EX-99.1

Exhibit 99.1


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

TRICO BANCSHARES ANNOUNCES QUARTERLY RESULTS

CHICO,CA – (April 25, 2019) – TriCo Bancshares (NASDAQ: TCBK) (the “Company”), parent company of Tri Counties Bank, today announced net income of $22,726,000 for the quarter ended March 31, 2019, compared to $23,211,000 during the trailing quarter December 31, 2018 and $13,910,000 during the quarter ended March 31, 2018. Diluted earnings per share were $0.74 for the first quarter of 2019, compared to $0.76 for the fourth quarter of 2018 and $0.60 for the first quarter of 2018.

Financial Highlights

Performance highlights and other developments for the Company during the three months ended March 31, 2019 included the following:

•

For the three months ended March 31, 2019, the Company’s return on average assets was 1.41% and the return on average equity was 10.78%.

•

As of March 31, 2019, the Company reached record levels of total loans, total assets and total deposits which were $4.03 billion, $6.47 billion and $5.43 billion, respectively.

•

The loan to deposit ratio remained stable at 74.3% at March 31, 2019 as compared to 75.0% at December 31, 2018 and 75.2% at March 31, 2018.

•

Net interest margin grew 32 basis points to 4.46% on a tax equivalent basis as compared to 4.14% in the quarter ended March 31, 2018 and decreased by 7 basis points from the trailing quarter.

•

Non-interest bearing deposits as a percentage of total deposits were 32.4% at March 31, 2019, as compared to 32.8% at December 31, 2018 and 33.3% at March 31, 2018.

•

The average rate of interest paid on deposits, including noninterest-bearing deposits, remained low at 0.20%, with no change from the trailing quarter and an increase of 9 basis points from the average rate paid during the same quarter of the prior year.

•

Non-performing assets to total assets were 0.34% as of March 31, 2019 as compared to 0.47% and 0.54% at December 31, 2018 and March 31, 2018, respectively.

•

The balance of nonperforming loans decreased by $7.9 million and recoveries on previously charged-off loans significantly contributed to the $1.6 million reversal of the allowance for loan losses during the period.

•

The efficiency ratio increased slightly to 60.1% as compared to the trailing quarter, which had an efficiency ratio of 59.1%.

President and CEO, Rick Smith commented, “Our strategic focus on process improvement and efficiency through the use of technology, investments in the next generation of our leadership teams, and our commitment to delivering service with solutions to our customers remain as the keys to the continued success of the Company. With the storm filled weeks of winter behind us, we remain optimistic about the growth possibilities throughout the markets that we serve.”

Smith continued, “Regardless of the local, national or global economic and political volatility that transpires, we believe that TriCo’s strengths including our low cost of funds, overall credit quality and access to liquidity provide us with significant competitive advantages.”

Summary Results

The following is a summary of the components of the Company’s operating results and performance ratios for the periods indicated:


	Three months ended
	March 31,			December 31,
(dollars and shares in thousands)	2019			2018			$ Change			% Change
Net interest income	$	63,870		$	64,002		$	(132	)		(0.2	%)
Benefit from reversal of (provision for) loan losses		1,600			(806	)		2,406			nm
Noninterest income		11,864			12,634			(770	)		(6.1	%)
Noninterest expense		(45,513	)		(45,285	)		(228	)		0.5	%
Provision for income taxes		(9,095	)		(7,334	)		(1,761	)		24.0	%

Net income	$	22,726		$	23,211		$	(485	)		(2.1	%)

Diluted earnings per share	$	0.74		$	0.76		$	(0.02	)		(2.2	%)
Dividends per share	$	0.19		$	0.19			—			0.0	%
Average common shares		30,424			30,423			1			0.0	%
Average diluted common shares		30,658			30,672			(14	)		(0.0	%)

Return on average total assets		1.41	%		1.47	%
Return on average equity		10.78	%		11.43	%
Efficiency ratio		60.10	%		59.09	%

	Three months ended March 31,
(dollars and shares in thousands)	2019			2018			$ Change			% Change
Net interest income	$	63,870		$	44,986		$	18,884			42.0	%
Benefit from reversal of provision for loan losses		1,600			236			1,364			nm
Noninterest income		11,864			12,290			(426	)		(3.5	%)
Noninterest expense		(45,513	)		(38,162	)		(7,351	)		19.3	%
Provision for income taxes		(9,095	)		(5,440	)		(3,655	)		67.2	%

Net income	$	22,726		$	13,910		$	8,816			63.4	%

Diluted earnings per share	$	0.74		$	0.60		$	0.14			23.3	%
Dividends per share	$	0.19		$	0.17		$	0.02			11.8	%
Average common shares		30,424			22,956			7,468			32.5	%
Average diluted common shares		30,658			23,283			7,375			31.7	%

Return on average total assets		1.41	%		1.17	%
Return on average equity		10.78	%		11.00	%
Efficiency ratio		60.10	%		66.63	%

Balance Sheet

Deposit growth of $63,796,000 or 4.8% on an annualized basis during the first quarter of 2019 continued to provide benefit to the overall organic growth in total assets of $88,469,000 (5.6% annualized).

