TriCo Bancshares (TCBK) 8-K Trico Bancshares Announces Quarterly Results

Exhibit 99.1

PRESS RELEASE	Contact: Richard P. Smith
For Immediate Release	President & CEO (530) 898-0300

TRICO BANCSHARES ANNOUNCES QUARTERLY RESULTS

CHICO, Calif. – (July 26, 2011) – TriCo Bancshares (NASDAQ: TCBK) (the “Company”), parent company of Tri Counties Bank (the “Bank”), today announced quarterly earnings of $2,771,000 for the quarter ended June 30, 2011. These earnings represent a $1,451,000 (110%) increase when compared to earnings of $1,320,000 reported for the quarter ended June 30, 2010. Diluted earnings per share for the quarter ended June 30, 2011 was $0.17 compared to diluted earnings per share of $0.08 for the quarter ended June 30, 2010. Diluted earnings per share for the six months ended June 30, 2011 and 2010 were $0.35 and $0.18, respectively, on earnings of $5,571,000 and $2,878,000, respectively.

Total assets of the Company decreased $48,461,000 (2.2%) to $2,176,184,000 at June 30, 2011 from $2,224,645,000 at June 30, 2010. Total loans of the Company decreased $104,878,000 (7.0%) to $1,396,062,000 at June 30, 2011 from $1,500,940,000 at June 30, 2010. During the three months ended June 30, 2011, loans increased $8,402,000, or 2.4% on an annualized basis. Excluding the Granite acquisition during the quarter ended June 30, 2010, this most recent quarterly increase in loans represents the first quarterly increase in loans since the quarter ended December 31, 2008. Total deposits of the Company decreased $53,218,000 (2.8%) to $1,836,731,000 at June 30, 2011 from $1,889,949,000 at June 30, 2010. Excluding a $70,000,000 decrease in certificates of deposit issued to the State of California that occurred during the fourth quarter of 2010, total deposits would have increased $16,782,000 during the twelve months ended June 30, 2011. The following is a summary of the components of net income for the periods indicated:

	Three months ended
	June 30,
(in thousands)	2011			2010			$ Change			% Change
Net Interest Income	$	21,753		$	22,134		$	(381	)		(1.7	%)
Provision for loan losses		(5,561	)		(10,000	)		4,439			(44.4	%)
Noninterest income		8,251			8,104			147			1.8	%
Noninterest expense		(20,095	)		(18,408	)		(1,687	)		9.2	%
Provision for income taxes		(1,577	)		(510	)		(1,067	)		209.2	%
Net income	$	2,771		$	1,320		$	1,451			109.9	%

Net interest income during the three months ended June 30, 2011 decreased $381,000 (1.7%) from the same period in 2010 to $21,753,000. The decrease in net interest income was due to a 0.10% (ten basis points) decrease in net interest margin on a fully tax-equivalent basis to 4.31% and a $69,486,000 (4.7%) decrease in average balance of loans. Much of the ten basis point decrease in net interest margin was due to the fact that despite historically low deposit rates, the ability to deploy deposits into some interest-earning asset other than short-term low-yield interest-earning cash at the Federal Reserve Bank has been limited. This limitation is the result of weak loan demand and investment yields that have been unattractive given their interest rate risk profile.

The following table details the components of the net interest income and net interest margin on a fully tax-equivalent (FTE) basis for the periods indicated:

