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. – (January 30, 2012) – TriCo Bancshares (NASDAQ: TCBK) (the “Company”), parent company of Tri Counties Bank (the “Bank”), today announced earnings of $6,549,000 for the quarter ended December 31, 2011. This compares with earnings of $3,126,000 the Company reported for the quarter ended December 31, 2010. Diluted earnings per share for the quarter ended December 31, 2011 were $0.41 compared to diluted earnings per share of $0.20 for the quarter ended December 31, 2010. Diluted earnings per share for the year ended December 31, 2011 and 2010 were $1.16 and $0.37, respectively, on earnings of $18,590,000 and $6,005,000, respectively.

Total assets of the Company increased $365,808,000 (16.7%) to $2,555,597,000 at December 31, 2011 from $2,189,789,000 at December 31, 2010. Total loans of the Company increased $131,461,000 (9.3%) to $1,551,032,000 at December 31, 2011 from $1,419,571,000 at December 31, 2010. Total deposits of the Company increased $338,363,000 (18.3%) to $2,190,536,000 at December 31, 2011 from $1,852,173,000 at December 31, 2010.

The following is a summary of the components of Company’s consolidated net income for the periods indicated:

	Three months ended
	December 31,
(in thousands)	2011			2010			$ Change			% Change
Net Interest Income	$	27,280		$	22,591		$	4,689			20.8	%
Provision for loan losses		(5,429	)		(8,144	)		2,715			(33.3	%)
Noninterest income		10,489			9,881			608			6.2	%
Noninterest expense		(22,076	)		(19,470	)		(2,606	)		13.4	%
Provision for income taxes		(3,715	)		(1,732	)		(1,983	)		114.5	%
Net income	$	6,549		$	3,126		$	3,423			109.5	%

Included in the Company’s results for the three and twelve month periods ended December 31, 2011 is the acquisition by Tri Counties Bank of the banking operations of Citizens Bank of Northern California (“Citizens”), Nevada City, California from the FDIC under a whole bank purchase and assumption agreement without loss sharing on September 23, 2011. The assets acquired and liabilities assumed in the Citizens acquisition have been accounted for under the acquisition method of accounting (formerly the purchase method).

As a result of the Citizens acquisition on September 23, 2011, the Company recorded a before-tax bargain purchase gain of $7,575,000 ($4,390,000 after-tax) representing the excess of the estimated fair value of the assets acquired over the estimated fair value of the liabilities assumed. The before-tax bargain purchase gain is recorded in noninterest income and the related tax effect ($3,185,000) is recorded in tax expense for the three month period ended September 30, 2011 and the year ended December 31, 2011.

A summary of the net assets received in the Citizens acquisition, at their estimated fair values on September 23, 2011, is presented below:

(in thousands)	Citizens
	September 23, 2011
Asset acquired:
Cash and cash equivalents	$	80,707
Securities available-for-sale		9,353
Loans		167,484
Core deposit intangible		898
Foreclosed assets		8,412
Other assets		3,450
Total assets acquired	$	270,304
Liabilities assumed:
Deposits	$	239,899
Other borrowings		22,038
Other liabilities		792
Total liabilities assumed		262,729
Net assets acquired/bargain purchase gain	$	7,575

A summary of the estimated fair value adjustments resulting in the bargain purchase gain in the Citizens acquisition are presented below:

	Citizens
(in thousands)	September 23, 2011
Cost basis net assets acquired	$	26,682
Cash payment received from FDIC		44,140
Fair value adjustments:
Cash and cash equivalents		539
Loans		(57,745	)
Foreclosed assets		(5,609	)
Core deposit intangible		898
Deposits		(382	)
Borrowings		(28	)
Other		(920	)
Bargain purchase gain	$	7,575

The operations of Citizens from September 23, 2011 to December 31, 2011 added approximately $6,171,000 and $54,000 to interest income and interest expense, respectively, $1,462,000 to provision for loan losses, $8,029,000 to noninterest income, and $1,865,000 to noninterest expense. Included in the $6,171,000 of Citizens related interest income recorded from September 23, 2011 to December 31, 2011, is $3,146,000 of interest income from fair value discount accretion. The recognition of interest income from the acquired Citizens loans, and in particular the fair value discount accretion portion, may fluctuate greatly depending on changes in actual and expected future cash flows of such loans. Loans acquired through the Citizens acquisition are classified as Purchased Not Credit Impaired (PNCI), Purchased Credit Impaired – cash basis (PCI – cash basis), or Purchased Credit Impaired – other (PCI – other). Loans not acquired in an acquisition or otherwise “purchased” are classified as “originated”. Further details regarding interest income from loans, including fair value discount accretion, may be found under the heading “Supplemental Loan Interest Income Data” in the Consolidated Financial Data table at the end of this announcement.

