affirmative vote of the holders of a majority of the outstanding shares of North ValleyFNBB common stock. If either or both of these required votes is not obtained from the shareholders of each of the respective companies, the merger may not be consummated.

The merger is subject to certain closing conditions that, if not satisfied or waived, will result in the merger not being completed, which may cause the prices of TriCo common stock entitledand FNBB common stock to votedecline.

Consummation of the merger is subject to customary conditions to closing in addition to the receipt of the required regulatory approvals and approval of the TriCo and FNBB shareholders of the merger agreement. If any condition to the merger is not satisfied or waived, to the extent permitted by law, the merger will not be completed. In addition, TriCo and FNBB may terminate the merger agreement under certain circumstances even if the merger agreement is approved by TriCo and/or FNBB shareholders, including if the merger has not been completed on or before September 30, 2018. If the merger is not completed, the respective trading prices of TriCo common stock and FNBB common stock on the Nasdaq Global Select Market may decline to the extent that the current prices reflect a market assumption that the merger will be completed. In addition, neither company would realize any of the expected benefits of having completed the merger if the merger does not close. Finally, TriCo and FNBB will each incur significant costs and diversion of management attention whether or not the merger is successfully consummated, any of which may have an adverse effect on the financial condition and results of operations of TriCo and FNBB, as applicable. For more information on closing conditions to the merger agreement, see “The Merger—Conditions to the Merger” beginning on page [●].

The unaudited condensed pro forma combined financial data included in this joint proxy statement/prospectus are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the merger.

The unaudited condensed pro forma combined financial data contained in this joint proxy statement/prospectus are presented for illustrative purposes only, are based on various adjustments, assumptions and preliminary estimates and may not be an indication of the combined company’s financial condition or results of operations following the merger for several reasons. The actual financial condition and results of operations of the combined company following the merger may not be consistent with, or evident from, these unaudited pro forma condensed combined financial data. In addition, the assumptions used in preparing the unaudited pro forma condensed combined financial data may not prove to be accurate, and other factors may affect the combined company’s financial condition or results of operations following the merger. Any potential decline in the combined company’s financial condition or results of operations may cause significant variations in the stock price of the combined company.

The shares of TriCo common stock to be received by FNBB shareholders as a result of the merger will have different rights than shares of FNBB common stock.

Upon completion of the merger, FNBB shareholders will become TriCo shareholders and their rights as shareholders will be governed by the TriCo articles and bylaws. The rights associated with FNBB common stock are different from the rights associated with TriCo common stock. See “Comparison of the Rights of Shareholders” beginning on page [●].

If FNBB shareholders approve the merger proposal and the merger successfully closes, FNBB shareholders will no longer have the right to benefit from any hypothetical future increase in the value of FNBB which may have resulted if FNBB continued as an independent company.

If the merger closes as contemplated, FNBB will cease to operate as an independent company. Consequently, FNBB shareholders will relinquish the right to benefit from any increase in value that may have hypothetically accrued to FNBB had it continued as an independent company and not completed the merger with TriCo. FNBB, as an independent company, may have increased in value at a more rapid pace (or decreased in value at a less rapid pace) compared to the actual value of the combined company. Following consummation of the merger, any change in the value of the shares currently held by FNBB shareholders will be based on the success or failure of the combined company and not the separate results of FNBB.

Risks Related to TriCo’s Business

TriCo is, and will continue to be, subject to the risks described in TriCo’s Annual Report onForm 10-K for the fiscal year ended December 31, 2017, as may be amended and as updated by subsequent Quarterly Reports onForm 10-Q, Current Reports onForm 8-K, all of which are or will be filed with the SEC and are incorporated by reference into this joint proxy statement/prospectus. See “Documents Incorporated by Reference” and “Where You Can Find More Information” included elsewhere in this joint proxy statement/prospectus.

Risks Related to FNBB’s Business

FNBB’s allowance for loan losses may not be adequate to cover actual losses.

Like other financial institutions, FNBB maintains an allowance for loan losses to provide for loan defaults andnon-performance. FNBB’s allowance for loan losses may not be adequate to cover actual loan losses, and any future provisions for loan losses would reduce FNBB’s earnings could materially and adversely affect FNBB’s business, financial condition, results of operations and cash flows. The allowance for loan losses reflects FNBB’s estimate of the probable losses in its loan portfolio at the relevant balance sheet date. The allowance for loan losses is based on prior experience, as well as an evaluation of the known risks in the current portfolio, composition and growth of the loan portfolio and economic factors. Determining an appropriate level of loan loss allowance is an inherently difficult process and is based on numerous assumptions. The amount of future losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates, that may be beyond FNBB’s control and these losses may exceed current estimates. Federal and state regulatory agencies, as an integral part of their examination process, review FNBB’s loans and allowance for loan losses. Therefore, we cannot assure you that FNBB will not increase its allowance for loan losses further or that the allowance will be adequate to absorb loan losses FNBB actually incurs. Either of these occurrences could have a material adverse effect on FNBB’s business, financial condition and results of operations and those of the combined company following the merger.

Substantially all of the loans in FNBB’s portfolio are secured by real estate and a downturn in its real estate markets could hurt FNBB’s business.

A large portion of FNBB’s loan portfolio is dependent on the performance of its real estate portfolio. At December 31, 2017, real estate (including construction loans) served as the principal source of collateral with respect to approximately 92% of FNBB’s loan portfolio. Within FNBB’s real estate secured loan portfolio, commercial real estate loans represented 59%, 1 to 4 single family residential loans represented 22%, multi-family residential loans represented 14% and construction loans represented 5% of the total as of December 31, 2017.

A substantial decline in the economy in general or a decline in real estate values in FNBB’s primary operating market areas could have an adverse effect on the demand for new loans, the ability of borrowers to repay outstanding loans, and the value of real estate and other collateral securing loans. Real estate values could decline due to reduced construction lending, tighter underwriting requirements, or reduced borrower ability to make

payments. Real estate loans may pose collection problems, resulting in increased collection expenses, and delays in the ultimate collection of these loans. In addition, acts of nature, including fires, earthquakes and floods, which may cause uninsured damage and other loss of value to real estate that secures these loans, may also negatively impact FNBB’s financial condition and those of the combined company following the merger.

FNBB makes commercial business loans, which could have a higher degree of loss than other types of loans.

As of December 31, 2017, approximately 7% of FNBB’s loan portfolio consisted of commercial business loans, which could have a higher degree of risk than other types of loans. Commercial lending is dependent on borrowers making payments on their loans and lines of credit in accordance with the terms of their notes. Worsening economic conditions could make it difficult for many commercial borrowers to make their required loan payments. This credit risk is increased when there is a concentration of principal in a limited number of loans and borrowers, the mobility of collateral, and the increased difficulty of evaluating and monitoring these types of loans. The availability of funds for the repayment of commercial business loans may be substantially dependent on the success of the business itself and the general economic environment. If the cash flow from business operations is reduced, the borrower’s ability to repay the loan may be impaired.

In addition, unlike residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment and other income and which are secured by real property whose value tends to be more easily ascertainable, commercial business loans typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. If FNBB is required to repossess equipment or pursue collection efforts under personal guarantees, there could be a substantial decrease in value of collateral, if any, increased legal costs, and an increased risk of loss on the amount outstanding.

FNBB is exposed to the risk of environmental liablities with respect to properties to which it owns or takes title.

In the ordinary course of its business, FNBB may foreclose and take title to real estate and could become subject to environmental related liabilities with respect to these properties. FNBB may be held liable to a government entity or third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination or may be required to investigate or clean-up hazardous or toxic substances, or chemical releases at a property. The costs associated with investigations or remediation activities could be substantial. In addition, as the owner or former owner of a contaminated site, FNBB could become subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. If FNBB becomes subject to significant environmental liabilities, its business prospects, financial condition, liquidity, results of operations and stock price, and those of the combined company following the merger, could be materially and adversely affected. One property that was acquired through foreclosure and subsequently sold is subject to contractual performance obligations related to toxic soil and water quality remediation. See “Nonperforming Assets” in FNBB’s Management’s Discussion and Analysis of Financial Condition and Results of Operations at page [●] and “FNBB is a Party to Contracts with Performance Obligations that Could be Substantial,” immediately below.

FNBB is a Party to Contracts with Performance Obligations that Could be Substantial.

FNBB utilizes purchase and sale contracts when entering into the purchase or sale of certain assets. Such a contract may contain performance obligations that are imbedded in the terms and conditions of the contract. These performance obligations may require FNBB to perform a service or services where the ultimate cost and the length of time required to perform the service or services cannot be predicted with certainty. When these circumstances exist, FNBB is required to review all the facts and circumstances related to its performance obligations and use sound business judgement in the quantification of the cost of these performance obligations. On July 12, 2011, FNBB foreclosed on a commercial real estate property that was known to have soil and ground water contamination. Since acquiring title to the property, the property has been held as other real estate owned

and FNBB has conducted remediation efforts, with the guidance of an environmental consultant and others, while seeking a final remediation plan acceptable to the San Francisco Bay Regional Water Quality Control Board, which we refer to as the Water Board. FNBB sold the property to an unrelated third party effective February 22, 2018. The sale transaction was completed using a purchase and sale contract that included continuing performance obligations. Under the terms of the contract, the buyer of the property obtained title to the property, including the legal right to lease revenue being generated by the property, and FNBB agreed to perform certain remediation activities and to continue work with the Water Board toward the objective of obtaining a mutually acceptable final remediation plan for the property. FNBB remains responsible for additional remediation costs should further remediation becomes necessary and could be liable to governmental entities or third parties for future investigation and clean-up costs or other expenses, which could be substantial. FNBB has established a contingent liability reserve based on future expected cost estimates provided to FNBB by its soil engineering and consulting company consultant. If the actual liabilities, costs and expenses related to these obligations are determined to be substantially in excess of the reserve established by FNBB, these excess costs could potentially have a material adverse effect on the business prospects, financial condition, liquidity, results of operations and stock price of FNBB and the combined company following the merger. For addition information, please see notes 7 and 23 to FNBB’s 2017 Consolidated Financial Statements included in Appendix D to this joint proxy statement/prospectus.

If FNBB fails to maintain an effective system of internal and disclosure controls, FNBB may not be able to accurately report its financial results or prevent fraud. As a result, current and potential shareholders could lose confidence in the financial reporting, which would harm FNBB’s business.

Management regularly reviews and updates FNBB’s internal control over financial reporting, disclosure controls and procedures, and corporate governance policies and procedures. FNBB maintains controls and procedures to mitigate risks such as processing system failures or errors and customer or employee fraud, and FNBB maintains insurance coverage for certain of these risks. Any system of controls and procedures, however well designed and operated, is based in part on certain assumptions and provides only reasonable, not absolute, certainty that the objectives of the system will be met. Events could occur which are not prevented or detected by FNBB’s internal controls, are not insured against, or are in excess of its insurance limits. Any failure or circumvention of FNBB’s controls and procedures, or failure to comply with regulations related to controls and procedures, could have an adverse effect on the business of FNBB and the combined company.

FNBB faces risks of systems failure and security risks, including “hacking” and “identity theft.”

FNBB is subject to certain operations risks, including, but not limited to, data processing system or cybersecurity failures and customer or employee fraud. FNBB maintains a system of internal controls to mitigate against such occurrences and maintains insurance coverage for such risks, but should such an event occur that is not prevented or detected by FNBB’s internal controls, uninsured or in excess of applicable insurance limits, it could have a significant adverse impact on FNBB’s business, financial condition or results of operations. Additionally, FNBB is dependent on network and computer systems. If these systems or theirback-up systems were to fail or were breached, FNBB could be adversely affected. FNBB cannot be certain that the continued implementation of safeguards will eliminate the risk of vulnerability to technological difficulties or failures or ensure the absence of a breach of information or security, including as a result of a cybersecurity breach. If information security is compromised or other technology difficulties or failures occur at FNBB or with one of its vendors, information may be lost or misappropriated, services and operations may be interrupted and FNBB and the combined company could be exposed to claims from customers.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This joint proxy statement/prospectus contains or incorporates by reference a number of forward-looking statements regarding the financial condition, results of operations, earnings outlook and business prospects of TriCo, Tri Counties Bank and FNBB and the potential combined company and may include statements for the periods following the completion of the merger. Shareholders of either TriCo or FNBB can find many of these statements by looking for words such as “expects,” “projects,” “anticipates,” “believes,” “intends,” “estimates,” “strategy,” “plan,” “potential,” “possible” and other similar expressions. Statements about the expected timing, completion and effects of the merger and all other statements in this joint proxy statement/prospectus or in the documents incorporated by reference in this joint proxy statement/prospectus other than historical facts constitute forward-looking statements. Forward-looking statements involve certain risks and uncertainties that are subject to change based on factors which are, in many instances, beyond TriCo’s or FNBB’s control. The ability of either TriCo or FNBB to predict results or actual effects of its plans and strategies, or those of the combined company, is inherently uncertain. Accordingly, actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Some of the factors that may cause actual results or earnings to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those discussed under “Risk Factors” and those discussed in the filings of TriCo that are incorporated into this joint proxy statement/prospectus by reference, as well as the following:

estimated revenue enhancements, costs savings and financial benefits from the merger may not be fully realized within the expected time frames or at all;

deposit attrition, customer loss, employee loss or revenue loss following the merger may occur or be greater than expected;

required regulatory, shareholder or other approvals may not be obtained or other closing conditions may not be satisfied in a timely manner or at all;

reputational risks and the reaction of the companies’ customers to the merger;

diversion of management time on merger-related issues and fees and expenses that TriCo and FNBB will incur whether or not the merger successfully closes;

competitive pressure among depository and other financial institutions may increase significantly;

costs or difficulties related to the integration of the businesses of TriCo and FNBB may be greater than expected;

changes in the interest rate environment may affect interest margins and the valuation of various assets and liabilities;

the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve;

general economic or business conditions, either nationally or in the states or regions in which TriCo and FNBB do business, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality or a reduced demand for credit;

legislation or changes in regulatory requirements may adversely affect the businesses in which TriCo and FNBB are engaged;

adverse changes may occur in the securities markets; and

competitors of TriCo may have greater financial resources and develop products and technology that enable those competitors to compete more successfully than TriCo.

Because these forward-looking statements are subject to assumptions and uncertainties, TriCo’s and FNBB’s actual results may differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of the management of each of TriCo

and FNBB based on information known to them as of the date of this joint proxy statement/prospectus. FNBB and TriCo shareholders are cautioned not to place undue reliance on these statements, which speak only as of the date of this joint proxy statement/prospectus or the date of any document incorporated by reference or related to in this joint proxy statement/prospectus.

All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this joint proxy statement/prospectus and attributable to TriCo or FNBB or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. TriCo and FNBB undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this joint proxy statement/prospectus or to reflect the occurrence of unanticipated events, unless obligated to do so under the federal securities laws.

GENERAL INFORMATION

This document constitutes a proxy statement for, and is being furnished to all record holders of, TriCo in connection with the solicitation of proxies by the board of directors of TriCo to be used at a special meeting of shareholders of TriCo to be held on [●], 2018 and any adjournment or postponement of the TriCo special meeting. The purposes of the TriCo special meeting are to consider and vote upon a proposal to approve the North Valleymerger agreement and the transactions contemplated therein, including the merger and the issuance of shares of TriCo common stock in connection with the merger, and a proposal to adjourn the TriCo special meeting to the extent necessary to solicit additional votes on the TriCo merger proposal in connection with the merger.

This document also constitutes a proxy statement for, and is being furnished to all record holders of, FNBB in connection with the solicitation of proxies by the board of directors of FNBB to be used at a special meeting of shareholders of FNBB to be held on [●], 2018 and any adjournment or postponement of the FNBB special meeting. The purposes of the FNBB special meeting are to consider and vote upon a proposal to approve the FNBB merger proposal, to approve, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and a proposal to adjourn the FNBB special meeting to the extent necessary to solicit additional votes on the merger agreement.

This document also constitutes a prospectus of TriCo relating to the TriCo common stock to be issued upon completion of the merger to holders of FNBB common stock as the merger consideration. See “The Merger—The Merger proposal.Consideration” beginning on page [●]. Based on [●] shares of FNBB common stock outstanding on [●], 2018 and the exchange ratio of 0.98, approximately [●] shares of TriCo common stock will be issuable to shareholders of FNBB upon completion of the merger, which does not include shares of TriCo common stock issuable to holders of FNBB options that may be exercised prior to the merger and which assumes no change in the exchange ratio.

TriCo has supplied all of the information contained or incorporated by reference herein relating to TriCo and Tri Counties Bank, and FNBB has supplied all of the information contained herein relating to FNBB and First National Bank.

THE TRICO SPECIAL MEETING

Time, Date and Place

A special meeting of shareholders of TriCo will be held at [●], Pacific Time, on [●], [●], 2018 at 890 Fortress Street, Chico, California 95973.

Matters to be Considered

The North Valleypurposes of the TriCo special meeting are to:

consider and vote upon a proposal to approve the merger agreement and the transactions contemplated in the merger agreement, including the merger and the issuance of shares of TriCo common stock to the shareholders of FNBB in connection with the merger; and

consider and vote upon a proposal to adjourn the TriCo special meeting to a later date or dates, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the TriCo special meeting to approve the TriCo merger proposal.

No other business may be conducted at the TriCo special meeting. A copy of the merger agreement is included in this joint proxy statement/prospectus as Appendix A, and TriCo shareholders are encouraged to read it carefully in its entirety.

Recommendation of TriCo’s Board of Directors

The TriCo board of directors (i) has unanimously determined that each of the merger agreement and the transactions contemplated by the merger agreement, including the merger and the issuance of shares of TriCo common stock, are fair and reasonable, advisable and in the best interests of TriCo and its shareholders; (ii) has unanimously approved the merger agreement, the merger and the transactions contemplated thereby and (iii) unanimously recommends that the TriCo shareholders approve the TriCo merger proposal. The TriCo board of directors unanimously recommends athat TriCo shareholders vote “FOR”FOR the North Valley MergerTriCo merger proposal.

Each of See “The Merger—TriCo’s Reasons for the directors of North Valley has entered into a shareholder agreement with TriCo and North Valley, pursuant to which they have agreed to vote “FOR” the North Valley Merger proposal. For more information regarding the shareholder agreements, please see the section entitled “The Merger Agreement—Shareholder Agreements”Merger” beginning on page 96.[●].

The TriCo board of directors also unanimously recommends that TriCo shareholders voteFOR the proposal to adjourn the TriCo special meeting, if necessary, to permit further solicitation of proxies on the TriCo merger proposal.

NORTH VALLEY PROPOSAL: ADVISORY VOTE CONCERNING SPECIFIED COMPENSATIONShares Outstanding and Entitled to Vote; Record Date

The close of business on [*], 2018 has been fixed by TriCo as the record date for the determination of TriCo shareholders entitled to notice of and to vote at the TriCo special meeting and any adjournment or postponement of the TriCo special meeting. At the close of business on the record date, there were [●] shares of TriCo common stock outstanding and entitled to vote, held by approximately [●] holders of record. Each share of TriCo common stock entitles the holder to one vote at the TriCo special meeting on all matters properly presented at the special meeting.

How to Vote TriCo Shares

Shareholders of Record.

TriCo shareholders of record may vote by mail, telephone, via the Internet or by attending the TriCo special meeting and voting in person. If a TriCo shareholder chooses to vote by mail, he or she should simply mark the enclosed proxy card, date and sign it, and return it in the postage-paid envelope provided. Internet and telephone voting is available until 11:59 p.m., Eastern Time, on [●], [●], 2018.

Shares Held in “Street Name.”

If a TriCo shareholder’s shares of TriCo common stock are held through a bank, broker or other nominee, such TriCo shareholder is considered the beneficial owner of such shares held in “street name.” In such case, this joint proxy statement/prospectus has been forwarded by such TriCo shareholder’s bank, broker or other nominee, who is considered, with respect to such shares, the shareholder of record. As the beneficial owner, a TriCo shareholder has the right to direct such bank, broker or other nominee how to vote the shares by following the voting instructions that such bank, broker or other nominee has sent, or will send, to the TriCo shareholder. Without specific instructions from the TriCo shareholder, the bank, broker or other nominee is not empowered to vote a TriCo shareholder’s shares onnon-routine matters such as the proposal to approve the TriCo merger proposal or the proposal of the TriCo board of directors to adjourn the TriCo special meeting, if necessary. Not voting these shares will have the same effect as a vote against the TriCo merger proposal but will have no effect on the proposal of the TriCo board of directors to adjourn the special meeting, if necessary. When the vote is tabulated for the proposals, brokernon-votes, if any, will only be counted for purposes of determining whether a quorum is present. Accordingly, we advise each TriCo shareholder to promptly give instructions to his or her bank, broker or other nominee to voteFOR approval of the TriCo merger proposal andFOR the proposal to adjourn the TriCo special meeting, if necessary, by using the voting instruction card provided to such TriCo shareholder by his or her bank, broker or other nominee. Alternatively, if a TriCo shareholder is a beneficial owner and wishes to vote in person at the TriCo special meeting, the TriCo shareholder must provide a proxy executed in such TriCo shareholder’s favor by the bank, broker or other nominee.

Revocation of Proxies

A TriCo shareholder can revoke a proxy at any time before his or her shares are voted. If the TriCo shareholder is a shareholder of record, the TriCo shareholder can revoke a proxy by:

delivering to TriCo, which must be received by TriCo prior to the TriCo special meeting, a written notice of revocation addressed to: Secretary, TriCo Bancshares, 63 Constitution Drive, Chico, California 95973;

completing, signing and returning a new proxy card with a later date before the date of the TriCo special meeting, which will automatically revoke any earlier dated proxy;

calling the toll-free number listed on the TriCo proxy card or by accessing the Internet site listed on the TriCo proxy card to change his or her vote by 11:59 p.m., Eastern Time, on [●], [●], 2018, in which case the later submitted proxy via telephone or Internet, as the case may be, will be recorded and the earlier dated proxy will be revoked; or

attending the TriCo special meeting and voting in person, which will automatically revoke any earlier proxy. However, simply attending the TriCo special meeting without voting will not revoke a TriCo proxy.

If a TriCo shareholder has instructed a bank, broker or other nominee to vote such TriCo shareholder’s shares of TriCo common stock, the TriCo shareholder must follow directions received from the bank, broker or other nominee to change his or her vote.

Each proxy returned to TriCo (and not revoked) by a holder of TriCo common stock will be voted in accordance with the instructions indicated thereon. If no instructions are indicated on a signed proxy that is returned, such proxy will be voted “FOR” approval of the TriCo merger proposal and “FOR” the proposal to adjourn the TriCo special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the TriCo special meeting to approve the TriCo merger proposal.

Quorum

A quorum, consisting of the holders of a majority of the shares entitled to vote at the TriCo special meeting, must be present in person or by proxy before any action may be taken at the TriCo special meeting. Once a share of

TriCo common stock is represented at the TriCo special meeting, it will be counted for the purpose of determining a quorum not only at the TriCo special meeting but also at any adjournment or postponement of the TriCo special meeting. In the event that a quorum is not present at the TriCo special meeting, it is expected that the TriCo special meeting will be adjourned or postponed.

Abstentions and brokernon-votes will not be counted for purposes of determining the number of votes cast on a proposal but will be treated as present for quorum purposes. “Brokernon-votes” are shares held by banks, brokers or nominees as to which voting instructions have not been received from the beneficial owners or the persons entitled to vote those shares and the bank, broker or nominee does not have discretionary voting power under the applicable New York Stock Exchange rules. Under these rules, the proposals to approve the TriCo merger proposal and to adjourn the TriCo special meeting, if necessary, are not items on which brokerage firms may vote in their discretion on behalf of their clients if such clients have not furnished voting instructions.

Vote Required

The affirmative vote of holders of the majority of the outstanding shares of TriCo common stock is needed to approve the TriCo merger proposal. The affirmative vote of holders of the majority of the shares for which votes are cast at the TriCo special meeting is needed to approve the proposal to adjourn the TriCo special meeting, if necessary.

Because the merger agreement must be approved by holders representing a majority of the outstanding shares of TriCo common stock, abstentions and brokernon-votes will have the same effect as a vote against the merger, as will the failure to vote TriCo shares. Abstentions and brokernon-votes will not be counted as votes cast and, therefore, will not affect the adjournment proposal. Further, the failure to vote, either by proxy or in person, will not have an effect on the adjournment proposal.

Unless instructions to the contrary are specified in a proxy properly voted and returned through available channels, the proxies will be voted “FOR” approval of the merger agreement and “FOR” the proposal to adjourn the TriCo special meeting, if necessary, to permit further solicitation of proxies on the proposal to approve the TriCo merger proposal.

Solicitation of Proxies

TriCo will pay the costs of soliciting its shareholders’ proxies, as well as all other costs incurred by it in connection with the solicitation of proxies from its shareholders on behalf of its board of directors. In addition to solicitation by mail, directors, officers and employees of TriCo may solicit proxies from shareholders of TriCo in person or by telephone, facsimile or other electronic methods without compensation other than reimbursement for their actual expenses TriCo may retain an outside proxy solicitation firm to assist in the solicitation of proxies, but at this time does not plan to do so.

Arrangements also will be made with custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of stock held of record by such persons, and TriCo will reimburse such custodians, nominees and fiduciaries for their reasonableout-of-pocket expenses in connection therewith.

Attending the TriCo Special Meeting

While not required, all holders of TriCo common stock, including shareholders of record and shareholders who hold their shares in street name through banks, brokers or other nominees, are invited to attend the TriCo special meeting. TriCo shareholders of record can vote in person at the TriCo special meeting. If a TriCo shareholder is not a shareholder of record and would like to vote in person at the TriCo special meeting, such TriCo shareholder must produce a proxy executed in his or her favor by the record holder of such TriCo shareholder’s shares. In addition, each TriCo shareholder must bring a form of personal photo identification with him or her in order to be

admitted at the TriCo special meeting. TriCo reserves the right to refuse admittance to anyone without proper proof of share ownership or without proper photo identification. The use of cameras, sound recording equipment, communications devices or any similar equipment during the TriCo special meeting is prohibited without TriCo’s written consent.

Adjournments and Postponements

Although it is not currently expected, the TriCo special meeting may be adjourned or postponed, including for the purpose of soliciting additional proxies, if there are insufficient votes at the time of the TriCo special meeting to approve the TriCo merger proposal or if a quorum is not present at the TriCo special meeting. Other than an announcement to be made at the TriCo special meeting of the time, date and place of an adjourned meeting, an adjournment generally may be made without notice. Any adjournment or postponement of the TriCo special meeting for the purpose of soliciting additional proxies will allow the shareholders who have already sent in their proxies to revoke them at any time prior to their use at the TriCo special meeting as adjourned or postponed.

Questions and Additional Information

If a TriCo shareholder has questions about the merger, please contact Richard P. Smith, TriCo’s President and Chief Executive Officer, at (530)898-0300. If a TriCo shareholder has questions about the process for voting or requires additional copies of this document or a replacement proxy card, please call Craig Compton, TriCo’s Corporate Secretary, at (530) 898-0300.

THE FNBB SPECIAL MEETING

Time, Date and Place

A special meeting of shareholders of FNBB will be held at [●], Pacific Time, on [●], 2018 at The Basque Cultural Center, 599 Railroad Avenue, South San Francisco, California 94080.

Matters to be Considered

The purposes of the FNBB special meeting are to:

consider and vote upon a proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger;

consider and vote upon, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger; and

consider and vote upon a proposal to adjourn the FNBB special meeting to a later date or dates, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the FNBB special meeting to approve the FNBB merger proposal.

No other business may be conducted at the FNBB special meeting. A copy of the merger agreement is included in this joint proxy statement/prospectus as Appendix A, and FNBB shareholders are encouraged to read it carefully in its entirety.

Recommendation of FNBB’s Board of Directors

The FNBB board of directors (i) has unanimously determined that each of the merger agreement and the transactions contemplated by the merger agreement are fair and reasonable, advisable and in the best interests of FNBB and its shareholders; (ii) has unanimously approved the merger agreement, the merger and the transactions contemplated thereby, including the merger and (iii) unanimously recommends that the FNBB shareholders approve the FNBB merger proposal. The FNBB board of directors unanimously recommends that FNBB shareholders vote “FOR” approval of the merger agreement. See “The Merger—FNBB’s Reasons for the Merger” beginning on page [●].

In accordance with Section 14A of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, North ValleyFNBB is providing its shareholders with the opportunity to cast an advisory(non-binding) vote on the compensation that may be payable to its named executive officers in connection with the merger, the value of which is set forth in the table included in the section of this joint proxy statement/prospectus entitled “The Merger—Merger-Related Compensation for North Valley’s NamedInterests of Certain FNBB Officers and Directors in the Merger—Summary of Payments to Certain Executive Officers” beginning on page 75.[●]. As required by Section 14A of the Exchange Act, North ValleyFNBB is asking its shareholders to vote on the adoption of the following resolution:

“RESOLVED, that the compensation that may be paid or become payable to North Valley’sFNBB’s named executive officers in connection with the merger, as disclosed in the table in the section of the joint proxy statement/prospectus statement entitled “The Merger—Interests of Certain FNBB Officers and Directors in the Merger—Merger-Related CompensationCompensatory Arrangements for North Valley’sFNBB’s Named Executive Officers,” including the associated narrative discussion, are hereby APPROVED.approved.

The advisory(non-binding) vote on executive compensation payable in connection with the merger is a vote separate and apart from the vote to approve the merger.FNBB merger proposal. Accordingly, a North Valleyan FNBB shareholder may vote to approve the executive compensation and vote not to approve the FNBB merger proposal and vice versa. Because the vote is advisory in nature only, it will not be binding on either North ValleyFNBB or TriCo. Accordingly,Furthermore, because North ValleyFNBB is contractually obligated to pay the compensation, the compensation will be payable, subject only to the conditions applicable thereto, if the merger is approved, and regardless of the outcome of the advisory vote.

The North ValleyFNBB board of directors unanimously recommends a vote “FOR”FOR” the North Valley Advisory (Non-Binding) Proposaladvisory(non-binding) proposal on Specified Compensation.the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and the agreements and understandings pursuant to which such compensation may be paid or become payable.

The FNBB board of directors also unanimously recommends that FNBB shareholders voteFOR” the proposal to adjourn the FNBB special meeting, if necessary, to permit further solicitation of proxies on the proposal to approve the FNBB merger proposal.

NORTH VALLEY PROPOSAL: ADJOURNMENTShares Outstanding and Entitled to Vote; Record Date

The North Valleyclose of business on [●], 2018 has been fixed by FNBB as the record date for the determination of FNBB shareholders entitled to notice of and to vote at the FNBB special meeting and any adjournment or postponement of the FNBB special meeting. At the close of business on the record date, there were [●] shares of FNBB common stock outstanding and entitled to vote, held by approximately [●] holders of record. Each share of FNBB common stock entitles the holder to one vote at the FNBB special meeting on all matters properly presented at the FNBB special meeting.

As of the close of business on the record date for the FNBB special meeting, neither TriCo nor any of its directors beneficially owned any shares of FNBB common stock.

How to Vote FNBB Shares

Shareholders of Record.

Shareholders of record may vote by mail, telephone, via the Internet or by attending the FNBB special meeting and voting in person. If an FNBB shareholder chooses to vote by mail, he or she should simply mark the enclosed proxy card, date and sign it, and return it in the postage-paid envelope provided. Internet and telephone voting is available until 11:59 p.m., Eastern Time, on [●], [●], 2018.

Shares Held in “Street Name.”

If an FNBB shareholder’s shares of FNBB common stock are held through a bank, broker or other nominee, such FNBB shareholder is considered the beneficial owner of such shares held in “street name.” In such case, this joint proxy statement/prospectus has been forwarded by such FNBB shareholder’s bank, broker or other nominee, who is considered, with respect to such shares, the shareholder of record. As the beneficial owner, an FNBB shareholder has the right to direct such bank, broker or other nominee how to vote the shares by following the voting instructions that they have sent, or will send, to the FNBB shareholder. Without specific instructions from the FNBB shareholder, the bank, broker or other nominee is not empowered to vote an FNBB shareholder’s shares onnon-routine matters such as the proposal to approve the FNBB merger proposal, the proposal to approve, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger, or the proposal of the FNBB board of directors to adjourn the FNBB special meeting, if necessary. Not voting these shares will have the effect of voting against the approval of the merger agreement and against approval of the advisory(non-binding) proposal regarding the compensation that may be payable to FNBB’s named executive officers in connection with the merger, but will not have any effect on the proposal of the FNBB board of directors to adjourn the special meeting, if necessary. When the vote is tabulated for the proposals, brokernon-votes, if any, will only be counted for purposes of determining whether a quorum is present. Accordingly, we advise each FNBB shareholder to promptly give instructions to his or her bank, broker or other nominee to vote “FOR” approval of the merger agreement, “FOR” the proposal to approve, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and “FOR” the proposal to adjourn the FNBB special meeting, if necessary, by using the voting instruction card provided to such FNBB shareholder by his or her bank, broker or other nominee. Alternatively, if an FNBB shareholder is a beneficial owner and wishes to vote in person at the FNBB special meeting, the FNBB shareholder must provide a proxy executed in such FNBB shareholder’s favor by the bank, broker or other nominee.

Revocation of Proxies

An FNBB shareholder can revoke a proxy at any time before his or her shares are voted. If the FNBB shareholder is a shareholder of record, the FNBB shareholder can revoke a proxy by:

delivering to FNBB, which must be received by FNBB prior to the FNBB special meeting, a written notice of revocation addressed to Edward J. Watson, Secretary, FNB Bancorp, 975 El Camino Real, South San Francisco, California 94080;

completing, signing and returning a new proxy card with a later date before the date of the FNBB special meeting, which will automatically revoke any earlier dated proxy;

calling the toll-free number listed on the FNBB proxy card or by accessing the Internet site listed on the FNBB proxy card to change his or her vote by 11:59 p.m., Eastern Time, on [●], 2018, in which case the later submitted proxy via telephone or Internet, as the case may be, will be recorded and the earlier dated proxy revoked; or

attending the FNBB special meeting and voting in person, which will automatically revoke any earlier dated proxy. However, simply attending the FNBB special meeting without voting will not revoke an FNBB proxy.

If an FNBB shareholder has instructed a bank, broker or other nominee to vote such FNBB shareholder’s shares of FNBB common stock, the FNBB shareholder must follow directions received from the bank, broker or other nominee to change his or her vote.

Each proxy returned to FNBB (and not revoked) by a holder of FNBB common stock will be voted in accordance with the instructions indicated thereon. If no instructions are indicated on a signed proxy that is returned, such proxy will be voted “FOR” approval of the merger agreement,FOR the proposal to approve, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and “FOR” the proposal to adjourn the FNBB special meeting, if necessary, to permit further solicitation of proxies on the proposals.

Quorum

A quorum, consisting of the holders of a majority of the shares entitled to vote at the FNBB special meeting, must be present in person or by proxy before any action may be taken at the FNBB special meeting. Once a share of FNBB common stock is represented at the FNBB special meeting, it will be counted for the purpose of determining a quorum not only at the FNBB special meeting but also at any adjournment or postponement of the FNBB special meeting. In the event that a quorum is not present at the FNBB special meeting, it is expected that the FNBB special meeting will be adjourned or postponed.

Abstentions and brokernon-votes will not be counted for purposes of determining the number of votes cast on a proposal but will be treated as present for quorum purposes. “Brokernon-votes” are shares held by banks, brokers or nominees as to which voting instructions have not been received from the beneficial owners or the persons entitled to vote those shares and the bank, broker or nominee does not have discretionary voting power under the applicable New York Stock Exchange rules. Under these rules, the proposals to approve the FNBB merger proposal, approve, on an advisory(non-binding) basis, the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and to adjourn the special meeting are not items on which brokerage firms may vote in their discretion on behalf of their clients if such clients have not furnished voting instructions.

Vote Required

The affirmative vote of the holders of a majority of the outstanding shares of FNBB common stock is necessary to approve the FNBB merger proposal. The proposal to approve, on an advisory(non-binding) basis, the

compensation that may be payable to FNBB’s named executive officers in connection with the merger, and to adjourn the special meeting, if necessary, to permit further solicitation of proxies, must be approved by the affirmative vote of a majority of the shares of FNBB common stock represented and entitled to vote at the FNBB special meeting.

Because the proposal to approve the FNBB merger proposal is required to be approved by the holders of a majority of the outstanding shares of FNBB common stock, abstentions and brokernon-votes, as well as the failure of an FNBB shareholder to vote by proxy or in person at the FNBB special meeting, will have the same effect as a vote against the proposal to approve the FNBB merger proposal.

Because the affirmative vote of a majority of shares of FNBB common stock represented and entitled to vote at the FNBB special meeting (which shares voting affirmatively must constitute a majority of the required quorum) is needed to approve the advisory(non-binding) proposal regarding the compensation that may be payable to FNBB’s named executive officers in connection with the merger, and the adjournment proposal, abstentions and brokernon-votes will not have any effect on these proposals. However, if the number of affirmative votes cast for these proposals is a majority of the votes cast, but such votes do not constitute a majority of the quorum required to transact business at the special meeting, then abstentions and brokernon-votes will have the same effect as a vote against the proposal of the FNBB board of directors to adjourn the FNBB special meeting.

Shares of FNBB Subject to Voting Agreements

Directors and executive officers of FNBB, who collectively own and have the power to vote approximately 20% of the outstanding shares of FNBB common stock, have entered into shareholder agreements with TriCo pursuant to which they have agreed, among other things, to vote all of their shares in favor of the merger agreement. See “The Merger—Shareholder Agreements” on page [●].

Solicitation of Proxies

FNBB will pay for the costs of mailing this joint proxy statement/prospectus to its shareholders, as well as all other costs incurred by it in connection with the solicitation of proxies from its shareholders on behalf of its board of directors. In addition to solicitation by mail, the directors, officers and employees of FNBB may solicit proxies from shareholders of FNBB in person or by telephone, facsimile or other electronic methods without compensation other than reimbursement for their actual expenses. FNBB may retain an outside proxy solicitation firm to assist in the solicitation of proxies, but at this time does not have plans to do so.

Arrangements also will be made with custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of stock held of record by such persons, and FNBB will reimburse such custodians, nominees and fiduciaries for their reasonableout-of-pocket expenses in connection therewith.

Attending the FNBB Special Meeting

While not required, all holders of FNBB common stock, including shareholders of record and shareholders who hold their shares in street name through banks, brokers or other nominees, are invited to attend the FNBB special meeting. Shareholders of record can vote in person at the FNBB special meeting. If an FNBB shareholder is not a shareholder of record and would like to vote in person at the FNBB special meeting, such FNBB shareholder must produce a proxy executed in his or her favor by the record holder of such FNBB shareholder’s shares. In addition, each FNBB shareholder must bring a form of personal photo identification with him or her in order to be admitted at the FNBB special meeting. FNBB reserves the right to refuse admittance to anyone without proper proof of share ownership or without proper photo identification. The use of cameras, sound recording equipment, communications devices or any similar equipment during the FNBB special meeting is prohibited without FNBB’s written consent.

Adjournments and Postponements

Although it is not currently expected, the FNBB special meeting may be adjourned to another time or place, if necessary or appropriate, to solicitpostponed, including for the purpose of soliciting additional proxies, if there are insufficient votes at the time of the North ValleyFNBB special meeting to approve the North Valley Merger proposal.

If, at the North Valley special meeting, the number of shares of North Valley common stock present or represented and voting in favor of the North Valley Merger proposal is insufficient to approve the North Valley MergerFNBB merger proposal North Valley intendsor if a quorum is not present at the FNBB special meeting. Other than an announcement to move to adjournbe made at the North ValleyFNBB special meeting in order to enable the

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North Valley board of directors to solicit additional proxies for approval of the merger. In that event, North Valley will ask its shareholders to vote only upontime, date and place of an adjourned meeting, an adjournment generally may be made without notice. Any adjournment or postponement of the North Valley Adjournment proposal, and not the North Valley Merger proposal or the North Valley Advisory (Non-Binding) Proposal on Specified Compensation.

In the North Valley Adjournment proposal, North Valley is asking its shareholders to authorize the holder of any proxy solicited by the North Valley board of directors to vote in favor of granting discretionary authority to the proxy holders, to adjourn the North ValleyFNBB special meeting to another time and place for the purpose of soliciting additional proxies. Ifproxies will allow the North Valley shareholders approve the North Valley Adjournment proposal, North Valley could adjourn the North Valley special meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from North Valley shareholders who have previously voted.

The North Valley board of directors unanimously recommends a vote “FOR” the North Valley Adjournment proposal.

Each of the directors of North Valley has entered into a shareholder agreement with TriCo and North Valley, pursuantalready sent in their proxies to which they have agreed to vote “FOR” the North Valley Adjournment proposal. For more information regarding the shareholder agreements, please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96.

Other Matters to Come Before the North Valley Special Meeting

No other matters are intended to be brought before the North Valley special meeting by North Valley, and North Valley does not know of any matters to be brought before the North Valley special meeting by others. If, however, any other matters properly come before the North Valley special meeting, the persons named in the proxy will vote the shares represented thereby in accordance with their best judgment on any such matter.

North Valley 2014 Annual Meeting

As a result of the pending merger with TriCo, the North Valley board of directors has postponed the 2014 annual meeting of North Valley shareholders, including the election of directors. North Valley annual meetings are normally held in the month of May each year and the 2013 annual meeting was held on May 30, 2013. If the TriCo merger is consummated during 2014, as anticipated, North Valley shareholders will become TriCo shareholders and North Valley will cease to exist as a corporation, so no annual meeting of North Valley shareholders would be necessary. If, for any reason, completion of the merger is delayed, or the merger agreement is terminated, the North Valley board of directors would then determine whether to call for an annual meeting of North Valley shareholders for 2014, in order to remain in compliance with the bylaws of the corporation and applicable law.

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TRICO ANNUAL MEETING OF SHAREHOLDERS

Date, Time and Place

The annual meeting of TriCo shareholders will be held at TriCo’s headquarters at 63 Constitution Drive, Chico, California at [], Pacific time, on [], 2014. On or about [], TriCo commenced mailing this document and the enclosed form of proxy to its shareholders entitled to vote at the TriCo annual meeting.

Purpose of TriCo Annual Meeting

At the TriCo annual meeting, TriCo shareholders will be asked to:

approve the merger and approve and adopt the merger agreement, a copy of which is attached as Appendix A to this document, and approve the issuance of TriCo common stock, no par value per share pursuant to the merger agreement, which is referred to as the TriCo Merger proposal; and

elect nine directors for terms expiring at the 2015 annual meeting of shareholders;

reapprove the existing performance criteria under the TriCo 2009 equity incentive plan;

approve an advisory resolution concerning the compensation of TriCo executives;

ratify the selection of Crowe Horwath LLP as TriCo’s principal independent auditor for 2014;

approve one or more adjournments of the TriCo annual meeting, if necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the TriCo Merger proposal, which is referred to as the TriCo Adjournment proposal.

Recommendation of the TriCo Board of Directors

The TriCo board of directors unanimously recommends that you vote“FOR” the TriCo Merger proposal,“FOR” the election of TriCo’s director nominees,“FOR” the reapproval of the existing performance criteria under TriCo’s 2009 equity incentive plan, “FOR” the approval of TriCo’s executive compensation program,“FOR” the ratification of Crowe Horwath LLP as TriCo’s principal independent auditor for 2014, and“FOR” any adjournment of the TriCo annual meeting, if necessary or appropriate, including to permit further solicitation of proxies in favor of the above-listed proposals.

Each of the directors of TriCo has entered into a shareholder agreement with TriCo and North Valley, pursuant to which they have agreed to vote“FOR” the TriCo Merger proposal and“FOR” the TriCo Adjournment proposal (if necessary or appropriate). For more information regarding the shareholder agreements, please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96.

TriCo Record Date and Quorum

The TriCo board of directors has fixed the close of business on [] as the record date for determining the holders of TriCo common stock entitled to receive notice of and to vote at the TriCo annual meeting.

As of the TriCo record date, there were [] shares of TriCo common stock outstanding and entitled to vote at the TriCo annual meeting held by [] holders of record. Each share of TriCo common stock entitles the holder to one vote at the TriCo annual meeting on each proposal to be considered at the TriCo annual meeting.

The representation of holders of at least a majority of the shares entitled to vote on the matters to be voted on at the TriCo annual meeting constitutes a quorum for transacting business at the TriCo annual meeting. All shares of TriCo common stock, whether present in person or represented by proxy, including abstentions and broker non-votes, will be treated as present for purposes of determining the presence or absence of a quorum for all matters voted on at the TriCo annual meeting.

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As of the record date, directors and executive officers of TriCo and their affiliates owned and were entitled to vote [] shares of TriCo common stock, representing approximately []% of the shares of TriCo common stock outstanding on that date. TriCo currently expects that TriCo’s directors and executive officers will vote their shares in favor of the TriCo Merger proposal and the TriCo Adjournment proposal. The members of the board of directors of TriCo have each entered into a shareholder agreement with respect to the merger and agreed to vote their shares in favor of the TriCo Merger proposal. Please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96. As of the record date, North Valley beneficially held [] shares of TriCo common stock.

Required Vote

Approval of the TriCo Merger proposal:The affirmative vote of a majority of the outstanding shares of TriCo common stock entitled to vote is required to approve the TriCo Merger proposal.

Election of directors:The nine directors who receive the most votes will be elected. If you do not vote for a particular nominee, or you indicate “WITHHOLD” authority to vote for a particular nominee on your proxy card, your vote will not count either “FOR” or “AGAINST” the nominee. In the election of directors, under California law and TriCo’s bylaws, you may cumulate your votes in the election of the directors by following the procedures described at “Corporate Governance, Board Nomination and Board Committees—Nomination and Election of Directors.” If the proxy is marked “FOR” all of the director nominees or not marked with respect to election of directors, authority will be granted to the persons named in the proxy to cumulate votes if they so choose and to allocate votes among the nominees in such a manner as they determine is necessary in order to elect all or as many of the nominees as possible.

Reapproval of the existing performance criteria under the TriCo 2009 equity incentive plan:Assuming a quorum is present, the affirmative vote of a majority of the shares of TriCo common stock represented (in person or by proxy) at the TriCo annual meeting and entitled to vote on the proposal is required to approve the equity incentive plan proposal.

Approval of the advisory vote on executive compensation:Assuming a quorum is present, the affirmative vote of a majority of the shares of TriCo common stock represented (in person or by proxy) at the TriCo annual meeting and entitled to vote on the proposal is required to approve the advisory vote on executive compensation proposal.

Ratification of the principal independent auditor:Assuming a quorum is present, the affirmative vote of a majority of the shares of TriCo common stock represented (in person or by proxy) at the TriCo annual meeting and entitled to vote on the proposal is required to approve the principal independent auditor proposal.

Approval of the TriCo Adjournment proposal: Assuming a quorum is present, the affirmative vote of a majority of the shares of TriCo common stock represented (in person or by proxy) at the TriCo annual meeting and entitled to vote on the proposal is required to approve the TriCo Adjournment proposal.

Treatment of Abstentions; Failure to Vote

For purposes of the TriCo annual meeting, an abstention occurs when a TriCo shareholder attends the TriCo annual meeting, either in person or by proxy, but abstains from voting.

For the TriCo Merger proposal, an abstention or failure to vote will have the same effect as a vote cast“AGAINST” this proposal.

Abstentions will not impact the election of directors.

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Abstentions will have no effect on the proposals to reapprove the existing performance criteria under TriCo’s 2009 equity incentive plan, the advisory proposal concerning executive compensation, the ratification of TriCo’s principal independent auditor for 2014, and the TriCo Adjournment, unless there are insufficient votes in favor of these proposals, such that the affirmative votes constitute less than a majority of the required quorum. In such cases, abstentions will have the same effect as a vote against these proposals.

Voting on Proxies; Incomplete Proxies

Giving a proxy means that a TriCo shareholder authorizes the persons named in the enclosed proxy card to vote its shares at the TriCo annual meeting in the manner it directs. A TriCo shareholder may vote by proxy or in person at the TriCo annual meeting. If you hold your shares of TriCo common stock in your name as a shareholder of record, to submit a proxy, you, as a TriCo shareholder, may use one of the following methods:

By telephone: Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week. Have your proxy card handy when you call. You will be prompted to enter your control number(s), which is located on your proxy card, and then follow the directions given.

Through the Internet: Use the Internet to vote your proxy 24 hours a day, 7 days a week. Have your proxy card handy when you access the website. You will be prompted to enter your control number(s), which is located on your proxy card, to create and submit an electronic ballot.

By mail: Complete and return the proxy card in the enclosed envelope. The envelope requires no additional postage if mailed in the United States.

TriCo requests that TriCo shareholders vote by telephone, over the Internet or by completing and signing the accompanying proxy and returning it to TriCo as soon as possible in the enclosed postage-paid envelope. When the accompanying proxy is returned properly executed, the shares of TriCo stock represented by it will be voted at the TriCo annual meeting in accordance with the instructions contained on the proxy card.

If any proxy is returned without indication as to how to vote, the shares of TriCo common stock represented by the proxy will be voted as recommended by the TriCo board of directors. Unless a TriCo shareholder checks the box on its proxy card to withhold discretionary authority, the proxy holders may use their discretion to vote on any other matters voted upon at the TriCo annual meeting.

If a TriCo shareholder’s shares are held in “street name” by a broker, bank or other nominee, the shareholder should check the voting form used by that firm to determine whether it may vote by telephone or the Internet.

Every TriCo shareholder’s vote is important. Accordingly, each TriCo shareholder should sign, date and return the enclosed proxy card, or vote via the Internet or by telephone, whether or not the TriCo shareholder plans to attend the TriCo annual meeting in person.

Shares Held in Street Name

If you are a TriCo shareholder and your shares are held in “street name” through a bank, broker or other holder of record, you must provide the record holder of your shares with instructions on how to vote the shares. Please follow the voting instructions provided by the bank or broker. You may not vote shares held in street name by returning a proxy card directly to TriCo or by voting in person at the TriCo annual meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank or other nominee. Further, brokers, banks or other nominees who hold shares of TriCo common stock on behalf of their customers may not give a proxy to TriCo to vote those shares with respect to any of the proposals without specific instructions from their customers, as brokers, banks and other nominees do not have discretionary voting power on these matters. Therefore, if you are a TriCo shareholder and you do not instruct your broker, bank or other nominee on how to vote your shares:

your broker, bank or other nominee may not vote your shares on the TriCo Merger proposal, which broker non-votes will have the same effect as a vote“AGAINST” this proposal; and

your broker, bank or other nominee may not vote your shares on the TriCo Adjournment proposal, which broker non-votes will have no effect on the vote count for this proposal.

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Voting of Shares Held in the TriCo Bancshares ESOP

If you hold your shares indirectly in the TriCo Bancshares ESOP, you have the right to direct the TriCo trustee how to vote shares allocated to your plan account as described in the voting materials sent to you by the TriCo trustee.

Revocability of Proxies and Changes to a TriCo Shareholder’s Vote

A TriCo shareholder has the power to change its voterevoke them at any time before its shares of TriCo common stock are votedprior to their use at the TriCo annualFNBB special meeting by:as adjourned or postponed.

Questions and Additional Information

sending

If an FNBB shareholder has questions about the merger or the process for voting or if additional copies of this document or a notice of revocation to TriCo Bancshares, Attention: Corporate Secretary, 63 Constitution Drive, Chico, California 95973 stating that you would like to revoke your proxy;

logging onto the Internet website specified on yourreplacement proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card, in each case if you are eligible to do so and following the instructions on the proxy card;

sending a completed proxy card bearing a later date than your original proxy card; or

attending the TriCo annual meeting and voting in person.

If you choose any of the first three methods, you must take the described action no later than the beginning of the TriCo annual meeting. If you choose to send a completed proxy card bearing a later date than your original proxy card or a notice of revocation, the new proxy card or notice of revocation must be received before the beginning of the TriCo annual meeting. If you have instructed a bank, broker or other nominee to vote your shares of TriCo common stock, you must follow the directions you receive from your bank, broker or other nominee in order to change or revoke your vote.

Solicitation of Proxies

The cost of solicitation of proxies from TriCo shareholders will be borne by TriCo. TriCo will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of common stock. In addition to solicitations by mail, TriCo’s directors, officers and regular employees may solicit proxies personally or by telephone without additional compensation.

Discontinuing Multiple Mailings

If you are a shareholder of record and have more than one account in your name orneeded, please contact Thomas C. McGraw, FNBB’s Chief Executive Officer at the same address as other shareholders of record, you may authorize TriCo to discontinue mailings of multiple annual reports and proxy statements, including this joint proxy statement/prospectus. To discontinue multiple mailings, or to reinstate multiple mailings, please mail your request to TriCo Bancshares, Attention: Shareholder Relations, 63 Constitution Drive, Chico, California 95973.

Attending the TriCo Annual Meeting

Subject to space availability, all TriCo shareholders as of the record date, or their duly appointed proxies, may attend the TriCo annual meeting. Since seating is limited, admission to the TriCo annual meeting will be on a first-come, first-served basis. Registration and seating will begin at [(650)588-6800.], Pacific time.

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If you hold your shares of TriCo common stock in your name as a shareholder of record and you wish to attend the TriCo annual meeting, please bring your proxy and evidence of your stock ownership, such as your most recent account statement, to the TriCo annual meeting. You must also bring valid picture identification.

If your shares of TriCo common stock are held in “street name” in a stock brokerage account or by a bank or nominee and you wish to attend the TriCo annual meeting, you need to bring a copy of a bank or brokerage statement to the TriCo annual meeting reflecting your stock ownership as of the record date. You must also bring valid picture identification.

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TRICO PROPOSAL: MERGER

As discussed throughout this joint proxy statement/prospectus, TriCo is asking its shareholders to approve the TriCo Merger proposal. Holders of TriCo common stock should read carefully this joint proxy statement/prospectus in its entirety, including the appendices, for more detailed information concerning the merger agreement and the merger. In particular, holders of TriCo common stock are directed to the merger agreement, a copy of which is attached as Appendix A to this joint proxy statement/prospectus.

Vote Required and TriCo Board Recommendation

The affirmative vote of a majority of the outstanding shares of TriCo common stock entitled to vote is required to approve the TriCo Merger proposal.

The TriCo board of directors unanimously recommends a vote “FOR” the TriCo Merger proposal.

Each of the directors of TriCo has entered into a shareholder agreement with TriCo and North Valley, pursuant to which they have agreed to vote “FOR” the TriCo Merger proposal. For more information regarding the shareholder agreements, please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96.

THE MERGER

The following is a discussion of the merger andinformation describes the material termsaspects of the merger agreement between TriCo and North Valley. You are urged to read carefully the merger agreement in its entirety, a copy of which is attached as Appendix A to this joint proxy statement/prospectus and incorporated by reference herein.merger. This summarydescription does not purport to be complete and may not contain all ofis qualified in its entirety by reference to the information about the merger agreement that is importantappendices to you. This section is not intended to provide you with any factual information about TriCo or North Valley. Such information can be found elsewhere in this joint proxy statement/prospectus, including the merger agreement which is attached as Appendix A and incorporated by reference into this joint proxy statement/prospectus. Shareholders of both TriCo and FNBB should carefully read the appendices and the documents incorporated herein in their entirety.

Structure of the Merger

Pursuant to the terms and conditions set forth in the public filings TriCo and North Valley make with the SEC, as described in the section entitled “Where You Can Find More Information” beginning on page v.

Terms of the Merger

Transaction Structure

TriCo’s and North Valley’s boards of directors unanimously have approved the merger agreement. The merger agreement, provides for the acquisition of North Valley by TriCo through the merger of North Valleyhas agreed to acquire FNBB in a transaction in which FNBB will merge with and into TriCo, with TriCo continuing as the surviving corporation.corporation, which is referred to as the merger. Immediately uponfollowing the closingconsummation of the merger, North ValleyFirst National Bank a wholly owned subsidiary of North Valley, will merge with and into Tri Counties Bank, a bank chartered under the laws of the State of California and a wholly owned subsidiary of TriCo, with Tri Counties Bank beingas the surviving bank.institution, which is referred to as the bank merger. Following consummation of the bank merger, Tri Counties Bank intends to continue to operate all of the branches acquired from First National Bank.

Merger Consideration

InFollowing the consummation of the merger, TriCo’s articles of incorporation and bylaws as in effect immediately prior to the merger will continue as the governing corporate documents of TriCo. The directors and executive officers of TriCo immediately prior to the merger will continue as the directors and executive officers of TriCo after the merger, in each share of North Valley common stock, no par value per share, owned by a North Valley shareholder (including the associated preferred stock purchase rights issuedcase, until their respective successors are duly elected or appointed and qualified. In addition, pursuant to the Amended and Restated Shareholder Protection Rights Agreement dated as of March 26, 2009, as amended, between North Valley and Computershare, Inc., as Rights Agent) will be converted into the right to receive 0.9433 shares of TriCo common stock, no par value per share. A North Valley shareholder will receive any whole shares of TriCo common stock such holder is entitled to receive and cash in lieu of any fractional shares of TriCo common stock such holder is entitled to receive.

Based on the closing share price of TriCo common stock of $27.93 on January 21, 2014, the last trading day before the announcementterms of the merger agreement, FNBB and TriCo will select two current directors of FNB Bancorp to become additional directors of TriCo and Tri Counties Bank upon the valueeffectiveness of the merger consideration was $26.35 per share. The value of the TriCo common stock on [], the most recent day for which information was available prior to the printing and

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mailing of this document, was [] based upon the exchange ratio.The share price of TriCo common stock will fluctuate and accordingly, the value of the merger consideration you receive may be different than either of these amounts.merger.

Treatment of North Valley Stock Options

Immediately prior to the effective time of the merger, each outstanding option to purchase shares of North Valley common stock, whether or not then vested and whether or not then exercisable, will be cancelled and the holder of the option will be entitled to receive, subject to any required tax withholding, an amount in cash, without interest, from North Valley equal to the product of (x) the total number of shares of North Valley common stock subject to the option times (y) the excess, if any, of the product of 0.9433 multiplied by the weighted average of the closing prices for shares of TriCo common stock as quoted on the NASDAQ Global Select Market for the 20 consecutive trading days ending on the trading day immediately before the closing date over the exercise price per share under such option. As consideration for the cancellation of out-of-the-money options, the holders (other than directors and executive officers) will be entitled to receive $500.00 for each outstanding option held. The North Valley board of directors has the right to amend all option plans and agreements governing all outstanding options to purchase shares of North Valley common stock to make them fully vested and exercisable before the closing date to permit the option holders to exercise their options before the date on which the options otherwise would terminate.

Background of the Merger

Each of TriCo’s and North Valley’s board of directors and management regularly review their respective business strategies, opportunities and challenges as part of their consideration and evaluation of their respective long-term prospects, with the goal of enhancing value for their respective shareholders. The strategic considerations have focused on, among other things, the business and regulatory environment facing financial institutions generally and each of TriCo and North Valley, in particular, as well as conditions and ongoing consolidation in the financial services industry. For each company, these reviews have also included periodic discussions with respect to potential transactions that would further its strategic objectives, and the potential benefits and risks of those transactions.

TriCo has considered acquisitions as a means of achieving growth and expanding its market. Consistent with this strategy, on May 28, 2010, TriCo acquired $100.3 million in assets and assumed $95.0 million of deposits of Granite Community Bank, N.A. in Granite Bay, California under a purchase and assumption agreement with the FDIC. On September 23, 2011, TriCo acquired $270.4 million in assets and assumed $239.9 million of deposits of Citizens Bank of Northern California under a purchase and assumption agreement with the FDIC.

In the normal course of its business, North ValleyFNBB has from time to time received unsolicited verbaloral inquiries from various sources regarding possible interest in a business combination transaction. The general policy of the board of directors has been to not respond to these unsolicited verbal inquiries unless confirmed in writing from a credible source.inquiries. At the same time, in the context of its annual budgeting and planning process, the board of directors has periodically discussed and evaluated strategic planning alternatives and whether they would be in the best interests of shareholders. DiscussionsRecent discussions have included the possibility of making additional acquisitions (such as FNBB’s acquisitions of Oceanic Bank in 2012 and America California Bank in 2015) and whether to remain independent or to consider a combination with some other financial institution. Discussion of these topics has typically involved a review of current and projected market conditions, the results of operations of North ValleyFNBB and North ValleyFirst National Bank, certain peer group performance comparisons, reported merger and acquisition activity, and selected industry information and analysis provided to the board of directors by its financial advisors.

At the annual retreat of the board of directors, held on September 28, 2012, in connection with consideration of the Strategic Plan and 2013 Budget for North Valley, the board of directors discussed and evaluated various strategic planning alternatives and whether they would be in the best interests of shareholders. The board discussions were principally focused on the highly competitive banking market in which North Valley currently operates (competition for deposits and loans, in particular), the current level of new bank formations and bank mergers in northern California, and the current and projected interest rate environment for commercial banks. These discussions also examined the importance of operational scale and financial resources in the current banking environment. North Valley’s board of directors tookenvironment, taking notice of the possibility that a business combination with a larger financial institution, having more resources, higher lending limits, a more geographically diversified customer

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base and product offerings, and with more liquidity in its common stock, could produce a stronger financial institution and increase value for North Valley’sFNBB’s shareholders. AtWithout making any change in the conclusion of the retreat on September 28, 2012, theboard’s general position to remain independent, FNBB’s board of directors instructed FNBB’s chief executive managementofficer to keep the board informed regarding the receipt of any unsolicited inquiries from representatives of other financial institutions that might expressexpressing interest in a possible business combination with North Valley, without making any change inFNBB.

During 2016 and 2017, the board’s general position that North Valley should remain independent.

In November 2012, North Valleychief executive officer of FNBB and First National Bank, Thomas C. McGraw, was approached on an unsolicited informal basisinformally by a bank holding company we refer to as “Company A”seven financial institutions including TriCo expressing preliminary interest in discussing a business combination transaction with North Valley. ThisFNBB. These verbal inquiry wasinquiries were reported to the chairman of the board of directors, who keptwithout anyfollow-up action being authorized or taken.

At an executive session of FNBB’s board of directors on April 28, 2017, without making any change in the board’s general position to remain independent while seeking to increase shareholder value, members of

executive management were instructed to review the potential for future earnings growth under various scenarios and to report back to the FNBB board of directors. FNBB’s executive management presented its preliminary report to the board of directors informed. Theon May 26, 2017. Thereafter, on June 14, 2017, the board of directors did not authorize executive managementdetermined to interview at least three investment banking firms, each with the requisite expertise and experience to advise the board on strategic planning matters. FNBB’s board of directors also established a committee composed entirely ofnon-employee (independent) directors Lisa Angelot, Tom Atwood and Ed Watson, with the authority to conduct interviews and make any written response to this verbal inquiry.recommendations for consideration by the entire board of directors. Following the completion of these interviews, the committee recommended and the board of directors approved the selection of Courtney, a private equity and investment banking firm based in Newport Beach, California.

At a meeting of the North Valleyheld on July 28, 2017, FNBB’s board of directors held on November 29, 2012, the board of directors continued its discussion ondiscussed further the subject of strategic planning alternatives andin the current banking environment with its executive management. Representatives of Sandler O’Neill, a nationally recognized investment banking firm whose principal business specialty is representing financial institutions, attended this meeting. From time to time over the years, Sandler O’Neill has consulted with North Valley’s board of directors and executive management regarding strategic planning alternatives, securities portfolio management and other corporate matters. These discussions carried over to a meeting of the board of directors heldInformation on December 20, 2012. At these board meetings, Sandler O’Neill discussed West Coastwest coast bank merger and acquisition activity and the potential strengths and weaknesses of various financial institutions that recently or in the past had completed business combination transactions. At thistransactions was examined. Based on the information and data reviewed at the meeting, the board of directors determined that it would be in the best interests of the shareholders of North ValleyFNBB to investigate, on a confidential and preliminary basis, with the assistance of Courtney, their strategic alternatives and the viability of a possiblepotential combination with certain of those financial institutions.

Following the meeting of FNBB’s board of directors on July 28, 2017, FNBB contacted C. Matthew Allen, Managing Principal of Courtney, regarding his preparation of a draft engagement letter for financial advisory services. From time to time in the past, Mr. Allen had consulted with FNBB’s board of directors and executive management regarding strategic planning alternatives, securities portfolio management and other corporate matters. In the past, Mr. Allen also had provided financial advisory services to FNBB and First National Bank in connection with multiple merger and acquisition transactions. The FNBB board of directors considered the various terms of the draft engagement letter proposed by Courtney and, with the assistance of FNBB legal counsel, negotiated changes and then provided direction to the Chief Executive Officer, Thomas C. McGraw, authorizing him to finalize and sign the engagement letter. FNBB signed the engagement letter on August 4, 2017, pursuant to which Courtney agreed to provide the board of directors with (i) financial analysis with respect to current market conditions affecting financial institutions and the valuation of financial institutions, and (ii) financial analysis with respect to the consideration of various strategic alternatives, including remaining independent and a possible business combination.

On August 16, 2017, the FNBB board of directors convened a special meeting with Courtney to discuss strategic alternatives and a general timetable for conducting exploratory inquiries. After further discussion, the board of directors identified a number ofseventeen financial institutions, (including Company Aincluding TriCo and TriCo)other institutions that couldhad previously expressed interest (verbally) in a potential transaction with FNBB, to be contacted for the purpose of confirming anytheir interest in proceeding with an exchange of financial information under the terms of a confidentiality agreement. Sandler O’NeillCourtney was authorized to contact each of those institutions on behalf of North ValleyFNBB and North Valley’s legal counsel preparedFirst National Bank, utilizing a form of confidentiality and nondisclosure agreement approved by FNBB’s legal counsel for that purpose. Sandler O’NeillCourtney was instructed to request any institution with preliminary interest to respond by September 8, 2017, so that Courtney could report back to the board of directors regarding the results of its investigations at the monthly meetings of the board, at which time North Valley’s executive management, legal counsel and Sandler O’Neill would be asked to discuss the results of the contacts made with the designated institutions.

On January 7, 2013, TriCo signed Courtney attended a confidentiality agreement with North Valley. Thereafter, TriCo’s chief executive officer gave the TriCo board monthly updates regarding the discussions with North Valley.

On January 8, 2013, a bank holding company we refer to as “Company B” signed a confidentiality agreement with North Valley and was provided financial information. Thereafter, Company B indicated interest in discussing a potential business combination transaction with North Valley. On March 19, 2013, the North Valley chief executive officer and chief financial officer, along with a representativeregular meeting of Sandler O’Neill, held a meeting with the chief executive officer of Company B. Selected information was shared and discussed between the parties. A formal letter of interest from Company B never materialized.

On January 10, 2013, Company A signed a confidentiality agreement with North Valley and on March 4, 2013, the North Valley chief executive officer and chief financial officer, along with representatives of Sandler O’Neill, held a meeting with the chief executive officer and chief financial officer of Company A. A formal letter of interest from Company A never materialized.

On February 20, 2013, the North Valley chief executive officer and chief financial officer, along with a representative of Sandler O’Neill, met informally with the chief executive officer and chief financial officer of TriCo. A tentative procedure for exchanging additional due diligence information was discussed.

Sandler O’Neill attended meetings of the North ValleyFNBB’s board of directors held on January 31, 2013, February 28, 2013 and March 28, 2013,August 25, 2017 and reported on the status of its contacts with various financial institutions.

During this three-monththe period from August 16, 2017 through September 8, 2017, seven of the financial institutions approached by Sandler O’Neill (including Company A, Company B and TriCo)declined interest, ten financial institutions executed a confidentiality agreement with North ValleyFNBB and were provided with access to selected FNBB financial and other information posted in a packageconfidential data room created for the purpose, and four financial institutions, including TriCo, submittednon-binding expressions of selected information onpreliminary interest. All four of those institutions had executed a confidentiality agreement with FNBB and were provided with access to the financial condition and results of operations of North Valley.same data room information.

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At a special meeting of the FNBB’s board of directors held on April 25, 2013, Sandler O’NeillSeptember 13, 2017, Courtney reported further on and the statusFNBB board of directors reviewed and discussed the four non-binding expression of interest letters. The non-

binding expression of interest letters included proposed preliminary consideration, subject in each case to the results of due diligence reviews, with implied values ranging from $32.50 to $36.00. TriCo’s proposed preliminary merger consideration consisted of TriCo shares of common stock for each share of FNBB common stock, with an implied value in the range of $34.50 to $36.00 per share of FNBB common stock and its non-binding expression of interest letter stated that TriCo would consider the addition of FNBB directors to TriCo’s board of directors as part of its contactsdiligence process. After extensive discussion regarding the proposed terms and merits of the four letters, FNBB’s board of directors instructed Courtney to suspend all further contact with various financial institutions, including the institutions thattwo companies having the lowest proposed consideration. The FNBB board of directors also instructed Courtney to arrangein-depth due diligence meetings in South San Francisco between FNBB directors and management and the representatives of TriCo and the other remaining company, which we refer to as Company A. Because both TriCo and Company A had signed confidentiality agreements and were provided with selected financial information. At that time, no institution had yet provided a formal indication of interestrequested exclusivity in a potential combination with North Valley. As regards TriCo, Sandler O’Neill and executive management discussed withfurther discussions, the board of directors determined that additional information regarding their beliefproposed transaction structures would be appropriate. In addition, the Company A expression of interest letter indicated that the potential benefitsif FNBB received an offer from an interested party other than Company A and such offer included a higher price than proposed by Company A, then Company A would be prepared to increase its proposed consideration to be derived from a combination with North Valley were still under consideration by TriCo and its advisors but that no conclusions or decisions had been reached about whether or not to proceed. Sandler O’Neill also updatedone percent higher than the board on the status of merger and acquisition activity among financial institutions on the West Coast. During the month of May 2013, there were no material developments.other party’s offer.

During the monthsweeks of JuneSeptember 18 and July, 2013, North Valley was approached on an unsolicited informal basis by an additional financial institution we refer25, 2017, both TriCo and Company A conductedon-site due diligence in South San Francisco and met with representatives of FNBB. On September 29, 2017, Courtney reported to as “Company C” expressing preliminary interest in discussing a business combination. On June 14, 2013, under the standing authority previously granted by the board of directors North Valley executed mutual confidentiality agreements withon the outcome of those meetings. During theon-site due diligence review by Company C. The North Valley chief executive officer and chief financial officer met with their counterparts at Company C and information was exchanged. Contacts with Company C and with TriCo were reported atA, the meetings ofFNBB board of directors heldand management met with directors and management of Company A to discuss their business plans and other matters relevant to a proposed business combination. Thereafter, on July 25, 2013October 5, 2017, six members of the FNBB board of directors (including the Chief Executive Officer, Thomas C. McGraw) traveled to Chico, California and August 22, 2013.met with four members of the TriCo board of directors (including TriCo’s Chief Executive Officer, Richard P. Smith) for the same general purposes as in the case of the meeting with directors and management of Company A.

On September 18, 2013,October 12, 2017, the North ValleyFNBB board of directors held a special meeting to review and discuss a letter received on September 10, 2013 from Company C, and a lettertwo outstanding non-binding expression of interest letters received from TriCo and Company A. TriCo had submitted an updated non-binding expression of interest letter on September 13, 2013, both letters expressingOctober 10, 2017, proposing revised preliminary consideration consisting of shares of TriCo common stock for each share of FNBB common stock, having an implied value of $41.50 per share of FNBB common stock based on the market price of TriCo common stock on October 10, 2017. TriCo also proposed that two of FNBB’s directors, who were not determined, join TriCo’s board of directors at the time of the merger. Company A had also submitted an updated expression of interest in proceeding with discussions aboutletter on October 10, 2017, proposing preliminary consideration consisting of shares of Company A common stock for each share of FNBB common stock, having an implied value of $38.00 per share of FNBB common stock based on the market price of Company A common stock on October 9, 2017. The updated non-binding expression of interest letter submitted by Company A did not, however, repeat its previous indication of a possible business combination with North Valley. Both of these financial institutions had been provided selected financial information under the terms of confidentiality agreements. Sandler O’Neillwillingness to increase its proposed consideration to be one percent higher than a competing offer. Courtney attended the special meeting and reviewed withprovided the board of directors with an analysis of the potential considerationdeal structure represented by each updated non-binding expression of interest letter. After extensive discussion, the board of directors decided to seek clarification of certain points addressed in the letters and instructed Sandler O’Neill to contact both financial institutions for this purpose.

On September 25, 2013, the North Valley board of directors held a special meeting (at the annual North Valley retreat) to continue the board’s discussion of the two expression of interest letters, including a supplemental letter submitted by TriCo dated September 24, 2013 and a revised expression of interest letter dated September 24, 2013 from Company C. At this meeting, Sandler O’Neill reviewed with the board of directors the financial condition and results of operations of these financial institutions, together with various considerations in evaluating whether to pursue a potential business combination. Following further evaluation of the expression of interest letters, North Valley’s board of directors determined that it would be in the best interests of North ValleyFNBB and its shareholders to pursuegive priority to a further review of the TriCo non-binding expression of interest letter, following which TriCo provided a further updated expression of interest letter dated October 12, 2017, proposing revised preliminary consideration consisting of shares of TriCo common stock at an exchange ratio of 1.000 share of TriCo common stock for each share of FNBB common stock, having an implied value of $41.85 for each share of FNBB common stock based on the market price of TriCo common stock on October 10, 2017. TriCo’s October 12, 2017 letter included a30-day exclusivity period during which TriCo would continue its due diligence review with the right to extend the review period for an additional 30 days, provided that TriCo before proceeding further with Company C. Accordingly,continued to conduct due diligence and negotiate the proposed terms of a definitive agreement in good faith. The FNBB board of directors authorized Sandler O’NeillCourtney and executive management to contact TriCo and facilitate a continuation of TriCo’s due diligence investigation of North Valley and, atFNBB. At the same time, the North Valley board of directors authorized and directed Courtney to notify Company A of its decision to suspend negotiations with Company A. On October 13, 2017, FNBB signed and returned TriCo’s updated non-binding expression of

interest letter for the continuation of negotiations with TriCo, including a morein-depth due diligence investigation of TriCo during the30-day exclusivity period.

On October 18, 2017, FNBB entered into a confidentiality andnon-disclosure agreement to facilitate further due diligence on TriCo. During the following week, TriCo established a confidential data room for FNBB’s online due diligence review purposes, and on October 24, 2017, TriCo sent FNBB a first draft of a proposed definitive agreement, with draft exhibits including as Exhibit A, a form of shareholder agreement to be signed by all directors and executive managementofficers of FNBB. Among other matters, this first draft of the proposed definitive merger agreement included a preliminary proposed exchange ratio of 1.000 share of TriCo common stock for each share of FNBB common stock, subject to ongoing due diligence reviews. On October 26, 2017, the FNBB Chief Executive Officer and members of the FNBB board of directors met with Courtney and legal counsel to commence a more in-depth due diligence investigationFNBB to identify the principal questions and issues raised by TriCo’s first draft of TriCo. Also, as directed by the proposed definitive merger agreement. The first draft and related documents were then discussed with all members of the FNBB board of directors executive management advised Company Cat a meeting held on October 26, 2017. Also on October 26, 2017, FNBB issued a press release, announcing its operating results and earnings for the third quarter of 2017.

During the board’s decision.

On Septemberweek of October 30, 2013, the2017, independent directors Lisa Angelot and Thomas G. Atwood, along with executive management represented by the chief executive officer, the chief financial officer and the general counsel of North Valley, accompanied by a representative of Sandler O’Neill, attended a meeting with the chief executive officer andpresident, the chief financial officer, of TriCo,the chief credit officer, and other senior credit administration and lending personnel, and accompanied by representatives of KBW, financial advisor to TriCo. The parties attending this meeting discussed a process for proceeding with further mutual due diligence investigationsCourtney and a tentative timetable for same.

During the month of October, 2013,FNBB legal counsel, performed a due diligence team representingvisitation review at the TriCo visited Redding, California, and conducted an on-siteheadquarters in Chico, supplementing their review of North Valley and North Valley Bank.the confidential internal information TriCo also conducted additional due diligence investigation of North Valley materials providedposted to the TriCo and its legal counsel. Following its due diligence investigation of North Valley, TriCo representatives expressed continuing interest indata room for FNBB review.

At a transaction with North Valley.

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On October 17, 2013,special meeting on November 6, 2017, the FNBB board of directors of North Valley held a meeting to discussdiscussed the status and results to date ofadditional TriCo information gathered by the onsite due diligence process authorized byteam in Chico the prior week. FNBB’s board of directors on September 25, 2013. The board of directors authorized executive management to continue with its due diligence investigation of TriCo and to continue its discussions with TriCo representatives in order to explore the potential terms and conditions of a proposed business combination. Thereafter, during October and November, 2013, a North Valley due diligence team conducted an on-site due diligence investigation of TriCo and its subsidiaries, in Chico, California. At the same time, management and legal counsel reviewed and analyzed the various diligence materials posted by TriCo on a confidential restricted access website established for that purpose.

On December 6, 2013,instructed FNBB’s legal counsel to TriCo provided the North Valley management withprepare a response draft to TriCo’s first draft of a proposed definitive merger agreement. On December 13, 2013, after reviewagreement incorporating the changes, questions and comments of the directors and executive management and to provide such draft withto legal counsel North Valley responded with comments and questions, andfor TriCo. On November 8, 2017, FNBB’s legal counsel transmitted a response draft of the proposed definitive merger agreement to TriCo’s legal counsel. By letter dated November 10, 2017, TriCo provided North Valleyacknowledged receipt of the response draft and notified FNBB of its election to extend the exclusivity period for an additional 30 days, until December 12, 2017, as permitted under TriCo’snon-binding expression of interest letter with FNBB.

On November 15, 2017, TriCo’s legal counsel transmitted a revised draft of theits proposed definitive merger agreement to FNBB’s legal counsel. Members of FNBB’s board of directors discussed this revised draft with Courtney and FNBB’s legal counsel on December 18, 2013.

On December 19, 2013,November 16, 2017, and the North Valleyopen issues were discussed at a meeting of FNBB’s board of directors held a meetingon November 17, 2017, to further consideraddress the status of negotiations with TriCo and the results of the ongoing due diligence reviews being conducted by TriCo and North Valley and to review the revised draft of a proposed merger agreement. The board of directors discussed the terms and conditions represented by the draft with its executive management, legal counsel and Sandler O’Neill at the meeting.diligence. After a review of possible alternative provisions, theFNBB’s board of directors directed its legal counsel and Sandler O’Neill,Courtney, in coordination with its executive management, to pursue negotiations for changes inattempt to negotiate revisions to the draft definitive merger agreement, subject to further review by the board of directors. Also, the board of directors authorized, ratified and approved the execution and delivery of a formal engagement letter between North Valley and Sandler O’Neill, in the form previously presented to the board of directors.

Thereafter, North Valley management andOn November 21, 2017, FNBB’s legal counsel prepared a redlined response to the revised draft of the merger agreement received on December 18, 2013 and North Valley’s legal counsel delivered the response to TriCo and its legal counsel on December 26, 2013. On December 27, 2013, legal counsel for TriCo and legal counsel for North Valley discussed the response and identified the remaining points of negotiation.

On January 6, 2014, the chief executive officer and the chief financial officer of North Valley, accompanied by a representative of Sandler O’Neill, met with the chief executive officer and the chief financial officer of TriCo, accompanied by representatives of KBW. The parties discussed the financial performance of their respective institutions for the year just ended, the appropriate assumptions on which to prepare pro forma combined financial statements, and the impact of such matters on the financial terms of the proposed merger agreement. On January 7, 2014, legal counsel to TriCo provided North Valley with a new, further revised draft of the merger agreement.

On January 9, 2014, the North Valley board of directors held a meeting with its legal counsel and Sandler O’Neill in attendance and discussed the status of negotiations with TriCo and the changes proposed in the January 7, 2014 draft of the proposed merger agreement, in particular a proposed change in the stock exchange ratio. The board of directors determined that the latest draft of the proposed merger agreement required further changes and directed executive management, Sandler O’Neill and its legal counsel to continue negotiations with TriCo. On January 10, 2014, North Valley received a revised expression of interest letter from TriCo, and on January 14, 2014, North Valley receivedtransmitted a further revised draft of the proposed definitive merger agreement fromto TriCo’s legal counsel along with a first draft of the FNBB Disclosure Schedule contemplated by the draft definitive merger agreement. On November 22, 2017, TriCo’s legal counsel forwarded a sample form of employment agreement to TriCo.FNBB’s legal counsel in anticipation of the possibility that Tri Counties Bank might decide to discuss post-closing employment positions with certain executive officers of FNBB and First National Bank. On November 26, 2017 and on December 1, 2017, TriCo legal counsel responded with further revised drafts of the proposed definitive merger agreement, including a draft of TriCo’s Disclosure Schedule. On December 4, 2017, FNBB legal counsel prepared and transmitted a more comprehensive draft of FNBB’s Disclosure Schedule to TriCo’s legal counsel. Meanwhile, during the last week of November and the first week of December, representatives of Tri Counties Bank engaged in discussions with FNBB executive officers Jim Black, Tony Clifford and Randy Brugioni concerning their potential interest in accepting post-closing employment positions with Tri Counties Bank, including the salary, benefits and other terms and conditions of

such employment. The independent members of FNBB’s board of directors felt that such a possibility would be conducive to a successful business combination and in the best interest of FNBB shareholders and instructed Courtney to keep the board of directors informed regarding the status of such discussions.

On January 15, 2014, TriCo entered into a formal engagement letter with KBW.

On January 16, 2014,December 6, 2017, the North ValleyFNBB board of directors held a special meeting to discuss with North Valley’s executive management and legal counsel the latest developments regarding negotiations with TriCo representatives, involving FNBB executive management, legal counsel and Courtney, and to review the changes made to the most recent draft mergerof the proposed definitive agreement since the last meeting of theFNBB’s board of directors, including changes reflected in thea revised draft distributed by legal counsel for TriCo on January 14, 2014.December 1, 2017, and further revised drafts distributed after such date. The FNBB board of directors also reviewed and discussed the proposed exhibits to the draft definitive merger agreement and the regulatory approvals required in connection with the transaction. Theproposed business combination. FNBB’s board of directors and executive management also discussed the impact of the proposed business combination on the shareholders, customers and employees of North Valley. TheFNBB. FNBB’s board of directors determined that certain remaining issues required further revisions of the proposed agreements would be appropriateattention and instructed North ValleyCourtney and FNBB legal counsel and executive management to continue negotiations with TriCo. As a result of these negotiations, TriCo’s legal counsel prepared and distributed a further revised draftsdraft of the proposed definitive merger agreement, consistingagreement. This draft included a proposed final exchange ratio of 0.980 of a draft receivedshare of TriCo common stock for each one share of FNBB common stock having an implied value of $40.81 for each share of FNBB common stock based on the market price of TriCo common stock on December 8, 2017, reflecting primarily the results of adjustments for anticipated expense savings, the mark to market on FNBB real estate, and employee retention arrangements following further due diligence by North Valley on January 17, 2014, another draft received on January 19, 2014 and a further draft received on January 20, 2014.TriCo.

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On January 21, 2014,December 11, 2017, the board of directors of North ValleyFNBB and North ValleyFirst National Bank met in a joint special meeting with its executive management, legal counsel and representatives of Sandler O’NeillCourtney to review the proposed final form of the proposed definitive merger agreement and exhibits thereto. After extensive review and discussion of the proposed final form of the definitive merger agreement and exhibits, followed by an updated review of the financial results and projections of North ValleyFNBB and its available strategic planning alternatives and an evaluation of various factors relevant to consummation of the proposed business combination, and based upon the advice of legal counsel and the opinion of Sandler O’NeillCourtney that the merger consideration was fair from a financial point of view to the holders of North ValleyFNBB common stock, the directors of North ValleyFNBB and North ValleyFirst National Bank voted unanimously to approve the merger agreement and the transactions contemplated therein including the merger and to authorize its execution and delivery to TriCo. In addition, the board of directors of North Valley voted unanimously to authorize and approve the execution and delivery of an Amendment One to the North Valley Bancorp Shareholder Protection Rights AgreementTriCo, along with Computershare, Inc., to provide that neither TriCo nor any of its affiliates will become an “acquiring person,” as that term is defined in the Rights Agreement, solely as a resultfinal version of the public announcement, execution, delivery, or performance of the merger agreement, shareholder agreements, or the other transactions contemplated by the merger agreement.FNBB Disclosure Schedule. It was understood that theTriCo’s board of directors of TriCo waswould be holding a special meeting thaton the same day in order to consider, authorize and approve the execution and delivery of the merger agreement with North Valley.FNBB. It was also understood that Tri Counties Bank would at the same time execute employment agreements with Jim Black, Tony Clifford and Randy Brugioni, to become effective upon the merger of First National Bank with and into Tri Counties Bank.

The TriCoOn December 11, 2017, TriCo’s board of directors held a special board meeting on January 21, 2014. Prior tofor purposes of considering the meeting, the proposed definitive agreement and related materials had been distributed tomerger agreement. At that meeting, TriCo’s board of directors for its review. During this meeting, legal counsel made a presentation regardingdiscussed and considered the terms and conditions of the transaction and the definitive merger agreement. TriCo’s management and legal counsel, Sheppard, Mullin, Richter and Hampton LLP, which we refer to as Sheppard Mullin, reviewed the material terms of the merger agreement and other related agreements with North Valley. KBWTriCo’s board of directors. Sheppard Mullin also advised TriCo’s board of directors regarding its duties in connection with the transaction. Stephens Inc. reviewed the financial aspects of the proposed mergertransaction and deliveredrendered an opinion to the TriCo board of directors an oral opinion, subsequently followed by delivery of its written opinion, dated January 21, 2014, to the effect that, as of such date and subject to the exchange ratioprocedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Stephens, Inc. as set forth in such opinion, the aggregate merger consideration to be usedpaid by TriCo to the FNBB shareholders in the proposed merger pursuant to the merger agreement was fair, from a financial point of view, to TriCo. The legal counsel discussed with the directors the material termsholders of the definitive agreement, and advised the directors as to their fiduciary duties in connection with considering and voting on the proposed merger. In addition, TriCo’s president and chief executive officer, Richard P. Smith, ledTriCo common stock. After deliberation, TriCo’s board of directors in a discussion ofvoted unanimously to approve the merits, risksmerger agreement and the strategic reasons for and against the transaction. After a thorough discussion, TriCo’s board of directors unanimously approvedtransactions contemplated by the definitive merger agreement, and other relevantauthorized TriCo management to execute the merger agreement.

After telephonic confirmations and the exchange of signature pages and final documents with North Valley.

At the conclusionbetween representatives of the board meetings on January 21, 2014,TriCo and pursuant toFNBB, in accordance with the resolutions adopted by each of TriCo’s and North Valley’s board of directors,the TriCo and North ValleyFNBB boards of directors,

TriCo and FNBB entered into the definitivemerger agreement dated as of January 21, 2014.December 11, 2017. At the same time, members of FNBB’s board of directors and certain of FNBB’s executive officers entered into the shareholders agreement with TriCo.

On January 21, 2014,December 11, 2017, after the closeclosing of trading on the NASDAQ Global SelectNasdaq Stock Market, TriCo and FNBB issued a joint press release announcing the execution of the merger agreement was issued by North Valley and TriCo.both parties filed a current report onForm 8-K summarizing the terms of the merger agreement.

TriCo’s Reasons for the Merger and Recommendation of the North ValleyTriCo’s Board of Directors

As part of TriCo’s business strategy, it evaluates opportunities to acquire bank holding companies, banks and other financial institutions. The North Valleyacquisition of FNBB and First National Bank is consistent with this strategy. In reaching its conclusion to approve the merger and to recommend to its shareholders to approve the TriCo merger proposal, TriCo’s board of directors believesconsulted with its financial advisor, Stephens Inc. with respect to the financial aspects of the proposed merger with TriCo is fair and in the best interests of the shareholders, as well as its employees and the communities served by North Valley Bank. In reaching this conclusion, the North Valley board of directors discussed the proposed merger with its senior managementacquisition and with its financiallegal counsel, Sheppard Mullin, as to its legal duties and legal advisors and considered the relative advantages and disadvantages of remaining independent rather than entering into the merger. The Directors unanimously recommend that North Valley shareholders vote in favorterms of the merger agreement and consummationrelated agreements. TriCo entered into the merger agreement with FNBB because, among other things, TriCo believes that the acquisition of FNBB and First National Bank will:

extend TriCo’s geographic footprint into the San Francisco Peninsula;

be immediately accretive to TriCo’s earnings per share in fiscal year 2018, excludingnon-recurring deal related expenses, and result in an anticipated earnings per share accretion of approximately 8.0% in fiscal year 2019;

improve and strengthen Tri Counties Bank’s existing deposit base by acquiring an attractive deposit franchise, which was comprised of approximately 29%non-interest bearing demand deposits at December 31, 2017;

enable TriCo to redeploy excess liquidity into higher yielding assets;

enable TriCo to offer its broader range of products and services to First National Bank customers;

result in a broader market presence providing greater opportunities for futurein-market acquisitions; and

allow TriCo to deploy a portion of its capital into what its board of directors believes is a compelling investment.

The TriCo board of directors also considered the potential adverse consequences of the proposed merger, including:

the possible disruption to TriCo’s or FNBB’s business that may result from the announcement of the merger;

the risk that the cost savings, operational synergies and other expected benefits resulting from the merger might not be fully realized or not realized at all;

the possibility that the merger may not be completed or may be unduly delayed because conditions to closing may not be satisfied, including:

the condition that TriCo’s shareholders approve the TriCo merger proposal,

the condition that FNBB’s shareholders approve the FNBB merger proposal, and

other conditions which are outside of TriCo’s control;

the risk that the merger might not be completed and the effect of the resulting public announcement of termination of the merger agreement on:

the market price of TriCo’s common stock,

TriCo’s relationships with its customers and employees;

TriCo’s operating results, particularly in light of the costs incurred in connection with the merger, which will be incurred whether or not the merger is successfully completed; and

the potential risk of diverting management focus and resources from operational matters and other strategic opportunities while working to implement the merger.

Based on the reasons stated above, TriCo’s board of directors believes that the merger is in the best interest of TriCo and its shareholders and unanimously recommends that the TriCo shareholders vote “FOR” approval of the TriCo merger proposal.

FNBB’s Reasons for the Merger and Recommendation of FNBB’s Board of Directors

After carefully considering all of its options, and cognizant of its fiduciary duty to shareholders, the current competitive and regulatory environment, and a number of other factors discussed in this joint proxy statement/prospectus, FNBB’s board of directors unanimously recommended approval of the merger agreement, determining that the merger, on the terms provided in the merger agreement, is FNBB’s best option to realize reasonable value for its shareholders in today’s challenging and uncertain banking market.

In reaching its conclusion to approve the merger and recommend adoption of the merger agreement to the FNBB shareholders, FNBB’s board of directors consulted with its financial advisor, Courtney, with respect to the financial aspects of the proposed sale, and consulted with its legal counsel, Dodd Mason George LLP, as to its legal duties and the other transactions contemplatedterms of the merger agreement and related agreements. All material factors considered by the merger agreement.FNBB board of directors have been disclosed in this joint proxy statement/prospectus.

In approving the merger with TriCo, the North ValleyFNBB’s board of directors considered and discussed a variety of factors, both positive and negative. FNBB’s Board of Directors did not assign any relative or specific weight to any of the factors described below and individual members of FNBB’s board of directors may have given different weights to different factors as they were discussed. In addition, the factors described below are not listed in any particular order nor intended to be exhaustive of the factors considered. The primary factors that favor the merger include, but are not limited to, the following:

 

  

Future Prospects. Based.Based on its understanding of the business, operations, financial condition, earnings, management and future prospects of North Valley,FNBB, and in consultation with its financial advisor, the North ValleyFNBB’s board of directors believes that a business combination with TriCo would enable North Valley

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FNBB shareholders to participate in a combined company that would have enhanced future prospects as compared to those that North ValleyFNBB is likely to achieve on a stand-alone basis. TheFNBB’s board of directors believes that a larger company will provide additional products and services to better grow and retain North Valley’sFNBB’s customers, that the combined, more diversified, customer base will improve and diversify future revenue sources, and that future earnings prospects will be stronger on a combined basis.

 

  Results of Due Diligence. The North Valley board’s.FNBB’s board of directors’ understanding of the business, operations, financial condition, earnings, management and future prospects of TriCo, taking into account North Valley’sFNBB’s due diligence investigation of TriCo, including, but not limited to, debt service and other existing financial obligations, the financial obligations to be incurred in connection with the proposed transaction and other likely financial obligations of TriCo and the possible effect of such obligations.

 

  Competition. The.The current and prospective economic and competitive environment facing the financial services industry generally, including the continued consolidation in the industry and the increased importance of operational scale and financial resources in maintaining efficiency and remaining competitive over the long term.

 

  Complementary Business. The.The complementary nature of the respective markets, customers and asset/liability mix of North ValleyFirst National Bank and Tri Counties Bank combined with an opportunity for North ValleyFirst National Bank customers to access enhanced products or services.services and a significant increase in lending limits.

  Financial Information.Presentations The.The reports of North Valley’sFNBB’s management and the financial presentation by Courtney to the North ValleyFNBB’s board of directors concerning the operations, financial condition and prospects of TriCo and the expected financial impact of the merger on the combined company, including pro forma assets, earnings, deposits and other financial metrics.

 

  Share Value. The.The value to be received by holders of North ValleyFNBB common stock pursuant to the merger agreement in relation to the historical trading prices of North ValleyFNBB common stock, as compared to other similar transactions of a comparable nature in the view of the Board’sFNBB’s board of directors’ financial advisor, as well as the possibility of a more active trading market.market for TriCo common stock (which is the merger consideration that will be payable to FNBB shareholders).

 

  Cash Dividends. TriCo.TriCo has paid cash dividends on its common stock in every quarter since March 1990.1993. Although there is no assurance that cash dividends will be paid in the future, the stated intention of the TriCoTriCo’s board of directors is to continue the payment of cash dividends on a quarterly basis. Receiving TriCo stock as consideration in the merger, North ValleyFNBB shareholders would benefit from the anticipated future cash dividends paid by TriCo.that TriCo may pay to its shareholders.

 

  Fairness Opinion. The.The opinion dated January 21, 2014, delivered to the North ValleyFNBB’s board of directors by Sandler O’NeillCourtney that, as of the date of the opinion and based upon and subject to the considerations in its opinion, the merger consideration was fair, from a financial point of view, to holders of North ValleyFNBB common stock.

 

  Terms of the Merger. The.The review by the North ValleyFNBB’s board of directors with its legal and financial advisorsadvisor of the structure of the merger and the financial and other terms of the merger agreement, including the exchange ratio, and TriCo’s agreement to appoint three (3)two members of the North ValleyFNBB’s board of directors to the TriCo board of directors of each of TriCo and the Tri Counties board of directors.Bank, and FNBB’s right to accept a superior offer in certain circumstances, so long as FNBB pays a termination fee to TriCo.

 

  Approvals. The.The likelihood of receiving regulatory approvals in a timely fashion without unacceptable conditions and the likelihood that the merger would be completed.

 

  Corporate Values. The.The belief of the North ValleyFNBB’s board of directors that the two companies share a common vision of the importance of customer service and that management and employees of North ValleyFNBB and TriCo possess complementary skills and expertise.

 

  Non-Financial Considerations.The potential social and economic effects of the merger on FNBB’s customers and employees.

Indemnification and Employee Benefits. The.The agreements of TriCo to provide indemnification for North Valley’sFNBB’s directors and executive officers and to honor certain existing employee benefits.

 

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  Reorganization. The.The expectation that the merger will constitute atax-free “reorganization” under Section 368(a) of the Code to North ValleyFNBB shareholders with respect to the TriCo common stock received by them.

In the course of its deliberations regarding the merger, the North ValleyFNBB’s board of directors also considered the following factors and risks, which the BoardFNBB’s board of Directorsdirectors determined did not outweigh the expected benefits to North ValleyFNBB and its shareholders:

 

  Integration Issues. The.The challenges of combining the businesses, assets and employees of North ValleyFNBB and TriCo which could affect ourthe post-merger success of the combined companies and the ability to achieve anticipated cost savings and other potential synergies.

 

  Overlapping Market AreasFixed Exchange Ratio. The branch locations operated.The fixed exchange ratio component of the merger consideration, which is subject to potential adjustment by North Valley Bank and Tri Counties Bank overlap in certain market areas and, due to the cost efficiencies made possible by the consolidation of offices in these areas, Tri Counties Bank is not likely to continue all branch locations currently being operated by North Valley Bank, nor is it likely that TriCo and Tri Counties Bank will be able to retain all officers and employees of North Valley Bank after the merger.a trading collar mechanism.

 

  Fixed Exchange RatioNon-Cash Merger Consideration. The fixed exchange ratio componentmerger consideration payable to FNBB shareholders consists of shares of TriCo common stock, which FNBB shareholders may not be able to immediately liquidate for fair market value due to market limitations or conditions, and the merger consideration will not adjust to compensate for potential changesbe in the priceform of TriCo common stock or North Valley common stock prior to completion of the merger.cash.

  Insider Interests. The.The interests of North ValleyFNBB executive officers and directors with respect to the merger apart from their interests as holders of North ValleyFNBB common stock, and the risk that these interests might influence their decision with respect to the merger, as described below in “The Merger — Merger—Interests of North Valley Directors and Executive OfficersCertain Persons in the Merger.”

 

  Competing Transactions. The.The risk that the terms of the merger agreement, including provisions relating to the payment of a termination fee under specified circumstances, although required by TriCo as a condition to its willingness to enter into a merger agreement, could have the effect of discouraging other parties that might be interested in a transaction with North ValleyFNBB that might be more favorable to FNBB shareholders from proposing such a transaction.

 

  Operational Restrictions. The.The restrictions contained in the merger agreement on the operation of North Valley’sFNBB’s business during the period between the signing of the merger agreement and completion of the merger which may delay or prevent North ValleyFNBB from pursuing business opportunities that could arise before completion of the merger.

 

  Risk of Termination. The.The possibility that the merger might not be completed and the impact of a public announcement of the termination of the merger agreement on, among other things, the market price of North ValleyFNBB common stock and North ValleyFNBB operating results, particularly in light of the costs incurred in connection with the transaction,transaction.

Other Risk Factors. The North Valley board of directors also considered other factors described under the section of this joint proxy statement/prospectus entitled “Risk Factors.”

The foregoing discussion ofBased on the information and factors considered by the North Valleyreasons stated, FNBB’s board of directors is not intended to be exhaustive, but includes the material factors, both positive and negative, considered by the North Valley board of directors. In reaching its decision to approve the merger agreement, the North Valley board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The North Valley board of directors considered all these factors as a whole, including discussions with, and questioning of, North Valley’s management team, its legal counsel and financial advisor. The North Valley board of directors determinedbelieves that overall, the totality of information and factors (positive and negative) considered by the North Valley board of directors, was favorable to, and supported, its determination.

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This explanation of North Valley’s reasons for the merger and other information presented in this section is forward-looking in nature and should be read in light of the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 21 of this joint proxy statement/prospectus.

For the reasons set forth above, the North Valley board of directors has unanimously approved the merger agreement and the transactions contemplated therebymerger are in the best interest of FNBB and the FNBB shareholders and unanimously recommends that youthe FNBB shareholders vote “FOR” the North Valley Merger proposal, “FOR” the North Valley Advisory (Non-Binding) Proposal on Specified Compensation and “FOR” the North Valley Adjournment proposal (if necessary or appropriate).

Each“FOR” approval of the directors of North Valley has entered into a shareholdermerger agreement with TriCo and North Valley, pursuant to which they have agreed to vote “FOR” the North Valley Merger proposal and “FOR” the North Valley Adjournment proposal (if necessary or appropriate). For more information regarding the shareholder agreements, please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96.merger.

Opinion of North Valley’sTriCo’s Financial Advisor

By letter dated December 3, 2012, Sandler O’Neill agreedOn November 2, 2017, TriCo engaged Stephens Inc. to act as financial advisoradviser to the North Valley board of directorsTriCo in connection with the board’sacquisition of FNBB. As part of the engagement, Stephens Inc. was asked to assess the fairness to TriCo, from a financial point of view, of the merger consideration of strategic alternatives, such as a possible business combination involving North Valley and a second party, such as another bank or bank holding company, or remaining independent. These services were formalized on December 19, 2013, at which time North Valley countersignedto be paid by TriCo in the Sandler O’Neill engagement letter. Sandler O’Neillacquisition. Stephens Inc. is a nationally recognized investment banking firm whose principal business specialty is financial institutions,with offices throughout the United States and was selected by North Valley for this reason. In the ordinary course of its investment banking business, Sandler O’Neill, ashas substantial experience in similar mergers. As part of its investment banking business, Stephens Inc. is regularlycontinually engaged in the valuation of financial institutionsbanking businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other corporate transactions.purposes. As specialists in the securities of banking companies, Stephens Inc. has experience in, and knowledge of, the valuation of banking enterprises.

Sandler O’Neill acted as financial advisor to North Valley’sAs part of its engagement, at the request of TriCo, representatives of Stephens Inc. attended meetings of the TriCo’s board of directors in connection withwhich the proposed transaction with TriCo and participated in certain of the negotiations leading to the execution of the merger agreement. At the January 21, 2014 meeting at which North Valley’s board of directors considered and approvedevaluated the proposed merger, agreement, Sandler O’Neill delivered toincluding, among others, a meeting of the board of directors held on December 11, 2017. At this meeting, the board of directors requested and received reports, discussion and commentary from its oraladvisors, management and members regarding the proposed merger. As TriCo’s financial advisor at that meeting, Stephens Inc. reviewed the financial aspects of the proposed merger and rendered its opinion which was subsequently followed up in writing, that, as of such date and based upon and subject to the factors and assumptions referenced in its opinion, the consideration to be paid in the merger consideration (defined as the exchange ratio of 0.9433 shares of TriCo common stock) was fair, to the holders of North Valley’s common stock from a financial point of view.view, to TriCo. The TriCo’s board of directors, after considering advice, reports, discussion and commentary from its advisors, management and members, approved the merger agreement at this meeting.

The full text of Sandler O’Neill’sStephens Inc.’s written opinion, dated December 11, 2017, is attached as Appendix BC to this joint proxy statement/prospectus. Thedocument and incorporated herein by reference. TriCo’s shareholders are urged to read the opinion outlinesin its entirety for a description of the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler O’Neill in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the full text of the opinion. Holders of North Valley common stock are urged to read the entire opinion carefully in connection with their consideration of the proposed merger.

Sandler O’Neill’s opinion speaks only as of the date of the opinion. The opinion was directed to North Valley’s board in connection with its consideration of the merger and is directed only to the fairness of the merger consideration to the holders of North Valley’s common stock from a financial point of view. It does not address the underlying business decision of North Valley to engage in the merger, the relative merits of the merger as compared to any other alternative business strategies that might exist for North Valley or the effect of any transaction in which North Valley might engage and does not constitute a recommendation to any holder of North Valley common stock as to how such holder of North Valley common stock should vote at the special meeting with respect to the merger or any other matter.

In connection with its opinion, Sandler O’Neill reviewed, among other things:

the merger agreement

certain publicly available financial statements and other historical financial information of North Valley that Sandler O’Neill deemed relevant

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certain publicly available financial statements and other historical financial information of TriCo that Sandler O’Neill deemed relevant

the mean publicly available analyst earnings per share estimate for North Valley for the years ending December 31, 2013 and December 31, 2014 and an internal long-term growth rate for the years thereafter as provided by senior management of North Valley

the mean publicly available analyst earnings per share estimate for TriCo for the years ending December 31, 2013 through December 31, 2015 and an internal long-term growth rate for the years thereafter provided by senior management of TriCo

the pro forma financial impact of the merger on TriCo based on assumptions relating to transaction expenses, purchase accounting adjustments, cost savings and other synergies as determined by the senior management of TriCo

a comparison of certain stock trading, financial and other information for North Valley and TriCo with similar publicly available information for certain other commercial banks, the securities of which are publicly traded

the terms and structures of other recent mergers and acquisition transactions, including merger of equal transactions, in the commercial banking sector

the current market environment generally and in the commercial banking sector in particular and

such other information, financial studies, analyses and investigations and financial, economic and market criteria as Sandler O’Neill considered relevant.

Sandler O’Neill also discussed with certain members of the senior management of North Valley the business, financial condition, results of operations and prospects of North Valley and held similar discussions with the senior management of TriCo regarding the business, financial condition, results of operations and prospects of TriCo.

In performing its review, Sandler O’Neill relied upon the accuracy and completeness of all of the financial and other information that was available to Sandler O’Neill from public sources, that was provided to Sandler O’Neill by North Valley and TriCo or that was otherwise reviewed by Sandler O’Neill and Sandler O’Neill assumed such accuracy and completeness for purposes of preparing its opinion. Sandler O’Neill further relied on the assurances of the senior management of North Valley and TriCo that they were not aware of any facts or circumstances that would make any of such information inaccurate or misleading in any material respect. Sandler O’Neill did not make an independent evaluation or appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of North Valley or TriCo or any of their respective subsidiaries. Sandler O’Neill did not make an independent evaluation of the adequacy of the allowance for loan losses of North Valley, TriCo or the combined entity after the merger and Sandler O’Neill did not review any individual credit files relating to North Valley or TriCo. Sandler O’Neill assumed, with North Valley’s consent, that the respective allowances for loan losses for both North Valley and TriCo are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity.

In preparing its analyses, Sandler O’Neill used publicly available earnings per share estimates and internal long-term growth rates for North Valley and TriCo. Sandler O’Neill also received and used in its analyses certain projections of transaction costs, purchase accounting adjustments, expected cost savings and other synergies which were prepared by and/or reviewed with the senior management of TriCo. With respect to these estimates and projections, the respective senior managements of North Valley and TriCo confirmed to Sandler O’Neill that those projections reflected the estimates and judgments of those respective managements of the future performance of North Valley and TriCo, respectively, and Sandler O’Neill assumed that such performance would be achieved. Sandler O’Neill expresses no opinion as to such estimates or the assumptions on which they are based. Sandler O’Neill has assumed that there has been no material change in the respective assets, financial condition, results of operations, business or prospects of North Valley and TriCo since the date of the most recent financial data made available to Sandler O’Neill, as of the date of its opinion. Sandler O’Neill has also assumed in all respects material to its analysis that North Valley and TriCo would remain as a going concern for all the periods relevant to its analyses and that the merger will be consummated as a tax-free reorganization under Section 368 of the Internal Revenue Code. Sandler O’Neill expresses no opinion as to any of the legal, accounting and tax matters relating to the merger and any other transactions contemplated in connection therewith.

49


Sandler O’Neill’s analyses and opinion were necessarily based on financial, economic, regulatory, market and other conditions as in effect on, and the information made available to Sandler O’Neill as of, the date of its opinion. Events occurring after the date thereof could materially affect its opinion. Sandler O’Neill has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date of its opinion. Sandler O’Neill rendered no opinion as to the trading values of each of North Valley’s and TriCo’s common shares at any time. Sandler O’Neill’s opinion was approved by Sandler O’Neill’s fairness opinion committee. Sandler O’Neill did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by North Valley’s officers, directors, or employees, or class of such persons, relative to the compensation to be received in the merger by any other shareholders of North Valley.

In rendering its January 21, 2014 opinion, Sandler O’Neill performed a variety of financial analyses. The following is a summary of the material analyses performed by Sandler O’Neill, but is not a complete description of all the analyses underlying Sandler O’Neill’s opinion. The summary includes information presented in tabular format.In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler O’Neill believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Sandler O’Neill’s comparative analyses described below is identical to North Valley or TriCo and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of North Valley and TriCo and the companies to which they are being compared.

In performing its analyses, Sandler O’Neill also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of North Valley, TriCo and Sandler O’Neill. The analyses performed by Sandler O’Neill is not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Sandler O’Neill prepared its analyses solely for purposes of rendering its opinion and provided such analyses to the North Valley board of directors at the board of directors’ January 21, 2014 meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Sandler O’Neill’s analyses do not necessarily reflect the value of North Valley’s common stock or the prices at which North Valley’s common stock may be sold at any time. The analyses of Sandler O’Neill and its opinion were among a number of factors taken into consideration by North Valley’s board of directors in making its determination to approve of North Valley’s entry into the merger agreement and the analyses described below should not be viewed as determinative of the decision made by North Valley’s board of directors or management with respect to the fairness of the merger. The exchange ratio was determined through negotiation between North Valley and TriCo and the decision to enter into the merger agreement was solely that of the North Valley board of directors.

In arriving at its opinion Sandler O’Neill did not attribute any particular weight to any analysis or factor that it considered. Rather it made qualitative judgments as to the significance and relevance of each analysis and factor. Sandler O’Neill did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinions; rather Sandler O’Neill made its determination as to the fairness of the merger consideration on the basis of its experience and professional judgment after considering the results of all its analyses taken as a whole.

Summary of Proposal

Sandler O’Neill reviewed the financial terms of the proposed transaction. As described in the merger agreement, North Valley shareholders have the right to receive consideration consisting of 0.9433 shares of TriCo

50


common stock in exchange for each share of North Valley common stock. Based upon TriCo’s closing stock price of $27.66 as of January 17, 2014, Sandler O’Neill calculated merger consideration value of $26.09 per North Valley share. Based upon 6,836,632 common shares outstanding, 128,829 in-the-money options outstanding with a weighted-average strike price of $14.99 and using TriCo’s closing stock price of $27.66 as of January 17, 2014, Sandler O’Neill calculated aggregate consideration value of $182 million. Based upon financial information of North Valley as of or for the twelve month period ended September 30, 2013, Sandler O’Neill calculated the following transaction ratios:

North
Valley/
TriCo

Transaction Value / Last Twelve Months’ Earnings Per Share

55.5x

Transaction Value / Mean Consensus Analyst Estimated 2014 Earnings Per Share

25.6x

Transaction Value / Book Value Per Share

188

Transaction Value / Tangible Book Value Per Share

188

Tangible Book Premium to Core Deposits

12.3

Premium to North Valley Stock Price (January 17, 2014)

36.8

North Valley - Comparable Company Analysis

Sandler O’Neill used publicly available information to compare selected financial information for North Valley and a group of financial institutions as selected by Sandler O’Neill. The North Valley comparable group consisted of publicly-traded Northern and Central California commercial banks with total assets between $500 million and $1.5 billion. The group excluded thrifts, merger targets and ethnic-focused commercial banks.

American River BanksharesHeritage Commerce Corp
Bank of Commerce HoldingsHeritage Oaks Bancorp
Bank of Marin BancorpOak Valley Bancorp
Bridge Capital HoldingsPremier Valley Bank
Central Valley Community BancorpSierra Bancorp
First Northern Community BancorpUnited Security Bancshares

The analysis compared publicly available financial information for North Valley and the financial and market trading data for the comparable group. The comparable group data is as of or for the period ended September 30, 2013. Pricing data for all companies is as of January 17, 2014. The table below sets forth the data for North Valley and the mean and median data for the comparable group.

   North
Valley
  Comparable
Group
Mean
  Comparable
Group
Median
 

Total Assets (in millions)

  $912   $1,024   $1,012  

Market Capitalization (in millions)

  $130   $150   $109  

Dividend Yield

   0.00  1.20  1.32

Price / Book Value

   137  126  113

Price / Tangible Book Value

   137  136  138

Price / Last Twelve Months’ Earnings Per Share

   40.6x    17.6x    15.6x  

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Price / Mean Consensus Analyst Estimated 2014 Earnings Per Share

   18.7x    17.8x    17.9x  

Last Twelve Months’ Net Interest Margin

   3.83  4.00  3.96

Last Twelve Months’ Efficiency Ratio

   81  66  68

Last Twelve Months’ Return on Average Assets

   0.36  0.88  0.85

Last Twelve Months’ Return on Average Equity

   3.4  7.5  7.4

Tangible Common Equity / Tangible Assets

   10.4  10.1  10.0

Tier 1 Leverage Ratio

   12.2  11.1  11.0

Total Risk-Based Capital Ratio

   18.6  16.6  15.5

Non-Performing Assets / Total Assets

   2.47  2.46  1.79

TriCo - Comparable Company Analysis

Sandler O’Neill used publicly available information to compare selected financial information for TriCo and a group of financial institutions as selected by Sandler O’Neill. The TriCo comparable group consisted of NASDAQ or NYSE-traded western region commercial banks with total assets between $1.25 billion and $8.0 billion. The group excluded thrifts, merger targets and ethnic-focused commercial banks.

Bank of Marin BancorpFirst Interstate BancSystem, Inc.
Banner CorporationHeritage Commerce Corp
Bridge Capital HoldingsHeritage Financial Corporation
Cascade BancorpPacific Continental Corporation
Central Pacific Financial Corp.Pacific Premier Bancorp, Inc.
Columbia Banking System, Inc.PacWest Bancorp

CU Bancorp

Sierra Bancorp

CVB Financial Corp.

Westamerica Bancorporation

The analysis compared publicly available financial information for TriCo and the financial and market trading data for the comparable group. The peer group data is as of or for the period ended September 30, 2013, with the exception of Westamerica Bancorp whose data is as of or for the period ending December 31, 2013. Pricing data for all companies is as of January 17, 2014. The table below sets forth the data for TriCo and the mean and median data for the comparable group.

   TriCo  Comparable
Group
Mean
  Comparable
Group
Median
 

Total Assets (in millions)

  $2,632   $3,431   $1,622  

Market Capitalization (in millions)

  $445   $730   $304  

Dividend Yield

   1.59  1.47  1.66

Price / Book Value

   181  165  149

Price / Tangible Book Value

   194  191  167

Price / Last Twelve Months’ Earnings Per Share

   16.7x    21.2x    21.6x  

Price / Mean Consensus Analyst Estimated 2014 Earnings Per Share

   16.3x    18.1x    18.0x  

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Price / Estimated 2015 Earnings Per Share

   15.1x    15.7x    14.9x  

Last Twelve Months’ Net Interest Margin

   4.17  4.24  4.11

Last Twelve Months’ Efficiency Ratio

   66  65  63

Last Twelve Months’ Return on Average Assets

   1.04  0.99  0.96

Last Twelve Months’ Return on Average Equity

   11.3  8.4  8.0

Tangible Common Equity / Tangible Assets

   8.8  10.7  10.8

Tier 1 Leverage Ratio

   10.4  11.3  11.3

Total Risk-Based Capital Ratio

   14.9  16.4  16.3

Non-Performing Assets / Total Assets

   3.82  1.87  1.78

North Valley - Stock Price Performance

Sandler O’Neill reviewed the history of the publicly reported trading prices of North Valley’s common stock for the one-year and three-year periods ended January 17, 2014. Sandler O’Neill then compared the relationship between the movements in the price of North Valley’s common stock against the movements in the prices of the comparable group for North Valley described above, the S&P 500 Index and the NASDAQ Bank Index.

One-Year Comparative Stock Performance

   Beginning Index Value  Ending Index Value 
   January 17, 2013  January 17, 2014 

North Valley

   100  119

North Valley Comparable Group

   100  126

S&P 500

   100  124

NASDAQ Bank

   100  131

Three-Year Comparative Stock Performance

   Beginning Index Value  Ending Index Value 
   January 18, 2011  January 17, 2014 

North Valley

   100  224

North Valley Comparable Group

   100  168

S&P 500

   100  142

NASDAQ Bank

   100  135

TriCo - Stock Price Performance

Sandler O’Neill reviewed the history of the publicly reported trading prices of TriCo’s common stock for the one-year and three-year periods ended January 17, 2014. Sandler O’Neill then compared the relationship between the movements in the price of TriCo’s common stock against the movements in the prices of the comparable group, for TriCo described above, the S&P 500 Index and the NASDAQ Bank Index.

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One-Year Comparative Stock Performance

   Beginning Index Value  Ending Index Value 
   January 17, 2013  January 17, 2014 

TriCo

   100  165

TriCo Comparable Group

   100  137

S&P 500

   100  124

NASDAQ Bank

   100  131

Three-Year Comparative Stock Performance

   Beginning Index Value  Ending Index Value 
   January 18, 2011  January 17, 2014 

TriCo

   100  175

TriCo Comparable Group

   100  133

S&P 500

   100  142

NASDAQ Bank

   100  135

North Valley - Net Present Value Analysis

Sandler O’Neill performed an analysis that estimated the net present value per share of North Valley common stock under various circumstances. The analysis assumed that North Valley performed in accordance with the publicly available analyst estimated earnings for the years ending December 31, 2013 and December 31, 2014 and an internal long-term growth rate for the years thereafter as provided by senior management of North Valley.

To approximate the terminal value of North Valley common stock at December 31, 2018, Sandler O’Neill applied price to earnings multiples ranging from 11.0x to 20.0x and multiples of tangible book value ranging from 100% to 200%. The terminal values were then discounted to present values using different discount rates ranging from 10.0% to 16.0%.

As illustrated in the following tables, the analysis indicates an imputed range of values per share of North Valley common stock of $6.48 to $15.36 when applying multiples of earnings and $9.44 to $24.62 when applying multiples of tangible book value.

Discount Rate

  Earnings Per Share Multiples 
  11.0x   13.0x   15.0x   17.0x   19.0x   20.0x 

10.00%

  $8.45    $9.99    $11.52    $13.06    $14.59    $15.36  

11.00%

  $8.08    $9.54    $11.01    $12.48    $13.95    $14.68  

12.00%

  $7.72    $9.13    $10.53    $11.93    $13.34    $14.04  

13.00%

  $7.39    $8.73    $10.07    $11.41    $12.76    $13.43  

14.00%

  $7.07    $8.35    $9.64    $10.92    $12.21    $12.85  

15.00%

  $6.77    $8.00    $9.23    $10.46    $11.69    $12.30  

16.00%

  $6.48    $7.66    $8.83    $10.01    $11.19    $11.78  

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Discount Rate

  Tangible Book Value Multiples 
  100%   120%   140%   160%   180%   200% 

10.00%

  $12.31    $14.77    $17.23    $19.70    $22.16    $24.62  

11.00%

  $11.76    $14.12    $16.47    $18.82    $21.18    $23.53  

12.00%

  $11.25    $13.50    $15.75    $18.00    $20.25    $22.50  

13.00%

  $10.76    $12.91    $15.06    $17.22    $19.37    $21.52  

14.00%

  $10.30    $12.36    $14.41    $16.47    $18.53    $20.59  

15.00%

  $9.86    $11.83    $13.80    $15.77    $17.74    $19.71  

16.00%

  $9.44    $11.33    $13.21    $15.10    $16.99    $18.88  

Sandler O’Neill also considered and discussed with the North Valley board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to net income. To illustrate this impact, Sandler O’Neill performed a similar analysis assuming North Valley net income varied from 25% higher to 25% lower. This analysis resulted in the following range of per share values for North Valley common stock, using the same price to earnings multiples of 11.0x to 20.0x and a discount rate of 13.0% (which represents the midpoint of the range of discount rates used).

Annual Budget Variance

  Earnings Per Share Multiples 
  11.0x   13.0x   15.0x   17.0x   19.0x   20.0x 

-25.0%

  $5.54    $6.55    $7.55    $8.56    $9.57    $10.07  

-20.0%

  $5.91    $6.98    $8.06    $9.13    $10.21    $10.74  

-15.0%

  $6.28    $7.42    $8.56    $9.70    $10.84    $11.41  

-10.0%

  $6.65    $7.86    $9.06    $10.27    $11.48    $12.09  

-5.0%

  $7.02    $8.29    $9.57    $10.84    $12.12    $12.76  

0.0%

  $7.39    $8.73    $10.07    $11.41    $12.76    $13.43  

5.0%

  $7.76    $9.17    $10.58    $11.99    $13.40    $14.10  

10.0%

  $8.12    $9.60    $11.08    $12.56    $14.03    $14.77  

15.0%

  $8.49    $10.04    $11.58    $13.13    $14.67    $15.44  

20.0%

  $8.86    $10.47    $12.09    $13.70    $15.31    $16.11  

25.0%

  $9.23    $10.91    $12.59    $14.27    $15.95    $16.79  

During the North Valley board of directors’ meeting on January 21, 2014, Sandler O’Neill noted that the terminal value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

TriCo – Net Present Value Analysis

Sandler O’Neill also performed an analysis that estimated the net present value per share of TriCo common stock under various circumstances. The analysis assumed that TriCo performed in accordance with publicly available analyst earnings estimates for the years ending December 31, 2013 through December 31, 2015 and an internal long-term growth rate for the years thereafter as provided by senior management of TriCo.

To approximate the terminal value of TriCo common stock at December 31, 2018, Sandler O’Neill applied price to earnings multiples ranging from 12.0x to 24.0x and multiples of tangible book value ranging from 135% to 325%. The terminal values were then discounted to present values using different discount rates ranging from 10.0% to 16.0%.

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As illustrated in the following tables, the analysis indicates an imputed range of values per share of TriCo common stock of $13.81 to $33.54 when applying multiples of earnings and $15.79 to $46.02 when applying multiples of tangible book value.

Discount Rate

  Earnings Per Share Multiples 
  12.0x   15.0x   17.0x   19.0x   21.0x   24.0x 

10.00%

  $17.77    $21.71    $24.34    $26.97    $29.60    $33.54  

11.00%

  $17.02    $20.79    $23.30    $25.81    $28.32    $32.09  

12.00%

  $16.31    $19.91    $22.31    $24.71    $27.12    $30.72  

13.00%

  $15.63    $19.08    $21.38    $23.67    $25.97    $29.42  

14.00%

  $14.99    $18.29    $20.49    $22.69    $24.89    $28.18  

15.00%

  $14.39    $17.54    $19.65    $21.75    $23.85    $27.01  

16.00%

  $13.81    $16.83    $18.85    $20.86    $22.88    $25.90  

Discount Rate

  Tangible Book Value Multiples 
  135%   165%   205%   245%   285%   325% 

10.00%

  $20.34    $24.40    $29.80    $35.21    $40.61    $46.02  

11.00%

  $19.48    $23.35    $28.52    $33.69    $38.86    $44.02  

12.00%

  $18.66    $22.37    $27.31    $32.25    $37.19    $42.13  

13.00%

  $17.89    $21.43    $26.16    $30.88    $35.61    $40.33  

14.00%

  $17.15    $20.54    $25.06    $29.59    $34.11    $38.63  

15.00%

  $16.45    $19.70    $24.03    $28.35    $32.68    $37.01  

16.00%

  $15.79    $18.90    $23.04    $27.19    $31.33    $35.48  

Sandler O’Neill also considered and discussed with the North Valley board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to net income. To illustrate this impact, Sandler O’Neill performed a similar analysis assuming TriCo net income varied from 25% higher to 25% lower. This analysis resulted in the following range of per share values for TriCo common stock, using the same price to earnings multiples of 12.0x to 24.0x and a discount rate of 13.0% (which represents the midpoint of the range of discount rates used):

Annual Budget Variance

  Earnings Per Share Multiples 
  12.0x   15.0x   17.0x   19.0x   21.0x   24.0x 

-25.0%

  $12.19    $14.77    $16.50    $18.22    $19.94    $22.53  

-20.0%

  $12.88    $15.63    $17.47    $19.31    $21.15    $23.90  

-15.0%

  $13.57    $16.50    $18.45    $20.40    $22.35    $25.28  

-10.0%

  $14.26    $17.36    $19.42    $21.49    $23.56    $26.66  

-5.0%

  $14.95    $18.22    $20.40    $22.58    $24.77    $28.04  

0.0%

  $15.63    $19.08    $21.38    $23.67    $25.97    $29.42  

5.0%

  $16.32    $19.94    $22.35    $24.77    $27.18    $30.80  

10.0%

  $17.01    $20.80    $23.33    $25.86    $28.38    $32.17  

15.0%

  $17.70    $21.66    $24.31    $26.95    $29.59    $33.55  

20.0%

  $18.39    $22.53    $25.28    $28.04    $30.80    $34.93  

25.0%

  $19.08    $23.39    $26.26    $29.13    $32.00    $36.31  

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At the January 21, 2014 North Valley board of directors meeting, Sandler O’Neill noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

Analysis of Selected Merger Transactions

Sandler O’Neill reviewed two groups of comparable mergers and acquisitions, the information for which was publicly available. The first of which included eighteen transactions announced between January 1, 2013 and January 20, 2014 involving nationwide banks with deal values between $100 million and $300 million with target non-performing assets / total assets less than 4% at announcement. Group one was composed of the following transactions:

Buyer/Seller

IBERIABANK Corporation/ Teche Holding Company

Old National Bancorp/ United Bancorp, Inc.

BancorpSouth, Inc./ Ouachita Bancshares Corp.

Provident Financial Services, Inc./ Team Capital Bank

Independent Bank Group, Inc./ BOH Holdings, Inc.

Heritage Financial Corporation/ Washington Banking Company

Cascade Bancorp/ Home Federal Bancorp, Inc.

East West Bancorp, Inc./ MetroCorp Bancshares, Inc.

Old National Bancorp/ Tower Financial Corporation

Prosperity Bancshares, Inc./ F & M Bancorporation Inc.

Mercantile Bank Corporation/ Firstbank Corporation

Cullen/Frost Bankers, Inc./ WNB Bancshares, Inc.

Wilshire Bancorp, Inc./ Saehan Bancorp

First Federal Bancshares of Arkansas, Inc./ First National Security Company

Peoples Financial Services Corp./ Penseco Financial Services Corporation

Home BancShares, Inc./ Liberty Bancshares, Inc.

SCBT Financial Corporation/ First Financial Holdings, Inc.

Renasant Corporation/ First M&F Corporation

The second group of comparable mergers and acquisitions included seven transactions announced between January 1, 2013 and January 20, 2014 involving nationwide banks with deal values between $100 million and $300 million with target non-performing assets / total assets less than 4% and target tangible common equity / tangible assets greater than 10% at announcement. Group two was composed of the following transactions from group one:

Buyer/Seller

IBERIABANK Corporation/ Teche Holding Company

Heritage Financial Corporation/ Washington Banking Company

Cascade Bancorp/ Home Federal Bancorp, Inc.

East West Bancorp, Inc./ MetroCorp Bancshares, Inc.

Wilshire Bancorp, Inc./ Saehan Bancorp

First Federal Bancshares of Arkansas, Inc./ First National Security Company

Peoples Financial Services Corp./ Penseco Financial Services Corporation

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Sandler O’Neill then reviewed the following multiples for each of the transactions: transaction price to book value, transaction price to tangible book value, transaction price to last twelve months’ earnings per share, transaction price to estimated earnings per share, tangible book premium to core deposits and transaction price premium to seller’s stock price one day before transaction announcement. As illustrated in the following table, Sandler O’Neill compared the proposed merger multiples to the multiples of the comparable transactions.

   North
Valley
  Comparable
Group One
  Comparable
Group Two
 
   /TriCo  Mean  Median  Mean  Median 

Transaction Value / Last Twelve Months’ Earnings Per Share

   55.5x    17.0x    15.9x    17.2x    15.6x  

Transaction Value / Median Estimated 2013 Earnings Per Share

   25.6x    17.3x    16.1x    20.1x    19.2x  

Transaction Value / Book Value Per Share

   188  166  160  141  152

Transaction Value / Tangible Book Value Per Share

   188  178  169  157  154

Tangible Book Premium to Core Deposits

   12.3  9.3  9.0  9.7  11.3

Premium to Stock Price:

   36.8  31.3  34.4  25.6  30.3

Imputed Valuation

The following table shows the imputed valuation for North Valley based on the application of mean and median multiples observed from the above transactions.

   Comparable
Group One
  

Implied Valuation:

Comparable

Group One

   

Comparable

Group Two

  

Implied Valuation:

Comparable

Group Two

 
   Mean  Median  Mean   Median   Mean  Median  Mean   Median 

Last Twelve Months’ EPS

   17.0x    15.9x   $7.97    $7.45     17.2x    15.6x   $8.07    $7.34  

Book Value

   166  160 $23.04    $22.23     141  152 $19.59    $21.09  

Tangible Book Value

   178  169 $24.70    $23.40     157  154 $21.76    $21.34  

Core Deposit Premium

   9.3  9.0 $23.51    $23.21     9.7  11.3 $23.98    $25.58  

2-Day Market Premium

   31.3  34.4  25.04    $25.63     25.6  30.3 $23.95    $24.85  

Illustrative Pro Forma Results

Sandler O’Neill analyzed certain potential pro forma effects of the merger, assuming the following: (i) the merger closes September 30, 2014; (ii) per share merger consideration value of $26.09, based on TriCo’s closing stock price on January 17, 2014 of $27.66; (iii) TriCo would be able to achieve cost savings of approximately 40% of North Valley projected operating expense and such savings would be 50% realized in 2014 and fully realized in 2015; (iv) pretax transaction costs and expenses would total approximately $20 million; (v) North Valley’s performance was calculated in accordance with publicly available mean analyst estimated earnings per share for the years ending December 31, 2013 and December 31, 2014, and an internal long-term growth rate for 2015 as provided by senior management of North Valley; (vi) TriCo’s performance was calculated in accordance with publicly available mean analyst estimated earnings per share for the years ending December 31, 2013 through December 31, 2015; and (vii) various purchase accounting adjustments provided by TriCo, including core deposit intangible, credit and interest rate mark-to-market adjustments and other accounting adjustments on North Valley’s loan portfolio, other real estate owned, other assets, deposits and borrowings. The analyses indicated that for the years ending December 31, 2014 and December 31, 2015, the merger (excluding transaction expenses) would be accretive to TriCo’s projected earnings per share and, as of September 30, 2014 the merger would be dilutive to TriCo’s tangible book value per share. The actual results achieved by the combined company, however, may vary from projected results and the variations may be material.

Sandler O’Neill’s Relationship

Sandler O’Neill acted as the financial advisor to North Valley’s board of directors in connection with the merger and will receive a fee of 1.0% of the aggregate consideration payable in the merger, $200,000 of which was received upon delivery of Sandler O’Neill’s opinion and the balance of which is contingent upon the closing of the merger. North Valley has also agreed to reimburse Sandler O’Neill’s for reasonable out-of-pocket expenses incurred in connection with its engagement and to indemnify Sandler O’Neill and its affiliates and their respective partners, directors, officers, employee and agents against certain expenses and liabilities, including liabilities under the securities laws.

In the ordinary course of its business as a broker-dealer, Sandler O’Neill may purchase securities from and sell securities to North Valley and TriCo and their respective affiliates. Sandler O’Neill may also actively trade the debt and/or equity securities of North Valley or TriCo or their respective affiliates for their own accounts and for the accounts of their customers and, accordingly may at any time hold a long or short position in such securities.

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Recommendation of the TriCo Board of Directors and Reasons for the Merger

TriCo considers North Valley to be a strategic acquisition as it believes that the acquisition will provide significant value to the shareholders of both organizations. In reaching its decision to adopt and approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, and to recommend that its shareholders approve the TriCo Merger proposal, the TriCo board of directors consulted with TriCo management, as well as its financial and legal advisors, and considered a number of factors, including the following material factors:

each of TriCo’s and North Valley’s business, operations, financial condition, asset quality, earnings and prospects;

the overlap of North Valley’s branches with TriCo’ branches has the potential to reduce TriCo’s total operating costs once all potential synergies have been realized;

the potential for the combination of the two institutions to create a more valuable community bank franchise, with a low cost core deposit base, strong capital ratios, attractive net interest margins, lower operating costs, and better overall returns for the shareholders of the combined institution;

its understanding of the current and prospective environment in which TriCo and North Valley operate, including national and local economic conditions, the competitive environment for financial institutions generally, and the likely effect of these factors on TriCo both with and without the proposed transaction;

its review and discussions with TriCo’s management concerning the due diligence examination of North Valley;

the complementary nature of the customers and markets of the two companies;

management’s expectation that TriCo will retain or enhance its strong capital position upon completion of the transaction;

the opinion of KBW, TriCo’s financial advisor, dated January 21, 2014, delivered to the TriCo board of directors to the effect that, as of that date, and subject to and based on the various assumptions, considerations, qualifications and limitations set forth in the opinion, the exchange ratio to be used in the merger was fair, from a financial point of view, to TriCo;

the financial and other terms of the merger agreement, including merger consideration, tax treatment and mutual deal protection and termination fee provisions, which it reviewed with its outside financial and legal advisors;

the potential risks associated with achieving anticipated cost synergies and savings and successfully integrating North Valley’s business, operations and workforce with those of TriCo, including the costs and risks of successfully integrating the differing business models of the two companies;

TriCo’s past record of integrating acquisitions and of realizing projected financial goals and benefits of acquisitions;

the nature and amount of payments and other benefits to be received by North Valley management in connection with the merger pursuant to existing North Valley plans and compensation arrangements and the merger agreement;

the potential risk of diverting management attention and resources from the operation of TriCo’s business and towards the completion of the merger and the integration of the two companies;

59


the regulatory and other approvals required in connection with the merger and the potential to receive such regulatory approvals in a reasonably timely manner and without the imposition of unacceptable conditions; and

the potential to create a banking platform that is well positioned for future growth, both organically and through acquisitions.

The foregoing discussion of the information and factors considered by the TriCo board of directors is not intended to be exhaustive, but includes the material factors considered by the TriCo board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the TriCo board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The TriCo board of directors considered all these factors as a whole, including discussions with, and questioning of, TriCo’s management and TriCo’s financial and legal advisors, and overall considered the factors to be favorable to, and to support its determination to approve entry into the merger agreement.

For the reasons set forth above, the TriCo board of directors determined that the merger agreement and the transactions contemplated by the merger agreement, including the issuance of TriCo common stock in connection with the merger, are advisable and in the best interests of TriCo and its shareholders, and unanimously approved the merger agreement and the transactions contemplated by it. The TriCo board of directors unanimously recommends that the TriCo shareholders vote “FOR” the TriCo Merger proposal and “FOR” the TriCo Adjournment proposal (if necessary or appropriate).

Each of the directors of TriCo has entered into a shareholder agreement with TriCo and North Valley, pursuant to which they have agreed to vote “FOR” the TriCo Merger proposal and “FOR” the TriCo Adjournment proposal (if necessary or appropriate). For more information regarding the shareholder agreements, please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96.

Opinion of TriCo’s Financial Advisor

Pursuant to an engagement letter dated January 15, 2014, TriCo engaged Keefe, Bruyette & Woods, Inc. to render financial advisory and investment banking services to TriCo, including an opinion to the TriCo board of directors as to the fairness, from a financial point of view, to TriCo of the exchange ratio to be used in the proposed merger. TriCo selected KBW because KBW is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger. As part of its investment banking business, KBW is continually engaged in the valuation of financial services businesses and their securities in connection with mergers and acquisitions.

As part of its engagement, representatives of KBW attended the meeting of the TriCo Board held on January 21, 2014, at which the TriCo board of directors evaluated the proposed merger. At this meeting, KBW reviewed the financial aspects of the proposed merger and delivered to the TriCo board of directors its oral opinion, subsequently followed by delivery of its written opinion, that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in such opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to TriCo. The TriCo board of directors approved the merger agreement at the January 21, 2014 meeting.

Stephens Inc.. The description of the opinion set forth herein is qualified in its entirety by reference to the full text of KBW’s written opinion dated January 21, 2014, which is attached as Appendix C to this document and is incorporated herein by reference, and describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in rendering itssuch opinion.

KBW’sStephens Inc.’s opinion speaks only as of theits date, of theand Stephens Inc. has undertaken no obligation to update or revise its opinion. The opinion was for the information of, and was directed to the TriCo Board (in its capacity as such) in connection with its considerationTriCo’s board of the financial terms of the merger. The opinion addresseddirectors and addresses only the

fairness to TriCo, from a financial point of view, to TriCo of the

60


exchange ratio consideration to be paid in the merger.merger by TriCo. It diddoes not address the underlying business decision to proceed with the merger or constitute a recommendation to the TriCo board of directors as to how it should vote on the merger, and itmerger. The opinion does not constitute a recommendation to any shareholder of TriCo or North Valley as to how any suchthe shareholder should vote at any shareholder meeting at which the merger is considered or whether or not any such shareholder should enter into a voting, shareholders’, or affiliates’ agreementact with respect to the merger or exercise any dissenters’ or appraisal rights that may be available to such shareholder.

KBW’s opinion was reviewedrelated matter. TriCo and approved by KBW’s Fairness Opinion Committee in conformity with its policies and procedures established underFNBB determined the requirements of Rule 5150 of the Financial Industry Regulatory Authority.merger consideration through a negotiation process.

In rendering theits opinion, KBW reviewed, analyzed and relied upon material bearing upon the financial and operating condition of TriCo and North Valley and the merger, includingStephens Inc., among other things:

 

a draft, dated January 20, 2014,
(i)analyzed certain publicly available financial statements and reports regarding TriCo and FNBB;

(ii)analyzed certain audited financial statements and management reports regarding TriCo and FNBB;

(iii)analyzed certain internal financial statements and other financial and operating data concerning TriCo and FNBB prepared by management of TriCo and FNBB, respectively;

(iv)analyzed, on a pro forma basis, the effect of the merger on the balance sheet, capitalization ratios, earnings and book value both in the aggregate and, where applicable, on a per share basis of TriCo;

(v)reviewed the reported prices and trading activity for the common stock of TriCo;

(vi)compared the financial performance of TriCo and FNBB with that of certain other publicly-traded companies and their securities that Stephens Inc. deemed relevant to its analysis of the merger;

(vii)reviewed the financial terms, to the extent publicly available, of certain merger or acquisition mergers that Stephens Inc. Inc. deemed relevant to its analysis of the merger;

(viii)reviewed the most recent draft of the merger agreement and related documents provided by TriCo;

(ix)discussed with management of TriCo and FNBB the operations of and future business prospects for TriCo and FNBB and the anticipated financial consequences of the merger to TriCo and FNBB;

(x)assisted in TriCo’s deliberations regarding the material terms of the merger and its negotiations with FNBB; and

(xi)performed such other analyses and provided such other services as Stephens Inc. Inc. deemed appropriate.

Stephens Inc.’s opinion was necessarily based upon conditions as they existed and could be evaluated on the date of the merger agreement (the most recent draft thenopinion and the information made available to KBW);

Stephens Inc. through the audited financial statements and Annual Reports on Form 10-K for the three years ended December 31, 2012 for TriCo and North Valley;

the Quarterly Filings with the Federal Reserve and/or the Federal Deposit Insurance Corporation for the five quarters ended September 30, 2013 of TriCo and North Valley;

the quarterly reports on Form 10-Q for the quarters ended March 31, 2013, June 30, 2013 and September 30, 2013 of TriCo and North Valley;

certain other interim reports and other communications of TriCo and North Valley to their respective stockholders; and

other financial information concerning the businesses and operations of TriCo and North Valley either furnished to KBW by TriCo and North Valley or which KBW was otherwise directed to use for purposes of its analysis.

KBW’s consideration of financial information and other factors that it deemed appropriate under the circumstances or relevant to its analyses included, among others, the following:

the historical and current financial position and results of operations of TriCo and North Valley;

the assets and liabilities of TriCo and North Valley;

the nature and terms of certain other merger transactions and business combinations in the banking industry;

a comparison of certain financial and stock market information for each of TriCo and North Valley with similar information for certain other companies the securities of which are publicly traded;

the publicly available consensus “street estimates” of TriCo for 2014 and 2015 and of North Valley for 2014, as well as assumed long term growth rates based thereon that were provided to KBW by the respective management teams of TriCo and North Valley, all of which information was discussed by KBW with such management teams and used and relied upon by KBW at the direction of such management teams with the consentdate of the TriCo board of directors; and

estimates regarding certain pro forma financial effects of the merger on TriCo that were prepared and provided to KBW by TriCo management.

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KBW also performed such other studies and analyses as it considered appropriate and took into account its assessment of general economic, market and financial conditions and its experience in other transactions, as well as its experience in securities valuation and knowledge of the banking industry generally. KBW also held discussions with senior management of TriCo and North Valley regarding the past and current business operations, regulatory relations, financial condition and future prospects of their respective companies and such other matters that KBW deemed relevant to its inquiry.

opinion. In conducting its review and arriving at its opinion, KBWStephens Inc. relied upon and assumed the accuracy and completeness of all of the financial and other information provided to it or otherwise publicly available andavailable. Stephens Inc. did not independently verify the accuracy or completeness of any such information or assume any responsibility or liability for such verification accuracy or completeness. KBWaccuracy. Stephens Inc. relied upon the respective management teams of TriCo and North ValleyFNBB as to the reasonableness and achievability of the financial and operating forecasts and projections of TriCo and North Valley (and the assumptions and bases therefor including, but not limited to, in the case of TriCo, any potential cost savings and operating synergies and other potential pro forma effects assumed or estimated with respect to the merger) that were prepared by such management teams andbasis therefore) provided to KBW orStephens Inc. Stephens Inc. assumed that in the case of the publicly available consensus “street estimates” of North Valley and TriCo, KBW was directed to use. KBW assumed, at the direction of TriCo, that all of such forecasts and projections reflected or in the case of the publicly available consensus “street estimates” referred to above were consistent with, the best currently available estimates and judgments of the TriCo and North Valley management teamssuch managements and that such forecasts and projections wouldwill be realized in the amounts and in the time periods estimated.

It is understood that the forecasts, projections and estimates of TriCo and North Valley provided to KBW were not prepared with the expectation of public disclosure, that allcurrently estimated by such information is based on numerous variables and assumptions that are inherently uncertain, including, without limitation, factors related to general economic and competitive conditions and that, accordingly, actual results could vary significantly from those set forth in such forecasts, projections and estimates. KBW assumed, based on discussions with the respective management teams of TriCo and North Valley, that such forecasts, projections and estimates, as well as publicly available consensus “street estimates” of TriCo and North Valley referred to above, provided a reasonable basis upon which KBW could form its opinion and KBW expressed no view as to any such information or the assumptions or bases therefor. KBW relied on this information without independent verification or analysis and did not in any respect assume any responsibility or liability for the accuracy or completeness thereof.

KBW also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either TriCo or North Valley since the date of the last financial statements of each such entity that were made available to KBW. KBWmanagements. Stephens Inc. is not an expert in the independent verification of the adequacy of allowances for loan and lease losses and it assumed, without independent verification and with TriCo’s consent, that the aggregate allowancesallowance for loan and lease losses for TriCo and North Valley wereFNBB was adequate to cover such losses. In rendering its opinion, KBWStephens Inc. did not make or obtain any evaluationsevaluation or appraisals or physical inspectionappraisal of the property, assets or liabilities (contingent or otherwise) of TriCo, FNBB or North Valley, the collateral securingtheir respective affiliates, nor did it examine any of such assets or liabilities, or the collectabilityindividual credit files. Stephens Inc. was not asked to and did not undertake any independent verification of any such assets, norinformation, and Stephens Inc. did KBW examinenot assume any individual loan or credit files or evaluate the solvency, financial capability or fair value of TriCo or North Valley under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Because such estimates are inherently subject to uncertainty, KBW assumed no responsibility or liability for the accuracy and completeness thereof.

In conducting its analyses, Stephens Inc. used publicly published research consensus estimates as well as projections of expected future financial performance of TriCo and FNBB reflecting the judgment of the senior management teams of TriCo and FNBB, respectively, regarding expected future performance of their accuracy.respective

businesses. Neither TriCo nor FNBB publicly discloses internal management projections of the type provided to Stephens Inc. in connection with its review of the merger. As a result, such projections were not prepared with a view towards public disclosure. The projections were based on numerous variables and assumptions, which are inherently uncertain, including factors related to general economic and competitive conditions. Accordingly, actual results could vary significantly from those set forth in the projections.

For purposes of rendering its opinion, KBWStephens Inc. assumed that, in all respects material to its analysis:analyses:

 

the merger would
(i)the merger will be completed substantially in accordance with the terms set forth in the merger agreement, without material waiver or modification;

(ii)the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement are true and correct;

(iii)each party to the merger agreement and all related documents will perform all of the covenants and agreements required to be performed by such party under such documents;

(iv)all conditions to the completion of the merger will be satisfied without any waivers;

(v)there has been no material change in the assets, liabilities, financial condition, results of operations, business or prospects of TriCo or FNBB since either the date of the last financial statements made available to Stephens Inc. and the date of the merger agreement, and that no legal, political, economic, regulatory or other development has occurred that will adversely impact TriCo or FNBB;

(vi)all required governmental, regulatory, shareholder and third party approvals have been or will be received in a timely manner and without any conditions or requirements that would have a material adverse effect on the contemplated benefits of the merger to TriCo; and

(vii)the merger will be accounted for as a purchase merger under generally accepted accounting principles.

Stephens Inc.’s opinion is limited to whether the consideration to be paid in the merger agreement (the finalby TriCo is fair from a financial point of view to TriCo. Stephens Inc. was not asked to, and it did not, offer any opinion as to the terms of which KBW assumed would not differ in any respect material to KBW’s analyses from the draft reviewed by KBW) with no additional payments or adjustments to the exchange ratio;

the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to inor the merger agreement are true and correct;

62


each party to the merger agreement and all related documents would perform all of the covenants and agreements required to be performed by such party under such documents;

there are no factors that would delay or subject to any adverse conditions, any necessary regulatory or governmental approval for the merger and that all conditions to the completionform of the merger would be satisfied withoutor any waivers or modifications to the merger agreement; and

in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the merger, no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, would be imposed that would have a material adverse effect on the future results of operations or financial condition of TriCo, North Valley or the combined entity or the contemplated benefitsaspect of the merger, including the cost savings, revenue enhancements and related expenses expected to result from the merger.

KBW further assumed that the merger would be consummated in a manner that would comply with the applicable provisions of the Securities Act of 1933, as amended, the Exchange Act and all other applicable federal and state statutes, rules and regulations. KBW further assumed that TriCo relied upon the advice of its counsel, independent accountants and other advisors (other than KBW) as to all legal, financial reporting, tax, accounting and regulatory matters with respect to TriCo, North Valley, the merger, the related merger of North Valley Bank, a wholly-owned subsidiary of North Valley, with and into Tri Counties Bank, a wholly-owned subsidiary of TriCo (the “Subsidiary Bank Merger”), and the merger agreement. KBW did not provide advice with respect to any such matters.

KBW’s opinion addressed only the fairness, from a financial point of view, as of the date of such opinion, of the exchange ratioconsideration to be usedpaid by TriCo in the merger to TriCo. KBW expressed no view or opinion as to any terms or other aspects of the merger, including without limitation, the form or structure of the merger, any transactions that might be related to the merger, any consequences of the merger to TriCo, its stockholders, creditors or otherwise, or any terms, aspects or implications of any voting, support, stockholder or other agreements, arrangements or understandings contemplated or entered into in connection with the merger or otherwise, including without limitation the amendment, entered into on or prior to the date of the merger agreement, to the North Valley amended and restated shareholder protection rights agreement dated as of March 26, 2009. KBW’s opinion was necessarily based upon conditions as they existed and could be evaluated on the date of such opinion and the information made available to KBW through such date. It is understood that developments subsequent to the date of KBW’s opinion may have affected, and may affect, the conclusion reached in KBW’s opinion and that KBW did not and does not have an obligation to update, revise or reaffirm its opinion. KBW’smerger. The opinion did not address, and KBWStephens Inc. expressed no view or opinion with respect to:

the underlying business decision of TriCo to, engage in the merger or enter into the merger agreement;

the relative merits or effect of the merger as compared to any other strategic alternatives or business strategies or combinations that are,may be or may have been or may be available to or contemplated by TriCo or the TriCoits board of directors;

directors. Moreover, Stephens Inc. did not express an opinion as to the fairness of the amount or nature of any compensation payable to or to be received by any of TriCo’s officers, directors or employees or any class of such persons, relative to any compensation to the holders of TriCo common stock;

the effect of the merger on, or the fairness of the consideration to be received by, holders of any class of securities of TriCo or North Valley, or any other party to any transaction contemplated by the merger agreement;

the Subsidiary Bank Merger;

the actual value of the TriCo common stock to be issued in the merger;

63


the prices, trading range or volume at which TriCo common stock or North Valley common stock would trade following the public announcement of the merger or the prices, trading rage or volume at which TriCo common stock would trade following consummation of the merger;

any advice or opinions provided by any other advisor to any of the parties to the merger or any other transaction contemplated byrelative to the aggregate consideration. Additionally, the opinion was not an expression of an opinion as to the price at which shares of TriCo common stock would trade at the time of issuance to shareholders of FNBB under the merger agreement;agreement or

the prices at which TriCo’s or FNBB’s common stock may trade at any legal, regulatory, accounting, tax or similar matters relating to TriCo, North Valley, their respective stockholders, or relating to or arising out of or as a consequence of the merger, the Subsidiary Bank Merger or any related transaction, including whether or not the merger would qualify as a tax-free reorganization for U.S. federal income tax purposes.
time.

In performing its analyses, KBWStephens Inc. made numerous assumptions with respect to industry performance, general business, economic, market, industry and financial conditions and other matters, which arewere beyond the control of KBW,Stephens Inc., TriCo and North Valley.FNBB. Any estimates contained in the analyses performed by KBW areStephens Inc. were not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities dodid not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. In addition, the KBWStephens Inc. opinion was one factor among severalmany factors taken into consideration by the TriCoTriCo’s board of directors in making its determination to approve the merger agreement and the merger. Consequently, the analyses described below should not be viewed as determinative of the decision of the TriCo BoardTriCo’s board of directors with respect to the fairness of the merger consideration. The exchange ratio was determined through negotiation between TriCo and North Valley and the decision to enter into the merger agreement was solely that of the TriCo board of directors.

The following is a summary of the material financial analyses performed by Stephens Inc. and presented by KBWit to the TriCoTriCo’s board of directors on January 21, 2014,December 11, 2017, in connection with its fairness opinion. The summary is not a

complete description of the financial analyses underlying the Stephens Inc. opinion or the presentation made by KBWStephens Inc. to the TriCoTriCo’s board of directors, but summarizes the material analyses performed and presented in connection with such opinion. The preparation of a fairness opinion is a complex analytic process involving various determinations as to the appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, KBWStephens Inc. did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysisthe analyses and factor.factors considered. The financial analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the financial analyses. Accordingly, KBW believes that itsStephens Inc.’s analyses and the summary of its analyses must be considered as a whole, and that selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying its analyses and opinion. The tables alone do not constitute a complete description

Summary of Proposal.

Under the terms of the financial analyses. No company or transaction used as a comparison inmerger agreement, at the selected companies or selected transactions analyses described below is identical to TriCo, North Valley or the merger. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristicseffective time of the companies.

For purposesmerger, each outstanding share of FNBB’s common stock will be converted into the financial analyses described below, based on the closing priceright to receive a fixed exchange ratio of 0.9800 shares of TriCo common stock subject to certain possible adjustments (as described in the merger agreement and elsewhere in this joint proxy statement/prospectus), and the options of FNBB will be cancelled in exchange for approximately $13.2 million in cash (based on January 17, 2014TriCo’s share price on December 8, 2017).

Implied Valuation.

Using publicly available information, Stephens Inc. compared certain performance metrics of $27.66,FNBB to selected groups of financial institutions deemed relevant by Stephens Inc. Merger multiples for the exchange ratio of 0.9433x representedmerger were derived from an impliedaggregate merger value of $26.09$40.81 per share, or $315.3 million (as of NorthDecember 8, 2017).

FNBB’s peer group consisted of the following selected publicly traded (NASDAQ, NYSE, or NYSE MKT) bank holding companies headquartered in the Western United States with total assets between $1.0 billion and $3.0 billion (excluding merger targets and ethnic focused banks):

Heritage Commerce Corp

Bank of Marin Bancorp

Sierra Bancorp

People’s Utah Bancorp

Central Valley common stock. Community Bancorp

Bank of Commerce Holdings

Pacific Mercantile Bancorp

First Financial Northwest, Inc.

To perform the selected companies analyses described below, KBWthis analysis, Stephens Inc. used (i) financial information as of orand for the last twelve months ended September 30, 2013, (ii) earnings estimates for 2013, 2014 and 2015 from First Call, a nationally recognized earnings estimate consolidator, and (iii) market2017. Market price datainformation was as of January 17, 2014. Certain financial data, referenced in the tables presented below, may not correspond to the data presented in TriCo’s and North Valley’s historical financial statements, as a result of the different periods, assumptions and methods used by KBW to compute the financial data presented.

Selected Companies Analysis for TriCo.Using publicly available information, KBW compared the financial condition and market performance of TriCo to the following banks that are publicly traded on major

64


exchanges and are headquartered in the Western U.S. (defined as Arkansas, Arizona, California, Colorado, Hawaii, Idaho, Montana, New Mexico, Nevada, Oregon, Utah, Washington and Wyoming) with assets between $1.5 billion and $5 billion, excluding thrifts and pending merger targets.

The selected companies included:

Westamerica BancorporationCoBiz Financial Inc.
Central Pacific Financial Corp.Guaranty Bancorp
Banner CorporationPreferred Bank
Banc of California, Inc.Heritage Financial Corporation
Hanmi Financial CorporationPacific Premier Bancorp, Inc.
Wilshire Bancorp, Inc.

KBW’sDecember 8, 2017. Stephens Inc.’s analysis showed to the extent publicly available, the following concerning the financialFNBB peer group’s 25th percentile, median, and 75th percentile performance and financial condition of TriCo and the selected companies:metrics:

 

   TriCo  Peer
Group
Minimum
  Peer
Group
25th
Percentile
  Peer
Group
Mean
  Peer
Group

Median
  Peer
Group

75th
Percentile
  Peer
Group

Maximum
 

LTM Return on Average Assets

   1.04  (0.28%)   0.76  1.25  1.16  1.50  3.65

LTM Return on Average Equity

   11.35  (2.77%)   6.46  10.17  9.41  12.20  27.88

LTM Net Interest Margin

   4.17  3.12  3.74  3.97  4.02  4.18  4.80

LTM Efficiency Ratio

   66.4  45.8  54.5  65.5  65.4  71.6  93.2

Tangible Common Equity / Tangible Assets

   8.75  5.09  9.05  10.53  11.29  12.47  13.95

Total Risk-Based Capital Ratio

   14.88  12.64  14.76  16.55  15.99  17.57  22.58

Loans / Deposits

   72.3  45.7  83.2  82.5  87.2  89.6  97.4

Loan Loss Reserve / Gross Loans

   2.37  0.65  1.50  1.92  2.04  2.33  3.41

Nonperforming Assets / Assets

   3.82  0.15  1.11  1.40  1.59  1.80  2.27

Nonperforming Assets / Loans + OREO

   6.16  0.21  1.53  2.04  2.08  2.48  3.47

LTM Net Charge-Offs / Average Loans

   0.35  (0.02%)   0.13  0.30  0.40  0.45  0.60

FNBB Peer Multiples

   

FNBB Implied Valuation ($ per share)

 
   Price/   

Price/

 
   TBV (x)  LTM EPS (x)      TBV ($)   LTM EPS ($) 

75th Percentile

   1.97   20.9   75th Percentile   33.71    37.91 

Median

   1.78   19.4   Median   30.46    35.19 

25th Percentile

   1.65   17.7   25th Percentile   28.23    32.10 

TriCo / FNBB

   2.38(1)   22.5(2) 

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KBW’s analysis showed, to the extent publicly available, the following concerning the market performance of TriCo and the selected companies (excluding stock price/LTM EPS multiples and LTM dividend payout percentages for selected companies whose EPS was negative or zero):

   TriCo  Peer
Group

Minimum
  Peer
Group

25th
Percentile
  Peer
Group

Mean
  Peer
Group

Median
  Peer
Group

75th
Percentile
  Peer
Group

Maximum
 

% One Year Stock Price Change

   65.4  12.1  24.7  36.9  37.2  46.7  72.1

% One Year Total Return

   68.6  16.3  27.0  38.8  39.2  46.7  74.0

% YTD Price Change

   (2.5%)   (6.4%)   (3.6%)   (0.9%)   (0.9%)   1.3  5.1

Stock Price / Book Value per Share

   1.81x    1.08x    1.36x    1.67x    1.57x    1.89x    2.60x  

Stock Price / Tangible Book Value per Share

   1.94x    1.28x    1.46x    1.83x    1.60x    1.96x    3.54x  

Stock Price / LTM EPS

   16.7x    4.9x    15.4x    17.9x    17.6x    21.3x    26.4x  

Stock Price / 2013 EPS(1)

   15.4x    15.3x    16.8x    22.8x    17.7x    22.3x    54.7x  

Stock Price / 2014 EPS(1)

   16.3x    11.6x    14.1x    17.0x    16.4x    19.0x    23.2x  

Stock Price / 2015 EPS(1)

   15.1x    9.9x    12.5x    15.0x    13.4x    16.1x    23.7x  

Dividend Yield(2)

   1.59  0.00  0.95  1.42  1.29  1.68  3.59

LTM Dividend Payout(3)

   24.44  0.00  14.83  23.38  20.31  31.25  63.33

(1)First Call consensus EPS estimates.FNBB’s common equity adjusted for fair market value markup of bank owned real estate of $18 millionpre-tax.
(2)Represents most recent quarterly dividend annualized as a percentageFNBB LTM net income adjusted to remove $1.8 millionpre-taxnon-recurring accelerated accrual for Salary Continuation Agreements and updated with the estimated ongoing future expense of stock price.
(3)Represents most recent quarterly dividend annualized as a percentage of LTM EPS.$0.35 millionpre-tax per year.

Selected Companies Analysis for North Valley.Using publicly available information, KBW then compared the financial condition and market performance of North ValleyIn contrast to the following banks that arecompanies in the publicly traded peer group analyzed on major exchanges and are headquartered ina standalone basis by Stephens Inc., the Western U.S.acquisition of FNBB will provide TriCo with assets between $500 million and $1.5 billion, excluding thrifts and pending merger targets.

The selected companies included:

Bank of Marin BancorpBank of Commerce Holdings
Bridge Capital HoldingsPacific Mercantile Bancorp
Pacific Continental CorporationIntermountain Community Bancorp
Cascade BancorpUnited Security Bancshares
Heritage Commerce CorpOak Valley Bancorp
Sierra BancorpAmerican River Bankshares
CU BancorpCommunity West Bancshares
Northrim BanCorp, Inc.1st Century Bancshares, Inc.
Heritage Oaks BancorpPlumas Bancorp
Central Valley Community Bancorp

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KBW’s analysis showed,the opportunity to realize cost savings. Stephens Inc. assessed the extent publicly available, the following concerning the financial performance and financial condition of North Valley and the selected companies:

   North
Valley
  Peer
Group

Minimum
  Peer
Group

25th
Percentile
  Peer
Group

Mean
  Peer
Group

Median
  Peer
Group

75th
Percentile
  Peer
Group

Maximum
 

LTM Return on Average Assets

   0.36%*   (0.82%)   0.73  0.99  0.88  1.14  3.83

LTM Return on Average Equity

   3.40%*   (6.94%)   6.56  8.80  7.94  9.06  33.05

LTM Net Interest Margin

   3.83  3.16  3.84  4.01  4.02  4.22  5.00

LTM Efficiency Ratio

   80.7%*   56.1  64.9  72.9  70.8  77.5  114.6

Tangible Common Equity / Tangible Assets

   10.41  5.72  9.35  10.32  10.49  11.20  13.28

Total Risk-Based Capital Ratio

   18.58  12.47  14.60  16.57  15.67  17.33  24.62

Loans / Deposits

   65.0  52.0  70.6  76.4  77.3  81.5  107.0

Loan Loss Reserve / Gross Loans

   1.83  1.10  1.57  1.92  1.92  2.21  2.75

Nonperforming Assets / Assets

   2.47  0.20  1.23  2.48  1.79  3.79  5.85

Nonperforming Assets / Loans + OREO

   4.29  0.30  1.88  3.85  2.74  5.31  9.66

LTM Net Charge-Offs / Average Loans

   0.43  (0.77%)   (0.04%)   0.26  0.16  0.49  1.69

*Includes other real estate owned (“OREO”) expense of $4.4 million.