	Three months ended							Three months ended
	June 30, 2011							June 30, 2010
	Average		Income/		Yield/			Average		Income/			Yield/
	Balance		Expense		Rate			Balance		Expense			Rate
Assets:
Loans	$	1,393,989	$	21,735		6.24	%	$	1,463,475	$	22,701			6.20	%
Investment securities — taxable		271,089		2,354		3.47	%		278,799		2,733			3.92	%
Investment securities — nontaxable		11,839		216		7.31	%		15,502		299			7.71	%
Cash at Federal Reserve and other banks		351,512		242		0.28	%		261,910		154			0.24	%
Total earning assets		2,028,429		24,547		4.84	%		2,019,686		25,887			5.13	%
Other assets		164,222							171,974
Total	$	2,192,651						$	2,191,660
Liabilities and shareholders’ equity:												��
Interest-bearing demand deposits		408,109		358		0.35	%		386,788		586			0.61	%
Savings deposits		613,924		372		0.24	%		541,710		613			0.45	%
Time deposits		406,436		1,072		1.06	%		544,320		1,528			1.12	%
Other borrowings		59,139		600		4.06	%		61,629		602			3.91	%
Junior subordinated debt		41,238		312		3.03	%		41,238		313			3.04	%
Total interest-bearing liabilities		1,528,846		2,714		0.71	%		1,575,685		3,642			0.92	%
Noninterest-bearing deposits		424,331							376,300
Other liabilities		33,711							36,147
Shareholders’ equity		205,763							203,528
Total liabilities and shareholders’ equity	$	2,192,651						$	2,191,660
Net interest rate spread(1)						4.13	%							4.21	%
Net interest income and interest margin(2)			$	21,833		4.31	%			$	22,245			4.41	%

The Company provided $5,561,000 for loan losses during the three months ended June 30, 2011 versus $10,000,000 during the three months ended June 30, 2010. The allowance for loan losses increased $738,000 from $43,224,000 at March 31, 2011 to $43,962,000 at June 30, 2011. The provision for loan losses and increase in the allowance for loan and lease losses during the three months ended June 30, 2011 were primarily the result of changes in the make-up of the loan portfolio and the Bank’s loss factors in reaction to losses in the construction, commercial real estate, commercial & industrial (C&I), home equity and auto indirect loan portfolios.

Noninterest income increased $147,000 (1.8%) to $8,251,000 during the three months ended June 30, 2011 when compared to the three months ended June 30, 2010. The following table presents the key components of noninterest income for the periods indicated:

	Three months ended
	June 30,
(in thousands)	2011			2010			$ Change			% Change
Service charges on deposit accounts	$	3,700		$	4,443		$	(743	)		(16.7	%)
ATM fees and interchange		1,776			1,531			245			16.0	%
Other service fees		437			362			75			20.7	%
Mortgage banking service fees		370			315			55			17.5	%
Change in value of mortgage servicing rights		(162	)		(569	)		407			(71.5	%)
Total service charges and fees		6,121			6,082			39			0.6	%
Gain on sale of loans		495			577			(82	)		(14.2	%)
Commission on NDIP		648			362			286			79.0	%
Increase in cash value of life insurance		450			426			24			5.6	%
Change in indemnification asset		144			—			144
Gain (loss) on sale of foreclosed assets		185			310			(125	)		(40.3	%)
Bargain purchase gain		—			232			(232	)		(100.0	%)
Sale of customer checks		67			54			13			24.1	%
Lease brokerage income		95			21			74			352.4	%
Gain (loss) on disposal of fixed assets		(6	)		(15	)		9			(60.0	%)
Commission rebates		(16	)		(17	)		1			(5.9	%)
Other nonintrest income		68			72			(4	)		(5.6	%)
Total other noninterest income		2,130			2,022			108			5.3	%
Total noninterest income	$	8,251		$	8,104		$	147			1.8	%

Service charges on deposit accounts were down $743,000 (16.7%) due to new overdraft regulations that became effective on July 1, 2010 and caused a decrease in non-sufficient funds fees. ATM fees and interchange income was up $245,000 (16.0%) due to increased customer point-of-sale transactions that are the result of incentives for such usage. Overall, mortgage banking activities, which includes mortgage banking servicing fees, change in value of mortgage servicing rights, and gain on sale of loans, accounted for $703,000 of noninterest income during the three months ended June 30, 2011 compared to $323,000 during the three months ended June 30, 2010. Commissions on sale of nondeposit investment products increased $286,000 (79.0%) during the three months ended June 30, 2011. The change in indemnification asset of $144,000 recorded during the three months ended June 30, 2011 is primarily due to an increase in estimated loan losses from the loan portfolio and foreclosed assets acquired in the Granite acquisition on May 28, 2010, and the fact that such losses are generally “covered” at the rate of 80% by the FDIC. The actual increase in estimated losses is reflected in decreased interest income, increased provision for loan losses and/or increased provision for foreclosed asset losses. The Company recorded a bargain purchase gain of $232,000 related to the Granite acquisition during the three months ended June 30, 2010.