Trailing Quarter Balance Sheet Change


Ending balances	As of March 31,		As of December 31,					Impact of		Organic			Annualized Organic
($‘s in thousands)	2019		2018		$ Change			ASU 2016-02 ⁽¹⁾		$ Change			% Change
Total assets	$	6,471,852	$	6,352,441	$	119,411		$	30,942	$	88,469			5.6	%
Total loans		4,034,331		4,022,014		12,317			—		12,317			1.2	%
Total investments		1,564,692		1,580,096		(15,404	)		—		(15,404	)		(3.9	%)
Total deposits	$	5,430,262	$	5,366,466	$	63,796			—	$	63,796			4.8	%

Total average assets increased by $78,473,000 (5.0% annualized) to $6,426,227,000 and total average deposits increased by $151,049,000 (11.5% annualized) to $5,393,188 as compared to the trailing quarter.

Average Trailing Quarter Balance Sheet Change


Qtrly avg balances	As of March 31,		As of December 31,					Impact of		Organic			Annualized Organic
($‘s in thousands)	2019		2018		$ Change			ASU 2016-02 ⁽¹⁾		$ Change			% Change
Total assets	$	6,426,227	$	6,316,337	$	109,890		$	31,417	$	78,473			5.0	%
Total loans		4,023,864		4,026,569		(2,705	)		—		(2,705	)		(0.3	%)
Total investments		1,567,584		1,521,780		45,804			—		45,804			12.0	%
Total deposits	$	5,393,188	$	5,242,139	$	151,049			—	$	151,049			11.5	%

(1)

On January 1, 2019, the Company recorded on its consolidated balance sheet a right-of-use asset for operating leases and a corresponding liability for payment obligations in conjunction with the adoption and implementation of the Accounting Standard Update (“ASU”) 2016-02: Leases, as issued by the Financial Accounting Standards Board (“FASB”).

In addition to the balance sheet changes which resulted from the acquisition of FNB Bancorp, total assets grew by $228,695,000 (4.8%) between March 2018 and March 2019. This growth was led by $129,915,000 (4.2%) of organic loan growth which was funded by $353,923,000 (8.7%) in organic deposit growth.

Year Over Year Balance Sheet Change


Ending balances	As of March 31,						Acquired		Organic			Organic
($‘s in thousands)	2019		2018		$ Change		Balances		$ Change			% Change
Total assets	$	6,471,852	$	4,779,957	$	1,691,895	$	1,463,200	$	228,695			4.8	%
Total loans		4,034,331		3,069,733		964,598		834,683		129,915			4.2	%
Total investments		1,564,692		1,251,776		312,916		335,667		(22,751	)		(1.8	%)
Total deposits	$	5,430,262	$	4,084,404	$	1,345,858	$	991,935	$	353,923			8.7	%

Total equity increased to $853,278,000 at March 31, 2019 as compared to $827,373,000 at the close of the trailing quarter and inclusive of $8,927,000 and $17,879,000 in accumulated other comprehensive loss at the same periods, respectively. As a result, the Company’s book value per share increased to $28.04 at March 31, 2019 from $27.20 per share at December 31, 2018. The Company’s tangible book value per share, calculated by subtracting goodwill and other intangible assets from total shareholders’ equity and dividing that sum by total shares outstanding, increased to $19.86 per share at March 31, 2019 from $18.97 per share at December 31, 2018. Excluding accumulated other comprehensive losses from total equity for both quarters, tangible book value per share increased to $20.16 at March 31, 2019 from $19.56 at December 31, 2018.

