TriCo Bancshares (TCBK) 8-K/A Combined Condensed Consolidated Financial Statements

Exhibit 99.1

UNAUDITED PRO FORMA

COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma combined condensed consolidated financial statements are based on the separate historical financial statements of TriCo Bancshares (“TriCo”) and North Valley Bancorp (“North Valley”) after giving effect to the merger of North Valley into Trico (the “Merger”) and the issuance of TriCo common stock in connection therewith, and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma combined condensed consolidated financial statements. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2014 is presented as if the Merger had occurred on June 30, 2014. The unaudited pro forma condensed consolidated income statements for the year ended December 31, 2013 and the six months ended June 30, 2014 are presented as if the Merger had occurred on January 1, 2013. The historical consolidated financial information has been adjusted to reflect factually supportable items that are directly attributable to the Merger and, with respect to the income statements only, expected to have a continuing impact on consolidated results of operations.

The unaudited pro forma combined condensed consolidated financial statements have been prepared using the acquisition method of accounting for business combinations under GAAP. TriCo is the acquirer for accounting purposes. Certain reclassifications have been made to the historical financial statements of North Valley to conform to the presentation in TriCo’s financial statements.

In connection with the plans to integrate the operations of TriCo and North Valley following the completion of the Merger, TriCo will incur nonrecurring charges, such as costs associated with systems implementation, severance, and other costs related to exit or disposal activities. These charges will affect the results of operations of TriCo in the periods in which they are recorded. The unaudited pro forma combined condensed consolidated statements of earnings do not include the effects of the costs associated with any restructuring or integration activities resulting from the transaction, as they are nonrecurring in nature. Additionally, the unaudited pro forma adjustments do not give effect to any nonrecurring or unusual restructuring charges that may be incurred as a result of the integration of the two companies or any anticipated disposition of assets that may result from such integration. However, the unaudited pro forma combined condensed consolidated balance sheets reflect the payment of merger costs specified therein as a reduction in cash and pro forma shareholders’ equity.

The unaudited pro forma combined condensed consolidated financial statements are provided for informational purposes only. The unaudited pro forma combined condensed consolidated financial statements are not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the transaction been completed as of the dates indicated or that may be achieved in the future. The actual amounts recorded may differ materially from the information presented in these unaudited pro forma condensed consolidated financial statements as a result of material and significant information becoming known that was previously not expected or known; and changes in the financial results of the combined company, which could change the future discounted cash flow projections. The preparation of the unaudited pro forma combined condensed consolidated financial statements and related adjustments required management to make certain assumptions and estimates. The unaudited pro forma combined condensed consolidated financial statements should be read together with:

• the accompanying notes to the unaudited pro forma combined condensed consolidated financial statements;

• TriCo’s separate audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2013 included in TriCo’s Annual Report on Form 10-K for the year ended December 31, 2013;

• TriCo’s separate unaudited historical consolidated financial statements and accompanying notes as of and for the six months ended June 30, 2014 included in TriCo’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014;

• North Valley’s separate audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2013 included in North Valley’s Annual Report on Form 10-K for the year ended December 31, 2013;

• North Valley’s separate unaudited historical consolidated financial statements and accompanying notes as of and for the six months ended June 30, 2014 included in North Valley’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014; and

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• Other information pertaining to TriCo and North Valley contained in or incorporated by reference into the joint proxy statement/prospectus included in TriCo’s amended registration statement on Form S-4 filed on June 27, 2014. See “Selected Historical Consolidated Financial Data for TriCo” and “Selected Historical Consolidated Financial Data for North Valley in the joint proxy statement/prospectus.

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Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet

as of June 30, 2014

(Dollars in Thousands)

