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. – (April 29, 2015) – TriCo Bancshares (NASDAQ: TCBK) (the “Company”), parent company of Tri Counties Bank, today announced earnings of $8,336,000, or $0.36 per diluted share, for the three months ended March 31, 2015. For the three months ended March 31, 2014 the Company reported earnings of $7,365,000, or $0.45 per diluted share. Diluted shares outstanding were 22,949,902 and 16,322,295 for the three months ended March 31, 2015 and 2014, respectively.

On October 3, 2014, TriCo completed its acquisition of North Valley Bancorp. North Valley Bancorp was headquartered in Redding, California, and was the parent of North Valley Bank that had approximately $935 million in assets and 22 commercial banking offices in Shasta, Humboldt, Del Norte, Mendocino, Yolo, Sonoma, Placer and Trinity Counties in Northern California. In connection with the acquisition, North Valley Bank was merged into Tri Counties Bank. Beginning on October 4, 2014, the effect of revenue and expenses from the operations of North Valley Bancorp, and 6,575,550 shares of TriCo Bancshares common shares issued in consideration of the merger are included in the results of the Company.

On October 25, 2014, North Valley Bank’s electronic customer service and other data processing systems were converted into Tri Counties Bank’s systems. Between January 7, 2015 and January 21, 2015, four Tri Counties Bank branches and four former North Valley Bank branches were consolidated into other Tri Counties Bank or other former North Valley Bank branches.

Included in the results of the Company for the three months ended March 31, 2015 and 2014 were $586,000 and $225,000, respectively, of nonrecurring noninterest expenses related to the merger with North Valley Bancorp of which $0 and $109,000, respectively, were not deductible for income tax purposes. Excluding these nonrecurring merger related expenses, but including the revenue and other expenses from the operations of North Valley Bancorp from January 1, 2015 to March 31, 2015, diluted earnings per share for the three months ended March 31, 2015 and 2014 would have been $0.38 and $0.46, respectively, on earnings of $8,676,000 and $7,541,000, respectively.

The following is a summary of certain of the Company’s consolidated assets and deposits as of the dates indicated:

	As of March 31,
(dollars in thousands)	2015		2014		$ Change		% Change
Total assets	$	3,895,860	$	2,755,184	$	1,140,676		41.4	%
Total loans		2,320,883		1,687,052	$	633,831		37.6	%
Total investments		1,044,564		450,955	$	593,609		131.6	%
Total deposits	$	3,349,488	$	2,411,120	$	938,368		38.9	%

Included in the changes in the Company’s assets and deposits from March 31, 2014 to March 31, 2015 is the effect of those assets and deposits acquired as part of the North Valley Bancorp acquisition on October 3, 2014. The following table discloses the fair value of consideration transferred, the total identifiable net assets acquired and the resulting goodwill related to the North Valley Bancorp acquisition:

	North Valley Bancorp
(in thousands)	October 3, 2014
Fair value of consideration transferred
Fair value of shares issued	$	151,303
Cash consideration		7
Total fair value of consideration transferred		151,310
Asset acquired:
Cash and cash equivalents		141,142
Securities available for sale		17,288
Securities held to maturity		189,950
Restricted equity securities		8,279
Loans		499,327
Foreclosed assets		695
Premises and equipment		11,936
Cash value of life insurance		38,075
Core deposit intangible		6,614
Other assets		18,540
Total assets acquired		932,116
Liabilities assumed:
Deposits		801,956
Other liabilities		10,104
Junior subordinated debt		14,987
Total liabilities assumed		827,047
Total net assets acquired		105,069
Goodwill recognized	$	46,241

The following is a summary of the components of the Company’s consolidated net income, average common shares, and average diluted common shares outstanding for the periods indicated:

	Three months ended
	March 31,
(dollars and shares in thousands)	2015			2014			$ Change			% Change
Net Interest Income	$	36,343		$	26,072		$	10,271			39.4	%
Benefit from
(provision for) loan losses		(197	)		1,355			(1,552	)
Noninterest income		10,180			8,295			1,885			22.7	%
Noninterest expense		(32,282	)		(23,317	)		(8,965	)		38.4	%
Provision for income taxes		(5,708	)		(5,040	)		(668	)		13.3	%
Net income	$	8,336		$	7,365		$	971			13.2	%
Average common shares		22,727			16,137			6,590			40.8	%
Average diluted common shares		22,950			16,331			6,619			40.5	%

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, 2015								December 31, 2014								March 31, 2014
	Average		Income/			Yield/			Average		Income/			Yield/			Average		Income/			Yield/
	Balance		Expense			Rate			Balance		Expense			Rate			Balance		Expense			Rate
Assets
Earning assets
Loans	$	2,283,622	$	31,165			5.46	%	$	2,253,025	$	30,736			5.46	%	$	1,671,231	$	23,738			5.68	%
Investments – taxable		906,366		6,135			2.71	%		763,131		5,197			2.72	%		390,230		2,976			3.05	%
Investments – nontaxable		21,512		258			4.80	%		18,506		219			4.73	%		17,618		218			4.95	%
Cash at Federal Reserve and other banks		345,603		264			0.31	%		477,958		337			0.28	%		473,833		309			0.26	%
Total earning assets		3,557,103		37,822			4.25	%		3,512,620		36,489			4.16	%		2,552,912		27,241			4.27	%
Other assets, net		335,373								293,429								184,852
Total assets	$	3,892,476							$	3,806,049							$	2,737,764
Liabilities and shareholders’ equity
Interest-bearing
Demand deposits	$	792,204		125			0.06	%	$	767,103		137			0.07	%	$	546,998		121			0.09	%
Savings deposits		1,156,710		357			0.12	%		1,140,817		360			0.13	%		840,221		257			0.12	%
Time deposits		353,616		417			0.47	%		360,788		455			0.50	%		280,968		404			0.58	%
Other borrowings		9,614		1			0.04	%		10,536		2			0.08	%		6,461		1			0.06	%
Trust preferred securities		56,296		482			3.42	%		53,750		483			3.59	%		41,238		304			2.95	%
Total interest-bearing liabilities		2,368,440		1,382			0.23	%		2,332,994		1,437			0.25	%		1,715,886		1,087			0.25	%
Noninterest-bearing deposits		1,047,840								1,007,762								731,731
Other liabilities		51,495								41,791								35,262
Shareholders’ equity		424,701								423,502								254,885
Total liabilities and shareholders’ equity	$	3,892,476							$	3,806,049							$	2,737,764
Net interest rate spread							4.02	%							3.91	%							4.02	%
Net interest income/net interest margin (FTE)				36,440			4.10	%				35,052			3.99	%				26,154			4.10	%
FTE adjustment				(97	)							(82	)							(82	)
Net interest income (not FTE)			$	36,343							$	34,970							$	26,072

Net interest income (FTE) during the first quarter of 2015 increased $10,286,000 (39.3%) from the same period in 2014 to $36,440,000. The increase in net interest income (FTE) was due primarily to a $612,391,000 (36.6%) increase in the average balance of loans to $2,283,622,000, and a $520,030,000 (127.5%) increase in the average balance of investments to $927,878,000 that were partially offset by a 22 basis point decrease in the average yield on loans from 5.68% during the three months ended March 31, 2014 to 5.46% during the three months ended March 31, 2015, and a 38 basis point decrease in the average yield on investments from 3.13% during the three months ended March 31, 2014 to 2.76% during the three months ended March 31, 2015. The $612,391,000 increase in average loan balances from the year ago quarter was primarily due to the addition of $499,327,000 of loans through the acquisition of North Valley Bancorp on October 4, 2014. The $520,030,000 increase in average investment balances from the year-ago quarter was primarily due to the use of cash at the Federal Reserve and other banks to purchase investments and the addition of $212,616,000 of investments through the acquisition of North Valley Bancorp on October 4, 2014. The decrease in average loan yields is due primarily to declines in market yields on new and renewed loans compared to yields on repricing, maturing, and paid off loans. The decrease in average investment yields is due primarily to declines in market yields on new investments compared to yields on existing investments. The increases in average loan and investment balances added $8,696,000 and $3,984,000, respectively, to net interest income (FTE) while the decreases in average loan and investment yields reduced net interest income (FTE) by $1,269,000 and $777,000, respectively, compared to the year-ago quarter.