67


KBW’s analysis showed, to the extent publicly available, the following concerning the market performance of North Valley and the selected companies (excluding stock price / EPS multiples for selected companies whose EPS was negative or zero):

   North
Valley
  Peer
Group

Minimum
  Peer
Group

25th
Percentile
  Peer
Group

Mean
  Peer
Group

Median
  Peer
Group

75th
Percentile
  Peer
Group

Maximum
 

% One Year Stock Price Change

   19.3  (26.5%)   18.8  33.4  31.2  43.9  132.4

% One Year Total Return

   19.3  (26.5%)   20.9  34.7  32.3  43.9  132.4

% YTD Price Change

   0.8  (7.3%)   (1.3%)   1.0  0.6  2.3  11.9

Stock Price / Book Value per Share

   1.37x    0.96x    1.05x    1.25x    1.16x    1.44x    2.02x  

Stock Price / Tangible Book Value per Share

   1.37x    0.96x    1.13x    1.33x    1.23x    1.48x    2.02x  

Stock Price / LTM EPS

   40.6x  4.5x    12.1x    16.2x    15.3x    20.5x    29.7x  

Stock Price / 2013 EPS(1)

   30.8x  8.7x    14.6x    18.3x    18.9x    20.4x    29.2x  

Stock Price / 2014 EPS(1)

   18.7x    10.7x    15.4x    17.7x    17.7x    19.0x    26.5x  

Stock Price / 2015 EPS(1)

   13.2x    9.4x    12.6x    14.5x    13.9x    15.3x    23.7x  

Dividend Yield(2)

   0.00  0.00  0.00  0.79  0.00  1.72  2.68

LTM Dividend Payout(3)

   0.00  0.00  0.00  10.67  0.00  25.00  40.91

*Includes OREO expense of $4.4 million.
(1)First Call consensus EPS estimates.
(2)Represents most recent quarterly dividend annualized as a percentage of stock price.
(3)Represents most recent quarterly dividend annualized as a percentage of LTM EPS.

Selected Transactions Analysis. KBW reviewed publicly available information related to 24 selected mergers and acquisitions involving banks and bank holding companies as well as thrifts and thrift holding companies nationwide that were announced in the last twelve months, with disclosed deal values between $100 million and $500 million and target nonperforming assets to assets ratio of less than or equal to 4%. The selected transactions included:

Acquiror:

Acquired Company:

IBERIABANK CorporationTeche Holding Company
BancorpSouth, Inc.Ouachita Bancshares Corp.
Old National BancorpUnited Bancorp, Inc.
Provident Financial Services, Inc.Team Capital Bank
ViewPoint Financial Group, Inc.LegacyTexas Group, Inc.
Independent Bank Group, Inc.BOH Holdings, Inc.
Rockville Financial, Inc.United Financial Bancorp, Inc.
Cascade BancorpHome Federal Bancorp, Inc.
Heritage Financial CorporationWashington Banking Company
East West Bancorp, Inc.MetroCorp Bancshares, Inc.
Old National BancorpTower Financial Corporation
Prosperity Bancshares, Inc.F & M Bancorporation Inc.
Mercantile Bank CorporationFirstbank Corporation

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Cullen/Frost Bankers, Inc.WNB Bancshares, Inc.
Wilshire Bancorp, Inc.Saehan Bancorp
First Federal Bancshares of Arkansas, Inc.First National Security Company
Prosperity Bancshares, Inc.FVNB Corp.
Peoples Financial Services Corp.Penseco Financial Services Corporation
Home BancShares, Inc.Liberty Bancshares, Inc.
Union First Market Bankshares CorporationStellarOne Corporation
Provident New York BancorpSterling Bancorp
SCBT Financial CorporationFirst Financial Holdings, Inc.
Renasant CorporationFirst M&F Corporation
United Bankshares, Inc.Virginia Commerce Bancorp, Inc.

To the extent publicly available, KBW derived, among other things, the following implied ratios for the selected transactions:

price per share paid for the acquired company to tangible book value per share of the acquired company baseddiscounted cash flow associated with the cost savings estimated by TriCo management at approximately 28% of FNBB’s noninterest expense through 2023. The analysis assumed discount rates ranging from 10.0% to 11.0% and terminal multiples ranging from 15.0 times to 17.0 times estimated cost savings in 2023. This resulted in a range of values of FNBB cost savings from $91 million to $104 million. The discounted cash flow present value analysis is a widely used valuation methodology that relies on numerous assumptions, including asset and earnings growth rates, terminal values and discount rates. The analysis did not purport to be effective to determine the latest publicly available financial statementsactual current or expected future values of the company available prior to the announcement of the acquisition;

FNBB.

price per share paid for the acquired company to last twelve months EPS based on the latest publicly available financial statements of the acquired company prior to the announcement of the acquisition;

transaction value for the acquired company minus tangible common equity premium as a percentage of core deposits (total deposits less time deposits greater than $100,000) based on the latest publicly available financial statements of the company available prior to the announcement of the acquisition; and

price per share paid for the acquired company to the closing price of the acquired company one day and one month prior to the announcement of the acquisition (expressed as a percentage and referred to as the 1-day market premium and 1-month market premium).

These ratios were compared with corresponding transaction ratios for the proposed merger based on the implied value of $26.09 per share of North Valley common stock, derived using the 0.9433x exchange ratio in the proposed merger and the closing price of TriCo common stock on January 17, 2014 of $27.66. The results of the analysis are set forth in the following table (excluding certain LTM EPS multiples for transactions in which the acquired company’s EPS was negative or zero):

Transaction Multiples:

  North
Valley
  Peer
Group

Minimum
  Peer
Group

25th
Percentile
  Peer
Group

Mean
  Peer
Group

Median
  Peer
Group

75th
Percentile
  Peer
Group

Maximum
 

Tangible Book Value

   1.91x    1.27x    1.48x    1.81x    1.69x    1.95x    2.84x  

LTM EPS

   55.4x  12.0x    15.2x    18.7x    17.0x    19.7x    48.5x  

Core Deposit Premium

   12.27  2.09  6.91  9.53  9.01  12.54  18.43

One-Day Market Premium(1)

   36.8  (36.3%)   10.8  20.1  18.0  33.5  64.8

One-Month Market Premium(2)

   38.6  (36.3%)   15.8  31.3  32.5  46.0  82.9

*Includes OREO expense of $4.4 million.
(1)Based on North Valley’s stock price of $19.07 on 1/17/2014.
(2)Based on North Valley’s stock price of $18.82 on 12/17/2013.

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No company or transaction used as a comparison in the above analysis is identical to FNBB, TriCo North Valley or the proposed merger. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.companies.

Relative ContributionComparable Merger Analysis.KBW prepared an analysis comparing

Stephens Inc. reviewed publicly available information related to recent bank acquisition mergers involving targets headquartered on the relative standalone percentage contributions of TriCo and North Valley to the pro forma market capitalization, balance sheet and income statement itemsWest Coast of the combined entity, including pro forma ownership, assets, gross loans, deposits, tangible common equity,United States announced since the 2016 United States Presidential Election on November 8, 2017 with an aggregate announced deal value between $100 million and $1.0 billion. The mergers included in this group were:

Buyer

Seller

Pacific Premier Bancorp

Plaza Bancorp

Heritage Financial Corp.

Puget Sound Bancorp Inc.

PacWest Bancorp

CU Bancorp

Columbia Banking System Inc.

Pacific Continental Corp.

Pacific Premier Bancorp

Heritage Oaks Bancorp

First Interstate BancSystem

Cascade Bancorp

Merger multiples for the merger were derived from an aggregate merger value of $40.81 per share, or $315.3 million (as of December 8, 2017). Using the comparable mergers, Stephens Inc. derived and compared, among other things, the implied deal value paid for the acquired company to:

Tangible book value of the acquired company based on the most recent publicly available financial statements prior to announcement, adjusted for a fair market value markup of bank owned real estate of $18 millionpre-tax (8 of FNBB’s 12 branches are owned as well as its operations center);

the last twelve months net income and projected 2013, 2014 and 2015 net income available to common shareholders. This analysis excluded any purchase accounting adjustments.

To perform this analysis, KBW used (i) balance sheet data for TriCo and North Valley as of September 30, 2013, (ii) net income for the twelve months ended September 30, 2013 for TriCo and North Valley, (iii)acquired company based on the most recent publicly available consensus “street estimates”financial statements prior to announcement, adjusted to remove $1.8 millionpre-taxnon-recurring accelerated accrual for Salary Continuation Agreements and updated with the estimated ongoing future expense of net income$0.35 millionpre-tax per year;

the premium paid on tangible common equity divided by the core deposits (core deposits defined as total deposits less time deposits greater than $100,000) of TriCo for 2013, 2014 and 2015 andthe acquired company based on the most recent publicly available consensus “street estimates” of net income for North Valley for 2013 and 2014, and a net income growth rate for North Valley for 2015 assumed per TriCo management, and (iv) market price data as of January 17, 2014. The results of KBW’s analysis are set forthfinancial statements prior to announcement.

As illustrated in the following table:table, Stephens Inc. compared the proposed merger ratios to the 25th percentile, median and 75th percentile merger ratios of the selected comparable mergers:

 

($ in millions)  TriCo
as a % of
Total
  North
Valley
as a % of
Total
 

Ownership

   

100% stock (0.9433x exchange ratio)

   71.4  28.6

Balance Sheet ($mm)

   

Assets

   74.3  25.7

Gross Loans

   76.5  23.5

Deposits

   74.6  25.4

Tangible Common Equity

   70.7  29.3

Net Income to Common ($mm)

   

LTM Net Income

   89.1  10.9

2013e Net Income(1)

   87.2  12.8

2014e Net Income(1)

   79.7  20.3

2015e Net Income(1)

   80.1  19.9

Market Capitalization ($mm)(2)

   

Pre-Deal Market Capitalization

   77.3  22.7

FNBB Comparable Merger Multiples

   

FNBB Implied Valuation ($ per share)

 
   Price/      Price/ 
   TBV
(x)
  LTM
EPS (x)
  Core
Deposit
Premium
(%)
      TBV
($)
   LTM
EPS ($)
   Core
Deposit
Premium
($)
 

75th Percentile

   2.62   29.2   16.1   75th Percentile   44.83    52.96    38.64 

Median

   2.24   26.2   15.2   Median   38.33    47.52    37.44 

25th Percentile

   2.14   25.3   13.2   25th Percentile   36.62    45.89    34.76 

TriCo / FNBB

   2.38(1)   22.5(2)   18.8         

 

70


(1)TriCo’s net income estimates per consensus “street estimates”; North Valley’s 2013 & 2014 net income estimates per consensus “street estimates” and net income growth rateFNBB’s common equity adjusted for 2015 assumed per TriCo management.fair market value markup of bank owned real estate of $18 millionpre-tax.
(2)Market capitalization asFNBB LTM net income adjusted to remove $1.8 millionpre-taxnon-recurring accelerated accrual for Salary Continuation Agreements and updated with the estimated ongoing future expense of 1/17/2014.$0.35 millionpre-tax per year.

Financial Impact Analysis. KBW performedNo company or merger used as a pro forma mergercomparison in the above analysis that combined projected income statementis identical to FNBB, TriCo or the proposed merger. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and balance sheet information at September 30, 2013 of TriCojudgments concerning differences in financial and North Valley. Pro forma assumptions regarding, among other things, the accounting treatmentoperating characteristics of the merger, merger adjustments and cost savings, and purchase accounting adjustments for marking assets to fair value, provided to KBW by TriCo management, were used to calculate the potential financial impact that the proposed merger could have on certain historical and projected financial results of TriCo. For the analysis, at the direction of TriCo management, KBW used publicly available consensus “street estimates” for TriCo’s net income for 2014 and 2015 and used publicly available consensus “street estimates” for North Valley’s net income for 2014 and TriCo’s management guidance regarding net income growth for 2015. The analysis indicated that the merger (excluding one-time merger-related charges) would be accretive to TriCo’s estimated earnings per share in 2014 and 2015. The analysis also indicated that the merger would be dilutive to tangible book value per share for TriCo and that one of TriCo’s pro forma capital ratios would be lower at the closing of the merger. For all of the above analyses, the actual results achieved by TriCo following the proposed merger will vary from the projected results, and the variations may be material.companies.

Discounted Cash Flow Analysis. KBW

Stephens Inc. performed a discounted cash flow analysis to estimate a range for the implied equity value of North Valley. In this analysis, at the directionpresent values ofafter-tax cash flows that FNBB could contribute to TriCo management, KBW used publicly available consensus “street estimates” for North Valley for 2014 pertaining to the earnings and assets of North Valley,through 2023, standalone as well as assumed long term growth rates based thereon, certain assumptions regarding the pro forma effectsincluding estimated cost savings of the proposed merger (including cost savings) and purchase accounting adjustments for marking assets28% of FNBB’s projected noninterest expense. In performing this analysis, Stephens Inc. relied on analyst projections to fair value. KBW assumed discount rates ranging from 11.0% to 15.0% and the range of values was determined by adding (1) the present value ofderive TriCo’s projectedafter-tax cash flows to North Valley shareholders fromfor fiscal years 2014 to2018-2019 (7.5% earnings growth thereafter). Stephens Inc. used FNBB management projections for 2018 and (2) the present value of the terminal value of North Valley cash flows. In determining cash flows available to shareholders, KBW assumedthen TriCo projections (based on 10% balance sheet growth, per TriCo management5%non-interest expense growth, and assumed that North Valley would maintain a flat rate environment) for 2019-2021 (12.5% earnings growth thereafter). Additionally, the analysis assumes FNBB pays the maximum dividend available while maintaining an 8.0% tangible common equity /to tangible asset ratio of 8.00%, and would retain sufficient earnings to maintain these levels.ratio. Any earnings in excess of what would need to be retained represented dividendable cash flows for North Valley. In calculatingFNBB.

A valuation was derived by discounting the projected free cash flows for FNBB based on the estimates for the period June 30, 2018 through December 31, 2022 and a terminal value at December 31, 2022 based on the next twelve months earnings ending December 31, 2023 and utilizing a range of North Valley, KBW applieddiscount rates approximating TriCo cost of capital.

The analysis assumed discount rates ranging from 10.0% to 11.0% and terminal multiples ranging from 13.015.0 times to 17.0 times 2019 estimatedfiscal year 2022 NTM forecasted earnings. ThisOn a standalone basis, this analysis resulted in a range of implied values per share of North Valley common stockFNBB from $302.3 million to $350.8 million. Including estimated cost savings of $23.01 per share28% of FNBB’s projected noninterest expense, this analysis resulted in a range of values of FNBB from $393.6 million to $32.86 per share.

$454.5 million. The discounted cash flow present value analysis is a widely used valuation methodology but the results of such methodology are highly dependent upon thethat relies on numerous assumptions, that must be made, including asset and earnings growth rates, terminal values and discount rates. The analysis did not purport to be indicativeeffective to determine the actual current or expected future values of FNBB.

Financial Impact Analysis.

Stephens Inc. performed pro forma merger analyses that combined projected income statement and balance sheet information of TriCo and FNBB. Analytic assumptions obtained from management of TriCo regarding the

accounting treatment, acquisition adjustments and cost savings were used to calculate the financial impact that the merger could be expected to have on certain projected financial results of TriCo. In the course of this analysis, Stephens Inc. used TriCo consensus analyst earnings estimates for 2017-2019 and 7.5% earnings growth thereafter. For FNBB earnings, management projections were used for 2018 and 2019-2021 projections were based on 10% balance sheet growth, 5%non-interest expense growth, and flat rate environment (12.5% earnings growth thereafter). This analysis indicated that the merger is expected to be approximately 2% accretive to TriCo’s estimated earnings per share in 2018, excluding estimatedone-time TriCo merger costs, and approximately 8% accretive to TriCo’s estimated earnings per share in 2019. The analysis also indicated that following the merger the pro forma entity would maintain well capitalized capital ratios. For all of the above analyses, the actual values or expected values of North Valley.results achieved by TriCo following the merger will likely vary from the projected results, and the variations may be material.

Miscellaneous.Relationships.KBW served as financial advisor to TriCo in connection with the proposed merger, and did not act as an advisor to or agent of any other person. As part of its investment banking business, KBW is continually engaged in the valuation of bank and bank holding company securities in connection with acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for various other purposes. As specialists in the securities of banking companies, KBW has experience in, and knowledge of, the valuation of banking enterprises.

In the ordinary course of its business as a broker-dealer, KBWStephens Inc. may, from time to time, purchase securities from, orand sell securities to TriCo, and North Valley. As a market maker in securities, KBWFNBB or their respective affiliates. Stephens Inc. may also from time to time have a long or short position in, and buy or sell, debt or equity securities of TriCo and North Valleyor its affiliates for its own account and for the accounts of its customers. To

Stephens Inc. has acted exclusively for the extent KBW had any such positions asTriCo’s board of the date ofdirectors in rendering its opinion it was disclosed to TriCo.

Pursuant to KBW’s engagement agreement, TriCo agreed to pay KBW a cash fee of $1,000,000, $100,000 of which became payable upon the rendering of KBW’s opinion and the balance of which is contingent upon the successful completion of the merger. In addition, TriCo agreed to reimburse KBW for reasonable out-of-pocket expenses and disbursements incurred in connection with the transactionmerger and will receive a fee from TriCo for its services. Stephens Inc. has consented to the inclusion of its opinion in the registration statement of which this joint proxy statement/prospectus is a part. Stephens Inc. was due a fee of $100,000 upon rendering its fairness opinion to the TriCo’s board of directors, regardless of the conclusions set forth in the opinion and a separate fee of $300,000 upon the signing of the merger agreement. Upon the successful closing of the merger, Stephens Inc. is also entitled to a fee of $1,500,000 for its financial advisory services to TriCo and its board of directors. In addition, TriCo has agreed to reimburse Stephens Inc. for reasonable and customaryout-of-pocket expenses and to indemnify KBWStephens Inc. against certain liabilities, including liabilities under the federal securities laws. Other than in connection with the merger, during the two years preceding the date of its opinion, KBW didStephens Inc. has not provide investment banking and financial advisory

71


services to TriCo. During the two years preceding the date of its opinion, KBW did not provide investment banking and financial advisory services to North Valley. KBW may in the future provideprovided other investment banking and financial advisory services to TriCo or FNBB in the past two years.

Opinion of FNBB’s Financial Advisor

By letter dated August 4, 2017, FNBB retained Courtney to act as its exclusive financial advisor in connection with a possible business combination with another financial institution. Courtney is a nationally recognized investment banking and private equity firm with a specialty in financial institutions transactions. In the ordinary course of its investment banking business, Courtney is engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

Courtney acted as exclusive financial advisor to FNBB in connection with the proposed transaction and participated in certain of the negotiations leading to the execution of a definitive merger agreement on December 11, 2017. At the December 11, 2017 meeting at which FNBB’s board of directors considered and approved the merger agreement, Courtney delivered to the FNBB board its opinion that, as of such date, the merger consideration was fair to the holders of FNBB common stock from a financial point of view.

The full text of Courtney’s opinion is attached as Appendix B to this joint proxy statement/prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Courtney in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the full text of the opinion. FNBB’s shareholders are urged to read the entire opinion carefully in connection with their consideration of the proposed merger.

Courtney’s opinion speaks only as of the date of the opinion. The opinion was directed to the FNBB board and is directed only to the fairness of the merger consideration to the holders of FNBB common stock from

a financial point of view. It does not address the underlying business decision of FNBB to engage in the merger or any other aspect of the merger and is not a recommendation to any FNBB shareholder as to how such shareholder should vote at FNBB’s special meeting with respect to the merger or any other matter.

In connection with rendering its December 11, 2017 opinion, Courtney reviewed and considered, among other things:

(1)the merger agreement and ancillary documents;

(2)certain publicly available business and financial information relating to FNBB and TriCo that Courtney deemed to be relevant;

(3)certain internal information, primarily financial in nature, including financial projections and other financial and operating data relating to the strategic implications and operational benefits anticipated to result from the merger, furnished to Courtney by FNBB and TriCo;

(4)certain publicly available and other information concerning the reported prices and trading history of, and the trading market for, the common stock of FNBB and TriCo;

(5)certain publicly available information with respect to other companies that Courtney believed to be comparable in certain respects to FNBB and TriCo;

(6)the financial terms, to the extent publicly available, of selected recent business combinations of companies in the banking industry which we deemed to be comparable, in whole or in part, to the merger;

(7)made inquiries regarding and discussed the merger and the merger agreement and other matters related thereto with the FNBB and FNBB’s legal counsel;

(8)such other information, financial studies, analyses and investigations and financial, economic and market criteria as Courtney considered relevant.

Courtney also discussed with certain members of senior management of FNBB the business, financial condition, results of operations and prospects of FNBB, including certain operating, liquidity, regulatory and other financial matters.

In performing its review, Courtney relied upon the accuracy and completeness of all of the financial and other information that was available to it from public sources, that was provided to it by FNBB or its respective representatives or that was otherwise reviewed by Courtney and Courtney assumed such accuracy and completeness for purposes of rendering its opinion. Courtney further relied on the assurances of the management of FNBB that it is not aware of any facts or circumstances that would make any of such information inaccurate or misleading. Courtney was not asked to and did not undertake an independent verification of any of such information and it does not assume any responsibility or liability for the accuracy or completeness thereof. Courtney did not make an independent evaluation or appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of FNBB, or the collectability of any such assets, nor was it furnished with any such evaluations or appraisals. Courtney did not make an independent evaluation of the adequacy of the allowance for loan losses of FNBB nor did Courtney review any individual credit files relating to FNBB.

With respect to the internal projections and estimates for FNBB used by Courtney in its analyses, FNBB’s management confirmed to Courtney that they reflected the best currently available estimates and judgments of management of the future financial performance of FNBB and Courtney assumed that such performance would be achieved. Courtney expressed no opinion as to such financial projections and estimates or the assumptions on which they are based. Courtney has also assumed that there had been no material change in FNBB’s assets, financial condition, results of operations, business or prospects since the date of the most recent financial statements were made available. Courtney assumed in all respects material to its analysis that all of the

representations and warranties contained in the merger agreement are true and correct, that each party to the merger agreement will perform all of the covenants required to be performed by such party under the merger agreement, and that the conditions precedent in the merger agreement are not waived. Courtney relied upon the advice FNBB has received from its legal, accounting and tax advisors as to all legal, accounting and tax matters relating to the merger and the other transactions contemplated by the merger agreement. Courtney did not provide any legal, accounting or tax advice relating to the merger agreement and the other transactions contemplated by the merger agreement.

Courtney’s opinion was necessarily based upon market, economic and other conditions as they existed on, and could be evaluated as of, the date of its opinion. Events occurring after the date of the opinion could materially affect the opinion. Courtney has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date of its opinion. Courtney’s opinion was approved by Courtney’s fairness opinion committee.

Courtney’s opinion is limited to whether the consideration to be received by FNBB in the merger is fair from a financial point of view to FNBB. The opinion did not address, and Courtney expressed no view or opinion with respect to, the relative merits or effect of the merger as compared to any other strategic alternatives or business strategies that may have been available to FNBB or its board of directors. Courtney did not express an opinion as to the fairness of the amount or nature of any compensation payable to or to be received by any officers, directors or employees of any of the parties to the merger relative to the merger consideration. Courtney’s opinion was not an expression of an opinion as to the price at which shares of TriCo common stock would trade at the time of issuance to shareholders of FNBB under the merger agreement or the prices at which Trico or FNBB common stock may trade at any time.

In rendering its December 11, 2017 opinion, Courtney performed a variety of financial analyses. The following is a summary of the material analyses performed by Courtney, but is not a complete description of all the analyses underlying Courtney’s opinion.

The summary of financial analyses includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses.

The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to partial analysis or summary description. Courtney believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, would create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Courtney’s comparative analyses described below is identical to FNBB or TriCo and no transaction is identical to the proposed merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of FNBB or TriCo and the companies to which they are being compared.

Summary of Proposal.Subject to the provisions of the merger agreement, each share of FNBB common stock issued and outstanding immediately prior to the effective time of the Merger shall be converted into the right to receive 0.9800 shares of TriCo common stock. The exchange ratio is fixed and subject to a trading collar. Options to purchase FNBB common stock will be cashed out for the positive difference between the deal value per share and the exercise price of the option.

Courtney reviewed the financial terms of the proposed transaction, and as fully described in the merger agreement in a transaction in which all of the outstanding shares of FNBB common stock and all outstanding

options are exchanged for total consideration of approximately $315.3 million or $40.81 per fully-diluted share as of December 11, 2017.

For purposes of its opinion, Courtney assumed 7,403,276 shares of FNBB common stock are outstanding and 512,819 options to purchase FNBB common stock are outstanding, with each option exercisable at a weighted average exercise price of $15.05 per share. The following table calculates the transaction ratios based on the above assumptions.

Transaction Ratios.

Based upon financial information for FNBB for the twelve months ended September 30, 2017, Courtney calculated the following transaction ratios:

Transaction Value to Tangible Book Value

271.3

Transaction Value to Trailing Twelve Months Earnings

24.6x

Transaction Value to 2017 Expected Earnings

24.4x

Tangible Book Premium to Core Deposits

21.0

Premium over Market Price One Month Prior to Transaction Announce

27.5

Comparable Publicly Traded Company Analysis—FNBB.

Courtney used publicly available information to compare selected financial and market trading information for FNBB and a group of financial institutions selected by Courtney. In this regard, Courtney noted that although such companies were considered similar, none of the companies has the same management, makeup, size or combination of business as FNBB, as the case may be. The FNBB peer group consisted of the following publicly traded commercial banks and/or Northbank holding companies headquartered in California with total assets between $750 million and $2.5 billion: American Business Bank, Avidbank Holdings, Bank of Commerce Holdings, California BanCorp, Central Valley Community Bancorp, Community West Bancshares, First Choice Bank, First Northern Community Bancorp, Malaga Financial Corporation, Oak Valley Bancorp, Pacific Mercantile Bancorp, Presidio Bank, Provident Financial Holdings, River City Bank and receiveUnited Security Bancshares.

The analysis compared publicly available financial information for FNBB and the high, low, average, and median financial and market trading data for the FNBB peer group using financial data as of and for the twelve months ended September 30, 2017 and market trading data as of the close of market on December 8, 2017. The table below sets forth the data for FNBB and FNBB’s peer group as of and for the dates provided above.

FNB BANCORP COMPARABLE COMPANY ANALYSIS—OPERATING METRICS

Company Name

 

Ticker

 State Total
Assets
($000)
  ROAE
(%)
  ROAA
(%)
  Tg Equity
Ratio
(%)
  NIM
(%)
  Efficiency
Ratio
(%)
  NPAs/
Assets
(%)
  Reserves/
NPAs
(%)
 

FNB Bancorp

 FNBG CA  1,274,614   11.20   1.03   9.16   3.94   60.70   1.12   71.69 
 LOGO Average  1,135,315   9.03   0.90   9.74   3.78   63.65   0.60   217.45 

Comparable Companies

  Median  1,030,000   9.06   0.91   9.31   3.79   63.00   0.56   143.19 
  High  2,004,267   11.52   1.25   11.52   4.42   85.87   2.12   700.58 
  Low  763,807   2.59   0.28   8.41   2.86   32.09   —     51.12 

FNB BANCORP COMPARABLE COMPANY ANALYSIS—TRADING METRICS

      Current  Average
Weekly
Volume
(%)
  Percent Stock Price Change 

Company Name

 Ticker State Market
Cap
($MMs)
  Price/
TBV
(%)
  Price/
TEPS
(x)
  Dividend
Yield
(%)
   One
Day
(%)
  One
Week
(%)
  One
Month
(%)
  Three
Months
(%)
  One
Year
(%)
 

FNB Bancorp

 FNBG CA  261.63   225.08   20.91   1.47   0.48   0.74   (3.63  8.60   10.85   60.64 

 

Comparable Companies

 

 LOGO Average   154.32   19.44   1.30   0.60   (0.66  (0.40  3.69   7.04   27.68 
  Median   156.55   16.91   1.13   0.35   —     0.00   1.60   7.18   27.14 
  High   190.49   45.98   3.35   1.70   1.87   10.10   18.48   18.48   51.88 
  Low   80.27   12.81   —     0.03   (5.97  (7.25  (2.28  (2.17  (6.91

Comparable Publicly Traded Company Analysis—TriCo.

Courtney used publicly available information to compare selected financial and market trading information for TriCo and a group of financial institutions selected by Courtney. In this regard, Courtney Group noted that although such companies were considered similar, none of the companies has the same management, makeup, size or combination of business as TriCo, as the case may be. The TriCo peer group consisted of the following publicly traded commercial banks and/or bank holding companies headquartered in California with total assets between $2 billion and $10 billion: 1867 Western Financial Corp., Bank of Marin Bancorp, Community Bank, CVB Financial Corp., Exchange Bank, Farmers & Merchants Bancorp, Farmers & Merchants Bank of Long Beach, First Foundation, Grandpoint Capital, Heritage Commerce Corp., Mechanics Bank, Opus Bank, Pacific Premier Bancorp, Sierra Bancorp and Westamerica Bancorporation.

The analysis compared publicly available financial information for TriCo and the high, low, average, and median financial and market trading data for the TriCo peer group using financial data as of and for the twelve months ended September 30, 2017 and market trading data as of the close of market on December 8, 2017. The table below sets forth the data for TriCo and TriCo’s peer group as of and for the dates provided above.

TRICO BANCSHARES COMPARABLE COMPANY ANALYSIS—OPERATING METRICS

Company Name

 Ticker State Total
Assets
($000)
  ROAE
(%)
  ROAA
(%)
  Tg Equity
Ratio
(%)
  NIM
(%)
  Efficiency
Ratio
(%)
  NPAs/
Assets
(%)
  Reserves/
NPAs
(%)
 

TriCo Bancshares

 TCBK CA  4,656,435   10.18   1.11   9.53   4.23   64.41   0.79   78.11 
 LOGO Average  4,473,679   8.97   1.00   10.11   3.71   57.56   0.44   286.16 

Comparable Companies

 

  Median  3,740,712   8.94   1.05   9.50   3.80   58.89   0.26   162.62 
  High  8,304,012   12.93   1.38   14.13   4.42   67.09   1.24   766.55 
  Low  2,077,993   2.80   0.36   8.02   2.96   42.30   0.03   45.05 

TRICO BANCSHARES COMPARABLE COMPANY ANALYSIS—TRADING METRICS

      Current  Average
Weekly
Volume
(%)
  Percent Stock Price Change 

Company Name

 Ticker State Market
Cap
($MMs)
  Price/
TBV
(%)
  Price/
TEPS
(x)
  Dividend
Yield
(%)
   One
Day
(%)
  One
Week
(%)
  One
Month
(%)
  Three
Months
(%)
  One
Year
(%)
 

TriCo Bancshares

 TCBK CA  955.28   218.65   19.37   1.63   1.29   (0.43  (1.14  3.33   22.18   24.04 
 LOGO Average   195.11   20.64   1.20   1.14   (0.52  (1.84  4.29   11.45   18.23 

Comparable Companies

 

  Median   179.87   20.45   1.18   1.04   —     (2.04  4.14   14.99   11.97 
  High   331.47   39.85   2.66   4.17   0.64   0.23   12.42   27.83   61.04 
  Low   107.08   9.92   —     —     (1.67  (4.73  (3.25  (4.52  (7.33

Market Trading Analysis—FNBB

Courtney reviewed the historical public market trading history of FNBB common stock and reviewed its relative stock price performance against the S&P Bank Index, NASDAQ Bank Index and KBW Nasdaq Regional Banking Index over the preceding1-year and3-year periods.

FNB Bancorp Historical Trading Information

Most Recent Trading Price (12/8/17)

 $35.34 

52-Week Average Closing Price

 $28.14 

52-Week High Price

 $36.67 

52-Week Low Price

 $21.67 

52-Week Average Weekly Volume (Shares 000s)

  49.0 

30-Day Trailing Average Closing Price

 $34.95 

60-Day Trailing Average Closing Price

 $34.60 

90-Day Trailing Average Closing Price

 $32.90 

180-Day Trailing Average Closing Price

 $30.18 

52-Week Average Weekly Volume ($000s)

 $1,732.4 

FNB Bancorp Comparative Price Performance

One Year Trading History: 12/7/16  12/8/17 

FNB Bancorp

  100.0  160.6

S&P Bank Index

  100.0  117.6

KBW Nasdaq Regional Banking Index

  100.0  114.7

Nasdaq Bank Index

  100.0  103.6
Three-Year Trading History: 12/8/14  12/8/17 

FNB Bancorp

  100.0  198.1

S&P Bank Index

  100.0  142.8

KBW Nasdaq Regional Banking Index

  100.0  143.1

Nasdaq Bank Index

  100.0  151.7

Market Trading Analysis—TriCo.

Courtney reviewed the historical public market trading history of TriCo common stock and reviewed its relative stock price performance against the S&P Bank Index, NASDAQ Bank Index and KBW Nasdaq Regional Banking Index over the preceding1-year and3-year periods.

TriCo Bancshares Historical Trading Information

Most Recent Trading Price (12/8/17)

 $41.64 

52-Week Average Closing Price

 $36.65 

52-Week High Price

 $43.42 

52-Week Low Price

 $32.84 

52-Week Average Weekly Volume (Shares 000s)

  308.6 

30-Day Trailing Average Closing Price

 $41.37 

60-Day Trailing Average Closing Price

 $40.71 

90-Day Trailing Average Closing Price

 $39.10 

180-Day Trailing Average Closing Price

 $37.22 

52-Week Average Weekly Volume ($000s)

 $12,851.5 

TriCo Bancshares Comparative Price Performance

One Year Trading History:  12/7/16  12/8/17 

TriCo Bancshares

   100.0  121.9

S&P Bank Index

   100.0  117.6

KBW Nasdaq Regional Banking Index

   100.0  114.7

Nasdaq Bank Index

   100.0  103.6
Three-Year Trading History:  12/8/14  12/8/17 

TriCo Bancshares

   100.0  162.1

S&P Bank Index

   100.0  142.8

KBW Nasdaq Regional Banking Index

   100.0  143.1

Nasdaq Bank Index

   100.0  151.7

Present Value Analysis—FNBB.

Courtney performed an analysis of the present value of FNBB shares under different market pricing scenarios. The analysis assumes that FNBB performs in accordance with Courtney’s financial projections for FNBB, and the estimates used were a combination of projections provided by management and independently developed by Courtney.

In performing the Present Value analyses, Courtney applied an estimatedprice-to-earnings multiple ranging from 12.0x to 24.0xto FNBB’s projected 2020 earnings per share and an estimatedprice-to-book multiple ranging from 125% to 275% to FNBB’s projected 2020 tangible book value per share, resulting in an implied projected valuation. The projected stock prices were discounted to the present using discount rates of 10.0% to 15.0%. These analyses indicate that the present value of the FNBB’s future stock price based on aprice-to-earnings multiple averaged $28.65 per share and ranged from $17.83 to $40.86 per share, and based on aprice-to-tangible book multiple averaged $29.09 per share and ranged from $16.97 to $42.78 per share.

   2020 Earnings per Share Multiples 

Discount Rate

  12.0x   14.0x   16.0x   18.0x   20.0x   22.0x   24.0x 
10%  $20.43   $23.84   $27.24   $30.65   $34.05   $37.46   $40.86 
11%  $19.87   $23.18   $26.50   $29.81   $33.12   $36.43   $39.74 
12%  $19.33   $22.56   $25.78   $29.00   $32.22   $35.45   $38.67 
13%  $18.81   $21.95   $25.09   $28.22   $31.36   $34.49   $37.63 
14%  $18.31   $21.37   $24.42   $27.47   $30.52   $33.57   $36.63 
15%  $17.83   $20.80   $23.77   $26.75   $29.72   $32.69   $35.66 

   2020 TBV per Share Multiples 

Discount Rate

  125%   150%   175%   200%   225%   250%   275% 
10%  $19.45   $23.34   $27.23   $31.12   $35.01   $38.90   $42.78 
11%  $18.92   $22.70   $26.48   $30.27   $34.05   $37.83   $41.61 
12%  $18.40   $22.08   $25.76   $29.45   $33.13   $36.81   $40.49 
13%  $17.91   $21.49   $25.07   $28.65   $32.24   $35.82   $39.40 
14%  $17.43   $20.92   $24.41   $27.89   $31.38   $34.86   $38.35 
15%  $16.97   $20.37   $23.76   $27.16   $30.55   $33.94   $37.34 

Courtney also considered how these ranges may be affected by changes in the underlying assumptions, specifically earnings fluctuations. Courtney assumed a range ofplus-30% tominus-30% for 2015 earnings to gauge the sensitivity of the analysis to earnings fluctuations, and discounted the resultant prices to the present using a discount rate of 12.5%.

   2020 Earnings per Share Multiples 

Budget Variance

  12.0x   14.0x   16.0x   18.0x   20.0x   22.0x   24.0x 
-30%  $13.35   $15.58   $17.80   $20.03   $22.25   $24.48   $26.70 
-20%  $15.26   $17.80   $20.34   $22.89   $25.43   $27.97   $30.51 
-10%  $17.16   $20.03   $22.89   $25.75   $28.61   $31.47   $34.33 
   0%  $19.07   $22.25   $25.43   $28.61   $31.79   $34.97   $38.14 
 10%  $20.98   $24.48   $27.97   $31.47   $34.97   $38.46   $41.96 
 20%  $22.89   $26.70   $30.51   $34.33   $38.14   $41.96   $45.77 
 30%  $24.79   $28.93   $33.06   $37.19   $41.32   $45.45   $49.59 

During the meeting of FNBB’s board of directors on December 11, 2017, Courtney noted that present value analyses are a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

Present Value Analysis—TriCo.

Courtney performed an analysis of the present value of shares of TriCo common stock under different market pricing scenarios. The analysis assumes that TriCo performs in accordance with Courtney’s financial projections for TriCo, and the estimates used were a combination of projections provided by management and independently developed by Courtney.

In performing the Present Value analyses, Courtney applied an estimatedprice-to-earnings multiple ranging from 12.0x to 24.0xto TriCo’s projected 2020 earnings per share and an estimatedprice-to-book multiple ranging from 125% to 275% to TriCo’s projected 2020 tangible book value per share, resulting in an implied projected valuation. The projected stock prices were discounted to the present using discount rates of 10.0% to 15.0%. These analyses indicate that the present value of the TriCo’s future stock price based on aprice-to-earnings multiple averaged $30.90 per share and ranged from $19.23 to $44.07 per share, and based on aprice-to-book multiple averaged $34.34 per share and ranged from $20.04 to $50.51 per share.

   2020 Earnings per Share Multiples 

Discount Rate

  12.0x   14.0x   16.0x   18.0x   20.0x   22.0x   24.0x 
10%  $22.03   $25.71   $29.38   $33.05   $36.72   $40.39   $44.07 
11%  $21.43   $25.00   $28.57   $32.15   $35.72   $39.29   $42.86 
12%  $20.85   $24.33   $27.80   $31.28   $34.75   $38.23   $41.70 
13%  $20.29   $23.67   $27.05   $30.44   $33.82   $37.20   $40.58 
14%  $19.75   $23.04   $26.33   $29.62   $32.92   $36.21   $39.50 
15%  $19.23   $22.43   $25.64   $28.84   $32.05   $35.25   $38.46 

   2020 TBV per Share Multiples 

Discount Rate

  125%   150%   175%   200%   225%   250%   275% 
10%  $22.96   $27.55   $32.14   $36.73   $41.33   $45.92   $50.51 
11%  $22.33   $26.80   $31.26   $35.73   $40.20   $44.66   $49.13 
12%  $21.73   $26.07   $30.42   $34.76   $39.11   $43.45   $47.80 
13%  $21.14   $25.37   $29.60   $33.83   $38.06   $42.28   $46.51 
14%  $20.58   $24.70   $28.81   $32.93   $37.04   $41.16   $45.27 
15%  $20.04   $24.04   $28.05   $32.06   $36.07   $40.07   $44.08 

Courtney also considered how these ranges may be affected by changes in the underlying assumptions, specifically earnings fluctuations. Courtney assumed a range ofplus-30% tominus-30% for 2015 earnings to gauge the sensitivity of the analysis to earnings fluctuations, and discounted the resultant prices to the present using a discount rate of 12.5%.

   2020 Earnings per Share Multiples 

Budget Variance

  12.0x   14.0x   16.0x   18.0x   20.0x   22.0x   24.0x 

-30%

  $14.40   $16.80   $19.20   $21.60   $24.00   $26.40   $28.79 

-20%

  $16.45   $19.20   $21.94   $24.68   $27.42   $30.17   $32.91 

-10%

  $18.51   $21.60   $24.68   $27.77   $30.85   $33.94   $37.02 

   0%

  $20.57   $24.00   $27.42   $30.85   $34.28   $37.71   $41.14 

 10%

  $22.62   $26.40   $30.17   $33.94   $37.71   $41.48   $45.25 

 20%

  $24.68   $28.79   $32.91   $37.02   $41.14   $45.25   $49.36 

 30%

  $26.74   $31.19   $35.65   $40.11   $44.56   $49.02   $53.48 

During the meeting of FNBB’s board of directors on December 11, 2017, Courtney noted that present value analyses are a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

Comparable Transaction Analysis

Courtney reviewed certain publicly available information regarding nine selected merger and acquisition transactions from January 1, 2016 to December 8, 2017 involving commercial banks and bank holding companies headquartered in the West Region of the United States and includes banking sector transactions for which transaction pricing was available and in which the target bank had between $500 million and $10 billion in assets. The nine selected transactions are listed in the following table.

Buyer

Seller

Glacier Bancorp, Inc.Inter-Mountain Bancorp, Inc.
Pacific Premier Bancorp, Inc.Plaza Bancorp
Heritage Financial CorporationPuget Sound Bancorp, Inc.
PacWest BancorpCU Bancorp
Columbia Banking System, Inc.Pacific Continental Corporation
Pacific Premier Bancorp, Inc.Heritage Oaks Bancorp
First Interstate BancSystem, Inc.Cascade Bancorp
Mechanics BankCalifornia Republic Bancorp
Midland Financial Co.1st Century Bancshares, Inc.

For each transaction, Courtney analyzed data illustrating, among other things, the multiple of purchase price to LTM earnings, the multiple of purchase price to tangible book value, and the ratio of the premium (i.e., purchase price in excess of tangible book value) to core deposits. The table below sets forth the transaction metrics for the peer transaction group.

Comparable Transaction Group Analysis

 
   Transaction Metrics 
   Price to
Tangible Book Value
(%)
   Price to
LTM Earnings
(x)
   Premium to
Core Deps
(%)
 

West Region Comparable Bank Transactions Average

   226.8    28.0    13.94 

West Region Comparable Bank Transactions Median

   215.1    26.9    12.51 

West Region Comparable Bank Transactions High

   316.9    43.2    21.40 

West Region Comparable Bank Transactions Low

   178.4    17.0    9.27 

Trico Banchares / FNB Bancorp

   271.3    24.6    20.97 

Pro Forma Accretion and Capitalization.

Courtney analyzed certain potentialpro-forma effects of the proposed merger, based upon (1) per share transaction value equal to an exchange ratio of 0.9800, or approximately $40.81 per share as of December 11, 2017, (2) the projected 2017 through 2021 earnings for FNBB and TriCo, (3) charges, transaction costs, and purchase accounting adjustments determined by Courtney and the senior managements of FNBB and TriCo, and (4) expense savings of approximately 28% of FNBB’snon-interest expense base, which becomes fully phased in for 2019 and thereafter.

The analyses indicated that for the year ending December 31, 2018, the merger (excluding transaction expenses) would be accretive to TriCo’s projected earnings per share and would be moderately dilutive to TriCo’s tangible book value per share. The analyses also indicated that for the year ending December 31, 2018, the merger would maintain TriCo’s regulatory capital ratios significantly in excess of the regulatory guidelines for “well capitalized” status. The actual results achieved by the combined company, however, may vary from projected results and the variations may be material.

Miscellaneous.

FNBB has agreed to pay Courtney a transaction fee in connection with the merger equal to 1% of the primary transaction value, all of which is contingent, and payable, upon closing of the merger. As of December 11, 2017,

the transaction fee would equal approximately $3,020,000. FNBB has also agreed to reimburse certain of Courtney’s reasonableout-of-pocket expenses incurred in connection with its engagement and to indemnify Courtney and its affiliates and their respective partners, directors, officers, employees, agents, and controlling persons against certain expenses and liabilities, including liabilities under the securities laws.

Courtney has not previously provided investment banking services to FNBB nor has it received any compensation from FNBB in the past. Mr. Allen, a principal of Courtney, has provided certain investment banking services to FNBB and the investment banking firms with which he was employed at the time of such transactions and received compensation for such services.services, including in connection with FNBB’s acquisition of America California Bank in 2015, the acquisition of Oceanic Bank in 2012, and the acquisition of Sequoia National Bank in 2004. In the ordinary course of its respective broker and dealer businesses, Courtney may purchase securities from, and sell securities to, FNBB and their affiliates. Courtney may also actively trade the debt and/or equity securities of FNBB or its affiliates for their own accounts and for the accounts of their customers and, accordingly, may at any time hold a long or short position in such securities.

ManagementThe Merger Consideration

General.

At the effective time of the merger, each share of FNBB common stock outstanding immediately before the effective time of the merger, will, by virtue of the merger and Boardwithout any action on the part of Directorsan FNBB shareholder, be converted into the right to receive whole shares of common stock of TriCo. Cash will be paid in lieu of fractional shares of TriCo common stock. Since the federal income tax consequences will be dependent on the form of consideration received, you are urged to read carefully the information set forth below under “—Material Federal Income Tax Consequences” beginning on page [●].

Merger Consideration.

Upon consummation of the merger, 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, which is referred to as the exchange ratio. The exchange ratio is subject to potential adjustment. See “Potential Adjustment to Exchange Ratio on page [●]. Upon completion of the merger, and based on [●] shares of FNBB common stock outstanding as of the date of this joint proxy statement/prospectus and assuming the TriCo average closing price is $33.18 or more and $49.78 or less, FNBB shareholders are expected to receive an aggregate of [●] shares of TriCo common stock, which does not include shares of TriCo common stock issuable to holders of FNBB options that will accelerate in their vesting and be canceled in exchange for cash payments in connection with the closing of the merger. Following the completion of the merger, and based on [●] shares of TriCo common stock outstanding as of [●], 2018, the former FNBB shareholders will own approximately 24% of the outstanding shares of TriCo common stock and the current shareholders of TriCo will own the remaining approximately 76% of the outstanding shares of TriCo common stock.

Aggregate Merger Consideration.

The total consideration to be paid by TriCo to the FNBB shareholders in connection with the merger is referred to in this joint proxy statement/prospectus as the aggregate merger consideration. The term aggregate merger consideration does not include the consideration, if any, payable to holders of FNBB options.

Upon completion of the merger and based on a $[●] closing price of TriCo’s common stock on [●], 2018, approximately $[●] million of aggregate merger consideration will be payable to the FNBB shareholders. The foregoing sentence does not include the payment of cash to the holders of FNBB options or the value of shares of TriCo common stock that will be issued on account of FNBB options that are exercised between [●], 2018 and the date of the merger and assumes (i) there are [●] shares of FNBB common stock outstanding at the closing and

(ii) FNBB shareholders will receive an aggregate of [●] shares of TriCo common stock after applying the exchange ratio of 0.98 without any adjustment on account of the trading collar.

Potential Adjustment to Exchange Ratio.

The merger agreement includes a trading collar that could result in termination of the merger agreement or a change to the exchange ratio.

If the TriCo average closing price is $33.18 or more and $49.78 or less, the exchange ratio will remain unchanged at 0.98 shares of TriCo common stock.

However, TriCo can elect to terminate the merger agreement if both (i) the TriCo average closing price is greater than $49.78, which equals 120% of the average share price of TriCo common stock for the 20trading-day period up to and including December 8, 2017, which was $41.48, which we refer to as the “initial TriCo trading price,” and (ii) TriCo common stock outperforms the KBW Nasdaq Regional Banking Index by more than 20%. Under the merger agreement, the performance of the KBW Nasdaq Regional Banking Index is determined by dividing the average closing value of the KBW Nasdaq Regional Banking Index for the 20trading-day period ending on the fifth business day prior to the closing date of the merger by 109.24, which was closing value of the KBW Nasdaq Regional Banking Index on last trading day prior to the date of the merger agreement. We refer to this ratio as the index ratio. If TriCo elects to terminate the merger agreement under these circumstances, the merger agreement allows FNBB to prevent TriCo from terminating the merger agreement for this reason by allowing the exchange ratio to decrease to the lesser of (a) the quotient (rounded to the nearestone-thousandth) of $49.78 divided by the TriCo average closing price and (b) the quotient (rounded to the nearestone-thousandth) of $49.78 divided by the TriCo average closing price multiplied by the index ratio. In such a case, fewer shares of TriCo common stock would be issued to FNBB shareholders.

The following table illustrates how the exchange ratio would adjust for a range of TriCo average closing prices greater than $49.78, assuming that TriCo common stock outperformed the index ratio by more than 20%.

Assumed TriCo average

closing price 

  Exchange ratio (1)  Aggregate number of
shares of TriCo
common stock to be
issued in the merger
  Aggregate value
of the shares of
TriCo common
stock to be issued
in the merger
(in thousands)
  Value of merger
consideration per
share of FNBB
common stock (2)
$59.73  0.833  6,169,892  $368,535  $49.78
$57.24  0.870  6,438,149  $368,535  $49.78
$54.75  0.909  6,730,792  $368,535  $49.78
$52.26  0.952  7,051,306  $368,535  $49.78

(1)The adjusted exchange ratio assumes that the index ratio is 1.0. The actual index ratio will depend on the average closing value of the KBW Nasdaq Regional Banking Index for the 20trading-day period ending on the fifth business day prior to the closing date of the merger.
(2)The value of the merger consideration per share of FNBB common stock is determined by multiplying the assumed average closing share price of TriCo common stock by the adjusted exchange ratio.

Conversely, FNBB can terminate the merger agreement if both (i) the TriCo average closing price is less than $33.18, which is equivalent to 80% of the initial TriCo trading price, and (ii) TriCo common stock underperforms the KBW Nasdaq Regional Banking Index by more than 20%. If FNBB elects to terminate the merger agreement under these circumstances, the merger agreement allows TriCo to prevent FNBB from terminating the merger agreement for this reason by allowing the exchange ratio to increase to the lesser of (a) the quotient (rounded to the nearestone-thousandth) of $33.18 divided by the TriCo average closing price and (b) the quotient (rounded to the nearestone-thousandth) of $33.18 divided by the TriCo average closing price multiplied by the index ratio. In such a case, more shares of TriCo common stock would be issued to FNBB shareholders.

The following table illustrates how the exchange ratio would adjust for a range of TriCo average closing prices less than $33.18, assuming that TriCo common stock underperforms the index ratio by more than 20%.

Assumed TriCo average

closing price

  Exchange ratio (1)  Aggregate number of
shares of TriCo
common stock to be
issued in the merger
  Aggregate value
of the shares of
TriCo common
stock to be issued
in the merger
(in thousands)
  Value of merger
consideration per

share of FNBB
common stock (2)
$31.52  1.053  7,791,983  $245,641  $33.18
$28.37  1.169  8,657,759  $245,641  $33.18
$24.12  1.376  10,185,598  $245,641  $33.18
$19.29  1.720  12,731,998  $245,641  $33.18

(1)The adjusted exchange ratio assumes that the index ratio is 1.0. The actual index ratio will depend on the average closing value of the KBW Nasdaq Regional Banking Index for the 20trading-day period ending on the fifth business day prior to the closing date of the merger.
(2)The value of the merger consideration per share of FNBB common stock is determined by multiplying the assumed average closing share price of TriCo common stock by the adjusted exchange ratio.

Fractional Shares.

No fractional shares of TriCo common stock will be issued, and in lieu thereof, each holder of FNBB common stock who would otherwise be entitled to a fractional share will receive an amount in cash, without interest, determined by multiplying such fractional interest by the average share closing price of TriCo common stock, rounded to the nearest whole cent. No such holder shall be entitled to dividends, voting rights or any other rights in respect of any fractional share of TriCo common stock.

FNBB Stock Options

The board of directors of FNBB will approve the acceleration of the vesting of FNBB stock options held by directors, officers and employees of FNBB or its subsidiaries.

Each outstanding and unexercised FNBB option will be canceled in exchange for a cash payment equal to the number of shares of FNBB common stock that are subject to such FNBB option immediately prior to the closing of the merger multiplied by the amount, if positive, by which the product of the exchange ratio multiplied by the TriCo average closing price exceeds the per share exercise price under such FNBB option.

Procedures for Exchanging FNBB Common Stock Certificates

Promptly following the closing of the merger, Computershare, who will serve as the exchange agent for the merger, will mail to each holder of record of FNBB common stock a notice and form of transmittal letter advising such holder of the effectiveness of the merger and the procedure for surrendering to the exchange agent certificates representing shares orbook-entry shares of FNBB common stock in exchange for the merger consideration allocated to them. Upon surrender of a stock certificate or book-entry shares of FNBB common stock for exchange and cancellation to the exchange agent, together with a duly executed transmittal letter, the holder of such certificate or book-entry shares will be entitled to receive the merger consideration allocated to him or her and the certificate or book-entry shares for FNBB common stock so surrendered will be canceled. No interest will be paid or accrued on any cash paid in lieu of fractional shares of TriCo common stock.

FNBB shareholders who surrender their stock certificates or book-entry shares and complete the transmittal materials, or who have taken other steps to surrender the evidence of their in FNBB common stock in accordance with the instructions accompanying the transmittal letter, will, upon the exchange agent’s acceptance of such

stock certificates or book-entry shares and transmittal materials or other evidence, be entitled to evidence of issuance in book entry form, or upon written request of such holder, a certificate or certificates representing, the number of whole shares of TriCo common stock in to which the aggregate number of shares of FNBB common stock surrendered have been converted pursuant to the merger agreement.

Any FNBB shareholder who receives shares of TriCo common stock in the merger will receive dividends on TriCo common stock or other distributions declared after the completion of the merger only if he or she has surrendered his or her FNBB stock certificates or book-entry share. Only then will the FNBB shareholder be entitled to receive all previously withheld dividends and distributions, which may have been declared on TriCo common stock following the closing of the merger without interest.

After completion of the merger, no transfers of FNBB common stock issued and outstanding immediately prior to the completion of the merger will be allowed. FNBB stock certificates or book-entry shares that are presented for transfer after the completion of the merger will be canceled and exchanged for the appropriate merger consideration.

TriCo will only issue a TriCo stock certificate in a name other than the name in which a surrendered FNBB stock certificate is registered if an FNBB shareholder presents the exchange agent with all documents required to show and effect the unrecorded transfer of ownership of the shares of FNBB common stock formerly represented by such FNBB stock certificate, and that the FNBB shareholder has paid any applicable stock transfer fees and taxes.

If an FNBB shareholder has lost his or her FNBB stock certificate, or the FNBB stock certificate has been lost, stolen or destroyed, the FNBB shareholder may be required to deliver an affidavit and a lost certificate bond as a condition to receiving any merger consideration to which he or she may be entitled.

Conditions to the Merger

Completion of the merger is subject to the satisfaction of certain conditions set forth in the merger agreement, or the waiver of such conditions by the party entitled to do so, at or before the closing date of the merger. Each of the parties’ obligation to consummate the merger under the merger agreement is subject to the following conditions:

the holders of a majority of the outstanding shares of TriCo common stock must approve the TriCo merger proposal;

the holders of a majority of the outstanding shares of FNBB common stock must approve the FNBB merger proposal;

all regulatory approvals required to consummate the merger by any governmental authority must have been obtained and must remain in full force and effect, all statutory waiting periods in respect thereof must have expired, and no required approval may contain any condition, restriction or requirement (other than a condition or requirement related to remedial actions) which TriCo’s board of directors reasonably determines in good faith would, individually or in the aggregate, materially reduce the economic benefits of the merger to such a degree that TriCo, in its reasonable discretion, would not have entered into the merger agreement had such conditions, restrictions or requirements been known at the date of the merger agreement;

no statute, rule, regulation, judgment, decree, injunction or other order shall have been enacted, issued, promulgated, enforced or entered which prohibits the consummation of the merger;

the registration statement of TriCo, of which this document is a part, must have become effective under the Securities Act of 1933, as amended, or the Securities Act, and no stop order suspending the effectiveness of such registration statement shall have been issued and no proceedings for that purpose shall have been initiated by the SEC and not withdrawn;

the shares of TriCo common stock to be issued in connection with the merger must have been approved for listing on the NASDAQ Global Select Market (or on any securities exchange on which the TriCo common stock may then be listed); and

each of TriCo and FNBB must have received an opinion of Sheppard Mullin to the effect that the merger will constitute a reorganization within the meaning of Section 368(a) of the Code.

In addition to the foregoing conditions, the obligation of TriCo to consummate the merger under the merger agreement is subject to the following conditions, which may be waived by TriCo:

the representations and warranties of FNBB in the merger agreement must be true and correct as of the date of the merger agreement and as of the effective time of the merger, except as to any representation or warranty which specifically relates to an earlier date and other than, in most cases, those failures to be true and correct that have not had or are reasonably likely not to have a material adverse effect (as defined below) on FNBB, and TriCo shall have received a certificate signed by the chief executive officer and chief financial officer of FNBB to that effect;

FNBB must have performed in all material respects all obligations required to be performed by it at or prior to consummation of the merger, and TriCo shall have received a certificate signed by the chief executive officer and chief financial officer of FNBB to that effect;

as of the closing date, FNBB’s tangible common equity (as defined and subject to certain specified adjustments set forth in the merger agreement) must not be less than $119 million;

all regulatory approvals required to consummate the bank merger by any governmental authority must have been obtained and must remain in full force and effect, all statutory waiting periods in respect thereof must have expired; no statute, rule, regulation, judgment, decree, injunction or other order shall have been enacted, issued, promulgated, enforced or entered which prohibits the consummation of the bank merger;

TriCo must have received an opinion from VP Tax, Inc., or another nationally recognized accounting firm reasonably acceptable to TriCo, that no agreement, contract or arrangement to which any employee of FNBB is a party will result in the payment of any amount that would not be deductible by reason of Section 280G of the Code, as determined without regard to Section 280G(b)(4) of the Code; and

TriCo must have received such certificates of FNBB’s officers or others and such other documents to evidence fulfillment of the conditions to its obligations as TriCo may reasonably request.

In addition to the other conditions set forth above, the obligation of FNBB to consummate the merger under the merger agreement is subject to the following conditions, which may be waived by FNBB:

the representations and warranties of TriCo in the merger agreement must be true and correct as of the date of the merger agreement and as of the effective time of the merger, except as to any representation or warranty which specifically relates to an earlier date and other than those failures to be true and correct that have not had or are reasonably likely not to have a material adverse effect (as defined below) on TriCo, and FNBB shall have received a certificate signed by the chief executive officer and chief financial officer of TriCo to that effect;

TriCo must have performed in all material respects all obligations required to be performed by it at or prior to consummation of the merger, and FNBB shall have received a certificate signed by the chief executive officer and chief financial officer of TriCo to that effect; and

FNBB must have received such certificates of TriCo’s officers or others and such other documents to evidence fulfillment of the conditions to its obligations as FNBB may reasonably request.

Under the terms of the merger agreement, three individuals who are currently directorsa material adverse effect on either TriCo or FNBB is defined to mean any effect that (i) is material and adverse to the financial condition, results of North Valleyoperations or business of TriCo and its subsidiaries taken as a whole or FNBB and its subsidiaries taken as a whole, as the case may be, or (ii) would

materially impair the ability of TriCo and its subsidiaries taken as a whole or FNBB and its subsidiaries taken as a whole, as the case may be, to perform their respective obligations under the merger agreement or otherwise materially impede the consummation of the merger. However, under the terms of the merger agreement, none of the following would be deemed to constitute a material adverse effect under subclause (i) above:

changes after December 11, 2017 in laws or regulations of general applicability to banks and their holding companies generally or interpretations of them by governmental authorities;

changes after December 11, 2017 in GAAP or regulatory accounting requirements applicable to banks or their holding companies generally;

any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism;

changes resulting from conditions affecting the banking and financial services industry or changes in global, national or regional political conditions or market conditions (including changes in prevailing interest rates or exchange rates) affecting banks and their holding companies generally;

the public announcement or pendency of the merger, including the impact of the merger on relationships with customers or employees or the incurrence by FNBB and its subsidiaries of merger related expenses;

any modifications or changes to valuation policies and practices in connection with the merger or restructuring charges taken in connection with the merger, in each case in accordance with GAAP;

the failure to meet earnings projections or internal financial forecasts, but not including the underlying causes unless otherwise excluded, or changes in the trading price or volume of TriCo’s or FNBB’s common stock, but not including the underlying causes unless otherwise excluded; and

with respect to FNBB, the effects of any action or omission taken with the prior consent of TriCo or as otherwise contemplated by the merger agreement,

provided that the effect of the changes described in the first, second, third and fourth bullet points above will not be excluded as a material adverse effect to the extent of a materially disproportionate impact, if any, that they have on TriCo and its subsidiaries as a whole on the one hand, or FNBB and its subsidiaries on the other hand, as measured relative to similarly situated companies in the banking industry.

Bank Regulatory Approvals

The merger cannot be completed unless the parties receive prior approvals from the FDIC, CDBO and the Federal Reserve.

California Department of Business Oversight—Division of Financial Institutions; FDIC

In order to consummate the merger, the prior approval of the CDBO for the bank merger is be required under the California Financial Code, or “CFC,” and the prior approval of the FDIC is be required for the bank merger under the Bank Merger Act. In reviewing the bank merger, the CDBO and the FDIC take competitive considerations into account, as well as capital adequacy, quality of management and earnings prospects. The FDIC also considers the record of performance of Tri Counties Bank in meeting the credit needs of the communities that it serves and Tri Counties Bank’s regulatory rating under the Community Reinvestment Act, or CRA. Tri Counties Bank and First National Bank both received a composite “satisfactory” performance rating in their most recent CRA evaluations. In considering the merger, the CFC also requires the CDBO to consider whether the proposed transaction will be designatedfair, just, and equitable to the bank being acquired and the surviving depository institution. In connection with the filing of the application, the FDIC will provide an opportunity for public comment on the application and is authorized to hold a public meeting or other proceeding if it determines such meeting or proceeding would be appropriate.

Any transaction approved by the FDIC under the Bank Merger Act may not be completed until 30 days after the FDIC’s approval, during which time the U.S. Department of Justice may challenge such transaction on antitrust grounds. With the approval of the FDIC and the U.S. Department of Justice, the waiting period may be reduced

to 15 days. While TriCo and FNBB do not know of any reason that the U. S. Department of Justice would challenge regulatory approval by the FDIC and believe that the likelihood of such action is remote, there can be no assurance that the U.S. Department of Justice will not initiate such a proceeding, or if such a proceeding is initiated, the result of any such challenge.

Board of Governors of the Federal Reserve System.

TriCo is a bank holding company under the Bank Holding Company Act of 1956, as amended, which we refer to as the BHC Act. The Federal Reserve is TriCo’s primary federal banking regulator. TriCo has filed an application with the Federal Reserve under Section 3 of the BHC Act for the transactions contemplated by the merger agreement. In considering the approval of a transaction such as the merger, the BHC Act requires the Federal Reserve to review, with respect to the bank holding companies and the banks concerned: (1) the competitive impact of the transaction, (2) the financial condition and future prospects, including capital positions and managerial resources, (3) the convenience and needs of the communities to be served and the record of the insured depository institution subsidiaries of the bank holding companies under the CRA, (4) the effectiveness of the companies and the depository institutions concerned in combating money laundering activities, and (5) the extent to which the proposal would result in greater or more concentrated risks to the stability of the United States banking or financial system. In connection the filing of the application, the Federal Reserve will provide an opportunity for public comment on the application and is authorized to hold a public meeting or other proceeding if it determines such meeting or other proceeding would be appropriate.

Other Regulatory Approvals.

In connection with its anticipated merger into Tri Counties Bank, First National Bank is required to provide a notice to its primary federal regulator, the OCC. First National Bank has provided that notice to the OCC.

Neither TriCo nor FNBB is aware of any other regulatory approvals that would be required for completion of the merger except as described above. Should any other approvals be required, it is presently contemplated that such approvals would be sought. There can be no assurance, however, that any other approvals, if required, will be obtained.

Status of Applications.

TriCo has filed all required applications and notices with the FDIC, CDBO, the Federal Reserve and the OCC. The CDBO has approved TriCo’s application. The applications filed with the FDIC and Federal Reserve are pending. There can be no assurance that all requisite approvals will be obtained, that such approvals will be received on a timely basis or that such approvals will not impose conditions, restrictions or requirements (other than conditions or requirements related to remedial actions) which, individually or in the aggregate, would so materially reduce the economic benefits of the transactions contemplated by the merger agreement to TriCo that had such condition, restriction or requirement been known or could reasonably have been known, TriCo, in its reasonable, good faith judgment, would not have entered into the merger agreement. If any such condition or requirement is imposed, TriCo, in its reasonable discretion, may elect not to consummate the merger. See “—Conditions to the Merger” beginning on page [●]. The approval of any application or notice merely implies satisfaction of regulatory criteria for approval, and does not include review of the merger from the standpoint of the adequacy of the merger consideration to be received by, or fairness to, FNBB shareholders. Regulatory approval does not constitute an endorsement or recommendation of the proposed merger.

Business Pending the Merger

The merger agreement contains certain covenants of the parties regarding the conduct of their respective businesses pending consummation of the merger. These covenants, which are contained in Article IV of the merger agreement included as Appendix A to this joint proxy statement/prospectus, are briefly described below.

Pending consummation of the merger, FNBB may not, and will cause each of its subsidiaries not to, among other things, take the following actions without the prior written consent of TriCo, except as expressly contemplated or permitted by the merger agreement:

conduct its business other than in the ordinary and usual course consistent with past practice or fail to use commercially reasonable best efforts to preserve its business organization, keep available the present services of its employees (except in the case of terminations of employees for cause) and preserve for itself and TriCo the goodwill of the customers of FNBB, its subsidiaries and others with whom business relations exist;

except for the issuances of shares of FNBB common stock pursuant to previously issued FNBB options, issue, sell or otherwise permit to become outstanding, or authorize the creation of, any additional shares of capital stock or rights to acquire stock, or permit any additional shares of stock to become subject to grants of employee or director stock options or other rights;

except for FNBB regular quarterly cash dividends equal to $0.13 per share, with record and payment dates consistent with past practice, make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares on its capital stock, or directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire any shares of its capital stock;

enter into or amend or renew any employment, consulting, severance, change in control, bonus, salary continuation or similar agreement or arrangement with any director or senior officer of FNBB or its subsidiaries, grant any salary or wage increase or increase any employee benefit, except for changes that are required by applicable law or as previously disclosed to TriCo, provided that the FNBB’s board of directors may, after conferring with TriCo, establish a discretionary bonus and retention pool providing for bonus and retention payments of up to $2,543,000;

hire any person as an employee of FNBB or any of its subsidiaries or promote any employee except (i) to satisfy contractual obligations existing as of the date of the merger agreement and previously disclosed to TriCo, and (ii) persons hired to fill a vacancy existing as of the date of the merger agreement and previously disclosed to TriCo or (iii) vacancies arising after the date of the merger agreement, provided that the person’s employment is terminable at the will of FNBB or a subsidiary of FNBB, the person has the a salary or wage and target cash bonus opportunity not greater than that of the employee who previously held such position or and the person is not subject to or eligible for any severance or similar benefits or payments that would become payable as a result of the merger or its consummation;

enter into, establish, adopt, amend, or terminate or make any contributions to (except (i) as may be required by applicable law or (ii) as required under the terms of a contract, plan, arrangement or agreement existing as of the date of the merger agreement and previously disclosed to TriCo) any employee benefit plan with respect to any current or former director, officer, or employee of FNBB or any of its subsidiaries, or take any action to accelerate the vesting or exercisability of stock options, restricted stock or other compensation or benefits payable thereunder, except that FNBB may accelerate the vesting and exercisability of FNBB options with respect to employees, directors and other service providers not being retained by TriCo or its subsidiaries;

sell, transfer, mortgage, encumber or otherwise dispose of or discontinue any of its material assets, deposits, business or properties, except for sales, transfers and dispositions in the ordinary course of business, consistent with past practices and not material to joinFNBB and its subsidiaries taken as a whole;

acquire (other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary and usual course of business consistent with past practice), including without limitation, by merger or consolidation or by investment in a partnership or joint venture, all or any portion of the assets, business, securities, deposits or properties of any other entity;

make any capital expenditures, other than capital expenditures in the ordinary course of business consistent with past practice not exceeding $50,000 individually or $100,000 in the aggregate;

amend the FNBB articles of incorporation or bylaws or the articles of incorporation or bylaws of any subsidiary of FNBB;

implement or adopt any change in its accounting principles, practices or methods other than as may be required by changes in laws or regulations or GAAP;

except as otherwise permitted under the merger agreement, enter into, cancel, fail to renew, terminate, amend, or modify any material contract or amend or modify in any material respect any of its existing material contracts;

enter into any settlement or similar agreement with respect to any claims if the settlement, agreement, or action involves payment by FNBB or any of its subsidiaries of an amount that exceeds $50,000 and/or would impose any material restriction on the business of FNBB or any of its subsidiaries or create precedent for claims that reasonably are likely to be material to FNBB or any of its subsidiaries;

enter into any new material line of business; introduce any material new products or services; change its material banking and operating policies, except as required by applicable law, regulation or policy, or the manner in which its investment securities or loan portfolio is classified or reported; or invest in any mortgage-backed or mortgage-related security that would be risk-weighted over 100%; or file any application or enter into any contract with respect to the opening, relocation or closing of, or open, relocate or close, any branch, office, service center or other facility;

introduce any material marketing campaigns or any material sales compensation or incentive programs or arrangements (except if the material terms have been fully disclosed in writing to TriCo prior to the date of the merger agreement);

except as previously disclosed to TriCo, enter into any derivatives contract;

incur any indebtedness for borrowed money (other than certain short-term borrowings) or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, other than with respect to the collection of checks and other negotiable instruments in the ordinary course of business consistent with past practice;

except as previously disclosed to TriCo, acquire (other than by way of foreclosures or acquisitions in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business consistent with past practice) any debt security or equity investment or dispose of any debt security or equity investment;

(i) make, renew or modify any loan, loan commitment, letter of credit or other extension of credit, which are collectively referred to as the loans, other than loans made in the ordinary course of business consistent with past practice that are not in excess of $1.0 million (with any loan in excess of $1.0 million subject to TriCo’s review and consent); (ii) take any action that would result in any discretionary release of collateral or guarantees, or otherwise restructure the respective amounts of any loan in clause (i) above; (iii) enter into any loan securitization or create any special purpose funding entity; or (iv) enter into any loan participation agreement or arrangement, except for loan participations entered into in the ordinary course of business consistent with past practice where the total exposure does not exceed $1.0 million;

make any investment or commitment to invest in real estate or in any real estate development project (other than by way of foreclosure or acquisitions in a bona fide fiduciary capacity or in satisfaction of a debt previously contracted in good faith, in each case in the ordinary course of business consistent with past practice);

except as previously disclosed to TriCo, make or change any tax election, settle or compromise any tax liability of FNBB or any of its subsidiaries, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of an amount of taxes of FNBB or any of its subsidiaries, enter into any closing agreement with respect to any amount of taxes or surrender any right to claim a tax refund, adopt or change any method of accounting with respect to taxes or any of its subsidiaries or file any amended tax return;

take any action that would cause the merger agreement or the merger to be subject to the provisions of any state antitakeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares, or to exempt or make not subject to the provisions of any state antitakeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares, any person (other than TriCo or its subsidiaries) or any action taken thereby, if that person or action would otherwise have been subject to the restrictive provisions of that law;

make or propose to make any loan to or enter into any transaction with FNBB or any of its subsidiaries or any of their respective officers, directors or affiliates, except that First National Bank may renew Regulation O compliant loans and originate new Regulation O compliant loans that are not objected to by TriCo;

take any action that would or is reasonably likely to result in (i) the merger not qualifying as a “reorganization” within the meaning of Section 368(a) of the Code, (ii) any of the representations and warranties of FNBB set forth in the merger agreement being or becoming untrue in any material respect at or prior to the effective time of the merger, (iii) any of the conditions to the merger set forth in the merger agreement not being satisfied, (iv) a material violation of any provision of the merger agreement, except as may be required by applicable law and regulation, (v) a material delay in the ability of TriCo or FNBB to perform any of their obligations under the merger agreement on a timely basis, or (vi) a material delay in the ability of TriCo to obtain any required regulatory approvals; or

enter into any contract with respect to, or otherwise agree or commit to do, any of the foregoing.

The merger agreement also provides that pending consummation of the merger, TriCo may not, and will cause each of its subsidiaries not to, take the following actions without the prior written consent of FNBB:

conduct its business other than in the ordinary and usual course consistent with past practice or fail to use commercially reasonable best efforts to preserve its business organization and preserve for itself and FNBB the goodwill of the customers of TriCo and its subsidiaries and others with whom business relations exist;

take any action that is intended or is reasonably likely to result in (i) the merger not qualifying as a “reorganization” within the meaning of Section 368(a) of the Code, (ii) any of the representations and warranties of TriCo set forth in the merger agreement being or becoming untrue in any material respect at or prior to the effective time of the merger, (iii) any of the conditions to the merger set forth in the merger agreement not being satisfied, (iv) a material violation of any provision of the merger agreement, except as may be required by applicable law and regulation, (v) a material delay in the ability of TriCo or FNBB to perform any of their obligations under the merger agreement on a timely basis, or (vi) a material delay in the ability of TriCo to obtain any required regulatory approvals; or enter into any contract with respect to, or otherwise agree or commit to do, any of the foregoing.

The merger agreement contains certain covenants of the parties regarding their respective obligations pending consummation of the merger. These covenants, which are contained in Article VI of the merger agreement included as Appendix A, include covenants regarding, among others, the obligations of the parties to prepare and file the registration statement of TriCo of which this joint proxy statement/prospectus is a part; FNBB’s agreement to share certain information with TriCo; FNBB’s agreement to cooperate with TriCo to effect the discharge of FNBB’s borrowings from the Federal Home Loan Bank of San Francisco prior to the effective time of the merger; the provision of notices to FNBB’s customers prior to the merger; FNBB’s commitment to use commercially reasonable efforts to sell certain real property acquired upon foreclosure of a loan; and other covenants discussed elsewhere in this joint proxy statement/prospectus.

FNBB Board of Directors’ Covenant to Recommend the Merger Agreement

Pursuant to the merger agreement, the FNBB board of directors is required to recommend that FNBB shareholders approve the FNBB merger proposal at all times prior to and during the FNBB special meeting at which the merger agreement is to be considered by them. The FNBB board of directors may not withdraw, modify or qualify in any manner adverse to TriCo such recommendation or take any other action or make any other public statement in connection with the FNBB special meeting inconsistent with such recommendation,

except as described below. Regardless of whether the FNBB board of directors changes its recommendation, the merger agreement must be submitted to the FNBB shareholders at the FNBB special meeting for the purpose of approving the merger agreement and any other matters required to be approved by FNBB’s shareholders for consummation of the transaction. FNBB may not submit to the vote of its shareholders any acquisition proposal other than the merger.

The FNBB board of directors is permitted to change its recommendation if FNBB has complied with the merger agreement and the FNBB board of directors, based on the advice of its outside counsel and financial advisor, has determined in good faith that failure to do so would result in a violation of the board of directors’ fiduciary duties under applicable law. If the FNBB board of directors intends to change its recommendation following an acquisition proposal, as described in “—No Solicitation” below, it must have first concluded in good faith, after giving effect to all of the adjustments to the terms and conditions of the merger agreement that may be offered by TriCo, that another acquisition proposal constitutes a superior proposal, as defined in “—No Solicitation” below. FNBB also must notify TriCo at least five business days in advance of its intention to change its recommendation in response to the superior proposal, including the identity of the party making the acquisition proposal, and furnish to TriCo all of the material terms and conditions of such superior proposal. Prior to changing its recommendation, FNBB must, and must cause its financial and legal advisors to, during the period following its delivery of the required notice, negotiate in good faith with TriCo for a period of up to five business days to the extent TriCo desires to negotiate to make adjustments in the terms and conditions of the merger agreement so that the other acquisition proposal ceases to constitute a superior proposal.

Pursuant to the merger agreement, the TriCo board of directors is required to recommend that TriCo shareholders approve the of TriCo merger proposal the shareholders of FNBB in connection with the merger and any other matters required to be approved by TriCo shareholders for consummation of the merger at all times prior to and during the TriCo special meeting.

No Solicitation

The merger agreement provides that FNBB will, and will direct and use its reasonable best efforts to cause its affiliates, directors, officers, employees, agents and representatives to, immediately cease any discussions or negotiations with any other parties that have been ongoing with respect to the possibility or consideration of any acquisition proposal and will use its reasonable best efforts to enforce any confidentiality or similar agreement relating to any acquisition proposal. For purposes of the merger agreement, “acquisition proposal” is defined to mean any inquiry, proposal or offer, filing of any regulatory application or notice, whether in draft or final form, or disclosure of an intention to do any of the foregoing from any person relating to any (i) direct or indirect acquisition or purchase of a business that constitutes 10% or more of the total revenues, net income, assets, or deposits of FNBB and its subsidiaries taken as a whole; (ii) direct or indirect acquisition or purchase of any class of equity securities representing 10% or more of the voting power of FNBB or First National Bank; (iii) tender offer or exchange offer that if consummated would result in any person beneficially owning 10% or more of any class of equity securities of FNBB or First National Bank; or (iv) merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving FNBB or First National Bank, other than the transactions contemplated by the merger agreement.

From the date of the merger agreement through the effective time of the merger, FNBB will not, and will use reasonable efforts to cause its directors, officers or employees or any other representative retained by it not to, directly or indirectly through another person (i) solicit, initiate, or encourage, including by way of furnishing information or assistance, or take any other action designed to facilitate or that is likely to result in, any inquiries or the making of any proposal or offer that constitutes, or is reasonably likely to lead to, any acquisition proposal, (ii) provide any confidential information or data to any person relating to any acquisition proposal, (iii) participate in any discussions or negotiations regarding any acquisition proposal, (iv) waive, terminate, modify, or fail to enforce any provision of any contractual “standstill” or similar obligations of any person other than TriCo or its affiliates, (v) approve or recommend, propose to approve or recommend, or execute or enter into, any letter of intent, agreement in principle, merger agreement, asset purchase agreement or share exchange

agreement, option agreement or similar agreement related to any acquisition proposal or propose to take any of these actions, or (vi) make or authorize any statement, recommendation, or solicitation in support of any acquisition proposal.

However, prior to the date of the FNBB special meeting, if the FNBB board of directors determines in good faith, after consulting with its outside legal and financial advisors, that the failure to do so would breach, or would reasonably be expected to result in a breach of, its fiduciary duties under applicable law, FNBB may, in response to a bona fide, written acquisition proposal not solicited in violation of the merger agreement that the FNBB board of directors determines in good faith constitutes a superior proposal, subject to providing two business days prior written notice of its decision to take such action to TriCo and identifying the person making the proposal and all the material terms and conditions of the proposal and compliance with the merger agreement:

furnish information with respect to itself and its subsidiaries to any person making the superior proposal pursuant to a customary confidentiality agreement, as determined by FNBB after consultation with its outside counsel, on terms no more favorable to the person than the terms contained in the confidentiality agreement between FNBB and TriCo are to TriCo; and

participate in discussions or negotiations regarding the superior proposal.

For purposes of the merger agreement, “superior proposal” is defined to mean any bona fide written proposal made by a third party to acquire, directly or indirectly, including pursuant to a tender offer, exchange offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction, for consideration consisting of cash and/or securities, more than 50% of the combined voting power of the shares of FNBB common stock then outstanding or all or substantially all of FNBB’s consolidated assets, that the FNBB board of directors determines in good faith, after taking into account all legal, financial, regulatory, and other aspects of the proposal and the person making the proposal, including anybreak-up fees, expense reimbursement provisions, and conditions to consummation, and after taking into account the advice of FNBB’s financial advisor, which will be a recognized investment banking firm, and outside counsel, (1) is more favorable from a financial point of view to its shareholders than the merger, (2) is reasonably likely to be consummated on the terms set forth, and (3) for which financing, to the extent required, is then committed or which, in the good faith judgment of the FNBB board of directors, is reasonably likely to be obtained by the third party.

In addition to these obligations, FNBB will promptly, within 24 hours, advise TriCo orally and in writing of its receipt of any acquisition proposal, and keep TriCo informed, on a current basis, of the continuing status of the inquiry, including the material terms and conditions of the inquiry and any material changes to the inquiry, and will contemporaneously provide to TriCo all materials provided to or made available to any third party that were not previously provided to TriCo.

FNBB has agreed that any violations of the restrictions set forth in the merger agreement by any representative of FNBB or its subsidiaries will be deemed a breach of the merger agreement by FNBB.

TriCo and FNBB have agreed that irreparable damage would occur in the event FNBB, its subsidiaries or any of their respective representatives violated any of the restrictions described above regarding discussions and negotiations with other parties with respect to the possibility or consideration of any acquisition proposal. As such, under the merger agreement, TriCo is entitled to injunctive relief to prevent breaches of these restrictions and to enforce specifically the terms of these restrictions.

Representations and Warranties of the Parties

Pursuant to the merger agreement, TriCo and FNBB made certain customary representations and warranties relating to their respective companies, subsidiaries, businesses and matters related to the merger. For detailed information concerning these representations and warranties, reference is made to Article V of the merger agreement included as Appendix A to this joint proxy statement/prospectus. Such representations and warranties generally must remain accurate through the completion of the merger, unless the fact or facts that caused a

breach of a representation and warranty has not had or is not reasonably likely to have a material adverse effect on the party making the representation and warranty. See “—Conditions to the Merger” beginning on page [●].

The merger agreement contains representations and warranties that TriCo and FNBB made to and solely for the benefit of each other. These representations and warranties are subject to materiality standards which may differ from what may be viewed as material by investors and shareholders, and, in certain cases, were used for the purpose of allocating risk among the parties rather than establishing matters as facts. The assertions embodied in those representations and warranties also are qualified by information in confidential disclosure schedules that the parties have exchanged in connection with signing the merger agreement. Although neither TriCo nor FNBB believes that the disclosure schedules contain information that the federal securities laws require to be publicly disclosed, the disclosure schedules do contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the merger agreement.

Accordingly, neither shareholders of either FNBB or TriCo should rely on the representations and warranties as characterizations of the actual state of facts, since they were only made as of the date of the merger agreement and are modified in important part by the underlying disclosure schedules. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the merger agreement, which subsequent information may or may not be fully reflected in TriCo’s or FNBB’s public disclosures.

Effective Time of the Merger

Pursuant to the terms and conditions set forth in the merger agreement, TriCo has agreed to acquire FNBB in a transaction in which FNBB will merge with and into TriCo, with TriCo as the surviving corporation. The merger will become effective upon the acceptance of a certificate of merger to be filed with the Secretary of State of the State of California in accordance with the provisions of applicable California law.

Amendment of the Merger Agreement

To the extent permitted under applicable law, the merger agreement may be amended or supplemented at any time by written agreement of the parties whether before or after the approval of the shareholders of FNBB, except that after shareholders of FNBB have approved the principal terms of the merger agreement, except as described in the next sentence, no amendment or supplement that by law requires further approval by the shareholders of FNBB may be made without first obtaining such approval. The merger agreement provides that, by approving the principal terms of the merger agreement, FNBB shareholders will be deemed to have approved any amendment to the September 30, 2018 termination date described below.

Termination of the Merger Agreement

The merger agreement may be terminated:

by the mutual written consent of TriCo and FNBB;

if the terminating party is not in material breach of any representation, warranty, covenant, or agreement contained in the merger agreement, by TriCo or FNBB, in the event of a breach by the other party of any representation, warranty, covenant, or agreement contained in the merger agreement that (i) cannot be or has not been cured within thirty (30) days of the giving of written notice to the breaching party or parties and (ii) would entitle thenon-breaching party not to consummate the merger;

by TriCo or FNBB, in the event that the merger is not consummated by September 30, 2018, except to the extent that the failure to consummate the merger by September 30, 2018 is due to (i) the failure of the party seeking to terminate to perform or observe its covenants and agreements set forth in the merger agreement, or (ii) the failure of any of the FNBB shareholders (if FNBB is the party seeking to terminate) to perform or observe their respective covenants under their respective shareholder agreements with TriCo;

by TriCo or FNBB, in the event the approval of any governmental authority required for consummation of the merger and the other transactions contemplated by the merger agreement have been denied by finalnon-appealable action of the governmental authority, or any governmental authority shall have issued a

final,non-appealable injunction prohibiting the consummations of the merger, or an application for approval has been permanently withdrawn at the request of a governmental authority, provided that no party has the right to terminate the merger agreement if the denial is due to the failure of the party seeking to terminate the merger agreement to perform or observe its covenants;

by TriCo, if approval of the FNBB merger proposal by FNBB shareholders has not been obtained by reason of the failure to obtain the required vote at the FNBB special meeting or at any adjournment or postponement thereof;

by FNBB, if the approval of the TriCo merger proposal has not been obtained by reason of the failure to obtain the required vote at the TriCo special meeting or at any adjournment or postponement thereof;

by TriCo, if FNBB materially breaches the covenants described under “—No Solicitation” on page [●], in any respect adverse to TriCo, the FNBB board of directors fails to recommend that the shareholders of FNBB approve the FNBB merger proposal or withdraws, modifies or qualifies its recommendation in a manner that is adverse to TriCo, or FNBB breaches its covenants requiring the calling and holding of a meeting of shareholders in accordance with the merger agreement;

by TriCo if a third party commences a tender offer or exchange offer for 15% or more of the outstanding FNBB common stock and the board of directors of FNBB recommends that FNBB shareholders tender their shares in the offer or otherwise fails to recommend that they reject the offer within a specified period; or

by FNBB, if the FNBB board of directors changes its recommendation of the merger to its shareholders and (i) FNBB is not in breach of any representation, warranty, covenant or agreement contained in the merger agreement and (ii)  FNBB has paid the termination fee referenced below under “—Termination Fee” to TriCo.

Termination Fee

The designated individualsmerger agreement provides that FNBB must be approvedpay TriCo a $12.0 million termination fee under the circumstances and in the manner described below:

if the merger agreement is terminated by TriCo for any of the reasons described in the seventh or eighth bullet points or by FNBB for the reason described in the ninth bullet point under “—Termination of the Merger Agreement” above, FNBB must pay the termination fee to TriCo on the second business day following the termination of the merger agreement; or

if the merger agreement is terminated by (A) TriCo pursuant to the second bullet point under “—Termination of the Merger Agreement” above, (B) either TriCo or FNBB pursuant to the third bullet point under “—Termination of the Merger Agreement” above and at the time of the termination no vote of the FNBB shareholders contemplated by the Nominatingmerger agreement at the FNBB special meeting shall have occurred, or (C) TriCo pursuant to the fifth bullet point under “—Termination of the Merger Agreement” above, and Corporate Governance Committeein the case of any termination referenced in clause (A), (B) or (C), an “acquisition proposal” (as defined under “—No Solicitation” above) shall have been publicly announced and communicated or made known to the executive officers of FNBB or the board of directors of TriCo. TriCoFNBB (or any person shall have publicly announced, communicated or made known an intention, whether or not conditional, to make an acquisition proposal, or reiterated a previously expressed plan or intention to make an acquisition proposal) at any time after the date of the merger agreement and North Valley expect to select such individuals prior to the time that shareholders of FNBB vote on the merger agreement (in the case of clause (C)) or the date of termination of the merger agreement (in the case of clause (A) or (B)) and (1) within twelve months after the termination, FNBB or an FNBB subsidiary enters into an agreement with respect to a “control transaction,” then FNBB shall pay to TriCo an amount equal to $12.0 million on the date of execution of such agreement and upon consummation of any such “control transaction” at any time thereafter, FNBB shall pay to TriCo the remainder of the termination fee on the date of such consummation and (2) if a control transaction is consummated otherwise than pursuant to an agreement with FNBB within twelve months after such termination, then FNBB shall pay to TriCo the

termination fee (less any amount previously paid by FNBB pursuant to clause (1) above) on the date of such consummation of such control transaction. A “control transaction” is defined as (i) the acquisition by any person whether by purchase, merger, consolidation, sale, transfer, or otherwise, in one transaction or any series of transactions, of a majority of the voting power of the outstanding securities of FNBB or First National Bank or a majority of the assets of FNBB or First National Bank, (ii) any issuance of securities resulting in the ownership by any person of more than 50% of the voting power of FNBB or by any person other than FNBB or its subsidiaries of more than 50% of the voting power of First National Bank, or (iii) any merger, consolidation, or other business combination transaction involving FNBB or any of its subsidiaries as a result of which the shareholders of FNBB cease to own, in the aggregate, at least 50% of the total voting power of the entity surviving or resulting from such transaction.

Any termination fee that becomes payable pursuant to the merger agreement shall be paid by wire transfer of immediately available funds to an account designated by TriCo.

If FNBB fails to timely pay the termination fee to TriCo, FNBB will be obligated to pay the costs and expenses (including reasonable legal fees and expenses) incurred by TriCo to collect such payment, provided TriCo prevails on the merits, together with interest.

Certain Employee Matters

The current directorsmerger agreement contains certain agreements of the parties with respect to various employee matters, which are described below.

As soon as administratively practicable after the effective time of the merger, TriCo will take all reasonable action so that employees of FNBB and senior officersits subsidiaries will be entitled to participate in the TriCo and Tri Counties Bank employee benefit plans of general applicability to the same extent as similarly-situated employees of TriCo and its subsidiaries, provided that coverage shall be continued under the corresponding benefit plans of FNBB and its subsidiaries until such employees are currently expectedpermitted to continue in their current positions. Information about the current TriCo directors and executive officers can be foundparticipate in the documents listedTriCo benefit plans. TriCo and Tri Counties Bank, however, shall not be under any obligation to make any grants to any former employee of FNBB and its subsidiaries under any discretionary equity compensation plan of TriCo. For purposes of determining eligibility to participate in, the vesting of benefits and for all other purposes, other than for accrual of pension benefits under, the section entitled “Where You Can Find More Information” beginning on page v.

InterestsTriCo employee benefit plans, TriCo will recognize years of service with FNBB and its subsidiaries, to the same extent as such service was credited for such purpose by FNBB and its subsidiaries, except where such recognition would result in duplication of benefits. Nothing contained in the merger agreement shall limit the ability of TriCo Directorsto amend or terminate any TriCo or FNBB benefit plan in accordance with their terms at any time.

At the time the employees of FNBB and Executive Officersits subsidiaries become eligible to participate in a medical, dental, health, life or disability plan of TriCo and its subsidiaries, TriCo will cause each such plan to:

waive any preexisting condition limitations to the Mergerextent such conditions are covered under the applicable medical, health or dental plans of TriCo;

provide full credit under such medical, health or dental plans for any deductibles,co-payment andout-of-pocket expenses incurred by the employees and their beneficiaries during the portion of the calendar year prior to such participation; and

waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to such employee on or after the effective time of the merger to the extent such employee had satisfied any similar limitation or requirement under a corresponding FNBB plan prior to the effective time of the merger.

At and following the effective time of the merger, TriCo shall honor and shall continue to be obligated to perform, in accordance with their terms, all benefit obligations to, and contractual rights of, current and former employees of FNBB and its subsidiaries and current and former directors of FNBB and its subsidiaries existing as of the effective date of the merger, as well as all bonus, deferred compensation, supplemental retirement plan, salary continuation, severance, termination, change in control or other existing plans and policies of FNBB and its subsidiaries that were disclosed to TriCo.

TriCo has agreed that those employees of FNBB and its subsidiaries (i) who are not entered into anyoffered employment by TriCo following the effective date of the merger, who are not a party to an employment agreement or understanding, whether writtenotherwise entitled to an existing severance package, change in control benefit or unwritten, withpayments under any directorsalary continuation plan, and who sign and deliver (and do not revoke) a termination and release agreement or executive officer, pursuant(ii) who are terminated by TriCo without cause prior to which any such person wouldthe first anniversary of the effective date of the merger and deliver (and do not revoke) a termination and release agreement, will be entitled to receive compensation, whether present, deferred or contingent, that is based on or otherwise relatesa single lump sum payment of severance in an amount and in accordance with the terms of a severance policy agreed to by the parties.

Pursuant to the merger agreement, FNBB is required, prior to the closing of the merger, to have made all discretionary employee contributions to the First National Bank retirement plan, to provide for full vesting of allnon-elective contributions under such retirement plan for all participants, and to take all actions necessary to terminate such retirement plan effective no later than the business day preceding the closing date of the merger.

Interests of North ValleyCertain FNBB Officers and Directors and Executive Officers in the Merger

InWhen FNBB shareholders are considering the recommendation of the North ValleyFNBB’s board of directors with respect to approving the merger North Valleyagreement, FNBB shareholders should be aware that the executiveFNBB directors and officers and directors of North Valley have certain interests in the merger as individuals that may be different from, orare in addition to, theor different from, their interests as shareholders of North Valley shareholders generally.FNBB. The North ValleyFNBB board of directors was aware of these interestsfactors and considered them, among other matters, in approving the merger agreement and the transactions contemplated thereby and making its recommendation that North Valley shareholders vote to approve the North Valley Merger proposal.merger. These interests are described below.

Stock Ownership.

The directors and executive officers of FNBB, as a group, beneficially owned and had the power to vote as of [●], 2018, a total of [●] shares of FNBB common stock, representing approximately 20% of the outstanding shares of FNBB common stock as of that date. Substantially all of these shares are expected to be voted in further detail below. Please note that, except as stated otherwise, amounts specified below have been calculated assuming thatfavor of the merger is consummatedagreement pursuant to the shareholder agreements entered into by each of the directors and substantially all of the executive officers of FNBB who own shares of FNBB common stock. See “—Shareholder Agreements” beginning on April 1, 2014.page [●]. Each of these persons will receive the same merger consideration for their shares of FNBB common stock as the other FNBB shareholders.

Outstanding Equity AwardsFNBB Options.

ImmediatelyUnder the terms of the merger agreement, the board of directors of FNBB will approve acceleration of the vesting of FNBB options, held by directors, officers and employees of FNBB or First National Bank immediately prior to the effective time of the merger, eachmerger.

Each outstanding option to purchase shares of North Valley common stock, including options held by executive officers and directors, whether or not then vested and whether or not then exercisable, will be cancelled and the holder of theunexercised FNBB option will be entitled to receive, subject to any required tax withholding, an amountcanceled in exchange for a cash without interest, from North Valleypayment equal to the product of (x) the total number of shares of North Valley common stock subject to the option times (y) the excess, if any, of the product of 0.9433 multiplied by the weighted average of the closing prices for shares of TriCo common stock as quoted on the NASDAQ Global Select Market for the 20 consecutive trading days ending on the trading day immediately before the closing date over the exercise price per share under such option. The North Valley board of directors has the right to amend all option plans and agreements governing all outstanding options to purchase shares of North Valley common stock in order to make them fully vested and exercisable before the date of the merger, and to permit option holders to exercise their options for North Valley common stock before the date on which their options would otherwise terminate.

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Summary Tables

The following table shows, for each executive officer, as of April 1, 2014, assuming merger consideration of $26.46 per share, (i) the number of shares of North ValleyFNBB common stock subject to vested optionssuch FNBB option immediately prior to the closing of the merger multiplied by the amount, if positive, by which the product of the exchange ratio multiplied by the TriCo average closing price exceeds the per share exercise price under such FNBB option.

The following tables disclose the number of FNBB shares included in stock option contracts held by such officer, (ii)each of FNBB’s executive officers and directors, and their vesting status, as of December 11, 2017, including the number of unvested options that will accelerate and vest in connection with the consummation of the merger and the value of the cash consideration that suchpayment each executive officer or director will receive foras the result of the cancellation of such vested North Valleyoptions, assuming the value of a share of TriCo common stock options uponis $41.64, which was the closing price of TriCo common stock on December 8, 2017, the last trading day prior to the announcement of the merger.

Executive Officer Table 

Named Executive Officers

  Number of
Shares
Subject to
Vested
Options (#)
   Cash-out
Payment
For
Vested
Options ($)
   Number of
Shares
Subject to
Unvested
Options (#)
   Cash-out
Payment
For
Unvested
Options ($)
   Total
Consideration
for Unvested
Equity
Awards ($)
   Total
Consideration
for Outstanding
Equity
Awards ($)
 

Thomas C. McGraw

   59,973   $1,691,438    —     $—     $—     $—   

Jim D. Black

   7,195    158,500    21,287    482,328    —      —   

Anthony J. Clifford

   —      —      21,287    482,328    —      —   

David A. Curtis

   —      —      15,741    356,722    —      —   

Randy R. Brugioni

   13,174    339,888    14,716    335,377    —      —   

Non-Employee Director Table 

Non-Employee Directors

  Number of
Shares
Subject to
Vested
Options (#)
   Cash-out
Payment
For
Vested
Options ($)
   Number of
Shares
Subject to
Unvested
Options (#)
   Cash-out
Payment
For
Unvested
Options ($)
   Total
Consideration
for Unvested
Equity
Awards ($)
   Total
Consideration
for Outstanding
Equity
Awards ($)
 

Lisa Angelot

   15,760   $442,805    —     $—     $—     $—   

Thomas G. Atwood

   9,806    230,035    —      —      —      —   

Ronald R. Barels

   8,576    192,862    —      —      —      —   

Merrie Turner Lightner

   5,435    114,137    —      —      —      —   

Michael Pacelli

   13,642    363,938    —      —      —      —   

Edward J. Watson

   15,754    442,658    —      —      —      —   

Appointment of FNBB Directors to the Boards of Directors of TriCo and Tri Counties Bank.

In the merger agreement, TriCo agreed to take all necessary action following completion of the merger (iii)to appoint two directors of FNBB to serve on the numberboards of sharesdirectors of North Valley common stock subjectTriCo and Tri Counties Bank until the first annual meeting of shareholders of TriCo following the merger. Subject to unvested North Valley stock options held bythe fiduciary duties of TriCo’s board of directors, TriCo agreed to cause such officer, (iv)directors to be included among the cash consideration thatnominees for which the TriCo board of directors will solicit proxies at such officer will receive for such unvested North Valley stock options upon completionannual meeting. As of the merger, (v)date of their joint proxy statement/prospectus, the total consideration that such officer will receive for all unvested North Valley equity awards upon completionidentity of the merger,two FNBB directors who will join the boards of directors of TriCo and (vi)Tri Counties Bank is not known.

Other FNB Employment-Related Agreements and Benefits.

There are no employment contracts between FNBB or First National Bank and the total considerationnamed executive officers identified in the Executive Officer Table above for FNBB options. The named executive officers participate in certain benefit arrangements, agreements and plans described below.

FNBB Savings Plan. Neither FNBB nor First National Bank has a formal cash bonus plan. The FNBB board of directors decides annually whether to keep the plan a “safe harbor” plan and whether to make a profit sharing contribution to the FNBB Savings Plan (formerly named the “First National Bank Profit Sharing and 401(k) Plan”) and the amount of that contribution. The FNBB named executive officers are participants in the FNBB Savings Plan. Each participant in the FNBB Savings Plan who meets IRS qualifying criteria receives a share of the annual “safe harbor” contribution based on the amount of his or her qualifying compensation. Any profit sharing contributions vest according to a schedule of years of service. Eligible employees are allowed to make

voluntary contributions and such officer will receive for all outstanding North Valley equity awards upon completioncontributions are funded by the individual employees. FNBB has agreed to terminate the plan in compliance with its terms and requirements of applicable law, effective prior to consummation of the merger.

Executive Officer Table

Named Executive Officers

  Number of
Shares
Subject to
Vested
Options
(#)
   Cash-Out
Payment
for Vested
Options
($)
   Number of
Shares
Subject to
Unvested
Options
(#)
   Cash-Out
Payment
for
Unvested
Options
($)
   Total
Consideration
for Unvested
Equity
Awards
($)
   Total
Consideration
for
Outstanding
Equity
Awards
($)
 

Michael J. Cushman

   35,524    $147,102     21,059    $252,710     0    $399,812  

Kevin R. Watson

   12,394    $76,645     11,964    $147,864     0    $224,509  

Scott R. Louis

   8,918    $67,681     10,373    $130,186     0    $197,867  

Roger D. Nash

   10,943    $68,999     10,373    $130,186     0    $199,185  

Gary S. Litzsinger

   9,102    $60,809     8,920    $113,359     0    $174,168  

Leo J. Graham

   12,301    $73,212     11,162    $138,956     0    $212,168  

Supplemental Compensation Agreements. First National Bank has entered into supplemental compensation agreements with each of the FNBB named executive officers which provide for annual retirement benefits to be paid to each officer or his designated beneficiary over a period of twenty years in such amounts as specified in the individual agreements. The following table shows, for each non-employee director,benefits are accrued at net present value and were fully vested as of April 1, 2014, assuming merger considerationDecember 31, 2017. Monthly payments begin the seventh month after the named executive officer’s separation from service. In order to help fund the payment of $26.46 per share, (i)such benefits, First National Bank maintains bank-owned life insurance contracts on the number of shares of North Valley common stock subject to vested options held by such director, (ii) the cash consideration that such director will receive for such vested North Valley stock options upon completionFNBB named executive officers and has entered into split dollar life insurance agreements with each of the merger, (iii) the number of shares of North Valley common stock subject to unvested North Valley stock options held by such director, (iv) the cash consideration that such directornamed executive officers. The payment obligations under these agreements will receive for such unvested North Valley stock optionsbecome TriCo obligations, effective upon completionconsummation of the merger, (v)merger. At December 31, 2017, the total consideration that such director will receive for all unvested North Valley equity awards upon completionnet present value of the merger,benefits accrued for the named executive officers under the supplemental compensation agreements were as follows: Thomas C. McGraw, $593,472; Jim D. Black, $1,455,193; Anthony J. Clifford, $1,670,029; David A. Curtis, $2,017,804; and (vi) the total consideration that such director will receive for all outstanding North Valley equity awards upon completion of the merger.Randy R. Brugioni, $1,483,679.

Non-Employee Director Table

Non-Employee Directors

  Number of
Shares
Subject to
Vested
Options
(#)
   Cash-Out
Payment
for Vested
Options
($)
   Number of
Shares
Subject to
Unvested
Options
(#)
   Cash-Out
Payment
for
Unvested
Options
($)
   Total
Consideration
for Unvested
Equity
Awards

($)
   Total
Consideration
for
Outstanding
Equity
Awards

($)
 

Dan W. Ghidinelli

   9,460    $85,464     12,000    $151,770     0    $237,234  

Kevin D. Hartwick

   9,460    $85,464     12,000    $151,770     0    $237,234  

Patrick W. Kilkenny

   5,500    $77,890     12,000    $153,060     0    $230,950  

Roger B. Kohlmeier

   8,740    $79,138     12,000    $151,770     0    $230,908  

Timothy R. Magill

   5,500    $77,030     12,000    $151,770     0    $228,800  

Martin A. Mariani

   8,740    $79,138     12,000    $151,770     0    $230,908  

Dolores M. Vellutini

   9,460    $85,464     12,000    $151,770     0    $237,234  

J. M. Wells, Jr.

   8,760    $83,707     12,000    $151,770     0    $235,477  

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EmploymentManagement Continuity Agreements and Change in Control Payments

Each. First National Bank has entered into management continuity agreements with two of the named executive officers, MichaelJim D. Black and Anthony J. Cushman, Kevin R. Watson, Scott R. Louis, Roger D. Nash, Gary S. Litzsinger and Leo J. Graham, hasClifford (and one other officer who is not an employmentexecutive officer). Each agreement with North Valley. Underprovides for the termspayment of their respective employment agreements, all executive officers are entitled to participate ina lump sum severance benefit of two times the North Valley Executive Deferred Compensation Plan and the North Valley Salary Continuation Plan (see discussions below), in addition to North Valley stock option plans and all other benefits made available to employees of North Valley generally. Each executive officer is entitled to receive severance payexecutive’s base annual salary upon termination of employment without cause in an amount of 12 months of current base salary, except Michael J. Cushman who is entitled to receive 24 months of his base salary plus continued insurance benefits (those costs of which are shared by North Valley and Mr. Cushman) and pro rata share of his annual incentive compensation for the prior year. The employment of each named executive officer is assumed to terminate at the effective time of the merger. Notwithstanding, as provided in the employment agreements, any severance payable due to early termination of employment in the context ofafter a change in control of First National Bank. Payment under the agreements is reduced,conditioned on a dollar for dollar basis, by the change in control payments made to the executive officers pursuant to the Salary Continuation Plan. Upon a change in control and regardless of anyonly. Any termination of employment each executive officer will be paid a benefit equal to two (2) times (2.99 times in the case of Michael J. Cushman) the officer’s annual compensation (base salary plus average incentive compensation earned by the executive officer in the prior three years) pursuant to the terms of the Salary Continuation Plan (in addition to payment of other salary continuation benefits, as indicated below).

Salary Continuation Plan

The Salary Continuation Plan is embodied in a single written plan document which, effective as of January 1, 2007, consolidated previously existing separate written agreements signed with each of the executive officers (including their individual benefits), consistent with the requirements of Section 409A. The merger will constitute a “change in control” for purposes of the Salary Continuation Plan. The following chart reflects the present value of payments which would be due to the executive officers under the Salary Continuation Plan at the effective time of the merger:

Named Executive Officer

  Value of
Salary
Continuation
Plan
Payments

($)
 

Michael J. Cushman

  $2,800,608  

Kevin R. Watson

  $1,103,284  

Scott R. Louis

  $536,800  

Roger D. Nash

  $530,951  

Gary S. Litzsinger

  $411,189  

Leo J. Graham

  $1,935,776  

North Valley has purchased life insurance policies in order to provide for payment of its obligations under the plan, but the executive officers have no rights under the plan beyond those of a general creditor.

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Executive Deferred Compensation Plan

The North Valley Executive Deferred Compensation Plan is a nonqualified executive benefit plan in which the executive officers voluntarily elect to defer some or all of their respective current compensation in exchange for North Valley’s promise to pay a deferred benefit. The deferred compensation is credited with interest under the plan and the accrued liability is paid to the executive at retirement. North Valley has purchased life insurance policies in order to provide for payment of its obligations under the plan, but the executive has no rights under the plan beyond those of a general creditor. The plan is embodied in a single written plan document which, effective as of January 1, 2007, consolidated previously existing separate written agreements signed with each of the executive officers (including their individual benefits), consistent with the requirements of Section 409A. The plan includes provisions that indicate the benefits to be provided at retirement or in the event of death, disability, or termination of employmentany reason prior to retirement. The payment of benefits is accelerated upon a change in control if that had been elected by the executive, and otherwise will be paid by TriCo following the effective timewould result in automatic termination of the merger in a lump sum or in installments, in each case according to the election made by each executive.

Director Deferred Fee Plan

The North Valley Director Deferred Fee Plan is a nonqualified director benefit plan in which non-employee directors may elect to defer some or all of their current fees in exchange for North Valley’s promise to pay a deferred benefit. The deferred fees are credited with interest under the planmanagement continuity agreement and the accrued liability is paid to the director at retirement. North Valley has purchased life insurance policies in order to provide forloss of any benefit thereunder. First National Bank’s payment of its obligations under the management continuity agreement will become obligations of Tri Counties Bank as a result of the merger. See “Merger-Related Compensatory Arrangements for FNBB’s Named Executive Officers” with respect to amounts payable under these agreements.

Deferred Compensation Plan. First National Bank has established a nonqualified deferred compensation plan butand participation is open to all officers, including the director has no rights underFNBB named executive officers. Messrs. Black, Clifford, Curtis and Brugioni currently participate in the plan. The funds contributed to the plan beyondare those of a general creditor, except that North Valley has entered into a split dollar agreement with Kevin D. Hartwickthe individual participant and J.M. Wells, Jr.represent income earned and/or bonuses awarded as an employee of First National Bank. There are no vesting requirements. Contributions of deferred compensation specified by the participants are forwarded by First National Bank to the deferred compensation trust which are then invested by the trustee in connectionaccordance with the life insurance policies obtained on each of their lives. The plan is embodied in a single written plan document which, effective as of January 1, 2008, consolidates previously existing separate written agreements signed with eachinstructions of the non-employee directors (including their individual benefits), consistent with the requirements of Section 409A. The plan includes provisions that indicate the benefits to be provided at retirement or in the event of death, disability, or termination of board membership prior to retirement. The payment of benefits is accelerated upon a change in control if that had been electedparticipants based on investment options offered by the director, and otherwise will be paid by TriCo following the effective timeplan’s investment manager. No funds of the merger in a lump sumFNBB or in installments, in each case accordingFirst National Bank are contributed to the election made by each director.

Indemnification and Insurance

TriCo has agreed to indemnify the directors and officersplan. Each participant may elect whether he or she will receive distribution of North Valley for six (6) years against all losses, claims, damages, costs, expenses (including attorneys’ fees), liabilities and judgmentshis or amounts that are paid in settlement of or in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal or administrative, arising out of matters existing or occurring at or before the effective time of the merger, whether asserted or claimed before, at or after the effective time of the merger, arisingher account, in whole or in part, outbased upon the passage of or pertaining to the fact that he or she was acting in his or her capacity as a director or officerspecified period of North Valley or its subsidiaries, to the fullest extent permitted by applicable laws.

TriCo has also agreed to cause the persons serving as directors and officers of North Valley and its subsidiaries immediately prior to the effective time of the merger to be coveredat least five years or upon termination of employment.

Merger-Related Compensatory Arrangements for a period of six (6) years by a directors’ and officers’ liability insurance policy, not less advantageous than North Valley’s current policy, with respect to acts and omissions committed by such directors and officers in their capacities as such prior to the effective time of the merger.

Merger-Related Compensation for North Valley’sFNBB’s Named Executive Officers

In accordance with Item 402(t) of Regulation S-K, theThe following table below sets forth the estimated amounts of compensation and benefits that each named executive officer of North ValleyFNBB could receive that are based on or otherwise relate to the merger. These amounts have been calculated assuming that the merger is consummated on [].March 9, 2018. Please see the section entitled “The Merger—Interests of North ValleyFNBB Directors and Executive Officers in the Merger” beginning on page 72[●] for further information about the applicable compensation and benefits. These estimated amounts are based on multiple assumptions that may or may not actually occur, including assumptions

75


described in this joint proxy statement/prospectus. Some of these assumptions are based on information not currently available and, as a result, the actual amounts, if any, to be received by a named executive officer may differ from the amounts set forth below.

Golden Parachute Compensation

 

Named Executive Officer

  Cash
($)(1)
   Equity
($)(2)
   Pension/NQDC
($)(3)
   Total
($)(4)(5)
 

Michael J. Cushman

  $1,335,676    $252,710    $0    $1,353,255  

Kevin R. Watson

  $563,735    $147,864    $147,582    $859,181  

Scott R. Louis

  $464,275    $130,186    $53,680    $648,141  

Roger D. Nash

  $470,941    $130,186    $0    $601,127  

Gary S. Litzsinger

  $394,880    $113,359    $41,119    $549,358  

Leo J. Graham

  $516,361    $138,956    $0    $655,317  

Named Executive Officer

  Cash
($) (1)
   Equity
($) (2)
   Total
($) (3)
 

Thomas C. McGraw

  $—     $1,642,656   $1,642,656 

Jim D. Black

   671,724    358,440    1,030,164 

Anthony J. Clifford

   642,646    417,813    1,060,459 

David A. Curtis

   418,252    266,045    684,297 

Randy R. Brugioni

   513,319    245,533    758,852 

 

(1)Cash.Cash.Cash amounts reflect change in control amounts payable pursuant to the named executive officer’s management continuity agreement. For Mr. Curtis, reflects a retention bonus in the amount of $418,252 and, for Mr. Brugioni, reflects a retention bonus in the amount of $513,319, which payments are conditioned upon their continued employment as Chief Financial Officer and Chief Credit Officer, respectively, for FNBB and First National Bank until the closing date, and their execution of a release.

Cash amounts reflect change in control amounts paid pursuant to the Salary Continuation Plan.

(2)Equity.Represents the value of the aggregate consideration to be paid in respect of vested an unvestedin-the-money FNBB options upon consummation of the merger, assuming the average closing share price for TriCo common stock is $40.81 as described in greater detail above in the section entitled “The Merger—Interests of FNBB Directors and Executive Officers in the Merger—FNBB Options” beginning on page [●] and as quantified in the “Cash-Out Payment For Vested Options” and“Cash-Out Payment For Unvested Options” columns of the Executive Officer Table on page [].

Represents the value of the aggregate consideration to be paid in respect of unvested in-the-money North Valley stock options upon consummation of the merger, assuming merger consideration of $26.46 per share, as described in greater detail above in the section entitled “The Merger—Interests of North Valley Directors and Executive Officers in the Merger—Outstanding Equity Awards” beginning on page 72 and as quantified in the “Cash-Out Payment For Unvested Options” column of the Executive Officer Table on page 73.

(3)Pension/NQDC.

Value of pension/nonqualified deferred compensation (NQDC) reflects the present value of payments which would be due, solely as a result of the change in control, to the executive officers as salary continuation payments under the Salary Continuation Plan. The present values of the benefits were determined using a discount rate and mortality assumption as required by the terms of the Plan.

(4)Total.

Represents for each named executive officer, the amounts which are payable as a single trigger (i.e., conditioned solely on the occurrence of a change in control). None are double trigger (i.e., payments requiring the occurrence of an additional event in addition to a change in control). None are double trigger (i.e., amounts requiring the occurrence of an additional event). The amounts in the “Total” column are all single trigger payment amounts.

(5)280G Limit.

The total amount for Michael J. Cushman was reduced by $235,131, because the total exceeded the threshold set forth in section 280G of the Internal Revenue Code.

Summary of Payments of Merger-Related Compensation

The cash“Cash” amounts to be paid to the named executive officers described in the “Golden Parachute Compensation” table and footnotes above will be paid in lump sums by FNBB immediately prior to the effective time of the merger.

The “Equity” amounts to be paid to the named executive officers described in the “Golden Parachute Compensation” table and footnotes above will be paid in lump sum by North Valley immediately prior to the effective time of the merger.

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The equity amounts to be paid to the executive officers described in the table and footnotes above will be paid in lump sum by North ValleyFNBB immediately prior to the effective time of the merger conditioned upon the cancellation of option agreements held by the named executive officers.

The pension/NQDC amounts to be paidTriCo Employment Agreements with Certain Officers of FNBB.

TriCo and Tri Counties Bank have entered into employment agreements with Jim Black, Anthony Clifford, and Randy Brugioni, presently the President, the Chief Operating Officer and the Chief Credit Officer of FNBB, respectively, which will become effective upon consummation of the merger. Pursuant to the executiveterms of their employment agreements, Mr. Black will be employed by Tri Counties Bank as Commercial Lending President—San Francisco Region, Mr. Clifford as Regional President—San Francisco Region, and Mr. Brugioni as Senior Vice President—Senior Credit Administrator. Mr. Black’s and Mr. Clifford’s employment agreements have a one year term and Mr. Brugioni’s employment agreement has a two year term.

Pursuant to their respective employment agreements, Messrs. Black, Clifford and Brugioni will receive an annual base salary of $300,000, $300,000 and $250,000, respectively. In addition, they are eligible for bonuses and entitled to participate in any benefit plans or programs available to similarly situated employees of Tri Counties Bank generally. Each of Messrs. Black’s, Clifford’s and Brugioni’s employment agreements includes provisions related to payments to them in certain circumstances related to termination of employment, treatment of confidential information and restrictions against soliciting employees, vendors and customers of TriCo and Tri Counties Bank.

Indemnification.

FNBB’s directors, officers describedand employees are entitled to continuing indemnification against certain liabilities by virtue of provisions contained in the tableFNBB articles of incorporation, as amended, and footnotes above will be paid eitherbylaws, as amended, and the merger agreement. FNBB’s articles of incorporation, as amended, are referred to as the FNBB articles of incorporation, and FNBB’s bylaws, as amended, are referred to as the FNBB bylaws. In the merger agreement, TriCo agreed for a period of six years from the closing of the merger, to indemnify and hold harmless each present and former director, officer and employee of FNBB or a subsidiary of FNBB, as applicable, determined as of the effective time of the merger, against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in a lump sum by North Valley immediatelyconnection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the effective time of the merger, whether asserted or in installments paid by TriCo followingclaimed prior to, at or after the effective time of the merger, arising in each case accordingwhole or in part out of or pertaining to the election made by each executive underfact that he or she was a director, officer, employee, fiduciary or agent of FNBB or its subsidiaries or is or was serving at the Salary Continuation Plan. Messrs. Cushman, Watson, Litzsingerrequest of FNBB or its subsidiaries as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust or other enterprise including, without limitation, matters related to the negotiation, execution and Graham have elected to receive a lump sum payment. Messrs. Louis and Nash have elected to receive installment payments, except Mr. Nash elected a lump sum if his termination is due to normal retirement. The payment (or commencement of payments) is subject to a six-month delay as necessary to comply with Internal Revenue Code Section 409A.

As a condition to consummationperformance of the merger Mr. Cushman has signed and delivered to TriCo a non-solicitation and confidentiality agreement which may not be revoked prior toor the effective time of the merger. The agreement will remain in effect for twenty-four months following the effective time of the merger. The agreement includes provisions permitting TriCo to seek remedies for breach by Mr. Cushman, including injunctive relief and specific performance.

Regulatory Approvals Required for the Merger

Completion of the merger and the bank merger is subject to the receipt of all approvals required to complete the transactions contemplated by the merger agreement from the Federal Reserve Board, FDIC and the Department of Business Oversight and the expirationconsummation of any applicable statutory waiting periods in each case subject to the condition that none of the approvals shall contain any “burdensome condition.” The merger agreement defines a “burdensome condition” to mean any condition that the TriCo board of directors determines in good faith would, or would be reasonably likely to, individually or in the aggregate, have a material adverse effect on the surviving corporation (assuming for this purpose that the surviving corporation consists of TriCo and North Valley and their respective subsidiaries, taken as a whole), other than a disposition of one or more branch offices of TriCo or North Valley in a geographic banking market. Each of TriCo and North Valley have agreed to take all actions that are necessary, proper and advisable in connection with obtaining all regulatory approvals, and have agreed to fully cooperate with the other in the preparation and filing of the applications and other documents necessary to complete the transactions contemplated by the merger. TriCo and its subsidiaries and North Valley and its subsidiaries have filed, or are in the process of filing, applications and notifications to obtain these regulatory approvals.

Although the parties currently believe they should be able to obtain all required regulatory approvals, they cannot be certain when or if they will obtain them or, if obtained, whether they will contain terms, conditions or restrictions not currently contemplated that will be detrimental to the combined company after the completion of the merger or will contain a materially burdensome regulatory condition.

Federal Regulatory Applications

Merger of TriCo and North Valley

TriCo is a bank holding company under Section 3 of the BHC Act. Section 3(a) of the BHC Act generally requires the prior approval of the Federal Reserve Board for any bank holding company to merge with any other bank holding company or to acquire direct or indirect ownership or control over more than 5 percent of the voting shares of a bank. TriCo will either file an application to merge with North Valley and acquire control of North Valley Bank or request confirmation from the Federal Reserve Board that no application is required under Section 3 of the BHC Act for the transactions contemplated by the merger agreement. Among the factors which must be considered by the Federal Reserve Board in approving such applications are: (1) the effect of the proposed acquisition on competition, (2) the financial and managerial resources and future prospects of the companies and banks concerned, including whether current and projected capital positions and levels of indebtedness conform to standards and policies established by the Federal Reserve Board and the records of the applicants and banks in compliance with laws and regulations, (3) the convenience and needs of the community to be served, including the records of performance of the banks concerned under the Community Reinvestment Act, (4) the effectiveness of the companies and banks concerned in combatting money laundering activities, and (5) the extent to which a proposed

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acquisition or merger would result in greater or more concentrated risks to the stability of the United States banking or financial system. In connection with such a review, the Federal Reserve Board will provide an opportunity for public comment on the application and is authorized to hold a public meeting or other proceeding if it determines such meeting or other proceeding would be appropriate.

Merger of Tri Counties Bank and North Valley Bank

Because Tri Counties Bank is a state nonmember bank, prior approval to merge North Valley Bank with and into Tri Counties Bank is required from the FDIC, pursuant to Section 18(c) of the Federal Deposit Insurance Act, which we refer to as the Bank Merger Act. In evaluating an application filed under the Bank Merger Act, the FDIC is required to take into consideration (1) the competitive impact of the proposed transactions, (2) financial and managerial resources and future prospects of the banks party to the merger, (3) the convenience and needs of the communities served by the banks and their compliance with the Community Reinvestment Act, (4) the banks’ effectiveness in combating money-laundering activities, and (5) the extent to which the proposed transactions would result in greater or more concentrated risks to the stability of the U.S. banking or financial system. In connection with its review under the Bank Merger Act, the FDIC provides an opportunity for public comment on the application for the bank mergers and is authorized to hold a public meeting or other proceeding if it determines that would be appropriate.

Approval of the transactions contemplated by the merger agreement, byto the Federal Reserve Boardfullest extent to which such indemnified parties would be entitled under the BHC Act and/FNBB articles of incorporation and FNBB bylaws, or any agreement, arrangement or understanding previously disclosed by FNBB to TriCo pursuant to the FDIC under the Bank Merger Act generally may not be completed until expiration of a 30 day “waiting period” after the approvals, during which time the Department of Justice may challenge the transactionmerger agreement, in each case as in effect on antitrust grounds. With the approval of the Federal Reserve Board and/or the FDIC, and the concurrence of the Department of Justice, the waiting period may be reduced to no less than 15 calendar days after the date of the Federal Reserve or FDIC approval. The commencement of an antitrust action would stay the effectiveness of such an approval unless a court specifically ordered otherwise. In reviewing the merger the Department of Justice could analyze the merger’s effect on competition differently than the Federal Reserve Board and/or the FDIC, and thus it is possible that the Department of Justice could reach a different conclusion than the Federal Reserve Board and/or the FDIC does regarding the effects of the proposed transactions on competition. A determination by the Department of Justice not to object to the merger may not prevent the filing of antitrust actions by private persons or state attorneys general.

California Department of Business Oversight Application

The prior approval of the Department of Business Oversight is required under Section 4880 et seq. of the California Financial Code to merge North Valley Bank with and into Tri Counties Bank. In reviewing the proposed merger of North Valley Bank with and into Tri Counties Bank, the Department of Business Oversight will consider (1) the competitive impact of the merger, (2) the adequacy of the surviving depository corporation’s shareholders’ equity and financial condition, (3) whether the directors and executive officers of the surviving depository institution will be satisfactory, (4) whether the surviving depository corporation will afford reasonable promise of successful operation and whether it is reasonable to believe that the surviving depository corporation will be operated in a safe and sound manner and in compliance with all applicable laws, and (5) whether the merger is fair, just and equitable to the disappearing depository corporation and the surviving depository corporation.

California Financial Code Section 1251 provides that no person shall acquire direct or indirect control of a California bank without the prior approval of the Department of Business Oversight. TriCo will submit a request for an order of exemption from the application and approval requirements of Section 1251 for the merger, whereby TriCo would acquire indirect control of North Valley Bank, based on a finding by the Department of Business Oversight that the requirements of Section 1251 are not necessary given the submission of the application for the bank merger and provided that North Valley Bank will be immediately merged with and into Tri Counties Bank after the merger. If the Department of Business Oversight did not grant an exemption, then TriCo would also be required to obtain prior approval for TriCo to acquire control of North Valley Bank in the merger. In reviewing the application, the Department of Business Oversight would consider the same factors set forth above for the application to the Department of Business Oversight for the bank merger.

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Additional Regulatory Approvals, Notices and Filings-Potential Challenges

Additional notifications, filings and/or applications will be submitted to various other federal and state regulatory authorities and self-regulatory organizations in connection with the merger.

Although TriCo and North Valley expect to obtain the required regulatory approvals, there can be no assurances as to if, or when, these regulatory approvals will be obtained, the terms and conditions on which the approvals may be granted, or whether there will be litigation challenging such approvals. There can likewise be no assurances that U.S. or state regulatory authorities will not attempt to challenge the merger on antitrust grounds or for other reasons, or, if such a challenge is made, as to the result of any such challenge.

Accounting Treatmentagreement.

In accordance with current accounting guidance, the merger will be accounted for using the acquisition method. The result of this is that (a) the recorded assets and liabilities of TriCo will be carried forward at their recorded amounts, (b) TriCo’s historical operating results will be unchanged for the prior periods being reported on and (c) the assets and liabilities of North Valley will be adjusted to fair value at the date of the merger. In addition, all identified intangibles will be recorded at fair value and included as part of the net assets acquired. The amount by which the purchase price, consisting of the value of shares of TriCo common stock to be issued to former North Valley shareholders and cash to be paid in lieu of fractional shares and to former option holders, exceeds the fair value of the net assets including identifiable intangibles of North Valley at the merger date will be reported as goodwill. In accordance with current accounting guidance, goodwill is not amortized and will be evaluated for impairment annually. Identified intangibles will be amortized over their estimated lives. Further, the acquisition method of accounting results in the operating results of North Valley being included in the operating results of TriCo beginning from the date of completion of the merger.

Public Trading Markets

TriCo common stock is listed on the NASDAQ Global Select Market under the symbol “TCBK.” North Valley common stock is listed on the NASDAQ Global Select Market under the symbol “NOVB.” Upon completion of the merger, North Valley common stock will be delisted from the NASDAQ Global Select Market and thereafter will be deregistered under the Exchange Act. The TriCo common stock issuable in the merger will be listed on the NASDAQ Global Select Market.

Exchange of Shares in the Merger

TriCo will appoint Computershare Trust Company, N.A. as exchange agent to handle the exchange of shares of North Valley common stock for shares of TriCo common stock. As promptly as practicable after the effective time, the exchange agent will send to each holder of record of North Valley common stock at the effective time who holds shares of North Valley common stock in certificated form a letter of transmittal and instructions for effecting the exchange of North Valley common stock certificates for the merger consideration the holder is entitled to receive under the merger agreement. Upon surrender of stock certificates for cancellation along with the executed letter of transmittal and other documents described in the instructions, a North Valley shareholder will receive any whole shares of TriCo common stock such holder is entitled to receive based on the exchange ratio and cash in lieu of any fractional shares of TriCo common stock such holder is entitled to receive. After the effective time, North Valley will not register any transfers of shares of North Valley common stock.

Upon consummation of the merger, uncertificated shares of North Valley common stock held in book-entry form will be automatically converted into whole shares of TriCo common stock in book-entry form, based on the exchange ratio, and the exchange agent will deliver to holders of book-entry shares cash in lieu of any fractional shares of TriCo common stock such holder is entitled to receive.

TriCo shareholders need not take any action with respect to their stock certificates or book-entry shares of TriCo common stock.

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THE MERGER AGREEMENT

The following is a summary of the material terms and conditions of the merger agreement. This summary does not purport to be complete and may not contain all of the information about the merger agreement, that is importantTriCo has agreed to you. This summary is qualified in its entirety by reference to the merger agreement, a copy of which is attached as Appendix A to,maintain FNBB’s existing directors’ and incorporated by reference into, this joint proxy statement/prospectus. The rights and obligations of the parties are governed by the express terms and conditions of the merger agreement and not by this summary or any other information contained in this joint proxy statement/prospectus. You are urged to read the merger agreement carefully and in its entirety before making any decisions regarding the merger.

Effects of the Merger

The merger agreement providesofficers’ liability insurance policy for the merger of North Valley with and into TriCo, with TriCo surviving the merger. The merger agreement provides that the articles of incorporation and the bylaws of TriCo as in effect immediately prior to the merger will be the articles of incorporation and bylaws of the surviving company.

As a result of the merger, there will no longer be any publicly held shares of North Valley common stock. North Valley shareholders will only participate in the surviving company’s future earnings and potential growth through their ownership of TriCo common stock. All of the other incidents of direct ownership of North Valley common stock, such as the right to vote on certain corporate decisions, to electFNBB’s directors and to receive dividendsofficers or a substitute policy which shall provide such directors and distributions from North Valley, will be extinguished upon completion of the merger. All of the property, rights, privileges and powers of TriCo and North Valley will vest in the surviving company, and all claims, obligations, liabilities, debts and duties of TriCo and North Valley will become the claims, obligations, liabilities, debts and duties of the surviving company.

Effective Time of the Merger

The merger agreement provides that the merger will be consummated no later than three business days after the satisfaction or waiver of all the closing conditions, including the receipt of all regulatory and shareholder approvals and after the expiration of all regulatory waiting periods, unless extended by mutual agreement of TriCo and North Valley. The merger will be consummated legally at the time the agreement of merger has been duly filedofficers with the Secretary of State of the State of California or at such later time as may be specified in the agreement of merger. As of the date of this document, the parties expect that the merger will be effective in the third quarter of 2014. However, there can be no assurance as to when or if the merger will occur.

If the merger is not completed by the close of business on January 21, 2015, the merger agreement may be terminated by either North Valley or TriCo, unless the failure of the closing to occur by such date is due to the failure of the party seeking to terminate the merger agreement to perform or observe the covenants and agreements of such party set forth in the merger agreement.

For a description of the transaction structure, merger consideration and treatment of North Valley stock options, please see the section entitled “The Merger—Terms of the Merger” beginning on page 40.

Covenants and Agreements

Conduct of Businesses Prior to the Completion of the Merger. North Valley has agreed that prior tocoverage following the effective time of the merger itfor an additional six years, provided that if the cost of such insurance exceeds 200% of the annual premiums paid by FNBB for its existing directors’ and officers’ liability insurance, which is referred to as the maximum insurance amount, TriCo will generally conduct its business, and cause its subsidiaries to conduct their respective businessesobtain the most advantageous coverage as is available for the maximum insurance amount.

Other than as set forth above, no director or officer of FNBB has any direct or indirect material interest in the usual, regularmerger, except insofar as ownership of FNBB common stock might be deemed such an interest.

Material Federal Income Tax Consequences

The following is a general description of the anticipated material U.S. federal income tax consequences of the merger. This discussion is based upon the Code, Treasury regulations, judicial authorities and ordinary coursepublished positions of the Internal Revenue Service, or IRS, all as currently in substantiallyeffect and all of which are subject to change. Accordingly, the same manner as previously conducted (exceptU.S. federal income tax consequences of the merger to the extent expressly providedholders of FNBB common stock could differ from those described below.

Except as specifically stated herein, this discussion is limited to U.S. holders (as defined below) that hold shares of FNBB common stock as a capital asset within the meaning of Section 1221 of the Code for U.S. federal income tax purposes. This discussion does not address the tax consequences applicable to FNBB shareholders that are not U.S. holders, nor does it address all of the tax consequences that may be relevant to particular U.S.

holders that are subject to special treatment under U.S. federal income tax laws, including, without limitation, financial institutions, insurance companies, partnerships and other pass-through entities,tax-exempt organizations, regulated investment companies, real estate investment trusts, dealers in securities or currencies, U.S. persons whose functional currency is not the U.S. dollar, traders in securities that elect to use amark-to-market method of accounting, persons that hold FNBB common stock as part of a straddle, hedge, constructive sale or conversion transaction, and U.S. holders that acquired their shares of FNBB common stock through the exercise of an employee stock option or otherwise as compensation.

If a partnership or other entity taxed as a partnership holds FNBB common stock, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships holding FNBB common stock and partners in such partnerships should consult with their tax advisors about the tax consequences of the merger to them.

This discussion does not address the tax consequences of the merger under state, local or foreign tax laws. This discussion also does not address the tax consequences of any transaction other than the merger.

For purposes of this section, the term “U.S. holder” means a beneficial owner of FNBB common stock that is for U.S. federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state or a political subdivision thereof, (iii) an estate that is subject to U.S. federal income tax on its income regardless of its source, or (iv) a trust, the substantial decisions of which are controlled by one or more U.S. persons and which is subject to the primary supervision of a U.S. court, or that has validly elected under applicable Treasury regulations to be treated as a U.S. person for U.S. federal income tax purposes.

Tax Consequences of the Merger.

The merger has been structured to qualify as a “reorganization” under Section 368(a) of the Code for U.S. federal income tax purposes. As a condition to the completion of the merger, Sheppard Mullin is required to deliver an opinion, dated the closing date of the merger, to the effect that the merger will be treated as a “reorganization” for U.S. federal income tax purposes within the meaning of Section 368(a) of the Code. The opinion will assume that the merger will be completed according to the terms of the merger agreement and that the parties will report the merger in a manner consistent with the opinion. The opinion will rely on the facts as stated in the merger agreement, the Registration Statement on FormS-4 filed by TriCo in connection with the merger (of which this joint proxy statement/prospectus is a part) and certain other documents. In rendering the opinion, counsel will rely on the representations of TriCo and FNBB, to be delivered at the time of closing (and counsel will assume that any representation that is qualified by belief, knowledge or materiality is true, correct and complete without such qualification). If any assumption or representation is or becomes inaccurate, the U.S. federal income tax consequences of the merger could be adversely affected. The opinion will be based on statutory, regulatory and judicial authority existing as consentedof the date of the opinion.

An opinion of counsel represents such counsel’s best legal judgment but is not binding on the IRS or on any court. Neither TriCo nor FNBB intends to in writing by TriCo). North Valley will further cause its subsidiaries to pay all of debts and taxes when due, pay or perform its other obligations when due, and use its commercially reasonable efforts consistent with past practice and policies to preserve intact its present business organizations, keep availablerequest any ruling from the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it,IRS as to the endU.S. federal income tax consequences of the merger. Consequently, no assurance can be given that its goodwill and ongoing businesses shall be unimpaired at the closing. North Valley agreedIRS will not assert, or that a court will not sustain, a position contrary to promptly notify TriCo of any event not in the ordinary course of its or any

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subsidiary’s business, and of any event which, individually or in the aggregate with any other events, would reasonably be expected to cause any of the conditions to closingtax consequences set forth below or any of the merger nottax consequences described in the opinion.

Based on representations to be satisfied. Further, North Valley agreed that itcontained in representation letters of officers of TriCo and each if its subsidiaries will use their commercially reasonable effortsFNBB, all of which must continue to assure that each of their material contracts (other than with TriCo) entered into prior to the merger will not require the procurement of any consent, waiver or novation or provide for any change in the obligations of any party in connection with, or terminate as a result of the consummation of, the merger or the bank merger,be true and shall give reasonable advance notice to TriCo prior to allowing any material contract or right thereunder to lapse or terminate by its terms.

North Valley agreed that it and each of its subsidiaries will maintain each of its leased premises in accordance with the terms of the applicable lease and they will complyaccurate in all material respects with all laws applicable to them or to the operationas of their business, including all applicable bank secrecy laws, fair lending laws and other laws relating to discriminatory business practices, and maintain their existing training programs for executive and lending staffs. North Valley further agreed to facilitate the assumption by TriCo of North Valley’s trust preferred securities.

In addition to the general covenants above, North Valley has agreed that prior to the effective time of the merger, and subject to specified exceptions,the other matters set forth above, it will not, and will not permit its subsidiaries to, withoutis the prior written consentopinion of TriCo:

declare or pay any dividends on, or make other distributions in respect of, any of its capital stock, provided however,Sheppard, Mullin, Richter & Hampton LLP that North Valley Bank may pay cash dividends or distributions to North Valley for the purpose of enabling North Valley to pay interest on its junior subordinated debt securities and to pay its ordinary operating expenses, in each case in accordance with past practices and as they become due;

split, combine or reclassify any shares of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except upon the exercise or fulfillment of North Valley stock options issued and outstanding;

repurchase, redeem or otherwise acquire (except in partial or complete satisfaction of debts previously contracted or upon the forfeiture of outstanding restricted stock or the exercise or fulfillment of North Valley stock options) any shares of the capital stock of North Valley or any North Valley subsidiaries, or any securities convertible into or exercisable for any shares of the capital stock of North Valley or any North Valley subsidiaries;

issue, allocate, deliver or sell, or authorize or propose the issuance, delivery or sale of, any shares of its capital stock or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares, or enter into any agreement with respect to any of the foregoing, other than with respect to the North Valley stock options;

amend its articles of incorporation, bylaws or other similar governing documents unless required to do so in order to comply with applicable laws or regulations or by regulatory directive;

enter into any written or oral contract, plan, commitment or any other arrangement, which (1) results in or accelerates any payment or benefit becoming due from TriCo, North Valley, any of their subsidiaries or the surviving corporation to any party; (2) contains a non-compete or client or customer non-solicitation requirement or any other provision that materially restricts the conduct of any line of business by North Valley or any of its subsidiaries or, following the closing, TriCo or any of its subsidiaries; (3) is with or to a labor union or guild; (4) that is a material contract; or (5) involved payments by North Valley or any of its subsidiaries in the fiscal year ended December 31, 2012 of more than $75,000 or which could reasonably be expected to involve payments during the fiscal year ending December 31, 2013 or any year thereafter of more than $75,000, other than any (a) such contract that is terminable at will on 60 days or less notice without payment of a penalty in excess of $10,000, (b) deposit liabilities and (c) with certain exceptions, debts for borrowed funds;

make capital expenditures aggregating in excess of $40,000, except for emergency repairs and replacements and those entered into prior to the date of the merger agreement;

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enter into any new line of business;

acquire or agree to acquire, by merging or consolidating with, or by purchasing an equity interest in or the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets, other than in connection with foreclosures, settlements in lieu of foreclosure or troubled loan or debt restructurings, or in the ordinary course of business consistent with past practices;

take any action that is intended or may reasonably be expected to result in any of its representations and warranties set forth in the merger agreement being or becoming untrue or in any of the conditions to the merger not being satisfied, or in a violation of any provision of the merger agreement or the bank merger agreement, except, in every case, as may be required by applicable laws;

change its methods of accounting in effect at December 31, 2012, except as required by changes in GAAP or regulatory accounting principles as concurred to by North Valley’s independent auditors;

(1) except as required by applicable laws or the merger agreement or to maintain qualification pursuant to the Internal Revenue Code, adopt, amend, renew or terminate any plan or any agreement, arrangement, plan or policy between North Valley or North Valley Bank and one or more of its current or former directors, officers or employees, (2) increase in any manner the compensation of any employee or director or pay any benefit not required by any plan or agreement as in effect as of the date of the merger agreement, (3) except as contemplated by the merger agreement, enter into, modify or renew any contract, agreement, commitment or arrangement providing for the payment to any director, officer or employee of compensation or benefits, (4) hire any new employee at an annual compensation in excess of $60,000, except to fill open positions consistent with past practices, (5) pay aggregate expenses of more than $2,500 per person for employees or directors who attend conventions or similar meetings, (6) promote any employee to a level of vice president or more senior or (7) except as contemplated by the merger agreement, pay any retention bonuses to any employees or any other bonuses or incentives other than pursuant to an incentive plan, agreement, plan or policy of North Valley or North Valley Bank in effect as of the date of the merger agreement and in a manner consistent with past practice;

incur any indebtedness, with a term greater than one year, for borrowed money, assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, in each case other than in the ordinary course of business consistent with past practices;

sell, purchase, enter into a lease, relocate, open or close any banking or other loan production office, or file an application pertaining to such action with any governmental entity;

make any equity investment or commitment to make such an investment in real estate or in any real estate development project, other than in connection with foreclosure, settlements in lieu of foreclosure, or troubled loan or debt restructuring, in the ordinary course of business consistent with past practices;

except as contemplated by the merger agreement, make any new loans to, modify or renew the terms of any existing loan to, or engage in any other transactions (other than routine banking transactions) with, any officer, director or greater than 5% shareholder of North Valley or North Valley Bank (or their affiliates), or to or with any employee of North Valley or North Valley Bank other than loans to employees that are in the ordinary course of business consistent with past practices and in compliance with applicable laws;

make any investment, or incur deposit liabilities, other than in the ordinary course of business consistent with past practices;

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purchase, modify or originate any: (1) loans except in accordance with existing North Valley Bank’s lending policies, and lending limits and authorities; or (2)(a) loans requiring North Valley Bank Executive Loan Committee approval under North Valley Bank’s existing lending policies, (b) loans that are criticized or classified, (c) unsecured consumer loans in excess of $25,000; (d) individual lot loans in excess of $200,000; (e) construction, acquisition or development loans, residential permanent loans, loans secured by special purpose property, including production lines for builders, or certain small business loans, to any one borrower in excess of $1,000,000 in the aggregate; except in each case for loans for which written commitments have been issued by North Valley Bank and are currently outstanding and, in connection with the foregoing prohibitions, North Valley has agreed to provide TriCo certain periodic reports and notices;

price or reprice any loans inconsistent with North Valley Bank’s current pricing methodology or, (1) in the case of variable rate loans, at a variable rate that is less than The Wall Street Journal Prime or which adjusts less frequently than monthly or, (2) in the case of a fixed rate loan, at a fixed rate of less than 4.00% per annum or with a term in excess of 5 years;

price, accept, renew or pay any deposits with a rate of interest in excess of the rates permitted by certain federal regulations or materially change the characteristics of North Valley Bank’s deposit portfolio, including deposit types, interest rates and terms offered;

make any investments in any equity or derivatives contract, hedging or arbitrage transaction or covered asset trading activities or make any investment in any investment security with an average life greater than one year at the time of purchase other than obligations of state and political subdivisions;

sell any “held for investment” loans or servicing rights related thereto or purchase any mortgage Loan servicing rights;

take or omit to take any action that would have or be reasonably likely to have a material adverse effect on North Valley or that would have or be reasonably likely to have a material adverse effect on, or materially delay, the ability of North Valley and TriCo to obtain the approvals required to close the merger or otherwise have or be reasonably likely to have a material adverse effect on North Valley’s and North Valley Bank’s ability to consummate the transactions contemplated by the merger agreement;

redeem, amend or waive any provisions of the North Valley rights agreement (other than such actions as are necessary to accommodate the merger agreement and the transactions contemplated hereby, but not with respect to any acquisition proposal) or implement or adopt any other so-called “poison pill,” shareholder rights plan or other similar plan;

except as contemplated by the merger agreement, (1) settle any claim, action or proceeding, except any settlement involving amounts payable by North Valley and/or its subsidiaries less than or equal to $100,000 individually or $250,000 in the aggregate and that would not impose any restriction on the conduct of its business or following the closing, the business of TriCo or its subsidiaries, (2) waive, compromise, assign, cancel or release any rights or claims except as contemplated by the merger agreement, or (3) agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise affecting its business;

materially restructure or materially change its investment securities portfolio or its portfolio duration, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, or invest in any mortgage-backed or mortgage-related securities which would be considered “high risk” securities under applicable regulatory pronouncements, except in each case as required by law or requested by a governmental entity;

except as may be required by law, make, change or revoke any tax election, change an annual tax accounting period, adopt or change any material tax accounting method, file any material amendment with respect to a material tax return, enter into any material closing agreement with respect to taxes, or settle any material tax claim, audit, assessment or dispute or surrender any right to claim a refund of a material amount of taxes;

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take any action that could, or fail to take any action, the failure of which could, reasonably be expected to prevent the merger or the bank merger from qualifyingwill qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; or

agree or commitCode. Based upon the foregoing, the following discussion represents the opinion of Sheppard, Mullin, Richter & Hampton LLP with respect to do anythe material U.S. federal income tax consequences of the prohibited actions set forth above.
merger.

Tax Consequences of the Merger for U.S. Holders of FNBB Common Stock.

Except as described below under “—Cash in Lieu of Fractional Shares of TriCo has agreedCommon Stock,” a U.S. holder that priorexchanges all of its shares of FNBB common stock for shares of TriCo common stock pursuant to the merger will not recognize gain or loss in connection with such exchange.

A U.S. holder’s aggregate tax basis in the TriCo common stock received in the merger, including any fractional shares deemed received by the U.S. holder under the treatment discussed below under “—Cash in Lieu of Fractional Shares of TriCo Common Stock,” will equal such U.S. holder’s aggregate tax basis in the FNBB common stock surrendered by such U.S. holder in the merger. The holding period for the shares of TriCo common stock received by such U.S. holder in the merger, including any fractional shares deemed received by the U.S. holder under the treatment discussed below under “—Cash in Lieu of Fractional Shares of TriCo Common Stock,” will include the holding period for the shares of FNBB common stock exchanged therefor.

Cash in Lieu of Fractional Shares of TriCo Common Stock.

A U.S. holder that receives cash instead of a fractional share of TriCo common stock will be treated as having received the fractional share of TriCo common stock pursuant to the merger and then having exchanged the fractional share of TriCo common stock for cash in a redemption by TriCo. This deemed redemption will be treated as a sale or exchange and a U.S. holder will recognize gain or loss equal to the difference between (i) the amount of cash received by such U.S. holder and (ii) the portion of the basis of the shares of FNBB common stock allocable to such fractional interest. Such gain or loss will constitute capital gain or loss and will be long-term capital gain or loss if the U.S. holder’s holding period for the FNBB common stock exchanged by such U.S. holder is greater than one year as of the effective time of the merger, exceptmerger. Long-term capital gains ofnon-corporate U.S. holders are generally subject to reduced rates of taxation. The deductibility of capital losses is subject to limitations. Capital gains recognized by individuals, trusts and estates also may be subject to a 3.8% federal Medicare contribution tax on “net investment income” as expressly contemplated or permitted byprovided in Section 1411 of the merger agreement, it willCode.

Notwithstanding the previous paragraph, if the receipt of the cash is deemed to be essentially equivalent to the distribution of a dividend to the U.S. holder, the cash would be treated as dividend income. While a dividend from TriCo would generally be treated as a “qualified dividend” and taxed at the same rates applicable to long-term capital gains, a U.S. holder would not and will not permitbe able to apply any portion of its subsidiariesbasis to withoutreduce the prior written consentamount of North Valley:such dividend and such basis would instead be reallocated to such U.S. holder’s other TriCo shares.

take any action that is intended or may reasonably be expected to result in any of TriCo’s representationsInformation Reporting and warranties set forthBackup Withholding.

Cash payments received in the merger agreement being or becoming untrue or anyby a U.S. holder may, under certain circumstances, be subject to information reporting and backup withholding at a current rate of 24% of the conditionscash payable to the mergerU.S. holder, unless the U.S. holder provides proof of an applicable exemption, furnishes its taxpayer identification number (in the case of individuals, their social security number) and otherwise complies with all applicable requirements of the backup withholding rules. Any amounts withheld from payments to a U.S. holder under the backup withholding rules are not being satisfiedadditional tax and will be allowed as a refund or incredit against the U.S. holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

Reporting Requirements.

A U.S. holder that receives shares of TriCo common stock as a violation of any provisionresult of the merger agreementwill be required to retain records pertaining to the merger. Each U.S. holder that is required to file a U.S. tax return and that is a “significant holder” that receives TriCo common stock in the merger will be required to file a statement with the significant holder’s U.S. federal income tax return setting forth such significant holder’s basis (determined immediately before the exchange) in the FNBB common stock surrendered and the fair market value (determined immediately before the exchange) of the FNBB common stock that is exchanged by such significant holder. A

“significant holder” is a U.S. holder that receives shares of TriCo common stock in the merger and that, immediately before the merger, owned at least 5% of the outstanding stock of FNBB (by vote or value) or securities of FNBB with a tax basis of $1 million or more.

THE FOREGOING IS NOT A SUBSTITUTE FOR AN INDIVIDUAL ANALYSIS OF THE TAX CONSEQUENCES OF THE MERGER TO FNBB SHAREHOLDERS. FNBB SHAREHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE MERGER IN THEIR PARTICULAR CIRCUMSTANCES, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL (INCLUDING THE ALTERNATIVE MINIMUM TAX), STATE, LOCAL OR FOREIGN AND OTHER TAX LAWS AND OF CHANGES IN THOSE LAWS.

Accounting Treatment of the bankMerger

The merger will be accounted for under the acquisition method of accounting under GAAP. Under this method, FNBB’s assets and liabilities as of the date of the merger will be recorded at their respective fair values and added to those of TriCo. Any excess between the purchase price for FNBB and the fair value of the identifiable net assets acquired (including identified core deposit and other intangibles) will be recorded as goodwill. In accordance with FASB Accounting Standards Codification (ASC) Topic 350, “Intangibles—Goodwill and Other,” the goodwill resulting from the merger will not be amortized to expense, but instead will be reviewed for impairment at least annually and to the extent goodwill is impaired, its carrying value will be written down to its implied fair value and a charge will be made to earnings. Core deposit and other intangibles with definite useful lives recorded by TriCo in connection with the merger will be amortized to expense. The financial statements of TriCo issued after the merger will reflect the results attributable to the acquired operations of FNBB beginning on the date of completion of the merger.

Expenses of the Merger

The merger agreement except,provides that each of FNBB and TriCo will bear and pay all costs and expenses incurred by it in every case, as may be required by applicable laws;

amend its articles of incorporation, bylaws or other similar governing documents unless required to do so in order to complyconnection with applicable laws or regulations or by regulatory directive;

take or omit to take any action that would have or be reasonably likely to have a material adverse effect on TriCo or that would have or be reasonably likely to have a material adverse effect on, or materially delay, the ability of TriCo and North Valley to obtain the regulatory approvals required for the merger or otherwise have or be reasonably likely to have a material adverse effect on TriCo’s and Tri Counties Bank’s ability to consummate the transactions contemplated by the merger agreement; or

agree or commit to do any of the prohibited actions set forth above.

TriCo also agreed that, prior to the effective time of the merger, it will promptly notify North Valley of any event not in the ordinary courseagreement, including fees and expenses of its or any subsidiary’s business,own financial consultants, accountants and of any event which, individually or in the aggregate with any other events, would reasonably be expected to cause any of the conditions to closing not to be satisfied prior to the first anniversary of the date of the merger agreement. In addition, it will not solicit or accept any offer from any third party in the nature of an acquisition proposal for a business combination with a third party, unless the offer is expressly conditioned upon the performance by TriCo (or its successor) of all of its obligations under the merger agreement in a manner such that the value of the consideration to be paid to the North Valley shareholders under the merger agreement is not thereby reduced.legal counsel.

In addition to the general covenants above, TriCo has agreed that prior to the effective time of the merger, subject to specified exceptions, it will not, and will not permit its subsidiaries to, without the prior written consent of North Valley:

declare or pay any distributions on or in respect of any of its capital stock other than ordinary quarterly cash dividends in conformity with past practice, or with respect to Tri Counties Bank, declare or pay dividends to TriCo other than in conformity with past practice and applicable law and for the purpose of enabling TriCo to pay interest on its junior subordinated debt securities and to pay its ordinary operating expenses, in each case in accordance with past practice and as they become due;

(1) split, combine or reclassify any shares of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except with respect to TriCo stock options, or (2) repurchase, redeem or otherwise acquire shares of its capital stock, other than (x) not more than 333,400 shares of TriCo common stock currently remaining available for repurchase under the TriCo stock repurchase plan adopted and announced on August 21, 2007), (y) shares of the capital stock of TriCo or any TriCo subsidiaries, or any securities convertible into or exercisable for any shares of the capital stock of TriCo or any TriCo subsidiaries and shares of TriCo common stock on behalfListing of the TriCo ESOP; and (z) shares delivered by holders of TriCo stock options in connection with the exercise of such options;
Common Stock

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issue, allocate, deliver or sell, or authorize or propose the issuance, delivery or sale of, any shares of its capital stock or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares, or enter into any agreement with respect to any of the foregoing, other than with respect to TriCo stock options; or

take any action that could, or fail to take any action, the failure of which could, reasonably be expected to prevent the merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.

Regulatory Matters. TriCo and North Valley have agreed to promptly prepare this joint proxy statement/prospectus and TriCo agreed to promptly file with the SEC a registration statement on Form S-4, of which this document is a part. TriCo and North Valley have each agreed to use their commercially reasonable best efforts to have the Form S-4 declared effective under the Securities Act as promptly as practicable after such filing. TriCo and North Valley have each agreed to furnish all information concerning themselves, their affiliates and the holders of their capital stock to the other and provide such other assistance and cooperation as may be reasonably requested in connection with the preparation, filing and distribution of the Form S-4 and this joint proxy statement/prospectus.

TriCo and North Valley have each agreed to cooperate with each other and use their reasonable best efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, and to obtain as promptly as practicable all permits, consents, waivers, approvals and authorizations of all third parties and any governmental entity that are necessary or advisable to consummate the transactions contemplated by the merger agreement. Each of TriCo and North Valley agreed to use their reasonable best efforts to resolve any objections or any burdensome condition that may be asserted or imposed by any governmental entity with respect to the merger agreement or the transactions contemplated by the merger agreement.

Shareholder Approval. The North Valley board of directors has unanimously resolved to recommend to the North Valley shareholders that they adopt and approve the merger agreement (subject to certain exceptions if, following the receipt of a Superior Proposal (as defined below), such recommendation would result in a violation of the board’s fiduciary duties under California law), and to submit to the North Valley shareholders the merger agreement, to include the recommendation that North Valley shareholders adopt and approve the merger agreement attached to this joint proxy statement/prospectus, and use reasonable best efforts to obtain from its shareholders a vote adopting the merger agreement. North Valley has an unqualified obligation to submit the merger agreement to its shareholders at its shareholder meeting.

TriCo’s board of directors has unanimously resolved to recommend to the TriCo shareholders that they adopt and approve the merger agreement and approve the issuance of shares of TriCo stock, and to submit to the TriCo shareholders the merger agreement, to include the recommendation that TriCo shareholders adopt and approve the merger agreement and the issuance of shares of TriCo stock in this joint proxy statement/prospectus, and use reasonable best efforts to obtain from its shareholders a vote adopting and approving the merger agreement and the issuance of shares of TriCo stock.

TriCo and North Valley have each agreed to use their reasonable best efforts to hold their respective shareholder meetings on the same date and as soon as practicable after the date of the merger agreement.

Bank Merger. TriCo and North Valley have agreed that, immediately upon closing the merger, North Valley Bank will merge with and into Tri Counties Bank, with Tri Counties Bank as the surviving entity.

NASDAQ Listing. TriCo has agreed to use its reasonable best efforts to cause the shares of TriCo common stock to be issued into FNBB shareholders as the merger consideration to be approved for listing on the NASDAQ Global Select Market, subject to official notice of issuance, prior to or at the effective time of the merger.Market.

Employee Matters. To the extent permissible under the applicable provisions of the Internal Revenue Code and ERISA, for purposes of crediting periods of service for eligibility to participate and vesting, but not for benefit accrual purposes, under TriCo plans that are employee pension benefit plans, individuals who are employees (including, but not limited to, those who are on unpaid leave, paid leave and active employees) of North Valley or any North Valley subsidiary at the effective time will be credited with periods of service with North Valley or the

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applicable North Valley subsidiary before the effective time as if such service had been with TriCo or a TriCo subsidiary, as applicable. This does not apply (1) for benefit accrual purposes, (2) as would result in the duplication of benefits for the same period of service, (3) for purposes of any “frozen” TriCo plan for which new TriCo employees are generally not eligible or (4) for any newly established TriCo plan for which similarly situated employeesResale of TriCo do notCommon Stock

The shares of common stock that FNBB shareholders receive service credit for the period in question. The parties have acknowledged that North Valley intends to maintain the North Valley 401(k) Plan through the effective time and to make matching contributions to the North Valley 401(k) Plan on behalf of eligible employees. With regard to participation by the employees who are eligible to participate in the North Valley 401(k) Plan prior to the effective time: (1) such employees will be eligible to participate in TriCo’s 401(k) Savings Plan immediately upon their becoming TriCo or TriCo subsidiary employees as a result of the merger; (2) such employeesmerger will be eligible for the employer contributions in the TriCo 401(k) Plan, if any (whether match, profit-sharing or both), with regard to eligible compensation earned by them from TriCo or the TriCo subsidiary following the effective time until the last day of the TriCo 401(k) Plan year that includes the effective time.

To the extent permissibleregistered under the applicable provisions of the Internal Revenue Code, ERISA and the applicable TriCo plans, TriCo willSecurities Act. FNBB shareholders may freely trade or will cause its applicable subsidiary to (1) give credit to employees of North Valley and its subsidiaries, with respect to the satisfaction of the waiting periods for participation and coverage which are applicable under the TriCo plans that are welfare benefit plans, equal to the credit that any such employee had received as of the effective time towards the satisfaction of any such limitations and waiting periods under the comparable North Valley plans that are welfare benefit plans; (2) make reasonable commercial efforts to cause each TriCo plan that is a group health plan (including medical, dental and prescription drug) and that is made available to employees of North Valley and its subsidiaries in the plan year, which includes the effective time, to provide each employee of North Valley and its subsidiaries with credit for any co-payment and deductibles in such plan year paid prior to the effective time in satisfying any deductible or out-of-pocket requirements. Notwithstanding the generality of the foregoing, (1) each employee of North Valley and its subsidiaries who has satisfied the applicable waiting periods for eligibility or participation in any TriCo plan that is made available, in TriCo’s sole discretion, to such employee as of the effective time after credit for pre-effective time service has been given, will begin participating in the TriCo plan immediately after the effective time without the need to wait for any open enrollment periods or plan entry dates; and (2) each employee of North Valley and its subsidiaries who has satisfied the applicable waiting periods for eligibility or participation in any North Valley plan that is a medical plan, dental plan, disability plan or life insurance plan (excepting plans maintained only for a select group, such as executives), will begin participating in the comparable TriCo plan immediately after the effective time; and (3) each TriCo plan that provides severance or vacation/paid time off benefits and that is made available to any employee of North Valley or its subsidiaries who continues employment with the surviving corporation or any of its subsidiaries following the effective time will recognize service with North Valley and its subsidiaries that was recognized by North Valley under the equivalent North Valley plan. For illustration, if an employee of TriCo with 10 years of service is eligible to accrue four weeks of vacation in a calendar year under a TriCo plan, then a North Valley employee with 10 years of North Valley service who becomes a TriCo employee as of the effective time due to the merger will accrue four weeks of vacation with TriCo in the calendar year under such TriCo Plan.

TriCo or one of its subsidiaries agreed to provide severance benefits to those employees of North Valley and its subsidiaries who continue in employment with the surviving corporation or any of its subsidiaries through the effective time and whose employment is involuntarily terminated by the surviving corporation and its subsidiaries without cause at or within 180 days after the effective time (other than employees who are entitled to receive severance payments under any employment, severance or similar plans or agreements) in accordance with TriCo’s current written severance policy as previously delivered to North Valley.

There will be no North Valley ESOP loans nor any unallocated accounts in respect of any North Valley ESOP loans as of the effective time. North Valley will continue to make employer contributions to the North Valley ESOP for each plan-year quarter ending on or before the effective time, provided such contributions are comparable in amount, on a prorated basis, to past employer contributions to the North Valley ESOP.

North Valley agreed to take, or cause to be taken, all actions necessary to cause the fiduciaries of the North Valley ESOP to take all of the following actions:

implement a written confidential pass-through voting procedure pursuant to which the participants under the North Valley ESOP and their beneficiaries will direct the trustee under the North Valley ESOP to vote the shares of North Valley common stock allocated to their North Valley ESOP accounts with respect to the merger;

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provide the North Valley ESOP participants and their beneficiaries with a written notice regarding the existence of and provisions for such confidential pass-through voting procedures, as well as the same written materials to be provided to the shareholders of North Valley in connection with the merger;

take any and all additional actions necessary to satisfy the requirements of ERISA applicable to the North Valley ESOP fiduciaries in connection with the merger.

If requested by TriCo, North Valley agreed to take all necessary action to terminate, effective as of no later than immediately prior to the closing date, the North Valley ESOP. The termination of the North Valley ESOP will be adopted conditioned upon the closing of the merger and upon receiving a favorable determination letter from the IRS with regard to certain matters. If requested by TriCo, North Valley agreed to take all necessary action, effective no later than the last day of the regularly scheduled payroll period immediately preceding the closing date, to freeze all contributions to the North Valley ESOP. As soon as administratively feasible after the effective time, at the election of TriCo, the North Valley ESOP will be merged with and into the TriCo ESOP.

