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 27, 2012) – TriCo Bancshares (NASDAQ: TCBK) (the “Company”), parent company of Tri Counties Bank (the “Bank”), today announced a $2,550,000 (92.0%) increase in earnings to $5,321,000 for the three months ended June 30, 2012 from $2,771,000 for the three months ended June 30, 2011. Diluted earnings per share for the three months ended June 30, 2012 were $0.33 compared to diluted earnings per share of $0.17 for the three months ended June 30, 2011. Diluted earnings per share for the six months ended June 30, 2012 and 2011 were $0.58 and $0.35, respectively, on earnings of $9,252,000 and $5,571,000, respectively.

Total assets of the Company increased $349,434,000 (16.1%) to $2,525,618,000 at June 30, 2012 from $2,176,184,000 at June 30, 2011. Total loans of the Company increased $156,420,000 (11.2%) to $1,552,482,000 at June 30, 2012 from $1,396,062,000 at June 30, 2011. The increase in loans from the year-ago balance is primarily due to $167,484,000 of loans acquired in the acquisition of the banking operations of Citizens Bank of Northern California (“Citizens”) on September 23, 2011 that was partially offset by charge offs and net loan payoffs. Loans increased $41,397,000 (2.7%) during the three months ended June 30, 2012 primarily due to seasonal draws on lines of credit and demand for new loans.

Total deposits of the Company increased $329,046,000 (17.9%) to $2,165,777,000 at June 30, 2012 from $1,836,731,000 at June 30, 2011. The increase in deposits is mainly due to $239,899,000 of deposits acquired in the Citizens acquisition.

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

	Three months ended June 30,
(dollars in thousands)	2012		2011		$ Change		% Change
Net Interest Income	$	25,934	$	21,753	$	4,181		19.2	%
Provision for loan losses		(3,371)		(5,561)		2,190		(39.4	%)
Noninterest income		10,577		8,251		2,326		28.2	%
Noninterest expense		(24,367)		(20,095)		(4,272)		21.3	%
Provision for income taxes		(3,452)		(1,577)		(1,875)		118.9	%
Net income	$	5,321	$	2,771	$	2,550		92.0	%

Included in the Company’s results for the three month period ended June 30, 2012 is the acquisition by Tri Counties Bank of the banking operations of Citizens Bank of Northern California, 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). 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, dollars in thousands)

	Three Months Ended
	June 30, 2012								June 30, 2011
	Average Balance		Income/ Expense			Yield/ Rate			Average Balance		Income/ Expense			Yield/ Rate
Assets
Earning assets
Loans	$	1,534,006	$	25,792			6.73	%	$	1,393,989	$	21,735			6.24	%
Investments - taxable		208,417		1,615			3.10	%		271,089		2,354			3.47	%
Investments - nontaxable		9,561		171			7.15	%		11,839		216			7.31	%
Federal funds sold		579,164		430			0.30	%		351,512		242			0.28	%
Total earning assets		2,331,148		28,008			4.81	%		2,028,429		24,547			4.84	%
Other assets, net		177,951								164,222
Total assets	$	2,509,099							$	2,192,651
Liabilities and shareholders’ equity
Interest-bearing
Demand deposits	$	473,124		197			0.17	%	$	408,109		358			0.35	%
Savings deposits		731,988		296			0.16	%		613,924		372			0.24	%
Time deposits		380,943		584			0.61	%		406,436		1,072			1.06	%
Other borrowings		62,300		601			3.86	%		59,139		600			4.06	%
Trust preferred securities		41,238		332			3.22	%		41,238		312			3.03	%
Total interest-bearing liabilities		1,689,593		2,010			0.48	%		1,528,846		2,714			0.71	%
Noninterest-bearing deposits		562,909								424,331
Other liabilities		33,569								33,711
Shareholders’ equity		223,028								205,763
Total liabilities and shareholders’ equity	$	2,509,099							$	2,192,651
Net interest rate spread							4.33	%							4.13	%
Net interest income/net interest margin (FTE)				25,998			4.46	%				21,833			4.31	%
FTE adjustment				(64	)							(80	)
Net interest income (not FTE)			$	25,934							$	21,753

Net interest income (FTE) during the three months ended June 30, 2012 increased $4,165,000 (19.1%) from the same period in 2011 to $25,998,000. The increase in net interest income (FTE) was due to a $140,017,000 (10.4%) increase in average balance of loans and a 49 basis point increase in average yield on loans to 6.73%, both of which are primarily due to the Citizens acquisition in September 2011. The operations of Citizens from April 1, 2012 to June 30, 2012 added approximately $5,032,000 and $5,000 to interest income and interest expense, respectively. Included in the $5,032,000 of Citizens related interest income recorded during the three months ended June 30, 2012, is $2,278,000 of interest income from fair value discount accretion. Also contributing to the increase in net interest income during the three months ended June 30, 2012 was a 19 basis point decrease in the cost of deposits from 0.39% during the three months ended June 30, 2011 to 0.20% during the three months ended June 30, 2012.