Loans acquired through purchase or acquisition of other banks are classified by the Company 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 pay off 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 recorded a provision for loan losses of $197,000 during the three months ended March 31, 2015 compared to a $1,421,000 benefit from reversal of provision for loan losses during the three months ended March 31, 2014. The increase in provision for loan losses from the year-ago period was primarily due to $38 million of net loan growth during the three months ended March 31, 2015.

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

	Three months ended
	March 31,
(dollars in thousands)	2015			2014			$ Change			% Change
Service charges on deposit accounts	$	3,600		$	2,690		$	910			33.8	%
ATM fees and interchange		3,002			2,013			989			49.1	%
Other service fees		714			520			194			37.3	%
Mortgage banking service fees		534			420			114			27.1	%
Change in value of mortgage servicing rights		(506	)		(181	)		(325	)		179.6	%
Total service charges and fees		7,344			5,462			1,882			34.5	%
Gain on sale of loans		622			464			158			34.1	%
Commission on NDIP		965			771			194			25.2	%
Increase in cash value of life insurance		675			397			278			70.0	%
Change in indemnification asset		(65	)		(412	)		347			(84.2	%)
Gain on sale of foreclosed assets		311			1,227			(916	)		(74.7	%)
Other noninterest income		328			386			(58	)		(15.0	%)
Total other noninterest income		2,836			2,833			3			0.1	%
Total noninterest income	$	10,180		$	8,295		$	1,885			22.7	%

Noninterest income increased $1,885,000 (22.7%) to $10,180,000 during the three months ended March 31, 2015 compared to the three months ended March 31, 2014. The increase in noninterest income was due primarily to an increase in service charges on deposit accounts of $910,000 (33.8%) to $3,600,000, and an increase in ATM fees and interchange revenue of 989,000 (49.1%) to $3,002,000. These increases, and the increases in other categories of noninterest income noted in the table above, are primarily the result of the acquisition of North Valley Bancorp on October 4, 2014. Partially offsetting these increases were decreases of $325,000 and $916,000 in change in value of mortgage servicing rights and gain on sale of foreclosed assets, respectively, to $(506,000) and $311,000, respectively. The decrease in change in value of mortgage servicing rights is primarily due to a larger increase in estimated prepayment speeds of serviced loans during the three months ended March 31, 2015 than the three months ended March 31, 2014. An increase in prepayment speeds of serviced loans results in reduced expected servicing cash flows, and thus, a lower value of such servicing rights. The decrease in gain on sale foreclosed assets is due to decreased foreclosed asset sales during the three months ended March 31, 2015 compared to the year-ago period.