	TriCo			North Valley			Pro forma adjustments							Pro forma combined
(in 000’s except per share amounts)							Dr		Cr
Assets:
Noninterest-bearing cash	$	76,104		$	22,984									$	99,088
Interest-bearing cash		268,279			2,226										270,505
Cash and due from banks		344,383			25,210										369,593
Federal funds sold		—			124,640				$	7		(a	)		124,633
Cash and cash equivalents		344,383			149,850										494,226
Securities - AFS		91,514			213,696										305,210
Securities - HTM		422,502			2										422,504
Restricted equity securities		11,582			8,576										20,158
Loans held for sale		1,671			—										1,671
Loans, gross		1,738,586			506,603					14,124		(b	)		2,231,065
Loan loss reserve		(39,968	)		(9,012	)	$	9,012				(c	)		(39,968	)
Loans, net		1,698,618			497,591										2,191,097
Foreclosed assets, net		5,785			505					13		(d	)		6,277
Premises and equipment, net		31,880			7,369			4,784				(e	)		44,033
Cash value of life insurance		53,106			37,759										90,865
Accrued interest		7,008			1,847										8,855
Goodwill		15,519			—			46,681				(f	)		62,200
Other intangible assets, net		779			37			6,577				(g	)		7,393
Mortgage servicing rights		5,909			923										6,832
Other assets		34,225			16,827					4,175		(h	)		46,877
Total assets	$	2,724,481		$	934,982									$	3,708,198
Liabilities:
Deposits
Noninterest-bearing demand	$	720,743		$	198,128									$	918,871
Interest-bearing		1,664,453			599,864										2,264,317
Total deposits		2,385,196			797,992										3,183,188
Accrued interest payable		849			106										955
Reserve for unfunded commitments		2,045		��	146										2,191
Other liabilities		28,135			16,204					2,972		(i	)		47,311
Other borrowings		6,075			—										6,075
Junior subordinated debt		41,238			21,651			6,664				(j	)		56,225
Total liabilities		2,463,538			836,099										3,295,945
															—
Shareholders’ equity:
Common stock		92,322			99,020			99,020		151,310		(k	)		243,632
Retained earnings		166,433			1,804					(1,804	)	(k	)		166,433
Accumulated other comprehensive income		2,188			(1,941	)				1,941		(k	)		2,188
Total shareholders’ equity		260,943			98,883										412,253
Total liabilities and shareholders’ equity	$	2,724,481		$	934,982		$	172,738	$	172,738				$	3,708,198

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Notes
(a)	Adjustment to cash and cash equivalents	$	(7	)
	Payment of cash consideration to North Valley common stock holders for fractional shares.
(b)	Adjustment to loans	$	(14,124	)
	To reflect fair value of loans acquired.
(c)	Adjustment to allowance for loan losses
	Since the acquired North Valley loans are carried at fair value at the acquisition date, there is no carryover of North Valley’s allowance for loan losses.	$	9,012
(d)	Adjustment to foreclosed assets
	To reflect fair value of foreclosed assets acquired.	$	(13	)
(e)	Adjustment to premises and equipment, net
	To reflect fair value of premises and equipment acquired.	$	4,784
(f)	Calculation of Goodwill for North Valley merger
	Represents the recognition of goodwill resulting from the difference between the net fair value of the acquired assets and assumed liabilities and the value of consideration paid for North Valley shareholders. The excess of the value of the consideration paid over the fair value of net assets acquired will be recorded as goodwill and can be summarized as follows:
	TriCo shares to be issued to North Valley shareholders		6,575,550
	Value of stock consideration to North Valley shareholders.	$	151,310
	Cash consideration to North Valley common shareholders for fractional shares.	$	7
	Total consideration paid	$	151,317
	Carrying value of North Valley’s net assets at June 30, 2014	$	98,883
	Fair value adjustments:
	Loans, net	$	(5,112	)
	Foreclosed assets	$	(13	)
	Premises and equipment	$	4,784
	Core deposits	$	6,577
	Deposits	$	—
	Pension liability	$	(2,972	)
	Junior subordinated debt	$	6,664
	Deferred taxes, net	$	(4,175	)
	Total fair value adjustments	$	5,753
	Fair value of net assets acquired as of June 30, 2014	$	104,636
	Excess of consideration paid over fair value of net assets acquired - (Goodwill)	$	46,681
(g)	To record fair value of core deposit intangible related to North Valley’s nonmaturity deposits.		6,577
(h)	Adjustment to deferred taxes, net
	To reflect the net deferred tax asset, net created in the merger.	$	(4,175	)
	Calculated as follows:
	Fair value adjustments:
	Loans, net	$	(5,112	)
	Foreclosed assets	$	(13	)
	Premises and equipment	$	4,784
	Core deposits	$	6,577
	Deposits	$	—
	Pension liability	$	(2,972	)
	Junior subordinated debt	$	6,664
	Total fair value adjustments	$	9,928
	Calculated deferred tax liability at TriCo’s estimated tax rate of 42.05%	$	(4,175	)
(i)	Adjustment to pension liability
	To reflect the estimated increase in pension liability due to change in control provisions of North Valley’s pension plans.	$	(2,972	)
(j)	Adjustment to subordinated debentures
	To reflect the fair value of junior subordinated debt acquired.	$	6,664
(k)	Adjustment to equity
	To eliminate North Valley’s common equity.	$	98,883
	To reflect the issuance of TriCo’s stock to North Valley shareholders.	$	(151,310	)
		$	(52,427	)

