TriCo Bancshares (TCBK) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Filed by TriCo Bancshares pursuant to Rule 425

under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12

under the Securities Exchange Act of 1934

Subject Company: North Valley Bancorp.

Commission File No.:0-10652

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

TRICO BANCSHARES ANNOUNCES QUARTERLY RESULTS

CHICO, Calif. – (April 29, 2014) – TriCo Bancshares (NASDAQ: TCBK) (the “Company”), parent company of Tri Counties Bank, today announced earnings of $7,365,000, or $0.45 per diluted share, for the three months ended March 31, 2014. These results compare to earnings of $8,477,000, or $0.53 per diluted share reported by the Company for the three months ended March 31, 2013.

Total assets of the Company 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.

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

	Three months ended
	March 31,
(dollars in thousands)	2014			2013			$ Change			% Change
Net Interest Income	$	26,072		$	24,569		$	1,503			6.1	%
Benefit from reversal of provision for loan losses		1,355			1,108			247			22.3	%
Noninterest income		8,295			10,218			(1,923	)		(18.8	%)
Noninterest expense		(23,317	)		(21,601	)		(1,716	)		7.9	%
Provision for income taxes		(5,040	)		(5,817	)		777			(13.4	%)
Net income	$	7,365		$	8,477		($	1,112	)		(13.1	%)

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
	March 31, 2014								December 31, 2013								March 31, 2013
	Average		Income/			Yield/			Average		Income/			Yield/			Average		Income/			Yield/
	Balance		Expense			Rate			Balance		Expense			Rate			Balance		Expense			Rate
Assets
Earning assets
Loans	$	1,671,231	$	23,738			5.68	%	$	1,649,692	$	24,470			5.93	%	$	1,548,565	$	24,072			6.22	%
Investments—taxable		390,230		2,976			3.05	%		326,696		2,457			3.01	%		156,057		1,187			3.04	%
Investments—nontaxable		17,618		218			4.95	%		19,641		256			5.21	%		8,884		162			7.29	%
Cash at Federal Reserve and other banks		473,833		309			0.26	%		515,289		375			0.29	%		721,424		446			0.25	%
Total earning assets		2,552,912		27,241			4.27	%		2,511,318		27,558			4.39	%		2,434,930		25,867			4.25	%
Other assets, net		184,852								181,913								174,864
Total assets	$	2,737,764							$	2,693,231							$	2,609,794
Liabilities and shareholders’ equity
Interest-bearing
Demand deposits	$	546,998		121			0.09	%	$	534,270		117			0.09	%	$	520,507		141			0.11	%
Savings deposits		840,221		257			0.12	%		826,378		260			0.13	%		782,173		271			0.14	%
Time deposits		280,968		404			0.58	%		297,052		434			0.58	%		333,556		513			0.62	%
Other borrowings		6,461		1			0.06	%		8,629		1			0.05	%		8,188		1			0.05	%
Trust preferred securities		41,238		304			2.95	%		41,238		311			3.02	%		41,238		311			3.02	%
Total interest-bearing liabilities		1,715,886		1,087			0.25	%		1,707,567		1,123			0.26	%		1,685,662		1,237			0.29	%
Noninterest-bearing deposits		731,731								699,530								651,303
Other liabilities		35,262								37,114								39,150
Shareholders’ equity		254,885								249,020								233,679
Total liabilities and shareholders’ equity	$	2,737,764							$	2,693,231							$	2,609,794
Net interest rate spread							4.02	%							4.13	%							3.96	%
Net interest income/net interest margin (FTE)				26,154			4.10	%				26,435			4.21	%				24,630			4.05	%
FTE adjustment				(82	)							(96	)							(61	)
Net interest income (not FTE)			$	26,072							$	26,339							$	24,569

Net interest income (FTE) during 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, the Company used a portion of its Fed 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, the Company deployed some of its excess Federal funds sold into some higher yielding investments while trying to maintain an appropriate level of interest rate risk. 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 decreases 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 press release.

The Company 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.