Effective no later than the last day of the regularly scheduled payroll period immediately preceding the closing date, North Valley will freeze contributions to the North Valley 401(k) Plan and effective no later than the day before the closing date, North Valley will terminate the North Valley 401(k) Plan.

With certain exceptions, North Valley will terminate, in accordance with its terms and applicable laws, effective prior to the closing date, each North Valley plan providing for group health, dental, vision, prescription drugs or other welfare benefit coverage to any former employees, officers, directors or consultants and/or their spouses and other dependents. At the request of TriCo, North Valley will terminate or discontinue accruals under any and all other North Valley plans, effective either immediately before the closing date or thereafter as specified by TriCo.

The merger agreement specifies that none of its provisions should be interpreted or construed to confer upon any employee of North Valley or any of its subsidiaries who continues to be employed by the surviving corporation or any of its subsidiaries after the effective time with any right with respect to continuance of employment by or other service with the surviving corporation or any of its subsidiaries. Nor does the merger agreement interfere in any way with the right of the surviving corporation and its subsidiaries to terminate the employment or other association of any person at any time. The terms of the merger agreement do not constitute an amendment of, or interfere in any way with the right of the surviving corporation and its subsidiaries to amend, terminate or otherwise discontinue, any or all TriCo plans and any other plans, practices or policies of the surviving corporation or any of its subsidiaries in effect from time to time.

No provision in the merger agreement creates any right to employment or continued employment or to a particular term or condition of employment with the surviving corporation or any of its subsidiaries nor does the merger agreement create any third party beneficiary right in any person.

Indemnification and Directors’ and Officers’ Insurance. From and after the effective time of the merger, TriCo has agreed to indemnify and hold harmless each any person who, prior to the effective time, is a director or officer or employee of North Valley or any North Valley subsidiary against any losses, claims, damages, liabilities, costs, expenses, judgments, fines and settlement amounts arising out of or pertaining to (i) the fact that he is or was a director, officer or employee of North Valley or any North Valley subsidiary or any of their respective predecessors or (ii) the merger agreement or any of the transactions contemplated by the merger agreement, whether in any case asserted or arising before or after the effective time. TriCo and North Valley agreed to use their commercially reasonable efforts to cause the persons serving as officers and directors of North Valley and the North Valley subsidiaries immediately prior to the effective time of the merger to be covered by a directors’ and officers’ liability

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insurance tail policy obtained from North Valley’s current insurance carrier of substantially the same coverage and amounts containing terms and conditions which are generally not less advantageous than North Valley’s current policy with respect to acts or omissions occurring prior to the effective time that were committed by such officers and directors in their capacity as such for a period of six years. The cost of such policy is limited to 275% of the amount currently paid for such insurance annually. If North Valley cannot obtain the insurance, TriCo agreed to use its commercially reasonable efforts to obtain as much comparable insurance as is available.

No Solicitation and Change in Recommendation. North Valley agreed that it and its subsidiaries will immediately cease all existing discussions or negotiations with any person (other than TriCo and its affiliates and representatives) regarding any proposal that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal (as defined below) and it agreed not to (1) solicit, initiate or knowingly encourage any Acquisition Proposal, (2) enter into, or otherwise participate in any discussions or negotiations regarding any Acquisition Proposal, (3) enter into any agreement regarding any Acquisition Proposal or Alternative Transaction (as defined below), (4) furnish to any person any information concerning North Valley, or any access to the properties, books and records of North Valley and its subsidiaries, in connection with any Acquisition Proposal, or (v) propose, agree or publicly announce an intention to take any of the foregoing actions or any other action which would reasonably be expected to lead to an Acquisition Proposal.

However, if at any time prior to obtaining the approval of the shareholders of North Valley to adopt the merger agreement, North Valley or its subsidiaries or their respective representatives receives a bona fide, unsolicited written Acquisition Proposal, North Valley, its board of directors and their respective representatives may engage in negotiations and discussions with and furnish any information and other access to any person making such Acquisition Proposal and its representatives if, and only if, North Valley’s board of directors determines in good faith, after consultation with the North Valley’s outside legal and financial advisors, that (1) such Acquisition Proposal is or is reasonably capable of becoming a Superior Proposal and (2) the failure of the North Valley board of directors to enter into such discussions or negotiations or furnish such information or other access would reasonably be expected to be a violation of its fiduciary duties to the shareholders of North Valley under applicable law.

Prior to furnishing any material nonpublic information to a person who has made an Acquisition Proposal, North Valley must receive from such person an executed confidentiality agreement with terms at least as restrictive in all material respects on such person as the confidentiality agreement between TriCo and North Valley is on TriCo. In addition, North Valley must promptly, and in any event within one business day, (1) notify TriCo in writing of the receipt of such Acquisition Proposal or any request for nonpublic information or access to properties, books or records relating to North Valley or its subsidiaries by any person that has made, or to North Valley’s knowledge may be considering making, an Acquisition Proposal and (2) communicate the material terms of such Acquisition Proposal to TriCo.

The merger agreement precludes North Valley and its board of directors from (1) withdrawing, modifying or qualifying, or publicly proposing to withdraw, modify or qualify, in a manner adverse to TriCo, the recommendation that North Valley shareholders vote to adopt the merger agreement, (2) approving or recommending, or publicly proposing to approve or recommend, to the shareholders of the North Valley any Acquisition Proposal or (3) authorizing, approving, recommending or declaring advisable, or proposing to adopt, approve, recommend or declare advisable, or allow North Valley or any of its subsidiaries to enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, option agreement or similar agreement with respect to, or that is intended to or would reasonably be expected to lead to, any Acquisition Proposal (other than a confidentiality agreement in accordance with the limitations described above).

Prior to its shareholders adopting the merger agreement, North Valley may change its recommendation that its shareholders vote in favor of adopting the merger agreement if (1) North Valley has complied with the obligations described in the merger agreement, (2) the North Valley board of directors receives an unsolicited bona fide, written Acquisition Proposal from any person that is not withdrawn and (3) the North Valley board of directors determines in good faith, after consultation with its independent financial advisors and outside legal counsel, that such Acquisition Proposal constitutes a Superior Proposal (as defined below).

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In addition, North Valley may only change its recommendation to shareholders if: (1) the North Valley board of directors determines in good faith, after consultation with its outside legal counsel, that the failure of the North Valley board of directors to take such action would reasonably be expected to be a violation of its fiduciary duties to the shareholders of North Valley under applicable law; (2) North Valley provides TriCo prior written notice at least five business days prior to taking such action, which notice will state that the North Valley board of directors has received a Superior Proposal and, absent any revision to the terms and conditions of the merger agreement, the North Valley board of directors has resolved to change its recommendation to shareholders to vote to adopt the merger agreement, which notice must specify the basis for the change of recommendation or termination, including the material terms of the Superior Proposal; (3) during such five business day period, North Valley negotiates in good faith with TriCo to enable TriCo to make an offer that is at least as favorable to the shareholders of North Valley so that such Acquisition Proposal would cease to constitute a Superior Proposal; and (4) at the end of such five business day period, the North Valley board of directors, after taking into account any modifications to the terms of the merger agreement and the merger agreed to by TriCo after receipt of such notice, continues to believe that such Acquisition Proposal constitutes a Superior Proposal. The merger agreement provides that any amendment or modification to the financial or other material terms of such Acquisition Proposal will constitute a new Acquisition Proposal giving rise to a new five business day response period for TriCo, consequently extending the periods referenced above.

Nothing in the merger agreement will prohibit North Valley from issuing a “stop, look and listen” communication pursuant to Rule 14d-9(f) under the Exchange Act or taking and disclosing to its shareholders any position contemplated by Rule 14e-2(a) and Rule 14d-9 under the Exchange Act, provided that any disclosure under Rule 14e-2(a)(1) will be deemed to be a change of recommendation unless the North Valley board of directors expressly and concurrently reaffirms its recommendation that North Valley shareholders vote for North Valley to adopt and approve the merger agreement.

“Acquisition Proposal” means any proposal or offer (whether in writing or otherwise) from any person (other than TriCo and any affiliates thereof) relating to, or that is reasonably expected to lead to, (1) any direct or indirect purchase or acquisition, in a single transaction or series of related transactions, of any assets or businesses of North Valley and its subsidiaries (including securities of subsidiaries) that constitute 5% or more of North Valley’s consolidated assets, (2) any direct or indirect purchase or acquisition, in a single transaction or series of related transactions, of beneficial ownership (as defined under Section 13(d) of the Exchange Act) of 5% or more of the total outstanding voting securities of North Valley pursuant to a merger, consolidation or other business combination, sale of shares of capital stock, tender offer, exchange offer or similar transaction, or (3) a merger, share exchange, consolidation or other business combination involving North Valley or North Valley Bank, other than the merger or the bank merger (any such transaction described in clauses (1) and (2) an “Alternative Transaction”).

“Superior Proposal” means any bona fide written Acquisition Proposal on terms which the North Valley board of directors determines in good faith, after consultation with North Valley’s outside legal counsel and independent financial advisors, and taking into account all the legal, financial, regulatory and other aspects of such Acquisition Proposal, including as to certainty and timing of consummation, would, if consummated, result in a transaction that is more favorable to the holders of North Valley common stock from a financial point of view than the terms of the merger agreement (in each case, taking into account any revisions to the merger agreement made or proposed by TriCo); provided that for purposes of the definition of “Superior Proposal,” the references to “5% or more” in the definition of Acquisition Proposal shall be deemed to be references to “100%.”

Representations and Warranties

The merger agreement contains representations and warranties made by North Valley to TriCo relating to a number of matters, including the following:

corporate organization, qualification to do business, corporate power, and subsidiaries;

capitalization;

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requisite corporate authority to enter into the merger agreement and to complete the contemplated transactions;

absence of conflicts with governing documents, applicable laws or certain agreements as a result of entering into the merger agreement or completing the merger;

required regulatory consents necessary in connection with the merger;

existing or contemplated cease-and-desist order or other orders, written agreements, memoranda of understanding or similar communications, commitment letters, directives, extraordinary supervisory letters, or board resolutions with or required by regulators or other government entities;

proper filing of documents with regulatory agencies and the SEC and the accuracy of information contained in the documents filed with the SEC, and Sarbanes-Oxley certifications;

conformity with U.S. GAAP and SEC requirements of North Valley’s financial statements filed with the SEC;

absence of undisclosed liabilities;

absence of certain changes or events since December 31, 2010;

compliance with applicable law;

legal proceedings;

taxes and tax returns;

employee compensation and benefits matters;

labor matters;

certain specified contracts;

intellectual property;

insurance;

affiliate transactions;

fairness opinion from financial advisor;

broker’s fees payable in connection with the merger;

accuracy of North Valley information provided in this joint proxy statement/prospectus;

loans;

derivative transactions;

allowance for loan losses;

title to securities held by North Valley and its subsidiaries;

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properties and assets;

environmental matters; and

inapplicability of takeover laws.

The merger agreement also contains representations and warranties made by TriCo to North Valley relating to a number of matters, including the following:

corporate organization, qualification to do business, corporate power, and subsidiaries;

capitalization;

requisite corporate authority to enter into the merger agreement and to complete the contemplated transactions;

absence of conflicts with governing documents, applicable laws or certain agreements as a result of entering into the merger agreement or completing the merger;

required regulatory consents necessary in connection with the merger;

existing or contemplated cease-and-desist order or other orders, written agreements, memoranda of understanding or similar communications, commitment letters, directives, extraordinary supervisory letters, or board resolutions with or required by regulators or other government entities;

proper filing of documents with regulatory agencies and the SEC and the accuracy of information contained in the documents filed with the SEC, and Sarbanes-Oxley certifications;

conformity with GAAP and SEC requirements of TriCo’s financial statements filed with the SEC

absence of undisclosed liabilities;

absence of a material adverse effect since December 31, 2010;

compliance with applicable law;

legal proceedings,

taxes and tax returns;

employee benefits and compensation matters;

labor matters;

contracts;

intellectual property;

insurance;

affiliate transactions;

broker’s fees payable in connection with the merger;

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accuracy of TriCo information provided in this joint proxy statement/prospectus;

loans;

derivative transactions;

allowance for loan losses;

title to securities held by TriCo and its subsidiaries;

title to property;

environmental liability;

available funds to complete the merger; and

ownership of North Valley shares and agreements in respect of North Valley shares.

Certain oftransfer these representations and warranties by North Valley and TriCo are qualified as to “materiality” or “material adverse effect.”

The term “material adverse effect” with respect to TriCo or North Valley, as the case may be, means a condition, event, change or occurrence that has had or is reasonably likely to have a material adverse effect upon the financial condition, results of operations or business of such party and its Subsidiaries, taken as a whole, or materially impairs the ability of such party to perform its obligations under, or to consummate the transactions contemplated by, the merger agreement; except that in determining whether a material adverse effect has occurred there shall be excluded any effect on the referenced party the cause of which is (1) any change in banking or similar laws, rules or regulations of general applicability or interpretations thereof by courts or governmental authorities, (2) any change in GAAP or regulatory accounting requirements applicable to banks or their holding companies generally, (3) any action or omission of TriCo, North Valley or any Subsidiary of either of them taken with the prior written consent of TriCo or North Valley, as applicable, or as otherwise expressly contemplated by the merger agreement, (4 any changes in general economic, market or political conditions affecting banks or their holding companies generally, (5) the impact of the announcement of the merger agreement and the transactions contemplated hereby, and (6) changes in national or international political or social conditions including the engagement by the United States in hostilities whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon or within the United States, or any of its territories, possessions or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, unless it uniquely affects either or both of the parties, except that the effect of such changes described in clauses (4) and (6) above shall not be excluded to the extent of any materially disproportionate impact (if any) they have on such party.

The representations and warranties in the merger agreement do not survive the effective time of the merger and, as described below under the section entitled “The Merger Agreement—Termination; Termination Fee” beginning on page 94, if the merger agreement is validly terminated, there will be no liability or damages arising under the representations and warranties of TriCo or North Valley, or otherwise under the merger agreement, unless TriCo or North Valley willfully breached the merger agreement or committed fraud.

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Conditions to the Merger

Conditions to Each Party’s Obligations. The respective obligations of each of TriCo and North Valley to complete the merger are subject to the satisfaction of the following conditions:

receipt of the requisite approvals of the merger agreement by the North Valley shareholders and the TriCo shareholders and the issuance of TriCo common stock to North Valley shareholders in connection with the merger;

the absence of any statute, rule, regulation, judgment, decree, injunction or other order that would prohibit or make illegal the completion of the merger;

the receipt of all regulatory approvals required from the Federal Reserve Board, the FDIC and the Department of Business Oversight, in each case required to consummate the transactions contemplated by the merger agreement, including the merger and the bank merger, and all statutory waiting periods in respect thereof having expired; and, in the case of the obligation of TriCo, without any such item containing or having resulted in, or reasonably being expected to result in, the imposition of a condition that would reasonably be likely to have a material and adverse effect on TriCo provided, that the sale, consolidation, divestiture or other disposition of one or more branch offices of TriCo or North Valley in a geographic banking market shall not constitute, or be taken into account in determining the existence of a burdensome condition;

the effectiveness of the registration statement on Form S-4, of which this joint proxy statement/prospectus is a part, and the absence of a stop order suspending effectiveness or proceeding initiated or threatened by the SEC for that purpose; and

approval for the listing on the NASDAQ Global Select Market of the TriCo common stock to be issued in the merger, subject to official notice of issuance.

Conditions to Obligations of TriCo. The obligation of TriCo to complete the merger is also subject to the satisfaction or waiver by TriCo, of the following conditions:

the accuracy of the representations and warranties of North Valley as of the closing date of the merger, other than, in most cases, those failures to be true and correct that would not reasonably be expected to result in a material adverse effect on North Valley;

North Valley’s adjusted shareholders’ equity as of the last business day of the month preceding closing being at least $95.074 million;

performance in all material respects by North Valley of the obligations required to be performed by it at or prior to the closing date;

satisfaction in form and substance of all corporate and other proceedings in connection with the transactions and all documents incident thereto contemplated at the closing;

receipt of Shareholder Agreements from each of the North Valley directors;

the timely filing of North Valley’s Annual Report on Form 10-K for the fiscal year ended on December 31, 2013 with the SEC;

receipt of Non-solicitation and Confidentiality Agreements from each of the North Valley directors;

receipt of resignations from each director of North Valley and each of its subsidiaries;

receipt of a properly executed statement from North Valley Bank that meets the requirements of the Foreign Investment in Real Property Tax Act;

receipt of an opinion from KBW that the merger consideration is fair to the holders of TriCo Common Stock; and

receipt by TriCo of an opinion of Manatt, Phelps & Phillips, LLP as to certain tax matters.

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Conditions to Obligations of North Valley. The obligation of North Valley to complete the merger is also subject to the satisfaction or waiver by North Valley of the following conditions:

the accuracy of the representations and warranties of TriCo as of the closing date of the merger, other than, in most cases, those failures to be true and correct that would not reasonably be expected to result in a material adverse effect on TriCo;

performance in all material respects by TriCo of the obligations required to be performed by it at or prior to the closing date;

satisfaction in form and substance of all corporate and other proceedings in connection with the transactions and all documents incident thereto contemplated at the closing;

receipt of an opinion from Sandler that the merger consideration is fair to the holders of North Valley Common Stock;

receipt of Shareholder Agreements from each of the TriCo directors; and

receipt by North Valley of an opinion of Crowe Horwath LLP as to certain tax matters.

Termination; Termination Fee

The merger agreement may be terminated (based upon action of the appropriate board of directors) at any time prior to the effective time:

by mutual written consent of TriCo and North Valley;

by either TriCo or North Valley if a required governmental approval is denied by final, nonappealable action or if any governmental entity of competent jurisdiction has issued a final nonappealable order enjoining or otherwise prohibiting the closing of the merger, unless such denial or order shall be due to the failure of the party seeking to terminate the merger agreement to perform or observe the covenants and agreements of such party

by TriCo if any regulatory approval includes or will not be issued without, the imposition of a burdensome condition on TriCo;

by either TriCo or North Valley if the merger has not closed on or before January 21, 2015; except that a party that is then in material breach of any of its covenants or obligations under the merger agreement is not entitled to terminate the merger agreement under these circumstances;

by either TriCo or North Valley if (1) the TriCo shareholders have not adopted the merger agreement and approved the issuance of TriCo common stock to the shareholders of North Valley in connection with the merger at the TriCo annual meeting (including any postponements or adjournments thereof), or (2) the North Valley shareholders have not adopted the merger agreement at the North Valley special meeting (including any postponements or adjournments thereof);

by either TriCo or North Valley, if the other party has breached or failed to perform any of its representations, warranties, covenants or agreements set forth in the merger agreement, which breach or failure to perform results in the failure of a condition to closing, and is incapable of being cured (or is not cured) before the earlier of January 21, 2015 and 30 days following receipt of written notice of the breach or failure to perform from the other party (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the merger agreement);

by TriCo, if, the North Valley board of directors (1) submits the merger agreement to its shareholders without a recommendation for approval, or otherwise withdraws or materially and adversely modifies its recommendation for approval (or discloses an intention to do so), or recommends to its shareholders an Acquisition Proposal other than the merger agreement, or (2) materially breaches its obligation to call a shareholder meeting, to prepare and mail to its shareholders this joint proxy statement/prospectus, to include in this joint proxy statement/prospectus its recommendation that its shareholders vote in favor of the adoption of the merger agreement, or to refrain from soliciting alternative acquisition proposals.

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North Valley must pay TriCo a termination fee of $7.6 million in the following circumstances:

TriCo terminates the merger agreement because the North Valley board of directors (1) has submitted the merger agreement to its shareholders without a recommendation for approval, or otherwise withdrew or materially and adversely modified (or disclosed such intention) its recommendation for approval, or recommended to its shareholders an Acquisition Proposal other than the merger agreement, or (2) materially breached its obligation to call a shareholder meeting, to prepare and mail its shareholders this joint proxy statement/prospectus, to include in this joint proxy statement/prospectus its recommendation that its shareholders vote in favor of the adoption of the merger agreement, or to refrain from soliciting alternative proposals; or

(1) any person has made an Acquisition Proposal that has been publicly disclosed and not withdrawn; (2) thereafter the merger agreement is terminated (a) by either party because the merger was not consummated on or before January 21, 2015 (but only if at such date North Valley has failed to hold its shareholder meeting and TriCo shareholders have approved the TriCo Merger proposal), (b) by either party because North Valley shareholders did not vote to adopt the merger agreement, or (c) by TriCo because North Valley has breached the merger agreement in such a way as would prevent certain closing conditions from being obtained and would give TriCo the right to terminate the merger agreement; and (3) within 15 months after the termination of the merger agreement, North Valley enters into any definitive agreement with respect to an Alternative Transaction.

TriCo must pay North Valley a termination fee of $3.8 million within two business days in certain circumstances, including following the termination of the merger agreement by either TriCo or North Valley in the event that TriCo shareholders fail to approve the adoption of the merger agreement and the issuance of TriCo common stock to the shareholders of North Valley in connection with the merger.

Effect of Termination

If the merger agreement is validly terminated, the agreement will become void and have no effect without any liability on the part of TriCo or North Valley unless either party willfully breaches the merger agreement or commits fraud. However, the provisions of the merger agreement relating to confidentiality obligations of the parties, the termination fee, publicity and certain other technical provisions will continue in effect notwithstanding termination of the merger agreement.

Amendments, Extensions and Waivers

The merger agreement may be amended by the parties, by action taken or authorized by their respective boards of directors, at any time before or after approval of matters presented in connection with the merger by the shareholders of TriCo and North Valley, except that after any approval of the transactions contemplated by the merger agreement by North Valley’s or TriCo’s shareholders, there may not be, without further approval of such shareholders, any amendment of the merger agreement that reduces the amount or changes the form of the consideration to be delivered to North Valley shareholders other than as contemplated by the merger agreement.

At any time prior to the effective time of the merger, the parties, by action taken or authorized by their respective boards of directors, may, to the extent legally allowed, (1) extend the time for the performance of any of the obligations or other acts of the other party, (2) waive any inaccuracies in the representations and warranties contained in the merger agreement, or (3) waive compliance with any of the agreements or conditions contained in the merger agreement. Any agreement on the part of a party to any extension or waiver must be in writing.

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Stock Market Listing

TriCo has agreed to apply to have the shares of TriCo common stock to be issuedif such FNBB shareholder is not considered an “affiliate” of TriCo, as that term is defined in the merger approvedfederal securities laws. Generally, “affiliates” include directors, certain executive officers and holders of 10% or more of the outstanding TriCo common stock. However, determination of affiliate status for listing on the NASDAQ Global Select Market, whichfederal securities law purposes is the principal trading marketa facts and circumstances test and FNBB shareholders should seek advice from their own legal counsel to determine whether or not they are an affiliate of TriCo for existingfederal securities law purposes.

TriCo’s affiliates may not sell their shares of TriCo common stock. It is a condition to both parties’ obligation to completestock acquired in the merger that such approval is obtained, subjectunless those shares are registered under an effective registration statement under the Securities Act, or by complying with an applicable exemption from the registration requirements of the Securities Act. TriCo may also place restrictive legends on certificates representing shares of TriCo common stock issued to official noticeall persons who will be considered “affiliates” of issuance. As promptly as reasonably practicable following completionTriCo.

Shareholder Agreements

In connection with the execution of the merger North Valley common stock will be delisted fromagreement, directors and substantially all executive officers of FNBB entered into a shareholder agreement with TriCo pursuant to which each such director and executive officer agreed that at any meeting of the NASDAQ Global Select Market and deregistered under the Exchange Act.

Fees and Expenses

Except with respect to (1) costs and expensesshareholders of printing and mailing this joint proxy statement/prospectus and all filing and other fees paid to the SECFNBB, or in connection with the merger, which will be borne equally by TriCo and North Valley and (2) the termination fee, as described elsewhere in this joint proxy statement/prospectus, all fees and expenses incurred in connection with the merger, the merger agreement, and the transactions contemplated by the merger agreement will be paid by the party incurring such fees or expenses, whether or not the merger is consummated.

Shareholder Agreements

TriCo and North Valley Directors. In connection with entering into the merger agreement and as an inducement to the willingness of each party to enter into the merger agreement, eachany written consent of the TriCo directors executedshareholders of FNBB, the director and deliveredexecutive officer shall:

appear at such FNBB meeting or otherwise cause all shares of FNBB common stock owned by him to North Valley and eachbe counted as present thereat for purposes of the North Valley directors executed and deliveredcalculating a quorum;

vote (or cause to TriCobe voted), in person or by proxy, or deliver a shareholder agreement, which we referwritten consent (or cause a consent to collectively as the shareholder agreements. Each director entered into the shareholder agreement in hisbe delivered) covering, all shares of FNBB common stock beneficially owned by him or her capacity as the record or beneficial owner of shares of TriCo or North Valley and not in his or her capacity as a director of TriCo or North Valley or as a trustee of any benefit plan. The following summary ofto which he or she has, directly or indirectly, the shareholder agreements is subjectright to and qualified in its entirety by reference to,direct the full text of the shareholder agreements attached to this joint proxy statement/prospectus as Appendix D and Appendix E, respectively.

Pursuant to the shareholder agreements, each director agreed to vote his or her shares of TriCo or North Valley common stock, as applicable:

voting:

 

in favor of adoption and approval of the merger, the merger agreement and the transactions contemplated by the merger agreement;

 

against any action or agreement that wouldcould reasonably be expected to result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement underof FNBB contained in the merger agreement or of the director or officer contained in the shareholder agreement; and

 

except with the prior written consent of the other party or as otherwise contemplatedagainst any acquisition proposal (as defined in the merger agreement against the following actions (other than the merger and the transactions contemplated by the merger agreement): (1) any extraordinary corporate transactions, such as a merger, consolidation or other business combination; (2) any sale, lease or transfer of a material amount of the assets; (3) any change in the majority of the board; (4) any material change in the present capitalization; (5) any amendment the articles of incorporation; (6) any other material change in the corporate structure or business; or (7) any other action, whichagreement or transaction that is intended, or could reasonably be expected, to materially impede, interfere or be inconsistent with, delay, postpone, discourage or materially and adversely affect consummation of the merger.merger or the performance of his, her, or its obligations under the shareholder agreement.

EachPursuant to the shareholder agreement, each FNBB executive officer and director in his or her capacity aswho entered into a shareholder agreement also agreed, while the shareholder agreement is in effect, not to, directly or indirectly, sell, transfer, pledge, encumber (except for pledges or encumbrances existing as of the date of the shareholder agreement), distribute by gift, or otherwise dispose of any of the shares whether by actual disposition, physical settlement, or effective economic disposition through hedging transactions; nor to enter into any agreement or understanding with any person or entitythat violates shareholder’s representations, warranties, covenants, and obligations under the shareholder agreement; nor to vote or give instructionstake any other action that reasonably could be expected to adversely effect, in any manner inconsistentmaterial respect, shareholder’s power, authority, and ability to comply with and perform his, her, or its covenants and obligations under the above clauses.

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Until the earlier of the termination of the mergershareholder agreement. Each FNBB executive officer and director who entered into a shareholder agreement or the effective time, each directoralso agreed not to directlydeposit any shares in a voting trust, grant any proxy, or indirectly:

sell, transfer, exchange, pledge, assign, hypothecate, encumber, tender or otherwise dispose of, or enforce or permit execution of the provisions of any redemption, share purchase or sale, recapitalization or other agreement with its respective company or any other person; or

enter into any contract, option or other agreement, arrangement or understanding with respect to the transfer of, directly or indirectly, any of the shares or any securities convertible into or exercisable for shares, any other capital stock of its respective company or any interest in any of the foregoing with any person;

enter into swap or any othervoting agreement or any transaction that transfers, in wholesimilar agreement or in part, directly or indirectly, the economic consequence of ownership of the shares; solicit, initiate, or encourage, any inquiries or the making of any proposal or offerarrangement with respect to any Acquisition Proposal;shares.

In addition, subject to enumerated exceptions, each FNBB executive officer and

take any action that would make any of the shareholder’s representations or warranties contained herein untrue or incorrect in any material respect or have the effect of preventing or disabling the shareholder from performing the shareholder’s obligations under the merger agreement.

Each director in his or her capacity aswho entered into a shareholder has furtheragreement agreed to not directly or indirectly solicit any inquiries or proposals from any person relating to any proposal or transactionthat, for the dispositiona period of the business or assets of TriCo or North Valley, as applicable, or any of their subsidiaries, or the acquisition of voting securities of TriCo or North Valley, as applicable, or any of their subsidiaries, or any business combination, other than the business combination between TriCo and North Valley.

The obligations of the shareholders will terminate upon the earlier oftwo years following the consummation of the merger, they will not:

solicit (other than general solicitations through newspapers or if the merger isother media of general circulation not consummated, upon the terminationtargeted at such employees) any employees of FNBB or its subsidiaries prior to consummation of the merger, agreement.

Non-Solicitation and Confidentiality Agreements

In order for TriCo and Tri Counties Bankprovided, however, that the foregoing shall not apply to have the full benefit of ownership of North Valley and the business it conducts, including its goodwill, following the effective time of the merger, each North Valley director (including director Michael J.Cushman, president and chief executive officer) entered into a Non-Solicitation and Confidentiality Agreement with TriCo which provided that, for a period of twenty-four months after the closing date, he or she would not:

take any affirmative action, directly or indirectly, to hire, attempt to hire, contact or solicit with respect to hiring, any personFNBB employee (i) who was an employee of North Valley or any subsidiary or affiliate of North Valley prior to the effective time of the merger and who becomesdoes not become an employee of TriCo Tri Counties Bank or any of their respective affiliatesits subsidiaries on the closing date of the merger; or subsidiaries in connection with the merger, or induce or otherwise counsel, advise or knowingly encourage any such person to leave the employ of TriCo, Tri Counties Bank or any of their respective affiliates or subsidiaries, and

directly or indirectly induce or attempt to induce any current or prospective client, customer, supplier, agent or other persons under contract or otherwise doing business with North Valley, TriCo, Tri Counties Bank or any of their respective affiliates or subsidiaries prior to or at the effective time, or any client, customer, supplier, agent or other persons under contract or otherwise doing business with TriCo, Tri Counties Bank or any of their respective affiliates or subsidiaries after the effective time (provided in the latter case, that the key employee/director had substantial contact or became familiar with such persons during the key employee/director’s service to North Valley), to terminate, reduce or alter his, her or its relationship with, or to take any action that would be disadvantageous to, North Valley, TriCo, Tri Counties Bank or their respective affiliates or subsidiaries.

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The foregoing does not apply to any person whose employment with TriCo, Tri Counties Bank or any of their respective affiliates or subsidiaries was involuntarily terminated or(ii) whose employment terminated more than six months beforeprior to the time the key employee/directorthat such FNBB employee is first solicited such person for employment following the closing date. General advertisingdate of the merger;

compete with TriCo in any of the California counties where FNBB or general solicitation that is not specifically directed at employeesFirst National Bank conducts business as of North Valley,the closing date of the merger;

induce, persuade, encourage or influence any person or entity having a business relationship with TriCo, Tri Counties Bank, orFNBB, First National Bank, their respective subsidiaries or any of their affiliates to discontinue, reduce or restrict such relationship or solicit or target depositors, borrowers or customers of FNBB or its subsidiaries is not prohibited byon the agreement.date of the merger agreement and/or as of the date the merger is

The Non-Solicitation and Confidentiality Agreements also provide that, other than

consummated, except for general solicitations that are directed to the general public and not directed specifically to persons who were depositors, borrowers or customers of FNBB or its subsidiaries on the date of the merger agreement or as of the date the merger is consummated; or

disparage TriCo, its subsidiaries or any of their affiliates.

Except for the benefitnon-solicitation, noncompetition andnon-disparagement provisions referenced in the paragraph above, which will survive for a period of North Valley, TriCo, Tri Counties Bank or their respective affiliates or subsidiaries,two years following the North Valley directors shall (1) make no use of trade secrets, or any part of them, and (2) not disclose trade secrets, or any part of them, to any other person, and (3) upon the request of TriCo or Tri Counties Bank, deliver all documents, reports, drawings, designs, plans, proposals and other tangible evidence of trade secrets possessed at the timeconsummation of the executionmerger, the shareholder agreements shall remain in effect until the earlier to occur of the Non-Solicitation and Confidentiality Agreement or thereafter acquired by the director, to TriCo and Tri Counties Bank.

The North Valley directors also agreed to holddate, if any, and all information regarding the merger andof termination of the merger agreement in strict confidence, and not to divulge any information to any third person, until such time as the merger had been publicly announced by North Valley, TriCo and Tri Counties Bank, at which time heaccordance with its terms, or she could divulge only such information as has been publicly disclosed.

The term of the Non-Solicitation and Confidentiality Agreements ends on the second anniversary of the effective time of the merger.

Explanatory Note RegardingDissenters’ Rights

Neither TriCo shareholders nor FNBB shareholders will have the Merger Agreementright to dissent from the merger and assert dissenters’ rights.

Under the CGCL, shareholders are generally entitled to dissent from a merger or consolidation and obtain payment of the fair value of their shares when a merger or consolidation occurs. However, the CGCL provides that appraisal rights are not available for shares that are listed on a national securities exchange where the merger consideration is stock of a publicly traded corporation. FNBB’s common stock is traded on a national securities exchange and the Summarymerger consideration, comprised of TriCo’s common stock, is also traded on a national securities exchange. Therefore, neither TriCo’s nor FNBB’s shareholders will be entitled to any statutory appraisal rights.

MARKET FOR COMMON STOCK AND DIVIDENDS

TriCo Market Information and Dividends

Market Information.

TriCo’s common stock is traded on the Merger Agreement: Representations, WarrantiesNasdaq Global Select Market under the symbol “TCBK.” As of [●], 2018, there were [●] shares of TriCo common stock outstanding, which were held by approximately [●] holders of record. Such numbers of shareholders do not reflect the number of individuals or institutional investors holding stock in nominee name through banks, brokerage firms and Covenantsothers.

The following table sets forth during the periods indicated the high and low sales prices of TriCo common stock as reported on the Nasdaq Global Select Market and cash dividends per share for the periods indicated.

   TriCo 
   Market Price   Cash
Dividends
Per Share
 
   High   Low   

Year Ending December 31, 2018

      

First Quarter (through [●], 2018)

  $[●  $[●  $[●

Year Ending December 31, 2017

      

First Quarter

  $37.38   $32.84   $0.15 

Second Quarter

   36.77    33.05    0.17 

Third Quarter

   40.75    33.60    0.17 

Fourth Quarter

   43.42    37.86    0.17 

Year Ending December 31, 2016

      

First Quarter

  $27.44   $23.80   $0.15 

Second Quarter

   28.90    24.60    0.15 

Third Quarter

   28.40    25.40    0.15 

Fourth Quarter

   34.46    25.49    0.15 

FNBB Market Information and Dividends

Market Information.

FNBB’s common stock is traded on the Nasdaq Global Select Market under the symbol “FNBG.” Prior to being listed for trading on the Nasdaq Global Select Market on April 13, 2017, FNBB’s common stock was traded over-the-counter and quoted on the OTCQB marketplace, also under the symbol “FNBG.” As of [●], 2018, there were [●] shares of FNBB common stock outstanding, which were held by approximately [●] holders of record. Such number of shareholders does not reflect the number of individuals or institutional investors holding stock in nominee name through banks, brokerage firms and others.

The following table sets forth during the periods indicated the high and low sales prices of FNBB common stock as reported on the Nasdaq Global Select Market and cash dividends paid on FNBB common stock. All data is adjusted to reflect a stock dividend in the Merger Agreement Are Not Intendedfourth quarter of 2016 and a three-for-two stock split during the second quarter of 2017.

   FNBB 
   Market Price   Cash
Dividends
Per Share
 
   High   Low   

Year Ending December 31, 2018

      

First Quarter (through [●], 2018)

  $[●  $[●  $[●

Year Ending December 31, 2017

      

First Quarter

  $24.50   $
21.73
 
  $0.11 

Second Quarter

   30.00    27.37    0.12 

Third Quarter

   34.14    27.10    0.13 

Fourth Quarter

   38.62    32.54    0.13 

Year Ending December 31, 2016

      

First Quarter

  $19.52   $18.42   $0.10 

Second Quarter

   18.50    17.97    0.10 

Third Quarter

   19.37    17.78    0.10 

Fourth Quarter

   22.67    19.08    0.11 

The last reported trade of FNBB’s common stock prior to Function as Public Disclosures

The merger agreement and the summaryfiling of its terms in this joint proxy statement/prospectus have been included onlywas on [●], 2018, at $[●]. The last reported trade of FNBB’s common stock on the date prior to provide you with information about the terms and conditionsannouncement of the merger agreement. The termswas on December 8, 2017, at $35.34.

Dividends.

FNBB’s Board of Directors has responsibility for the oversight and informationapproval of the declaration of dividends. Dividends FNBB declares are subject to the restrictions set forth in the merger agreement are not intended to provide any other public disclosure of factual information about TriCo, North Valley or any of their respective subsidiaries, affiliates or businesses. The representations, warrantiesCGCL and covenants contained in the merger agreement are made by TriCo and North Valley only for purposespolicies of the merger agreementFederal Reserve. See “Effect of Existing or Probable Governmental Regulations on the Business of FNBB and as of specific dates and were qualified and subject to certain limitations and exceptions agreed to by First National Bank—Dividends” on page [●].

INFORMATION ABOUT TRICO

General

TriCo and North Valley in connection with negotiating the termsis a California-based bank holding company for Tri Counties Bank, a California-chartered commercial bank. TriCo’s principal asset is all of the merger agreement. In particular,capital stock of Tri Counties Bank. Tri Counties Bank provides banking services to businesses, professionals,non-profit organizations and consumers through 57 traditional stand-alone branches, nine in-store branches and two loan production offices in your reviewcommunities throughout Northern and Central California currently through 66 branch offices. Through Tri Counties Bank’s branches and its Internet website at www.TCBK.com, Tri Counties Bank offers a broad array of the representationsdeposit products and warranties contained in the merger agreementservices for both businesses and described in this summary, itconsumer customers, including checking, money market and savings accounts, cash management services, electronic banking services, and Internet bill payment. Tri Counties Bank also offers a wide array of loan products, such as commercial business loans, lines of credit, U.S. Small Business Administration loans, warehouse credit facilities, commercial real estate loans, residential home loans, construction loans and consumer loans. Information included on or accessible through TriCo’s website is important to bear in mind that the representations and warranties were made solely for the benefitnot part of the parties to the merger agreement and were negotiated for the purpose of allocating contractual risk among the parties to the merger agreement rather than to establish matters as facts. Shareholders of North Valley and TriCo are not third-party beneficiaries under the merger agreement. The representations and warranties may also be subject to a contractual standard of materiality or material adverse effect different from those generally applicable to shareholders and reports and documents filed with the SEC, and, in some cases, they may be qualified by disclosures made by one party to the other, which are not necessarily reflected in the merger agreement or other public disclosures made by TriCo or North Valley. The representations and warranties contained in the merger agreement do not survive the effective time. Moreover, information concerning the subject matter of the representations, warranties and covenants, which do not purport to be accurate as of the date of this joint proxy/prospectus, may have changed since the date of the merger agreement, and subsequent developments or new information may not be fully reflected in public disclosures of TriCo or North Valley.

For the foregoing reasons, the representations, warranties and covenants or any descriptions of those provisions should not be read alone or relied upon as characterizations of the actual state of facts or condition of TriCo or North Valley or any of their respective subsidiaries or affiliates. Instead, such provisions or descriptions should be read only in conjunction with the other information provided elsewhere in this document or incorporated by reference into this joint proxy statement/prospectus. Please see

As of December 31, 2017, TriCo had, on a consolidated basis, total assets of $4.8 billion, total shareholders’ equity of $505.8 million and total deposits of $4.0 billion.

TriCo’s principal executive offices are located at 63 Constitution Drive, Chico, California 95973 and its telephone number is (530)898-0300.

Management and Additional Information

Certain information relating to director and executive compensation, benefit plans, voting securities and the section entitledprincipal holders thereof, certain relationships and related transactions and other related matters as to TriCo is incorporated by reference or set forth in TriCo’s annual report on Form10-K for the year ended December 31, 2017, and its proxy statement for its 2017 annual meeting shareholders, both of which are incorporated herein by reference. Shareholders wishing to obtain a copy of such document may contact TriCo at its address or telephone number indicated under “Where You Can Find More Information” beginning on page v[●].

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LITIGATION RELATED TO THE MERGERINFORMATION ABOUT FNBB

On January 24, 2014,General

FNBB is a purported shareholderCalifornia based bank holding company for First National Bank of North Valley filedNorthern California, a lawsuitnational bank headquartered in connection withDaly City, California. First National Bank is a community bank that which provides banking products and services to small and medium sized businesses and consumers. Products and services are offered primarily through 12 retail branches located on the merger. Captioned Solak v. North Valley Bancorp, et al., Shasta County Superior Court, Case No. 179099,San Francisco Peninsula.

As of December 31, 2017, FNBB, on a consolidated basis, had total assets of $1.3 billion, gross loans of $840 million, total stockholders’ equity of $119.3 million and total deposits of $1.1 billion.

FNBB’s principal executive offices are located at 975 El Camino Real, South San Francisco, California 94080 and its telephone number is (650)588-6800.

Business

FNBB, is a bank holding company registered under the suitBHC Act. FNBB was filed inincorporated under the Superior Courtlaws of the State of California Shasta County, against North Valley,on February 28, 2001.

As a bank holding company, FNBB is authorized to engage in the activities permitted under BHC Act, and regulations thereunder. Its principal office is located at 975 El Camino Real, South San Francisco, California, 94080, and its directors, and TriCo. Ittelephone number is brought as a putative class action and alleges that North Valley’s directors breached certain alleged fiduciary duties to North Valley’s shareholders by approving the merger agreement pursuant to an allegedly unfair process and at an allegedly unfair price. It alleges that North Valley and TriCo aided and abetted those breaches. The suit seeks, among other things, to enjoin consummation(650)588-6800.

FNBB owns all of the merger. At this stage, it is not possible to predict the outcomeissued and outstanding shares of the proceedings and their impact on North Valley or TriCo.

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

This section describes the material United States federal income tax consequences of the merger to U.S. holders of North Valley common stock who exchange shares of North Valley common stock for shares of TriCo common stock.First National Bank, a national banking association. FNBB has no other subsidiary.

For purposes of this discussion, a U.S. holder is a beneficial owner of North Valley common stock who for United States federal income tax purposes is:

a citizen or resident of the United States;

a corporation, or an entity treated as a corporation, created orFirst National Bank was organized in or1963 as “First National Bank of Daly City.” In 1995, the shareholders approved a change in the name to “First National Bank of Northern California.” The administrative headquarters of First National Bank is located at 975 El Camino Real, South San Francisco, California. First National Bank presently operates twelve full service banking offices in the cities of Daly City, South San Francisco, Millbrae, Pacifica, Half Moon Bay, San Mateo, Redwood City, Pescadero, San Francisco and Sunnyvale. First National Bank’s primary business is servicing the business and commercial banking needs of individuals and small tomid-sized businesses within San Mateo, San Francisco and Santa Clara Counties.

First National Bank is chartered under the laws of the United States or any state or political subdivision thereof;

and is governed by the National Bank Act, and as a trust that (1)national bank is a member of the Federal Reserve System. The FDIC insures the deposits of First National Bank up to the applicable legal limits, currently $250,000 per separately insured depositor. First National Bank is subject to (A)regulation, supervision and regular examination by the OCC. The regulations of the FDIC, the Federal Reserve, and the OCC govern many aspects of First National Bank’s business and activities, including investments, loans, borrowings, branching, mergers and acquisitions, reporting and numerous other areas. First National Bank is also subject to applicable provisions of California law to the extent those provisions are not in conflict with or preempted by federal banking law.

First National Bank offers a broad range of services to individuals and businesses in its primary supervisionservice area, including a full line of business financial products specialized services such as courier, appointment banking, and business Internet banking. First National Bank offers personal and business checking and savings accounts. Including individual interest-bearing negotiable orders of withdrawal, which we refer to as NOW accounts, money market accounts and/or accounts combining checking and savings accounts with automatic transfer capabilities, IRA accounts, time certificates of deposit, direct deposit services and computer cash management with access through the Internet. First National Bank also offers commercial loans and standby letters of credit, construction loans, accounts receivable, inventory, automobile, home improvement, residential real estate,

commercial real estate loans, home equity lines, Small Business Administration loans, office equipment, leasehold improvement and consumer loans as well as overdraft protection and lines of credit. In addition, First National Bank sells travelers checks and cashier’s checks, offers automated teller machine (ATM) services tied in with major statewide and national networks and offers other customary commercial banking services.

Most of First National Bank’s deposits are obtained from commercial andnon-profit businesses, professionals and individuals. As of December 31, 2017, First National Bank had a total of 20,986 deposit accounts. First National has obtained some deposits through brokers for which it pays a broker fee. As of December 31, 2017, First National had $264,000 in such deposits.

FNBB and First National Bank maintain an Internet website athttp://www.fnbnorcal.com. Neither the website nor information accessible through the website is part of this joint proxy statement/prospectus.

Employees

At December 31, 2017, FNBB employed 167 persons on a full time equivalent basis. FNBB believes its employee relations are good. FNBB is not a party to any collective bargaining agreement.

Market Area

First National Bank’s market area consists primarily of the counties of San Francisco, San Mateo and Santa Clara. Based on latest available reports from the U. S. Department of Commerce Bureau of Economic Analysis, per capita incomes in the counties of San Francisco, San Mateo and Santa Clara for the year 2016 were $110,418, $105,721 and $88,920, respectively.

FNBB management believes per capita income levels grew at single digit growth rates during the year ended December 31, 2017, based upon expected economic activity levels and overall employment prospects. Unemployment data published by the California Employment Development Department reports unemployment levels of 2.3% in San Francisco County, 2.0% in San Mateo County, 2.6% in Santa Clara County, and 5.0% for the State of California; 2.8% in December, 2017. The unemployment levels in San Francisco County were 2.8%, in San Mateo County they were 3.4%, in Santa Clara County they were 3.4% and for the State of California, 5.0% in December 2016. In December 2015, San Francisco County unemployment was 3.3%, San Mateo County was 3.1%, Santa Clara County was 3.7% and the State of California was 5.8%.

A report from the California Employment Development Department based on information published by America’s Labor Market Information System (ALMIS) Employer Database 2018 1st Edition, lists the following major employers in San Francisco County: Bechtel, California Pacific Medical Center, Deloitte, Ernst & Young, Federal Reserve Bank, Golden Gate University, Kaiser Permanente Medical Center, Laguna Honda Hospital & Rehabilitation Center, Pacific Gas & Electric, San Francisco Chronicle, San Francisco State University, UCSF-Medical Center, U.S. Veterans Medical Center and University ofCalifornia-San Francisco.

The following were listed as major employers in San Mateo County: Electronic Arts, Inc., Facebook, Inc., Fisher Investments, Franklin Templeton Investments, Genentech, Inc., Gilead Sciences, Kaiser Permanente Medical Group, Mills-Peninsula Medical Center, Oracle Corp., San Francisco International Airport, San Mateo County Behavior, SRI International, U. S. Interior Department, and Visa International Services Association. The major labor force in San Francisco County and San Mateo County is represented by the service industries, including financial services, educational and health services, professional and business services, leisure and hospitality, biotech, technology and state government.

The following were listed as major employers in Santa Clara County: Adobe Systems, Inc., Advanced Micro Devices, Inc., Apple Inc., Applied Materials, Avaya, Inc., Christopher Ranch, Inc., Cisco Systems Inc., E Bay Inc., Great America Pavilion, Hewlett-Packard Co., Intel Corp, Lockheed Martin Space Systems, Microsoft

Corp, NASA, Net App Inc, prime Materials, SAP Center At San Jose, Silicon Valley Sports & Entertainment, Stanford University School of Medicine and VA Medical Center-Palo Alto. See “Competition-Competitive Data” below.

General Competitive Factors.

In order to compete with the financial institutions in their primary service areas, community banks such as First National Bank, use, to the fullest extent possible, the flexibility which is accorded by their independent status. This includes an emphasis on specialized services, local promotional activity, and personal contacts by their respective officers, directors and employees. First National Bank’s management and employees develop a thorough knowledge of local businesses and markets.

Community banks also seek to provide special services and programs for individuals in their primary service area who are employed in the agricultural, professional and business fields, such as loans for equipment, furniture and tools of the trade or expansion of practices or businesses. In the event there are customers whose loan demands exceed their respective lending limits, they seek to arrange for such loans on a participation basis with other financial institutions. They also assist those customers requiring services not available at such banks to obtain such services from correspondent banks.

Banking is a business that depends on interest rate differentials. In general, the difference between the interest rate paid by a bank to obtain their deposits and other borrowings and the interest rate received by a bank on loans extended to customers and on securities held in a bank’s investment portfolio comprise the major portion of a court within thebank’s earnings. First National Bank competes with savings and loan associations, credit unions, other financial institutions and other entities for funds.

First National Bank also competes for loans with savings and loan associations, credit unions, consumer finance companies, banking and other financial institutions, mortgage companies and other lending institutions.

The interest rate differentials of a bank, and therefore its earnings, are affected not only by general economic conditions, but also by statutes, as implemented by federal agencies. The Federal Reserve Board can and does implement national monetary policy, such as seeking to curb inflation and combat recession, by its open market operations in United States government securities, and (B)adjustments to the authoritydiscount rates applicable to borrowing by banks from the Federal Reserve Banks.

These activities influence the growth of bank loans, investments and deposits and also affect interest rates charged on loans and paid on deposits. The nature and timing of any future changes in monetary policies and their impact on First National Bank are not predictable.

Competitive Data.

In its market area, First National Bank competes for deposit and loan customers with other banks (including those with much greater resources), thrifts and credit unions, finance companies and other financial service providers. FNBB competes with approximately 120 other banking or savings institutions in its San Francisco, San Mateo and Santa Clara County service area. Larger banks may have a competitive advantage because of higher lending limits and major advertising and marketing campaigns, along with significant investment banking, trust and insurance operations. FNBB’s market share of FDIC insured deposits in the service area of Santa Clara County is less than 0.03%; of San Mateo County is approximately 2.13%, and 0.08% in the San Francisco County market area (based upon the most recent information available from the FDIC through June 30, 2017).

For borrowers requiring loans in excess of First National Bank’s legal lending limits, the bank has offered, and intends to offer in the future, such loans on a participating basis with other insured financial institutions, retaining the portion of such loans which are within its legal lending limits. As of December 31, 2017, First National

Bank’s aggregate legal lending limit to a single borrower and such borrower’s related business interests were $19,129,000 on an unsecured basis and $31,882,000 on a fully secured basis, computed based on First National Bank’s December 31, 2017 total risk-based capital of $127,528,000. First National Bank’s business is concentrated in its service area, which primarily encompasses San Mateo County and Santa Clara County and the City and County of San Francisco. The economy of First National Bank’s service area is dependent upon government, manufacturing, tourism, retail sales, population growth and smaller, service-oriented businesses.

Based upon the most recent information made available by the FDIC Summary of Deposits at June 30, 2017, there were 29 commercial and savings banking institutions in San Mateo County with a total of $38,477,689,000 in deposits. First National Bank had a total of 8 offices in San Mateo County with total deposits of $817,835,000 at the same date. There were 45 banking and savings institutions in the City and County of San Francisco with a total of $212,299,667,000 in deposits. First National Bank had a total of four offices in the City and County of San Francisco with total deposits of $167,319,000. There were 45 commercial and savings banking institutions in Santa Clara County with a total of $134,865,696,000 in deposits. First National Bank had one office in Santa Clara County with total deposits of $39,209,000.

Effect of Existing or more United States persons to control all substantial decisions of the trust or (2) has a valid election in effect under applicable TreasuryProbable Governmental Regulations to be treated as a United States person; or

an estate that is subject to United States federal income tax on its income regardless of its source.

If a partnership (including for this purpose any entity treated as a partnership for United States federal income tax purposes) holds North Valley common stock, the tax treatment of a partner generally will depend on the statusBusiness of the partnerFNBB and the activities of the partnership. If youFirst National Bank

Bank holding companies and banks are extensively regulated under both federal and state law. The following discussion summarizes certain significant laws, rules and regulations affecting FNBB and First National Bank.

FNB Bancorp.

FNBB is a partner of a partnershipbank holding North Valley common stock, you should consult your tax advisor.

This discussion addresses only those North Valley shareholders that hold their North Valley common stock as a capital assetcompany within the meaning of Section 1221 of the Internal Revenue Code,BHC Act, and does not address all the United States federal income tax consequences that may be relevant to particular North Valley shareholders in light of their individual circumstances or to North Valley shareholders that areis registered as such with, and subject to special rules,supervision and regulation by, the Federal Reserve. As a registered bank holding company, FNBB is required to file quarterly and annual reports with the Federal Reserve, along with such as:

financial institutions;

investors in pass-through entities;

insurance companies;

tax-exempt organizations;

dealers in securities;

99


traders in securities that elect to useadditional information as the Federal Reserve may require. FNBB is also a mark to market method of accounting;

persons that hold North Valley common stock as part of a straddle, hedge, constructive sale or conversion transaction;

certain expatriates or persons that have a functional currency other than the U.S. dollar;

persons who are not U.S. holders; and

shareholders who acquired their shares of North Valley common stock through the exercise of an employee stock option or otherwise as compensation or through a tax-qualified retirement plan.

In addition, the discussion does not address any alternative minimum tax or any state, local or foreign tax consequences of the merger, nor does it address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2011.

The following discussion is based on the Internal Revenue Code, its legislative history, existing and proposed regulations thereunder and published rulings and decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Any such change could affect the continuing validity of this discussion.

TriCo and North Valley have structured the merger to qualify as a reorganizationbank holding company within the meaning of Section 368(a)the CFC and, as such, is subject to examination by, and may be required to file reports with, the CDBO.

The common stock of FNBB is subject to the registration requirements of the Internal Revenue Code. The obligationSecurities Act of TriCo to complete1933, as amended, and the merger is conditioned uponqualification requirements of the receiptCalifornia Corporate Securities Law of an opinion from Manatt, Phelps & Phillips, LLP, counsel to TriCo,1968, as amended. FNBB has registered its common stock under Section 12(g) of the Exchange Act and its subject to the periodic reporting requirements of Section 13 of the Exchange Act, which include, but are not limited to, annual, quarterly and other current reports required to be filed with the SEC. The common stock of FNBB is traded on the Nasdaq Global Select market under the trading symbol, “FNBG.”

FNBB is required to obtain the approval of the Federal Reserve before it may acquire all or substantially all of the assets of any bank, or ownership or control of the voting shares of any bank if, after giving effect thatto such acquisition of shares, FNBB would own or control more than 5% of the merger will qualify as a reorganizationvoting shares of such bank.

FNBB, and anynon-bank subsidiary which it may acquire or organize, are deemed to be “affiliates” of First National Bank within the meaning of Section 368(a)that term as defined in the Federal Reserve Act. The Federal Reserve Act limits loans by First National Bank to its affiliates, and investments by First National Bank in affiliates’ stock as collateral for loans to any borrower. FNBB and First National Bank are also subject to certain restrictions with respect to engaging in the underwriting, public sale and distribution of securities.

In addition, regulations of the Internal Revenue Code.Federal Reserve under the Federal Reserve Act require that reserves be maintained by First National Bank in conjunction with any liability of FNBB under any obligation (promissory note, acknowledgment of advance, banker’s acceptance or similar obligation) with a weighted average maturity of less than seven (7) years to the extent that the proceeds of such obligations are used for the purpose of supplying funds to First National Bank for use in its banking business, or to maintain the availability of such funds.

First National Bank of Northern California.

As a national banking association licensed under the national banking laws of the United States, First National Bank is regularly examined by the OCC and is further subject to supervision and regulation by the FDIC and the Federal Reserve.

This supervision and regulation includes comprehensive reviews of all major aspects of First National Bank’s business and condition, including its capital ratios, allowance for possible loan losses and other factors. However, no inference should be drawn that such authorities have approved any such factors. First National Bank is required to file reports with the OCC and the FDIC.

National banks that are well capitalized, have a high overall supervisory rating and a satisfactory CRA rating, and are not subject to any regulatory enforcement action may engage in activities related to banking through operating subsidiaries subject to an expedited application process. In addition, a national bank may apply to the OCC to engage in an activity through a subsidiary in which the national bank itself may not engage.

Capital Standards.

Risk-Based Capital. The obligationFederal Reserve, the OCC and the FDIC have adopted risk-based capital guidelines for evaluating the capital adequacy of North Valleybank holding companies and banks. The guidelines were designed to completemake capital requirements sensitive to differences in risk profiles among banking organizations, to take into accountoff-balance sheet exposures and to aid in making the mergerdefinition of bank capital uniform internationally. Under the risk-based guidelines and prior to amendments to the capital rules effective January 1, 2015, as described below in “Basel III—New Capital and Prompt Corrective Action Regulations,” FNBB and First National Bank were required to maintain capital equal to at least 8% of its assets and commitments to extend credit, weighted by risk, of which at least 4% was required to consist primarily of common equity (including retained earnings) and the remainder was to consist of subordinated debt, cumulative preferred stock, or a limited amount of loan and lease loss reserves.

Assets, commitments to extend credit, andoff-balance sheet items were categorized according to risk and certain assets considered to present less risk than others permitted maintenance of capital at less than the 8% ratio. For example, most home mortgage loans were placed in a 50% risk category and therefore required maintenance of capital equal to 4% of those loans, while commercial loans were placed in a 100% risk category and therefore required maintenance of capital equal to 8% of those loans.

Under the risk-based capital guidelines, assets reported on an institution’s balance sheet and certainoff-balance sheet items are assigned to risk categories, each of which has an assigned risk weight. Capital ratios are calculated by dividing the institution’s qualifying capital by itsperiod-end risk-weighted assets. The guidelines established two categories of qualifying capital: Tier 1 capital (core capital including common shareholders’ equity and noncumulative perpetual preferred stock) and Tier 2 capital (supplementary capital which includes, among other items, limited life (and in the case of banks, cumulative) preferred stock, mandatory convertible securities, subordinated debt and a limited amount of reserve for credit losses. Each institution was required to maintain a minimum risk-based capital ratio (including Tier 1 and Tier 2 capital) of 8%, of which at least half was to be Tier 1 capital.

A leverage capital standard was adopted as a supplement to the risk-weighted capital guidelines. Under the leverage capital standard, an institution was required to maintain a minimum ratio of Tier 1 capital to the sum of its quarterly average total assets and quarterly average reserve for loan losses, less intangible assets not included in Tier 1 capital. A minimum leverage ratio was also adopted for bank holding companies as a supplement to the risk-weighted capital guidelines. The leverage ratio establishes a minimum Tier 1 ratio of 3% (Tier 1 capital to total assets) for the highest rated bank holding companies or those that have implemented the risk-based capital market risk measure. All other bank holding companies must maintain a minimum Tier 1 leverage ratio of 4% with higher leverage capital ratios required for bank holding companies that have significant financial and/or operational weakness, a high-risk profile, or are undergoing or anticipating rapid growth.

Effective January 1, 2015, the risk-based capital regulations described above were amended to as described below. See “Basel III—New Capital and Prompt Corrective Action Regulations.”

Basel III—New Capital and Prompt Corrective Action Regulations. “Basel III” refers to a comprehensive set of reform measures developed by the Bank for International Settlements to strengthen the regulation, supervision and risk management of the banking sector. In July 2013, the federal bank regulatory agencies issued interim final rules that revised and replaced the risk-based capital requirements summarized above in order to implement the Basel III regulatory capital reforms and changes required by the Dodd-Frank Act. The final rules include an increase in the risk-based capital requirements and certain changes to capital components, as well as changes to the calculation and categories of risk-weighted assets. For example, changes to risk weighted assets include increasing the original risk weight to 150% on assets past due 90 days or more or on nonaccrual, utilizing loan to value ratios in the risk weighting of mortgage loans and assigning a 150% risk weight to certain higher risk commercial real estate loans.

Effective January 1, 2015, bank holding companies with consolidated assets of $1 billion or more and banks like First National Bank must comply with new minimum capital ratio requirements to bephased-in between January 1, 2015 and January 1, 2019, which consist of the following: (i) a new common equity Tier 1 capital to total risk weighted assets ratio of 4.5%; (ii) a Tier 1 capital to total risk weighted assets ratio of 6% (increased from 4%); (iii) a total capital to total risk weighted assets ratio of 8% (unchanged); and (iv) a Tier 1 capital to adjusted average total assets ratio, or leverage ratio, of 4%.

In addition the Basel III rules establish a “capital conservation buffer” which when fullyphased-in will require maintenance of a minimum of 2.5% of common equity Tier 1 capital to total risk weighted assets in excess of the regulatory minimum capital ratio requirements described above. The 2.5% buffer will increase the minimum capital ratios to (i) a common equity Tier 1 capital ratio of 7%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. The new buffer requirement will bephased-in between January 1, 2016 and January 1, 2019 and was 1.25% at December 31, 2017 and 0.625% at December 31, 2016. If the capital ratio levels of a banking organization fall below the capital conservation buffer amount, the organization will be subject to limitations on (i) the payment of dividends; (ii) discretionary bonus payments; (iii) discretionary payments under Tier 1 instruments; and (iv) engaging in share repurchases.

The federal bank regulatory agencies also implemented changes to the prompt corrective action framework, described below in “Prompt Corrective Action,” which is conditioneddesigned to place restrictions on insured depository institutions if their capital ratios begin to show signs of weakness. These changes took effect beginning January 1, 2015 and require insured depository institutions to meet the following increased capital ratio requirements in order to qualify as “well capitalized:” (i) a new common equity Tier 1 capital ratio of 6.5%; (ii) a Tier 1 capital ratio of 8%; (iii) a total capital ratio of 10%; and (iv) a Tier 1 leverage ratio of 5%. In order to qualify as “adequately capitalized,” institutions must have (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%. See also the additional requirements of the prompt corrective action framework discussed below in “Prompt Corrective Action.”

FNBB’s management believes that First National Bank and FNBB are in compliance with the minimum capital requirements, including the fullyphased-in “capital conservation buffer” requirement, based upon their capital positions at December 31, 2017. See “Capital” under “FNBB’s Management’s Discussion and Analysis of Financial Condition and the receiptResults of Operations” beginning on page [•] and Note 19 “Regulatory Matters” in the FNBB’s 2017 Consolidated Financial Statements of FNBB (and related Notes) included in Appendix D to this document.

Under FDICIA, the federal financial institution agencies have adopted regulations which require institutions to establish and maintain comprehensive written real estate policies which address certain lending considerations,

includingloan-to-value limits, loan administrative policies, portfolio diversification standards, and documentation, approval and reporting requirements. FDICIA further generally prohibits an insured bank from engaging as a principal in any activity that is impermissible for a national bank, absent FDIC determination that the activity would not pose a significant risk to First National Bank Insurance Fund, and that such bank is, and will continue to be, within applicable capital standards.

Transition for New Ratios and Capital Definitions for Community Banks

Years (as of Jan.1)

  2017  2018  2019
and thereafter
 

Minimum CET1 ratio

   4.50  4.50  4.50

Capital conservation buffer

   1.25  1.875  2.50

CET1 plus capital conservation buffer

   5.75  6.375  7.00

Phase-in of deductions from CET1*

   80.0  100.0  100.0

Minimum Tier 1 capital

   6.0  6.0  6.0

Minimum Tier 1 capital plus capital conservation buffer

   7.25  7.875  8.5

Minimum total capital

   8.0  8.0  8.0

Minimum total capital plus conservation buffer.

   9.25  9.875  10.5

*Includingthreshold deduction items that are over the limits.
N/Ameans not applicable.

Prompt Corrective Action

The Federal Reserve, the OCC and the FDIC have adopted regulations implementing a system of prompt corrective action pursuant to Section 38 of the Federal Deposit Insurance Act and Section 131 of the FDIC Improvement Act of 1991, which we refer to as FDICIA. Prior to amendments to the capital rules effective January 1, 2015, as described above in “Basel III—New Capital and Prompt Corrective Action Regulations ,” the regulations established five capital categories with the following characteristics: (1) “Well capitalized”—consisting of institutions with a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 6% or greater and a leverage ratio of 5% or greater, and the institution is not subject to an order, written agreement, capital directive or prompt corrective action directive; (2) “Adequately capitalized”—consisting of institutions with a total risk-based capital ratio of 8% or greater, a Tier 1 risk-based capital ratio of 4% or greater and a leverage ratio of 4% or greater, and the institution does not meet the definition of a “well capitalized” institution; (3) “Undercapitalized”—consisting of institutions with a total risk-based capital ratio less than 8%, a Tier 1 risk-based capital ratio of less than 4%, or a leverage ratio of less than 4%; (4) “Significantly undercapitalized”—consisting of institutions with a total risk-based capital ratio of less than 6%, a Tier 1 risk-based capital ratio of less than 3%, or a leverage ratio of less than 3%; (5) “Critically undercapitalized”—consisting of an opinioninstitution with a ratio of tangible equity to total assets that is equal to or less than 2%.

The regulations established procedures for classification of financial institutions within the capital categories, and for filing and reviewing capital restoration plans required under the regulations and procedures for issuance of directives by the appropriate regulatory agency, among other matters. The regulations imposed restrictions upon all institutions to refrain from Crowe Horwath LLP, tax advisorcertain actions which would cause an institution to North Valley,be classified within any one of the three “undercapitalized” categories, such as declaration of dividends or other capital distributions or payment of management fees, if following the distribution or payment the institution would be classified within one of the “undercapitalized” categories. In addition, institutions which are classified in one of the three “undercapitalized” categories are subject to certain mandatory and discretionary supervisory actions. Mandatory supervisory actions include (1) increased monitoring and review by the appropriate federal banking agency; (2) implementation of a capital restoration plan; (3) total asset growth restrictions; and (4) limitations upon acquisitions, branch expansion, and new business activities without prior approval of the appropriate federal banking agency. Discretionary supervisory actions may include (a) requirements to augment capital; (b) restrictions upon affiliate

transactions; (c) restrictions upon deposit gathering activities and interest rates paid; (d) replacement of senior executive officers and directors; (e) restrictions upon activities of the institution and its affiliates; (f) requiring divestiture or sale of the institution; and (g) any other supervisory action that the appropriate federal banking agency determines is necessary to further the purposes of the regulations. Further, the federal banking agencies may not accept a capital restoration plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution’s capital. In addition, for a capital restoration plan to be acceptable, the depository institution’s parent holding company must guarantee that the institution will comply with such capital restoration plan. The aggregate liability of the parent holding company under the guaranty is limited to the effectlesser of (i) an amount equal to 5 percent of the depository institution’s total assets at the time it became undercapitalized, and (ii) the amount that is necessary (or would have been necessary) to bring the mergerinstitution into compliance with all capital standards applicable with respect to such institution as of the time it fails to comply with the plan. If a depository institution fails to submit an acceptable plan, it is treated as if it were “significantly undercapitalized.” FDICIA also restricts the solicitation and acceptance of and interest rates payable on brokered deposits by insured depository institutions that are not “well capitalized.” An “undercapitalized” institution is not allowed to solicit deposits by offering rates of interest that are significantly higher than the prevailing rates of interest on insured deposits in the particular institution’s normal market areas or in the market areas in which such deposits would otherwise be accepted.

Any financial institution which is classified as “critically undercapitalized” must be placed in conservatorship or receivership within ninety days of such determination unless it is also determined that some other course of action would better serve the purposes of the regulations. Critically undercapitalized institutions are also prohibited from making (but not accruing) any payment of principal or interest on subordinated debt without prior regulatory approval and regulators must prohibit a critically undercapitalized institution from taking certain other actions without prior approval, including (1) entering into any material transaction other than in the usual course of business, including investment expansion, acquisition, sale of assets or other similar actions; (2) extending credit for any highly leveraged transaction; (3) amending articles or bylaws unless required to do so to comply with any law, regulation or order; (4) making any material change in accounting methods; (5) engaging in certain affiliate transactions; (6) paying excessive compensation or bonuses; and (7) paying interest on new or renewed liabilities at rates which would increase the weighted average costs of funds beyond prevailing rates in the institution’s normal market areas.

On November 18, 2014, the FDIC adopted the “Assessments Final Rule” which revises the FDIC’s risk-based deposit insurance assessment system to reflect changes in the regulatory capital rules, effective commencing January 1, 2015. For smaller financial institutions (with total assets less than $1 billion and which are not custodial banks), the Assessments Final Rule revised and conformed capital ratios and ratio thresholds to the new prompt corrective action capital ratios and ratio thresholds for “well capitalized” and “adequately capitalized” evaluations which were adopted by the federal banking agencies as part of the Basel III capital regulations. Consequently, effective January 1, 2015, the prompt corrective action regulations were amended to the extent described above in “Basel III—New Capital and Prompt Corrective Action Regulations.”

FDIC Insurance

The FDIC is an independent federal agency that insures deposits of federally insured banks (such as First National Bank) and savings institutions up to prescribed limits through the Deposit Insurance Fund, which we refer to as the DIF. All depository accounts of First National Bank are covered by FDIC insurance up to established maximum limits (currently $250,000 per separately insured depositor). In 2011, as required by the Dodd-Frank Act, the FDIC revised the assessment rates and the deposit insurance assessment base used to calculate premiums paid to the DIF. The amount of FDIC assessments paid by each DIF member institution for insurance coverage is now based on average/total assets less average tangible equity, defined as Tier 1 capital and an institution’s risk profile as measured by regulatory capital ratios and other supervisory factors with assessments ranging from 2.5 to 9 basis points for institutions in the lowest risk category to 30 to 45 basis points for those in the highest risk category.

Dividends

FNB Bancorp. FNBB’s ability to pay cash dividends is subject to restrictions set forth in the CGCL. Funds for payment of any cash dividends by FNBB could be obtained from its investments, equity sales or dividends received from First National Bank. First National Bank’s ability to pay cash dividends to FNBB is subject to restrictions imposed under the National Bank Act and regulations promulgated by the OCC. FNBB has paid cash dividends for each quarter of operations commencing with the second quarter of 2002. Future dividends will continue to be determined after consideration of FNBB’s earnings, financial condition, future capital funds, regulatory requirements and other relevant factors.

The CGCL provides that neither a corporation nor any of its subsidiaries shall make a distribution to the corporation’s shareholders unless the board of directors has determined in good faith either of the following: (1) the amount of retained earnings of the corporation immediately prior to the distribution equals or exceeds the sum of (A) the amount of the proposed distribution plus (B) the preferential dividends arrears amount; or (2) immediately after the distribution, the value of the corporation’s assets would equal or exceed the sum of its total liabilities plus the preferential rights amount. The good faith determination of the board of directors may be based upon (1) financial statements prepared on the basis of reasonable accounting practices and principles, (2) a fair valuation, or (3) any other method reasonable under the circumstances; provided, that a distribution may not be made if the corporation or subsidiary making the distribution is, or is likely to be, unable to meet its liabilities (except those whose payment is otherwise adequately provided for) as they mature. The term “preferential dividends arrears amount” means the amount, if any, of cumulative dividends in arrears on all shares having a preference with respect to payment of dividends over the class or series to which the applicable distribution is being made, provided that if the articles of incorporation provide that a distribution can be made without regard to preferential dividends arrears amount, then the preferential dividends arrears amount shall be zero. The term “preferential rights amount” means the amount that would be needed if the corporation were to be dissolved at the time of the distribution to satisfy the preferential rights, including accrued but unpaid dividends, of other shareholders upon dissolution that are superior to the rights of the shareholders receiving the distribution, provided that if the articles of incorporation provide that a distribution can be made without regard to any preferential rights, then the preferential rights amount shall be zero.

The Federal Reserve generally prohibits a bank holding company from declaring or paying a cash dividend which would impose undue pressure on the capital of subsidiary banks or would be funded only through borrowing or other arrangements that might adversely affect a bank holding company’s financial position. The Federal Reserve Board policy is that a bank holding company should not continue its existing rate of cash dividends on its common stock unless its net income is sufficient to fully fund each dividend and its prospective rate of earnings retention appears consistent with its capital needs, asset quality and overall financial condition.

First National Bank of Northern California. As First National Bank’s sole shareholder, FNBB is entitled to receive dividends when and as declared by First National Bank’s board of directors, out of funds legally available therefore, subject to the restrictions set forth in the National Bank Act.

The payment of cash dividends by First National Bank may be subject to the approval of the OCC, as well as restrictions established by federal banking law and the FDIC. Approval of the OCC is required if the total of all dividends declared by First National Bank’s board of directors in any calendar year will exceed First National Bank’s net profits for that year combined with its retained net profits for the preceding two years, less any required transfers to surplus or to a fund for the retirement of preferred stock.

Additionally, the FDIC and/or the OCC, might, under some circumstances, place restrictions on the ability of a bank to pay dividends.

Gramm-Leach-Bliley Act of 1999. The Gramm-Leach-Bliley Act of 1999, which we refer to as the GLB Act, eliminated most of the remainingdepression-era “firewalls” between banks, securities firms and insurance

companies which were established by First National Banking Act of 1933, also known as the Glass-Steagall Act, which sought to insulate banks as depository institutions from the perceived risks of securities dealing and underwriting, and related activities. Bank holding companies that can qualify as “financial holding companies” can now, among other matters, acquire securities firms or create them as subsidiaries, and securities firms can now acquire banks or start banking activities through a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. In addition,financial holding company. The GLB Act includes provisions which permit national banks to conduct financial activities through a subsidiary that are permissible for a national bank to engage in connection with the filing of the registration statement of which this document is a part, each of Manatt, Phelps & Phillips, LLP and Crowe Horwath LLP has delivered an opiniondirectly, as well as certain activities authorized by statute, or that are financial in nature or incidental to TriCo and North Valley, respectively,financial activities to the same effectextent as permitted to a “financial holding company” or its affiliates. FNBB has not sought authority to act as a financial holding company under the GLB Act.

Financial holding companies are also permitted to engage in activities that are complementary to financial activities if the Federal Reserve determines that the activity does not pose a substantial risk to the safety or soundness of depository institutions or the financial system in general. These standards expand upon the list of activities “closely related to banking” which have defined the permissible activities of bank holding companies under Bank Holding Company Act. The GLB Act also requires that federal financial institution and securities regulatory agencies prescribe regulation to implement the policy that financial institutions must respect the privacy of their customers and protect the security and confidentiality of customers’non-public personal information. These regulations require, in general, that financial institutions (1) may not disclosenon-public information of customers tonon-affiliated third parties without notice to their customers, who must have an opportunity to direct that such information not be disclosed; (2) may not disclose customer account numbers except to consumer reporting agencies; and (3) must give prior disclosure of their privacy policies before establishing new customer relationships.

Small Business Jobs Act of 2010. On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010, which we refer to as the opinions described above. These opinions will be based on assumptions, representations, warrantiesSBJ Act, which, among other matters, authorized the U.S. Treasury to buy preferred stock or subordinated debt issued by community banks with assets less than $10 billion. On September 15, 2011, as part of the Small Business Lending Fund program established under the SBJ Act, FNBB issued and covenants, including those contained insold to the merger agreement and in tax representation letters provided by TriCo and North Valley.Secretary of the Treasury a total of 12,600 shares of FNBB’s SeniorNon-Cumulative Perpetual Preferred Stock, Series C, or Series C Preferred Stock, for a purchase price of $12,600,000. The accuracySeries C Preferred Stock qualified as Tier 1 capital. All of such assumptions, representations and warranties, and compliance with such covenants, could affect the conclusions set forth in such opinions. None$12,600,000 proceeds from FNBB’s sale of these opinions is binding on the Internal Revenue Service or the courts. TriCo and North Valley have not requested and do not intendits Series C Preferred Stock were immediately applied to request any ruling from the Internal Revenue Service asFNBB’s repurchase of outstanding shares of preferred stock which had been issued to the United States federal income tax consequencesDepartment of the merger. Accordingly,Treasury on February 27, 2009, pursuant to the TARP Capital Purchase Program authorized by the Emergency Economic Stabilization Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009. On May 6, 2013, FNBB redeemed 25% of the original issue $12,600,000 of Series C Preferred Stock for a cash payment of $3,150,000. Subsequently, on January 23, 2014, the remaining $9,450,000 of Series C Preferred Stock was redeemed by FNBB, also in a cash transaction.

Community Reinvestment Act

Under the CRA and CRA regulations, regulators evaluate banks’ lending to low and moderate income individuals and businesses across a four-point scale from “outstanding” to “substantial noncompliance,” and are a factor in regulatory review of applications to merge, establish new branches or form bank holding companies. In addition, any bank rated in “substantial noncompliance” with the CRA regulations may be subject to enforcement proceedings. First National Bank has a current rating of “satisfactory” for CRA compliance.

The Patriot Act

On October 26, 2001, President George W. Bush signed the USA Patriot Act, which we refer to as the Patriot Act, which included provisions pertaining to domestic security, surveillance procedures, border protection, and terrorism laws to be administered by the Secretary of the Treasury.

Title III of the Patriot Act entitled, “International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001” includes amendments to First National Bank Secrecy Act which expand the responsibilities of

financial institutions in regard to anti-money laundering activities with particular emphasis upon international money laundering and terrorism financing activities through designated correspondent and private banking accounts.

Effective December 25, 2001, Section 313(a) of the Patriot Act prohibits any insured financial institution such as First National Bank, from providing correspondent accounts to foreign banks which do not have a physical presence in any country (designated as “shell banks”), subject to certain exceptions for regulated affiliates of foreign banks. Section 313(a) also requires financial institutions to take reasonable steps to ensure that foreign bank correspondent accounts are not being used to indirectly provide banking services to foreign shell banks, and Section 319(b) requires financial institutions to maintain records of the owners and agent for service of process of any such foreign banks with whom correspondent accounts have been established.

Effective July 23, 2002, Section 312 of the Patriot Act created a requirement for special due diligence for correspondent accounts and private banking accounts. Under Section 312, each North Valley shareholder should consult its tax advisorfinancial institution that establishes, maintains, administers, or manages a private banking account or a correspondent account in the United States for anon-United States person, including a foreign individual visiting the United States, or a representative of anon-United States person, shall establish appropriate, specific, and, where necessary, enhanced, due diligence policies, procedures, and controls that are reasonably designed to detect and record instances of money laundering through those accounts.

The Patriot Act contains various provisions in addition to Sections 312 and 313(a) that affect the operations of financial institutions by encouraging cooperation among financial institutions, regulatory authorities and law enforcement authorities with respect to the particular tax consequencesindividuals, entities and organizations engaged in, or reasonably suspected of engaging in, terrorist acts or money laundering activities. FNBB and First National Bank are not currently aware of any account relationships between First National Bank and any foreign bank or other person or entity as described above under Sections 312 or 313(a) of the mergerPatriot Act.

Sarbanes-Oxley Act of 2002

On July 30, 2002, President George W. Bush signed into law the Sarbanes-Oxley Act of 2002, which we refer to such holder.

Tax Consequencesas the Sarbanes-Oxley Act, legislation designed to address certain issues of corporate governance and accountability. The key provisions of the Merger Generally to Holders of North Valley Common Stock. Accordingly, based onSarbanes-Oxlely Act and the opinions delivered in connection herewith:

no gain or loss will be recognizedrules promulgated by U.S. holders upon the exchange of shares of North Valley common stock for shares of TriCo common stockSEC pursuant to the merger (exceptSarbanes-Oxlely Act include the following:

Created expanded oversight of the accounting profession by creating a new independent public company oversight board to be monitored by the SEC.

Revised rules on auditor independence to restrict the nature ofnon-audit services provided to audit clients and to require such services to bepre-approved by the audit committee.

Created mandatory listing standards relating to audit committees, certifications of periodic reports by the CEO and CFO and it made issuer interference with respectan audit a crime.

Required enhanced financial disclosures, including periodic reviews for largest issuers and real time disclosure of material company information.

Enhanced criminal penalties for a broad array of white collar crimes and increased the statute of limitations time period for filing securities fraud lawsuits.

Required disclosure of whether a company’s audit committee of its board of directors has a member of the audit committee who qualifies as an “audit committee financial expert.”

Mandated disclosure ofoff-balance sheet transactions.

Specified conditions related to any cash received insteadthe use of fractional share interests in TriConon-GAAP (generally accepted accounting principles) financial measures.

FNBB’s common stock as discussed below under “Cash Received Instead of a Fractional Share of TriCo Common Stock”);

is listed on the aggregate basis ofNasdaq Global Select Market and, in addition to the TriCo common stock received inrules promulgated by the merger (including any fractional share of TriCo common stock deemed received and sold for cash, as discussed below under “Cash Received Instead of a Fractional Share of TriCo Common Stock”) will be the same as the aggregate basis of the North Valley common stock surrendered; and

the holding period of TriCo common stock received in the merger (including any fractional share of TriCo common stock deemed received and sold for cash, as discussed below under “Cash Received Instead of a Fractional Share of TriCo Common Stock”) will include the holding period of the North Valley common stock surrendered.

100


If U.S. holders of North Valley common stock acquired different blocks of shares of North Valley common stock at different times or at different prices, such holders’ basis and holding period in their shares of TriCo common stock may be determined with reference to each block of North Valley common stock. Any such holders should consult their tax advisors regarding the manner in which TriCo common stock received in the exchange should be allocated among different blocks of North Valley common stock and with respect to identifying the bases or holding periods of the particular shares of TriCo common stock received in the merger.

Cash Received Instead of a Fractional Share of TriCo Common Stock. A holder of North Valley common stock who receives cash instead of a fractional share of TriCo common stock will generally be treated as having received the fractional shareSEC pursuant to the mergerSarbanes-Oxley Act, FNBB is required to comply with the Nasdaq Global Select Market’s listing standards.

FNBB has incurred and then as having soldit is anticipated that fractional share of TriCo common stock for cash. As a result, a holder of North Valley common stockit will generally recognize gain or loss equalcontinue to incur costs to comply with the Sarbanes-Oxley Act and the rules and regulations promulgated pursuant to the difference betweenSarbanes-Oxley Act by the SEC and other regulatory agencies having jurisdiction over FNBB on the issuance and listing of its securities. FNBB does not currently anticipate, however, that compliance with the Sarbanes-Oxley Act and such rules and regulations will have a material effect upon its financial position or results of its operations or its cash flows.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which we refer to as the Dodd-Frank Act. The Dodd-Frank act is intended to restructure the regulation of the financial services sector by, among other things, (i) establishing a framework to identify systemic risks in the financial system implemented by a newly created Financial Stability Oversight Council and other federal banking agencies; (ii) expanding the resolution authority of the federal banking agencies over troubled financial institutions; (iii) authorizing changes to capital and liquidity requirements; (iv) changing deposit insurance assessments; and (v) enhancing regulatory supervision to improve the safety and soundness of the financial services sector. The Dodd-Frank Act is expected to have a significant impact upon our business as its provisions are implemented over time. Below is a summary of certain provisions of the Dodd-Frank Act which, directly or indirectly, may affect FNBB and First National Bank.

Changes to Capital Requirements. The federal banking agencies are required to establish minimum leverage and risk-based capital requirements for banks and bank holding companies which will not be lower and could be higher than current regulatory capital and leverage standards for insured depository institutions. Under these requirements, trust preferred securities will be excluded from Tier 1 capital unless such securities were issued prior to May 19, 2010 by a bank holding company with less than $15 billion in assets. FNBB has no trust preferred securities outstanding. The Dodd-Frank Act requires capital increases in times of economic expansion and decreases in times of economic contraction consistent with safety and soundness.

Enhanced Regulatory Supervision. The Dodd-Frank Act increases regulatory oversight, supervision and examination of banks, bank holding companies and their respective subsidiaries by the appropriate regulatory agency.

Consumer Protection. The Dodd-Frank Act created the Consumer Financial Protection Bureau, which we refer to as the CFPB, within the Federal Reserve System. The CFPB is responsible for establishing and implementing rules and regulations under various federal consumer protection laws governing certain consumer products and services.

The CFPB has primary enforcement authority over large financial institutions with assets of $10 billion or more, while smaller institutions will be subject to the CFPB’s rules and regulations through the enforcement authority of the federal banking agencies. States are permitted to adopt consumer protection laws and regulations that are more stringent than those laws and regulations adopted by the CFPB and state attorneys general are permitted to enforce consumer protection laws and regulations adopted by the CFPB.

Debit Card Interchange Fees. The Dodd-Frank Act required that the amount of any interchange fee charged by a debit card issuer with respect to a debit card transaction must be reasonable and proportional to the cost incurred by the issuer. Within nine months of enactment of the Dodd-Frank Act, the Federal Reserve Board was required to establish standards for reasonable and proportional fees which may take into account the costs of preventing fraud. The restrictions on interchange fees, however, do not apply to banks that, together with their affiliates, have assets of less than $10 billion.

Interstate Branching. The Dodd-Frank Act authorized national and state banks to establish branches in other states to the same extent as a bank chartered by that state would be permitted to branch. Previously, banks could only establish branches in other states if the host state expressly permittedout-of-state banks to establish branches in that state. Accordingly, banks will be able to enter new markets more freely.

Charter Conversions. Effective one year after enactment of the Dodd-Frank Act, depository institutions that are subject to a cease and desist order or certain other enforcement actions issued with respect to a significant supervisory matter were prohibited from changing their federal or state charters, except in accordance with certain notice, application and other procedures involving the applicable regulatory agencies.

Compensation Practices. The Dodd-Frank Act provided that the appropriate federal banking regulators must establish standards prohibiting as an unsafe and unsound practice any compensation plan of a bank holding company or other “covered financial institution” that provides an insider or other employee with “excessive compensation” or could lead to a material financial loss to such firm. In June 2010, prior to the enactment of the Dodd-Frank Act, the federal bank regulatory agencies jointly issued the Interagency Guidance on Sound Incentive Compensation Policies, which requires that financial institutions establish metrics for measuring the risk to the financial institution of such loss from incentive compensation arrangements and implement policies to prohibit inappropriate risk taking that may lead to material financial loss to the institution. This policy and the Frank-Dodd Act may impact FNBB’s compensation policies and arrangements.

Corporate Governance. The Dodd-Frank Act has enhanced corporate governance requirements to include (i) requiring publicly traded companies to give shareholders anon-binding vote on executive compensation at their first annual meeting taking place six months after the enactment and at least every three years thereafter and onso-called “golden parachute” payments in connection with approvals of mergers and acquisitions unless previously voted on by shareholders; (ii) authorizing the SEC to promulgate rules that would allow shareholders to nominate their own candidates for election as directors using a company’s proxy materials; (iii) directing the federal banking regulators to promulgate rules prohibiting excessive compensation paid to executives of depository institutions and their holding companies with assets in excess of $1.0 billion, regardless of whether or not the company is publicly traded; and (iv) authorizing the SEC to prohibit broker discretionary voting on the election of directors and on executive compensation matters.

Volcker Rule. On December 10, 2013, the federal banking agencies jointly issued a final rule implementing theso-called “Volcker Rule” set forth in Section 619 of the Dodd-Frank Act. The Volcker Rule prohibits depository institutions, companies that control such institutions, bank holding companies, and the affiliates and subsidiaries of such banking entities, from engaging as principal for the trading account of the banking entity in any purchase or sale of one or more covered financial instruments(so-called “proprietary trading”) and imposes limitations upon retaining interests in, sponsoring, investing in and transacting with certain investment funds, including hedge funds and private equity funds. The effective date of the final rule restricting proprietary trading was extended to July 21, 2015, and certain other matters were extended to July 21, 2017. Neither FNBB nor First National Bank engages in activities prohibited by the Volcker Rule and management does not expect the Volcker Rule to have a material impact upon FNBB or First National Bank.

Many of the requirements under the Dodd-Frank Act will be implemented over an extended period of time and therefore, the nature and extent of regulations that will be issued by various regulatory agencies and the impact such regulations will have on the operations of financial institutions such as FNBB and First National Bank is unclear. Such regulations resulting from the Dodd-Frank Act may impact the profitability of our business activities, require changes to certain of our business practices, impose upon us more stringent capital, liquidity and leverage ratio requirements or otherwise adversely affect our business. These changes may also require us to

invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements.

Future Legislation and Regulations

Certain legislative and regulatory proposals that could affect FNBB, First National Bank, and the banking business in general are periodically introduced before the United States Congress, the California State Legislature and federal and state government agencies. It is not known to what extent, if any, legislative proposals will be enacted and what effect such legislation would have on the structure, regulation and competitive relationships of financial institutions. It is likely, however, that such legislation could subject FNBB and First National Bank to increased regulation, disclosure and reporting requirements, more competition, and increased costs of doing business. In addition to legislative changes, the various federal and state financial institution regulatory agencies frequently propose rules and regulations to implement and enforce already existing legislation. It cannot be predicted whether or in what form any such rules or regulations will be enacted or the effect that such regulations may have on FNBB and First National Bank.

Properties

Since its incorporation on February 28, 2001, FNBB has conducted its operations at the administrative offices of First National Bank, located at 975 El Camino Real, South San Francisco, CA 94080.

First National Bank owns the land and building at 975 El Camino Real, South San Francisco, CA 94080. The premises consist of a three-story building of approximately 15,000 square feet andoff-street parking for employees and customers of approximately 45 vehicles.

The Buri Branch Office of First National Bank is located on the ground floor of the building at 975 El Camino Real, South San Francisco, CA 94080, and administrative offices, including the offices of senior management and credit administration, occupy the second and third floors.

First National Bank owns the land andtwo-story building occupied by the Daly City Branch Office (6600 Mission Street, Daly City, CA 94014); the land andtwo-story building occupied by the Colma Branch Office (1300 El Camino Real, Colma, CA 94014); the land andtwo-story building occupied by the Redwood City Branch Office (700 El Camino Real, Redwood City, CA 94063); the land andtwo-story building occupied by the Millbrae Branch Office (1551 El Camino Real, Millbrae, CA 94030); the land and single-story building occupied by the Half Moon Bay Branch Office (756 Main Street, Half Moon Bay, CA 94019); the land andtwo-story building occupied by the Pescadero Branch Office (239 Stage Road, Pescadero, CA 94060); and the land and one story building occupied by the Sunnyvale Branch Office (425 South Mathilda Avenue, Sunnyvale, CA 94086). All properties include adequate vehicle parking for customers and employees.

First National Bank leases premises at 1450 Linda Mar Shopping Center, Pacifica, California 94044, for its Linda Mar Branch Office. This ground floor space is approximately 4,100 square feet. The lease will expire on August 31, 2019.

First National Bank leases premises at 6599 Portola Drive, San Francisco, CA 94127, for its Portola Office. The current lease expired June 30, 2012, and the premises are currently leased on amonth-to-month basis. The location consists of approximately 1,325 square feet of street level space.

First National Bank subleases premises at 2197 Chestnut Street, San Francisco, CA 94123, for its Chestnut Street Branch, which opened for business on April 4, 2011, and consists of 2,150 square feet at street level and approximately 2,000 square feet on the second floor. The sublease ends on July 15, 2024.

First National Bank leases premises at 150 East Third Avenue, San Mateo, CA 94401, for its San Mateo Branch Office. First National Bank exercised the remaining option to extend the lease term to August 12, 2018. The location consists of approximately 4,000 square feet of ground floor usable commercial space.

First National Bank leases premises at 130 Battery Street, San Francisco, CA, 94000, for its Battery Street Branch Office. The lease has been renewed with the maturity extended to February 28, 2023. The location consists of approximately 13,000 square feet, consisting of ground floor, mezzanine and lower level.

First National Bank leased a warehouse facility at 450 Cabot Road, South San Francisco, CA 94080. The lease expired February 28, 2011. The facility is currently leased on amonth-to-month basis and consists of approximately 7,600 square feet of office/warehouse space.

As of December 31, 2017, First National Bank’s net investment in premises and equipment totaled $9,322,000.

Legal Proceedings

There are no material legal proceedings adverse to FNBB or First National Bank to which any director, officer, affiliate of FNBB, or 5% shareholder of FNBB, or any associate of any such director, officer, affiliate or 5% shareholder of FNBB are a party, and none of the foregoing persons has a material interest adverse to FNBB or First National Bank.

From time to time, FNBB and/or First National Bank are a party to claims and legal proceedings arising in the ordinary course of business. FNBB’s management is not aware of any material pending legal proceedings to which either it or First National Bank may be a party or has recently been a party, which will have a material adverse effect on the financial condition or results of operations of FNBB and First National Bank, taken as a whole.

Selected Financial Data

See “Selected Consolidated Historical Financial Data of FNBB” on page [●].

Supplementary Financial Information

A summary of selected quarterly results of FNBB operations for each of the quarters ended March, June, September and December 2017, 2016 and 2015.

QUARTERLY FINANCIAL DATA (UNAUDITED)

       Three Months Ended     
   March 31,   June 30,   September 30,   December 31, 
   (In thousands, except per share amounts) 

2017

        

Interest income

  $12,027   $12,378   $12,785    13,028 

Net interest income

   11,192    11,432    11,753    11,970 

Provision for (recovery of) loan losses

   —     (140   —     (220

Earnings before income tax

   4,597    4,906    5,077    5,438 

Net earnings

   3,089    3,351    3,311    960 

Net earnings per common share

        

Basic

  $0.42   $0.46   $0.45    0.13 

Diluted

  $0.41   $0.44   $0.43    0.13 

2016

        

Interest income

  $11,565   $11,316   $11,122   $11,510 

Net interest income

   10,717    10,550    10,401    10,776 

Provision for loan losses

   75    75    —     —   

Earnings before income tax

   3,989    3,862    3,990    4,356 

Net earnings

   2,567    2,448    2,444    3,042 

Net earnings per common share

        

Basic

  $0.36   $0.34   $0.33   $0.42 

Diluted

  $0.35   $0.33   $0.33   $0.41 

2015

        

Interest income

  $9,068   $9,300   $9,893   $11,021 

Net interest income

   8,554    8,705    9,200    10,226 

Provision for (recovery of) loan losses

   75    75    75    (530

Earnings before income tax

   2,614    3,108    2,670    3,169 

Net earnings

   1,799    2,071    2,239    2,088 

Net earnings per common share

        

Basic

  $0.38   $0.44   $0.48   $0.44 

Diluted

  $0.37   $0.43   $0.46   $0.42 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

FNBB’S QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Closely related to the concept of liquidity is the concept of interest rate sensitivity (i. e., the extent to which assets and liabilities are sensitive to changes in interest rates). FNBB’s management uses an asset/liability model that considers the relative sensitivities of the balance sheet, including the effect of interest rate caps on adjustable rate mortgages and the relatively stable aspects of core deposits. As such, FNBB’s management can model a change in economic value of equity and net interest income simulation that is designed to address the probability

of interest rate changes and behavioral response of the balance sheet and net interest income to those changes. The economic value of equity represents the fair value of the net present value of assets, liabilities and off-balance sheet items as of a point in time. The projected net interest income represents the amount of cash received andnet interest income expected during the basis in his or her fractional share interest as set forth above. This gain or loss will generally be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date of the merger, the holding period for such shares (including the holding periodsubsequent 12 calendar months. The starting point (or “base case”) for the shares of North Valley common stock surrendered therefor)following table is greater than one year. The deductibility of capital losses is subject to limitations.

The preceding discussion is intended only as a summary of material United States federal income tax consequences of the merger. It is not a complete analysis or discussion of all potential tax effects that may be important to you. Thus, you are strongly encouraged to consult your tax advisor as to the specific tax consequences resulting from the merger, including tax return reporting requirements, the applicability and effect of federal, state, local, and other tax laws and the effect of any proposed changes in the tax laws.

UNAUDITED PRO FORMA

COMBINED CONDENSED FINANCIAL STATEMENTS

The following unaudited pro forma combined condensed financial statements are based on the separate historical financial statements of TriCo and North Valley, the merger and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma combined condensed financial statements. The unaudited pro forma combined condensed balance sheet as ofFNBB’s net equity position at December 31, 2013 is presented as if the merger had occurred on December 31, 2013. The unaudited pro forma combined condensed statement of earnings2017 and FNBB’s net interest income for the year ended December 31, 20132017. Using current discount rates and accountholder behavior assumptions, a simulation is presented as ifrun designed to produce an estimate of the merger had occurredeconomic value of equity and FNBB’s annual net interest income under a variety of changing interest rates assuming that FNBB’s interest-sensitive assets and liabilities remain at December 31, 2017 levels.

The “rate shock” information in the table shows estimates the changes in the economic value of portfolio equity from levels that existed at December 31, 2017. Net interest income changes are based on January 1, 2013.the initial value of net interest income that was recorded for the year ended December 31, 2017 assuming fluctuations or “rate shocks” of plus and minus 100 and 200 basis points above and below current market rates. Rate shocks assume that current interest rates change immediately and then remain constant once the change has occurred. The historical consolidatedinformation set forth in the following table is based on significant estimates and assumptions, and constitutes a forward-looking statement within the meaning of that term set forth in Rule 175 under the Securities Act and Rule 3b-6(c) of the Exchange Act.

TABLE 17

 

(Dollar amounts in thousands)

  Interest Rate Risk Simulation
Change in Economic Value of Equity
As of December 31, 2017
 
   Rates Decline      Rates Increase 
Rate change  (2%)  (1%)  Current   +1%  +2% 

Projected market value of equity

  $99,814  $112,398  $119,280   $118,648  $115,773 

Change from current

  $(19,466 $(6,882   $(632 $(3,507
(Dollar amounts in thousands)  

Change in Annual Net Interest Income

12 Month Time Period

 
   Rates Decline      Rates Increase 
Rate change  (2%)  (1%)  Current   +1%  +2% 

Projected net interest income

  $45,267  $46,092   46,347    44,206   41,888 

Change from current

  $(1,080 $(255    (2,141  (4,175

FNBB’S MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion presents FNBB’s and its subsidiaries management’s analysis of the financial information has been adjusted to reflect factually supportable items that are directly attributable to the mergercondition and with respect to the income statements only, expected to have a continuing impact on consolidated results of operations.

The unaudited pro forma combined condensedoperations of FNBB as of and for the years in the two year period ended December 31, 2017. This discussion is designed to provide a more comprehensive review of the financial position and operating results of FNBB than could be obtained from an examination of the financial statements have been prepared usingalone. The discussion should be read in conjunction with the acquisition method of accounting for business combinations under GAAP. TriCo is the acquirer for accounting purposes. Certain reclassifications have been made to the historical financial statements of North ValleyFNBB and the notes thereto which appear in Appendix D to conform tothis joint proxy statement/prospectus.

Statements contained in this joint proxy statement/prospectus that are not purely historical are forward-looking statements within the presentation in TriCo’s financial statements.

A final determinationmeaning of Section 21E of the acquisition consideration and fair values of North Valley’s assets and liabilities, which cannot be made prior toExchange Act, including FNBB’s expectations, intentions, beliefs or strategies regarding the completion of the merger, will befuture. All forward-looking statements included in this joint proxy statement/prospectus are based on the actual net tangible and intangible assets of North Valley that exist as of the date of completion of the transaction. Consequently, fair value adjustments and amounts preliminarily allocatedinformation available to goodwill and identifiable intangibles could change significantly from those allocations used in the unaudited pro forma combined condensed financial statements presented below and could result in a material change in amortization of acquired intangible assets.

In connection with the plan to integrate the operations of TriCo and North Valley following the completion of the merger, TriCo anticipates that nonrecurring charges, such as costs associated with systems implementation, severance, and other costs related to exit or disposal activities, will be incurred. TriCo is not able to determine the timing, nature and amount of these chargesFNBB as of the date of this joint proxy statement/prospectus. However,prospectus, and FNBB assumes no obligation to update any such forward-looking statements. It is important to note that FNBB actual results could materially differ from those in such forward-looking statements. Factors that could cause results to differ materially from those in such forward-looking statements are fluctuations in interest rates, inflation, government regulations, economic conditions and competitive product and pricing pressures in the geographic and business areas in which FNBB conducts its operations. See “Cautionary Statement Concerning Forward-Looking Statements” beginning on page [●].

Critical Accounting Policies and Estimates

FNBB’s management’s discussion and analysis of its financial condition and results of operations are based upon FNBB’s financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these charges willfinancial statements requires FNBB to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On anon-going basis, FNBB evaluates its estimates, including those related to its loans and allowance for loan losses. FNBB bases its estimates on current market conditions, historical experience and on various other assumptions that FNBB’s management 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. All adjustments that, in the opinion of FNBB’s management, are necessary for a fair presentation for the periods presented have been reflected as required by RegulationS-X, Rule10-01. FNBB believes the following critical accounting policies requires significant judgments and estimates used in the preparation of the consolidated financial statements.

Allowance for Loan Losses

FNBB’s management periodically evaluates the adequacy of FNBB’s allowance for loan losses. Factors considered include FNBB’s loan loss experience, known and inherent risks in the portfolio, current economic conditions, known adverse situations that may affect the borrower’s ability to repay, regulatory policies, and the estimated value of underlying collateral. The evaluation of the adequacy of the allowance is based on the above factors along with prevailing and anticipated economic conditions that may impact FNBB’s borrowers’ ability to repay their loans. Determination of the allowance is based upon objective and subjective judgments by FNBB’s management from the information currently available. Adverse changes in information could result in higher charge-offs and loan loss provisions.

Goodwill

Goodwill arises when FNBB’s purchase price exceeds the fair value of net assets of an acquired business. Goodwill represents the value attributable to intangible elements acquired. The value of goodwill is supported ultimately by profit from the acquired business. A decline in earnings could lead to impairment, which would be recorded as a write-down in FNBB’s consolidated statements of earnings. Events that may indicate goodwill impairment include significant or adverse changes in results of operations of the acquired business or asset, economic or political climate; an adverse action or assessment by a regulator; unanticipated competition; and amore-likely-than-not expectation that a reporting unit will be sold or disposed of at a loss.

Other Than Temporary Impairment

Other than temporary impairment (“OTTI”) is triggered if FNBB has the intent to sell the security, it is likely that it will be required to sell the security before recovery, or if FNBB does not expect to recover the entire amortized cost basis of the security.

If FNBB intends to sell the security or it is likely it will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If FNBB does not intend to sell the security and it is not likely that FNBB will be required to sell the security but FNBB does not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings as an OTTI. The credit loss is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected of a security. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment loss related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, would be recognized as a charge to other comprehensive income (“OCI”). Impairment losses related to all other factors are to be presented as a

separate category within OCI. For investment securities held to maturity, this amount is accreted over the remaining life of the debt security prospectively based on the amount and timing of future estimated cash flows. The accretion of the OTTI amount recorded in OCI will increase the carrying value of the investment, and would not affect earnings. If there is an indication of additional credit losses the security isre-evaluated accordingly based on the procedures described above.

Provision for and Deferred Income Taxes

FNBB is subject to income tax laws of the United States, its states, and municipalities in which it operates. FNBB considers its income tax provision methodology to be critical, as the determination of current and deferred taxes based on complex analyses of many factors including interpretation of federal and state laws, the difference between tax and financial reporting bases of assets and liabilities (temporary differences), estimates of amounts due or owed, the timing of reversals of temporary differences and current financial standards. Actual results could differ significantly from the estimates due to tax law interpretations used in determining the current and deferred income tax liabilities. Additionally, there can be no assurances that estimates and interpretations used in determining income tax liabilities may not be challenged by federal and state taxing authorities.

Fair Values of Financial Instruments

Certain assets and liabilities are either carried at fair value on a recurring ornon-recurring basis or are required to be disclosed at fair value. Accounting principles have established a fair value measurement model which establishes a framework that quantifies fair value estimates by the level of pricing precision. The degree of judgment utilized in measuring the fair value of assets generally correlates to the level of pricing precision. Financial instruments rarely traded or not quoted will generally have a higher degree of judgment utilized in measuring fair value. Pricing precision is impacted by a number of factors including the type of asset or liability, the availability of the asset or liability, the market demand for the asset or liability, and other conditions that were considered at the time of the valuation.

Recent Accounting Pronouncements

Information pertaining to Recent Accounting Pronouncements is included in Note 1 of FNBB’s Consolidated Financial Statements included in Appendix D to this joint proxy statement/prospectus.

Recent Development – Proposed Merger with TriCo

As announced by FNBB on December 11, 2017 and discussed elsewhere in this joint proxy statement/prospecuts, FNBB has entered into the merger agreement with TriCo providing for the merger of FNBB with and North Valley,into TriCo.

Earnings Analysis

The principal source of FNBB’s income is interest income on loans. The level of interest income can be affected by changes in interest rate, volume of loans outstanding, and the quality of FNBB’s loan portfolio. Loans that are 90 days or more past due are placed onnon-accrual status. Income on such loans is then recognized only to the extent that cash is received, and where the future collection of principal is probable. All other loans accrue interest at the stated contract rate.

FNBB’s net interest income totaled $46,347,000, $42,444,000 and $36,685,000 in 2017, 2016 and 2015, respectively. Total interest income was $50,218,000, $45,513,000 and $39,282,000 for 2017, 2016, and 2015, respectively. Most of the interest earning assets are tied to the prime lending rate, which did not change during all of 2015 and the first eleven months of 2016 when the rate was 3.25%. The rate was raised 25 basis points on December 14, 2017, June 15, 2017, March 16, 2017, December 15, 2016 and December 17, 2015. These increases in the prime lending rate were loosely connected with short term interest rate changes initiated by the

Federal Open Market Committee of the Federal Reserve. Total nonaccrual loans were $1,940,000 and $6,647,000 as of December 31, 2017 and 2016, respectively. Payments received for loans on nonaccrual status, where principal is believed to be fully collectible, are credited to interest income when they are received. Average interest earning assets were $1,192,081 in 2017 compared to $1,099,192 in 2016, an increase of $92,889,000. Average interest earning assets were $923,700,000 in 2015. The principal earning assets were loans. Loan growth in 2017 and 2016 was obtained through the existing operating facilities of FNBB. Interest expense totaled $3,871,000, $3,069,000 and $2,597,000 for 2017, 2016 and 2015, respectively. During 2017, First National Bank increased its deposit rates slightly, as the interest rates that were available in the general marketplace rose. First National Bank also maintained FHLB advances throughout 2017. The cost of the FHLB advances increased 52 basis points during 2017 and decreased 16 basis points in 2016 compared to 2015. Time deposit interest rates increased 22 basis points in 2017 compared to 2016 and increased 10 basis points in 2016 compared to 2015. First National Bank slowly raised the interest rates paid on its time deposits during 2017.

TABLE 1 Net Interest Income and Average Balances 
  2017  2016  2015 
(Dollar amounts in thousands) Average
Balance
  Interest
Income
Expense
  Average
Yield
Cost
  Average
Balance
  Interest
Income
Expense
  Average
Yield
Cost
  Average
Balance
  Interest
Income
Expense
  Average
Yield
Cost
 

INTEREST EARNING ASSETS

         

Loans, gross (1) (2)

 $823,333  $41,956   5.10 $746,829  $38,313   5.13 $629,814  $33,235   5.28

Taxable securities

  224,600   5,209   2.32  209,257   4,213   2.01  188,286   3,554   1.89

Nontaxable securities (3)

  133,467   3,653   2.74  135,412   3,916   2.89  103,611   3,272   3.16

Interest on deposits-other financial institutions

  10,681   126   1.18  7,694   44   0.57  1,989   39   1.96
 

 

 

    

 

 

    

 

 

  

 

 

  

Total interest earning assets

  1,192,081   50,944   4.27  1,099,192   46,486   4.23  923,700   40,100   4.34
 

 

 

    

 

 

  

 

 

   

 

 

  

 

 

  

Cash and due from banks

  15,168   92,889    15,041     44,774   

Premises and equipment

  9,500     10,086     10,557   

Other assets

  41,087     39,135     31,404   
 

 

 

    

 

 

    

 

 

   

Total noninterest earning assets

  65,755     64,262     86,735   
 

 

 

    

 

 

    

 

 

   

TOTAL ASSETS

 $1,257,836    $1,163,454    $1,010,435   
 

 

 

    

 

 

    

 

 

   

Deposits:

         

Demand, interest bearing

 $124,267  $121   0.10 $113,121  $123   0.11 $92,267   104   0.11

Money market

  395,960   1,559   0.39  424,981   1,824   0.43  368,858   1,589   0.43

Savings

  88,249   91   0.10  84,229   88   0.10  75,861   77   0.10

Time deposits

  123,971   1,036   0.84  120,115   745   0.62  112,414   589   0.52

Federal Home Loan Bank advances

  86,603   850   0.98  14,497   67   0.46  1,452   9   0.62

Note payable

  4,050   214   5.28  4,663   222   4.76  5,263   229   4.35
 

 

 

  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

  

Total interest bearing liabilities

  823,100   3,871   0.47  761,606   3,069   0.40  656,115   2,597   0.40
 

 

 

  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

  

NONINTEREST BEARING LIABILITIES:

         

Demand deposits

  300,670     274,952     240,969   

Other liabilities

  17,252     17,042     12,730   
 

 

 

    

 

 

    

 

 

   

Total noninterest bearing liabilities

  317,922     291,994     253,699   
 

 

 

    

 

 

    

 

 

   

TOTAL LIABILITIES

  1,141,022     1,053,600     909,814   

Stockholders’ equity

  116,814     109,854     100,621   
 

 

 

    

 

 

    

 

 

   

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 $1,257,836    $1,163,454    $1,010,435   
 

 

 

    

 

 

    

 

 

   

NET INTEREST INCOME AND MARGIN ON TOTAL EARNING ASSETS (4)

  $47,073   3.95  $43,417   3.95  $37,503   4.06

(1)Interest onnon-accrual loans is recognized into income on a cash received basis if the loan has demonstrated performance and full collection is considered probable.
(2)Amounts of interest earned include loan fees of $1,856,000, $1,844,000 and $1,514,000 for the years ended December 31, 2017, 2016 and 2015, respectively.
(3)Tax equivalent adjustments recorded at the statutory rate of 35% that are included in the nontaxable securities portfolio are $726,000, $973,000, and $818,000 for the years ended December 31, 2017, 2016 and 2015, respectively, and were derived from nontaxable municipal interest income.
(4)The net interest margin is computed by dividing net interest income by total average interest earning assets.

The following table analyzes the dollar amount of change in FNBB’s interest income and expense and the changes in dollar amounts attributable to (a) changes in volume (changes in volume at the current year rate), (b) changes in rate (changes in rate times the prior year’s volume) and (c) changes in rate/volume (changes in rate times changes in volume). In this table, the dollar change in rate/volume is prorated to volume and rate proportionately.

TABLE 2  Rate/Volume Variance Analysis 
   Year Ended December 31 
   2017 compared to 2016
Increase (decrease) (2)
  2016 compared to 2015
Increase (decrease) (2)
 
   Interest
Income/
Expense
Variance
  Variance
Attributable To
  Interest
Income/
Expense
Variance
  Variance
Attributable To
 
(Dollar amounts in thousands)   Rate  Volume   Rate  Volume 

INTEREST EARNING ASSETS:

 

     

Loans

  $3,643  $(280 $3,923  $5,078  $(925 $6,003 

Taxable securities

   996   687   309   659   263   396 

Nontaxable securities (1), (3)

   (263  (207  (56  644   (360  1,004 

Deposits with other financial institutions

   82   65   17   5   (107  112 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

  $4,458  $265  $4,193  $6,386  $(1,129 $7,515 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

INTEREST BEARING LIABILITIES:

 

     

Demand deposits

  $(2 $(14 $12  $19  $(5 $24 

Money market

   (265  (151  (114  235   (6  241 

Savings deposits

   3   (1  4   11   2   9 

Time deposits

   291   267   24   156   116   40 

Federal Home Loan Bank advances

   783   450   333   58   (23  81 

Interest on note payable

   (8  21   (29  (7  19   (26
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

   802   572   230   472   103   369 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

NET INTEREST INCOME

  $3,656  $(307 $3,963  $5,914  $(1,232 $7,146 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

(1)Nontaxable securities in this Table are shown on a tax equivalent basis.
(2)Increases (decreases) shown are in relation to their effect on net interest income.
(3)Tax equivalent adjustments recorded at the statutory rate of 35% that are included in the nontaxable portfolio are $726,000, $973,000 and $818,000 for the years ended December 31, 2017, 2016 and 2015, respectively, and were derived from nontaxable municipal interest income.

There were no fed funds sold in 2017 and 2016 and nominal amounts of federal funds sold in 2015. Yields on deposits at other financial institutions averaged 1.18%, 0.57% and 1.96% in 2017, 2016 and 2015, respectively. On the interest expense side, the interest rate increase in Time Deposits and FHLB advances during 2017 was due to increases in short term market interest rate increases that occurred due to actions taken by the Federal Open Market Committee of the Federal Reserve.

Allowance for Loan Losses

FNBB’s board of directors has the ultimate oversight responsibility over the processes utilized in assessing the overall risks in FNBB’s loan portfolio, assessing the specific loss expectancy, and determining the adequacy of the loan loss reserve. The level of reserves is determined by FNBB’s management and documented with internally generated credit quality ratings, a review of the local economic conditions in First National Bank’s market area, and consideration of First National Bank’s historical loan loss experience. First National Bank is committed to maintaining adequate reserves, identifying credit weaknesses through frequent loan reviews, and updating loan risk ratings and changing those risk ratings in a timely manner as circumstances change.

Loans outstanding (net of deferred loan fees and allowance for loan losses) increased by $47,281,000 to $829,766,000 in 2017; $59,738,000 to $782,485,000 in 2016 compared to 2015, and $139,032,000 to $722,747,000 in 2015. First National Bank management believes that it has consistently maintained conservative underwriting standards which generally require borrowers to maintain at most aloan-to-value ratio of 70%; maintain a debt service coverage ratio of at least 1.25; and requires borrowers to make monthly mortgage payments out of documented cash flows.

The allowance for loan losses totaled $10,171,000, $10,167,000, and $9,970,000 at December 31, 2017, 2016 and 2015, respectively. This represented 1.21%, 1.28%, and 1.36% of total loans outstanding on those dates. These balances reflect amounts that, in FNBB’s management’s judgment, are adequate to provide for probable loan losses based on the considerations listed above. FNBB management performs stress testing of the loan portfolio to gain a better understanding of the portfolio effects of additional declines in real estate values and expected cash values. FNBB’s management also evaluates all commercial loans, secured and unsecured, at least quarterly.

Loans acquired in the Oceanic Bank acquisition in 2012 and the America California Bank acquisition in 2015 were accounted for at fair value, resulting in a discount at the time of the acquisition, due in part to credit quality. If expected potential credit losses are actually incurred, they will be evaluated against the net book discount remaining. Only those losses that occur after the acquisition date or exceed the amount of discount remaining on the acquired Oceanic Bank loan portfolio will be charged to the allowance for loan losses. At December 31, 2017, 2016, and 2015, the remaining discount related to the Oceanic Bank and America California Bank acquisitions totaled $443,425, $1,336,000, and $1,397,000, respectively.

TABLE 3 Allocation of the Allowance for Loan Losses 
  (Dollar amounts in thousands) 
     2017     2016     2015     2014     2013 
  Amount  Percent
of loans
in each
category
to total
Loans
  Amount  Percent
of loans
in each
category
to total
Loans
  Amount  Percent
of loans
in each
category
to total
Loans
  Amount  Percent
of loans
in each
category
to total
Loans
  Amount  Percent
of loans
in each
category
to total
Loans
 

Commercial real estate

 $5,495   54.4 $6,392   53.1 $6,059   54.5 $5,549   53.6 $5,763   57.8

Real estate construction

  388   4.2  617   5.5  589   6.1  849   6.7  734   6.1

Real estate multi family

  1,496   12.5  389   13.3  243   8.7  206   9.1  293   8.2

Real estate 1 to 4 family

  2,008   20.6  2,082   21.5  2,176   23.4  1,965   21.7  1,788   19.0

Commercial & industrial

  440   6.6  650   6.2  853   7.1  1,073   8.7  1,237   8.6

Consumer

  344   1.7  37   0.4  50   0.2  58   0.2  64   0.3
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

 $10,171   100.0 $10,167   100.0 $9,970   100.0 $9,700   100.0 $9,879   100.0
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

The following table summarizes transactions in the allowance for loan losses and details the charge-offs, recoveries and net loan losses by loan category for each of the last five fiscal years ended December 31, 2017. The amount added to the provision and charged to operating expenses for each period is based on the risk profile of the loan portfolio.

TABLE 4  

Allowance for Loan Losses

 
   Historical Analysis 
(Dollar amounts in thousands)  For the year ended December 31, 
   2017  2016  2015  2014  2013 

Balance at Beginning of Period

  $10,167  $9,970  $9,700  $9,879  $9,124 

(Recovery of) provision for loan losses

   (360  150   (305  (1,020  1,385 

Charge-offs:

      

Real Estate

   (91  (35  (45  (328  (728

Commercial

   (39  (165  (23  (28  (57

Consumer

   (8  (18  (13  (26  (7
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

   (138  (218  (81  (382  (792

Recoveries:

      

Real Estate

   183   52   591   1,065   88 

Commercial

   319   213   60   154   73 

Consumer

   —     —     5   4   1 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

   502   265   656   1,223   162 

Net recoveries (charge-offs)

   364   47   575   841   (630
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at End of Period

  $10,171  $10,167  $9,970  $9,700  $9,879 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Percentages

      

Allowance for loan losses/total loans

   1.21  1.28  1.36  1.63  1.76

Net (recoveries) charge-offs/real estate loans

   -0.08  -0.08  -0.08  -0.14  0.13

Net (recoveries) charge-offs/commercial loans

   -0.50  -0.10  -0.07  -0.24  -0.03

Net charge-offs/consumer loans

   0.06  0.51  0.51  1.52  0.36

Net (recoveries) charge-offs/total loans

   -0.04  -0.01  -0.08  -0.14  0.11

Allowance for loan losses/non-performing loans

   524.28  118.65  118.65  171.74  134.39

The level of yearly charge-offs were primarily attributable to problems that were identified with specific borrowers rather than problems with a particular segment of the loan portfolio. In particular, borrowers who had exposure to real estate projects outside of San Mateo and San Francisco counties were identified as having a relatively higher risk profile than those operating solely within these two counties. If real estate values or lease rates decline in the future, additional increases in FNBB’s allowance for loan losses may be warranted.

Nonperforming Assets

Nonperforming assets consist of nonaccrual loans, foreclosed assets, and loans that are 90 days or more past due but are still accruing interest. The accrual of interest onnon-accrual loans is discontinued when, in FNBB’s management’s opinion, the borrower may be unable to meet payments as they become due. For the years ended December 31, 2017, 2016 and 2015, hadnon-accrual loans performed as agreed, approximately $664,000, $569,000, and $460,000, respectively, would have been recognized in additional interest income.

The following table provides a summary of nonperforming assets for the most recent five years. Nonperforming loans were 0.2%, 0.8% and 1.2% of total loans at December 31, 2017, 2016 and 2015. FNBB management believes the current list of past due loans as of December 31, 2017 are collectible and does not anticipate future significant losses that exceed the current allowance for loan losses.

TABLE 5  Analysis of Nonperforming Assets 
(Dollar amounts in thousands)  December 31 
   2017   2016   2015   2014   2013 

Nonaccrual loans

  $1,940   $6,647   $7,915   $5,648   $7,351 

Other real estate owned

   3,300    1,427    1,026    763    5,318 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $5,240   $8,074   $8,941   $6,411   $12,669 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Nonaccrual loans at December 31, 2017 consist of commercial real estate loans, single family residence loans, commercial loans and some commercial and industrial loans. First National Bank is working with its borrowers to develop strategies that can give the borrowers time to work through their financial difficulties.

There are two properties reported in other real estate owned. The first property is a commercial building with a net book balance of $1,483,000, $1,427,000 and $1,026,000 as of December 31. 2017, 2016 and 2015, respectively. This commercial property has environmental issues related to soil contamination from the property’s use by previous owners. The building is fully leased on a triple net lease and the market value of the building, supported by appraisal and other market data, is significantly greater than the net book value of the property as of December 31, 2017. During February 2018, the property was sold to an unrelated third party for $2.8 million. First National Bank loaned $1.2 million to the buyer and in accordance with the purchase and sale agreement has agreed to incur the costs necessary to continue monitoring the property and to continue its efforts to obtain a signed remediation agreement with the local Water Board. The purchase and sale agreement requires aset-aside reserve of $500,000 to cover the costs that are anticipated to be incurred by FNBB. Theset-aside reserve will be funded with a portion of the net cash provided by the sale of the property. During 2017, 2016 and 2015, toxic remediation costs were incurred with the goal of obtaining a definitive remediation agreement with the Water Board. All remediation costs leading up to the sale date were capitalized into the net carrying value of the property. The remediation efforts performed included soil replacement, soil treatment and drilling water monitoring wells. These capitalized costs have increased the carrying value of the property while at the same time the appraised market value of the property has steadily increased. On an annual basis, the net investment in the property has been reviewed for potential impairment, and to date, no impairment has been found. From the time this property was obtained through foreclosure until the date of the sale and the transfer of ownership of the property, the estimated market value of the property has consistently been more than the property’s net book value plus estimated future toxic remediation costs. However, FNBB does not yet have a signed final remediation plan with the Water Board and FNBB has no guarantee as to when or if that might occur. FNBB’s management has obtained cost estimates from FNBB’s soil engineering and consulting company consultant related to the estimated future cost of remediation using a remediation plan that has been submitted for approval to the local Water Board. The estimated future costs are expected to total approximately $725,000 but could vary in the future. At the time of sale, FNBB established aset-aside monetary fund of $500,000 which was deposited into an insured depository account that was funded from the purchase and sale contract that closed escrow in February 2018. The second property is an elderly care facility located in Lafayette, California that was acquired in November 2017 and has a net book balance of $1,817,000. A potential purchaser of this facility has been identified and First National Bank is working with the potential buyer to complete the sale of this property, which FNBB expects to occur in either March or April of 2018. For additional information regarding these two properties, please see Note 7 and Note 23 to FNBB’s 2017 Consolidated Financial Statements included in Appendix D to this joint proxy statement/prospectus.

A troubled debt restructuring occurs when First National Bank offers, at favorable terms, a modification of loan terms and conditions because its management believes the borrower may not be able to make payments at their

original note rate and terms. There were no troubled debt restructurings in 2017 or 2016. There was one troubled debt restructuring in 2015 that consisted of one 1 to 4 family real estate loan. Total restructured loans outstanding as of December 31, 2017 and 2016 were $7,708,000and $13,268,000, respectively.

Noninterest Income

The following table sets forth the principal components of noninterest income:

TABLE 6  Noninterest Income   Variance  Variance 
   Years ended December 31,   2017 vs. 2016  2016 vs. 2015 
(Dollar amounts in thousands)  2017   2016   2015   Amount  Percent  Amount  Percent 

Service charges

  $2,264   $2,461   $2,501    (197  -8  (40  -2

Net gain on sale ofavailable-for-sale securities

   210    438    339    (228  -52  201   59

Earnings on bank-owned life insurance

   390    402    364    (12  -3  5   1

Other income

   996    1,294    1,292    (298  -23  333   26
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

Total noninterest income

  $3,860   $4,595   $4,496   $(735  -16 $499   11
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

Total noninterest income consists mainly of service charges on deposits. The gain on sale ofavailable-for-sale securities during 2017, 2016 and 2015 was derived primarily from the sale of U. S. government agency, mortgage-backed securities, municipal securities and U. S. Treasury securities. A significant source of other income was dividends on equity securities, which totaled $558,000, $775,000, and $651,000, in the years 2017, 2016, and 2015, respectively. The equity securities that are owned by First National Bank are either highly illiquid securities or investments in government sponsored entities that cannot be bought and sold in open market transactions.

Noninterest Expenses

The following table sets forth the various components of noninterest expense:

TABLE 7  Noninterest Expenses   Variance  Variance 
(Dollar amounts in thousands)  Years ended December 31,   2017 vs. 2016  2016 vs. 2015 
   2017   2016  2015   Amount  Percent  Amount  Percent 

Salaries and employee benefits

  $19,366   $19,474  $18,523   $(108  -1  951   5

Occupancy expense

   2,747    2,528   2,517    219   9  11   0

Equipment expense

   1,646    1,765   1,926    (119  -7  (161  -8

Professional fees

   1,482    1,363   1,471    119   9  (108  -7

FDIC assessment

   400    600   600    (200  -33  0   0

Telephone, postage, supplies

   1,267    1,199   1,074    68   6  125   12

Advertising expense

   451    524   500    (73  -14  24   5

Data processing expense

   571    657   1,076    (86  -13  (419  -39

Low income housing expense

   472    284   283    188   66  1   0

Surety insurance

   349    347   381    2   1  (34  -9

Directors expense

   288    288   288    —     —     —     —   

Other real estate owned expense (recovery), net

   80    (5  4    85   -1700  (9  -225

Other expense

   1,430    1,668   1,282    (238  -14  386   30
  

 

 

   

 

 

  

 

 

   

 

 

   

 

 

  

Total noninterest expense

  $30,549   $30,692  $29,925   $(143  0 $767   3
  

 

 

   

 

 

  

 

 

   

 

 

   

 

 

  

Salaries and employee benefits were $19,366,000, 19,474,000 and $18,523,000 in 2017, 2016 and 2015, respectively. Salaries and employee benefits represented 63%, 63%, and 62% of noninterest expense for the years 2017, 2016, and 2015, respectively. Decreases in salary and employee benefits in 2017 were primarily related to open, unfilled positions within FNBB. Increases in salaries and employee benefits in 2016 and 2015 were related to normal salary progression, changes related to executive salary continuation agreements and the purchase of America California Bank.

Occupancy expense increased $219,000 and $11,000 in 2017 and 2016, respectively and decreased $256,000 in 2015. The increase in occupancy expense during 2017 was primarily due to maintenance and repair costs of heating and air conditioning systems and the resurfacing of parking lots at First National Bank’s branch and home office facilities. The decrease in 2015 was primarily related First National Bank’s sale of its South San Francisco South Airport Boulevard branch late in 2014.

The increase in other real estate owned expense during 2017 was primarily related to the foreclosure of an assisted living facility located in Lafayette, California during 2017. Toxic remediation costs incurred at the OREO property were capitalized during 2017, 2016 and 2015 and were not a factor in the increased OREO costs during 2017.

Provision for Loan Losses

The allowance for loan losses in 2017, 2016 and 2015 was recorded at levels FNBB management believed reflected the estimated loss exposure identified in the loan portfolio during each of these years. The allowance for loan losses was $10,171,000 or 1.21% of total gross loans at December 31, 2017. During 2016 and 2015 the allowance for loan losses was $10,167,000 and $9,970,000 or 1.28% and 1.26%of total gross loans as of December 31, 2016 and 2015. During 2017, improvement in the credit characteristics of the loan portfolio resulted in a recovery of provision for loan losses of $360,000. During 2016, First National Bank incurred a loan loss provision of $150,000 primarily attributable to growth that occurred within the loan portfolio. During the fourth quarter of 2015, a reversal of $530,000 in loan loss provision was recorded to reflect improving credit metrics that occurred within the loan portfolio during 2015.

The allowance for loan losses is maintained at a level considered adequate to provide for probable loan losses inherent in the loan portfolio. FNBB management is taking steps necessary to work with borrowers and has granted modified loan terms to certain borrowers willing to make payments on loans secured by their primary residence, even though they were delinquent, and/or the value of their home had declined substantially. The purchased Oceanic Bank and America California Bank loans have a fair value discount that was created at acquisition pursuant to acquisition accounting and representing, in part, expected credit losses inherent in the acquired loan portfolio. The fair value discount is not part of the allowance for loan losses.

Balance Sheet Analysis

Total assets were $1,265,238,000, $1,219,394,000 and $1,124,349,000 as of December 31, 2017, 2016 and 2015, respectively. Total assets averaged $1,257,836, $1,163,454 and $1,010,435during 2017, 2016 and 2015 respectively. Average earning assets represented 95%, 94% and 93% of total average assets during 2017, 2016 and 2015, respectively. Asset growth in 2017 and 2016 was through increased business developed through existing facilities. In 2015, a significant portion of FNBB’s growth was obtained from the America California Bank acquisition as well as thosegrowth in customer business generated through First National Bank’s branch offices.

Loans

The loan portfolio is the principal earning asset of First National Bank. Gross loans outstanding (net of loan fees) totaled $839,937,000, $792,652,000 and $732,717,000 as of December 31, 2017, 2016 and 2015, respectively. During 2017 and 2016, the combined company following the completion of the merger,growth in Frist National Bank’s loan portfolio was obtained through its existing

branch network. During 2015, total growth in the period in which theyloan portfolio was $140,113,000, and $93,000,000 of this amount was the result of FNBB’s acquisition of America California Bank. The remainder was from organic growth.

The following table presents an analysis of loans outstanding at December 31, 2013 through December 31, 2017.

TABLE 8  Loan Portfolio 
   December 31 
   2017     2016     2015     2014     2013    
(Dollar amounts in thousands)                            

Commercial real estate

  $456,992   54 $421,222   53 $399,993   55 $318,427   54 $325,199   58

Real estate construction

   35,206   4  43,683   6  44,816   6  39,771   7  34,318   6

Real estate multi family

   105,138   12  105,963   13  63,597   9  53,824   9  46,143   8

Real estate 1 to 4 family

   173,476   21  170,523   22  171,964   23  128,732   22  106,903   21

Commercial & industrial

   55,727   7  48,874   6  52,033   7  51,662   9  48,504   9

Consumer

   14,057   2  3,533   —     1,574   —     1,448   —     1,650   0
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Sub total

   840,596   100  793,798   100  733,977   100  593,864   100  562,717   100

Net deferred loan fees

   (659  —     (1,146  —     (1,260  —     (449  —     (495  —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

Total

  $839,937   100 $792,652   100 $732,717   100 $593,415   100 $562,222   100
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

Loans that are recorded. The unaudited pro forma combined condensed statementsnot guaranteed by the U. S. Government contain some level of earnings do not include the effectsrisk of the costs associatedprincipal repayment. Real estate and loans supported by UCC filing requirements contain less risk of loss than unsecured loans. By securing loans with any restructuring or integration activities resultingvarious types of collateral, First National Bank is able to better assure repayment, either from the transaction, as they are nonrecurring in nature and not

101


factually supportable at the time that the unaudited pro forma combined condensed statementsliquidation of earnings were prepared. Additionally, the unaudited pro forma adjustments do not give effect to any nonrecurringcollateral or unusual restructuring charges that may be incurred as a result of the integration of the two companies or any anticipated disposition of assets that may result from such integration. However, the unaudited pro forma combined condensed balance sheet reflects the payment of merger costs specified therein as a reduction in cash and pro forma shareholders’ equity.

The actual amounts recorded as of the completion of the merger may differ materially from the information presentedborrower. For commercial loans, both secured and unsecured, First National Bank will generally require personal guarantees from its borrowers. These financial guarantees allow First National Bank to initiate collection activity against the borrowers individually if the liquidation of collateral is insufficient to repay the loan. First National Bank’s underwriting policies require its borrowers to document the source of repayment for their loans, maintain equity positions in these unaudited pro forma combined condensedany secured financings, and provide ongoing financial statements as a result of:

changes in the trading price for TriCo’s common stock;

net cash used or generated in North Valley’s operations between the signing of the merger agreement and completion of the merger;

changes in the fair values of North Valley’s assets and liabilities;

other changes in North Valley’s net assets that occur prior to the completion of the merger, which could cause material changes in the information presented below; and

changes in the financial results of the combined company, which could change the future discounted cash flow projections.

The unaudited pro forma combined condensed financial statements are provided for informational purposes only. The unaudited pro forma combined condensed financial statements are not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the transaction been completed as of the dates indicated or that may be achieved in the future. The preparation of the unaudited pro forma combined condensedstatement information. Current appraisals, financial statements, and related adjustments requiredtax returns allow the First National Bank management to make certain assumptionsevaluate a borrower’s repayment ability on at least an annual basis. Commercial loans are generally variable rate in nature. Real estate loans more than five years to maturity generally contain variable interest rates. Loans that mature in five years or less may be either fixed or variable rate in nature, with fixed rate loans containing initial rates that are higher than those with variable rates. A borrower’s preference and estimates.interest

rate risk tolerance will generally dictate whether to utilize fixed or variable rate financing. The unaudited pro forma combined condensed financial statements should be read together with:following table shows First National Bank’s loan maturities and sensitivities to changes in interest rates as of December 31, 2017.

 

TABLE 9     Maturing       

(Dollar amounts in thousands)

  Maturing
Within
1 Year
  After 1 But
Within
5 Years
  Maturing
After
5 Years
  Total 

Commercial real estate

  $25,702  $76,323  $354,967  $456,992 

Real estate construction

   27,279   4,740   3,187   35,206 

Real estate multi family

   3,130   18,892   83,116   105,138 

Real estate 1 to 4 family

   11,007   22,777   139,692   173,476 

Commercial & industrial

   33,604   17,958   4,165   55,727 

Consumer

   1,294   391   12,372   14,057 
  

 

 

  

 

 

  

 

 

  

 

 

 

Sub total

   102,016   141,081   597,499   840,596 

Net deferred loan fees

   (104  (323  (232  (659
  

 

 

  

 

 

  

 

 

  

 

 

 

Total

  $101,912  $140,758  $597,267  $839,937 
  

 

 

  

 

 

  

 

 

  

 

 

 

With predetermined fixed interest rates

  $15,459  $55,977  $195,757  $267,193 

With floating interest rates

   86,453   84,781   401,510   572,744 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total

  $101,912  $140,758  $597,267  $839,937 
  

 

 

  

 

 

  

 

 

  

 

 

 

Investment Portfolio

The primary purpose of First National Bank’s investment portfolio is to provide available funds sufficient to fund FNBB’s liquidity needs, including the accompanying notesability to fund loans or pay down liabilities. FNBB’s primary source of funds is the deposit base. If more funds are needed, investment maturities, calls and sales from the investment portfolio may be used. First National Bank’s investment portfolio is composed primarily of debt securities of U. S. Government Agencies, mortgage-backed securities that have their principal guaranteed by U. S. Government Agencies, and in obligations of States and their political subdivisions. First National Bank believes this provides for an appropriate liquidity level and minimal credit risk.

The following table sets forth the maturity distribution and interest rate sensitivity of investment securities at December 31, 2017:

TABLE 10       After     After                   

(Dollar amounts

in thousands)

 

Due

In 1 Year

     1 Year
Through
     5 Years
Through
     Due
After
     Fair  Maturity
In
  Average 
 Or Less  Yield  5 Years  Yield  10 Years  Yield  10 Years  Yield  Value  Years  Yield 

U. S. Treasury securities

 $—     —   $1,975   1.88 $—     —   $—     —   $1,975   2.92   1.83

Obligations of U. S. Government Agencies

  6,000   1.10  35,822   1.74  —     1.77  —     —     41,823   3.12   1.59

Mortgage-backed securities

  —     —     44,580   2.48  31,732   2.61  43,481   2.78  119,792   11.03   2.35

Asset-backed securities

  —     —     —     —     1,628   2.43  2,058   3.95  3,686   9.71   3.32

Obligations of states and political subdivisions

  4,636   2.54  81,470   2.33  54,503   2.62  10,493   3.73  151,103   5.11   2.45

Corporate debt

  2,011   1.70  26,272   2.64  8,136   5.14  1,060   5.84  37,478   4.32   3.95
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Total

 $12,647   1.72 $190,119   2.29 $95,999   2.83 $57,092   3.06 $355,857   6.76   2.54
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

The following table shows the securities portfolio mix at December 31, 2017, 2016 and 2015.

TABLE 11  Years Ended December 31, 
   2017   2016   2015 
(Dollar amounts in thousands)  Amortized   Fair   Amortized   Fair   Amortized   Fair 
   Cost   Value   Cost   Value   Cost   Value 

U. S. Treasury securities

  $1,989   $1,975   $977   $987   $7,004   $7,000 

Obligations of U.S. Government Agencies

   42,247    41,823    60,773    60,545    84,842    84,609 

Mortgage-backed securities

   121,087    119,792    85,709    84,284    61,579    61,663 

Asset-backed securities

   3,734    3,686    —      —      —      —   

Obligations of states and political subdivisions

   150,724    151,103    151,988    151,618    132,125    135,190 

Corporate debt

   37,409    37,478    63,277    62,671    41,045    40,745 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $357,190   $355,857   $362,724   $360,105   $326,595   $329,207 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Deposits

During 2017, 2016 and 2015 total average deposits were $1,033,117,000, $1,017,398,000 and $890,369,000. The prime lending rate was revised upwards on three separate occasions in 2017, and once in both 2016 and 2015. Time deposit interest rates have moved higher in a steady fashion over the last few years. Average time deposit interest rates were 0.84%, 0.62% and 0.52% in 2017, 2016 and 2015, respectively. First National Bank management has made a conscious effort to keep transaction based deposit accounts, such as interest bearing demand, savings and money market rates, stable.

The following table summarizes the distribution of average deposits and the average rates paid for them in the periods indicated:

TABLE 12 Average Deposits and Average Rates paid for the period ending December 31, 
  2017  2016  2015 
(Dollar amounts in thousands) Average
Balance
  Average
Rate
  % of
total
Deposits
  Average
Balance
  Average
Rate
  % of
total
Deposits
  Average
Balance
  Average
Rate
  % of
total
Deposits
 

Interest-bearing demand

 $124,267   0.10  12 $113,121   0.11  11  92,267   0.11  10

Money market

  395,960   0.39  38  424,981   0.43  42  368,858   0.43  42

Savings

  88,249   0.10  9  84,229   0.10  8  75,861   0.10  8

Time deposits $100,000 or more

  89,594   0.91  9  83,942   0.43  8  78,842   0.36  9

Time deposits under $100,000

  34,377   0.66  3  36,173   0.19  4  33,572   1.60  4
 

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

Total interest bearing deposits

  732,447   0.38  71  742,446   0.37  73  649,400   0.36  73

Demand deposits

  300,670   —     29  274,952   —     27  240,969   —     27
 

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

Total deposits

 $1,033,117   0.27  100 $1,017,398   0.21  100 $890,369   0.21  100
 

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

The following table indicates the maturity schedule of time deposits of $250,000 or more:

TABLE 13

  Analysis of Time Deposits $250,000 or more at December 31, 2017
(Dollar amounts in thousands)         

Total

Deposits of

$250,000 or

More

  Three Months
Or Less
  Over Three
To Six
Months
  Over Six
To Twelve
Months
  Over
Twelve
Months

$63,678

  $8,397  $26,580  $14,932  $13,769

Capital

The increases in FNBB’s retained earnings were primarily attributable to retention of net earnings less cash dividends paid in 2017, 2016 and 2015. Net earnings totaled $10,711,000, $10,501,000 and $8,197,000 in 2017, 2016, and 2015, respectively. Cash dividend payments totaled $3,634,000, $2,890,000 and $2,447,000 in 2017, 2016 and 2015, respectively.

Under regulatory capital guidelines, qualifying capital is classified into two tiers, referred to as Tier 1 (core) and Tier 2 (supplementary) capital. FNBB’s Tier 1 capital consists of common shareholders’ equity and preferred stock issued to the unaudited pro forma combined condensedU.S. Treasury during 2011. FNBB’s Tier 2 capital consists of eligible reserves for possible loan losses. Total capital is the sum of Tier 1 plus Tier 2 capital. Risk-weighted assets are calculated by applying risk percentages specified by the FDIC to categories of both balance sheet assets andoff-balance sheet obligations. The FDIC also requires the calculation of a leverage ratio requirement. This ratio supplements the risk-based capital ratios and is defined as Tier 1 capital divided by quarterly average assets during the reporting period. This requirement established a minimum leverage ratio of 3.0% for the highest rated banks and ratios of 100 to 200 basis points higher for most other banks. To qualify as “well-capitalized” as defined by regulation, financial statements;

TriCo’s separate audited historical consolidatedinstitutions must maintain a leverage ratio, common equity Tier 1, Tier 1 and total capital ratios of at least 5.0%, 6.5%, 8.0% and 10.0% respectively. “Well-capitalized” financial statements and accompanying notesinstitutions must maintain a capped conservation buffer in additional capital across all capital ratios as of December 31, 2017.

Table 14            Required        
             for Capital  To be Well-Capitalized 
             Adequacy Purposes  Under Prompt Correction 
Dollars in thousands            Effective January 1, 2017  Action Regulations 
   At December 31, 2017                  

Regulatory Capital Ratios

      Amount           Ratio             Amount           Ratio          Amount           Ratio     

Leverage Ratio(1)

           

Company

  $115,364    9.09 ³  $50,768    4.00%(2)   N/A    N/A 

Bank

   117,180    9.23 ³   50,768    4.00%(2)  $63,460    5.00

Tier 1 Common Equity Capital Ratio

           

Company

   115,364    11.57 ³   57,342    5.75%(2)   N/A    N/A 

Bank

   117,180    11.75 ³   57,342    5.75%(2)   64,822    6.50

Tier 1 Capital Ratio

           

Company

   115,364    11.57 ³   72,301    7.25%(2)   N/A    N/A 

Bank

   117,180    11.75 ³   72,301    7.25%(2)   79,781    8.00

Total Capital Ratio

           

Company

   125,712    12.61 ³   92,246    9.25%(2)   N/A    N/A 

Bank

   127,528    12.79 ³   92,246    9.25%(2)   99,726    10.00

(1)The leverage ratio consists of Tier 1 Capital divided by the most recent quarterly average total assets, excluding certain intangible assets.
(2)Includes capital conservation buffer as phased in effective January 1, 2017.

Dollars in thousands            Required
for Capital
Adequacy Purposes
Effective January 1, 2016
  To be Well-Capitalized
Under Prompt Correction
Action Regulations
 
   At December 31, 2016                  

Regulatory Capital Ratios

  Amount   Ratio         Amount           Ratio          Amount           Ratio     

Leverage Ratio(1)

           

Company

  $106,971    9.02 ³  $47,443    4.000%(2)   N/A    N/A 

Bank

   109,538    9.27 ³   47,248    4.000%(2)  $59,060    5.00

Tier 1 Common Equity Capital Ratio

           

Company

   106,971    11.32 ³   48,441    5.125%(2)   N/A    N/A 

Bank

   109,538    11.59 ³   48,441    5.125%(2)   61,437    6.50

Tier 1 Capital Ratio

           

Company

   106,971    11.32 ³   62,618    6.625%(2)   N/A    N/A 

Bank

   109,538    11.59 ³   62,618    6.625%(2)   75,615    8.00

Total Capital Ratio

           

Company

   117,315    12.42 ³   81,522    8.625%(2)   N/A    N/A 

Bank

   119,882    12.68 ³   81,522    8.625%(2)   94,518    10.00

(1)The leverage ratio consists of Tier 1 Capital divided by the most recent quarterly average total assets, excluding certain intangible assets.
(2)Includes capital conservation buffer as phased in effective January 1, 2016.

Liquidity

FNBB’s primary source of liquidity on a stand-alone basis is dividends from First National Bank. The payment of dividends by First National Bank is subject to regulatory restrictions. See the “Effect of Existing or Probable Governmental Regulations on the Business of FNBB and First National Bank – Dividends” beginning on page [●].

Liquidity is a measure of FNBB’s ability to convert assets into cash. Liquidity consists of cash and due from correspondent bank accounts, including time deposits, federal funds sold, and securities available for sale. FNBB’s policy is to maintain a liquidity ratio of 5% or greater of total assets. As of December 31, 2017, FNBB’s primary liquidity was 29.6%, compared to 30.8% and 30.4% as of December 31, 2016 and 2015, respectively. There were total liquid assets of $374,340,000, $376,068,000 and $341,726,000 as of December 31, 2017, 2016 and 2015, respectively. The objective of liquidity management is to ensure that FNBB has funds available to meet all present and future financial obligations and to take advantage of business opportunities as they occur. Financial obligations arise from withdrawals of deposits, repayment on maturity of purchased funds, extension of loans or other forms of credit, payment of operating expenses and payment of dividends.

Core deposits, which consist of all deposits other than time deposits, have provided FNBB with a sizeable source of relatively stablelow-cost funds. FNBB’s average core deposits represented 87% of average total liabilities of $1,050,295 for the year ended December 31, 2013, included in TriCo’s Annual Report on Form 10-K2017, 85% of average total liabilities of $1,053,600,000 for the year ended December 31, 2013, incorporated by reference herein;

North Valley’s separate audited historical consolidated financial statements2016 and accompanying notes as71% of andaverage total liabilities of $909,814,000 for the year ended December 31, 2013,2015.

As of December 31, 2017, FNBB had contractual obligations and other commercial commitments totaling approximately $284,438,000. The following table sets forth FNBB’s contractual obligations and other commercial commitments as of December 31, 2017. These obligations and commitments can be funded from other loan repayments, FNBB’s liquidity sources such as cash and due from other banks, federal funds sold, securities available for sale, as well as from First National Bank’s lines of credit with the Federal Home Loan

Bank of San Francisco and the Federal Reserve Bank of San Francisco. For additional information, please see the Consolidated Statements of Cash Flows included in North Valley’s Annual Report on Form 10-K for the year ended December 31, 2013, incorporated by reference herein; and

other information pertainingAppendix D to TriCo and North Valley contained in or incorporated by reference into this joint proxy statement/prospectus. Please see the sections entitled “Selected Historical Consolidated Financial Data for TriCo” and “Selected Historical Consolidated Financial Data for North Valley” beginning on pages 17 and 18, respectively.

 

TABLE 15  Payments Due by Period 
(Dollar amounts in thousands)      1 year   Over 1 to   Over 3 to   Over 

Contractual Obligations

  Total   or less   3 years   5 years   5 years 

Operating Leases

  $4,991   $1,150   $1,701   $1,612   $528 

Salary Continuation Agreements

   13,399    172    344    294    12,589 

Federal Home Loan Bank Advances

   75,000    75,000    —      —      —   

Note payable

   3,750    600    3,150    —      —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Contractual Cash Obligations

  $97,140   $76,922   $5,195   $1,906   $13,117 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   Amount of Commitment Expirations Per Period 
   Total                 
(Dollar amounts in thousands)  Amounts   1 year   Over 1 to   Over 3 to   Over 

Other Commercial Commitments

  Committed   or less   3 years   5 years   5 years 

Lines of Credit

  $131,737   $43,272   $38,992   $29,064   $20,409 

Standby Letters of Credit

   5,286    5,286    —      —      —   

Other Commercial Commitments

   51,472    49,333    842    —      1,297 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Commercial Commitments

  $188,495   $97,891   $39,834   $29,064   $21,706 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

102The largest component of FNBB’s earnings is net interest income, which can fluctuate widely when significant interest rate movements occur. FNBB’s management is responsible for minimizing First National Bank’s exposure to interest rate risk and assuring an adequate level of liquidity. By developing objectives, goals and strategies designed to enhance profitability and performance, management is also able to manage First National Bank’s interest rate exposure to within levels preapproved by its board of directors.


Unaudited Pro Forma Combined Condensed Balance SheetIn order to ensure that sufficient funds are available for loan growth and deposit withdrawals, as well as to provide for general needs, FNBB must maintain an adequate level of liquidity. Asset liquidity comes from FNBB’s ability to convert short-term investments into cash and from the maturity and repayment of loans and investment securities. Liability liquidity is provided by FNBB’s ability to attract deposits and obtain short term credit through established borrowing lines.

The primary source of liability liquidity is First National Bank’s depository customer base. The overall liquidity position of FNBB is closely monitored and evaluated on a daily basis. FNBB has Federal Funds borrowing facilities for a total of $30,000,000, a Federal Home Loan Bank line of credit of up to 30% of eligible total assets, and a Federal Reserve Bank of San Francisco borrowing facility of approximately $56,000,000. FNBB’s management believes FNBB’s liquidity sources at December 31, 2017 are adequate to meet its operating needs in 2018 and into the foreseeable future.

Effect of Changing Prices

The results of operations and financial conditions presented in this report are based on historical cost information and are not adjusted for the effects of inflation. Since the assets and liabilities of banks are primarily monetary in nature (payable in fixed, determinable amounts), the performance of FNBB is affected more by changes in interest rates than by inflation. Interest rates generally increase as the rate of inflation increases, but the magnitude of the change in rates may not be the same.

The effect of inflation on banks is normally not as significant as its influence on those businesses that have large investments in plant and inventories. During periods of high inflation, there are normally corresponding increases in the money supply, and banks will usually experience above average growth in assets, loans and deposits. Also, increases in the price of goods and services will result in increased operating expenses. The following table includes key ratios, including returns on average assets and equity for FNBB.

TABLE 16          
   Return on Equity and Assets 
   (Key financial ratios are computed
on average balances)
 
   Year Ended December 31, 
       2017          2016          2015     

Return on average assets

   0.85  1.02  0.81

Return on average equity

   8.86  10.88  8.15

Dividend payout ratio (accrual basis)

   33.46  27.52  29.85

Average equity to assets ratio

   9.61  9.44  9.96

CERTAIN BENEFICIAL OWNERSHIP OF FNBB COMMON STOCK

The following tables set forth information as of December 31, 2013March 9, 2018 pertaining to the beneficial ownership of FNBB common stock by: (i) each person who is known to FNBB to be the beneficial owner of more than five percent of FNBB common stock; (ii) each director of FNBB; (iii) each executive officer of FNBB; and (iv) all directors and executive officers of FNBB as a group. As used throughout this section, the term “executive officers” means FNBB’s chief executive officer, its president, its chief operating officer, its chief financial officer and its chief credit officer. The information contained herein has been obtained from FNBB’s records and from information furnished directly to FNBB by each individual or entity. Except as otherwise indicated in the footnotes to the table, the beneficial owners listed have sole voting and investment power as to all of the shares beneficially owned by them. Beneficial ownership is determined in accordance withRule 13d-3 under the Exchange Act. In computing the number of shares beneficially owned by a person or group and the percentage ownership of that person or group, shares of FNBB common stock subject to options currently exercisable or exercisable within 60 days after the above referenced date are deemed outstanding, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

(Dollars in Thousands)As of March 9, 2018, no person known to FNBB owned beneficially more than five percent of the outstanding shares of FNBB’s common stock, except as indicated below:

 

   TriCo  North
Valley
  Pro forma
adjustments
  Pro forma
combined
 

(in 000’s except per share amounts)

        Dr   Cr    

Assets:

       

Noninterest-bearing cash

  $76,915   $19,348       96,263  

Interest-bearing cash

   521,453    2,226       523,679  

Cash and due from banks

   598,368    21,574       619,942  

Federal funds sold

   —      38,135      3,272 (a)   34,863  
  

 

 

  

 

 

     

 

 

 

Cash and cash equivalents

   598,368    59,709       654,805  

Securities - AFS

   104,647    279,479       384,126  

Securities - HTM

   240,504    2       240,506  

Restricted equity securities

   9,163    8,402       17,565  

Loans held for sale

   2,270    288       2,558  

Loans, gross

   1,672,007    508,956      17,813 (b)   2,163,150  

Allowance for loan losses

   (38,245  (9,301  9,301          (c)   (38,245
  

 

 

  

 

 

     

 

 

 

Loans, net

   1,633,762    499,655       2,124,905  

Foreclosed assets, net

   6,262    3,454      864 (d)   8,852  

Premises and equipment, net

   31,612    7,833    1,679          (e)   41,124  

Cash value of life insurance

   52,309    37,209       89,518  

Accrued interest

   6,516    2,124       8,640  

Goodwill

   15,519    —      89,345          (f)   104,864  

Other intangible assets, net

   883    109    2,635          (g)   3,627  

Mortgage servicing rights

   6,165    1,010       7,175  

Indemnification asset

   206    —         206  

Other assets

   35,880    18,490      2,488 (h)   51,882  
  

 

 

  

 

 

    

 

 

  

 

 

 

Total assets

  $2,744,066   $917,764       3,740,353  
  

 

 

  

 

 

     

 

 

 

Liabilities:

       

Deposits

       

Noninterest-bearing demand

  $789,458   $184,971       974,429  

Interest-bearing

   1,621,025    602,878       2,223,903  

Total deposits

   2,410,483   ��787,849       3,198,332  

Accrued interest payable

   938    108       1,046  

Reserve for unfunded commitments

   2,415    146       2,561  

Other liabilities

   31,711    14,581      2,972 (i)   49,264  

Other borrowings

   6,335    —         6,335  

Junior subordinated debt

   41,238    21,651    13,949          (j)   48,940  
  

 

 

  

 

 

  

 

 

    

 

 

 

Total liabilities

   2,493,120    824,335       3,306,478  
  

 

 

  

 

 

     

 

 

 

Shareholders’ equity:

       

Common stock

  $89,356   $98,824    98,824     182,929 (k)   272,285  

Retained earnings

   159,733    (375    375 (k)   159,733  

Accumulated other comprehensive income (loss)

   1,857    (5,020    5,020 (k)   1,857  
  

 

 

  

 

 

     

 

 

 

Total shareholders’ equity

   250,946    93,429       433,875  
  

 

 

  

 

 

     

 

 

 

Total liabilities and shareholders’ equity

  $2,744,066   $917,764    215,733     215,733    3,740,353  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

Name and Address

  Amount and Nature of
Beneficial Ownership
  Percentage of
Ownership (1)
 

Chicago Capital Management, LLC.

   374,076 shares (2)   5.00

311 South Wacker Drive

   

Suite 6025

   

Chicago, IL 60606

   

Thomas G. Atwood, D.D.S.

   848,320 shares (3)   11.34

P.O. Box 890

   

Kenwood, CA 95452

   

The Ricco Lagomarsino Trust

   687,952 shares (4)   9.20

26 Hillcrest Drive

   

Daly City, CA 94014

   

Thomas C. McGraw

   410,436 shares (5)   5.49

975 El Camino Real

   

South San Franciso, CA

   

(1)Based upon 7,477,518 shares outstanding on March 9, 2018. Includes shares of FNBB common stock that the indicated shareholders have the right to acquire within 60 days of such date.
(2)Information as based on a Schedule 13G filed on February 21, 2018 by Chicago Capital Management, LLC and Steven R. Gerbel. Mr. Gerbel owns no shares of FNBB common stock directly but beneficially owned 374,076 shares of FNBB common stock in his capacity as the managing member of Chicago Capital Management, LLC, which is general partner and investment manager of Chicago Capital Management, L.P., and as manager of other accounts.
(3)Dr. Atwood is a director of FNBB. Please see the beneficial ownership table below.
(4)Lisa Angelot a co-trustee of the trust and director and chairwoman of FNBB’s board of directors and she disclaims beneficial ownership of these shares. Please see the beneficial ownership table below.
(5)Mr. McGraw is the Chief Executive Officer and a director of FNBB. Please see the beneficial ownership table below.

The following table sets forth information with respect to beneficial ownership of the common stock of FNBB’s directors and executive officers individually and as a group.

 

103


TriCo – North Valley Pro Forma

       Positions Held
With First
National Bank

and FNBB
   Shares Beneficially Owned
as of March 9, 2018
 

Director or

Executive Officer (1)

  Age     Sole (2)   Shared (3)   % of
Total
  Note 

Lisa Angelot

   60    

Chairwoman of
the Board,
Director
 
 
 
   40,259    1,775    0.56  (4

Thomas C. McGraw

   66    

Chief Executive
Officer,
Director
 
 
 
   62,298    348,138    5.49  (5

Thomas G. Atwood, D.D.S.

   71    Director    848,320    —      11.34  (6

Ronald R. Barels, D.D.S.

   71    Director    41,383    —      0.55  (7

Merrie Turner Lightner

   62    Director    15,752    2,434    0.24  (8

Michael Pacelli

   69    Director    19,676    —      0.26  (9

Edward J. Watson

   69    
Secretary,
Director
 
 
   42,004    10,548    0.70  (10

Jim D. Black

   61    
President,
Director
 
 
   64,537    834    0.87  (11

Anthony J. Clifford

   55    



Executive Vice
President and
Chief Operating
Officer,
Director
 
 
 
 
 
   37,453    —      0.50  (12

David A. Curtis

   59    


Senior Vice
President and
Chief Financial
Officer
 
 
 
 
   1,432    28,752    0.40  (13

Randy R. Brugioni

   51    


Senior Vice
President and
Chief Credit
Officer
 
 
 
 
   52,291    17,476    0.93  (14

All directors and officers as a group
(11 persons)

       1,225,405    409,957    21.87 

 

Notes:       

(a)

  

Adjustment to cash and cash equivalents

  
  

Payment of cash consideration to North Valley common stock option holders

  $(3,272
    

 

 

 

(b)

  

Adjustment to loans

  
  

To reflect estimated fair value at December 31, 2013, calculated as a net 3.5% discount to North Valley’s loan balance, 3.0% that is related to credit, and 0.5% related primarily to interest rate. During TriCo’s due diligence on North Valley, TriCo performed a valuation analysis across loan types and the valuation applied traditional valuation methodologies to arrive at the fair value adjustment for the purpose of these pro formas.

  $(17,813
    

 

 

 

(c)

  

Adjustment to allowance for loan losses

  
  

Because the acquired North Valley loans are carried at fair value at the acquisition date, there is no carryover of North Valley’s allowance for loan losses.

  $9,301  
    

 

 

 

(d)

  

Adjustment to foreclosed assets

  
  

Foreclosed assets were discounted by 25% of North Valley’s book value of foreclosed assets based on TriCo’s experience with recent sales of foreclosed assets.

  $(864
    

 

 

 

(e)

  

Adjustment to premises and equipment, net

  
  

As part of the due diligence, TriCo had reviews completed on North Valley’s premises and equipment.

  $1,679  
    

 

 

 

(f)

  

Calculation of Pro Forma Goodwill for North Valley merger

  
  

Represents the recognition of goodwill resulting from the difference between the net fair value of the acquired assets and assumed liabilities and the value of consideration paid for North Valley shareholders. The excess of the value of the consideration paid over the fair value of net assets acquired will be recorded as goodwill and can be summarized as follows:

  
  

TriCo shares to be issued to North Valley shareholders

   6,447,978  
  

Value of stock consideration to North Valley shareholders, based on the value of TriCo stock of $28.37, the closing price on December 31, 2013.

  $182,929  
  

Cash consideration to North Valley option holders

   3,272  
    

 

 

 
  

Total pro forma consideration paid

  $186,201  
    

 

 

 
  

Note: The actual value of the TriCo common stock at the completion of the merger could be different and have an equal and offsetting impact on equity and goodwill.

  
  

Carrying value of North Valley’s net assets at December 31, 2013

  $93,429  
  

Fair value adjustments:

  
  

Loans, net

   (8,512
  

Foreclosed assets

   (864
  

Premises and equipment

   1,679  
  

Core deposits

   2,635  
  

Deposits

   —    
  

Pension liability

   (2,972
  

Junior subordinated debt

   13,949  
  

Deferred taxes, net

   (2,488
    

 

 

 
  

Total fair value adjustments

  $3,427  
    

 

 

 
  

Fair value of net assets acquired on December 31, 2013

  $96,856  
    

 

 

 
  

Excess of consideration paid over fair value of net assets acquired - (Goodwill)

  $89,345  
    

 

 

 

(g)

  

Adjustment to core deposit intangible

  
  

To record the estimated fair value of acquired identifiable intangible assets, calculated as approximately 0.50% of North Valley’s core deposits. Core deposits were identified as the demand, savings, and money market accounts. The total core deposit intangible was estimated to be $2,744, which resulted in an adjustment of $2,635 over the core deposit already recorded by North Valley. The acquired core deposit intangible will be amortized over 7 years using a straight line method.

