UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 23, 2003
TriCo Bancshares
(Exact name of registrant as specified in its charter)
California 0-10661 94-2792841
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(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or organization)
63 Constitution Drive, Chico, California 95973
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (530) 898-0300
Item 7(c): Exhibits
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99.1 Press release dated October 23, 2003
Item 12: Results of Operations and Financial Condition
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On October 23, 2003 TriCo Bancshares announced their quarterly earnings for the
third quarter of 2003. A copy of the press release is attached as Exhibit 99.1
to this Form 8-K and is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TRICO BANCSHARES
Date: October 23, 2003 By: /s/ Thomas J. Reddish
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Thomas J. Reddish, Vice President and
Chief Financial Officer (Principal
Financial and Accounting Officer)
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press release dated October 23, 2003
PRESS RELEASE Contact: Thomas J. Reddish
Vice President & CFO
For Immediate Release (530) 898-0300
TRICO BANCSHARES ANNOUNCES 3rd QUARTER EARNINGS FOR 2003
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Chico, CA - October 23, 2003. TriCo Bancshares (NASDAQ: TCBK), parent
company of Tri Counties Bank, today announced quarterly earnings of $4,338,000,
or $0.54 per diluted share, for the three months ended September 30, 2003. These
results represent an 8.0% increase from the $0.50 earnings per diluted share
reported for the three months ended September 30, 2002 on earnings of
$3,627,000. Diluted earnings per share for the nine months ended September 30,
2003 and 2002 were $1.57 and $1.44, respectively, on earnings of $12,205,000 and
$10,320,000, respectively.
Included in the results ended September 30, 2003 was the effect of the
Company's acquisition of North State National Bank on April 4, 2003. On April 4,
2003, North State National Bank had assets of $140 million, loans totaling $77
million, and deposits totaling $126 million. The Company issued $13,090,057 in
cash, 723,512 shares of TriCo common stock, and options to purchase 79,587 TriCo
common shares at an average exercise price of $6.22 per share in exchange for
all of the 1,234,375 common shares and options to purchase 79,937 common shares
of North State National Bank outstanding as of April 4, 2003.
The improvement in results from the year-ago quarter was due to a
$2,549,000 (18.9%) increase in fully tax-equivalent net interest income to
$16,069,000, and a $550,000 (78.6%) decrease in provision for loan losses to
$150,000. These contributing factors were partially offset by a $207,000 (3.8%)
decrease in noninterest income to $5,206,000, and a $1,916,000 (15.8%) increase
in noninterest expense to $14,049,000 for the quarter ended September 30, 2003.
Richard Smith, President and Chief Executive Officer commented that, "The
quarter ended September 30, 2003 was a very good quarter for our Company. The
hard work of our team members and the acceptance of our line of products and
services by our marketplace continue to provide strong asset and customer
account growth. This growth allowed us to continue to improve earnings despite
the recent slowdown in mortgage banking activities. In addition, during this
quarter we dramatically reduced the level of nonperforming assets."
During the quarters ended September 30, 2003 and 2002, the Company's net
interest margin was 5.24% and 5.67%, respectively, on interest-earning asset
balances averaging $1.23 billion and $955 million, respectively. The 28%
increase in the average balance of interest earning assets more than offset the
decrease in net interest margin resulting in an increase in fully tax equivalent
net interest income of $2,549,000 (18.9%) to $16,069,000.
Noninterest income for the third quarter of 2003 decreased $207,000 (3.8%)
to $5,206,000 from $5,413,000 in the year-ago quarter. The decrease in
noninterest income from the year-ago quarter was mainly due to a $673,000 (93%)
decrease in mortgage banking noninterest income to $51,000 from $724,000 in the
year-ago quarter.
Noninterest expense for the third quarter of 2003 increased $1,916,000
(15.8%) to $14,049,000 from $12,133,000 in the third quarter of 2002. The
increase in noninterest expense was mainly due to an increase in salary and
benefit expense (up $1,116,000 or 17.6% to $7,460,000). The increase in salary
and benefits expense was mainly due to annual salary increases, increased
commission and incentive expense, and new employees at four new branches the
Company opened during 2002 and from the merger with North State National Bank on
April 4, 2003. Other noninterest expense, including intangible amortization,
increased (up $800,000 or 13.8% to $6,589,000) due to the new branch openings in
2002 and the merger with North State.