Net Interest Income and Net Interest Margin

The following is a summary of the components of net interest income for the periods indicated:


	Three months ended
	March 31,			December 31,
(dollars in thousands)	2019			2018			$ Change			% Change
Interest income	$	67,457		$	68,065		$	(608	)		(0.9	%)
Interest expense		(3,587	)		(4,063	)		476			(11.7	%)
Fully tax-equivalent adjustment (FTE) ⁽¹⁾		322			322			0			0.0	%

Net interest income (FTE)	$	64,192		$	64,324		$	(132	)		(0.2	%)

Net interest margin (FTE)		4.46	%		4.53	%

Acquired loans discount accretion, net:
Amount (included in interest income)	$	1,655		$	1,982		$	(327	)		(16.5	%)
Effect on average loan yield		0.17	%		0.20	%
Effect on net interest margin (FTE)		0.12	%		0.14	%


	Three months ended March 31,
(dollars in thousands)	2019			2018			$ Change			% Change
Interest income	$	67,457		$	47,121		$	20,336			43.2	%
Interest expense		(3,587	)		(2,135	)		(1,452	)		68.0	%
Fully tax-equivalent adjustment (FTE) ⁽¹⁾		322			312			10			3.2	%

Net interest income (FTE)	$	64,192		$	45,298		$	18,894			41.7	%

Net interest margin (FTE)		4.46	%		4.14	%

Acquired loans discount accretion, net:
Amount (included in interest income)	$	1,655		$	632		$	1,023			161.9	%
Effect on average loan yield		0.17	%		0.09	%
Effect on net interest margin (FTE)		0.12	%		0.06	%

⁽¹⁾

Information is presented on a fully tax-equivalent (FTE) basis. The Company believes the use of this non-generally accepted accounting principles (non-GAAP) measure provides additional clarity in assessing its results, and the presentation of these measures on a FTE basis is a common practice within the banking industry.

Loans may be acquired at a premium or discount to par value, in which case, the premium is amortized (subtracted from) or accreted (added to) interest income over the remaining life of the loan. Generally, as time goes on, the effects of loan discount accretion and loan premium amortization decrease as the purchased loans mature or pay off early. Upon the early pay off of a loan, any remaining (unaccreted) discount or (unamortized) premium is immediately taken into interest income; and as loan payoffs may vary significantly from quarter to quarter, so may the impact of discount accretion and premium amortization on interest income. During the three months ended March 31, 2019, December 31, 2018 and March 31, 2018, purchased loan discount accretion was $1,655,000, $1,982,000, and $632,000, respectively. During the three months ended March 31, 2019, loans purchased at net premiums several years ago were repaid prior to expected maturity resulting in approximately $259,000 of accelerated amortization.

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, 2019							December 31, 2018							March 31, 2018
	Average		Income/		Yield/			Average		Income/		Yield/			Average		Income/		Yield/
	Balance		Expense		Rate			Balance⁽⁴⁾		Expense		Rate			Balance		Expense		Rate
Assets
Loans	$	4,023,864	$	54,398		5.41	%	$	4,026,569	$	55,662		5.53	%	$	3,028,178	$	38,049		5.03	%
Investments - taxable		1,425,352		10,915		3.06	%		1,378,182		10,660		3.09	%		1,125,394		7,658		2.72	%
Investments - nontaxable ⁽¹⁾		142,232		1,395		3.92	%		143,598		1,395		3.89	%		136,160		1,353		3.97	%

Total investments		1,567,584		12,310		3.14	%		1,521,780		12,055		3.17	%		1,261,554		9,011		2.86	%
Cash at Federal Reserve and other banks		168,518		1,071		2.54	%		131,496		670		2.04	%		90,864		373		1.64	%

Total earning assets		5,759,966		67,779		4.71	%		5,679,845		68,387		4.82	%		4,380,596		47,433		4.33	%
Other assets, net		666,261							636,492							360,631

Total assets	$	6,426,227						$	6,316,337						$	4,741,227

Liabilities and shareholders’ equity
Interest-bearing demand deposits	$	1,279,639		287		0.09	%	$	1,183,805		272		0.09	%	$	994,206	$	211		0.08	%
Savings deposits		1,926,339		1,133		0.24	%		1,849,788		1,132		0.24	%		1,371,377		411		0.12	%
Time deposits		441,778		1,299		1.18	%		459,658		1,190		1.04	%		306,514		474		0.62	%

Total interest-bearing deposits		3,647,756		2,719		0.30	%		3,493,251		2,594		0.30	%		2,672,097		1,096		0.16	%
Other borrowings		15,509		13		0.34	%		122,755		639		2.08	%		107,781		342		1.27	%
Junior subordinated debt		56,950		855		6.01	%		57,019		830		5.82	%		56,882		697		4.90	%

Total interest-bearing liabilities		3,720,215		3,587		0.39	%		3,673,025		4,063		0.44	%		2,836,760		2,135		0.30	%