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

	Three months ended
	March 31,
(dollars in thousands)	2014			2013			$ Change			% Change
Service charges on deposit accounts	$	2,690		$	3,140		($	450	)		(14.3	%)
ATM fees and interchange		2,013			1,875			138			7.4	%
Other service fees		520			559			(39	)		(7.0	%)
Mortgage banking service fees		420			416			4			1.0	%
Change in value of mortgage servicing rights		(181	)		(61	)		(120	)		196.7	%
Total service charges and fees		5,462			5,929			(467	)		(7.9	%)
Gain on sale of loans		464			2,294			(1,830	)		(79.8	%)
Commission on NDIP		771			761			10			1.3	%
Increase in cash value of life insurance		397			426			(29	)		(6.8	%)
Change in indemnification asset		(412	)		(101	)		(311	)		307.9	%
Gain on sale of foreclosed assets		1,227			551			676			122.7	%
Other noninterest income		386			358			28			7.8	%
Total other noninterest income		2,833			4,289			(1,456	)		(33.9	%)
Total noninterest income	$	8,295		$	10,218		($	1,923	)		(18.8	%)

Noninterest income decreased $1,923,000 (18.8%) to $8,295,000 in the three months ended March 31, 2014 when 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 May 2013 that resulted in a significant decrease in mortgage refinance activity, and thus a significant decrease in newly originated mortgages for the Company 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 salaries 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 Bancorp, 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.

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

	Three months ended
	March 31,
(dollars in thousands)	2014			2013			$ Change			% Change
Salaries	$	8,866		$	8,348		$	518			6.2	%
Commissions and incentives		1,123			1,286			(163	)		(12.7	%)
Employee benefits		3,314			3,327			(13	)		(0.4	%)
Total salaries and benefits expense		13,303			12,961			342			2.6	%
Occupancy		1,962			1,659			303			18.3	%
Equipment		1,036			1,034			2			0.2	%
Change in reserve for unfunded commitments		(185	)		(440	)		255			(58.0	%)
Data processing and software		1,178			1,078			100			9.3	%
Telecommunications		580			525			55			10.5	%
ATM network charges		643			496			147			29.6	%
Professional fees		739			511			228			44.6	%
Advertising and marketing		342			325			17			5.2	%
Postage		227			231			(4	)		(1.7	%)
Courier service		234			167			67			40.1	%
Intangible amortization		52			52			0			0.0	%
Operational losses		177			117			60			51.3	%
Provision for foreclosed asset losses		36			27			9			33.3	%
Foreclosed asset expense		158			99			59			59.6	%
Assessments		521			606			(85	)		(14.0	%)
Other		2,314			2,153			161			7.5	%
Total other noninterest expense		10,014			8,640			1,374			15.9	%
Total noninterest expense	$	23,317		$	21,601		$	1,716			7.9	%

On January 21, 2014, the Company and North Valley Bancorp announced that they entered into an Agreement and Plan of Merger and Reorganization under which North Valley will merge with and into the Company, with the Company as the surviving corporation. North Valley Bancorp shareholders will receive a fixed exchange ratio of 0.9433 shares of TriCo Bancshares common stock for each share of North Valley common stock. The merger is expected to be completed in the third quarter of 2014, subject to approval of the merger by shareholders of both companies, receipt of required regulatory and other approvals and satisfaction of customary closing conditions.

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, whether and when shareholders and regulators approve the Company’s proposed merger with North Valley Bancorp, 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, 2013. 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. Shareholders are urged to read the joint proxy statement/prospectus that will be included in the registration statement on Form S-4, which the Company will file with the SEC in connection the proposed action because it will contain important information about TriCo, North Valley, the merger and related matters, including additional risk and uncertainties

TriCo Bancshares and Tri Counties Bank are headquartered in Chico, California. Tri Counties Bank has a 39-year history in the banking industry. It operates 41 traditional branch locations and 20 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 67 ATMs and an automated Customer Service Department, available 24 hours a day, seven days a week. 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 at http://www.tricountiesbank.com.

ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER TRANSACTION AND WHERE TO FIND IT

Investors and shareholder are urged to carefully review and consider each of TriCo’s and North Valley Bancorp’s public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by TriCo with the SEC may be obtained free of charge at TriCo’s website at www.tricountiesbank.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from TriCo by requesting them in writing to TriCo, 63 Constitution Drive, Chico, California 95973; Attention: Investor Relations, or by telephone at (530) 898-0300. The documents filed by North Valley with the SEC may be obtained free of charge at North Valley’s website at www.novb.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from North Valley by requesting them in writing to North Valley Bancorp, 300 Park Marina Circle, Redding, CA 96001, Attention: Corporate Secretary, or by telephone at Phone: (530) 226-2900.