  

(h)

  

Adjustment to deferred taxes, net

  
  

To reflect the net deferred tax asset, net created in the merger

  $(2,488
    

 

 

 
  

Calculated as follows:

  
  

Fair value adjustments:

  
  

Loans, net

  $(8,512
  

Foreclosed assets

  $(864
  

Premises and equipment

  $1,679  
  

Core deposits

  $2,635  
  

Deposits

  $—    
  

Pension liability

   (2,972
  

Junior subordinated debt

   13,949  
    

 

 

 
  

Total fair value adjustments

  $5,915  
    

 

 

 
  

Calculated deferred tax liability at TriCo’s estimated tax rate of 42.05%

  $(2,488
    

 

 

 

(i)

  

Adjustment to pension liability

  
  

To reflect the estimated increase in pension liability due to change in control provisions of North Valley’s pension plans.

  $(2,972
    

 

 

 

(j)

  

Adjustment to subordinated debentures

  
  

To reflect the estimated fair value at December 31, 2013, based on current market rates for similar products. This adjustment will be accreted into income as additional interest expense over the remaining lives of the debentures.

  $13,949  
    

 

 

 

(k)

  

Adjustment to equity

  
  

To eliminate North Valley’s common equity

  $93,429  
  

To reflect the issuance of TriCo’s stock to North Valley shareholders based on the value of TriCo’s stock on December 31, 2013, of $28.37

  $(182,929
    

 

 

 
    $(89,500
    

 

 

 
(1)This table is based on information supplied by FNBB’s directors, executive officers, and principal shareholders. Percentages are based upon 7,477,518 shares of FNBB common stock outstanding as of March 9, 2018 plus the individual person’s exercisable options within 60 days of the same date.
(2)The named persons exercise sole voting and investment power with respect to shares listed in this column.
(3)The named persons share voting and investment power with respect to shares listed in this column.
(4)Includes 1,609 shares held by Ms. Angelot as custodian for Katherine Brandenberger. A total of 687,952 shares are held by The Ricco Lagomarsino Trust, for which Ms. Angelot serves as one of theco-trustees. Ms. Angelot disclaims beneficial ownership of such shares. Includes 166 shares held by Ms. Angelot as Custodian for Eric Angelot. Includes 24,499 shares held directly by Ms. Angelot. Includes 15,760 shares of exercisable stock options under FNBB’s various stock option plans.
(5)

Includes 313,778 shares held by the Thomas C. and Virginia K. McGraw Family Trust for which Mr. McGraw serves asco-trustee, and 34,360 shares in the name of Thomas C. and Virginia McGraw,

trustees of the Thomas C. and Virginia K. McGraw Living Trust. Includes 2,325 shares in the name of Thomas C. McGraw. Includes 59,973 shares of exercisable stock options under FNBB’s various stock option plans.
(6)Includes 529,520 shares held directly by Thomas G. Atwood. Includes 308,994 shares held in his IRA account. Includes 9,806 shares presently exercisable stock options under FNBB’s various stock option plans.
(7)Includes 27,278 shares held by Ronald R. Barels. Includes 5,529 shares held in his IRA account. Includes 8,576 shares of exercisable stock options under FNBB’s various stock option plans.
(8)Includes 10,317 shares held by Ms. Merrie Turner Lightner. Includes 2,434 shares held as tenantin-common with her mother. Includes 5,435 shares of exercisable stock options under FNBB’s various stock option plans.
(9)Includes 11,100 shares held by Michael Pacelli. Includes 8,576 shares of exercisable stock options under FNBB’s various stock option plans.
(10)Includes 10,548 shares held by Edward J. and Elizabeth C. Watson, as Trustees for the Watson Family Trust. Includes 26,250 shares held in Mr. Watson’s IRA account. Includes 1,605 shares of exercisable stock options under FNBB’s various stock option plans.
(11)Includes 64,537 shares held in the name of Jim D. Black. Includes 136 shares held in the name of Jim and Lisa Black, as joint tenants. Includes 568 shares held in trust for Greg Black, and includes 130 shares held in trust for Janelle Black. Excludes 35,115 shares held in the Bank’s Deferred Compensation Trust.
(12)Includes 33,415 shares held by Anthony J. Clifford. Includes 4,038 shares of exercisable stock options under FNBB’s various stock option plans. Excludes 966 shares held in the Bank’s Deferred Compensation Trust.
(13)Includes 72 shares held in the name of David A. and Esther Curtis. Includes 28,628 shares held by the Curtis Family Trust. Includes 1,432 shares held in David Curtis’s IRA account. Includes 52 shares held in spouse’s IRA account. Excludes 5,153 shares held in the Bank’s Deferred Compensation Trust.
(14)Includes 49,224 shares held by Randy R. Brugioni. Includes 3,067 shares in his IRA account. Includes 15,562 shares in his spouse’s SEP IRA account. Includes 1,914 shares held by Randy and Bryn Brugioni as community property. Excludes 35,555 shares held in the Bank’s Deferred Compensation Trust.

104


Unaudited Pro Forma Combined Condensed Statement of Earnings

Year Ended December 31, 2013

(In thousands, except per share amounts)

   TriCo  North
Valley
   Pro forma
adjustments
  Pro forma
combined
 

(in 000’s except per share amounts)

         Dr   Cr    

Interest income:

        

Loans

   97,548    25,739       509 (a)   123,796  

Investments

   7,319    6,420        13,739  

Other

   1,693    54        1,747  
  

 

 

  

 

 

      

 

 

 

Total interest income

   106,560    32,213        139,282  
  

 

 

  

 

 

      

 

 

 

Interest expense:

        

Deposits

   3,445    1,084        4,529  

Subordinate debt

   1,247    532     697          (b)   2,476  

Other borrowings

   4    2        6  

Total interest expense

   4,696    1,618        7,011  
  

 

 

  

 

 

      

 

 

 

Net interest income

   101,864    30,595        132,271  
  

 

 

  

 

 

      

 

 

 

(Benefit from) provision for loan losses

   (715  —          (715

Noninterest income:

        

Service charges and fees

   25,257    8,112        33,369  

Gain on sale of loans

   5,602    3,038        8,640  

Commissions on sale of non-deposit investment products

   2,983    114        3,097  

Increase in cash value of life insurance

   1,727    1,472        3,199  

Change in indemnification asset

   (1,649  —          (1,649

Gain on sale of foreclosed assets

   1,640    —          1,640  

Gain on sale of securities

   —      548        548  

Other noninterest income

   1,269    853        2,122  
  

 

 

  

 

 

      

 

 

 

Total noninterest income

   36,829    14,137        50,966  
  

 

 

  

 

 

      

 

 

 

Noninterest expense:

        

Salaries and benefits

   51,936    20,454       1,002 (e)   71,388  

Occupancy

   7,405    2,495     56          (c)   9,956  

Equipment

   4,162    860        5,022  

Data processing and software

   4,844    2,605        7,449  

Assessments

   2,248    820        3,068  

ATM network charges

   2,480    573        3,053  

Advertising and marketing

   1,981    571        2,552  

Professional fees

   3,019    1,034        4,053  

Telecommunications

   2,449    294        2,743  

Postage

   786    450        1,236  

Courier service

   988    418        1,406  

OREO Expense

   514    482        996  

Intangible amortization

   209    146     246          (d)   601  

Operational losses

   618    474        1,092  

Provision for OREO losses

   682    3,057        3,739  

(Benefit) provision for losses unfunded

   (1,200  3        (1,197

Legal settlement

   339    —          339  

105


Other

   10,144     4,777        14,921  

Total noninterest expense

   93,604     39,513        132,417  
  

 

 

   

 

 

      

 

 

 

Income before income tax expense

   45,804     5,219        51,535  

Income tax expense

   18,405     1,594     215     —   (f)   20,214  
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 

Net income

   27,399     3,625     1,214     1,511    31,321  
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 

Weighted average shares outstanding:

         

Basic

   16,045,141     6,835,554     6,835,554     6,447,978 (g)   22,493,119  

Diluted

   16,197,324     6,857,929     6,857,929     6,447,978 (g)   22,645,302  

Earnings per common share:

         

Basic

  $1.71    $0.53       $1.39  

Diluted

  $1.69    $0.53       $1.38  

(a)

  

Adjustment to loan interest income

  
  

To reflect accretion of the loan discount resulting from the loan fair value pro forma adjustment based on weighted average remaining life of five years.

  $(509

(b)

  

Adjustment to subordinated debt interest expense

  
  

To reflect amortization of the subordinated debentures discount resulting from the subordinated debentures fair value pro forma adjustment based on a weighted average life of twenty years

  $697  

(c)

  

Adjustment to depreciation expense due to property, premises and equipment

  
  

To reflect depreciation expense on increased fair value of buildings over 30 years

  $56  

(d)

  

Adjustment due to amortization of intangibles

  
  

To reflect amortization of acquired core deposit intangibles over 7 years

  $246  

(e)

  

Adjustment to pension plan expense

  
  

To reflect decrease in net periodic pension cost due to accelerated recognition of pension liability at change in control

  $(1,002

(f)

  

Adjustment to income tax provision

  
  

To reflect the income tax effect of pro forma adjustments at TriCo’s effective tax rate.

  $215  

(g)

  

Adjustment to weighted average number of common shares and diluted common shares

  
  

Shares issued by TriCo to North valley shareholders

   6,447,978  
  

Removal of North Valley weighted average number of common shares

   (6,835,554
    

 

 

 
  

Adjustment to weighted average number of common shares

   (387,576
    

 

 

 
  

Shares issued by TriCo to North valley shareholders

   6,447,978  
  

Removal of North Valley weighted average number of diluted common shares

   (6,857,929
    

 

 

 
  

Adjustment to weighted average number of diluted common shares

   (409,951
    

 

 

 

106


COMPARISONDESCRIPTION OF SHAREHOLDERS’ RIGHTSTRICO CAPITAL STOCK

General

North Valley is incorporated under the lawsThe following summary of the Statecurrent terms of California,the capital stock of TriCo and the rightsterms of North Valley shareholders are governed by the lawscapital stock of TriCo to be in effect after completion of the State of California, North Valley’smerger is not meant to be complete and is qualified in its entirety by reference to the CGCL, federal law, the TriCo articles of incorporation and North Valley’s bylaws.the TriCo bylaws, copies of which have been filed with the SEC and are also available upon request from TriCo. See “Where You Can Find More Information” beginning on page [●].

Common Stock

The TriCo articles of incorporation authorize 50,000,000 shares of common stock, no par value per share. At [●], 2018, there were [●] shares of TriCo common stock issued and outstanding, held of record by approximately [●] shareholders. The TriCo common stock is listed on the NASDAQ Global Select Market under the symbol “TCBK.” The transfer agent and registrar for TriCo common stock is Computershare.

Each holder of TriCo common stock is entitled to:

one vote for each share held on all matters submitted to a vote of the shareholders;

receive ratably such dividends as may be declared by the TriCo board of directors out of funds legally available for dividends, subject to preferences that may be applicable to outstanding shares of preferred stock, if any, or limitations and restrictions under applicable bank holding company regulations; and

share ratably in TriCo’s net assets, legally available to holders of TriCo common stock in the event of TriCo’s liquidation, dissolution or winding up, after payment in full of all amounts required to be paid to any holders of shares of preferred stock and to creditors (unless provision for such payment has been made).

Holders of TriCo common stock are not entitled to preemptive rights and have no subscription, redemption or conversion privileges.

The outstanding shares of TriCo common stock are validly issued, fully-paid andnon-assessable.

Preferred Stock

The TriCo certificate of incorporation authorizes 1,000,000 shares of preferred stock, no value per share. As of the date of this joint proxy statement/prospectus, there were no issued and outstanding shares of TriCo preferred stock.

Under the TriCo articles of incorporation, TriCo may issue shares of preferred stock in one or more series, as may be determined by the TriCo board of directors. The TriCo board of directors may also establish, from time to time, the number of shares to be included in each series and may fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof, and may increase or decrease the number of shares of any series without any further vote or action by the shareholders. Any preferred stock that TriCo may issue will rank senior to TriCo common stock with respect to the payment of dividends or amounts paid upon liquidation, dissolution or winding up of TriCo, or both. In addition, any shares of TriCo preferred stock may have class or series voting rights. Under certain circumstances, the issuance of shares of TriCo preferred stock, or merely the existing authorization of the TriCo board of directors to issue shares of TriCo preferred stock, may tend to discourage or impede a merger or other change in control of TriCo. No shares of preferred stock are currently outstanding. Each series of preferred stock, to the extent issued, will be issued under a separate certificate of designation.

Anti-takeover Provisions

Charter Documents.TriCo’s authorized shares of common stock or preferred stock may be used by the TriCo board of directors consistent with its fiduciary duty to deter future attempts to gain control of TriCo. The TriCo

board of directors also has sole authority to determine the terms of any one or more series of preferred stock, including voting rights, conversion rates and liquidation preferences. As a result of the ability to fix voting rights for a series of preferred stock, the board of directors has the power, to the extent consistent with its fiduciary duty, to issue a series of preferred stock to persons friendly to management in order to attempt to block a post-tender offer merger North Valleyor other transaction by which a third party seeks control, and thereby assist management to retain its position. TriCo’s bylaws impose certain notice and information requirements in connection with the nomination by shareholders willof candidates for election to the board of directors at any annual or special meeting of shareholders.

California and Federal Banking Law. The following discussion is a summary of certain provisions of California and federal law and regulations which may be deemed to have “anti-takeover” effects. The description of these provisions is necessarily general and reference should be made to the actual law and regulations.

Federal law prohibits a person or group of persons “acting in concert” from acquiring “control” of a bank holding company unless the Federal Reserve Board has been given 60 days prior written notice of such proposed acquisition and within that time period the Federal Reserve has not issued a notice disapproving the proposed acquisition or extending for up to another 30 days the period during which such a disapproval may be issued. An acquisition may be made prior to the expiration of the disapproval period if the Federal Reserve issues written notice of its intent not to disapprove the action. Under a rebuttable presumption established by the Federal Reserve, the acquisition of 10% or more of a class of voting stock of a bank or bank holding company with a class of securities registered under Section 12 of the Exchange Act would, under the circumstances set forth in the presumption, constitute the acquisition of control. In addition, any “company” would be required to obtain the approval of the Federal Reserve under the Bank Holding Company Act before acquiring 25% (5% in the case of an acquiror that is, or is deemed to be, a bank holding company) or more of any class of voting stock, or such lesser number of shares as may constitute control.

Under the CFC, no person shall, directly or indirectly, acquire control of a California state bank or its holding company unless the CDBO has approved such acquisition of control. A person would be deemed to have acquired control of Tri Counties Bank if such person, directly or indirectly, has the power (1) to vote 25% or more of the voting power of Tri Counties Bank, or (2) to direct or cause the direction of the management and policies of Tri Counties Bank. For purposes of this law, a person who directly or indirectly owns or controls 10% or more of our outstanding common stock would be presumed to control Tri Counties Bank.

COMPARISON OF THE RIGHTS OF SHAREHOLDERS

When the merger becomes effective, shareholders of FNBB who receive shares of TriCo common stock andin exchange for their shares of FNBB common stock will become TriCo shareholders.shareholders of TriCo. TriCo is incorporated under the laws of the State ofa California corporation and the rights of TriCo shareholders are governed by the laws ofCGCL, as well as the State of California, TriCo’sTriCo articles of incorporation and TriCo’sthe TriCo bylaws. Thus, following the merger, theFNBB is a California corporation, and its shareholders’ rights of North Valley shareholders who become TriCo shareholders in the merger will continue to beare governed by the laws ofCGCL and the State of California, but will no longer be governed by North Valley’sFNBB articles of incorporation and North Valley’s bylaws, and insteadFNBB bylaws.

After the merger, as TriCo shareholders, the rights of former FNBB shareholders will be governed by the TriCo articles of incorporation, the TriCo bylaws and the TriCo bylaws.

Comparison of Shareholders’ Rights

Set forth belowCGCL. The following is a summary comparison of material differences between the rights of holders of TriCo shareholders under the TriCo articlescommon stock and holders of incorporation and the TriCo bylaws (right column), and the rights of North Valley shareholders under the North Valley articles of incorporation and North Valley bylaws (left column).FNBB common stock. The summary set forth below discusses all materialdoes not purport to be a complete statement of the provisions affecting, and differences between, the rights of holders of TriCo shareholderscommon stock and North Valley shareholders under such documents. Copiesholders of FNBB common stock. Rather, the summary is intended to provide a general overview of the full textdifferences in shareholders’ rights under the governing corporate instruments of the TriCo articlesand FNBB, and other known material differences. For more detailed information with respect to TriCo, see “Description of incorporation and TriCo bylaws currently in effect, and the North Valley articles of incorporation and North Valley bylaws currently in effect, are available, without charge, by following the instructions in the section titled “Where You Can Find More Information”Capital Stock” beginning on page v.[●].

 

North ValleyFNBB

  

TriCo

Authorized Capital Stock

North Valley’s amended and restatedFNBB’s articles of incorporation statesstate that the authorized capital stock of North ValleyFNBB consists of 60,000,00010,000,000 shares of common stock, without par value, and 5,000,000 shares of preferred stock, without par value. As of [North Valley record date][●], 2018 there were [[●] shares of North ValleyFNBB common stock outstanding. No shares of North ValleyFNBB preferred stock are currently issued and outstanding except that 125,000 shares of North Valley preferred stock designated as Series A Junior Participating Preferred Stock have beenor reserved for issuance pursuant to the North Valley Shareholder Protection Rights Agreement.issuance. Subject to compliance with the California Corporations Code, North Valley’sFNBB’s articles of incorporation and bylaws, the North ValleyFNBB board of directors may authorize the issuance of additional shares of authorized common stock and preferred stock.  TriCo’s restated articles of incorporation states that the authorized capital stock of TriCo consists of 50,000,000 shares of common stock, without par value, and 1,000,000 shares of preferred stock, without par value. As of [TriCo record date][●], 2018 there were [[●] shares of TriCo common stock outstanding. No shares of TriCo preferred stock are currently issued and outstanding except that 150,000 shares of TriCo preferred stock designated as Series AA Junior Participating Preferred Stock have beenor reserved for issuance pursuant to the TriCo Rights Agreement.issuance. Subject to compliance with the California Corporations Code, TriCo’s articles of incorporation and bylaws, the TriCo board of directors may authorize the issuance of additional shares of authorized common stock and preferred stock.
Shareholder

Voting Rights Agreement

The North Valley board of directors is authorized to fix the rights, preferences, privileges and restrictions of the preferred stock and in 1999 established a class of preferred stock known as Series A Junior Participating Preferred Stock, in connection with the adoption of aThe TriCo board of directors is authorized to fix the rights, powers, and preferences of the preferred stock and in 2001 established a class of preferred stock known as Series AA Preferred Stock, in connection with the adoption of a Rights Agreement. On May 8, 2001, TriCo authorized and

 

107


North Valley

TriCo

Shareholder Protection Rights Agreement. On September 9, 1999, North Valley declared a dividend of one right for each outstanding share of common stock. Each right entitles the holder to purchase from North Valley, upon the occurrence of specified events involving a change in control of North Valley, one 1/100th of a share of the Series A Junior Participating Preferred Stock. On March 26, 2009, North Valley entered into an Amended and Restated Shareholder Protection Rights Agreement to extend the Agreement for 10 years to 2019. The rights distributed in 1999 remained in effect. The issuance of shares of the Series A Junior Participating Preferred Stock to rights holders could have the effect of delaying, deferring or preventing a change in control of North Valley without further action of its shareholders. On January 21, 2014, North Valley and Computershare, Inc. (the current Rights Agent) entered into Amendment One to the Amended and Restated Shareholder Protection Rights Agreement, in order to prevent the issuance of such preferred stock upon execution of the merger agreement with TriCo.declared a dividend distribution of one right for each outstanding share of common stock. Each right entitles the holder to purchase from TriCo, upon the occurrence of certain specified events involving a change of control of TriCo, 1/100th of a share of Series AA Preferred Stock. The issuance of shares of the Series AA Preferred Stock to rights holders could have the effect of delaying, deferring or preventing a change in control of TriCo without further action of its shareholders. On July 8, 2011, TriCo entered into an amendment to the Rights Agreement extending the agreement for 10 years to July 10, 2021. The rights distributed in 2001 remain in effect.
Voting Rights
Holders of North ValleyFNBB common stock are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders. HoldersIn the election of North Valley common stockdirectors, each shareholder may cumulate votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which the shareholder’s shares are notnormally entitled, or distribute the shareholder’s votes on the same principle among as many candidates as the shareholder chooses.

No shareholder is entitled to cumulate votes in favor of any candidate or candidates unless such candidate’s or candidates’ names have been placed in nomination prior to the election of directors. Directors are elected by a pluralityvoting and the shareholder has given notice at the meeting prior to the voting of the votes cast.shareholder’s intention to cumulate the shareholder’s votes. If any one

  

Each TriCo shareholder entitled to vote is entitled to one vote for each share held on each matter submitted to a vote of shareholders. In the election of directors, each shareholder may cumulate votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which the shareholder’s shares are normally entitled, or distribute the shareholder’s votes on the same principle among as many candidates as the shareholder thinks fit.chooses.

 

No shareholder is entitled to cumulate votes in favor of any candidate or candidates unless such candidate’s or candidates’ names have been placed in nomination prior to the voting and the shareholder has given notice at the meeting prior to the voting of

FNBB

TriCo

shareholder has given such notice, this fact shall be announced to all shareholders and proxies present, who may then cumulate their votes for candidates in nomination.

In any election of directors, the candidates receiving the highest number of votes of the shares entitled to be voted for them, up to the number of directors to be elected by such shares, are elected.

the shareholder’s intention to cumulate the shareholder’s votes. If any one shareholder has given such notice, this fact shall be announced to all shareholders and proxies present, who may then cumulate their votes for candidates in nomination.

 

In any election of directors, the candidates receiving the highest number of votes of the shares entitled to be voted for them, up to the number of directors to be elected by such shares, are elected.

Number of Directors

 

108


North Valley

TriCo

Number of Directors
North Valley’s amended and restatedFNBB’s bylaws state that the number of directors constituting the board of directors will be from 6six to 11, with the exact number to be determined from time to time by (i) a resolution duly adopted by the board of directors, (ii) an amendment of the bylaws duly adoptedor by the vote of a majority of the shares entitled to vote represented at a duly held meeting at which a quorum is present, or by written consent of the holders of a majority of the outstanding shares entitled to vote, or (iii) approval of the shareholders. If the board of directors or shareholders make no such determination, the number of directors shall be fixed at 8.present. The number of directors was fixed by the board of directors at 9nine and there are currently 9nine members of the North ValleyFNBB board of directors.  

TriCo’s restated articles of incorporation provides that the number of directors of TriCo shall be set forth in the bylaws as adopted and amended from time to time in the manner authorized by law.

 

TriCo’s amended and restated bylaws state that the number of directors constituting the board of directors will be from 8eight to fifteen 15, with the exact number within said range to be determined from time to time by a resolution of the board of directors or the company’s shareholders. If the board of directors or shareholders make no such determination, the number of directors shall be fixed at 12. There are currently 911 members of the TriCo board of directors.

Election of Directors

FNBB’s bylaws provide that directors shall be elected annually by the shareholders at the annual meeting of the shareholders. If, for any reason, the annual meeting or an adjournment thereof is not held or the directors are not elected thereat, then the directors may be elected at any special meeting of the shareholders called and held for that purpose. The term of office of the directors shall begin immediately after their election and continue until their respective successors are elected and qualified.
North Valley’sTriCo’s amended and restated bylaws provide that directors shall be elected annually by the shareholders at the annual meeting of the shareholders. If, for any reason, the annual meeting or an adjournment thereof is not held or the directors are not elected thereat, then the directors may be elected at any special meeting of the shareholders called and held for that purpose. The term of office of the directors shall begin immediately after their election and continue until their respective successors are elected and qualified.TriCo’s bylaws provide that directors shall be elected annually by the shareholders at the annual meeting of the shareholders. If, for any reason, the annual meeting or an adjournment thereof is not held or the directors are not elected thereat, then the directors may be elected at any special meeting of the shareholders called and held for that purpose. The term of office of the directors shall begin immediately after their election and continue until their respective successors are elected and qualified.

Classification of Board of Directors

FNBB’s bylaws do not provide for a classified board of directors.
North Valley’sTriCo’s amended and restated bylaws do not provide for a classified board of directors.TriCo’s bylaws do not provide for a classified board of directors.

109


North Valley

TriCoVacancies

Vacancies
North Valley’s amended and restatedFNBB’s bylaws provide that a vacancy on the board of directors, not including a vacancy created by the removal of a director, may be filled by a majority of theTriCo’s amended and restated bylaws provide that a vacancy on the board of directors may be filled by a majority of the remaining directors, even though less

FNBB

TriCo

remaining directors, even though less than a quorum, or by a sole remaining director. Any director so elected may hold office for the remainder of the full term of the director in which the vacancy occurred until such director’s successor is elected at an annual or special shareholders meeting. The shareholders may elect a director at any time to fill any vacancy not filled by directors. Any such election by written consent other than to fill a vacancy created by removal requires the consent of a majority of the outstanding shares entitled to vote.  TriCo’s bylaws provide that a vacancy on the board of directors may be filled by a majority of the remaining directors, even though less than a quorum, or by a sole remaining director. Any director so elected may hold office for the remainder of the full term of the director in which the vacancy occurred until such director’s successor is elected at an annual or special shareholders meeting. The shareholders may elect a director at any time to fill any vacancy not filled by directors. Any such election by written consent other than to fill a vacancy created by removal requires the consent of a majority of the outstanding shares entitled to vote.

Removal of Directors

A director may be removed from office without cause by a vote of shareholders holding a majority of the outstanding shares entitled to vote at an election of directors; however, unless the entire board is removed, an individual director shall not be removed if the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the total number of votes were cast, or, if such action is taken by written consent, all shares entitled to vote were voted, and the entire number of directors authorized at the time of the director’s most recent election were then being elected. In addition, a director may also be removed from office by the Superior Court of the county in which the principal office is located, at the suit of shareholders holding at least 10% of the number of outstanding shares of any class, in case of fraudulent or dishonest acts or gross abuse of authority or discretion with reference to the corporation, in the manner provided by the law.

 

No reduction of the authorized number of directors shall have the effect of removing any director before his or her term of office expires.

  

A director may be removed from office without cause by a vote of shareholders holding a majority of the outstanding shares entitled to vote at an election of directors; however, unless the entire board of directors is removed, an individual director shall not be removed if the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the total number of votes were cast, or, if such action is taken by written consent, all shares entitled to vote were voted, and the entire number of directors authorized at the time of the director’s most recent election were then being elected. In addition, a director may also be removed from office by the Superior Court of the county in which the principal office is located, at the suit of shareholders holding at least 10% of the number of outstanding shares of any class, in case of fraudulent or dishonest acts or gross abuse of authority or discretion with reference to the corporation, in the manner provided by the law.

 

No reduction of the authorized number of directors shall have the effect of removing any director before his or her term of office expires.

 

110


Nomination of Director Candidates by Shareholders

FNBB’s amended and restated bylaws permit shareholders who are entitled to vote in the meeting of shareholders to nominate a director for election if written notice is delivered to the president of the corporation not less than 20 or more than 50 days prior to any meeting of shareholders called for election of directors. If less than 25 day notice of the meeting is given to shareholders, such notice of intention to nominate shall be mailed or delivered to the president of
North Valley’sTriCo’s amended and restated bylaws permit shareholders who are entitled to vote in the meeting of shareholders to nominate a director for election if written notice is delivered to the president of the corporation not less than 21 or more than 60 days prior to any meeting of shareholders called for election of directors. If less than 21 day notice of the meeting is given to shareholders, such notice of intention to nominate shall be mailed or delivered to

FNBB

TriCo

the corporation not later than the close of business on the seventh day following the day on which the notice of meeting was mailed.the president of the corporation not later than the close of business on the 10th day following the day on which the notice of meeting was mailed. If notice of such meeting is sent by third-class mail, no notice of intention to make nominations shall be required.

TriCo’s bylaws permit shareholders who are entitled to vote in the meeting of shareholders to nominate a director for election if written notice is delivered to the president of the corporation not less than 21 or more than 60 days prior to any meeting of shareholders called for election of directors. If less than 21 day notice of the meeting is given to shareholders, such notice of intention to nominate shall be mailed or delivered to the president of the corporation not later than the close of business on the 10th day following the day on which the notice of meeting was mailed. If notice of such meeting is sent by third-class mail, no notice of intention to make nominations shall be required.

Shareholder Action Without a Meeting

North Valley’s amended and restatedFNBB’s bylaws provide that any action which may be taken at any annual or special meeting of shareholders may be taken without a meeting and without prior notice if a consent in writing, setting forth the action so taken, is signed by the number of shareholders whose affirmative vote would be required to take such action at a meeting at which all shares entitled to vote thereon were present and voted. Unanimous written consent shall be required for the election of directors tonon-vacant positions; provided however that the North ValleyFNBB board of directors, by resolution, shall have previously approved any such action.  TriCo’s amended and restated bylaws provide that any action which may be taken at any annual or special meeting of the shareholders may be taken without a meeting and without prior notice if a consent in writing, setting forth the action so taken, is signed by the number of shareholders whose affirmative vote would be required to take such action at a meeting at which all shares entitled to vote thereon were present and voted. Unanimous written consent shall be required for election of directors to nonvacantnon-vacant positions.

Special Meetings of Shareholders

North ValleyFNBB may call a special shareholders meeting at any time upon the request of the board of directors, chairman of the board, the president, or of the North ValleyFNBB shareholders entitled to cast not less than 10% of the votes at such a meeting.  TriCo may call a special shareholders meeting at any time upon the request of the board of directors, chairman of the board, the president, or of the TriCo shareholders entitled to cast not less than 10% of the votes at such a meeting.

Indemnification of Directors and Officers

North Valley’s amended and restated

FNBB’s articles of incorporation authorizes North Valleyauthorize FNBB to indemnify its directors, officers, and agents, through bylaw provisions, agreements with such agents or other persons, vote of shareholders or disinterested directors or otherwise, in excess of the indemnification otherwise permitted by Section 317 of the California Corporations Code to the fullest extent permitted by applicable law.

FNBB’s bylaws provide that FNBB will indemnify any person who was or is made a party to or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a director or officer of FNBB or is or was serving at the request of FNBB as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, to the fullest extent permitted by law.

  

TriCo’s restated articles of incorporation authorizesauthorize TriCo to indemnify its agents, as defined in Section 317, through bylaw provisions, agreements with such agents, vote of shareholders or disinterested directors or otherwise, or any combination of the foregoing, in excess of the indemnification otherwise permitted by Section 317 of the Corporations Code, subject only to the limits set forth in Section 204 with respect to actions for breach of duty to the corporationCorporation and its shareholders.

111


North Valley’s

TriCo’s amended and restated bylaws provide that North Valley will indemnify any person who was or is made a party to or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a director or officer of North Valley or is or was serving at the request of North Valley as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, to the fullest extent permitted by law. North Valley has entered into separate indemnification agreements with its directors and officers for such purpose.

TriCo’s bylaws provide that TriCo will indemnify its directors and officers of vice president level or above and the directors and officers of vice president level or above of Tri Counties Bank, a wholly owned subsidiary, who was or is made a party or is threatened to be made a party to or is otherwise involved in a proceeding against expenses, judgments, fines, settlements, and other amounts

FNBB

TriCo

actually and reasonably incurred in connection with any such proceeding arising by reason of the fact that any such person is or was an agent of the corporation, provided that the proceeding was authorized by the board of directors of TriCo. TriCo has entered into separate indemnification agreements with its directors and senior officers for such purpose.

Amendments to Articles of Incorporation and Bylaws

North Valley’sFNBB’s bylaws may be amended or repealed by the affirmative vote or written consent of a majority of the outstanding shares entitled to vote. An amendment reducing the number of directors on a fixed-number board or the minimum number of directors on a variable-number board to a number less than 5 cannot be adopted if the votes cast against its adoption at a meeting or the shares not consenting, in the case of action by written consent, are equal to more than16-2/3% of the outstanding shares entitled to vote.  TriCo’s bylaws may be amended or repealed by the affirmative vote or written consent of a majority of the outstanding shares entitled to vote. An amendment reducing the number of directors on a fixed-number board or the minimum number of directors on a variable-number board to a number less than 5 cannot be adopted if the votes cast against its adoption at a meeting or the shares not consenting, in the case of action by written consent, are equal to more than16-2/3% of the outstanding shares entitled to vote.

LEGAL MATTERS

The validity of the TriCo common stock to be issued in the merger has been passed upon for TriCo by Sheppard, Mullin, Richter & Hampton, LLP, San Francisco, California.

EXPERTS

TheTriCo’s consolidated financial statements of TriCo andincorporated into this joint proxy statement/prospectus by reference to its subsidiaries as of December 31, 2013 and 2012 and for each of the two fiscal years in the period ended December 31, 2013 and the effectiveness of TriCo’s internal control over financial reporting as of December 31, 2013 have been audited by Crowe Horwath LLP, an independent registered public accounting firm, as set forth in their report appearing in our Annual Report on Form10-K for the fiscal year ended December 31, 2013 and incorporated in this prospectus by reference. Such consolidated financial statements2017 have been so incorporated in reliance upon the report of suchCrowe Horwath LLP, independent registered public accounting firm, given upon theiron the authority of such firm as experts in accountingauditing and auditing.accounting.

TheFNBB’s audited consolidated financial statements of TriCo and its subsidiariesincluded in this joint proxy statement/prospectus as of December 31, 20112017 and 2016, and for each of the yearthree years in the period ended December 31, 2011,2017, have been incorporated by reference herein and in the registration statementso included in reliance upon the report of Moss Adams LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of saidsuch firm as experts in accounting and auditing.

FUTURE SHAREHOLDER PROPOSALS

TriCo Annual Meeting

The consolidated financial statementsnext annual meeting of North Valley and its subsidiaries as of December 31, 2013 and 2012 andTriCo shareholders is scheduled for each[●], 2018. Under the SEC rules, any shareholder proposals intended to be included in TriCo’s notice of the three fiscal years in the period ended December 31, 2013 and the effectiveness of North Valley’s internal control over financial reporting as of December 31, 2013 have been audited by Crowe Horwath LLP, an independent registered public accounting firm, as set forth in their report appearing in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and incorporated in this prospectus by reference. Such consolidated financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

LEGAL AND TAX OPINIONS

Manatt, Phelps & Phillips, LLP and Crowe Horwath LLP will deliver prior to the effective time of the merger their opinions to TriCo and North Valley, respectively, as to certain United States federal income tax consequences of the merger. Please see the section entitled “Material United States Federal Income Tax Consequences of the Merger” beginning on page 99. The validity of the TriCo common stock to be issued in connection with the merger will be passed upon for TriCo by Manatt, Phelps, & Phillips LLP.

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TRICO PROPOSAL: Election of Directors

Nine directors will be elected at the TriCo annual meeting for terms expiring at TriCo’s annual meeting in 2015. Each nominee is currently serving as a director of TriCo. The nominees for election are:

Donald J. AmaralWilliam J. CaseyCraig S. Compton
L. Gage Chrysler IIICory W. GieseJohn S. A. Hasbrook
Michael W. KoehnenRichard P. SmithW. Virginia Walker

Brief biographies of the director nominees are found at “Board of Directors.” These biographies include each nominee’s age, business experience and the names of publicly held and certain other corporations of which they are also directors. Unless stated otherwise, each director has been engaged in his present occupation for at least the past five years. The biographies also describe the experience, qualifications, attributes or skills that led TriCo to conclude that each nominee should serve as a director of TriCo.

The nine nominees receiving the most affirmative votes cast at the meeting will be elected as directors assuming a quorum is present. Consequently, any shares not voted at the meeting, whether by abstention or otherwise, will have no effect on the election of directors. If any of the nominees should unexpectedly decline or become unable to serve, the proxies TriCo is soliciting may be voted for a substitute nominee or the board of directors may reduce the size of the board of directors.

Shareholders may cumulate their votes when electing directors. To do so, you must follow the procedures set forth in TriCo’s bylaws which are described at “Corporate Governance, Board Nomination and Board Committees—Nomination and Election of Directors.”

The TriCo Board of Directors recommends a vote “FOR” the election of all nine nominees.

Board of Director Nominees

The following nine persons are nominated for election as directors at TriCo’s annual meeting. Each currently serves as a member of the board of directors of both TriCo Bancshares and Tri Counties Bank, TriCo’s wholly owned subsidiary. These directors also serve on committees of the board of directors of Tri Counties Bank in addition to the TriCo board of directors committees discussed below. The following biographies show the age and principal occupations during the past five years of each of the nominees. Ages are shown as of April 29, 2014.

William J. Casey

William J. Casey, age 69, has been a director since 1989. He is the chairman of TriCo’s board of directors, chairman of TriCo’s compensation and management succession committee, chairman of TriCo’s nominating and corporate governance committee and a member of TriCo’s audit committee. Mr. Casey has been a self-employed healthcare consultant since 1983. Mr. Casey has an MPA degree from the University of Southern California. He has served on the audit committees of other public companies. Mr. Casey is Mr. Giese’s father-in-law.

TriCo has nominated Mr. Casey because TriCo believes that his leadership qualities, knowledge and experience on the boards of other public companies are important to the board of directors’ effectiveness and in his role as Chairman. In addition, his knowledge of corporate governance, finance and accounting matters make him well-suited to serve on TriCo’s nominating and corporate governance committee and TriCo’s audit committee.

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Donald J. Amaral

Donald J. Amaral, age 61, has been a director since 2003. Mr. Amaral is chairman of TriCo’s audit committee and a member of TriCo’s compensation and management succession committee and TriCo’s nominating and corporate governance committee. He was chairman and chief executive officer of Coram Healthcare Corporation, a home infusion therapy company, from 1995 to 1999. Mr. Amaral has a Bachelor’s degree in accounting and an MBA degree. Retired since 1999, he served as chief executive officer and chief financial officer of various companies for over 25 years.

TriCo nominated Mr. Amaral because his education, knowledge and experience allow him to provide the board of directors with insight regarding financial and accounting matters and to serve on TriCo’s audit committee as an audit committee financial expert. In addition TriCo believes that his professional experience and leadership qualities contribute to the effectiveness of the board of directors and the committees on which he serves.

L. Gage Chrysler III

L. Gage Chrysler III, age 60, has been a director since 2008. Mr. Chrysler has been with Modern Building, Inc., a construction company, since 1978 and currently serves as its president and chief executive officer. He also serves as a director of the Salvation Army Advisory Board, Mid Valley Title and CSU Chico Alumni Association, Chico Chapter. Mr. Chrysler has a Bachelor’s degree in business specializing in finance.

TriCo nominated Mr. Chrysler because of his leadership experience and community involvement. In addition, his experience in construction allows him to provide valuable insights to the board of directors concerning construction lending and the state of the construction industry and real estate markets generally.

Craig S. Compton

Craig S. Compton, age 58, has been a director since 1989. Mr. Compton is a member of TriCo’s compensation and management succession committee and TriCo’s nominating and corporate governance committee. He has served as the president, chief executive officer and chief financial officer of AVAG, Inc., an aerial application business, for over 20 years and has been a principal in his family rice farming partnership for over 23 years. Mr. Compton is also the owner of A&P Helicopters, a commercial helicopter business. He is a director of Environmental Alternatives Foster Care Agency. He holds a B.S. in Business Administration from California State University, Chico.

TriCo nominated Mr. Compton based on his leadership experience and community involvement. His business background as a chief executive officer, chief financial officer and business owner contribute to his effective service as a board member and as a member of TriCo’s compensation and management succession committee and TriCo’s nominating and corporate governance committee.

Cory W. Giese

Cory W. Giese, age 35, has been a director since February, 2013. Mr. Giese is a member of TriCo’s audit committee. Mr. Giese is a certified public accountant and owns and operates an accounting firm in Truckee, California. He also serves as controller for several privately held real estate investment entities. He holds a B.S. in Business Administration from California State University, Chico and a Master of Accounting from Washington State University. Mr. Giese is Mr. Casey’s son-in-law. TriCo nominated Mr. Giese based on his business background and his ties to and familiarity with several of the communities in which TriCo operates. In particular, Mr. Giese’s education and experience in accounting as a certified public accountant qualify him to serve on TriCo’s audit committee.

John S. A. Hasbrook

John S. A. Hasbrook, age 54, has been a director since 2002. Mr. Hasbrook is a member of TriCo’s compensation and management succession committee and TriCo’s audit committee and serves as chairman of the director loan committee of Tri Counties Bank. He is active in several agricultural and investment enterprises. He is president of SunWest Wild Rice Co., Inc.; president of Hasbrook-Fetter Farms, Inc.; vice president, marketing of SunWest

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Foods, Inc., a food marketing company; and serves as an officer for other agricultural-related entities. Mr. Hasbrook also serves as a director of Santa Clara University’s Food & Agribusiness Institute, as well as for various charitable and civic organizations. Mr. Hasbrook has a BSC degree in finance and an MBA degree in agribusiness from Santa Clara University. He is a Board Member of Sutter Medical Foundation, a former comptroller of the California Wine Commission and former corporate account officer at Bank of America where he worked for three years.

TriCo nominated Mr. Hasbrook because of his experience in the areas of finance, marketing, banking and agri-business. His broad business experience and community involvement provides the board of directors with valuable insights concerning the primary communities in which the bank operates and the agricultural industry in particular.

Michael W. Koehnen

Michael W. Koehnen, age 53, has been a director since 2002. He is the vice chairman of TriCo’s board of directors. Mr. Koehnen is also a member of TriCo’s compensation and management succession committee and TriCo’s nominating and corporate governance committee. He is the owner and president of C.F. Koehnen & Sons, a third-generation family farming and beekeeping company. Mr. Koehnen is also president and owner of Riverwest Processing, an almond processing company.

TriCo nominated Mr. Koehnen because of his leadership experience and knowledge of corporate governance and compensation-related matters. In addition, his involvement in businesses related to agricultural industry allows him to provide valuable insights to the board of directors.

Richard P. Smith

Richard P. Smith, age 56, has been a director since 1999. He has served as the president and chief executive officer of TriCo and the bank since 1999. Mr. Smith joined the bank in 1994 as vice president and chief information officer. He was senior vice president-customer/employee support and control from 1997 until 1998, when he was promoted to executive vice president in the same capacity. Mr. Smith was named president of the bank and executive vice president of TriCo in 1998. Mr. Smith served as chairman of the California Bankers Association during 2011 and is currently a member of its board of directors.

TriCo nominated Mr. Smith because TriCo believes that including the president and chief executive officer on the board of directors is important and assists the board of directors in keeping abreast of the TriCo’s operations and management’s progress on corporate initiatives. Further, Mr. Smith has 20 years of banking experience, including 13 as the bank’s chief executive officer. This experience allows him to provide valuable insights to the board of directors concerning the banking industry and the bank in particular.

W. Virginia Walker

W. Virginia Walker, age 69, has been a director since 2009. She is a member of the nominating and corporate governance committee and the audit committee. Ms. Walker is the General Manager of the Jamison Group LLC, a consulting group specializing in finance, marketing and strategy for high tech companies. Her professional experience includes having worked in companies ranging from start-ups to those with a billion dollars in annual revenue. From 2001 to 2007 she held various executive management positions with Enea AB, a software and services company, where she was most recently Senior Vice President, Corporate Strategy and Marketing.

Our decision to nominate Ms. Walker is primarily based on her marketing, finance and public affairs experience, her over 25 years as chief financial officer, in addition to her management experience gained in large, complex organizations, and her long-standing ties to the community in which the bank is headquartered.

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CORPORATE GOVERNANCE, BOARD NOMINATION

AND BOARD COMMITTEES

Corporate Governance

TriCo has long believed that good corporate governance is important to ensure that TriCo is managed for the long-term benefit of its shareholders. TriCo continues to review its corporate governance policies and practices along with provisions of the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act, the rules of the Securities and Exchange Commission and the listing standards of NASDAQ. TriCo has adopted a code of ethics that applies to its principal executive officer, principal financial officer and persons performing similar functions. You can view TriCo’s code of business conduct, TriCo’s code of ethics for its principal executive officers and senior financial officers, TriCo’s audit committee charter, TriCo’s nominating and corporate governance committee charter and TriCo’s compensation and management succession committee charter on its website at www.tricountiesbank.com under “About Tri Counties Bank—Investor Relations—Corporate Governance,” or receive copies by contacting TriCo’s corporate secretary in writing at TriCo Bancshares, 63 Constitution Drive, Chico, California 95973, or by telephone at (530) 898-0300.

Board Leadership Structure

The positions of chairman of the board of directors and of president and chief executive officer are held by different persons. This has been the case since TriCo’s inception. TriCo believes that this structure is appropriate, because it provides segregation of duties between managing the operations of TriCo and the leadership and oversight responsibilities of its board of directors. TriCo’s chairman also serves as its lead director. TriCo believes that this is appropriate because its chairman is an independent director and the position of chairman is separate from that of executive management.

TriCo’s non-employee directors meet regularly in executive sessions. Executive sessions are chaired by the independent director then serving as lead director. Mr. Casey was TriCo’s lead director in 2013 and will continue to serve as lead director in 2014.

The Board’s Role in Enterprise Risk Oversight

TriCo’s board of directors is responsible for overseeing risk management for TriCo. TriCo’s management is responsible for the day-to-day management of these risks across TriCo.

The full board of directors engages in periodic discussions related to risk management with executive officers and other employees as the board of directors deems appropriate. In addition, several board of directors committees have been assigned oversight responsibility for specific areas of risk and risk management is an agenda topic at regular committee meetings. The committees consider risks within their areas of responsibility. For example, the compensation and management succession committee considers risks that may result from TriCo’s compensation programs, the loan committee of the bank, which is comprised of members of TriCo’s board of directors, focuses on risks related to credit and interest rates, and the audit committee reviews and approves the annual plans for TriCo’s and Tri Counties Bank’s external audits, internal monitoring and compliance functions. TriCo maintains a Board Enterprise Risk Committee that reviews and approves the annual assessment of TriCo’s enterprise risk management process and considers any need for periodic third-party evaluations of such process. The Board Enterprise Risk Committee and the audit committee have authority to conduct any investigation appropriate to fulfilling their responsibilities, and have direct access to all persons in TriCo. The board of directors also assigns other specific risk-related assessment matters to Board Enterprise Risk Committee and the audit committee from time to time.

Director Independence

TriCo believes that independent directors play an important role in TriCo’s corporate governance and are committed to ensuring that at least a majority of TriCo’s directors are independent. TriCo’s corporate governance guidelines provide that a director is independent if he or she does not have a material relationship with TriCo directly or indirectly as a partner, shareholder or officer of an organization that has a relationship with TriCo, and otherwise qualifies as independent under the applicable rules of the Exchange Act and NASDAQ. TriCo’s independence determinations are based upon a review of all relevant transactions and relationships between TriCo, TriCo’s senior management and TriCo’s accountants, on the one hand, and each director and his or her family members, on the other hand.

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Our board of directors has affirmatively determined that the following seven of TriCo’s nine current directors are independent as defined by NASDAQ Marketplace Rule 5605(a)(1) and TriCo’s own corporate governance guidelines: Mr. Amaral, Mr. Casey, Mr. Compton, Mr. Giese, Mr. Hasbrook, Mr. Koehnen, and Ms. Walker. Mr. Smith is not considered independent because of his employment as president and chief executive officer of TriCo. Mr. Chrysler is not considered independent because his construction company has provided services to Tri Counties Bank during the past three years, as described below.

Transactions with Related Persons

Our nominating and corporate governance committee is charged with monitoring and reviewing issues involving potential conflicts of interest and reviewing and approving all related party transactions. TriCo has a policy adopted by its board of directors for reviewing transactions between TriCo and its directors and executive officers, their family members and entities with which they have a position or relationship. TriCo’s procedures for transactions with related persons are intended to determine whether any such related person transaction impairs the independence of a director or presents a conflict of interest on the part of a director or executive officer. All transactions between TriCo and related persons may be consummated only if TriCo’s nominating and corporate governance committee approves such transaction in accordance with the procedures set forth in TriCo’s policy.

TriCo annually requires each of its directors and executive officers to complete a questionnaire that seeks information about related person transactions. TriCo’s nominating and corporate governance committee and board of directors annually review all transactions and relationships disclosed in the questionnaires, and the board of directors makes a formal determination regarding each director’s independence under TriCo’s corporate governance guidelines.

There have been no transactions or series of similar transactions during 2013, or any currently proposed transaction, to which TriCo was or is to be a party, in which the amount involved exceeded $120,000 or in which any of TriCo’s directors, director nominees, executive officers or any shareholder owning 5% or more of TriCo’s common stock, or any member of the immediate family or associate of any of the foregoing persons (together, the “related parties”), had or will have a direct or indirect material interest, except that Mr. Chrysler’s construction company, Modern Building Inc., provided construction services to Tri Counties Bank in 2013 for TriCo’s new Operations Center, and tenant improvements and modification at several branches of Tri Counties Bank for aggregate payments of $4,136,024. Mr. Chrysler owns 51% of Modern Building and serves as its president. The board of directors believes that these construction services were provided only in accordance with the policy described above.

Indebtedness of Management

Some of TriCo’s directors, executive officers and their immediate family members and associates are customers of Tri Counties Bank and TriCo expects to have banking transactions with them in the future. The loan committee of Tri Counties Bank reviews the terms and fairness of any loans made by Tri Counties Bank to TriCo’s directors and officers. TriCo concluded that all such loans and commitments to lend were made in the ordinary course of TriCo’s business and complied with applicable laws. Terms, including interest rates and collateral, were substantially the same as those prevailing for comparable transactions with other persons of similar creditworthiness not affiliated with TriCo. In the opinion of TriCo’s board of directors, these transactions did not involve more than a normal risk of collectability or present other unfavorable features. The aggregate amount of all loans and credit extensions outstanding as of December 31, 2013, to all directors and executive officers (including their associates and members of their immediate family) was approximately $2,636,000, representing approximately 1.05% of shareholders’ equity at that time. As of the date of this joint proxy statement/prospectus, all of these loans were performing loans.

Board Committees

Our full board of directors generally considers all major corporate decisions. However, TriCo has established three standing committees so that some matters can be addressed in more depth than may be possible in a full board

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meeting and to comply with legal and NASDAQ requirements that certain committees be comprised of independent directors: a compensation and management succession committee, a nominating and corporate governance committee and an audit committee. Each of these three committees operates under a written charter. Following is a description of each of these committees. TriCo’s directors also serve on various board of directors committees of TriCo’s subsidiary, Tri Counties Bank.

Audit

Committee

member

Compensation and
Management Succession
Committee member
Nominating and
Corporate Governance
Committee member

Donald J. Amaral*

 (Chairman)

William J. Casey*

 (Chairman) (Chairman)

L. Gage Chrysler III

Craig S. Compton*

Cory W. Giese*

John S. A. Hasbrook*

Michael W. Koehnen*

Richard P. Smith

Carroll R. Taresh*

W. Virginia Walker*

*Determined to be independent as described at “Director Independence” above.

Audit Committees. TriCo has a standing audit committee of TriCo and a standing audit committee of Tri Counties Bank. The board of directors has determined that Mr. Amaral is an audit committee financial expert under the rules of the Securities and Exchange Commission and that each member of the committee is financially literate as defined by NASDAQ listing standards and is independent under special standards established by the SEC and NASDAQ for audit committee members. Their qualifications and business expertise are described at “Board of Directors.” TriCo’s audit committee monitors:

the integrity of TriCo’s financial statements, including the financial reporting process and systems of internal controls regarding finance, accounting and legal and regulatory compliance,

our compliance with legal and regulatory requirements,

the independence, qualifications and performance of TriCo’s financial executives, principal independent auditor and internal auditing department, and

the communication among TriCo’s principal independent auditor, management, TriCo’s internal auditing function and the board of directors.

The committee also annually retains TriCo’s principal independent auditor and approves the terms and scope of work to be performed. TriCo’s audit committee met 7 times during 2013. For more information on this committee, please see “Report of the Audit Committee.”

Compensation and Management Succession Committee. The compensation and management succession committee held 7 meetings in 2013. The committee considers the recommendations of TriCo’s management regarding most compensation matters, including executive compensation. For more information on this committee, please see “Compensation Discussion and Analysis.” This committee:

establishes TriCo’s compensation philosophy,

evaluates and approves the compensation levels for TriCo’s chief executive officer and the other executive officers,

produces annually a compensation discussion and analysis of executive compensation,

administers TriCo’s stock option plans,

approves the benefits provided to TriCo’s executive officers and directors, and

establishes and reviews TriCo’s management succession policies.

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Nominating and Corporate Governance Committee. TriCo’s nominating and corporate governance committee met 2 times in 2013. This committee:

determines nominees to the board of directors in the manner described at “Nomination and Election of Directors,”

reviews TriCo’s board of directors committee structure and members,

annually evaluates the board of directors,

approves any related party transactions as described at “Transactions with Related Persons,”

monitors director independence, and

reviews TriCo’s corporate governance guidelines and code of business ethics.

Attendance at Meetings

The board of directors of TriCo met 12 times and the board of directors of Tri Counties Bank met 12 times during 2013. Each director attended at least 75% of the meetings of the boards of directors of TriCo and the meetings of the committees of on which they served.

Our corporate governance guidelines provide that each director is expected to attend TriCo’s annual shareholders meeting. In 2013, all of TriCo’s directors attended the annual shareholders meeting.

Nomination and Election of Directors

Qualifications. TriCo’s nominating and corporate governance committee determines the director nominees for each2018 annual meeting of shareholders using the criteria set forth in TriCo’s corporate governance guidelines. TriCo’s guidelines provide that all directorsand related proxy materials must be committed to representing the long-term interests of TriCo’s shareholders and possess:

the highest personal and professional ethics, integrity and values,

informed judgment,

sound business experience,

the ability to make independent analytical inquiries, and

an understanding of TriCo’s business environment.

The committee has not established any specific minimum qualification standards for directors, except that no person may serve as a director who is 75 years of age or olderhave been received at the time of election.

The committee may identify certain skills or attributes as being particularly desirable for specific director nominees in order to complement the existing board of directors composition. To date the committee has identified and evaluated nominees for directors based on several factors, including:

referrals from TriCo’s management, existing directors and advisors,

business or banking experience,

involvement in and familiarity with TriCo’s community,

education,

leadership abilities,

professional reputation and affiliation,

personal interviews, and

diversity.

TriCo does not currently pay any fee to a third party to identify or evaluate potential director nominees, although TriCo may retain search firms in the future to assist in finding qualified candidates.

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Shareholder Nominations. The committee will consider nominees recommended by shareholders if the recommendation is made with the proposed nominee’s consent and includes sufficient information for, and is made early enough to allow, the committee to complete the evaluation process. Section 15 of TriCo’s bylaws provides that formal nomination for election of directors may be made by the board of directors or by any shareholder of any outstanding class of TriCo’s capital stock entitled to vote for the election of directors. Notice of intention to make any nominations must be made in writing and be delivered or mailed to TriCo’s president not less than 21 days or more than 60 days prior to any meeting of shareholders called for the election of directors. If less than 21 days’ notice of the meeting is given to shareholders, the notice of intention to nominate shall be mailed or delivered to TriCo’s president not later than the tenth day following the day on which the notice of meeting was mailed. If notice of the meeting is sent by third-class mail as permitted by Section 6 of the bylaws, no notice of intention to make nominations shall be required. The notification shall contain the following information to the extent known to the notifying shareholder:

the name and address of each proposed nominee,

the principal occupation of each proposed nominee,

the number of shares of capital stock of TriCo owned by each proposed nominee,

the name and residence address of the notifying shareholder, and

the number of shares of TriCo stock owned by the notifying shareholder.

Nominations not made in accordance with Section 15 of the bylaws may, in the discretion of the chairman of the meeting, be disregarded. Nominees recommended by shareholders are evaluated in the same manner as other nominees. TriCo has not received any proposals for director nominees from shareholders for this election as of the date of this joint proxy statement/prospectus.

Cumulative Voting.Each shareholder may cumulate votes in the election of directors. This means that a shareholder may cast votes for the number of shares owned multiplied by the number of directors to be elected. For example, if you own 1,000 shares, you could cast 9,000 votes because TriCo will be electing nine directors at the meeting. You could cast those votes for a single candidate or distribute your votes among any or all of the candidates. However, you may not cumulate votes for a candidate unless that candidate has been properly nominated prior to the voting and you have given notice of your intention to cumulate your votes. You must express your intention to cumulate votes at the meeting prior to the election. If any shareholder gives notice to cumulate his shares, all other shareholders shall be allowed to cumulate their votes as well. TriCo will provide an opportunity at the meeting for any shareholder who desires to cumulate votes to announce his intention to do so. TriCo is soliciting, by your proxy, the discretionary authority to vote proxies cumulatively. The nine nominees receiving the highest number of votes will be elected as directors.

Compensation and Management Succession Committee Interlocks and Insider Participation

No member of TriCo’s compensation and management succession committee is an officer, former officer or employee of TriCo or Tri Counties Bank. No executive officer of TriCo had any interlocking relationship with any other for-profit entity during 2013, including serving on the compensation committee for any other for-profit entity.

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COMPENSATION OF DIRECTORS

Director Compensation for 2013

The following table summarizes the compensation paid by TriCo to its non-employee directors in 2013:

Name (1)

  Fees earned or
paid in cash
($) (2)
   Option
awards
($) (3)
   Change in
pension

value and
nonqualified
deferred
compensation
earnings

($) (4)
   All other
compensation
($) (5)
   Total
($)
   Number of stock
options
outstanding as of
December 31,
2013
 

Donald J. Amaral

  $30,000   $36,640   $22,247    $1,180    $90,067     19,500  

William J. Casey

  $40,000   $35,920   $6,750    $2,097    $84,767     38,500  

L. Gage Chrysler III

  $24,000   $36,640   $0    $0    $60,640     38,000  

Craig S. Compton

  $24,000   $36,640   $4,119    $1,401    $66,160     34,000  

Cory W. Giese

  $20,000    $92,965    $0    $0    $112,965     11,500  

John S. A. Hasbrook

  $24,000   $36,640   $3,953    $1,231    $65,824     34,000  

Michael W. Koehnen

  $24,000   $36,640   $2,966    $1,213    $64,819     34,000  

Carroll R. Taresh (6)

  $10,000    $0    $42,619    $4,858    $57,477     0  

W. Virginia Walker

  $24,000   $35,920   $0    $0    $59,920     36,000  

(1)Mr. Smith, TriCo’s president and chief executive officer, is not included in this table as he is an employee of TriCo. Mr. Smith receives no additional cash compensation for his service. Mr. Smith’s compensation is shown at “Compensation of Named Executive Officers.”
(2)Includes a $2,000 monthly retainer for each named director, $1,000 per month for the chairman of the board of directors, $333 per month for the chairman of the compensation and management succession committee and $500 per month for the chairman of the audit committee. TriCo does not pay its directors any additional compensation to attend board of directors or committee meetings.
(3)Represents full grant date fair value of options awarded in 2013, determined in accordance with FASB ASC Topic 718, using the valuation assumptions described in the “Notes to the Consolidated Financial Statements” section of TriCo’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the SEC.
(4)Reflects the change in value during 2013 of each director’s account under the director supplemental retirement plan described on page 122 and the above-market interest earned during 2013 under TriCo’s executive deferred compensation plan described below, if any.
(5)Reflects the taxable value attributable to the split dollar life insurance benefits described on page 122.
(6)Mr. Taresh did not stand for reelected as a director in 2013 and retired from TriCo’s board of directors at the 2013 annual meeting after 15 years of service.

In addition, each director has an indemnity agreement under which TriCo will indemnify the director against claims arising or relating to his or her service as a director, was covered by directors’ and officers’ liability insurance and was reimbursed for expenses incurred in connection with attendance at board of directors meetings (including expenses related to spouses when spouses are invited to attend board of directors events).

Deferred Compensation Plans

In 2005 TriCo adopted a deferred compensation plan permitting TriCo’s directors to defer payment of their retainer fees until retirement, termination of directorship or death. A director can defer up to a lifetime maximum of $1.5 million for all deferrals under this plan and TriCo’s predecessor plan which permitted director deferrals from 1992 until 2004. A director who elects to defer retainer fees for any year must defer a minimum of $200 per month. In 2012 none of the directors elected to defer any of their retainer fees. The plan also permits TriCo to make discretionary contributions to a director’s account. To date, TriCo has not made any discretionary contributions on behalf of any directors. A director’s plan benefit is payable upon the director’s retirement, the termination of directorship or death. All distributions under the plan are subject to the rules of Section 409A of the Internal Revenue Code. The plan is nonqualified, unsecured and unfunded.

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Interest accrues on directors’ deferred compensation plan accounts at a rate equal to 1% above the monthly equivalent of the annual yield of the Moody’s corporate bond yield index for the preceding month. From the time that a director leaves TriCo’s board of directors and until benefits are paid, a director’s account under the plan is credited with interest each month at the monthly equivalent of the annual yield of the Moody’s average corporate bond yield index for the preceding month. A director is immediately 100% vested in any deferrals and any related interest on those deferrals. TriCo determines the vesting rate for any discretionary contributions credited to a director’s account and any related interest. Notwithstanding the foregoing, if a director is removed for cause, TriCo’s compensation and management succession committee can decide whether the interest credited to the director’s account with respect to any deferrals and TriCo’s discretionary contributions, if any, are forfeited.

Any deferrals made by a director and any discretionary contributions credited by TriCo prior to January 1, 2005, and any related interest, are governed by a predecessor deferred compensation plan for directors that TriCo adopted in 1992. The 1992 plan credits accounts at the monthly equivalent of three percent above the annual yield of the Moody’s average corporate bond yield index but is otherwise similar to the 2005 plan in most respects.

Director Supplemental Retirement Plan

In 2004 TriCo adopted a supplemental retirement plan to provide additional retirement benefits to directors who retire on or after January 1, 2004. This plan replaced TriCo’s supplemental retirement plan for directors originally adopted in 1987 and any benefit accrued by a director as of December 31, 2003 under this earlier plan will be paid under the terms of the 2004 plan. Directors joining TriCo’s board of directors after 2007 are not eligible to participate in this plan. However, any of the eligible outside directors who attains “director emeritus” status becomes qualified to participate in the 2004 plan. A participating director retiring on or after age 55 with at least 15 years of service, or after a change of control with any number of years of service, can receive an annual lifetime benefit equal to the amount of his base board of directors fees paid by TriCo during the final year of service. The amount of the retirement benefit is reduced for each month that the benefit commencement date precedes the director’s 65th birthday. A director’s annual benefit payments under the plan begin the month after retirement. If a director is involuntarily removed, all benefits under this plan are forfeited. The plan is nonqualified, unsecured and unfunded.

Split Dollar Life Insurance

TriCo has entered into joint beneficiary agreements with all of its directors, except for Mr. Chrysler, Mr. Giese and Ms. Walker. These agreements provide that TriCo owns and pays premiums on a split dollar life insurance policy to provide various death benefits in certain circumstances to the beneficiaries named by each of these directors.

OWNERSHIP OF TRICO VOTING SECURITIES

This chart shows the common stock ownership for each TriCo director, the current named executive officers, TriCo’s directors and executive officers as a group and owners of more than 5.0% of TriCo’s outstanding common stock as of April 28, 2014. Each shareholder has direct ownership and sole voting and investment power for the shares listed unless otherwise noted. The share amounts have been rounded to the nearest full share and include stock options granted under TriCo’s stock option plans which are exercisable through April 28, 2014.

   Common stock ownership not including
stock owned as a trustee of the ESOP
  Common stock ownership including
stock owned as a trustee of the ESOP
 

Beneficial owners

  Number of shares
beneficially owned
  Percentage of
common stock
outstanding
  Number of shares
beneficially owned
  Percentage of
common stock
outstanding
 

5% Holders

     

TriCo Bancshares

Employee Stock Ownership

Plan and Trust (ESOP)

63 Constitution Drive

Chico, CA 95973

   1,283,200(1)  7.96%  1,283,200(1)  7.96

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Wellington Management Company, LLP 280 Congress Street Boston, MA 02210

   1,062,085    6.59%  0    6.59

Directors and Named Executive Officers

     

Donald J. Amaral

   28,045(2)  *   1,311,245(2)(6)  8.13%*

Daniel K. Bailey

   103,857(3)  *   103,857(3)  *  

Craig Carney

   90,350(4)  *   90,350(4)  *  

William J. Casey

   656,260(5)  4.07%  656,260(5)  4.07

L. Gage Chrysler III

   59,195(7)  *   59,195(7)  *  

Craig S. Compton

   251,340(8)  1.56%  1,534,540(6)(8)  9.52

Cory W. Giese

   6,000(9)  *    6,000(9)  *  

John S. A. Hasbrook

   50,675(10)  *   1,333,875(6)(10)  8.27

Michael W. Koehnen

   166,640(11)  1.03%  166,640(11)  1.03

Richard O’Sullivan

   269,484(12)  1.67%  269,484(12)  1.67

Thomas J. Reddish

   138,420(13)  *   138,420(13)  * 

Richard P. Smith

   372,884(14)  2.31%  372,884(14)  2.31%

W. Virginia Walker

   28,000   *   1,311,200(6)(15)  8.13%

All TriCo directors and executive officers as a group (19 persons)

   2,257,440(16)  14.00%  3,540,640(6)(16)  21.96%

*Less than 1%.
(1)Each TriCo ESOP participant may direct the TriCo ESOP trustees how to vote the shares allocated to his account. The TriCo ESOP’s advisory committee directs the TriCo ESOP trustees how to vote shares which are not allocated to participants’ accounts. As of April 28, 2014, participants in the TriCo ESOP could direct the voting of all 1,283,200 shares held by the TriCo ESOP. Of that total, 117,764 shares had been allocated to the accounts of TriCo’s executive officers.
(2)Includes stock options for 14,000 shares.
(3)Includes stock options for 98,900 shares and 4,957 shares allocated to Mr. Bailey’s account in the TriCo ESOP.
(4)Includes 350 shares owned by Mr. Carney’s children, 16,850 shares allocated to Mr. Carney’s account in the TriCo ESOP and stock options for 60,150 shares.
(5)Includes stock options for 38,500 shares864 shares held in an IRA account for the benefit of Mr. Casey and 124,000 shares held by a family trust of which Mr. Casey is manager.
(6)Includes 1,283,200 shares held by the TriCo ESOP of which Messrs. Amaral, Compton, Hasbrook and Ms. Walker are trustees of which 117,764 shares have been allocated to the accounts of executive officers in the TriCo ESOP.
(7)Includes 6,600 shares held by Modern Building, Inc., of which Mr. Chrysler is president and a majority owner, 872 shares held by Mr. Chrysler’s spouse and 4,825 shares held by the Modern Building Pension and Profit-Sharing Plan and stock options for 38,000 shares.
(8)Includes 105,464 shares held by the Betty Compton Revocable Trust of which Mr. Compton is trustee,34,814 shares held in an IRA account for the benefit of Mr. Compton and stock options for 34,000 shares.
(9)Mr. Giese has 5,500 unvested stock options.
(10)Includes stock options for 30,000 shares.

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(11)Includes 65,214 shares owned by CF Koehnen & Sons, of which Mr. Koehnen is an owner, 8,600 shares owned by the CF Koehnen & Sons Profit Sharing Plan of which Mr. Koehnen is trustee, 4,400 shares owned by the Helen Koehnen Trust of which Mr. Koehnen is trustee, 1,700 shares owned by Mr. Koehnen’s children, 2,300 shares owned by Mr. Koehnen’s wife and stock options for 30,000 shares.
(12)Includes stock options for 59,400 shares and 40,893 shares allocated to Mr. O’Sullivan’s account in the TriCo ESOP.
(13)Includes stock options for 62,600 shares and 20,843 shares allocated to Mr. Reddish’s account in the TriCo ESOP.
(14)Includes 206 shares held by Mr. Smith’s wife, stock options for 178,600 shares and 28,586 shares allocated to Mr. Smith’s account in the TriCo ESOP.
(15)Includes stock options for 28,000 shares.
(16)Includes stock options for 707,950and 117,764 shares allocated to executive officers’ accounts in the TriCo ESOP.

EXECUTIVE OFFICERS

The following persons currently serve as executive officers and senior management of both TriCo and Tri Counties Bank.

Richard P. Smith

Information about Mr. Smith can be found at “Board of Directors.”

Daniel K. Bailey

Daniel Bailey, age 45, has been executive vice president—retail banking & bank operations of Tri Counties Bank since May 2007. Prior to joining Tri Counties Bank, Mr. Bailey spent more than fifteen years at Wells Fargo Bank where he served in numerous senior management positions. His most recent position with Wells Fargo was senior vice president, Northern California Region Initiatives Manager.

Craig Carney

Craig Carney, age 55, has served as executive vice president and chief credit officer of Tri Counties Bank since 2007. From 1997 until 2007 he was senior vice president and chief credit officer of Tri Counties Bank. From 1985 to 1996 Mr. Carney was employed by Wells Fargo Bank in various lending capacities. His most recent position with Wells Fargo was as vice president, senior lender in commercial banking from 1991 to 1996. Mr. Carney served as a consultant to Tri Counties Bank from 1996 until his employment in 1997.

Glenn Hunter

Glenn Hunter, age 63, has served as senior vice president and director of human resources of Tri Counties Bank since 2013. Previously, he was senior vice president, global human resources for Obopay, Inc., a mobile payments technology company, from 2008 to 2013.

Richard O’Sullivan

Richard O’Sullivan, age 57, has served as executive vice president—wholesale banking of Tri Counties Bank since 1997. He was TriCo’s senior vice president—customer sales and service from 1995 to 1997. He served as vice president and manager of TriCo’s Park Plaza branch from 1992 until 1995. Mr. O’Sullivan is also a partner in a family farm.

Thomas J. Reddish

Tom Reddish, age 54, has served as executive vice president and financial officer of TriCo and Tri Counties Bank since 2006 after serving as senior vice president and chief financial officer since 2003 and, prior to that, as vice president and chief financial officer since 1999. Previously, he was vice president and controller of TriCo and vice president of Tri Counties Bank from 1998 until 1998. He served as controller of Tri Counties Bank from 1994 until 1998.

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Raymond Rios

Ray Rios, age 57, has served as senior vice president, and chief technology officer, since 2005. From 1983 through 1994 Mr. Rios served in a variety of positions in TriCo’s information technology department and from 1997 to 2005 he was manager—information systems of Tri Counties Bank.

Carol Ward

Carol Ward, age 59, is the executive vice president and chief risk officer of Tri Counties Bank. She was appointed to this position in June, 2012 following more than 28 years of banking experience including executive risk management positions at several southern California banks. From 2010 to 2012, she served as senior vice president of enterprise risk management for Elevations Credit Union in Boulder, Colorado. From 2006 to 2010, she worked as an independent consultant and, supported Kinecta Federal Credit Union as an internal consultant from 2008 to 2010.

COMPENSATION OF NAMED EXECUTIVE OFFICERS

Summary Compensation Table

The following table presents information concerning all compensation earned in 2013, 2012 and 2011 by TriCo’s principal executive officer, principal financial officer and the three other most highly compensated executive officers during 2013:

Name and principal position

YearSalary
($)(1)
Bonus
($)(2)
Stock
awards
($)
Option
awards
($)(3)
Non- equity
incentive
plan
compensation
($)
Change in
pension value
and
nonqualified
deferred

compensation
earnings
($)(4)
All other
compensation
($)(5)
Total ($)

Richard Smith,

President and CEO


2013

2012

2011



505,675

493,365

483,691



0

0

0



0

0

0



395,840

270,400

316,500



160,000

149,461

145,107



9,135

822,407

442,904



49,984

57,549

45,758



1,120,634

1,793,182

1,433,960


Thomas Reddish,

Executive Vice President and CFO


2013

2012

2011



309,272

301,744

290,801



60,000

60,940

73,597



0

0

0



99,990

135,200

189,900



0

0

0



0

389,411

321,634



25,341

28,025

24,238



494,603

915,320

900,170


Richard O’Sullivan,

Executive Vice President—Wholesale Banking


2013

2012

2011




252,004

246,656
243,411




75,974

49,656

12,171



0

0

0



95,920

101,400

63,300



0

0

0



31,805

237,480

273,668



24,992

36,187

35,558



480,695

671,379

628,107


Craig Carney,

Executive Vice President—Chief Credit Officer


2013

2012

2011




262,338

242,311
210,172




79,279

50,885

42,761



0

0

0



99,110

135,200

189,900



0

0

0



9,158

500,896

203,232



30,961

28,933

26,861



480,846

958,225

672,926


Dan Bailey,

Executive Vice President—Retail Banking


2013

2012

2011




257,299

249,194
240,157




77,756

50,327

48,862



0

0

0



100,760

135,200

189,900



0

0

0



0

87,743

54,436



29,383

27,715

27,269



465,198

550,179

560,624


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(1)Reflects actual salary earned in the year indicated.
(2)Reflects cash bonuses earned for performance in the year indicated but paid in the following year.
(3)Reflects the fair value of the option awards on the grant date determined in accordance with FASB ASC Topic 718, using the valuation assumptions described in the “Notes to the Consolidated Financial Statements” section of TriCo’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the SEC.
(4)Reflects only the above-market rates earned under TriCo’s executive deferred compensation plan. The actuarial change in the present value of the executive’s benefits under TriCo’s supplemental executive retirement plan described was negative. In accordance with SEC rules, such negative amounts are not reflected in the sum in this column. The table below shows the actuarial change in the present value for each executive:

Name of Executive

  Change in Pension Value 

Mr. Smith

  $(302,232

Mr. Reddish

  $(138,010

Mr. O’Sullivan

  $(346,435

Mr. Carney

  $(71,640

Mr. Bailey

  $(2,013

The actuarial change in the present value is determined using interest rate and mortality rate assumptions consistent with those named in TriCo’s financial statements and includes amounts which the executive may not be currently entitled to receive because such amounts are not vested. The actuarial change in present value for the executives was negative in 2013 primarily as a result of an increase in the market value of TriCo common stock, which increase the values of the executives’ ESOP accounts. Other than for Mr. Bailey, the present value of an executive’s benefit under his supplemental executive retirement plan is reduced by the value of his ESOP account on the date of retirement.

(5)Reflects the incremental cost to TriCo of other compensation indicated in the perquisites and personal benefits table below.

Perquisites and Personal Benefits

Name

YearAutomobile
use or
allowance
($) (A)
Life
insurance
benefits
($) (B)
Personal use
of club
memberships
($)
TriCo
contributions
($) (C)
ESOP
contributions
($)(D)
Total
perquisites
and other
personal
benefits ($) (E)

Mr. Smith



2013

2012
2011





5,886

5,904
7,338





26,333

35,585
23,890





4,506

4,070
3,700




0

0

0




12,750

11,710
10,698





49,984

57,549
45,758



Mr. Reddish



2013

2012
2011




0

0

0




8,477

11,505
9,100





4,114

4,810
4,440




0

0

0




12,750

11,710
10,698





25,341

28,025
24,238



Mr. O’Sullivan



2013

2012
2011





12,000

12,000
12,000





8,061

8,194
8,489





4,506

4,440
4,440




0

0

0




291

11,553
10,628





24,992

36,187
35,558



Mr. Carney



2013

2012
2011





6,000

6,000
6,000





6,763

6,991
7,116





4,959

4,544
4,440





227

183
184





12,750

11,123
8,994





30,961

28,933
26,861



Mr. Bailey



2013

2012
2011





12,000

12,000
12,000





563

713
713





4,070

3,330
4,070




0

0

0




12,750

11,672
10,486





29,383

27,715
27,269



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(A)Reflects the value attributable to personal use of automobiles provided by TriCo as calculated in accordance with IRS guidelines.
(B)In 2013, TriCo provided all full time employees, including the named executive officers, with life insurance benefits paying greater three times the employee’s annual salary or $500,000 to the employee’s beneficiaries. For 2013, reflects the incremental cost of this insurance. For 2012 and 2011, reflects the taxable value attributable to split dollar life insurance benefits provided by joint beneficiary agreements between TriCo and each executive; TriCo owned and paid premiums on these insurance policies which provided various death benefits to the beneficiaries named by each executive.
(C)Reflects contributions allocated by TriCo to an executive’s ESOP account pursuant to the terms of TriCo’s nonqualified deferred compensation plan.
(D)Reflects discretionary contributions made by TriCo to an executive’s account in TriCo’s ESOP described below.
(E)Includes security system expenses for Mr. O’Sullivan and expenses related to spouses when spouses are invited to accompany executives on management retreats and conventions.

CEO Incentive Plan

Each year the board of directors adopts a CEO Incentive Plan providing for potential bonus compensation to TriCo’s chief executive officer, Richard Smith, for his performance during that year. In 2013, the CEO Incentive Plan generally provided that Mr. Smith could earn a bonus equal to up to 100% of his 2013 salary if TriCo met certain pre-established performance goals. See “Compensation Discussion and Analysis—Annual Incentive Bonus” for a more detailed discussion of this plan. The compensation and management succession committee retains discretion regarding the determinations as to whether TriCo reached these goals.

ESOP

TriCo has an employee stock ownership plan and trust for all employees completing at least 1,000 hours of service with TriCo or Tri Counties Bank. Annual contributions are made by TriCo in cash at the discretion of the board of directors. Contributions to the plan are held in trust and invested primarily in TriCo’s common stock. Contributions are allocated to participants on the basis of salary in the year of allocation. In general, benefits become vested after six years.

401(k)

TriCo has a 401(k) plan for all employees age 21 and over who complete at least 90 days of service with TriCo or Tri Counties Bank. Participants may contribute a portion of their compensation subject to certain limits based on federal tax laws. Participants may select between making regular pre-tax deferrals or Roth deferrals (effective January 1, 2008). TriCo has not made any matching contributions to the plan to date. Plan assets are held in trust. Participants can direct their investment contributions into one or more of 29 mutual funds. Generally, contributions are triggered by a participant’s retirement, disability, death or other separation from employment.

2009 Equity Incentive Plan

General.In 2009 TriCo adopted and its shareholders approved TriCo’s 2009 equity incentive plan. In 2013, TriCo’s shareholders approved an amendment to the 2009 plan increasing the number of authorized shares from 650,000 to 1,650,000. The plan may be administered by the board of directors or an authorized committee of the board of directors. It is the current policy of the board of directors that all equity incentive awards be approved by the compensation and management succession committee. The 2009 plan expires in 2019.

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Employees, officers, directors and consultants of TriCo or its subsidiaries are eligible for awards under the 2009 plan. The board of directors or an authorized committee determines which individuals will receive awards, as well as the number of shares underlying and composition of each award.

Grants to non-employee directors. The 2009 plan provides that TriCo may grant to each outside (i.e., non-employee) director a stock option for 20,000 shares of common stock when first elected to the board of directors and an additional stock option for 4,000 shares each year when re-elected to the board of directors. In addition, each outside director who is appointed as Chairman of the Board or as Chairman of the Audit Committee may receive an additional stock option for 1,000 shares. The exercise price for these options will be the fair market value on the date of grant and the options will vest as determined by the board of directors. Outside directors are eligible to receive other awards, but no such awards have been granted to them.

Awards. The 2009 plan permits TriCo to grant stock options, restricted stock, stock awards, and stock appreciation rights. The board of directors or an authorized committee determines the types, sizes and terms of awards based on various factors, including a participant’s duties and responsibilities, the value of the participant’s past services, the participant’s potential contributions to TriCo’s success and other factors. No participant may receive awards for more than 300,000 shares of common stock during any year, including grants of stock options and stock appreciation rights.

The 2009 plan provides for the following types of awards:

Stock Options. TriCo may grant stock options under the 2009 plan, including options which are qualified as incentive stock options as defined under Section 422 of the Internal Revenue Code and nonqualified stock options. Options will not be exercisable at a price that is less than 100% of the fair market value of TriCo’s common stock on the date of grant or, if the optionee holds at least 10% of the voting power of all classes of TriCo’s stock, 110% of fair market value with respect to incentive stock options. The term of options will generally be ten years, except that incentive stock options granted to any 10% shareholders will have a term of no more than five years. Options will vest and become exercisable as determined by the board of directors at the time of grant.

Restricted Stock. A restricted stock award is the grant of shares of TriCo’s common stock, exercisable currently at a price determined by the board of directors (including zero), that is subject to forfeiture until specific conditions or goals are met. Conditions may be based on continuing employment or achieving performance goals specified by the board of directors. During the period of restriction, participants holding restricted stock may, if permitted by the board of directors, have full voting and dividend rights. The restrictions lapse in accordance with a schedule or other conditions determined by the board of directors.

Stock Grants. A stock grant is an award of shares of common stock without restriction. Stock grants may be made in certain circumstances to reward special performance or for other reasons.

Stock Appreciation Rights. Under the 2009 plan, TriCo may grant stock appreciation rights or “SARs” that are settled in common stock or cash and which must be granted with an exercise price not less than 100% of fair market value on the date of grant. Upon exercise of a SAR, a participant is entitled to receive cash or a number of shares of common stock equivalent in value to the difference between the fair market value on the exercise date and the exercise price of the SAR. For example, if a participant is granted 100 SARs with an exercise price of $10 and the SARs are later exercised when the fair market value of the underlying shares is $20 per share, the participant would be entitled to receive 50 Shares [(($20—$10) x 100) / $20], or $1,000 in cash (($20—$10) x 100). Because of adverse accounting consequences of an SAR settled in cash, TriCo expects that most SARs will provide for settlement in shares of common stock.

Performance-based awards. Grants of performance-based awards under the 2009 plan are intended to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code and preserve the deductibility of these awards for federal income tax purposes. Section 162(m) of the Internal Revenue Code denies a tax deduction to public companies for compensation paid to certain “covered employees” in a taxable year to the extent the compensation paid to a covered employee exceeds $1,000,000 unless the plan contains certain features that qualify the compensation as “performance-based compensation.” Because Section 162(m) of the Internal Revenue Code only applies to those employees who are “covered employees” as defined in Section 162(m), covered

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employees and those who may become covered employees are most likely to receive performance-based awards. “Covered employees” means TriCo’s chief executive officer, its chief financial officer and any of its other three highest compensated officers.

Shares reserved for issuance. Subject to certain adjustments, the maximum aggregate number of shares of TriCo’s common stock which may be issued pursuant to or subject to awards under the 2009 plan is 1,650,000. As of March 31, 2014 there were 937,500 shares available for grant of awards under the 2009 plan. The number of shares available for issuance under the 2009 plan is reduced by: (i) one share for each share of common stock issued pursuant to a stock option or a Stock Appreciation Right and (ii) two shares for each share of common stock issued pursuant to a Performance Award, a Restricted Stock Award or a Restricted Stock Unit Award. When awards made under the 2009 plan expire or are forfeited or cancelled, the underlying shares will become available for future awards under the 2009 plan. To the extent that a share of common stock pursuant to an award that counted as two shares again becomes available for issuance under the 2009 plan, the number of shares of common stock available for issuance under the 2009 plan will increase by two shares. Shares awarded and delivered under the 2009 plan may be authorized but unissued, or reacquired shares.

Acceleration of vesting. The board of directors has the authority to accelerate the vesting and exercisability of awards. In addition, an award held by a participant whose service has not terminated prior to a change in control may be subject to additional acceleration of vesting and exercisability upon or after such event as may be provided in the agreement for such award or as may be provided in any other written agreement between TriCo or any affiliate and the participant. In the absence of such an acceleration provision, however, no acceleration will occur. See “Compensation of Named Executive Officers—Potential Payments Upon Termination or Change of Control.”

Federal Income Tax Consequences. Tax consequences to TriCo and to participants receiving awards will vary with the type of award. The plan is not intended to be a “qualified plan” under Section 401(a) of the Internal Revenue Code.

Following is a summary of the principal federal tax consequences to U.S. citizens and residents of awards under the plan. It is based on the provisions of the Internal Revenue Code and applicable Internal Revenue Service (“IRS”) regulations and rulings. The Internal Revenue Code is subject to amendment and continuing interpretation by the IRS. This summary describes only the principal tax consequences in the circumstances described and does not take into account special rules that might apply in limited cases.

IRS regulations provide that, for the purpose of avoiding certain penalties under the Internal Revenue Code, taxpayers may rely only on opinions of counsel that meet specific requirements set forth in the regulations, including a requirement that such opinions contain extensive factual and legal discussion and analysis. Any tax advice that may be contained in this document does not constitute an opinion that meets the requirements of the regulations. Any such tax advice therefore cannot be used, and was not intended or written to be used, for the purpose of avoiding any federal tax penalties that the IRS may attempt to impose. Because any such tax advice could be viewed as a “marketed opinion” under the IRS regulations, those regulations require this document to state that any such tax advice was written to support the “promotion or marketing” of the matters set forth in this document.

For purposes of this summary, TriCo assumed that no award will be considered “deferred compensation” as that term is defined for purposes of Section 409A of the Internal Revenue Code and the federal tax rules governing nonqualified deferred compensation arrangements.

You should consult your own independent tax advisor and seek advice based on your particular circumstances as to the specific consequences under federal tax law, and under other tax laws, such as foreign, state or local tax laws, which are not addressed here.

Nonstatutory Options.

Grant. Participants will not have to report any taxable income upon receipt of a nonstatutory option.

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Exercise with Cash. Participants will have to report taxable income upon exercise of a nonstatutory option with cash. The amount a participant must report is the difference between the value of the shares on the date that the option is exercised and the amount paid for the shares. This income will be taxable to the participant just as any other income the participant received as compensation for services. This income, together with the amount paid for the shares, will then be the participant’s basis in the shares for purposes of determining the participant’s taxable gain or loss on any later sale of the shares.

Exercise with Stock. If a participant exercises a nonstatutory option by delivering shares that are already owned, the exercise will be treated, in part, as a nontaxable exchange of shares. This means

The participant will not have to report compensation income on the number of shares received whose value equals the value of the shares delivered. The participant’s basis in those shares, for determining any taxable gain or loss when the participant sells those shares, will be the basis of the shares delivered. Also, the shares received will have a holding period (for determining whether the participant qualifies for long-term capital gains tax rates) which includes the length of time the participant held the shares delivered.

The participant will have to report compensation income on any additional shares received in an amount equal to the difference between the value of those additional shares and the amount of cash, if any, paid for the shares. This income, together with the amount paid for the shares, will then be the participant’s basis in the shares for purposes of determining the participant’s taxable gain or loss on any later sale of the shares.

If the shares used to exercise a nonstatutory option were acquired by exercising an incentive stock option or under an employee stock purchase plan, the participant’s use of those shares may constitute a “disqualifying disposition” of those shares, as explained below under “Incentive Stock Options.”

Sale of Shares. A participant may also have to report taxable gain or loss when selling a share received on exercise of a nonstatutory option. The amount of gain or loss that the participant must report will be measured by the difference between the amount that the participant receives from selling that share and the participant’s basis in the share. Any such gain or loss will be a capital gain or loss. Capital gains qualify to be taxed at long-term capital gains tax rates rather than the rates which apply to compensation income if the participant has held the share more than one year.

Incentive Stock Options.

Grant.Participants will not have to report any taxable income upon receipt of an incentive stock option.

Exercise with Cash. In most cases participants will not have to report any taxable income when exercising an incentive stock option with cash. However, the federal income tax system includes a separate tax, the alternative minimum tax, intended to ensure that taxpayers cannot completely eliminate all income taxes through the use of various special provisions of the Internal Revenue Code. The special treatment of incentive stock options generally does not apply for purposes of calculating whether participants owe any alternative minimum tax, however, so for that purpose a participant will have to report the difference between the value of the shares on the date that the option is exercised and the amount the participant paid for the shares as though it were taxable compensation income. As a result, and depending on a participant’s particular circumstances, a participant may have to pay an alternative minimum tax when exercising an incentive stock option even though the participant has no taxable income for regular income tax purposes because the participant does not sell the shares acquired as a result of the exercise until a subsequent year.

Exercise with Stock. Subject to the discussion above regarding the alternative minimum tax, in most cases a participant also will not have to report any taxable income on exercising an incentive stock option with shares already owned but there will be other consequences unique to exercising an option with shares, as follows:

For purposes of determining the amount of gain or loss on any later sale of those shares, the number of shares that the participant receives on exercise whose value equals the value of the shares delivered will have a basis equal to the basis of the shares delivered and a holding period which includes the length of time the participant held the shares delivered. The additional shares received will have basis equal to any cash paid to exercise the option.

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However, for purposes of determining whether any later sale of any of the shares received is a “disqualifying disposition” (described in “Sale of Shares” immediately below), all of the shares received will be treated as newly acquired.

In addition, if a participant later sells less than all of the shares received when exercising the incentive stock option with shares, the participant will be considered to have first sold the shares with the lowest basis.

If the participant acquired the shares used to exercise the option by exercising another incentive stock option or through an employee stock purchase plan, and the holding periods required for favorable tax treatment are not met with respect to the shares used, those shares will be treated as sold in a disqualifying disposition for purposes of reporting compensation income (that is, the participant will not have any capital gain or loss on exchanging those shares, but may be required to report compensation income as if the participant sold the shares).

Sale of Shares. A participant may have to report taxable gain or loss when selling a share received on exercise of an incentive stock option. The amount of gain or loss will be measured by the difference between the amount the participant receives from selling that share and the participant’s basis in the share. Any such gain or loss will usually be capital gain or loss. Capital gains qualify to be taxed at long-term capital gains tax rates rather than the rates which apply to compensation income if the participant had held the share more than one year. However, if the participant has a gain when selling a share received on exercising an incentive stock option, some or all of that gain will be taxed as compensation income if the participant sells that share

within two years from the date that the participant received the option, or

within one year after the participant exercised the option.

A participant’s sale of shares within the above time periods is known as a disqualifying disposition. In the case of a disqualifying disposition, a participant will have to report as additional compensation income the portion of the gain that the participant otherwise would report on selling the share equal to the difference between the value of the share at the date that the participant exercised the option and the amount that the participant paid for the share on exercise. Note that the amount of the participant’s compensation income will not be limited to the gain on the sale, but instead will include all of the difference between value and amount paid, if the participant’s sale is the type of transaction where a loss, had the participant sustained one, would not be recognized for federal income tax purposes such as, for example, a sale to certain relatives. Any such compensation income is not subject to income and employment tax withholding, but will be reported by TriCo to the IRS.

Restricted Stock Awards.

Grant and Lapse of Restrictions. A participant receiving an award of stock that is subject to a substantial risk of forfeiture will not have to report any taxable income except as follows:

If the participant makes an “83(b) election” (described below), at the date that the participant receives the restricted stock award, the participant will have to report compensation income equal to the difference between the value of the shares and the price paid for the shares, if any. Value is determined without regard to the risk of forfeiture that applies to the award.

If the participant does not make an “83(b) election” (described below), at the date or dates the substantial risk of forfeiture which applies to the award expires, the participant will have to report compensation income equal to the difference between the value of the shares and the price paid for the shares, if any.

83(b) Elections. An 83(b) election is a special tax election that a participant can make to have any risk of forfeiture that otherwise applies to a restricted stock award disregarded for tax purposes. An 83(b) election has three effects. First, the participant will have to report compensation income, if any, at the time that the shares are received, rather than later as the risk of forfeiture expires. Second, the amount of the participant’s compensation income will be based on the value of the shares when the participant receives the shares (disregarding the risk of forfeiture) rather than based on the value as the risk of forfeiture expires. Third, the date that the participant is first treated as holding the shares for purposes of later determining whether the participant qualifies for the tax rates that apply to long-term capital gains or losses will be the date that the participant receives the award rather than the date or dates the risk of forfeiture which applies to the award expires. An 83(b) election must be made within 30 days of receiving a restricted stock award, and generally cannot be revoked once made.

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Sale of Shares. A participant may have to report taxable gain or loss when selling shares received as a restricted stock award. The amount of gain or loss that the participant must report will be measured by the difference between the amount received on selling those shares and the participant’s basis in the shares. A participant’s basis in the shares is the amount that the participant paid for the shares, if any, plus the amount of compensation income the participant previously reported in connection with the restricted stock award. Any such gain or loss will be a capital gain or loss. Any such gain will qualify for long-term capital gains tax rates rather than the rates which apply to compensation income if the participant held the awarded shares more than one year after the date that the participant received the shares, assuming the participant makes an 83(b) election. If the participant does not make an 83(b) election, then the participant must have held the awarded shares more than one year after the date or dates the risk of forfeiture which applies to the award expires to qualify for long-term capital gains tax rates.

Forfeiture of Shares. If a participant should forfeit a restricted stock award, the participant will have to report taxable gain or loss based on the difference between the amount paid for the award and the amount received on forfeiture, if anything. That gain or loss will be an ordinary gain or loss if the participant did not make a Section 83(b) election and capital gain or loss if the participant did make a Section 83(b) election. Note that if the participant made an 83(b) election and the shares are subsequently forfeited, only the amount paid for the shares, and not any amount of compensation income recognized because of the Section 83(b) election, will be taken into account for purposes of determining the participant’s capital gain or loss.

Stock Appreciation Rights; Restricted Stock Unit Awards.

A participant will generally recognize taxable income on receipt of cash or other property pursuant to an award of stock appreciation rights or restricted stock units. The amount that the participant must report is the difference between the amount of cash or value of the shares received and the amount, if any, paid for any such shares. This income will be taxed to the participant just as any other income received as compensation for services.

Performance Awards.

Participants will generally recognize taxable income in connection with the grant and/or vesting of performance awards depending upon the form of the grant as described above (e.g., restricted stock award or restricted stock unit award).

Section 16 Officers and Directors.

For tax purposes, shares acquired upon exercise of an option or as a restricted stock award may be considered subject to a substantial risk of forfeiture if the sale of such shares at a profit could subject the seller to Section 16(b) liability. The existence of a substantial risk of forfeiture may change some of the tax consequences described above. In these circumstances, participants should consult their tax advisors regarding the tax consequences of an exercise of an option or receipt of an award of restricted stock.

Company Deductions; Tax Withholding.

Except as has been previously described, whenever a participant has to report compensation income in connection with an award, TriCo generally will be entitled to deduct the same amount in computing its taxable income and TriCo must withhold income and employment taxes based on that compensation income if paid to a participant as an employee. Participants are responsible for ensuring that adequate funds are available to TriCo for such withholding.

2001 Stock Option Plan

General. In 2001, TriCo adopted a 2001 stock option plan for key officers, employees, directors and consultants, as subsequently approved by shareholders, which provides that options to purchase an aggregate of 2,124,650 shares of TriCo’s common stock may be granted under the plan. With the adoption of the 2009 plan, TriCo decided that it would make no additional grants of options under the 2001 plan, even though there were 128,140 shares still available for grant under the 2001 plan. Vesting schedules are determined individually for each grant. The stock options that TriCo issued to TriCo’s executives were granted at exercise prices equal to the fair market value of TriCo stock on the date of grant. Aside from certain stock options granted to TriCo’s directors, which vest in their entirety on the first anniversary of the grant date, all stock options granted vest ratably over a five-year period beginning either on the grant date or the first anniversary of the grant date.

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The 2001 plan authorized the issuance incentive stock options and non-qualified stock options. The plan imposes individual limitations on the amount of certain awards so that no single participant may generally receive options in any calendar year that relate to more than $1 million. Finally, options may generally be adjusted to prevent dilution or enlargement of benefits when certain events occur, such as a stock dividend, reorganization, recapitalization, stock split, combination, merger or consolidation.

The 2001 plan is administered by TriCo’s compensation and management succession committee, which is authorized to: (i) amend the terms and conditions of any option, including the vesting schedule, (ii) interpret the rules relating to the plan, and (iii) otherwise administer the plan. See “Compensation of Named Executive Officers—Potential Payments Upon Termination or Change of Control.”

Tax consequences to TriCo and to participants receiving options vary with the type of option. The plan is not intended to be a “qualified plan” under Section 401(a) of the Internal Revenue Code.

Grants of Plan-Based Awards for 2013

The following table presents information concerning plan-based awards granted to each named executive in 2013:

       Estimated possible payouts
under non-equity

incentive plan awards
   Estimated future payouts
under equity
incentive plan awards
   

All other
option
awards:
number of

securities

  

Exercise
or base

price of
option

   

Grant
date fair

value of
option

 

Name

  Grant
Date
   Threshold
($)
   Target
($)
   Maximum
($)
   Threshold
(#)
   Target
(#)
   Maximum
(#)
   underlying
options (#)
  awards
($/Sh)
   award
($) (1)
 

Mr. Smith

   5/9/2013     —       —       —       —       —       —       40,000(2)  19.46     359,400  

Mr. Smith

   5/9/2013     —       —       —       —       —       —       4,000(2)  19.46     36,640  

Mr. Reddish

   5/9/2013     —       —       —       —       —       —       11,000(2)  19.46     99,990  

Mr. O’Sullivan

   5/9/2013     —       —       —       —       —       —       11,000(2)  19.46     95,920  

Mr. Carney

   5/9/2013     —       —       —       —       —       —       11,000(2)  19.46     99,110  

Mr. Bailey

   5/9/2013     —       —       —       —       —       —       11,000(2)  19.46     100,760  

(1)Reflects the fair value of the option awards on the grant date determined in accordance with FASB ASC Topic 718, using the valuation assumptions described in the “Notes to the Consolidated Financial Statements” section of TriCo’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the SEC.
(2)Reflects stock options granted under TriCo’s 2009 stock option plan which vest in five equal installments each year beginning on the first anniversary of the grant date.

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Outstanding Equity Awards at 2013 Fiscal Year-End

The following table presents information for all stock option awards held by the named executives as of December 31, 2013. There are no stock awards outstanding for any of the named executives. All stock options vest in five equal installments each year beginning on the grant date unless indicated otherwise in the chart below.

Name

  Number of
securities underlying
unexercised options
(#) exercisable
   Number of
securities
underlying
unexercised
options (#)
unexercisable
  Equity incentive plan
awards: number of
securities underlying
unexercised unearned
options (#)
   Option
exercise
price ($)(1)
   Option
expiration
date
 

Mr. Smith

   51,520     —      —       17.38     2/17/2014  
   4,000     —      —       17.40     5/4/2014  
   4,000     —      —       20.58     5/24/2015  
   4,000     —      —       25.91     5/23/2016  
   45,000     —      —       24.46     8/22/2016  
   4,000     —      —       22.54     5/22/2017  
   45,000     —      —       22.54     5/22/2017  
   2,000     —      —       15.40     5/20/2018  
   12,000     —      —       15.40     5/20/2018  
   4,000     —      —       17.54     5/25/2020  
   36,600     24,400(2)  —       17.54     5/25/2020  
   4,000     —      —       14.54     12/20/2021  
   20,000     30,000(3)  —       14.54     12/20/2021  
   8,000     32,000(4)  —       15.34     5/22/2022  
   —       40,000(5)  —       19.46     5/9/2023  
   —       4,000(6)  —       19.46     5/9/2023  

Mr. Reddish

   25,000     —      —       17.38     2/17/2014  
   10,000     —      —       19.35     2/22/2015  
   19,100     —      —       22.54     5/22/2017  
   8,500     —      —       15.40     5/20/2018  
   15,000     10,000(2)  —       17.54     5/25/2020  
   12,000     18,000(3)  —       14.54     12/20/2021  
   4,000     16,000(4)  —       15.34     5/22/2022  
   —       11,000(5)   —       19.46     5/9/2023  

Mr. O’Sullivan

   5,000     —      —       17.38     2/17/2014  
   10,000     —      —       19.35     2/22/2015  
   19,400     —      —       22.54     5/22/2017  
   8,000     —      —       15.40     5/20/2018  
   9,000     6,000(2)   —       17.54     5/25/2020  
   4,000     6,000(3)   —       15.34     5/22/2022  
   3,000     12,000(4)   —       15.34     5/22/2022  
   —       11,000(5)   —       19.46     5/9/2023  

Mr. Carney

   20,000     —      —       17.38     2/17/2014  
   7,500     —      —       19.35     2/22/2015  
   10,450     —      —       22.54     5/22/2017  
   4,000     —      —       15.40     5/20/2018  
   12,000     8,000(2)   —       17.54     5/25/2020  
   12,000     18,000(3)   —       14.54     12/20/2021  
   4,000     16,000(4)   —       15.34     5/22/2022  
   —       11,000(5)   —       19.46     5/9/2023  

Mr. Bailey

   52,500     —      —       22.54     5/22/2017  
   5,000     —      —       15.40     5/20/2018  
   14,400     9,600(2)   —       17.54     5/25/2020  
   12,000     18,000(3)   —       14.54     5/22/2022  
   4,000     16,000(4)   —       15.34     5/22/2022  
   —       11,000(5)   —       19.40     5/9/2023  

(1)The exercise price equals the market value on the grant date.
(2)Vests in two equal installments each year beginning May 25, 2014.
(3)Vests in three equal installments each year beginning December 20, 2014.
(4)Vests in four equal installments each year beginning May 22, 2014.
(5)Vests in five equal installments each year beginning May 9, 2014.
(6)Vests on May 9, 2014.

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Option Exercises for 2013

The following table presents information on stock options exercised by each of the named executives in 2013 and the aggregate dollar amount realized on exercise.

   Option Awards 

Name

  Number of
shares
acquired
on exercise
(#)
   Value realized
on exercise

($) (1)
 

Mr. Smith

   104,000     838,728  

Mr. Reddish

   40,000     279,179  

Mr. O’Sullivan

   —       —    

Mr. Carney

   10,765     86,820  

Mr. Bailey

   —       —    

(1)The aggregate dollar value realized upon the exercise of an option represents the difference between the market price of the underlying shares on the date of exercise and the exercise price of the option.

Pension Benefits

Effective January 1, 2004, TriCo adopted a supplemental executive retirement plan to provide supplemental retirement benefits to TriCo’s key employees. This plan replaced a supplemental retirement plan for executives that TriCo originally adopted in 1987, and any benefits accrued by an executive as of December 31, 2003 under the earlier plan will now be paid under terms of the 2004 plan. TriCo selects the key employees who will participate in this plan. The plan is nonqualified, unsecured and unfunded. The plan was amended and restated effective January 1, 2009 to incorporate changes required by Internal Revenue Code 409A, and to add a new provision for anyone who is designated as a participant on or after January 1, 2009.

For participants under the 2004 plan as of December 31, 2008, commencing on the first day of the month coinciding or following the participant’s normal retirement date, the bank is obligated to pay to the participant a monthly cash benefit equal to the target retirement percentage (ranges from 0 to 70 percent depending on years of credited service) multiplied by the participant’s final average compensation (defined as the 36 full consecutive months of employment during which the participant’s compensation is the highest divided by 36) less the sum of the participant’s monthly estimated primary Social Security benefit and the participant’s ESOP offset. For participants who enter the 2004 Plan on or after January 1, 2009, commencing on the first day of the month following a participant’s normal retirement date the bank is obligated to pay to the participant a monthly retirement cash benefit equal to the target retirement percentage (ranges from 0 to 45 percent depending on years of credited service) multiplied by the participant’s final average compensation for the remainder of the participant’s life.

For purposes of this plan, “normal retirement date” means the date on which the participant terminates employment if such termination occurs on or after the participant’s attainment of age 62. “Early retirement date” means the date on which a participant terminates employment if such termination occurs on or after such participant’s attainment of age 55 and completion of 15 years of credited service, but prior to normal retirement date. If the participant receives a supplemental retirement benefit under this plan before the normal retirement date, the monthly cash benefit shall be reduced by 0.5 percent per month for each month by which the benefit commencement date precedes the participant’s age 62, and in no case shall the commencement of benefits precede the participant’s 55th birthday.

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The following table presents certain information concerning the benefits of the named executives under TriCo’s supplemental executive retirement plan:

Name

  Plan Name   Number of
years credited
service (#)
   Present
value of
accumulated
benefit

($) (1)
   Payments
during
2013 ($)
 

Mr. Smith

   Supplemental Executive Retirement Plan     20     3,406,582     —    

Mr. Reddish

   Supplemental Executive Retirement Plan     19     1,394,795     —    

Mr. O’Sullivan

   Supplemental Executive Retirement Plan     28     753,410     —    

Mr. Carney

   Supplemental Executive Retirement Plan     16     1,130,960     —    

Mr. Bailey

   Supplemental Executive Retirement Plan     6     241,456     —    

(1)The value as of December 31, 2013, is determined using assumptions consistent with those used in note 25 of TriCo’s audited financial statements included in TriCo’s annual report on Form 10-K for the year ended December 31, 2013.

Nonqualified Deferred Compensation

TriCo’s 2005 deferred compensation plan provides participating executives with the opportunity to defer all or part of their salaries and bonuses until retirement, termination from employment or death. An executive can defer up to a lifetime maximum of $1.5 million for all deferrals under this plan and TriCo’s predecessor plan which permitted deferrals from 1987 until 2004. An executive who elects to defer his compensation for any year must defer a minimum of $200 per month. The plan permits TriCo to make discretionary contributions to an executive’s account. Each year since the plan’s inception, TriCo has credited to each executive’s account a contribution based on TriCo’s contributions made for him under TriCo’s ESOP for that year. This plan is nonqualified, unsecured and unfunded.

Monthly interest is credited to an executive’s account at the rate of 1% higher than the monthly equivalent of the annual yield of the Moody’s corporate bond yield index for the preceding month. From the time that his employment with TriCo ends until his benefit is paid, an executive’s account under the plan is credited with interest each month at the monthly equivalent of the annual yield of the Moody’s average corporate bond yield index for the preceding month.

Executives are immediately 100% vested in their own contributions and in TriCo’s reoccurring contributions credited to their account. TriCo determines the vesting rate for any discretionary contributions credited to an executive’s account as well as for the interest related to these contributions. If an executive is terminated for cause, TriCo’s compensation and management succession committee can decide whether the interest credited to the executive’s account with respect to his deferrals, TriCo’s discretionary contributions and TriCo’s reoccurring contributions are forfeited. The distribution of an executive’s plan benefit in the event of a change of control or other termination is described at See “Compensation of Named Executive Officers—Potential Payments Upon Termination or Change of Control.”

Any deferrals made by an executive, TriCo’s discretionary contributions, TriCo’s reoccurring contributions credited to his account prior to January 1, 2005, and the related interest, are governed by a predecessor deferred compensation plan for executives that TriCo adopted in 1987. An executive’s account under the 1987 plan is credited with interest each month at a rate that is 3% higher than the monthly equivalent of the annual yield of the Moody’s average corporate bond yield index for the preceding month, but otherwise the 1987 plan is similar to the 2005 plan in most respects.

The following table presents information concerning nonqualified deferred compensation under both plans for each of the named executives:

Name

  Executive
contributions
in 2013

($) (1)
   TriCo
contributions
in 2013

($)
   Aggregate
earnings
in 2013
($)(2)
   Aggregate
withdrawals/
distributions
($)
   Aggregate
balance at
2013 year end

($)
 

Mr. Smith

   —       —       19,533     —       311,739  

Mr. Reddish

   —       —       —       —       —    

Mr. O’Sullivan

   246,206     —       59,578     —       986,306  

Mr. Carney

   5,247     227     18,514     —       284,261  

Mr. Bailey

   —       —       —       —       —    

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(1)These amounts were included as salary paid to such officer in the summary compensation table on page 125
(2)The following amounts were included in the summary compensation table on page 125 as above-market rates earned under TriCo’s executive nonqualified deferred compensation plan: Mr. Smith, $9,135; Mr. O’Sullivan, $31,805; and Mr. Carney, $9,158.

CEO Employment Agreement

In March, 2013, TriCo entered into an employment agreement with Richard Smith, TriCo’s president and chief executive officer, which provided Mr. Smith with a base annual salary of $508,165 for 2013 with future increases as determined by the compensation and management succession committee. Mr. Smith is also eligible to receive an annual incentive bonus under the CEO Incentive Plan and stock options and other awards under TriCo’s 2009 stock option plan. Mr. Smith’s employment agreement also provides that Mr. Smith is entitled to 20 paid vacation days annually and a car allowance of $1,000 per month or use of an automobile owned or leased by TriCo, membership in a country club and reimbursement of other reasonable out-of-pocket expenses incurred in the performance of his duties. Mr. Smith is also eligible to participate in TriCo’s 401(k) savings plan, TriCo’s employee stock ownership plan, TriCo’s executive deferred compensation plan and TriCo’s supplemental executive retirement plan. Finally, Mr. Smith and his dependents receive disability, health, dental or other insurance plans available to all of TriCo’s employees.

The term of Mr. Smith’s employment agreement ends in April 2014, but the agreement automatically extends for an additional year term each year unless one party notifies the other party to the contrary 90 days prior to the renewal date. If Mr. Smith is terminated without cause and not in connection with a change of control, then TriCo will pay to Mr. Smith all amounts earned or accrued as salary and a prorated amount of Mr. Smith’s minimum guaranteed annual bonus through the date of termination. In addition, TriCo would pay Mr. Smith the amount of his salary that would be payable if his employment had not been terminated until the end of the then-current term. If Mr. Smith’s employment is terminated in various circumstances as described under “Compensation of Named Executive Officers - Potential Payments Upon Termination or Change of Control,” then Mr. Smith would be entitled to receive the potential benefits described in that section.

Potential Payments Upon Termination or Change of Control

Change of Control Agreements. Each named executive has entered into an agreement with TriCo that provides him with benefits if TriCo experiences a change of control. If a change of control occurs and the executive’s employment is terminated other than for “cause” or the executive terminates his employment after a substantial and material negative change in his title, compensation or responsibilities within one year after such change of control, then the executive is entitled to receive a severance payment equal to twice the combined amount of his annual salary in effect at the time plus his most recent annual bonus, paid in 24 equal monthly installments; provided that the present value of those payments shall not be more than 299% of executive’s compensation as defined by section 280G of the Internal Revenue Code (“Section 280G”). The effect of this provision is that deductions for payments made under these agreements will not be disallowed due to Section 280G. All of TriCo’s executives’ change of control agreements are currently scheduled to expire in 2013, except for Mr. Smith’s agreement which renews with his employment agreement each year. However, each agreement will automatically renew for an additional one-year period unless terminated by either party 90 days prior to such anniversary date. In exchange for receiving the benefits under the agreement, each executive has agreed to keep confidential all of TriCo’s trade secrets.

A “change of control” as defined in Mr. Smith’s employment agreement generally occurs in connection with:

a person or group becoming the owner of 20% or more of TriCo’s outstanding common stock,

a person or group acquiring assets of TriCo having a value equal to one third or more of all of TriCo’s assets,

a person or group acquiring 50% or more of the total ownership of TriCo, based on either fair market value or voting power,

a replacement of at least a majority of TriCo’s directors.

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A “change of control” as defined in TriCo’s executives’ change of control agreements (other than Mr. Smith’s employment agreement”) generally occurs in connection with:

a person becoming the beneficial owner of 40% or more of TriCo’s outstanding common stock,

the purchase of TriCo’s common stock pursuant to a tender or exchange offer,

our shareholders’ approval of the merger of TriCo where TriCo is not the surviving corporation, the sale of all of TriCo’s assets or TriCo’s dissolution, or

a replacement of at least a majority of TriCo’s directors.

For “cause” as defined in these agreements means:

an employee’s dishonesty, disloyalty, willful misconduct, dereliction of duty or conviction of a felony or other crime the subject matter of which is related to his duties for TriCo,

an employee’s commission of an act of fraud or bad faith upon TriCo,

an employee’s willful misappropriation of any funds or property of TriCo, or

an employee’s willful continued and unreasonable failure to perform his duties or obligations.

Upon termination of an executive’s employment or service, a participant will generally have 90 days following termination of employment or service to exercise any vested options. All options which are not exercised prior to 90 days after the date the executive ceases to serve as an employee of TriCo shall be forfeited. If an executive is terminated for cause, all right to exercise his vested options terminates on the date of the executive’s termination.

Nonqualified Deferred Compensation Plans. An executive’s plan benefit is generally payable upon his retirement, separation from employment or death. However, if an executive is terminated for cause, TriCo’s compensation and management succession committee can determine in its discretion whether the interest credited to the executive’s account with respect to his deferrals and any contributions made by TriCo are forfeited. For “cause” as defined in this plan is generally the same as an “involuntary termination” under TriCo’s supplemental executive retirement plan described below. An executive can also elect in advance to receive a distribution of his plan benefit in the event of a change of control. A “change of control” as defined under TriCo’s 2005 deferred compensation plan generally means:

the acquisition of more than 50% of TriCo’s outstanding stock,

the acquisition in 12 months or less of at least 35% of TriCo’s stock,

the replacement in 12 months or less of a majority of TriCo’s directors, or

the acquisition in 12 months or less of at least 40% of TriCo’s assets.

In addition to any advance election to receive his benefit in the event of a change of control, the executive can make an advance election as to the time and form for his benefit distribution after his separation from employment. In all cases, other than a distribution to satisfy his severe financial hardship, the executive may elect to receive his benefit payments in a lump sum or in annual installments over 5, 10 or 15 years. An executive’s distribution election can be changed in advance of his retirement or other separation in accordance with Section 409A of the Internal Revenue Code. All distributions under the plan are subject to Section 409A of the Internal Revenue Code including, for example, the rule that an employee who is a “specified employee” may not receive a distribution of his benefit until at least 6 months following his separation.

Supplemental Executive Retirement Plans.Under TriCo’s 2004 supplemental executive retirement plan, if, following a change of control, a participant retires after age 55, is terminated without cause or voluntarily terminates within 24 months, he is entitled to a supplemental retirement benefit. The monthly lifetime benefit is determined by a formula based on the executive’s highest average compensation, including salary and bonus, for 36 of the last 60 months of his employment and his years of service when he ceases employment. The executive is entitled to a supplemental retirement benefit under the plan without regard to the minimum number of years of service that

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would be required if his retirement or termination had occurred before the change of control. An executive’s benefit is reduced by the sum of his ESOP and social security benefits. In general, his monthly benefit payments begin on the first day of the month after his retirement or other termination from employment following a change of control without any reduction for payment of this benefit prior to age 62, as would be the case if he had retired or terminated before a change of control. See “Pension Benefits” for a description of benefits payable not in connection with a change of control. A “change of control” as defined under this plan is generally the same as under TriCo’s executive change of control agreements. An involuntary termination with cause as defined in this plan generally means a termination due to:

gross negligence or gross neglect,

commission of a felony, misdemeanor or any other act involving moral turpitude, fraud or dishonesty which has a material adverse impact on TriCo,

willful and intentional disclosure, without authority, of any secret or confidential information that has a material adverse impact on TriCo, or

willful and intentional violation of the rules of any regulatory agency that has a material adverse impact on TriCo.

Joint Beneficiary Agreements. In 2003 TriCo entered into joint beneficiary agreements with each of TriCo’s executives named in the Summary Compensation Table other than Mr. Bailey. Under these agreements, Tri Counties Bank purchased a life insurance policy on the executive’s life and the executive may designate beneficiaries to receive his share of the death proceeds, if any. The value of the benefits that would be received by the executive’s beneficiaries depends on the executive’s age at the time of death, whether the executive was eligible for benefits under TriCo’s supplemental executive retirement plan, and the cash value of the plan compared to the benefits payable on death.

Summary. The amounts listed in the following table are estimated maximum amounts that would have been payable to TriCo’s executives upon termination of employment in certain circumstances if payment had occurred on December 31, 2013. The actual amounts payable can only be determined when an executive is terminated from TriCo and can be more or less than the amounts shown below, depending on the facts and circumstances actually prevailing at the time of the executive’s termination of employment. TriCo’s compensation and management succession committee may in its discretion revise, amend or add to the benefits if it deems advisable. Thus, the actual amounts payable in certain circumstances could be significantly greater or less than the estimated amounts shown in the table below.

Name

  

Benefit

  Involuntary
termination
for cause
($)
   Involuntary
termination
not for
cause ($)
   Retirement
or
voluntary
resignation
($)
   Death ($)   Disability
($)
   After
change in
control,
involuntary
or good
reason
termination
($)
 

Mr. Smith

  

Severance pay(1)

   0     338,777     0     0     0     1,016,332  
  

Option vesting acceleration(2)

   0     0     0     0     0     1,488,152  
  

Supplemental executive retirement plans(3)

   0     3,406,582     3,406,582     0     3,406,582     3,406,582  
  

Deferred compensation plan(4)

   156,000     311,739     311,739     311,739     311,739     311,739  
  

Joint beneficiary agreement(5)

   0     0     0     5,291,750     0     0  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Total

   156,000     4,057,098     3,718,321     5,603,489     3,718,321     6,222,805  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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Mr. Reddish

  

Severance pay(1)

   0     0     0     0     0     621,592  
  

Option vesting acceleration(2)

   0     0     0     0     0     663,730  
  

Supplemental executive retirement plans(3)

   0     1,394,795     1,394,795     0     1,394,795     1,394,795  
  

Deferred compensation plan(4)

   0     0     0     0     0     0  
  

Joint beneficiary agreement(5)

   0     0     0     1,813,387     0     0  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Total

   0     1,394,795     1,394,795     1,813,387     1,394,795     2,680,117  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Mr. O’Sullivan

  

Severance pay(1)

   0     0     0     0     0     506,490  
  

Option vesting acceleration(2)

   0     0     0     0     0     402,330  
  

Supplemental executive retirement plans(3)

   0     753,410     753,410     0     753,410     753,410  
  

Deferred compensation plan(4)

   509,672     986,306     986,306     986,306     986,306     986,306  
  

Joint beneficiary agreement(5)

   0     0     0     1,648,698     0     0  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

 

Total

   509,672     1,739,716     1,739,716     2,635,004     1,739,716     2,648,536  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Mr. Carney

  

Severance pay(1)

   0     0     0     0     0     528,524  
  

Option vesting acceleration(2)

   0     0     0     0     0     598,750  
  

Supplemental executive retirement plans(3)

   0     1,130,960     1,130,960     0     1,130,960     1,130,960  
  

Deferred compensation plan(4)

   135,953     284,261     284,261     284,261     284,261     284,261  
  

Joint beneficiary agreement(5)

   0     0     0     1,561,790     0     0  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Total

   135,953     1,415,221     1,415,221     1,846,051     1,415,221     2,542,495  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Mr. Bailey

  

Severance pay(1)

   0     0     0     0     0     518,372  
  

Option vesting acceleration(2)

   0     0     0     0     0     659,398  
  

Supplemental executive retirement plans(3)

   0     96,582     0     0     241,456     241,456  
  

Deferred compensation plan(4)

   0     0     0     0     0     0  
  

Joint beneficiary agreement(5)

   0     0     0     0     0     0  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

 

Total

   0     96,582     0     0     241,456     1,419,226  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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(1)Payment based on annual salary as of December 31, 2013.
(2)The value of accelerated stock option amounts represents the number of shares issuable upon the exercise of stock options for which vesting is accelerated multiplied by the difference between the market value on December 31, 2013, and the option exercise price. The closing price of TriCo’s common stock on December 31, 2013, was $28.37 per share. Stock option vesting is accelerated following a change of control regardless of an executive’s termination of employment.
(3)Represents an estimate of the present value of the accumulated benefit obligation under TriCo’s supplemental executive retirement plans as of December 31, 2013, as adjusted to reflect the effect of vesting considerations in the termination situations indicated.
(4)The value of the benefits under TriCo’s deferred compensation plans assumed that the executive received a lump sum payment. Participants are fully vested in amounts deferred and interest earned on such deferrals. In calculating the value of deferred compensation plans in the event of involuntary termination for cause, assumes that TriCo’s compensation and management succession committee determined that the executive forfeited interest on his deferrals and any contributions made by TriCo.
(5)Represents the lesser of the difference between death benefit and the cash value of the executive’s life insurance policies and the amount specified in the joint beneficiary agreement.

Regardless of the manner in which an executive’s employment terminates, he is also generally entitled to receive amounts earned during his term of employment. Such amounts include:

salary earned,

annual incentive bonus compensation earned,

gain on exercise of vested stock options granted pursuant to TriCo’s stock option plan,

amounts contributed under TriCo’s 401(k) savings plan and TriCo’s ESOP, and

unused vacation pay.

Securities Authorized For Issuance Under Equity Compensation Plans

The information in the following table is provided as of the end of the fiscal year ended December 31, 2013 with respect to compensation plans (including individual compensation arrangements) under which equity securities are issuable:

Plan category

  (a)
No. of securities to be
issued upon exercise
of outstanding
option, warrants and
rights
   (b)
Weighted average
exercise price of
outstanding
option, warrants
and rights
   (c)
No. of securities
remaining available
for future issuance
under equity
compensation plans
(excluding
securities reflected
in column (a))
 

Equity compensation plans approved by securities holders(1)

   1,246,370     18.04     937,500  

Equity compensation plans not approved by security holders

   —       —       —    

Total

   1,246,370     18.04     937,500  

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(1)Includes the 2001 stock option plan and the 2009 equity incentive plan. The board of directors elected to freeze and make no further grants under the 2001 stock plan effective upon shareholder approval of the 2009 equity incentive plan. Accordingly, column (c) includes only shares issuable under the 2009 equity incentive plan.

Analysis of Employee Compensation Plan Risks

The compensation committee reviewed each employee incentive compensation plan to determine whether the plan includes features that would encourage the manipulation of TriCo’s reported earnings to enhance the compensation of any employee, and how compensation policies may be used to mitigate risks. In addition to the incentive plans in which the named executive officers participate, TriCo has established incentive plans for certain bank employees that reward performance based on product referrals, business development and profitability as well as long-term incentive awards including stock options and restricted stock awards. The compensation committee limited its review to these plans, which are the only plans under which the amount payable is based, directly or indirectly, on TriCo’s reported earnings.

The compensation committee believes that the features of these incentive compensation plans, either alone or combined with the systems of controls in place, do not encourage unnecessary or excessive risk and do not encourage the manipulation of reported earnings to enhance the compensation of any employee.

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

TriCo’s executive compensation program is designed to support TriCo’s mission to:

Improve the financial success and well-being of TriCo’s shareholders, customers, communities and employees;

Provide opportunities for TriCo’s people to achieve unparalleled personal and professional success; and

Enable TriCo’s shareholders to achieve the exceptional rewards of ownership.

You should read this section of the joint proxy statement/prospectus in conjunction with the advisory vote that TriCo is conducting on the compensation of TriCo’s named executive officers (seeAdvisory (Non-binding) Vote to Approve Executive Compensation on page 153). This Compensation Discussion and Analysis contains information that is relevant to your voting decision.

The Compensation Discussion and Analysis is organized into three sections:

Section 1-Executive Summary
Section 2-Performance and Pay
Section 3- Compensation Process and Decisions

Section 1—Executive Summary

Our Response to Say on Pay Vote:

The compensation and management succession committee (the “Committee”) continues to monitor and address the concerns of TriCo’s major shareholders and proxy advisors. In 2013, TriCo was pleased that over 93% of the votes cast were in support of TriCo’s “Say on Pay” proposal. TriCo’s board of directors, the Committee, and TriCo’s executive team continues to review TriCo’s executive compensation practice and look for opportunities to improve and strengthen its pay for performance objective and alignment with shareholders. In the past year TriCo took the following steps:

a.The Committee reengaged Radford, an Aon Hewitt Company (“Radford”), a leading human resources consulting firm, to perform a review of TriCo’s executive compensation program and make recommendations for enhancements. The Committee’s decision to engage Radford was made by the Committee and was not made or recommended by management.

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b.TriCo reviewed Institutional Shareholder Services (“ISS”) and Glass Lewis analysis to further understand any ongoing or new concerns about TriCo’s compensation program.

c.TriCo reviewed alternative equity vehicles and mixes including the use restricted stock and performance based metrics. As a result of this review, TriCo is shifting from 100% stock options to 50% time-based RSUs and 50% performance-based RSUs (or PSUs) for its 2014 equity grant to the CEO and direct reports. The PSU design is discussed further under the Equity Compensation section in the Compensation Discussion and Analysis. The Committee felt the 50/50% split was a reasonable first year approach, but intends to revisit the weighting before the 2015 grant. In no event, will the performance weighting be less than 50%.

d.TriCo implemented a stock ownership policy in 2012 requiring that TriCo’s chief executive officer, executive vice presidents, and board of directors acquire and maintain minimum positions in company stock. This policy is reviewed annually to ensure all covered individuals are in compliance, and that the requirements are robust. While there were no changes made to the policy at this time, the Committee in approving the shift to RSUs and PSUs intends to revisit the ownership requirements, and potentially strengthen them to promote long-term retention of the shares post-vesting / performance.

e.TriCo continued to evaluate additional policies that can further bolster or enhance TriCo’s commitment to true pay-for-performance.

Financial Highlights:

In 2013, TriCo accomplished the following:

Net income of $1.69 per diluted share, an increase of 43% from $1.18 in 2012.

Net interest income (FTE) for the year ended December 31, 2013 was $101,864,000, an increase of $492,000 or 0.5% compared to the year ended December 31, 2012.

Provision for loan losses declined from $9,423,000 in 2012 to $(715,000) in 2013.

Paid $0.42 per share in cash dividends in 2013, up 16.7% from the $0.36 paid in 2012.

On January 21, 2014, TriCo announced that it had entered into an Agreement and Plan of Merger and Reorganization under which it would acquire North Valley Bancorp.

Other Highlights:

In 2013, TriCo:

Opened its new “campus building” which houses its technology, operations, customer support, and training departments. TriCo now has a facility that provides an environment for collaboration, learning, communication and coordination with core departments that support our growing branch network.

There are now 63 Tri Counties Bank branch locations and North Valley Bank currently has 22 branch locations.

TriCo established new customer service programs that allow us to track and respond to our customer’s comments and concerns

TriCo continued to implement numerous changes in order to comply with requirements under the “Dodd Frank Act”.

TriCo continued to support programs for needed community initiatives and schools in TriCo’s service area.

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Summary of Compensation Decisions:

Base salary for Mr. Smith was increased 5.3% for 2014 based on his performance in 2013.

Merit increases for the other named executive officers increased 0-2.5% for 2013.

TriCo exceeded the requirements for a 100% payout of the financial component of the 2013 annual incentive plans; however, the Committee utilized its discretion to limit the payout to no more than target.

Mr. Smith received a bonus of 31.5% (target is 50%) of base salary and bonuses to named executive officers ranged from 19.5% to 30% of base salary.

TriCo reviewed alternative equity vehicles and mixes including the use of restricted stock and performance based metrics. As a result of this review, TriCo is shifting from 100% stock options to 50% time-based RSUs and 50% performance-based RSUs (or PSUs) for its 2014 equity grant to the CEO and direct reports. The PSU design is discussed further under the Equity Compensation section in the Compensation Discussion and Analysis. The Committee felt the 50/50% split was a reasonable first year approach, but intends to revisit the weighting before the 2015 grant. In no event, will the performance weighting be less than 50%.

The Committee reviewed the stock ownership guidelines that were implemented in 2012 for the CEO, executive vice presidents, and the board of directors. All individuals covered are in compliance with the Policy. No changes were made at this time, but the Committee in approving the shift to RSUs and PSUs intends to revisit the ownership requirements, and potentially strengthen them to promote long-term retention of the shares post-vesting / performance.

Section 2—Performance and Pay

TriCo has long maintained a strong pay-for-performance philosophy that links executive compensation to achievement of the operating and financial goals set by the board of directors. TriCo anticipates that growth in net earnings per share and a continued focus on maintaining a strong balance sheet will be positively reflected in TriCo’s stock price.

In 2013, TriCo achieved the following results, compared with prior periods:

Financial Metric

  12/31/13  12/31/12  12/31/11 

Net income per diluted share

  $1.69   $1.18   $1.16  

Non-performing assets to total assets ratio

   2.30%  3.07%  3.99%

Loans, net of allowance at FYE (000’s)

  $1,633,762   $1,522,175   $1,505,118  

Deposits at FYE (000’s)

  $2,410,483   $2,289,702   $2,190,536  

Dividends declared per share

  $0.44   $0.36   $0.36  

Total risk based capital ratio

   14.8%  14.5%  13.9%

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The following graph shows TriCo’s total shareholder return compared with the KRX total return index over the past five years. The KRX is a regional bank stock index compiled by Keefe Bruyette and Woods, a global investment bank focused on the financial services sector. The index is comprised of 50 regional bank stocks maintained by Keefe, Bruyette & Woods, Inc.

LOGO

As the chart indicates, the return to investors is up over the past five years (growth primarily during 2013). TriCo is just slightly behind KRX Index during this time. Further, TriCo made compensation decisions that reflect a pay-for-performance commitment during this period. Prior to 2012, no bonuses were paid to TriCo’s chief executive officer for the last four out of five years and the last three out of five years for the executive team. Since that time, TriCo has paid bonuses to the CEO and named executive officers, but has exhibited some discretion in limiting the amount that would have otherwise been paid due to continued uncertainty and a challenging banking environment. Furthermore, the Committee maintained its commitment to stock options over the years since it required positive TSR in excess of the dividend yield in order for the executives to have any value gained.

New for 2014, the Committee is shifting the equity grant strategy for the CEO and named executive officers to a 50% / 50% mix of time-based restricted stock units (“RSU”) and performance-based restricted stock units (“PSU”). The RSUs will vest annually over four years. The PSUs will be measured based on relative total shareholder return (“TSR”) for TriCo against the KBW Regional Banking Index over a three-year performance period. The actual number of shares earned can range from 0% to 150% of the target number granted.

Section 3—Compensation Process and Decisions

Compensation Philosophy

TriCo’s executive compensation program is designed to maximize shareholder value by aligning compensation with TriCo’s performance and to attract, retain, motivate and reward a highly qualified executive management team. The Committee believes that these objectives can best be met by linking compensation to the achievement of both individual and corporate performance.

The underlying philosophy behind TriCo’s compensation program is very straightforward: TriCo pays competitive salaries and rewards executives for enhancement of shareholder value and sustained individual superior performance. Consistent with this philosophy is TriCo’s commitment to offer fair pay based on the respective roles of TriCo’s executives, the market value of their jobs and the opportunity to earn additional cash and non-cash compensation when they provide superior performance.

Role of the Compensation and Management Succession Committee

The Committee has the primary authority to determine TriCo’s compensation philosophy and to establish compensation for Richard P. Smith, TriCo’s chief executive officer, and TriCo’s other executive officers. Each component of compensation for TriCo’s executives is generally administered under the direction of TriCo’s Committee and is reviewed on an annual basis to ensure that remuneration levels and benefits are competitive and reasonable using the guidelines described below. In determining each level of compensation and the total compensation package, the Committee reviews a variety of sources to determine and set compensation. Mr. Smith

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aids the Committee by providing annual recommendations regarding the compensation of all executive officers, other than himself. The Committee can exercise its discretion in modifying any recommended adjustments or awards to the executives. Each executive also participates in an annual performance review with Mr. Smith to provide input about his contributions to TriCo’s success for the period being assessed.

While the Committee does not set compensation at specific percentage levels compared to the market, the Committee does seek to provide salary, incentive compensation opportunities and employee benefits that fall within the average practice of TriCo’s competitors. The Committee periodically, and as warranted, considers compensation levels of executives with similar qualifications and experience at banks of similar size. In 2013 the Committee retained Radford to assist in identifying a peer group of competitive banks as a baseline comparator to which TriCo would refer when establishing executive compensation on a go forward basis. The Committee has developed a compensation peer group consisting of 20 publicly traded bank holding companies which the Committee believed were similar to TriCo in terms of market place, total assets, net income, market capitalization and shareholder return. The companies were Columbia Banking System, PacWest Bancorp, CVB Financial Corp., BBCN Bancorp, National Bank Holdings, Westamerica Bancorp, Banner Corp., Banc of California, HomeStreet, Hanmi Financial, Wilshire Bancorp, CoBiz Financial, Farmers & Merchants Bancorp, Guaranty Bancorp, Preferred Bank, Heritage Financial Corp., Bank of Marin Bancorp, Bridge Capital Holdings, and Pacific Continental Corp.

Surveys prepared by management are also used periodically to ensure that TriCo is maintaining its labor market competitiveness. These surveys compare TriCo’s compensation programs to the compensation programs of similarly-sized bank holding companies located in California.

Compensation Program Components

The compensation program for TriCo’s executives consists of three fundamental components:

base salary,

annual performance-based incentive compensation consisting of a cash bonus, and

long-term incentive compensation composed of equity-based awards intended to reward executives for the enhancement of shareholder value and promote retention.

This program enables TriCo to tie executive compensation to TriCo’s performance, reward individual performance and attract and retain a highly-qualified executive management team. As a result, the Committee believes that this program best serves the interests of TriCo and TriCo’s shareholders. The particular elements of TriCo’s compensation programs are set forth below. Each executive’s current and prior compensation is considered in setting future compensation.

A percentage of total compensation is allocated to incentives as a result of TriCo’s philosophy. TriCo has no pre-established policy or target for the allocation between either cash and non-cash, or short- and long-term, incentive compensation. Based on the summary compensation table on page 125, compensation for the named executive officers in 2013 and 2012 was allocated as follows (excluding the change in pension value and nonqualified deferred compensation earnings):

   Mix of Total Compensation 
   2013  2012 

Base salaries

   53.0%  53.8%

Short-term incentives (annual incentive bonuses)

   15.1%  12.6%

Long-term incentives (stock options)

   26.5%  27.3%

Benefits

   5.4%  6.3%
  

 

 

  

 

 

 
   100.0%  100.0%

Base Salaries

The Committee reviews base salaries annually to align them with market and industry levels as appropriate and after taking into account TriCo’s general financial performance and the executive’s responsibilities, experience and future potential. The Committee seeks to establish base salaries that are within the range of salaries for persons holding

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similarly responsible positions at other peer company banks and bank holding companies with an emphasis placed on those located in California. Specific criteria considered in Mr. Smith’s 2013 performance were the bank’s performance to budget, asset growth, loan quality, loan growth, deposit pricing, net interest margin, capital management, bank compliance with rules, regulations, and bank safety and soundness. In addition, the Committee considered other meaningful bank objectives including the full integration of Citizen’s Bank of Northern California, and the recently announced acquisition of North Valley Bancorp. As a result of the Committee’s performance evaluation Mr. Smith’s salary was increased 5.3% from $508,166 in 2013 to $535,000 for 2014. Mr. Smith did not receive a salary adjustment in 2009, 2010 or 2011. He received 3% in 2012 and 2% in 2013.

Based upon guidance provided by Radford and additional information captured through a variety of sources including Towers Watson, California Bankers Association and Mercer Human Resources Consulting regarding market ranges for salaries of equivalent positions at peer group companies, TriCo believes that TriCo compensates TriCo’s executives equitably when compared to competitive companies in that peer group.

Annual Incentive Bonuses

It is the Committee’s objective to have a substantial portion of each executive’s compensation contingent upon TriCo’s performance as well as upon the executive’s own level of performance and contribution toward TriCo’s performance. TriCo utilizes annual cash bonuses to align executive compensation with TriCo’s business objectives and TriCo’s performance. Placing an emphasis on incentive compensation is consistent with TriCo’s philosophy of rewarding executives for TriCo’s performance.

CEO Incentive Plan.

Under TriCo’s CEO Incentive Plan approved in May 2010, Mr. Smith was eligible to receive an annual incentive bonus if certain budgeted corporate goals were achieved. The goals included measurements for performance to budget, asset growth, loan quality, loan growth, deposit pricing, net interest margin, capital management, bank compliance with rules, regulations, and bank safety and soundness. The potential incentive bonus for Mr. Smith’s performance in 2013 ranged from 0% to 100% of his base salary. If TriCo achieved less than 90% of its budgeted corporate goals, Mr. Smith would not be eligible for a bonus. If TriCo achieved substantially all of the following corporate goals, Mr. Smith would be eligible for a bonus of up to 50% of his annual salary. If TriCo achieved 120% or more of these budgeted corporate goals, Mr. Smith would be eligible for a bonus of up to 100% of his annual salary. The Committee retained discretion regarding the determinations as to whether TriCo reached these goals. In 2013, TriCo’s net income increased to $1.69 per diluted share, a 43% increase over 2012; loans and leases grew $111 million or 7%, provisions for loan losses decreased entirely from $9,423,000 to ($707,000), and net charge-offs declined by 71%. In March 2014, the Committee determined that TriCo had achieved substantially all of the corporate goals, allowing for a payout of the target 50% of annual salary, and that a payout was warranted; however, the Committee utilized its discretion to hold back a portion of Mr. Smith’s bonus and awarded him an incentive bonus for 2013 of $160,000, or 31.5% of his annual salary.

For 2014 performance, the Committee has determined that Mr. Smith’s potential incentive bonus will range from 0% to 100% with a target of 50% of his base salary depending on TriCo’s achievement of budgeted corporate performance goals, integration of North Valley Bancorp, personal leadership traits and other items such as results of examinations and audits. The following table shows the historical target and actual payout percentages:

   2008  2009  2010  2011  2012  2013 

Target %

   65%  65%  50%  50%  50%  50

Company Performance

   <90%  <90%  <90%  >90%  >90%  >100

Actual %

   0%  0%  0%  30%  30%  31.5

Other Executives.The Committee may provide incentive compensation to TriCo’s other executives in the form of an annual cash bonus. For 2013, the Committee determined that the incentive bonus compensation for TriCo’s other named executive officers would be based on the achievement of a combination of goals and targets that take into account both TriCo’s performance and that of the executives individually. Although the achievement of certain financial objectives as measured by TriCo’s earnings was considered in determining incentive bonus compensation, other subjective and less quantifiable criteria were also considered. In March of 2014, the Committee considered

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TriCo’s 2013 financial performance and the specific achievements of TriCo’s executives that are expected to affect TriCo’s future earnings and performance or that had an identifiable impact on the prior year’s results and based primarily on TriCo’s 2013 financial performance and with consideration of the continued uncertainty in the market, the Committee determined that bonuses would be awarded to other named executive officers for their performances in 2013. The Committee paid bonuses ranging from 19.5% to 30% of annual salary to the named executive officers based upon their individual and company performance metrics.

Equity Compensation

The Committee provides long-term incentive compensation to TriCo’s executive officers through the grant of stock options under TriCo’s equity incentive plans. In accordance with TriCo’s philosophy, the use of equity compensation is intended to provide incentives to TriCo’s executive officers to work toward the long-term growth of TriCo by providing them with an award that will increase in value only to the extent that the value of TriCo’s common stock increases. Since the value awards under TriCo’s equity incentive plan bears a direct relationship to TriCo’s stock price, the Committee believes it is an effective long-term incentive to create value for shareholders and appropriately align the interests of TriCo’s executives with the interest of TriCo’s shareholders. The grant of equity awards also serves as a long-term retention incentive for TriCo’s executives because equity awards are generally subject to vesting schedules of four or five years.

Equity awards are made at regular Committee meetings. The effective date for all grants is the date that the Committee approves the grant and all key terms have been determined. The Committee generally grants stock options to TriCo’s executives, including the chief executive officer, on the date of TriCo’s annual shareholders’ meeting each year. The Committee may also grant stock options and other types of awards in its discretion in connection with the hiring of a new executive officer or other employee or to address other special circumstances. The exercise price for stock option grants is determined by reference to the last quoted price per share on the NASDAQ Global Select Market at the close of business on the date of grant. TriCo’s annual shareholders meeting typically occurs within four weeks after the official announcement of TriCo’s first quarter results so that the stock option exercise price will reflect a fully informed market price. Each option grant allows the executive to acquire shares of common stock over the term of the option, typically ten years, subject to vesting. Accordingly, the option will provide a return to the executive only if the market price of the shares appreciates over the option term. TriCo’s trading policies prohibit TriCo’s executive from short-selling or otherwise hedging against decreases in the trading price of TriCo’s common stock.

In 2013, TriCo granted equity awards to the chief executive officer and the other named executive officers as reported under “Grants of Plan-based Awards for 2013” on page 133. The number of options and other awards granted each year by the Committee to an executive is not set, but is based on a subjective evaluation of:

the perceived incentive that the grant will provide,

the executive’s prior performance and level of responsibility,

the benefit that the grant may have on long-term shareholder value, and

the value of the stock option at the time of grant.

The Committee views the grant of options and other equity awards as a retention device and therefore also reviews the status of vesting and the number of vested versus unvested awards held by an executive at the time of grant and the annual grants made to executives at TriCo’s peer group companies.

New for 2014, the Committee is shifting the equity grant strategy for the CEO and named executive officers to a 50% / 50% mix of time-based restricted stock units (“RSU”) and performance-based restricted stock units (“PSU”). The RSUs will vest annually over four years. The PSUs will be measured based on relative total shareholder return (“TSR”) for TriCo against the KBW Regional Banking Index over a three-year performance period. The actual number of shares earned can range from 0% to 150% of the target number granted.

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Stock Ownership and Retention Policies

TriCo believes that key executives should have significant stake in the performance of TriCo’s stock, to align their decisions with creating shareholder value and to minimize negative market perceptions caused by excessive insider sales of Company shares. TriCo’sStock Ownership Guidelines Policy (posted on TriCo’s website) requires directors and executive officers to accumulate a meaningful position in Company shares. TriCo’s board of directors adopted the ownership requirement and tied it to a multiple of base salary for the executive officers and a multiple of retainer, as noted below:

Position

Minimum Ownership

(multiple of base salary)

Chief Executive Officer

3.0

Executive Vice Presidents

1.5

Directors

Minimum Ownership

(multiple of director compensation)

Outside Director

3.0

Under this policy, share ownership is determined from the totals on Table 1 of SEC Form 4, which includes unvested RSAs or RSUs and shares in which beneficial ownership is disclaimed, but outstanding vested stock options that are in the money are included based on the intrinsic value converted to an equivalent number of full shares (i.e., net of exercise price). Compliance with share ownership guidelines is reviewed annually by the Nominating and Corporate Governance Committee. This minimum ownership must be achieved within five years after any new officer or director takes office (or within five years of the adoption of this policy for existing officers and directors).

Other Elements of Compensation and Perquisites

In order to attract and retain talented executives who will focus on achieving TriCo’s long-term goals, TriCo provides to TriCo’s executives, including Mr. Smith, the following benefits and perquisites:

Supplemental Executive Retirement Plan. TriCo maintains a supplemental executive retirement plan described at “Compensation of Named Executive Officers—Pension Benefits,” which provides TriCo’s executives with benefits upon their retirement or upon the termination of employment with 24 months of a change of control.

Deferred Compensation Plan. TriCo maintains a nonqualified, unsecured and unfunded executive deferred compensation plan, which is described at “Compensation of Named Executive Officers—Nonqualified Deferred Compensation.” This plan provides TriCo’s executives with the opportunity to defer all or part of their salaries and bonuses until retirement, earlier termination from employment or death, in addition to any discretionary contribution or reoccurring contribution that TriCo credits to his account. All amounts are credited with interest and are paid in the form and at the time elected by the executive, generally after the executive’s cessation of employment.

Change of Control Agreements. The change of control agreements described beginning on page 137 protect income for TriCo’s executives who would likely be involved in decisions regarding, and the successful implementation of, a merger or acquisition and would be at risk for a job loss if a change of control occurs. The Committee believes it was important to adopt such agreements in order to provide an incentive for executives to remain employed with TriCo throughout the turmoil and uncertainty that an unsolicited tender offer or merger can cause. Such continuity in leadership benefits both TriCo’s shareholders and employees. These agreements enable the executives to make decisions that are in the best interests of TriCo’s shareholders without being distracted or influenced in the exercise of his business judgment by personal concerns. Change of control agreements are typically offered to executives in the marketplace and thus are necessary to attract and retain executives as well as protect shareholders’ interests. A change of control will also accelerate the vesting of all of the executives’ outstanding options and accelerate benefits under some of TriCo’s benefit plans as described at “Compensation of Named Executive Officers—Potential Payments Upon Termination and Change of Control.”

ESOP Contributions. TriCo makes yearly contributions to each executive’s account under TriCo’s employee stock ownership plan described at “Compensation of Named Executive Officers—ESOP.”

Defined Contribution Plan. TriCo offers a 401(k) savings plan to all eligible employees as described at “Compensation of Named Executive Officers—401(k).”

Medical Insurance. TriCo provides to each executive and their family such health, dental and vision insurance coverage as TriCo may from time to time make available to its other executives of the same level of employment. TriCo pays a portion of the premiums for this insurance for all employees.

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Life and Disability Insurance. TriCo provides each officer such disability and/or life insurance as TriCo in its sole discretion determines from time to time to make available.

Other. TriCo makes available certain other perquisites to executives such as country club memberships and automobile allowances which are listed in the perquisites and personal benefits table on page 126. Although TriCo allows its executives officers and directors to utilize TriCo’s corporate airplane for personal use in limited circumstances, TriCo requires its executive officers and directors to reimburse TriCo for such personal use on an operating cost per flight hour which is predetermined each year. The hourly reimbursement rate represents the aggregate incremental cost to TriCo for such personal use and takes into account items such as maintenance and repair, operating expenses, the pilot’s salary, landing and ramp fees, fuel costs, airport taxes and crew travel expenses.

Revenue Code Section 162(m)

The Committee considers the potential impact of section 162(m) of the Internal Revenue Code. Section 162(m) disallows a tax deduction for any publicly held corporation for individual compensation exceeding $1 million in any taxable year for the chief executive officer and the other senior executive officers, other than performance based compensation that is approved by the shareholders of the corporation and that meets certain other technical requirements. For stock option grants, Section 162(m) requires that the grant be made by a compensation Committee comprised of at least two “outside directors” (as defined in the Treasury regulations), that the option exercise price be not less than the fair market value of the stock at the time of grant, that the option plan states the maximum number of shares with respect to which options may be granted to any employee in a specified period, and that the plan be approved by shareholders. TriCo believes that TriCo’s 2009 equity incentive plan satisfies these requirements so that any compensation paid in connection with the exercise of options granted under the plan will qualify as performance-based compensation. Therefore, awards granted under the 2009 plan should not be subject to the $1 million deduction limitation in most cases. Certain options granted under TriCo’s 2001 stock option plan may not meet these requirements and it is therefore possible that an executive officer’s exercise of such options, either alone or combined with other compensation, could cause his annual compensation to exceed 162(m)’s limit for deductibility. The board of directors has determined that no further awards will be granted under the 2001 stock option plan. Otherwise, based on current levels of compensation, no executive is expected to receive compensation for 2013 services that would be non-deductible under Section 162(m) of the Internal Revenue Code.

TriCo’s policy is to generally qualify compensation paid to executive officers for deductibility under the Internal Revenue Code including Section 162(m), but reserves the right to pay compensation that is not deductible. Based on current levels of compensation, and except as described above, no executive officer is expected to receive compensation for 2013 services that would be non-deductible under section 162(m) of the Internal Revenue Code. At the annual meeting of shareholders, the board of directors is requesting that its shareholders reapprove the existing performance criteria under the 2009 plan.

Summary

The Committee believes that TriCo’s philosophy of aligning compensation with TriCo’s performance and individual superior performance was met and that the compensation for TriCo’s executive officers has been competitive and comparable to the compensation received by executive officers of similarly-sized banks located in the western United States. In addition, TriCo’s executive compensation philosophy and programs support TriCo’s overall objective to enhance shareholder value through profitable management of TriCo’s operations. The Committee is firmly committed to the ongoing review and evaluation of TriCo’s executive compensation program.

REPORT OF THE COMPENSATION AND MANAGEMENT SUCCESSION COMMITTEE

To TriCo Shareholders:

The compensation and management succession committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with TriCo’s management. Based on such review and discussion, the committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this joint proxy statement/prospectus.

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This report shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A promulgated by the Commission or Section 18 of the Securities Exchange Act of 1934, as amended.

Respectfully submitted:

William J. Casey (Chairman)

Donald J. Amaral

Craig S. Compton

John S. A. Hasbrook

Michael Koehnen

W. Virginia Walker

REPORT OF THE AUDIT COMMITTEE

To TriCo Shareholders:

The board of directors has affirmatively determined that all members of TriCo’s audit committee are independent directors as required by the NASDAQ listing standards and the special standards established by the Securities and Exchange Commission. The committee assists the board of directors in fulfilling its responsibility for oversight of the quality and integrity of TriCo’s accounting, the system of internal controls established by management, auditing and reporting practices. The responsibilities of the committee are described at “Corporate Governance, Board Nomination and Board Committees—Board Committees” and are set forth in its charter, a copy of which can be found on TriCo’s website.

Management is responsible for internal controls and the financial reporting process, including the system of internal controls. Crowe Horwath LLP, TriCo’s principal independent auditor in 2013, was responsible for expressing an opinion on the conformity of TriCo’s audited consolidated financial statements with generally accepted accounting principles. The audit committee monitors these processes and reports its findings to the full board of directors. The committee has reviewed and discussed TriCo’s audited consolidated financial statements with management and Crowe Horwath. The committee has also discussed with Crowe Horwath the matters required to be discussed by Statement on Auditing Standards No. 16, Communications with Audit Committess, of the Public Company Accounting Oversight Board, as amended (communication with audit committees).

The audit committee has reviewed and implemented the provisions of the Sarbanes-Oxley Act, the rules of the Securities and Exchange Commission and the NASDAQ listing standards. The committee may also engage independent legal counsel to review assets and make recommendations on procedures required by the Sarbanes-Oxley Act. At regular meetings in 2013, the committee met with Crowe Horwath, TriCo’s chief executive officer and the director of the internal audit department to review:

overall audit scope and plans,

results of internal and external audit examinations,

TriCo’s audited consolidated financial statements,

management’s discussion and analysis of financial condition and results of operations contained in TriCo’s quarterly and annual reports,

evaluations of TriCo’s internal controls by Crowe Horwath, and

the quality of TriCo’s financial reporting.

The audit committee considered the need to ensure the independence of TriCo’s auditors while recognizing that in certain situations Crowe Horwath may possess the expertise and be in the best position to advise TriCo on issues other than auditing and accounting. All audit services and other fees payable to TriCo’s principal independent auditor for audit services must be pre-approved by the committee. The committee’s charter requires that any other services, including any permitted non-audit services, must also be pre-approved by the committee. The committee then communicates its approval to management. All services performed by Crowe Horwath during 2013 were pre-approved by the committee.

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The committee received from Crowe Horwath the written disclosures and the letter required by federal securities laws administered by the U.S. Securities and Exchange Commission and Public Company Accounting Oversight Board Rule 3526 (independence discussions with audit committees), and the committee discussed with Crowe Horwath their independence. The audit committee considered the effect that provision of services unrelated to audit services may have on the independence of Crowe Horwath. These fees amounted to 8.1% of the total fees earned by Crowe Horwath in 2013 as indicated on page 154. The committee approved these services and determined that those services were compatible with maintaining the independence of Crowe Horwath as TriCo’s principal auditor in 2013.

Based on the audit committee’s review and discussions with management and Crowe Horwath referenced in this report, the audit committee recommended to the board of directors, and the board of directors approved, that the audited financial statements be included in TriCo’s annual report on Form 10-K for the year ending December 31, 2013, for filing with the Securities and Exchange Commission.

Respectfully submitted:
Donald J. Amaral (Chairman)
William J. Casey
Cory W. Giese
John S. A. Hasbrook
W. Virginia Walker

TRICO PROPOSAL: Reapprove the Performance Criteria under the 2009 Equity Incentive Plan

TriCo’s board of directors is asking the shareholders of TriCo to approve performance criteria that would apply to performance-based awards granted under the TriCo Bancshares 2009 equity incentive plan. Shareholders are not being asked to approve an increase in the number of shares issuable under TriCo’s 2009 plan or any other amendment, but only to reapprove performance criteria.

Shareholder approval of the performance criteria is required for TriCo to fully deduct the amount or value of certain performance-based awards, as permitted under Section 162(m) of the Internal Revenue Code. Section 162(m) of the Internal Revenue Code generally limits to $1 million the deduction available to public companies for compensation paid to its chief executive officer and the other three highest compensated officers (other than the chief financial officer) as of the end of its fiscal year (for purposes of Section 162(m), these individuals are referred to as “covered employees”). This $1 million deduction limit does not apply, however, to “performance-based compensation” as defined under Section 162(m) of the Internal Revenue Code.

Stock options and share appreciation rights granted under TriCo’s 2009 plan may qualify as “performance-based compensation” even if not subject to shareholder-approved performance criteria. However, other performance-based awards granted under TriCo’s 2009 plan would be eligible to qualify as performance-based compensation that would be fully deductible under Section 162(m) of the Internal Revenue Code only if subject to performance criteria established by a committee or subcommittee comprised solely of two or more independent directors of TriCo (the “Committee”), such as the compensation and management succession committee. In addition, the performance criteria must be disclosed to and approved by shareholders of TriCo. If, however, the Committee has authority to change the targets under performance criteria after shareholder approval, as is authorized under TriCo’s 2009 plan, the performance criteria must be disclosed to and reapproved by shareholders of TriCo no later than December 15, 2017, which was 120 days prior to the first shareholder meeting that occurs in the fifth year following the year in which shareholders previously approved the performance criteria. The full textanniversary of the 2009 plan was last approved by shareholders of TriCo at the 2009TriCo’s 2017 annual meeting of shareholders. If shareholder approval of the revised performance criteria is not obtained, performance-based awards granted under TriCo’s 2009 plan, other than stock options or share appreciation rights, will be subject to the $1 million deduction limit, which may result in additional cost to TriCo to the extent amounts of compensation paid to covered officers are not deductible.

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Performance Criteria Under TriCo’s 2009 plan

The performance goals and period are set by the Committee. These pre-established performance goals must be based on one or more of the following performance criteria which are set forth in Section 2(ff) of the 2009 Plan: (i) earnings per share; (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization (EBITDA); (iv) net earnings; (v) total shareholder return; (vi) return on equity; (vii) return on assets; (viii) return on investment; (ix) return on capital employed; (x) operating margin (xi) gross margin; (xii) operating income; (xiii) net income; (xiv) net operating income; (xv) net operating income after tax; (xvi) pre- and after-tax income; (xvii) pre-tax profit; (xviii) operating cash flow; (xix) revenue; (xx) revenue growth; (xxi) expenses; (xxii) improvement in or attainment of expense levels; (xxiii) improvement in or attainment of working capital levels; (xxiv) economic value added; (xxv) market share; (xxvi) cash flow; (xxvii) cash flow per share; (xxviii) economic value added (or an equivalent metric); (xxix) share price performance; (xxx) debt reduction; and (xxxi) other measures of performance selected by the committee. These performance criteria may be measured in absolute terms or as compared to any incremental increase or as compared to results of a peer group, and may be calculated in any manner chosen by the committee. With regard to a particular performance period, the committee has the discretion to select the length of the performance period, the type of performance-based awards to be granted, and the goals that will be used to measure the performancescheduled date for the period. In determining the actual size of an individual performance-based award for a performance period, the committee may reduce or eliminate (but not increase) the award. Generally, a participant would have to be employed on the date the performance-based award is paid to be eligible for a performance-based award for that period. Shareholder approval of this proposal represents approval of the performance criteria set forth above. Accordingly, the board of directors of TriCo is seeking shareholder approval of the 2009 Plan at the 20142018 annual meeting of shareholders.

The above summaryshareholders is changed by more than 30 days from the date of the material termsanniversary of the performance criteria under TriCo’s 2009 plan is qualified in its entirety by the specific language2017 annual meeting of TriCo’s 2009 plan,shareholders, which is has been filed withMay 23, 2018, shareholders will be informed of the SECnew meeting date and the revised date by which shareholder proposals must be received.

FNBB Annual Meeting

If the merger occurs, there will be no FNBB annual meeting of shareholders for 2018. In the event that the merger is available tonot completed in 2018, or at all, any shareholder upon request. A description of the 2009 Plan begins on page 127 under the heading “2009 Equity Incentive Plan.” Approximately [] employees, directors and consultants are currently eligible to receive grants of awards under the 2009 plan.

If a quorum is present, a majority of the stock having voting power present in personnominations or represented by proxy is required for approval of this proposal. Abstentions and “broker non-votes” will each be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of the vote.

The TriCo Board of Directors recommends a vote “FOR” the proposal to reapprove the existing performance criteria under the 2009 equity incentive plan.

TRICO PROPOSAL: Advisory Vote Concerning Executive Compensation

TriCo is asking its shareholders to approve, on an advisory (nonbinding) basis, the compensation of its named executive officers as disclosed in this joint proxy statement/prospectus. At the meeting, shareholders will have the opportunity to endorse or not endorse TriCo’s executive compensation programs through an advisory (nonbinding) vote on the compensation of TriCo’s named executive officers as disclosed in this joint proxy statement/prospectus.

Detailed information about the compensation of TriCo’s executive officers is included in the sections titled “Compensation of Named Executive Officers” beginning on page 125 andCompensation Discussion and Analysis,” beginning on page 142. TriCo’s executive compensation programs are designed to attract and retain well-qualified executives and to link executive officer compensation to and to reward executive officers for TriCo’s financial performance and the creation of shareholder value. TriCo believes that TriCo’s executive compensation programs achieve these objectives.

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The board of directors will consider the proposalproposals intended to be adopted if a majority of the shareholders present and voting on the proposal vote in favor of the proposal. TriCo asks TriCo shareholders to indicate their support for TriCo’s executive compensation programs for TriCo’s named executive officers and vote “FOR” the following resolutionpresented at the annual meeting:

“RESOLVED, that TriCo’s shareholders approve, on an advisory basis, the compensation paid to TriCo’s named executive officers as disclosed in this joint proxy statement/prospectus pursuant to Item 402 of Regulation S-K, including the discussion in the “Compensation Discussion and Analysis” section of this joint proxy statement/prospectus and the related compensation tables and narrative discussion.”

As an advisory vote, this proposal is not binding on TriCo. However, TriCo’s board of directors and TriCo’s compensation and management succession committee value the opinions of TriCo’s shareholders and will consider the outcome of the vote when making future compensation decisions regarding TriCo’s named executive officers.

The Board recommends a vote “FOR” approval of the advisory proposal to approve TriCo’s executive

compensation program as described in this joint proxy statement/prospectus.

TRICO PROPOSAL: Ratification of Selection of Principal Independent Auditor

TriCo’s audit committee has selected the firm of Crowe Horwath LLP as TriCo’s principal independent auditor for 2014. Crowe Horwath has served as TriCo’s principal independent auditor since being engaged by TriCo’s audit committee on June 19, 2012. Representatives of Crowe Horwath will be present at the meeting and will have the opportunity to make a statement and to answer appropriate questions.

The affirmative vote of a majority of those shareholders present and voting will ratify the selection of Crowe Horwath as TriCo’s principal independent auditor. If shareholders fail to ratify the appointment of Crowe Horwath LLP, the audit committee will reconsider whether or not to retain that firm. Even if appointment is ratified, the audit committee in its discretion may direct the appointment of a different principal independent auditor at any time.

The following audit services were performed for TriCo by Crowe Horwath for the year ended December 31, 2013:

examination of TriCo’s financial statements and TriCo’s employee benefit plans;

services related to TriCo’s filings with the SEC; and

consultation on matters related to accounting, financial reporting, tax returns, internal controls and regulatory compliance.

Additional information concerning Crowe Horwath’s services for TriCo in 2013 can be found at “Report of the Audit Committee.”

Audit Fees, Audit-related Fees, Tax Fees and All Other Fees

The following table shows all of the fees charged by Crowe Horwath during 2013 and 2012.

   2013   2012 

Audit fees(1)

  $309,632    $297,000  

Audit-related fees(2)

   27,000     9,500  

Tax fees

   27,890    $24,300  

All other fees

   1,755     0  
  

 

 

   

 

 

 

Total

  $366,277    $330,800  

(1)For auditing TriCo’s annual consolidated financial statements and TriCo’s interim financial statements in TriCo’s reports filed with the SEC and auditing TriCo’s internal controls over financial reporting and management’s assessments of those controls.
(2)For accounting and auditing consultation services, audits of TriCo’s employee benefit plans, assistance with registration statements filed with the SEC and audits of separate subsidiary financial statements.

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Change in Principle Independent Auditor

On June 13, 2012, TriCo’s audit committee dismissed TriCo’s principal independent auditor, Moss Adams LLP and engaged the services of Crowe Horwath as TriCo’s new principal independent auditor for the year ended December 31, 2012. During the year ended December 31, 2011 and through June 13, 2012, TriCo did not consult with Crowe Horwath regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.

