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. – (October 29, 2013) – TriCo Bancshares (NASDAQ: TCBK) (the “Company”), parent company of Tri Counties Bank (the “Bank”), today announced earnings of $7,361,000, or $0.45 per diluted share, for the three months ended September 30, 2013. These results compare to earnings of $5,020,000, or $0.31 per diluted share reported by the Company for the three months ended September 30, 2012.

Total assets of the Company increased $116,625,000 (4.6%) to $2,632,106,000 at September 30, 2013 from $2,515,481,000 at September 30, 2012. Total loans increased $81,404,000 (5.2%) to $1,657,051,000 at September 30, 2013 from $1,575,647,000 at September 30, 2012. Total investment securities increased $125,045,000 (68.2%) to $308,477,000 at September 30, 2013 from $183,432,000 at September 30, 2012. Total deposits increased $91,672,000 (4.2%) to $2,293,311,000 at September 30, 2013 from $2,201,639,000 at September 30, 2012. Cash and due from banks decreased $81,344,000 (13.1%) to $541,150,000 at September 30, 2013 from $622,494,000 at September 30, 2012.

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

	Three months ended September 30,
(dollars in thousands)	2013			2012			$ Change			% Change
Net Interest Income	$	26,367		$	25,631		$	736			2.9	%
Benefit from (provision for) loan losses		393			(532	)		925			(173.9	%)
Noninterest income		9,127			9,127			0			0.0	%
Noninterest expense		(23,616	)		(25,590	)		1,974			(7.7	%)
Provision for income taxes		(4,910	)		(3,616	)		(1,294	)		35.8	%
Net income	$	7,361		$	5,020		$	2,341			46.6	%

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								Three Months Ended								Three Months Ended
	September 30, 2013								June 30, 2013								September 30, 2012
	Average		Income/			Yield/			Average		Income/			Yield/			Average		Income/			Yield/
	Balance		Expense			Rate			Balance		Expense			Rate			Balance		Expense			Rate
Assets
Earning assets
Loans	$	1,635,506	$	25,123			6.14	%	$	1,608,511	$	23,883			5.94	%	$	1,573,816	$	25,530			6.49	%
Investments - taxable		249,901		1,863			2.98	%		164,907		1,229			2.98	%		195,951		1,455			2.97	%
Investments - nontaxable		20,809		275			5.29	%		17,108		240			5.61	%		9,561		173			7.24	%
Cash at Federal Reserve and other banks		498,978		378			0.30	%		632,292		494			0.31	%		571,837		372			0.26	%
Total earning assets		2,405,194		27,639			4.60	%		2,422,818		25,846			4.27	%		2,351,164		27,530			4.68	%
Other assets, net		198,049								161,916								168,095
Total assets	$	2,603,243							$	2,584,734							$	2,519,259
Liabilities and shareholders’ equity
Interest-bearing
Demand deposits	$	522,784		145			0.11	%	$	518,961		125			0.10	%	$	479,565		196			0.16	%
Savings deposits		800,126		249			0.12	%		782,339		246			0.13	%		757,491		314			0.17	%
Time deposits		307,957		460			0.60	%		322,668		484			0.60	%		359,507		596			0.66	%
Other borrowings		7,693		1			0.05	%		7,596		1			0.05	%		41,852		395			3.78	%
Trust preferred securities		41,238		314			3.05	%		41,238		311			3.02	%		41,238		333			3.23	%
Total interest-bearing liabilities		1,679,798		1,169			0.28	%		1,672,802		1,167			0.28	%		1,679,652		1,834			0.44	%
Noninterest-bearing deposits		643,175								635,503								577,523
Other liabilities		36,494								36,444								35,227
Shareholders’ equity		243,776								239,985								226,857
Total liabilities and shareholders’ equity	$	2,603,243							$	2,584,734							$	2,519,259
Net interest rate spread							4.32	%							3.99	%							4.24	%
Net interest income/net interest margin (FTE)				26,470			4.40	%				24,679			4.07	%				25,696			4.37	%
FTE adjustment				(103	)							(90	)							(65	)
Net interest income (not FTE)			$	26,367							$	24,589							$	25,631