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)	2015			2014			$ Change			% Change
Salaries	$	11,744		$	8,866		$	2,878			32.5	%
Commissions and incentives		1,596			1,123			473			42.1	%
Employee benefits		4,760			3,314			1,446			43.6	%
Total salaries and benefits expense		18,100			13,303			4,797			36.1	%
Occupancy		2,417			1,962			455			23.2	%
Equipment		1,414			1,036			378			36.5	%
Change in reserve for unfunded commitments		(130	)		(185	)		55			(29.7	%)
Data processing and software		1,952			1,178			774			65.7	%
Telecommunications		886			580			306			52.8	%
ATM network charges		770			643			127			19.8	%
Professional fees		1,119			614			505			82.2	%
Advertising and marketing		808			342			466			136.3	%
Postage		312			227			85			37.4	%
Courier service		248			234			14			6.0	%
Intangible amortization		289			52			237			455.8	%
Operational losses		124			177			(53	)		(29.9	%)
Provision for foreclosed asset losses		67			36			31			86.1	%
Foreclosed asset expense		98			158			(60	)		(38.0	%)
Assessments		651			521			130			25.0	%
Merger related expense		586			225			361			160.4	%
Other		2,571			2,214			357			16.1	%
Total other noninterest expense		14,182			10,014			4,168			41.6	%
Total noninterest expense	$	32,282		$	23,317		$	8,965			38.4	%
Average full time equivalent employees		966			732			234			32.0	%
Merger expense:
Data processing and software		108			—
Professional fees		120			225
Other		358			—
Total merger expense	$	586		$	225

Salary and benefit expenses increased $4,797,000 (36.1%) to $18,100,000 during the three months ended March 31, 2015 compared to the three months ended March 31, 2014. Base salaries, incentive compensation and benefits & other compensation expense increased $2,878,000 (32.5%), 473,000 (42.1%), and 1,446,000 (43.6%), respectively, to $11,744,000, $1,596,000 and $4,760,000, respectively, during the three months ended March 31, 2015. The increases in these categories of salary and benefits expense are primarily due to the Company’s acquisition of North Valley Bancorp on October 4, 2014. The average number of full-time equivalent staff increased 234 (32.0%) from 732 during the three months ended March 31, 2014 to 966 for the three months ended March 31, 2015.

Other noninterest expense increased $4,168,000 (38.4%) to $14,182,000 during the three months ended March 31, 2015 compared to the three months ended March 31, 2014. The increase in other noninterest expense was primarily due to the Company’s acquisition of North Valley Bancorp on October 4, 2014. Nonrecurring merger expenses related to the North Valley Bancorp acquisition totaling $586,000 are included in noninterest expense for the three months ended March 31, 2015. These nonrecurring merger related expenses include $108,000 of data processing expense, $120,000 of professional fees, and $358,000 of lease contract resolution, leasehold improvement write-off and facility restoration, and moving expenses related to the consolidation of four former North Valley Bank and four Tri Counties Bank branches during the three months ended March 31, 2015, six of which were leased. As of March 31, 2015, the Company had substantially completed all of its previously planned facility consolidations related to the North Valley Bancorp acquisition. The annualized run rate of noninterest expense for the three months ended March 31, 2015, excluding the nonrecurring merger expenses noted above, is within 4% of management’s goal for noninterest expense in 2015 for the combined company following the North Valley acquisition. Following a thorough analysis of profitability and market opportunity, the bank has identified five additional branches for closure. Two of those branches are former North Valley Bank branches. The bank expects that all five branches will close by September 30, 2015.

Richard Smith, President and CEO of the Company commented, “We continue to make progress integrating the banking operations of Tri Counties Bank and North Valley Bank. With the data systems conversion behind us, we are now seeing our commercial lending teams from North Valley Bank increasing lending activity in our newly acquired markets. The North Valley commercial teams played a significant role in contributing to our commercial loan growth in the quarter.”

Smith added, “While we continue to see improved lending opportunities in our markets, we remain focused upon improvements in bank efficiency efforts as a result of our combination with North Valley Bank.”

In addition to the historical information contained herein, this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to various uncertainties and risks that could affect their outcome. The Company’s actual results could differ materially. 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, the Company’s ability to effectively integrate the business of 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, 2014. 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. The Company does not intend to update any of the forward-looking statements after the date of this release.

