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):
July 21, 2004
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 July 21, 2004
Item 12: Results of Operations and Financial Condition
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On July 21, 2004 TriCo Bancshares announced their quarterly earnings for the
period ended June 30, 2004. 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: July 21, 2004 By: /s/ Thomas J. Reddish
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Thomas J. Reddish, Executive 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 July 21, 2004
PRESS RELEASE Contact: Thomas J. Reddish
For Immediate Release Executive Vice President & CFO
(530) 898-0300
TRICO BANCSHARES ANNOUNCES RECORD HIGH EARNINGS IN SECOND QUARTER 2004
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CHICO, Calif. - (July 21, 2004) - TriCo Bancshares (NASDAQ: TCBK), parent
company (the "Company") of Tri Counties Bank (the "Bank"), today announced
record quarterly earnings of $4,847,000 for the quarter ended June 30, 2004.
This represents a 13.9% increase when compared with earnings of $4,254,000 for
the quarter ended June 30, 2003. Diluted earnings per share for the quarter
ended June 30, 2004 increased 11.1% to $0.30 from $0.27 for the quarter ended
June 30, 2003. Total assets of the Company increased $184 million (13.5%) to
$1.545 billion at June 30, 2004 versus $1.361 billion at June 30, 2003. Total
loans of the Company increased $226 million (26.5%) to $1.078 billion at June
30, 2004 versus $852 million at June 30, 2003. Total deposits of the Company
increased $94 million (8.0 %) to $1.267 billion at June 30, 2004 versus $1.174
billion at June 30, 2003. Diluted earnings per share for the six months ended
June 30, 2004 and 2003 were $0.59 and $0.52, respectively, on earnings of
$9,624,000 and $7,867,000, respectively.
"Tri Counties Bank is the largest community bank in California headquartered
north of Sacramento, and our strategy to expand our franchise by opening new
branches in addition to acquiring other banks continues to be tremendously
successful as indicated by our record high earnings," said Richard Smith,
President and Chief Executive Officer. "In April of 2004 we opened another
full-service branch in Turlock, Calif., which has already exceeded projections.
Additionally, loan demand continues to be strong, the credit quality of our loan
portfolio remains high, and our expansion into California's Central Valley has
allowed us to increase sales of nondeposit investment products, and add
households that enhance our source of low cost deposits, service charges and fee
revenue."
The increase in earnings for the quarter ended June 30, 2004 over the year-ago
quarter was due to a $2,825,000 (19.2%) increase in net interest income to
$17,541,000, and a $388,000 (5.9%) increase in noninterest income to $6,942,000.
The increase in net interest income was due to a $228 million (28.4%) increase
in average loan balances to $1.029 billion, and a 0.25% increase in fully
tax-equivalent net interest margin to 5.27% during the quarter ended June 30,
2004 compared to the year-ago quarter.
The following table shows the components of noninterest income for the
three-month periods ended June 30, 2004 and 2003, and the changes therein:
Three Months Ended June 30,
2004 2003 Change
Service charges on deposit accounts $ 3,407 $ 3,192 $ 215
ATM fees and surcharges 664 597 67
Other service fees 269 196 73
Mortgage servicing valuation recovery 570 - 570
Gain on sale of loans 433 1,319 (886)
Commissions on sale of
nondeposit investment products 616 461 155
Gain on sale of investments - 100 (100)
Gain on sale of fixed assets 89 - 89
Gain on sale of other real estate 182 60 122
Increase in cash value of life insurance 432 376 56
Other noninterest income 280 253 27
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Total noninterest income $ 6,942 $ 6,554 $ 388
Service charges on deposit accounts, ATM fees and surcharges, and other service
fees increased $355,000 (8.9%) to $4,340,000 during the quarter ended June 30,
2004 compared to $3,985,000 in the year-ago quarter. The increases in these
categories are primarily due to an increase in number of customers as a result
of the Bank's continued de-novo expansion and penetration of existing markets.