Net interest income (FTE) during the three months ended September 30, 2013 increased $774,000 (3.0%) from the same period in 2012 to $26,470,000. The increase in net interest income (FTE) was primarily due to increased loan and investment balances that were funded by reducing lower yielding cash at the Federal Reserve Bank. A decrease in the average balance of other borrowings also helped to increase net interest income from the year-ago quarter. Average loan and investment balances increased $61,690,000 (3.9%) and $65,199,000 (31.7%), respectively, and added $1,001,000 and $605,000 to net interest income, respectively, when compared to the year-ago quarter. Included in the increase in average loan balances was the effect of the purchase of $60,647,000 of residential real estate loans in the quarter ended June 30, 2013. The increase in the average balance of investments was due to the Company’s decision to deploy some of its excess cash at the Federal Reserve Bank into higher yielding investments during the quarters ended June 30 and September 30, 2013. The average balance of other borrowings decreased $34,158,000 (81.6%) as the Company paid off a $50,000,000 borrowing on August 30,2012, and this reduction in other borrowings added $323,000 to net interest income when compared to the year-ago quarter. These favorable changes in asset and liability balances were partially offset by a 35 basis point decrease in the average yield on loans to 6.14% that decreased net interest income by $1,408,000 when compared to the year-ago quarter. The decrease in loan yields from the year-ago quarter is due mainly to the repricing of existing loans and the origination of new loans at current market yields that are lower than the yields that existed at earlier repricing and origination dates. Accretion of loan purchase discounts totaling $2,153,000 and $1,807,000 are included in net interest income for the three months ended September 30, 2013 and 2012, respectively. Decreases in rates paid for all categories of interest bearing liabilities added $292,000 to net interest income when compared to the year-ago quarter.

Loans acquired through purchase or acquisition of other banks 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”. Often, such purchased loans are purchased at a discount to face value, and part of this discount is accreted into (added to) interest income over the remaining life of the loan. Generally, as time goes on, the effect of this discount accretion becomes less and less as these purchased loans mature or payoff early. 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 Company benefited from a $393,000 reversal of provision for loan losses in the third quarter of 2013 versus a provision for loan losses of $532,000 in the third quarter of 2012. The level of provision for loan losses during the third quarter of 2013 was due primarily to a decrease in the required allowance for loan losses as of September 30, 2013 when compared to the required allowance for loan losses as of June 30, 2013 less net charge-offs during the three months ended September 30, 2013. The decrease in the required allowance for loan losses during the quarter ended September 30, 2013 was due primarily to reduced impaired loans, improvements in estimated cash flows and collateral values for the remaining and newly impaired loans, and reductions in historical loss factors that, in part, determine the required loan loss allowance for performing loans in accordance with the Company’s allowance for loan losses methodology.

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

	Three months ended
	September 30,
(dollars in thousands)	2013			2012			$ Change			% Change
Service charges on deposit accounts		3,353			3,617		($	264	)		(7.3	%)
ATM fees and interchange		2,132			1,877			255			13.6	%
Other service fees		562			567			(5	)		(0.9	%)
Mortgage banking service fees		434			403			31			7.7	%
Change in value of mortgage servicing rights		181			(681	)		862			(126.6	%)
Total service charges and fees		6,662			5,783			879			15.2	%
Gain on sale of loans		1,083			1,430			(347	)		(24.3	%)
Commission on NDIP		692			803			(111	)		(13.8	%)
Increase in cash value of life insurance		531			450			81			18.0	%
Change in indemnification asset		(461	)		(94	)		(367	)		390.4	%
Gain on sale of foreclosed assets		313			418			(105	)		(25.1	%)
Other noninterest income		307			337			(30	)		(8.9	%)
Total other noninterest income		2,465			3,344			(879	)		(26.3	%)
Total noninterest income		9,127			9,127		$	0			0.0	%