Noninterest-bearing deposits		1,745,432							1,748,888							1,332,235
Other liabilities		117,490							81,899							66,219
Shareholders’ equity		843,090							812,525							506,013

Total liabilities and shareholders’ equity	$	6,426,227						$	6,316,337						$	4,741,227

Net interest rate spread^{(1) (2)}						4.32	%						4.38	%						4.03	%
Net interest income and net interest margin^{(1) (3)}			$	64,192		4.46	%			$	64,324		4.53	%				45,298		4.14	%

⁽¹⁾	Fully taxable equivalent (FTE)

⁽²⁾	Net interest spread is the average yield earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.

⁽³⁾	Net interest margin is computed by calculating the difference between interest income and interest expense, divided by the average balance of interest-earning assets.

⁽⁴⁾

The reported amounts of average balances for the three months ended December 31, 2018 have been corrected for immaterial differences that were identified subsequent to the prior period’s earnings release and for purposes of ensuring that reclassifications of these amounts are presented on a comparable basis. These changes in average balances had no impact on the aggregate amounts of income or expense previously reported but did have an immaterial impact on the calculated rates and yields.

Net interest income (FTE) during the three months ended March 31, 2019 decreased $132,000 or 0.2% to $64,192,000 compared to $64,324,000 during the three months ended December 31, 2018. The generally static level of net interest income (FTE) was due primarily to negligible changes in the average balances and mix of interest earnings assets and interest bearing liabilities during the quarter but negatively impacted by the repayment of loans prior to anticipated maturity that were acquired for net premiums.

The index utilized in a significant portion of the Company’s variable rate loans, Wall Street Journal Prime, has increased by 1.50% to 5.50% at March 31, 2019 as compared to 4.00% at March 31, 2018. The most recent increase of the index was during December 2018, with an increase of 25 basis points. As such, there were minimal changes to loan yields as compared to the trailing quarter. However, as compared to the same quarter in the prior year, average loan yields increased 38 basis points from 5.03% during the three months ended March 31, 2018 to 5.41% during the three months ended March 31, 2019. Of the 38 basis point increase in yields on loans, 30 basis points was attributable to increases in market rates while 8 basis points was from increased accretion of purchased loans.

The impact of changes in rates and volumes of interest bearing liabilities resulted in a decrease in interest expense of $476,000 during the current quarter. Declines in interest expense on other borrowings contributed to $626,000 of the decrease which was partially offset by a $109,000 increase in interest expense on time deposits and an additional $25,000 in expense on variable rate junior subordinated debt. Comparing the quarter ended March 31, 2019 to the trailing quarter, the total cost of interest bearing liabilities decreased by 5 basis points to 0.39% but increased 9 basis points from the same quarter in the prior year due in part to differences in market rates associated with deposits acquired from First National Bank of Northern California and to increases in the variable rates paid on other borrowings and subordinated debt.

Asset Quality and Loan Loss Provisioning

The Company recorded a benefit from the reversal of provision for loan losses of $1,600,000 during the three months ended March 31, 2019 as compared to a benefit from the reversal of provision of $236,000 in the same quarter of the prior year. The benefit from the reversal of the provision was necessitated in part by $1,082,000 in net recoveries on previously charged-off loans during the first quarter of 2019 as compared to net charge-offs of $114,000 in the first quarter of 2018. Additionally, while the Company remains cautious about the risks associated with trends in California real estate prices and the affordability of housing in the markets served by the Company, changes in affordability and energy related index rates improved during the quarter ended March 31, 2019. The qualitative factors associated with these two measures reduced the level of calculated required reserves by approximately $1,059,000.

Provision for Income Taxes

The Company’s effective tax rate was 28.6% for the quarter ended March 31, 2019 as compared to 28.1% for the same quarter in the prior year. As previously reported, the Company’s effective tax rate was 24.0% for the quarter ended December 31, 2018 which was benefited by certain tax method elections. Absent the benefits made possible through these elections, the Company’s effective tax rate would have been 27.5% for the quarter ended December 31, 2018.