During the years ended December 31, 2010 and 2011, and the following interim period through June 13, 2012, there were no disagreements between TriCo and Moss Adams on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Moss Adams’s satisfaction, would have caused Moss Adams to make reference to the subject matter of the disagreement in connection with its reports on TriCo’s financial statements for such periods. Also, none of the reportable events described under Item 304(a)(1)(v) of Regulation S-K occurred within the two most recent years ended December 31, 2010 and 2011 or within the following interim period through June 13, 2012.

The audit reports of Moss Adams on TriCo’s consolidated financial statements as of and for the years ended December 31, 2010 and 2011 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. TriCo requested Moss Adams to furnish TriCo with a letter addressed to the SEC stating whether they agreed with the above statements. A copy of that letter was filed with the Commission on a Form 8-K filed on June 19, 2012.

The TriCo Board of Directors recommends a vote “FOR” the ratification of Crowe Horwath LLP as TriCo’s principal
independent auditor

OTHER INFORMATION

Financial Materials

Shareholders may request free copies of TriCo’s financial materials (annual report, Form 10-K and joint proxy statement/prospectus) from TriCo Bancshares, 63 Constitution Drive, Chico, California 95973, Attention: Corporate Secretary. These materials may also be accessed on TriCo’s website at www.tricountiesbank.com under “investor information.”

Section 16(a) Beneficial Ownership Reporting Compliance

TriCo’s directors, executive officers and some other shareholders are required to report their ownership of TriCo’s common stock and any changes in that ownership to the SEC and NASDAQ. To the best of TriCo’s knowledge, all required filings in 2013 were timely made. In making these statements, TriCo has relied on the representations of the persons involved and on copies of their reports filed with the Securities and Exchange Commission.

How to Contact the Board

Shareholders may direct questions to the independent lead director by sending an e-mail to leaddirector@tricountiesbank.com. All communications required by law or regulation to be relayed to the board of directors will be promptly delivered to the lead director. The lead director monitors these messages and replies appropriately. The lead director for 2014 is Mr. Casey. TriCo also encourages shareholders to attend the annual meeting to ask questions of directors concerning TriCo.

Employees and others may confidentially or anonymously report potential violations of laws, rules, regulation or TriCo’s code of business conduct, including questionable accounting or auditing practices, by calling TriCo’s hotline at (866) 519-1882. Employee comments will be promptly delivered to the chairman of the audit committee, Mr. Amaral.

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TRICO ADJOURNMENT PROPOSAL

The TriCo annual meeting may be adjourned to another time or place, if necessary or appropriate, to permit, among other things, further solicitation of proxies if necessary to obtain additional votes in favor of the TriCo Merger proposal.

If, at the TriCo annual meeting, the number of shares of TriCo common stock present or represented and voting in favor of the TriCo Merger proposal is insufficient to approve the TriCo Merger proposal, TriCo intends to move to adjourn the TriCo annual meeting in order to enable the TriCo board of directors to solicit additional proxies for approval of the TriCo Merger proposal.

In the TriCo Adjournment proposal, TriCo is asking its shareholders to authorize the holder of any proxy solicited by the TriCo board of directors to vote in favor of granting discretionary authority to the proxy holders, to adjourn the TriCo annual meeting to another time and place for the purpose of soliciting additional proxies. If the TriCo shareholders approve the TriCo Adjournment proposal, TriCo could adjourn the TriCo annual meeting and any adjourned session of the TriCo annual meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from TriCo shareholders who have previously voted.

The TriCo board of directors recommends a vote “FOR” the TriCo Adjournment proposal.

Each of the directors of TriCo has entered into a shareholder agreement with TriCo and North Valley, pursuant to which they have agreed to vote “FOR” the TriCo Adjournment proposal. For more information regarding the shareholder agreements, please see the section entitled “The Merger Agreement—Shareholder Agreements” beginning on page 96.

Shareholder Proposals for TriCo 2015 Annual Meeting

All shareholder proposals to be considered for inclusion in TriCo’s proxy statement for the 2015FNBB’s next annual meeting must be received at TriCo’s principal office by []. Shareholder nominations for directors mustsubmitted a reasonable time prior to any such meeting to be received by TriCo’s president as described at “Corporate Governance, Board Nomination and Board Committees—Nomination and Election of Directors.”considered timely.

OTHER MATTERS

As of the date of this document, neither the TriCo nor the North Valley boards of directors know of any matters that will be presented for consideration at their respective shareholders’ meetings other than as described in this document. However, if any other matter shall properly come before either the TriCo annual meeting or the North Valley special meeting or any adjournment or postponement thereof and shall be voted upon, the proposed proxies will be deemed to confer authority to the individuals named as authorized therein to vote the shares represented by the proxy as to any matters that fall within the purposes set forth in the notices of shareholders’ meetings.

INCORPORATION OF CERTAIN DOCUMENTS INCORPORATED BY REFERENCE

The SEC allows TriCo and North Valley to incorporate certain information“incorporate by reference” into this joint proxy statement/prospectus, which means that TriCo can disclose important information to you by referencereferring you to other information that has beenanother document filed separately with the SEC. The information incorporated by reference is deemedconsidered to be part of this joint proxy statement/prospectus, except for any information that is superseded by information contained in this joint proxy statement/prospectus. The documents that are incorporated by reference contain important information about the companies and you should read this joint proxy statement/prospectus together with any otherlater filed documents incorporated by reference in this joint proxy statement/prospectus.

156


This joint proxy statement/prospectus incorporates by reference the following documents that have previously been filed with the SEC by TriCo (File No. 000-10661):

Annual Reports on Form 10-K for the year ended December 31, 2013 filed March 7, 2014, as amended by Form 10-K/A filed on April 30, 2014;

Current Reports on Form 8-K filed January 22, 2014 and March 7, 2014.

This document also incorporates by reference the following documents that have previously been filed with the SEC by North Valley (File No. 005-35385):

Annual Report on Form 10-K for the year ended December 31, 2013 filed March 12, 2014, as amended by Form 10-K/A filed on April 18, 2014;

Current Reports on Form 8-K filed January 22, 2014 and March 7, 2014.

In addition, TriCo and North Valley are incorporating by reference any documents they may file under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this document and prior to the date of the respective shareholders’ meetings of the TriCo shareholders and the North Valley shareholders, provided, however, that TriCo and North Valley are not incorporating by reference any information furnished (but not filed), except as otherwise specified herein.

Both TriCo and North Valley file annual, quarterly and special reports, proxy statements and other business and financial information with the SEC. You may obtain the information incorporated by reference and any other materials North Valley or TriCo filefiles with the SEC without charge by following the instructions in the section entitled “Where You Can Find More Information” beginningin the forepart of this document.

To obtain timely delivery, you should request desired information no later than five (5) business days prior to the date of the special meetings, or by [], 2018

TriCo incorporates by reference the following documents filed by it with the SEC listed below and any future filings made by it with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the date of the special meetings (other than documents or information deemed to have been furnished and not filed in accordance with the rules of the SEC):

TriCo’s Annual Report on page v ofForm10-K for the year ended December 31, 2017, filed on March 1, 2018.

TriCo’s Current Report on Form8-K filed on February 28, 2018.

TriCo’s annual meeting proxy statement, filed on April 17, 2017 (only those portions that have been incorporated by reference in the Annual Report on Form10-K for the year ended December 31, 2016).

You should rely only on the information contained or incorporated by reference in this joint proxy statement/prospectus.

Neither TriCo nor North Valley hasand FNBB have not authorized anyone else to give anyprovide you with information or make any representation about the merger or its companies that is different from or in addition to, that which is contained in this joint proxy statement/prospectusprospectus. Moreover, neither TriCo nor FNBB is making an offer to sell or soliciting an offer to buy any securities other than the TriCo common stock to be issued by TriCo in the merger, and neither TriCo nor FNBB is making an offer of such securities in any of the materials that have been incorporated into this joint proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdictionstate where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this joint proxy statement/prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this joint proxy statement/prospectus doesis not extend to you.permitted. The information contained in this joint proxy statement/prospectus speaks only as of theits date of this joint proxy statement/prospectus unless the information specifically indicates that another date applies.

157


Appendix A— Agreement and Plan of Merger and ReorganizationA

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

DATED AS OF DECEMBER 11, 2017

BY AND BETWEEN

TRICO BANCSHARES

AND

NORTH VALLEYFNB BANCORP


TABLE OF CONTENTS

   Page 

ARTICLE I. THE MERGER

   2  

1.1.

 

The Merger

   2  

1.2.

 

Effective Time

   2  

1.3.

 

Effects of the Merger

   2  

1.4.

 

Conversion of North Valley Common Stock

   2  

1.5.

 

TriCo Common Stock

   3  

1.6.

 

Stock Options

   3  

1.7.

 

Articles of Incorporation

   3  

1.8.

 

Bylaws

   3  

1.9.

 

Directors and Officers

   3  

1.10.

 

Tax Consequences

   3  

1.11.

 

Accounting Treatment

   4  

ARTICLE II. EXCHANGE OF SHARES

   4  

2.1.

 

TriCo to Make Cash and Shares Available

   4  

2.2.

 

Exchange of Shares

   4  

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF NORTH VALLEY

   6  

3.1.

 

Corporate Organization

   6  

3.2.

 

Capitalization

   8  

3.3.

 

Authority; No Violation

   9  

3.4.

 

Consents and Approvals

   11  

3.5.

 

Reports

   11  

3.6.

 

Financial Statements; Exchange Act Filings; Books and Records

   12  

3.7.

 

Broker’s Fees

   14  

3.8.

 

Absence of Certain Changes or Events

   14  

3.9.

 

Legal Proceedings

   14  

3.10.

 

Taxes and Tax Returns

   15  

3.11.

 

Employee Plans

   16  

3.12.

 

Certain Contracts

   18  

3.13.

 

Regulatory Agreements

   19  

3.14.

 

State Takeover Laws; Rights Agreement

   19  

A-i


TABLE OF CONTENTS

(continued)

   Page 

3.15.

 

Environmental Matters

   20  

3.16.

 

Allowances for Losses

   20  

3.17.

 

Properties and Assets

   21  

3.18.

 

Insurance

   21  

3.19.

 

Compliance with Applicable Laws

   22  

3.20.

 

Loans

   22  

3.21.

 

Undisclosed Liabilities

   23  

3.22.

 

Intellectual Property Rights

   24  

3.23.

 

Indemnification

   24  

3.24.

 

Insider Interests

   24  

3.25.

 

Fairness Opinion

   24  

3.26.

 

Labor

   25  

3.27.

 

Investment Securities

   25  

3.28.

 

Derivatives Contracts

   25  

3.29.

 

Tax Treatment of Merger

   25  

3.30.

 

North Valley Information

   25  

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF TRICO

   26  

4.1.

 

Corporate Organization

   26  

4.2.

 

Capitalization

   27  

4.3.

 

Authority; No Violation

   28  

4.4.

 

Consents and Approvals

   29  

4.5.

 

Reports

   29  

4.6.

 

Financial Statements; Exchange Act Filings; Books and Records

   30  

4.7.

 

Broker’s Fees

   32  

4.8.

 

Absence of Certain Changes or Events

   32  

4.9.

 

Legal Proceedings

   32  

4.10.

 

Taxes and Tax Returns

   32  

4.11.

 

Regulatory Agreements

   33  

4.12.

 

State Takeover Laws; Rights Agreement

   33  

4.13.

 

Environmental Matters

   34  

A-ii


TABLE OF CONTENTS

(continued)

   Page 

4.14.

 

Allowances for Losses

   34  

4.15.

 

Insurance

   34  

4.16.

 

Compliance with Applicable Laws

   35  

4.17.

 

Loans

   35  

4.18.

 

Undisclosed Liabilities

   36  

4.19.

 

Tax Treatment of Merger

   36  

4.20.

 

TriCo Information

   36  

4.21.

 

Employee Plans

   37  

4.22.

 

Certain Contracts

   37  

ARTICLE V. COVENANTS RELATING TO CONDUCT OF BUSINESS

   38  

5.1.

 

Covenants of North Valley

   38  

5.2.

 

Covenants of TriCo

   44  

5.3.

 

Merger Covenants

   46  

ARTICLE VI. ADDITIONAL AGREEMENTS

   46  

6.1.

 

Regulatory Matters

   46  

6.2.

 

Access to Information

   48  

6.3.

 

Shareholder Meetings

   48  

6.4.

 

Legal Conditions to Merger

   50  

6.5.

 

Nasdaq Listing

   50  

6.6.

 

Employees

   50  

6.7.

 

No Solicitation; Change of Recommendation

   53  

6.8.

 

Indemnification

   57  

6.9.

 

Additional Agreements

   58  

6.10.

 

Advice of Changes

   58  

6.11.

 

Current Information

   58  

6.12.

 

Bank Merger Agreement

   59  

6.13.

 

Change in Structure

   59  

6.14.

 

Exemption From Section 16 Liability

   59  

6.15.

 

Board of Directors

   59  

6.16.

 

North Valley Options

   59  

6.17.

 

Closing Financial Statements

   60  

A-iii


TABLE OF CONTENTS

(continued)

   Page 

6.18.

 

Customer Notices

   61  

6.19.

 

Professional Fees and Expenses

   61  

6.18.

 

Change in Control Payments

   61  

ARTICLE VII. CONDITIONS PRECEDENT

   61  

7.1.

 

Conditions to Each Party’s Obligation to Effect the Merger

   61  

7.2.

 

Conditions to Obligations of TriCo

   62  

7.3.

 

Conditions to Obligations of North Valley

   64  

ARTICLE VIII. TERMINATION AND AMENDMENT

   66  

8.1.

 

Termination

   66  

8.2.

 

Effect of Termination

   67  

8.3.

 

Amendment

   68  

8.4.

 

Extension; Waiver

   69  

ARTICLE IX. GENERAL PROVISIONS

   69  

9.1.

 

Closing

   69  

9.2.

 

Nonsurvival of Representations, Warranties and Agreements

   69  

9.3.

 

Expenses

   69  

9.4.

 

Notices

   69  

9.5.

 

Interpretation

   71  

9.6.

 

Counterparts

   71  

9.7.

 

Entire Agreement

   71  

9.8.

 

Governing Law

   71  

9.9.

 

Enforcement of Agreement

   71  

9.10.

 

Severability

   71  

9.11.

 

Publicity

   71  

9.12.

 

Assignment; Limitation of Benefits

   72  

 

EXHIBITS
A Agreement of Merger
B  Bank Merger AgreementPage
C-1

ARTICLE I CERTAIN DEFINITIONS

A-1

1.01

Certain DefinitionsA-1

ARTICLE II THE MERGER

A-8

2.01

The MergerA-8

2.02

Effective Date and Effective Time; ClosingA-9

2.03

Bank MergerA-9

ARTICLE III CONSIDERATION AND EXCHANGE PROCEDURES

A-10

3.01

Conversion of SharesA-10

3.02

Exchange ProceduresA-10

3.03

Rights as ShareholdersA-12

3.04

No Fractional SharesA-12

3.05

Anti-Dilution ProvisionsA-12

3.06

Withholding RightsA-12

3.07

FNBB OptionsA-12

ARTICLE IV ACTIONS PENDING ACQUISITION

A-13

4.01

Forbearances of FNBBA-13

4.02

Forbearances of TriCoA-16

ARTICLE V REPRESENTATIONS AND WARRANTIES

A-17

5.01

Disclosure SchedulesA-17

5.02

StandardA-17

5.03

Representations and Warranties of FNBBA-18

5.04

Representations and Warranties of TriCoA-35

ARTICLE VI COVENANTS

A-41

6.01

Reasonable Best EffortsA-41

6.02

Shareholder ApprovalA-41

6.03

Registration StatementA-42

6.04

Regulatory FilingsA-43

6.05

Press ReleasesA-43

6.06

Access; InformationA-44

6.07

No Solicitation; Acquisition ProposalsA-45

6.08

Certain PoliciesA-46

6.09

Nasdaq ListingA-47

6.10

IndemnificationA-47

6.11

Benefit PlansA-48

6.12

Appointment of DirectorsA-49

6.13

Notification of Certain MattersA-50

6.14

Estoppel LettersA-50

6.15

Antitakeover StatutesA-50

6.16

ConsentsA-50

6.17

Exemption from Liability Under Section 16(b)A-50

6.18

Federal Home Loan Bank BorrowingsA-50

6.19

Shareholder Litigation and ProtestsA-50

6.20

Closing Financial StatementsA-50

6.21

Customer NoticesA-51

6.22

Professional Fees and ExpensesA-51

6.23

Shareholder AgreementsA-51

-i-


Page

6.24

Change in Control PaymentsA-51

6.25

Sale of Certain OREOA-51

6.26

Tax TreatmentA-51

ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER

A-51

7.01

Conditions to Each Party’s Obligation to Effect the MergerA-52

7.02

Conditions to Obligation of FNBBA-52

7.03

Conditions to Obligation of TriCoA-53

ARTICLE VIII TERMINATION

A-54

8.01

TerminationA-54

8.02

Effect of Termination and AbandonmentA-56

ARTICLE IX MISCELLANEOUS

A-56

9.01

SurvivalA-57

9.02

Waiver; AmendmentA-57

9.03

CounterpartsA-57

9.04

Governing LawA-58

9.05

ExpensesA-58

9.06

NoticesA-58

9.07

Entire Understanding; Limited Third Party BeneficiariesA-58

9.08

SeverabilityA-59

9.09

Enforcement of the AgreementA-59

9.10

InterpretationA-59

9.11

AssignmentA-59

9.12

Alternative StructureA-59

EXHIBIT A  Form of Shareholder Agreement for North Valley Directors
C-2  Form of Shareholder Agreement for TriCo DirectorsA-1
EXHIBIT BAgreement of MergerB-1
EXHIBIT CBank Merger AgreementC-1
EXHIBIT D  Form of Non-Solicitation and Confidentiality AgreementLandlord Estoppel LetterD-1
EXHIBIT EForm of Benefits Summary AcknowledgmentE-1

 

A-iv-ii-


AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

This AGREEMENT AND PLAN OF MERGER AND REORGANIZATION,, dated as of January 21, 2014 (this “Agreement”), is entered intoDecember 11, 2017 by and between TriCo Bancshares, a California corporation (“TriCo”), and North ValleyFNB Bancorp, a California corporation (“North ValleyFNBB”).

RECITALS

WHEREAS, upon the terms and subject to the conditions of this Agreement and in accordance with the California General Corporation Law (the “CGCL”), FNBB will merge with and into TriCo (the “Merger”), with TriCo as the surviving corporation in the Merger (sometimes referred to in such capacity as the “Surviving Corporation”).

WHEREAS, immediately following the Merger, First National Bank of Northern California, a national banking association and a wholly-owned subsidiary of FNBB (“First National Bank”) will merge with and into Tri Counties Bank, a California state-chartered bank and wholly-owned subsidiary of TriCo (“Tri Counties”), with Tri Counties as the surviving bank (the “Bank Merger”).

WHEREAS, the Boardsrespective boards of Directorsdirectors of each of TriCo and North ValleyFNBB have determined that it isthis Agreement and the transactions contemplated hereby are fair to and in the best interests of their respective companies and their respective shareholders, to consummateas applicable, and have approved and declared advisable this Agreement and the business combination transaction provided for herein in which North Valley will,transactions contemplated hereby, including the Merger, all upon the terms and subject to the terms and conditions set forth herein, merge with and into TriCo, with TriCo beingherein.

WHEREAS, it is the surviving corporation in such merger (the “Merger”), pursuant to the termsintention of the agreement of merger (the “parties to this Agreement of Merger”) substantially in the form attached hereto as Exhibit A.

WHEREAS, immediately upon consummation ofthat the Merger TriCo intends to cause Tri Counties Bank, a California-chartered bank and wholly owned subsidiary of TriCo (“Tri Counties Bank”), and North Valley Bank, a California-chartered bank and wholly owned subsidiary of North Valley (“North Valley Bank”), to consummate a merger (the “Bank Merger”) pursuant to the terms of a merger agreement, substantially in the form attached hereto as Exhibit B (the “Bank Merger Agreement”), whereby North Valley Bank will merge with and into Tri Counties Bank with Tri Counties Bank being the surviving corporation in the Bank Merger (the “Surviving Bank”).

WHEREAS, the Merger and the Bank Merger are each intended to be treated as a reorganization” within the meaning of“reorganization” under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”)., and the regulations and formal guidance issued thereunder.

WHEREAS, the parties desireas material inducement to make certain representations, warranties, covenantsTriCo to enter into this Agreement, and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

WHEREAS, concurrentlysimultaneously with the execution of this Agreement, and as a material inducement to the willingness of TriCo to entereach Shareholder is entering into this Agreement, each of the North Valley directors is executing and delivering to TriCo a shareholderan agreement, (each, a “Shareholder Agreement”),substantially in the form attached heretoto this Agreement asExhibit C-1 and a non-solicitation agreement inA (collectively, the form attached hereto as Exhibit D (the Non-Solicitation and Confidentiality AgreementShareholder Agreements”), pursuant to be effective aswhich they have agreed, among other things, to vote their shares of the Effective Time.

WHEREAS, concurrently with the executionFNBB Common Stock in favor of this Agreement, not to compete with TriCo or Tri Counties and as a material inducement to not solicit the willingnesscustomers or employees of North Valley to enter into this Agreement, each of the TriCo directors is executing and delivering to North Valley a Shareholder Agreement in the form attached hereto as of Exhibit C-2.Tri Counties.

NOW, THEREFORE, in consideration of the foregoing,premises and of the mutual covenants, representations, warranties covenants and agreements contained herein the parties to this Agreement agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

1.01Certain Definitions.The following terms are used in this Agreement with the meanings set forth below:

Acquisition Proposal” has the meaning set forth in Section 6.07.

Affiliate”means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by or is under common control with such Person. For purposes of this definition, “control” of a Person shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and intendingpolicies of such Person, whether through the ownership of voting securities, by contract or otherwise.

Agreement” means this Agreement and Plan of Merger and Reorganization, as amended or modified from time to time in accordance with Section 9.02.

Agreement of Merger” has the meaning set forth in Section 2.02(a).

Bank Merger” has the meaning set forth in the recitals.

Bank Merger Agreement” means the Bank Merger Agreement by and between Tri Counties and First National Bank, the form of which is attached hereto asExhibit C, as amended or modified from time to time in accordance with its provisions.

Bank Secrecy Act” means the Bank Secrecy Act of 1970, as amended.

Benefit Plans” has the meaning set forth in Section 5.03(m)(i).

Book-Entry Shares” means shares of FNBB Common Stock held in book-entry form immediately prior to the Effective Time.

Business Day” means Monday through Friday of each week, except a legal holiday recognized as such by the U. S. Government or any day on which banking institutions in the State of California are authorized or obligated to close.

Cause,” for the purposes of Section 6.11(d), has the meaning set forth such Section.

Certificate” means any certificate which immediately prior to the Effective Time represented shares of FNBB Common Stock.

CFC” means the California Financial Code, as amended.

CGCL” has the meaning set forth in the recitals.

Change in Recommendation” has the meaning set forth in Section 6.02(a).

Closing” and “Closing Date” have the meanings set forth in Section 2.02(b).

Closing Financial Statements” has the meeting set forth in Section 6.20.

Code” has the meaning set forth in the preamble to this Agreement.

Community Reinvestment Act” means the Community Reinvestment Act of 1977, as amended.

Confidentiality Agreements” has the meaning set forth in Section 6.06(d).

Control Transaction” has the meaning set forth in Section 8.02(b).

DBO” means the California Department of Business Oversight—Division of Financial Institutions.

Derivatives Contract” means any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, credit-related events or conditions or any indexes, or any other similar transaction or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral or other similar arrangements related to such transactions; provided that, for the avoidance of doubt, the term “Derivatives Contract” shall not include any FNBB Options.

Determination Date” means the fifth (5th) Business Day immediately prior to the Closing Date.

Determination Period” means the period beginning on the day that is twenty (20) consecutive trading days prior to the Determination Date and ending on the Determination Date.

Disclosure Schedule” has the meaning set forth in Section 5.01.

DOL” has the meaning set forth in Section 5.03(m)(i).

Effective Date” has the meaning set forth in Section 2.02(a).

Effective Time” has the meaning set forth in Section 2.02(a).

Employees” has the meaning set forth in Section 5.03(m)(i).

Environmental Laws” has the meaning set forth in Section 5.03(o).

Equal Credit Opportunity Act” means the Equal Credit Opportunity Act, as amended.

Equity Investment” means (a) an Equity Security; (b) an ownership interest in any company or other entity or a membership interest that includes a voting right in any company or other entity; and (c) any investment or transaction which in substance falls into any of these categories even though it may be structured as some other form of investment or transaction.

Equity Security” means any stock, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, or voting-trust certificate; any security convertible into such a security; any security carrying any warrant or right to subscribe to or purchase any such security; and any certificate of interest or participation in, temporary or interim certificate for, or receipt for any of the foregoing.

ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and formal guidance issued thereunder.

ERISA Affiliate” has the meaning set forth in Section 5.03(m)(iii).

Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

Exchange Agent” has the meaning set forth in Section 3.02(a).

Exchange Ratio” has the meaning set forth in Section 3.01(b).

Fair Housing Act” means the Fair Housing Act, as amended.

FDIC” means the Federal Deposit Insurance Corporation.

FHLB” means the Federal Home Loan Bank of San Francisco.

Final Index Price” means the average closing price of the KBW Regional Banking Index as quoted on Bloomberg.com (KRX:IND) during the Determination Period.

First National Bank” has the meaning set forth in the recitals.

First National Bank Board” means the Board of Directors of First National Bank.

FNBB” has the meaning set forth in the preamble to this Agreement.

FNBB Articles” means the Articles of Incorporation of FNBB, as amended.

FNBB Board” means the Board of Directors of FNBB.

FNBB Bylaws” means the Bylaws of FNBB, as amended.

FNBB Common Stock” means the common stock, no par value per share, of FNBB.

FNBB Group” means any or all of FNBB and its Subsidiaries or any predecessor of or any successor to any or all of FNBB and its Subsidiaries (or to another such predecessor or successor). References herein to the FNBB Group shall be deemed to refer to both the FNBB Group as a whole and to each individual member thereof, as well as to groups comprising some, but not all, of FNBB and its Subsidiaries.

FNBB IT Systems” has the meaning set forth in Section 5.03(t)(iii).

FNBB Loan Property” has the meaning set forth in Section 5.03(o).

FNBB Meeting” has the meaning set forth in Section 6.02(a).

FNBB NQDP” has the meaning set forth in Section 5.03(m)(vii).

FNBB Options” means the options to acquire FNBB Common Stock.

FNBB Preferred Stock” means the preferred stock, no par value per share, of FNBB.

FNBB Retirement Plan” has the meaning set forth in Section 6.11(e).

FNBB’s SEC Reports” has the meaning set forth in Section 5.03(g)(i).

FNBB Option Plans” means the FNB Bancorp Stock Option Plan (formerly the First National Bank of Northern California 1997 Stock Option Plan), the FNB Bancorp 2002 Stock Option Plan and the FNB Bancorp 2008 Stock Option Plan.

FRB” means the Board of Governors of the Federal Reserve System.

GAAP” means accounting principles generally accepted in the United States of America.

Governmental Entity” means any federal, state or local court, administrative agency or commission or other governmental authority or instrumentality or self-regulatory organization.

Hazardous Substance” has the meaning set forth in Section 5.03(o).

Indemnified Parties” and “Indemnifying Party” have the meanings set forth in Section 6.10(a).

Index Ratio” means the Final Index Price divided by the Initial Index Price.

Initial Index Price” means $109.24.

Initial TriCo Stock Price” means $41.48 per share.

Insurance Policies” has the meaning set forth in Section 5.03(w).

Intellectual Property” means: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereon, and all patents, patent applications and patent disclosures, together with all reissues, continuations,continuations-in-part, divisions, extensions andre-examinations thereof; (b) all trademarks whether registered or unregistered, service marks, domain names, corporate names and all combinations thereof, and associated therewith; (c) all copyrights whether registered or unregistered, and all applications, registrations and renewals in connection therewith; (d) all datasets, databases and related documentation; and (e) all other intellectual property and proprietary rights.

IRS” has the meaning set forth in Section 5.03(m)(i).

Knowledge” means facts and other information which, as of the date hereof, is actually known after due inquiry (i) in the case of FNBB and any FNBB Subsidiary, by the chief executive officer, president, chief financial officer, chief operating officer, and chief credit or lending officer (and any officer superior to any of the foregoing) and (ii) in the case of TriCo and any TriCo Subsidiary, by the chief executive officer, president, chief financial officer, chief operating officer, chief credit or lending officer, and general counsel or chief legal officer (and any officer superior to any of the foregoing).

Liens” means any charge, mortgage, pledge, security interest, restriction, claim, lien or encumbrance other than Permitted Liens.

Loans” has the meaning set forth in Section 4.01(t).

Material Adverse Effect” means, with respect to TriCo or FNBB, any effect that (i) is material and adverse to the financial condition, results of operations or business of TriCo and its Subsidiaries taken as a whole or FNBB and its Subsidiaries taken as a whole, as the case may be, or (ii) would or is reasonably likely to materially impair the ability of any of TriCo and its Subsidiaries or FNBB and its Subsidiaries, as the case may be, to perform their respective obligations under this Agreement or otherwise materially impede the consummation of the Transaction;provided, however, that Material Adverse Effect with respect to subclause (i) shall not be deemed to include the impact of (a) changes after the date hereof in laws or regulations of general applicability to banks and their holding companies or interpretations thereof by Governmental Entities, (b) changes after the date hereof in GAAP or regulatory accounting requirements applicable to banks and their holding companies generally, (c) any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism, (d) changes resulting from conditions affecting the banking and financial services industry or changes in global, national or regional economic, political or market conditions (including changes in prevailing interest rates or exchange rates) affecting banks and their holding companies generally, (e) the public announcement or pendency of the Transaction, (f) any modifications or changes to valuation policies and practices in connection with the Transaction or restructuring charges taken in connection with the Transaction, in each case in accordance with GAAP, (g) the failure, in and of itself, to meet earnings projections or internal financial forecasts, but not including the underlying causes thereof (unless otherwise excluded hereunder), or changes in the trading price or trading volume of a party’s common stock, in and of itself, but not including the underlying causes thereof (unless otherwise excluded hereunder), and (h) with respect to FNBB, the effects of any action or omission taken with the prior written consent of TriCo or as otherwise required by this Agreement;provided that the effect of such changes described in clauses (a), (b), (c) and (d) shall not be excluded when determining whether a Material Adverse Effect has occurred to the extent of a materially disproportionate impact, if any, on TriCo and its Subsidiaries taken as a whole on the one hand, or FNBB and its Subsidiaries taken as a whole on the other hand, as measured relative to similarly situated companies in the banking industry.

Material Contracts” has the meaning set forth in Section 5.03(k)(i).

Maximum Insurance Amount” has the meaning set forth in Section 6.10(c).

Merger” has the meaning set forth in the recitals.

Merger Consideration” means the aggregate number of whole shares of TriCo Common Stock, plus cash in lieu of any fractional share interest, payable to the holders of FNBB Common Stock in connection with the Transaction, plus cash, if any, that TriCo may elect to deliver in lieu of TriCo Common Stock pursuant to Section 8.01(i).

Merger Related Expenses” means all costs, fees and expenses incurred or to be legally bound hereby,incurred by FNBB and its Subsidiaries in connection with this Agreement and the partiesTransaction up to and including the Closing of the Transaction, including but not limited to the fees and expenses associated with the termination of any Material Contracts of FNBB that are required to be terminated on or before the Closing pursuant to their terms in connection with the Transaction or that TriCo and FNBB otherwise mutually agree to terminate on or before the Closing, and fees and expenses of their attorneys, accountants, investment bankers and other advisors. An estimate of Merger Related Expenses shall be set forth in Section 1.01(a) of FNBB’s Disclosure Schedule, which shall be updated within five Business Days prior to the Closing Date.

Nasdaq” means the Nasdaq Global Select Market or such other securities exchange on which the TriCo Common Stock or the FNBB Common Stock (as applicable) may be listed.

National Bank Act” means the National Bank Act, as follows.

amended.

National Labor Relations Act” means the National Labor Relations Act, as amended.

A-2OCC” means the Office of the Comptroller of the Currency.


Option Consideration” has the meaning set forth in Section 3.07(a).

ARTICLE I.OREO” means other real estate owned.

Payroll Processor” has the meaning set forth in Section 3.07(a).

Pension Plan” has the meaning set forth in Section 5.03(m)(ii).

Permitted Lien” means (i) statutory Liens securing payments not yet delinquent (or being contested in good faith and for which adequate reserves have been established), (ii) Liens for real property Taxes not yet delinquent, or (iii) easements, rights of way, restrictive covenants, imperfections or irregularities of title, and other similar encumbrances or Liens that do not materially affect the value or prohibit the current use of the property or asset subject thereto.

Person” means any individual, bank, corporation, partnership, association, joint-stock company, business trust, limited liability company or unincorporated organization.

Previously Disclosed” by a party shall mean information set forth in a section of its Disclosure Schedule corresponding to the section of this Agreement where such term is used;provided, that any information set forth in any section of a party’s Disclosure Schedule shall be deemed to apply to and be set forth in each other section or subsection of its Disclosure Schedule, if its relevance to such other section or subsection is reasonably apparent on its face.

Proxy Statement” has the meaning set forth in Section 6.03(a).

Registration Statement” has the meaning set forth in Section 6.03(a).

Representatives” has the meaning set forth in Section 6.07(a).

Retiree Welfare Plan” means any Benefit Plan providing for retiree health and life benefits, other than coverage as may be required under Section 4980B of the Code or Part 6 of Title I of ERISA, or under the continuation of coverage provisions of the laws of any state or locality.

Rights” means, with respect to any Person, warrants, options, rights, convertible securities and other arrangements or commitments which obligate the Person to issue or dispose of any of its capital stock or other ownership interests.

SEC” means the U.S. Securities and Exchange Commission.

Secured Creditor Exemption” has the meaning set forth in Section 5.03(o).

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

Shareholder Agreements” has the meaning set forth in the recitals to this Agreement.

Shareholders” means each director and the president, the chief executive officer, chief financial officer, chief credit officer and chief operating officer of FNBB.

Subsidiary” has the meaning ascribed to that term in Rulel-02 of RegulationS-X of the SEC.

Superior Proposal” has the meaning set forth in Section 6.07(a).

Surviving Corporation” has the meaning set forth in the recitals.

Tangible Common Equity” means FNBB’s total shareholders’ equity (i) excluding intangible assets, (ii) excluding accumulated other comprehensive income or loss, (iii) excluding changes in the value of FNBB’s deferred tax asset resulting from any amendment or changes to the Code effected after the date of this Agreement, and (iv) adding back up to $8,243,520 in Merger Related Expenses incurred and accrued by FNBB prior to the Closing Date on atax-adjusted basis (to the extent there was a tax benefit recorded by FNBB as a result of the incurrence of such expense) based on FNBB’s marginal tax rate;provided that “total shareholders’ equity,” “intangible assets” and “accumulated other comprehensive income or loss” shall each be calculated in accordance with GAAP and FNBB’s consolidated balance sheet at December 31, 2016 as included in FNBB’s SEC Reports.

Tax” and “Taxes” mean all federal, state, local or foreign income, gross income, gains, gross receipts, sales, use, ad valorem, goods and services, capital, production, transfer, franchise, windfall profits, license, withholding, payroll, employment, disability, employer health, excise, estimated, severance, stamp, occupation, property (real or personal), real property gains, registration, alternative minimum,add-on minimum, value added, natural resources, social security, environmental, custom duties, unemployment or other taxes of any kind whatsoever, together with any interest, additions or penalties thereto and any interest in respect of such interest and penalties.

Tax Returns” means any return (including any amended return), declaration or other report (including elections, declarations, claims for refunds, schedules, estimates and information returns) with respect to any Taxes (including estimated taxes).

Termination Fee” has the meaning set forth in Section 8.02(b).

Transaction” means the Merger, the Bank Merger and any other transactions contemplated by this Agreement.

Treasury Regulations” has the meaning set forth in Section 5.03(p)(xv).

Tri Counties” has the meaning set forth in the recitals.

Tri Counties Board” means the Board of Directors of Tri Counties.

TriCo” has the meaning set forth in the preamble to this Agreement.

TriCo Articles” means the Articles of Incorporation of TriCo, as amended.

TriCo Average Closing Price” means the average closing price per share of TriCo Common Stock, as reported on Nasdaq, for the twenty (20) trading days ending on and including the fifth (5th) trading day prior to the Closing Date.

TriCo Benefit Plans” has the meaning set forth in Section 5.04(l)(i).

TriCo Board” means the Board of Directors of TriCo.

TriCo Bylaws” means the Bylaws of TriCo, as amended.

TriCo Common Stock” means the common stock, no par value per share, of TriCo.

TriCo Meeting” has the meaning set forth in Section 6.02(c).

TriCo Preferred Stock” means the preferred stock, no par value per share, of TriCo.

TriCo’s SEC Reports” has the meaning set forth in Section 5.04(g)(i).

ARTICLE II

THE MERGER

1.1.2.01The Merger.

(a)The Merger. Subject to the terms and conditions of this Agreement, at the Effective Time, North ValleyFNBB shall merge with and into TriCo in accordance with TriCo being the surviving corporation (hereinafter sometimes called the “Surviving Corporation”) in the Merger. Upon consummationapplicable provisions of the Merger,CGCL, the separate corporate existence of North ValleyFNBB shall cease and the Surviving CorporationTriCo shall survive and continue to exist as a California corporation.corporation incorporated under the CGCL, with TriCo as the Surviving Corporation.

1.2.Effective Time(b)Name. The name of the Surviving Corporation shall be “TriCo Bancshares”.

(c)Articles and Bylaws. The articles of incorporation and bylaws of the Surviving Corporation immediately after the Merger shall be the TriCo Articles and the TriCo Bylaws as in effect immediately prior to the Merger.

(d)Directors and Executive Officers. The directors of the Surviving Corporation immediately after the Merger shall be the directors of TriCo immediately prior to the Merger, except for the addition of two new directors as contemplated by Section 6.12, each of whom shall serve until the first annual meeting of shareholders of TriCo following the Effective Time. The executive officers of the Surviving Corporation immediately after the Merger shall be the executive officers of TriCo immediately prior to the Merger, each of whom shall serve until such time as their successors shall be duly elected and qualified.

(e)Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in accordance with the CGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective

Time, all the property, rights, privileges, powers and franchises of FNBB shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of FNBB shall become effective on the Closingdebts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation.

(f)Additional Actions. If, at any time after the Effective Time, the Surviving Corporation shall consider that any further assignments or assurances in law or any other acts are necessary or desirable to (i) vest, perfect, record or otherwise confirm the Surviving Corporation’s right, title or interest in, to or under any of the rights, properties or assets of FNBB acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger, or (ii) otherwise carry out the purposes of this Agreement, FNBB, and its proper officers and directors, acting in such corporate capacity and not individually, shall be deemed to have granted to the Surviving Corporation an irrevocable power of attorney to execute and deliver all such proper deeds, assignments and assurances in law and to do all acts necessary or proper to vest, perfect or confirm title to and possession of such rights, properties or assets in the Surviving Corporation and otherwise to carry out the purposes of this Agreement, and the proper officers and directors of the Surviving Corporation are fully authorized in the name of the Surviving Corporation or otherwise to take any and all such action.

2.02Effective Date (as defined in Section 9.1 hereof), asand Effective Time; Closing.

(a) Subject to the satisfaction or waiver of the conditions set forth inArticle VII (other than those conditions that by their nature are to be satisfied at the consummation of the Merger, but subject to the fulfillment or waiver of those conditions), the parties shall cause an Agreement of Merger inrelating to the Merger, the form of which is attached hereto asExhibit A hereto, which shallB (the “Agreement of Merger”), to be filed with the Secretary of State of the State of California pursuant to the CGCL on the Closing Date.first Friday that is at least five (5) Business Days after such satisfaction or waiver or (ii) such other date following such satisfaction or waiver to which the parties may mutually agree in writing. The Effective TimeMerger provided for herein shall bebecome effective upon the date and timefiling of the Agreement of Merger is so filed.

1.3.Effectswith the Secretary of State of the State of California. The date of such filing with the Secretary of State of the State of California is herein called the “Effective Date.” The “Effective Time” of the Merger. At and after shall be the time of such filing or as set forth in such filing.

(b) A closing (the “Closing”) shall take place immediately prior to the Effective Time at the offices of Sheppard, Mullin, Richter & Hampton LLP, Four Embarcadero Center, 17th Floor, San Francisco, California 94111, or at such other place, at such other time, or on such other date as the parties may mutually agree upon in writing (such date, the “Closing Date”). At the Closing, there shall be delivered to TriCo and FNBB the certificates and other documents required to be delivered underArticle VII hereof.

2.03Bank Merger. As soon as practicable after the execution of this Agreement, or on such later date as TriCo shall specify in writing, TriCo and FNBB shall cause Tri Counties and First National Bank, respectively, to enter into the Bank Merger Agreement, the form of which is attached hereto asExhibit C, which provides for the Bank Merger, which shall be completed in accordance with applicable laws and regulations and the terms of the Bank Merger Agreement as soon as practicable after consummation of the Merger. The Bank Merger Agreement provides that the directors of Tri Counties immediately after the Bank Merger shall havebe the effects set forth in Section 1107directors of Tri Counties immediately prior to the Bank Merger, except for the addition of the California Corporations Code (the “CGCL”).two new directors as contemplated by Section 6.12.

1.4.

ARTICLE III

CONSIDERATION AND EXCHANGE PROCEDURES

3.01Conversion of North Valley Common StockShares.

(a) At the Effective Time, by virtue of the Merger and without any action on the part of thea holder of any shares of North Valley common stock (the “North ValleyFNBB Common Stock:

(a)TriCo Common Stock”), each. Each share of North ValleyTriCo Common Stock that is issued and outstanding immediately prior to the Effective Time including the associated preferred stock purchase rights (the “North Valley Rights”)shall remain issued pursuant to the Amended and Restated Shareholder Protection Rights Agreement dated as of March 26, 2009, as amended, between North Valley and Mellon Investor Services LLC (the “North Valley Rights Agreement”), will be converted into the right to receive a number of shares of TriCo common stock (“TriCo Common Stock”) equal to the Stock Exchange Ratio (as defined below) (the “Merger Consideration”). For purposes of this Agreement, “Stock Exchange Ratio” means 0.9433 shares of TriCo Common Stock for each one (1) share of North Valley Common Stock.

(b) All of the shares of North Valley Common Stock converted pursuant to this Article I shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each certificate previously representing any such shares of North Valleyunchanged by the Merger.

(b)FNBB Common Stock (each, a “Certificate”) shall thereafter represent the right. Subject to receive (i) the number of whole shares of TriCo Common StockSections 3.02, 3.05 and (ii) cash in lieu of fractional shares into which the shares of North Valley Common Stock represented by such Certificate have been converted pursuant to this Agreement. Certificates previously representing shares of North Valley Common Stock shall be exchanged for certificates representing whole shares of TriCo Common Stock and cash in lieu of fractional shares issued in consideration therefor upon the surrender of such Certificates in accordance with Section 2.2 hereof, without any interest thereon. If after the date hereof and prior to the Effective Time, TriCo should split or combine its common stock, or declare a stock dividend with a distribution or record date, as applicable, prior to the Effective Time, or effect a reclassification, recapitalization or similar transaction, then the Stock Exchange Ratio, and the number of shares of TriCo Common Stock to be issued pursuant to Section 1.4(a) of this Agreement shall be appropriately adjusted to reflect such split, combination, stock dividend, reclassification, recapitalization or similar transaction.

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(c) At the Effective Time, all shares of North Valley Common Stock that are owned by North Valley as treasury stock, if any, and all shares of North Valley Common Stock that are owned directly or indirectly by North Valley or any Subsidiary of North Valley except those (i) held in a fiduciary capacity or (ii) held as a result of debts previously contracted in good faith, shall be canceled and shall cease to exist and no TriCo Common Stock or other consideration shall be delivered in exchange therefor. For purposes of this Agreement, “Subsidiary” shall have the meaning given that term in Item 210.1-02 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”).

(d) Certificates for fractions of shares of TriCo Common Stock will not be issued. In lieu of a fraction of a3.06, each share of TriCo Common Stock, each holder of North Valley Common Stock entitled to a fraction of a share of TriCo Common Stock pursuant to this Agreement shall be entitled to receive an amount of cash equal to such fraction of a share of TriCo Common Stock multiplied by the weighted average of the closing prices for shares of TriCo Common Stock as quoted on NASDAQ for the twenty (20) consecutive trading days ending on the trading day immediately prior to the Closing Date. Following consummation of the Merger, no holder of North Valley Common Stock shall be entitled to dividends or any other rights in respect of any such fraction.

1.5.TriCo Common Stock. Each share of TriCoFNBB Common Stock issued and outstanding immediately prior to the Effective Time shall be unchangedconverted into, and shall remain issued and outstanding as common stock of the Surviving Corporation.

1.6.Stock Options. At the Effective Time, each option to purchase shares of North Valley Common Stock (a “North Valley Option”) granted by North Valley pursuant to the North Valley Bancorp 1998 Employee Stock Incentive Plan, the North Valley Bancorp 1999 Director Stock Option Plan, and the North Valley Bancorp 2008 Incentive Plan, each such Plan governed by the laws of the state of California (collectively, the “North Valley Option Plans”), that is outstanding and unexercised immediately prior to the Effective Time shall be treatedcanceled in accordance with Section 6.16.

1.7.Articles of Incorporation. At the Effective Time, the Articles of Incorporation of TriCo, as in effect at the Effective Time, shall be the Articles of Incorporation of the Surviving Corporation.

1.8.Bylaws. At the Effective Time, the Bylaws of TriCo, as in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Corporation.

1.9.Directors and Officers. Subject to Section 6.15, at the Effective Time, the directors and officers of TriCo immediately prior to the Effective Time shall continue to be directors and officers of the Surviving Corporation.

1.10.Tax Consequences. It is intended that the Merger, either alone or in conjunction with the Bank Merger, and the Bank Merger shall constitute a reorganization within the meaning of Section 368(a) of the Code, and that this Agreement shall constitute a “plan of reorganization”exchange for, the purposes of the Code.

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1.11.Accounting Treatment. It is intended that the Merger shall be accounted for as a “purchase” under accounting principles generally accepted in the United States of America (“GAAP”).

ARTICLE II.

EXCHANGE OF SHARES

2.1.TriCoright to Make Cash and Shares Available. Prior to the Effective Time, TriCo shall appoint TriCo’s transfer agent, Computershare, or such other similarly-qualified bank, trust company or transfer agent as TriCo may select (the “Exchange Agent”) and provide the Exchange Agent with appropriate instructions regarding the matters described in this Article II, in form and substance reasonably acceptable to TriCo and North Valley, all in accordance with the provisions of an agreement (the “Exchange Agent Agreement”) executed between TriCo and the Exchange Agent. At or prior to the Effective Time, TriCo shall deposit, or shall cause to be deposited, with the Exchange Agent, for the benefit of the holders of Certificates, for exchange in accordance with this Article II, certificates representing thereceive 0.98 shares of TriCo Common Stock and cash(as may be adjusted as provided in lieu of fractional shares (such certificates and cash forthis Agreement, the “Exchange Ratio”). Any shares of TriCoFNBB Common Stock being hereinafter referredowned by FNBB as treasury stock or owned, directly or indirectly, by FNBB, TriCo or any of TriCo’s subsidiaries (other than those held in a fiduciary capacity or as a result of debts previously contracted) shall automatically be cancelled and retired and shall cease to asexist at the Effective Time of the Merger and no consideration shall be issued in exchange therefor.

3.02Exchange Fund”)Procedures.

(a)Mailing of Transmittal Material. Provided that FNBB has delivered, or caused to be issued pursuantdelivered, to Section 1.4 and paid pursuant to Section 2.2(a) hereof in exchangeComputershare, Inc. (the “Exchange Agent”) all information which is reasonably necessary for outstanding shares of North Valley Common Stock. All fees, expenses and cost reimbursements payable to the Exchange Agent pursuant to perform its obligations as specified herein, the Exchange Agent Agreement shall, be forpromptly following the account of TriCo.

2.2.Exchange of Shares.

(a) As soon as practicable but not laterEffective Date (but in no event more than five (5) Business Days after the Effective Time, TriCo shall cause the Exchange Agent toDate), mail and otherwise make available to each holder of record of FNBB Common Stock, a Certificate or Certificatesnotice and a form of letter of transmittal, in a form and substance reasonably acceptable to, TriCo and North Valley,approved in writing by, FNBB (which shall specify that delivery shall be effected, and risk of loss and title to the Certificatessuch Certificate(s) theretofore representing shares of FNBB Common Stock shall pass, only upon proper delivery of the Certificatessuch Certificate(s) to the Exchange Agent or transfer of Book-Entry Shares to the Exchange Agent) plus instructions, advising such holder of the effectiveness of the Merger and the procedure for use ofsurrendering to the Exchange Agent such Certificate(s) or Book-Entry Shares in exchange for the Merger Consideration to which such holder may be entitled pursuant to Section 3.01(b) hereof. A letter of transmittal in effectingwill be properly completed only if accompanied by Certificate or Certificates or instructions to transfer Book-Entry Shares representing all shares of FNBB Common Stock covered thereby, subject to the surrenderprovisions of paragraph (d) of this Section 3.02.

(b)TriCo Deliveries. At the Effective Time, for the benefit of the holders of Certificates and/or Book-Entry Shares, TriCo shall deliver to the Exchange Agent certificates, or at TriCo’s option, evidence of shares in book entry form, representing the number of shares of TriCo Common Stock issuable to the holders of FNBB Common Stock as the Merger Consideration, to be given to the holders of FNBB Common Stock in exchange for certificates representingtheir Certificates and Book-Entry Shares as provided for in thisArticle III. The Exchange Agent shall not be entitled to vote or exercise any rights of ownership with respect to the shares of TriCo Common Stock held by it from time to time hereunder, except that it shall receive and hold all dividends or other distributions paid or distributed with respect to such shares for the cash in lieuaccount of fractional shares into which the sharesPersons entitled thereto.

(c)Exchange Agent Deliveries.

(i) Each holder of North Valley Common Stock represented byan outstanding Certificate or Certificates or Book-Entry Shares who has surrendered such Certificate or Certificates shall have been converted pursuant to this Agreement. Upon surrender of a Certificate for exchange and cancellation to the Exchange Agent together with such letter of transmittal, duly executed,will, upon acceptance thereof by the holder of such Certificate shallExchange Agent, be entitled to receive promptlyevidence of issuance in exchange therefor (x)book entry form, or upon written request of such holder, a certificate or certificates representing, thatthe number of whole shares of TriCo Common Stock tointo which such holderthe aggregate number of North Valleyshares of FNBB Common Stock shall have become entitled pursuant to the provisions hereof and (y) a check representing the amount of cash in lieu of a fractional share, if any, whichpreviously represented by such holder has the right to receive in respect of the Certificate surrendered pursuant to the provisions of this Article II, which certificate for shares of TriCo Common Stock and check representing cash in lieu of fractional shares shall be mailed to each such holder not later than ten (10) days following receipt by the Exchange Agent of the Certificate or Certificates and a duly executed letter of transmittal, and the Certificate

or Certificates soBook-Entry Shares surrendered shall forthwith be canceled. No interest will behave been converted pursuant to this Agreement and any other distribution theretofore paid or accrued on the cash in lieu of fractional shares, unpaid dividends, and distributions, if any, payable to holders of Certificates.

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(b) No dividends or other distributions declared after the Effective Time with respect to TriCo Common Stock issuable in the Merger, in each case, without interest. The Exchange Agent shall accept such Certificates or Book-Entry Shares upon compliance with such reasonable terms and payableconditions as the Exchange Agent may impose consistent with the notice and form of letter of transmittal to the holders of recordeffect an orderly exchange thereof shall be paid to the holder of any unsurrendered Certificate until the holder thereof shall surrender such Certificate in accordance with this Article II. After the surrender of anormal exchange practices.

(ii) Each outstanding Certificate or CertificatesBook-Entry Share which prior to the Effective Time represented FNBB Common Stock and which is not surrendered to the Exchange Agent in accordance with this Article II, the record holder thereofprocedures provided for herein shall, except as otherwise herein provided, until duly surrendered to the Exchange Agent, be entitleddeemed to receive any such dividends or other distributions, without any interest thereon, which theretofore had become payable with respect toevidence ownership of the number of shares of TriCo Common Stock represented byinto which such Certificate.FNBB Common Stock shall have been converted. After the Effective Time, there shall be no further transfer on the records of FNBB of Certificates or Book-Entry Shares representing shares of FNBB Common Stock and, if such Certificates or Book-Entry Shares are presented to FNBB for transfer, they shall be cancelled against delivery of certificates for TriCo Common Stock as hereinabove provided. No dividends which have been declared will be remitted to any Person entitled to receive shares of TriCo Common Stock under Section 3.01 until such Person surrenders the Certificate or Certificates or Book-Entry Shares representing FNBB Common Stock, at which time such dividends shall be remitted to such Person, without interest.

(c) If any(d)Lost or Destroyed Certificates; Issuances of TriCo Common Stock in New Names. The Exchange Agent and TriCo, as the case may be, shall not be obligated to deliver a certificate or certificates representing shares of TriCo Common Stock isto which a holder of FNBB Common Stock would otherwise be entitled as a result of the Merger until such holder surrenders the Certificate or Certificates representing the shares of FNBB Common Stock for exchange as provided in this Section 3.02, or, in default thereof, an appropriate affidavit of loss and indemnity agreement and/or a bond in an amount as may be reasonably required in each case by TriCo. If any certificates evidencing shares of TriCo Common Stock are to be issued in a name other than that in which the Certificate evidencing FNBB Common Stock surrendered in exchange therefortherefore is registered, it shall be a condition of the issuance thereof that the Certificate so surrendered shall be properly endorsed (oror accompanied by an appropriate instrumentexecuted form of transfer)assignment separate from the Certificate and otherwise in proper form for transfer and that the personPerson requesting such exchange shall pay to the Exchange Agent in advance any transfer or other taxes or applicable feesTax required by reason of the issuance of a certificate representingfor shares of TriCo Common Stock in any name other than that of the registered holder of the Certificate surrendered or shallotherwise establish to the satisfaction of the Exchange Agent that such taxTax has been paid or is not payable.

(d) After the Effective Time, there shall be no transfers entered on the stock transfer books of North Valley or otherwise(e)Unclaimed Merger Consideration. Any portion of the shares of North Valley Common Stock that were issued and outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates representing such shares are presented for transfer to the Exchange Agent, they shall be canceled and exchanged for certificates representing shares of TriCo Common Stock delivered to the Exchange Agent by TriCo pursuant to Section 3.02(b) that remains unclaimed by the shareholders of FNBB for twelve (12) months after the Effective Time (as well as any proceeds from any investment thereof) shall be delivered by the Exchange Agent to TriCo. Any shareholders of FNBB who have not theretofore complied with Section 3.02(c) shall thereafter look only to TriCo for the consideration deliverable in respect of each share of FNBB Common Stock such shareholder holds as determined pursuant to this Agreement without any interest thereon. If outstanding Certificates or Book-Entry Shares are not surrendered or the payment for them is not claimed prior to the date on which such shares of TriCo Common Stock would otherwise escheat to any governmental unit or agency, the unclaimed items shall, to the extent permitted by abandoned property and cashany other applicable law, become the property of TriCo (and to the extent not in lieuits possession shall be delivered to it), free and clear of fractional shares as provided inall claims or interest of any Person previously entitled to such property. Neither the Exchange Agent nor any party to this Article II.

(e) EachAgreement shall be liable to any holder of stock represented by any Certificate or Book-Entry Share for any consideration paid to a public official pursuant to applicable abandoned property, escheat or similar laws. TriCo and the Exchange Agent shall be entitled to rely upon the stock transfer books of FNBB to establish the identity of those Persons entitled to receive the consideration specified in this Agreement, which books shall be conclusive (absent manifest error) with respect thereto. In the event of a dispute with respect to ownership of stock represented by any Certificate or Book-Entry Share, TriCo and the Exchange Agent shall be entitled to deposit any consideration represented thereby in escrow with an independent third party and thereafter be relieved with respect to any claims thereto.

3.03Rights as Shareholders. At the Effective Time, holders of FNBB Common Stock shall cease to be, and shall have no rights as, shareholders of FNBB other than to receive the consideration provided for under thisArticle III.

3.04No Fractional Shares. Notwithstanding any other provision of this Agreement, neither certificates nor scrip for fractional shares of TriCo Common Stock shall be issued in the Merger. Each holder of FNBB Common Stock who otherwise would have been entitled to a fraction of a share of TriCo Common Stock (after taking into account all Certificates or Book-Entry Shares delivered by such holder) shall receive in lieu thereof cash (without interest) in an amount determined by multiplying the fractional share interest to which such holder would otherwise be entitled by the TriCo Average Closing Price, rounded to the nearest whole cent. No such holder shall be entitled to dividends, voting rights or any other rights in respect of any fractional share.

3.05Anti-Dilution Provisions. If, between the date hereof and the Effective Time, the shares of TriCo Common Stock shall be changed into a different number or class of shares by reason of any reclassification, recapitalization,split-up, combination, exchange of shares or readjustment, or similar transaction, or a stock dividend thereon shall be declared with a record date within said period, the Merger Consideration and Exchange Ratio shall be adjusted accordingly; provided that a bona fide offering or sale of TriCo Common Stock for fair value received shall not be deemed a reclassification, recapitalization,split-up, combination, exchange of shares or readjustment of the TriCo Common Stock.

3.06Withholding Rights. TriCo (through the Exchange Agent, if applicable) shall be entitled to deduct and withhold from any considerationamounts otherwise payable from the Exchange Fund pursuant to this Agreement to any holder of North Valleyshares of FNBB Common Stock such amounts as the Exchange Agent or TriCo as the case may be, is required to deduct and withhold under the Code or any provision of state, local or foreign tax Law,Tax law or regulation thereunder to deduct and withhold with respect to the making of such payment. To the extent theAny amounts are so withheld by TriCo orshall be timely remitted to the Exchange Agent, as the case may be, such withheld amountsapplicable Governmental Entity and shall be treated for all purposes of this Agreement as having been paid to the holder of shares of North ValleyFNBB Common Stock in respect of whomwhich such deduction and withholding was made by TriCo.

3.07FNBB Options.

(a) At the Effective Time, each FNBB Option, whether vested or unvested, shall be cancelled and shall only entitle the holder of such FNBB Option to receive, as soon as administratively practicable after the Effective Time, an amount in cash equal to the product of (i) the total number of shares of FNBB Common Stock subject to such FNBB Option multiplied by (ii) the amount, if any, that the product of the TriCo orAverage Closing Price multiplied by the Exchange Agent, asRatio exceeds the case may be.

(f) In the eventexercise price per share of such FNBB Option,less any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificateapplicable Taxes required to be lost, stolen or destroyed and, if required by TriCo, the posting by such person of a bond in such amount as TriCo may reasonably direct as indemnity against any claim that may be made against itwithheld with respect to such Certificatepayment (such amount, the “Option Consideration”);provided that to the extent reasonably practicable and permitted by Code Section 409A, TriCo may elect to fund the Option Consideration to be paid with respect to FNBB Options by funding the necessary amounts to the payroll processor of FNBB or TriCo or any of their respective Affiliates (the “Payroll Processor”) for payment by the Payroll Processor of the Option Consideration to the applicable holders of such FNBB Options. For the avoidance of doubt, any FNBB Option which has an exercise price per share of FNBB Common Stock that is greater than or equal to the product of the TriCo Average Closing Price multiplied by the Exchange Ratio shall be cancelled at the Effective Time for no consideration or payment.

(b) At least fifteen (15) days prior to the Closing Date and prior to any such person’s expensepayment, FNBB shall obtain a written acknowledgement and waiver (in form and substance reasonably satisfactory to FNBB and TriCo) from each holder of an FNBB Option (i) confirming the number of FNBB Options held (and shares of FNBB Common Stock subject to such person’s paymentFNBB Options), (ii) confirming that the treatment of such FNBB Options pursuant to this Agreement and the amounts to be paid pursuant to this Agreement have been correctly calculated and (iii) acknowledging that in consideration for the cancellation of such FNBB Option, the holder agrees to accept the Option Consideration. FNBB shall provide a copy of each such acknowledgement and waiver to TriCo at least five (5) Business Days prior to the Closing Date.

(c) Prior to the Effective Time, the FNBB Board shall adopt any necessary resolutions and take any actions necessary to (i) effectuate the provisions of Section 3.07(a) and 3.07(b) and (ii) cause all FNBB Options to vest in full as of the Effective Time to the extent permitted under the applicable FNBB Option Plan and be terminated as of the Effective Time.

ARTICLE IV

ACTIONS PENDING ACQUISITION

4.01Forbearances of FNBB. From the date hereof until the Effective Time, except as expressly contemplated or permitted by this Agreement, as required by applicable law, or with the prior written consent of TriCo, FNBB will not, and will cause each of its Subsidiaries not to:

(a)Ordinary Course. Conduct its business other than in the ordinary and usual course consistent with past practice or fail to use all commercially reasonable efforts consistent with past practice and its policies as in effect on this date of this Agreement, to preserve its business organization, keep available the present services of its officers and employees (except in the case of terminations of officers and employees for cause) and preserve for itself and TriCo the goodwill of the customers of FNBB and its Subsidiaries and others with whom business relations exist.

(b)Capital Stock. Other than pursuant to Rights set forth on Section 4.01(b) of FNBB’s Disclosure Schedule and outstanding on the date hereof, (i) issue, sell or otherwise permit to become outstanding, or authorize the creation of, any related feesadditional shares of FNBB capital stock or any Rights or (ii) permit any additional shares of FNBB capital stock to become subject to grants of employee or director stock options or other Rights.

(c)Dividends; Reclassifications; Etc.

(i) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of FNBB capital stock, other than regular quarterly cash dividends on FNBB capital stock not greater than the rate paid during the fiscal quarter immediately preceding the date of this Agreement and with record and payment dates consistent with past practice,provided however, FNBB shall not make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of FNBB capital stock that would cause, or could be reasonably expected to cause, FNBB to fail to satisfy the condition to Closing set forth in Section 7.03(c).

(ii) Directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of FNBB capital stock.

(d)Compensation; Employment Agreements; Etc. Enter into or amend or renew any employment, consulting, severance, change in control, retention, bonus, salary continuation or similar agreements or arrangements with any director or executive officer of FNBB or its Subsidiaries or grant or pay any salary or wage increase, grant any severance or termination pay (other than pursuant to an existing severance arrangement or policy in effect on the date of this Agreement and disclosed in Section 4.01(d) of FNBB’s Disclosure Schedule), increase any employee benefit (including incentive or bonus payments), except for changes that are required by applicable law or payments made in accordance with FNBB’s existing employee benefit plans and set forth in Section 4.01(d) of FNBB’s Disclosure Schedule, or pay any other bonuses or incentives other than pursuant to an incentive plan, agreement, plan or policy of FNBB or First National Bank in effect as of the Exchange Agent,date hereof and set forth in Section 4.01(d) of FNBB’s Disclosure Schedule and in a manner consistent with past practice.

(e)Hiring. Hire any person as an employee of FNBB or any of its Subsidiaries or promote any employee, except (i) to satisfy contractual obligations existing as of the Exchange Agentdate hereof and set forth on

Section 4.01(e) of FNBB’s Disclosure Schedule and (ii) persons hired to fill any vacancies either existing as of the date hereof and set forth in Section 4.01(e) of FNBB’s Disclosure Schedule or arising after the date hereof whose employment is terminable at the will issueof FNBB or a Subsidiary of FNBB and who are not subject to or eligible for any severance or similar benefits or payments that would become payable as a result of the Transaction or consummation thereof and at an annual base salary or wage rate and with a target cash bonus opportunity not greater than that of the employee who previously held such position, or enter into any agreement with a labor union, guild or association representing any employee.

(f)Benefit Plans. Enter into, establish, adopt, amend or terminate, or make any contributions to (except to satisfy contractual obligations existing as of the date hereof and set forth in exchangeSection 4.01(f) of FNBB’s Disclosure Schedule), any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement, or any trust agreement (or similar arrangement) related thereto, in respect of any current or former director, officer or employee of FNBB or, other than as contemplated by Section 3.07, take any action to accelerate the vesting or exercisability of FNBB Options or other compensation or benefits payable thereunder.

(g)Dispositions. Sell, transfer, mortgage, encumber or otherwise dispose of or discontinue any of its material assets, deposits, business or properties, except for sales, transfers, mortgages, encumbrances, dispositions or discontinuances which are in the ordinary course of business and consistent with past practices and are not material to FNBB and its Subsidiaries taken as a whole.

(h)Acquisitions. Acquire (other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary and usual course of business consistent with past practice), including without limitation, by merger or consolidation or by investment in a partnership or joint venture, all or any portion of the assets, business, securities, deposits or properties of any other entity.

(i)Capital Expenditures. Make any capital expenditures, other than capital expenditures in the ordinary course of business consistent with past practice in amounts not exceeding $50,000 individually or $100,000 in the aggregate.

(j)Governing Documents. Amend the FNBB Articles, the FNBB Bylaws or the articles of incorporation or bylaws (or equivalent documents) of any Subsidiary of FNBB.

(k)Accounting Methods. (i) Implement or adopt any change in FNBB’s book or tax accounting principles, practices or methods, other than as may be required by GAAP, and as concurred in by FNBB’s independent public accountants, or as required by Section 6.08 of this Agreement or (ii) except as may be required by GAAP, and in the ordinary course of business consistent with past practice, revalue in any material respect any of its assets (including any contract, agreement or understanding that would be a Material Contract as a result of entering into, modifying or amending such lost, stolencontract, agreement or destroyed Certificateunderstanding), other than in the ordinary course of business consistent with past practice.

(l)Contracts. Except as otherwise permitted under Section 4.01 hereof, enter into, cancel, fail to renew or terminate any Material Contract or amend or modify in any material respect any of its existing Material Contracts.

(m)Claims. Except as set forth in Section 5.03(p)(iii) of FNBB’s Disclosure Schedule, enter into any settlement or similar agreement with respect to any action, suit, proceeding, order or investigation to which FNBB or any of its Subsidiaries is or becomes a party after the date of this Agreement, which settlement, agreement or action involves payment by FNBB or any of its Subsidiaries of an amount which exceeds $50,000 and/or would impose any material restriction on the business of FNBB or any of its Subsidiaries or create precedent for claims that are reasonably likely to be material to FNBB and its Subsidiaries taken as a whole.

(n)New Business. Enter into any new material line of business; introduce any material new products or services; acquire any brokered deposits, change its material lending, investment, underwriting, loan, deposit or fee pricing, servicing, risk and asset liability management and other material banking and operating policies, except as required by applicable law, regulation or policies imposed by any Governmental Entity, or the manner in which its investment securities or loan portfolio is classified or reported; or invest in any mortgage-backed or mortgage-related security that would be risk-weighted over 100% according to BASEL III regulatory capital guidelines.

(o)Branches and Offices. File any application or enter into any contract with respect to the opening, relocation or closing of, or open, relocate or close, any branch, office, service center or other facility.

(p)Marketing.Introduce any material marketing campaigns or any material new sales compensation or incentive programs or arrangements (except those the material terms of which have been fully disclosed in writing to TriCo prior to the date hereof).

(q)Derivatives Contracts. Purchase or enter into any Derivatives Contract.

(r)Indebtedness.Incur any indebtedness for borrowed money (other than deposits, federal funds purchased, cash management accounts, Federal Home Loan Bank and FRB borrowings that mature within ninety (90) days and that have no put or call features and securities sold under agreements to repurchase that mature within ninety (90) days, in each case, in the ordinary course of business consistent with past practice); or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person, other than with respect to the collection of checks and other negotiable instruments in the ordinary course of business consistent with past practice.

(s)Investment Securities. (i) Make any investment either by contributions to capital, property transfers or purchases of any property or assets of any Person or any Equity Investment, (ii) other than purchases of direct obligations of the United States of America or obligations of United States government agencies which are entitled to the full faith and credit of the United States of America, in any case with a remaining maturity at the time of purchase of six months or less, purchase or acquire securities of any type or (iii) dispose of any debt security or Equity Investment, except to the extent that FNBB provides written notice to TriCo including a description of its proposal to take any of the actions described in the forgoing subsections (i), (ii) or (iii) and TriCo does not object to the proposal within three (3) Business Days of its receipt of such notice.

(t)Loans.(i) Make, renew or otherwise modify any loan, loan commitment, letter of credit or other extension of credit (collectively, “Loans”), other than Loans made in the ordinary course of business, consistent with past practice, that are not in excess of $1.0 million individually; (ii) take any action that would result in any discretionary release of collateral or guarantees or otherwise restructure the respective amounts set forth in clause (i) above; (iii) enter into any Loan securitization or create any special purpose funding entity; or (iv) enter into any Loan participation agreement or arrangement, other than a loan participation entered into in the ordinary course of business consistent with past practice where FNBB’s or any Subsidiary’s exposure does not exceed $1.0 million. FNBB and its Subsidiaries can make, renew or modify Loans or Loan participations that exceed the foregoing dollar limitations to the extent FNBB provides to TriCo in writing a complete Loan Credit Memo for each Loan or Loan Participation from $1.0 million to $2.5 million and a complete Loan package for each Loan or Loan participation in excess of $2.5 million and TriCo does not object to such proposed Loan or Loan participation within three (3) Business Days of receipt of such Loan Credit Memo or complete Loan package.

(u)Investments in Real Estate.Make any investment or commitment to invest in real estate or in any real estate development project (other than by way of foreclosure or acquisitions in a bona fide fiduciary capacity or in satisfaction of a debt previously contracted in good faith, in each case in the ordinary course of business consistent with past practice).

(v)Tax Elections.Except as set forth on Section 4.01(v) of FNBB’s Disclosure Schedule, make or change any Tax election, settle or compromise any Tax liability of FNBB or any of its Subsidiaries, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of an amount of Taxes of FNBB or any of its Subsidiaries (or the assets and liabilities of FNBB or any of its Subsidiaries), enter into any closing agreement with respect to any amount of Taxes or surrender any right to claim a Tax refund, adopt or change any method of accounting with respect to Taxes, or file any amended Tax Return.

(w)Antitakeover Statutes.Take any action (i) that would cause this Agreement or the Transaction to be subject to the provisions of any state antitakeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares or (ii) to exempt or make not subject to the provisions of any state antitakeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares, any Person (other than TriCo or its Subsidiaries) or any action taken thereby, which Person or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom.

(x)Transactions with Insiders.Make or propose to make any loan to or enter into any transaction with FNBB, any of its Subsidiaries, or any of their respective directors or executive officers or any Affiliate thereof, provided that First National Bank may make Loans compliant with Regulation O promulgated by the FRB and First National Bank’s policies in effect as of the date of this Agreement to its directors and executive officers to the extent it has provided TriCo in writing information with respect to any such proposed Loan and TriCo does not object to such proposed Loan within three (3) Business Days of receipt of such written notice, and provided further that First National Bank may renew existing Loans compliant with Regulation O promulgated by the FRB and First National Bank’s policies in effect as of the date of this Agreement to its directors and executive officers in the event the term of any such Loan outstanding as of the date hereof expires prior to the consummation of the Transaction or the earlier termination of this Agreement pursuant to Article VIII hereof.

(y)Adverse Actions.Take any action that would or is reasonably likely to result in (i) the Merger not qualifying as a reorganization within the meaning of Section 368(a) of the Code, (ii) any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time at or prior to the Effective Time, (iii) any of the conditions to the Merger set forth inArticle VII not being satisfied, (iv) a material violation of any provision of this Agreement, except as may be required by applicable law or regulation, (v) a material delay in the ability of TriCo or FNBB to perform any of their obligations under this Agreement on a timely basis, or (vi) a material delay in the ability of TriCo to obtain any necessary approvals of any Governmental Entity required for the transactions contemplated hereby.

(z)Consent and Absence of Changes.Unreasonably withhold, delay or condition FNBB’s prior written consent or approval as may be reasonably requested by TriCo, or fail to promptly notify TriCo of any change, occurrence or event not in the ordinary course of the business of FNBB or any of its Subsidiaries and of any change, occurrence or event which, individually or in the aggregate with any other changes, occurrences and events, would reasonably be expected to cause any of the conditions to Closing inArticle VII of this Agreement not to be satisfied.

(aa)Commitments.Enter into any contract with respect to, or otherwise agree or commit to do, any of the foregoing.

4.02Forbearances of TriCo.From the date hereof until the Effective Time, except as expressly contemplated or permitted by this Agreement, as required by applicable law, or with the prior written consent of FNBB, TriCo will not, and will cause each of its Subsidiaries not to:

(a)Ordinary Course. Conduct its business other than in the ordinary and usual course consistent with past practice or fail to use all commercially reasonable efforts consistent with past practice to preserve its business organization and preserve for itself and FNBB the goodwill of the customers of TriCo and its Subsidiaries and others with whom business relations exist.

(b)Adverse Actions. Take any action that would or is reasonably likely to result in (i) the Merger not qualifying as a reorganization within the meaning of Section 368(a) of the Code, (ii) any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time at or prior to the Effective Time, (iii) any of the conditions to the Merger set forth inArticle VII not being satisfied, (iv) a material violation of any provision of this Agreement, except as may be required by applicable law or regulation or (v) a material delay in the ability of TriCo or FNBB to perform any of their obligations under this Agreement on a timely basis, or (vi) a material delay in the ability of TriCo to obtain any necessary approvals of any Governmental Entity required for the transactions contemplated hereby.

(c)Antitakeover Statutes.Take any action (i) that would cause this Agreement or the Transaction to be subject to the provisions of any state antitakeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares or (ii) to exempt or make not subject to the provisions of any state antitakeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares, any Person (other than FNBB or its Subsidiaries) or any action taken thereby, which Person or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom.

(d)Third Party Offer. Accept any offer from any third party involving TriCo or its Subsidiaries in a business combination with such third party or other entity, unless such offer is expressly conditioned upon the performance by TriCo (or the successor in interest of TriCo) of all of its obligations under this Agreement in a manner such that holders of FNBB Common Stock entitled to receive TriCo Common Stock in the Merger would receive, on account of the shares of TriCo Common Stock and cash payable to holders of FNBB Options that they would be entitled to receive in lieu of fractional shares deliverable in respect thereofthe Merger pursuant to the terms of this Agreement.

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(g) Any portionAgreement, subject to completion of the Exchange Fund that remains unclaimed byMerger, the shareholders of North Valley for twelve (12) months aftersame consideration in the Effective Time shall be returned to TriCo. Any shareholders of North Valley who have not theretofore complied with this Article II shall thereafter look only to TriCo or TriCo’s designated representative for payment of their sharesbusiness combination, if completed, as other holders of TriCo Common Stock, cashStock.

(e)Notice of Changes.Fail to promptly notify FNBB of any change, occurrence or event not in lieuthe ordinary course of fractional sharesthe business of TriCo or any of its Subsidiaries and unpaid dividendsof any change, occurrence or event which, individually or in the aggregate with any other changes, occurrences and distributions on TriCo Common Stock deliverableevents, would reasonably be expected to cause any of the conditions to Closing in respectArticle VII of each share of North Valley Common Stock such shareholder holds as determined pursuant to this Agreement in each case, withoutnot to be satisfied.

(f)Commitments.Enter into any interest thereon. Notwithstandingcontract with respect to, or otherwise agree or commit to do, any of the foregoing, none offoregoing.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

5.01Disclosure Schedules.On or prior to the date hereof, TriCo North Valley, the Exchange Agent or any other person shall be liable to any former holder of shares of North Valley Common Stock for any amount properlyhas delivered to FNBB a public official pursuantschedule and FNBB has delivered to applicable abandoned property, escheatTriCo a schedule (each respectively, its “Disclosure Schedule”) setting forth, among other things, items the disclosure of which is necessary or similar laws.appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 5.03 or 5.04 or to one or more of its covenants contained inArticles IV orVI;provided, however, that the mere inclusion of an item in a Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by a party that such item represents a material exception or fact, event or circumstance or that, absent such inclusion in the Disclosure Schedule, such item is or would be reasonably likely to result in a Material Adverse Effect.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF NORTH VALLEY

Subject to5.02Standard.Solely for the disclosurespurposes of determining whether the conditions set forth in Sections 7.02(a) or 7.03(a), as the disclosure lettercase may be, have been satisfied (and without otherwise qualifying any representation or warranty made on the date hereof), no representation or warranty of North Valley deliveredFNBB on the one hand or TriCo on the other hand contained in Sections 5.03 or 5.04, respectively (other than (a) the representations of FNBB contained in

Section 5.03(b), which shall be true in all respects, except to TriCo concurrently withade minimis extent (relative to Section 5.03(b) taken as a whole), (b) the parties’ executionrepresentations of this Agreement (the “North Valley Disclosure Letter”) (each of which disclosures,FNBB contained in order to be effective, shall clearly indicate the SectionSections 5.03(d), 5.03(e), 5.03(g)(iii) and if applicable, the Subsection of this Article III to which it relates (unless and to the extent the relevance to other representations and warranties is readily apparent from the actual text of the disclosures)5.03(i), and eachthe representations of TriCo contained in Section 5.04(g)(ii), which disclosures shall alsobe true and correct in all respects, and (c) the representations of FNBB contained in Section 5.03(m)(v), which shall be true in all material respects) shall be deemed untrue or incorrect for purposes of Sections 7.02(a) or 7.03(a), and no party hereto shall be deemed to be representations and warranties made by North Valley to TriCo under this Article III), North Valley hereby makes the following representations and warranties to TriCo, eachhave breached a representation or warranty for purposes of which is being relied upon by TriCosuch Sections, as a material inducementconsequence of the existence of any fact, event or circumstance unless such fact, circumstance or event, individually or taken together with all other facts, events or circumstances inconsistent with any representation or warranty contained in Sections 5.03 or 5.04, has had or is reasonably likely to TriCohave a Material Adverse Effect on the party making such representation or warranty.

5.03Representations and Warranties of FNBB.Subject to enter intoSections 5.01 and perform this Agreement.

3.1.Corporate Organization.5.02, FNBB hereby represents and warrants to TriCo:

(a) North ValleyOrganization, Standing and Authority.FNBB is a corporation duly organized, and validly existing and in good standing under the laws of the State of California. North Valley and its Subsidiaries have the corporate and other power and authority to own or lease all of their properties and assets and to carry on their business as itFNBB is now being conducted and are duly licensed or qualified to do business and is in good standing in each jurisdiction in which the naturewhere its ownership or leasing of any material business conducted by themproperty or assets or the characterconduct of its business requires it to be so licensed or location of any material properties or assets owned or leased by them makes such licensing or qualification necessary,qualified, except where the failure to be so licensed or qualified would not have nor reasonably be expected to have a Material Adverse Effect (as defined below) on North Valley. North Valley is duly registered as a bank holding company with the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). North Valley Bank, North Valley Trading Company, which is inactive, North Valley Capital Trust II, North Valley Capital Trust III, and North Valley Capital Trust IV are the only direct or indirect Subsidiaries of North Valley. Section 3.1(a) of the North Valley Disclosure Letter sets forth true, correct and complete copies of the Articles of Incorporation and Bylaws of North Valley and North Valley Bank asFNBB. FNBB has in effect as of the date of this Agreement.

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(b) North Valley Bank is a Californiaall federal, state, chartered bank organizedlocal and validly existing under the laws of California. The deposit accounts of North Valley Bank are insured by the Federal Deposit Insurance Corporation (the “FDIC”) to the fullest extent permitted by Law (as defined in Section 3.3), and all premiums and assessments due the FDIC in connection therewith have been paid by North Valley Bank. As of the date hereof, North Valley Bank is “well-capitalized” (as that term is defined at 12 C.F.R. Section 325.103). North Valley Bank has the corporate and other power and authorityforeign governmental authorizations necessary for it to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business in each jurisdiction in which the nature of any material business conducted by it or the character or location of any material properties or assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not have a Material Adverse Effect on North Valley. Neither North Valley Bank, North Valley nor any Subsidiary of North Valley engages in the trust business or serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor for any fiduciary accounts. Section 3.1(b) of the North Valley Disclosure Letter sets forth true, correct and completeconducted. The copies of the FNBB Articles and FNBB Bylaws set forth in Section 5.03(a) of IncorporationFNBB’s Disclosure Schedule are true, complete and Bylawscorrect copies of North Valley Banksuch documents as in effect as ofon the date of this Agreement.

(c) The minute books of North ValleyFNBB and each of its Subsidiaries previously made available to TriCo contain true, complete and correct records in all material respects contain accurate records of all meetings and accurately reflect all other material corporate actions held or taken by the shareholders,of their respective shareholders and Boards of Directors and all standing(including committees of their respective BoardsBoard of Directors.Directors) through the date hereof.

(d) The term “Material Adverse Effect” with respect to TriCo or North Valley, as the case may be, means a condition, event, change or occurrence that has had or is reasonably likely to have a material adverse effect upon the financial condition, results of operations or business of such party and its Subsidiaries, taken as a whole, or materially impairs the ability of such party to perform its obligations under, or to consummate the transactions contemplated by, this Agreement;(b)provided, however,FNBB Capital Stock. that in determining whether a Material Adverse Effect has occurred there shall be excluded any effect on the referenced party the cause of which is (i) any change in banking or similar laws, rules or regulations of general applicability or interpretations thereof by courts or governmental authorities, (ii) any change in GAAP or regulatory accounting requirements applicable to banks or their holding companies generally, (iii) any action or omission of TriCo, North Valley or any Subsidiary of either of them taken with the prior written consent of TriCo or North Valley, as applicable, or as otherwise expressly contemplated by this Agreement, (iv) any changes in general economic, market or political conditions affecting banks or their holding companies generally, (v) the impact of the announcement of this Agreement and the transactions contemplated hereby, (vi) changes in national or international political or social conditions including the engagement by the United States in hostilities whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon or within the United States, or any of its territories, possessions or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, unless it uniquely affects either or both of the parties, provided that the effect of such changes described in clauses (iv), and (vi) hereof shall not be excluded to the extent of any materially disproportionate impact (if any) they have on such party.

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3.2.Capitalization.

(a) The authorized capital stock of North ValleyFNBB consists solely of 60,000,00010,000,000 shares of North ValleyFNBB Common Stock, of which 7,380,132 shares are issued and outstanding as of the date hereof, and 5,000,000 shares of preferred stock, with no par value (the “North ValleyFNBB Preferred Stock,”). As of the date hereof, there are: (i) 6,836,463 shares of North Valley Common Stock issued and outstanding, including 47,740 shares held by the North Valley Employee Stock Ownership Plan (the “North Valley ESOP”); (ii) no shares of North Valley Common Stock held in North Valley’s treasury; and (iii) no shares of North Valley Common Stock reserved for issuance upon exercise of outstanding stock options or otherwise, except for 378,365 shares of North Valley Common Stock reserved for issuance pursuant to the North Valley Option Plans (of which, collectively, options to purchase 354,710 shares are outstanding at the date hereof). No shares of North Valley Preferred Stock are issued and outstanding or reserved for issuance, except for 125,000 shares of North Valley Preferred Stock designated as Series A Junior Participating Preferred Stock reserved for issuance pursuant to the North Valley Rights Agreement, none of which iswere issued and outstanding as of the date hereof. AllAs of the issued anddate hereof, no shares of FNBB Common Stock were held in treasury by FNBB or otherwise directly or indirectly owned by FNBB. The outstanding shares of North ValleyFNBB Common Stock have been duly authorized and validly issued and are fully paid and nonassessable, and free of preemptive rights.

(b) Allnone of the outstanding stock options granted by North Valleyshares of FNBB Common Stock have been grantedissued in compliance in all material respects with the termsviolation of the applicable North Valley Option Plan and all applicable Laws. Except for the outstanding options, plans and other obligations set forth above, North Valley does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreementspreemptive rights of any character calling for the purchase or issuance of any shares of North Valley Common Stock, North Valley Preferred Stock or any other equity security of North Valley or any securitiesPerson. There are outstanding FNBB Options representing the right to purchase or otherwise receive anyan aggregate of 569,493 shares of North ValleyFNBB Common Stock, North Valley Preferred Stock or any other equity securityStock. Section 5.03(b) of North Valley. With respect to each option outstandingFNBB’s Disclosure Schedule sets forth, as of the date hereof, for each FNBB Option, the name of each optionee, the date of each option to purchase North Valley Common Stock granted, the number of shares subject to each such option and the price at which each such option may be exercised are set forth in Section 3.2(a) of the North Valley Disclosure Letter and no such option expires more than ten (10) years fromgrantee, the date of the grant, thereof. The exercise price of each North Valley Option is no less than the fair market value of a share of common stock of North Valley Bancorp determined on the date of grant of such stock option (and as of any later modification thereof within the meaning of Section 409Astatus of the Code). Each North Valley Option intended to qualifyoption grant as an “incentive stock option”qualified ornon-qualified under Section 422 of the Code, the number of shares of FNBB Common Stock underlying each FNBB Option, the number of shares of FNBB Common Stock subject to FNBB Options that are currently exercisable and the exercise or strike price per share. Each FNBB Option (i) currently has an exercise price that is the same as when first issued and such exercise price is at least equal to the fair market value of the underlying shares of FNBB Common Stock as of the grant date; and (ii) has been structured to so qualify. Each grantissued in compliance with applicable laws. Except for the FNBB Options listed in Section 5.03(b) of a North Valley Option was duly authorizedFNBB’s Disclosure Schedule, there are no later than the date on which the grantshares of such North Valley Option was by its terms to be effective by all necessary corporate action, including, as applicable, approval by the board of directors of North Valley (or a duly constituted and authorized committee thereof), or a duly authorized delegate thereof, and any required shareholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto no later than the date of grant. North Valley hasFNBB Common Stock reserved for issuance, FNBB does not granted, and there is no and has been no North Valley policy or practice to grant, any North Valley Options prior to, or otherwise coordinated the grant of North Valley Options with, the release or other public announcement of material information regarding North Valley or its financial results or prospects. The treatment of the North Valley Options provided for under this Agreement, including but not limited to Section 6.16 hereof, is consistent in all material respects with and not in violation of any document or agreement pertaining to a North Valley Option or a North Valley Option Plan or any applicable Laws.

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(c) Neither North Valley nor any of its Subsidiaries have any authorized,Rights issued or outstanding with respect to FNBB Common Stock or FNBB Preferred Stock and FNBB does not have any commitment to authorize, issue or sell any FNBB Common Stock or FNBB Preferred Stock or Rights. No bonds, debentures, notes or other indebtedness for which the holders thereof havehaving the right to vote on any matters on which shareholders of FNBB may vote are outstanding.

(c)First National Bank.

(i) First National Bank is duly organized, validly existing and in good standing, licensed as a national banking association by the shareholders haveOCC under the rightlaws of the United States of America and is duly qualified to vote. Other than

do business and is in good standing in the North Valley Rights Agreement, there are no registration rights, and there is no voting trust, proxy, rights agreement, “poison pill” anti-takeover planjurisdictions where its ownership or other agreementleasing of property or understanding to which North Valley is a party or by which it is bound with respect to any equity security of any class of North Valley or with respect to any equity security, partnership interest or similar ownership interest of any class of anythe conduct of its Subsidiaries.business requires it to be so qualified. The deposit accounts of First National Bank are insured by the FDIC in the manner and to the maximum extent provided by applicable law and First National Bank has paid all deposit insurance premiums and assessments required by applicable laws and regulations.

(d) North Valley(ii) (A) FNBB directly owns directly or indirectly, all of the issued and outstanding sharesEquity Securities of capital stockFirst National Bank, (B) no Equity Securities of First National Bank are or may become required to be issued (other than to FNBB) by reason of any Right or otherwise, (C) there are no contracts, commitments, understandings or arrangements by which First National Bank is or may be bound to sell or otherwise transfer any of its Subsidiaries,Equity Securities (other than to FNBB), (D) there are no contracts, commitments, understandings, or arrangements relating to FNBB’s right to vote or to dispose of such Equity Securities and (E) all the Equity Securities of First National Bank held by FNBB are fully paid and nonassessable and are owned by FNBB free and clear of all liens, charges, encumbrancesany Liens, except as set forth in Section 5.03(c)(ii) of FNBB’s Disclosure Schedule.

(iii) FNBB has no direct or indirect Subsidiaries other than First National Bank. First National Bank has no direct or indirect Subsidiaries. Except as set forth in Section 5.03(c)(iii) of FNBB’s Disclosure Schedule and securityexcept for securities and other interests whatsoever,held by First National Bank in a fiduciary capacity and allbeneficially owned by third parties or taken in consideration of such shares are duly authorizeddebts previously contracted, ownership interests in First National Bank and validly issued and are fully paid, nonassessable and free of preemptive rights. No North Valley Subsidiary hasstock in the FHLB, FNBB does not own beneficially, directly or is bound byindirectly, any outstanding subscriptions, options, warrants, calls, commitmentsEquity Securities or agreementssimilar interests of any character calling for the purchasePerson or issuanceany interest in a partnership or joint venture of any shareskind.

(d)Corporate Power and Authority.Each of FNBB and its capital stock or any other equity security or any securities representingSubsidiaries has the rightcorporate power and corporate authority to purchase or otherwise receive any shares of capital stock or any other equity security.

3.3.Authority; No Violation.

(a) North Valleycarry on its business as it is now being conducted and to own all its properties and assets; FNBB has fullthe corporate power and corporate authority to execute, deliver and perform its obligations under this Agreement and to consummate the Transaction, and to cause First National Bank to consummate the Bank Merger, and First National Bank has the corporate power and authority to execute, deliver and deliver thisperform its obligations under the Bank Merger Agreement, and,in each case, subject to the receipt of regulatoryall necessary approvals of Governmental Entities and shareholder approvals, to consummate the transactions contemplated hereby. The execution and deliveryapproval of FNBB’s shareholders of this Agreement andAgreement.

(e)Corporate Action; Enforceability.Subject to the consummation of the transactions contemplated hereby have been duly and validly approved by the Board of Directors of North Valley (the “North Valley Board”). The North Valley Board, at a meeting duly called and held, has determined that this Agreement and the transactions contemplated hereby are fair to and in the best interests of the North Valley shareholders and resolved to recommend that the holders of the North Valley Common Stock vote in favor of approval and adoption of this Agreement and the consummation of the transactions contemplated hereby, including the Merger and the Bank Merger. Except for the adoption of this Agreement by the affirmative vote of the holders of a majority of the outstanding shares of North ValleyFNBB Common Stock, (the “Requisite North Valley Vote”), no further corporate proceedings on the part of the North Valley Board, North Valley shareholders or the North Valley Bank Board of Directors (except for matters related to setting the date, time, place and record date for said meeting) are necessary in order to authorize or approve this Agreement, or to consummate the transactions contemplated hereby including the MergerTransaction and the Bank Merger. ThisMerger Agreement have been authorized by all necessary corporate action by FNBB, the FNBB Board, First National Bank, and the First National Bank Board, as applicable, on or prior to the date hereof, and the FNBB Board has beenunanimously resolved to recommend that shareholders of FNBB adopt this Agreement and that such matter be submitted for consideration by the holders of FNBB Common Stock at the FNBB Meeting as required by Section 6.02. FNBB has duly and validly executed and delivered by North Valleythis Agreement and, (assumingassuming due authorization, execution and delivery by TriCo, of this Agreement) this Agreement constitutesis a valid and legally binding obligation of North Valley,FNBB, enforceable against North Valley in accordance with its terms except(except as enforcementenforceability may be limited by general principles of equity whether applied in a court of law or a court of equity and byapplicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyancetransfer and similar Lawslaws of general applicability relating to or affecting creditors’ rights and remedies generally. All corporate proceedings on the part of North Valley necessary to consummate the transactions contemplated hereby will have been taken prior to the Effective Time.

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(b) North Valley Bank has full corporate or other power and authority to execute and deliver the Bank Merger Agreement and, subject to the receipt of regulatory and shareholder approvals, to consummate the transactions contemplated thereby. The execution and delivery of the Bank Merger Agreement and the consummation of the transactions contemplated thereby will be duly and validly approved by the Board of Directors of North Valley Bank, and by North Valley as the sole shareholder of North Valley Bank prior to the Effective Time. All corporate proceedings on the part of North Valley Bank and by North Valley as sole shareholder of North Valley Bank necessary to consummate the transactions contemplated hereby will have been taken prior to the Effective Time. The Bank Merger Agreement, upon execution and delivery by North Valley Bank, will be duly and validly executed and delivered by North Valley Bank and will (assuming due authorization, execution and delivery by Tri Counties Bank) constitute a valid and binding obligation of North Valley Bank, enforceable against North Valley Bank in accordance with its terms, except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency, moratorium, fraudulent conveyance and similar Laws affecting creditors’ rights and remedies generally.

(c) Neither the execution and delivery of this Agreement by North Valley and the Bank Merger Agreement by North Valley Bank, nor the consummation by North Valley or its Subsidiaries, as the case may be, of the transactions contemplated hereby or thereby, nor compliance by North Valley or its Subsidiaries, as the case may be, with any of the terms or provisions hereof or thereof, will (i) violate any provision of the Articles of Incorporation or Bylaws of North Valley or the Articles of Incorporation or Bylaws (or the equivalent documents) of its Subsidiaries, or (ii) assuming that the consents and approvals referred to in Section 3.4 hereof are duly obtained, (x) violate in any material respect any Laws applicable to North Valley or its Subsidiaries, or any of their respective properties or assets, or (y) violate or conflict in any material respect with, result in a material breach of any provision of or the loss of any benefit under, constitute a material default (or an event which, with notice or lapse of time, or both, would constitute a material default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any lien, pledge, security interest, charge or other encumbrance upon any of the respective properties or assets of North Valley or any of its Subsidiaries under any of the terms, conditions or provisions of any material note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other material instrument or obligation to which North Valley or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound or affected.

(d) For the purposes of this Agreement, “Laws” shall mean any and all statutes, laws, ordinances, rules, regulations and other rules of law enacted, promulgated or issued by any court, administrative agency or commission or other governmental authority or instrumentality or self-regulatory organization, including, without limitation, the California Department of Business Oversight (the “CDBO”), the Federal Reserve Board, the FDIC, the SEC and any self-regulatory organization (each, a “Governmental Entity”).

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3.4.Consents and Approvalsprinciples).

(a) Except for: (f)Regulatory Approvals; No Defaults.

(i) the filingsNo consents or approvals of, applications or notices with, and approvals or waivers by, the Federal Reserve Board, the FDIC and the CDBO; (ii) the filing with the SEC and declaration of effectiveness of a registration statement on Form S-4 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”) including the joint proxy statement/prospectus (the “Joint Proxy Statement/Prospectus”) relatingor notices to, the meetings, including any adjournments or postponements thereof, of North Valley shareholders and TriCo shareholders to be held in connection with this Agreement and the Merger (the “North Valley Meeting” and the “TriCo Meeting,” as the case may be); (iii) approval of the listing on the NASDAQ Global Select Market (“NASDAQ”) of the TriCo Common Stock to be issued in connection with the Merger; (iv) the Requisite North Valley Vote and the Requisite TriCo Vote (as defined below); (v) the filing of the Agreement of Merger pursuant to the CGCL; (vi) such filings and approvals as are required to be made or obtained under applicable state securities laws or with NASDAQ in connection with the issuance of the shares of TriCo Common Stock pursuant to this Agreement; and (vii) the filings and approvals required in connection with the Bank Merger Agreement and the Bank Merger, no consents or approvals of or filings or registrations with, any Governmental Entity or with any third party are necessaryrequired to be made or obtained by FNBB or any of its Subsidiaries in connection with: (1)with the execution, and delivery or performance by North ValleyFNBB of this Agreement; (2) the consummationAgreement and by North Valley of the Merger and the other transactions contemplated hereby; (3) the execution and delivery by North ValleyFirst National Bank of the Bank Merger Agreement;Agreement, or to consummate the Transaction, except for (A) filings of applications or notices with, and (4)approvals or waivers by, the consummation by North Valley BankFRB, the FDIC, the OCC and the DBO, as required, (B) filings with the SEC, Nasdaq and state securities authorities, as applicable, (C) the filing of (1) the Agreement of Merger with the Secretary of State of the State of California pursuant to the CGCL and (2) the Bank Merger Agreement with the Secretary of State of the State of California and the transactions contemplated thereby; except, in each case, for such consents, approvals or filings,DBO pursuant to the failureCGCL and CFC, and (D) the approval of which to obtain will not have a Material Adverse Effect onthis Agreement and the abilityTransaction by the holders of North Valley or North Valley Bank, as applicable, to consummate the transactions contemplated hereby.outstanding

(b)

shares of FNBB Common Stock. As of the date hereof, North Valley has no Knowledge (as defined below)FNBB is not aware of any reason why approvalthe approvals set forth above and referred to in Section 7.01(b) will not be received in a timely manner and without the imposition of a condition, restriction or effectiveness of anyrequirement of the applications, noticestype described in Section 7.01(b).

(ii) Subject to receipt, or the making, of the consents, approvals, waivers and filings referred to in Section 3.4(a) cannot be obtained or granted on a timely basis without the impositionpreceding paragraph and the expiration of any Burdensome Condition (as defined below).

(c) Forrelated waiting periods, the purposesexecution, delivery and performance of this Agreement Knowledge” means, with respectby FNBB and the Bank Merger Agreement by First National Bank and the consummation of the Transaction do not and will not (A) constitute a material breach or material violation of, or a material default under, or give rise to any fact, circumstance, eventLien, any acceleration of remedies or any right of termination under, any law, code, ordinance, rule or regulation or any judgment, decree, injunction, order, governmental permit or license, or agreement, indenture or instrument of FNBB or any of its Subsidiaries or to which FNBB or any of its Subsidiaries or any of their respective assets or properties is subject or bound, (B) constitute a breach or violation of, or a default under, the articles of incorporation or bylaws (or similar governing documents) of FNBB or any of its Subsidiaries or (C) require any consent or approval under any such law, code, ordinance, rule, regulation, judgment, decree, injunction, order, governmental permit or license, agreement, indenture or instrument.

(g)Financial Reports and SEC Reports; Undisclosed Liabilities; No Material Adverse Effect.

(i) FNBB’s Annual Report on Form10-K for the year ended December 31, 2016 and all other matter in question,reports, registration statements, definitive proxy statements or information statements filed or to be filed by it subsequent to December 31, 2016 under the knowledgeSecurities Act, or under Section 13(a), 13(c), 14 or 15(d) of such fact, circumstance, event or other matter after reasonable inquiry of (a) an individual, if used in reference to an individual or (b) with respect to any Person (as defined below) that is not an individual, the officers at the Executive Vice President level and above and the directors of such Person (the persons specified in clause (b) are collectively referred to herein as the “Entity Representatives”). Any such individual or Entity Representative will be deemed to have Knowledge of a particular fact, circumstance, event or other matter if (x) such fact, circumstance, event or other matter is reflected in one or more documents (whether written or electronic, including electronic mails sent to or by such individual or Entity Representative) in, or that have beenExchange Act in the possession of such individualform filed or Entity Representative, including his or her personal files, (y) such fact, circumstance, event or other matter is reflected in one or more documents (whether written or electronic) contained in books and records of such Person that would reasonably be expected to be reviewed by an individual who hasfiled (collectively, “FNBB’s SEC Reports”) with the duties and responsibilities of such individual or Entity Representative in the customary performance of such duties and responsibilities, or (z) such knowledge could be obtained from reasonable inquirySEC, as of the direct reports of such individualdate filed or Entity Representative.

3.5.Reports. Since December 31, 2010, North Valley and its Subsidiaries have timely filed all reports, registrations and applications, together with any amendments required to be made with respect thereto, that they have been required to file with any Governmental Entities. As of its respective filing date (subject to any subsequent amendment thereto), each such report, registration, application and amendmentfiled, (A) complied or will comply in all material respects as to form with all rules and regulations promulgated by the applicable Governmental Entityrequirements under the Securities Act or the Exchange Act, as the case may be and (B) did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Except for normal examinations conducted bymisleading, except that information as of a Governmental Entity in the regular courselater date shall be deemed to modify information as of an earlier date; and each of the business of North Valley and its Subsidiaries, no Governmental Entity is conducting, or has conducted, any proceeding or investigation into the business or operations of North Valley or any of its Subsidiaries since December 31, 2008. Except as previously disclosed to TriCo, there is no material unresolved violation, criticism or exception by any Governmental Entity with respect to any report or letter relating to any examinations of North Valley or any of its Subsidiaries.

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3.6.Financial Statements; Exchange Act Filings; Books and Records.

(a) North Valley has previously made available to TriCo true, correct and complete copies of (i) the audited consolidated balance sheets contained in or incorporated by reference into any of North ValleyFNBB’s SEC Reports (including the related notes and schedules thereto) fairly presents, or will fairly present, the consolidated financial position of FNBB and its Subsidiaries as of December 31, 2012its date, and 2011 andeach of the related audited consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of changes in shareholders’ equity and consolidated statements of cash flows or equivalent statements in such SEC Reports (including any related notes and schedules thereto) fairly presents, or will fairly present, the consolidated results of operations, changes in shareholders’ equity and other comprehensive income (loss) and cash flows, for the fiscal years 2012, 2011 and 2010, inclusive, as reported in North Valley’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in each case accompanied by the audit report of North Valley’s independent registered public accounting firm and (ii) the unaudited consolidated balance sheets of North Valley and its Subsidiaries as of September 30, 2013 and 2012 and the related audited consolidated statements of income, shareholders’ equity and comprehensive income and cash flows for the nine months and quarterly period ended September 30, 2013 as reported in North Valley’s Quarterly Report on Form 10-Q with respect to the quarter ended September 30, 2013 filed with the SEC under the Exchange Act. North Valley will deliver as soon as is reasonably practicable, a draft of the consolidated balance sheet of North Valley and its Subsidiaries as of December 31, 2013 and the related consolidated statements of income, shareholders’ equity and comprehensive income and cash flows for the period ended December 31, 2013, in the form North Valley expects to file under the Exchange Act in connection with its Form 10-K for the period ended December 31, 2013. The financial statements referred to in this Section 3.6 (including the related notes, where applicable) fairly present (subject, in the case may be, of the unaudited statements, to normal recurring audit adjustments), the results of the consolidated operations and consolidated financial condition of North ValleyFNBB and its Subsidiaries for the respective fiscal periods orto which they relate, in each case in accordance with GAAP consistently applied during the periods involved, except in each case as of the respective dates therein set forth; eachmay be noted therein. Each of such financial statements (including theany related notes where applicable) complyand schedules thereto) complies in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto and each of such statements (including the related notes, where applicable) has been prepared in accordance with GAAP consistently applied during the periods involved, except in each case as indicated in such statements or in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q. North Valley’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and all reports subsequently filed under the Exchange Act (the “North Valley Exchange Act Reports”) comply (or, in the case of North Valley Exchange Act Reports filed subsequent to the date hereof, will comply) in all material respects with the appropriate requirements for such reports under the Exchange Act, and North Valley has previously delivered or made available to TriCo true, correct and complete copies of such reports.thereto. The books and records of North ValleyFNBB and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements.

requirements and reflect only actual transactions.

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(b) North Valley(ii) Except as set forth on the unaudited consolidated balance sheet of FNBB dated as of September 30, 2017 and eachincluded in FNBB’s SEC Reports filed prior to the date hereof, neither FNBB nor any of its Subsidiaries maintainshas any material liability (whether absolute, contingent or accrued or otherwise and whether due or to become due) that would be required to be reflected on a balance sheet or in notes thereto prepared in accordance with GAAP, other than liabilities (A) incurred after September 30, 2017 in the ordinary course of business consistent with past practice or (B) incurred pursuant to or provided for in this Agreement.

(iii) Since December 31, 2016, no event has occurred or circumstance arisen that, individually or taken together with all other facts, circumstances and events (described in any paragraph of this Section 5.03(g) or otherwise), is reasonably likely to have a Material Adverse Effect with respect to FNBB.

(iv) Since December 31, 2016, (A) FNBB and its Subsidiaries have conducted their respective businesses in the ordinary and usual course consistent with past practice, (B) except as set forth in Section 5.03(g)(iv) of FNBB’s Disclosure Schedule, neither FNBB nor any of its Subsidiaries has taken nor permitted or entered into any contract with respect to, or otherwise agreed or committed to do or take, any action that, if taken after the date hereof, would constitute a breach of any of the covenants in Section 4.01 and (C) no event has occurred or circumstance arisen that, individually or taken together with all other facts, circumstances and events (described in any paragraph of this Section 5.03(g) or otherwise), has had or is reasonably likely to have a Material Adverse Effect with respect to FNBB.

(v) Except as set forth in Section 5.03(g)(v) of FNBB’s Disclosure Schedule, no agreement pursuant to which any Loans or other assets have been or shall be sold by FNBB or its Subsidiaries entitled the buyer of such Loans or other assets, to cause FNBB or its Subsidiaries to repurchase such Loan or other asset or the buyer to pursue any other form of recourse against FNBB or its Subsidiaries. Section 5.03(g)(v) of FNBB’s Disclosure Schedule sets forth all cash, stock or other dividend or any other distribution with respect to the capital stock of FNBB or its Subsidiaries that has been declared, set aside or paid since December 31, 2013, as well as all shares of capital stock of FNBB or any of its Subsidiaries that have been purchased, redeemed or otherwise acquired, directly or indirectly, by FNBB or any of its Subsidiaries since December 31, 2013.

(vi) The records, systems, controls, data and information of FNBB and its Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of FNBB or its Subsidiaries (either directly or through FNBB’s third party data processing service provider) or its accountants (including all means of access thereto and therefrom), except for anynon-exclusive ownership andnon-direct control that would not reasonably be expected to have a material adverse effect on the system of “disclosureinternal accounting controls described below in this Section 5.03(g)(vi). FNBB (A) has implemented and maintains disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) reasonably designed and maintainedprocedures to ensure that allmaterial information (both financialrelating to FNBB and non-financial) requiredits Subsidiaries is made known to be disclosed by North Valley in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to North Valley’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the Chief Executive Officer and the Chief Financial Officer of North Valley required under the Exchange Act with respect to such reports. North ValleyFNBB by others within FNBB or its Subsidiaries and (B) has disclosed, based on its most recent evaluation prior to the date of this Agreement,hereof, to North Valley’sFNBB’s outside auditors and the audit committee of the North ValleyFNBB Board (i)(x) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that would bewhich are reasonably likely to adversely affect North Valley’sFNBB’s ability to accurately record, process, summarize and report financial information and (ii)(y) any fraud, whether or not material, that involves management or other employees who have a significant role in North Valley’sFNBB’s internal controls over financial reporting. These disclosures were made in writing by management to FNBB’s auditors and audit committee and a copy has previously been made available to TriCo.

(c) Except for (i) those liabilities that are fully reflected or reserved for(vii) Since December 31, 2013, (A) except as set forth in the consolidated financial statementsSection 5.03(g)(vii) of North Valley included in its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2013, as filed with the SEC, (ii) this Agreement or (iii) liabilities incurred since September 30, 2013 in the ordinary course of business consistent with past practice,FNBB’s Disclosure Schedule, neither North Valley nor any of its Subsidiaries has incurred any material liability of any nature whatsoever (whether absolute, accrued or contingent or otherwise and whether due or to become due).

(d) Since January 1, 2012, (i) neither North ValleyFNBB nor any of its Subsidiaries nor, to the Knowledge of North Valley,FNBB, any director, officer, employee, auditor, accountant or representative of North ValleyFNBB or any of its Subsidiaries, has received or otherwise had or obtained Knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of North ValleyFNBB or any of its Subsidiaries or their respective internal accounting controls, relating to periods after January 1, 2012, including any material complaint, allegation, assertion or claim that North ValleyFNBB or any of its Subsidiaries, has engaged in questionable accounting or auditing practices, and (ii) to the Knowledge of North Valley,(B) no attorney representing North ValleyFNBB or any of its Subsidiaries, whether or not employed by North ValleyFNBB or any of its Subsidiaries, has reported evidence of a material violation of securities Laws,laws, breach of fiduciary duty or similar violation relating to periods after January 1, 2012, by North ValleyFNBB or any of its Subsidiaries or their respective officers, directors, employees or agents to the North ValleyFNBB Board or any committee thereof or, to the Knowledge of FNBB, to any director or officer of North Valley.

(e) Neither North Valley norFNBB or any of its SubsidiariesSubsidiaries.

(h)Legal Proceedings.Section 5.03(h) of the FNBB Disclosure Schedule lists all litigation, arbitration, claims or other proceedings before any court or Governmental Entity that is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract or arrangement relating to any transaction or relationship between or among North Valleypending against FNBB or any of its Subsidiaries onas of the one hand, anddate hereof. Except as set forth in Section 5.03(h) of FNBB’s Disclosure Schedule, no litigation, arbitration, claim or other proceeding before any unconsolidated affiliate, including any structured finance, special purposecourt or limited purpose Person (as defined below), on the other hand,Governmental Entity is pending against

FNBB or any “off-balance sheet arrangements” (as definedof its Subsidiaries and, to FNBB’s Knowledge, no such litigation, arbitration, claim or other proceeding has been threatened and there are no facts which could reasonably give rise to such litigation, arbitration, claim or other proceeding in Item 303(a) of Regulation S-K promulgated underany such case that, individually or in the Securities Act and the Exchange Act).

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3.7.Broker’s Fees.aggregate, has or could be reasonably expected to have a Material Adverse Effect with respect to FNBB. Neither North ValleyFNBB nor any of its Subsidiaries nor any of their respective officers or directors has employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with any of the transactions contemplated by this Agreement or the Bank Merger Agreement, except that North Valley has engaged, and will pay a fee to Sandler O’Neill & Partners, L.P. (“Sandler”) in accordance with the terms of an agreement identified in Section 3.7 of the North Valley Disclosure Letter.

3.8.Absence of Certain Changes or Events.

(a) Except as disclosed in any North Valley Exchange Act Report filed with the SEC prior to the date of this Agreement: (i) neither North Valley nor any of its Subsidiaries has incurred any material liability, except as contemplated by this Agreement or in the ordinary course of their business; (ii) neither North Valley nor any of its Subsidiaries has discharged or satisfied any material lien or paid any material obligation or liability (absolute or contingent), other than in the ordinary course of business; (iii) neither North Valley nor any of its Subsidiaries has sold, assigned, transferred, leased, exchanged or otherwise disposed of any of its material properties or assets other than in the ordinary course of business; (iv) neither North Valley nor any of its Subsidiaries has suffered any material damage, destruction, or loss, whether as a result of fire, explosion, earthquake, accident, casualty, labor trouble, requisition or taking of property by any Governmental Entity, flood, windstorm, embargo, riot, act of God or other casualty or event, whether or not covered by insurance; (v) neither North Valley nor any of its Subsidiaries has cancelled or compromised any debt, except for debts charged off or compromised in accordance with the past practice of North Valley or any of its Subsidiaries, as the case may be; and (vi) no event has occurred which has had or is reasonably certain to have, individually or in the aggregate, a Material Adverse Effect on North Valley.

(b) Except as disclosed in any North Valley Exchange Act Report filed with the SEC prior to the date of this Agreement, since December 31, 2010, North Valley and its Subsidiaries have in all material respects carried on their respective businesses in the ordinary and usual course consistent in all material respects with their past practices.

3.9.Legal Proceedings.

(a) Neither North Valley nor any of its Subsidiaries is a party to any, and there are no pending, or subject to North Valley’s Knowledge, threatened, legal, administrative, arbitration or other proceedings, claims, actions or governmental or regulatory investigations of any nature against North Valley or any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect upon North Valley or that challenge the validity or propriety of the transactions contemplated by this Agreement or the Bank Merger Agreement.

(b) There is no injunction, order, judgment, decree or regulatory restriction imposed upon North Valley, its Subsidiariesthat, individually or in the assets of North Valley or its Subsidiaries whichaggregate, has had or could reasonably be expected to have a Material Adverse Effect on North Valley or the Surviving Corporation.

with respect to FNBB.

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3.10.Taxes and Tax Returns(i)Regulatory Matters.

(a)(i) Since December 31, 2006, each of North Valley2013, FNBB and its Subsidiaries hashave duly filed with the appropriate regulatory authorities in substantially correct form the monthly, quarterly and annual reports required to be filed under applicable laws and regulations, and such reports were in all material respects complete and accurate and in compliance in all material respects with the requirements of applicable laws and regulations, and FNBB has previously delivered or made available to TriCo accurate and complete copies of all such reports. In connection with the most recent examination of FNBB and its Subsidiaries by the appropriate regulatory authorities, neither FNBB nor any of its Subsidiaries was required to correct or change any action, procedure or proceeding which FNBB believes in good faith has not been now corrected or changed, other than corrections or changes which, if not made, either individually or in the aggregate, would not have a Material Adverse Effect on FNBB.

(ii) Except as set forth in Section 5.03(i)(ii) of FNBB’s Disclosure Schedule, neither FNBB nor any of its Subsidiaries nor any of their respective properties is a party to or is subject to any order, decree, directive, agreement, memorandum of understanding or similar arrangement with, or a commitment letter or similar submission to, or extraordinary supervisory letter from, nor has FNBB or any of its Subsidiaries adopted any policies, procedures or board resolutions at the request or suggestion of, any Governmental Entity. FNBB and its Subsidiaries have paid all assessments made or imposed by any Governmental Entity.

(iii) Neither FNBB nor any of its Subsidiaries has been advised by, nor does FNBB have any Knowledge of facts which could reasonably be expected to give rise to an advisory notice by, any Governmental Entity that such Governmental Entity is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such order, decree, directive, agreement, memorandum of understanding, board resolution, commitment letter, supervisory letter or similar submission or any request for the adoption of any policy, procedure or board resolution.

(iv) (A) Except as set forth in Section 5.03(i)(iv)(A) of FNBB’s Disclosure Schedule, no Governmental Entity has initiated since December 31, 2013 or has pending any proceeding, enforcement action or, to the Knowledge of FNBB, investigation or inquiry into the business, operations, policies, practices or disclosures of FNBB or any of its Subsidiaries (other than normal examinations conducted by a Governmental Entity in the ordinary course of the business of FNBB and its Subsidiaries), or, to the Knowledge of FNBB, threatened any of the foregoing, and (B) there is no material unresolved violation, criticism, comment or exception by any Governmental Entity with respect to any report or statement relating to any examinations or inspections of FNBB or any of its Subsidiaries.

(v) The most recent regulatory rating given to First National Bank as to compliance with the Community Reinvestment Act is “satisfactory.” To the Knowledge of FNBB, since the last regulatory examination of First National Bank with respect to Community Reinvestment Act compliance, First National Bank has not received any complaints as to Community Reinvestment Act compliance.

(j)Compliance With Laws.Each of FNBB and its Subsidiaries:

(i) is, and at all times since December 31, 2013, has been, in compliance in all material respects with all applicable federal, state, local and foreign Tax Returns (as defined below) requiredstatutes, laws, codes, regulations, ordinances, rules,

judgments, injunctions, orders, decrees or policies and/or guidelines of any Governmental Entity applicable thereto or to be filed by it on or priortheir employees conducting such businesses, including, without limitation, Sections 23A and 23B of the Federal Reserve Act and FRB, FDIC, and OCC regulations pursuant thereto, the Equal Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home Mortgage Disclosure Act, the Bank Secrecy Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the USA PATRIOT Act, the Electronic Fund Transfer Act and Regulation E of the FRB, all other applicable fair lending laws and other laws relating to the date hereof (all such returns being accuratediscriminatory business practices and complete in all material respects).

(b) Since December 31, 2006, eachposted and internal policies of North ValleyFNBB and its Subsidiaries related to customer data, privacy and security;

(ii) has, duly paid or made provisions for the payment ofand at all times since December 31, 2013, has had, all material Taxes (as defined below) which have been incurredpermits, licenses, franchises, authorizations, orders and approvals of, and has made all material filings, applications and registrations with, all Governmental Entities (and has paid all fees and assessments due and payable in connection therewith) that are required in order to permit them to own or lease their properties and to conduct their businesses as presently conducted; all such permits, licenses, franchises, certificates of authority, orders and approvals are duein full force and effect and, to FNBB’s Knowledge, no suspension or claimed to be duecancellation of any of them is threatened; and

(iii) has received no notification or communication from it by federal, state, local and foreign taxing authorities on or prior to the date hereof.

(c) Neither the Internal Revenue Service (“IRS”) nor any other Governmental Entity has notified North Valley of, or otherwise asserted,(A) asserting that there are any material deficiencies with respect to the Tax Returns of North Valley or any Subsidiary.

(d) There are no material disputes pending, or claims asserted for, Taxes or assessments upon North ValleyFNBB or any of its Subsidiaries is not in compliance with any of the statutes, regulations or ordinances which such Governmental Entity enforces or (B) threatening to revoke any license, franchise, permit or governmental authorization (nor, to FNBB’s Knowledge, do any grounds for any of the foregoing exist).

(k)Material Contracts; Defaults.

(i) Except for documents set forth in Section 5.03(k)(i) of FNBB’s Disclosure Schedule, neither FNBB nor has North Valleyany of its Subsidiaries is a party to, bound by or subject to any agreement, contract, arrangement, commitment or understanding (whether written or oral) (A) with respect to the employment of any of its directors, officers, employees, or with regards to the provision of services similar to those provided by an employee, independent contractors or consultants and involving the payment or value of more than $100,000 per annum, (B) which would entitle any present or former director, officer, employee, independent contractor, consultant or agent of FNBB or any of its Subsidiaries been requested to giveindemnification from FNBB or any waivers extending the statutory period of limitation applicable to any federal, state or local Tax Return for any period.

(e) Neither North Valley nor any Subsidiary has any liabilityits Subsidiaries, (C) which provides for the Taxes of any Person (as defined below) (other than North Valleypayment by FNBB or any Subsidiary) under Section 1.1502-6 of the Treasury Regulations promulgated under the Code (or any similar provisionits Subsidiaries of state, local or foreign law) as a transferee or successor, by contract or otherwise.

(f) Neither North Valley nor any Subsidiary will be required to include any item in, or exclude any item of deduction from, Taxable income for any Taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting for a Taxable period ending on or prior to the Closing Date; or (ii) “closing agreement” described in Section 7121 of the Code (or any corresponding or similar provision of state, local, or foreign Tax law).

(g) For the purposes of this Agreement, unless expressly defined elsewhere, “Taxes” (and, with correlative meaning, “Taxes” and “Taxable”) shall mean all taxes, charges, fees, levies, penaltiesseverance or other assessmentscompensation upon a merger, consolidation, acquisition, asset purchase, stock purchase or chargesother business combination transaction involving FNBB or any of any kind whatsoever imposed by any United States federal, state, local or foreign taxing authority,its Subsidiaries, including but not limited to, income, excise, property,the Transaction, (D) which would be a material contract (as defined in Item 601(b)(10) of RegulationS-K of the SEC), (E) which is an agreement (including data processing, software programming, consulting and licensing contracts) not terminable on sixty (60) days or less notice and involving the payment or value of more than $100,000 per annum, (F) which is with or to a labor union or guild (including any collective bargaining agreement), (G) which relates to the incurrence of indebtedness or guaranty of any liability (other than deposit liabilities, advances and loans from the FHLB, and sales transfer, franchise, payroll, withholding, social securityof securities subject to repurchase, in each case, in the ordinary course of business), (H) which grants any Person a right of first refusal, right of first offer or similar right with respect to any material properties, rights, assets or businesses of FNBB or any of its Subsidiaries, (I) which involves the purchase or sale of assets with a purchase price of $75,000 or more in any single case or $200,000 in all such cases, other than purchases and sales of investment securities or government guaranteed loans in the ordinary course of business consistent with past practice, (J) which is a consulting agreement, license or service contract (including data processing, software programming and licensing contracts and outsourcing contracts) which involves the payment of $100,000 or more in annual fees, (K) which relates to the settlement or other taxes, includingresolution of any interest, penaltieslegal proceeding in an amount in excess of $75,000 or additions attributable thereto (whether disputedthat has any continuing obligations, liabilities or not).restrictions, (L) which relates to a partnership or joint venture or similar arrangement, (M) which is a lease for any real or material personal property owned or presently used by FNBB or any of its Subsidiaries, (N) which restricts the conduct of any business by FNBB or any of its Subsidiaries or limits the freedom of FNBB or any of its Subsidiaries to engage in any line of business in any geographic area (or would so restrict the Surviving Corporation or any of its

(h) For purposes

Affiliates after consummation of the Transaction) or which requires exclusive referrals of business or requires FNBB or any of its Subsidiaries to offer specified products or services to its customers or depositors on a priority or exclusive basis, or (O) which is with respect to, or otherwise commits FNBB or any of its Subsidiaries to do, any of the foregoing (collectively, “Material Contracts”). Except as set forth in Section 5.03(k)(i) of FNBB’s Disclosure Schedule, no consents, approvals, notices or waivers are required to be obtained or delivered pursuant to the terms and conditions of any Material Contract as a result of FNBB’s and First National Bank’s (as applicable) execution, delivery or performance of this Agreement unless expressly defined elsewhere, “Tax Return” shall meanand the Bank Merger Agreement and the consummation of the Transaction. True, correct and complete copies of all such Material Contracts have been made available to TriCo as of the date hereof.

(ii) Each of the Material Contracts is in full force and effect (other than due to the ordinary expiration thereof) and is a valid and binding obligation of FNBB or its Subsidiaries and, to FNBB’s Knowledge, is a valid and binding obligation of the other parties thereto, enforceable against FNBB or its Subsidiaries, and to FNBB’s Knowledge, the other parties thereto, in accordance with its terms (in each case, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles). FNBB and its Subsidiaries (as applicable) have performed, in all material respects, all obligations required to be performed by them under each Material Contract. Neither FNBB or its Subsidiaries nor, to FNBB’s Knowledge, any return, report, information returnother parties thereto, is in material default under any contract, agreement, commitment, arrangement, lease, insurance policy or other document (including estimated Tax returnsinstrument to which they are a party, by which their respective assets, business, or operations may be bound or affected, or under which their respective assets, business, or operations receives benefits, and reports, withholding Tax returnsthere has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a default. Except as set forth in Section 5.03(k)(ii) of FNBB’s Disclosure Schedule, no power of attorney or similar authorization given directly or indirectly by FNBB or any of its Subsidiaries is currently outstanding. With respect to the Material Contracts, to FNBB’s Knowledge, no event has occurred, and reports,no circumstance or condition exists that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, (A) give any Person the right to declare a default or exercise any remedy under any Material Contract, (B) give any Person the right to accelerate the maturity or performance of any Material Contract, or (C) give any Person the right to cancel, terminate or modify any Material Contract.

(iii) Section 5.03(k)(iii) of FNBB’s Disclosure Schedule sets forth a schedule of all holders of five percent (5%) or attachmentmore of FNBB Common Stock and executive officers and directors of FNBB and its Subsidiaries who have outstanding loans from FNBB or any relatedof its Subsidiaries, and there has been no default, or supporting information)forgiveness or waiver, in whole or in part, on or of any such loan during the two years immediately preceding the date hereof.

(l)No Brokers.No action has been taken by FNBB or any of its Subsidiaries that would give rise to any valid claim against any party hereto for a brokerage commission, finder’s fee or other like payment with respect to Taxes filedthe Transaction, other than fees to be paid to The Courtney Group, which are set forth in Section 5.03(l) of FNBB’s Disclosure Schedule. Copies of all agreements with a taxing authority having jurisdiction over a partyThe Courtney Group have been previously provided or made available to TriCo.

(m)Employee Benefit Plans.

(i) All benefit and compensation plans, contracts, policies or arrangements maintained, contributed to, obligated to be contributed to, or sponsored by FNBB and its Subsidiaries for the benefit of current or former employees of FNBB and its Subsidiaries (the “Employees”) and current or former directors or independent contractors of FNBB or its Subsidiaries.

(i) “Person” as used in this Agreement, means any individual, corporation (including any non-profit corporation), company, limited liability company, general or limited partnership, limited liability partnership, joint venture, trust, estate, proprietorship, firm, society or other enterprise, association, organization, entity or governmental body.

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3.11.Employee Plans.

(a) Section 3.11(a) of the North Valley Disclosure Letter sets forth a true and complete list of each pension, retirement, salary continuation, profit-sharing, savings, deferred compensation, stock option, restricted stock or other equity-based compensation, severance, retention, change in control, termination, bonus, incentive compensation, fringe benefit, vacation, life insurance, disability, accident, supplemental benefit, welfare, medical, dental, vision, education reimbursement, compensation or other employee benefit plan, program, policy, arrangement or agreement,Subsidiaries including, but not limited to, each “employee benefit plan” (withinplans” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA,”), any pension, retirement, profit sharing, medical, life, accidental death and dismemberment, disability, dental, vision, compensation, severance, termination pay, salary continuation, unemployment, workers’ compensation, vacation, sick pay, paid-time off, retention, employment, consulting, change in control, fringe benefit, deferred compensation, stock option, stock purchase, stock appreciation rights or other stock-based incentive, cafeteria or flexible benefit, adoption or educational

assistance, and bonus or other cash-based incentive, or other similar plans, agreements, programs, policies or other arrangements (whether written or oral and whether or not subjectqualified or funded) or any such plan for which FNBB may have any liability including, without limitation, as a result of being deemed a single employer with any entity under Section 4001(b)(1) of ERISA or Section 414 of the Code (collectively, the “Benefit Plans”), are set forth in Section 5.03(m)(i) of FNBB’s Disclosure Schedule. True and complete copies of the following documents have been provided or made available to ERISA)TriCo: (A) all Benefit Plans and all written agreements underlying a funding medium for, or relating to the administration of, any Benefit Plan including, but not limited to, any trust instruments, group annuity contracts, investment management, recordkeeping, administrative services, other third party services agreements and insurance contracts, certificate of coverage and other similar agreements entered into in connection with any Benefit Plans and all amendments thereto; (B) the three most recent annual report (Form 5500), together with all schedules, as required, filed with the Internal Revenue Service (“IRS”) or Department of Labor (the “DOL”), as applicable, and any financial statements and opinions required by Section 103(e)(3) of ERISA with respect to each Benefit Plan; (C) for each Benefit Plan which is a“top-hat” plan, a copy of filings with the DOL; (D) the most recent determination or opinion or advisory letter issued by the IRS for each Benefit Plan that is maintained, sponsored, contributedintended to orbe “qualified” under Section 401(a) of the Code; (E) the most recent summary plan description and any summary of material modifications, as required, for each Benefit Plan; (F) the three most recent actuarial reports, if any, relating to each Benefit Plan; (G) the most recent summary annual report for each Benefit Plan required to be contributedprovide summary annual reports by Section 104 of ERISA; (H) the most recent minimum coverage and discrimination testing results for each applicable Benefit Plan; and (I) copies of allnon-routine correspondence received from or delivered to as of the date of this Agreement,IRS or that hasthe DOL since December 31, 20062013.

(ii) Each Benefit Plan has been sponsored, maintained, sponsored, contributedestablished and administered to date in all material respects in accordance with the applicable provisions of ERISA, the Code and applicable law and with the terms and provisions of all documents, contracts or requiredagreements pursuant to be contributed to,which such Benefit Plan is maintained. FNBB and any ERISA Affiliate has complied with the Patient Protection and Affordable Care Act, as amended by North Valleythe Health Care and Reconciliation Act of 2010, and the requirements of Section 4980B of the Code, Part 6 of Subtitle I of ERISA and the regulations thereunder, including all applicable reporting, tax deposits and fee payment obligations. No asset of either FNBB or any of its Subsidiaries or with respectis subject to which North Valley or any of its Subsidiaries has any liability or obligation, contingent or otherwise, including by reason of being or having been treated as a “single employer” with any other trade or business within the meaning of Section 4001 ofan encumbrance lien under ERISA or Sections 414(b), (c), (m) or (o) of the Code (an “ERISA Affiliate”) (individually, a “North ValleyCode. Each Benefit Plan,” or collectively, “North Valley Plans”).

(b) North Valley has previously made available to TriCo true, correct and complete copies of each of the North Valley Plans and all related documents, including, but not limited to, the following (if applicable): (i) the actuarial report for such North Valley Plans for the most recent plan year; (ii) the most recent determination letter from the IRS for such North Valley Plans; (iii) the current summary plan description and any summaries of material modifications thereto; (iv) all annual reports (Form 5500 series) for each North Valley Plan filed for each of the preceding three plan years, together with all schedules and attachments; (v) all agreements with fiduciaries and service providers relating to the North Valley Plans; (vi) all substantive correspondence relating to any such North Valley Plans addressed to or received from the IRS, the Department of Labor, the Pension Benefit Guaranty Corporation or any other governmental agency; and (vii) all Forms 5310 for each North Valley Plan filed for each of the preceding three plan years.

(c) No North Valley Plan is a “multiemployer plan” as defined in Section 3(37) of ERISA, a “multiple employer plan,” within the meaning of Section 210 of ERISA or Section 413 of the Code, or a “multiple employer welfare arrangement,” as defined in Section 3(40) of ERISA, and neither North Valley nor any of its Subsidiaries has contributed to, or had any obligation to contribute to, any such plan or arrangement in the previous seven years.

(d) No North Valley Plan which is an “employee pension benefit plan” as defined inwithin the meaning of Section 3(2) of ERISA that is or was at any time subject to Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code,(a “Pension Plan”) and neither North Valley nor any of its Subsidiaries has contributed to, or had any obligation to contribute to, any such employee pension benefit plan in the previous seven years.

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(e) Each North Valley Plan thatwhich is intended to be qualified under Section 401(a) of the Code, has received a favorable determination letter, or advisory or opinion letter, as applicable, from the IRS, that considers the law changes incorporated in the plan sponsor’s most recently expired remedial amendment cycle determined under the provisions of Internal Revenue Service Revenue Procedure 2007-44, and to theFNBB has no Knowledge of North Valley, nothing has occurred since the date of such letter that isany circumstances reasonably likely to adversely affectresult in revocation of any such favorable determination letter or the taxloss of the qualification of such planPension Plan under Section 401(a) of the Code. Neither FNBB nor any of its Subsidiaries has received any correspondence or written or verbal notice from the IRS, DOL, any other Governmental Entity, any participant in or beneficiary of, a Benefit Plan, or any agent representing any of the foregoing that brings into question the qualification of any such Benefit Plan. There is no pending or, to require actionFNBB’s Knowledge, threatened proceeding, lawsuit or claim (other than a routine claim for benefits) relating to the Benefit Plans. Neither FNBB nor any of its Subsidiaries is subject to or could reasonably be likely to be subject to a material Tax, fine, penalty or material liability of any kind under either the compliance resolution programs ofCode or ERISA. There are no matters pending before the Internal Revenue Service to preserve such qualification.

(f) To the Knowledge of North Valley, each North Valley Plan, bothIRS, DOL or other Governmental Entity with respect to its form and administration,any Benefit Plan. Since January 1, 2013, no Benefit Plan or related trust has been maintained, fundedthe subject of an audit, investigation or examination by a Governmental Entity.

(iii) Neither FNBB nor any entity considered to be a single employer with FNBB under Section 4001(b)(1) of ERISA or Section 414 of the Code (“ERISA Affiliate”) maintains or contributes to any Pension Plan subject to Title IV of ERISA, a multiple employer plan (as defined in Section 413(c) of the Code) or multiemployer plan (as defined in 4001(a)(3) of ERISA), a “voluntary employee’s beneficiary association” within the meaning of Section 501(c)(9) of the Code, a “multiple employer welfare arrangement” within the meaning of Section 3(40) of ERISA or a Retiree Welfare Plan, other than those disclosed and administeredidentified as such in all material respectsSection 5.03(m)(iii) of FNBB’s Disclosure Schedule. Except as set forth in complianceSection 5.03(m)(iii) of FNBB’s

Disclosure Schedule, no Benefit Plan holds as an asset an annuity contract, guaranteed investment contract or other investment contract issued by an insurance company.

(iv) All contributions required to be made under the terms of any Benefit Plan (including any amounts withheld from employees’ paychecks with itsrespect to a Benefit Plan) and premiums required to be paid have been timely made in accordance with the terms of the provisionsapplicable Benefit Plan and applicable law. All contributions for any period ending on or before the Closing Date that are not yet due have been made or have been reflected appropriately in the financial statements included in FNBB’s SEC Reports. Benefits under each Benefit Plan that is an “employee welfare benefit plan” (within the meaning of ERISA,Section 3(1) of ERISA), with the exception of any flexible spending arrangements subject to Sections 125 and 105 of the Code and applicable Law, whetherhealth savings accounts, are provided exclusively through insurance contracts or policies issued by an insurance company, health maintenance organization, or similar organization unrelated to FNBB or any ERISA Affiliate, the premiums for which are paid directly by FNBB or an ERISA Affiliate thereof, from its general assets or partly from its general assets and partly from contributions by its employees. No insurance policy or contract relating to a Benefit Plan requires or permits a retroactive increase to premiums or payments due thereunder.

(v) Except as a matterset forth in Section 5.03(m)(v) of substantive LawFNBB’s Disclosure Schedule, none of the execution of this Agreement, the FNBB shareholder approval of this Agreement or the consummation of the Transaction, either alone or in order to maintainconnection with any intended tax qualification.

(g) With respect to each North Valley Plan, all contributions and premium payments for all time periods ending onother event, (A) entitle any Employees or prior to the Closing Date and which are otherwise due and payable shall have been made.

(h) Section 3.11(h)any current or former director or independent contractor of the North Valley Disclosure Letter lists each obligation of North Valley andFNBB or any of its Subsidiaries to severance pay or provide for post-termination welfareany increase in severance pay upon any termination of employment or welfare-typeservice after the date hereof, (B) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits forunder, increase the amount payable under, or trigger any currentother material obligation pursuant to, any of the Benefit Plans, (C) result in any breach or former employee, officer, directorviolation of, or contractora default under, any of the Benefit Plans or their dependents or beneficiaries, other than those benefits required under COBRA.

(i) Other than routine claims for benefits, including those relating to qualified domestic relations orders, there are no (i) pending or (ii) threatened lawsuits, governmental investigations or other claims against or involving(D) result in the payment of any North Valley Plan, or any fiduciary (within“excess parachute payments” within the meaning of Section 3(21)(A)280G of ERISA)the Code. FNBB will make available to TriCo upon request FNBB’s calculations under Section 280G of the Code and all related underlyingback-up information and agreements taken into account in the performance of such calculations or service provider of any North Valley Plan, nor is there any reasonable basisdeemed necessary by TriCo, in its discretion, including, without limitation, pertinent FormW-2 information for any such lawsuit, investigation or claim.

(j)“disqualified individuals” determined in accordance withQ&A-15 of Treasury Regulation §280G-1. Neither North ValleyFNBB nor any of its Subsidiaries has any liability underor is a party with respect to any North Valley Plan arising out of the treatment of any service provider as an independent contractorgross-up provision or other self-employed individual rather than as an employee, or vice-versa. Except as set forthagreement in connection with Section 3.11(j) of the North Valley Disclosure Letter, the consummation of the transactions contemplated hereby will not, either alone or in combination with any other event, (i) accelerate the time of payment or vesting, or increase the amount of or otherwise enhance any benefit due any employee, officer, director, independent contractor or consultant of North Valley or any of its Subsidiaries under any North Valley Plan; or (ii) accelerate or require the funding (whether on a formal or informal basis) of the benefits under any North Valley Plan.

(k) Each North Valley Plan which constitutes in any part a nonqualified deferred compensation arrangement within the meaning of and subject to Section 409A280G of the Code has at all times complied, both in form and operation, with the requirements ofor excise Taxes under Section 409A(a)(2), (3) and (4)4999 of the Code and applicable regulations and other guidance thereunder.

Code.

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(l) None of the North Valley Plans provides any benefits that would result in excess parachute payments (within the meaning of Section 280G) of the Code, either (i) solely as a result of the consummation of the transactions contemplated hereby; or (ii) as a result of the consummation of the transactions contemplated hereby and any actions taken by TriCo after the Closing Date.

(m) To the Knowledge of North Valley, neither North Valley(vi) Neither FNBB nor any of its Subsidiaries has madenow, nor has had, the obligation to maintain, establish, sponsor, participate in or contribute to any payments,Benefit Plan or other similar arrangement that is obligatedsubject to make any payments,law or applicable custom or rule of any jurisdiction outside of the United States. No compensation paid (or to be paid) under any Benefit Plan has been or will benon-deductible under Code Section 409A.

(vii) Each Benefit Plan which is a “nonqualified deferred compensation plan” (within the meaning of Section 409A of the Code) (hereinafter referred to as an “FNBB NQDP”) has been maintained, as to both form and operation, in compliance with Section 409A of the Code. No event in connection with an FNBB NQDP has occurred which would subject a participant to inclusion of income under Section 409A(a)(1) of the Code and neither FNBB nor any ERISA Affiliate has any liability or is a party with respect to anygross-up provision or agreement that could underin connection with any circumstances obligate it to make any payments that would not be deductible underincome inclusion, interest or additional Tax payable in accordance with Section 162(m)409A of the Code.

(viii) Except as set forth in Sections 6.11(d), neither FNBB nor any Subsidiary has (A) announced its intention, made any amendment or any binding commitment, or given written or oral notice providing that it will increase benefits under any Benefit Plan, (B) created or adopted any arrangement that would be considered a Benefit Plan once established, or (C) agreed not to exercise any right or power to amend, suspend or terminate any Benefit Plan.

(n) EachLabor Matters.

(i) Section 5.03(n)(i) of FNBB’s Disclosure Schedule sets forth (A) the name, title, date of hire or retention and total compensation of each employee, independent contractor or consultant of FNBB and each of its Subsidiaries, (B) all bonuses and other incentive compensation received by such employees, independent contractors and consultants in 2016 and 2017 and any accrual for such bonuses and incentive compensation, (C) all persons who will be (as of the North Valley Plans is maintained inEffective Time) “specified employees” of FNBB within the United Statesmeaning of Code Section 409A and is subject only to the Laws(D) all contracts, agreements, commitments or arrangements by FNBB and each of the United States or a political subdivision thereof.

(o) No action taken pursuant to Section 6.16 hereof will violate the terms of the North Valley Option Plans or of any award agreement entered into pursuant to such plans, nor will any such action constitute a material violation of any applicable Laws.

(p) Neither North Valley norits Subsidiaries regarding compensation with any of its Subsidiaries has undertakenrespective officers, employees, independent contractors and consultants, including those to maintain any North Valley Plan for any period of time, and each North Valley Plan is terminable atincrease the sole discretion ofcompensation or to modify the sponsor thereof, subject only to such constraints as may be imposed by applicable Laws, including Section 409A of the Code,conditions or as may be imposed by the written terms of the plan documentemployment.

(ii) To FNBB’s Knowledge, no officer or director of the North Valley Plan.

3.12.Certain Contracts.

(a) Section 3.12 of the North Valley Disclosure Letter lists each written or oral contract, plan, commitment or any other arrangement to or by which North Valley or any if its Subsidiaries is a party or is bound with respect to the employment of any directors, officers, employees or consultants: (i) which, upon the execution of this Agreement, the North Valley Requisite Vote or the consummation of the transactions contemplated by this Agreement will (either alone or upon the occurrence of any additional acts or events) result in or accelerate any payment or benefit (whether severance, retirement, change of control or otherwise) becoming due from TriCo, North Valley, any of their Subsidiaries or the Surviving Corporation to any party; (ii) which contains a non-compete or client or customer non-solicitation requirement or any other provision that materially restricts the conduct of any line of business by North ValleyFNBB or any of its Subsidiaries or following the Closing, TriCoany employee, independent contractor or anyconsultant of its Subsidiaries; (iii) with or to a labor union or guild (including any collective bargaining agreement); (iv) that is a material contract (as defined in Item 601(b)(10) of Regulation S-K of the SEC); or (v) which involved payments by North Valley or any of its Subsidiaries in the fiscal year ended December 31, 2012 of more than $75,000 or which could reasonably be expected to involve payments during the fiscal year ending December 31, 2013 or any year thereafter of more than $75,000, other than (x) any such contract that is terminable at will on sixty (60) days or less notice without payment of a penalty in excess of $10,000, (y) deposit liabilities and (z) except with respect to item (i) above, debts for borrowed funds.

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(b) Section 3.12(b) of the North Valley Disclosure Letter sets forth true, correct and complete copies of all employment, consulting and deferred compensation agreements to which North ValleyFNBB or any of its Subsidiaries is a party. Each contract,party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality,non-competition,or commitmentproprietary rights agreement, that could adversely affect the ability of the type described in this Section 3.12 is referred to herein as a “North Valley Contract.”

(c) (i) Each North Valley Contract is a valid and binding commitment of North Valley or one of its Subsidiaries, as the case may be, and is in full force and effect; (ii) each of North Valley and its Subsidiaries has in all material respects performed all obligations required to be performed by it to date under each North Valley Contract; (iii) no event or condition exists which constitutes or, after notice or lapse of time or both, would constitute, a material default on the part of North ValleyFNBB or any of its Subsidiaries under any such North Valley Contract; and (iv)to conduct its business as currently conducted.

(iii) To FNBB’s Knowledge, neither North ValleyFNBB nor any of its Subsidiaries has received notice(A) classified any individual as an “independent contractor” or similar status who, under applicable law, rule or regulation or the provisions of any violationBenefit Plan, should have been classified as an employee or imminent violation(B) incurred any liability for improperly excluding any Person from participating in any Benefit Plan who provides or provided services to FNBB or any of its Subsidiaries, in any capacity.

(iv) None of the officers, employees or consultants of FNBB or any of its Subsidiaries has informed FNBB or such Subsidiary of his or her intent, nor does FNBB have any Knowledge of any North Valley Contract byof the officers, employees or consultants of FNBB or any other party thereto. True, correct and complete copies of each North Valley Contract have been providedits Subsidiaries having an intention, to terminate employment with FNBB or made available to TriCo prior toany of its Subsidiaries during the date hereof.next twelve (12) months.

3.13.Regulatory Agreements. Except as previously disclosed to TriCo, neither North Valley(v) Neither FNBB nor any of its Subsidiaries is subject to any cease-and-desist or other order issued by, or is a party to or is bound by any writtencollective bargaining agreement, consentcontract or other agreement, arrangement or memorandum of understanding with a labor union or labor organization, nor is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been a recipient of any extraordinary supervisory letter from, or has adopted any board resolutions (each of the foregoing, a “Regulatory Agreement”), at the request of any Governmental Entity that restricts the conduct of its business or that in any manner relates to its capital adequacy, its credit policies, its management or its business, nor has North ValleyFNBB or any of its Subsidiaries the subject of a proceeding asserting that it has committed an unfair labor practice (within the meaning of the National Labor Relations Act) or seeking to compel FNBB or any of its Subsidiaries to bargain with any labor organization as to wages or conditions of employment, nor is there any strike or other labor dispute involving it pending or, to FNBB’s Knowledge, threatened, nor does FNBB have any Knowledge of any activity involving its employees seeking to certify a collective bargaining unit or engaging in other organizational activity, either currently or during the past three (3) years. Each of FNBB and its Subsidiaries has paid in full all wages, salaries, commissions, bonuses, benefits and other compensation currently due to its employees or otherwise arising on a current basis under any FNBB policy, practice, agreement, plan, or program, or any applicable statute or other law. Except as set forth in Section 5.03(n)(v) of FNBB’s Disclosure Schedule, the employment of each officer and employee of FNBB and each of its Subsidiaries is terminable at the will of FNBB or such Subsidiary.

(vi) Except as set forth in Section 5.03(n)(vi) of FNBB’s Disclosure Schedule, (A) there is no pending or, to FNBB’s Knowledge, threatened legal proceeding involving FNBB or any of its Subsidiaries, on the one hand, and any present or former employee(s) of FNBB or any of its Subsidiaries, on the other hand, and (B) no other Person, to FNBB’s Knowledge, has threatened any claim or any legal proceeding against FNBB or any of its Subsidiaries (or, to FNBB’s Knowledge, against any officer, director or employee of FNBB or any of its Subsidiaries) relating to employees or former employees of FNBB or any of its Subsidiaries, including any such claim or legal proceeding arising out of any statute, ordinance or regulation relating to wages, collective bargaining, discrimination in employment or employment practices or occupational safety and health standards (including, without limitation, the Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964, as amended, the Occupational Safety and Health Act, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act or the Family and Medical Leave Act).

(vii) FNBB and each of its Subsidiaries is, and at all times since December 31, 2013 has been, advised by anyin compliance in all material respects with all applicable federal, state, local and foreign statutes, laws, codes, regulations, ordinances, rules, judgments, injunctions, orders, decrees or policies and/or guidelines of a Governmental Entity that it is considering issuingrelating to labor, employment, termination of employment or requesting any Regulatory Agreement.

3.14.State Takeover Laws; Rights Agreement.

(a) North Valleysimilar matters, including, but not limited to, such laws, codes, regulations, ordinances, rules, judgments, injunctions, orders, decrees or policies and/or guidelines relating to discrimination, disability, labor relations, hours of work, payment of wages and its Board of Directors have taken, or by the Effective Time will have taken, all necessary action so that any applicable provisions of the takeover laws of Californiaovertime wages, pay equity, immigration, workers compensation, working conditions, employee scheduling, occupational safety and any other state (and any comparable provisions of North Valley’s Articles of Incorporationhealth, family and Bylaws) do notmedical leave and will not apply to this Agreement, the Merger or the transactions contemplated hereby or thereby.

(b) North Valley has (i) duly authorizedemployee terminations, and executed an appropriate amendment to the North Valley Rights Agreement, which amendment has been provided to TriCo and (ii) taken all other action necessary or appropriate so that the entering into of this Agreement or the Shareholder Agreements, and the consummation of the transactions contemplated hereby and thereby (including the Merger) do not and will not result in TriCo being or becoming an “Acquiring Person” thereunder or the ability of any person to exercise a “Right” (as defined in the North Valley Rights Agreement) or enabling or requiring Rights to separate from the shares of North Valley Common Stock to which they are attached or to be triggered or become exercisable. The North Valley Rights Agreement will expire immediately prior to the Effective Time, and the North Valley Rights Agreement, as so amended, has not, been further amendedto FNBB’s Knowledge, engaged in any unfair labor practices or modified exceptsimilar prohibited practices.

(o)Environmental Matters.Except as set forth in accordance herewith. No “Distribution Date,” “Shares Acquisition Date” or “Trigger Event” (as such terms are defined in the North Valley Rights Agreement) has occurred prior to the dateSection 5.03(o) of this Agreement, nor will occur as a result of the entry by North Valley into this Agreement or the consummation of any of the transactions contemplated hereby and thereby.

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3.15.Environmental Matters. ThereFNBB’s Disclosure Schedule, (i) there are no legal, administrative, arbitral or other proceedings, claims, actions, causes of action, privateor, to FNBB’s Knowledge, environmental investigations or remediation activities by a Governmental Entity or governmental investigations of any naturethird party, seeking to impose, or that reasonably could be expected to result in the imposition, on North ValleyFNBB or any of its Subsidiaries of any liability or obligation arising under commonany Environmental Laws pending or, to FNBB’s Knowledge, threatened against FNBB or any of its Subsidiaries, which liability or obligation could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on FNBB, and there is no reasonable basis for any such proceeding, claim, action, environmental remediation or investigation that could impose any liability or obligation that could have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on FNBB; (ii) FNBB and each of its Subsidiaries is in compliance in all material respects with applicable Environmental Laws; (iii) no real property (including buildings or other structures) currently or, to FNBB’s Knowledge, formerly owned or operated by FNBB or any of its Subsidiaries, or any property in which FNBB or any of its Subsidiaries holds a security interest or a fiduciary or management role (“FNBB Loan Property”), has been contaminated with, or has had any release of, any Hazardous Substance in violation of Environmental Law or that requires investigation or remediation under an Environmental Law, that has resulted, or would reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect on FNBB; (iv) in accordance with the Secured Creditor Exemption, neither FNBB nor any of its Subsidiaries are the “owner or operator” of, nor have “participated in the management” regarding Hazardous Substances at, any FNBB Loan Property which has been contaminated with, or has had any release of, any Hazardous Substance in violation of any Environmental Law or that requires investigation or remediation under any Environmental Law, that has resulted, or would reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect on FNBB; (v) neither FNBB nor any of its Subsidiaries nor, to FNBB’s Knowledge, any Person whose liability FNBB or any of its Subsidiaries has assumed whether contractually or by operation of law, standardshas received any notice, demand letter, claim or request for information alleging any material violation of, or material liability under, any Environmental Law, and neither FNBB nor any of its Subsidiaries is subject to any order, decree, injunction or other agreement with any Governmental Entity relating to any Environmental Law, or agreement with any third party resolving claims under any Environmental Law, which has not been fully satisfied or discharged; (vi) there are no circumstances or conditions (including the presence of asbestos, underground storage tanks, lead products, polychlorinated biphenyls, prior manufacturing operations,dry-cleaning, or automotive services) involving any currently or, to FNBB’s Knowledge, formerly owned or operated property, any FNBB Loan Property, or to FNBB’s Knowledge any Person whose liability FNBB or any of its Subsidiaries has assumed, whether contractually or by operation of law, that could reasonably be expected to result in any claims, liability or investigations against FNBB, result in any restrictions on the ownership, use, or transfer of any property pursuant to any Environmental Law, or adversely affect the value of any FNBB Loan Property, which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on FNBB; and (vii) FNBB has provided and made available to TriCo copies of all material environmental reports or studies, sampling data, correspondence, filings and other material environmental information in its possession or reasonably available to it relating to FNBB, its Subsidiaries and any currently or formerly owned or operated property.

As used herein, the term “Environmental Laws” means any federal, state, local or foreign law, statute, code, ordinance, injunction, regulation, order, decree, permit, or Governmental Entity requirement relating to: (A) the

protection humanor restoration of the environment, health, or safety, or undernatural resources, (B) the handling, use, presence, disposal, release or threatened release of any local, stateHazardous Substance or federal environmental statute, regulation(C) noise, odor, wetlands, indoor air, pollution, contamination or ordinance,any injury or threat of injury to persons or property in connection with any Hazardous Substance, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act, of 1980, as amended, (collectively, the42 U.S.C. § 9601, et seq. and related or similar state and local laws and regulations. The termEnvironmental LawsHazardous Substance), pending means any substance that is: (X) listed, classified or to the Knowledge of North Valley, threatened against North Valley or any of its Subsidiaries, which liability or obligation would have or would reasonably be expected to have a Material Adverse Effect on North Valley. There is no reasonable basis for any such proceeding, claim, action or governmental investigation that would impose any liability or obligation that would have or would reasonably be expected to have a Material Adverse Effect on North Valley. To the Knowledge of North Valley, during or prior to the period of (i) its or any of its Subsidiaries’ ownership or operation of any of their respective current properties, (ii) its or any of its Subsidiaries’ participation in the management of any property, or (iii) its or any of its Subsidiaries’ holding of a security interest in any property, there were no releases or threatened releases of hazardous, toxic, radioactive or dangerous materials or other materials regulated under Environmental Laws in, on, under or affecting any such property which would reasonably be expected to have a Material Adverse Effect on North Valley. Neither North Valley nor any of its Subsidiaries is subject to any agreement, order, judgment, decree, letter or memorandum by or with any court, governmental authority, regulatory agency or third party imposing any material liability or obligation pursuant to or under any Environmental Law, that would have(Y) any petroleum, petroleum product or would reasonably be expected to have a Material Adverse Effect on North Valley.

3.16. Allowances for Losses. All allowances for loan and lease lossesby-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive materials, radon or urea-formaldehyde insulation or (Z) any other substance which is the subject of North Valley and its Subsidiaries, including any reserves for unfunded commitments, are, and as of the Effective Time will be, made in compliance with all applicable Laws, North Valley’s methodology for determining the adequacy of its allowance for losses and the standards established by the Financial Accounting Standards Board. Neither North Valley nor any of its Subsidiaries has been notifiedregulatory action by any Governmental Entity in connection with any Environmental Law. The term “Secured Creditor Exemption” has the meaning provided to such term in 42 U.S.C. § 9601(20)(A), 42 U.S.C. § 6991b(h)(9), and Cal. Health & Safety Code § 25548, et seq.

(p)Tax Matters.

(i) (A) All Tax Returns that are required to be filed on or before the Closing Date (taking into account any extensions of time within which to file that have not expired) by North Valley’s independent auditor,or with respect to the FNBB Group have been or will be timely filed on or before the Closing Date, (B) all such Tax Returns are or will be true, correct and complete in writingall material respects, (C) all Taxes due and payable by or otherwise, that: (i) such allowances are inadequate; (ii)with respect to the practices and policies of North ValleyFNBB Group (whether or not shown as due on any of its SubsidiariesTax Return) have been timely paid in establishing such allowances and in accounting for non-performing and classified assets generally fail to comply with applicable accounting or regulatory requirements; or (iii) such allowances are inadequate or inconsistent withfull, (D) the historical loss experience of North Valley or any of its Subsidiaries. Section 3.16unpaid Taxes of the North Valley Disclosure Letter sets forth a complete list of all extensions of nonaccrual, credit and other real estate owned (“OREO”) that as of December 31, 2013 were classified as special mention, substandard, doubtful, loss or words of similar import. All OREO, if any, held by North Valley or any of its Subsidiaries is being carried at fair value in accordance with GAAP.

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3.17.   Properties and Assets. Section 3.17 of the North Valley Disclosure Letter listsFNBB Group did not, as of the date of this Agreement: (i) all real property owned by North Valleythe most recent financial statements included in FNBB’s SEC Reports, exceed the reserve for Tax liability set forth on the face of such financial statements and its Subsidiaries; (ii) each real property lease, sublease or installment purchase arrangement to which North Valley or any of its Subsidiaries is a party; (iii) a description of each contractdo not exceed that reserve as adjusted for the purchase, sale, or developmentpassage of real estate to which North Valley or any of its Subsidiaries is a party; and (iv) each item of North Valley’s or any of its Subsidiaries’ tangible personal property and equipment with a net book value of $40,000 or more or having any annual lease payment of $25,000 or more. Except for (a) items reflected in North Valley’s consolidated financial statements as of September 30, 2013 referred to in Section 3.6 hereof, (b) exceptions to title that do not interfere materially with North Valley’s or any of its Subsidiaries’ use and enjoyment of owned real property (other than OREO), (c) liens for current real estate taxes not yet delinquent, or being contested in good faith, properly reserved against, (d) properties and assets sold or transferred intime through the ordinary course of business consistent with past practices since December 31, 2012, and (e) items listed in Section 3.17 of the North Valley Disclosure Letter, North Valley and its Subsidiaries have good and, as to owned real property, marketable and insurable title to all their owned real and tangible personal property, free and clear of all material liens, claims, charges and other encumbrances. North Valley and its Subsidiaries, as lessees, have the right under valid and existing leases to occupy, use and possess all property leased by them. All real property and fixed assets used by North Valley and its Subsidiaries are in good operating condition and repair (subject to ordinary wear and tear) suitable for the purposes for which they are currently utilized, and, to the Knowledge of North Valley, comply in all material respects with all applicable Laws relating thereto now in effect. North Valley and its Subsidiaries enjoy peaceful and undisturbed possession under all leases for the use of all property under which they are the lessees, and all leases to which North Valley or any of its Subsidiaries is a party are valid and binding obligations of North Valley or any of its SubsidiariesClosing Date in accordance with the terms thereof. Neither North Valley norpast custom and practice of the FNBB Group in filing its Tax Returns, (E) all deficiencies asserted or assessments made as a result of examinations conducted by any taxing authority have been paid in full, (F) no issues that have been raised by the relevant taxing authority in connection with the examination of any of its Subsidiaries isthe Tax Returns referred to in material defaultclause (A) are currently pending and (G) no statutes of limitation with respect to any Taxes of the FNBB Group have been waived by or on behalf of the FNBB Group.

(ii) FNBB has made available to TriCo (A) true and correct copies of the U.S. federal, state, local and foreign income Tax Returns filed by or on behalf of the FNBB Group for each of the three most recent fiscal years for which such lease,returns have been filed and there has occurred no default(B) any audit report issued within the last three years relating to Taxes due from or with respect to the FNBB Group or its income, assets or operations. Section 5.03(p)(ii) of FNBB’s Disclosure Schedule sets forth any income or franchise Tax Returns filed by North Valley or on behalf of the FNBB Group that have been examined by any of its Subsidiaries or event which with the lapse of time or the giving of notice, or both, would constitute a material default by North Valley or any of its Subsidiaries under any such lease.taxing authority since January 1, 2013.

(iii) To the Knowledge of North Valley, there are no applicable Laws, conditions of record, or other impediments that materially interfere with the intended use by North Valley or any of its Subsidiaries of any of the property owned, leased, or occupied by them.

3.18.  Insurance.

(a) North Valley and its Subsidiaries are insured with reputable insurers against such risks and in such amounts as the management of North Valley reasonably has determined to be prudent in accordance with industry practice. North Valley and its Subsidiaries are in material compliance with their insurance policies and are not in default under any of the material terms thereof. Each such policy is outstanding and in full force and effect and,FNBB, except for policies insuring against potential liabilities of officers, directors and employees of North Valley and its Subsidiaries and policies on which a third party is named as an additional insured, North Valley or the relevant Subsidiary thereof is the sole beneficiary of such policies. All premiums and other payments due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion.

(b) The existing insurance carried by North Valley and its Subsidiaries is sufficient for compliance by North Valley and its Subsidiaries with all requirements of applicable Laws and agreements to which North Valley or its Subsidiaries are subject. Section 3.18 of the North Valley Disclosure Letter contains a true, correct and complete list as of the date hereof of all material insurance policies and bonds maintained by North Valley and its Subsidiaries, including the name of the insurer, the policy number, the type of policy and any applicable deductibles. True, correct and complete copies of all such policies and bonds set forth in Section 3.18 of the North Valley Disclosure Letter, as in effect on the date hereof, have been delivered or made available to TriCo.

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3.19.  Compliance with Applicable Laws. Except as set forth in Section 3.195.03(p)(iii) of the North ValleyFNBB’s Disclosure Letter, each of North Valley and its Subsidiaries has complied (after giving effect toSchedule, there are no audits or investigations by any non-compliance and cure) and istaxing authority or proceedings in compliance in all material respectsprogress with all Laws applicable to it orrespect to the operation of its business including, without limitation,FNBB Group, nor has the Equal Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Truth in Lending Act, the Foreign Corrupt Practices Act, the Home Mortgage Disclosure Act, the Bank Secrecy Act, Title III of the USA Patriot Act and all other applicable bank secrecy laws, fair lending laws and other laws relating to discriminatory business practices, except for those instances of noncompliance that are not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect on North Valley, or prevent, materially delay or materially impair the ability of North Valley to consummate the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, North Valley has not been advised of any regulatory concerns regarding its compliance with the Bank Secrecy Act or related state or federal anti-money-laundering laws, regulations and guidelines, including those provisions of federal regulations requiring (i) the filing of reports, such as Currency Transaction Reports and Suspicious Activity Reports, (ii) the maintenance of records and (iii) the exercise of diligence in identifying customers. North Valley has adopted such procedures and policies as are necessary or appropriate to comply with Title III of the USA Patriot Act and, to North Valley’s Knowledge, North Valley is in compliance with such law in all material respects. Neither North Valley nor its Subsidiaries haveFNBB Group received any notice from any taxing authority that it intends to conduct such an audit or investigation.

(iv) No claim has been made in writing of any material allegedduring the past five (5) years by a taxing authority in a jurisdiction where the FNBB Group does not already file Tax Returns that the FNBB Group is or threatened claim, violation of or liability under any such Lawsmay be subject to taxation by that jurisdiction.

(v) The FNBB Group has not heretoforewithheld and paid over all Taxes required to have been curedwithheld and for which there is any remaining liability.