Nonperforming loans net of government agency guarantees were $6,072,000,
$20,539,000, $8,180,000, and $11,031,000 as of September 30, 2003, June 30,
2003, December 31, 2002, and September 30, 2002, respectively. As of September
30, 2003, December 31, 2002, and September 30, 2002, the ratio of allowance for
loan losses to total loans was 1.45%, 2.09% and 2.10%, respectively. As of
September 30, 2003, December 31, 2002, and September 30, 2002, the ratio of
allowance for loan losses to nonperforming assets was 177%, 158% and 130%,
respectively. Based on the current conditions of the loan portfolio, Management
believes that the $13,460,000 allowance for loan losses at September 30, 2003 is
adequate to absorb probable losses inherent in the Company's loan portfolio.
The Company provided $150,000 for loan losses in the third quarter of 2003
versus $700,000 in the third quarter of 2002. This decrease in the provision for
loan losses was due to improved credit quality as evidenced by the reduction in
nonperforming loans, and the adequacy of the loan loss reserve as evidenced by
the increase in the ratio of allowance for loan losses to nonperforming assets.
During the third quarter of 2003, the Company recorded $145,000 of net loan
charge offs versus $68,000 of net loan recoveries in the year earlier quarter.
Assets of the Company at September 30, 2003 were $1.44 billion compared to
$1.07 billion at September 30, 2002. Loan balances at September 30, 2003 were
$930 million compared to $684 million at September 30, 2002, and deposit
balances at September 30, 2003 were $1.20 billion compared to $938 million at
September 30, 2002.
For the third quarter of 2003, the Company had an annualized return on
assets of 1.25% and a return on equity of 14.09% versus 1.39% and 15.17%,
respectively, in the third quarter of 2002. As of September 30, 2003, TriCo
Bancshares had a Tier 1 capital ratio of 10.6% and a total risk-based capital
ratio of 11.7%.
As previously announced on July 31, 2003, the Company terminated its stock
repurchase plan to repurchase 150,000 shares of common stock originally
announced on October 19, 2001. There were 118,800 shares repurchased under the
plan and the remaining 31,200 shares had not been repurchased. The Company has
adopted a new stock repurchase plan for the repurchase of up to 250,000 shares
of the Company's common stock from time to time as market conditions allow. The
250,000 shares authorized for repurchase under this plan represented
approximately 3.2% of the Company's approximately 7,852,000 common shares
outstanding as of July 31, 2003. This new plan has no stated expiration date for
the repurchases. The Company repurchased 8,100 common shares under this new
plan, all of which were repurchased during the quarter ended September 30, 2003.
In addition to the historical information contained herein, this press
release contains certain forward-looking statements. 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, 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. 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.
TriCo Bancshares and Tri Counties Bank are headquartered in Chico,
California. Tri Counties Bank has a 28 year history in the banking industry. Tri
Counties Bank operates 33 traditional branch locations and 10 in-store branch
locations in 20 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 54 ATMs and a 24-hour, seven days a week
telephone customer service center. Brokerage services are provided at the Bank's
offices by the Bank's association with Raymond James Financial, Inc. For further
information please visit the Tri Counties Bank web-site at
http://www.tricountiesbank.com
TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share data)
Three months ended
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September 30, June 30, March 31, December 31, Sept. 30,
2003 2003 2003 2002 2002
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Statement of Income Data
Interest income $ 19,105 $ 18,161 $ 16,349 $ 16,228 $ 16,435
Interest expense 3,305 3,445 3,115 3,245 3,227
Net interest income 15,800 14,716 13,234 12,983 13,208