Noninterest expense for the three months ended June 30, 2011 was $20,095,000, an increase of $1,687,000 (9.2%), as compared to the same period in 2010. The following table presents the key components of noninterest expense for the periods indicated:

	Three months ended
	June 30,
(in thousands)	2011			2010			$ Change			% Change
Salaries	$	7,198		$	6,990		$	208			3.0	%
Commissions and incentives		783			526			257			48.9	%
Employee benefits		2,734			2,469			265			10.7	%
Total salaries and benefits expense		10,715			9,985			730			7.3	%
Occupancy		1,402			1,407			(5	)		(0.4	%)
Equipment		880			1,060			(180	)		(17.0	%)
Change in reserve for unfunded commitments		(50	)		(800	)		750			(93.8	%)
Data processing and software		956			661			295			44.6	%
Telecommunications		520			461			59			12.8	%
ATM network charges		507			446			61			13.7	%
Professional fees		573			704			(131	)		(18.6	%)
Advertising and marketing		739			627			112			17.9	%
Postage		219			311			(92	)		(29.6	%)
Courier service		221			201			20			10.0	%
Intangible amortization		20			72			(52	)		(72.2	%)
Operational losses		118			120			(2	)		(1.7	%)
Provision for foreclosed asset losses		638			55			583			1060.0	%
Foreclosed asset expense		115			66			49			74.2	%
Assessments		518			812			(294	)		(36.2	%)
Other		2,004			2,220			(216	)		(9.7	%)
Total other noninterest expense		9,380			8,423			957			11.4	%
Total noninterest expense	$	20,095		$	18,408		$	1,687			9.2	%

Salary and benefit expenses increased $730,000 (7.3%) to $10,715,000 during the three months ended June 30, 2011 compared to the three months ended June 30, 2010. Base salaries increased $208,000 (3.0%) to $7,198,000 during the three months ended June, 2011. The increase in base salaries was mainly due to a 2.6% increase in average full time equivalent staff to 672. Incentive and commission related salary expenses increased $257,000 (48.9%) to $783,000 during three months ended June 30, 2011 due primarily to increases in production related incentives and incentives tied to net income. Benefits expense, including retirement, medical and workers’ compensation insurance, and taxes, increased $265,000 (10.7%) to $2,734,000 during the three months ended June 30, 2011 primarily due to increases in stock option vesting, supplemental retirement plan expenses, and employer taxes related to option exercises.

Other noninterest expenses increased $957,000 (11.4%) to $9,380,000 during the three months ended June 30, 2011 when compared to the three months ended June 30, 2010. Changes in the various categories of other noninterest expense are reflected in the table above. The changes are indicative of the economic environment which has led to increases, or fluctuations, in professional loan collection expenses, provision for foreclosed asset losses, and foreclosed asset expenses.

The effective tax rate on income was 36.3% and 27.9% for the three months ended June 30, 2011 and 2010, respectively. The effective tax rate was greater than the federal statutory tax rate due to state tax expense of $384,000 and $108,000, respectively, in these periods. Tax-exempt income of $136,000 and $188,000, respectively, from investment securities, and $450,000 and $426,000, respectively, from increase in cash value of life insurance in these periods, along with relatively low levels of net income before taxes, helped to reduce the effective tax rate.

In addition to the historical information contained herein, this press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The reader of this press release should understand that all such forward-looking statements are subject to various uncertainties and risks that could affect their outcome. The Company’s actual results could differ materially from those suggested by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, variances in the actual versus projected growth in assets, return on assets, interest rate fluctuations, economic conditions in the Company’s primary market area, demand for loans, regulatory and accounting changes, loan losses, expenses, rates charged on loans and earned on securities investments, rates paid on deposits, competition effects, fee and other noninterest income earned as well as other factors detailed in the Company’s reports filed with the Securities and Exchange Commission which are incorporated herein by reference, including the Form 10-K for the year ended December 31, 2010. These reports and this entire press release should be read to put such forward-looking statements in context and to gain a more complete understanding of the uncertainties and risks involved in the Company’s business. Any forward-looking statement may turn out to be wrong and cannot be guaranteed. The Company does not intend to update any of the forward-looking statements after the date of this release.