3.20.  Loans.

(a) All loans, loan commitments, letters of creditpaid over, and other extensions of credit (including any amendments, renewals, extensions or modifications thereto) (“Loans”) in which North Valley or any of its Subsidiaries has an interest, comply in all material respectscomplied with all applicable Laws,information reporting and backup withholding requirements, including but not limitedmaintenance of required records thereto, in connection with amounts paid or owing to applicable usury statutes, underwriting and recordkeeping requirements and the Truth in Lending Act, the Equal Credit Opportunity Act and the Real Estate Settlement Procedures Act, and other applicable consumer protection statutes and the regulations thereunder. There are no oral loans, loan commitmentsany employee, creditor, independent contractor, or other extensions of credit owned by North Valley or any of its Subsidiaries, or in which North Valley or any of its Subsidiaries has an interest.

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(b) Except as set forth in Section 3.20 of the North Valley Disclosure Letter, all Loans have been made or acquired by North Valley in all material respects in accordance with Board of Director-approved loan policies. To the Knowledge of North Valley, each outstanding Loan of North Valley or any of its Subsidiaries (i) is evidenced by notes, agreements or other evidences of indebtedness that are true, genuine and what they purport to be, (ii) to the extent secured, has been secured by valid liens which have been perfected and (iii) is a legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms, except as such enforcement may be limited by general principles of equity whether applied in a court of law or a court in equity and by bankruptcy, insolvency, moratorium, fraudulent conveyance, and similar Laws affecting creditors’ rights and remedies generally. Each of North Valley and its Subsidiaries holds the Loans contained in its loan portfolio for its own benefit to the extent of its interest shown therein; such Loans include liens having the priority indicated by their terms, subject, as of the date of recordation or filing of applicable security instruments, only to such exceptions as are discussed in attorneys’ opinions regarding title or in title insurance policies in the mortgage files relating to the Loans secured by real property or are not material as to the collectability of such Loans; all Loans owned by North Valley and its Subsidiaries or in which North Valley or any of its Subsidiaries has an interest are with full recourse to the borrowers (except as set forth in Section 3.20 of the North Valley Disclosure Letter), and neither North Valley nor its Subsidiaries have taken any action that would result in a waiver or negation of any rights or remedies available against the borrower or guarantor, if any, on any Loan, other than in the ordinary course of business. To the Knowledge of North Valley, all applicable remedies against all borrowers and guarantors are enforceable except as such enforcement may be limited by general principles of equity whether applied in a court of law or a court in equity and by bankruptcy, insolvency, moratorium, fraudulent conveyance, and similar Laws affecting creditors’ rights and remedies generally. All Loans sold by North Valley or any of its Subsidiaries have been sold without recourse (except as set forth in Section 3.20 of the North Valley Disclosure Letter) to North Valley or any of its Subsidiaries (other than with respect to customary representations and warranties) and without any liability under any yield maintenance or similar obligation.

(c) True, correct and complete copies of the currently effective lending policies of North Valley and its Subsidiaries have been furnished or made available to TriCo.

(d) Each outstanding Loan participation sold by North Valley or any of its Subsidiaries was sold with the risk of non-payment of all or any portion of that underlying Loan to be shared by each participant (including North Valley or any of its Subsidiaries) proportionately to the share of such Loan represented by such participation without any recourse of such other lender or participant to North Valley or any of its Subsidiaries for payment or repurchase of the amount of such Loan represented by the participation or liability under any yield maintenance or similar obligation. Each of North Valley and its Subsidiaries has properly fulfilled in all material respects its contractual responsibilities and duties in any Loan in which it acts as the lead lender or servicerthird party and has complied in all material respects with its duties as requiredall applicable laws, rules and regulations relating to the withholding and payment of Taxes.

(vi) The FNBB Group does not have a permanent establishment in any country other than the United States under any applicable regulatory requirements.Tax treaty between the United States and such other country and is not subject to income Tax in any country other than the United States.

(e) Each of North Valley and its Subsidiaries has properly perfected or caused to be properly perfected all security interests, liens,(vii) There are no Liens or other interests in any collateral securing any Loans made by it.

3.21.  Undisclosed Liabilities. Neither North Valley nor any of its Subsidiaries has incurred any liability of any nature whatsoever (whether absolute, accrued or contingent or otherwise and whether due or to become due) that, either alone or when combined with all similar liabilities, has had, or would be reasonably expected to have, a Material Adverse Effectencumbrances on North Valley.

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3.22.  Intellectual Property Rights. North Valley and each of its Subsidiaries owns or possesses all legal rights, or is licensed or otherwise has the right to use, all proprietary rights, including without limitation trademarks, trade names, service marks and copyrights, if any, that are material to the conduct of their existing businesses. Section 3.22 of the North Valley Disclosure Letter sets forth all proprietary rights that are material to the conduct of business of North Valley or any of its Subsidiaries. Neither North Valley nor any of its Subsidiaries is bound by or a party to any options, licenses or agreements of any kind with respect to any trademarks, service marks or trade names which it claims to own. Neither North Valley nor any of its Subsidiaries has received any communications alleging that any of them has violated any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or any other proprietary rights of any other person or entity.

3.23.  Indemnification.

(a) North Valley has no Knowledge of any action or failure to take action by any director, officer, employee or agent of North Valley or any North Valley Subsidiary which would give rise to a claim or a potential claim by any such person for indemnification from North Valley or any North Valley Subsidiary under the Articles of Incorporation, Bylaws (or equivalent documents) or Laws applicable to North Valley or any North Valley Subsidiary.

(b) Prior to the Closing Date, North Valley has entered into amended indemnification agreements with its current directors and officers to provide that the Tail Insurance Policy (as defined below) shall be substituted for the Letter of Credit called for in the current indemnification agreements with such directors and officers, and the North Valley Board has adopted resolutions determining that the Tail Insurance Policy is an adequate substitute for the Letter of Credit called for in all applicable indemnification agreements entered into between North Valley and its directors and officers (the “Tail Resolutions”).

(c) Section 3.23assets of the North Valley Disclosure Letter sets forth the indemnification agreements as amended andFNBB Group that arose in effect at the date of the Agreement.connection with any failure (or alleged failure) to pay any Tax.

3.24.  Insider Interests.

(a) All outstanding Loans and other contractual arrangements (including deposit relationships) between North Valley or any North Valley Subsidiary and any officer, director, employee or greater than five percent (5%) shareholder of North Valley (or any affiliate of any of them) of North Valley or any North Valley Subsidiary conform to applicable Laws.

(b)(viii) Except as set forth in Section 3.24(b)5.03(p)(viii) of FNBB’s Disclosure Schedule, no closing agreements, extensions of time within which to file any Tax Return, private letter rulings (or comparable rulings), technical advice memoranda or similar agreements or rulings have been entered into, requested of or issued by any taxing authority with respect to the FNBB Group.

(ix) Except as set forth in Section 5.03(q)(ix) of FNBB’s Disclosure Schedule, no member of the North Valley Disclosure Letter, no officer, directorFNBB Group has been, in the past five (5) years, a party to a transaction reported or employeeintended to qualify as a reorganization under Section 368 of North Valleythe Code. No member of the FNBB Group has been a “distributing corporation” or any North Valley Subsidiary,a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of shares that was reported or anyotherwise constituted a distribution of such persons’ family members or their affiliates, has an outstanding Loan from North Valley or anyshares under Section 355 of its Subsidiaries or any material interestthe Code in any property, real or personal, tangible or intangible, used in or pertainingthe two (2) years prior to the businessdate of North Valleythis Agreement or any North Valley Subsidiary.

3.25.  Fairness Opinion. North Valley has received an opinion from Sandler dated asthat could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the date hereof toCode) that includes the effect that,Transaction contemplated by this Agreement.

(x) No member of the FNBB Group is or has been, a United States real property holding corporation within the meaning of Section 897(c) of the Code during the applicable period specified in its opinion,Section 897(c)(1)(A)(ii) of the aggregate consideration pursuant toCode; the Transaction contemplated by this Agreement is fairnot subject to withholding under Section 1445 of the Code, and no stock transfer Taxes, sales Taxes, use Taxes or real estate transfer or gains Taxes will be imposed on the Transaction contemplated by this Agreement.

(xi) The FNBB Group will not be required to include any material item of income in, or exclude any material item of deduction from its taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any of the following that occurred or exists on or prior to the holdersClosing Date: (A) a “closing agreement” as described in Section 7121 of North Valley Common Stock fromthe Code (or any corresponding or similar provision of the Code or of the Tax laws of any state or locality), (B) an installment sale or open transaction, (C) a financial pointprepaid amount, or (D) change in the accounting method of view.

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3.26.  LaborFNBB pursuant to Section 481 of the Code (or any corresponding or similar provision of the Code or of the Tax laws of any state or locality).

(a) Neither North Valley(xii) Except as set forth in Section 5.03(p)(xii) of FNBB’s Disclosure Schedule, neither FNBB nor any of its Subsidiaries is a party to any Tax sharing, Tax allocation or boundsimilar agreement or arrangement (whether or not written) with any Person.

(xiii) The FNBB Group has not (A) consummated or participated in, and is not currently participating in, any transaction which was or is a “tax shelter” transaction as defined in Section 6662, 6011, 6111 or 6112 of the Code, applicable regulations thereunder or other related published guidance from the IRS or (B) engaged in any transaction that could give rise to (1) a registration obligation with respect to any Person under Section 6111 of the Code or the regulations thereunder, (2) a list maintenance obligation with respect to any person under Section 6112 of the Code or the regulations thereunder, or (3) a disclosure obligation as a “reportable transaction” under Section 6011 of the Code or the regulations thereunder.

(xiv) Except as set forth in Section 5.03(p)(xiv) of FNBB’s Disclosure Schedule, no power of attorney granted by any collective bargaining agreement,member of the FNBB Group relating to Taxes is currently in force.

(xv) No member of the FNBB Group has been a member of a consolidated, combined, unitary or affiliated group (other than a group of which FNBB is the parent) or has any liability for Taxes of any Person

(other than another member of the FNBB Group) underSection 1.1502-6 of the regulations of the U.S. Treasury (“Treasury Regulations”) or any similar provision of state, local, or foreign law, or as a transferee or successor, by contract, or other agreementotherwise.

(xvi) No member of the FNBB Group has taken any action or understanding with a labor unionfailed to take any action, or labor organization. To the Knowledgeis aware of North Valley, there are no labor union organizing activitiesany fact or labor union demands for recognition or certification,circumstance, in each case, with respectthat could reasonably be expected to prevent the employeesMerger from qualifying as a “reorganization” within the meaning of North Valley or its Subsidiaries. Since January 1, 2012, there has been no actual or, to the Knowledge of North Valley, threatened strikes, slowdowns or work stoppages by any employees of North Valley or its Subsidiaries.

(b) North Valley and its Subsidiaries are in compliance in all material respects with all applicable Laws relating to employment and employment practices, terms and conditions of employment, wages, hours of work and occupational safety and health. Without limiting the generalitySection 368(a) of the foregoing, each individual who renders services to North ValleyCode.

(q)Risk Management Instruments. None of the FNBB nor or any Subsidiary of North Valley who is classified by North Valley or such Subsidiary of North Valley, as applicable, as having the status of an independent contractor or other non-employee status for any purpose (including for purposes of taxation and tax reporting and under North Valley benefit plans) is properly so characterized.

3.27.  Investment Securities. Each of North Valley and its Subsidiaries has good and marketable title to all securities held by it (except securities sold under repurchase agreements or held in any fiduciary or agency capacity) free and clear of any lien, except to the extent that such securities are pledged in the ordinary course of business consistent with prudent business practices to secure obligations of North Valley or any of its Subsidiaries and except for such defects in title or liens that would not be material to North Valley and its Subsidiaries. Such securities are valued on the books of North Valley and its Subsidiaries in accordance with GAAP.

3.28.  Derivatives Contracts. Neither North Valley nor any of its Subsidiaries is a party to, owns or havehas agreed to enter into an exchange traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar oracquire any other contract that is a derivatives contractDerivatives Contract (including various combinations thereof) (each, a “Derivatives Contract”) and do not ownor any securities that (i) are referred to generically as “structured notes,” “high risk mortgage derivatives,” “capped floating rate notes” or “capped floating rate mortgage derivatives” or (ii) could have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes.

3.29.  Tax Treatment(r)Loans; Nonperforming and Classified Assets.

(i) Each Loan on the books and records of Merger. AsFNBB and its Subsidiaries was made and has been serviced in all material respects in accordance with First National Bank’s lending standards in the ordinary course of business, is evidenced in all material respects by appropriate and sufficient documentation and, to FNBB’s Knowledge, constitutes the legal, valid and binding obligation of the obligor named therein, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles. The Loan data previously provided by FNBB to TriCo accurately reflects in all material respects the Loan portfolio of FNBB and its Subsidiaries as of the date of this Agreement, North Valleysuch data.

(ii) Section 5.03(r)(ii) of FNBB’s Disclosure Schedule sets forth, as of the date hereof: (A) any Loan under the terms of which the obligor is sixty (60) or more days delinquent in payment of principal or interest, or to FNBB’s Knowledge, in default of any other material provision thereof; (B) each Loan which has been classified as “substandard,” “doubtful,” “loss” or “special mention” (or words of similar import) by FNBB, any of its Subsidiaries or an applicable regulatory authority; (C) a listing of the OREO acquired by foreclosure or bydeed-in-lieu thereof, including the book value thereof as of September 30, 2017; and (D) each Loan with any director, executive officer or five percent or greater shareholder of FNBB or any of its Subsidiaries, or to FNBB’s Knowledge, any Person controlling, controlled by or under common control with, any of the foregoing.

(iii) No agreement pursuant to which FNBB or any of its Subsidiaries has sold or is servicing Loans or pools of Loans or participations in Loans or pools of Loans contains any obligation to repurchase such Loans or interests therein, or entitles the buyer of such Loans or pool of Loans or participation in Loans or pools of Loans or any other Person to pursue any other form of recourse against FNBB or any of its Subsidiaries. There has not been any claim made by any such buyer or other Person for repurchase or other similar form of recourse against FNBB or any of its Subsidiaries nor, to the Knowledge of FNBB, are there any facts or circumstances that could reasonably give rise to any such claim.

(s)Properties.

(i) Section 5.03(s)(i) of FNBB’s Disclosure Schedule contains a complete and correct list of all real property or premises owned or operated by FNBB as of the date hereof. Other than as disclosed in Section 5.03(s)(i) of FNBB’s Disclosure Schedule, none of FNBB or any of its Subsidiaries owns, and no such entity is in the process of foreclosing (whether by judicial process or by power of sale) or otherwise in the process of acquiring title to, except pursuant to foreclosures which are pending in the ordinary course of business consistent with past practice, any real property or premises on the date hereof in whole or in part.

(ii) Section 5.03(s)(ii) of FNBB’s Disclosure Schedule contains a complete and correct list of all real property or premises leased or subleased in whole or in part by FNBB or any of its Subsidiaries, and together with a list of applicable leases or subleases and the name of the lessor or sublessor.

(iii) To FNBB’s Knowledge, all real and personal property owned by FNBB or any of its Subsidiaries or presently used by any of them in their respective business is in a good condition (ordinary wear and tear excepted) and is sufficient to carry on their respective business in the ordinary course of business consistent with their past practices. FNBB has good, marketable and indefeasible title, free and clear of all Liens, to all of the material properties and assets, real and personal, reflected on the consolidated balance sheet of FNBB as of September 30, 2017 included in FNBB’s SEC Reports, or acquired after such date, other than properties sold by FNBB or any of its Subsidiaries in the ordinary course of business, except (A) Liens for current taxes and assessments not yet due or payable for which adequate reserves have been established, (B) pledges to secure deposits incurred in the ordinary course of its banking business consistent with past practice, (C) such imperfections of title, easements and encumbrances, if any, as are not material in character, amount or extent, (D) as reflected on the consolidated balance sheet of FNBB as of September 30, 2017 included in FNBB’s SEC Reports and/or (E) as shown on the title policies listed in Section 5.03(s)(iii) of FNBB’s Disclosure Schedule.

(iv) All real and personal property which is material to FNBB’s business on a consolidated basis and leased or licensed by FNBB or any of its Subsidiaries is held pursuant to leases or licenses which are valid obligations of FNBB or any of its Subsidiaries and, to FNBB’s Knowledge, are valid and binding obligations of the other parties thereto, enforceable against FNBB or such Subsidiary of FNBB, and to FNBB’s Knowledge, the other parties thereto, in accordance with their terms (in each case, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditor’s rights or by general equity principles).

(v) Except as set forth in Section 5.03(s)(v) of FNBB’s Disclosure Schedule, such leases will not terminate or lapse prior to the Effective Time and FNBB and each of its Subsidiaries has the right to use and occupy such leased real property for the full term, and in accordance with the conditions of the lease relating thereto. Neither FNBB nor any of its Subsidiaries has received any written notice of termination, cancellation, breach or default under any such real property lease and, to the Knowledge of FNBB as of the date hereof, no event has occurred, and no circumstances or condition exists, that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, (A) result in a violation or breach of any of the provisions of any real property lease, (B) give any Person the right to declare a default or exercise any remedy under any real property lease, (C) give any Person the right to accelerate the maturity or performance of any real property lease, or (D) give any Person the right to cancel, terminate or modify any real property lease. To FNBB’s Knowledge, FNBB and its Subsidiaries are in compliance with all applicable health and safety related requirements for the real property owned by any of them, including those requirements under the Americans with Disabilities Act of 1990, as amended. None of the owned or leased premises or properties described in paragraph (i) or (ii) above have been condemned or otherwise taken by any Governmental Entity and no condemnation or taking is threatened or contemplated and none thereof is subject to any claim, contract or law which could reasonably be expected to materially and adversely affect its use or value for the purposes now made of it.

(t)Intellectual Property; Information Technology; Security.

(i) Each of FNBB and its Subsidiaries owns or possesses valid and binding licenses and other rights to use all Intellectual Property used by FNBB and its Subsidiaries in the conduct of its business as currently conducted, and neither FNBB nor any of its Subsidiaries has received any notice of conflict or allegation of invalidity with respect thereto that asserts the right of others. Section 5.03(t)(i) of FNBB’s Disclosure Schedule lists all registered Intellectual Property owned by FNBB and its Subsidiaries, and all contracts to which FNBB and its Subsidiaries has licensed Intellectual Property from third parties that is material to the operation of FNBB and its Subsidiaries (other than commercially available “shrink wrap” or “click wrap”

licenses). Each of FNBB and its Subsidiaries owns or has a valid right to use or license such Intellectual Property, free and clear of all Liens (except any restrictions set forth in any licensed Intellectual Property), and has performed all the obligations required to be performed by it and is not awarein default in any material respect under any contract, agreement, arrangement or commitment relating to any of the foregoing. To FNBB’s Knowledge, such Intellectual Property is valid and enforceable (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(ii) (A) Each of FNBB and its Subsidiaries owns or is validly licensed to use (in each case, free and clear of any factLiens, except), all Intellectual Property used in or statenecessary for the conduct of affairs relatingits business as currently conducted; (B) to North Valley that could causeFNBB’s Knowledge, the Mergeruse of any Intellectual Property by FNBB or any of its Subsidiaries and the Bank Mergerconduct of their respective businesses as currently conducted does not infringe on or otherwise violate the legal rights of any Person; (C) to be treatedFNBB’s Knowledge, no Person is challenging, infringing on or otherwise violating any right of FNBB or any of its Subsidiaries with respect to any Intellectual Property owned by and/or licensed to FNBB or any of its Subsidiaries; and (D) neither FNBB nor any of its Subsidiaries has received any written notice or otherwise has Knowledge of any pending legal proceeding against FNBB or any of its Subsidiaries with respect to any Intellectual Property used by FNBB or any of its Subsidiaries, or any Intellectual Property owned by any Person, and as a “reorganization” under Section 368(a) of the Code.

3.30.  North Valley Information. The information provideddate hereof, neither FNBB nor its Subsidiaries has Knowledge of any facts or events that would result in writing by North Valley relating to North Valley andany legal proceeding against FNBB or any of its Subsidiaries that is likely to succeed.

(iii) To FNBB’s Knowledge, all information technology and computer systems (including software, information technology and telecommunication hardware and other equipment) relating to the transmission, storage, maintenance, organization, presentation, generation, processing or analysis of data and information, whether or not in electronic format, used in or necessary to the conduct of FNBB’s and its Subsidiaries respective businesses (collectively, “FNBB IT Systems”) have been properly maintained by technically competent personnel, in accordance with standards set by the manufacturers or otherwise in accordance with standards in the industry, to ensure proper operation, monitoring and use. The FNBB IT Systems are in good working condition to effectively perform all information technology operations necessary to conduct business as currently conducted. Neither FNBB nor any of its Subsidiaries has experienced within the past three (3) years any material disruption to, or material interruption in, its conduct of its business attributable to a defect, bug, breakdown or other failure or deficiency of the FNBB IT Systems. FNBB and its Subsidiaries have taken commercially reasonable measures to provide for theback-up and recovery of the data and information necessary to the conduct of its business (including such data and information that is stored on magnetic or optical media in the ordinary course) without material disruption to, or material interruption in, the conduct of its business. To FNBB’s Knowledge, neither FNBB nor any of its Subsidiaries is in breach of any Material Contract related to any FNBB IT Systems.

(iv) To FNBB’s Knowledge, since January 1, 2015, no third party has gained unauthorized access to any information technology networks controlled by and material to the operation of the business of FNBB and its Subsidiaries.

(u)Fiduciary Accounts. FNBB and each of its Subsidiaries have properly administered all accounts for which it acts as a fiduciary, including but not limited to accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in all material respects in accordance with the terms of the governing documents and applicable laws and regulations. Neither FNBB nor any of its Subsidiaries, nor, to FNBB’s Knowledge, any of their respective directors, officers or employees, has committed any breach of trust with respect to any fiduciary account and the records for each such fiduciary account are true and correct and accurately reflect the assets of such fiduciary account.

(v)Books and Records. The books and records of FNBB and its Subsidiaries have been fully, properly and accurately maintained in compliance in all material respects with applicable legal and accounting

requirements, and such books and records accurately reflect in all material respects all dealings and transactions in respect of the business, assets, liabilities and affairs of FNBB and its Subsidiaries.

(w)Insurance. Section 5.03(w) of FNBB’s Disclosure Schedule lists and summarizes all of the insurance policies, binders, or bonds currently maintained by FNBB and its Subsidiaries (“Insurance Policies”), which summary includes for each Insurance Policy, the name of the insurance carrier, annual premiums, and the amount of coverage per event and, in the aggregate, a named insured (including any additional insured that may be required), or otherwise the beneficiary of the coverage. FNBB and each of its Subsidiaries is insured with reputable insurers against such risks and in such amounts as are customary and prudent in accordance with industry practices. All the Insurance Policies are in full force and effect; neither FNBB nor any of its Subsidiaries is in default thereunder; no event has occurred which, with notice or lapse of time, or both, would constitute a default or permit termination, modification or acceleration under such policies; all premiums due and payable with respect to the Insurance Policies have been timely and fully paid; and all claims thereunder have been filed in due and timely fashion. Except as set forth in Section 5.03(w) of FNBB’s Disclosure Schedule, there is no claim for coverage by FNBB or any of its Subsidiaries pending under any Insurance Policies as to which coverage has been questioned, denied or disputed by the underwriters of such Insurance Policies or in respect of which such underwriters have reserved their rights. Neither FNBB nor any of its Subsidiaries have received written notice of any threatened termination of, material premium increase with respect to, or material alteration of coverage under, any Insurance Policies.

(x)Allowance For Loan Losses. First National Bank’s allowance for loan losses is, and shall be as of the Effective Date, in compliance with First National Bank’s existing methodology for determining the adequacy of its allowance for loan losses as well as the standards established by applicable Governmental Entities and the Financial Accounting Standards Board and is and shall be adequate under all such standards.

(y)Transactions With Affiliates. Except as set forth in Section 5.03(y) of FNBB’s Disclosure Schedule, FNBB has not engaged in any transactions with Affiliates within the meaning of Sections 23A and 23B of the Federal Reserve Act. All agreements between FNBB or any of its Subsidiaries and any of their respective Affiliates comply in all material respects, to the extent applicable, with Regulation W of the FRB.

(z)Required Vote; Antitakeover Provisions.

(i) The affirmative vote of the holders of a majority of the outstanding shares of FNBB Common Stock entitled to vote is necessary to approve this Agreement and the Transaction on behalf of FNBB. No other vote of the shareholders of FNBB is required by law, the FNBB Articles, the FNBB Bylaws, the rules of Nasdaq or otherwise to approve this Agreement, the Bank Merger Agreement and the Transaction.

(ii) No “control share acquisition,” “business combination moratorium,” “fair price” or other form of antitakeover statute or regulation under the CGCL or any applicable provisions of the takeover laws of any other state (and any comparable provisions of the FNBB Articles and FNBB Bylaws), apply or will apply to this Agreement, the Bank Merger Agreement or the Transaction.

(aa)Fairness Opinion. The FNBB Board has received the opinion of The Courtney Group to the effect that as of the date hereof, subject to the assumptions, qualifications, limitations and other matters stated therein, the aggregate consideration pursuant to this Agreement is fair to the holders of FNBB Common Stock from a financial point of view.

(bb)Transactions in Securities.

(i) Since December 31, 2013, all offers and sales of FNBB Common Stock by FNBB were at all relevant times exempt from, or complied with, the registration requirements of the Securities Act.

(ii) Neither FNBB, none of its Subsidiaries, nor, to FNBB’s Knowledge, (A) any director or executive officer of FNBB or any of its Subsidiaries, (B) any Person related to any such director or officer by blood, marriage or adoption and residing in the same household and (C) any Person who has been knowingly provided material nonpublic information by any one or more of these Persons, has purchased or sold, or caused to be containedpurchased or sold, any shares of FNBB Common Stock or other securities issued by FNBB (1) during any period when FNBB was in the Registration Statement, the Joint Proxy Statement/Prospectus,possession of material nonpublic information, or (2) in violation of any filingsapplicable provision of federal or approvals under applicable state securities laws, rules or regulations.

(cc)Ownership of TriCo Common Stock. None of FNBB or any filing pursuantof its Subsidiaries, or to Rule 165FNBB’s Knowledge, any of its other affiliates or Rule 425 under the Securities Act or Rule 14a-12associates (as such terms are defined under the Exchange Act,Act), owns beneficially or of record, directly or indirectly, or is a party to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of, shares of TriCo Common Stock (other than shares held in any other document filed with any other Governmental Entitya fiduciary capacity that are beneficially owned by third parties, shares held in connection herewith, willan index or mutual fund, or as a result of debts previously contracted).

(dd)Disclosure. The representations and warranties contained in this Section 5.03, when considered as a whole, do not contain any untrue statement of a material fact or omit to state aany material fact necessary in order to make the statements therein,and information contained in light ofthis Section 5.03 not misleading.

(ee)No Additional Representations. Except for the circumstances in which they are made, not misleading and will comply in all material respects with the provisions of the Securities Act, the Exchange Act, the rules and regulations thereunder, and any other governing laws or regulations, as applicable. No representation or warranty by North Valley, and no statement by North Valley in any certificate, agreement, schedule or other document furnished or to be furnished in connection with the transactions contemplated by this Agreement, was or will be inaccurate, incomplete or incorrect in any material respect as of the date furnished or contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary to make such representation, warranty or statement not misleading to TriCo.

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ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF TRICO

Subject to the disclosures set forth in the disclosure letter of TriCo delivered to North Valley concurrently with the parties’ execution of this Agreement (the “TriCo Disclosure Letter”) (each of which disclosures, in order to be effective, shall clearly indicate the Section and, if applicable, the Subsection of this Article IV to which it relates (unless and to the extent the relevance to other representations and warranties is readily apparent from the actual text of the disclosures), and each of which disclosures shall also be deemed to be representations and warranties made by TriCoFNBB in this Section 5.03 and as Previously Disclosed, neither FNBB nor any other Person makes any express or implied representation or warranty with respect to North Valley under this Article IV),FNBB, its Subsidiaries, or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and FNBB hereby expressly disclaims any such other representations and warranties.

5.04Representations and Warranties of TriCo. Subject to Sections 5.01 and 5.02, TriCo hereby makes the following representationsrepresents and warrantieswarrants to North Valley, each of which is being relied upon by North ValleyFNBB as a material inducement to North Valley to enter intofollows:

(a)Organization, Standing and perform this Agreement.

4.1.  Corporate OrganizationAuthority.

(a) TriCo is a corporation duly organized, and validly existing and in good standing under the laws of the State of California. TriCo and its Subsidiaries have the corporate and other power and authority to own or lease all of their properties and assets and to carry on their business as it is now being conducted, and are duly licensed or qualified to do business and is in good standing in each jurisdiction in which the naturewhere its ownership or leasing of any material business conducted by themproperty or assets or the characterconduct of its business requires it to be so licensed or location of any material properties or assets owned or leased by them makes such licensing or qualification necessary,qualified, except where the failure to be so licensed or qualified would not have nor reasonably be expected to have a Material Adverse Effect on TriCo. TriCo is duly registered as a bank holding company with the Federal Reserve Board. Tri Counties Bank, TriCo Capital Trust I, and TriCo Capital Trust II are the only direct or indirect Subsidiaries of TriCo. Section 4.1(a) of the TriCo Disclosure Letter sets forth true, correct and complete copies of the Articles of Incorporation and Bylaws of TriCo and Tri Counties Bank ashas in effect as of the date of this Agreement.

(b) Tri Counties Bank is a Californiaall federal, state, chartered bank duly organizedlocal and validly existing under the laws of the State of California. The deposit accounts of Tri Counties Bank are insured by the FDIC to the fullest extent permitted by Law, and all premiums and assessments due the FDIC in connection therewith have been paid by Tri Counties Bank. Tri Counties Bank is “well-capitalized” (as that term is defined at 12 C.F.R. Section 325.103). Tri Counties Bank has no Subsidiaries. Tri Counties Bank has the corporate and other power and authorityforeign governmental authorizations necessary for it to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business in each jurisdiction in which the nature of any material business conducted by it or the character or location of any material properties or assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not have a Material Adverse Effect on TriCo. None of Tri Counties Bank, TriCo nor any Subsidiary of TriCo engages in the trust business or serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor for any fiduciary accounts.conducted. The Articles of Incorporation and Bylaws of Tri Counties Bank, copies of which are set forth in Section 4.1(b) of the TriCo Disclosure Letter,Articles and the TriCo Bylaws which have previously been made available to FNBB are true, correctcomplete and completecorrect copies of such documents as in effect as ofon the date of this Agreement.

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(c) The minute books of TriCo and each of its Subsidiaries in all material respects,previously made available to FNBB contain accuratetrue, complete and correct records of all meetings and accurately reflect all other material corporate actions held or taken byas of the shareholders, their respective Boards of Directors and all standing committees of their respective Boards of Directors.dates thereof.

4.2.  Capitalization(b)TriCo Capital Stock.

(a) The(i) As of the date hereof, the authorized capital stock of TriCo consists solely of 50,000,000 shares of TriCo Common Stock, of which 22,943,963 shares were issued and 1,000,000 shares of preferred stock, with no par value (the “TriCo Preferred Stock”). Asoutstanding as of the date hereof there are: (i) 16,076,662 shares of TriCo Common Stock issued and outstanding, including 1,317,666 shares held by the TriCo ESOP; (ii) no shares of TriCo Common Stock held in TriCo’s treasury; and (iii) no shares of TriCo Common Stock reserved for issuance upon exercise of outstanding stock options or otherwise, except for 2,183,870 shares of TriCo Common Stock reserved for issuance pursuant to the TriCo’s equity incentive plans (the “TriCo Equity Plans”) (of which, collectively, options to purchase 1,246,370 shares are outstanding at the date hereof). No1,000,000 shares of TriCo Preferred Stock, are issued and outstanding or reserved for issuance, except for 150,000 shares of TriCo Preferred Stock designated as Series AA Junior Participating Preferred Stock reserved for issuance pursuant to the TriCo Rights Agreement, none of which iswere issued and outstanding as of the date hereof. All of the issued andThe outstanding shares of TriCo Common Stock have been duly authorized and validly issued and are fully paid and nonassessable, and freenone of preemptive rights, with no personal liability attaching to the ownership thereof.

(b) All of the outstanding stock options granted by TriCo have been granted in compliance in all material respects with all applicable Laws. Except for the outstanding options, plans and other obligations set forth above, TriCo does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of TriCo Common Stock TriCo Preferred Stockhave been issued in violation of the preemptive rights of any Person. As of the date hereof, there are no Rights authorized, issued or any other equity securityoutstanding with respect to the capital stock of TriCo, or any securities representing the right to purchase or otherwise receive anyexcept for shares of TriCo Common Stock issuable pursuant to the TriCo PreferredBenefit Plans and by virtue of this Agreement.

(ii) The shares of TriCo Common Stock to be issued in exchange for shares of FNBB Common Stock in the Merger, when issued in accordance with the terms of this Agreement, will be duly authorized,

validly issued, fully paid and nonassessable and the issuance thereof is not subject to any preemptive rights of any Person.

(c)Tri Counties; Subsidiaries.

(i) Tri Counties is duly organized, validly existing and in good standing under the laws of the State of California, licensed as a bank by the DBO and is duly qualified to do business and is in good standing in the jurisdictions where its ownership or any other equity securityleasing of TriCo. Neither TriCo nor anyproperty or the conduct of its Subsidiaries have any authorized, issued, or outstanding bonds, debentures, notes or other indebtedness for whichbusiness requires it to be so qualified. The deposit accounts of Tri Counties are insured by the holders thereof haveFDIC in the rightmanner and to vote on any matters on which the shareholders have the right to vote. Other than the TriCo Rights Agreement, there are no registration rights,maximum extent provided by applicable law and there is no voting trust, proxy, rights agreement, “poison pill” anti-takeover plan or other agreement or understanding to which TriCo is a party orTri Counties has paid all deposit insurance premiums and assessments required by which it is bound with respect to any equity security of any class of TriCo or with respect to any equity security, partnership interest or similar ownership interest of any class of any of its Subsidiaries.

applicable laws and regulations.

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(c)(ii) (A) TriCo owns, directly or indirectly, all of the issued and outstanding sharesEquity Securities of capital stockTri Counties and equity securities of each of the Subsidiaries of TriCo listed in the TriCo SEC Reports, (B) no Equity Securities of Tri Counties or any equity securities of TriCo’s other Subsidiaries are or may become required to be issued (other than to TriCo) by reason of any Right or otherwise, (C) there are no contracts, commitments, understandings or arrangements by which Tri Counties or any other Subsidiary of TriCo is or may be bound to sell or otherwise transfer any of its Equity Securities (other than to TriCo or any of its wholly-owned Subsidiaries) and (D) there are no contracts, commitments, understandings, or arrangements relating to TriCo’s right to vote or to dispose of such Equity Securities and (E) all of the Equity Securities of Tri Counties and equity securities of TriCo’s other Subsidiaries are fully paid and nonassessable and are owned by TriCo, directly or indirectly, free and clear of any Liens.

(d)Corporate Power and Authority. Each of TriCo and Tri Counties has the corporate power and authority to carry on its business as it is now being conducted and to own all liens, charges, encumbrancesits properties and security interests whatsoever, and all of such shares are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. No TriCo Subsidiary has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of its capital stock or any other equity security or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security.

4.3.  Authority; No Violation.

(a)assets. TriCo has fullthe corporate power and authority to execute, deliver and deliverperform its obligations under this Agreement and to consummate the Transaction and to cause Tri Counties to consummate the Bank Merger, and Tri Counties has the corporate power and authority to execute, deliver and perform its obligations under the Bank Merger Agreement, in each case, subject to the receipt of regulatoryall necessary approvals of Governmental Entities and shareholder approvals,the approval by TriCo’s shareholders of the issuance of TriCo Common Stock in the Merger.

(e)Corporate Action; Enforceability. Subject to consummate the transactions contemplated hereby. The execution and deliveryapproval of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly approved by the TriCo Board (the “TriCo Board”). The TriCo Board, at a meeting duly called and held, has determined that this Agreement and the transactions contemplated hereby are fair to and in the best interestsissuance of the TriCo shareholders and resolved to recommend that the holders of TriCo Common Stock vote in favor of approval and adoption of this Agreement and the consummation of the transactions contemplated hereby, including the Merger and the Bank Merger. Except for the adoption of this Agreement by the affirmative voterequisite votes of the holders of a majority of the outstanding shares of TriCo Common Stock, (the “Requisitethis Agreement, the Transaction and the Bank Merger Agreement have been authorized by all necessary corporate action by TriCo, Vote”), no further corporate proceedings on the part of the TriCo Board the shareholders of TriCo orand the Tri Counties Bank Board, of Directors (except for matters relatedas applicable, on or prior to setting the date time, placehereof, and record date for said meeting) are necessary in orderthe TriCo Board has unanimously resolved to authorize or approverecommend that holders of TriCo Common Stock adopt this Agreement or to consummateand that such matter be submitted for consideration by the transactions contemplated hereby includingholders of TriCo Common Stock at the Merger and the Bank Merger.TriCo Meeting as required by Section 6.02. This Agreement has been duly and validly executed and delivered by TriCo and, (assumingassuming due authorization, execution and delivery by North Valley of this Agreement)FNBB, this Agreement constitutesis a valid and legally binding obligationagreement of TriCo enforceable against TriCo in accordance with its terms except(except as enforcementenforceability may be limited by general principles of equity whether applied in a court of law or a court of equity and byapplicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyancetransfer and similar Lawslaws of general applicability relating to or affecting creditors’ rights and remedies generally. All corporate proceedings on the part of TriCo necessary to consummate the transactions contemplated hereby will have been taken prior to the Effective Time.

(b) Tri Counties Bank has full corporate or other power and authority to execute and deliver the Bank Merger Agreement and, subject to the receipt of regulatory and shareholder approvals, to consummate the transactions contemplated thereby. The execution and delivery of the Bank Merger Agreement and the consummation of the transactions contemplated thereby will be duly and validly approved by the Board of Directors of Tri Counties Bank and by TriCo as the sole shareholder of Tri Counties Bank prior to the Effective Time. All corporate proceedings on the part of Tri Counties Bank and by TriCo as sole shareholder of Tri Counties Bank necessary to consummate the transactions contemplated hereby will have been taken prior to the Effective Time. The Bank Merger Agreement, upon execution and delivery by Tri Counties Bank, will be duly and validly executed and delivered by Tri Counties Bank and will (assuming due authorization, execution and delivery by North Valley Bank) constitute a valid and binding obligation of Tri Counties Bank, enforceable against Tri Counties Bank in accordance with its terms, except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency, moratorium, fraudulent conveyance and similar Laws affecting creditors’ rights and remedies generally.

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(c) Neither the execution and delivery of this Agreement by TriCo or the Bank Merger Agreement by Tri Counties Bank nor the consummation by TriCo or its Subsidiaries, as the case may be, of the transactions contemplated hereby or thereby, nor compliance by TriCo or its Subsidiaries, as the case may be, with any of the terms or provisions hereof or thereof, will (i) violate any provision of the Articles of Incorporation or Bylaws of TriCo or the Articles of Incorporation or Bylaws (or the equivalent documents) of its Subsidiaries, or (ii) assuming that the consents and approvals referred to in Section 4.4 are duly obtained, (x) violate in any material respect any Laws applicable to TriCo or its Subsidiaries or any of their respective properties or assets, or (y) violate or conflict in any material respect with, result in a material breach of any provision of or the loss of any benefit under, constitute a material default (or an event which, with notice or lapse of time, or both, would constitute a material default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any lien, pledge, security interest, charge or other encumbrance upon any of the respective properties or assets of TriCo or any of its Subsidiaries under any of the terms, conditions or provisions of any material note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other material instrument or obligation to which TriCo or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound or affected.

4.4.  Consents and Approvalsprinciples).

(a) Except for the approvals and filings referred to in Section 3.4(a), no(f)Regulatory Approvals; No Defaults.

(i) No consents or approvals of, or waivers by, or notices to, or filings or registrations with, any Governmental Entity or with any third party are necessaryrequired to be made or obtained by TriCo or any of its Subsidiaries in connection with: (1)with the execution, and delivery or performance by TriCo of this Agreement; (2) the consummation by TriCo of the MergerAgreement and the other transactions contemplated hereby; (3) the execution and delivery by Tri Counties Bank of the Bank Merger Agreement;Agreement or to consummate the Transaction, except for (A) filings of applications or notices with, and (4)approvals or waivers by, the consummation by Tri Counties BankFRB, the FDIC, the OCC and the DBO, as required, (B) filings with the SEC and state securities authorities, as applicable, in connection with the issuance of TriCo Common Stock in the Merger, (C) approval of the listing of such TriCo Common Stock on the Nasdaq, (D) the filing of

(1) the Agreement of Merger with the Secretary of State of the State of California pursuant to the CGCL, and (2) the Bank Merger Agreement with the Secretary of State of the State of California and the transactions contemplated thereby; except, in each case, for such consents, approvals or filings,DBO pursuant to the failureCGCL and the CFC and (E) the approval of which to obtain will not have a Material Adverse Effect onthis Agreement and the abilityTransaction and the issuance of TriCo or Tri Counties Bank, as applicable, to consummateCommon Stock in the transactions contemplated hereby.

(b)Merger by the vote of the holders of the outstanding shares of TriCo’s Common Stock. As of the date hereof, TriCo has no Knowledgeis not aware of any reason why approvalthe approvals set forth above and referred to in Section 7.01(b) will not be received in a timely manner and without the imposition of a condition, restriction or effectiveness of anyrequirement of the applications, noticestype described in Section 7.01(b).

(ii) Subject to receipt, or the making, of the consents, approvals, waivers and filings referred to in Section 3.4(a) cannot be obtainedthe preceding paragraph and expiration of the related waiting periods, the execution, delivery and performance of this Agreement by TriCo and the Bank Merger Agreement by Tri Counties and the consummation of the Transaction do not and will not (A) constitute a material breach or granted onmaterial violation of, or a timely basis without the impositionmaterial default under, or give rise to any Lien, any acceleration of remedies or any right of termination under, any law, code, ordinance, rule or regulation or any judgment, decree, injunction, order, governmental permit or license, or agreement, indenture or instrument of TriCo or of any Burdensome Condition (as defined below)of its Subsidiaries or to which TriCo or any of its Subsidiaries or any of their respective assets or properties is subject or bound, (B) constitute a breach or violation of, or a default under, the articles of incorporation or bylaws (or similar governing documents) of TriCo or any of its Subsidiaries or (C) require any consent or approval under any such law, code, ordinance, rule, regulation, judgment, decree, injunction, order, governmental permit or license, agreement, indenture or instrument.

(g)Financial Reports and SEC Reports; Undisclosed Liabilities; No Material Adverse Effect.

4.5.  Reports. Since(i) TriCo’s Annual Report on Form10-K for the year ended December 31, 2012, TriCo2016 and its Subsidiaries have timelyall other reports, registration statements, definitive proxy statements or information statements filed all reports, registrations and applications, together with any amendments requiredor to be madefiled by it subsequent to December 31, 2016 under the Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act in the form filed or to be filed (collectively, “TriCo’s SEC Reports”) with respect thereto, that they have been requiredthe SEC, as of the date filed or to file with any Governmental Entities. As of its respective filing date (subject to any subsequent amendment thereto), each such report, registration, application and amendmentbe filed, (A) complied or will comply in all material respects as to form with all rules and regulations promulgated by the applicable Governmental Entityrequirements under the Securities Act or the Exchange Act, as the case may be and (B) did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Except for normal examinations conducted bymisleading, except that information as of a Governmental Entity in the regular courselater date shall be deemed to modify information as of an earlier date; and each of the businessconsolidated statements of TriCofinancial condition contained in or incorporated by reference into any such SEC Reports (including the related notes and its Subsidiaries, no Governmental Entity is conducting,schedules thereto) fairly presents, or has conducted, any proceeding or investigation intowill fairly present, the business or operations of TriCo since December 31, 2008. Except as previously disclosed to North Valley, there is no material unresolved violation, criticism or exception by any Governmental Entity with respect to any report or letter relating to any examinations of TriCo or any of its Subsidiaries.

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4.6.  Financial Statements; Exchange Act Filings; Books and Records.

(a) TriCo has previously made available to North Valley true, correct and complete copies of (i) the audited consolidated balance sheetsfinancial position of TriCo and its Subsidiaries as of December 31, 2012its date, and 2011 andeach of the related audited consolidated statements of income,operations and shareholders’ equity and other comprehensive income (loss) and cash flows foror equivalent statements in such SEC Reports (including any related notes and schedules thereto) fairly presents, or will fairly present, the fiscal years 2012, 2011 and 2010, inclusive, as reportedconsolidated results of operations, changes in TriCo’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the SEC under the Exchange Act, in each case accompanied by the audit report of TriCo’s independent registered public accounting firm and (ii) the unaudited consolidated balance sheets of TriCo and its Subsidiaries as of September 30, 2013 and 2012 and the related audited consolidated statements of income, shareholders’ equity and other comprehensive income (loss) and cash flows, for the nine months and quarterly period ended September 30, 2013 as reported in TriCo’s Quarterly Report on Form 10-Q with respect to the quarter ended September 30, 2013 filed with the SEC under the Exchange Act. TriCo will deliver as soon as is reasonably practicable, a draft of the consolidated balance sheet of TriCo and its Subsidiaries as of December 31, 2013 and the related consolidated statements of income, shareholders’ equity and comprehensive income and cash flows for the period ended December 31, 2013, in the form TriCo expects to file under the Exchange Act in connection with its Form 10-K for the period ended December 31, 2013. The financial statements referred to in this Section 4.6 (including the related notes, where applicable) fairly present (subject, in the case of the unaudited statements, to normal recurring audit adjustments), the results of the consolidated operations and consolidated financial conditionmay be, of TriCo and its Subsidiaries for the respective fiscal periods orto which they relate, in each case in accordance with GAAP consistently applied during the periods involved, except in each case as of the respective dates therein set forth; eachmay be noted therein. Each of such financial statements (including theany related notes where applicable) complyand schedules thereto) complies in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto and each of such statements (including the related notes, where applicable) has been prepared in accordance with GAAP consistently applied during the periods involved, except in each case as indicated in such statements or in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q. TriCo’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and all reports subsequently filed under the Exchange Act (the “TriCo Exchange Act Reports”) comply (or, in the case of TriCo Exchange Act Reports filed subsequent to the date hereof, will comply) in all material respects with the appropriate requirements for such reports under the Exchange Act, and TriCo has previously delivered or made available to North Valley true, correct and complete copies of such reports.thereto. The books and records of TriCo and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements.

requirements and reflect only actual transactions.

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(b) TriCo and each of its Subsidiaries maintains a system of “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under(ii) Except as set forth on the Exchange Act) reasonably designed and maintained to ensure that all information (both financial and non-financial) required to be disclosed by TriCo in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to TriCo’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the Chief Executive Officer and Chief Financial Officerunaudited consolidated balance sheet of TriCo required under the Exchange Act with respect to such reports. TriCo has disclosed, based on its most recent evaluationdated as of September 30, 2017 and included in TriCo’s SEC Reports filed prior to the date hereof, neither TriCo nor any of this Agreement,its Subsidiaries has any material liability (whether absolute, contingent or accrued or otherwise and whether due or to TriCo’s outside auditors and the audit committee of the TriCo Board (i) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act)become due) that would be reasonably likelyrequired to adversely affect TriCo’s ability to accurately record, process, summarize and report financial information and (ii) any fraud, whetherbe reflected on a balance sheet or not material, that involves management orin notes thereto prepared in accordance with GAAP, other employees who have a significant role in TriCo’s internal controls over financial reporting.

(c) Except for (i) thosethan liabilities that are fully reflected or reserved for in the consolidated financial statements of TriCo included in its Quarterly Report on Form 10-Q for the fiscal quarter ended(A) incurred after September 30, 2013, as filed with the SEC, (ii) this Agreement or (iii) liabilities incurred since September 30, 20132017 in the ordinary course of business consistent with past practice or (B) incurred pursuant to or provided for in this Agreement.

(iii) Since December 31, 2016, no event has occurred or circumstance arisen that, individually or taken together with all other facts, circumstances and events (described in any paragraph of this Section 5.04(g) or otherwise), is reasonably likely to have a Material Adverse Effect with respect to TriCo.

(iv) Since December 31, 2016, (A) TriCo and its Subsidiaries have conducted their respective businesses in the ordinary and usual course consistent with past practice, (B) neither TriCo nor any of its Subsidiaries has incurredtaken nor permitted or entered into any material liabilitycontract with respect to, or otherwise agreed or committed to do or take, any action that, if taken after the date hereof, would constitute a breach of any nature whatsoever (whether absolute, accruedof the covenants in Section 4.02 and (C) no event has occurred or contingentcircumstance arisen that, individually or otherwisetaken together with all other facts, circumstances and whether dueevents (described in any paragraph of this Section 5.04(g) or otherwise), has had or is reasonably likely to become due).have a Material Adverse Effect with respect to TriCo.

(d) Since January 1, 2012, (i) neither TriCo nor(h)Legal Proceedings.Section 5.04(h) of TriCo’s Disclosure Schedule lists all litigation, arbitration, claims or other proceedings before any of its Subsidiaries nor, to the Knowledge of TriCo, any director, officer, employee, auditor, accountantcourt or representative ofGovernmental Entity that is pending against TriCo or any of its Subsidiaries has receivedas of the date hereof. Except as set forth in Section 5.04(h) of TriCo’s Disclosure Schedule, no litigation, arbitration, claim or otherwise obtained Knowledge ofother proceeding before any material complaint, allegation, assertioncourt or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods ofGovernmental Entity is pending against TriCo or any of its Subsidiaries and, to TriCo’s Knowledge, no such litigation, arbitration, claim or their respective internal accounting controls relatingother proceeding has been threatened and there are no facts which could reasonably give rise to periods after January 1, 2012, includingsuch litigation, arbitration, claim or other proceeding in any material complaint, allegation, assertionsuch case that, individually or claim that TriCoin the aggregate, has or any of its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii)could be reasonably expected to the Knowledge of TriCo, no attorney representing TriCo or any of its Subsidiaries, whether or not employed by TriCo or any of its Subsidiaries, has reported evidence ofhave a material violation of securities Laws, breach of fiduciary duty or similar violation, relatingMaterial Adverse Effect with respect to periods after January 1, 2012, by TriCo or any of its officers, directors, employees or agents to the TriCo Board or any committee thereof or to any director or officer of TriCo.

(e) Neither TriCo nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract or arrangement relating to any transaction or relationship between or among TriCo or any of its Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose Person, on the other hand, or any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K promulgated under the Securities Act and the Exchange Act).

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4.7.  Broker’s Fees. Neither TriCo nor any of its Subsidiaries nor any of their respective officersproperties is a party to or directors has employedsubject to any brokerorder, judgment, decree or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with any of the transactions contemplated by this Agreement or the Bank Merger Agreement, exceptregulatory restrictions that, TriCo has engaged, and will pay a fee to Keefe, Bruyette & Woods, Inc. (“KBW”) in accordance with the terms of a letter agreement between TriCo and KBW identified in Section 4.7 of the TriCo Disclosure Letter.

4.8.  Absence of Certain Changes or Events.

(a) Except as disclosed in any TriCo Exchange Act Report filed with the SEC prior to the date of this Agreement: (i) neither TriCo nor any of its Subsidiaries has incurred any material liability, except as contemplated by this Agreement or in the ordinary course of their business; (ii) neither TriCo nor any of its Subsidiaries has discharged or satisfied any material lien or paid any material obligation or liability (absolute or contingent), other than in the ordinary course of business; (iii) neither TriCo nor any of its Subsidiaries has sold, assigned, transferred, leased, exchanged or otherwise disposed of any of its material properties or assets other than in the ordinary course of business; (iv) neither TriCo nor any of its Subsidiaries has suffered any material damage, destruction, or loss, whether as a result of fire, explosion, earthquake, accident, casualty, labor trouble, requisition or taking of property by any Governmental Entity, flood, windstorm, embargo, riot, act of God or other casualty or event, whether or not covered by insurance; (v) neither TriCo nor any of its Subsidiaries has cancelled or compromised any debt, except for debts charged off or compromised in accordance with the past practice of TriCo or any of its Subsidiaries, as the case may be; and (vi) no event has occurred which has had or is reasonably certain to have, individually or in the aggregate, a Material Adverse Effect on TriCo.

(b) Except as disclosed in any TriCo Exchange Act Report filed with the SEC prior to the date of this Agreement, since December 31, 2010, TriCo and its Subsidiaries have in all material respects carried on their respective businesses in the ordinary and usual course consistent in all material respects with their past practices.

4.9.  Legal Proceedings.

(a) Neither TriCo nor any of its Subsidiaries is a party to any, and there are no pending, or to TriCo’s Knowledge, threatened, legal, administrative, arbitration or other proceedings, claims, actions or governmental or regulatory investigations of any nature against TriCo or any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect upon TriCo or that challenge the validity or propriety of the transactions contemplated by this Agreement or the Bank Merger Agreement.

(b) There is no injunction, order, judgment, decree or regulatory restriction imposed upon TriCo, its Subsidiaries or the assets of TriCo or its Subsidiaries which has had, or could reasonably be expected to have a Material Adverse Effect onwith respect to TriCo.

(i)No Brokers.No action has been taken by TriCo or its Subsidiaries that would give rise to any valid claim against any party hereto for a brokerage commission, finder’s fee or other like payment with respect to the Surviving Corporation.Transaction, other than a fee payable by TriCo to Stephens, Inc.

4.10.  Taxes and Tax Returns(j)Regulatory Matters.

(a)(i) Since December 31, 2006,2013, TriCo and each of TriCo and its Subsidiaries has duly filed all material federal, state, localwith the appropriate bank regulatory authorities in substantially correct form the monthly, quarterly and foreign Tax Returnsannual reports required to be filed by it on or prior to the date hereof (allunder applicable laws and regulations, and such returns being accurate and completereports were in all material respects).

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(b) Since December 31, 2006, eachrespects complete, accurate and in compliance with the requirements of applicable laws and regulations. In connection with the most recent examination of TriCo and each of its Subsidiaries has duly paid or made provisions forby the payment of all material Taxes which have been incurred or are due or claimed to be due from it by federal, state, local and foreign taxingappropriate regulatory authorities, on or prior to the date hereof.

(c) Neither the IRSneither TriCo nor any other Governmental Entity has notified TriCo of, or otherwise asserted, that there are any material deficiencies with respect to the Tax Returns of TriCo.

(d) There are no material disputes pending, or claims asserted for, Taxes or assessments upon TriCo or any of its Subsidiaries was required to correct or change any action, procedure or proceeding which TriCo believes in good faith has not now been corrected or changed, other than corrections or changes which, if not made, either individually or in the aggregate, would not have a Material Adverse Effect on TriCo.

(ii) Neither TriCo nor any of its Subsidiaries nor any of their respective properties is a party to or is subject to any order, decree, directive, agreement, memorandum of understanding or similar arrangement with, or a commitment letter or similar submission to, or extraordinary supervisory letter from, nor has TriCo or any of its Subsidiaries been requested to giveadopted any waivers extendingpolicies, procedures or board resolutions at the statutory periodrequest or suggestion of, limitation applicable to any federal, stateGovernmental Entity. TriCo and its Subsidiaries have paid all assessments made or local Tax Return forimposed by any period.Governmental Entity.

4.11.  Regulatory Agreements. Except as previously disclosed to North Valley, neither(iii) Neither TriCo nor any of its Subsidiaries is subject to any Regulatory Agreement, at the request of any Governmental Entity that materially restricts the conduct of its business or that in any manner relates to its capital adequacy, its credit policies, its management or its business, nor has TriCo or any of its Subsidiaries been advised by, any Governmental Entity that it is considering issuing or requesting any Regulatory Agreement.

4.12.  State Takeover Laws; Rights Agreement.

(a) TriCo and its Board of Directorsdoes not have taken, or by the Effective Time will have taken, all necessary action so that any applicable provisions of the takeover laws of California and any other state (and any comparable provisions of TriCo’s Articles of Incorporation and Bylaws) do not and will not apply to this Agreement, the Merger or the transactions contemplated hereby or thereby.

(b) TriCo has taken all other action necessary or appropriate, if any, so that the entering into of this Agreement or the Shareholder Agreements, and the consummation of the transactions contemplated hereby and thereby (including the Merger), do not and will not result in North Valley being or becoming an “Acquiring Person” thereunder or the ability of any Person to exercise a “Right” (as defined in the TriCo Rights Agreement) or enabling or requiring Rights to separate from the shares of TriCo Common Stock to which they are attached or to be triggered or become exercisable. No “Distribution Date,” “Shares Acquisition Date” or “Trigger Event” (as such terms are defined in the TriCo Rights Agreement) has occurred prior to the date of this Agreement, nor will occur as a result of the entry by TriCo into this Agreement or the consummation of any of the transactions contemplated hereby and thereby.

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4.13.  Environmental Matters. There are no legal, administrative, arbitral or other proceedings, claims, actions, causes of action, private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that reasonably could be expected to result in the imposition, on TriCo or any of its Subsidiaries of any liability or obligation arising under Environmental Laws, pending or, to the Knowledge of TriCo, threatened against TriCo or any of its Subsidiaries, which liability or obligation would have or would reasonably be expected to have a Material Adverse Effect on TriCo. To the Knowledge of TriCo, there is no reasonable basis for any such proceeding, claim, action or governmental investigation that would impose any liability or obligation that would have or would reasonably be expected to have a Material Adverse Effect on TriCo. There is no reasonable basis for any such proceeding, claim, action or governmental investigation that would impose any liability or obligation that would have or would reasonably be expected to have a Material Adverse Effect on TriCo. To the Knowledge of TriCo, during or prior to the period of (i) its or any of its Subsidiaries’ ownership or operation of any of their respective current properties, (ii) its or any of its Subsidiaries’ participation in the management of any property, or (iii) its or any of its Subsidiaries’ holding of a security interest in any property, there were no releases or threatened releases of hazardous, toxic, radioactive or dangerous materials or other materials regulated under Environmental Laws in, on, under or affecting any such propertyfacts which would reasonably be expected to have a Material Adverse Effect on TriCo. Neither TriCo nor any of its Subsidiaries is subjectgive rise to any agreement, order, judgment, decree, letter or memorandum by or with any court, governmental authority, regulatory agency or third party imposing any material liability or obligation pursuant to or under any Environmental Laws that would have or would reasonably be expected to have a Material Adverse Effect on TriCo.

4.14.  Allowances for Losses. All allowances for loan and lease losses of TriCo and its Subsidiaries, including any reserves for unfunded commitments, are, and as of the Effective Time will be, made in compliance with all applicable Laws, TriCo’s methodology for determining the adequacy of its allowance for losses and the standards established by the Financial Accounting Standards Board. Neither TriCo nor any of its Subsidiaries has been notifiedan advisory notice by, any Governmental Entity that such Governmental Entity is contemplating issuing or byrequesting (or is considering the appropriateness of issuing or requesting) any such order, decree, directive, agreement, memorandum of understanding, commitment letter, supervisory letter or similar submission or any request for the adoption of any policy, procedure or board resolution.

(iv) (A) No Governmental Entity has initiated since December 31, 2013 or has pending any proceeding, enforcement action or, to TriCo’s independent auditor, in writingKnowledge, investigation or otherwise, that: (i) such allowances are inadequate; (ii)inquiry into the business, operations, policies, practices and policiesor disclosures of TriCo or any of its Subsidiaries (other than normal examinations conducted by a Governmental Entity in establishing such allowances and in accounting for non-performing and classified assets generally fail to comply with applicable accounting or regulatory requirements; or (iii) such allowances are inadequate or inconsistent with the historical loss experienceordinary course of the business of TriCo or the applicable Subsidiary), or, to TriCo’s Knowledge, threatened any of its Subsidiaries. All OREO, ifthe foregoing, and (B) there is no unresolved violation, criticism, comment or exception by any held byGovernmental Entity with respect to any report or statement relating to any examinations or inspections of TriCo or anyits Subsidiaries, except in each case in subparagraphs (A) and (B), that did not have a Material Adverse Effect.

(v) TriCo and Tri Counties are “well-capitalized” (as that term is defined at 12 CFR §225.2(r) or the relevant regulation of its Subsidiariesprimary federal bank regulator). The most recent regulatory rating given to Tri Counties as to compliance with the Community Reinvestment Act is being carried at fair valueno less than “satisfactory.” Neither TriCo nor Tri Counties has received any notification from a Governmental Entity that their status as “well-capitalized” or “satisfactory” for Community Reinvestment Act purposes will change within one year, nor does TriCo have Knowledge of any conditions or circumstances that would result in accordancea Community Reinvestment Act rating of less than “satisfactory” or material criticism from regulators with GAAP.respect to discriminatory lending practices.

4.15.Insurance.

(a)(k)Compliance With Laws.Each of TriCo and its Subsidiaries are insured with reputable insurers against such risksSubsidiaries:

(i) is, and in such amounts as the management of TriCo reasonablyat all times since December 31, 2013 has determined to be prudent in accordance with industry practice. TriCo and its Subsidiaries arebeen in material compliance with all applicable federal, state, local and foreign statutes, laws, codes, regulations, ordinances, rules, judgments, injunctions, orders, decrees or policies and/or guidelines of any Governmental Entity applicable thereto or to their insurance policiesemployees conducting such businesses, including, without limitation, Section 23A and are not in default under any23B of the material terms thereof. Each such policy is outstandingFederal Reserve Act and in full forceFRB and effect and, except for policies insuring against potential liabilities of officers, directors and employees of TriCo and its Subsidiaries and policies on which a third party is named as an additional insured, TriCo or the relevant Subsidiary thereof is the sole beneficiary of such policies. All premiums and other payments due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion.

(b) The existing insurance carried by TriCo and its Subsidiaries is sufficient for compliance by TriCo and its Subsidiaries with all requirements of applicable Laws and agreements to which TriCo or its Subsidiaries are subject.

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4.16.Compliance with Applicable Laws. Except as set forth in Section 4.16 of the TriCo Disclosure Letter, each of TriCo and its Subsidiaries has complied (after giving effect to any non-compliance and cure) and is in compliance in all material respects with all Laws applicable to it or to the operation of its business including, without limitation,FDIC regulations pursuant thereto, the Equal Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Truth in Lending Act, the Foreign Corrupt Practices Act, the Home Mortgage Disclosure Act, the Bank Secrecy Act, Title IIIthe Dodd-Frank Wall Street Reform and Consumer Protection Act, the USA PATRIOT Act, the Electronic Fund Transfer Act and Regulation E of the USA Patriot Act andFRB, all other applicable bank secrecy laws, fair lending laws and other laws relating to discriminatory business practices except for those instancesand Environmental Laws and all posted and internal policies of noncomplianceTriCo and its Subsidiaries related to customer data, privacy and security;

(ii) has, and at all times since December 31, 2013 has had, all permits, licenses, franchises, authorizations, orders and approvals of, and has made all filings, applications and registrations with, all Governmental Entities (and has paid all fees and assessments due and payable in connection therewith) that are not, individuallyrequired in order to permit them to own or lease their properties and to conduct their businesses as presently conducted; all such permits, licenses, certificates of authority, orders and approvals are in the aggregate, reasonably likely to have a Material Adverse Effect on TriCo or prevent, materially delay or materially impair the ability of TriCo to consummate the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, TriCo has not been advised of any regulatory concerns regarding its compliance with the Bank Secrecy Act or related state or federal anti-money-laundering laws, regulationsfull force and guidelines, including those provisions of federal regulations requiring (i) the filing of reports, such as Currency Transaction Reports and Suspicious Activity Reports, (ii) the maintenance of records and (iii) the exercise of diligence in identifying customers. TriCo has adopted such procedures and policies as are necessary or appropriate to comply with Title III of the USA Patriot Acteffect and, to TriCo’s Knowledge, TriCo is in compliance with such law in all material respects. Neither TriCo nor its Subsidiaries have received any notice in writingno suspension or cancellation of any material allegedof them is threatened; and

(iii) has received no notification or threatened claim, violation of or liability undercommunication from any such LawsGovernmental Entity (A) asserting that has not heretofore been cured and for which there is any remaining liability.

4.17.Loans.

(a) All Loans in which TriCo or any of its Subsidiaries has an interest, complyis not in allcompliance with any of the statutes, regulations or ordinances which such Governmental Entity enforces or (B) threatening to revoke any license, franchise, permit or governmental authorization (nor, to TriCo’s Knowledge, do any grounds for any of the foregoing exist).

(l)Employee Benefit Plans.

(i) All material respects with all Laws,benefit and compensation plans, contracts, policies or arrangements maintained, contributed to, obligated to be contributed to, or sponsored by TriCo and Tri Counties for the benefit of current or former employees of TriCo and its Subsidiaries and current or former directors or independent contractors of TriCo and its Subsidiaries including, but not limited to, applicable usury statutes, underwriting“employee benefit plans” within the meaning of Section 3(3) of ERISA, any pension, retirement, profit sharing, medical, life, accidental death and recordkeeping requirements and the Truthdismemberment, disability, dental, vision, compensation, severance, termination pay, salary continuation, unemployment, workers’ compensation, vacation, sick pay, paid-time off, retention, employment, consulting, change in Lending Act, the Equal Credit Opportunity Act and the Real Estate Settlement Procedures Act, and other applicable consumer protection statutes and the regulations thereunder. There are no oral loans, loan commitments control, fringe benefit, deferred compensation, stock option, stock purchase, stock appreciation rights

or other extensions of credit owned by TriCostock-based incentive, cafeteria or flexible benefit, adoption or educational assistance, and bonus or other cash-based incentive, or other similar plans, agreements, programs, policies or other arrangements (whether written or oral and whether or not qualified or funded) or any ofsuch plan for which TriCo and its Subsidiaries may have any liability including, without limitation, as a result of being deemed a single employer with any entity under Section 4001(b)(1) of ERISA or in which Section 414 of the Code (collectively, the “TriCo or any of its Subsidiaries has an interest.

(b) All LoansBenefit Plans”), have been provided or made or acquired byavailable to FNBB.

(ii) Each TriCo Benefit Plan has been established and administered to date in all material respects in accordance with Boardthe applicable provisions of Director-approved loan policies. EachERISA, the Code and applicable law and with the terms and provisions of all documents, contracts or agreements pursuant to which such TriCo Benefit Plan is maintained.

(iii) Other than as disclosed and its Subsidiaries holds the Loans containedidentified as such in its loan portfolio for its own benefit to the extentSection 5.04(l)(iii) of its interest shown therein; such Loans include liens having the priority indicated by their terms, subject, as of the date of recordation or filing of applicable security instruments, only to such exceptions as are discussed in attorneys’ opinions regarding title or in title insurance policies in the mortgage files relating to the Loans secured by real property or are not material as to the collectability of such Loans; all Loans owned by TriCo and its Subsidiaries or in which TriCo or any of its Subsidiaries has an interest are with full recourse to the borrowers, andTriCo’s Disclosure Schedule, neither TriCo nor its Subsidiaries have taken any action that would resultentity considered to be a single employer with TriCo under Section 4001(b)(1) of ERISA or Section 414 of the Code maintains or contributes to any pension plan subject to Title IV of ERISA, to any multiemployer plan (as defined in a waiver4001(a)(3) of ERISA), or negationto any TriCo Benefit Plan providing for retiree health and life benefits, other than coverage as may be required under Section 4980B of the Code or Part 6 of Title I of ERISA or under the continuation of coverage provisions of the laws of any rightsstate or remedies available againstlocality.

(m)Tax Matters.(i) All Tax Returns that are required to be filed on or before the borrowerClosing Date (taking into account any extensions of time within which to file that have not expired) by or guarantor, if any, on any Loan, other than in the ordinary course of business. To the Knowledge of TriCo, all applicable remedies against all borrowers and guarantors are enforceable except as such enforcement may be limited by general principles of equity whether applied in a court of law or a court in equity and by bankruptcy, insolvency, moratorium, fraudulent conveyance, and similar Laws affecting creditors’ rights and remedies generally. All Loans sold bywith respect to TriCo or any of its Subsidiaries have been sold without recourseor will be timely filed on or before the Closing Date, (ii) all such Tax Returns are or will be true, correct and complete in all material respects, (iii) all Taxes due and payable by or with respect to TriCo or any of its Subsidiaries (other than with respect to customary representations and warranties) and without(whether or not shown as due on any liability under any yield maintenance or similar obligation.

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(c) True, correct and complete copies ofTax Return) have been timely paid in full, (iv) the currently effective lending policiesunpaid Taxes of TriCo and its Subsidiaries did not, as of the date of the most recent financial statements, exceed the reserve for Tax liability set forth on the face of such financial statements and do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of TriCo and its Subsidiaries in filing its Tax Returns, (v) all deficiencies asserted or assessments made as a result of examinations conducted by any taxing authority have been furnished orpaid in full, (vi) no issues that have been raised by the relevant taxing authority in connection with the examination of any of the Tax Returns referred to in clause (v) are currently pending, and (vii) no claim has been made available to North Valley.

(d) Each outstanding Loan participation soldin writing in the past five (5) years by a taxing authority in a jurisdiction where TriCo or any of its Subsidiaries was sold with the risk of non-payment of alldoes not already file Tax Returns that TriCo or any portion ofa Subsidiary is or may be subject to taxation by that underlying Loan to be shared by each participant (including TriCo orjurisdiction. Neither Trico nor any of its Subsidiaries) proportionatelySubsidiaries has taken any action or failed to take any action, or is aware of any fact or circumstance, in each case, that could reasonably be expected to prevent the shareMerger from qualifying as a “reorganization” within the meaning of such Loan representedSection 368(a) of the Code. TriCo has made available to FNBB (A) true and correct copies of the U.S. federal and state income tax returns filed by such participation withoutor on behalf of TriCo and its Subsidiaries for the most recent three (3) years and (B) any recourseaudit reports by the respective taxing authorities making adjustments to those returns.

(n)Required Vote; Antitakeover Provisions. The affirmative vote of suchthe holders of a majority of the outstanding shares of TriCo Common Stock entitled to vote is necessary to approve this Agreement and the Transaction on behalf of TriCo. No other lendervote of the shareholders of TriCo is required by law, the TriCo Articles, the TriCo Bylaws, the rules of Nasdaq or participantotherwise to approve this Agreement, the Bank Merger Agreement and the Transaction.

(o)Ownership of FNBB Common Stock.None of TriCo or any of its Subsidiaries, for payment or repurchase of the amount of such Loan represented by the participation or liability under any yield maintenance or similar obligation. Each of TriCo and its Subsidiaries has properly fulfilled in all material respects its contractual responsibilities and duties in any Loan in which it acts as the lead lender or servicer and has complied in all material respects with its duties as required under applicable regulatory requirements.

(e) Each of TriCo and its Subsidiaries has properly perfected or caused to be properly perfected all security interests, liens, or other interests in any collateral securing any Loans made by it.

4.18.Undisclosed Liabilities. Neither TriCo norTriCo’s Knowledge, any of its Subsidiaries has incurredother affiliates or associates (as such terms are defined under the Exchange Act), owns beneficially or of record, directly or indirectly, or is a party to any liabilityagreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of, shares of FNBB Common Stock (other than shares held in a fiduciary capacity that are beneficially owned by third parties, shares held in an index or mutual fund, or as a result of debts previously contracted).

(p)Required Vote; Antitakeover Provisions. No “control share acquisition,” “business combination moratorium,” “fair price” or other form of antitakeover statute or regulation under the CGCL or any applicable

provisions of the takeover laws of any nature whatsoever (whether absolute, accrued or contingent or otherwise and whether due or to become due) that, either alone or when combined with all similar liabilities, has had, or would be reasonably expected to have, a Material Adverse Effect on TriCo.

4.19.Tax Treatment of Merger. Asother state (and any comparable provisions of the date ofTriCo Articles and TriCo Bylaws), apply or will apply to this Agreement, TriCo is not aware of any fact or state of affairs relating to TriCo that could cause the Merger or the Bank Merger not to be treatedAgreement or the Transaction.

(q)Disclosure.The representations and warranties contained in this Section 5.04, when considered as a “reorganization” under Section 368(a) of the Code.

4.20.TriCo Information. The information relating to TriCo and its Subsidiaries to be contained in the Joint Proxy Statement/Prospectus, the Registration Statement, any filings or approvals under applicable state securities laws, any filing pursuant to Rule 165 or Rule 425 under the Securities Act or Rule 14a-12 under the Exchange Act, or in any other document filed with any other Governmental Entity in connection herewith, willwhole, do not contain any untrue statement of a material fact or omit to state aany material fact necessary in order to make the statements therein,and information contained in light ofthis Section 5.04 not misleading.

(r)No Additional Representations.Except for the circumstances in which they arerepresentations and warranties made not misleading and will comply in all material respects with the provisions of the Securities Act, the Exchange Act, the rules and regulations thereunder, and any other governing laws or regulations, as applicable. No representation or warranty by TriCo, and no statement by TriCo in any certificate, agreement, schedule or other document furnished or to be furnished in connection with the transactions contemplated by this Agreement, was or will be inaccurate, incomplete or incorrect in any material respectSection 5.04 and as of the date furnished or contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary to make such representation, warranty or statement not misleading to North Valley.

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4.21.Employee Plans.

(a) No TriCo Plan is a “multiemployer plan” as defined in Section 3(37) of ERISA or a “multiple employer plan,” within the meaning of Section 210 of ERISA or Section 413 of the Code andPreviously Disclosed, neither TriCo nor any ofother Person makes any express or implied representation or warranty with respect to TriCo, its Subsidiaries, has contributed to, or had any obligation to contribute to,their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and TriCo hereby expressly disclaims any such planother representations or arrangement in the previous seven years.warranties.

(b) No TriCo Plan is an “employee pension benefit plan” as defined in Section 3(2) of ERISA that is or was at any time subject to Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code, and neither Trico nor any of its Subsidiaries has contributed to, or had any obligation to contribute to, any such employee pension benefit plan in the previous seven years.ARTICLE VI

(c) Other than routine claims for benefits, including those relating to qualified domestic relations orders, there are no pending or,COVENANTS

6.01Reasonable Best Efforts.Subject to the Knowledge of TriCo, threatened lawsuits, governmental investigations or other claims against or involving any TriCo Plan, or, to the Knowledge of TriCo, any fiduciary (within the meaning of Section 3(21)(A) of ERISA) or service provider of any Plan, nor, to the Knowledge of TriCo, is there any reasonable basis for any such lawsuit, investigation or claim.

(d) For purposes of this Section 4.21, “TriCo Plan” shall mean each pension, retirement, profit-sharing, savings, deferred compensation, stock option, restricted stock or other equity-based compensation, severance, retention, change in control, termination, bonus, incentive compensation, fringe benefit, vacation, life insurance, disability, accident, supplemental benefit, welfare, medical, dental, vision, education reimbursement, compensation or other employee benefit plan, program, policy, arrangement or agreement, including, but not limited to, each “employee benefit plan” (within the meaning of Section 3(3) ofERISA, whether or not subject to ERISA), that is maintained, sponsored, contributed to or required to be contributed to as of the dateterms and conditions of this Agreement, or with respect to which TriCo or any of its Subsidiaries has any liability or obligation, contingent or otherwise, including by reason of being or having been treated as a “single employer” with any other trade or business within the meaning of Section 4001 of ERISA or Sections 414(b), (c), (m) or (o) of the Code.

4.22Certain Contracts. Neither TriCo nor any of its Subsidiaries is a party to or bound by any written or oral contract, plan, commitment or any other arrangement with respect to the employment of any directors, officers, employees or consultants (each a “TriCo Contract”): (i) which, upon the execution of this Agreement, the TriCo Requisite Vote or the consummation of the transactions contemplated by this Agreement will (either alone or upon the occurrence of any additional acts or events) result in or accelerate any payment or benefit (whether severance, retirement, change of control or otherwise) becoming due from TriCo, North Valley, any of their Subsidiaries or the Surviving Corporation to any party, (ii) which contains a non-compete or client or customer non-solicitation requirement or any other provision that materially restricts the conduct of any line of business by TriCo or any of its Subsidiaries or, following the Closing, TriCo or any of its Subsidiaries; or (iii) with or to a labor union or guild (including any collective bargaining agreement). Each TriCo Contract is a valid and binding commitment of TriCo or one of its Subsidiaries, as the case may be, and is in full force and effect; (ii) each of FNBB and TriCo and its Subsidiaries has in all material respects performed all obligations required to be performed by it to date under each TriCo Contract; (iii) no event or condition exists which constitutes or, after notice or lapse of time or both, would constitute, a material default on the part of TriCo or any of its Subsidiaries under any such TriCo Contract; and (iv) neither TriCo nor any of its Subsidiaries has received notice of any violation or imminent violation of any TriCo Contract by any other party thereto. True, correct and complete copies of each TriCo Contract have been provided or made available to North Valley prior to the date hereof.

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ARTICLE V.

COVENANTS RELATING TO CONDUCT OF BUSINESS

5.1.  Covenants of North Valley.

(a) During the period from the date hereof and continuing until the earlier of the termination of this Agreement and the Effective Time:

(i) North Valley shall, and shall cause each Subsidiary to, conduct its business in the usual, regular and ordinary course in substantially the same manner as previously conducted (except to the extent expressly provided otherwise in this Agreement, or as consented to in writing by TriCo);

(ii) North Valley shall, and shall cause each Subsidiary to, (A) pay all of its debts and Taxes when due, subject to good faith disputes over such debts or Taxes, (B) pay or perform its other obligations when due, subject to good faith disputes, and (C) use its commercially reasonable efforts consistent with past practice and policies to preserve intact its present business organizations, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses shall be unimpaired at the Closing (as defined in Section 9.1 hereof);

(iii) North Valley shall promptly notify TriCo of any change, occurrence or event not in the ordinary course of its or any Subsidiary’s business, and of any change, occurrence or event which, individually or in the aggregate with any other changes, occurrences and events, would reasonably be expected to cause any of the conditions to Closing set forth in Article VII not to be satisfied;

(iv) North Valley shall, and shall cause each Subsidiaryagrees to use its commercially reasonable best efforts to assure that each of its material contracts (other than with TriCo) entered into after the date hereof will not require the procurement of any consent, waiver or novation or provide for any change in the obligations of any party in connection with, or terminate as a result of the consummation of, the Merger or the Bank Merger, and shall give reasonable advance notice to TriCo prior to allowing any material contract or right thereunder to lapse or terminate by its terms;

(v) North Valley shall, and shall cause each Subsidiary to, maintain each of its leased premises in accordance with the terms of the applicable lease;

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(vi) North Valley shall, and shall cause each Subsidiary to, continue to ensure compliance in all material respects with all Laws applicable to it or to the operation of its business including, without limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Truth in Lending Act, the Foreign Corrupt Practices Act, the Home Mortgage Disclosure Act, the Bank Secrecy Act, Title III of the USA Patriot Act and all other applicable bank secrecy laws, fair lending laws and other laws relating to discriminatory business practices, and maintain its existing training programs for executive and lending staffs; and

(vii) North Valley shall execute and deliver any supplemental indentures or other documents required to allow TriCo to assume the obligations of North Valley under the indentures and guarantee agreements listed on Section 5.1(a) of the North Valley Disclosure Letter relating to the trust preferred securities issued by North Valley so as to make such assumptions effective and shall cause its counsel to provide any opinion of counsel to the trustees thereof if requested by TriCo.

(b) Without limiting the generality or effect of the provisions of Section 5.1(a), during the period from the date hereof and continuing until the earlier of the termination of this Agreement and the Effective Time, North Valley shall not, and shall cause each Subsidiary not to, do, cause or permit any of the following, except to the extent expressly provided otherwise in this Agreement or as consented to in writing by TriCo:

(i) declare or pay any dividends on, or make other distributions in respect of, any of its capital stock,provided however, that North Valley Bank may pay cash dividends or distributions to North Valley for the purpose of enabling North Valley to pay interest on its Junior Subordinated Debt Securitiesgood faith, and to pay its ordinary operating expenses, in each case in accordance with past practices and as they become due;

(ii) (a) split, combine or reclassify any shares of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock except upon the exercise or fulfillment of North Valley Options issued and outstanding as of the date of this Agreement pursuantcause their respective Subsidiaries to the North Valley Option Plans in accordance with their present terms, or (b) repurchase, redeem or otherwise acquire (except in partial or complete satisfaction of debts previously contracted or upon the forfeiture of outstanding restricted stock or the exercise or fulfillment of North Valley Options) any shares of the capital stock of North Valley or any North Valley Subsidiaries, or any securities convertible into or exercisable for any shares of the capital stock of North Valley or any North Valley Subsidiaries;

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(iii) issue, allocate, deliver or sell, or authorize or propose the issuance, delivery or sale of, any shares of its capital stock or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares, or enter into any agreement with respect to any of the foregoing, other than the issuance of North Valley Common Stock pursuant to North Valley Options granted pursuant to the North Valley Option Plans and outstanding as of the date of this Agreement, in accordance with their present terms;provided,that prior to the Effective Time, North Valley may register such number of additional shares of North Valley Common Stock on a Form S-8 registration statement as may be necessary to cover all of the outstanding North Valley Options;

(iv) amend its Articles of Incorporation, Bylaws or other similar governing documents unless required to do so in order to comply with applicable Laws or regulations or by regulatory directive;

(v) enter any written or oral contract, plan, commitment or any other arrangement of a nature described in subsection 3.12(a)(i) – (v), other than those described in subsections 3.12(a)(x) – (z).

(vi) other than commitments entered into prior to the date of this Agreement, as set forth in Section 5.1(b)(vi) of the North Valley Disclosure Letter, make capital expenditures aggregating in excess of $40,000, except for emergency repairs and replacements;

(vii) enter into any new line of business;

(viii) acquire or agree to acquire, by merging or consolidating with, or by purchasing an equity interest in or the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets, other than in connection with foreclosures, settlements in lieu of foreclosure or troubled loan or debt restructurings, or in the ordinary course of business consistent with past practices;

(ix) take any action that is intended or may reasonably be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue or in any of the conditions to the Merger set forth in Article VII not being satisfied, or in a violation of any provision of this Agreement or the Bank Merger Agreement, except, in every case, as may be required by applicable Laws;

(x) change its methods of accounting in effect at December 31, 2012 except as required by changes in GAAP or regulatory accounting principles as concurred to by North Valley’s independent auditors;

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(xi) (a) except as required by applicable Laws or this Agreement or to maintain qualification pursuant to the Code, adopt, amend, renew or terminate any Plan or any agreement, arrangement, plan or policy between North Valley or North Valley Bank and one or more of its current or former directors, officers or employees, (b) increase in any manner the compensation of any employee or director or pay any benefit not required by any Plan or agreement as in effect as of the date hereof (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or performance units or shares), (c) except as provided in Schedule 5.1(b)(xi)(c), enter into, modify or renew any contract, agreement, commitment or arrangement providing for the payment to any director, officer or employee of compensation or benefits, (d) hire any new employee at an annual compensation in excess of $60,000, except to fill open positions consistent with past practices, (e) pay aggregate expenses of more than $2,500 per person for employees or directors who attend conventions or similar meetings after the date hereof, (f) promote any employee to a level of vice president or more senior, (g) except as provided in Schedule 5.1(b)(xi)(g), pay any retention bonuses to any employees or (h) except as provided in Schedule 5.1(b)(xi)(c), pay any other bonuses or incentives other than pursuant to an incentive plan, agreement, plan or policy of North Valley or North Valley Bank in effect as of the date hereof and in a manner consistent with past practice;

(xii) incur any indebtedness, with a term greater than one year, for borrowed money, assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, in each case other than in the ordinary course of business consistent with past practices;

(xiii) sell, purchase, enter into a lease, relocate, open or close any banking or other loan production office, or file an application pertaining to such action with any Governmental Entity;

(xiv) make any equity investment or commitment to make such an investment in real estate or in any real estate development project, other than in connection with foreclosure, settlements in lieu of foreclosure, or troubled loan or debt restructuring, in the ordinary course of business consistent with past practices;

(xv) except as set forth in Section 5.1(b)(xv) of the North Valley Disclosure Letter, make any new Loans to, modify or renew the terms of any existing Loan to, or engage in any other transactions (other than routine banking transactions) with, any officer, director or greater than five percent (5%) shareholder of North Valley or North Valley Bank (or any affiliate of any of them), or to or with any employee of North Valley or North Valley Bank other than Loans to employees that are in the ordinary course of business consistent with past practices and in compliance with applicable Laws, including Federal Reserve Board Regulation O;

(xvi) make any investment, or incur deposit liabilities, other than in the ordinary course of business consistent with past practices;

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(xvii) purchase, modify or originate any: (a) Loans except in accordance with existing North Valley Bank’s lending policies, and lending limits and authorities; or (b)(i) Loans requiring North Valley Bank Executive Loan Committee approval under North Valley Bank’s existing lending policies, (ii) Loans that are criticized or classified, (iii) unsecured consumer Loans in excess of $25,000; (iv) individual lot Loans in excess of $200,000; (v) construction, acquisition or development Loans, residential permanent Loans, Loans secured by special purpose property (as described in the TriCo credit underwriting guidelines approved August 1, 2013), including production lines for builders, or SBA 7(a) loans, to any one borrower in excess of $1,000,000 in the aggregate; except in each case for Loans for which written commitments have been issued by North Valley Bank and are currently outstanding as of the date hereof;provided, however, that North Valley shall provide TriCo (y) a copy of North Valley Bank’s weekly and monthly production report no more than five (5) Business Days after week or month end and (z) notice of any commitments over any of the limits set forth above, andprovided further, that with respect to any Loan in excess of the foregoing limits, North Valley shall provide notice to TriCo of such Loan, describing the pertinent terms of the Loan (and for purposes of this clause (xvii) such notice shall include all necessary credit write-ups, and may be given by electronic transmission or facsimile), and TriCo shall have three (3) Business Days to give notice of objection to such Loan, acting reasonably, and for purposes of this clause (xvii) such notice may be by telephone (confirmed by electronic transmission or facsimile), electronic transmission or facsimile and such notice of objection shall provide in reasonable detail the basis for such objection, and the failure to so object within five Business Days shall be deemed a waiver of any such objection;

(xviii) price or reprice any Loans inconsistent with North Valley Bank’s current pricing methodology or, (i) in the case of variable rate Loans, at a variable rate that is less than The Wall Street Journal Prime or which adjusts less frequently than monthly or, (ii) in the case of a fixed rate loan, at a fixed rate of less than 4.00% per annum or with a term in excess of five (5) years;

(xix) price, accept, renew or pay any deposits with a rate of interest in excess of the rates permitted by 12 C.F.R. Section 337.6(b)(2) or materially change the characteristics of North Valley Bank’s deposit portfolio, including deposit types, interest rates and terms offered;

(xx) make any investments in any equity or Derivatives Contract, hedging or arbitrage transaction or covered asset trading activities or make any investment in any investment security with an average life greater than one (1) year at the time of purchase other than obligations of state and political subdivisions;

(xxi) sell any “held for investment” Loans or servicing rights related thereto or purchase any mortgage Loan servicing rights;

(xxii) take or omit to take any action that would have or be reasonably likely to have a Material Adverse Effect on North Valley or that would have or be reasonably likely to have a Material Adverse Effect on, or materially delay, the ability of North Valley and TriCo to obtain the Requisite Regulatory Approvals (as defined in Section 7.1) or otherwise have or be reasonably likely to have a Material Adverse Effect on North Valley’s and North Valley Bank’s ability to consummate the transactions contemplated by this Agreement;

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(xxiii) redeem, amend or waive any provisions of the North Valley Rights Agreement (other than such actions as are necessary to accommodate this Agreement and the transactions contemplated hereby, but not with respect to any Acquisition Proposal) or implement or adopt any other so-called “poison pill,” shareholder rights plan or other similar plan;

(xxiv) except as set forth in Section (b)(xxiv) of the North Valley Disclosure Letter, (i) settle any claim, action or proceeding, except any settlement involving amounts payable by North Valley and/or its Subsidiaries less than or equal to $100,000 individually or $250,000 in the aggregate and that would not impose any restriction on the conduct of its business or following the Closing, the business of TriCo or its Subsidiaries, (ii) waive, compromise, assign, cancel or release any rights or claims except as contemplated by clause (i) of this Section 5.1(b)(xxiv), or (iii) agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise affecting its business;

(xxv) Materially restructure or materially change its investment securities portfolio or its portfolio duration, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, or invest in any mortgage-backed or mortgage-related securities which would be considered “high risk” securities under applicable regulatory pronouncements, except in each case as required by Law or requested by a Governmental Entity;

(xxvi) Except as may be required by Law, make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any material amendment with respect to a material Tax Return, enter into any material closing agreement with respect to Taxes, or settle any material Tax claim, audit, assessment or dispute or surrender any right to claim a refund of a material amount of Taxes;

(xxvii) Take any action that could, or fail to take any action, the failure of which could, reasonably be expected to prevent the Merger or the Bank Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code; or

(xxviii) agree or commit to do any of the actions set forth in clauses (i)—(xxvii) of this Section 5.1(b).

The consent of TriCo to any action by North Valley or any North Valley Subsidiary that is not permitted by any of the preceding paragraphs shall be evidenced only by a writing signed by, or an email from, the President or any Executive Vice President of TriCo or Tri Counties Bank, or any designee designated in writing by such persons. With respect to any written request by North Valley for TriCo’s consent to any non-permitted action of North Valley or any North Valley Subsidiary described in this Section 5.1, TriCo shall not unreasonably withhold or delay its consent.

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5.2.Covenants of TriCo.

(a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time, except as expressly contemplated or permitted by this Agreement or disclosed in the TriCo Disclosure Letter or with North Valley’s prior written consent, TriCo shall not, and shall not permit Tri Counties Bank to:

(i) take any action that is intended or may reasonably be expected to result in any of TriCo’s representations and warranties set forth in this Agreement being or becoming untrue or any of the conditions to the Merger set forth in Article VII not being satisfied or in a violation of any provision of this Agreement or the Bank Merger Agreement, except, in every case, as may be required by applicable Laws;

(ii) amend its Articles of Incorporation, Bylaws or other similar governing documents unless required to do so in order to comply with applicable Laws or regulations or by regulatory directive;

(iii) take or omit to take any action that would have or be reasonably likely to have a Material Adverse Effect on TriCo or that would have or be reasonably likely to have a Material Adverse Effect on, or materially delay, the ability of TriCo and North Valley to obtain the Requisite Regulatory Approvals (as defined in Section 7.1) or otherwise have or be reasonably likely to have a Material Adverse Effect on TriCo’s and Tri Counties Bank’s ability to consummate the transactions contemplated by this Agreement; or

(iv) agree or commit to do any of the actions set forth in clauses (i)—(iii) of this Section 5.2(a).

(b) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time, TriCo shall promptly notify North Valley of any change, occurrence or event not in the ordinary course of its or any Subsidiary’s business, and of any change, occurrence or event which, individually or in the aggregate with any other changes, occurrences and events, would reasonably be expected to cause any of the conditions to Closing set forth in Article VII not to be satisfied prior to the first anniversary of the date of this Agreement.

(c) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time, TriCo undertakes and agrees with North Valley that it shall not solicit or accept any offer from any third party in the nature of an Acquisition Proposal involving TriCo in a business combination with such third party or other entity, unless such offer is expressly conditioned upon the performance by TriCo (or the successor in interest of TriCo) of all of its obligations under this Agreement in a manner such that the value of the consideration to be paid to the North Valley shareholders under this Agreement is not thereby reduced.

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(d) Without limiting the generality or effect of the provisions of Sections 5.2(a), (b) and (c), during the period from the date hereof and continuing until the earlier of the termination of this Agreement and the Effective Time, TriCo shall not, and shall cause each Subsidiary not to, do, cause or permit any of the following, except to the extent expressly provided otherwise in this Agreement or as consented to in writing by North Valley:

(i) declare or pay any distributions on or in respect of any of its capital stock other than ordinary quarterly cash dividends in conformity with past practice, or with respect to Tri Counties Bank, declare or pay dividends to TriCo other than in conformity with past practice and applicable law and for the purpose of enabling TriCo to pay interest on its Junior Subordinated Debt Securities and to pay its ordinary operating expenses, in each case in accordance with past practice and as they become due;

(ii) (a) split, combine or reclassify any shares of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except the grant of awards pursuant to the TriCo Equity Plans, and upon the exercise or fulfillment of TriCo Options issued and outstanding as of the date hereof or (b) repurchase, redeem or otherwise acquire shares of its capital stock (except in partial or complete satisfaction of debts previously contracted, or upon the forfeiture of any outstanding shares of restricted stock) other than (x) not more than 333,400 shares of TriCo Common Stock currently remaining available for repurchase under the TriCo stock repurchase plan adopted and announced on August 21, 2007), (y) shares of the capital stock of TriCo or any TriCo Subsidiaries, or any securities convertible into or exercisable for any shares of the capital stock of TriCo or any TriCo Subsidiaries and shares of TriCo Common Stock on behalf of the TriCo Employee Stock Ownership Plan; and (z) shares delivered by holders of TriCo Stock Options in connection with the exercise of such options;

(iii) issue, allocate, deliver or sell, or authorize or propose the issuance, delivery or sale of, any shares of its capital stock or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares, or enter into any agreement with respect to any of the foregoing, other than the issuance of TriCo Options and other awards pursuant to the TriCo Equity Plans and TriCo Common Stock pursuant to TriCo Options or other awards granted pursuant to the TriCo Equity Plans; or

(iv) take any action that could, or fail to take any action, the failure of which could, reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

The consent of North Valley to any action by TriCo or Tri Counties Bank that is not permitted by any of the preceding paragraphs shall be evidenced only by a writing signed by the President or any Executive Vice President of North Valley. With respect to any written request by TriCo for North Valley’s consent to any non-permitted action of TriCo described in this Section 5.2, North Valley shall not unreasonably withhold or delay its consent.

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5.3.Merger Covenants. Notwithstanding that North Valley believes that it has established all allowances and taken all provisions for losses required by GAAP and applicable Laws, North Valley recognizes that TriCo may have adopted different loan, accrual and allowance policies (including loan classifications and levels of allowances for losses). In that regard and in general from and after the date of this Agreement to the Effective Time, North Valley and TriCo shall consult and cooperate with each other in order to formulate the plan of integration for the Merger, including, among other things, with respect to conforming immediately prior to the Effective Time, based upon such consultation, North Valley’s loan, accrual and allowance policies to those policies of TriCo to the extent consistent with GAAP,provided, however, that no such additional accruals and loss allowances will be: (i) required to be made more than two (2) Business Days prior to the Closing Date and only after all conditions under Article VII have been satisfied or waived or (ii) deemed to have a Material Adverse Effect upon North Valley if made upon TriCo’s written request.

ARTICLE VI.

ADDITIONAL AGREEMENTS

6.1.Regulatory Matters.

(a) Upon the execution and delivery of this Agreement, TriCo and North Valley shall promptly cause the Registration Statement to be prepared and TriCo shall cause the Registration Statement to be filed with the SEC. TriCo and North Valley shall use their commercially reasonable best efforts in good faith, to havetake, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable laws, so as to permit consummation of the Registration Statement declared effective byTransaction as promptly as practicable and otherwise to enable consummation of the SECTransaction, including the satisfaction of the conditions set forth inArticle VII hereof, and shall cooperate fully with the other party hereto to that end.

6.02Shareholder Approval.

(a) FNBB agrees to take, in accordance with applicable law and the FNBB Articles and the FNBB Bylaws, all action necessary to convene as soon as reasonably practicable after the filing thereof. The parties shall cooperate in responding to and considering any questions or comments from the SEC staff regarding the information contained in the Registration Statement. If at any time after the Registration Statement is filed with the SEC,becomes effective, a special meeting of its shareholders to consider and prior to the Closing Date, any event relating to North Valley or TriCo is discovered by North Valley or TriCo, as applicable, which should be set forth in an amendment of, or a supplement to, the Registration Statement, the discovering party shall promptly inform the other party with all relevant information relating to such event, whereupon TriCo shall promptly cause an appropriate amendment to the Registration Statement to be filed with the SEC. Upon the effectiveness of such amendment, each of North Valley and TriCo (if prior to the meetings of the shareholders pursuant to Section 6.3 hereof) will take all necessary action as promptly as practicable to permit an appropriate amendment or supplement to be transmitted to the shareholders entitled to vote at such meetings. TriCo shall also use reasonable best efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to carry out the transactions contemplated by this Agreement, and North Valley shall furnish all information concerning North Valley and the holders of North Valley Common Stock as may be reasonably requested in connection with any such action. If the SEC requires a tax opinion in connection with the filing of the Registration Statement or before it will declare the registration statement effective, (i) TriCo shall use its commercially reasonable best efforts to cause its tax advisor to provide such opinion addressed to TriCo and (ii) North Valley shall use its commercially reasonable best efforts to cause its tax advisor to provide such opinion addressed to North Valley;provided, that the issuance of such opinions shall be conditioned upon the receipt by such tax advisorsapproval of customary representation letters from each of TriCo and North Valley in a form reasonably agreed to by the parties, and the parties shall otherwise reasonably cooperate with each other in the issuance of such tax opinions.

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(b) The parties hereto shall cooperate with each other and use their reasonable best efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, and to obtain as promptly as practicable all permits, consents, waivers, approvals and authorizations of all third parties and any Governmental Entity that are necessary or advisable to consummate the transactions contemplated by this Agreement (including without limitation, the Merger and the Bank Merger). North Valley and TriCo shall have the right to review in advance, and to the extent practicable each will consult the other on, in each case subject to applicable Laws relating to the exchange of information, all the information relating to North Valley or TriCo, as the case may be, which appears in any regulatory application made with, or written materials submitted to, any third party or any Governmental Entity in connection with the transactions contemplated by this Agreement. In addition, counsel to North Valley shall be provided with a draft of all regulatory applications for its review and approval not less than five (5) Business Days prior to the filing or submission of such applications with any Governmental Entity. The parties hereto agree that they will consult with each other with respect to the obtaining of all permits, consents, approvals and authorizations of all third parties and Governmental Entities necessary or advisable to consummate the transactions contemplated by this Agreement and each party will keep the other apprised of the status of matters relating to consummation of the transactions contemplated herein. Each of TriCo and North Valley shall use their reasonable best efforts to resolve any objections or any Burdensome Condition (as defined below) that may be asserted or imposed by any Governmental Entity with respect to this Agreement or the transactions contemplated by this Agreement. Notwithstanding anything set forth in this Agreement, under no circumstances shall either party or its Subsidiaries be required, and neither North Valley nor any of its Subsidiaries shall be permitted (without TriCo’s written consent in its sole discretion), to take any action or commit to take any action or agree to any condition, restriction or requirement involving any of them, pursuant to this Section 6.1 or otherwise in connection with obtaining the foregoing permits, consents, waivers, approvals and authorizations, that the TriCo Board determines in good faith would, or would be reasonably likely to, individually or in the aggregate, have a material adverse effect on the Surviving Corporation (assuming for this purpose that the Surviving Corporation consists of TriCo and North Valley and their respective subsidiaries, taken as a whole) (a “Burdensome Condition”);provided,that the sale, consolidation, divestiture or other disposition of one or more branch offices of TriCo or North Valley in a geographic banking market shall not constitute, or be taken into account in determining the existence of a Burdensome Condition.

(c) North Valley and TriCo shall each furnish the other with all information concerning each other and its directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with the Registration Statement, the Joint Proxy Statement/Prospectus or any other statement, filing, notice or application made by or on behalf of TriCo or North Valley to any Governmental Entity in connection with the Merger or the other transactions contemplated by this Agreement.

(d) TriCo and North Valley shall promptly advise each other upon receiving any communication from any Governmental Entity whose consent, waiver or approval is required for consummation of the transactions contemplated by this Agreement which causes such party to believe that there is a reasonable likelihood that any Requisite Regulatory Approval (as defined in Section 7.1(c) hereof) will not be obtained or that the receipt of any such approval will be materially delayed or will contain any Burdensome Condition.

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6.2.Access to Information.

(a) Upon reasonable notice and subject to applicable Laws relating to the exchange of information, North Valley and TriCo shall each accord to the Representatives (defined below) of TriCo and North Valley, as applicable, access, during normal business hours throughout the period prior to the Effective Time, to all of its and its Subsidiaries’ properties, books, contracts, commitments and records and, during such period, shall make available to TriCo and North Valley, respectively, (i) a copy of each report, schedule, and other document filed or received by it (including by its Subsidiaries) during such period pursuant to the requirements of federal securities laws or federal or state banking laws and (ii) all other information concerning its (including its Subsidiaries’) business, properties and personnel as TriCo or North Valley may reasonably request. TriCo shall receive notice of all meetings of North Valley and its Subsidiaries’ Board of Directors (in all cases, at least as timely as all North Valley and its Subsidiaries, as the case may be, representatives to such meetings are required to be provided notice), and a representative of TriCo shall have the right to attend the portions of such meetings that do not pertain to: (i) confidential matters as reasonably determined by such Board of Directors; (ii) this Agreement or any of the transactions contemplated hereby; or (iii) matters relating to a Superior Proposal. North Valley and TriCo shall each provide to the other true, correct and complete copies of all financial and other information relating to their respective business or operations including their Subsidiaries (except for information that is attorney-client privileged) that is provided to directors of North Valley or its Subsidiaries and TriCo and its Subsidiaries in connection with meetings of their respective Boards of Directors or committees thereof. Set forth in Section 6.2 of the North Valley Disclosure Letter is an estimate of the expenses North Valley expects to incur in connection with the transactions contemplated by this Agreement, including the Merger, and the Bank Merger, and North Valley shall keep TriCo reasonably informed of material changes in such estimate.

(b) TriCo and North Valley entered into a Confidentiality Agreement dated January 7, 2013 (the “Confidentiality Agreement”). The Confidentiality Agreement shall remain in effect and applyany other matters required to the information furnishedbe approved by TriCo and North Valley pursuant to this Section 6.2.

(c) No investigation by eitherFNBB’s shareholders for consummation of the partiesTransaction (including any adjournment or their respective Representativespostponement, the ���FNBB Meeting”). Except with the prior approval of TriCo, no other matters shall affectbe submitted for the representations and warrantiesapproval of the other set forth herein.

6.3.Shareholder Meetings.

(a) Each of TriCoFNBB shareholders at the FNBB Meeting. Subject to Section 6.02(b), the FNBB Board shall at all times prior to and North Valleyduring such FNBB Meeting recommend such approval and shall take all reasonable lawful action necessary in accordance with applicable Law and their respective Articles of Incorporation, Bylaws or similar organizational documents to duly call, give notice of, convene and, as soon as practicable but not later than sixty (60) days after the Registration Statement is declared effective, hold a meeting ofsolicit such approval by its shareholders and shall not (x) withdraw, modify or qualify in any manner adverse to TriCo such recommendation or (y) take any other action or make any other public statement in connection with the FNBB Meeting inconsistent with such recommendation (collectively, a “Change in Recommendation”), except as otherwise provided herein, use its reasonable best effortsand to take such other actions necessarythe extent permitted by Section 6.02(b). Notwithstanding any Change in Recommendation, this Agreement shall be submitted to obtain the relevant shareholder approvals, in each case as promptly as practicableshareholders of FNBB at the FNBB Meeting for the purpose of obtainingapproving the Requisite TriCo Vote, inAgreement and any other matters required to be approved by FNBB’s shareholders for consummation of the caseTransaction. In addition to the foregoing, FNBB shall not submit to the vote of TriCo, and the Requisite North Valley Vote. North Valley and TriCo shall cooperate to schedule and convene the North Valley Meeting and the TriCo Meeting on the same date.

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(b) Except in the case of a Change in Recommendation expressly permitted by Section 6.7, North Valley shall solicit, and use its reasonable best efforts to obtain, the Requisite North Valley Vote at the North Valley Meeting. Subject to Section 6.7(d), North Valley shall (i) through the North Valley Board, recommend to its shareholders adoption of this Agreement (the “North Valley Board Recommendation”), (ii) include such recommendation inany Acquisition Proposal other than the Joint Proxy Statement/Prospectus and (iii) use reasonable best efforts to obtain the North Valley Requisite Vote from its shareholders. North ValleyMerger. FNBB hereby acknowledges its obligation to submit this Agreement to its shareholders at the North ValleyFNBB Meeting as provided in this Section 6.3. In addition to6.02(a).

(b) Notwithstanding the foregoing, North Valley agrees that itFNBB and the FNBB Board shall not submitbe permitted to the vote of its shareholders at or prior to the North Valley Meeting any proposal (including but not limited to an Acquisition Proposal) other than the Merger and any proposal required by SEC Rule 14a-21(c) as a result of the Merger or the transactions contemplated by this Agreement;provided, however, that North Valley may withdraw, modify, qualify or otherwise effect a Change in Recommendation fromif and only to the North Valley Board Recommendation if an Acquisition Proposal is a Superior Proposal as determined by the North Valley Boardextent that:

(i) FNBB shall have complied in accordanceall material respects with Section 6.76.07;

(ii) the FNBB Board, after consulting with its outside counsel and North Valley may include disclosuresfinancial advisor, shall have determined in the Joint Proxy Statement or any amendment or supplement thereto as may be submittedgood faith that failure to North Valley shareholders describing the reasons therefor along with the terms of any such Superior Proposal, all as the North Valley Board deems appropriate and necessarydo so would result in the exercisea breach of its fiduciary duties under applicable law; and

(iii) if the FNBB Board intends to North Valley shareholders.

(c) TriCoeffect a Change in Recommendation following receipt of an Acquisition Proposal, (A) the FNBB Board shall solicit, and use its reasonable best efforts to obtain, the Requisite TriCo Vote at the TriCo Meeting. TriCo shall (i) through its Board of Directors, recommend to its shareholders adoption of this Agreement, (ii) include such recommendation in the Joint Proxy Statement and (iii) use reasonable best efforts to obtain the Requisite TriCo Vote from its shareholders.

(d) Each party shall cooperate and keep the other party informed on a current basis regarding its solicitation efforts and voting results following the dissemination of the Joint Proxy Statement/Prospectus to the shareholders of each party. If at any time following the dissemination of the Joint Proxy Statement/Prospectus (i) North Valley reasonably determineshave concluded in good faith, after giving effect to all of the adjustments which may be offered by TriCo pursuant to clause (C) below, that such Acquisition Proposal constitutes a Superior Proposal, (B) FNBB shall notify TriCo, at least five (5) Business Days in advance, of its intention to effect a Change in Recommendation in response to such Superior Proposal (including the Requisiteidentity of the party making such Acquisition Proposal) and furnish to TriCo Vote is unlikelyall the material terms and conditions of such proposal, and (C) prior to be obtained ateffecting such a Change in Recommendation, FNBB shall, and shall cause its financial and legal advisors to, during the period following FNBB’s delivery of the notice referred to in clause (B) above, negotiate with TriCo Meeting, or (ii) TriCo reasonably determines in good faith that the Requisite North Valley Vote is unlikely to be obtained at the North Valley Meeting, then prior to the vote contemplated having been taken such party may request that the other party adjourn or postpone its meeting for a period of up to forty-five (45) days from then-scheduled date andfive (5) Business Days (to the other party shall comply withextent TriCo desires to negotiate) to make such request; provided that a party shall be required to adjourn or postpone its meeting on only one occasion. During such period of adjournment or postponement, the parties shall continueadjustments in all respects to comply with their obligations under this Section 6.3 and shall in good faith use reasonable best efforts to obtain shareholder approval or negotiate a restructuring of the transactions contemplated by this Agreement including the Merger and the Bank Merger (it being understood that neither party shall have any obligation to alter or change the amount or kind of the Merger Consideration in a manner adverse to such party or its shareholders) and, subject to this Section 6.3, seek to obtain the Requisite TriCo Vote and/or the Requisite North Valley Vote, as the case may be. Except as set forth in this Section 6.3, no party shall have the obligation to postpone or adjourn its shareholder meeting.

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6.4.Legal Conditions to Merger. Subject to the terms and conditions of this Agreement each of TriCo and North Valley shall use their reasonable best efforts (a) to take, or cause to be taken, all actions reasonably necessary, proper or advisable to comply promptly with all legal requirements which may be imposed on such party with respect to the Merger and the Bank Merger and, subject to the conditions of Article VII hereof, to consummate the transactions contemplated by this Agreement and (b) to obtain (and to cooperate with the other party to obtain) any consent, authorization, order or approval of, or any exemption by, any Governmental Entity and any other third party which is required to be obtained by North Valley or TriCo in connection with the Merger, the Bank Merger and the other transactions contemplated by this Agreement.

6.5.Nasdaq Listing. TriCo shall use its reasonable best efforts to cause the shares of TriCo Common Stock to be issued in the Merger to be approved for quotation on NASDAQ prior to or at the Effective Time.

6.6.Employees.

(a) To the extent permissible under the applicable provisions of the Code and ERISA, for purposes of crediting periods of service for eligibility to participate and vesting, but not for benefit accrual purposes, under TriCo Plans that are employee pension benefit plans (within the meaning of ERISA Section 3(2)), individuals who are employees (including, but not limited to, those who are on unpaid leave, paid leave and active employees) of North Valley or any North Valley Subsidiary at the Effective Time will be credited with periods of service with North Valley or the applicable North Valley Subsidiary before the Effective Time as if such service had been with TriCo or a TriCo Subsidiary, as applicable; provided that the foregoing shall not apply (i) for benefit accrual purposes, (ii) as would result in the duplication of benefits for the same period of service, (iii) for purposes of any “frozen” TriCo Plan for which new TriCo employees are generally not eligible or (iv) for any newly established TriCo Plan for which similarly situated employees of TriCo do not receive service credit for the period in question. Notwithstanding the preceding, the parties recognize that North Valley intends to maintain the North Valley 401(k) Plan through the Effective Time and to make matching contributions to the North Valley 401(k) Plan on behalf of eligible employees. With regard to participation by the employees who are eligible to participate in the North Valley 401(k) Plan prior to the Effective Time: (i) such employees shall be eligible to participate in TriCo’s 401(k) Savings Plan (the “TriCo 401(k) Plan”) immediately upon their becoming TriCo or TriCo Subsidiary employees incident to this transaction; (ii) such employees shall be eligible for the employer contributions in the TriCo 401(k) Plan, if any (whether match, profit-sharing or both), with regard to eligible compensation earned by them from TriCo or the TriCo Subsidiary following the Effective Time until the last day of the TriCo 401(k) Plan year that includes the Effective Time.

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(b) To the extent permissible under the applicable provisions of the Code, ERISA and the applicable TriCo Plans (except as to reasonable amendments that TriCo shall make to accommodate a provision that is permitted under the Code and ERISA), TriCo will or will cause its applicable Subsidiary to (i) give credit to employees of North Valley and its Subsidiaries, with respect to the satisfaction of the waiting periods for participation and coverage which are applicable under the TriCo Plans that are welfare benefit plans, equal to the credit that any such employee had received as of the Effective Time towards the satisfaction of any such limitations and waiting periods under the comparable North Valley Plans that are welfare benefit plans; (ii) make reasonable commercial efforts to cause each TriCo Plan that is a group health plan (including medical, dental and prescription drug) and that is made available to employees of North Valley and its Subsidiaries in the plan year which includes the Effective Time to provide each employee of North Valley and its Subsidiaries with credit for any co-payment and deductibles in such plan year paid prior to the Effective Time in satisfying any deductible or out-of-pocket requirements. Notwithstanding the generality of the foregoing, (i) each employee of North Valley and its Subsidiaries who has satisfied the applicable waiting periods for eligibility or participation in any TriCo Plan that is made available, in TriCo’s sole discretion, to such employee as of the effective time after credit for pre-Effective Time service has been given shall begin participating in such TriCo Plan immediately after the Effective Time without the need to wait for any open enrollment periods or plan entry dates; and (ii) each employee of North Valley and its Subsidiaries who has satisfied the applicable waiting periods for eligibility or participation in any North Valley Plan that is a medical plan, dental plan, disability plan or life insurance plan (excepting plans maintained only for a select group, such as executives), shall begin participating in the comparable TriCo Plan immediately after the Effective Time; and (iii) each TriCo Plan that provides severance or vacation/paid time off benefits and that is made available to any employee of North Valley or its Subsidiaries who continues employment with the Surviving Corporation or any of its subsidiaries following the Effective Time shall recognize service with North Valley and its Subsidiaries that was recognized by North Valley under the equivalent North Valley Plan. For illustration, if an employee of TriCo with 10 years of service is eligible to accrue four weeks of vacation in a calendar year under a Trico Plan, then a North Valley employee with 10 years of North Valley service who becomes a TriCo employee as of the Effective Time due to this transaction will accrue four weeks of vacation with TriCo in the calendar year under such Trico Plan.

(c) TriCo or one of its Subsidiaries shall provide severance benefits to those employees of North Valley and its Subsidiaries who continue in employment with the Surviving Corporation or any of its Subsidiaries through the Effective Time and whose employment is involuntarily terminated by the Surviving Corporation and its Subsidiaries without cause at or within 180 days after the Effective Time (other than employees who are entitled to receive severance payments under any employment, severance or similar plans or agreements as set forth in Section 3.11 of the North Valley Disclosure Letter) in accordance with TriCo’s current written severance policy as previously delivered to North Valley.

(d) There shall be no North Valley ESOP loans nor any unallocated accounts in respect of any North Valley ESOP loans as of the Effective Time. North Valley shall continue to make employer contributions to the North Valley ESOP for each plan year quarter ending on or before the Effective Time, provided such contributions are comparable in amount, on a prorated basis, to past employer contributions to the North Valley ESOP.

(e) North Valley shall take, or cause to be taken, all actions necessary to cause the fiduciaries of the North Valley ESOP to take all of the following actions:

(i) Implement a written confidential pass-through voting procedure pursuant to which the participants under the North Valley ESOP and their beneficiaries shall direct the trustee under the North Valley ESOP to vote the shares of North Valley Common Stock allocated to their North Valley ESOP accounts with respect to the Merger.

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(ii) Provide the North Valley ESOP participants and their beneficiaries with a written notice regarding the existence of and provisions for such confidential pass-through voting procedures, as well as the same written materials to be provided to the shareholders of North Valley in connection with the Merger.

(iii) Take any and all additional actions necessary to satisfy the requirements of ERISA applicable to the North Valley ESOP fiduciaries in connection with the Merger.

(f) If and to the extent requested by TriCo in a writing delivered to North Valley following the date hereof and prior to the Closing Date, North Valley shall take all necessary action (including without limitation the adoption of resolutions and plan amendments and the delivery of any required notices) to terminate, effective as of no later than immediately prior to the Closing Date, the North Valley ESOP. North Valley shall provide TriCo with a copy of the resolutions, plan amendments, notices and other documents prepared to effectuate the termination of the North Valley ESOP in advance and give TriCo a reasonable opportunity to comment on such documents (which comments shall be considered in good faith), and prior to the Closing Date North Valley shall provide TriCo with the final board resolutions evidencing that the ESOP has been terminated. The termination of the North Valley ESOP will be adopted conditioned upon the consummation of the Merger and upon receiving a favorable determination letter from the IRS with regard to (i) the continued qualification of the North Valley ESOP after any required amendments necessary to implement the actions thereof set forth above and (ii) the termination of the North Valley ESOP. North Valley and TriCo will cooperate in submitting appropriate requests for any such determination and termination letters to the IRS and will use their best efforts to seek the issuance of such letters as soon as practicable following the date hereof;provided, however, that North Valley does not represent or warrant that it shall begin the determination letter process as to the termination of the North Valley ESOP prior to Closing. North Valley will adopt such additional amendments to the North Valley ESOP as may be reasonably required by the IRS as a condition to granting such favorable determination and termination letters provided that such amendments do not substantially change the terms outlined herein or would result in a material adverse change in the business, operations, assets, financial condition or prospects of North Valley or TriCo or result in an additional material liability to TriCo or North Valley.

(g) If and to the extent requested by TriCo in a writing delivered to North Valley following the date hereof and prior to the Closing Date, (i) North Valley shall take all necessary action (including without limitation the adoption of resolutions and plan amendments and the delivery of any required notices), effective no later than the last day of the regularly scheduled payroll period immediately preceding the Closing Date, to freeze all contributions to the North Valley ESOP; and (ii) as soon as administratively feasible after the Effective Time, at the election of TriCo, the North Valley ESOP shall be merged with and into the TriCo ESOP.

(h) Effective no later than the last day of the regularly scheduled payroll period immediately preceding the Closing Date, North Valley shall freeze contributions to the North Valley 401(k) Plan. Effective no later than the day before the Closing Date, North Valley shall terminate the North Valley 401(k) Plan by proper action of the North Valley Board and the board of directors of North Valley Bank. Before the Closing Date, North Valley shall provide to TriCo (i) copies of duly adopted board resolutions terminating the North Valley 401(k) Plan, and (ii) an executed amendment to the North Valley 401(k) Plan sufficient to assure compliance with all applicable requirements of the Code and regulations thereunder. The resolution and amendment shall be subject to the prior review and approval of TriCo.

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(i) North Valley shall terminate, in accordance with its terms and applicable Laws, effective prior to the Closing Date, each North Valley Plan providing for group health, dental, vision, prescription drugs or other welfare benefit coverage to any former employees, officers, directors or consultants and/or their spouses and other dependents. At the request of TriCo, North Valley shall terminate or discontinue accruals under any and all other North Valley Plans, including any group health, dental, severance, separation or salary continuation plans, programs or arrangements, effective either immediately before the Closing Date or thereafter as specified by TriCo; provided, however, that North Valley shall not be required to terminate any North Valley Plan identified in Schedule 6.6(i).

(j) Notwithstanding the foregoing, nothing in this Agreement shall be interpreted or construed to confer upon any employee of North Valley or any of its Subsidiaries who continues to be employed by the Surviving Corporation or any of its Subsidiaries after the Effective Time with any right with respect to continuance of employment by or other service with the Surviving Corporation or any of its Subsidiaries, nor shall this Agreement interfere in any way with the right of the Surviving Corporation and its Subsidiaries to terminate the employment or other association of any Person at any time. Nothing in this Agreement shall constitute an amendment of, or interfere in any way with the right of the Surviving Corporation and its Subsidiaries to amend, terminate or otherwise discontinue, any or all TriCo Plans and any other plans, practices or policies of the Surviving Corporation or any of its Subsidiaries in effect from time to time.

(k) Notwithstanding anything herein to the contrary, nothing in this Section 6.6 shall create any third party beneficiary right in any Person, and no provision in this Agreement shall create any right to employment or continued employment or to a particular term or condition of employment with the Surviving Corporation or any of its Subsidiaries.

6.7.No Solicitation; Change of Recommendation.

(a) North Valley agrees that it shall, and shall cause its Subsidiaries to, and shall direct and use its reasonable best efforts to cause its and its Subsidiaries’ directors, officers, employees, advisors and agents (collectively, “Representatives”) to, immediately cease all existing discussions or negotiations with any Person (other than TriCo and its affiliates and Representatives) conducted heretofore with respect to any proposal that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal (as defined below). Except as expressly permitted in this Section 6.7, from the date of this Agreement until the earlier of the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 8.1, North Valley shall not, and shall cause its Subsidiaries not to, and shall direct and use its reasonable best efforts to cause its and its Subsidiaries’ Representatives not to, directly or indirectly, (i) solicit, initiate or knowingly encourage any Acquisition Proposal, (ii) enter into, or otherwise participate in any discussions (except for the limited purpose of notifying such person of the existence of the provisions of this Section 6.7) or negotiations regarding any Acquisition Proposal, (iii) enter into any agreement regarding any Acquisition Proposal or Alternative Transaction (as defined below), (iv) furnish to any person any information concerning North Valley, or any access to the properties, books and records of North Valley and its Subsidiaries, in connection with any Acquisition Proposal, or (v) propose, agree or publicly announce an intention to take any of the foregoing actions or any other action which would reasonably be expected to lead to an Acquisition Proposal. North Valley shall use commercially reasonable efforts to request all Persons other than TriCo, TriCo’s Representatives and North Valley’s Representatives who have been furnished confidential information regarding North Valley in connection with the solicitation of or discussions regarding an Acquisition Proposal within the eighteen (18) months prior to the date hereof promptly to return or destroy such information. Except as permitted by this Section 6.7, North Valley agrees not to, and to cause its Subsidiaries not to, release any third party from, and agrees to enforce, the confidentiality and standstill provisions of any agreement to which North Valley or its Subsidiaries is a party that remains in effect as of the date hereof, and shall immediately take all steps necessary to terminate any approval that may have been heretofore given under any such provisions authorizing any Person to make an Acquisition Proposal.

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(b) Notwithstanding anything to the contrary contained in this Section 6.7, if at any time after the date hereof and prior to obtaining North Valley Shareholder Approval, North Valley or any of its Subsidiaries, or any of its or their respective Representatives, having each theretofore complied with the terms of Section 6.7(a), receives a bona fide, unsolicited written Acquisition Proposal, North Valley, the North Valley Board and their respective Representatives may engage in negotiations and discussions with, and furnish any information and other access (so long as all such information and access has previously been made available to TriCo or is made available to TriCo prior to or concurrently with the time such information or access is made available to such Person) to, any Person making such Acquisition Proposal and its Representatives if, and only if, the North Valley Board determines in good faith, after consultation with North Valley’s outside legal and financial advisors, that (i) such Acquisition Proposal is or is reasonably capable of becoming a Superior Proposal and (ii) the failure of the North Valley Board to furnish such information or access or enter into such discussions or negotiations would reasonably be expected to be a violation of its fiduciary duties to the shareholders of North Valley under applicable Law;provided that prior to furnishing any material nonpublic information, North Valley shall have received from the Person making such Acquisition Proposal an executed confidentiality agreement with terms at least as restrictive in all material respects on such Person as the Confidentiality Agreement is on TriCo, which confidentiality agreement shall not prohibit North Valley from complying with the terms of this Section 6.7. North Valley will promptly, and in any event within one (1) Business Day, (x) notify TriCo in writing of the receipt of such Acquisition Proposal or any request for nonpublic information relating to North Valley or any of its Subsidiaries or for access to the properties, books or records of North Valley or any of its Subsidiaries by any Person that has made, or to North Valley’s Knowledge may be considering making, an Acquisition Proposal and (y) communicate the material terms of such Acquisition Proposal to TriCo, including as they may change upon any modification or amendment to the terms thereof. North Valley will keep TriCo reasonably apprised of the status of and other matters relating to any such Acquisition Proposal on a timely basis.

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(c) Except as expressly permitted by this Section 6.7, neither North Valley nor the North Valley Board shall (i)(A) withdraw, modify or qualify, or publicly propose to withdraw, modify or qualify, in a manner adverse to TriCo, the North Valley Board Recommendation or (B) approve or recommend, or publicly propose to approve or recommend, to the shareholders of North Valley any Acquisition Proposal or Alternative Transaction or (ii) authorize, approve, recommend or declare advisable, or propose to adopt, approve, recommend or declare advisable, or allow North Valley or any of its Subsidiaries to enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, option agreement or similar agreement with respect to, or that is intended to or would reasonably be expected to lead to, any Acquisition Proposal (other than a confidentiality agreement referred to in Section 6.2(b) pursuant to and in accordance with the limitations set forth therein) (any action described in this Section 6.7(c) being referred to as a “Change of Recommendation”).

(d) Notwithstanding anything to the contrary in this Agreement, at any time prior to obtaining the Shareholder Approval, the North Valley Board may make a Change of Recommendation, if (A) North Valley has complied with the terms of this Section 6.7, (B) the North Valley Board receives an unsolicited bona fide, written Acquisition Proposal from any Person that is not withdrawn and (C) the North Valley Board determines in good faith, after consultation with its independent financial advisors and outside legal counsel, that such Acquisition Proposal constitutes a Superior Proposal;provided that:

(i) the North Valley Board determines in good faith, after consultation with its outside legal counsel, that the failure of the North Valley Board to take such action would reasonably be expected to be a violation of its fiduciary duties to the shareholders of North Valley under applicable Law; and

(ii) (1) North Valley provides TriCo prior written notice at least five (5) Business Days (or such longer period as it may be extended upon the modification or amendment of the Acquisition Proposal as contemplated below) prior to taking such action, which notice shall state that the North Valley Board has received a Superior Proposal and, absent any revision to the terms and conditions of this Agreement, the North Valley Board has resolved to effect a Change of Recommendation, which notice shall specify the basis for such Change of Recommendation or termination, including the material terms of the Superior Proposal (a “Notice of Superior Proposal”) (it being understood that such Notice of Superior Proposal shall not in and of itself be deemed a Change of Recommendation);

(2) during such five (5) Business Day period (as it may be extended upon the modification or amendment of the Acquisition Proposal as contemplated below), North Valley negotiates in good faith with TriCo (to the extent that TriCo wishes to negotiate) to enable TriCo to make an offer that is at least as favorable to the shareholders of North Valley so that such Acquisition Proposal would ceaseceases to constitute a Superior Proposal; and

(3) at the end of such five (5) Business Day period (as it may be extended upon the modification or amendment of the Acquisition Proposal as contemplated below, or such earlier time that TriCo advises North Valley in writing that it no longer wishes to negotiate to amend this Agreement), the North Valley Board, after taking into account any modifications to the terms of this Agreement and the Merger agreed to by TriCo after receipt of such notice, continues to believe that such Acquisition Proposal constitutes a Superior Proposal.

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It is understood that and agreed that any amendment or modification to the financial or other material terms of the Acquisition Proposal giving rise to the NoticeFNBB’s notice of a Superior Proposal shall constitute a new Acquisition Proposal giving rise to a new obligation to provide notice and a new five (5) Business Day response period for TriCo, consequently extending the periods referenced in Sections 6.7(d)(ii)(1)-(3)6.02(b)(iii) above.

(e) Nothing(c) TriCo agrees to take, in accordance with applicable law and the TriCo Articles and TriCo Bylaws, all action necessary to convene as soon as reasonably practicable after the Registration Statement becomes effective, a meeting of its shareholders to consider and vote upon the approval of this Agreement, the Merger and the issuance of the TriCo Common Stock in the Merger and any other matters required to be approved by TriCo’s shareholders for consummation of the Transaction (including any adjournment or postponement, the “TriCo Meeting”). The TriCo Board shall prohibit North Valleyat all times prior to and during the TriCo Meeting recommend approval of this Agreement, the Merger and the issuance of the TriCo Common Stock in the Merger and any other matters required to be approved by TriCo’s shareholders for consummation of the Transaction contemplated hereby and shall take all reasonable lawful action to solicit such approval by its shareholders.

(d) FNBB and TriCo shall cooperate to schedule and convene the FNBB Meeting and the TriCo Meeting on the same date.

6.03Registration Statement.

(a) TriCo agrees to prepare a registration statement on FormS-4 or other applicable form (the “Registration Statement”) to be filed by TriCo with the SEC in connection with the issuance of the shares of TriCo Common Stock to the FNBB shareholders as the Merger Consideration in the Merger (including the joint proxy statement for the TriCo Meeting and the FNBB Meeting and prospectus and other proxy solicitation materials of TriCo and FNBB constituting a part thereof (the “Proxy Statement”) and all related documents). FNBB shall prepare and furnish such information relating to it, its Subsidiaries and their respective directors, officers and shareholders as may be reasonably required in connection with the above referenced documents based on its knowledge of and access to the information required for said documents, and FNBB, and its legal, financial and accounting advisors, shall have the right to review in advance and comment on such Registration Statement prior to its filing and on any amendments or supplements thereto and any written communications with the SEC in connection therewith. FNBB agrees to cooperate with TriCo and TriCo’s counsel and accountants in requesting and obtaining appropriate opinions, consents and letters from its financial advisor and independent auditor in connection with the Registration Statement and the Proxy Statement. TriCo shall use its commercially reasonable best efforts to file, or cause to be filed, the Registration Statement with the SEC within forty-five (45) days of the date of this Agreement or as promptly as reasonably practicable thereafter. Each of FNBB and TriCo agrees to use its commercially reasonable best efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as reasonably practicable after the filing thereof. TriCo also agrees to use its commercially reasonable best efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to carry out the transactions contemplated by this Agreement. After the Registration Statement is declared effective under the Securities Act, FNBB and TriCo shall promptly mail at each party’s own expense the Proxy Statement to all of their respective shareholders.

(b) Each of FNBB and TriCo agrees that none of the information supplied or to be supplied by it for inclusion or incorporation by reference in (i) the Registration Statement shall, at the time the Registration Statement and each amendment or supplement thereto, if any, becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) the Proxy Statement and any amendment or supplement thereto shall, at the date(s) of mailing to FNBB’s and TriCo’s respective shareholders and at the time(s) of the FNBB Meeting and the TriCo Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. Each of FNBB and TriCo further agrees that if such party shall become aware prior to the date of effectiveness of the Registration Statement of any information furnished by such party that would cause any of the statements in the Registration Statement or the Proxy Statement to be false or misleading with respect to any material fact, or to omit to state any material fact necessary to make the statements therein not false or misleading, to promptly inform the other parties thereof and to take the necessary steps to correct the Registration Statement or the Proxy Statement.

(c) TriCo agrees to advise FNBB promptly in writing after TriCo receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, of the issuance of any stop order or the suspension of the qualification of TriCo Common Stock for offering or sale in any jurisdiction, of the initiation or, to the extent TriCo is aware thereof, threat of any proceeding for any such purpose, or of any request by the SEC for the amendment or supplement of the Registration Statement or for additional information.

6.04Regulatory Filings.

(a) Each of TriCo and FNBB and their respective Subsidiaries shall cooperate and use their respective commercially reasonable best efforts to prepare all documentation, to effect all filings and to obtain all permits, consents, approvals and authorizations of all Governmental Entities necessary to consummate the Transaction; and TriCo shall use its commercially reasonable best efforts to make any initial application filings with Governmental Entities within thirty (30) days of the date of this Agreement or as promptly as reasonably practicable thereafter. Each of TriCo and FNBB shall have the right to review in advance, and to the extent practicable, each shall consult with the other, in each case subject to applicable laws relating to the exchange of information, with respect to all written information submitted to any Governmental Entity in connection with the Transaction. In exercising the foregoing right, each of such parties agrees to act reasonably and as promptly as practicable. Each party hereto agrees that it shall consult with the other party hereto with respect to the obtaining of all permits, consents, approvals, waivers and authorizations of all Governmental Entities necessary or advisable to consummate the Transaction, and each party shall keep the other party apprised of the status of material matters relating to completion of the Transaction. Each party hereto further agrees to provide the other party with a copy of all correspondence to or from any Governmental Entity in connection with the Transaction,provided that TriCo shall not be required to provide FNBB with confidential portions of any filing with a Governmental Entity if such provision would violate applicable laws relating to the exchange of information.

(b) Each party agrees, upon request, to furnish the other party with all information concerning itself, its Subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with any filing, notice or application made by or on behalf of such other party or any of their Subsidiaries to any Governmental Entity.

6.05Press Releases.FNBB and TriCo shall consult with each other before issuing any press release or public statement with respect to the Transaction or this Agreement and shall not issue any such press release or make any such public statements without the prior consent of the other party, which shall not be unreasonably withheld, delayed or conditioned;provided, however, that TriCo or FNBB may, without the prior consent of the other party (but after such consultation, to the extent practicable under the circumstances), issue such press release or make such public statements as may, upon the advice of outside counsel, be required by law or the

rules or regulations of the SEC or Nasdaq. FNBB and TriCo shall cooperate to develop all public announcement materials and make appropriate management available at presentations related to the Transaction as reasonably requested by the other party.

6.06Access; Information.

(a) FNBB agrees that upon reasonable notice and subject to applicable laws relating to the exchange of information, it shall afford TriCo and TriCo’s officers, employees, counsel, accountants and other authorized representatives such access during normal business hours throughout the period prior to the Effective Time to the books, records (including, without limitation, minutes and records of the FNBB Board, the First National Bank Board and their respective committees, Tax Returns and work papers of independent auditors), systems, properties, personnel and advisors of FNBB and its Subsidiaries and to such other information relating to FNBB and its Subsidiaries as TriCo may reasonably request, provided that TriCo shall coordinate any and all meetings with FNBB personnel with one or more designated representatives of FNBB, and, during such period, FNBB shall furnish promptly to TriCo (i) a “stop, lookcopy of each report, schedule, registration statement and listen” communicationother document filed or received during such period pursuant to Rule 14d-9(f) promulgatedthe requirements of federal or state banking, lending, securities, consumer finance or privacy laws and (ii) all other information concerning the business, properties and personnel of FNBB and its Subsidiaries as TriCo may reasonably request. Notwithstanding the foregoing, FNBB shall not be required to provide access to or disclose information (x) included in any communications, memoranda or work product prepared by advisors to FNBB, or confidential reports, documents or minutes of meetings of the FNBB Board, its committees or its management personnel, or similar materials to the extent directly or indirectly substantially related to or prepared in connection with the Transaction and the rights and obligations of FNBB under this Agreement, or (y) where such access or disclosure would jeopardize the Exchange Actattorney-client privilege of FNBB or taking and disclosingany other Person in possession or control of such information (after giving due consideration to its shareholdersthe existence of any position contemplated by Rule 14e-2(a) and Rule 14d-9 promulgated undercommon interest, joint defense or similar agreement between the Exchange Act,parties) or contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or agreement entered into prior to the date of this Agreement, provided that in any such event, FNBB will cooperate in good faith with TriCo to make reasonably appropriate substitute disclosure under Rule 14e-2(a)(1)arrangements.

(b) During the period from the date of this Agreement to the Effective Time, FNBB shall, upon the request of TriCo, cause one or more of its designated representatives to confer on a monthly or more frequent basis with representatives of TriCo regarding its consolidated financial condition, operations and business and matters relating to the completion of the Transaction. Subject to applicable law, as soon as reasonably available, but in no event more than thirty (30) days after the end of each calendar quarter ending after the date of this Agreement (other than the last quarter of each fiscal year ending December 31), FNBB will deliver to TriCo its unaudited consolidated balance sheet and consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows, without related notes, for such quarter prepared in accordance with GAAP, and, as soon as reasonably available, but in no event more than forty (40) days after the end of each fiscal year, FNBB will deliver to TriCo its unaudited consolidated balance sheet and consolidated statements of income, changes in shareholders’ equity and comprehensive income and cash flows for such year prepared in accordance with GAAP. Subject to applicable law, within fifteen (15) days after the end of each month, FNBB will deliver to TriCo an unaudited consolidated balance sheet and consolidated statements of income, without related notes, for such month prepared in accordance with GAAP.

(c) During the period from the date of this Agreement to the Effective Time, TriCo shall, upon the request of FNBB, cause one or more of its designated representatives to confer on a monthly or more frequent basis with representatives of FNBB regarding its consolidated financial condition, operations and business and matters relating to the completion of the Transaction. Subject to applicable law, as soon as reasonably available, but in no event more than thirty (30)days after the end of each calendar quarter ending after the date of this Agreement (other than the last quarter of each fiscal year ending December 31), TriCo will deliver to FNBB its unaudited consolidated balance sheet and consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows, without related notes, for such quarter prepared in accordance with GAAP,

and, as soon as reasonably available, but in no event more than forty (40) days after the end of each fiscal year, TriCo will deliver to FNBB its unaudited consolidated balance sheet and consolidated statements of income, changes in shareholders’ equity and comprehensive income and cash flows for such year prepared in accordance with GAAP. Subject to applicable law, within fifteen (15) days after the end of each month, TriCo will deliver to FNBB an unaudited consolidated balance sheet and consolidated statements of income, without related notes, for such month prepared in accordance with GAAP.

(d) All information furnished by FNBB pursuant to this Section 6.06 shall be deemedsubject to the provisions of theNon-Disclosure Agreement, dated as of August 18, 2017 by and between TriCo and FNBB and all information furnished by TriCo pursuant to this Section 6.06 shall be subject to the provisions of theNon-Disclosure Agreement, dated as of October 18, 2017 by and between TriCo and FNBB (such agreements, the “Confidentiality Agreements”).

(e) No investigation by any of the parties or their respective representatives shall affect the representations, warranties, covenants or agreements of the other parties set forth herein.

6.07No Solicitation; Acquisition Proposals.

(a) FNBB agrees that it shall, and shall direct and use its reasonable best efforts to cause its affiliates, directors, officers, employees, agents and representatives (including, without limitation, any investment banker, financial advisor, attorney, accountant or other representative retained by it) (all of the foregoing, collectively, “Representatives”) to, immediately cease any discussions or negotiations with any other parties that may be ongoing with respect to the possibility or consideration of any Acquisition Proposal, and will use its reasonable best efforts to enforce any confidentiality or similar agreement relating to any Acquisition Proposal, including by requesting the other party to promptly return or destroy any confidential information previously furnished by or on behalf of FNBB or any of its Subsidiaries thereunder and by specifically enforcing the terms thereof in a Changecourt of Recommendation unlesscompetent jurisdiction. From the North Valley Board expressly and concurrently reaffirms the North Valley Board Recommendation.

(f) As used indate of this Agreement Acquisition Proposalthrough the Effective Time, neither FNBB nor any of its Subsidiaries shall, meanand shall cause their respective directors, officers or employees or any Representative retained by them not to, directly or indirectly through another Person, (i) solicit, initiate or encourage (including by way of furnishing information or assistance), or take any other action designed to facilitate or that is likely to result in, any inquiries or the making of any proposal or offer (whether in writingthat constitutes, or otherwise) from any Person (other than TriCo and any affiliates thereof) relating to, or that is reasonably expectedlikely to lead to, (A) any directAcquisition Proposal, (ii) provide any confidential information or indirect purchasedata to any Person relating to any Acquisition Proposal, (iii) participate in any discussions or acquisition, in a single transactionnegotiations regarding any Acquisition Proposal, (iv) waive, terminate, modify or series of related transactions,fail to enforce any provision of any assetscontractual “standstill” or businessessimilar obligations of North Valley andany Person other than TriCo or its Subsidiaries (including securitiesAffiliates, (v) approve or recommend, propose to approve or recommend, or execute or enter into, any letter of Subsidiaries) that constitute 5%intent, agreement in principle, merger agreement, asset purchase agreement or more of North Valley’s consolidated assets, (B)share exchange agreement, option agreement or other similar agreement related to any directAcquisition Proposal or indirect purchase or acquisition, in a single transaction or series of related transactions, of beneficial ownership (as defined under Section 13(d)propose to do any of the Exchange Act)foregoing, or (vi) make or authorize any statement, recommendation or solicitation in support of 5% or moreany Acquisition Proposal;provided, however, that prior to the date of the total outstanding voting securities of North Valley pursuant to a merger, consolidation or other business combination, sale of shares of capital stock, tender offer, exchange offer or similar transaction, or (C) a merger, share exchange, consolidation or other business combination involving North Valley or North Valley Bank, other thanFNBB Meeting, if the Merger or the Bank Merger (any such transaction described in clauses (A) and (B) an “Alternative Transaction”).

(g) As used in this Agreement, “Superior Proposal” shall mean any bona fide written Acquisition Proposal on terms which the North ValleyFNBB Board determines in good faith, after consulting with its outside legal and financial advisors, that the failure to do so would breach, or would reasonably be expected to result in a breach of, the FNBB Board’s fiduciary duties under applicable law, FNBB may, in response to a bona fide, written Acquisition Proposal not solicited in violation of this Section 6.07(a) that the FNBB Board determines in good faith constitutes a Superior Proposal, subject to providing two (2) Business Days prior written notice of its decision to take such action to TriCo and identifying the Person making the proposal and all the material terms and conditions of such proposal and compliance with Section 6.07(b), (1) furnish information with respect to itself to any Person making such a Superior Proposal pursuant to a customary confidentiality agreement (as determined by FNBB after consultation with North Valley’sits outside legal counselcounsel) on terms no more favorable to such Person than the terms contained in the Confidentiality Agreement are to TriCo, and independent financial advisors,(2) participate in discussions or negotiations regarding such a Superior Proposal. For purposes of this Agreement, the term “Acquisition Proposal” means any inquiry, proposal or offer, filing of any regulatory application or notice or disclosure of an intention to do any of the foregoing from any Person relating to any (w) direct or indirect acquisition or purchase of a business that constitutes 10%

or more of the total revenues, net income, assets or deposits of FNBB and its Subsidiaries taken as a whole, (x) direct or indirect acquisition or purchase of any class of Equity Securities representing 10% or more of the voting power of FNBB or First National Bank, (y) tender offer or exchange offer that if consummated would result in any person beneficially owning 10% or more of any class of Equity Securities of FNBB or First National Bank or (z) merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving FNBB or First National Bank, other than the Transaction contemplated by this Agreement. For purposes of this Agreement, the term “Superior Proposal” means any bona fide written proposal made by a third party to acquire, directly or indirectly, including pursuant to a tender offer, exchange offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction, for consideration consisting of cash and/or securities, more than 50% of the combined voting power of the shares of FNBB Common Stock then outstanding or all or substantially all of FNBB’s consolidated assets, which the FNBB Board determines in good faith, after taking into account all the legal, financial, regulatory and other aspects of such Acquisition Proposal, including asthe proposal and the person making the proposal (including anybreak-up fees, expense reimbursement provisions and conditions to certaintyconsummation), and timing of consummation, would, if consummated, result inafter consulting with FNBB’s financial advisor (which shall be a transaction thatrecognized investment banking firm) and outside counsel, (i) is more favorable to the holders of North Valley Common Stock from a financial point of view to its shareholders than the Transaction, (ii) is reasonably likely to be consummated on the terms set forth, and (iii) for which financing, to the extent required, is then committed or which, in the good faith judgment of the FNBB Board, is reasonably likely to be obtained by such third party.

(b) In addition to the obligations of FNBB set forth in Section 6.07(a), FNBB shall promptly (within 24 hours) advise TriCo orally and in writing of its receipt of any Acquisition Proposal and keep TriCo reasonably informed, on a current basis, of the continuing status thereof, including the material terms and conditions thereof and any material changes thereto, and shall contemporaneously provide to TriCo all materials provided to or made available to any third party pursuant to this Section 6.07 which were not previously provided to TriCo.

(c) FNBB agrees that any violation of the restrictions set forth in this Section 6.07 by any Representative of FNBB or its Subsidiaries shall be deemed a breach of this Agreement (in each case, taking into account any revisions toSection 6.07 by FNBB.

(d) Nothing contained in this Agreement shall prevent FNBB or the FNBB Board from complying with Rules14d-9 and14e-2 under the Exchange Act with respect to an Acquisition Proposal.

(e) The parties hereto agree that irreparable damage would occur in the event any of the restrictions set forth in Section 6.07(a) were violated by FNBB, its Subsidiaries or any Representative of FNBB or its Subsidiaries. It is accordingly agreed that TriCo shall be entitled to an injunction or injunctions to prevent breaches of Section 6.07 and to enforce specifically the terms and provisions thereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which TriCo is entitled at law or in equity. In the event attorneys’ fees or other costs are incurred to secure performance of any of the obligations herein provided for, or to establish damages for the breach thereof, or to obtain any other appropriate relief, whether by way of prosecution or defense, TriCo shall be entitled to recover reasonable attorneys’ fees and costs incurred therein.

6.08Certain Policies.Prior to the Effective Date, upon the request of TriCo, FNBB shall, and shall cause its Subsidiaries to, consistent with GAAP and applicable banking laws and regulations, use their commercially reasonable best efforts to modify or change their Loan, OREO, accrual, reserve, Tax, litigation and real estate valuation policies and practices (including loan classifications and levels of reserves) so as to be applied on a basis that is consistent with that of TriCo;provided, however, that no such modifications or changes need be made or proposed by TriCo)prior to the satisfaction of the conditions set forth in Section 7.01(b); andfurther provided that for purposesin any event, no such modification or change made by FNBB or any of the definition of “Superior Proposal,” the referencesits Subsidiaries pursuant to “5%this Section 6.08 shall constitute or more” in the definition of Acquisition Proposal shall be deemed to be referencesa breach, violation of or failure to “100%.”satisfy any representation, warranty, covenant, agreement, condition or other provision of this Agreement or otherwise be considered in determining whether any such breach, violation or failure to satisfy shall have occurred. The recording of any such

adjustments shall not be deemed to imply any misstatement of previously furnished financial statements or information and shall not be construed as concurrence of FNBB or its management with any such adjustments.

A-576.09Nasdaq Listing.TriCo shall, as promptly as practicable, file all documents, take all actions reasonably necessary and otherwise use its commercially reasonable best efforts to list, prior to the Effective Date, on the Nasdaq the shares of TriCo Common Stock to be issued to the FNBB shareholders as the Merger Consideration.


6.8.6.10Indemnification.

(a) InFrom and after the eventEffective Time through the sixth (6th) anniversary of the Effective Time, TriCo and the Surviving Corporation (each an “Indemnifying Party”) shall indemnify and hold harmless each present and former director, officer and employee of FNBB or First National Bank, as applicable, determined as of the Effective Time (the “Indemnified Parties”) against any threatenedcosts or actualexpenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or administrative, in which any person who is now,investigative, arising out of matters existing or has beenoccurring at any time prior to the date of this Agreement, or who becomes prior to the Effective Time, a directorwhether asserted or officerclaimed prior to, at or employee of North Valley or any North Valley Subsidiary (the “Indemnified Parties”) is, or is threatened to be, made a party based in whole or in part on, orafter the Effective Time, arising in whole or in part out of or pertaining to (i) the fact that he is or she was a director, officer, employee, fiduciary or employeeagent of North ValleyFNBB or any North ValleyFNBB Subsidiary or is or was serving at the request of FNBB or any FNBB Subsidiary as a director, officer, employee, fiduciary or agent of their respective predecessorsanother corporation, partnership, joint venture, trust or (ii)other enterprise, including, without limitation, matters related to the negotiation, execution and performance of this Agreement or anyconsummation of the transactions contemplated hereby, whether in any case asserted or arising before or after the Effective Time, the parties hereto agree to cooperate and use their reasonable best efforts to defend against and respond thereto. It is understood and agreed that, after the Effective Time, TriCo shall indemnify and hold harmless, as andTransaction, to the fullest extent permitted by applicable Laws, eachwhich such Indemnified Party againstParties would be entitled under the FNBB Articles and the FNBB Bylaws or, as applicable, the First National Bank Articles and the First National Bank Bylaws or any losses, claims, damages, liabilities, costs,agreement, arrangement or understanding which has been set forth in Section 6.10 of FNBB’s Disclosure Schedule, in each case as in effect on the date hereof. TriCo shall also cause the Surviving Corporation to advance expenses including reasonable attorney’s fees andas incurred by such Indemnified Parties to the same extent as such persons are entitled to advancement of expenses in advanceas of the final dispositiondate of this Agreement by FNBB pursuant to the FNBB Articles and the FNBB Bylaws or, as applicable, the First National Bank Articles or the First National Bank Bylaws or any agreement, arrangement or understanding which has been set forth in Section 6.10 of FNBB’s Disclosure Schedule, in each case as in effect on the date hereof.

(b) Any Indemnified Party wishing to claim indemnification under this Section 6.10, upon learning of any claim, suit, proceeding or investigation to each Indemnified Party to the fullest extent permitted by applicable Laws (upon receipt of any undertaking required by applicable Laws from such Indemnified Party to repay such advanced expenses if it is determined by a final and non-appealable judgment of a court of competent jurisdiction that such Indemnified Party was not entitled to indemnification hereunder), judgments, fines and amounts paid in settlement in connection with any such threatened or actual claim, action, suit, proceeding or investigation, and inshall promptly notify the Indemnifying Party, but the failure to so notify shall not relieve the Indemnifying Party of any liability it may have to such Indemnified Party if such failure does not actually prejudice the Indemnifying Party. In the event of any such threatened or actual claim, action, suit, proceeding or investigation (whether asserted or arising before or after the Effective Time), (i) the Indemnified Parties may retain counsel reasonably satisfactory to TriCo;provided, however, that (1) TriCoIndemnifying Party shall have the right to assume the defense thereof and upon such assumption TriCothe Indemnifying Party shall not be liable to anysuch Indemnified PartyParties for any legal expenses of other counsel or any other expenses subsequently incurred by anysuch Indemnified PartyParties in connection with the defense thereof, except that if TriCothe Indemnifying Party elects not to assume such defense or counsel for the Indemnified Parties reasonably advises the Indemnified Parties that there are issues which raise conflicts of interest between TriCothe Indemnifying Party and the Indemnified Parties that make joint representation inappropriate, the Indemnified Parties may retain counsel which is reasonably satisfactory to TriCo,the Indemnifying Party, and TriCothe Indemnifying Party shall pay, promptly as statements therefor are received, the reasonable fees and expenses of such counsel for the Indemnified Parties (2) TriCo shall be obligated pursuant to this paragraph to pay for only(which may not exceed one firm of counsel reasonably required in each applicableany jurisdiction for suchunless the Indemnified Parties and (3) TriCohave conflicts of interest), (ii) the Indemnified Parties will cooperate in the defense of any such matter, (iii) the Indemnifying Party shall not be liable for any settlement effected without its prior written consent, (which consentwhich shall not be unreasonably withheld, delayed or delayed). Anyconditioned and (iv) the Indemnifying Party shall have no obligation hereunder in the event that a federal or state banking agency or a court of competent jurisdiction shall determine by final,non-appealable written order that indemnification of an Indemnified Party wishing to claim indemnification under this Section 6.8, upon learning of any such claim, action, suit, proceeding or investigation,in the manner contemplated hereby is prohibited by applicable laws and regulations.

(c) TriCo (and the Surviving Corporation) shall promptly notify TriCo thereof;provided, however, that the failure to so notify shall not affect the obligations of TriCo under this Section 6.8 exceptmaintain FNBB’s existing directors’ and officers’ liability insurance policy (or provide a policy providing comparable coverage and amounts on terms no less

favorable to the extentpersons currently covered by FNBB’s existing policy, including TriCo’s existing policy if it meets the foregoing standard) covering persons who are currently covered by such failure to notify prejudices TriCo. TriCo’s obligations under this Section 6.8 shall continue in full force and effectinsurance for a period of six (6) years fromafter the Effective Time;provided, however,, that all rights to indemnification in respect of any claim asserted or made within such period shall continue until the final disposition of such claim.

(b) TriCo and North Valley shall use commercially reasonable efforts to cause the persons serving as officers and directors of North Valley and the North Valley Subsidiaries immediately prior to the Effective Time to be covered by a directors’ and officers’ liability insurance tail policy obtained from North Valley’s current insurance carrier (the “Tail Insurance Policy”) of substantially the same coverage and amounts containing terms and conditions which are generally not less advantageous than North Valley’s current policy with respect to acts or omissions occurring prior to the Effective Time that were committed by such officers and directors in their capacity as such for a period of six (6) yearsprovided, however, that in no event shall the costTriCo be obligated to expend, in order to maintain or provide insurance coverage pursuant to this Section 6.10(c), an amount in excess of the Tail Insurance Policy be more than two hundred seventy-five percent (275%(200%) of the current amount expended on an annual basispremiums paid by North ValleyFNBB as of the date hereof for its current policy;such insurance (“provided, further, that if the TailMaximum Insurance Policy cannot be obtained as called for by this Section 6.7(b), TriCo shall use its commercially reasonable efforts to obtain as much comparable insurance as is available;Amount”);provided further, that officers and directorsif the amount of North Valley may be requiredthe annual premiums necessary to make application and provide customary representations and warrantiesmaintain or procure such insurance coverage exceeds the Maximum Insurance Amount, TriCo shall obtain the most advantageous coverage obtainable for an annual premium equal to an insurance carrier for the purpose of obtaining the TailMaximum Insurance Policy.

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(c) This Section 6.8 shall survive the Effective Time and is intended to benefit each indemnified person (each of whom shall be entitled to enforce this Section against TriCo) and shall be binding on all successors and assigns of TriCo.Amount.

(d) In the eventIf TriCo or any of its successors or assigns (i) consolidatesshall consolidate with or mergesmerge into any other Personentity and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfersshall transfer all or substantially all of its properties and assets to one or moreany other Persons,entity, then and in each case, proper provision shall be made so that the successors and assigns of TriCo shall assume the obligations set forth in this Section 6.8.6.10.

6.9.Additional Agreements. In case at(e) The provisions of this Section 6.10 are (i) intended to be for the benefit of, and will be enforceable by, each Indemnified Party and (ii) in addition to, and not in substitution for, any timeother rights to indemnification or contribution that any such Person may have by contract or otherwise.

6.11Benefit Plans.

(a) As soon as administratively practicable after the Effective Time, TriCo shall take all reasonable action so that employees of FNBB and its Subsidiaries shall be entitled to participate in each TriCo Benefit Plan of general applicability to the same extent as similarly-situated employees of TriCo and its Subsidiaries (it being understood that inclusion of the employees of FNBB and its Subsidiaries in the TriCo Benefit Plans may occur at different times with respect to different plans),provided that coverage shall be continued under the corresponding Benefit Plans of FNBB and its Subsidiaries until such employees are permitted to participate in the TriCo Benefit Plans andprovided further, however, that nothing contained herein shall require TriCo or any further action is necessary or desirableof its Subsidiaries to carry out themake any grants to any former employee of FNBB and its Subsidiaries under any discretionary equity compensation plan of TriCo. TriCo shall cause each TriCo Benefit Plan in which employees of FNBB and its Subsidiaries are eligible to participate to recognize, for purposes of this Agreement,determining eligibility to participate in, the vesting of benefits and for all other purposes (but not for accrual of pension benefits, if applicable) under the TriCo Benefit Plans, the service of such employees with FNBB and its Subsidiaries to the same extent as such service was credited for such purpose by FNBB and its Subsidiaries, provided, however, that such service shall not be recognized to the extent that such recognition would result in a duplication of benefits or to vestthe extent not otherwise permissible under the terms of a TriCo Benefit Plan,provide further, that an employee’s eligibility to participate will be governed by the eligibility criteria of the particular TriCo Benefit Plan. Nothing herein shall limit the ability of TriCo to amend or terminate any of the TriCo Benefit Plans or the FNBB Benefit Plans in accordance with their terms at any time.

(b) At and following the Effective Time, TriCo shall honor, and the Surviving Corporation or the Surviving Bankshall continue to be obligated to perform, in accordance with full titletheir terms, all benefit obligations to, all properties, assets,and contractual rights approvals, immunitiesof, current and franchisesformer employees of anyFNBB and its Subsidiaries and current and former directors of FNBB and its Subsidiaries existing as of the partiesEffective Date, as well as all bonus, deferred compensation, supplemental retirement plan, salary continuation, severance, termination, change in control and other existing plans and policies of FNBB and its Subsidiaries to the Merger,extent that each of the foregoing are Previously Disclosed.

(c) At such time as employees of FNBB and its Subsidiaries become eligible to participate in a medical, dental, health, life or the constituent partiesdisability plan of TriCo or its Subsidiaries, TriCo shall cause each such plan to (i) waive any preexisting condition limitations to the Bank Merger, asextent such conditions are covered under the case mayapplicable medical, health or dental plans of TriCo, (ii) provide full credit under medical, health and dental plans for any deductibles,co-payment andout-of-pocket expenses incurred by the employees and their beneficiaries during the portion of the calendar year prior to such participation and (iii) waive any waiting period limitation or evidence

of insurability requirement which would otherwise be applicable to such employee on or after the proper officers and directors of each partyEffective Time to this Agreement and TriCo’s Subsidiaries and North Valley’s Subsidiaries shall take allthe extent such necessary action as may be reasonably requested by TriCo.

6.10.Advice of Changes. TriCo and North Valley shall promptly advise the other party ofemployee had satisfied any changesimilar limitation or event that, individually or in the aggregate, has had or would be reasonably likely to haverequirement under a Material Adverse Effect on it or to cause or constitute a material breach of any of its representations, warranties or covenants contained herein. From time to timecorresponding FNBB Benefit Plan prior to the Effective Time, eachprovided, however, that such waiver shall not be required to the extent that such waiver would result in a duplication of benefits or to the extent not otherwise permissible under the terms of a contract insuring benefits under the TriCo Benefit Plans.

(d) Those employees of FNBB and its Subsidiaries (i) who are not offered employment by TriCo or its Subsidiaries following the Effective Time, who are not a party to an employment agreement or otherwise entitled to an existing severance package, change in control benefit or payments under any salary continuation plan, and who sign and deliver (and do not revoke) a termination and release agreement in a form acceptable to TriCo within forty-five (45) days of the Effective Time or (ii) who are terminated by TriCo without cause prior to the first anniversary of the Effective Time and deliver (and do not revoke) a termination and release agreement in a form acceptable to TriCo within forty-five (45) days of termination, shall be entitled to receive a single lump sum payment of severance in an amount and in accordance with the terms of the severance policy set forth in Section 6.11(d) of FNBB’s Disclosure Schedule. If FNBB or any of its Subsidiaries has any other severance pay plan or arrangement, then any amounts paid pursuant to that plan or arrangement shall reduce the amount that the employee will promptly supplementreceive under this Section 6.11(d) and in no event shall there be any duplication of severance pay. Nothing contained in this Section 6.11(d) hereof shall be construed or interpreted to limit or modify in any way TriCo’s or its Subsidiaries’ at will employment policy or provide any third party beneficiary rights to employees of FNBB or any of its Subsidiaries. In no event shall severance pay be taken into account in determining the amount of any other benefit (including but not limited to, an individual’s benefit under any retirement plan or policy). For purposes of this Section 6.11(d), “cause” shall mean the employee’s personal dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, failure to comply with any valid and legal directive of TriCo, Tri Counties, FNBB and/or First National Bank failure to perform stated duties, violation of any law, rule or regulation (other than traffic violations or similar offenses) or order of any Governmental Entity.

(e) Prior to the Closing, FNBB shall have paid into the FNB Bancorp Savings Plan (the “FNBB Retirement Plan”) all discretionary employer contributions, including any employer matching contributions, profit sharing contributions or othernon-elective contributions. Prior to the Closing, FNBB shall (i) adopt written resolutions (or take such other necessary or appropriate action), in form and substance reasonably acceptable to TriCo, to terminate the FNBB Retirement Plan in compliance with its terms and requirements of applicable law, effective no later than the Business Day preceding the Closing Date and (ii) provide for full vesting of allnon-elective contributions under the FNBB Retirement Plan for all participants who currently maintain an account under the FNBB Retirement Plan, such termination and vesting to be effective no later than the Business Day preceding the Closing Date. FNBB shall provide TriCo with evidence of the termination of the FNBB Retirement Plan.

(f) Prior to December 31, 2017, FNBB shall freeze or amend its disclosure letter deliveredeach FNBB NQDP to close such plans to new participants and so that no participant may make any contribution after December 31, 2017.

(g) Each of FNBB and TriCo acknowledges and agrees that all provisions contained within this Section 6.11 with respect to Employees are included for the sole benefit of FNBB and nothing contained in connection with the executionthis Section 6.11 shall confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this AgreementSection 6.11. Nothing contained herein (i) shall be construed to reflectestablish, amend or modify any matter which, if existing, occurringbenefit plan, program or knownarrangement or (ii) alter or limit the ability of TriCo to amend, modify or terminate any benefit plan, program or arrangement at any time established, sponsored or maintained by TriCo or any of its Subsidiaries. Each of FNBB and TriCo agrees that the terms of this Section 6.11 do not and shall not create any right in any Person to continued employment with FNBB, TriCo or any of their respective Subsidiaries or to any compensation or benefit.

6.12Appointment of Directors. TriCo agrees to take all action necessary to appoint or elect, effective as of the Effective Time, two individuals servings as directors of FNBB on the date of this Agreement, each of whom

shall be mutually agreeable to TriCo and FNBB, as directors of each of TriCo and Tri Counties. Each individual shall serve until the first annual meeting of shareholders of TriCo following the Effective Time. Subject to the fiduciary duties of the TriCo Board, TriCo shall include such individuals on the list of nominees for director presented by the TriCo Board and for which the TriCo Board shall solicit proxies at the first annual meeting of shareholders of TriCo following the Effective Time.