Established in 1975, Tri Counties Bank is a wholly-owned subsidiary of TriCo Bancshares (NASDAQ: TCBK) headquartered in Chico, California, providing a unique brand of customerService with Solutions available in traditional stand-alone and in-store bank branches in communities throughout Northern and Central California. Tri Counties Bank provides an extensive and competitive breadth of consumer, small business and commercial banking financial services, along with convenient around-the-clock ATM, online and mobile banking access. Brokerage services are provided by the Bank’s investment services through affiliation with Raymond James Financial Services, Inc. Visitwww.TriCountiesBank.com to learn more.

TRICO BANCSHARES – CONSOLIDATED FINANCIAL DATA

(Unaudited. Dollars in thousands, except share data)

	Three months ended
	March 31, 2015			December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014
Statement of Income Data
Interest income	$	37,725		$	36,407		$	29,131		$	28,418		$	27,159
Interest expense		1,382			1,437			1,082			1,075			1,087
Net interest income		36,343			34,970			28,049			27,343			26,072
Provision for (benefit from) loan losses		197			(1,421	)		(2,977	)		1,708			(1,355	)
Noninterest income:
Service charges and fees		7,344			7,165			6,090			5,519			5,462
Other income		2,836			2,590			2,499			2,358			2,833
Total noninterest income		10,180			9,755			8,589			7,877			8,295
Noninterest expense:
Base salaries net of deferred loan origination costs		11,744			12,402			9,066			9,008			8,866
Incentive compensation expense		1,596			1,475			1,265			1,205			1,123
Employee benefits and other compensation expense		4,760			3,678			3,038			3,104			3,314
Total salaries and benefits expense		18,100			17,555			13,369			13,317			13,303
Other noninterest expense		14,182			19,011			12,011			11,799			10,014
Total noninterest expense		32,282			36,566			25,380			25,116			23,317
Income before taxes		14,044			9,580			14,235			8,396			12,405
Net income	$	8,336		$	5,650		$	8,234		$	4,859		$	7,365
Share Data
Basic earnings per share	$	0.37		$	0.25		$	0.51		$	0.30		$	0.46
Diluted earnings per share	$	0.36		$	0.25		$	0.50		$	0.30		$	0.45
Book value per common share	$	18.68		$	18.42		$	16.57		$	16.17		$	15.94
Tangible book value per common share	$	15.59		$	15.39		$	15.56		$	15.16		$	14.93
Shares outstanding		22,740,503			22,714,964			16,139,414			16,133,414			16,120,297
Weighted average shares		22,727,038			22,500,544			16,136,675			16,128,550			16,096,569
Weighted average diluted shares		22,949,902			22,726,795			16,330,746			16,310,463			16,322,295
Credit Quality
Nonperforming originated loans	$	34,576		$	32,529		$	33,849		$	37,164		$	44,334
Total nonperforming loans		49,217			47,954			40,643			44,200			51,968
Foreclosed assets, net of allowance		5,892			4,894			5,096			5,785			3,215
Loans charged-off		1,235			419			345			1,028			766
Loans recovered	$	508		$	505		$	1,274		$	967		$	2,197
Selected Financial Ratios
Return on average total assets		0.86	%		0.59	%		1.19	%		0.71	%		1.08	%
Return on average equity		7.85	%		5.34	%		12.39	%		7.45	%		11.56	%
Average yield on loans		5.46	%		5.46	%		5.70	%		5.70	%		5.68	%
Average yield on interest-earning assets		4.25	%		4.16	%		4.56	%		4.45	%		4.27	%
Average rate on interest-bearing liabilities		0.23	%		0.25	%		0.25	%		0.25	%		0.25	%
Net interest margin (fully tax-equivalent)		4.10	%		3.99	%		4.39	%		4.28	%		4.10	%
Supplemental Loan Interest Income Data:
Discount accretion PCI – cash basis loans	$	172		$	107		$	290		$	69		$	203
Discount accretion PCI – other loans		1,274			919			822			811			984
Discount accretion PNCI loans		1,348			827			402			624			379
All other loan interest income	$	28,371			28,883			23,466			22,929			22,172
Total loan interest income	$	31,165		$	30,736		$	24,980		$	24,433		$	23,738