The mortgage servicing valuation recovery and the decrease in gain on sale of
loans are due to the slowdown in mortgage refinance activity that peaked in the
middle of 2003. During the third quarter of 2003, when refinance activity was
high, the Company recorded a $600,000 valuation allowance for its mortgage
servicing portfolio. During the first quarter of 2004, as refinance activity
slowed, the Company recovered $30,000 of the $600,000 valuation allowance.
During the second quarter of 2004, as refinance activity continued to slow, the
Company recovered the remaining $570,000 of this valuation allowance. As of June
30, 2004, the Company serviced $372 million of residential mortgage loans for
others, $360 million of which is subject to potential valuation allowance. As of
June 30, 2004, this servicing portfolio has an estimated market value of $3.7
million, and is recorded in the Company's consolidated financial statements at
$3.5 million.
The increases in net interest income and noninterest income were partially
offset by a $1,150,000 (767%) increase in provision for loan losses to
$1,300,000, and a $1,044,000 (7.3%) increase in noninterest expense to
$15,412,000 in the quarter ended June 30, 2004 versus the year-ago quarter. The
increase in provision for loan losses is mainly due to loan growth of $84
million during the quarter ended June 30, 2004 as loan quality remains high and
loan charge-offs remain low. During the quarter ended June 30, 2004, net loan
charge-offs were $67,000 or 0.026% of average outstanding loans on an annualized
basis. As of June 30, 2004, nonperforming loans net of government guarantees,
and the allowance for loan losses were 0.36% and 1.44%, respectively, of
outstanding loans. The increase in noninterest expense was mainly due to salary
and benefit expense related to the addition of de-novo branches in Roseville
(November 2003), Folsom (December 2003), and Turlock (April 2004), and regular
salary increases.
As previously announced on March 11, 2004, the Board of Directors of TriCo
Bancshares approved a two-for-one stock split of its common stock at its meeting
held on March 11, 2004. The stock split was effected in the form of a stock
dividend and provided each stockholder of record at the close of business on
April 9, 2004 one additional share for every share of TriCo common stock held on
that date. Shares resulting from the split were distributed on April 30, 2004.
As of June 30, 2004, the Company had 15,640,000 common shares outstanding. All
per share amounts for prior periods have been restated to reflect the stock
split.
As of July 21, 2004, the Company had purchased 222,600 shares under its stock
repurchase plan announced on July 31, 2003 and amended on April 9, 2004, which
leaves 277,400 shares available for repurchase under the plan.
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 13 in-store branch locations
in 21 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 57 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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June 30, March 31, December 31, September 30, June 30,
2004 2004 2003 2003 2003
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Statement of Income Data
Interest income $ 20,628 $ 19,912 $ 20,354 $ 19,105 $ 18,161
Interest expense 3,087 3,014 3,224 3,305 3,445
Net interest income 17,541 16,898 17,130 15,800 14,716
Provision for loan losses 1,300 650 800 150 150
Noninterest income:
Service charges and fees 4,910 4,081 3,939 3,117 3,985
Other income 2,032 1,674 1,814 2,089 2,569
Total noninterest income 6,942 5,755 5,753 5,206 6,554
Noninterest expense:
Salaries and benefits 8,440 8,167 7,741 7,460 7,636
Intangible amortization 343 331 330 325 324
Other expense 6,629 5,848 6,388 6,264 6,408
Total noninterest expense 15,412 14,346 14,459 14,049 14,368
Income before taxes 7,771 7,657 7,624 6,807 6,752
Net income $ 4,847 $ 4,777 $ 4,683 $ 4,338 $ 4,254