TriCo Bancshares and Tri Counties Bank are headquartered in Chico, California. Tri Counties Bank has a 36-year history in the banking industry. It operates 34 traditional branch locations and 27 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 a 24-hour, seven days-a-week telephone customer service center. Brokerage services are provided by the Bank’s investment services affiliate, Raymond James Financial Services, Inc. For further information please visit the Tri Counties Bank web site athttp://www.tricountiesbank.com.

TRICO BANCSHARES — CONSOLIDATED FINANCIAL DATA
(Unaudited. Dollars in thousands, except share data)

	Three months ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2011			2011			2010			2010			2010
Statement of Income Data
Interest income	$	24,467		$	24,434		$	25,627		$	27,233		$	25,776
Interest expense		2,714			2,730			3,036			3,497			3,642
Net interest income	$	21,753		$	21,704			22,591			23,736			22,134
Provision for loan losses		5,561			7,001			8,144			10,814			10,000
Noninterest income:
Service charges and fees		6,121			5,782			6,045			5,237			6,082
Other income		2,130			3,568			3,836			1,926			2,022
Total noninterest income		8,251			9,350			9,881			7,163			8,104
Noninterest expense:
Base salaries net of deferred loan origination costs	$	7,198		$	7,004			7,160			7,131			6,990
Incentive compensation expense		783			916			478			294			526
Employee benefits and other compensation expense		2,734			2,873			2,434			2,473			2,469
Total salaries and benefits expense	$	10,715		$	10,793			10,072			9,898			9,985
Other noninterest expense		9,380			8,878			9,398			10,626			8,423
Total noninterest expense	$	20,095			19,671			19,470			20,524			18,408
Income (loss) before taxes	$	4,348		$	4,382			4,858			(439	)		1,830
Net income	$	2,771		$	2,800		$	3,126		$	1		$	1,320
Share Data
Basic earnings per share	$	0.17		$	0.18		$	0.20		$	0.00		$	0.08
Diluted earnings per share	$	0.17		$	0.17		$	0.20		$	0.00		$	0.08
Book value per common share	$	12.82		$	12.72		$	12.64		$	12.66		$	12.76
Tangible book value per common share	$	11.82		$	11.71		$	11.62		$	11.64		$	11.74
Shares outstanding		15,978,958			15,860,138			15,860,138			15,860,138			15,860,138
Weighted average shares		15,922,228			15,860,138			15,860,138			15,860,138			15,860,138
Weighted average diluted shares		15,953,572			16,023,589			16,009,538			15,972,826			16,107,909
Credit Quality
Nonperforming loans	$	73,720		$	71,053		$	75,987		$	84,983		$	72,708
Guaranteed portion of nonperforming loans(2)		3,496			3,736			3,937			4,131			4,674
Foreclosed assets, net of allowance		9,337			8,983			9,913			11,172			9,945
Loans charged-off		5,230			7,049			6,040			11,163			8,424
Loans recovered		407			701			1,698			689			513
Allowance for losses to total loans(1)		3.34	%		3.31	%		3.18	%		2.86	%		2.75	%
Allowance for losses to NPLs(1)		63	%		65	%		59	%		49	%		57	%
Allowance for losses to NPAs(1)		56	%		57	%		53	%		43	%		50	%
Selected Financial Ratios
Return on average total assets		0.51	%		0.51	%		0.56	%		0.00	%		0.24	%
Return on average equity		5.39	%		5.50	%		6.14	%		0.00	%		2.61	%
Average yield on loans		6.24	%		6.22	%		6.39	%		6.61	%		6.20	%
Average yield on interest-earning assets		4.84	%		4.84	%		4.88	%		5.31	%		5.13	%
Average rate on interest-bearing liabilities		0.71	%		0.72	%		0.76	%		0.87	%		0.92	%
Net interest margin (fully tax-equivalent)		4.31	%		4.31	%		4.30	%		4.63	%		4.41	%

(1)	Allowance for losses includes allowance for loan losses and reserve for unfunded commitments.
(2)	Portion of nonperforming loans guaranteed by the U.S. Government, including its agencies and its government-sponsored agencies.