6.13Notification of Certain Matters.Each of FNBB and TriCo shall give prompt written notice to the other of any fact, event or circumstance known to it that (a) is reasonably likely, individually or taken together with all other facts, events and circumstances known to it, to result in any Material Adverse Effect with respect to it or (b) would have been required to be set forthcause or described in such disclosure letter or which is necessary to correctconstitute a failure of any information in such disclosure letter which has been rendered inaccurate thereby. No supplement or amendment to such disclosure letter shall have any effect for the purpose of determining satisfaction of the conditions set forthprovided for inArticle VII hereof,.

6.14Estoppel Letters.FNBB shall use its commercially reasonable efforts to obtain and deliver to TriCo at the Closing with respect to the real estate leased by FNBB or a FNBB Subsidiary, an estoppel letter from each of its lessors dated as of the caseClosing in substantially the form ofExhibit D attached hereto or such other form as may be reasonably acceptable to TriCo.

6.15Antitakeover Statutes.Each of TriCo and FNBB and their respective Boards of Directors shall, if any state antitakeover statute or similar statute becomes applicable to this Agreement and the compliance by North Valley or TriCo, asTransaction, take all action reasonably necessary to ensure that the caseTransaction may be withconsummated as promptly as practicable on the respective covenants set forth in Sections 5.1terms contemplated hereby and 5.2 hereof.

6.11.Current Information. Duringotherwise to minimize the period from the dateeffect of such statute or regulation on this Agreement and the Transaction.

6.16Consents.FNBB shall, and shall cause its Subsidiaries to, use their commercially reasonable best efforts to obtain all consents, approvals, waivers,non-objections and to deliver any notices required pursuant to the terms of the Material Contracts as a result of the Transaction.

6.17Exemption from Liability Under Section 16(b).Prior to the Effective Time, each party will cause one or more of its designated representatives to confer on a regular and frequent basis (not less than monthly) with representatives of the other party and to report the general status of its ongoing operations. Each party will promptly notify the other party of any material change in the normal course of business or in the operation of the properties of itself or any of its Subsidiaries and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or the institution or the threat of litigation involving itself or any of its Subsidiaries, and will keep the other party fully informed of such events.

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6.12.Bank Merger Agreement. Prior to the Effective Time, (a) TriCo and North Valley shall each approve the Bank Merger Agreement as the sole shareholder of Tri Counties Bank and North Valley Bank, respectively, and (b) North Valley Bank, on the one hand or Tri Counties Bank, on the other, shall execute and deliver the Bank Merger Agreement.

6.13.Change in Structure. TriCo may elect to modify the structure of the transactions contemplated by this Agreement as noted herein so long as (i) there are no adverse tax consequences to the North Valley shareholders as a result of such modification, (ii) the consideration and other benefits to be paid to or received by the North Valley shareholders and optionees, and the North Valley directors, officers and employees under this Agreement are not thereby changed or reduced in amount, or (iii) such modification will not delay or jeopardize receipt of any Requisite Regulatory Approvals. In the event that the structure of the Merger is modified pursuant to this Section 6.13, the parties agree to modify this Agreement and the various exhibits hereto to reflect such revised structure. In such event, TriCo shall prepare appropriate amendments to this Agreement and the exhibits hereto for execution by the parties hereto. North Valley agrees to cooperate fully with TriCo to effect such amendments.

6.14.Exemption From Section 16 Liability. Prior to the Effective Time, TriCo and North ValleyFNBB shall take all such actions including, without limitation, action by the North Valley Board and the TriCo Board,steps as may be necessary or appropriate to cause any disposition of shares of North ValleyFNBB Common Stock or conversion of any derivative securities in respect of such shares of North ValleyFNBB Common Stock in connection with the consummation of the transactions contemplated by this Agreement to be exempt under Rule16b-3 promulgated under the Exchange Act.

6.15.Board of Directors6.18Federal Home Loan Bank Borrowings. At or promptly following the Effective Time, TriCo shall take all action necessary to appoint three (3) members of the North Valley Board, each of whom shall be selected byFNBBshall cooperate with TriCo to eacheffect the discharge of FNBB’s borrowings from the TriCo Board and the board of directors of Tri Counties Bank. TriCo agrees that the TriCo Board and its Nominating and Corporate Governance Committee shall in good faith consider the nomination of each such member of the North Valley Board at each annual or special meeting of TriCo shareholders from and after the Effective Time through the year ended 2015 at which a proposal to elect directors is voted upon.

6.16.North Valley Options.

(a) Prior to the Effective Time, North Valley shall take such actions as may be necessary such that immediately prior to the Effective Time each North Valley Option, whether or not then vested and whether or not then exercisable, shall be cancelled and shall only entitle the holder thereof, as soon as reasonably practicable after surrender thereof, to receive an amount, if any, in cash, without interest, from North Valley equal to the product of (x) the total number of Shares subject to the North Valley Option times (y) the excess, if any, of the product of the Stock Exchange Ratio multiplied by the weighted average of the closing prices for shares of TriCo Common Stock as quoted on NASDAQ for the twenty (20) consecutive trading days ending on the trading day immediately prior to the Closing Date over the exercise price per share under such North Valley Option less applicable Taxes required to be withheld with respect to such payment. At the Effective Time, each option to purchase a share of North Valley Common Stock whether or not then vested and whether or not then exercisable, shall terminate and be of no further effect and any rights thereunder to purchase shares of North Valley Common Stock shall also terminate and be of no further force or effect. Without limiting the foregoing, no such amount shall be payable to the holder of a North Valley Option cancelled pursuant to this Section 6.16 if the North Valley Option is out-of-the-money;provided, however, that in consideration of the cancellation of such out-of-the-money North Valley Option, the holder shall be entitled to payment of such consideration as may be determined by the North Valley Board and approved by TriCo. Notwithstanding any provision of this Agreement to the contrary, the North Valley Board shall have the absolute right to amend any or all option plans and agreements governing any or all outstanding North Valley Options to make such North Valley Options fully vested and exercisable prior to the Closing Date so as to permit the holder of such North Valley Options to exercise such North Valley Options (and thereby, at the holder’s discretion, to convert to a share of stock to which such North Valley Option is subject) prior to the date on which such North Valley Options otherwise would terminate and/or liquidate under this Section 6.16.

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(b) In addition, if so requested by TriCo, at least twenty (20) Business Days prior to the Effective Time and prior to any such payment, North Valley shall use its reasonable efforts to obtain a written acknowledgement and waiver (in form and substance reasonably satisfactory to TriCo) from each holder of a North Valley Option (i) confirming the number of North Valley Options held, (ii) confirming that the treatment of such North Valley Options pursuant to this Agreement and the amounts to be paid pursuant hereto have been correctly calculated and (iii) containing waivers and/or such other matters as reasonably determined by TriCo and shall provide a copy of each such acknowledgement and waiver it has been able to obtain to TriCo at least five (5) Business DaysFHLB prior to the Effective Time.

(c) At6.19Shareholder Litigation and Protests. FNBB shall promptly advise TriCo orally and in writing of any shareholder litigation or priorcommunity-based protests against FNBB or its directors relating to this Agreement, the Effective Time, North Valley,Merger, the North Valley BoardBank Merger or any of Directorsthe other transactions contemplated hereby and shall keep TriCo fully informed regarding any such shareholder litigation or protests, including providing all relevant documentation. FNBB shall consult with TriCo and give good faith consideration of its compensation committee, as applicable, shall adopt any resolutionscomments and take any actions which are necessaryadvice and give TriCo the opportunity to effectuateparticipate in the provisions of Section 6.16(a), (b) and (d).

(d) North Valley shall take all actions necessary to ensure that from and after the Effective Time neither TriCo nor the Surviving Corporation will be required to deliver shares of TriCo Common Stockdefense or North Valley Common Stock or other capital stock to any Person pursuant to or in settlement of North Valley Options after the Effective Time.any such litigation, provided that TriCo shall pay its own expenses, subject to applicable law. No settlement in connection with such litigation or protests shall be agreed to without TriCo’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).

6.17.6.20Closing Financial Statements. At least five (5) Business Days prior to the Effective Time of the Merger, North ValleyFNBB shall provide TriCo with North Valley’sFNBB’s unaudited consolidated financial statementsbalance sheet and results of operations presenting the financial condition of North ValleyFNBB and its Subsidiaries as of the close of business on the last day of the last month ended prior to the Effective Time of the Merger and North Valley’s consolidated results of operations for the period from January 1, 2014beginning on the first date of the then-current fiscal year through the close of business on the last day of the last month ended prior to the Effective Time of the Merger (the “Closing Financial Statements”);provided, however,, that if the Effective Time of the Merger occurs on or before the fifth (5th) Business Day of the month, North Valleythe Closing Financial Statements shall have provided consolidated financial statements

instead be as of and through the end of the second (2nd) month immediately preceding the Effective Time of the Merger. Such financial statementsTime. The Closing Financial Statements shall be prepared in all material respects in accordance with GAAP (excluding notes) and regulatory accounting principles and other applicable legal and accounting requirements, and shall reflect allperiod-end accruals and other adjustments, subject to the other requirements of this Agreement including the final sentence of this Section 6.17. Such financial statements shall be accompanied by a certificate of North Valley’s Chief Financial Officer, dated as of the Effective Time, to the effect that such financial statements continue to reflect accurately, as of the date of the certificate, the financial condition of North Valley in all material respects. Such Closing Financial Statementsand shall also reflect accruals for all fees and expenses incurred or expected to be incurred in connection with the transactions contemplated in this Agreement (whether or not doing so is in accordance with GAAP) and. The Closing Financial Statements shall be accompanied by a certificate of North Valley’sFNBB’s Chief Financial Officer dated as of the Effective Time, to the effect that such financial statements meet the requirements of this Section 6.17.

6.20. On the Closing Date, FNBB’s Chief Financial Officer, shall deliver to TriCo a certificate, dated as of the Effective Date, to the effect that such financial statements continue to reflect accurately, as of the date of the certificate, the financial condition of FNBB in all material respects and the requirements of this Section 6.20.

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6.18.6.21Customer Notices. On and after the later of the date of receipt of all Requisite Regulatory Approvalsregulatory approvals required to consummate the Transaction (disregarding any statutory waiting periods) and the date of receipt of approval of the Merger Agreement, including the Merger, the Bank Merger and the transactions contemplated thereby by North ValleyFNBB shareholders, North ValleyFNBB and North ValleyFirst National Bank shall permit TriCo and Tri Counties Bank to provide one or more written notices (which may be joint notices from North ValleyFirst National Bank and Tri Counties Bank)Counties) to customers of North ValleyFNBB and North ValleyFirst National Bank describing the proposed Merger and the Bank Merger, the effect on customers, planned transition procedures and similar information. North ValleyFNBB shall have the right to review and approve the substance any such communications, provided that North ValleyFNBB shall not unreasonably withhold, delay or condition its approval.

6.19.6.22Professional Fees and Expenses. North ValleyFNBB shall use its reasonable best efforts to cause final bills (or estimated final bills through the Effective Time) for all fees and expenses for services rendered by accounting, investment banking, legal, tax and other advisors to North ValleyFNBB to be submitted to North ValleyFNBB at least five (5) Business Days prior to the Closing Date. North ValleyDate and shall provide copies of all such bills or estimates to TriCo. FNBB shall pay all such final bills or estimated final bills prior to the Effective Time;Time.

6.23provided,Shareholder Agreements that any fees or expenses in excess of such estimated final bills, or which result from services rendered by any such advisors after the Effective Time,. Each Shareholder shall be submittedexecute and deliver to TriCo insimultaneously with the execution of this Agreement or at such time as the parties may otherwise agree, a supplemental bill and promptly paid by TriCo upon receipt thereof.Shareholder Agreement.

6.20.6.24Change in Control Payments. North ValleyFNBB shall pay, immediately prior to the Effective Time, all amounts due and owing to North Valley executiveFNBB officers pursuant to a contract, arrangement, commitment, or understanding between North ValleyFNBB and each such executive officer including, without limitation severance and retirement payments under North Valley salary continuationFNBB management continuity agreements (individually,(each, a “Change in Control Payment” and collectively, “Change in Control Payments”).

6.25Sale of Certain OREO. FNBB shall use its commercially reasonable efforts to cause First National Bank to sell or transfer, prior to the Effective Time, the OREO listed on Section 6.25 of FNBB’s Disclosure Schedule to a purchaser that is not an Affiliate of FNBB.

6.26Tax Treatment. The Merger contemplated by this Agreement is intended to qualify as a reorganization within the meaning of Section 368(a) of the Code and this Agreement is hereby adopted as a “plan of reorganization” within the meaning of the Treasury Regulations promulgated under Section 368 of the Code. Until the Closing, each party to this Agreement shall use its commercially reasonable efforts to cause the Merger to so qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action not to be taken, which action or failure to act could prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a).

ARTICLE VII.

CONDITIONS PRECEDENTVII

7.1.CONDITIONS TO CONSUMMATION OF THE MERGER

7.01Conditions to Each Party’sPartys Obligation to Effect the Merger.

The respective obligation of each partyof the parties hereto to effectconsummate the Merger shall beis subject to the satisfaction atfulfillment or, to the extent permitted by applicable law, written waiver by the parties hereto prior to the Closing Dateof each of the following conditions:

(a)Shareholder Approvals. Approvals.The Requisite North Valley Voteholders of outstanding shares of FNBB Common Stock and the Requisite TriCo Vote shall have been obtained.

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(b)Stock Exchange Listing. Theholders of outstanding shares of TriCo Common Stock to be issuedshall have duly approved this Agreement and the transactions contemplated hereby, including the Merger and, in the case of TriCo, the issuance of shares of TriCo Common Stock in the Merger, upon consummationin each by the requisite vote of such holders.

(b)Regulatory Approvals.All regulatory approvals required to consummate the Merger shall have been authorized for quotation on NASDAQ.

(c)Regulatory Approvals. All regulatory permits, consents, waivers, approvalsobtained and authorizations of Governmental Entities that are necessary or advisable to consummate the transactions contemplated by this Agreement (including without limitation, the Merger and the Bank Merger), shall have been obtained and remain in full force and effect and all statutory waiting periods in respect thereof shall have expired (the “Requisite Regulatory Approvals”) and no such regulatory approvalapprovals shall contain any conditions, restrictions or requirements (other than conditions or requirements related to remedial actions) which the TriCo Board reasonably determines in good faith, after consultation with FNBB, would, individually or in the aggregate, materially reduce the economic benefits of the Transaction to such a degree that TriCo would not have entered into this Agreement had such conditions, restrictions or requirements been known at the date hereof.

(c)No Injunction.No Governmental Entity of competent jurisdiction shall have resultedenacted, issued, promulgated, enforced or entered any statute, rule, regulation, judgment, decree, injunction or other order which is in or would reasonably be expected to result ineffect and prohibits consummation of the imposition of, any Burdensome Condition.Transaction.

(d)Registration Statement. Statement.The Registration Statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC.SEC and not withdrawn.

(e)No Injunctions or Restraints; Illegality. No order, injunction or decreeListing.The shares of TriCo Common Stock to be issued by any court or agency of competent jurisdiction or other legal restraint or prohibition (an “Injunction”) preventingto the consummation ofFNBB shareholders as the Merger or any of the other transactions contemplated by this Agreement shall be in effect. No statute, rule, regulation, order, Injunction or decreeConsideration shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits, restricts or makes illegal consummation of the Merger. No proceeding initiated by any Governmental Entity seeking an Injunction to prevent the consummation of the Merger or any of the other transactions contemplated by this Agreement shall be pending.approved for listing on Nasdaq.

7.2.Conditions to Obligations of TriCo.

The obligation(f)Tax Opinion.Each of TriCo to effect the Merger is also subject to the satisfaction or waiver by TriCo at or prior to the Closing Date of the following conditions:

(a)Representations and Warranties. The representations and warranties of North Valley set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, unless they speak to an earlier date, then as of such earlier date;provided, however, that for purposes of this paragraph, and except as provided below, no such representation or warranty shall be deemed to be untrue, incorrect or breached, as a consequence of the existence of any fact, circumstance or event, unless such fact circumstance or event individually or taken together with all other facts, circumstances or events has had or can reasonably be expected to have a Material Adverse Effect on North Valley, disregarding for these purposes (i) any qualification or exception for, or reference to, materiality in any such representation or warranty and (ii) any use of the terms “material, “materially,” “in all material respects,” “Material Adverse Effect” or similar terms or phrases in any such representation or warranty. The foregoing standard shall not apply to (i) the representations and warranties contained in Sections 3.1(a) and (b), 3.2, 3.3(a), (b) and (c), 3.7, 3.14., 3.23(b) and 3.25, which shall be true and correct in all respects; and (ii) the representations and warranties contained in Sections 3.5, 3.6 and 3.12, which shall be true and correct in all material respects. TriCoFNBB shall have received a certificate signed on behalfthe written opinion of North Valley by each of the Chief Executive Officer and the Chief Financial Officer of North Valley, and the Chief Credit Officer of North Valley Bank to the foregoing effect.

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(b)Performance of Covenants and Agreements of North Valley. North Valley shall have performed in all material respects all covenants and agreements required to be performed by it under this Agreement at or prior to the Closing Date. TriCo shall have received a certificate signed on behalf of North Valley by each of the Chief Executive Officer and the Chief Financial Officer of North Valley, and the Chief Credit Officer of North Valley Bank to the foregoing effect.

(c)Closing Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to TriCo and to TriCo’s counsel, and they shall each have received all such counterpart originals and certified or other copies of such documents as they may reasonably request. Such documents shall include (but not be limited to) the following:

(i)Corporate Actions. A copy of the resolutions of the Boards of Directors and the shareholders of North Valley and North Valley Bank evidencing (a) the requisite approval of this Agreement, the Merger, the Bank Merger and the other matters contemplated hereby and (b) adoption of the Tail Resolutions, certified by the Secretary of North Valley as true and correct copies thereof as of the Closing, which resolutions shall be in full effect.

(ii)Officers’ Certificate. North Valley shall have delivered to TriCo the certificates described in Sections 7.2(a) and 7.2(b) hereof.

(d)Shareholder Agreements. On and effective as of the date of this Agreement, TriCo shall have received Shareholder Agreements from each of the North Valley directors, and no action shall have been taken by any such director to rescind or breach any such Shareholder Agreement prior to the receipt of the North Valley Requisite Vote.

(e)Annual Report. North Valley shall have timely filed with the SEC its Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which shall include the audited consolidated balance sheets of North Valley and its Subsidiaries as of December 31, 2013 and 2012 and the related audited consolidated statements of income, shareholders’ equity and comprehensive income and cash flows for the fiscal years 2013, 2012 and 2011accompanied by the audit report of North Valley’s independent registered public accounting firm.

(f)Non-solicitation and Confidentiality Agreements. On the date of this Agreement, TriCo shall have received Non-solicitation and Confidentiality Agreements from each of the North Valley directors and no action shall have been taken by any such shareholder to rescind any such Non-solicitation and Confidentiality Agreement.

(g)Director Resignations. TriCo shall have received resignations from each director of North Valley and each of its Subsidiaries.

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(h)Shareholders’ Equity. As of the last Business Day of the month reflected in the Closing Financial Statements and prior to implementation the plan of integration described in Section 5.3 (the “Shareholders’ Equity Measuring Date”), the Adjusted Shareholders’ Equity of North Valley shall not be less than $95.074 million. For purposes of this Section 7.03(d), “Adjusted Shareholders’ Equity” means the consolidated equity of North Valley as set forth in the Closing Financial Statements, minus any unrealized gains or plus any unrealized losses (as the case may be) in North Valley’s securities portfolio due to mark-to-market adjustments, minus any unrealized gains or plus any unrealized losses in North Valley’s salary continuation plans due to mark-to-market adjustments and excluding all costs and expenses related to the transactions contemplated by this Agreement including the Merger and the Bank Merger, including, but not limited to, fees and expenses of the accounting, investment banking, legal, tax and other advisors to North Valley, premium expense for the Tail Insurance Policy, Change in Control Payments and the costs related to printing, mailing and distribution to North Valley shareholders of the Joint Proxy Statement, as of the Shareholders’ Equity Measuring Date.

(i)FIRPTA Certificate. North Valley shall have delivered to TriCo a properly executed statement from North Valley Bank that meets the requirements of Treasury Regulations Sections 1.1445-2(c)(3) and 1.897-2(h)(1), dated as of the Closing Date.

(j)Fairness Opinion. The TriCo Board shall have received an opinion from KBW dated as of the date of this Agreement to the effect that the Merger Consideration is fair, from a financial point of view, to the holders of TriCo Common Stock.

(k)Tax Opinion. TriCo shall have received an opinion from Bingham McCutchenSheppard, Mullin, Richter & Hampton LLP, in form and substance reasonably satisfactory to both FNBB and TriCo, dated the dateas of the Effective Date, substantially to the effect that, on the basis of the facts, representations and assumptions set forth in such opinion which are consistent with the state of facts existing at the Effective Time, that the Merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code. In rendering any such opinion, such counsel shall be entitled to receivemay require and rely on customary representation letters from eachupon representations and covenants, including those contained in certificates of officers of TriCo, FNBB and North Valley.others, reasonably satisfactory in form and substance to such counsel and FNBB’s counsel.

7.3.7.02Conditions to ObligationsObligation of North ValleyFNBB. The obligationsobligation of North ValleyFNBB to effectconsummate the Merger areis also subject to the satisfactionfulfillment or written waiver by North Valley at orFNBB prior to the Closing Dateof each of the following conditions:

(a)Representations and Warranties. The representations and warranties of TriCo set forth in this Agreement, subject in all cases to the standard set forth in Section 5.02, shall be true and correct as of the date of this Agreementhereof and as of the ClosingEffective Date as though made on and as of the ClosingEffective Date unless they speak to an earlier date, then as of such earlier date;provided, however,(except that for purposes of this paragraph, and except as provided below, no such representation or warranty shall be deemed to be untrue, incorrect or breached, as a consequence of the existence of any fact, circumstance or event, unless such fact circumstance or event individually or taken together with all other facts, circumstances or events has had or can reasonably be expected to have a Material Adverse Effect on TriCo, disregarding for these purposes (i) any qualification or exception for, or reference to, materiality in any such representation or warranty and (ii) any use of the terms “material,” “materially,” “in all material respects,” “Material Adverse Effect” or similar terms or phrases in any such representation or warranty. The foregoing standard shall not apply to (i) the representations and warranties contained in Sections 4.1(a) and (b), 4.3(a), (b) and (c)(i), 4.7, and 4.12, whichthat by their terms speak as of the date hereof or some other date shall be true and correct in all respects;as of such date), and (ii) the representations and warranties contained in Sections 4.5 and 4.6, which shall be true and correct in all material respects. North ValleyFNBB shall have received a certificate, dated the Effective Date, signed on behalf of TriCo by each of the Chief Executive Officer and the Chief Financial Officer of TriCo to the foregoingsuch effect.

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(b)Performance of Covenants and AgreementsObligations of TriCo. TriCo shall have performed in all material respects all covenants and agreementsobligations required to be performed by it under this Agreement at or prior to the Closing Date. North ValleyEffective Time, and FNBB shall have received a certificate, dated the Effective Date, signed on behalf of TriCo by each of the Chief Executive Officer and the Chief Financial Officer of TriCo to the foregoingsuch effect.

(c)Closing Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to North Valley and to North Valley’s counsel, and they shall each have received all such counterpart originals and certified or other copies of such documents as they may reasonably request. Such documents shall include (but not be limited to) the following:

(i)CorporateOther Actions. A copy of the resolutions of the Boards of Directors of TriCo and of Tri Counties Bank evidencing the requisite approval of this Agreement, the Merger, the Bank Merger and the other matters contemplated hereby, certified by the Secretary or Assistant Secretary of TriCo as true and correct copies thereof as of the Closing.

(ii)Officers’ Certificate. TriCo shall have deliveredfurnished FNBB with such certificates of its respective officers or others and such other documents to North Valleyevidence fulfillment of the certificate describedconditions set forth in Sections 7.3(a)7.01 and 7.3(b) hereof.7.02 as FNBB may reasonably request.

(d)Fairness Opinion7.03Conditions to Obligation of TriCo. The North Valley Board shall have received an opinion from Sandler dated (i)obligation of TriCo to consummate the date of this Agreement and (ii)Merger is also subject to the date of mailing,fulfillment or a date within three dayswritten waiver by TriCo prior to the dateClosing of mailing,each of the Joint Proxy Statement/Prospectus,following conditions:

(a)Representations and Warranties. The representations and warranties of FNBB set forth in this Agreement, subject in all cases to the effect that the Merger Consideration is fair, from a financial point of view, to the holders of North Valley Common Stock.

(e)Shareholder Agreements. Onstandard set forth in Section 5.02, shall be true and effectivecorrect as of the date hereof and as of the Effective Date as though made on and as of the Effective Date (except that representations and warranties that by their terms speak as of the date hereof or some other date shall be true and correct as of such date), and TriCo shall have received a certificate, dated the Effective Date, signed on behalf of FNBB by the Chief Executive Officer and the Chief Financial Officer of FNBB to such effect.

(b)Performance of Obligations of FNBB. FNBB shall have performed in all material respects all obligations required to be performed by it under this Agreement North Valleyat or prior to the Effective Time, and TriCo shall have received a certificate, dated the Effective Date, signed on behalf of FNBB by the Chief Executive Officer and the Chief Financial Officer of FNBB to such effect.

(c)Minimum Tangible Common Equity. (i) As of the last day of the month reflected in the Closing Financial Statements, FNBB shall have Tangible Common Equity equal to at least $119,000,000 and (ii) FNBB shall have delivered the certificates the Chief Financial Officer of FNBB contemplated by Section 6.20.

(d)Bank Merger. All regulatory approvals required to consummate the Bank Merger, including, without limitation, the approval of the DBO, the FDIC and FRB, shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired or been terminated. No order, injunction or decree issued by any Governmental Entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Bank Merger shall be in effect. No statute, rule, regulation, order, injunction or decree shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits or makes illegal the consummation of the Bank Merger.

(e)280G Opinion. FNBB shall have delivered to TriCo the written confirmation, to be dated as of a date not earlier than five (5) Business Days prior to the Closing Date, of VP Tax, Inc., or another nationally recognized accounting firm reasonably acceptable to TriCo, that no agreement, contract or arrangement to which any employee of FNBB is a party will result in the payment of any amount that would not be deductible by reason of Section 280G of the Code, as determined without regard to Section 280G(b)(4) of the Code.

(f)Agreements and Acknowledgments of Shareholders. TriCo shall have received Shareholder Agreements fromexecuted and delivered by each of the TriCo directors,Shareholders as contemplated by Section 6.23, each of which shall remain in full force and no actioneffect. The Shareholders shall have been takenperformed in all material respects all obligations required to be performed by anythem under the Shareholder Agreements. The Chief Executive Officer, President, Chief Financial Officer, Chief Operating Officer, and Chief Credit Officer of FNBB shall have delivered to TriCo an executed acknowledgment in the form ofExhibit E.

(g)Other Actions. FNBB shall have furnished TriCo with such directorcertificates of its officers or others and such other documents to rescind any such Shareholder Agreement prior to the receiptevidence fulfillment of the conditions set forth in Sections 7.01 and 7.03 as TriCo Requisite Vote.may reasonably request.

(f)Tax Opinion. North Valley shall have received an opinion from Crowe Horwath LLP, in form and substance reasonably satisfactory to North Valley, dated the date of the Effective Time, that the Merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code. In rendering such opinion, such counsel shall be entitled to receive and rely on customary representation letters from each of TriCo and North Valley.

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ARTICLE VIII.

TERMINATION AND AMENDMENTVIII

8.1.TERMINATION

8.01Termination. This Agreement may be terminated, (based upon action ofand the appropriate Board of Directors)Transaction may be abandoned, at any time prior to the Effective Time:

(a) byMutual Consent. By the mutual written consent of TriCo and North Valley;FNBB.

(b) (i)Breach. Provided that the terminating party is not then in material breach of any representation, warranty, covenant or agreement contained herein, by either TriCo or North Valley ifFNBB in the event of a breach by the other party of any representation, warranty, covenant or agreement contained herein, which breach (i) cannot be or has not been cured within thirty (30) days after the giving of written notice to the breaching party of such breach and (ii) would entitle thenon-breaching party not to consummate the Transaction contemplated hereby under Section 7.02(a) or (b) or 7.03(a) or (b), as the case may be.

(c)Delay. By TriCo or FNBB in the event the Merger is not consummated by September 30, 2018, except to the extent that the failure of the Merger to be consummated by such date shall be due to (i) the failure of the party seeking to terminate pursuant to this Section 8.01(c) to perform or observe the covenants and agreements of such party set forth in this Agreement or (ii) the failure of any of the Shareholders (if FNBB is the party seeking to terminate) to perform or observe their respective covenants and agreements under the relevant Shareholder Agreement.

(d)No Regulatory Approval. By TriCo or FNBB in the event the approval of any Governmental Entity which must grant a Requisite Regulatory Approval hasrequired for consummation of the Merger and the other transactions contemplated by this Agreement shall have been denied by finalnon-appealable action of such approval and such denial has become final and nonappealableGovernmental Entity, or (ii) by either TriCo or North Valley if any Governmental Entity of competent jurisdiction shall have issued a final, nonappealable ordernon-appealable injunction permanently enjoining or otherwise prohibiting the consummation of the Merger and the other transactions contemplated by this Agreement, unlessor an application therefor shall have been permanently withdrawn at the formal or informal request of a Governmental Entity,provided, however, that no party shall have the right to terminate this Agreement pursuant to this Section 8.01(d) if such denial or order shall be due to the failure of the party seeking to terminate this Agreement to perform or observe the covenants and agreements of such party set forth herein, or (iii) by TriCo if any Requisite Regulatoryunder this Agreement.

(e)No Shareholder Approval includes, or will not be issued without, the imposition of a Burdensome Condition;

(c) by either. By TriCo or North Valley if the Merger shall not have been consummated on or before the first anniversary of the date of this Agreement (the “Outside Date”);provided, that a party that is then in material breach of any of its covenants or obligations under this Agreement shall not be entitled to terminate this Agreement under this Section 8.1(c);

(d) by either TriCo or North ValleyFNBB if (i) the TriCo Meeting (including any postponements or adjournments thereof) shall have concluded withapproval of the voteshareholders of FNBB contemplated by Section 4.3(a) having been taken and the Requisite TriCo Votethis Agreement shall not have been obtained or (ii) the North Valley Meeting (including any postponements or adjournments thereof) shall have concluded with the vote contemplated by Section 3.3(a) having been taken and the Requisite North Valley Vote shall have not been obtained; provided that the party seeking to terminate this Agreement under this Section 8.1(d) shall have complied in all material respects with its obligations under Section 6.3 (including by complying with an adjournment or postponement request under Section 6.3(d));provided further, however, that the right to terminate this Agreement under this Section 8.1(d) will not be available to a party wherereason of the failure to obtain the approvalrequired vote at the FNBB Meeting or at any adjournment or postponement thereof or (ii) the approvals of itsthe shareholders has been causedof TriCo contemplated by (i) its material breach of this Agreement or (ii) a breachshall not have been obtained by reason of the Shareholder Agreements entered into by one or more shareholders of the party seeking to terminate;

(e) by North Valley (i) if TriCo shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement, which breach or failure to perform (A) would give rise toobtain the failure of a condition set forth in Section 7.1required vote at the TriCo Meeting or 7.3 and (B) is incapable of being cured (or is not cured) by TriCo prior to the earlier of (i) the Outside Date and (ii) thirty (30) calendar days following receipt of written notice of such breachat any adjournment or failure to perform from North Valley,postponement thereof,provided, however, that North Valleyno party may terminate this Agreement pursuant to this Section 8.01(e) if such party has breached in any material respect any of its obligations under this Agreement, in each case in a manner that caused the failure to obtain the requisite approval of the shareholders of FNBB at the FNBB Meeting, or at any adjournment or postponement thereof, or the requisite approval of the shareholders of TriCo at the TriCo Meeting, or at any adjournment or postponement thereof, as the case may be.

(f)Failure to Recommend; Etc. By TriCo if, at any time before the requisite vote of the shareholders of FNBB contemplated by this Agreement is obtained, (i) FNBB shall have materially breached the provisions of Section 6.07, (ii) the FNBB Board shall have failed to make its recommendation referred to in Section 6.02, withdrawn such recommendation or modified or qualified (or discloses its intention to withdraw or modify or qualify) such recommendation in a manner adverse in any respect to the interests of TriCo, (iii) the FNBB Board effects a permissible Change in Recommendation in accordance with Section 6.02(b), (iv) FNBB shall have materially breached its obligations under Section 6.02 by failing to call, give notice of, convene and hold the FNBB Meeting in accordance with Section 6.02 or (v) at any time after the end of five (5) Business Days

following receipt of an Acquisition Proposal, the FNBB Board shall have failed to reaffirm its recommendation referred to in Section 6.02 as promptly as practicable (but in any event within five (5) Business Days) after receipt of any written request to do so by TriCo.

(g)Certain Tender or Exchange Offers. By TriCo if a tender offer or exchange offer for 10% or more of the outstanding shares of FNBB Common Stock is commenced (other than by TriCo or a Subsidiary thereof), and the FNBB Board recommends that the shareholders of FNBB tender their shares in such tender or exchange offer or otherwise fails to recommend that such shareholders reject such tender offer or exchange offer within the ten (10) Business Day period specified in Rule14e-2(a) under the Exchange Act.

(h)Superior Proposal. By FNBB, prior to such time that requisite vote of the shareholders of FNBB contemplated by this Agreement is obtained, in order to enter into a definitive agreement providing for a Superior Proposal, provided that FNBB is not then in breach of any representation, warranty, covenant or agreement contained herein, including without limitation Sections 6.02 and 6.07,provided further, that such termination shall not be effective until FNBB has paid the Termination Fee required by Section 8.02(b) to TriCo.

(i)Trading Collar.

(i)By FNBB. Provided that FNBB is not then in material breach of any representation, warranty, covenant or other agreement contained herein;

herein, including without limitation Sections 6.02 and 6.07, by FNBB, by action of the FNBB Board, by written notice to TriCo on the Business Day immediately following the Determination Date, effective as of the date that is three (3) Business Days following the date of such written notice, in the event that:

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(f)(A) the TriCo Average Closing Price is less than $33.18 per share (with a proportionate adjustment in the event that outstanding shares of TriCo Common Stock shall be changed into a different number of shares by TriCo, if:

(i) North Valley shall have breachedreason of any stock dividend, reclassification, recapitalization,split-up, combination, exchange of shares or failed to perform anysimilar transaction between the date of its representations, warranties, covenants or agreements set forth in this Agreement which breach or failureand the Determination Date); and

(B) the quotient of the TriCo Average Closing Price divided by the Initial TriCo Stock Price is less than the sum of (x) the Index Ratio minus (y) 0.20.

If FNBB elects to perform (A) would give riseterminate this Agreement pursuant to this Section 8.01(i)(i) and provides such written notice to TriCo, then within two (2) Business Days following TriCo’s receipt of such notice, TriCo may elect by written notice to FNBB to reinstate the Transaction as contemplated by this Agreement and adjust the Exchange Ratio to equal to the failurelesser of a condition set forth in Section 7.1 or 7.2 and (B) is incapable of being cured (or is not cured) by North Valley prior(x) the quotient to (rounded to the earliernearestone-thousandth) of (i)$33.18 divided by the Outside DateTriCo Average Closing Price and (ii) thirty (30) calendar days following receipt(y) the quotient (rounded to the nearestone-thousandth) of written notice of$33.18 divided by the TriCo Average Closing Price, multiplied by the Index Ratio. If TriCo makes such breach or failureelection to perform fromreinstate the Merger and the other transactions contemplated by this Agreement, no termination will occur pursuant to this Section 8.01(i) and this Agreement will remain in effect according to its terms (except as the Exchange Ratio and Merger Consideration have been adjusted).

(ii)By TriCoprovided, however,. Provided that TriCo is not then in material breach of any representation, warranty, covenant or other agreement contained herein; or

(ii) The North Valleyherein, including without limitation Section 6.02, by TriCo, by action of the TriCo Board, (A) effects a Changeby written notice to FNBB on the Business Day immediately following the Determination Date, effective as of Recommendation or approves, recommends or endorses (orthe date that is three (3) Business Days following the date of such written notice, in the caseevent that:

(A) the TriCo Average Closing Price and is greater than $49.78 per share (with a proportionate adjustment in the event that outstanding shares of TriCo Common Stock shall be changed into a tender offer, fails to promptly recommend rejection of) an Acquisition Proposal,different number of shares by reason of any stock dividend, reclassification, recapitalization,split-up, combination, exchange of shares or resolves or publicly proposes to do anysimilar transaction between the date of this Agreement and the Determination Date); and

(B) the quotient of the foregoing, or (B) fails to comply with its obligations underTriCo Average Closing Price divided by the Initial TriCo Stock Price is greater than the sum of (x) Section 6.3(a) or 6.3(b) orthe Index Ratio plus (y) Section 6.7 or (z) fails to include the North Valley Board Recommendation in the Joint Proxy Statement.0.20.

(g) The party desiringIf TriCo elects to terminate this Agreement pursuant to clause (b), (c), (d), (e) or (f) of this Section 8.1 shall give8.01(i)(ii) and provides such written notice to FNBB, then within two (2) Business Days following FNBB’s receipt of such terminationnotice, FNBB may elect by written notice to TriCo to reinstate the Transaction as contemplated by this Agreement and adjust the Exchange Ratio to equal the lesser of (i) the quotient to (rounded to the nearestone-thousandth) of $49.78 divided by the TriCo Average Closing Price and (ii) the quotient (rounded to the nearestone-thousandth) of $49.78 divided by the TriCo Average Closing Price, multiplied by the Index Ratio. If FNBB makes such election to reinstate the Merger and the other party in accordance with Section 9.4, specifying the provision or provisions hereoftransactions contemplated by this Agreement, no termination will occur pursuant to which such termination is affected.this Section 8.01(i) and this Agreement will remain in effect according to its terms (except as the Exchange Ratio and Merger Consideration have been adjusted).

8.2.8.02Effect of Termination and Abandonment.

(a) In the event of termination of this Agreement by either TriCo or North Valley as provided in Section 8.1,and the abandonment of the Merger pursuant to thisArticle VIII, no party to this Agreement shall forthwith become voidhave any liability or further obligation to any other party hereunder except that (i) this Section 8.02, Section 6.06(d) and have no effect except Sections 6.2(b), 8.2, 9.3, 9.4, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10 and 9.12Article IX shall survive any termination of this Agreement.

(b) In the event that this Agreement is terminated:

(i) by TriCo pursuant to Section 8.1(f)(ii); or

and (ii) (A) by (1) TriCo or North Valley pursuant to Section 8.1(c) or Section 8.1(d)(ii) (in the case of Section 8.1(c), only if at such time North Valley has failed to hold the North Valley Shareholder Meeting and TriCo has obtained the TriCo Requisite Vote and is not in breach of its obligations under Section 6.3) or (2) TriCo pursuant to Section 8.1(f)(i), and (B) a bona fide Acquisition Proposal shall have been publicly disclosed and not withdrawn priornotwithstanding anything to the North Valley Shareholder Meeting (in the case of termination pursuant to Section 8.1(d)(ii)), prior to the termination date (in the case of termination pursuant to Section 8.1(c)) or prior to the breach giving rise to the right of termination (in the case of termination pursuant to Section 8.1(f)(i)), and (C) within fifteen (15) months after the termination of this Agreement North Valley or any of its Subsidiaries enters into a definitive agreement with respect to, or consummates the transactions contemplated by, any Alternative Transaction, then North Valley shall paycontrary, neither TriCo a fee, in immediately available funds, in the amount of $7,600,000 (the “North Valley Termination Fee”) (x) not later than two (2) Business Days following such termination, in the case of a termination described in clause (b)(i) above, or (y) at the time of the earlier of the entry into a definitive agreement with respect to, or consummation of, the transaction contemplated by the Alternative Transaction described in clause (b)(ii)(C) above, in the event of a termination under the circumstances described in clause (b)(ii) above.

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(c) In the event that this Agreement is terminated by TriCo or North Valley pursuant to Section 8.1(c) or Section 8.1(d)(i) (in the case of Section 8.1(c), only if at such time TriCo has failed to hold the TriCo Shareholder Meeting and North Valley has obtained the North Valley Shareholder Approval and is not in breach of its obligations under Sections 6.1, 6.2 and 6.3), then TriCo shall pay North Valley a fee, in immediately available funds, in the amount of $3,800,000 (the “TriCo Termination Fee”) not later than two (2) Business Days following such termination. In no event shall TriCo be required to pay the TriCo Termination Fee on more than one occasion.

(d) North Valley and TriCo acknowledge that the agreements contained in Sections 8.2(b) and 8.2(c) are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, neither party would enter into this Agreement. The amounts payable by North Valley pursuant to Section 8.2(b) hereof and the amounts payable by TriCo pursuant to Section 8.2(c) hereof constitute liquidated damages and not a penalty andnor FNBB shall be the sole and exclusive remedy of North Valley and TriCo, respectively, in the event of termination of this Agreement on the bases specified in such sections (except forrelieved or released from any liabilities or damages arising out of its fraud or willful and material breach of any provisionsprovision of this Agreement). InAgreement.

(b) The parties hereto agree that FNBB shall pay TriCo the sum of $12.0 million (the “Termination Fee”) as follows:

(i) if this Agreement is terminated by TriCo pursuant to Section 8.01(f) (Failure to Recommend, etc.), FNBB shall pay the Termination Fee to TriCo on the second (2nd) Business Day following the termination of this Agreement;

(ii) if this Agreement is terminated by FNBB pursuant to Section 8.01(h) (Superior Proposal), FNBB shall pay the Termination Fee to TriCo on the date of the termination of this Agreement; or

(iii) if this Agreement is terminated by (A) TriCo pursuant to Section 8.01(b) (Breach), or (B) by either TriCo or FNBB pursuant to Section 8.01(c) (Delay) and at the time of such termination no vote of the FNBB shareholders contemplated by this Agreement at the FNBB Meeting shall have occurred, or (C) by TriCo or FNBB pursuant to Section 8.01(e)(i) (No Shareholder Approval), and in the case of any termination pursuant to clause (A), (B) or (C), an Acquisition Proposal shall have been publicly announced and communicated or made known to the executive officers of FNBB or the FNBB Board (or any Person shall have publicly announced and communicated or made known an intention, whether or not conditional, to make an Acquisition Proposal, or reiterated a previously expressed plan or intention to make an Acquisition Proposal) at any time after the date of this Agreement and prior to the taking of the vote of the shareholders of FNBB contemplated by this Agreement at the FNBB Meeting, in the case of clause (C), or prior to the date of termination, in the case of clause (A) or (B), then (1) if within twelve (12) months after such termination FNBB enters into an agreement with respect to a Control Transaction, then FNBB shall pay to TriCo the Termination Fee on the date of execution of such agreement and (2) if a Control Transaction is consummated otherwise than pursuant to an agreement with FNBB within twelve (12) months after such termination, then FNBB shall pay to TriCo the Termination Fee on the date of such consummation of such Control Transaction.

As used in this Section 8.02(b), a “Control Transaction” means (i) the acquisition by any Person whether by purchase, merger, consolidation, sale, transfer or otherwise, in one transaction or any series of transactions, of a majority of the voting power of the outstanding securities of FNBB or First National Bank or a majority of the assets of FNBB or First National Bank, (ii) any issuance of securities resulting in the ownership by any Person of more than twenty-five percent (25%) of the voting power of FNBB or by any Person other than FNBB or First

National Bank of more than ten percent (10%) of the voting power of First National Bank or (iii) any merger, consolidation or other business combination transaction involving FNBB or any of its Subsidiaries as a result of which the shareholders of FNBB cease to own, in the aggregate, at least fifty percent (50%) of the total voting power of the entity surviving or resulting from such transaction.

Any amount that becomes payable pursuant to this Section 8.02(b) shall be paid by wire transfer of immediately available funds to an account designated by TriCo. Under no circumstances shall FNBB be obligated to pay the Termination Fee on more than one occasion, and the parties hereby acknowledge and agree that in the event the Termination Fee becomes payable and is paid by FNBB pursuant to this Section 8.02, the Termination Fee shall be TriCo’s sole and exclusive remedy under this Agreement.

(c) FNBB and TriCo agree that North Valleythe agreement contained in paragraph (b) above is an integral part of the Transactions contemplated by this Agreement, that without such agreement TriCo would not have entered into this Agreement, and that such amount does not constitute a penalty or TriColiquidated damages in the event of a breach of this Agreement by FNBB. If FNBB fails to pay whenTriCo the amount due any amounts payable under this Section 8.2, then (1)paragraph (b) above within the party who fails totime periods specified in such paragraph (b), FNBB shall pay such amounts shall reimburse the other party hereto for all costs and expenses (including disbursementsreasonable legal fees and reasonable fees of counsel)expenses) incurred by TriCo in connection with any action, including the collectionfiling of any lawsuit, taken to collect payment of such overdue amount, and (2)provided TriCo prevails on the party who fails to pay such amounts shall pay to the other party heretomerits, together with interest on the amount of any such overdueunpaid amount (forat the prime lending rate prevailing during such period commencing as ofpublished inThe Wall Street Journal, calculated on a daily basis from the date that such overdue amount was originally required to be paid and ending on the date that such overdue amount is actually paid in full) at a rate per annum equal to the prime rate published in the New York edition of The Wall Street Journal on the date such payment was required to be made.

8.3.Amendment. Subject to compliance with applicable Laws, this Agreement may be amended by the parties hereto, by action taken or authorized by their respective Boards of Directors, at any time before or after approval of the matters presented in connection with the Merger by the shareholders of TriCo and North Valley;provided, however, that after any approval of the transactions contemplated by this Agreement by North Valley’s or TriCo’s shareholders, there may not be, without further approval of such shareholders, any amendment of this Agreement which reduces the amount or changes the form of the consideration to be delivered to North Valley shareholders hereunder other than as contemplated by this Agreement. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

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8.4.Extension; Waiver. At any time prior to the Effective Time, the parties hereto, by action taken or authorized by their respective Boards of Directors, may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party, but such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

ARTICLE IX.

GENERAL PROVISIONS

9.1.Closing. Subject to the terms and conditions of this Agreement, the closing of the Merger (the “Closing”) will be on the day the Agreement of Merger and Bank Merger Agreement are filed with the California Secretary of State, and will take place at the offices of Bingham McCutchen LLP, Three Embarcadero Center, San Francisco, California 94111, on a date which shall be no later than the last day of the month following the later to occur of: (a) receipt of all Requisite Regulatory Approvals; or (b) the receipt of the North Valley Requisite Vote and the TriCo Requisite Vote;provided, however that if the last day of the month is not a Business Day, then the date shall be no later than the next Business Day to follow such last day of the month, with such date to be specified in writing by TriCo to North Valley at least five (5) Business Days prior to such Closing, or such other date, place and time as the parties may agree (the “Closing Date”). The parties shall use their commercially reasonable best efforts to cause all conditions to the Closing to be satisfied (unless waived) on or before the first anniversary ofuntil the date of this Agreement.actual payment.

9.2.Nonsurvival of Representations, Warranties and AgreementsARTICLE IX

MISCELLANEOUS

9.01Survival. None of theNo representations, warranties, agreements and covenants and agreementscontained in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time except for those(other than agreements or covenants and agreements contained herein or therein whichthat by their express terms apply in whole or in partare to be performed after the Effective Time.Time) or the termination of this Agreement if this Agreement is terminated prior to the Effective Time (other than Sections 6.06(d), 8.02 and thisArticle IX, which shall survive any such termination). Notwithstanding anything in the foregoing to the contrary, no representations, warranties, agreements and covenants contained in this Agreement shall be deemed to be terminated or extinguished so as to deprive a party hereto or any of its affiliates of any defense at law or in equity which otherwise would be available against the claims of any Person, including without limitation any shareholder or former shareholder.

9.3.Expenses9.02Waiver; Amendment. All costsPrior to the Effective Time, any provision of this Agreement may be (i) waived, by the party benefited by the provision or (ii) amended or modified at any time, by an agreement in writing among the parties hereto executed in the same manner as this Agreement, provided that after the approval of the principal terms of this Agreement by the FNBB shareholders, no amendment shall be made which by law requires further approval by the shareholders of FNBB without obtaining such approval, provided further that after the approval of the principal terms of this Agreement by the TriCo shareholders, no amendment shall be made which by law requires further approval by the shareholders of TriCo without obtaining such approval. For purposes of clarification, an amendment of any date in Section 8.01(c) shall not require further approval by any shareholders and if such amendment were deemed by law to require further approval by the shareholders of FNBB or TriCo, the approval of the principal terms of this Agreement by such shareholders will be deemed to have granted FNBB or TriCo, as the case may be, the authority to amend such dates without such further approval.

9.03Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be deemed to constitute one and the same original agreement.

9.04Governing Law. This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of California applicable to contracts made and to be performed entirely within such State.

9.05Expenses. Each party hereto will bear all expenses incurred by it in connection with this Agreement and the transactions contemplated hereby, including fees and expenses of its own financial consultants, accountants and counsel;providedthat nothing contained herein shall be paid bylimit either party’s rights to recover any liabilities or damages arising out of the party incurring such expense.other party’s fraud or willful breach of any provision of this Agreement.

9.4.9.06Notices. AnyAll notices, requests and all notices required or permitted to be givenother communications hereunder to a party pursuant to the provisions of this Agreement willshall be in writing and willshall be effective and deemed given on the earliest of the following: (i) at the time of personal delivery if a Business Day, and otherwise on the next Business Day thereafter, if delivery is in person; (ii) at the time of transmissionpersonally delivered, telecopied (with confirmation) or mailed by facsimile if a Business Day, and otherwise on the next Business Day thereafter, addressed to the other party at its facsimile number specified herein (or hereafter modified by subsequent notice to the parties hereto), with confirmation of receipt made by both telephone and printed confirmation sheet verifying successful transmission of the facsimile; (iii) one (1) Business Day after deposit with an express overnight courier for United States deliveries,registered or two (2) Business Days after such deposit for deliveries outside of the United States, with proof of delivery from the courier requested; or (iv) three (3) Business Days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries.

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All notices for delivery outside the United States will be sentor delivered by facsimilean overnight courier (with confirmation) to such party at its address set forth below or by express courier. Notices by facsimile shall be machine verified as received. All notices not delivered personally or by facsimile will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address or facsimile number as follows, or at such other address or facsimile number as such other party may designatespecify by one of the indicated means of notice herein to the other parties hereto as follows:hereto.

(a)if to TriCo,If to FNBB to:

TriCo Bancshares

63 Constitution DriveFNB Bancorp

Chico, California 95973975 El Camino Real

Attn.: Richard P. SmithSouth San Francisco, CA 94080

President andAttention:     Thomas C. McGraw,

                     Chief Executive Officer

Facsimile Number: (530) 898-0388Fax: (650)488-2289

with a copy to:

Bingham McCutchen LLP

Three Embarcadero Center

San Francisco, CA 94111

Attn.: David J. Gershon, Esq.

          James M. Rockett, Esq.

Facsimile Number: (415) 393-2286

and

(b)if to North Valley, to:

North Valley Bancorp

300 Park Marina Circle

Redding, California 96001

Attn.: Michael J. Cushman

President and Chief Executive Officer

Facsimile Number: (530) 222-4877

withWith a copy to:

Dodd Mason George LLP

1740 Technology Drive, #205991 West Hedding Street, Suite 102

San Jose, California 95110CA 95126

Attn.:Attention:     Joseph G. Mason Esq.

                     Glenn T. Dodd Esq.

Facsimile Number:Fax: (408)452-1487

If to TriCo to:

TriCo Bancshares

63 Constitution Drive

Chico, CA 95973

Attention:     Richard P. Smith, President and

                     Chief Executive Officer

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With a copy to:

9.5.InterpretationSheppard, Mullin, Richter & Hampton LLP

Four Embarcadero Center, 17th Floor

San Francisco, CA 94111

Attention: David J. Gershon

Fax: (415)403-6091

9.07Entire Understanding; Limited Third Party Beneficiaries. When aThis Agreement, the Bank Merger Agreement, the Shareholder Agreements, and the Confidentiality Agreements represent the entire understanding of the parties hereto and thereto with reference is madeto the Transaction, and this Agreement, the Agreement of Merger, the Bank Merger Agreement, the Shareholder Agreements, and the Confidentiality Agreements supersede any and all other oral or written agreements heretofore made. Except for the Indemnified Parties’ rights with to Section 6.10, which are expressly intended to be for benefit of each Indemnified Party, nothing in this Agreement, expressed or implied, is intended to Sections, Exhibitsconfer upon any Person, other than the parties hereto or Schedules, such reference shall be to a Section oftheir respective successors, any rights, remedies, obligations or an Exhibitliabilities under or Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretationby reason of this Agreement. Whenever

9.08Severability. Except to the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “but not limited to” or “without limitation.” No provisionextent that application of this Agreement shall be construed to requireSection 9.08 would have a Material Adverse Effect on FNBB or TriCo, North Valley or any of their respective Subsidiaries or affiliates to take any action that would violate any applicable Laws, rules or regulations.

9.6.Counterparts. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

9.7.Entire Agreement. This Agreement (including the Disclosure Letters, documents and the instruments referred to herein) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, other than the Confidentiality Agreement.

9.8.Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of California, without regard to any applicable conflicts of law rules.

9.9.Enforcement of Agreement. Except as specifically set forth in Sections 8.2(b) and 8.2(c), each party hereto acknowledges that money damages would be an insufficient remedy for any breach of this Agreement by such party and that that irreparable damage would occur in the event that the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an Injunction or Injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions thereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

9.10.Severability. Any term or provision of this Agreement which is declared invalid or unenforceable by a court of competent jurisdiction in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. In all such cases, the parties shall use their reasonable best efforts to substitute a valid, legal and enforceable provision which, insofar as practicable, implements the original purposes and intents of this Agreement.

9.11.Publicity9.09Enforcement of the Agreement. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Except as otherwise required by Lawsprovided in Section 8.02(b), it is accordingly agreed that the parties shall be entitled to an injunction or the rulesinjunctions to prevent breaches of NASDAQ (or such other exchange on which the TriCo Common Stock or North Valley’s Common Stock may become listed), so long as this Agreement isand to enforce specifically the terms and provisions hereof in effect, neither TriCo nor North Valley shall,any court of the United States or shall permitany state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. In the event attorneys’ fees or other costs are incurred to secure performance of any of TriCo’s Subsidiariesthe obligations herein provided for, or representativesto establish damages for the breach thereof, or North Valley’s Subsidiariesto obtain any other appropriate relief, whether by way of prosecution or Representativesdefense, the prevailing party shall be entitled to issuerecover reasonable attorneys’ fees and costs incurred therein.

9.10Interpretation. When a reference is made in this Agreement to Sections, Exhibits or causeSchedules, such reference shall be to a Section of, or Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and are not part of this Agreement. Whenever the publicationwords “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Whenever the words “as of any press release or other public announcement with respectthe date hereof” are used in this Agreement, they shall be deemed to or otherwise make any public statement concerning,mean the transactions contemplated byday and year first above written.

9.11Assignment. No party may assign either this Agreement or the Merger Agreement or the Bank Merger Agreement without the consent of the other party, which consent shall not be unreasonably withheld.

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9.12.Assignment; Limitation of Benefits. Neither this Agreement nor any of theits rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consentapproval of the other parties. Subject to the preceding sentence, this Agreement willshall be binding upon and shall inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Except as otherwise specifically provided in Section 6.8 hereof, this Agreement (including the documents and instruments referred to herein) is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder, and the covenants, undertakings and agreements set out herein shall be solely for the benefit of, and shall be enforceable only by, the parties hereto and their permitted assigns.

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TriCo and North Valley have caused this Agreement to be executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

TRICO BANCSHARESNORTH VALLEY BANCORP
By

/s/ Richard P. Smith

/s/ Michael J. Cushman

RICHARD P. SMITH

President and Chief Executive Officer

MICHAEL J. CUSHMAN

President and Chief Executive Officer

[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]

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INDEX OF DEFINED TERMS

Acquisition Proposalhas the meaning provided in Section 6.7.

Adjusted Merger Considerationhas the meaning provided in Section 1.4.

Adjusted Shareholders’ Equityhas the meaning provided in Section 7.2

Agreementhas the meaning provided in the recitals.

Agreement of Mergerhas the meaning provided in Section 1.2.

Alternative Transaction has the meaning provided in Section 6.7.

Acquisition Proposal has the meaning provided in Section 6.7.

Bank Mergerhas the meaning provided in the recitals.

Bank Merger Agreementhas the meaning provided in the recitals.

Burdensome Conditionhas the meaning provided in Section 6.1(b).

Business Day has the meaning provided in Section 1.4.

CDBOhas the meaning provided in Section 3.3.

CGCLhas the meaning provided in Section 1.3.

Certificatehas the meaning provided in Section 1.4.

Change in the Board Recommendationhas the meaning provided in Section 6.3.

Change in Control Paymentshas the meaning provided in Section 6.20.

Closinghas the meaning provided in Section 9.1.

Closing Datehas the meaning provided in Section 9.1.

Closing Financial Statements has the meaning provided in Section 6.17.

Codehas the meaning provided in the recitals.

Confidentiality Agreementhas the meaning provided in Section 6.2.

Daily Sales Pricehas the meaning provided in Section 8.1.

Derivatives Contract has the meanings provided in Section 3.28.

Determination Datehas the meaning provided in Section 8.1.

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Dissenting Shareholderhas the meaning provided in Section 1.4.

Dissenting Shareshas the meaning provided in Section 1.4.

Effective Timehas the meaning provided in Section 1.2.

Environmental Lawshas the meaning provided in Section 3.15.

ERISAhas the meaning provided in Section 3.11.

ERISA Affiliatehas the meaning provided in Section 3.11.

Exchange Acthas the meaning provided in Section 3.6.

Exchange Agenthas the meaning provided in Section 2.1.

Exchange Agent Agreementhas the meaning provided in Section 2.1.

Exchange Fundhas the meaning provided in Section 2.1.

FDIChas the meaning provided in Section 3.1.

Federal Reserve Boardhas the meaning provided in Section 3.1.

Final Pricehas the meaning provided in Section 1.4.

GAAPhas the meaning provided in Section 1.11.

Governmental Entityhas the meaning provided in Section 3.3.

Indemnified Partieshas the meaning provided in Section 6.8.

Injunctionhas the meaning provided in Section 7.1.

IRShas the meaning provided in Section 3.10.

Joint Proxy Statement/Prospectushas the meaning provided in Section 3.4.

KBW has the meaning provided in Section 4.7

Knowledgehas the meaning provided in Section 3.4(c).

Lawshas the meaning provided in Section 3.3.

Loanshas the meaning provided in Section 3.20.

Material Adverse Effecthas the meaning provided in Section 3.1.

Mergerhas the meaning provided in the recitals.

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Merger Considerationhas the meaning provided in Section 1.4.

NASDAQhas the meaning provided in Section 3.4.

Non-Solicitation and Confidentiality Agreementhas the meaning provided in the recitals.

North Valleyhas the meaning provided in the recitals.

North Valley 401(k) Plan has the meaning set forth in Section 6.6.

North Valley Affiliatehas the meaning provided in Section 6.13.

North Valley Bankhas the meaning provided in the recitals.

North Valley Boardhas the meaning provided in Section 3.3.

North Valley Board Recommendationhas the meaning provided in Section 6.3.

North Valley Common Stockhas the meaning provided in Section 1.4.

North Valley Contracthas the meaning provided in Section 3.12.

North Valley Disclosure Letterhas the meaning provided in the first paragraph of Article III.

North Valley ESOP is defined in Section 3.2.

North Valley Exchange Act Reportshas the meaning provided in Section 3.6.

North Valley Meetinghas the meaning provided in Section 3.4.

North Valley Optionhas the meaning provided in Section 1.6.

North Valley Option Planshas the meaning provided in Section 1.6.

North Valley Preferred Stock has the meaning provided in Section 3.2.

North Valley Rights has the meaning provided in Section 1.4.

North Valley Rights Agreement has the meaning provided in Section 1.4.

North Valley Section 16 Informationhas the meaning provided in Section 5.2.

North Valley Termination Feehas the meaning provided in Section 8.2.

OREOhas the meaning provided in Section 3.16.

PersonandPersonshave the meaning provided in Section 3.10.

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Planshas the meaning provided in Section 3.11.

Registration Statementhas the meaning provided in Section 3.4.

Regulatory Agreementhas the meaning provided in Section 3.13.

Representativeshas the meaning provided in Section 6.7.

Requisite Regulatory Approvalshas the meaning provided in Section 7.1.

Requisite North Valley Vote has the meaning provided in Section 3.3.

Requisite TriCo Vote has the meaning provided in Section 4.3

Sandlerhas the meaning provided in Section 3.7.

SEChas the meaning provided in Section 1.4.

Securities Acthas the meaning provided in Section 3.4.

Stock Exchange Ratiohas the meaning provided in Section 1.4.

Subsidiaryhas the meaning provided in Section 1.4.

Superior Proposalhas the meaning provided in Section 6.7.

Surviving Bankhas the meaning provided in the recitals.

Surviving Corporationhas the meaning provided in Section 1.1.

Shareholder Agreementhas the meaning provided in the recitals.

Shareholders’ Equity Measuring Date has the meaning provided in Section 7.2

Tail Insurance Policyhas the meaning provided in Section 6.8.

Tail Resolutionshas the meaning provided in Section 3.23.

Tax Returnhas the meaning provided in Section 3.10.

Taxablehas the meaning provided in Section 3.10.

Taxeshas the meaning provided in Section 3.10.

Trading Dayhas the meaning provided in Section 8.1.

Tri Counties Bankhas the meaning provided in the recitals.

TriCo has the meaning provided in the recitals.

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TriCo 401(k) Plan has the meaning provide in Section 6.6.

TriCo Boardhas the meaning provided in Section 4.3.

TriCo Common Stockhas the meaning provided in Section 1.4.

TriCo Contractshas the meaning provided in Section 4.22.

TriCo Determination Pricehas the meaning provided in Section 8.1.

TriCo Disclosure Letterhas the meaning provided in the first paragraph of Article IV.

TriCo Equity Plans has the meaning provided in Section 4.2.

TriCo Plans has the meaning provided in Section 4.21

TriCo Exchange Act Reportshas the meaning provided in Section 4.6.

TriCo Meetinghas the meaning provided in Section 3.4.

TriCo Termination Fee has the meaning set forth in Section 8.2.

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EXHIBIT A

AGREEMENT OF MERGER

THIS MERGER AGREEMENT (this “Agreement”) dated as of [*], 2014, adopted and made by and between TriCo Bancshares, a California corporation (“TriCo”), and North Valley Bancorp, a California corporation (“North Valley”).

WHEREAS, TriCo is a California corporation duly organized, validly existing and doing business in good standing under the laws of the State of California, and has authorized capital stock of (i) 50,000,000 shares of Common Stock (“TriCo Common Stock”), of which, at the date hereof, there are [*] shares outstanding and (ii) 1,000,000 shares of Preferred Stock, of which, at the date hereof, none were outstanding;

WHEREAS, North Valley is a California corporation duly organized, validly existing and doing business in good standing under the laws of the State of California, and has authorized capital stock of (i) 60,000,000 shares of Common Stock (“North Valley Common Stock”), of which, at the date hereof, there are [*] shares outstanding and (ii) 5,000,000 shares of Preferred Stock, of which, at the date hereof, none were outstanding;

WHEREAS, TriCo and North Valley have entered into an Agreement and Plan of Merger and Reorganization, dated as of [*], 2014 (the “Plan of Merger”), pursuant to which North Valley will merge with and into TriCo (the “Merger”), with TriCo being the surviving company; and

WHEREAS, the Boards of Directors of TriCo and North Valley have each determined that the Merger of North Valley with and into TriCo, under and pursuant to the terms and conditions herein set forth or referred to, is in the best interests of the respective corporations and their shareholders, and the Boards of Directors of TriCo and North Valley have authorized and approved the execution and delivery of this Agreement by their respective officers.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, TriCo and North Valley hereby agree that North Valley is to be merged with and into TriCo on the following terms and conditions:

Section 1. The Merger

(a)Effective Time. The Merger shall be effective upon filing of this Agreement, together with such certificates or other documents executed as may be required by the California Corporations Code, with the California Secretary of State (the “Effective Time”).

(b)Effect of the Merger. Subject to the terms and conditions of this Agreement, at the Effective Time, North Valley shall be merged with and into TriCo pursuant to the provisions of Sections 1100 and 1101 of the California Corporartions Code. At the Effective Time, the separate existence of North Valley shall cease, and TriCo, as the surviving corporation in the Merger (the “Surviving Corporation”), shall continue unaffected and unimpaired by the Merger, and shall be liable for all of the liabilities of North Valley.

(c)Name of Surviving Corporation. The name of the Surviving Corporation shall be “TriCo Bancshares.”

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Section 2. Corporate Governance Matters

(a)Articles of Incorporation and Bylaws. From and after the Effective Time and until thereafter amended as provided by law, the Articles of Incorporation and Bylaws of TriCo as in effect immediately prior to the Effective Time shall be and continue to be the Articles of Incorporation and Bylaws of the Surviving Corporation.

(b)Board of Directors. The directors and officers of TriCo at the Effective Time will be the directors and officers of the Surviving Corporation until they are removed or their successors are elected and qualified.

Section 3. Rights and Duties of TriCo

Upon the Merger becoming effective, all rights, privileges, franchises and property of North Valley, and all debts and liabilities due or to become due to North Valley, including things in action and every interest or asset of conceivable value or benefit, shall be deemed fully and finally and without any right of reversion transferred to and vested in TriCo without further act or deed, and TriCo shall have and hold the same in its own right as fully as the same was possessed and held by North Valley.

Upon the Merger becoming effective, all debts, liabilities, and obligations due or to become due, and all claims or demands for any cause existing against North Valley shall be and become the debts, liabilities, obligations of, and the claims and demands against TriCo in the same manner as if TriCo had itself incurred or become liable for them.

Upon the Merger becoming effective, all rights of creditors of North Valley, and all liens upon the property of North Valley, shall be preserved unimpaired as in effect immediately prior to the Effective Time.

Upon the Merger becoming effective, any action or proceeding pending by or against North Valley shall not be deemed to have abated or been discontinued, but may be prosecuted to judgment, with the right to appeal or review as in other cases, as if the Merger had not taken place or the TriCo may be substituted for North Valley.

Section 4. Conversion of Shares

(a)Effect on TriCo Common Stock. Each outstanding share of TriCo Common Stock shall remain outstanding and shall not be converted or otherwise affected by the Merger.

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(b)Effect on North Valley Common Stock. In and by virtue of the Merger and at the Effective Time, each share of North Valley Common Stock, excluding Treasury Shares (as hereinafter defined), issued and outstanding immediately prior to the Effective Time (each, a “Share” and, collectively, “Shares”), shall become and be converted into the right to receive 0.9433shares of TriCo Common Stock. At the Effective Time, all Shares shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate that immediately prior to the Effective Time represented any Shares shall cease to have any rights with respect thereto, except the right to receive shares of Trico Common Stock as provided in this Section 2(b) or cash in lieu of fractional shares as provided in Section 2(d) below.

(c)Cancellation of Certain Shares. Any shares of North Valley Common Stock held by TriCo or by North Valley, other than those held in a fiduciary capacity or as a result of debts previously contracted (“Treasury Shares”), shall automatically be cancelled and retired and shall cease to exist at the Effective Time of the Merger and no consideration shall be issued in exchange therefor.

(d)Fractional Shares. No fractional shares of TriCo Common Stock will be issued and any holder of North Valley Common Stock entitled to receive a fractional share of TriCo Common Stock shall be entitled to receive a cash payment in lieu thereof, which payment represents such holder’s proportionate interest in a share of TriCo Common Stock.

Section 5. Further Action

The parties hereto shall execute and deliver, or cause to be executed and delivered, all such deeds and other instruments, and will take or cause to be taken all further or other action as they may deem necessary or desirable in order to vest in and confirm to the Surviving Corporation title to and possession of all of North Valley’s and TriCo’s property, rights, privileges, powers and franchises hereunder, and otherwise to carry out the intent and purposes of this Agreement.

Section 6. Successors and Assigns

This Agreement shall be binding upon and enforceable by the parties hereto and their respective successors assigns and transferees, butpermitted assigns.

9.12Alternative Structure. Notwithstanding any provision of this Agreement may not be assigned by either party without the written consent of the other.

Section 7. Termination and Amendment

(a)Termination. Notwithstanding the approval of this Merger Agreement by the shareholders of North Valley or TriCo, this Merger Agreement shall terminate forthwith prior to the Effective Time in the event that the Plan of Merger shall be terminated as therein provided.

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(b)Amendment. This Merger Agreementcontrary, TriCo may be amended by TriCo and North Valley at any time priormodify the structure of the acquisition of FNBB set forth herein, provided that (i) the Merger Consideration to be paid to the Effective Time withoutholders of FNBB Common Stock is not thereby changed in kind or reduced in amount as a result of such modification, (ii) such modifications will not adversely affect the approvaltax treatment to FNBB’s shareholders as a result of receiving the Merger Consideration and (iii) such modification will not jeopardize receipt of any required approvals of Governmental Entities or materially delay consummation of the shareholders of North Valley or TriCo with respect to any of its terms except any change in its principal terms, the terms relating to the form or amount of consideration to be delivered to North Valley shareholders in the Merger or as may otherwise be requiredTransaction contemplated by the Plan of Merger or by law. This Merger Agreement may not be amended, except by an instrument in writing signed on behalf of each of the parties hereto.this Agreement.

(c)Counterparts. This Merger Agreement may be signed in any number of counterparts, each of which shall be deemed an original, and all of which shall be deemed but one and the same instrument.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in counterparts by their duly authorized officers, and attested by their officers thereunto duly authorized, all as of the day and year first above written.

 

TRICO BANCSHARESNORTH VALLEY BANCORP
By: 

By:

/s/ Richard P. Smith

Name: Richard P. Smith President and CEO
Title: Michael J. Cushman, President and CEOChief Executive Officer
FNB BANCORP
By: 

/s/ Thomas C. McGraw

Name: Thomas C. McGraw
Title: By:

Craig Compton, SecretaryLeo J. Graham, Corporate Secretary

A-84


Certificate of Approval

of

Merger Agreement

Richard P. Smith and Craig Compton certify that:

1.They are the President and Chief Executive Officer and the Secretary, respectively, of TriCo Bancshares, a California corporation (“TriCo”).

2.This certificate is attached to the Merger Agreement dated [*], 2014 (the “Agreement”), by and between North Valley Bancorp, a California corporation (“North Valley”), and TriCo, which provides for the merger of North Valley with and into TriCo (“Merger”).

3.The Agreement in the form attached was duly approved by the Board of Directors of TriCo.

4.TriCo has two classes of stock authorized consisting of shares of Common Stock and Preferred Stock. TriCo has [*] shares of Common Stock outstanding which were entitled to vote on the Merger, and no shares of Preferred Stock outstanding.

5.The principal terms of the Agreement in the form attached were approved by TriCo by the vote of a number of shares of its capital stock as of the record date, which equaled or exceeded the vote required.

6.The percentage vote required is at least 50.1% of the outstanding shares which were entitled to vote on the Merger.

We certify under penalty of perjury under the laws of the State of California that the foregoing is true and correct of our own knowledge.

Executed in Chico, California on [*], 2014.

Richard P. Smith, President and CEO

Craig Compton, Secretary

EXHIBIT A

A-85SHAREHOLDER AGREEMENT


Certificate of Approval

of

Merger SHAREHOLDER AGREEMENT (this “Agreement

Michael J. Cushman and Leo J. Graham certify that:

1.They are the President and Chief Executive Officer and the Corporate Secretary, respectively, of North Valley Bancorp, a California corporation (“North Valley”).

2.This certificate is attached to the Merger Agreement dated [*], 2014 (the “Agreement”), by and between TriCo Bancshares, a California corporation (“TriCo”), and North Valley, which provides for the merger of North Valley with and into TriCo (“Merger”).

3.The Agreement in the form attached was duly approved by the Board of Directors of North Valley.

4.North Valley has two classes of stock authorized consisting of shares of Common Stock and Preferred Stock. North Valley has [*] shares of Common Stock outstanding which were entitled to vote on the Merger and no shares of Preferred Stock outstanding.

5.The principal terms of the Agreement in the form attached were approved by North Valley by the vote of a number of shares of its capital stock, as of the record date, which equaled or exceeded the vote required.

6.The percentage vote required is at least 50.1% of the outstanding shares which were entitled to vote on the Merger.

We certify under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

Executed in Redding, California on                     , 2014.

Michael J. Cushman, President and CEO

Leo J. Graham, Corporate Secretary

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EXHIBIT B

BANK MERGER AGREEMENT

THIS AGREEMENT OF MERGER, dated as of [*December 11, 2017, among [●], 2014 (this “Merger Agreementa shareholder (“Shareholder”) of FNB Bancorp, a California corporation (“FNBB”), is made and entered into by and between Tri Counties Bank,TriCo Bancshares, a California banking corporation (“Tri Counties BankTriCo”), and, North Valley Bank, a California banking corporation (“North Valley Bank”)solely for purposes of the last sentence of Section 9, FNBB. All terms used herein and not defined herein shall have the meanings assigned thereto in the Merger Agreement (defined below).

WHEREAS, the Boards of Directors of Tri Counties BankFNBB and North Valley Bank have approved, and deem it advisable and in the best interests of Tri Counties Bank, North Valley Bank and their respective shareholders, that Tri Counties Bank and North Valley Bank consummate the business transaction provided for herein in which North Valley Bank would merge with andTriCo are entering into Tri Counties Bank (the “Merger”) as contemplated in thatan Agreement and Plan of Merger and Reorganization, dated as of January [*], 2014 by and between TrCo Bancshares and North Valley Bancorpthe date hereof (the “Plan of Merger Agreement”), providing, among other things, for the execution and filing of this Merger Agreement and the consummation of the Merger.

NOW, THEREFORE, in consideration of the promises and mutual agreements contained in this Merger Agreement, the parties to this Merger Agreement hereby agree that North Valley Bank shall be merged with and into Tri Counties Bank in accordance with the provisions of the laws of the State of California upon the terms and subject to the conditions set forth as follows:

Section 1. The Merger.

(a)Effective Time. This Merger Agreement shall become effective as and at the time provided in Section 4887(b) of the California Financial Code (the “Effective Time”).

(b)Effect of the Merger. At the Effective Time, North Valley Bank shall be merged with and into Tri Counties Bank and the separate corporate existence of North Valley Bank shall cease. Tri Counties Bank shall be the surviving corporation (the “Surviving Corporation”) in the Merger. The Surviving Corporation shall thereupon succeed, without other transfer, to all rights and properties of, and shall be subject to all the debts and liabilities of, North Valley Bank and the separate existence of Surviving Corporation as a California corporation, with all its purposes, objects, rights, powers, privileges and franchises, shall continue unaffected and unimpaired by the Merger.

(c)Name of Surviving Corporation. The name of the Surviving Corporation shall be “Tri Counties Bank.”

(d)Further Actions. North Valley Bank shall execute and deliver any documents and instruments and take all action, as requested by the Surviving Corporation, necessary or desirable to evidence or carry out the Merger.

Section 2. Corporate Governance Matters.

(a)Articles of Incorporation and Bylaws. From and after the Effective Time and until thereafter amended as provided by law, the Articles of Incorporation and Bylaws of Tri Counties Bank as in effect immediately prior to the Effective Time shall be and continue to be the Articles of Incorporation and Bylaws of the Surviving Corporation.

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(b)Board of Directors. The directors and officers of Tri Counties Bank at the Effective Time will be the directors and officers of the Surviving Corporation until they are removed or their successors are elected and qualified.

Section 3. Treatment of Shares.

(a)Shares of North Valley Bank. At the Effective Time, by virtue of the Merger, and without any action on the part of the holders of common stock of North Valley Bank (“North Valley Bank Common Stock”), each share of North Valley Bank Common Stock issued and outstanding immediately prior to the Effective Time shall be cancelled.

(b)Shares of Tri Counties Bank. All shares of Tri Counties Bank’s common stock issued and outstanding immediately prior to the Effective Time shall remain outstanding.

Section 4. Termination and Amendment.

(a)Termination. Notwithstanding the approval of this Merger Agreement by the shareholders of North Valley Bank or Tri Counties Bank, this Merger Agreement shall terminate forthwith prior to the Effective Time in the event that the Plan of Merger shall be terminated as therein provided.

(b)Amendment. This Merger Agreement may be amended by Tri Counties Bank and North Valley Bank at any time prior to the Effective Time without the approval of the shareholders of North Valley Bank or Tri Counties Bank with respect to any of its terms except any change in its principal terms, the terms relating to the form or amount of consideration to be delivered to North Valley Bank shareholders in the Merger or as may otherwise be required by the Plan of Merger or by law. This Merger Agreement may not be amended, except by an instrument in writing signed on behalf of each of the parties hereto.

(c)Counterparts. This Merger Agreement may be signed in any number of counterparts, each of which shall be deemed an original, and all of which shall be deemed but one and the same instrument.

[Continued and to be signed on following page]

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IN WITNESS WHEREOF, the parties have duly executed this Merger Agreement as of the date first written above.

TRI COUNTIES BANKNORTH VALLEY BANK
By:

By:

Richard P. Smith, President and CEOMichael J. Cushman, President and CEO
By:

By:

Craig Compton, SecretaryLeo J. Graham, Corporate Secretary

A-89


Certificate of Approval

of

Merger Agreement

Richard P. Smith and Craig Compton certify that:

1.They are the President and Chief Executive Officer and Secretary, respectively, of Tri Counties Bank, a California corporation (the “Corporation”).

2.This certificate is attached to the Merger Agreement dated [*], 2014 (the “Agreement”), by and between North Valley Bank, a California banking corporation (“North Valley Bank”), and the Corporation, which provides for the merger of North Valley Bank with and into the Corporation (“Merger”).

3.The Agreement in the form attached was duly approved by the Board of Directors of the Corporation.

4.The Corporation has one class of stock authorized consisting of shares of Common Stock. The Corporation has [*] shares of Common Stock outstanding which were entitled to vote on the Merger.

5.The principal terms of the Agreement in the form attached were approved by the Corporation by 100% of the shares of its shares capital stock outstanding, which equaled or exceeded the vote required.

6.The percentage vote required is at least 50.1% of the outstanding shares which were entitled to vote on the Merger.

We certify under penalty of perjury under the laws of the State of California that the foregoing is true and correct of our own knowledge.

Executed in Chico, California on [*], 2014.

Richard P. Smith, President and CEO

Craig Compton, Secretary

A-90


Certificate of Approval

of

Merger Agreement

Michael J. Cushman and Leo J. Graham certify that:

1.They are the Chief Executive Officer and Corporate Secretary, respectively, of North Valley Bank, a California banking corporation (the “Corporation”).

2.This certificate is attached to the Merger Agreement dated [*], 2014 (the “Agreement”), by and between Tri Counties Bank, a California corporation (“Tri Counties Bank”), and the Corporation, which provides for the merger of the Corporation with and into Tri Counties Bank (the “Merger”).

3.The Agreement in the form attached was duly approved by the Board of Directors of the Corporation.

4.The Corporation has two classes of stock authorized consisting of shares of Common Stock and Preferred Stock. The Corporation has [*] shares of Common Stock outstanding which were entitled to vote on the Merger, and no shares of Preferred Stock outstanding.

5.The principal terms of the Agreement in the form attached were approved by the Corporation by the vote of 100% of the shares of its capital stock outstanding as of the record date, which equaled or exceeded the vote required.

6.The percentage vote required is 100% of the outstanding shares which were entitled to vote on the Merger.

We certify under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

Executed in Redding, California on [*], 2014.

Michael J. Cushman, President and CEO

Leo J. Graham, Corporate Secretary

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EXHIBIT C-1

SHAREHOLDER AGREEMENT

This SHAREHOLDER AGREEMENT is made and entered into as of January 21, 2014 by and between TriCo Bancshares, a California corporation (“TriCo”), and the person signatory hereto (the “Shareholder”).

WHEREAS, TriCo and North Valley Bancorp, a California corporation (“North Valley”) have entered into that certain Agreement and Plan of Merger and Reorganization (the “Agreement”), dated as of January 21, 2014, pursuant to which North ValleyFNBB will merge (the “Merger”) with and into TriCo whereupon each shareon the terms and conditions set forth therein (the “Merger”) and, in connection therewith, outstanding shares of North Valley common stock (“North ValleyFNBB Common Stock”)Stock will be converted into shares of TriCo Common Stock in the right to receive the considerationmanner set forth in the Agreement;therein; and

WHEREAS, Shareholder owns the shares of FNBB Common Stock identified onSchedule I hereto (such shares, together with all shares of FNBB Common Stock subsequently acquired by Shareholder during the term of this Agreement, being referred to as a conditionthe “Shares”); and

WHEREAS, in order to its willingnessinduce TriCo to enter into the Merger Agreement, TriCo has required that each director of North Valley,Shareholder, solely in his or hersuch Shareholder’s capacity as a shareholder of FNBB and beneficial owner or record holder of North Valley Common Stock, enter into, and the Shareholdernot in any other capacity, has agreed to enter into and perform this Shareholder Agreement.

NOW, THEREFORE, in consideration of the foregoing, for good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties herebyhereto agree as follows:

1.Agreement to Vote Shares. Shareholder agrees while this Agreement is in effect, that at any meeting of the shareholders of FNBB, or in connection with any written consent of the shareholders of FNBB, Shareholder shall:

(a) appear at each such meeting or otherwise cause the Shares to be counted as present thereat for purposes of calculating a quorum; and

(b) vote (or cause to be voted), in person or by proxy, or deliver a written consent (or cause a consent to be delivered) covering, all the Shares (whether acquired heretofore or hereafter) that are beneficially owned by Shareholder or as to which Shareholder has, directly or indirectly, the right to vote or direct the voting, (x) in favor of adoption and approval of the Merger, the Merger Agreement and the transactions contemplated thereby; (y) against any action or agreement that to the knowledge of Shareholder would reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of FNBB contained in the Merger Agreement or of Shareholder contained in this Agreement; and (z) against any Acquisition Proposal or any other action, agreement or transaction that is intended, or to the knowledge of Shareholder would reasonably be expected, to materially impede, interfere or be inconsistent with, delay, postpone, discourage or materially and adversely affect consummation of the Merger or the performance by Shareholder of his or her obligations under this Agreement.

2.Transfer of Shares.

(a)Prohibition on Transfers of Shares; Other Actions.Shareholder hereby agrees that while this Agreement is in effect, Shareholder shall not, (i) sell, transfer, pledge, encumber, distribute by gift or donation, or otherwise dispose of any of the Shares (or any securities convertible into or exercisable or exchangeable for Shares) or any interest therein, whether by actual disposition, physical settlement or effective economic disposition through hedging transactions, derivative instruments or other means, (ii) enter into any agreement, arrangement or understanding with any Person, or take any other action, that violates or conflicts with or could

reasonably be expected to violate or conflict with Shareholder’s representations, warranties, covenants and obligations under this Agreement, or (iii) take any other action that could reasonably be expected to impair or otherwise adversely affect, in any material respect, Shareholder’s power, authority and ability to comply with and perform his, her or its covenants and obligations under this Agreement; provided, however, that once the Shares have been voted at the FNBB Meeting as provided for in Section 1(b)(x) hereof, and provided that at least a majority of all of the issued and outstanding shares of FNBB Common Stock have been irrevocably voted in favor of the Merger, the Merger Agreement and the transactions contemplated thereby at the FNBB Meeting as provided for in Section 1(b)(x) hereof, then the prohibitions provided for in this Section 2 shall no longer apply to Shareholder.

(b)Transfer of Voting Rights.Shareholder hereby agrees that Shareholder shall not deposit any Shares in a voting trust, grant any proxy or enter into any voting agreement or similar agreement or arrangement with respect to any of the Shares.

3.Representations and Warranties of the Shareholder.Shareholder. The Shareholder hereby represents and warrants to and agrees with TriCo as follows:

(a)Authority; No ViolationCapacity.. The Shareholder has all necessary powerrequisite capacity and authority to enter into and perform allhis or her obligations under this Agreement.

(b)Binding Agreement.This Agreement has been duly executed and delivered by Shareholder and constitutes the valid and legally binding obligation of Shareholder, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

(c)Non-Contravention.The execution and delivery of this Agreement by Shareholder does not, and the performance by Shareholder of his or her obligations hereunder and the consummation by Shareholder of the Shareholder’s obligations hereunder. The execution, delivery and performance of this Shareholder Agreement by the Shareholdertransactions contemplated hereby will not, violate or conflict with, or constitute a default under, any agreement, instrument, contract or other agreementobligation or any order, arbitration award, judgment or decree to which the Shareholder is a party includingor by which Shareholder is bound, or any voting agreement, shareholders’ agreement,statute, rule or regulation to which Shareholder is subject or, in the event that Shareholder is a corporation, partnership, trust agreement or voting trust. Thisother entity, any charter, bylaw or other organizational document of Shareholder.

(d)Ownership.Shareholder’s Shares are, and, except as otherwise provided for in Section 2(a) hereof, through the term of this Agreement will be, owned beneficially and of record solely by Shareholder, Agreementexcept as otherwise disclosed onSchedule I hereto. Shareholder has been duly and validly executed and delivered by the Shareholder (and the Shareholder’s spouse, iftitle to the Shares, (as defined below) constitute community property)free and constitutes a valid and binding agreementclear of the Shareholder and such spouse, enforceable against the Shareholder and the Shareholder’s spouse in accordance with its terms.

(b)Ownership of Shares. The Shareholder is the beneficial ownerany lien, pledge, mortgage, security interest or record holder of the number of shares of North Valley Common Stock indicated under the Shareholder’s nameother encumbrance, except as otherwise disclosed on the signature page hereto (the “Existing Shares”, and together with any shares of North Valley Common Stock acquired by the Shareholder after the date hereof, the “Shares”) and, asSchedule I hereto. As of the date hereof, the Existing Shares identified onSchedule I hereto constitute all of the shares of North ValleyFNBB Common Stock owned beneficially or of record or beneficially by the Shareholder. With respect to the Existing Shares, subject to applicable community property laws, the Shareholder has and, except as otherwise provided for in Section 2(a) above, will have at all times during the term of this Agreement (i) sole voting power and sole power to issue instructions with respect to the matters set forth in Section 21 hereof, (ii) sole power of disposition and (iii) sole power to demand appraisal rights and sole poweragree to engage in actionsall of the matters set forth in Section 2 hereof, with no restrictions on the voting rights, rights of disposition or otherwise, subject to applicable laws and the terms of this Agreement.

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2. Voting Agreement and Agreement Not to Transfer.

(a) The Shareholder hereby agrees to vote all of the Shares held by the Shareholder (i) in favor of the Merger, the Agreement and the transactions contemplated by the Agreement; (ii) against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of North Valley under the Agreement; and (iii) except with the prior written consent of TriCo or as otherwise contemplated in the Agreement, against the following actions (other than the Merger and the transactions contemplated by the Agreement): (A) any extraordinary corporate transactions, such as a merger, consolidation or other business combination involving North Valley; (B) any sale, lease or transfer of a material amount of the assets of North Valley; (C) any change in the majority of the board of North Valley; (D) any material change in the present capitalization of North Valley; (E) any amendment of North Valley’s Articles of Incorporation; (F) any other material change in North Valley’s corporate structure or business; or (G) any other action which is intended, or could reasonably be expected to, impede, interfere with, delay, postpone, discourage or materially adversely affect the Merger. The Shareholder shall not enter into any agreement or understanding with any person or entity prior to the Termination Date (as defined below) to vote or give instructions after the Termination Date in any manner inconsistent with clauses (i), (ii) or (iii) of the preceding sentence.

(b) Until the earlier of the termination of this Agreement, or the Effective Time, the Shareholder will not, directly or indirectly: sell, transfer, exchange, pledge, assign, hypothecate, encumber, tender or otherwise dispose of (collectively, a “Transfer”), or enforce or permit execution of the provisions of any redemption, share purchase or sale, recapitalization or other agreement with North Valley or any other Person or enter into any contract, option or other agreement, arrangement or understandingin each case with respect to the Transferall of directly or indirectly, any of the Shares or any securities convertible into or exercisable for Shares, any other capital stock of North Valley or any interest in any of the foregoing with any Person; enter into swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Shares; solicit, initiate, or encourage, any inquiries or the making of any proposal or offer with respect to any Acquisition Proposal; take any action that would make any of the Shareholder’s representations or warranties contained herein untrue or incorrect in any material respect or have the effect of preventing or disabling the Shareholder from performing the Shareholder’s obligations under this Agreement;provided however, this Agreement shall not prohibit the Shareholder from transferring and delivering Shares to North Valley to effect the exercise of an option to purchase North Valley Common Stock or cancellation of Shares in exchange for cash as set forth in the Agreement.

3.Cooperation. The Shareholder agrees that he/she will not directly or indirectly solicit any inquiries or proposals from any person relating to any proposal or transaction for the disposition of the business or assets of North Valley or any of its subsidiaries, or the acquisition of voting securities of North Valley or any subsidiary of North Valley or any business combination between North Valley or any subsidiary of North Valley and any Person other than TriCo.

4.Shareholder Capacity. The Shareholder is entering this Shareholder Agreement in his or her capacity as the record or beneficial owner of the Shareholder’s Shares, and not in his

A-93


or her capacity as a director of North Valley or as a trustee of any North Valley benefit plan. Nothing in this Shareholder Agreement shall be deemed in any manner to limit the discretion of the Shareholder to take any action, or fail to take any action, in his or her capacity as a director of North Valley or as a trustee of any North Valley benefit plan, that may be required of the Shareholder in the exercise of his or her fiduciary duties and responsibilities as a director of North Valley or as a trustee of any North Valley benefit plan.

5. Termination. The obligations of the Shareholder shall terminate upon the earlier of (a) the consummation of the Merger or (b) if the Merger is not consummated, upon the termination of the Agreement (the “Termination Date”).

6.Specific Performance. The Shareholder acknowledges that damages would be an inadequate remedy to TriCo for an actual or prospective breach of this Agreement and that the obligations of the Shareholder hereto shall be specifically enforceable.

7.Miscellaneous.

(a) Definitional Matters.

(i) All capitalized terms used but not defined in this Shareholder Agreement shall have the respective meanings that the Agreement ascribes to such terms.

(ii) The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Shareholder Agreement.

(b)Entire Agreement. This Shareholder Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.

(c)Parties in Interest. This Shareholder Agreement shall be binding upon and inure solely to the benefit of each party hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Nothing in this Shareholder Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Shareholder Agreement.

(d)Certain Events. Shareholder agrees that this Shareholder Agreement and the obligations hereunder shall attach to the Shares owned by Shareholder on the date of this Agreement and all of the Shares hereafter acquired by Shareholder and owned beneficially or of record by him or her during the term of this Agreement. For purposes of this Agreement, the term “beneficial ownership shall be bindinginterpreted in accordance with Rule13d-3 under the Exchange Act,provided that a Person shall be deemed to beneficially own any securities which may be acquired by such Person pursuant to any agreement, arrangement or understanding or upon any Person to which legal ownershipthe exercise of such Shares shall pass, whether by operation of lawconversion rights, exchange rights, warrants or options, or otherwise (irrespective of whether the right to acquire such securities is exercisable immediately or only after the passage of time, including without limitation, the Shareholder’s heirs, executors, guardians, administrators, trusteespassage of time within 60 days, the satisfaction of any conditions, the occurrence of any event or successors. Notwithstanding any Transfercombination of such Sharesthe foregoing).

(e)Consents and Approvals.The execution and delivery of this Agreement by a Shareholder the Shareholder or, as applicable, the Shareholder’s heirs, executors, guardians, administrators, trustees or successors, shall remain liable fordoes not, and the performance by Shareholder of allhis or her obligations under this Agreement.Agreement will not, require Shareholder

to obtain any consent, approval, authorization or permit of, or to make any filing with or notification to, any Governmental Entity.

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(e)4.AssignmentNo Solicitation.. This Shareholder hereby agrees that during the term of this Agreement he or she shall not, be assigned without the prior written consentand shall not permit any investment banker, financial advisor, attorney, accountant or other representative retained by him or her, directly or indirectly, (a) take any of the other party hereto, and any purported assignment without such consent shall be null and void.

(f)Modifications. This Shareholder Agreement shall not be amended, altered or modifiedactions specified in any manner whatsoever, except by a written instrument executed by the parties hereto.

(g)Governing Law. This Shareholder Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the lawsclauses (i)-(vi) of Section 6.07(a) of the stateMerger Agreement, (b) agree to release, or release, any Person from any obligation under any existing standstill agreement or arrangement relating to FNBB, or (c) participate in, directly or indirectly, a “solicitation” of California, without regard“proxies” (as such terms are used in the rules of the SEC) or powers of attorney or similar rights to vote, or seek to advise or influence any Person with respect to the conflictvoting of, laws rules thereof. The state or federal courts located within the stateany shares of California shall have exclusive jurisdiction over any and all disputes between the parties hereto, whether in law or equity, arising out of or relating to this Agreement and the agreements, instruments and documents contemplated hereby and the parties consent to and agree to submit to the jurisdiction of such courts. Each of the parties hereby waives and agrees not to assert in any such dispute, to the fullest extent permitted by applicable law, any claim that (i) such party is not personally subject to the jurisdiction of such courts, (ii) such party and such party’s property is immune from any legal process issued by such courts or (iii) any litigation or other proceeding commenced in such courts is brought in an inconvenient forum. The parties hereby agree that mailing of process or other papersFNBB Common Stock in connection with any suchvote or other action or proceeding in the manner providedon any matter of a type described in Section 7(k)1(b), orother than to recommend that shareholders of FNBB vote in other mannerfavor of the adoption and approval of the Merger Agreement and the Merger and as may beotherwise expressly permitted by law, shallthis Agreement. Shareholder agrees immediately to cease and cause to be validterminated any activities, discussions or negotiations conducted before the date of this Agreement with any Persons other than TriCo with respect to any possible Acquisition Proposal and sufficient service thereof and hereby waivewill take all necessary steps to inform any objections to service accomplished in the manner herein provided.

(h)Reliance on Counsel and Other Advisors. The Shareholder has consulted with such legal,investment banker, financial technicaladvisor, attorney, accountant or other experts as the Shareholder deems necessaryrepresentative retained by him, her or desirable before entering into this Agreement.

(i)Validity. The invalidity or unenforceability of any provision of this Shareholder Agreement shall not affect the validity or enforceability of any other provision of this Shareholder Agreement, each of which shall remain in full force and effect.

(j)Counterparts. This Shareholder Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

(k)Notices. Any notices or other communications required or permitted hereunder shall be in writing and shall be deemed duly given upon (i) transmitter’s confirmation of a receipt of a facsimile transmission, (ii) confirmed delivery by a standard overnight carrier or (iii) the expiration of five business days after the day when mailed by certified or registered mail, postage prepaid, addressed at the following addresses (or at such other address as the parties hereto shall specify by like notice):

If to Trico, to:

TriCo Bancshares

63 Constitution Drive

Chico, California 95973

Attn.: Richard P. Smith

President and Chief Executive Officer

Facsimile Number: (530) 898-0388

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with a copy to:

Bingham McCutchen LLP

Three Embarcadero Center

San Francisco, CA 94111

Attn.: David J. Gershon, Esq.

Facsimile Number: (415) 393-2286

If to the Shareholder, to the address noted on the signature page hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Shareholder Agreement asit of the date first above written.

TRICO BANCSHARES
By:

Richard P. Smith
President and Chief Executive Officer

SHAREHOLDER:

Name:

Number of Shares:

Address for Notices:

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EXHIBIT C-2

SHAREHOLDER AGREEMENT

This SHAREHOLDER AGREEMENT (“Shareholder Agreement”) is made and entered into as of January [    ], 2014obligations undertaken by and between North Valley Bancorp, a California corporation (“North Valley”), and the person signatory hereto (the “Shareholder”).

WHEREAS, TriCo Bancshares, a California corporation (“TriCo”), and North Valley have entered into that certain Agreement and Plan of Merger and Reorganization (the “Agreement”), dated as of January [    ], 2014,Shareholder pursuant to which North Valley will merge (the “Merger”) with and into TriCo; and

WHEREAS, asthis Section 4. Nothing contained in this Section 4 shall prevent a condition to its willingness to enter intoShareholder who is an officer or a member of the Agreement, North Valley has required that each director of TriCo,FNBB Board from discharging his or her fiduciary duties solely in his or her capacity as a shareholder and beneficial ownersuch an officer or record holderdirector.

5.Notice of TriCo Bancshares Common Stock (“TriCo Common Stock”), enter into, and the Shareholder has agreed to enter into, this Shareholder Agreement.

NOW, THEREFORE, in consideration of the foregoing, for good and valuable consideration, the parties hereby agree as follows:

1.Representations and Warranties of the ShareholderAcquisitions; Proposals Regarding Prohibited Transactions.. The Shareholder hereby represents and warrantsagrees to notify TriCo as follows:

(a)Authority; No Violation. The Shareholder has all necessary power and authority to enter into and perform all of the Shareholder’s obligations hereunder. The execution, delivery and performance of this Shareholder Agreement by the Shareholder will not violatepromptly (and in any other agreement to which the Shareholder is a party, including any Shareholder Agreement, shareholders’ agreement, trust agreement or voting trust. This Shareholder Agreement has been duly and validly executed and delivered by the Shareholder (and the Shareholder’s spouse, if the Shares (as defined below) constitute community property) and constitutes a valid and binding agreement of the Shareholder and such spouse, enforceable against the Shareholder and the Shareholder’s spouseevent within two (2) Business Days) in accordance with its terms.

(b)Ownership of Shares. The Shareholder is the beneficial owner or record holderwriting of the number of any additional shares of TriCoFNBB Common Stock indicated under the Shareholder’s nameor other securities of FNBB of which Shareholder acquires beneficial or record ownership on the signature page hereto (the “Existing Shares”, and together with any shares of TriCo Common Stock acquired by the Shareholderor after the date hereof,hereof. Shareholder will comply with the Shares”) and, asprovisions of the date hereof, the Existing Shares constitute all the shares of TriCo Common Stock owned of record or beneficially by the Shareholder. With respect to the Existing Shares, subject to applicable community property laws, the Shareholder has sole voting power and sole power to issue instructions with respect to the matters set forth in Section 2 hereof, sole power of disposition, sole power to demand appraisal rights and sole power to engage in actions set forth in Section 2 hereof, with no restrictions on the voting rights, rights of disposition or otherwise, subject to applicable laws and the terms of this Agreement.

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2.Shareholder Agreement and Agreement Not to Transfer.

(a) The Shareholder hereby agrees to vote all of the Shares held by the Shareholder (i) in favor6.07(b) of the Merger the Agreement and the transactions contemplated by the Agreement; and (ii) against any actionas if he, she or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of TriCo under the Agreement; and (iii) exceptit were FNBB.

6.Non-Solicitation;Non-Competition; Confidential Information

(a) In connection with the prior written consentdisposition of North Valley or as otherwise contemplatedall of Shareholder’s ownership interest in FNBB Common Stock, Shareholder agrees that for a period of two (2) years following the Agreement, against any other action which is intended, or could reasonably be expected to, impede, interfere with, delay, postpone, discourage or materially adversely affect the Merger. The Shareholder shall not enter into any agreement or understanding with any person or entity prior to the TerminationClosing Date, (as defined below) to vote or give instructions after the Termination Date in any manner inconsistent with clauses (i), (ii) or (iii) of the preceding sentence.

(b) Until the earlier of the termination of this Agreement or the Effective Time, the Shareholder will not directly or indirectly: sell, transfer, exchange, pledge, assign, hypothecate, encumber, tender or otherwise dispose of (collectively, a “Transfer”), or enforce or permit execution of the provisions of any redemption, share purchaser or sale, recapitalization

(i) solicit (other than general solicitations through newspapers or other agreement with TriComedia of general circulation, or the engagement of professional search firms, not targeted at such employees) any other Personemployees of FNBB or enter intoits wholly-owned Subsidiaries (“FNBB Employees”);provided, however, that the foregoing shall not apply to any contract, option or other agreement, arrangement or understanding with respect to the Transfer of, directly or indirectly, any of the Shares or any securities convertible into or exercisable for Shares, any other capital stockFNBB Employee (Y) who does not become an employee of TriCo or any interestof its Subsidiaries on the Closing Date; or (Z) whose employment terminated more than six months prior to the time that such FNBB Employee is first solicited for employment following the Closing Date;

(ii) knowingly (A) induce, persuade, encourage or influence or attempt to induce, persuade, encourage or influence any Person having a business relationship with FNBB or its wholly-owned Subsidiaries and Affiliates prior to the Closing Date, to discontinue, reduce or restrict such relationship after the Closing Date or (B) solicit or target the deposits, loans or other products and services from or to Persons who were depositors, borrowers or customers of FNBB or its wholly-owned Subsidiaries as of the Closing Date, whether by personal contact, by telephone, by facsimile, by mail or other form of solicitation or communication, or in any other way except for general solicitations that are directed to the general public and not directed specifically to Persons who were depositors, borrowers or customers of FNBB or its wholly-owned Subsidiaries as of the Closing Date. Notwithstanding the foregoing and for purposes of clarity, nothing herein shall prohibit Shareholder from exercising Shareholder’s discretion relating to Shareholder’s personal and business banking relationships; or

(iii) own, manage, operate, control, finance or participate in the ownership, management, operation, control or financing of, or be connected as an officer, director, employee, partner, principal, agent,

representative, consultant or otherwise with, any business or enterprise engaged in any business that is competitive with or similar to FNBB’s Business within any of the foregoing with any Person; enter into swapCalifornia counties in which FNBB or any other agreementits wholly-owned Subsidiaries does business or any transaction that transfers, in whole or in part,maintains an office as of the Closing Date. Notwithstanding the above, Shareholder shall not be deemed to be engaged directly or indirectly the economic consequence of ownershipin any business in contravention of the Shares; take any action that would make any of the Shareholder’s representations or warranties contained herein untrue or incorrectimmediately preceding sentence, if (a) Shareholder participates in any material respectsuch business solely (i) as an officer or have the effect of preventing or disabling such the Shareholder from performing the Shareholder’s obligations under this Agreement;provided however, this Agreement shall not prohibit the Shareholder from exercising a stock option for TriCo Common Stock or transferring and delivering Shares to TriCo to effect the exercise of an option to purchase TriCo Common Stock.

3.Shareholder Capacity. The Shareholder is entering this Shareholder Agreement in his or her capacity as the record or beneficial owner of the Shareholder’s Shares, and not in his or her capacity as a director of TriCo or Tri Counties or (ii) as a trusteepassive investor in up to 5% of any TriCo benefit plan. Nothingthe equity securities or 10% of the debt securities of a company or partnership, provided such securities are publicly traded or (b) Shareholder is employed by a business or enterprise that is engaged primarily in thisa business other than that which is competitive with or similar to the FNBB’s Business and Shareholder Agreement shall be deemeddoes not apply in any manner to limit the discretion of the Shareholder to take any action, or fail to take any action, in his or her capacity as a director of TriCoexpertise at such business or as a trustee of any TriCo benefit plan,enterprise to that may be required of the Shareholder in the exercise of his or her duties and responsibilities as a director of TriCo or as a trustee of any TriCo benefit plan.

4. Termination. The obligations of the Shareholder shall terminate upon the earlier of (a) the consummation of the Merger or (b) if the Merger is not consummated, upon the termination of the Agreement (the “Termination Date”).

5.Specific Performance. The Shareholder acknowledges that damages would be an inadequate remedy to North Valley for an actual or prospective breach of this Agreement and that the obligations of the Shareholder hereto shall be specifically enforceable.

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6.Miscellaneous.

(a)Definitional Matters.

(i) Unless the context otherwise requires, “person” shall mean a corporation, association, partnership, joint venture, organization, business, individual, trust, estate or any other entity or group (within the meaning of Section 13(d)(3) of the Exchange Act).

(ii) All capitalized terms used but not defined in this Shareholder Agreement shall have the respective meanings that the Agreement ascribes to such terms.

(iii) The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of such business or to affect the meaning or interpretation of this Shareholder Agreement.

(b)Entire Agreement. This Shareholder Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.

(c)Parties in Interest. This Shareholder Agreement shall be binding upon and inure solely to the benefit of each party hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Nothing in this Shareholder Agreement, express or implied,enterprise that is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Shareholder Agreement.

(d)Certain Events. Shareholder agrees that this Agreement and the obligations hereunder shall attach to the Shares owned by Shareholder and shall be binding upon any Person to which legal ownership of such Shares shall pass, whether by operation of law or otherwise, including, without limitation, the Shareholder’s heirs, executors, guardians, administrators, trustees or successors. Notwithstanding any Transfer of such Shares by a Shareholder, the Shareholder or, as applicable, the Shareholder’s heirs, executors, guardians, administrators, trustees or successors, shall remain liable for the performance of all obligations of the transferor under this Agreement.

(e)Assignment. This Shareholder Agreement shall not be assigned without the prior written consent of the other party hereto, and any purported assignment without such consent shall be null and void.

(f)Modifications. This Shareholder Agreement shall not be amended, altered or modified in any manner whatsoever, except by a written instrument executed by the parties hereto.

(g)Governing Law. This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the state of California, without regard to the conflict of laws rules thereof. The state or federal courts located within the state of California shall have exclusive jurisdiction over any and all disputes between the parties hereto, whether in law or equity, arising out of or relating to this Agreement and the

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agreements, instruments and documents contemplated hereby and the parties consent to and agree to submit to the jurisdiction of such courts. Each of the parties hereby waives and agrees not to assert in any such dispute, to the fullest extent permitted by applicable law, any claim that (i) such party is not personally subject to the jurisdiction of such courts, (ii) such party and such party’s property is immune from any legal process issued by such courts or (iii) any litigation or other proceeding commenced in such courts is brought in an inconvenient forum. The parties hereby agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 6(k), or in other manner as may be permitted by law, shall be valid and sufficient service thereof and hereby waive any objections to service accomplished in the manner herein provided.

(h)Reliance on Counsel and Other Advisors. The Shareholder has consulted with such legal, financial, technical or other experts as the Shareholder deems necessary or desirable before entering into this Agreement.

(i)Validity. The invalidity or unenforceability of any provision of this Shareholder Agreement shall not affect the validity or enforceability of any other provision of this Shareholder Agreement, each of which shall remain in full force and effect.

(j)Counterparts. This Shareholder Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

(k)Notices. Any notices or other communications required or permitted hereunder shall be in writing and shall be deemed duly given upon (i) transmitter’s confirmation of a receipt of a facsimile transmission, (ii) confirmed delivery by a standard overnight carrier or (iii) the expiration of five business days after the day when mailed by certified or registered mail, postage prepaid, addressed at the following addresses (or at such other address as the parties hereto shall specify by like notice):

if to North Valley, to:

North Valley Bancorp

300 Park Marina Circle

Redding, California 96001

Attn.: Michael J. Cushman

President and Chief Executive

Officer Facsimile Number: (530) 222-4877

with a copy to:

Dodd Mason George LLP

1740 Technology Drive,

#205 San Jose, California 95110

Attn.: Joseph G. Mason, Esq.

          Glenn T. Dodd, Esq.

Facsimile Number: (408) 452-1487

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If to the Shareholder, to the address noted on the signature page hereto.

[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Shareholder Agreement as of the date first above written.

NORTH VALLEY BANCORP
By:

Michael J. Cushman
President and Chief Executive Officer

SHAREHOLDER:

Name:

Number of Shares:

Address for Notices:

Signature Page to Shareholder Agreement

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EXHIBIT D

Form of Non-Solicitation and Confidentiality Agreement

NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT (this “Agreement”), dated as of January [    ], 2014, by and among TriCo Bancshares, a California corporation (“TriCo”), Tri Counties Bank, a California state-chartered bank and wholly-owned subsidiary of TriCo (“Tri Counties Bank”), and the undersigned key employee or director (“Representative”) of North Valley Bancorp, a California corporation (“Bancorp”) and/or its wholly-owned subsidiary, North Valley Bank (“North Valley Bank” and, together with Bancorp, “North Valley”).

WHEREAS, TriCo and Bancorp are entering into an Agreement and Plan of Merger and Reorganization, dated as of the date hereof (including all annexes, exhibits and schedules thereto, and as it may be amended, the “Merger Agreement”), pursuant to which North Valley will merge with and into TriCo (the “Merger”) and North Valley Bank will merge with and into Tri Counties Bank (the “Bank Merger”) on the terms and conditions set forth therein and, in connection therewith, all outstanding shares of Bancorp Common Stock will be exchanged in the manner set forth therein. Unless otherwise indicated, capitalized terms used and not defined herein shall have the meanings set forth in the Merger Agreement.

WHEREAS, Representative owns shares of Bancorp Common Stock and/or options to purchase such common stock, and, as a result, Representative has a material economic interest in the consummation of the Merger.

WHEREAS, following the Merger, the business and operations of TriCo, Tri Counties Bank and North Valley could be irreparably injured if Representative were to undertake certain activities competitive with TriCo, Tri Counties Bank or North Valley.

WHEREAS, in ordersimilar to induce TriCo to enter into the Merger Agreement and consummate the Merger and to induce Tri Counties Bank to consummate the Bank Merger, Representative has agreed to enter into and perform this Agreement.

NOW, THEREFORE, in consideration of the transactions contemplated by the Merger Agreement and the benefits to be derived, directly or indirectly, by Representative under the Merger Agreement, and in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

1.Acknowledgments by Representative. Representative acknowledges that, by virtue of his or her positions with North Valley, he or she has developed considerable expertise in the business operations of North Valley and has access to extensive confidential information with respect to North Valley and has access to Trade Secrets (as defined below). Representative recognizes that TriCo and Tri Counties Bank would be irreparably damaged, and TriCo’s and Tri Counties Bank’s substantial investment as a result of its acquisition of North Valley in the Merger and the Bank Merger would be materially impaired, if Representative were to disclose or make unauthorized use of any Trade Secrets or to solicit customers or employees of North Valley. Accordingly, Representative expressly acknowledges that he or she is voluntarily entering into this Agreement and that the terms and conditions of this Agreement are fair and

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reasonable to Representative in all respects.FNBB’s Business. For purposes of this Agreement, “Trade SecretsFNBB’s Businessmeans and includes (i) the origination, purchasing, selling and servicing of commercial, real estate, residential, construction, agricultural and consumer loans and/or (ii) the solicitation and provision of deposits, as conducted by FNBB and its wholly-owned Subsidiaries, in either event as conducted by FNBB or its wholly-owned subsidiaries as of the Closing Date[, provided this Section 6(a)(iii) shall mean (a)not apply if Shareholder continues to be employed as the Chief Financial Officer of FNBB at the Effective Time of the Merger].1

(b) Without limiting the generality of the foregoing and at all times after the date hereof, other than for the benefit of TriCo, FNBB or their respective Subsidiaries, or as otherwise approved by TriCo, Shareholder (i) shall make no use of the Confidential Information, or any other part thereof, (ii) shall not disclose the Confidential Information, or any part thereof, to any other Person, and (iii) shall deliver, on and after the Effective Time of the Merger, upon the request of TriCo, all documents, reports, drawings, designs, plans, proposals and other tangible evidence of Confidential Information, now possessed or hereafter acquired by Shareholder, to TriCo. For purposes of this Agreement, “Confidential Information” means all secrets and other confidential information, trade secrets, ideas, knowledge,know-how, techniques, secret processes, improvements, discoveries, methods, inventions, sales, financial information, customers, lists of customers and prospective customers, broker lists, potential brokers, rate sheets, plans, concepts, strategies or products, as well as all documents, reports, drawings, designs, plans and proposals otherwise pertaining to same with respector relating to North Valley, plusthe business and properties of FNBB or its Subsidiaries of which Shareholder has acquired, or may hereafter acquire, knowledge and possession as a shareholder, director, officer or employee of FNBB or its Subsidiaries or as a result of the transactions contemplated by the Merger Agreement,provided however, notwithstanding any non-public personal information on any present or past customer or clientother provisions of North Valley. Notwithstandingthis Agreement to the foregoing,contrary,Trade SecretsConfidential Information” shall not include any (i) information which is or has become available from an independenta third party who learned the information independently and is not or was not bound by a duty or agreement of confidentiality agreement with respect to such information; or (ii) information readily ascertainable from public, trade or other non-confidentialnonconfidential sources (other than as a result, directly or indirectly, of a disclosure or other dissemination in violationcontravention of an obligation or duty of confidentiality)a confidentiality agreement).

2.Non Solicitation.

(a) In order that TriCo and Tri Counties Bank may have and enjoy the full benefit of ownership of North Valley and the business it conducts, including its goodwill, following the Effective Time of the Merger, Representative agrees that for a period of twenty-four (24) months after the Closing Date (i) Representative will not take any affirmative action, directly or indirectly, to hire, attempt to hire, contact or solicit with respect to hiring, any Person who was an employee of North Valley or any Subsidiary or Affiliate of North Valley prior to the Effective Time of the Merger and who becomes an employee of TriCo, Tri Counties Bank or any of their respective Affiliates or Subsidiaries in connection with the Merger, or induce or otherwise counsel, advise or knowingly encourage any such Person to leave the employ of TriCo, Tri Counties Bank or any of their respective Affiliates or Subsidiaries,provided, however, that the foregoing shall not apply to any Person whose employment with TriCo, Tri Counties Bank or any of their respective Affiliates or Subsidiaries was involuntarily terminated or whose employment terminated more than six months prior to the time Representative first solicited such Person for employment following the Closing Date, and (ii) Representative will not, directly or indirectly, induce or attempt to induce any current or prospective client, customer, supplier, agent or other Persons under contract or otherwise doing business with North Valley, TriCo, Tri Counties Bank or any of their respective Affiliates or Subsidiaries prior to or at the Effective Time, or any client, customer, supplier, agent or other Persons under contract or otherwise doing business with TriCo, Tri Counties Bank or any of their respective Affiliates or Subsidiaries after the Effective Time (provided in the latter case, that Representative had substantial contact or became familiar with such Persons during Representative’s service to North Valley), to terminate, reduce or alter his, her or its relationship with, or to take any action that would be disadvantageous to, North Valley, TriCo, Tri Counties Bank or their respective Affiliates or Subsidiaries. Nothing contained in this Section 2(a) is intended to prohibit general advertising or general solicitation not specifically directed at employees of North Valley, TriCo, Tri Counties Bank or their respective Affiliates or Subsidiaries.

(b) Representative(c) Shareholder acknowledges and agrees that the business conducted by North ValleyFNBB and its wholly-owned Subsidiaries is highly competitive a significant portion of North Valley’s competitiveness and its value as a going enterprise is derived from its workforce and business relationships, and that the covenants made by RepresentativeShareholder in this Section 26 are made in considerationconnection with the disposition of the shares of

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TriCo Common Stock that will be issuedShareholder’s entire ownership interest in exchange for Representative’s BancorpFNBB Common Stock, and if applicable, the payments of cash Representative will receive on account of certain options to purchase Bancorp Common Stock immediately prior to the Merger, andare further made as a necessary inducement for TriCo and Tri Counties Bank to enter into the Merger Agreement and to consummate the transactions contemplated thereby. It is the desire and intent of the parties to this Agreement that the provisions of this Section 26 shall be enforced to the fullest extent permissible under the laws and public policies of each jurisdiction in which enforcement is sought. It is expressly understood and agreed that although Representative,Shareholder and TriCo and Tri Counties Bank each consider the restrictions contained in this Section 26 to be reasonable, if a final determination is made by a court of competent jurisdiction or an arbitrator that the time or territory or any other restriction contained in this Section 26 is unenforceable against any party, the provisions of this Section 26 shall be deemed amended to apply as to thesuch maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Representative acknowledges that breach of this Section 2 would cause TriCo and Tri Counties Bank irreparable harm and consents to the entry of an injunction without bond in the event Representative breaches or threatens to breach this Section 2.

3.Trade Secrets; Trade Names and Styles.

(a) Without limiting the generality of Section 2 above, other than for the benefit of North Valley, TriCo, Tri Counties Bank or their respective Affiliates or Subsidiaries, Representative (i) shall make no use of Trade Secrets, or any part thereof, and (ii) shall not disclose Trade Secrets, or any part thereof, to any other Person, and (iii) shall, upon the request of TriCo or Tri Counties Bank, deliver all documents, reports, drawings, designs, plans, proposals and other tangible evidence of Trade Secrets now possessed or hereafter acquired by Representative, to TriCo and Tri Counties Bank.

(b) Notwithstanding any provision of this Agreement to the contrary, Representative may disclose or reveal any information, whether including in whole or part any Trade Secrets, that:

(i) Representative is required to disclose or reveal under any applicable law or regulation, provided Representative makes a good faith request that the confidentiality of the Trade Secrets be preserved and, to the extent not prohibited by applicable laws and regulations, gives TriCo and Tri Counties Bank prompt advance notice of such requirement.

(ii) Representative is otherwise required to disclose or reveal by any governmental entity, provided Representative makes a good faith request that the confidentiality of the Trade Secrets be preserved and, to the extent not prohibited by applicable laws and regulations, gives TriCo and Tri Counties Bank prompt advance notice of such requirement.

(iii) In the written opinion of Representative’s legal counsel, Representative is compelled to disclose or else stand liable for contempt or suffer other censure or penalty imposed by any governmental entity, provided Representative makes a good faith request that the confidentiality of the Trade Secrets be preserved and, to the extent not prohibited by applicable laws and regulations, gives TriCo and Tri Counties Bank prompt advance notice of such requirement.

 

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1This exception only applies to David A. Curtis, SVP, Chief Financial Officer.


(c) The undersigned(d) Shareholder acknowledges and agrees that the provisions of this Agreement are necessary to protect TriCo’s legitimate business interests and to protect the value, including goodwill, of TriCo’s acquisition of FNBB. Shareholder warrants that these provisions will not unreasonably interfere with his or her ability to earn a living or to pursue his or her occupation and Shareholder has the means to support himself or herself and his or her dependents and the provisions of this Section 6 will not impair such ability in any manner whatsoever.

(e) Shareholder will not, at any time during thetwo-year period referred to in Subsection 6(a) of this Agreement, disparage TriCo, its Subsidiaries or any of its Affiliates, or the business conducted by TriCo, its Subsidiaries or any of their Affiliates, or any shareholder, member, director, manager, officer, employee or agent of TriCo, its Subsidiaries or any of their Affiliates.

7. Specific Performance and all trade namesRemedies.Shareholder acknowledges that it will be impossible to measure in money the damage to TriCo if Shareholder fails to comply with the obligations imposed by this Agreement and styles used by North Valley, including, butthat, in the event of any such failure, TriCo will not limitedhave an adequate remedy at law. Accordingly, Shareholder agrees that injunctive relief or other equitable remedy, in addition to remedies at law or in damages, is the appropriate remedy for any such failure and will not oppose the granting of such relief on the basis that TriCo may have an adequate remedy at law. Shareholder agrees that he or she will not seek, and agrees to waive any requirement for, the securing or posting of a bond in connection with TriCo’s seeking or obtaining such equitable relief.

8.Term of Agreement; Termination.

(a) The term of this Agreement shall commence on the date hereof.

(b) This Agreement shall terminate upon the date, if any, of the termination of the Merger Agreement in accordance with its terms. Upon any such termination, no party shall have any further obligations or liabilities hereunder;provided, however, such termination shall not relieve any party from liability for any willful breach of this Agreement prior to such termination. Notwithstanding the foregoing, in the event this Agreement is terminated prior to the terms “North Valley Bancorp” and “North Valley Bank” and all trademarks, visual designs and logos under which North Valley did business (collectively, the “Marks”), are valuable trade names and service marks, the ownershipEffective Time of which will remain with North Valley upon the Merger, the provisions in Sections 6(a) (other than Section 6(a)(iii)) and the Bank Merger. The undersigned agrees that use by any entity, other than TriCo or Tri Counties Bank or one of their respective Affiliates or Subsidiaries, of the Marks in the State of California would both cause public and customer confusion, and dilute the value of TriCo and Tri Counties Bank’s investment. Therefore, the undersigned unconditionally agrees that6(e) shall survive for a period of two (2) years afterfrom the date of termination (substituting the date of termination for the term “Closing Date” in such sections) and the provisions in Sections 3, 6(b) through 6(d), 7, 8 and 10 through 13 shall survive indefinitely.

9.Stop Transfer Order.In furtherance of this Agreement, Shareholder hereby authorizes and instructs FNBB to enter a stop transfer order with respect to all of Shareholder’s Shares for the period from the date hereof he or she will not enter into any business arrangement or agreement, whether formal or informal, directly or indirectly, wherethrough the term “North Valley Bancorp” or “North Valley Bank” or any other Mark, is used for the purpose of doing business as a financial services provider, or in connection with the sale, promotion or marketing of financial services to the public in the State of California.

4.Independence of Obligations. The covenants of Representative set forth indate this Agreement shall be construedis terminated in accordance with Section 9, except as independent of any other agreement or arrangement between Representative, on the one hand, and TriCo and Tri Counties Bank, or their respective Affiliates on the other; and the existence of any claim or cause of action by Representative against TriCo, Tri Counties Bank, or their respective Affiliates shall not constitute a defense to the enforcement of such covenants against Representative.

5.Equitable Relief. Representative expressly acknowledges and understands that breach of any provision of this Agreement exposes TriCo and Tri Counties Bank to extraordinary reputational, financial and market risks,otherwise provided for which there is no adequate remedy at law or by way of damages alone. Representative therefore stipulates andin Section 2(a) hereof. FNBB agrees that (a) in the event of any alleged violation or any alleged threatened violation by Representative of the provisions of Sections 2 or 3 hereof, a temporary restraining order or preliminary and/or permanent injunction, as the case may be, may forthwith issue upon showing of probable cause ofit shall comply with such actual or threatened breach, such order to prohibit the use, copying, retention or release of any Trade Secrets in violation of Sections 2 or 3 hereof and to provide such other and ancillary remedies as TriCo or Tri Counties Bank may reasonably request, and (b) TriCo and Tri Counties Bank shall be entitled to any and all equitable remedies such as specific performance of any provision of this Agreement in addition to, and not in lieu of, its remedies at law for any breach of thisstop transfer instructions.

10.Entire Agreement.

6.Term. The term of this Agreement shall extend from the Closing Date until the second anniversary of the Effective Time of the Merger.

7.Confidentiality. Representative agrees (a) to hold any and all information regarding this Agreement, the Merger and the Merger Agreement in strict confidence, and (b) not to divulge any information regarding this Agreement, the Merger or the Merger Agreement to any third person, until such time as the Merger has been publicly announced by North Valley, TriCo and Tri Counties Bank, at which time Representative may only divulge such information

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as has been publicly disclosed by North Valley, TriCo and Tri Counties Bank. Notwithstanding anything to the contrary in this Section 7, Representative may divulge information regarding this Agreement, the Merger and the Merger Agreement to his or her legal counsel.

8.Entire Agreement. This Agreement supersedes all prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof and contains the entire agreement among the parties with respect to the subject matter hereof. This Agreement may not be amended, supplemented or modified, and no provisions hereof may be modified or waived, except by an instrument in writing signed by each party hereto. No waiver of any provisions hereof by any party shall be deemed a waiver of any other provisions hereof by any such party, nor shall any such waiver be deemed a continuing waiver of any provision hereof by such party.

9.Attorneys’ Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements, in addition to any other relief to which the prevailing party is entitled.

10.Severability. If any provision of this Agreement shall be held by a court of competent jurisdiction to be unreasonable as to duration, activity or subject, it shall be deemed to extend only over the maximum duration, range of activities or subjects as to which such provision shall be valid and enforceable under applicable law. If any provision of this Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

11.Notices. Notices.All notices, requests, claims, demands or other communications hereunder shall be in writing and shall be deemed given when delivered personally, upon receipt of a transmission confirmation if sent by telecopy or like transmission and on the next Business Day when sent by a reputable overnight courier service to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to TriCo or Tri Counties Bank:to:

TriCo Bancshares

63 Constitution Drive

Chico, CaliforniaCA 95973

Attn.:Attention:     Richard P. Smith, President and

Facsimile Number:                     Chief Executive Officer

Fax: (530) 898-0388530-898-0310

With a copy to:

Bingham McCutchen,Sheppard Mullin Richter & Hampton LLP

ThreeFour Embarcadero Center, 17th Floor

San Francisco, California 94118CA 94111-4109

Attention:     David J. Gershon

Fax: (415) 383-2286403-6091

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If to Representative, at the address of Representative appearing on the signature pageShareholder to:

FNB Bancorp

975 El Camino Real

South San Francisco, CA 94080

Attention:     Thomas C. McGraw,

                     Chief Executive Officer

Fax: (650)488-2289

With a copy to:

Dodd Mason George LLP

991 West Hedding Street, Suite 102

San Jose, CA 95126

Attention:     Joseph G. Mason

                     Glenn T. Dodd

Fax: (408)452-1487

12.Miscellaneous.

(a)Severability.If any provision of this Agreement.Agreement or the application of such provision to any person or circumstances shall be held invalid or unenforceable by a court of competent jurisdiction, such provision or application shall be unenforceable only to the extent of such invalidity or unenforceability, and the remainder of the provision held invalid or unenforceable and the application of such provision to persons or circumstances, other than the party as to which it is held invalid, and the remainder of this Agreement, shall not be affected.

12.Binding Effect; Assignment. This(b)Capacity.The covenants contained in Sections 1 – 4 herein shall apply to Shareholder solely in his or her capacity as a shareholder of FNBB, and no covenant contained in any such Sections shall apply to Shareholder in his or her capacity as a director, officer or employee of FNBB or, if applicable, of TriCo, or in any other capacity. Nothing contained in this Agreement shall be binding upon and inuredeemed to apply to, or limit in any manner, the benefitobligations of the parties hereto, the heirs and legal representatives of Representative and the successors and assigns of TriCo and Tri Counties Bank. Representative shall not be entitledShareholder to assigncomply with his or her obligations hereunder. TriCofiduciary duties as a director, officer or employee of FNBB.

(c)Counterparts.This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and Tri Counties Bank may each assign its rights underthe same instrument.

(d)Headings.All Section headings herein are for convenience of reference only and are not part of this Agreement, to any Personand no construction or its/their Affiliates.reference shall be derived therefrom.

13.(e)Governing Law. Law.This Agreement shall be governed by and interpretedconstrued in accordance with the laws of the State of California applicablewithout giving effect to contracts made and entirely to be performed within such state, without regard to any applicablethe principles of conflicts of law principles that would require the applicationlaw.

(f)Successors and Assigns; Third Party Beneficiaries.Neither this Agreement nor any of the lawsrights or obligations of any other jurisdiction.

14.Independent Review and Advice. Representative represents and warrants that he or she has carefully read this Agreement; that Representative executesparty under this Agreement with full knowledgeshall be assigned, in whole or in part, by any party without the prior written consent of the contentsother parties hereto. Subject to the foregoing, this Agreement shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. Tri Counties Bank, as a Subsidiary of TriCo, is an intended third-party beneficiary of this Agreement. Otherwise, nothing in this Agreement, express or implied, is intended to confer on any Person other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.

(g)Regulatory Compliance.Each of the provisions of this Agreement the legal consequences thereof,is subject to compliance with all applicable regulatory requirements and conditions.

13.Attorney’s Fees.The prevailing party or parties in any and all rights which any party may have with respectlitigation, arbitration, mediation, bankruptcy, insolvency or other proceeding (“Proceeding”) relating to the other parties; that Representative has had the opportunity to receive independent legal advice with respect to the matters set forth inenforcement or interpretation of this Agreement may recover from the unsuccessful party or parties all reasonable fees and with respectdisbursements of counsel (including expert witness and other consultants’ fees and costs) relating to the rights and asserted rightsor arising out of (a) the Proceeding (whether or not the Proceeding proceeds to judgment), and (b) any post-judgment or post-award proceeding including, without limitation, one to enforce or collect any judgment or award resulting from the Proceeding. All such matters,judgments and that Representative is entering into this Agreementawards shall contain a specific provision for the recovery of Representative’s own free will. Representative expressly agrees that there are no expectations contrary to this Agreementall such subsequently incurred costs, expenses, and no usagefees and disbursements of trade or regular practice in the industry shall be used to modify this Agreement. The parties agree that this Agreement shall not be construed for or against either party in any interpretation thereof.counsel.

15.Headings. The descriptive headings of the Sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

16.Execution and Counterparts. Signatures sent by facsimile or electronically shall have the same force an effect as manual signed originals. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party hereto and delivered to each party hereto.

[Signature page followsfollows]]

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first written above.

 

TRICO BANCSHARES
By: 

     

Name: 

Richard P. Smith
Title:President and Chief Executive Officer
FNB BANCORP
By: 

     

Name:Thomas C. McGraw
Title:Chief Executive Officer
SHAREHOLDER
By:

Name:

SCHEDULE I

SHAREHOLDER AGREEMENT

Name of Shareholder

Shares of FNBB
Common Stock
Beneficially Owned

EXHIBIT B

FORM OF

AGREEMENT OF MERGER

THIS AGREEMENT OF MERGER, dated as of [●] (this “Agreement”), is made and entered into by and between, TriCo Bancshares, a California corporation (“TriCo”), and FNBB Bancorp, a California corporation (“FNBB”).

WHEREAS, the Boards of Directors of TriCo and FNBB have approved, and deem it advisable and in the best interests of TriCo, FNBB and their respective shareholders, that TriCo and FNBB consummate the business transaction provided for in this Agreement in which FNBB would merge with and into TriCo (the “Merger”) as contemplated in that certain Agreement and Plan of Reorganization and Merger dated as of December 11, 2017 by and between TriCo and FNBB (the “Plan of Merger”), providing, among other things, for the execution and filing of this Agreement and the consummation of the Merger.

NOW, THEREFORE, in consideration of the promises and mutual agreements contained in this Agreement, the parties to this Agreement hereby agree that FNBB shall be merged with and into TriCo in accordance with the provisions of the laws of the State of California upon the terms and subject to the conditions set forth as follows:

Section 1.The Merger.

(a)Effective Time. The Merger shall become effective on the date and at the time that this Agreement of Merger is filed with the California Secretary of State (the “Effective Time”).

(b)Effect of the Merger. At the Effective Time, FNBB shall be merged with and into TriCo and the separate corporate existence of FNBB shall cease. TriCo shall be the surviving corporation (the “Surviving Corporation”) in the Merger. The Surviving Corporation shall thereupon succeed, without other transfer, to all rights and properties of, and shall be subject to all the debts and liabilities of, FNBB and the separate existence of Surviving Corporation as a California corporation, with all its purposes, objects, rights, powers, privileges and franchises, shall continue unaffected and unimpaired by the Merger.

(c)Name of Surviving Corporation. The name of the Surviving Corporation shall be “TriCo Bancshares.”

(d)Articles of Incorporation and Bylaws. From and after the Effective Time and until thereafter amended as provided by law, the Articles of Incorporation and Bylaws of TriCo as in effect immediately prior to the Effective Time shall be and continue to be the Articles of Incorporation and Bylaws of the Surviving Corporation.

(e)Board of Directors and Officers. The directors and officers of TriCo at the Effective Time will be the directors and officers of the Surviving Corporation until they are removed or their successors are elected and qualified.

(f)Further Actions.FNBB shall execute and deliver any documents and instruments and shall take all actions, as requested by the Surviving Corporation, necessary or desirable to evidence or carry out the Merger.

Section 2.Treatment of Shares.

(a)Shares of FNBB.

(i) At the Effective Time, by virtue of the Merger, and without any action on the part of the holders of FNBB common stock, each share of FNBB common stock issued and outstanding immediately prior to the Effective Time (other than shares that are “dissenting shares” within the meaning of Chapter 13 of the California General Corporation Law) shall converted into the right to receive 0.98 shares of TriCo common stock, together with any cash in lieu of fractional shares.

(ii) Any shares of FNBB common stock owned by FNBB as treasury stock or owned, directly or indirectly, by FNBB, TriCo or any of TriCo’s subsidiaries (other than those held in a fiduciary capacity or as a result of debts previously contracted) shall automatically be cancelled and retired and shall cease to exist at the Effective Time of the Merger and no consideration shall be issued in exchange therefor.

(iii) Shares of FNBB common stock that are “dissenting shares” within the meaning of Chapter 13 of the California General Corporation Law will not be converted as described in Section 2(a)(i), but from and after the Effective Time will represent only the right to receive such value as may be determined under Chapter 13 of the California General Corporation Law.

(iv) At the Effective Time, the stock transfer books of FNBB will be closed and no transfer of FNBB common stock theretofore outstanding will thereafter be made.

(b)Shares of TriCo. All shares of TriCo common stock issued and outstanding immediately prior to the Effective Time shall remain outstanding and unaffected by the Merger.

Section 3.Termination and Amendment.

(a)Termination. This Agreement shall terminate prior to the Effective Time in the event that the Plan of Merger shall be terminated as provided therein.

(b)Amendment. This Agreement may be amended by TriCo and FNBB at any time prior to the Effective Time without the approval of the shareholders of TriCo or FNBB with respect to any of its terms except any change in its principal terms, the terms relating to the form or amount of consideration to be delivered to FNBB shareholders in the Merger or as may otherwise be required by the Plan of Merger or by law. This Agreement may not be amended, except by an instrument in writing signed on behalf of each of the parties hereto.

Section 4.Rules of Construction. Descriptive headings as to the contents of particular sections are for convenience only and do not control or affect the meaning, construction or interpretation of this Agreement. Each use herein of the plural includes the singular and vice versa, in each case as the context requires or as it is otherwise appropriate. The word “or” is used in the inclusive sense. Any and all documents or instruments referred to herein are incorporated herein by reference hereto as though fully set forth herein verbatim. If there is any conflict between the terms of this Agreement and the terms of the Plan of Merger, the terms of the Plan of Merger are to control.

Section 5.Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be deemed an original, and all of which shall be deemed but one and the same instrument.

IN WITNESS WHEREOF, the parties have duly executed this Agreement of Merger as of the date first written above.

TRICO BANCSHARES
By:

Name:Richard P. Smith
Title:President and Chief Executive Officer
By:

Name:
Title:
FNB BANCORP
By:

Name:Thomas C. McGraw
Title:Chief Executive Officer
By:

Name:
Title:

EXHIBIT C

FORM OF

BANK MERGER AGREEMENT

BANK MERGER AGREEMENT, dated as of [●], 2018 (“Bank Merger Agreement”), by and between First National Bank of Northern California (“First National Bank”) and Tri Counties Bank (“Tri Counties”).

WHEREAS, First National Bank is a national banking association and wholly-owned subsidiary of FNB Bancorp, a California corporation (“FNBB”), which has its principal place of business in South San Francisco, California; and

WHEREAS, Tri Counties is a California-chartered bank and a wholly-owned subsidiary of TriCo Bancshares (“TriCo”), which has its principal place of business in Chico, California; and

WHEREAS, TriCo and FNBB have entered into an Agreement and Plan of Merger and Reorganization, dated as of December 11, 2017 (the “Plan of Merger”), pursuant to which FNBB will merge with and into TriCo, with TriCo as the surviving corporation (the “Parent Merger”); and

WHEREAS, the Boards of Directors of First National Bank and Tri Counties have approved and deemed it advisable to consummate the merger provided for herein in which First National Bank would merge with and into Tri Counties on the terms and conditions herein provided immediately following the effective time of the Parent Merger.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound hereby, agree as follows:

1.The Merger. Subject to the terms and conditions of this Bank Merger Agreement, at the Effective Time, First National Bank shall merge with and into Tri Counties (the “Merger”) under the laws of the State of California. Tri Counties shall be the surviving corporation in the Merger (the “Surviving Bank”) and the separate existence of First National Bank shall cease.

2.Articles of Incorporation and Bylaws. The Articles of Incorporation and the Bylaws of Tri Counties in effect immediately prior to the Effective Time shall be the governing documents of the Surviving Bank, until altered, amended or repealed in accordance with their terms and applicable law.

3.Name; Offices. The name of the Surviving Bank shall be “Tri Counties Bank.” The main office of the Surviving Bank shall be the main office of Tri Counties immediately prior to the Effective Time. All branch offices of First National Bank and Tri Counties which were in lawful operation immediately prior to the Effective Time shall continue to be the branch offices of the Surviving Bank upon consummation of the Merger, subject to the opening or closing of any offices which may be authorized by First National Bank and Tri Counties and applicable regulatory authorities after the date hereof.

4.Directors and Executive Officers. The directors and executive officers of the Surviving Bank immediately after the Merger shall be the directors and executive officers of Tri Counties immediately prior to the Merger.

5.Effectiveness of Merger. The Merger shall become effective on the date and at the time that this Bank Merger Agreement, as certified by the California Secretary of State, is filed with the California Department of Business Oversight—Division of Financial Institutions, or as set forth in such filing (the “Effective Time”).

6.Effects of the Merger. At the Effective Time, the effect of the Merger shall be as provided in the General Corporation Law of the State of California. Without limiting the generality of the foregoing and subject thereto, at the Effective Time:

(a) all rights, franchises and interests of First National Bank in and to every type of property (real, personal and mixed), tangible and intangible, and choses in action shall be transferred to and vested in the Surviving Bank by virtue of the Merger without any deed or other transfer, and the Surviving Bank, without any order or other action on the part of any court or otherwise, shall hold and enjoy all rights of property, franchises and interests, including appointments, designations and nominations, and all other rights and interests as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver and committee, and in every other fiduciary capacity, in the same manner and to the same extent as such rights, franchises and interest were held or enjoyed by First National Bank immediately prior to the Effective Time; and

(b) the Surviving Bank shall be liable for all liabilities of First National Bank, fixed or contingent, including all deposits, accounts, debts, obligations and contracts thereof, matured or unmatured, whether accrued, absolute, contingent or otherwise, and whether or not reflected or reserved against on balance sheets, books of account or records thereof, and all rights of creditors or obligees and all liens on property of First National Bank shall be preserved unimpaired; after the Effective Time, the Surviving Bank will continue to issue savings accounts on the same basis as immediately prior to the Effective Time.

7.Effect on Shares of Stock.

(a)First National Bank. As of the Effective Time, each share of First National Bank common stock issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be cancelled without consideration. Any shares of First National Bank common stock held in the treasury of First National Bank prior to the Effective Time shall be retired and cancelled.

(b)Tri Counties.Each share of Tri Counties common stock issued and outstanding immediately prior to the Effective Time shall be unchanged and shall remain issued and outstanding.

8.Counterparts. This Bank Merger Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one agreement.

9.Governing Law. This Bank Merger Agreement shall be governed in all respects, including, but not limited to, validity, interpretation, effect and performance, by the laws of the State of California.

10.Amendment. Subject to applicable law, this Bank Merger Agreement may be amended, modified or supplemented only by written agreement of Tri Counties and First National Bank at any time prior to the Effective Time.

11.Waiver. Any of the terms or conditions of this Bank Merger Agreement may be waived at any time by whichever of the parties hereto is, or the shareholders of which are, entitled to the benefit thereof by action taken by the Board of Directors of such waiving party.

12.Assignment. This Bank Merger Agreement may not be assigned by any party hereto without the prior written consent of the other party.

13.Termination. This Bank Merger Agreement shall terminate upon the termination of the Agreement prior to the Effective Time in accordance with its terms. The Bank Merger Agreement may also be terminated at any time prior to the Effective Time by an instrument executed by First National Bank and Tri Counties.

14.Conditions Precedent. The obligations of the parties under this Bank Merger Agreement shall be subject to the consummation of the Parent Merger pursuant to the Agreement on or before the Effective Time.

15.Entire Agreement. Except as otherwise set forth in this Bank Merger Agreement and the Plan of Merger, the Plan of Merger and this Bank Merger Agreement (including the documents and the instruments referred to herein) constitute the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. To the extent of a conflict between the terms of the Agreement and the terms of this Bank Merger Agreement, the terms of the Plan of Merger shall control.

[Signature page follows]

IN WITNESS WHEREOF, each of Tri Counties Bank and First National Bank of Northern California has caused this Bank Merger Agreement to be executed on its behalf by its duly authorized officers.

TRI COUNTIES BANK
By: 

     

Name: 

Richard P. Smith
Title: 

President and Chief Executive Officer
REPRESENTATIVE
By:

     

Name: 

Address:Title:
FIRST NATIONAL BANK OF NORTHERN CALIFORNIA
By: 

     

Name:Thomas C. McGraw
Title:Chief Executive Officer
By: 

     

Name:
Title:

[Signature Page

EXHIBIT D

LANDLORD ESTOPPEL LETTER

                    , 201[]

TriCo Bancshares

63 Constitution Drive

Chico, CA 95973

Re:

        , as amended                             (“Lease”) by and between

(“Landlord”) and                                      (“Tenant”) for the premises commonly known as

            (“Premises”)

Dear :

In connection with the acquisition of FNB Bancorp (“FNBB”) and its subsidiary First National Bank of Northern California (“First National Bank”) by TriCo Bancshares, and pursuant to Non-Solicitationa merger of FNBB with and Confidentiality Agreement]into TriCo Bancshares and a merger of First National Bank with and into Tri Counties Bank (“Assignee”), a subsidiary of TriCo Bancshares (collectively, the “Merger”), and the corresponding assignment of the above referenced Lease, the undersigned Landlord hereby certifies to Assignee that the following statements are true, correct and complete as of the date hereof:

1. Tenant is the tenant under the Lease for the Premises. There have been no amendments, modifications or revisions to the Lease, and there are no agreements of any kind between Landlord and Tenant regarding the Premises, except as provided in the attached Lease.

2. Attached hereto asSchedule A is a true, correct and complete copy of the Lease which has been duly authorized and executed by Landlord and which is in full force and effect.

3. Tenant has accepted and is in possession of the Premises and is presently occupying the Premises. To the Landlord’s knowledge, the Lease has not been assigned, by operation of law or otherwise, by Tenant, and no sublease, concession agreement or license, covering the Premises, or any portion of the Premises, has been entered into by Tenant.

4. No rent under the Lease has been paid to Landlord more than one (1) month in advance, and no other sums or security deposits have been deposited with Landlord, except in the amount $         . (If none, state “NONE”). Tenant is not entitled to rent concessions or free rent.

5. All conditions and obligations under the Lease to be satisfied or performed by Landlord and Tenant as of the date hereof have been fully satisfied or performed.

6. Neither Landlord nor Tenant is in default under the Lease and no event has occurred which, with the giving of notice or passage of time, or both, could result in such a default.

7. Landlord has not received any notice of any present violation of any federal, state, county or municipal laws, regulations, ordinances, orders or directives relating to the use or condition of the Premises.

8. Except as specifically stated herein, Tenant has not been granted any option to extend the term of the Lease, except as set forth in the Lease.

9. If and to the extent that Landlord’s consent thereto is required under the terms of the Lease, Landlord hereby consents to the Merger and the resulting assignment of the Lease to Assignee.

The agreements and certifications set forth herein are made with the knowledge and intent that Assignee will rely on them in purchasing the Premises, and Assignee’s successors and assigns may rely upon them for that purpose.

 

A-109

Very truly yours,

[LANDLORD]

By: 

Name:

Title:


SCHEDULE A

LEASE

[INSERT]

Appendix B — Opinion of Sandler O’Neill + Partners, L.P.EXHIBIT E

January 21, 2014FORM OF

Board of DirectorsBENEFITS SUMMARY ACKNOWLEDGMENT

North Valley Bancorp

300 Park Marina Circle

Redding, CA 96001

Ladies and Gentlemen:

North Valley Bancorp (“North Valley”) andTHIS BENEFITS SUMMARY ACKNOWLEDGEMENT is delivered to TriCo Bancshares (“TriCo”TriCo) have entered into an agreement and planTri Counties Bank (“Tri Counties”), in accordance with the terms of mergerthe Agreement and Plan of Reorganization and Merger, dated as of January 21, 2014 (the “Agreement”December 11, 2017, by and between TriCo and FNB Bancorp (“FNBB), pursuant to (1) which North ValleyFNBB will merge with and into TriCo and (2) First National Bank of Northern California (“First National Bank”) will merge with and into Tri Counties (the “Mergers”).

Plan/Agreement

DateAmount Payable at
Time of Merger
Present ValueRetirement Benefit

I confirm to TriCo and Tri Counties that I have reviewed the table above and each of the plans and/or agreements listed in the table above. Having reviewed such plans and/or agreements, and having had to opportunity to confer with management of FNBB about such plans and/or agreements, I confirm and acknowledge that:

1. The table above includes an accurate and complete list of all FNBB and First National Bank benefit plans and agreements to which I am a party or beneficiary and pursuant to which I am or will become entitled to receive a benefit as a result of the Merger, upon the Merger or at any time following the Merger (the “Benefits”).

2. The table above accurately states the amounts or values of all Benefits.

Date:, 201[●]

By:

Name:

Appendix B

LOGO

December 11, 2017

The Board of Directors

FNB Bancorp

975 El Camino Real

South San Francisco, California 94080

Dear Board of Directors:

We understand that FNB Bancorp (the “Company”) and Trico Bancshares are prepared to enter into an Agreement and Plan of Merger dated as of December 11, 2017 (the “Merger Agreement”), pursuant to which the Company will be merged with and into Trico Bancshares or a subsidiary thereof (the “Merger”). Pursuant to the termsMerger, as more fully described in the Merger Agreement and as further described to us by management of the merger, uponCompany, we understand that, subject to the effective dateexercise of dissenters’ rights, each outstanding share of common stock of the Merger, each share of North Valley common stock issued and outstanding immediately before the Effective Time, except for certain shares as specified in the Agreement, willCompany (“Company Common Stock”) is to be converted into the right to receive a number of0.9800 shares of TriCoTrico Bancshares common stock equal to the Stock Exchange Ratio (the “Merger Consideration”“Consideration”). The Stock Exchange Ratio means 0.9433 shares of TriCo common stock. The other terms and conditions of the Merger are set forth in more fullydetail in the Merger Agreement and all defined terms used herein shall have the meaning set forth in the Agreement, and capitalized terms used herein without definition shall have the meanings assigned to them in theMerger Agreement.

You have requestedasked us whether, in our opinion, as of the date hereof, the Consideration to be received by the fairness,holders of Company Common Stock is fair to such holders from a financial point of view, of the Merger Consideration to the holders of North Valley common stock.view.

Sandler O’Neill & Partners, L.P.,The Courtney Group is an investment banking firm and is regularly engaged as part of its investment banking business is regularly engaged in the valuation of financial institutionsbusinesses and their securities in connection with mergers and acquisitions, negotiated underwritings, private placements, secondary distributions of listed and otherunlisted securities, and valuations for corporate transactions. Inpurposes in the financial services sector. For purposes of this opinion and in connection with this opinion,our review of the Merger, we have, reviewed, among other things: (i)(1) reviewed the Agreement; (ii)Merger Agreement, (2) reviewed certain publicly available business and financial statementsinformation relating to the Company and TriCo Bancshares that we deem to be relevant, (3) reviewed certain internal information, primarily financial in nature, including financial projections and other historical financial information of North Valley that we deemed relevant; (iii)and operating data relating to the strategic implications and operational benefits anticipated to result from the Merger, furnished to us by the Company and TriCo Bancshares, (4) reviewed certain publicly available financial statements and other historical financial information of TriCo that we deemed relevant; (iv) the mean publicly available analyst earnings per share estimate for North Valley for the years ending December 31, 2013 through December 31, 2014 and an internal long-term growth rate for the years thereafter as provided by senior management of North Valley; (v) the mean publicly available analyst earnings per share estimate for TriCo for the years ending December 31, 2013 through December 31, 2015 and an internal long-term growth rate for the years thereafter as provided by senior management of TriCo; (vi) the pro forma financial impact of the Merger on TriCo based on assumptions relating to transaction expenses, purchase accounting adjustments, cost savings and other synergies as determined by the senior management of TriCo; (vii) a comparison of certain stock trading, financial and other information concerning the reported prices and trading history of, and the trading market for, North Valleythe common stock of the Company and TriCo with similarBancshares, (5) reviewed certain publicly available information forwith respect to other companies that we believe to be comparable in certain other commercial banks,respects to the securitiesCompany and TriCo Bancshares, (6) considered the financial terms, to the extent publicly available, of which are publicly traded; (viii) the terms and structuresselected recent business combinations of other recent mergers and acquisition transactions, including merger of equal transactions,companies in the commercial banking sector; (ix)industry which we deemed to be comparable, in whole or in part, to the current market environment generallyMerger, and in(7) made inquiries regarding and discussed the commercial banking sector in particular;Merger and (x)the Merger Agreement and other matters related thereto with the Company and the Company’s counsel. In addition to the foregoing, we have conducted such other information, financial studies, analyses and investigationsexaminations and considered such other financial, economic and market criteria as we considered relevant. We also discussed with certain members of senior management of North Valley the business, financial condition, results of operations and prospects of North Valley and held similar discussions with the senior management of TriCo regarding the business, financial condition, results of operations and prospects of TriCo.deem appropriate to arrive at our opinion.

In performingarriving at our review,opinion, we have assumed and relied upon the accuracy and completeness of all of the financial and other information that was available to us from public sources, that was provided to us by North Valley and TriCo or that was otherwise reviewed by us, whether or not publicly available, and we have not assumed any

610 Newport Center Drive • Suite 330 • Newport Beach, CA 92660 • T: (949) 706-3600 • F: (949) 625-7900 • thecourtneygroup.com

FNB Bancorp

December 11, 2017

Page 2 of 2

responsibility for independent verification of any such accuracyinformation. With respect to financial projections and completeness for purposesother information provided to or reviewed by us, we have been advised by the management of preparing this letter.the Company that such projections and other information were reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to the expected future financial performance of the Company and the strategic implications and operational benefits anticipated from the Merger. We have further relied on the assurances of the senior management of North Valley and TriCothe Company that they are not awareunaware of any facts or circumstances that would make the information or projections provided to us incomplete or misleading. We have not made or been provided with any independent evaluations or appraisals of any of such information inaccuratethe assets, properties, liabilities or misleading insecurities of the Company, nor have we made any material respect.physical inspection of the properties or assets of the Company. We did not makeconduct an independent evaluation or appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise)Company’s loan portfolio for purposes of North Valley or TriCo or any of their respective subsidiaries. We did not make an independent evaluation ofassessing the adequacy of the allowance for loan losses of North Valley, TriCo orwith respect thereto and have assumed that such allowances for the combined entity afterCompany are in the Merger andaggregate adequate to cover such losses. In addition, we have we not reviewedassumed responsibility for reviewing any individual credit files

B-1


relating to North Valley or TriCo. We have assumed, with your consent, that the respective allowances for loan losses for both North Valley and TriCo are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity.

In preparing its analyses, Sandler O’Neill used publicly available earnings per share estimates and internal long-term growth rates for North Valley and TriCo, respectively. Sandler O’Neill also received and used in its analyses certain projections of transaction costs, purchase accounting adjustments, expected cost savings and other synergies which were prepared by and/or reviewed with the senior management of TriCo. With respect to these estimates and projections, the respective senior managements of North Valley and TriCo confirmed to us that those projections reflected the estimates and judgments of those respective managements of the future financial performance of North Valley and TriCo, respectively, and we assumed that such performance would be achieved. We express no opinion as to such estimates or the assumptions on which they are based. We have assumed that there has been no material change in the respective assets, financial condition, results of operations, business or prospects of North Valley and TriCo since the date of the most recent financial data made available to us, as of the date hereof. We have also assumed in all respects material to our analysis that North Valley and TriCo would remain as a going concern for all periods relevant to our analyses and that the Merger will be consummated as a tax-free reorganization under Section 368 of the Internal Revenue Code. We express no opinion as to any of the legal, accounting and tax matters relating to the Company or Trico Bancshares. The Courtney Group expresses no opinion on matters of a legal, regulatory, tax or accounting nature related to the Merger. Our opinion does not address the underlying business decision of the Company to enter into the Merger and any other transactions contemplated in connection therewith.Agreement or complete the Merger.

Our analyses and the views expressed herein are necessarilyopinion is based on financial, economic, regulatory, market and other conditions as in effect on, and the information made available to us as of, the date hereof. Events occurring after the date hereof could materially affect our views.the assumptions used in preparing this opinion. We have not undertaken to update, revise, reaffirm or withdrawrevise this letteropinion or otherwise comment upon any events occurring after the date hereof. We renderassume no opinion as toresponsibility for updating or revising this Opinion based on circumstances or events occurring after the trading values of each of North Valley’s and TriCo’s common shares at any time.date hereof.

We have acted as financial advisor to the Board of Directors of North Valley in connection with the MergerCompany and a significant portion of our fees are contingent upon the closing of the Merger. We also will receive a fee for providing this opinion. North Valley has also agreed to indemnify us against certain liabilities arising out of our engagement. Infrom the ordinary course of our business as a broker-dealer, we may purchase securities from and sell securities to North Valley and TriCo and their affiliates. We may also actively trade the securities of North Valley and TriCo or their affiliatesCompany for our own account andservices if the proposed Merger is consummated.

This opinion is for the accountsbenefit and use of our customers.

This letter is directed tothe members of the Board of Directors of North Valleythe Company in connection with its considerationtheir evaluation of the Merger and does not constitute a recommendation to any shareholderholder of North Valleythe Company Common Stock as to how such shareholderholder should vote at any meeting of shareholders calledwith respect to consider and vote upon the Merger. Our opinion is directed only to the fairness, from a financial point of view, of the Merger Consideration to the holders of North Valley common stock and does not address the underlying business decision of North Valley to engage in the Merger, the relative merits of the Merger as compared to any other alternative business strategies that might exist for North Valley or the effect of any other transaction in which North Valley might engage. This opinion shallmay not be reproduced or used for any other purposes,purpose without Sandler O’Neill’sour prior written consent, which consent will notconsent; provided, however, that this letter may be unreasonably withheld. This Opinion has been approved by Sandler O’Neill’s fairness opinion committee. We do not expressincluded in its entirety in any opinion as to the fairness of the amountproxy statement, information statement or nature of the compensationany other material required to be receiveddistributed to Company shareholders in connection with the Merger by North Valley’s officers, directors, or employees, or class of such persons, relative to the compensation to be received in the Merger by any other shareholders of North Valley.Merger.

Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Merger Consideration is fair, to the holders of North Valley common stock from a financial point of view.view, to the holders of Company Common Stock.

Very truly yours,

Sincerely,

 

B-2LOGO


The Courtney Group, LLC

THE COURTNEY GROUP, LLC

Appendix C—Opinion of Keefe, Bruyette & Woods, Inc.C

January 21, 2014

The LOGO

December 11, 2017

Board of Directors

TriCo Bancshares

63 Constitution Drive

Chico, CA 95973

Dear Members of the Board:

We have served as your financial advisor in connection with the proposed acquisition of FNB Bancorp (the “Target”) by TriCo Bancshares (the “Company”) (collectively, the “Transaction”). You have requested thethat we provide our opinion of Keefe, Bruyette & Woods, Inc. (“KBW” or “we”(the “Opinion”) as investment bankers asto whether the Transaction is fair to the fairness,Company from a financial point of view, to TriCo Bancshares (“TriCo”)view.

The terms and conditions of the Exchange Ratio (as defined below) to be usedTransaction are more fully set forth in the proposed merger of North Valley Bancorp (“North Valley”) with and into TriCo (the “Merger”), pursuant to thean Agreement and Plan of Merger and Reorganization to be entered into(the “Agreement”) by and between TriCothe Company and North Valley (the “Agreement”).FNB Bancorp. Pursuant to the termsAgreement and for purposes of our Opinion, we understand that the consideration expected to be exchanged by the Company for the outstanding common stock and options of the Agreement and subjectTarget, has an aggregate value of approximately $315 million. Pursuant to the terms and conditions set forth therein, at the Effective Time (as defined in the Agreement), by virtueAgreement, each outstanding share of the Merger and without any action on the part of the holder of any shares of North ValleyTarget’s common stock (the “North Valley Common Stock”), each share of North Valley Common Stock that is issued and outstanding immediately prior to the Effective Time (including, without duplication, the North Valley Rights (as defined below) associated with each such share of North Valley Common Stock), will be converted into the right to receive 0.9433a fixed exchange ratio of 0.980x shares of TriCothe Company’s common stock (the “TriCo Common Stock”“Exchange Ratio”) subject to a certain possible adjustments as (as defined in the Agreement). The ratio of 0.9433 shares of TriCo Common Stock for each one share of North Valley Common Stock is referred to herein asWe further understand that the “Exchange Ratio.” The terms and conditions“in the money” portion of the Merger are more fully set forth in the Agreement.

The Agreement further provides that (i) immediately upon consummationoptions of the Merger, North Valley Bank, a wholly-owned subsidiary of North Valley (“North Valley Bank”),Target will mergebe exchanged for cash.

In connection with rendering our Opinion we have:

(i)analyzed certain publicly available financial statements and reports regarding the Company and the Target;

(ii)analyzed certain audited financial statements and management reports regarding the Company and the Target;

(iii)analyzed certain internal financial statements and other financial and operating data concerning the Company and the Target prepared by management of the Company and Target, respectively;

(iv)analyzed, on a pro forma basis, the effect of the Transaction on the balance sheet, capitalization ratios, earnings and book value both in the aggregate and, where applicable, on a per share basis of the Company;

(v)reviewed the reported prices and trading activity for the common stock of the Company;

(vi)compared the financial performance of the Company and the Target with that of certain other publicly-traded companies and their securities that we deemed relevant to our analysis of the Transaction;

(vii)reviewed the financial terms, to the extent publicly available, of certain merger or acquisition transactions that we deemed relevant to our analysis of the Transaction;

(viii)reviewed the most recent draft of the Agreement and related documents provided to us by the Company;

Stephens Inc.    

    111 Center Street

    Little Rock, AR 72201    

    501-377-2000    

    800-643-9691    

    www.stephens.com

December 11, 2017

PAGE 2

(ix)discussed with management of the Company and the Target the operations of and future business prospects for the Company and the Target and the anticipated financial consequences of the Transaction to the Company and the Target;

(x)assisted in your deliberations regarding the material terms of the Transaction and your negotiations with the Target; and

(xi)performed such other analyses and provided such other services as we have deemed appropriate.

We have relied on the accuracy and into Tri Counties Bank, a wholly-owned subsidiary of TriCo (“Tri Counties Bank”) (such transaction, the “Bank Merger”) and (ii) pursuant to an amendment (the “North Valley Rights Agreement Amendment”), to be entered on or prior to the datecompleteness of the Agreement,information and financial data provided to us by the AmendedCompany and Restated Shareholder Protection Rights Agreement dated asthe Target and of March 26, 2009, as amended, between North Valley and Computershare, Inc., as Rights Agent, such agreement will expire immediately prior to the Effective Time, and certain rights to purchase shares of preferred stock of North Valley pursuant to such agreement will not,other information reviewed by us in connection with the Merger, be exercisedpreparation of our Opinion, and our Opinion is based upon such information. We have not assumed any responsibility for independent verification of the accuracy or become exercisablecompleteness of any of such information or triggered or separated fromfinancial data. Management of the shares of North Valley Common Stock to whichCompany has assured us that they are attached.

KBW has acted as financial advisor to TriCo and not as an advisor to or agentaware of any other person. relevant information that has been omitted or remains undisclosed to us. We have not assumed any responsibility for making or undertaking an independent evaluation or appraisal of any of the assets or liabilities of the Company or of the Target, and we have not been furnished with any such evaluations or appraisals; nor have we evaluated the solvency or fair value of the Company or of the Target under any laws relating to bankruptcy, insolvency or similar matters. We have not assumed any obligation to conduct any physical inspection of the properties or facilities of the Company or Target. With respect to the financial forecasts prepared by the Company, including the forecasts of potential cost savings and potential synergies, we have assumed that such financial forecasts have been reasonably prepared and reflect the best currently available estimates and judgments of the management of the Company as to the future financial performance of the Company and the Target, and that the financial results reflected by such projections will be realized as predicted. We have not received or reviewed any individual credit files nor have we made an independent evaluation of the adequacy of the allowance for loan losses of the Company or the Target. We have also assumed that the representations and warranties contained in the Agreement and all related documents are true, correct and complete in all material respects.