Non-interest Income

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


	Three months ended March 31,
(dollars in thousands)	2019			2018			$ Change			% Change
ATM and interchange fees	$	4,581		$	4,235		$	346			8.2	%
Service charges on deposit accounts		3,880			3,779			101			2.7	%
Other service fees		771			714			57			8.0	%
Mortgage banking service fees		483			517			(34	)		(6.6	%)
Change in value of mortgage servicing rights		(645	)		111			(756	)		(681.1	%)

Total service charges and fees		9,070			9,356			(286	)		(3.1	%)

Increase in cash value of life insurance		775			608			167			27.5	%
Asset management and commission income		642			876			(234	)		(26.7	%)
Gain on sale of loans		412			626			(214	)		(34.2	%)
Lease brokerage income		220			128			92			71.9	%
Sale of customer checks		140			101			39			38.6	%
Gain on sale of foreclosed assets		99			371			(272	)		(73.3	%)
Gain (loss) on marketable equity securities		36			(47	)		83			(176.6	%)
Loss on disposal of fixed assets		(38	)		(13	)		(25	)		192.3	%
Other		508			284			224			78.9	%

Total other noninterest income		2,794			2,934			(140	)		(4.8	%)

Total noninterest income	$	11,864		$	12,290		$	(426	)		(3.5	%)

Noninterest income decreased $426,000 (3.5%) to $11,864,000 during the three months ended March 31, 2019 compared to the three months ended March 31, 2018. The decrease in noninterest income was due primarily to a $756,000 (681.1%) decrease in the fair value of mortgage servicing rights, $234,000 (26.7%) decrease in asset management and commission income, $214,000 (34.2%) decrease in gain on sale of loans, and a $272,000 (73.3%) decrease on the gain on sale of foreclosed assets. Offsetting the decreases in non-interest income was an increase in ATM and interchange fees of $346,000 (8.2%), an increase in service charges on deposit accounts of $101,000 (2.7%), and an increase in the cash value of life insurance of $167,000 (27.5%). The fair value of the mortgage servicing asset decreased as compared to the first quarter in the prior year due to changes in the assumptions utilized in determining the fair value. Specifically, increased prepayment speeds and decreases in the 15 and 30 year mortgage rates were the largest contributors to the decline in fair value of the mortgage servicing asset.


	Three months ended
(dollars in thousands)	March 31, 2019			December 31, 2018			$ Change			% Change
ATM and interchange fees	$	4,581		$	4,914		$	(333	)		(6.8	%)
Service charges on deposit accounts		3,880			4,059			(179	)		(4.4	%)
Other service fees		771			832			(61	)		(7.3	%)
Mortgage banking service fees		483			511			(28	)		(5.5	%)
Change in value of mortgage servicing rights		(645	)		(184	)		(461	)		250.5	%

Total service charges and fees		9,070			10,132			(1,062	)		(10.5	%)

Increase in cash value of life insurance		775			722			53			7.3	%
Asset management and commission income		642			737			(95	)		(12.9	%)
Gain on sale of loans		412			540			(128	)		(23.7	%)
Lease brokerage income		220			164			56			34.1	%
Sale of customer checks		140			122			18			14.8	%
Gain on sale of foreclosed assets		99			18			81			450.0	%
Gain on marketable equity securities		36			28			8			28.6	%
(Loss) gain on disposal of fixed assets		(38	)		21			(59	)		(281.0	%)
Other		508			150			358			238.7	%

Total other noninterest income		2,794			2,502			292			11.7	%

Total noninterest income	$	11,864		$	12,634		$	(770	)		(6.1	%)

Noninterest income decreased $770,000 (6.1%) to $11,864,000 during the three months ended March 31, 2019 compared to the three months ended December 31, 2018. The decrease in noninterest income was due primarily to a $1,062,000 (10.5%) decrease in total service charges and fees, which comprised primarily of a $461,000 (250.5%) decrease in the fair value of the mortgage servicing rights and $333,000 (6.8%) decrease in ATM and interchange fees. Partially offsetting the decreases in non-interest income was an increase in other miscellaneous income of $358,000 (238.7%).

Non-interest Expense

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


	Three months ended March 31,
	2019		2018		$ Change			% Change
Base salaries, net of deferred loan origination costs	$	16,757	$	13,962	$	2,795			20.0	%
Incentive compensation		2,567		2,452		115			4.7	%
Benefits and other compensation costs		5,804		5,238		566			10.8	%

Total salaries and benefits expense		25,128		21,652		3,476			16.1	%

Occupancy		3,774		2,681		1,093			40.8	%
Data processing and software		3,349		2,514		835			33.2	%
Equipment		1,867		1,551		316			20.4	%
Intangible amortization		1,431		339		1,092			322.1	%
Advertising		1,331		838		493			58.8	%
ATM and POS network charges		1,323		1,226		97			7.9	%
Professional fees		839		773		66			8.6	%
Telecommunications		797		701		96			13.7	%
Regulatory assessments and insurance		511		430		81			18.8	%
Merger and acquisition expense		—		476		(476	)		(100.0	%)
Postage		310		358		(48	)		(13.4	%)
Operational losses		225		294		(69	)		(23.5	%)
Courier service		270		267		3			1.1	%
Other miscellaneous expense		4,358		4,062		296			7.3	%