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Unaudited Pro Forma Combined Condensed Consolidated Statement of Earnings

Six Months Ended June 30, 2014

(In thousands, except per share amounts)

	TriCo			North Valley		Pro forma adjustments						Pro forma combined
(in 000’s except per share amounts)						Dr		Cr
Interest income:
Loans	$	48,171		$	12,728			$	253	(a	)	$	61,152
Investments		6,823			3,099								9,922
Other		583			86								669
Total interest income		55,577			15,913								71,743
Interest expense:
Deposits		1,550			444								1,994
Subordinate debt		610			261	$	167			(b	)		1,038
Other borrowings		2			—								2
Total interest expense		2,162			705								3,034
Net interest income		53,415			15,208								68,709
(Benefit from) provision for loan losses		353			—								353
Noninterest income:
Service charges and fees		10,981			3,547								14,528
Gain on sale of loans		978			520								1,498
Commissions on sale of non-deposit investment products		1,614			42								1,656
Increase in cash value of life insurance		797			710								1,507
Change in indemnification asset		(505	)		—								(505	)
Gain on sale of foreclosed assets		1,468			190								1,658
Gain on sale of securities		—			56								56
Other noninterest income		839			255								1,094
Total noninterest income		16,172			5,320								21,492
Noninterest expense:
Salaries and benefits		26,620			9,889				501	(c	)		36,008
Occupancy		3,764			1,218		80			(d	)		5,062
Equipment		2,096			412								2,508
Data processing and software		2,528			1,291								3,819
Assessments		1,002			307								1,309
ATM network charges		1,353			297								1,650
Advertising and marketing		683			245								928
Professional fees		1,726			427								2,153
Telecommunications		1,293			154								1,447
Postage		448			214								662
Courier service		458			214								672
OREO Expense		309			200								509
Intangible amortization		104			73		436			(e	)		613
Operational losses		327			200								527
Provision for OREO losses		40			84								124
(Benefit) provision for losses unfunded		(370	)		—								(370	)
Legal settlement		—			—								—
Merger related expenses		631			378				1,009				—
Other		5,421			1,914								7,335

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Total noninterest expense		48,433		17,517								64,956
Income before income tax expense		20,801		3,011								24,892
Income tax expense		8,577		832		454		—	(f	)		9,863
Net income	$	12,224	$	2,179	$	1,137	$	1,763			$	15,029
Weighted average shares outstanding:
Basic		16,112,560		6,836,463		6,836,463		6,575,550	(g	)		22,688,110
Diluted		16,316,379		6,889,491		6,889,491		6,575,550	(g	)		22,891,929
Earnings per common share:
Basic	$	0.76	$	0.32							$	0.66
Diluted	$	0.75	$	0.32							$	0.66

Notes:
(a)	Adjustment to loan interest income
	To reflect accretion of the loan discount resulting from the loan fair value pro forma adjustment based on weighted average remaining life of five years.	$	(253	)
(b)	Adjustment to subordinated debt interest expense
	To reflect amortization of the subordinated debentures discount resulting from the subordinated debentures fair value pro forma adjustment based on a weighted average life of 20 years.	$	167
(c)	Adjustment due to amortization of intangibles
	To reflect amortization of acquired core deposit intangibles over seven years.	$	436
(d)	Adjustment to pension plan expense
	To reflect decrease in net periodic pension cost due to accelerated recognition of pension liability at change in control.	$	(501	)
(e)	Adjustment to depreciation expense due to property, premises and equipment
	To reflect depreciation expense on increased fair value of buildings over 30 years.	$	80
(f)	Adjustment to income tax provision
	To reflect the income tax effect of pro forma adjustments at TriCo’s effective tax rate.	$	454
(g)	Adjustment to weighted average number of common shares and diluted common shares
	Shares issued by TriCo to North valley shareholders		6,575,550
	Removal of North Valley weighted average number of common shares		(6,836,463	)
	Adjustment to weighted average number of common shares		(260,913	)
	Shares issued by TriCo to North Valley shareholders		6,575,550
	Removal of North Valley weighted average number of diluted common shares		(6,889,491	)
	Adjustment to weighted average number of diluted common shares		(313,941	)