TRICO BANCSHARES – CONSOLIDATED FINANCIAL DATA

(Unaudited. Dollars in thousands)

	Three months ended
Balance Sheet Data	March 31, 2015			December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014
Cash and due from banks	$	281,228		$	610,728		$	369,679		$	344,383		$	502,251
Securities, available for sale		225,126			83,205			84,962			91,514			97,269
Securities, held to maturity		802,482			676,426			443,509			422,502			344,523
Restricted equity securities		16,956			16,956			11,582			11,582			9,163
Loans held for sale		5,413			3,579			2,724			1,671			1,119
Loans:
Commercial loans		177,540			174,945			135,085			137,341			119,418
Consumer loans		410,727			417,084			373,620			377,143			381,786
Real estate mortgage loans		1,646,863			1,615,359			1,214,153			1,167,856			1,126,298
Real estate construction loans		85,753			75,136			43,013			56,246			59,550
Total loans, gross		2,320,883			2,282,524			1,765,871			1,738,586			1,687,052
Allowance for loan losses		(36,055	)		(36,585	)		(37,920	)		(39,968	)		(38,322	)
Foreclosed assets		5,892			4,894			5,096			5,785			3,215
Premises and equipment		42,846			43,493			32,181			31,880			32,004
Cash value of life insurance		93,012			92,337			53,596			53,106			52,706
Goodwill		63,462			63,462			15,519			15,519			15,519
Other intangible assets		6,762			7,051			726			779			831
Mortgage servicing rights		7,057			7,378			5,985			5,909			6,107
Accrued interest receivable		9,794			9,275			6,862			7,008			6,690
Other assets		51,002			51,735			34,571			34,225			35,057
Total assets		3,895,860			3,916,458			2,794,943			2,724,481			2,755,184
Deposits:
Noninterest-bearing demand deposits		1,034,012			1,083,900			762,452			720,743			728,492
Interest-bearing demand deposits		795,471			782,385			553,053			547,110			554,296
Savings deposits		1,172,257			1,156,126			872,432			854,127			856,811
Time certificates		347,748			358,012			249,419			263,216			271,521
Total deposits		3,349,488			3,380,423			2,437,356			2,385,196			2,411,120
Accrued interest payable		852			978			753			849			865
Reserve for unfunded commitments		2,015			2,145			2,220			2,045			2,230
Other liabilities		53,256			49,192			33,331			28,135			36,035
Other borrowings		9,096			9,276			12,665			6,075			6,719
Junior subordinated debt		56,320			56,272			41,238			41,238			41,238
Total liabilities		3,471,027			3,498,286			2,527,563			2,463,538			2,498,207
Total shareholders’ equity		424,833			418,172			267,380			260,943			256,977
Accumulated other comprehensive gain (loss)		(2,083	)		(2,203	)		1,796			2,188			1,802
Average loans		2,283,622			2,253,025			1,752,026			1,714,061			1,671,231
Average interest-earning assets		3,557,103			3,512,620			2,561,398			2,559,296			2,552,912
Average total assets		3,892,476			3,806,049			2,771,972			2,737,634			2,737,764
Average deposits		3,350,370			3,276,470			2,424,968			2,395,146			2,399,918
Average total equity	$	424,701		$	423,502		$	265,848		$	260,817		$	254,885
Total risk based capital ratio		15.2	%		15.6	%		14.8	%		14.6	%		14.8	%
Tier 1 capital ratio		14.0	%		14.4	%		13.5	%		13.4	%		13.6	%
Tier 1 common equity ratio		12.1	%		n/a			n/a			n/a			n/a
Tier 1 leverage ratio		10.7	%		10.8	%		10.5	%		10.4	%		10.2	%
Tangible capital ratio		9.3	%		9.1	%		9.0	%		9.0	%		8.8	%