Noninterest income was $9,127,000 during the three months ended September 30, 2013, and was unchanged when compared to the three months ended September 30, 2012. Increases in ATM and interchange fees and change in value of mortgage servicing rights were offset by decreases in service charges on deposit accounts, gain on sale of loans, and change in indemnification asset. ATM and interchange fees increased $255,000 to $2,132,000 due to increased interchange fees from an ongoing effort to expand this business line. Change in value of mortgage servicing rights had an improvement of $862,000 going from a negative contribution of $681,000 in the three months ended September 30, 2012 to a positive contribution of $181,000 in the three months ended September 30, 2013. The $681,000 negative contribution from change in value of mortgage servicing rights in the quarter ended September 30, 2012 was due to decreased expected life of such assets, and an increase in market discount rates for such assets during the quarter ended September 30, 2012. The $181,000 positive contribution from change in value of mortgage servicing rights in the quarter ended September 30, 2013 was due to increased expected life of such assets during the quarter ended September 30, 2013. Service charges on deposit accounts decreased $264,000 to $3,353,000 due to reduced customer overdrafts and a resulting decrease in non-sufficient funds fees. Gain on sale of loans decreased $347,000 to $1,083,000 due to increased mortgage rates and a resulting decrease in mortgage refinance activity from the year-ago quarter. Change in indemnification asset was a negative contribution of $461,000 in the quarter ended September 31, 2013 compared to a negative contribution of $94,000 in the quarter ended September 30, 2012. This $367,000 increase in negative contribution from change in indemnification asset is reflective of continued and larger decreases in estimated future losses from covered assets. Such decreases in estimated losses from covered loans are also reflected in decreases in the Company’s provision for loan losses that offset this negative contribution from change in indemnification asset.

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

	Three months ended
	September 30,
(dollars in thousands)	2013			2012			$ Change			% Change
Salaries	$	8,716		$	8,337		$	379			4.5	%
Commissions and incentives		1,166			1,254			(88	)		(7.0	%)
Employee benefits		2,979			2,771			208			7.5	%
Total salaries and benefits expense		12,861			12,362			499			4.0	%
Occupancy		1,925			1,851			74			4.0	%
Equipment		1,089			1,138			(49	)		(4.3	%)
Change in reserve for unfunded commitments		(335	)		(35	)		(300	)		857.1	%
Data processing and software		1,184			1,017			167			16.4	%
Telecommunications		629			553			76			13.7	%
ATM network charges		626			529			97			18.3	%
Professional fees		741			832			(91	)		(10.9	%)
Advertising and marketing		492			710			(218	)		(30.7	%)
Postage		269			230			39			17.0	%
Courier service		217			270			(53	)		(19.6	%)
Intangible amortization		53			52			1			1.9	%
Operational losses		137			171			(34	)		(19.9	%)
Provision for foreclosed asset losses		47			433			(386	)		(89.1	%)
Foreclosed asset expense		48			284			(236	)		(83.1	%)
Assessments		572			590			(18	)		(3.1	%)
Legal settlement		339			2,090			(1,751	)		(83.8	%)
Other		2,722			2,513			209			8.3	%
Total other noninterest expense		10,755			13,228			(2,473	)		(18.7	%)
Total noninterest expense	$	23,616		$	25,590		($	1,974	)		(7.7	%)

Salary and benefit expenses increased $499,000 (4.0%) to $12,861,000 during the three months ended September 30, 2013 compared to the three months ended September 30, 2012. Base salaries increased $379,000 (4.5%) to $8,716,000 during the three months ended September 30, 2013 versus the year ago period due mainly to annual merit increases, and the addition of several higher compensated management positions, while the average number full-time equivalent staff decreased to 732 from 740 in the year-ago quarter. Incentive and commission related salary expenses decreased $88,000 (7.0%) to $1,166,000 during three months ended September 30, 2013 due

primarily to decreases in production related incentives. Benefits expense, including retirement, medical and workers’ compensation insurance, and taxes, increased $208,000 (7.5%) to $2,979,000 during the three months ended September 30, 2013 due primarily to increased health insurance and workers compensation insurance expenses.