Total other noninterest expense		20,385		16,510		3,875			23.5	%

Total noninterest expense	$	45,513	$	38,162	$	7,351			19.3	%

Average full time equivalent staff		1,138		1,002

Salary and benefit expenses increased $3,476,000 (16.1%) to $25,128,000 during the three months ended March 31, 2019 compared to $21,652,000 during the three months ended March 31, 2018. Base salaries, net of deferred loan origination costs increased $2,795,000 (20.0%) to $16,757,000. The increase in base salaries was due primarily to a 13.6% increase in average full time equivalent employees to 1,138 from 1,002 in the year-ago quarter. Commissions and incentive compensation increased $115,000 (4.7%) to $2,567,000 during the three months ended March 31, 2019 compared to the year-ago quarter due primarily to organic loan and deposit growth. Benefits & other compensation expense increased $566,000 (10.8%) to $5,804,000 during the three months ended March 31, 2019 due primarily to increases in the average full time equivalent employees, as mentioned above.

Other noninterest expense increased $3,875,000 (23.5%) to $20,385,000 during the three months ended March 31, 2019 compared to the three months ended March 31, 2018. The increase in other noninterest expense was due primarily to increased overhead operating costs related to the additional branches as a result of the prior year acquisition of FNB Bancorp. Highlighting those increases were intangible amortization, occupancy, data processing and software, and advertising expenses, which increased by $1,092,000, $1,093,000, $835,000 and $493,000, respectively, as compared to the prior year quarter. The increases in noninterest expenses were partially offset by decreased merger & acquisition expenses of $476,000.


	Three months ended
	March 31, 2019		December 31, 2018		$ Change			% Change
Base salaries, net of deferred loan origination costs	$	16,757	$	16,980	$	(223	)		(1.3	%)
Incentive compensation		2,567		3,313		(746	)		(22.5	%)
Benefits and other compensation costs		5,804		4,721		1,083			22.9	%

Total salaries and benefits expense		25,128		25,014		114			0.5	%

Occupancy		3,774		3,565		209			5.9	%
Data processing and software		3,349		3,042		307			10.1	%
Equipment		1,867		1,713		154			9.0	%
Intangible amortization		1,431		1,431		—			0.0	%
Advertising		1,331		1,364		(33	)		(2.4	%)
ATM and POS network charges		1,323		1,413		(90	)		(6.4	%)
Professional fees		839		1,071		(232	)		(21.7	%)
Telecommunications		797		822		(25	)		(3.0	%)
Regulatory assessments and insurance		511		522		(11	)		(2.1	%)
Postage		310		220		90			40.9	%
Operational losses		225		497		(272	)		(54.7	%)
Courier service		270		518		(248	)		(47.9	%)
Other miscellaneous expense		4,358		4,093		265			6.5	%

Total other noninterest expense		20,385		20,271		114			0.6	%

Total noninterest expense	$	45,513	$	45,285	$	227			0.5	%

Average full time equivalent staff		1,138		1,134

Salary and benefit expenses increased $114,000 (0.5%) to $25,128,000 during the three months ended March 31, 2019 compared to $25,014,000 during the three months ended December 31, 2018. Base salaries, net of deferred loan origination costs decreased $223,000 (1.3%) to $16,757,000. Commissions and incentive compensation decreased $746,000 (22.5%) to $2,567,000 during the three months ended March 31, 2019 compared to the trailing quarter due primarily to lack of organic loan and deposit growth. Benefits & other compensation expense increased $1,083,000 (22.9%) to $5,804,000 during the three months ended March 31, 2019 due primarily to increases in group insurance and employer taxes.

Other noninterest expense increased $114,000 (0.6%) to $20,385,000 during the three months ended March 31, 2019 compared to the trailing quarter. Increases in occupancy, data processing and software, and equipment were offset by decrease in professional fees, operational losses, and courier service.

About TriCo Bancshares

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 customer Service 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. Visit www.TriCountiesBank.com to learn more.