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Unaudited Pro Forma Combined Condensed Consolidated Statement of Earnings

Year Ended December 31, 2013

(In thousands, except per share amounts)

	TriCo			North Valley		Pro forma adjustments						Pro forma combined
(in 000’s except per share amounts)						Dr		Cr
Interest income:
Loans	$	97,548		$	25,739			$	509	(a	)	$	123,796
Investments		7,319			6,420								13,739
Other		1,693			54								1,747
Total interest income		106,560			32,213								139,282
Interest expense:
Deposits		3,445			1,084								4,529
Subordinate debt		1,247			532	$	333			(b	)		2,112
Other borrowings		4			2								6
Total interest expense		4,696			1,618								6,647
Net interest income		101,864			30,595								132,635
(Benefit from) provision for loan losses		(715	)		—								(715	)
Noninterest income:
Service charges and fees		25,257			8,112								33,369
Gain on sale of loans		5,602			3,038								8,640
Commissions on sale of non-deposit investment products		2,983			114								3,097
Increase in cash value of life insurance		1,727			1,472								3,199
Change in indemnification asset		(1,649	)		—								(1,649	)
Gain on sale of foreclosed assets		1,640			—								1,640
Gain on sale of securities		—			548								548
Other noninterest income		1,269			853								2,122
Total noninterest income		36,829			14,137								50,966
Noninterest expense:
Salaries and benefits		51,936			20,454				1,002	(c	)		71,388
Occupancy		7,405			2,495		159			(d	)		10,059
Equipment		4,162			860								5,022
Data processing and software		4,844			2,605								7,449
Assessments		2,248			820								3,068
ATM network charges		2,480			573								3,053
Advertising and marketing		1,981			571								2,552
Professional fees		3,019			1,034								4,053
Telecommunications		2,449			294								2,743
Postage		786			450								1,236
Courier service		988			418								1,406
OREO Expense		514			482								996
Intangible amortization		209			146		799			(e	)		1,154
Operational losses		618			474								1,092
Provision for OREO losses		682			3,057								3,739
(Benefit) provision for losses unfunded		(1,200	)		3								(1,197	)
Legal settlement		339			—								339

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Other		10,144		4,777								14,921
Total noninterest expense		93,604		39,513								133,023
Income before income tax expense		45,804		5,219								51,535
Income tax expense		18,405		1,594		92		—	(f	)		20,091
Net income	$	27,399	$	3,625	$	1,383	$	1,511			$	31,152
Weighted average shares outstanding:
Basic		16,045,141		6,835,554		6,835,554		6,575,550	(g	)		22,620,691
Diluted		16,197,324		6,857,929		6,857,929		6,575,550	(g	)		22,772,874
Earnings per common share:
Basic	$	1.71	$	0.53							$	1.38
Diluted	$	1.69	$	0.53							$	1.37

(a)	Adjustment to loan interest income
	To reflect accretion of the loan discount resulting from the loan fair value pro forma adjustment based on weighted average remaining life of five years.	$	(509	)
(b)	Adjustment to subordinated debt interest expense
	To reflect amortization of the subordinated debentures discount resulting from the subordinated debentures fair value pro forma adjustment based on a weighted average life of 20 years.	$	333
(c)	Adjustment to pension plan expense
	To reflect decrease in net periodic pension cost due to accelerated recognition of pension liability at change in control.	$	(1,002	)
(d)	Adjustment to depreciation expense due to property, premises and equipment
	To reflect depreciation expense on increased fair value of buildings over 30 years	$	159
(e)	Adjustment due to amortization of intangibles
	To reflect amortization of acquired core deposit intangibles over seven years	$	799
(f)	Adjustment to income tax provision
	To reflect the income tax effect of pro forma adjustments at TriCo’s effective tax rate.	$	92
(g)	Adjustment to weighted average number of common shares and diluted common shares
	Shares issued by TriCo to North valley shareholders		6,575,550
	Removal of North Valley weighted average number of common shares		(6,835,554	)
	Adjustment to weighted average number of common shares		(260,004	)
	Shares issued by TriCo to North valley shareholders		6,575,550
	Removal of North Valley weighted average number of diluted common shares		(6,857,929	)
	Adjustment to weighted average number of diluted common shares		(282,379	)

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