TriCo intends to file a registration statement with the SEC which will include a joint proxy statement of TriCo and North Valley and a prospectus of TriCo, and each party will file other documents regarding the proposed transaction with the SEC. Before making any voting or investment decision, investors and security holders of North Valley and TriCo are urged to carefully read the entire registration statement and joint proxy statement/prospectus, when they become available, as well as any amendments or supplements to these documents, because they will contain important information about the proposed transaction. A definitive joint proxy statement/prospectus will be sent to the shareholders of each company seeking required stockholder approvals. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from TriCo or North Valley by writing to the addresses provided for each company set forth above.

TriCo, North Valley, their directors, executive officers and certain other persons may be deemed to be participants in the solicitation of proxies from TriCo and North Valley shareholders in favor of the approval of the transaction. Information regarding TriCo’s officers and directors will be included in TriCo’s Form 10-K Annual Report to be filed with the SEC, and information regarding North Valley’s officers and directors will be included in North Valley’s Form 10-K Annual Report to be filed with the SEC. Descriptions of the interests of the directors and executive officers of TriCo and North Valley in the proposed merger will be set forth in the proxy statement/prospectus and other relevant documents filed with the SEC (when they become available).

TRICO BANCSHARES—CONSOLIDATED FINANCIAL DATA

(Unaudited. Dollars in thousands, except share data)

	Three months ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2014			2013			2013			2013			2013
Statement of Income Data
Interest income	$	27,159		$	27,462		$	27,536		$	25,756		$	25,806
Interest expense		1,087			1,123			1,169			1,167			1,237
Net interest income		26,072			26,339			26,367			24,589			24,569
Provision for (benefit from) loan losses		(1,355	)		172			(393	)		614			(1,108	)
Noninterest income:
Service charges and fees		5,462			5,973			6,662			6,693			5,929
Other income		2,833			1,380			2,465			3,438			4,289
Total noninterest income		8,295			7,353			9,127			10,131			10,218
Noninterest expense:
Base salaries net of deferred loan origination costs		8,866			8,832			8,716			8,508			8,348
Incentive compensation expense		1,123			943			1,166			1,299			1,286
Employee benefits and other compensation expense		3,314			3,449			2,979			3,083			3,327
Total salaries and benefits expense		13,303			13,224			12,861			12,890			12,961
Other noninterest expense		10,014			11,654			10,755			10,619			8,640
Total noninterest expense		23,317			24,878			23,616			23,509			21,601
Income before taxes		12,405			8,642			12,271			10,597			14,294
Net income	$	7,365		$	5,236		$	7,361		$	6,325		$	8,477
Share Data
Basic earnings per share	$	0.46		$	0.33		$	0.46		$	0.39		$	0.53
Diluted earnings per share	$	0.45		$	0.32		$	0.45		$	0.39		$	0.53
Book value per common share	$	15.94		$	15.61		$	15.27		$	14.90		$	14.75
Tangible book value per common share	$	14.93		$	14.59		$	14.24		$	13.87		$	13.71
Shares outstanding		16,120,297			16,076,662			16,076,662			16,065,469			16,005,191
Weighted average shares		16,096,569			16,076,662			16,073,864			16,027,557			16,002,482
Weighted average diluted shares		16,322,295			16,333,476			16,230,160			16,134,510			16,091,150
Credit Quality
Nonperforming originated loans	$	44,334		$	45,131		$	53,261		$	52,661		$	54,763
Total nonperforming loans		51,968			53,216			61,384			61,466			63,963
Foreclosed assets, net of allowance		3,215			6,262			4,140			5,054			6,124
Loans charged-off		766			1,840			985			1,947			2,771
Loans recovered	$	2,197		$	574		$	1,119		$	1,065		$	1,098
Selected Financial Ratios
Return on average total assets		1.08	%		0.78	%		1.13	%		0.98	%		1.30	%
Return on average equity		11.56	%		8.41	%		12.08	%		10.54	%		14.51	%
Average yield on loans		5.68	%		5.93	%		6.14	%		5.94	%		6.22	%
Average yield on interest-earning assets		4.27	%		4.39	%		4.60	%		4.27	%		4.25	%
Average rate on interest-bearing liabilities		0.25	%		0.26	%		0.28	%		0.28	%		0.29	%
Net interest margin (fully tax-equivalent)		4.10	%		4.21	%		4.40	%		4.07	%		4.05	%
Supplemental Loan Interest Income Data:
Discount accretion PCI—cash basis loans	$	203		$	255		$	140		$	129		$	167
Discount accretion PCI—other loans		984			893			898			732			597
Discount accretion PNCI loans		379			568			1,115			815			766
All other loan interest income		22,172			22,754			22,970			22,207			22,542
Total loan interest income	$	23,738		$	24,470		$	25,123		$	23,883		$	24,072