Forward-Looking Statement

The statements contained herein that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond our control. There can be no assurance that future developments affecting us will be the same as those anticipated by management. We caution readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; the impact of changes in financial services policies, laws and regulations; technological changes; mergers and acquisitions; changes in the level of our nonperforming assets and charge-offs; any deterioration in values of California real estate, both residential and commercial; the effect of changes in accounting standards and practices; possible other-than-temporary impairment of securities held by us; changes in consumer spending, borrowing and savings habits; our ability to attract deposits and other sources of liquidity; changes in the financial performance and/or condition of our borrowers; the impact of competition from other financial service providers; the possibility that any of the anticipated benefits of our recent merger with FNBB will not be realized or will not be realized within the expected time period, or that integration of FNBB’s operations will be more costly or difficult than expected; the challenges of integrating and retaining key employees; unanticipated regulatory or judicial proceedings; the costs and effects of litigation and of unexpected or adverse outcomes in such litigation; and our ability to manage the risks involved in the foregoing. Additional factors that could cause results to differ materially from those described above can be found in our Annual Report on Form 10-K for the year ended December 31, 2018, which is on file with the Securities and Exchange Commission (the “SEC”) and available in the “Investor Relations” section of our website, https://www.tcbk.com/investor-relations and in other documents we file with the SEC. Annualized, pro forma, projections and estimates are not forecasts and may not reflect actual results.

TRICO BANCSHARES - CONDENSED CONSOLIDATED FINANCIAL DATA

(Unaudited. Dollars in thousands, except share data)


	Three months ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2019			2018			2018			2018			2018
Revenue and Expense Data
Interest income	$	67,457		$	68,065		$	64,554		$	48,478		$	47,121
Interest expense		3,587			4,063			4,065			2,609			2,135

Net interest income		63,870			64,002			60,489			45,869			44,986
Provision for (benefit from) loan losses		(1,600	)		806			2,651			(638	)		(236	)
Noninterest income:
Service charges and fees		9,070			10,132			9,743			9,228			9,356
Gain on sale of investment securities		—			—			207			—			—
Other income		2,794			2,502			2,236			2,946			2,934

Total noninterest income		11,864			12,634			12,186			12,174			12,290
Noninterest expense:
Salaries and benefits		25,128			25,014			25,823			21,453			21,652
Occupancy and equipment		5,641			5,278			5,056			4,357			4,232
Data processing and network		4,672			4,455			3,981			4,116			3,740
Other noninterest expense		10,072			10,538			12,518			7,944			8,538

Total noninterest expense		45,513			45,285			47,378			37,870			38,162

Total income before taxes		31,821			30,545			22,646			20,811			19,350

Provision for income taxes		9,095			7,334			6,476			5,782			5,440

Net income	$	22,726		$	23,211		$	16,170		$	15,029		$	13,910

Share Data
Basic earnings per share	$	0.75		$	0.76		$	0.54		$	0.65		$	0.61
Diluted earnings per share	$	0.74		$	0.76		$	0.53		$	0.65		$	0.60
Dividends per share	$	0.19		$	0.19		$	0.17		$	0.17		$	0.17
Book value per common share	$	28.04		$	27.20		$	26.37		$	22.27		$	22.01
Tangible book value per common share⁽¹⁾	$	19.86		$	18.97		$	18.10		$	19.28		$	19.00
Shares outstanding		30,432,419			30,417,223			30,417,818			23,004,153			22,956,323
Weighted average shares		30,424,184			30,422,687			30,011,307			22,983,439			22,956,239
Weighted average diluted shares		30,657,833			30,671,723			30,291,225			23,276,471			23,283,127
Credit Quality
Loans past due 30 days or more	$	16,761		$	17,368		$	13,218		$	11,626		$	20,416
Nonperforming originated loans		13,737			19,416			17,087			17,077			16,080
Total nonperforming loans		19,565			27,494			27,148			25,420			24,381
Total nonperforming assets		21,880			29,774			28,980			26,794			25,945
Loans charged-off		726			424			1,142			318			480
Loans recovered	$	1,808		$	596		$	570		$	507		$	366
Selected Financial Ratios
Return on average total assets		1.41	%		1.47	%		1.05	%		1.25	%		1.17	%
Return on average equity		10.78	%		11.43	%		9.11	%		11.78	%		11.00	%
Average yield on loans		5.41	%		5.53	%		5.27	%		5.06	%		5.03	%
Average yield on interest-earning assets		4.71	%		4.82	%		4.61	%		4.38	%		4.33	%
Average rate on interest-bearing deposits		0.30	%		0.30	%		0.25	%		0.18	%		0.16	%
Average cost of total deposits		0.20	%		0.20	%		0.16	%		0.12	%		0.11	%
Average rate on borrowings and subordiated debt		4.79	%		3.27	%		2.63	%		2.80	%		2.52	%
Average rate on interest-bearing liabilities		0.39	%		0.44	%		0.44	%		0.36	%		0.30	%
Net interest margin (fully tax-equivalent)		4.46	%		4.53	%		4.32	%		4.14	%		4.14	%
Loans to deposits		74.29	%		74.95	%		79.08	%		77.17	%		75.16	%
Efficiency ratio		60.10	%		59.09	%		65.19	%		65.24	%		66.63	%
Supplemental Loan Interest Income Data
Discount accretion on acquired loans	$	1,655		$	1,982		$	2,098		$	559		$	632
All other loan interest income		52,743			53,680			51,004			38,745			37,417
Total loan interest income	$	54,398		$	55,662		$	53,102		$	39,304		$	38,049