As part of our investment banking business, we regularly issue fairness opinions and are continually engaged in the valuation of bankcompanies and bank holding companytheir securities in connection with acquisitions,business reorganizations, private placements, negotiated underwritings, secondary distributions of listedmergers and unlisted securities, private placementsacquisitions and valuations for variousestate, corporate and other purposes. As specialistsWe are familiar with the Company and the Target. We have not received fees for providing investment banking or other services to the Company or the Target within the past two years. We serve as financial adviser to the Company in connection with the securitiesTransaction, and we are entitled to receive from the Company reimbursement of banking companies, we have experience in,our expenses and knowledgea fee for our services as financial adviser to the Company, a significant portion of which is contingent upon the consummation of the valuation of banking enterprises. InTransaction. We are also entitled to receive a fee from the ordinary course ofCompany for providing our business as a broker-dealer, we may, from timeOpinion to time purchase securities from, and sell securities to, TriCo and North Valley, and as a market maker in securities, we may from time to time have a long or short position in, and buy or sell, debt or equity securities of TriCo and North Valley for our own account and for the accounts of our customers. To the extent we have any such position as of the date of this opinion it has been disclosed to TriCo. We have acted exclusively for the Board of Directors of TriCo (the “TriCo Board”) in rendering this opinion and will receive a fee from TriCo for our services. A portion of our fee is payable upon the rendering of this opinion and a significant portion is contingent upon the successful completion of the Merger. In addition, TriCoCompany. The Company has also agreed to indemnify us for certain liabilities arising out of our engagement.

Other thanengagement, including certain liabilities that could arise out of our providing this Opinion letter. We expect to pursue future investment banking services assignments with the Company. In the ordinary course of business, Stephens Inc. and its affiliates at any time may hold long or short positions, and may trade or otherwise effect transactions as principal or for the accounts of customers, in connection with this present engagement,debt or equity securities or options on securities of the Company or of any other participant in the past two years KBW hasTransaction.

We are not provided investment bankinglegal, accounting, regulatory, or tax experts, and financial advisory services to TriCo. In the past two years, KBW has not provided investment banking and financial advisory services to North Valley. We may in the future provide investment banking and financial advisory services to TriCo or North Valley and receive compensation for such services.

C-1


In connection with this opinion, we have reviewed, analyzed and relied upon material bearing upon the financial and operating condition of TriCo and North Valley and the Merger, including among other things, the following: (i) a draft of the Agreement dated January 20, 2014 (the most recent draft made available to us); (ii) the audited financial statements and Annual Reports on Form 10-K for the three years ended December 31, 2012 and the Quarterly Filings with the Federal Reserve and/or the FDIC for the five quarters ended September 30, 2013 of TriCo and North Valley; (iii) the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2013, June 30, 2013 and September 30, 2013 of TriCo and North Valley; (iv) certain other interim reports and other communications of TriCo and North Valley to their respective stockholders; and (v) other financial information concerning the businesses and operations of TriCo and North Valley furnished to us by TriCo and North Valley or which we were otherwise directed to use for purposes of our analysis. Our consideration of financial information and other factors that we deemed appropriate under the circumstances or relevant to our analyses included, among others, the following: (i) the historical and current financial position and results of operations of TriCo and North Valley; (ii) the assets and liabilities of TriCo and North Valley; (iii) the nature and terms of certain other merger transactions and business combinations in the banking industry; (iv) a comparison of certain financial and stock market information for each of TriCo and North Valley with similar information for certain other companies the securities of which are publicly traded; (v) the publicly available consensus “street estimates” of TriCo for 2014 and 2015 and of North Valley for 2014, as well as assumed long term growth rates based thereon that were provided to us by the respective management teams of TriCo and North Valley, all of which information was discussed with us by such management teams and used and relied upon by us at the direction of such management teams with the consent of the TriCo Board; and (vi) estimates regarding certain pro forma financial effects of the Merger on TriCo that were prepared and provided to us by TriCo management. We have also performed such other studies and analyses as we considered appropriate and have taken into account our assessment of general economic, market and financial conditions and our experience in other transactions, as well as our experience in securities valuation and knowledge of the banking industry generally. We have also held discussions with senior management of TriCo and North Valley regarding the past and current business operations, regulatory relations, financial condition and future prospects of their respective companies and such other matters as we have deemed relevant to our inquiry.

In conducting our review and arriving at our opinion, we have relied uponsolely, and assumedwithout independent verification, on the accuracy and completeness of allassessments of the financialCompany and its other information provided to us or publicly available and we have not independently verified the accuracy or completeness of any such information or assumed any responsibility or liability for such verification, accuracy or completeness. We have relied upon the respective management teams of TriCo and North Valley as to the reasonableness and achievability of the financial and operating forecasts and projections of TriCo and North Valley (and the assumptions and bases therefor, including but not limited to, in the case of TriCo, any potential cost savings and operating synergies and other potential pro forma effects assumed or estimatedadvisors with respect to the Merger) that were prepared by such management teamslegal, accounting, regulatory and provided to us or that, in the case of the publicly available consensus “street estimates” of TriCo and North Valley referred to above, we were directed to use.tax matters. We have assumed, at the direction of TriCo, that all of such forecasts and projections of TriCo and North Valley reflect, or in the case of the publicly available consensus “street estimates” referred to above are consistent with, the best currently available estimates and judgments of the North Valley and TriCo management teams and that such forecasts and projections will be realized in the amounts and in the time periods currently estimated.

It is understood that the forecasts, projections and estimates of TriCo and North Valley provided to us were not prepared with the expectation of public disclosure, that all such information is based on numerous variables and assumptions that are inherently uncertain, including, without limitation, factors related to general economic and competitive conditions and that, accordingly, actual results could vary significantly from those set forth in such forecasts, projections and estimates. We have assumed, based on discussions with the respective management teams of TriCo and North Valley, that such forecasts, projections and estimates, as well as the publicly available consensus “street estimates” of TriCo and North Valley referred to above, provide a reasonable basis upon which we could form our opinion and we express no view as to any such information or the assumptions or bases therefor. We have relied on all such information without independent verification or analysis and do not in any respect assume any responsibility or liability for the accuracy or completeness thereof.

We also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either TriCo or North Valley since the date of the last financial statements of each such entity that were made available to us. We are not experts in the independent verification of the adequacy

C-2


of allowances for loan and lease losses and we have assumed, without independent verification and with your consent, that the aggregate allowancesTransaction will not result in any material adverse legal, regulatory, accounting or tax consequences for loanthe Company.

The Opinion is necessarily based upon market, economic and lease losses for TriCoother conditions as they exist and North Valley are adequatecan be evaluated on, and on the information made available to cover such losses. In rendering our opinion, we have not made or obtained any evaluations or appraisals or physical inspectionus as of the property, assets or liabilities (contingent or otherwise) of TriCo or North Valley, the collateral securing any of such assets or liabilities, or the collectability of any such assets, nor havedate hereof. It should be understood that

December 11, 2017

PAGE 3

subsequent developments may affect this Opinion and that we examined any individual loan or credit files, nor did we evaluate the solvency, financial capability or fair value of TriCo or North Valley under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. Estimates of values of companies and assets do not purporthave any obligation to be appraisalsupdate, revise or necessarily reflect the prices at which companies or assets may actually be sold. Because such estimates are inherently subject to uncertainty, we assume no responsibility or liability for their accuracy.

reaffirm this Opinion. We have assumed in all respects material to our analyses, the following: (i) that the MergerTransaction will be completed substantially in accordance withconsummated on the terms set forth inof the latest draft of the Agreement (the final terms of which will not differ in any respectprovided to us, without material to our analyses from the draft reviewed) with no additional paymentswaiver or adjustments to the Exchange Ratio; (ii) that the representations and warranties of each party in the Agreement and in all related documents and instruments referred to in the Agreement are true and correct; (iii) that each party to the Agreement and all related documents will perform all of the covenants and agreements required to be performed by such party under such documents; (iv) that there are no factors that would delay or subject to any adverse conditions, any necessary regulatory or governmental approval for the Merger and that all conditions to the completion of the Merger will be satisfied without any waivers or modifications to the Agreement; and (v)modification. We have assumed that in the course of obtaining the necessary regulatory, contractual,lending or other consents or approvals (contractual or otherwise) for the Merger,Transaction, no restrictions, including any divestiture requirements termination or other payments or amendments or modifications, will be imposed that willwould have a material adverse effect on the future results of operations or financial condition of TriCo, North Valley or the combined entity or the contemplated benefits of the Merger, includingTransaction to the cost savings, revenue enhancements and related expenses expectedCompany. We are not expressing any opinion herein as to result from the Merger. We have assumed thatprice at which the Merger will be consummated in a manner that complies with the applicable provisionscommon stock or any other securities of the Securities ActCompany will trade following the announcement of 1933,the Transaction.

This Opinion is for the use and benefit of the Board of Directors of the Company for purposes of assisting with its evaluation of the Transaction. Our Opinion does not address the merits of the underlying decision by the Company to engage in the Transaction, the merits of the Transaction as amended,compared to other alternatives potentially available to the Securities Exchange ActCompany or the relative effects of 1934, as amended, and all other applicable federal and state statutes, rules and regulations. We have further assumed that TriCo has relied uponany alternative transaction in which the advice of its counsel, independent accountants and other advisors (other than KBW) asCompany might engage, nor is it intended to all legal, financial reporting, tax, accounting and regulatory matters with respect to TriCo, North Valley, the Merger, the Bank Merger and the Agreement. KBW has not provided advice with respectbe a recommendation to any such matters.

This opinion addresses only the fairness, from a financial point of view, as of the date hereof, of the Exchange Ratio to be used in the Merger to TriCo. We express no view or opinionperson as to any terms or other aspects of the Merger, including without limitation, the form or structure of the Merger, any transactionsspecific action that mayshould be related to the Merger, any consequences of the Merger to TriCo, its stockholders, creditors or otherwise, or any terms, aspects or implications of any voting, support, stockholder or other agreements, arrangements or understandings contemplated or entered intotaken in connection with the MergerTransaction. This Opinion is not intended to confer any rights or otherwise, including without limitation the North Valley Rights Agreement Amendment. Our opinion is necessarily basedremedies upon conditionsany other person. In addition, except as they exist and can be evaluated on the date hereof and the information made available to us through the date hereof. It is understood that subsequent developments may affect the conclusion reachedexplicitly set forth in this opinionletter, you have not asked us to address, and that KBW does not have an obligation to update, revise or reaffirm this opinion. Our opinionOpinion does not address, and we express no viewthe fairness to, or opinion with respect to, (i) the underlying business decision of TriCo to engage in the Merger or enter into the Agreement, (ii) the relative meritsany other consideration of, the Mergerholders of any class of securities, creditors or other constituencies of the Company. We have not been asked to express any opinion, and do not express any opinion, as compared to any strategic alternatives that are, have been or may be available to or contemplated by TriCo or the TriCo Board, (iii) the fairness of the amount or nature of anythe compensation to any of TriCo’sthe Company’s officers, directors or employees, or to any classgroup of such persons,officers, directors or employees, relative to anythe compensation to the holders of TriCo Common Stock, (iv) the effectother stockholders of the Merger on, or the fairness of the consideration to be received by, holders of any class of securities of TriCo or North Valley or any other party to any transaction contemplated by the Agreement, (v) the Bank Merger, (vi) the actual value of TriCo Common Stock to be issued in the Merger, (vii) the prices, trading range or volume at which TriCo Common Stock or North Valley Common Stock will trade following the public announcement of the Merger or the prices, trading range or volume at which TriCo Common Stock will trade following consummation of the Merger, (viii) any advice or opinions provided by any other advisor to any of the parties to the Merger or any other transaction contemplated by the Agreement, or (ix) any legal, regulatory, accounting, tax or similar matters relating to TriCo, North Valley, their respective stockholders, or relating to or arising out of or as a consequence of the Merger, the Bank Merger or any related transaction, including whether or not the Merger would qualify as a tax-free reorganization for United States federal income tax purposes.

C-3


This opinion is for the information of, and is directed to, the TriCo Board (in its capacity as such) in connection with its consideration of the financial terms of the Merger. This opinion does not constitute a recommendation to the TriCo Board as to how it should vote on the Merger or to any holder of TriCo Common Stock or North Valley Common Stock as to how any such shareholder should vote at any shareholders’ meeting at which the Merger is considered or whether or not any such shareholder should enter into a voting, shareholders’, or affiliates’ agreement with respect to the Merger or exercise any dissenters’ or appraisal rights that may be available to such shareholder.

This opinion has been reviewed and approved by ourCompany. Our Fairness Opinion Committee has approved the Opinion set forth in conformity withthis letter. Neither this Opinion nor its substance may be disclosed by you to anyone other than your advisors without our policieswritten permission. Notwithstanding the foregoing, this Opinion letter and procedures established undera summary discussion of our underlying analyses and role as financial adviser to the requirements of Rule 5150Company may be included in communications to stockholders of the Financial Industry Regulatory Authority. This opinion may not be published, referredCompany, provided that we approve of the content of such disclosures prior to reproduced, disseminatedany filing, distribution or quoted from, in whole or in part, nor shall any public reference to KBW be made, without our prior written consent.publication of such communications.

Based uponon the foregoing and our general experience as investment bankers, and subject to the foregoing, it is ourassumptions and qualifications stated herein, we are of the opinion, that, as ofon the date hereof, that the Exchange Ratio to be used in the MergerTransaction is fair to the Company from a financial point of view, to TriCo.view.

Very truly yours,

STEPHENS INC.

Appendix D

FNB Bancorp’s Report of Independent Registered Public Accounting Firm and

Audited Consolidated Financial Statements as of December 31, 2017 and 2016,

and for the Three Years in the period ended December 31, 2017

 

Very truly yours,INDEXPage
LOGO
Keefe, Bruyette & Woods, Inc.

Report of Independent Registered Public Accounting Firm

D-3

Consolidated Balance Sheets, December 31, 2017 and 2016

D-4

Consolidated Statement of Earnings for the years ended December  31, 2017, 2016 and 2015

D-5

Consolidated Statements of Comprehensive Earnings for the years ended December 31, 2017, 2016, and 2015

D-6

Consolidated Statement of Changes in Stockholders’ Equity for the years ended December 31, 2017, 2016, and 2015

D-7

Consolidated Statements of Cash Flows for the years ended December  31, 2017, 2016 and 2015

D-8

Notes to Consolidated Financial Statements

D-10

 

C-4[This page is intentionally blank.]


Appendix D—FormReport of Shareholder Agreement - TriCoIndependent Registered Public Accounting Firm

(TRICO BANCSHARES)To the Shareholders and Board of Directors of

SHAREHOLDER AGREEMENTFNB Bancorp

This SHAREHOLDER AGREEMENT is madeOpinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of FNB Bancorp and entered intosubsidiary (the “Company”) as of January 21, 2014 byDecember 31, 2017 and between TriCo Bancshares, a California corporation (“TriCo”),2016, the related consolidated statements of earnings, comprehensive earnings, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2017, and the person signatory heretorelated notes(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidatedfinancial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Moss Adams LLP

Sacramento, California

March 13, 2018

We have served as the Company’s auditor since 2005.

FNB BANCORP AND SUBSIDIARY

Consolidated Balance Sheets

December 31, 2017 and 2016

(Dollar amounts in thousands)  2017  2016 
Assets   

Cash and due from banks

  $18,353  $15,758 

Interest-bearing time deposits with financial institutions

   130   205 

Securitiesavailable-for-sale, at fair value

   355,857   360,105 

Other equity securities

   7,567   7,206 

Loans, net of deferred loan fees and allowance for loan losses of $10,171 and $10,167 on December 31, 2017 and December 31, 2016

   829,766   782,485 

Bank premises, equipment, and leasehold improvements, net

   9,322   9,837 

Bank owned life insurance

   16,637   16,247 

Accrued interest receivable

   5,317   4,942 

Other real estate owned, net

   3,300   1,427 

Goodwill

   4,580   4,580 

Prepaid expenses

   825   856 

Other assets

   13,584   15,746 
  

 

 

  

 

 

 

Total assets

  $1,265,238  $1,219,394 
  

 

 

  

 

 

 
Liabilities and Stockholders’ Equity   

Deposits

   

Demand, noninterest bearing

  $313,435  $296,273 

Demand, interest bearing

   130,988   121,086 

Savings and money market

   467,788   487,763 

Time

   138,084   114,384 
  

 

 

  

 

 

 

Total deposits

   1,050,295   1,019,506 

Federal Home Loan Bank advances

   75,000   71,000 

Note payable

   3,750   4,350 

Accrued expenses and other liabilities

   16,913   14,224 
  

 

 

  

 

 

 

Total liabilities

   1,145,958   1,109,080 

Commitments and Contingencies (Note 12)

   

Stockholders’ equity

   

Common stock, no par value, authorized 10,000,000 shares; issued and outstanding 7,442,279 shares at December 31, 2017 and 7,280,122 shares at December 31, 2016

   85,565   84,283 

Retained earnings

   34,654   27,577 

Accumulated other comprehensive loss, net of tax

   (939  (1,546
  

 

 

  

 

 

 

Total stockholders’ equity

   119,280   110,314 
  

 

 

  

 

 

 

Total liabilities and stockholders’ equity

  $1,265,238  $1,219,394 
  

 

 

  

 

 

 

See accompanying notes to consolidated financial statements.

FNB BANCORP AND SUBSIDIARY

Consolidated Statements of Earnings

Years ended December 31, 2017, 2016 and 2015

(Dollar amounts and average shares are in thousands, except earnings per share amounts)

   2017  2016  2015 

Interest income:

    

Interest and fees on loans

  $41,956  $38,313  $33,235 

Interest and dividends on taxable securities

   5,209   4,213   3,554 

Interest ontax-exempt securities

   2,927   2,943   2,454 

Interest on deposits with other financial institutions

   126   44   39 
  

 

 

  

 

 

  

 

 

 

Total interest income

   50,218   45,513   39,282 

Interest expense:

    

Interest on deposits

   2,807   2,780   2,359 

Interest on FHLB advances

   850   67   9 

Interest on note payable

   214   222   229 
  

 

 

  

 

 

  

 

 

 

Total interest expense

   3,871   3,069   2,597 
  

 

 

  

 

 

  

 

 

 

Net interest income

   46,347   42,444   36,685 

(Recovery of) provision for loan losses

   (360  150   (305
  

 

 

  

 

 

  

 

 

 

Net interest income after provision for (recovery of) loan losses

   46,707   42,294   36,990 
  

 

 

  

 

 

  

 

 

 

Noninterest income:

    

Service charges

   2,264   2,461   2,501 

Net gain on sale ofavailable-for-sale securities

   210   438   339 

Earnings on bank-owned life insurance

   390   402   364 

Other income

   996   1,294   1,292 
  

 

 

  

 

 

  

 

 

 

Total noninterest income

   3,860   4,595   4,496 
  

 

 

  

 

 

  

 

 

 

Noninterest expense:

    

Salaries and employee benefits

   19,366   19,474   18,523 

Occupancy expense

   2,747   2,528   2,517 

Equipment expense

   1,646   1,765   1,926 

Professional fees

   1,482   1,363   1,471 

FDIC assessment

   400   600   600 

Telephone, postage, supplies

   1,267   1,199   1,074 

Advertising expense

   451   524   500 

Data processing expense

   571   657   1,076 

Low income housing expense

   472   284   283 

Surety insurance

   349   347   381 

Director expense

   288   288   288 

Other real estate owned expense (recovery)

   80   (5  4 

Other expense

   1,430   1,668   1,282 
  

 

 

  

 

 

  

 

 

 

Total noninterest expense

   30,549   30,692   29,925 
  

 

 

  

 

 

  

 

 

 

Earnings before provision for income taxes

   20,018   16,197   11,561 

Provision for income taxes

   9,307   5,696   3,364 
  

 

 

  

 

 

  

 

 

 

Net earnings

  $10,711  $10,501  $8,197 
  

 

 

  

 

 

  

 

 

 

Earnings per share available to common stockholders:

    

Basic

  $1.46  $1.45  $1.15 

Diluted

  $1.41  $1.42  $1.12 

Weighted average shares outstanding:

    

Basic

   7,361   7,233   7,113 

Diluted

   7,607   7,417   7,314 

See accompanying notes to consolidated financial statements.

FNB BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(Dollar amounts in thousands)  Years ended
December 31,
 
   2017  2016  2015 

Net earnings

  $10,711  $10,501  $8,197 
  

 

 

  

 

 

  

 

 

 

Other comprehensive income:

    

Unrealized holding gain (loss) onavailable-for-sale securities net of tax (expense) benefit of ($321), $1,966, and ($120)

   755   (2,828  173 

Reclassification adjustment for gains recognized onavailable-for-sale securities sold, net of tax benefit of ($62), ($179) and ($139)

   (148  (259  (200
  

 

 

  

 

 

  

 

 

 

Total other comprehensive earnings (loss)

   607   (3,087  (27
  

 

 

  

 

 

  

 

 

 

Total comprehensive earnings

  $11,318  $7,414  $8,170 
  

 

 

  

 

 

  

 

 

 

See accompanying notes to consolidated financial statements.

FNB BANCORP AND SUBSIDIARY

Consolidated Statement of Changes in Stockholders’ Equity

Years ended December 31, 2017, 2016 and 2015

              Accumulated    
              other    
(Shares and dollar amounts in thousands)             compre-    
              hensive    
   Common stock   Retained  earnings    
   Shares   Amount   earnings  (loss)  Total 

Balance at December 31, 2014

   6,389   $66,791   $28,729  $1,568  $97,088 

Net earnings

   —      —      8,197   —     8,197 

Other comprehensive loss

   —      —      —     (27  (27

Cash dividends declared on common stock

   —      —      (2,447  —     (2,447

Stock dividend of 5%

   324    6,663    (6,663  —     —   

Stock options exercised net of shares tendered

   100    924    —     —     924 

Stock-based compensation expense

   —      427    —     —     427 
  

 

 

   

 

 

   

 

 

  

 

 

  

 

 

 

Balance at December 31, 2015

   6,813    74,805    27,816   1,541   104,162 

Net earnings

   —      —      10,501   —     10,501 

Other comprehensive loss

   —      —      —     (3,087  (3,087

Cash dividends declared on common stock

   —      —      (2,890  —     (2,890

Stock dividend of 5%

   347    7,850    (7,850  —     —   

Stock options exercised net of shares tendered

   120    1,115    —     —     1,115 

Stock-based compensation expense

   —      513    —     —     513 
  

 

 

   

 

 

   

 

 

  

 

 

  

 

 

 

Balance at December 31, 2016

   7,280    84,283    27,577   (1,546  110,314 

Net earnings

   —      —      10,711   —     10,711 

Other comprehensive earnings

   —      —      —     607   607 

Cash dividends declared on common stock

   —      —      (3,634  —     (3,634

Stock options exercised, net of shares tendered

   162    864    —     —     864 

Stock-based compensation expense

   —      418    —     —     418 
  

 

 

   

 

 

   

 

 

  

 

 

  

 

 

 

Balance at December 31, 2017

   7,442   $85,565   $34,654  $(939 $119,280 
  

 

 

   

 

 

   

 

 

  

 

 

  

 

 

 

See accompanying notes to consolidated financial statements.

FNB BANCORP AND SUBSIDIARY

Consolidated Statements of Cash Flows

Years ended December 31, 2017, 2016 and 2015

(Dollar amounts in thousands)  2017  2016  2015 

Cash flows from operating activities:

    

Net earnings

  $10,711  $10,501  $8,197 

Adjustments to reconcile net earnings to net cash provided by operating activities:

    

Depreciation, amortization and accretion

   3,940   3,923   3,458 

Gain on sale of securitiesavailable-for-sale

   (210  (438  (339

Stock-based compensation expense

   418   513   427 

Excess tax benefit from stock option exercises

   (340  —     —   

Earnings on bank owned life insurance

   (390  (402  (364

(Recovery of) provision for loan losses

   (360  150   (305

Tax Cut and Jobs Act rate reduction

   2,987   —     —   

Deferred tax expense (benefit)

   (802  (1,150  (886

Change in net deferred loan fees

   (487  (114  (133

Increase in accrued interest receivable

   (375  (431  (473

Decrease in prepaid expense

   31   141   1,856 

Decrease in other assets

   1,514   2,155   1,852 

Increase (decrease) in accrued expenses and other liabilities

   812   583   (2,414
  

 

 

  

 

 

  

 

 

 

Net cash provided by operating activities

   17,449   15,431   10,876 
  

 

 

  

 

 

  

 

 

 

Cash flows from investing activities:

    

Proceeds from matured/called/sold securitiesavailable-for-sale

   77,210   76,979   50,247 

Purchases of securitiesavailable-for-sale

   (74,458  (115,541  (116,640

Purchases of other equity securities

   (361  (458  (300

Acquisition, net of cash paid

   —     —     (10,855

Maturities of time deposits of other banks

   75   —     2,789 

Net increase in loans

   (48,251  (59,821  (45,625

Net investment in other real estate owned

   (56  (401  (263

Purchases of bank premises, equipment, and leasehold improvements

   (432  (687  (287
  

 

 

  

 

 

  

 

 

 

Net cash used in investing activities

   (46,273  (99,929  (120,934
  

 

 

  

 

 

  

 

 

 

See accompanying notes to consolidated financial statements.

FNB BANCORP AND SUBSIDIARY

Consolidated Statements of Cash Flows

Years ended December 31, 2017, 2016 and 2015

(Dollar amounts in thousands)  2017  2016  2015 

Cash flows from financing activities:

    

Net increase in demand and savings deposits

  $7,089  $47,363  $107,422 

Net increase (decrease) in time deposits

   23,700   (11,046  (6,553

Net advances (repayment) of FHLB borrowings

   4,000   54,000   8,000 

Principal repayment on note payable

   (600  (600  (600

Cash dividends paid on common stock

   (3,634  (2,890  (1,786

Cash in lieu of franctional shares

   —     —     (13

Exercise of stock options

   864   1,115   924 
  

 

 

  

 

 

  

 

 

 

Net cash provided by financing activities

   31,419   87,942   107,394 
  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in cash and cash equivalents

   2,595   3,444   (2,664

Cash and cash equivalents at beginning of year

   15,758   12,314   14,978 
  

 

 

  

 

 

  

 

 

 

Cash and cash equivalents at end of year

  $18,353  $15,758  $12,314 
  

 

 

  

 

 

  

 

 

 

Additional cash flow information:

    

Interest paid

  $3,607  $3,059  $2,543 

Income taxes paid

   7,875   6,335   4,737 

Non-cash investing and financing activities:

    

Accrued dividends

   961   738   648 

Change in fair value ofavailable-for-sale securities, net of tax effect

   607   (3,087  (27

Loans transferred to other real estate owned

   1,817   —     —   

Stock dividend of 5%

   —     7,850   6,663 

Acquisition:

    

Fair value of assets acquired

   —     —     115,119 

Fair value of liabilities assumed

   —     —     93,619 

See accompanying notes to consolidated financial statements.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(1)The Company and Summary of Significant Accounting Policies

FNB Bancorp (the “Shareholder”“Company”) is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. The Company was incorporated under the laws of the State of California on February 28, 2001. The consolidated financial statements include the accounts of FNB Bancorp and its wholly-owned subsidiary, First National Bank of Northern California (the “Bank”). The Bank provides traditional banking services in San Mateo, San Francisco and Santa Clara Counties.

The preparation of consolidated 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 the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Actual results could differ from those estimates. The significant accounting estimates are the allowance for loan losses, the valuation of goodwill, the valuation of the allowance for deferred tax assets and fair value determinations such as OREO and impaired loans. A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows.

On December 11, 2017, the Company’s Board of Directors signed a definitive agreement to sell FNB Bancorp and its wholly owned subsidiary, First National Bank of Northern California, in an all stock transaction, to TriCo Bancshares. The details of the definitive agreement are discussed in Note 2 – The Agreement and Plan of Merger and Reorganization.

(a)Basis of Presentation

The accounting and reporting policies of the Company and its wholly-owned subsidiary are in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated.

(b)Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, amounts due from banks, and federal funds sold. Generally, federal funds are sold forone-day periods. The cash equivalents are readily convertible to known amounts of cash and present insignificant risk of changes in value due to original maturity dates of 90 days or less. Included in cash and cash equivalents are restricted balances at the Federal Reserve Bank of San Francisco which relate to a minimum cash reserve requirement of approximately $0 and $1,810,000 at December 31, 2017 and 2016, respectively.

(c)Investment Securities

Investment securities consist of U.S. Treasury securities, U.S. agency securities, obligations of states and political subdivisions, obligations of U.S. corporations, mortgage-backed securities and other securities. At the time of purchase of a security, the Company designates the security asheld-to-maturity oravailable-for-sale, based on its investment objectives, operational needs, and intent to hold. The Company classifies securities as held to maturity only if and when it has the positive intent and ability to hold the security to maturity. The Company does not purchase securities with the intent to engage in trading activity. Held to maturity securities are recorded at amortized cost, adjusted for amortization of premiums or accretion of discounts.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

The Company did not have any investments in theheld-to-maturity portfolio at December 31, 2017 or 2016. Securitiesavailable-for-sale are recorded at fair value with unrealized holding gains or losses, net of the related tax effect, reported as a separate component of stockholders’ equity until realized.

An impairment charge will be recorded if the Company has the intent to sell a security that is currently in an unrealized loss position or where the Company may be required to sell a security that is currently in an unrealized loss position. A decline in the fair value of any securityavailable-for-sale orheld-to-maturity below cost that is deemed other than temporary will cause a charge to earnings to be recorded and the corresponding establishment of a new cost basis for the security. Amortization of premiums and accretion of discounts on debt securities are included in interest income over the life of the related securityheld-to-maturity oravailable-for-sale using the effective interest method. Dividend and interest income are recognized when earned. Realized gains and losses for securities classified asavailable-for-sale andheld-to-maturity are included in earnings and are derived using the specific identification method for determining the cost of securities sold.

Investments with fair values that are less than amortized cost are considered impaired. Impairment may result from either a decline in the financial condition of the issuing entity or, in the case of fixed interest rate investments, from rising interest rates. At each consolidated financial statement date, management assesses each investment to determine if impaired investments are temporarily impaired or if the impairment is other than temporary. This assessment includes a determination of whether the Company intends to sell the security, or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit losses. For debt securities that are considered other than temporarily impaired and that the Company does not intend to sell and will not be required to sell prior to recovery of the amortized cost basis, the amount of impairment is separated into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is calculated as the difference between the security’s amortized cost basis and the present value of its expected future cash flows. The remaining difference between the security’s fair value and the present value of the future expected cash flows is deemed to be due to factors that are not credit related and is recognized in other comprehensive earnings.

(d)Derivatives

All derivatives contracts and instruments are recognized as either assets or liabilities in the consolidated balance sheet and measured at fair value. The Company did not hold any derivative contracts at December 31, 2017 or 2016.

(e)Loans

Loans are reported at the principal amount outstanding, net of deferred loan fees and the allowance for loan losses. An unearned discount on installment loans is recognized as income over the terms of the loans by the interest method. Interest on other loans is calculated by using the simple interest method on the daily balance of the principal amount outstanding. Loan fees net of certain direct costs of origination, which represent an adjustment to interest yield, are deferred and amortized over the contractual term of the loan using the interest method.

Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Accrual of interest on loans is discontinued either when reasonable doubt exists as to the full and timely collection of interest or principal when a loan becomes contractually past due by 90 days or more with respect to interest or principal. When a loan is placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Interest accruals are resumed on such loans only when they are brought

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

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.

A loan is considered impaired if, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due, according to the contractual terms of the loan agreement. An impaired loan is measured based upon the present value of future cash flows discounted at the loan’s effective rate, the loan’s observable market price, or the fair value of collateral if the loan is collateral dependent. Interest on impaired loans is recognized on a cash basis. If the measurement of the impaired loan is less than the recorded investment in the loan, an impairment is recognized by a charge to the allowance for loan losses. Large groups of smaller balance loans are collectively evaluated for impairment.

Restructured loans are loans on which concessions in terms have been granted because of the borrowers’ financial difficulties. Interest is generally accrued on such loans in accordance with the new terms, once the borrower has demonstrated a history of at least six months repayment. A loan is considered to be a troubled debt restructuring when the Company, for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that makes it easier for the debtor to make their required loan payments. The concession may take the form of a temporary reduction in the interest rate or monthly payment amount due or may extend the maturity date of the loan. Other financial concessions may be agreed to as conditions warrant. Troubled debt restructured loans are accounted for as impaired loans. For an impaired loan that has been restructured, the contractual terms of the loan agreement refer to the contractual terms specified by the original loan agreement, not the contractual terms specified by the restructuring agreement.

Loans acquired in business combinations are recorded on aloan-by-loan basis at their estimated fair value. The Company uses third party valuation specialists to determine the estimated fair value on all acquired loans. The Company acquires both performing and impaired loans (loans acquired with evidence of credit quality deterioration at the time of purchase) in its acquisitions. For acquired performing loans, any discount or premium related to fair value adjustments at the time of purchase is recognized as interest income over the estimated life of the loan using the effective yield method. Loans acquired with evidence of credit quality deterioration, at the time of purchase, are accounted for under ASC310-30Loans and Debt Securities Acquired with Deteriorated Credit Quality(“ASC310-30 Loans”). For ASC310-30 loans, the excess of cash flows expected to be collected over a loan’s carrying value is considered to be the accretable yield and is recognized as interest income over the estimated life of the loan using the effective yield method. The acquisition date estimates of accretable yield may subsequently change due to changes in management’s estimates of timing and amounts of expected cash flows.

The excess of the contractual amounts due over the cash flows expected to be collected is considered to be the nonaccretable difference. The nonaccretable difference represents the Company’s estimate of the credit losses expected to occur and is considered in determining the fair value of the loans as of the acquisition date. Subsequent to the acquisition date, any increases in expected cash flows over those expected at acquisition date in excess of fair value are adjusted through an increase to the accretable yield on a prospective basis. Any subsequent decreases in cash flows attributable to credit deterioration are recognized by recording additional provision for loan losses.

(f)Allowance for Loan Losses

The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged off against the allowance for loan losses when management believes that the collectability of the principal is unlikely. The allowance is an amount that management believes will be adequate to absorb probable losses inherent in existing loans, standby letters of credit, overdrafts, and commitments to extend credit based on

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

evaluations of collectability and prior loss experience. The evaluations take into consideration such factors as changes in the nature and volume of the portfolio, overall portfolio quality, loan concentrations, specific problem loans and current and anticipated economic conditions that may affect the borrowers’ ability to pay. While management uses these evaluations to determine the level of the allowance for loan losses, future provisions may be necessary based on changes in the factors used in the evaluations. Material estimates relating to the determination of the allowance for loan losses are particularly susceptible to significant change in the near term. Management believes that the allowance for loan losses is adequate as of December 31, 2017. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions, and our borrowers’ ability to pay. In addition, the banking regulators, as an integral part of its examination process, periodically review the Bank’s allowance for loan losses. The banking regulators may require the Bank to recognize additions to the allowance based on their judgment about information available to them at the time of their examination.

(g)Premises and Equipment

Premises and equipment are reported at cost less accumulated depreciation using the straight-line method over the estimated service lives of related assets ranging from 3 to 50 years. Leasehold improvements are amortized over the estimated lives of the respective leases or the service lives of the improvements, whichever is shorter.

(h)Impairment of long-lived assets

Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. No impairment loss was recognized in 2017 or 2016.

(i)Other Real Estate Owned

Real estate properties acquired through, or in lieu of, loan foreclosure are initially recorded at the lower of the carrying amount of the loan or fair value of the property at the date of foreclosure, less anticipated selling costs. Subsequent to foreclosure, valuations are periodically performed, and any subsequent revisions in the estimate of fair value are reported as an adjustment to the carrying value of the real estate, provided the adjusted carrying amount does not exceed the original amount at foreclosure. Revenues and expenses from operations and changes in the valuation allowance are included in other operating expenses.

The Company may make loans to facilitate the sale of foreclosed real estate. Gains and losses on financed sales are recorded in accordance with the appropriate accounting standard, taking into account the buyer’s initial and continuing investment in the property, potential subordination and transfer of ownership.

(j)Goodwill and Other Intangible Assets

Goodwill is recognized in a business acquisition transaction when the acquisition purchase price exceeds the fair value of identified tangible and intangible assets and liabilities. Goodwill is subsequently evaluated for possible impairment at least annually. If impairment is determined to exist, it is recorded in the period it is identified. The Company evaluated goodwill at December 31, 2017 and found no impairment.

Other intangible assets consist of core deposit and customer intangible assets that are initially recorded at fair value and subsequently amortized over their estimated useful lives, usually no longer than a seven year period.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(k)Cash Dividends

The Company’s ability to pay cash dividends is subject to restrictions set forth in the California General Corporation Law. Funds for payment of any cash dividends by the Company would be obtained from its investments as well as dividends and/or management fees from the Bank. The Bank’s ability to pay cash dividends is also subject to restrictions imposed under the National Bank Act and regulations promulgated by the Office of the Comptroller of the Currency.

(l)Stock Dividends and Stock Split

On March 31, 2017, the Company announced that its board of directors had declared a 3 for 2 stock split aggregating approximately 2,436,057 shares. The stock split had a record date of May 5, 2017 and a payable date of May 26, 2017. On October 28, 2016, the Company announced that its Board of Directors had declared a five percent (5%) stock dividend which resulted in approximately 231,000 shares being issued, payable to investors at the rate of one share of Common Stock for every twenty (20) shares of Common Stock owned. The stock dividend was paid on December 30, 2016. The earnings per share data for all periods presented have been adjusted for the stock split and the stock dividend. Stock splits are reflected retroactively back to the earliest period presented. However, the Consolidated Statement of Changes in Stockholders’ Equity shows the historical roll forward of stock dividends declared.

(m)Other Income

Other income includes the following major items for the year ended December 31:

(Dollar amounts in thousands)  2017   2016   2015 

Dividend income-other equity securities

  $558   $775   $651 

Rental income-other real estate owned

   152    144    144 

All other items

   286    375    497 
  

 

 

   

 

 

   

 

 

 

Total other income

  $996   $1,294   $1,292 
  

 

 

   

 

 

   

 

 

 

(n)Other Expense

Other expense includes the following major items for the year ended December 31:

(Dollar amounts in thousands)  2017   2016   2015 

Dues and memberships

  $176   $146   $125 

Real estate appraisals

   58    75    75 

Training and seminars

   99    54    66 

Amortization of deposit premium

   171    207    82 

Card based third party fees

   113    104    96 

Armored transit

   86    113    113 

Regulatory assessment

   290    269    238 

Operating losses

   100    188    97 

All other items

   337    512    390 
  

 

 

   

 

 

   

 

 

 
  $1,430   $1,668   $1,282 
  

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(o)Income Taxes

Deferred income taxes are determined using the asset and liability method. Under this method, net deferred tax assets and liabilities are recognized by applying current tax rates to temporary timing differences between the financial reporting and tax basis of existing assets and liabilities. Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. A valuation allowance is established through the provision for income taxes for any deferred tax assets where the utilization of the asset is in doubt. As changes in tax laws or rates are enacted, or as significant changes are made in financial projections, deferred tax assets and liabilities are adjusted through the provision for income taxes.

On December 22, 2017, President Donald Trump signed into law the Tax Cuts and Jobs Act of 2017 (the “Act”), which reduced the federal income tax rate from 35% to 21% beginning in 2018. Pursuant to the passage of the Act, the Company has revalued our deferred assets and liabilities in accordance with the lower federal income tax rate resulting in a reduction in our net deferred tax asset and an additional income tax expense of $2,987,000 during 2017.

The Company had no unrecognized tax benefits as of December 31, 2017, 2016 and 2015, respectively. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2017, 2016 and 2015, the Company believes that any penalties and interest that may exist are not material and the Company has not accrued for them.

At December 31, 2017, the Bank had a $1,358,000 net investment in five partnerships, which ownlow-income affordable housing projects that generate tax benefits in the form of federal and state housing tax credits. As a limited partner investor in these partnerships, the Company receives tax benefits in the form of tax deductions from partnership operating losses and federal and state income tax credits.

The federal and state income tax credits are earned over a10-year period as a result of the investment properties meeting certain criteria and are subject to recapture for noncompliance with such criteria over a15-year period.

The expected benefit resulting from thelow-income housing tax credits is recognized in the period for which the tax benefit is recognized in the Company’s consolidated tax returns. These investments are accounted for using the historical cost method less depreciation and amortization and are recorded in other assets on the balance sheet. The Company recognizes tax credits as they are allocated and amortizes the initial cost of the investments over the period that tax credits are allocated to the Company. There is no residual value for the investment at the end of the tax credit allocation period. Cash received from operations of the limited partnership or sale of the properties, if any, will be included in earnings when realized.

(p)Earnings per Share

Earnings per common share (EPS) are computed based on the weighted average number of common shares outstanding during the period. Basic EPS excludes dilution and is computed by dividing net earnings available to common stockholders by the weighted average of common shares outstanding. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The number of potential common shares included in the quarterly diluted EPS is computed using the average market price during the three months included in the reporting period under the treasury method. In years where a stock split or stock dividend occurs, all weighted average shares reported are adjusted to reflect the stock split retroactively applied to each of the periods presented. The number of potential common shares

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

included inyear-to-date diluted EPS is ayear-to-date weighted average of potential shares included in each quarterly diluted EPS computation. All common stock equivalents are anti-dilutive when a net loss occurs. A3-for-2 stock split occurred in 2017, and a 5% stock dividend was declared in both 2016 and 2015 and therefore prior per share amounts and weighted average shares outstanding have been adjusted for the stock split and stock dividends that occurred.

(Number of shares in thousands)  2017   2016   2015 

Weighted average common shares outstanding-used in computing basic earnings per share

   7,361    7,233    7,113 

Dilutive effect of stock options outstanding, using the treasury stock method

   246    184    201 
  

 

 

   

 

 

   

 

 

 

Shares used in computing diluted earnings per share

   7,607    7,417    7,314 
  

 

 

   

 

 

   

 

 

 

(q)Stock Option Plans

Measurement of the cost of stock options granted is based on the grant-date fair value of each stock option granted using the Black-Scholes valuation model. The cost is then amortized to expense on a straight-line basis over each option’s requisite service period. The amortized expense of the stock option’s fair value has been included in salaries and employee benefits expense on the consolidated statements of earnings for the three years ended December 31, 2017, 2016 and 2015. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected term of the option is based on the U. S. Treasury yield curve in effect at the time of the grant. Volatility was calculated using historical price changes on a monthly basis over the expected life of the option. The dividend yield was calculated using the annual projected cash dividends divided by the market value of the Company’s stock.

(r)Fair Values of Financial Instruments

The accounting standards provide for a fair value measurement framework that quantifies fair value estimates by the level of pricing precision. The degree of judgment utilized in measuring the fair value of assets generally correlates to the level of pricing precision. Financial instruments rarely traded or not quoted will generally have a higher degree of judgment utilized in measuring fair value. Pricing precision is impacted by a number of factors including the type of asset or liability, the availability of the asset or liability, the market demand for the asset or liability, and other conditions that were considered at the time of the valuation.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Transfers between levels of the fair values hierarchy are recognized at the actual date of the event or circumstance that caused the transfer.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(s)Bank Owned Life Insurance

The Company purchased insurance on the lives of certain executives. The policies accumulate asset values to meet future liabilities including the payment of employee benefits such as the deferred compensation plan. Changes in the cash surrender value are recorded as other noninterest income in the consolidated statements of earnings.

(t)Federal Home Loan Bank Borrowings

The Bank maintains a collateralized line of credit with the Federal Home Loan Bank (“FHLB”) of San Francisco. Under this line, the Bank may borrow on a short term or a long term (over one year) basis at the then stated interest rate. FHLB advances are recorded and carried at their historical cost. FHLB advances are not transferable and may contain prepayment penalties. In addition to the collateral pledged, the Company is required to hold prescribed amounts of FHLB stock that vary with the usage of FHLB borrowings.

(u)Comprehensive Earnings

Certain changes in assets and liabilities, such as unrealized gain and losses onavailable-for-sale securities are reported as a separate component of the equity section of the consolidated balance sheet, such items, along with net income, are components of comprehensive income.

(v)Note Payable

The Company obtained a corporate loan with a five year term, for $6,000,000, payable at $50,000 principal monthly, plus interest, and is based on the3-month LIBOR rate plus 4%.

WHEREAS, TriCo

(w)Federal Home Loan Bank Stock

Federal Home Loan Bank (FHLB) stock represents an equity interest that does not have a readily determinable fair value because its ownership is restricted and North Valleyit lacks a market (liquidity). FHLB stock is recorded at cost.

(x)Reclassifications

Certain prior year information has been reclassified to conform to current year presentation. The reclassifications had no impact on consolidated net earnings or retained earnings.

(y)Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU)2014-9,Revenue from Contracts with Customers.The core principal of ASU2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer, as well as enhanced disclosure requirements. In August 2015, the FASB issued2015-14 which deferred the effective date of ASU2014-09 to fiscal years, and interim reporting periods within those fiscal years, beginning after December 31, 2017. In March 2016, the FASB issued ASU2016-08 which clarified the revenue recognition implementation guidance on principal versus agent considerations and is effective during the same period as ASU2014-09. In April 2016, The FASB issued ASU2016-10 which clarified the revenue recognition guidance regarding the

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

identification of performance obligations and the licensing implementation and is effective during the same period as ASU2014-09. In May 2016, the FASB issued ASU2016-12 which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition. ASU2016-12 is effective during the same period as ASU2014-09.

The majority of the Company’s revenue consists of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU2014-09. The Company adopted the new standard beginning January 1, 2018. The Company completed its analysis for determining the extent ASU2014-09 will affect its noninterest income, primarily in the area of fees and service charges on deposit accounts. Based on the analysis performed, the Company did not have a California corporation (“North Valley”)material change in timing or measurement of revenues related to noninterest income. The Company will continue to evaluate the effect that this guidance will have enteredon other revenue steams within its scope, as well as changes in disclosures required by the new guidance. However, the Company does not expect this to have a material impact on the Company’s consolidated financial statements.

In January 2016 FASB issued ASU2016-01,Financial Instruments-overall (subtopic825-10) Recognition and Measurement of Financial Assets and Financial Liabilities. Before the global financial crisis that began in 2008, both the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) began a joint project to improve and to achieve convergence of their respective standards on the accounting for financial instruments. The global economic crisis further highlighted the need for improvement in the accounting models for financial instruments in today’s complex economic environment. As a result, the main objective in developing this Update is enhancing the reporting model for financial instruments to provide users of financial statements with more decision-useful information. For public business entities, the amendments in this Update address certain aspects of recognition measurement. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this Update is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2016 FASB issued ASU2016-02, Leases (Topic 842).The FASB is issuing this Update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. All leases create an asset and a liability for the lessee in accordance with FASB Concepts Statement No. 6, Elements of Financial Statements, and, therefore, recognition of those lease assets and lease liabilities represents an improvement over previous GAAP, which did not require lease assets and lease liabilities to be recognized for most leases. ASU2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Although an estimate of the impact on the new leasing standard has not yet been determined, the Company expects a significant new lease asset and related liability to be recorded on the consolidated balance sheet due to the number of branch facilities that are subject to a formal Lease agreement.

In March 2016, the FASB issued ASU2016-08,Revenue from Contracts with Customers (Topic 606); Principal versus agent considerations (reporting revenue gross versus net). The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this Update do not change the core principle of the guidance. The amendments clarify the implementation guidance on principal versus agent considerations. When another party is involved in providing goods or services to a customer, an entity is required to determine whether the nature of its promise to provide the specified good or service itself (that is, the entity is a principal) or to arrange for that good or service to be provided by the other party (that is, the entity is an agent). When (or as) an entity that is a principal satisfies a performance obligation, the entity recognizes revenue in the gross amount of consideration to which it expects

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

to be entitled in exchange for the specified good or service transferred to the customer. When (or as) an entity that is an agent satisfies a performance obligation, the entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specified good or service to be provided by the other party. ASU2016-08 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company has reviewed all our customer relationships in order to determine whether an agency relationship exists and if it does, whether the Company needed to change the way we recognize income related to these relationships. The Company does not believe the adoption of this ASU will have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASUNo. 2016-09, Compensation – Stock Compensation (Topic 718).ASU 2016-09, among other things, requires: (i) that all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement, (ii) the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur, (iii) an entity also should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period, (iv) excess tax benefits should be classified along with other income tax cash flows as an operating activity, (v) an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur, (vi) the threshold to qualify for equity classification permits withholding up to the maximum statutory tax rates in the applicable jurisdictions, and (vii) cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity.ASU 2016-09 was effective for the Company on January 1, 2017 and did not have a significant impact on the Company’s consolidated financial statements.

In June 2016 FASB issued ASU2016-13,Financial Instruments-Credit Losses (Topic 326). Measurement of Credit Losses. The amendments in this Update require a financialasset (or a group of financial assets) measured at amortized cost to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU on the Company’s consolidated financial statements.

In August 2016, FASB issued ASU2016-15,Statement of Cash Flows (Topic 230; Classification of Certain Cash Receipts and Cash Payments.This ASU update addresses eight cash flow classification issues related to: debt prepayment or debt extinguishment costs; settlement of zero coupon debt instruments; contingent consideration payments made after a business combination; proceeds from the payment of insurance claims; proceeds from the settlement of corporate owned life insurance policies, including bank owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principal. ASU2016-15 is effective for fiscal years beginning after December 15, 2017. The adoption of this Update is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2017, FASB issued ASU2017-01,Business Combinations, (Topic 805) Clarifying the Definition of a Business.The amendments are intended to provide guidance to companies in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The amendments are effective for annual and interim reporting periods after December 31, 2017. The Company has begun the process

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

to implement this guidance. The guidance, is not, however, expected to have a material impact on the Company’s financial statements.

In January 2017, FASB issued ASU2017-03,Accounting Changes and Error Corrections (Topic 250) and Investments – Equity Method and Joint Ventures (Topic 323).This ASU amends the Codification for SEC Staff Announcements made at recent Emerging Issues Task Force (EITF) meetings. The SEC staff expressed their expectations about the extent of disclosures registrant should make about the effects of the new FASB guidance as well as any amendments issued prior to adoption, or revenue (ASU2014-09), leases (ASU2016-02) and credit losses on financial instruments (ASU2106-013). In accordance with SAB Topic M, Registrants are required to disclose the effect that recently issued accounting standards will have on their financial statements when adopted in a future period. In cases where a registrant cannot reasonably estimate the impact of the adoption, then additional qualitative disclosures should be considered. The amendments are effective for annual and interim periods after December 31, 2017. The adoption of this ASU in not expected to have a material impact on the Company’s consolidated financial statements.

In January 2017, FASB issued ASU2017-04,Intangibles-Goodwill and Other (Topic 350). Simplifying the Test for Goodwill Impairment.To simplify the subsequent measurement of goodwill, the Board eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value, at the impairment testing date, of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment testing by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The Board also eliminated the requirements for any reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This Update also includes amendments to the Overview and Background Sections of the Codification (as discussed in Part II of the amendments) as part of the Board’s initiative to unify and improve the Overview and Background Sections across Topics and Subtopics. This ASU is effective for fiscal years beginning after December 15, 2019. The adoption of this Update is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2017, FASB issued ASU2017-08,Receivables – Nonrefundable Fees and Other Costs (Subtopic310-20). Premium Amortization on Purchased Callable Debt Securities.This Update was issued in order to shorten the amortization period for certain purchased callable debt securities held at a premium to the earliest call date. This amendment does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. Before this update was issued, previous generally accepted accounting principles (GAAP) allowed purchased premiums to be amortized as an adjustment of yield over the contractual life of the instrument.

Stakeholders raised concerns that current GAAP excludes certain callable debt securities from consideration of early repayment of principal even if the holder is certain that the call will be exercised.

As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. Additionally, stakeholders told the Board that there is diversity in practice (1) in

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

the amortization period for premiums of callable debt securities and (2) in how the potential for exercise of a call is factored into current impairment assessments. Stakeholders noted that generally, in the United States, callable debt securities are quoted, priced, and traded assuming a model that incorporates consideration of calls (also referred to as“yield-to-worst” pricing). For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this Update is not expected to have a material impact on the Company’s consolidated financial statements.

In May 2017, FASB issued ASU2017-09,Compensation – Stock Compensation (Topic 718). Scope of Modification Accounting.This update was issued in order to provide clarity regarding accounting for changes to terms and conditions of share-based payment awards. This amendment requires a company to account for the effects of a share based payment award modification unless (i) the fair value of the modified award is the same as the original award; (ii) the vesting of the modified award is the same as the original award; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the original award. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this Update is not expected to have a material impact on the Company’s consolidated financial statements.

In July, 2017, FASB issued ASU2017-11,Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815); (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception.This update was issued in order to provide additional clarity related to accounting for certain financial instruments that have characteristics of both liabilities and equity. In particular, this update addresses freestanding and embedded financial instruments with down round features and whether they should be treated as a liability or equity instrument. Part II of the Update addresses the accounting and disclosure requirements of mandatorily redeemable financial instruments. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this Update is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2017, FASB issued ASU2017-12,Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.This Update was issued in order to improve the financial reporting of hedging relationships and to portray the economic results of an entity’s risk management activities in a manner that is easier to understand. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this Update is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2018, FASB issued2018-02,Income Statement – Reporting Comprehensive Income (Topic 220). The Update was issued in order to allow a reclassification from accumulated other comprehensive income to retained earnings in order to eliminate the “stranded” tax effects resulting from the federal income tax rate reduction contained in the Tax Cuts and Jobs Act that was signed into law on December 22, 2017. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires the effect of a change in tax law or rates to be included in income from continuing operations is not affected. For all business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption for public business entities for which financial statements have not yet been issued is allowed. The adoption of this Update is expected to result in a reduction in retained earnings of approximately $165,000.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(2)Agreement and Plan of Merger and Reorganization

On December 11, an Agreement and Plan of Merger and Reorganization (the “Agreement”), dated as of January 21, 2014, pursuant was entered into between FNB Bancorp and TriCo Bancshares whereby FNB Bancorp agreed to which North Valley will merge (the “Merger”)be merged with and into TriCo whereuponBancshares, with TriCo as the surviving corporation in the merger. Immediately following the merger, First National Bank of Northern California will merge with and into Tri Counties Bank (“TriCo”), with TriCo as the surviving bank. The respective boards of both FNB Bancorp and TriCo Bancshares have approved the merger, but the merger must still receive shareholder and regulatory approval to proceed. Under the terms of the agreement, so long as the market price of TriCo Bancshares stays within prescribed limits, shareholders of FNB Bancorp will exchange each share of North Valley common stock (“North Valley Common Stock”)their FNB Bancorp shares for 0.98 shares of TriCo Bancshares. The upcoming FNB Bancorp shareholder meeting where shareholders of record will be asked to vote on this merger is expected to occur in April 2018 with the merger closing date expected sometime in either May or June 2018.

(3)Acquisition

FNB Bancorp acquired all of the assets and liabilities of America California Bank on September 4, 2015, using the acquisition method of accounting for cash consideration of $21,500,000, and accordingly, the operating results of the acquired entities have been included in the consolidated financial statements from the date of the acquisition. On the date of the acquisition, the fair value of the assets acquired and the liabilities assumed were as follows:

(In thousands)  America
California
Bank
September 4,
2015
 

Assets acquired:

  

Cash and due from banks, net of cash paid

  $10,855 

Loans

   92,962 

Premises and equipment, net

   62 

Bank owned life insurance

   2,971 

Goodwill

   2,739 

Core deposit intangible

   727 

Other assets

   4,803 
  

 

 

 

Total assets acquired

  $115,119 
  

 

 

 

Liabilities assumed:

  

Noninterest-bearing deposits

  $14,500 

Interest-bearing deposits

   75,626 

Other liabilities

   3,493 
  

 

 

 

Total liabilities assumed:

   93,619 
  

 

 

 

Merger consideration (all cash)

  $21,500 
  

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(In thousands)  America
California
Bank
September 4,
2015
 

Book value of net assets acquired from America California Bank

  $18,138 

Fair value adjustments:

  

Loans

   2,171 

Core deposit intangible asset

   727 

Time deposits

   (1,732

Other liabilities

   (243
  

 

 

 

Total purchase accounting adjustments

   19,061 

Deferred tax liabilities

   (300
  

 

 

 

Fair value of net assets acquired from America California Bank

  $18,761 
  

 

 

 

Merger consideration

   21,500 

Less fair value of net assets acquired

   (18,761
  

 

 

 

Goodwill

  $2,739 
  

 

 

 

As a result of this acquisition, the Company recorded $2.7 million in goodwill, which represents the excess of the total purchase price paid over the fair value of the assets acquired, net of the fair values of liabilities assumed. Goodwill reflects the expected value created through the combination of the Company and the acquired company.The entire amount of recorded goodwill in the America California Bank acquisition is expected to be deductible. In the case of the America California Bank acquisition, the Company gains greater customer relationships to the Asian community in San Francisco, we can increase the borrowing to loan customers due to higher loan borrower concentration limits, and we leverage our capital to help improve our return on equity. At December 31, 2017 and 2016, management determined that the market value of our Company exceeded our carrying value; therefore, there was no goodwill impairment. The following is a description of the methods used to determine the fair values of significant assets and liabilities at acquisition date:

Loans

As discussed in Note 1, the fair values of acquired loans are derived from the present values of the expected cash flows for Each acquired loan were projected based on contractual cash flows adjusted for expected prepayment, probability of default and expected prepayment, probability of default and expected loss given default, and principal recovery.

Prepayment rates were applied to the principal outstanding based on the type of loan acquired. Prepayments were based on a constant prepayment rate (“CPR”) applied over the life of the loan. The Company used a CPR of between 6% and 24%, depending on the characteristics of the loan acquired.

Non-credit-impaired loans with similar characteristics were grouped together and were treated in the aggregate when applying the discount rate to the expected cash flows. Aggregation factors, considered included in the type of loan and related collateral, risk classification, fixed or variable interest rate, term of loan and whether or not the loan was amortizing.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

Core Deposit Intangible

The core deposit intangible represents the estimated future benefits of acquired deposits and is recorded separately from the related deposits. The value of the core deposit intangible asset was determined using a discounted cash flow approach to arrive at the cost differentialbetween the core deposits

In thousands

  2018   2019   2020   2021   2022
and
later
   Total 

Core deposit intangible amortization

  $1   $66   $45   $29   $174   $315 

Pro Forma Results of Operations

The contribution of the acquired operations of America California Bank to our results of operation for the period September 5, 2015 to December 31, 2015 is as follows: interest income of $1,889,000, interest expense of $152,000,non-interest income of $58,000,non-interest expense of $551,018, and income before taxes of $1,244,000. These amounts include acquisition-related costs, accretion or amortization of the discount or premium on the acquired loans, amortization of the fair value markup on time deposits, and core deposit intangible amortization. America California Bank’s results of operations prior to the acquisition date are not included in our operating results for 2015.

The following table presents America California Bank’s revenue and earnings included in the Company’s consolidated statement of comprehensive income for the year ended December 31, 2015 on a pro forma basis as if the acquisition date had been December 31 in the year before the pro forma year presented. This pro forma information does not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the periods presented, nor is it indicative of the results of operations in future periods.

Pro Forma Revenue and Earnings

(in thousands)

  Revenue   Net
Earnings
 

Actual from September 5, 2015 to December 31, 2015 for America California Bank only

  $1,889   $734 

2015 supplemental pro forma of the combined entity for the year ended December 31, 2015

   42,749    9,458 

Acquisition-related expenses are recognized as incurred and continue until all systems have been converted intoand operational functions become fully integrated. The Bank incurredone-time third-party acquisition related expenses in the consolidated statement of comprehensiveearnings during 2015 as follows:

(in thousands)

  December 31,
2015
 

Data processing expense

  $515 

Occupancy expense

   342 

Surety insurance

   35 

Equipment expense

   2 
  

 

 

 

Total

  $894 
  

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(4)Restricted Cash Balance

Cash and due from banks includes balances with the Federal Reserve Bank of San Francisco (the FRB). The Bank is required to maintain specified minimum average balances with the FRB, based primarily upon the Bank’s deposit balances. As of December 31, 2017, and 2016, the Bank maintained deposits in excess of the FRB reserve requirement, which was $0 and $1,810,000, respectively.

(5)SecuritiesAvailable-for-Sale

The amortized cost and fair values of securitiesavailable-for-sale are as follows:

(Dollar amounts in thousands)  Amortized
cost
   Unrealized
gains
   Unrealized
losses
   Fair
value
 

December 31, 2017:

        

U.S. Treasury securities

  $1,989   $—     $(14  $1,975 

Obligations of U.S. government agencies

   42,247    10    (434   41,823 

Mortgage-backed securities

   121,087    421    (1,716   119,792 

Asset-backed securities

   3,734    —      (48   3,686 

Obligations of states and political subdivisions

   150,724    1,325    (946   151,103 

Corporate debt

   37,409    199    (130   37,478 
  

 

 

   

 

 

   

 

 

   

 

 

 
  $357,190   $1,955   $(3,288  $355,857 
  

 

 

   

 

 

   

 

 

   

 

 

 

December 31, 2016:

        

U.S. Treasury securities

  $977   $10   $—     $987 

Obligations of U.S. government agencies

   60,773    112    (340   60,545 

Mortgage-backed securities

   85,709    397    (1,822   84,284 

Obligations of states and political subdivisions

   151,988    1,458    (1,828   151,618 

Corporate debt

   63,277    121    (727   62,671 
  

 

 

   

 

 

   

 

 

   

 

 

 
  $362,724   $2,098   $(4,717  $360,105 
  

 

 

   

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

At December 31, 2017, there were 65 securities in an unrealized loss position for greater than 12 consecutive months, and135 securities in an unrealized loss position for under 12 months. At December 31, 2016, there were no securities in an unrealized loss position for greater than 12 consecutive months, and 227 securities in an unrealized loss position for under 12 months. Management periodically evaluates each security in an unrealized loss position to determine if the impairment is temporary or other-than-temporary. Management has determined that no investment security is other-than-temporarily impaired at December 31, 2017 and 2016. The unrealized losses are due solely to interest rate changes, and the Company does not intend to sell nor expects it will be required to sell investment securities identified with impairments resulting from interest rate declines prior to the earliest of forecasted recovery or the maturity of the underlying investment security.

December 31, 2017:

(Dollar amounts in thousands)

  Total
Fair Value
   < 12 Months
Unrealized
Losses
  Total Fair
Value
   12 Months or >
Unrealized
Losses
  Total
Fair Value
   Total
Unrealized
Losses
 

U. S. Treasury securities

  $1,975   $(14 $—     $—    $1,975   $(14

Obligations of U.S. government agencies

   22,364    (195  16,461    (236  38,825    (434

Mortgage-backed securities

   46,515    (424  38,003    (1,292  84,518    (1,716

Asset-backed securities

   3,685    (48  —      —     3,685    (48

Obligations of states and political subdivisions

   46,919    (460  15,243    (486  62,162    (946

Corporate debt

   13,255    (112  1,982    (18  15,237    (130
  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

Total

  $134,713   $(1,253 $71,689   $(2,032 $206,402   $(3,288
  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

December 31, 2016:

(Dollar amounts in thousands)

  Total
Fair Value
   < 12 Months
Unrealized
Losses
  Total Fair
Value
   12 Months or >
Unrealized
Losses
  Total
Fair Value
   Total
Unrealized
Losses
 

U. S. Treasury securities

  $—     $—    $—     $—    $—     $—   

Obligations of U.S. government agencies

   36,828    (340  —      —     36,828    (340

Mortgage-backed securities

   67,990    (1,822  —      —     67,990    (1,822

Obligations of states and political subdivisions

   84,728    (1,828  —      —     84,728    (1,828

Corporate debt

   41,012    (727  —      —     41,012    (727
  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

Total

  $230,558   $(4,717 $—     $—    $230,558   $(4,717
  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

The amortized cost and fair value of debt securities as of December 31, 2017, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the

right to call or prepay obligations with or without call or prepayment penalties.

(Dollar amounts in thousands)

  Amortized
Cost
   Fair
Value
 

Available for sale:

    

Due in one year or less

  $12,653   $12,647 

Due after one year through five years

   190,357    190,119 

Due after five years through ten years

   96,147    95,999 

Due after ten year

   58,033    57,092 
  

 

 

   

 

 

 
   $357,190   $355,857 
  

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

At December 31, 2017 and 2016, securities with an amortized cost of $131,613,000 and $116,240,000, and fair value of $130,546,000 and $115,315,000, respectively, were pledged as collateral for public deposits and for other purposes required by law.

During the years ended December 31, 2107, 2016, and 2015 there were no investment securities that were sold for a loss. The investment securities sold totaled $34,056,000, $43,647,000 and $16,017,000 resulting in a pretax gain on sale of $210,000, $438,000 and $339,000 for the twelve months ended December 31, 2017, 2016, and 2016, respectively.

The following table summarizes Other Equity Securities Outstanding:

(Dollar amounts in thousands)

Equity Securities

  December 31,
2017
   December 31,
2016
 

Federal Home Loan Bank stock

  $5,969   $5,613 

Federal Reserve Bank stock

   1,273    1,268 

Pacific Coast Bankers Bank stock

   145    145 

Texas Independent Bank stock

   176    176 

Community Bank of the Bay stock

   4    4 
  

 

 

   

 

 

 

Totals

  $7,567   $7,206 
  

 

 

   

 

 

 

These investments are carried at cost and evaluated periodically for impairment. Federal Home Loan Bank and FRB stock can be redeemed at par by the government agencies. These securities cannot be sold to other investors. Management reviews the financial statements, credit rating and other pertinent financial information of these entities to determine if impairment has occurred. So long as there is sufficient evidence to support the ability of these entities to continue to redeem their stock, management believes these securities are not impaired.

(6)Loans

Loans are summarized as follows at December 31:

(Dollar amounts in thousands)  FNB
Bancorp
Originated
   PNCI   PCI   Total
Balance
December 31,
2017
 

Commercial real estate

  $401,157   $55,835   $—     $456,992 

Real estate construction

   35,206    —      —      35,206 

Real estate multi-family

   91,642    13,496    —      105,138 

Real estate 1 to 4 family

   160,425    13,051    —      173,476 

Commercial & industrial

   52,270    3,457    —      55,727 

Consumer loans

   14,057    —      —      14,057 
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross loans

   754,757    85,839    —      840,596 

Net deferred loan fees

   (659   —      —      (659

Allowance for loan losses

   (10,171   —      —      (10,171
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loans

  $743,927   $85,839   $—     $829,766 
  

 

 

   

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(Dollar amounts in thousands)  FNB
Bancorp
Originated
   PNCI   PCI   Total
Balance
December 31,
2016
 

Commercial real estate

   351,261    68,736    1,225    421,222 

Real estate construction

   43,683    —      —      43,683 

Real estate multi-family

   90,763    15,200    —      105,963 

Real estate 1 to 4 family

   153,843    16,680    —      170,523 

Commercial & industrial

   40,140    8,734    —      48,874 

Consumer loans

   3,533    —      —      3,533 
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross loans

   683,223    109,350    1,225    793,798 

Net deferred loan fees

   (1,142   —      —      (1,146

Allowance for loan losses

   (10,167   —      —      (10,167
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loans

   671,914    109,350    1,225    782,485 
  

 

 

   

 

 

   

 

 

   

 

 

 

Note: PNCI means Purchased, Not Credit Impaired. PCI means Purchased, Credit Impaired. These designations are assigned to the purchased loans on their date of purchase. Once the loan designation has been made, each loan will retain its designation for the life of the loan.

Commercial Real Estate Loans

Commercial Real Estate loans consist of loans secured bynon-farm,non-residential properties, including, but not limited to industrial, hotel, assisted care, retail, office and mixed use buildings. Our commercial real estate loans are made primarily to investors or small businesses where our primary source of repayment is from cash flows generated by the properties, either through rent collection or business profits. The borrower’s promissory notes are secured with recorded liens on the underlying property. The borrowers would normally also be required to personally guarantee repayment of the loan. The Bank uses conservative underwriting standards in reviewing applications for credit. Generally, our borrowers have multiple sources of income, so if cash flow generated from the property declines, at least in the short term, the borrowers can normally cover these short term cash flow deficiencies from their available cash reserves. Risk of loss to the Bank is increased when there are cash flow decreases sufficiently large and for such a prolonged period of time that loan payments can no longer be made by the borrowers.

Real Estate Construction Loans

Our real estate construction loans are generally made to borrowers who are rehabilitating a building, converting a building use from one type of use to another, or developing land and building residential or commercial structures for sale or lease.

The borrower’s promissory notes are secured with recorded liens on the underlying property. The borrowers would normally also be required to personally guarantee repayment of the loan. The Bank uses conservative underwriting standards in reviewing applications for credit. Generally, our borrowers have sufficient resources to make the required construction loan payments during the construction and absorption orlease-up period.

After construction is complete, the loans are normally paid off from proceeds from the sale of the building or through a refinance to a commercial real estate loan. Risk of loss to the Bank is increased when there are material construction cost overruns, significant delays in the time to complete the project and/or there has been a material drop in the value of the projects in the marketplace since the inception of the loan.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

Real Estate – Multi-Family

Our multi-family commercial real estate loans are secured by multi-family properties located primarily in San Mateo and San Francisco Counties. These loans are made to investors where the primary source of loan repayment is from cash flows generated by the properties, through rent collections. The borrowers’ promissory notes are secured with recorded liens on the underlying properties. The borrowers would normally also be required to personally guarantee repayment of the loans. The Bank uses conservative underwriting standards in reviewing applications for credit. Generally, our borrowers have multiple sources of income, so if cash flow generated from the property declines, at least in the short term, the borrowers can normally cover these short term cash flow deficiencies from their available cash reserves. Risk of loss to the Bank is increased when there are cash flow decreases sufficiently large and for such a prolonged period of time that loan payments can no longer be made by the borrowers.

RealEstate-1 to 4 family Loans

Our residential real estate loans are generally made to borrowers who are buying or refinancing their primary personal residence or a rental property of1-4 single family residential units. The Bank uses conservative underwriting standards in reviewing applications for credit. Risk of loss to the Bank is increased when borrowers lose their primary source of income and/or property values decline significantly.

Commercial and Industrial Loans

Our commercial and industrial loans are generally made to small businesses to provide them with at least some of the working capital necessary to fund their daily business operations. These loans are generally either unsecured or secured by fixed assets, accounts receivable and/or inventory. The borrowers would normally also be required to personally guarantee repayment of the loan. The Bank uses conservative underwriting standards in reviewing applications for credit. Risk of loss to the Bank is increased when our small business customers experience a significant business downturn, incur significant financial losses, or file for relief from creditors through bankruptcy proceedings.

Consumer Loans

Our consumer and installment loans generally consist of personal loans, credit card loans, automobile loans or other loans secured by personal property. The Bank uses conservative underwriting standards in reviewing applications for credit. Risk of loss to the Bank is increased when borrowers lose their primary source of income, or file for relief from creditors through bankruptcy proceedings.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

Recorded Investment in Loans at December 31, 2017

(Dollar amounts in thousands) Commercial
Real Estate
  Real Estate
Construction
  Real
Estate
Multi
family
  Real
Estate
1 to 4
family
  Commercial
& industrial
  Consumer  Total 

Loans: Ending balance

 $456,992  $35,206  $105,138  $173,476  $55,727  $14,057  $840,596 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance: individually evaluated for impairment

 $6,350  $814  $—    $2,750  $860  $—    $10,954 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance: collectively evaluated for impairment

 $450,462  $34,392  $105,138  $170,726  $54,867  $14,057  $829,642 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Recorded Investment in Loans at December 31, 2016

(Dollar amounts in thousands) Commercial
Real Estate
  Real Estate
Construction
  Real
Estate
Multi
family
  Real
Estate
1 to 4
family
  Commercial
& industrial
  Consumer  Total 

Loans: Ending balance

 $421,222  $43,683  $105,963  $170,523  $48,874  $3,533  $793,798 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance: individually evaluated for impairment

 $10,023  $843  $—    $3,530  $1,065  $—    $15,461 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance: collectively evaluated for impairment

 $411,199  $42,840  $105,963  $166,993  $47,809  $3,533  $778,337 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Recorded Investment in Loans at December 31, 2015

(Dollar amounts in thousands) Commercial
Real Estate
  Real Estate
Construction
  Real
Estate
Multi
family
  Real
Estate
1 to 4
family
  Commercial
& industrial
  Consumer  Total 

Loans: Ending balance

 $399,993  $44,816  $63,597  $171,964  $52,033  $1,574  $733,977 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance: individually evaluated for impairment

 $11,292  $2,154  $—    $4,218  $1,782  $—    $19,446 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance: collectively evaluated for impairment

 $388,701  $42,662  $63,597  $167,746  $50,251  $1,574  $714,531 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

A summary of impaired loans, the related allowance for loan losses, average investment and income recognized on impaired loans follows. The following tables include originated and purchasednon-credit impaired loans.

Impaired Loans

As of and for the year ended December 31, 2017

(Dollar amounts in thousands)  Recorded
Investment
   Unpaid
Principal
Balance
   Related
Allowance
   Average
Recorded
Investment
   Income
Recognized
 

With no related allowance recorded

          

Commercial real estate

  $5,785   $5,785   $—     $8,317   $212 

Commercial real estate construction

   —      —      —      520    22 

Real estate multi-family

   —      —      —      764    12 

Residential- 1 to 4 family

   464    464    —      561    21 

Commercial and industrial

   115    115    —      117    7 

Consumer

   —      —      —      —      —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   6,364    6,364    —      10,279    274 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

With an allowance recorded

          

Commercial real estate

  $745   $745   $15   $2,294   $72 

Commercial real estate construction

   814    814    4    556    52 

Residential- 1 to 4 family

   2,286    2,286    318    1,503    69 

Commercial and industrial

   745    745    72    841    —   

Consumer

   —      —      —      —      —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   4,590    4,590    409    5,194    193 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

          

Commercial real estate

  $4,182   $4,182   $15   $10,611   $284 

Commercial real estate construction

   814    814    4    556    74 

Real estate multi-family

   —      —      —      764    12 

Residential- 1 to 4 family

   2,750    2,750    318    2,064    90 

Commercial and industrial

   860    860    72    958    7 

Consumer

   —      —      —      —      —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $10,954   $10,954   $409    14,953   $467 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

Impaired Loans

As of and for the year ended December 31, 2016

(Dollar amounts in thousands)  Recorded
Investment
   Unpaid
Principal
Balance
   Related
Allowance
   Average
Recorded
Investment
   Income
Recognized
 

With no related allowance recorded

          

Commercial real estate

  $8,516   $9,026   $—     $9,730   $716 

Commercial real estate construction

   843    843    —      857    53 

Residential- 1 to 4 family

   678    678    —      685    —   

Commercial and industrial

   120    120    —      322    25 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   10,157    10,667    —      11,594    794 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

With an allowance recorded

          

Commercial real estate

  $1,507   $1,507   $50   $1,528   $89 

Residential- 1 to 4 family

   2,852    2,852    442    3,202    157 

Commercial and industrial

   945    945    96    1,240    1 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   5,304    5,304    588    5,970    247 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

          

Commercial real estate

  $10,023   $10,533   $50   $11,258   $805 

Commercial real estate construction

   843    843    —      857    53 

Residential- 1 to 4 family

   3,530    3,530    442    3,887    157 

Commercial and industrial

   1,065    1,065    96    1,562    26 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $15,461   $15,971   $588   $17,564   $1,041 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Impaired Loans

As of and for the year ended December 31, 2015

(Dollar amounts in thousands)  Recorded
Investment
   Unpaid
Principal
Balance
   Related
Allowance
   Average
Recorded
Investment
   Income
Recognized
 

With no related allowance recorded

          

Commercial real estate

  $8,169   $9,271   $—     $8,379   $282 

Commercial real estate construction

   2,154    2,337    —      2,264    130 

Residential- 1 to 4 family

   457    457    —      460   $36 

Commercial and industrial

   524    524    —      731    27 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   11,304    12,589    —      11,834    475 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

With an allowance recorded

          

Commercial real estate

  $2,634   $2,638   $96   $2,664   $160 

Residential- 1 to 4 family

   3,761    3,782    479    3,786    149 

Commercial and industrial

   1,258    1,497    182    1,484    7 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   7,653    7,917    757    7,934    316 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

          

Commercial real estate

  $10,803   $11,909   $96   $11,043   $442 

Commercial real estate construction

   2,154    2,337    —      2,264    130 

Residential- 1 to 4 family

   4,218    4,239    479    4,246    185 

Commercial and industrial

   1,782    2,021    182    2,215    34 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $18,957   $20,506   $757   $19,768   $791 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

There has been no additional impairment recognized on previous credit impairment loans subsequent to acquisition. Not all impaired loans are in a nonaccrual status. The majority of the difference between impaired loans and nonaccrual loans represents loans that are restructured and performing under modified loan agreements, and where principal and interest is considered to be collectible.

The following is a summary ofnon-accrual loans outstanding as of December 31, 2107 and 2016:

   Loans on Nonaccrual Status as of 
(Dollar amounts in thousands)  December 31,
2017
   December 31,
2016
 

Commercial real estate

  $731   $5,553 

Real estate 1 to 4 family

   464    149 

Commercial & industrial

   745    945 
  

 

 

   

 

 

 

Total

  $1,940   $6,647 
  

 

 

   

 

 

 

Interest income on impaired loans of $374,000, $1,041,000 and $791,000 was recognized based upon cash payments received in 2017, 2016, and 2015, respectively. The amount of interest on impaired loans not collected in 2017, 2016 and 2015, was $6,000, $569,000 and $460,000, respectively. The cumulative amount of unpaid interest on impaired loans was $22,000, $3,973,000 and $3,405,000 at December 31, 2017, 2016 and 2015, respectively.

The following is a summary of the total outstanding principal of troubled debt restructurings as of December 31, 2017 and 2016:

   Total troubled debt restructurings outstanding at year end 
   December 31, 2017   December 31, 2016 
(dollars in thousands)  Accrual
status
   Non-
accrual
status
   Total
modifications
   Accrual
status
   Non-
accrual
status
   Total
modifications
 

Commercial real estate

  $3,451   $646    4,097   $4,466   $4,494    8,960 

Real estate construction

   —      —      —      —      —      —   

Real estate 1 to 4 family

   2,286   $464    2,750    3,381    —      3,381 

Commercial & industrial

   115    746    861    120    902    1,022 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $5,852   $1,856   $7,708   $7,967   $5,396   $13,363 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

   Modifications 
   For the Year Ended December 31, 2017 
(Dollar amounts in thousands)  Number of
Contracts
   Pre-
Modification
Outstanding
Recorded
Investment
   Post-
Modification
Outstanding
Recorded
Investment
 

Commercial real estate

   1   $646   $646 
  

 

 

   

 

 

   

 

 

 

Total

   1   $646   $646 
  

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

   Modifications
For the Year Ended December 31, 2016
 
(Dollar amounts in thousands)  Number of
Contracts
   Pre-
Modification
Outstanding
Recorded
Investment
   Post-
Modification
Outstanding
Recorded
Investment
 

Commercial real estate

           2   $3,527   $3,527 
  

 

 

   

 

 

   

 

 

 

Total

   2   $3,527   $3,527 
  

 

 

   

 

 

   

 

 

 
   Modifications
For the Year Ended December 31, 2015
 
(Dollar amounts in thousands)  Number of
Contracts
   Pre-
Modification
Outstanding
Recorded
Investment
   Post-
Modification
Outstanding
Recorded
Investment
 

Commercial real estate

   1   $472   $472 
  

 

 

   

 

 

   

 

 

 

Total

   1   $472   $472 
  

 

 

   

 

 

   

 

 

 

During the years ended December 31, 2017, 2016 and 2015, no loans defaulted within twelve months following the date of restructure. All restructurings were a modification of interest rate and/or payment. There were no principal reductions granted.

Allowance for Credit Losses

As of and For the Year Ended December 31, 2017

(Dollar amounts in thousands)  Commercial
Real estate
  Real Estate
Construction
  Real
Estate
Multi
family
   Real
Estate
1 to 4
family
  Commercial
& industrial
  Consumer  Total 

Allowance for credit losses

         

Beginning balance

  $6,392  $617  $389   $2,082  $650  $37  $10,167 

Charge-offs

   (91  —     —      —     (39  (8  (138

Recoveries

   8   —     —      175   319   —     502 

(Recovery of) / provision for loan losses

   (814  (229  1,107    (249  (490  315   (360
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance

  $5,495  $388  $1,496   $2,008  $440  $344  $10,171 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance:

         

individually evaluated for impairment

  $15  $4  $—     $318  $72  $—    $409 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance:

         

collectively evaluated for impairment

  $5,480  $384  $1,496   $1,690  $368  $344  $9,762 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

Allowance for Credit Losses

As of and For the Year Ended December 31, 2016

(Dollar amounts in thousands)  Commercial
Real estate
   Real Estate
Construction
   Real
Estate
Multi
family
   Real
Estate
1 to 4
family
  Commercial
& industrial
  Consumer  Total 

Allowance for credit losses

           

Beginning balance

  $6,059   $589   $243   $2,176  $853  $50  $9,970 

Charge-offs

   —      —      —      (36  (164  (18  (218

Recoveries

   8    —      —      53   204   —     265 

Provision for / (recovery of) loan losses

   325    28    146    (111  (243  5   150 
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance

  $6,392   $617   $389   $2,082  $650  $37  $10,167 
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance:

           

individually evaluated for impairment

  $50   $—     $—     $442  $96  $—    $588 
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance:

           

collectively evaluated for impairment

  $6,342   $617   $389   $1,640  $554  $37  $9,579 
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Allowance for Credit Losses

As of and For the Year Ended December 31, 2015

(Dollar amounts in thousands)  Commercial
Real estate
  Real Estate
Construction
  Real
Estate
Multi
family
   Real
Estate
1 to 4
family
  Commercial
& industrial
  Consumer  Total 

Allowance for credit losses

         

Beginning balance

  $5,549  $849  $206   $1,965  $1,073  $58  $9,700 

Charge-offs

   —     —     —      (45  —     (36  (81

Recoveries

   576   —     —      15   60   5   656 

(Recovery of) / provision for loan losses

   (66  (260  37    241   (280  23   (305
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance

  $6,059  $589  $243   $2,176  $853  $50  $9,970 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance:

         

individually evaluated for impairment

  $96  $—    $—     $479  $182  $—    $757 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Ending balance:

         

collectively evaluated for impairment

  $5,963  $589  $243   $1,697  $671  $50  $9,213 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

The following is a summary of the aging analysis of loans outstanding at December 31, 2017 and 2016:

Age Analysis of Past Due Loans

As of December 31, 2017

(Dollar amounts in thousands)  30-59
Days
Past
Due
   60-89
Days
Past
Due
   Over
90
Days
   Total
Past
Due
   Current   Total
Loans
 

Originated

            

Commercial real estate

  $989   $597   $—     $1,586   $399,571   $401,157 

Real estate construction

   —      —      —      —      35,206    35,206 

Real estate multi family

   —      2,348    —      2,348    89,294    91,642 

Real estate 1 to 4 family

   1,603    1,082    464    3,149    157,276    160,425 

Commercial & industrial

   69    250    745    1,064    51,206    52,270 

Consumer

   52    —      —      52    14,005    14,057 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $2,713   $4,277   $1,209   $8,199   $746,558   $754,757 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Purchased

            

Not credit impaired

            

Commercial real estate

  $—     $85   $—     $85   $55,750   $55,835 

Real estate multi-family

   —      —      —      —      13,496    13,496 

Real estate 1 to 4 family

   —      —      —      —      13,051    13,051 

Commercial & industrial

   —      —      —      —      3,457    3,457 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $—     $85   $—     $85   $85,754   $85,839 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Purchased

            

Credit impaired

            

Commercial real estate

  $—     $—     $—     $—     $—     $—   

Real estate construction

   —      —      —      —      —      —   

Real estate multi-family

   —      —      —      —      —      —   

Real estate 1 to 4 family

   —      —      —      —      —      —   

Commercial & industrial

   —      —      —      —      —      —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $—     $—     $—     $—     $—     $—   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

Age Analysis of Past Due Loans

As of December 31, 2016

(Dollar amounts in thousands)  30-59
Days
Past
Due
   60-89
Days
Past
Due
   Over
90
Days
   Total
Past
Due
   Current   Total
Loans
 

Originated

            

Commercial real estate

  $835   $2   $—     $837   $350,424   $351,261 

Real estate construction

   645    —      —      645    43,038    43,683 

Real estate multi family

   —      —      —      —      90,763    90,763 

Real estate 1 to 4 family

   1,365    61    74    1,500    152,343    153,843 

Commercial & industrial

   241    —      945    1,186    38,954    40,140 

Consumer

   —      —      —      —      3,533    3,533 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $3,086   $63   $1,019   $4,168   $679,055   $683,223 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Purchased

            

Not credit impaired

            

Commercial real estate

  $1,869   $1,909    550    4,328    64,408    68,736 

Real estate multi-family

   —      —      —      —      15,200    15,200 

Real estate 1 to 4 family

   —      —      75    75    16,605    16,680 

Commercial & industrial

   285    —      —      285    8,449    8,734 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $2,154   $1,909   $625   $4,688   $104,662   $109,350 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Purchased

            

Credit impaired

            

Commercial real estate

  $—     $—     $—     $—     $1,225   $1,225 

Real estate construction

   —      —      —      —      —      —   

Real estate multi-family

   —      —      —      —      —      —   

Real estate 1 to 4 family

   —      —      —      —      —      —   

Commercial & industrial

   —      —      —      —      —      —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $—     $—     $—     $—     $1,225   $1,225 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Risk rating system

Loans to borrowers graded as pass or pooled loans represent loans to borrowers of acceptable or better credit quality. They demonstrate sound financial positions, repayment capacity and credit history. They have an identifiable and stable source of repayment.

Special mention loans have potential weaknesses that deserve management’s attention. If left uncorrected these potential weaknesses may result in a deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. These assets are “not adversely classified” and do not expose the Bank to sufficient risk to warrant adverse classification.

Substandard loans are inadequately protected by current sound net worth, paying capacity of the borrower, or pledged collateral. Loans are normally classified as Substandard when there are unsatisfactory characteristics causing more than acceptable levels of risk. A substandard loan normally has one or more well-defined weakness that could jeopardize the repayment of the debt. For example, a) cash flow deficiency, which may jeopardize future payments; b) sale ofnon-collateral assets has become primary source of repayment; c) the borrower is bankrupt; or d) for any other reason, future repayment is dependent on court action.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

Doubtful loans represent credits with weakness inherent in the Substandard classification and where collection or liquidation in full is highly questionable. To be classified Doubtful, there must be specific pending factors which prevent the Loan Review Officer from determining the amount of loss contained in the credit. When the amount of loss can be reasonably estimated, that amount is classified as “loss” and the remainder is classified as Substandard.

The following is a summary of the credit quality indicators in the loan portfolio as of December 31, 2017 and 2016:

   Credit Quality Indicators
As of December 31, 2017
 
(Dollar amounts in thousands)  Pass   Special
mention
   Sub-
standard
   Doubtful   Total loans 

Originated

          

Commercial real estate

  $397,311   $—     $3,846   $—     $401,157 

Real estate construction

   34,392    —      814    —      35,206 

Real estate multi-family

   91,642    —      —      —      91,642 

Real estate 1 to 4 family

   159,881    —      544    —      160,425 

Commercial & industrial

   51,968    —      302    —      52,270 

Consumer loans

   14,057    —      —      —      14,057 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Totals

  $749,251   $—     $5,506   $—     $754,757 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Purchased

          

Not credit impaired

          

Commercial real estate

  $53,656   $873   $1,306   $—     $55,835 

Real estate multi-family

   13,496    —      —      —      13,496 

Real estate 1 to 4 family

   13,051    —      —      —      13,051 

Commercial & industrial

   3,457    —      —      —      3,457 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $83,660   $873   $1,306   $—     $85,839 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Purchased

          

Credit impaired

          

Commercial real estate

          $—   
          

 

 

 

Total

          $—   
          

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

   Credit Quality Indicators
As of December 31, 2016
 
(Dollar amounts in thousands)  Pass   Special
mention
   Sub-
standard
   Doubtful   Total loans 

Originated

          

Commercial real estate

  $348,785   $902   $1,574   $—     $351,261 

Real estate construction

   42,840    —      843    —      43,683 

Real estate multi-family

   90,763    —      —      —      90,763 

Real estate 1 to 4 family

   153,769    —      74    —      153,843 

Commercial & industrial

   39,752    —      384    4    40,140 

Consumer loans

   3,533    —      —      —      3,533 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Totals

  $679,442   $902   $2,875   $4   $683,223 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Purchased

          

Not credit impaired

          

Commercial real estate

  $61,705   $—     $7,031   $—     $68,736 

Real estate multi-family

   15,200    —      —      —      15,200 

Real estate 1 to 4 family

   16,605    —      75    —      16,680 

Commercial & industrial

   8,644    —      90    —      8,734 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $102,154   $—     $7,196   $—     $109,350 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Purchased

          

Credit impaired

          

Commercial real estate

          $1,225 
          

 

 

 

Total

          $1,225 
          

 

 

 

Purchased credit impaired loans are not included in the Company’s risk-rated methodology

(7)Other Real Estate Owned

A summary of the activity in the balance of foreclosed assets follows:

   Year ended December 31, 
(Dollar amounts in thousands)  2017   2016   2015 

Beginning foreclosed asset balance, net

  $1,427   $1,026   $763 

Additions/transfers from loans

   1,817    —      —   

Capitalized expenditures

   56    401    263 

Disposition/sales

   —      —      —   

Valuation adjustments

   —      —      —   
  

 

 

   

 

 

   

 

 

 

Ending foreclosed asset balance, net

  $3,300   $1,427   $1,026 
  

 

 

   

 

 

   

 

 

 

Ending valuation allowance

   —      —      —   

Ending number of foreclosed properties

   2    2    1 

Proceeds from sale of foreclosed properties

   —      —      —   

Loans to finance sale of foreclosed properties

   —      —      —   

Gain on sale of foreclosed properties

   —      —      —   

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

At December 31, 2017, there were two properties reported in other real estate owned. The first property was a commercial building located at 416 Browning Way, South San Francisco, California that had a net book balance of $1,483,000, $1,427,000 and $1,026,000 as of December 31. 2017, 2016 and 2015, respectively. This commercial property has toxic issues related to soil and water contamination related to the property’s use by previous owners. The building is fully leased on a triple net lease and the market value of the building, supported by appraisal and other market data, is significantly greater than the net book value of the property. Remediation efforts to date include, but are not limited to, removal of contaminated soil around the building down to the water table, water detoxification treatments, drilling of water monitoring wells, obtaining air samples inside the building, and engaging in ongoing discussions with the San Francisco Bay Regional Water Quality Control Board (the “Water Board”) with the stated objective of obtaining a final approved remediation plan. The Bank has engaged a soil engineering and consulting company consultant to provide cost estimates related to the finalclean-up costs that are expected to be incurred as part of any final remediation plan that would be acceptable to the Water Board. Those costs along with reimbursable costs incurred by the Water Board, are expected to total approximately $725,000, but could vary depending on the extent of final remediation requirements and the time required to complete them. The Bank developed this cost estimate based on advice from its soil engineering expert and consulting company consultant and over six years of coordinated remediation efforts with the Water Board. The second property is an elderly care facility located in Lafayette, California that was acquired in November 2017 and has a net book balance of $1,817,000.

Subsequent to December 31, 2017, the other real estate owned property located at 416 Browning Way, South San Francisco, California was sold subject to a purchase and sale agreement between the Bank and the buyer of the property. Please see Note 23 – Subsequent Event for additional information.

(8)Related Party Transactions

In the ordinary course of business, the Bank made loans and advances under lines of credit to directors, officers, and their related interests. The Bank’s policies require that all such loans be made at substantially the same terms as those prevailing at the time for comparable transactions with unrelated parties and do not involve more than normal risk or unfavorable features. The following summarizes activities of loans to such parties at December 31:

(Dollar amounts in thousands)  2017   2016 

Balance, beginning of year

  $6,397   $3,988 

Additions

   4,093    2,474 

Repayments

   (678   (65
  

 

 

   

 

 

 

Balance, end of year

  $9,812   $6,397 
  

 

 

   

 

 

 
   2017    2016 
  

 

 

   

 

 

 

Related party deposits

  $3,670   $3,316 
  

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(9)Bank Premises, Equipment, and Leasehold Improvements

Bank premises, equipment and leasehold improvements are stated at cost, less accumulated depreciation and amortization, and are summarized as follows at December 31:

(Dollar amounts in thousands)  2017   2016 

Buildings

  $10,087   $10,099 

Equipment & furniture

   8,767    8,803 

Leasehold improvements

   1,428    1,496 
  

 

 

   

 

 

 
   20,282    20,398 

Accumulated depreciation and amortization

   (15,702   (15,275
  

 

 

   

 

 

 
   4,580    5,123 

Land

   4,742    4,714 
  

 

 

   

 

 

 
  $9,322   $9,837 
  

 

 

   

 

 

 

Depreciation and amortization expense for the years ended December 31, 2017, 2016, and 2015 were $947,000, $1,051,000, and $1,098,000, respectively.

(10)Deposits

The aggregate amount of time certificates, each with a minimum denomination of $250,000 or more, was $63,678,000 and $46,553,000 at December 31, 2017 and 2016, respectively.

At December 31, 2017, the scheduled maturities of all time certificates of deposit are as follows:

(Dollar amounts in thousands)  Under
$250,000
   $250,000
or more
   Total 

Year ending December 31:

      

2018

  $47,906   $49,908   $97,814 

2019

   20,423    12,461    32,884 

2020

   4,944    1,309    6,253 

2021

   967    —      967 

2022

   166    —      166 
  

 

 

   

 

 

   

 

 

 
  $74,406   $63,678   $138,084 
  

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(11)Federal Home Loan Bank Advances

   As of December 31, 2017   As of December 31, 2016 
(Dollar amounts in thousands)  Maturity
Date
   Interest
Rate
  Amount
Outstanding
   Maturity
Date
   Interest
Rate
  Amount
Outstanding
 

FHLB Overnight Advance

     —    $—      01/03/17    0.61 $10,000 

FHLB Term Advance

     —     —      01/05/17    0.55  7,000 

FHLB Term Advance

   01/02/18    1.35  15,000    01/09/17    0.49  7,000 

FHLB Term Advance

   01/04/18    1.39  10,000    01/27/17    0.63  11,000 

FHLB Term Advance

   01/22/18    1.49  10,000    01/30/17    0.63  6,000 

FHLB Term Advance

   01/29/18    1.49  20,000    01/30/17    0.61  10,000 

FHLB Term Advance

   01/29/18    1.49  20,000    02/28/17    0.67  20,000 
     

 

 

      

 

 

 

Totals

     $75,000      $71,000 
     

 

 

      

 

 

 

At December 31, 2017, the Bank had a maximum borrowing capacity under Federal Home Loan Bank advances of $508,861,000 of which $433,861,000 was available. The Federal Home Loan Bank advances are secured by a blanket collateral agreement pledge of FHLB stock and certain other qualifying collateral, such as commercial and mortgage loans. Interest rates are at the prevailing rate when advances are made.

(12)Commitments and Contingencies

Operating Lease Commitments

The Bank leases a portion of its facilities and equipment undernon-cancelable operating leases expiring at various dates through 2024. Some of these leases provide that the Bank pay taxes, maintenance, insurance, and other occupancy expenses applicable to leased premises.

The minimum rental commitments under the operating leases as of December 31, 2017 are as follows:

(Dollars in thousands)    

2018

  $1,150 

2019

   895 

2020

   806 

2021

   806 

2022

   806 

Thereafter

   528 
  

 

 

 
  $4,991 
  

 

 

 

Total rent expense for operating leases was $1,121,000, $1,127,000 and $1,092,000, in 2017, 2016, and 2015, respectively.

Legal Commitments

The Bank is engaged in various lawsuits either as plaintiff or defendant in the ordinary course of business and, in the opinion of management, based upon the advice of counsel, the ultimate outcome of these lawsuits does not expect to have a material effect on the Bank’s financial condition or results of operations.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(13)Salary Deferral 401(k) Plan

The Company maintains a salary deferral 401(k) plan covering substantially all employees, known as the FNB Bancorp Savings Plan (the “Plan”). The Plan allows employees to make contributions to the Plan up to a maximum allowed by law, and the Company’s contribution is discretionary. Beginning in 2008, the Board approved a safe harbor election related to the Plan which requires the Company to contribute 3% of qualifying employees’ wages as a profit sharing contribution. The Bank’s accrued contribution to the Plan on the safe harbor basis for the years ended December 31, 2017, 2016, and 2015 was $366,000, $375,000, and $355,000, respectively.

(14)Salary Continuation and Deferred Compensation Plans

The Company maintains Salary Continuation Agreements for certain Executive officers. Executives participating in the Salary Continuation Plan are entitled to receive a monthly payment for a period of twenty years beginning six months after their retirement. The Company accrues the consideration setpresent value of such post-retirement benefits over the individual’s employment period. The Salary Continuation Plan expense for the years ended December 31, 2017, 2016, and 2015 was $1,838,000, $1,860,000 and $1,786,000, respectively. Accrued compensation payable under the salary continuation plan totaled $8,270,000 and $6,659,000 at December 31, 2017 and 2016, respectively. All salary continuation agreements are fully vested and accrued for as of December 31, 2017.

Beginning January 1, 2015 and for all subsequent periods the Company elected to utilize straight line service cost amortization accounting. In December 2015, the current executive officers of the Bank and the Company’s Board of Directors agreed to amend and restate the salary agreements. The effect of these agreed upon amendments and restatements was to reduce the remaining time to retirement which accelerated the vesting and increased the service cost component of the Salary Continuation Agreement expense. Expense recognition was recorded using a straight line service cost amortization method. There was no change in benefit payment amounts recorded in 2017, 2016 or 2015.

The Deferred Compensation Plan allows eligible officers to defer annually their compensation up to a maximum 80% of their base salary and 100% of their cash bonus. The officers are entitled to receive distributions upon reaching a specified age, passage of at least five years or termination of employment. As of December 31, 2017 and 2016, the related liability included in accrued expenses and other liabilities on the consolidated balance sheets was $3,031,000 and $1,790,000, respectively.

(15)Income Taxes

The provision (benefit) for income taxes for the years ended December 31, consists of the following:

(Dollar amounts in thousands)  2017   2016   2015 

Current:

      

Federal

  $4,991   $4,597   $2,929 

State

   2,131    2,249    1,321 
  

 

 

   

 

 

   

 

 

 
  $7,122   $6,846   $4,250 
  

 

 

   

 

 

   

 

 

 

Deferred:

      

Federal

  $2,782   $(808  $(158

State

   (597   (342   (728
  

 

 

   

 

 

   

 

 

 
   2,185    (1,150   (886
  

 

 

   

 

 

   

 

 

 

Total provision for taxes

  $9,307   $5,696   $3,364 
  

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

The reason for the differences between the statutory federal income tax rate and the effective tax rates for the years ending December 31, are summarized as follows:

       2017          2016          2015     

Statutory rates

   35.0  35.0  34.0

Increase (decrease) resulting from:

    

Tax exempt Income for federal purposes

   -5.1  -7.1  -8.2

State taxes on income, net of federal benefit

   5.0  7.8  3.4

Benefits from low income housing credits

   -1.3  -1.6  -2.3

Stock based compensation

   -0.9  1.7  2.0

Tax Cut and Jobs Act rate reduction

   14.9  —    —  

Other, net

   -0.6  -0.6  0.2
  

 

 

  

 

 

  

 

 

 

Effective tax rate

   47.0  35.2  29.1
  

 

 

  

 

 

  

 

 

 

The tax effects of temporary differences giving rise to the Company’s net deferred tax asset are as follows:

   December 31, 
(Dollar amounts in thousands)  2017   2016   2015 

Deferred tax assets

      

Allowance for loan losses

  $3,295   $4,661   $4,470 

Accrued salaries and officers compensation

   3,130    3,717    2,770 

Expenses accrued on books, not yet deductible in tax return

   1,236    1,908    1,766 

Depreciation

   254    388    399 

Net operating loss carryforward

   824    1,069    1,335 

Acquisition accounting differences

   141    325    —   

Unrealized depreciation onavailable-for-sale securities

   394    1,074    —   
  

 

 

   

 

 

   

 

 

 
   9,274    13,142    10,740 
  

 

 

   

 

 

   

 

 

 

Deferred tax liabilities

      

Unrealized appreciation onavailable-for-sale securities

  $—     $—     $1,075 

State income taxes

   713    1,156    1,070 

Core deposit intangible

   109    236    323 

Expenses and credits deducted on tax return, not on books

   314    933    754 
  

 

 

   

 

 

   

 

 

 

Total deferred tax liabilities

   1,136    2,325    3,222 
  

 

 

   

 

 

   

 

 

 

Net deferred tax assets (included in other assets)

  $8,138   $10,817   $7,518 
  

 

 

   

 

 

   

 

 

 

As of December 31, 2017, management believes that it is more likely than not that the deferred tax assets will be realized through recovery of taxes previously paid and/or future taxable income. In assessing the Company’s ability to realize the tax benefits of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the recorded benefits of these deductible differences.

On December 22, 2017, President Donald Trump signed into law the Tax Cuts and Jobs Act (the “Act”), which among other things reduced the federal corporate income tax rate to 21% effective January 1, 2018. As a result, the Company has concluded that this Act caused a reduction in the net deferred tax asset and an increase in the income tax expense of the Company of approximately $3 million, as of December 31, 2017, due to the revaluation of the Company’s net timing differences at the lower statutory income tax rate.

(16)Financial Instruments

The Bank is a party to financial instruments withoff-balance-sheet risk in the normal course of business. These financial instruments include commitments to extend credit in the form of loans or through standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the balance sheet. The Bank’s exposure to credit loss is represented by the contractual amount of those instruments and is usually limited to amounts funded or drawn. The contract or notional amounts of these agreements, which are not included in the balance sheets, are an indicator of the Bank’s credit exposure. Commitments to extend credit generally carry variable interest rates and are subject to the same credit standards used in the lending process foron-balance-sheet instruments. Additionally, the Bank periodically reassesses the customer’s creditworthiness through ongoing credit reviews. The Bank generally requires collateral or other security to support commitments to extend credit. The following table provides summary information on financial instruments whose contract amounts represent credit risk as of December 31:

(Dollars amounts in thousands)  December 31 
  2017   2016 

Financial instruments whose contract amounts represent credit risk:

    

Lines of credit

  $131,737   $103,316 

Other Commercial Commitments:

    

Undisbursed loan commitments

   45,718    59,249 

Mastercard/Visa lines

   5,754    5,696 

Standby Letters of credit

   5,286    4,995 
  

 

 

   

 

 

 
  $188,495   $173,256 
  

 

 

   

 

 

 

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on acase-by-case basis, following normal lending policies. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial and residential properties. Equity reserves and unused credit card lines are additional commitments to extend credit. Many of these customers are not expected to draw down their total lines of credit, and therefore, the total contract amount of these lines does not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued by the Bank to

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

The Bank issues both financial and performance standby letters of credit. The financial standby letters of credit are primarily to guarantee payment to third parties. As of December 31, 2017, there were financial standby letters of credit of $5,274,000 issued. The performance standby letters of credit are typically issued to municipalities as specific performance bonds.

As of December 31, 2017 there were performance letters of credit of $12,000,000 issued. The terms of the guarantees will expire in 2018. The Bank has experienced no draws on these letters of credit and does not expect to in the future. However, should a triggering event occur, the Bank either has collateral in excess of the letters of credit or embedded agreements of recourse from the customer.

(17)Fair Value Measurements

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016. Management has also described the fair value techniques used by the Company to determine such fair value. During 2017 and 2016 there were no transfers of assets and liabilities that are valued using different valuation technologies.

Fair values established foravailable-for-sale investment securities are based on estimates of fair values quoted for similar types of securities with similar maturities, risk and yield characteristics. The following tables present the recorded amount of assets measured at fair value on a recurring basis:

(Dollar amounts in thousands)      Fair Value Measurements
at December 31, 2017, Using
 
  Fair Value
12/31/2017
   Quoted Prices
in Active
Markets
for Identical
Assets
(Level 1)
   Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 

Description

        

U. S. Treasury securities

  $1,975   $1,975   $—     $—   

Obligations of U.S. Government agencies

   41,823    —      41,823    —   

Mortgage-backed securities

   119,792    —      119,792    —   

Asset-backed securities

   3,686    —      3,686    —   

Obligations of states and political subdivisions

   151,103    —      151,103    —   

Corporate debt

   37,478    —      37,478    —   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets measured at fair value

  $355,857   $1,975   $353,882   $—   
  

 

 

   

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(Dollar amounts in thousands)      Fair Value Measurements
at December 31, 2016, Using
 
  Fair Value
12/31/2016
   Quoted Prices
in Active
Markets
for Identical
Assets
(Level 1)
   Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 

Description

        

U. S. Treasury securities

  $987   $987   $—     $—   

Obligations of U.S. Government agencies

   60,545    —      60,545    —   

Mortgage-backed securities

   84,284    —      84,284    —   

Obligations of states and political subdivisions

   151,618    —      151,618    —   

Corporate debt

   62,671    —      62,671    —   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets measured at fair value

  $360,105   $987   $359,118   $—   
  

 

 

   

 

 

   

 

 

   

 

 

 

The following tables present the recorded amounts of assets measured at fair value on anon-recurring basis:

(Dollar amounts in thousands)      Fair Value Measurements
at December 31, 2017, Using
 
  Fair Value
12/31/2017
   Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
   Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 

Description

        

Impaired loans:

        

Commercial real estate

  $745   $—     $—     $745 

Commercial real estate construction

   814    —      —      814 

Residential-1 to 4 family

   2,286    —      —      2,286 

Commercial and industrial

   745    —      —      745 

Other real estate owned

   3,300    —      —      3,300 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total impaired assets measured at fair value

  $7,890   $—     $—     $7,890 
  

 

 

   

 

 

   

 

 

   

 

 

 

(Dollar amounts in thousands)      Fair Value Measurements
at December 31, 2016, Using
 
  Fair Value
12/31/2016
   Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
   Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 

Description

        

Impaired loans:

        

Commercial real estate

  $—     $—     $—     $—   

Residential-1 to 4 family

   67    —      —      67 

Commercial and industrial

   815    —      —      815 

Other real estate owned

   1,427    —      —      1,427 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total impaired assets measured at fair value

  $2,309   $—     $—     $2,309 
  

 

 

   

 

 

   

 

 

   

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

The following methods and assumptions were used by the Company in estimating the fair value disclosures for financial instruments that are not carried at fair value on either a recurring ornon-recurring basis:

Cash and Cash Equivalents including Interest Bearing Time Deposits with Financial Institutions.

The carrying amounts reported in the balance sheet for cash and short-term instruments are a reasonable estimate of fair value, which will approximate their historical cost.

SecuritiesAvailable-for-Sale.

Fair values for investment securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Loans.

For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. For fixed rate loans, fair values are based on discounted cash flows, credit risk factors, and liquidity factors.

Other equity securities.

These are mostly Federal Reserve Bank stock and Federal Home Loan Bank stock, carried in other assets on the consolidated balance sheet. These securities can only be issued and redeemed at par by the issuing entities. They cannot be sold in in open market transactions. Fair value is estimated to be carrying value.

Deposit liabilities.

The fair values disclosed for demand deposits (e.g., interest andnon-interest checking, savings, and money market accounts) are, by definition, equal to the amount payable on demand at reporting date (i.e., their carrying amounts). The fair values for fixed-rate certificates of deposit are based on discounted cash flows.

Federal Home Loan Bank Advances.

The fair values of Federal Home Loan Bank Advances are based on discounted cash flows. The discount rate is equal to the market currently offered on similar products.

Note payable.

Fair value is equal to the current balance. They represent a corporate loan with a monthly variable rate, based on the3-month LIBOR rate plus 4%.

Accrued Interest Receivable and Payable.

The interest receivable and payable balances approximate their fair value due to the short-term nature of their settlement dates.

Undisbursed loan commitments, lines of credit, Mastercard line and standby letters of credit.

The fair value of theseoff-balance sheet items are based on discounted cash flows of expected fundings.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

The Company has excludednon-financial assets andnon-financial liabilities defined by the Codification (ASC820-10-15-A), such as Company premises and equipment, deferred taxes and other liabilities. In addition, the Company has not disclosed the fair value of financial instruments specifically excluded from disclosure requirements of the Financial Instruments Topic of the Codification (ASC825-10-50-8), such as Bank-owned life insurance policies.

The following table provides summary information on the estimated fair value of financial instruments at December 31, 2017 and 2016:

December 31, 2017  Carrying
amount
   Fair
value
   Fair value measurements 
(Dollar amounts in thousands)      Level 1   Level 2   Level 3 

Financial assets:

          

Cash and cash equivalents

  $18,353   $18,353   $18,353   $—     $—   

Interest-bearing time deposits with financial institutions

   130    130    —      130    —   

Securities available for sale

   355,857    355,857    1,975    353,882    —   

Loans

   829,766    811,382    —      —      811,382 

Other equity securities

   7,567    7,567    —      —      7,567 

Accrued interest receivable

   5,317    5,317    5,317    —      —   

Financial liabilities:

          

Deposits

   1,050,295    1,050,858    912,211    138,647    —   

Federal Home Loan Bank advances

   75,000    75,000    —      75,000    —   

Note payable

   3,750    3,750    —      3,750    —   

Accrued interest payable

   510    510    510    —      —   

Off-balance-sheet liabilities:

          

Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit

   —      1,884    —      —      1,884 

December 31, 2016  Carrying
amount
   Fair
value
   Fair value measurements 
(Dollar amounts in thousands)      Level 1   Level 2   Level 3 

Financial assets:

          

Cash and cash equivalents

  $15,758   $15,758   $15,758   $—     $—   

Interest-bearing time deposits with financial institutions

   205    205    —      205    —   

Securities available for sale

   360,105    360,105    987    359,118    —   

Loans

   782,485    769,661    —      —     $769,661 

Other equity securities

   7,206    7,206    —      —      7,206 

Accrued interest receivable

   4,942    4,942    4,942    —      —   

Financial liabilities:

          

Deposits

   1,019,506    1,020,088    951,743    68,345    —   

Federal Home Loan Bank advances

   71,000    71,000    —      71,000    —   

Note payable

   4,350    4,350    —      4,350    —   

Accrued interest payable

   246    246    246    —      —   

Off-balance-sheet liabilities:

          

Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit

   —      1,733    —      —      1,733 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(18)Significant Group Concentrations of Credit Risk

Most of the Bank’s business activity is with customers located within San Mateo and San Francisco counties. Generally, loans are secured by assets of the borrowers. Loans are expected to be repaid from cash flows or proceeds from the sale of selected assets of the borrowers. The Bank does not have significant concentrations of loans to any one industry, but does have loan concentrations in commercial real estate loans that are considered high by regulatory standards. The Bank has mitigated this concentration to a large extent by utilizing underwriting standards that are more conservative than regulatory guidelines, and performing stress testing on this segment of the portfolio to insure that the commercial real estate loan portfolio will perform within management expectations given an additional downturn in commercial lease rates and commercial real estate valuations. The distribution of commitments to extend credit approximates the distribution of loans outstanding. Commercial and standby letters of credit were granted primarily to commercial borrowers. The contractual amounts of credit-related financial instruments such as commitments to extend credit, credit-card arrangements, and letters of credit represent the amounts of potential accounting loss should the contract be fully drawn upon, the customer default, and the value of any existing collateral become worthless.

(19)Regulatory matters

The Company, as a bank holding company, is subject to regulation by the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended. The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities and certain off balance-sheet items as calculated under regulatory accounting practices.

The capital amounts and classification are also subject to qualitative judgments by the regulators about asset groupings, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the Agreement;table below) of total, Tier 1 common equity and

WHEREAS, Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of leverage capital (as defined) to average assets (as defined). Management believes, as a condition to its willingness to enter intoof December 31, 2017, that the Agreement, TriCo has required that each director of North Valley, solely in his or her capacity as a shareholder and beneficial owner or record holder of North Valley Common Stock, enter into,Company and the Shareholder has agreed to enter into, this Shareholder Agreement.Bank have met all regulatory capital requirements.

NOW, THEREFORE, in considerationAs of December 31, 2017, the foregoing, for good and valuable consideration,most recent notification from the parties hereby agreeregulatory agencies categorized the Bank as follows:

1.Representations and Warranties of the Shareholder. The Shareholder hereby represents and warrants to TriCo as follows:

(a)Authority; No Violation. The Shareholder has all necessary power and authority to enter into and perform all of the Shareholder’s obligations hereunder. The execution, delivery and performance of this Shareholder Agreement by the Shareholder will not violate any other agreement to which the Shareholder is a party, including any voting agreement, shareholders’ agreement, trust agreement or voting trust. This Shareholder Agreement has been duly and validly executed and delivered by the Shareholder (and the Shareholder’s spouse, if the Shares (as defined below) constitute community property) and constitutes a valid and binding agreement of the Shareholder and such spouse, enforceable against the Shareholder and the Shareholder’s spouse in accordance with its terms.

(b)Ownership of Shares. The Shareholder is the beneficial owner or record holder of the number of shares of North Valley Common Stock indicatedwell capitalized under the Shareholder’s name onregulatory framework for prompt corrective action. To be categorized as well capitalized the signature page hereto (the “Existing Shares”,Bank must maintain minimum total risk-based, Tier 1 risk-based, and together with any shares of North Valley Common Stock acquired by the Shareholder after the date hereof, the “Shares”) and, as of the date hereof, the Existing Shares constitute all the shares of North Valley Common Stock owned of record or beneficially by the Shareholder. With respect to the Existing Shares, subject to applicable community property laws, the Shareholder has sole voting power and sole power to issue instructions with respect to the matters set forth in Section 2 hereof, sole power of disposition, sole power to demand appraisal rights and sole power to engage in actions set forth in Section 2 hereof, with no restrictions on the voting rights, rights of disposition or otherwise, subject to applicable laws and the terms of this Agreement.

2. Voting Agreement and Agreement Not to Transfer.

(a) The Shareholder hereby agrees to vote all of the Shares held by the Shareholder (i) in favor of the Merger, the Agreement and the transactions contemplated by the Agreement; (ii) against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of North Valley under the Agreement; and (iii) except with the prior written consent of TriCo or as otherwise contemplated in the Agreement, against the following actions (other than the Merger and the transactions contemplated by the Agreement): (A) any extraordinary corporate transactions, such as a merger,

D-1


consolidation or other business combination involving North Valley; (B) any sale, lease or transfer of a material amount of the assets of North Valley; (C) any change in the majority of the board of North Valley; (D) any material change in the present capitalization of North Valley; (E) any amendment of North Valley’s Articles of Incorporation; (F) any other material change in North Valley’s corporate structure or business; or (G) any other action which is intended, or could reasonably be expected to, impede, interfere with, delay, postpone, discourage or materially adversely affect the Merger. The Shareholder shall not enter into any agreement or understanding with any person or entity prior to the Termination Date (as defined below) to vote or give instructions after the Termination Date in any manner inconsistent with clauses (i), (ii) or (iii) of the preceding sentence.

(b) Until the earlier of the termination of this Agreement or the Effective Time, the Shareholder will not, directly or indirectly: sell, transfer, exchange, pledge, assign, hypothecate, encumber, tender or otherwise dispose of (collectively, a “Transfer”), or enforce or permit execution of the provisions of any redemption, share purchase or sale, recapitalization or other agreement with North Valley or any other Person or enter into any contract, option or other agreement, arrangement or understanding with respect to the Transfer of, directly or indirectly, any of the Shares or any securities convertible into or exercisable for Shares, any other capital stock of North Valley or any interest in any of the foregoing with any Person; enter into swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Shares; solicit, initiate, or encourage, any inquiries or the making of any proposal or offer with respect to any Acquisition Proposal; take any action that would make any of the Shareholder’s representations or warranties contained herein untrue or incorrect in any material respect or have the effect of preventing or disabling the Shareholder from performing the Shareholder’s obligations under this Agreement;provided however, this Agreement shall not prohibit the Shareholder from transferring and delivering Shares to North Valley to effect the exercise of an option to purchase North Valley Common Stock or cancellation of Shares in exchange for cashTier 1 leverage ratios as set forth in the Agreement.table. There are no conditions or events since that notification that management believes have changed the Bank’s categories.

3.Cooperation.

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

The Shareholder agrees that he/she will not directly or indirectly solicit any inquiries or proposals from any person relating to any proposal or transaction for the dispositionconsolidated actual capital amounts and ratios of the business or assets of North Valley or any of its subsidiaries, orCompany and the acquisition of voting securities of North Valley or any subsidiary of North Valley or any business combination between North Valley or any subsidiary of North Valley and any Person other than TriCo.

4.Shareholder Capacity. The Shareholder is entering this Shareholder Agreement in his or her capacity as the record or beneficial owner of the Shareholder’s Shares, and not in his or her capacity as a director of North Valley or as a trustee of any North Valley benefit plan. Nothing in this Shareholder Agreement shall be deemed in any manner to limit the discretion of the Shareholder to take any action, or fail to take any action, in his or her capacity as a director of North Valley or as a trustee of any North Valley benefit plan, that may be required of the ShareholderBank are presented in the exercise of his or her fiduciary duties and responsibilities as a director of North Valley or as a trustee of any North Valley benefit plan.

5. Termination. The obligations of the Shareholder shall terminate upon the earlier of (a) the consummation of the Merger or (b) if the Merger is not consummated, upon the termination of the Agreement (the “Termination Date”).

6.Specific Performance. The Shareholder acknowledges that damages would be an inadequate remedy to TriCo for an actual or prospective breach of this Agreement and that the obligations of the Shareholder hereto shall be specifically enforceable.

7.Miscellaneous.

(a) Definitional Matters.

(i) All capitalized terms used but not defined in this Shareholder Agreement shall have the respective meanings that the Agreement ascribes to such terms.

(ii) The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Shareholder Agreement.

following table:

 

D-2


(b)Entire Agreement. This Shareholder Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.

(c)Parties in Interest. This Shareholder Agreement shall be binding upon and inure solely to the benefit of each party hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Nothing in this Shareholder Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Shareholder Agreement.

(d)Certain Events. Shareholder agrees that this Shareholder Agreement and the obligations hereunder shall attach to the Shares owned by Shareholder and shall be binding upon any Person to which legal ownership of such Shares shall pass, whether by operation of law or otherwise, including, without limitation, the Shareholder’s heirs, executors, guardians, administrators, trustees or successors. Notwithstanding any Transfer of such Shares by a Shareholder, the Shareholder or, as applicable, the Shareholder’s heirs, executors, guardians, administrators, trustees or successors, shall remain liable for the performance of all obligations under this Agreement.

(e)Assignment. This Shareholder Agreement shall not be assigned without the prior written consent of the other party hereto, and any purported assignment without such consent shall be null and void.

(f)Modifications. This Shareholder Agreement shall not be amended, altered or modified in any manner whatsoever, except by a written instrument executed by the parties hereto.

(g)Governing Law. This Shareholder Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the state of California, without regard to the conflict of laws rules thereof. The state or federal courts located within the state of California shall have exclusive jurisdiction over any and all disputes between the parties hereto, whether in law or equity, arising out of or relating to this Agreement and the agreements, instruments and documents contemplated hereby and the parties consent to and agree to submit to the jurisdiction of such courts. Each of the parties hereby waives and agrees not to assert in any such dispute, to the fullest extent permitted by applicable law, any claim that (i) such party is not personally subject to the jurisdiction of such courts, (ii) such party and such party’s property is immune from any legal process issued by such courts or (iii) any litigation or other proceeding commenced in such courts is brought in an inconvenient forum. The parties hereby agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 7(k), or in other manner as may be permitted by law, shall be valid and sufficient service thereof and hereby waive any objections to service accomplished in the manner herein provided.

(h)Reliance on Counsel and Other Advisors. The Shareholder has consulted with such legal, financial, technical or other experts as the Shareholder deems necessary or desirable before entering into this Agreement.

(i)Validity. The invalidity or unenforceability of any provision of this Shareholder Agreement shall not affect the validity or enforceability of any other provision of this Shareholder Agreement, each of which shall remain in full force and effect.

(j)Counterparts. This Shareholder Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

D-3


(k)Notices. Any notices or other communications required or permitted hereunder shall be in writing and shall be deemed duly given upon (i) transmitter’s confirmation of a receipt of a facsimile transmission, (ii) confirmed delivery by a standard overnight carrier or (iii) the expiration of five business days after the day when mailed by certified or registered mail, postage prepaid, addressed at the following addresses (or at such other address as the parties hereto shall specify by like notice):

If to TriCo, to:

TriCo Bancshares

63 Constitution Drive

Chico, California 95973

Attn.:    Richard P. Smith

President and Chief Executive Officer

Facsimile Number: (530) 898-0388

with a copy to:

Bingham McCutchen LLP

Three Embarcadero Center

San Francisco, CA 94111

Attn.:    David J. Gershon, Esq.

Facsimile Number: (415) 393-2286

If to the Shareholder, to the address noted on the signature page hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Shareholder Agreement as of the date first above written.

TRICO BANCSHARES
By:

Richard P. Smith
President and Chief Executive Officer
dollars in thousands            Required for Capital
Adequacy Purposes
Effective January 1, 2017
   To beWell-Capitalized
Under Prompt Correction
Action Regulations
 
   At December 31, 2017                   

Regulatory Capital Ratios

  Amount   Ratio         Amount           Ratio           Amount           Ratio     

Leverage Ratio(1)

            

Company

  $115,364    9.09 ³  $50,768    4.00%(2)    N/A    N/A 

Bank

   117,180    9.23 ³   50,768    4.00%(2)    63,460    5.00

Tier 1 Common Equity Capital Ratio

            

Company

   115,364    11.57 ³   57,342    5.75%(2)    N/A    N/A 

Bank

   117,180    11.75 ³   57,342    5.75%(2)    64,822    6.50

Tier 1 Capital Ratio

            

Company

   115,364    11.57 ³   72,301    7.25%(2)    N/A    N/A 

Bank

   117,180    11.75 ³   72,301    7.25%(2)    79,781    8.00

Total Capital Ratio

            

Company

   125,712    12.61 ³   92,246    9.25%(2)    N/A    N/A 

Bank

   127,528    12.79 ³   92,246    9.25%(2)    99,726    10.00

 

(1)
SHAREHOLDER:

Name:

The leverage ratio consists of Tier 1 Capital divided by the most recent quarterly average total assets, excluding certain intangible assets.
(2)Includes 125% capital conservation buffer.
Number of Shares:

dollars in thousands            Required for Capital
Adequacy Purposes
Effective January 1, 2016
   To be Well-Capitalized
Under Prompt Correction
Action Regulations
 
   At December 31, 2016                   

Regulatory Capital Ratios

  Amount   Ratio         Amount       Ratio   Amount   Ratio 

Leverage Ratio(1)

            

Company

  $106,971    9.02 ³  $47,443    4.000%(2)    N/A    N/A 

Bank

   109,538    9.27 ³   47,248    4.000%(2)    59,060    5.00

Tier 1 Common Equity Capital Ratio

            

Company

   106,971    11.32 ³   48,441    5.125%(2)    N/A    N/A 

Bank

   109,538    11.59 ³   48,441    5.125%(2)    61,437    6.50

Tier 1 Capital Ratio

            

Company

   106,971    11.32 ³   62,618    6.625%(2)    N/A    N/A 

Bank

   109,538    11.59 ³   62,618    6.625%(2)    75,615    8.00

Total Capital Ratio

            

Company

   117,315    12.42 ³   81,522    8.625%(2)    N/A    N/A 

Bank

   119,882    12.68 ³   81,522    8.625%(2)    94,518    10.00

 

(1)
Address for Notices:

The leverage ratio consists of Tier 1 Capital divided by the most recent quarterly average total assets, excluding certain intangible assets.
(2)Includes 125% capital conservation buffer.

Management believes that the Company and the Bank are both “well capitalized” by regulatory definitions for all required regulatory capital ratios, including leverage, Tier 1 common equity, Tier 1 risk based and total risk based capital requirements for all periods presented. The capital position of the Company is stable, composed

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

 

D-4primarily of common stock and retained earnings. Management believes that relations with our regulatory agencies are good, as evidenced by the regulatory approval received to purchase America California Bank.


The Federal Reserve and the Federal Deposit Insurance Corporation approved final capital rules in July 2013, that substantially amend the existing capital rules for banks. These new rules reflect, in part, certain standards initially adopted by the Basel Committee on Banking Supervision in December 2010 (which standards are commonly referred to as “Basel III”) as well as requirements contemplated by the Dodd-Frank Act.

Appendix E—FormUnder these capital rules, the Bank is required to meet certain minimum capital requirements. The Bank will also be required to establish a “conservation buffer,” consisting of Shareholder Agreement – North Valleya common equity Tier 1 capital amount equal to 2.5% of risk-weighted assets to be phased in by 2019. An institution that does not meet the conservation buffer will be subject to restrictions on certain activities including payment of dividends, stock repurchases, and discretionary bonuses to executive officers.

(NORTH VALLEY BANCORP)The prompt corrective action rules are modified to include the common equity Tier 1 capital ratio and to increase the Tier 1 capital ratio requirements for the various thresholds. For example, the requirements for the Bank to be considered well-capitalized under the rules will be a 5.0% leverage ratio, a 6.5% common equity Tier l capital ratio, an 8.0% Tier 1 capital ratio, and a 10.0% total capital ratio. To be adequately capitalized, those ratios are 4.0%, 4.5%, 6.0%, and 8.0%, respectively.

SHAREHOLDER AGREEMENTThe rules modify the manner in which certain capital elements are determined. The rules make changes to the methods of calculating the risk-weighting of certain assets, which in turn affects the calculation of the risk-weighted capital ratios. Higher risk weights are assigned to various categories of assets, including commercial real estate loans, credit facilities that finance the acquisition, development or construction of real property, certain exposures or credit that are 90 days past due or are nonaccrual, securitization exposures, and in certain cases mortgage servicing rights and deferred tax assets.

The Bank was required to comply with all capital requirements on December 31, 2017. The conservation buffer began to bephased-in beginning in 2016 and will take full effect on January 1, 2019. Certain calculations under the rules will also havephase-in periods.

(20)Stock Option Plans

In 1997, the Board of Directors of the Bank adopted the First National Bank of Northern California 1997 stock option plan. Pursuant to the holding company reorganization effective March 15, 2002, the Bank stock option plan became the FNB Bancorp stock option Plan. In 2002, the Company adopted an incentive employee stock option plan known as the 2002 FNB Bancorp plan. In 2008, the Company adopted an incentive employee stock option plan known as the 2008 FNB Bancorp stock option plan. The plans allow the Company as of December 31, 2017 to grant options to employees covering 404,766 shares.

Incentive stock options currently outstanding become exercisable in one to five years from the grant date, based on a vesting schedule of 20% per year and expire 10 years after the grant date. Nonqualified options to directors become vested on the date of grant. The options exercise price is the fair value of the per share price of the underlying stock options at the grant date.

The amount of compensation expense for options recorded in the years ended December 31, 2017, 2016, and 2015 was $418,000, $513,000 and $427,000, respectively. There was an income tax benefit related to stock option exercises for the year ended December 31, 2017 of $340,000 that was reflected as an excess income tax

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

benefit. During 2016 and 2015, the tax benefit related to disqualified stock option exercises andnon-qualified stock option exercises totaled $600,000 and $553,000, respectively. During 2016 and 2015, this tax benefit was reflected as an increase in common equity and a decrease in income taxes payable. The amount of unrecognized compensation expense related tonon-vested options at December 31, 2017 was $947,000, and the remaining weighted average amortization period was 3.1 years. There were no new stock options granted during 2017.

The amount of total unrecognized compensation expense related tonon-vested options at December 31, 2016 was $1,409,000, and the weighted average period it will be amortized over was 3.9 years. The assumptions for options granted in 2016 were as follows: dividend yield of 1.94% for the year; risk-free interest rate of 2.15%; expected volatility of 37%; expected life of 7.2 years. This SHAREHOLDER AGREEMENT (“Shareholder Agreement”)resulted in a weighted average fair value of $7.43 per share. The amount of total unrecognized compensation expense related tonon-vested options at December 31, 2015 was $1,061,000, and the weighted average period it will be amortized over is made4.0 years. The assumptions for options granted in 2015 were as follows: dividend yield of 1.96% for the year; risk-free interest rate of 2.14%; expected volatility of 41%; expected life of 8.9 years. This resulted in a weighted average option fair value of $2.72 per share.

A summary of option activity, adjusted for stock dividends and stock splits, issued under the 2008 FNB Bancorp Plan as of December 31, 2017 and changes during the year then ended is presented below.

           Weighted-     
           Average     
2008 FNB Bancorp Plan      Weighted   Remaining   Aggregate 
       Average   Contractual   Intrinsic 
       Exercise   Term   Value 

Options

  Shares   Price/share   (in years)   per share 

Outstanding at January 1, 2017

   632,635   $13.99     $22.50 

Granted

   —     $—       

Exercised

   (164,389  $10.71     $20.35 

Forfeited or expired

   (12,955  $15.35     
  

 

 

       

Outstanding at December 31, 2017

   455,291   $15.14    6.4   $21.35 

Exercisable at December 31, 2017

   278,911   $13.20    5.6   $23.29 

The following supplemental information applies to the three years ended December 31:

2008 FNB Bancorp Plan

 

  2017   2016   2015 

Options outstanding

   455,291    632,635    586,344 

Range of exercise prices/share

  $3.53 to $20.95   $3.53 to $20.95   $3.53-$16.27 

Weighted average remaining contractual life (in years)

   6.4    6.9    7.0 

Fully vested options

   278,911    366,286    326,461 

Weighted average exercise price/sh

  $13.20   $11.35   $11.83 

Aggregate intrinsic value

  $6,496,216   $4,876,927   $4,307,190 

Weighted average remaining contractual life (in years)

   5.6    5.7    5.9 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

A summary of option activity, adjusted for stock dividends, under the 2002 FNB Bancorp Plan as of December 31, 2017 and changes during the year then ended is presented below.

           Weighted-     
           Average     
2002 FNB Bancorp Plan      Weighted   Remaining   Aggregate 
       Average   Contractual   Intrinsic 
       Exercise   Term   Value 

Options

  Shares   Price/share   (in years)   per share 

Outstanding at January 1, 2017

   28,555   $12.48     $24.01 

Granted

   —     $—       

Exercised

   (28,555  $12.48     $14.14 

Forfeited or expired

   —     $—       
  

 

 

       

Outstanding at December 31, 2017

   —     $—      —     $—   

Exercisable at December 31, 2017

   —     $—      —     $—   

The following supplemental information applies to the three years ended December 31:

2002 FNB Bancorp Plan            
   2017   2016   2015 

Options outstanding

   —      28,555    96,023 

Range of exercise prices/share

  $—     $12.48 to $12.48   $12.48 to $14.13 

Weighted average remaining contractual life (in years)

   —      0.5    0.9 

Fully vested options

   —      28,555    96,023 

Weighted average exercise price/sh

  $—     $12.48   $13.48 

Aggregate intrinsic value

  $—     $263,324   $547,108 

Weighted average remaining contractual life (in years)

   —      0.5    0.9 

A summary of option activity, adjusted for stock dividends, under the 1997 FNB Bancorp Plan as of December 31, 2017 and changes during the year then ended is presented below.

           Weighted-     
           Average     
1997 First National Bank Plan      Weighted   Remaining   Aggregate 
       Average   Contractual   Intrinsic 
       Exercise   Term   Value 

Options

  Shares   Price   (in years)   per share 

Outstanding at January 1, 2016

   16,616   $12.48     $9.15 

Granted

   —     $—       

Exercised

   (16,616   12.48     $15.93 

Forfeited or expired

   —      —       
  

 

 

   

 

 

     

Outstanding at December 31, 2017

   —     $—      —     $—   

Exercisable at December 31, 2017

   —     $—      —     $—   

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

The following supplemental information applies to the three years ended December 31

1997 FNB Bancorp Plan            
   2017   2016   2015 

Options outstanding

   —      16,616    50,823 

Range of exercise prices

  $—     $12.48   $12.48 

Weighted average remaining contractual life (in years)

   —      0.5    1.5 

Fully vested options

   —      16,616    50,823 

Weighted average exercise price/sh

  $—     $12.48   $12.48 

Aggregate intrinsic value

  $—     $152,593   $340,094 

Weighted average remaining contractual life (in years)

   —      0.5    1.5 

(21)Quarterly Data (Unaudited)

Per share amounts adjusted for stock splits and stock dividends

   2017 
(Dollars in thousands)  First   Second   Third   Fourth 

Interest income

  $12,027   $12,378   $12,785   $13,028 

Interest expense

   835    946    1,032    1,058 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

   11,192    11,432    11,753    11,970 

Provision for loan losses

   —      (140   —      (220
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income, after provision for loan losses

   11,192    11,572    11,753    12,190 

Noninterest income

   1,010    1,012    972    866 

Noninterest expense

   7,605    7,678    7,648    7,618 
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before income taxes

   4,597    4,906    5,077    5,438 

Provision for income taxes

   1,508    1,555    1,766    4,478 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings

  $3,089   $3,351   $3,311   $960 
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

  $0.42   $0.46   $0.45   $0.13 

Diluted earnings per share

  $0.41   $0.44   $0.43   $0.13 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

Per share amounts adjusted for stock splits and stock dividends.

   2016 
   First   Second   Third   Fourth 
(Dollars in thousands)                

Interest income

  $11,565   $11,316   $11,122   $11,510 

Interest expense

   848    766    721    734 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

   10,717    10,550    10,401    10,776 

Provision for (recovery) of loan losses

   75    75    —      —   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income, after provision for loan losses

   10,642    10,475    10,401    10,776 

Non-interest income

   1,134    1,036    1,102    1,323 

Non-interest expense

   7,787    7,649    7,513    7,743 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   3,989    3,862    3,990    4,356 

Provision for income taxes

   1,422    1,414    1,546    1,314 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings

  $2,567   $2,448   $2,444   $3,042 
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

  $0.36   $0.34   $0.33   $0.42 

Diluted earnings per share

  $0.35   $0.33   $0.33   $0.41 

(22)Condensed Financial Information of Parent Company

The parent company-only condensed balance sheets, condensed statements of earnings, and condensed statements of cash flows information are presented as of and for the years ended December 31, as follows:

FNB Bancorp  Condensed balance sheets 
   December 31, 
(Dollars in thousands)  2017       2016 

Assets:

      

Cash and due from banks

  $1,947      1,795 

Investments in subsidiary

   121,096      112,881 

Dividend receivable from subsidiary

   964      739 

Other assets

   242      243 
  

 

 

     

 

 

 

Total assets

  $124,249     $115,658 
  

 

 

     

 

 

 

Liabilities:

      

Dividend declared

  $964     $739 

Income tax payable to subsidiary

   244      244 

Note payable

   3,750      4,350 

Other liabilities

   11      11 
  

 

 

     

 

 

 

Total liabilities

   4,969      5,344 

Stockholders’equity

   119,280      110,314 
  

 

 

     

 

 

 

Total liabilities and stockholders’ equity

  $124,249     $115,658 
  

 

 

     

 

 

 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

FNB Bancorp  Condensed statements of earnings 
   Years Ended December 31, 
(Dollars in thousands)  2017   2016   2015 

Income:

      

Dividends from subsidiary

  $3,634    2,890    2,439 
  

 

 

   

 

 

   

 

 

 

Total income

   3,634    2,890    2,439 
  

 

 

   

 

 

   

 

 

 

Expense:

      

Interest on note payable

   214    222    229 

Other expense

   317    135    128 
  

 

 

   

 

 

   

 

 

 

Total expense

   531    357    357 
  

 

 

   

 

 

   

 

 

 

Income before income tax benefit and equity in undistributed earnings of subsidiary

   3,103    2,533    2,082 

Income tax benefit

   —      —      (56
  

 

 

   

 

 

   

 

 

 

Income before equity in undistributed earnings of subsidiary

   3,103    2,533    2,138 

Equity in undistributed earnings of subsidiary

   7,608    7,968    6,059 
  

 

 

   

 

 

   

 

 

 

Net earnings

  $10,711   $10,501   $8,197 
  

 

 

   

 

 

   

 

 

 

FNB Bancorp  Condensed statement of cash flows 
   Years ended December 31, 
(Dollars in thousands)  2017   2016   2015 

Net earnings

  $10,711   $10,501   $8,197 

Decrease in income tax receivable from subsidiary

   —      166    165 

Net increase in dividend receivable and other assets

   (224   (90   (163

Net increase in other liabilities

   565    —      147 

Excess tax benefit from exercised stock options

   (340   (600   (222

Undistributed earnings of subsidiary

   (7,608   (8,044   (6,059

Stock-based compensation expense

   418    513    427 
  

 

 

   

 

 

   

 

 

 

Cash flows from operating activities

   3,522    2,446    2,492 
  

 

 

   

 

 

   

 

 

 

Investment in subsidiary

   —      —      (882
  

 

 

   

 

 

   

 

 

 

Cash flows from investing activities

   —      —      (882
  

 

 

   

 

 

   

 

 

 

Payment on note payable

   (600   (600   (600

Exercise of stock options

   864    1,115    924 

Excess tax benefit from exercised stock options

   —      600    222 

Dividends on common stock

   (3,634   (2,890   (1,786
  

 

 

   

 

 

   

 

 

 

Cash flows provided by financing activities

   (3,370   (1,775   (1,240
  

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash

   152    671    370 
  

 

 

   

 

 

   

 

 

 

Cash, beginning of year

   1,795    1,124    754 
  

 

 

   

 

 

   

 

 

 

Cash, end of year

  $1,947   $1,795   $1,124 
  

 

 

   

 

 

   

 

 

 

Non-cash investing and financing activities:

      

Accrued dividends

   964    739    649 

Stock dividend of 5%

   —      7,850    6,663 

FNB Bancorp and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

(23)Subsequent Event

During 2017, the Company entered into as of January [    ], 2014 bya purchase and between North Valley Bancorp, a California corporation (“North Valley”), andsale contract to sell the person signatory hereto (the “Shareholder”).

WHEREAS, TriCo Bancshares, a California corporation (“TriCo”), and North Valley have entered into that certain Agreement and Plan of Merger and Reorganization (the “Agreement”), dated as of January [    ], 2014, pursuant to which North Valley will merge (the “Merger”) with and into TriCo; and

WHEREAS, as a condition to its willingness to enter into the Agreement, North Valley has required that each director of TriCo, solely in his or her capacity as a shareholder and beneficial owner or record holder of TriCo Bancshares Common Stock (“TriCo Common Stock”), enter into, and the Shareholder has agreed to enter into, this Shareholder Agreement.

NOW, THEREFORE, in consideration of the foregoing, for good and valuable consideration, the parties hereby agree as follows:

1.Representations and Warranties of the Shareholder. The Shareholder hereby represents and warrants to TriCo as follows:

(a)Authority; No Violation. The Shareholder has all necessary power and authority to enter into and perform all of the Shareholder’s obligations hereunder. The execution, delivery and performance of this Shareholder Agreement by the Shareholder will not violate any other agreement to which the Shareholder is a party, including any Shareholder Agreement, shareholders’ agreement, trust agreement or voting trust.Company’s OREO property located at 416 Browning Way, South San Francisco, California. This Shareholder Agreement has been duly and validly executed and delivered by the Shareholder (and the Shareholder’s spouse, if the Shares (as defined below) constitute community property) and constitutes a valid and binding agreement of the Shareholder and such spouse, enforceable against the Shareholder and the Shareholder’s spouse in accordance with its terms.

(b)Ownership of Shares. The Shareholder is the beneficial owner or record holder of the number of shares of TriCo Common Stock indicated under the Shareholder’s name on the signature page hereto (the “Existing Shares”, and together with any shares of TriCo Common Stockproperty was acquired by the Shareholder afterCompany through foreclosure on July 12, 2011 and contained soil and ground water contamination in and around the date hereof,property. The sale closed escrow on February 22, 2018 and the Shares”)contract sales price of $2.8 million consisted of a down payment by the buyer of $1,600,000 as well as the Company providing the buyer a $1.2 million 15 year fully amortized loan at an interest rate of 4.25% fixed.

The purchase and assale contract required the Company to transfer title of the date hereof, the Existing Shares constitute all the shares of TriCo Common Stock owned of record or beneficially by the Shareholder. With respectproperty to the Existing Shares, subject to applicable community property laws,buyer, and the Shareholder has sole voting power and sole power to issue instructions with respect to the matters set forth in Section 2 hereof, sole power of disposition, sole power to demand appraisalbuyer obtained all rights and sole power to engage in actions set forth in Section 2 hereof, with no restrictions on the voting rights, rights of disposition or otherwise, subject to applicable laws and the terms of this Agreement.

2.Shareholder Agreement and Agreement Not to Transfer.

(a) The Shareholder hereby agrees to vote all of the Shares held by the Shareholder (i) in favor of the Merger, the Agreement and the transactions contemplated by the Agreement; and (ii) against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of TriCo under the Agreement; and (iii) except with the prior written consent of North Valley or as otherwise contemplated in the Agreement, against any other action which is intended, or could reasonably be expected to, impede, interfere with, delay, postpone, discourage or materially adversely affect the Merger. The Shareholder shall not enter into any agreement or understanding with any person or entity prior to the Termination Date (as defined below) to vote or give instructions after the Termination Date in any manner inconsistent with clauses (i), (ii) or (iii) of the preceding sentence.

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(b) Until the earlier of the termination of this Agreement or the Effective Time, the Shareholder will not, directly or indirectly: sell, transfer, exchange, pledge, assign, hypothecate, encumber, tender or otherwise dispose of (collectively, a “Transfer”), or enforce or permit execution of the provisions of any redemption, share purchaser or sale, recapitalization or other agreement with TriCo or any other Person or enter into any contract, option or other agreement, arrangement or understanding with respect to the Transfer of, directly or indirectly, any of the Shares or any securities convertible into or exercisable for Shares, any other capital stock of TriCo or any interest in any of the foregoing with any Person; enter into swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequenceresponsibilities of ownership of the Shares; take any actionproperty including the right to the lease revenue generated by the tenant that would make any ofcurrently leases the Shareholder’s representations or warranties contained herein untrue or incorrect in any material respect or havebuilding. The Company retained the effect of preventing or disabling suchobligation to continue working with the Shareholder from performingWater Board to obtain and complete a final remediation plan for the Shareholder’s obligations under this Agreement;provided however, this Agreement shall not prohibit the Shareholder from exercising a stock option for TriCo Common Stock or transferring and delivering Shares to TriCo to effect the exercise of an option to purchase TriCo Common Stock.

3.Shareholder Capacity. The Shareholder is entering this Shareholder Agreement in his or her capacity as the record or beneficial owner of the Shareholder’s Shares, and not in his or her capacity as a director of TriCo or as a trustee of any TriCo benefit plan. Nothing in this Shareholder Agreement shall be deemed in any manner to limit the discretion of the Shareholder to take any action, or fail to take any action, in his or her capacity as a director of TriCo or as a trustee of any TriCo benefit plan, that may be required of the Shareholderproperty. Included in the exercise of his or her duties and responsibilities as a director of TriCo or as a trustee of any TriCo benefit plan.

4. Termination. The obligations ofsale agreement is the Shareholder shall terminate upon the earlier of (a) the consummation of the Merger or (b) if the Merger is not consummated, upon the termination of the Agreement (the “Termination Date”).

5.Specific Performance. The Shareholder acknowledges that damages would be an inadequate remedy to North Valley for an actual or prospective breach of this Agreement andrequirement that the obligationsCompany set aside $500,000 in the form of the Shareholder hereto shall be specifically enforceable.

6.Miscellaneous.

(a)Definitional Matters.

(i) Unless the context otherwise requires, “person” shall mean a corporation, association, partnership, joint venture, organization, business, individual, trust, estate or any other entity or group (within the meaning of Section 13(d)(3) of the Exchange Act).

(ii) All capitalized terms used but not defined in this Shareholder Agreement shall have the respective meaningsgood faith deposit that the Agreement ascribes to such terms.

(iii) The descriptive headings herein are inserted for convenience of reference only and are not intendedis to be partused to fund the ongoing remediation efforts. If the Company spends more than $500,000, the Company is required to fund certain remediation costs beyond the initial $500,000 good faith deposit. Those costs along with reimbursable costs incurred by the Water Board are currently estimated to be approximately $725,000 by the Company’s soil engineering and consulting company consultant but could vary in the future depending on the extent of or to affect the meaning or interpretation of this Shareholder Agreement.

(b)Entire Agreement. This Shareholder Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.

(c)Parties in Interest. This Shareholder Agreement shall be binding upon and inure solely to the benefit of each party hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Nothing in this Shareholder Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Shareholder Agreement.

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(d)Certain Events. Shareholder agrees that this Agreementfinal remediation requirements and the obligations hereunder shall attachtime required to the Shares owned by Shareholder and shall be binding upon any Person to which legal ownership of such Shares shall pass, whether by operation of law or otherwise, including, without limitation, the Shareholder’s heirs, executors, guardians, administrators, trustees or successors. Notwithstanding any Transfer of such Shares by a Shareholder, the Shareholder or, as applicable, the Shareholder’s heirs, executors, guardians, administrators, trustees or successors, shall remain liable for the performance of all obligations of the transferor under this Agreement.

(e)Assignment. This Shareholder Agreement shall not be assigned without the prior written consent of the other party hereto, and any purported assignment without such consent shall be null and void.

(f)Modifications. This Shareholder Agreement shall not be amended, altered or modified in any manner whatsoever, except by a written instrument executed by the parties hereto.

(g)Governing Law. This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the state of California, without regard to the conflict of laws rules thereof. The state or federal courts located within the state of California shall have exclusive jurisdiction over any and all disputes between the parties hereto, whether in law or equity, arising out of or relating to this Agreement and the agreements, instruments and documents contemplated hereby and the parties consent to and agree to submit to the jurisdiction of such courts. Each of the parties hereby waives and agrees not to assert in any such dispute, to the fullest extent permitted by applicable law, any claim that (i) such party is not personally subject to the jurisdiction of such courts, (ii) such party and such party’s property is immune from any legal process issued by such courts or (iii) any litigation or other proceeding commenced in such courts is brought in an inconvenient forum. The parties hereby agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 6(k), or in other manner as may be permitted by law, shall be valid and sufficient service thereof and hereby waive any objections to service accomplished in the manner herein provided.

(h)Reliance on Counsel and Other Advisors. The Shareholder has consulted with such legal, financial, technical or other experts as the Shareholder deems necessary or desirable before entering into this Agreement.

(i)Validity. The invalidity or unenforceability of any provision of this Shareholder Agreement shall not affect the validity or enforceability of any other provision of this Shareholder Agreement, each of which shall remain in full force and effect.

(j)Counterparts. This Shareholder Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

(k)Notices. Any notices or other communications required or permitted hereunder shall be in writing and shall be deemed duly given upon (i) transmitter’s confirmation of a receipt of a facsimile transmission, (ii) confirmed delivery by a standard overnight carrier or (iii) the expiration of five business days after the day when mailed by certified or registered mail, postage prepaid, addressed at the following addresses (or at such other address as the parties hereto shall specify by like notice):

if to North Valley, to:

North Valley Bancorp

300 Park Marina Circle

Redding, California 96001

Attn.:     Michael J. Cushman

President and Chief Executive Officer

Facsimile Number: (530) 222-4877complete them.

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with a copy to:

Dodd Mason George LLP

1740 Technology Drive, #205

San Jose, California 95110

Attn.:    Joseph G. Mason, Esq.

    Glenn T. Dodd, Esq.

Facsimile Number: (408) 452-1487

If to the Shareholder, to the address noted on the signature page hereto.

[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Shareholder Agreement as of the date first above written.

NORTH VALLEY BANCORP
By:

Michael J. Cushman

President and Chief Executive Officer

SHAREHOLDER:

Name:

Number of Shares:

Address for Notices:

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 20.Indemnification of Directors and Officers

The following summary is qualified in its entirety by reference to the complete text of TriCo articles of incorporation, as amended, and its bylaws, as amended.

TriCo is subject to the California General Corporation Law (the “CGCL”), which provides a detailed statutory framework covering indemnification of any officer or other agent of a corporation who is made or threatened to be made a party to any legal proceeding by reason of his or her services on behalf of such corporation.

With respect to indemnification, the CGCL provides that to the extent any officer, director or other agent of a corporation is successful “on the merits” in defense of any legal proceeding to which such person is a party or is threatened to be made a party by reason of his or her service on behalf of such corporation or in defense of any claim, issue, or matter therein, such agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith, but does not require indemnification in any other circumstance. The CGCL also provides that a corporation may indemnify any agent of the corporation, including officers and directors, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in a third party proceeding against such person by reason of his or her services on behalf of the corporation, provided the person acted in good faith and in a manner he or she reasonably believed to be in the best interests of such corporation. The CGCL further provides that in derivative suits a corporation may indemnify such a person against expenses incurred in such a proceeding, provided such person acted in good faith and in a manner he or she reasonably believed to be in the best interests of the corporation and its shareholders. Indemnification is not available in derivative actions (i) for amounts paid or expenses incurred in connection with a matter that is settled or otherwise disposed of without court approval or (ii) with respect to matters for which the agent shall have been adjudged to be liable to the corporation unless the court shall determine that such person is entitled to indemnification.

The CGCL permits the advancing of expenses incurred in defending any proceeding against a corporate agent by reason of his or her service on behalf of the corporation upon the giving of a promise to repay any such sums in the event it is later determined that such person is not entitled to be indemnified. Finally, the CGCL provides that the indemnification provided by the statute is not exclusive of other rights to which those seeking indemnification may be entitled, by bylaw, agreement or otherwise, to the extent additional rights are authorized in a corporation’s articles of incorporation. The law further permits a corporation to procure insurance on behalf of its directors, officers and agents against any liability incurred by any such individual, even if a corporation would not otherwise have the power under applicable law to indemnify the director, officer or agent for such expenses.

The Bylaws of TriCo provide that it shall, to the maximum extent permitted by the CGCL, have power to indemnify each of its agents against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact any such person is or was an agent of the corporation, and shall have power to advance to each such agent expenses incurred in defending any such proceeding to the maximum extent permitted by that law.

Directors’ and Officers’ Liability Insurance

TriCo presently maintains a policy of directors’ and officers’ liability insurance that provides coverage sufficiently broad to permit indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act of 1933.

Indemnification Agreements

TriCo hasand Tri Counties Bank have entered into indemnification agreements with each of itstheir directors and certain of itstheir senior executive officers, including TriCo’s named executive officers, (each, an “Indemnitee”) to provide them with, among other things, indemnification against liabilities relating to their services as directors and officers of TriCo and Tri Counties Bank and the advancement of expenses under certain circumstances. The indemnification

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agreements also require TriCo and Tri Counties Bank to use its reasonable best efforts to purchase and maintain one or more policies of directors’ and officers’ liability insurance to cover liabilities asserted against, or incurred by, the indemnitees.directors and officers that are parties to the agreements.

Directors’ and Officers’ Liability Insurance

TriCo presently maintains a policy of directors’ and officers’ liability insurance that provides coverage sufficiently broad to permit indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act of 1933.

 

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Item 21.Exhibits and Financial Statement Schedules

(a) The following is a list of exhibits to this registration statement:

(a)The following is a list of exhibits to this registration statement:

 

Exhibit
No.

  

Description

  2.1  Agreement and Plan of Merger and Reorganization, dated January 21, 2014,December 11, 2017, by and between TriCo Bancshares and North ValleyFNB Bancorp (included as Appendix  A to the joint proxy statement/prospectus contained in Part I of this Registration Statement).
  3.1  Restated Articles of Incorporation, (incorporated by reference tofiled as Exhibit 3.1 to TriCo’s Current Report on Form8-K filed on March 16, 2009).2009.
  3.2  Bylaws of TriCo Bancshares, as amended, (incorporated by reference tofiled as Exhibit 3.1 to TriCo’s Current Report on Form8-K filed February 17, 2011).
  4.1Certificate of Determination of Preferences of Series AA Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.3 to TriCo’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2001).
  4.2Rights Agreement dated as of June 25, 2001 between TriCo Bancshares and Computershare, Inc., as Rights Agent (incorporated by reference to Exhibit 1 to TriCo’s Registration Statement on Form8-A filed on July 5, 2001).
  4.3Amendment to Rights Agreement dated as of July 8, 2011 between TriCo Bancshares and Computershare, Inc., as Rights Agent (incorporated by reference to Exhibit 4.1 to the TriCo’s Form8-K filed on July 8, 2011).
  4.4Amended and Restated Form of Right Certificate (incorporated by reference to Exhibit 4.2 to TriCo’sForm 8-K filed on July 8, 2011).2011.
  5.1  FormOpinion of OpinionSheppard, Mullin, Richter and Consent of Manatt, Phelps & Phillips,Hampton, LLP as to the validity of the securities being registered.
  8.1  Form of Opinion of Manatt, Phelps & Phillips,Sheppard, Mullin, Richter and Hampton, LLP regarding certain tax matters.
  8.210.1  FormEmployment Agreement by among Tri Counties Bank, TriCo Bancshares and Jim D. Black dated as of OpinionDecember 11, 2017.
10.2Employment Agreement by among Tri Counties Bank, TriCo Bancshares and Randy Brugioni dated as of Crowe Horwath LLP regarding certain tax matters.December 11, 2017.
10.3Employment Agreement by among Tri Counties Bank, TriCo Bancshares and Anthony J. Clifford dated as of December 11, 2017.
23.1  Consent of Crowe Horwath LLP, (TriCo).Independent Registered Public Accounting Firm.
23.2  Consent of Moss Adams LLP, (TriCo).
23.3Consent of Crowe Horwath LLP (North Valley).Independent Registered Public Accounting Firm.
23.4  Consent of Manatt, Phelps & Phillips,Sheppard, Mullin, Richter and Hampton, LLP (included in Exhibit 5.1 hereto).
23.5  Consent of Manatt, Phelps & Phillips,Sheppard, Mullin, Richter and Hampton, LLP (included in Exhibit 8.1 hereto).
23.6Consent of Crowe Horwath LLP (included in Exhibit 8.2 hereto).
24.1  Power of Attorney (included on the signature page to the Registration Statement).
99.1  Consent of Sandler O’Neill + Partners, L.P.The Courtney Group, LLC.
99.2  Consent of Keefe, Bruyette & Woods,Stephens, Inc.
99.3  Form of Proxy Card to be used by TriCo.TriCo Bancshares.
99.4  Form of Proxy Card to be used by North Valley.FNB Bancorp.

 

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Item 22.Undertakings

The undersigned registrant hereby undertakes:

(a) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(1) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933.

(2) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) that, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

(3) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering.

(d) For purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(e) That prior to any public reoffering of the securities registered hereunder through use of a prospectus that is a part of this Registration Statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

(f) That every prospectus (1) that is filed pursuant to paragraph (e) immediately preceding, or (2) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(g) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 20 above, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for

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indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is

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asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(h) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first-class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(i) To supply by means of a post-effective amendment all information concerning a transaction, and TriCo being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement onForm S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chico, State of California, on May 8, 2014.March 21, 2018.

 

TRICO BANCSHARES
By: 

/s/ Richard P. Smith

Name: Richard P. Smith
Title: President and Chief Executive Officer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

We, the undersigned directors and officers of TriCo, do hereby constitute and appoint Richard P. Smith and TomThomas J. Reddish, and each of them individually, our true and lawfulattorneys-in-fact and agents with full power to them, and each of them individually, to do any and all acts and things in our names and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our name in the capacities indicated below, which said attorneys and agents may deem necessary or advisable to enable said registrant to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this registration statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names in the capacities indicated below, any and all amendments hereof relating to the merger of TriCo and North Valley.

 

/s/ Richard P. Smith

Richard P. Smith

  

President, Chief Executive Officer and Director (Principal Executive Officer)

 May 8, 2014March 21, 2018

/s/ Thomas J. Reddish

Thomas J. Reddish

  

Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

 May 8, 2014March 21, 2018

/s/ Donald J. Amaral

Donald J. Amaral

  

Director

 May 8, 2014March 21, 2018

/s/ William J. Casey

William J. Casey

  

Director and Chairman of the Board

 May 8, 2014March 21, 2018

/s/ Craig S. Compton

Craig S. Compton

  

Director

 May 8, 2014March 21, 2018

/s/ L. Gage Chrysler

L. Gage Chrysler

  

Director

 May 8, 2014March 21, 2018

/s/ Cory W. Giese

Cory W. Giese

  

Director

 May 8, 2014March 21, 2018

 

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/s/ John S.A. Hasbrook

John S.A. Hasbrook

  

Director

March 21, 2018

/s/ Patrick W. Kilkenny

Patrick W. Kilkenny

Director

 

May 8, 2014

March 21, 2018

/s/ Michael W. KoehnanKoehnen

Michael W. KoehnanKoehnen

  

Director

 May 8, 2014March 21, 2018

/s/ Martin Mariani

Martin Mariani

Director

March 21, 2018

/s/ W. Virginia Walker

W. Virginia Walker

  

Director

 May 8, 2014March 21, 2018

 

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EXHIBIT INDEX

Exhibit
No.

Description

  2.1Agreement and Plan of Merger and Reorganization, dated January 21, 2014, by and between TriCo Bancshares and North Valley Bancorp (included as Appendix A to the joint proxy statement/prospectus contained in Part I of this Registration Statement).
  3.1Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to TriCo’s Current Report on Form8-K filed on March 16, 2009).
  3.2Bylaws of TriCo Bancshares, as amended (incorporated by reference to Exhibit 3.1 to TriCo’s Current Report on Form8-K filed February 17, 2011).
  4.1Certificate of Determination of Preferences of Series AA Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.3 to TriCo’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2001).
  4.2Rights Agreement dated as of June 25, 2001 between TriCo Bancshares and Computershare, Inc., as Rights Agent (incorporated by reference to Exhibit 1 to TriCo’s Registration Statement on Form8-A filed on July 5, 2001).
  4.3Amendment to Rights Agreement dated as of July 8, 2011 between TriCo Bancshares and Computershare, Inc., as Rights Agent (incorporated by reference to Exhibit 4.1 to TriCo’s Form8-K filed on July 8, 2011).
  4.4Amended and Restated Form of Right Certificate (incorporated by reference to Exhibit 4.2 to TriCo’sForm 8-K filed on July 8, 2011).
  5.1Form of Opinion and Consent of Manatt, Phelps & Phillips, LLP as to the validity of the securities being registered.
  8.1Form of Opinion of Manatt, Phelps & Phillips, LLP regarding certain tax matters.
  8.2Form of Opinion of Crowe Horwath LLP regarding certain tax matters.
23.1Consent of Crowe Horwath LLP (TriCo).
23.2Consent of Moss Adams LLP (TriCo).
23.3Consent of Crowe Horwath LLP (North Valley).
23.4Consent of Manatt, Phelps & Phillips, LLP (included in Exhibit 5.1 hereto).
23.5Consent of Manatt, Phelps & Phillips, LLP (included in Exhibit 8.1 hereto).
23.6Consent of Crowe Horwath LLP (included in Exhibit 8.2 hereto).
24.1Power of Attorney (included on the signature page to the Registration Statement).
99.1Consent of Sandler O’Neill + Partners, L.P.
99.2Consent of Keefe, Bruyette & Woods, Inc.
99.3Form of Proxy Card to be used by TriCo.
99.4Form of Proxy Card to be used by North Valley.

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