The Company provided $3,371,000 for loan losses in the second quarter of 2012 versus $3,996,000 in the first quarter of 2012 and $5,561,000 in the second quarter of 2011. Included in the provision for loan losses during the quarter ended June 30, 2012, was $281,000 related to Citizens loans. The allowance for loan losses increased $397,000 from $45,452,000 at March 31, 2012 to $45,849,000 at June 30, 2012. The decrease in provision for loan losses during the second quarter of 2012 compared to the first quarter of 2012 was primarily the result of a decrease in nonperforming Originated loans and a decrease in net loan charge offs.

The following table presents the key components of noninterest income for the periods indicated:

	Three months ended June 30,
(dollars in thousands)	2012			2011			$ Change			% Change
Service charges on deposit accounts	$	3,644		$	3,700		($	56	)		(1.5	%)
ATM fees and interchange		2,026			1,776			250			14.1	%
Other service fees		570			437			133			30.4	%
Mortgage banking service fees		379			370			9			2.4	%
Change in value of mortgage servicing rights		(464	)		(162	)		(302	)		186.4	%
Total service charges and fees		6,155			6,121			34			0.6	%
Gain on sale of loans		1,237			495			742			149.9	%
Commission on NDIP		842			648			194			29.9	%
Increase in cash value of life insurance		450			450			—			0.0	%
Change in indemnification asset		662			144			518			359.7	%
Gain on sale of foreclosed assets		304			185			119			64.3	%
Life insurance death benefit		600			—			600
Other noninterest income		327			208			119			57.2	%
Total other noninterest income		4,422			2,130			2,292			107.6	%
Total noninterest income	$	10,577		$	8,251		$	2,326			28.2	%

Noninterest income increased $2,326,000 (28.2%) to $10,577,000 in the three months ended June 30, 2012 when compared to the three months ended June 30, 2011. The increase in noninterest income was primarily due to a $742,000 increase in gain on sale of loans, a $600,000 gain on life insurance benefit, a $518,000 increase in change in indemnification asset, a $250,000 increase in ATM fees and interchange, and a $194,000 increase in commissions on sale of nondeposit investment products (NDIP), that were partially offset by a $302,000 decrease in change in value of mortgage servicing rights to a negative $464,000. The increase in gain on sale of loans is due to increased residential real estate loan refinance activity and our focus to service that activity. The increase in change in indemnification asset is due to increased actual and estimated future losses in our covered loan and foreclosed assets portfolios. The increase in commissions on sale of NDIP is due to our application of additional resources in that area. The operations of Citizens from April 1, 2012 to June 30, 2012 accounted for $643,000 of the $10,577,000 of noninterest income during the three months ended June 30, 2012.

Salary and benefit expenses increased $1,775,000 (16.6%) to $12,490,000 during the three months ended June 30, 2012 compared to the three months ended June 30, 2011. Base salaries increased $1,075,000 (14.9%) to $8,273,000 during the three months ended June 30, 2012. The increase in base salaries was mainly due to a 10.3% increase in average full time equivalent staff to 741 and annual merit increases when compared to the three months ended June 30, 2011. The increase in full time equivalent staff is mainly due to the Citizens acquisition on September 23, 2011. Incentive and commission related salary expenses increased $564,000 (72.0%) to $1,347,000 during three months ended June 30, 2012 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 $136,000 (5.0%) to $2,870,000 during the three months ended June 30, 2012 primarily due to the increase in average full time equivalent staff noted above. The operations of Citizens from April 1, 2012 to June 30, 2012 added $894,000 to salaries and benefits expense.