Provision for loan losses 150 150 150 800 700
Noninterest income:
Service charges and fees 3,117 3,985 3,500 3,651 3,521
Other income 2,089 2,569 1,896 2,347 1,892
Total noninterest income 5,206 6,554 5,396 5,998 5,413
Noninterest expense:
Salaries and benefits 7,460 7,636 6,877 6,434 6,344
Intangible amortization 325 324 228 228 228
Other expense 6,264 6,408 5,546 5,811 5,561
Total noninterest expense 14,049 14,368 12,651 12,473 12,133
Net income before taxes 6,807 6,752 5,829 5,708 5,788
Net income $ 4,338 $ 4,254 $ 3,613 $ 3,748 $ 3,627
Share Data
Basic earnings per share $ 0.55 $ 0.55 $ 0.51 $ 0.53 $ 0.52
Diluted earnings per share 0.54 0.53 0.50 0.52 0.50
Book value per common share $ 15.91 $ 15.86 $ 14.39 $ 14.02 $ 13.70
Shares outstanding 7,846,001 7,852,110 7,080,470 7,060,965 7,035,590
Weighted average shares 7,850,374 7,796,383 7,070,701 7,046,246 7,026,120
Weighted average diluted shares 8,094,964 8,021,229 7,250,178 7,211,705 7,231,165
Credit Quality
Non-performing loans, net of
government agency guarantees $ 6,072 $ 20,539 $ 20,610 $ 8,180 $ 11,031
Other real estate owned 1,545 1,551 1,608 932 -
Loans charged-off 551 2,063 280 870 73
Loans recovered $ 406 $ 147 $ 46 $ 66 $ 141
Allowance for loan losses to total loans 1.45% 1.58% 2.06% 2.09% 2.10%
Allowance for loan losses to NPLs 222% 66% 69% 176% 130%
Allowance for loan losses to NPAs 177% 61% 64% 158% 130%
Selected Financial Ratios
Return on average total assets 1.25% 1.27% 1.26% 1.35% 1.39%
Return on average equity 14.09% 13.88% 14.29% 15.35% 15.17%
Average yield on loans 7.41% 7.34% 7.64% 7.75% 7.89%
Average yield on earning assets 6.32% 6.18% 6.36% 6.53% 7.02%
Average rate on earning liabilities 1.36% 1.45% 1.52% 1.65% 1.72%
Net interest margin 5.24% 5.02% 5.17% 5.25% 5.67%
Total risk based capital ratio 11.7% 10.4% 11.6% 12.0% 11.9%
Tier 1 Capital ratio 10.6% 9.1% 10.4% 10.7% 10.6%
TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share data)
Three months ended
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September 30, June 30, March 31, December 31, Sept. 30,
2003 2003 2003 2002 2002
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Balance Sheet Data
Cash and due from banks $ 66,747 $ 65,051 $ 58,925 $ 67,170 $ 56,749
Fed funds sold 1,900 3,200 10,100 8,100 23,400
Securities, available-for-sale 350,761 354,040 354,007 338,024 268,921
Loans
Commercial loans 152,477 147,746 117,329 125,982 142,290
Consumer loans 297,186 237,704 210,633 201,858 191,601
Real estate mortgage loans 420,312 407,218 330,001 319,969 313,191
Real estate construction loans 60,066 59,622 35,810 39,713 36,472
Total loans, gross 930,041 852,290 693,773 687,522 683,554
Allowance for loan losses (13,460) (13,455) (14,293) (14,377) (14,382)
Premises and equipment 19,787 19,830 17,542 17,224 16,583
Cash value of life insurance 38,644 34,633 29,257 15,208 15,045
Intangible assets 21,992 22,189 3,815 4,043 4,387
Other assets 24,172 23,124 23,377 21,660 19,266
Total assets 1,440,584 1,360,902 1,176,503 1,144,574 1,073,523
Noninterest bearing demand deposits 267,148 260,861 226,373 232,499 202,895
Interest bearing demand deposits 211,219 204,538 188,575 182,816 175,883
Savings deposits 426,340 393,198 324,584 297,926 268,182
Time certificates 291,145 315,008 293,120 291,996 290,935
Total deposits 1,195,852 1,173,605 1,032,652 1,005,237 937,895
Fed funds purchased & repurchase agreements 55,700 17,400 - - -
Other liabilities 21,312 22,425 19,044 17,399 16,275
Other borrowings 22,894 22,905 22,915 22,924 22,932
Trust preferred securities 20,000 - - - -
Total liabilities 1,315,758 1,236,335 1,074,611 1,045,560 977,102
Total shareholders' equity 124,826 124,567 101,892 99,014 96,421
Accumulated other
comprehensive income 1,223 3,433 2,688 2,303 2,333
Average loans 876,068 801,493 679,975 675,626 676,009
Average interest earning assets 1,226,453 1,194,618 1,048,286 1,013,175 954,611
Average total assets 1,384,672 1,339,107 1,149,759 1,112,660 1,044,518
Average deposits 1,185,059 1,146,211 1,003,853 970,666 908,675
Average total equity $ 123,168 $ 122,567 $ 101,139 $ 97,684 $ 95,645