TRICO BANCSHARES — CONSOLIDATED FINANCIAL DATA
(Unaudited. Dollars in thousands)

	Three months ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2011			2011			2010			2010			2010
Balance Sheet Data
Cash and due from banks	$	391,054		$	406,294		$	371,066		$	398,191		$	322,644
Securities, available-for-sale		264,992			279,824			277,271			250,012			275,783
Federal Home Loan Bank Stock		9,199			9,133			9,133			9,157			9,523
Loans held for sale		4,379			2,834			4,988			9,455			4,153
Loans:
Commercial loans		140,531			131,242			141,902			149,743			162,898
Consumer loans		382,864			388,142			423,238			436,597			434,943
Real estate mortgage loans		828,757			823,563			807,482			821,562			860,615
Real estate construction loans		43,910			44,713			46,949			44,890			42,484
Total loans, gross		1,396,062			1,387,660			1,419,571			1,452,792			1,500,940
Allowance for loan losses		(43,962	)		(43,224	)		(42,571	)		(38,770	)		(38,430	)
Foreclosed assets		9,337			8,983			9,913			11,172			9,945
Premises and equipment		20,142			18,552			19,120			18,947			19,001
Cash value of life insurance		51,441			50,991			50,541			49,972			49,546
Goodwill		15,519			15,519			15,519			15,519			15,519
Intangible assets		475			495			580			665			750
Mortgage servicing rights		4,818			4,808			4,605			3,905			4,033
FDIC indemnification asset		4,545			6,689			5,640			5,098			7,515
Accrued interest receivable		6,549			6,941			7,131			7,318			7,472
Other assets		41,634			40,239			37,282			36,185			36,251
Total assets		2,176,184			2,195,738			2,189,789			2,229,618			2,224,645
Deposits:
Noninterest-bearing demand deposits		419,391			427,116			424,070			389,315			386,617
Interest-bearing demand deposits		401,040			406,060			395,413			383,859			383,578
Savings deposits		618,413			608,582			585,845			577,603			552,616
Time certificates		397,887			418,154			446,845			537,764			567,138
Total deposits		1,836,731			1,859,912			1,852,173			1,888,541			1,889,949
Accrued interest payable		1,865			2,044			2,151			2,368			2,487
Reserve for unfunded commitments		2,640			2,690			2,640			2,840			2,840
Other liabilities		29,561			30,262			29,170			26,721			25,257
Other borrowings		59,234			57,781			62,020			67,182			60,452
Junior subordinated debt		41,238			41,238			41,238			41,238			41,238
Total liabilities		1,971,269			1,993,927			1,989,392			2,028,890			2,022,223
Total shareholders’ equity		204,915			201,811			200,397			200,728			202,422
Accumulated other comprehensive gain (loss)		2,644			1,086			1,310			3,606			4,132
Average loans		1,393,989			1,396,331			1,443,603			1,481,497			1,463,473
Average interest-earning assets		2,028,429			2,024,285			2,107,499			2,060,108			2,019,684
Average total assets		2,192,651			2,189,363			2,235,471			2,237,670			2,191,660
Average deposits		1,852,800			1,851,606			1,895,006			1,893,677			1,849,118
Average total equity	$	205,763		$	203,535		$	203,712		$	205,324		$	203,528
Total risk based capital ratio		14.6	%		14.5	%		14.2	%		13.8	%		13.6	%
Tier 1 capital ratio		13.3	%		13.2	%		12.9	%		12.6	%		12.3	%
Tier 1 leverage ratio		10.4	%		10.3	%		10.0	%		9.9	%		10.2	%
Tangible capital ratio		8.7	%		8.5	%		8.5	%		8.3	%		8.4	%