Other noninterest expenses increased $2,497,000 (26.6%) to $11,877,000 during the three months ended June 30, 2012 when compared to the three months ended June 30, 2011. Changes in the various categories of other noninterest expense are reflected in the table below. The changes are indicative of the Citizens acquisition, and 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 operations of Citizens from April 1, 2012 to June 30, 2012 added $1,257,000 to other noninterest expense including $419,000 of loan and OREO expenses.

The following table presents the key components of the Company’s noninterest expense for the periods indicated:

	Three months ended June 30,
(dollars in thousands)	2012		2011			$ Change			% Change
Salaries	$	8,273	$	7,198		$	1,075			14.9	%
Commissions and incentives		1,347		783			564			72.0	%
Employee benefits		2,870		2,734			136			5.0	%
Total salaries and benefits expense		12,490		10,715			1,775			16.6	%
Occupancy		1,857		1,402			455			32.5	%
Equipment		1,126		880			246			28.0	%
Change in reserve for unfunded commitments		40		(50	)		90
Data processing and software		1,143		956			187			19.6	%
Telecommunications		567		520			47			9.0	%
ATM network charges		532		507			25			4.9	%
Professional fees		691		573			118			20.6	%
Advertising and marketing		863		739			124			16.8	%
Postage		218		219			(1	)		(0.5	%)
Courier service		256		221			35			15.8	%
Intangible amortization		52		20			32			160.0	%
Operational losses		143		118			25			21.2	%
Provision for foreclosed asset losses		1,004		638			366			57.4	%
Foreclosed asset expense		267		115			152			132.2	%
Assessments		590		518			72			13.9	%
Other		2,528		2,004			524			26.1	%
Total other noninterest expense		11,877		9,380			2,497			26.6	%
Total noninterest expense	$	24,367	$	20,095		$	4,272			21.3	%

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, 2011. 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 37-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 73 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, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
Statement of Income Data
Interest income	$	27,944		$	27,164		$	29,609		$	24,472		$	24,467
Interest expense		2,010			2,128			2,329			2,465			2,714
Net interest income		25,934			25,036			27,280			22,007			21,753
Provision for loan losses		3,371			3,996			5,429			5,069			5,561
Noninterest income:
Service charges and fees		6,155			5,952			6,457			5,584			6,121
Other income		4,422			2,313			4,032			9,139			2,130
Total noninterest income		10,577			8,265			10,489			14,723			8,251
Noninterest expense:
Base salaries net of deferred loan origination costs		8,273			8,159			8,071			7,478			7,198
Incentive compensation expense		1,347			1,375			188			1,850			783
Employee benefits and other compensation expense		2,870			3,228			2,506			2,602			2,734
Total salaries and benefits expense		12,490			12,762			10,765			11,930			10,715
Other noninterest expense		11,877			10,153			11,311			8,943			9,380
Total noninterest expense		24,367			22,915			22,076			20,873			20,095
Income before taxes		8,773			6,390			10,264			10,788			4,348
Net income	$	5,321		$	3,931		$	6,549		$	6,470		$	2,771
Share Data
Basic earnings per share	$	0.33		$	0.25		$	0.41		$	0.40		$	0.17
Diluted earnings per share	$	0.33		$	0.25		$	0.41		$	0.40		$	0.17
Book value per common share	$	13.96		$	13.71		$	13.55		$	13.19		$	12.82
Tangible book value per common share	$	12.91		$	12.66		$	12.49		$	12.14		$	11.82
Shares outstanding		15,992,893			15,978,958			15,978,958			15,978,958			15,978,958
Weighted average shares		15,985,922			15,978,958			15,978,958			15,978,958			15,922,228
Weighted average diluted shares		16,047,344			16,042,765			16,015,312			16,006,358			15,953,572
Credit Quality
Nonperforming originated loans	$	69,749		$	70,764		$	75,775		$	74,324		$	73,720
Total nonperforming loans		82,877			82,575			85,731			85,067			73,720
Guaranteed portion of nonperforming loans		218			218			3,061			3,287			3,496
Foreclosed assets, net of allowance		12,743			14,789			16,332			17,870			9,337
Loans charged-off		4,188			4,922			5,340			4,428			5,230
Loans recovered		1,214			464			525			697			407
Selected Financial Ratios
Return on average total assets		0.85	%		0.63	%		1.04	%		1.17	%		0.51	%
Return on average equity		9.54	%		7.14	%		12.19	%		12.41	%		5.39	%
Average yield on loans		6.73	%		6.53	%		6.94	%		6.24	%		6.24	%
Average yield on interest-earning assets		4.81	%		4.66	%		5.12	%		4.82	%		4.84	%
Average rate on interest-bearing liabilities		0.48	%		0.49	%		0.53	%		0.64	%		0.71	%
Net interest margin (fully tax-equivalent)		4.46	%		4.30	%		4.71	%		4.34	%		4.31	%
Supplemental Loan Interest Income Data:
Discount accretion PCI - cash basis loans		108			18			418			28			—
Discount accretion PCI - other loans		886			776			949			223			185
Discount accretion PNCI loans		1,391			1,286			1,738			—			—
Regular interest Purchased loans		3,439			3,420			3,651			978			872
All other loan interest income		19,968			19,429			20,491			20,758			20,678
Total loan interest income		25,792			24,929			27,247			21,987			21,735

TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA

(Unaudited. Dollars in thousands)

	Three months ended
	June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
Balance Sheet Data
Cash and due from banks	$	644,102		$	681,760		$	637,275		$	522,636		$	391,054
Securities, available-for-sale		202,849			212,157			229,223			257,300			264,992
Federal Home Loan Bank Stock		9,990			10,508			10,610			11,124			9,199
Loans held for sale		5,321			5,869			10,219			10,872			4,379
Loans:
Commercial loans		139,733			129,906			139,131			154,257			140,531
Consumer loans		393,248			419,539			406,330			400,627			382,864
Real estate mortgage loans		984,147			924,336			965,922			978,492			828,757
Real estate construction loans		35,354			37,304			39,649			42,251			43,910
Total loans, gross		1,552,482			1,511,085			1,551,032			1,575,627			1,396,062
Allowance for loan losses		(45,849	)		(45,452	)		(45,914	)		(45,300	)		(43,962	)
Foreclosed assets		12,743			14,789			16,332			17,870			9,337
Premises and equipment		22,595			19,814			19,893			19,717			20,142
Cash value of life insurance		50,292			50,853			50,403			51,891			51,441
Goodwill		15,519			15,519			15,519			15,519			15,519
Intangible assets		1,196			1,248			1,301			1,353			475
Mortgage servicing rights		4,757			4,784			4,603			4,238			4,818
FDIC indemnification asset		4,046			3,405			4,405			4,473			4,545
Accrued interest receivable		7,545			7,095			7,312			7,397			6,549
Other assets		38,030			39,474			43,384			33,750			41,634
Total assets		2,525,618			2,532,908			2,555,597			2,488,467			2,176,184
Deposits:
Noninterest-bearing demand deposits		578,010			564,143			541,276			469,630			419,391
Interest-bearing demand deposits		480,337			488,573			431,565			425,281			401,040
Savings deposits		737,433			724,449			797,182			788,276			618,413
Time certificates		369,997			392,581			420,513			437,036			397,887
Total deposits		2,165,777			2,169,746			2,190,536			2,120,223			1,836,731
Accrued interest payable		1,415			1,587			1,674			1,815			1,865
Reserve for unfunded commitments		2,590			2,550			2,740			2,640			2,640
Other liabilities		30,538			29,675			30,427			28,808			29,561
Other borrowings		60,831			69,074			72,541			82,919			59,234
Junior subordinated debt		41,238			41,238			41,238			41,238			41,238
Total liabilities		2,302,389			2,313,870			2,339,156			2,277,643			1,971,269
Total shareholders’ equity		223,229			219,038			216,441			210,824			204,915
Accumulated other comprehensive gain		3,537			3,658			3,811			3,468			2,644
Average loans		1,534,006			1,527,536			1,570,648			1,410,151			1,393,989
Average interest-earning assets		2,331,148			2,334,842			2,320,205			2,037,348			2,028,429
Average total assets		2,509,099			2,514,541			2,513,634			2,207,800			2,192,651
Average deposits		2,148,964			2,149,212			2,149,422			1,865,399			1,852,800
Average total equity	$	223,028		$	220,366		$	214,979		$	208,560		$	205,763
Total risk based capital ratio		14.3	%		14.3	%		13.9	%		13.5	%		14.6	%
Tier 1 capital ratio		13.0	%		13.0	%		12.7	%		12.2	%		13.3	%
Tier 1 leverage ratio		9.7	%		9.5	%		9.5	%		10.5	%		10.4	%
Tangible capital ratio		8.2	%		8.0	%		7.9	%		7.8	%		8.7	%