Share Data (1)
Basic earnings per share $ 0.31 $ 0.31 $ 0.30 $ 0.28 $ 0.27
Diluted earnings per share 0.30 0.29 0.29 0.27 0.27
Book value per common share $ 8.20 8.28 8.17 7.95 7.93
Tangible book value per common share $ 6.87 $ 6.92 $ 6.79 $ 6.55 $ 6.52
Shares outstanding 15,639,897 15,635,522 15,668,248 15,692,002 15,704,220
Weighted average shares 15,639,556 15,616,540 15,693,494 15,700,748 15,592,766
Weighted average diluted shares 16,215,160 16,212,845 16,296,892 16,189,928 16,042,458
Credit Quality
Non-performing loans, net of
government agency guarantees $ 3,886 $ 5,265 $ 4,394 $ 6,072 $ 20,539
Other real estate owned 628 924 932 1,545 1,551
Loans charged-off 177 188 859 551 2,063
Loans recovered $ 110 $ 62 $ 372 $ 406 $ 147
Allowance for loan losses to total loans 1.44% 1.44% 1.40% 1.45% 1.58%
Allowance for loan losses to NPLs 400% 272% 313% 222% 66%
Allowance for loan losses to NPAs 344% 231% 259% 177% 61%
Selected Financial Ratios
Return on average total assets 1.29% 1.33% 1.29% 1.25% 1.27%
Return on average equity 14.97% 14.80% 14.71% 14.09% 13.88%
Average yield on loans 6.82% 6.90% 7.17% 7.41% 7.34%
Average yield on earning assets 6.18% 6.30% 6.41% 6.32% 6.18%
Average rate on earning liabilities 1.14% 1.18% 1.26% 1.36% 1.45%
Net interest margin (fully tax-equivalent) 5.27% 5.35% 5.41% 5.24% 5.02%
Total risk based capital ratio 12.4% 11.5% 11.6% 11.7% 10.4%
Tier 1 Capital ratio 10.9% 10.3% 10.4% 10.6% 9.1%
(1) Share and per share data for all periods have been adjusted to reflect
the 2-for-1 stock split announced March 11, 2004 payable on April 30,
2004 to shareholders of record on April 9, 2004.
TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share data)
Three months ended
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June 30, March 31, December 31, September 30, June 30,
2004 2004 2003 2003 2003
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Balance Sheet Data
Cash and due from banks $ 65,512 $ 55,568 $ 80,603 $ 66,747 $ 65,051
Fed funds sold - - 326 1,900 3,200
Securities, available-for-sale 309,163 312,657 316,436 350,941 354,040
Loans
Commercial loans 146,262 131,759 142,252 152,477 147,746
Consumer loans 357,901 334,221 319,029 297,186 237,704
Real estate mortgage loans 518,696 465,429 458,369 420,312 407,218
Real estate construction loans 55,605 62,656 61,591 60,066 59,622
Total loans, gross 1,078,464 994,065 981,241 930,041 852,290
Allowance for loan losses (15,529) (14,297) (13,773) (13,460) (13,455)
Premises and equipment 18,996 19,288 19,521 19,787 19,830
Cash value of life insurance 39,844 39,412 38,980 38,644 34,633
Intangible assets 20,931 21,274 21,604 21,992 22,189
Other assets 27,792 22,476 23,817 24,611 23,124
Total assets 1,545,173 1,450,443 1,468,755 1,441,203 1,360,902
Noninterest bearing demand deposits 282,292 260,299 298,462 267,148 260,861
Interest bearing demand deposits 224,552 222,986 220,875 211,219 204,538
Savings deposits 476,798 488,915 441,461 426,340 393,198
Time certificates 283,710 267,739 276,025 291,145 315,008
Total deposits 1,267,352 1,239,939 1,236,823 1,195,852 1,173,605
Fed funds purchased & repurchase agreements 66,000 16,300 39,500 55,700 17,400
Other liabilities 19,397 21,194 20,966 21,312 22,425
Other borrowings 22,866 22,877 22,887 22,894 22,905
Junior subordinated debt 41,238 20,619 20,619 20,619 -
Total liabilities 1,416,853 1,320,929 1,340,795 1,316,377 1,236,335
Total shareholders' equity 128,320 129,514 127,960 124,826 124,567
Accumulated other
comprehensive (loss) income (1,984) 2,426 1,814 1,223 3,433
Average loans 1,029,425 970,793 951,669 876,068 801,493
Average interest earning assets 1,351,774 1,281,032 1,285,905 1,226,453 1,194,618
Average total assets 1,505,261 1,440,953 1,447,137 1,384,672 1,339,107
Average deposits 1,252,472 1,231,704 1,216,223 1,185,059 1,146,211
Average total equity $ 129,481 $ 129,133 $ 127,374 $ 123,168 $ 122,567