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

ANALYSIS OF CHANGE IN NET INTEREST MARGIN ON EARNING ASSETS

(unaudited, in thousands)

	Three Months Ended
	December 31, 2011								December 31, 2010
	Average Balance		Income/ Expense			Yield/ Rate			Average Balance		Income/ Expense			Yield/ Rate
Assets
Earning assets
Loans	$	1,570,648	$	27,247			6.94	%	$	1,443,603	$	23,070			6.39	%
Investments – taxable		245,683		1,887			3.07	%		246,043		2,159			3.51	%
Investments – nontaxable		10,128		181			7.15	%		12,644		232			7.34	%
Federal funds sold		493,746		361			0.29	%		365,925		252			0.28	%
Total earning assets		2,320,205		29,676			5.12	%		2,068,215		25,713			4.97	%
Other assets, net		193,429								167,256
Total assets	$	2,513,634							$	2,235,471
Liabilities and shareholders’ equity
Interest-bearing
Demand deposits	$	424,109		235			0.22	%	$	393,356		459			0.47	%
Savings deposits		800,035		351			0.18	%		580,451		449			0.31	%
Time deposits		433,844		801			0.74	%		515,809		1,200			0.93	%
Other borrowings		75,179		617			3.28	%		63,040		608			3.86	%
Trust preferred securities		41,238		325			3.15	%		41,238		320			3.10	%
Total interest-bearing liabilities		1,774,405		2,329			0.53	%		1,593,894		3,036			0.76	%
Noninterest-bearing deposits		491,434								405,390
Other liabilities		32,816								32,475
Shareholders’ equity		214,979								203,712
Total liabilities and shareholders’ equity	$	2,513,634							$	2,235,471
Net interest rate spread							4.59	%							4.21	%
Net interest income/net interest margin (FTE)				27,347			4.71	%				22,677			4.39	%
FTE adjustment				(67	)							(86	)
Net interest income (not FTE)			$	27,280							$	22,591

The increase in net interest income and the increase in net interest margin (FTE) from 4.39% during the three months ended December 31, 2010 to 4.71% in the current quarter is primarily due to the operations of Citizens since their acquisition on September 23, 2011. Absent the contributions from the Citizens acquisition, loan demand continues to be weak and investments continue to be unattractive given their low market yields and interest rate risk profile.

The Company recorded a provision for loan loss of $5,429,000 during the three months ended December 31, 2011 compared to $8,144,000 during the three months ended December 31, 2010. Nonperforming originated loans were $75,775,000 and $75,987,000 at December 31, 2011 and 2010, respectively. Loan charge-offs, net of recoveries, were $4,815,000 during the three months ended December 31, 2011 compared to $4,342,000 during the year-ago period.

Noninterest income increased $608,000 to $10,489,000 during the three months ended December 31, 2011 when compared to the three months ended December 31, 2010. The following table presents the key components of noninterest income for the periods indicated:

	Three months ended December 31,
(in thousands)	2011			2010		$ Change			% Change
Service charges on deposit accounts	$	3,877		$	3,510	$	367			10.5	%
ATM fees and interchange		1,857			1,601		256			16.0	%
Other service fees		419			379		40			10.6	%
Mortgage banking service fees		389			358		31			8.7	%
Change in value of mortgage servicing rights		(85	)		198		(283	)		(142.9	%)
Total service charges and fees		6,457			6,046		411			6.8	%
Gain on sale of loans		1,219			1,395		(176	)		(12.6	%)
Commission on NDIP		555			341		214			62.8	%
Increase in cash value of life insurance		535			569		(34	)		(6.0	%)
Change in indemnification asset		512			1,294		(782	)		(60.4	%)
Gain on sale of foreclosed assets		191			157		34			21.7	%
Gain on life insurance death benefit		789			—
Other noninterest income		231			79		152			192.4	%
Total other noninterest income	$	4,032		$	3,835		197			5.1	%
Total noninterest income	$	10,489		$	9,881	$	608			6.2	%

Noninterest expense increased $2,606,000 to $22,076,000 during the three months ended December 31, 2011 when compared to the three months ended December 31, 2010. The operations of Citizens from September 23, 2011 to December 31, 2011 added $751,000 to salaries expense and $1,114,000 to other noninterest expense. Included in the $1,114,000 of Citizens related other noninterest expense were $296,000 of provision for foreclosed assets expense and $271,000 of information systems expense including system conversion expense as the Company has begun work to convert the Citizens systems to the Company’s systems. The following table presents the key components of the Company’s noninterest expense for the periods indicated:

	Three months ended December 31,
(in thousands)	2011		2010			$ Change			% Change
Salaries	$	8,071	$	7,160		$	911			12.7	%
Commissions and incentives		188		478			(290	)		(60.7	%)
Employee benefits		2,506		2,434			72			3.0	%
Total salaries and benefits expense		10,765		10,072			693			6.9	%
Occupancy		1,815		1,457			358			24.6	%
Equipment		1,020		951			69			7.3	%
Change in reserve for unfunded commitments		100		(200	)		300
Data processing and software		1,232		885			347			39.2	%
Telecommunications		567		456			111			24.3	%
ATM network charges		525		475			50			10.5	%
Professional fees		682		396			286			72.2	%
Advertising and marketing		871		702			169			24.1	%
Postage		337		217			120			55.3	%
Courier service		302		221			81			36.7	%
Intangible amortization		52		85			(33	)		(38.8	%)
Operational losses		207		102			105			102.9	%
Provision for foreclosed asset losses		570		337			233			69.1	%
Foreclosed asset expense		258		265			(7	)		(2.6	%)
Assessments		589		833			(244	)		(29.3	%)
Other		2,184		2,216			(32	)		(1.4	%)
Total other noninterest expense		11,311		9,398			1,913			20.4	%
Total noninterest expense	$	22,076	$	19,470		$	2,606			13.4	%

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 41 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 76 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
	December 31, 2011			September 30, 2011			June 30, 2011			March 31, 2011			December 31, 2010
Statement of Income Data
Interest income	$	29,609		$	24,472		$	24,467		$	24,434		$	25,627
Interest expense		2,329			2,465			2,714			2,730			3,036
Net interest income		27,280			22,007			21,753			21,704			22,591
Provision for loan losses		5,429			5,069			5,561			7,001			8,144
Noninterest income:
Service charges and fees		6,457			5,584			6,121			5,782			6,045
Other income		4,032			9,139			2,130			3,568			3,836
Total noninterest income		10,489			14,723			8,251			9,350			9,881
Noninterest expense:
Base salaries net of deferred loan origination costs		8,071			7,478			7,198			7,004			7,160
Incentive compensation expense		188			1,850			783			916			478
Employee benefits and other compensation expense		2,506			2,602			2,734			2,873			2,434
Total salaries and benefits expense		10,765			11,930			10,715			10,793			10,072
Other noninterest expense		11,311			8,943			9,380			8,878			9,398
Total noninterest expense		22,076			20,873			20,095			19,671			19,470
Income (loss) before taxes		10,264			10,788			4,348			4,382			4,858
Net income	$	6,549		$	6,470		$	2,771		$	2,800		$	3,126
Share Data
Basic earnings per share	$	0.41		$	0.40		$	0.17		$	0.18		$	0.20
Diluted earnings per share	$	0.41		$	0.40		$	0.17		$	0.17		$	0.20
Book value per common share	$	13.55		$	13.19		$	12.82		$	12.72		$	12.64
Tangible book value per common share	$	12.49		$	12.14		$	11.82		$	11.71		$	11.62
Shares outstanding		15,978,958			15,978,958			15,978,958			15,860,138			15,860,138
Weighted average shares		15,978,958			15,978,958			15,922,228			15,860,138			15,860,138
Weighted average diluted shares		16,015,312			16,006,358			15,953,572			16,023,589			16,009,538
Credit Quality
Nonperforming originated loans	$	75,775		$	74,324		$	73,720		$	71,053		$	75,987
Total nonperforming loans	$	85,731		$	85,067		$	73,720		$	71,053		$	75,987
Guaranteed portion of nonperforming loans		3,061			3,287			3,496			3,736			3,937
Foreclosed assets, net of allowance		16,332			17,870			9,337			8,983			9,913
Loans charged-off		5,340			4,428			5,230			7,049			6,040
Loans recovered		525			697			407			701			1,698
Selected Financial Ratios
Return on average total assets		1.04	%		1.17	%		0.51	%		0.51	%		0.56	%
Return on average equity		12.19	%		12.41	%		5.39	%		5.50	%		6.14	%
Average yield on loans		6.94	%		6.24	%		6.24	%		6.22	%		6.39	%
Average yield on interest-earning assets		5.12	%		4.82	%		4.84	%		4.84	%		4.97	%
Average rate on interest-bearing liabilities		0.53	%		0.64	%		0.71	%		0.72	%		0.76	%
Net interest margin (fully tax-equivalent)		4.71	%		4.34	%		4.31	%		4.31	%		4.39	%
Supplemental Loan Interest Income Data:
Discount accretion Citizens PNCI loans		1,738			—			—			—			—
Discount accretion Citizens PCI – cash basis loans		418			28			—			—			—
Discount accretion Citizens PCI – other loans		868			93			—			—			—
Regular interest Citizens loans		2,816			144			—			—			—
Discount accretion Granite PCI – other loans		81			130			185			136			326
Regular interest Granite loans		835			777			828			790			922
All other loan interest income		20,491			20,815			20,722			20,796			21,822
Total loan interest income		27,247			21,987			21,735			21,722			23,070