Other noninterest expenses decreased $2,473,000 (18.7%) to $10,755,000 during the three months ended September 30, 2013 when compared to the three months ended September 30, 2012. The decrease in other noninterest expense was due primarily a $1,751,000 decrease in legal settlement expense to $339,000, a $622,000 (86.8%) decrease in the provision for, and expenses related to, foreclosed assets to $95,000, a $218,000 (30.7%) decrease in advertising and marketing expense to $492,000, and a $300,000 increase in reversal of provision for losses for unfunded commitments to a reversal of $335,000. Data processing and software expense was up $167,000 (16.4%) to $1,184,000. The decrease in foreclosed asset provision and expenses was due to increased property values and a reduction in foreclosed assets from $12,743,000 at June 30, 2012 to $4,140,000 at September 30, 2013. The decrease in advertising and marketing expense from the year ago period was due to cost savings efforts in this area. The increase in reversal of provision for losses for unfunded commitments was due to a decrease in construction loan related commitments and a decrease in historical loss rates.

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, 2012. 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 38-year history in the banking industry. It operates 41 traditional branch locations and 24 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 72 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
	September 30,			June 30,			March 31,			December 31,			September 30,
	2013			2013			2013			2012			2012
Statement of Income Data
Interest income	$	27,536		$	25,756		$	25,806		$	26,143		$	27,465
Interest expense		1,169			1,167			1,237			1,372			1,834
Net interest income		26,367			24,589			24,569			24,771			25,631
(Benefit from) provision for loan losses		(393	)		614			(1,108	)		1,524			532
Noninterest income:
Service charges and fees		6,662			6,693			5,929			6,035			5,783
Other income		2,465			3,438			4,289			3,976			3,344
Total noninterest income		9,127			10,131			10,218			10,011			9,127
Noninterest expense:
Base salaries net of deferred loan origination costs		8,716			8,508			8,348			8,324			8,337
Incentive compensation expense		1,166			1,299			1,286			1,162			1,254
Employee benefits and other compensation expense		2,979			3,083			3,327			2,852			2,771
Total salaries and benefits expense		12,861			12,890			12,961			12,338			12,362
Other noninterest expense		10,755			10,619			8,640			12,788			13,228
Total noninterest expense		23,616			23,509			21,601			25,126			25,590
Income before taxes		12,271			10,597			14,294			8,132			8,636
Net income	$	7,361		$	6,325		$	8,477		$	4,722		$	5,020
Share Data
Basic earnings per share	$	0.46		$	0.39		$	0.53		$	0.30		$	0.31
Diluted earnings per share	$	0.45		$	0.39		$	0.53		$	0.29		$	0.31
Book value per common share	$	15.27		$	14.90		$	14.75		$	14.33		$	14.21
Tangible book value per common share	$	14.24		$	13.87		$	13.71		$	13.30		$	13.16
Shares outstanding		16,076,662			16,065,469			16,005,191			16,000,838			15,992,893
Weighted average shares		16,073,864			16,027,557			16,002,482			15,996,137			15,992,893
Weighted average diluted shares		16,230,160			16,134,510			16,091,150			16,064,685			16,051,876
Credit Quality
Nonperforming originated loans	$	53,261		$	52,661		$	54,763		$	61,769		$	66,654
Total nonperforming loans		61,384			61,466			63,963			72,516			81,611
Foreclosed assets, net of allowance		4,140			5,054			6,124			7,498			10,185
Loans charged-off		985			1,947			2,771			4,006			3,368
Loans recovered		1,119			1,065			1,098			983			1,133
Selected Financial Ratios
Return on average total assets		1.13	%		0.98	%		1.30	%		0.74	%		0.80	%
Return on average equity		12.08	%		10.54	%		14.51	%		8.20	%		8.85	%
Average yield on loans		6.14	%		5.94	%		6.22	%		6.16	%		6.49	%
Average yield on interest-earning assets		4.60	%		4.27	%		4.25	%		4.40	%		4.68	%
Average rate on interest-bearing liabilities		0.28	%		0.28	%		0.29	%		0.33	%		0.44	%
Net interest margin (fully tax-equivalent)		4.40	%		4.07	%		4.05	%		4.17	%		4.37	%
Supplemental Loan Interest Income Data:
Discount accretion PCI - cash basis loans	$	140		$	129		$	167		$	42		$	24
Discount accretion PCI - other loans		898			732			597			979			1,192
Discount accretion PNCI loans		1,115			815			766			841			591
All other loan interest income		22,970			22,207			22,542			22,383			23,723
Total loan interest income		25,123			23,883			24,072			24,245			25,530

TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA

(Unaudited. Dollars in thousands)

	Three months ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2013			2013			2013			2012			2012
Balance Sheet Data
Cash and due from banks	$	541,150		$	592,155		$	802,271		$	748,899		$	622,494
Securities, available for sale		115,215			127,519			144,454			163,027			183,432
Securities, held to maturity		193,262			85,643			—			—			—
Federal Home Loan Bank Stock		9,163			9,163			9,647			9,647			9,647
Loans held for sale		3,247			6,582			7,931			12,053			14,937
Loans:
Commercial loans		133,616			128,410			115,483			135,528			145,469
Consumer loans		389,711			387,217			376,063			386,111			388,844
Real estate mortgage loans		1,091,475			1,097,446			1,010,249			1,010,130			1,007,432
Real estate construction loans		42,249			38,967			30,567			33,054			33,902
Total loans, gross		1,657,051			1,652,040			1,532,362			1,564,823			1,575,647
Allowance for loan losses		(39,340	)		(39,599	)		(39,867	)		(42,648	)		(44,146	)
Foreclosed assets		4,140			5,054			6,124			7,498			10,185
Premises and equipment		31,246			31,194			29,468			26,985			24,083
Cash value of life insurance		51,919			51,388			51,008			50,582			50,742
Goodwill		15,519			15,519			15,519			15,519			15,519
Intangible assets		935			987			1,040			1,092			1,144
Mortgage servicing rights		6,049			5,571			4,984			4,552			4,485
FDIC indemnification asset		861			1,441			1,807			1,997			2,485
Accrued interest receivable		6,450			7,339			7,201			6,636			7,638
Other assets		35,239			35,935			38,484			38,607			37,189
Total assets		2,632,106			2,587,931			2,612,433			2,609,269			2,515,481
Deposits:
Noninterest-bearing demand deposits		656,266			645,461			639,420			684,833			592,529
Interest-bearing demand deposits		524,897			514,088			531,695			503,465			483,557
Savings deposits		811,182			791,978			786,352			762,919			767,244
Time certificates		300,966			315,175			328,083			338,485			358,309
Total deposits		2,293,311			2,266,702			2,285,550			2,289,702			2,201,639
Accrued interest payable		937			944			975			1,036			1,139
Reserve for unfunded commitments		2,875			3,210			3,175			3,615			2,555
Other liabilities		33,667			29,936			37,340			35,122			32,449
Other borrowings		14,626			6,575			8,125			9,197			9,264
Junior subordinated debt		41,238			41,238			41,238			41,238			41,238
Total liabilities		2,386,654			2,348,605			2,376,403			2,379,910			2,288,284
Total shareholders’ equity		245,452			239,326			236,030			229,359			227,197
Accumulated other comprehensive gain		132			49			1,538			2,159			3,635
Average loans		1,635,506			1,608,511			1,548,565			1,574,329			1,573,816
Average interest-earning assets		2,405,194			2,422,818			2,434,920			2,383,226			2,351,164
Average total assets		2,603,243			2,584,734			2,609,794			2,565,307			2,519,259
Average deposits		2,274,042			2,259,471			2,287,539			2,247,776			2,174,085
Average total equity	$	243,776		$	239,985		$	233,679		$	230,296		$	226,857
Total risk based capital ratio		14.9	%		14.7	%		15.2	%		14.5	%		14.4	%
Tier 1 capital ratio		13.6	%		13.5	%		13.9	%		13.3	%		13.1	%
Tier 1 leverage ratio		10.4	%		10.2	%		9.9	%		9.8	%		9.9	%
Tangible capital ratio		8.8	%		8.7	%		8.5	%		8.2	%		8.4	%