TRICO BANCSHARES—CONSOLIDATED FINANCIAL DATA

(Unaudited. Dollars in thousands)

	Three months ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Balance Sheet Data	2014			2013			2013			2013			2013
Cash and due from banks	$	502,251		$	598,368		$	541,150		$	592,155		$	802,271
Securities, available for sale		97,269			104,647			115,215			127,519			144,454
Securities, held to maturity		344,523			240,504			193,262			85,643			—
Federal Home Loan Bank Stock		9,163			9,163			9,163			9,163			9,647
Loans held for sale		1,119			2,270			3,247			6,582			7,931
Loans:
Commercial loans		119,418			131,878			133,616			128,410			115,483
Consumer loans		381,786			383,163			389,711			387,217			376,063
Real estate mortgage loans		1,126,298			1,107,863			1,091,475			1,097,446			1,010,249
Real estate construction loans		59,550			49,103			42,249			38,967			30,567
Total loans, gross		1,687,052			1,672,007			1,657,051			1,652,040			1,532,362
Allowance for loan losses		(38,322	)		(38,245	)		(39,340	)		(39,599	)		(39,867	)
Foreclosed assets		3,215			6,262			4,140			5,054			6,124
Premises and equipment		32,004			31,612			31,246			31,194			29,468
Cash value of life insurance		52,706			52,309			51,919			51,388			51,008
Goodwill		15,519			15,519			15,519			15,519			15,519
Intangible assets		831			883			935			987			1,040
Mortgage servicing rights		6,107			6,165			6,049			5,571			4,984
FDIC indemnification asset		(220	)		206			861			1,441			1,807
Accrued interest receivable		6,690			6,516			6,450			7,339			7,201
Other assets		35,277			35,880			35,239			35,935			38,484
Total assets	$	2,755,184			2,744,066			2,632,106			2,587,931			2,612,433
Deposits:
Noninterest-bearing demand deposits		728,492			789,458			656,266			645,461			639,420
Interest-bearing demand deposits		554,296			533,351			524,897			514,088			531,695
Savings deposits		856,811			798,986			811,182			791,978			786,352
Time certificates		271,521			288,688			300,966			315,175			328,083
Total deposits		2,411,120			2,410,483			2,293,311			2,266,702			2,285,550
Accrued interest payable		865			938			937			944			975
Reserve for unfunded commitments		2,230			2,415			2,875			3,210			3,175
Other liabilities		36,035			31,711			33,667			29,936			37,340
Other borrowings		6,719			6,335			14,626			6,575			8,125
Junior subordinated debt		41,238			41,238			41,238			41,238			41,238
Total liabilities		2,498,207			2,493,120			2,386,654			2,348,605			2,376,403
Total shareholders’ equity		256,977			250,946			245,452			239,326			236,030
Accumulated other comprehensive gain		1,802			1,857			132			49			1,538
Average loans		1,671,231			1,649,692			1,635,506			1,608,511			1,548,565
Average interest-earning assets		2,552,912			2,511,318			2,405,194			2,422,818			2,434,920
Average total assets		2,737,764			2,693,231			2,603,243			2,584,734			2,609,794
Average deposits		2,399,918			2,357,230			2,274,042			2,259,471			2,287,539
Average total equity	$	254,885		$	249,020		$	243,776		$	239,985		$	233,679
Total risk based capital ratio		14.8	%		14.8	%		14.9	%		14.7	%		15.2	%
Tier 1 capital ratio		13.6	%		13.5	%		13.6	%		13.5	%		13.9	%
Tier 1 leverage ratio		10.2	%		10.2	%		10.4	%		10.2	%		9.9	%
Tangible capital ratio		8.8	%		8.6	%		8.8	%		8.7	%		8.5	%