TRICO BANCSHARES – CONSOLIDATED FINANCIAL DATA

(Unaudited. Dollars in thousands)

	Three months ended
	December 31, 2011			September 30, 2011			June 30, 2011			March 31, 2011			December 31, 2010
Balance Sheet Data
Cash and due from banks	$	637,275		$	522,636		$	391,054		$	406,294		$	371,066
Securities, available-for-sale		229,223			257,300			264,992			279,824			277,271
Federal Home Loan Bank Stock		10,610			11,124			9,199			9,133			9,133
Loans held for sale		10,219			10,872			4,379			2,834			4,988
Loans:
Commercial loans		141,609			154,257			140,531			131,242			141,902
Consumer loans		397,692			400,627			382,864			388,142			423,238
Real estate mortgage loans		976,008			978,492			828,757			823,563			807,482
Real estate construction loans		35,723			42,251			43,910			44,713			46,949
Total loans, gross		1,551,032			1,575,627			1,396,062			1,387,660			1,419,571
Allowance for loan losses		(45,914	)		(45,300	)		(43,962	)		(43,224	)		(42,571	)
Foreclosed assets		16,332			17,870			9,337			8,983			9,913
Premises and equipment		19,893			19,717			20,142			18,552			19,120
Cash value of life insurance		50,403			51,891			51,441			50,991			50,541
Goodwill		15,519			15,519			15,519			15,519			15,519
Intangible assets		1,301			1,353			475			495			580
Mortgage servicing rights		4,603			4,238			4,818			4,808			4,605
FDIC indemnification asset		4,405			4,473			4,545			6,689			5,640
Accrued interest receivable		7,312			7,397			6,549			6,941			7,131
Other assets		43,384			33,750			41,634			40,239			37,282
Total assets		2,555,597			2,488,467			2,176,184			2,195,738			2,189,789
Deposits:
Noninterest-bearing demand deposits		541,276			469,630			419,391			427,116			424,070
Interest-bearing demand deposits		431,565			425,281			401,040			406,060			395,413
Savings deposits		797,182			788,276			618,413			608,582			585,845
Time certificates		420,513			437,036			397,887			418,154			446,845
Total deposits		2,190,536			2,120,223			1,836,731			1,859,912			1,852,173
Accrued interest payable		1,674			1,815			1,865			2,044			2,151
Reserve for unfunded commitments		2,740			2,640			2,640			2,690			2,640
Other liabilities		30,427			28,808			29,561			30,262			29,170
Other borrowings		72,541			82,919			59,234			57,781			62,020
Junior subordinated debt		41,238			41,238			41,238			41,238			41,238
Total liabilities		2,339,156			2,277,643			1,971,269			1,993,927			1,989,392
Total shareholders’ equity		216,441			210,824			204,915			201,811			200,397
Accumulated other comprehensive gain (loss)		3,811			3,468			2,644			1,086			1,310
Average loans		1,570,648			1,410,151			1,393,989			1,396,331			1,443,603
Average interest-earning assets		2,320,205			2,037,348			2,028,429			2,024,285			2,068,215
Average total assets		2,513,634			2,207,800			2,192,651			2,189,363			2,235,471
Average deposits		2,149,422			1,865,399			1,852,800			1,851,606			1,895,006
Average total equity	$	214,979		$	208,560		$	205,763		$	203,535		$	203,712
Total risk based capital ratio		13.9	%		13.5	%		14.6	%		14.5	%		14.2	%
Tier 1 capital ratio		12.7	%		12.2	%		13.3	%		13.2	%		12.9	%
Tier 1 leverage ratio		9.5	%		10.5	%		10.4	%		10.3	%		10.0	%
Tangible capital ratio		7.9	%		7.8	%		8.7	%		8.5	%		8.5	%