⁽¹⁾

Tangible book value per share is calculated by subtracting goodwill and other intangible assets from total shareholders’ equity and dividing that result by the shares outstanding at the end of the period. Management believes that tangible book value per common share is meaningful because it is a measure that the Company and investors commonly use to assess shareholder value.

TRICO BANCSHARES - CONDENSED CONSOLIDATED FINANCIAL DATA

(Unaudited. Dollars in thousands)


	Three months ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2019			2018			2018			2018			2018
Balance Sheet Data
Cash and due from banks	$	318,708		$	227,533		$	226,543		$	184,062		$	182,979
Securities, available for sale		1,116,426			1,117,910			1,058,806			757,075			738,785
Securities, held to maturity		431,016			444,936			459,897			477,745			496,035
Restricted equity securities		17,250			17,250			17,250			16,956			16,956
Loans held for sale		5,410			3,687			3,824			3,601			2,149
Loans:
Commercial loans		269,163			276,548			289,645			237,619			216,015
Consumer loans		418,352			418,982			421,287			350,925			348,789
Real estate mortgage loans		3,129,339			3,143,100			3,132,202			2,401,040			2,359,379
Real estate construction loans		217,477			183,384			184,302			156,729			145,550

Total loans, gross		4,034,331			4,022,014			4,027,436			3,146,313			3,069,733
Allowance for loan losses		(32,064	)		(32,582	)		(31,603	)		(29,524	)		(29,973	)

Total loans, net		4,002,267			3,989,432			3,995,833			3,116,789			3,039,760
Premises and equipment		89,275			89,347			89,290			59,014			58,558
Cash value of life insurance		117,841			117,318			116,596			99,047			98,391
Accrued interest receivable		20,431			19,412			19,592			14,253			12,407
Goodwill		220,972			220,972			220,972			64,311			64,311
Other intangible assets		27,849			29,280			30,711			4,496			4,835
Operating leases, right-of-use		30,942			—			—			—			—
Other assets		73,465			75,364			79,551			65,804			64,791

Total assets	$	6,471,852		$	6,352,441		$	6,318,865		$	4,863,153		$	4,779,957
Deposits:
Noninterest-bearing demand deposits	$	1,761,559		$	1,760,580		$	1,710,505		$	1,369,834		$	1,359,996
Interest-bearing demand deposits		1,297,672			1,252,366			1,152,705			1,006,331			1,022,299
Savings deposits		1,925,168			1,921,324			1,801,087			1,385,268			1,395,481
Time certificates		445,863			432,196			428,820			315,789			306,628

Total deposits		5,430,262			5,366,466			5,093,117			4,077,222			4,084,404
Accrued interest payable		2,195			1,997			1,729			1,175			958
Operating lease liability		30,204			—			—			—			—
Other liabilities		86,362			83,724			82,077			62,623			67,393
Other borrowings		12,466			15,839			282,831			152,839			65,041
Junior subordinated debt		57,085			57,042			56,996			56,950			56,905

Total liabilities	$	5,618,574		$	5,525,068		$	5,516,750		$	4,350,809		$	4,274,701
Common stock		542,340			541,762			541,519			256,590			256,226
Retained earnings		319,865			303,490			287,555			276,877			266,235
Accumulated other comprehensive loss		(8,927	)		(17,879	)		(26,959	)		(21,123	)		(17,205	)

Total shareholders’ equity	$	853,278		$	827,373		$	802,115		$	512,344		$	505,256
Average Balance Data
Average loans	$	4,023,864		$	4,026,569		$	4,028,462		$	3,104,126		$	3,028,178
Average interest-earning assets	$	5,759,966		$	5,679,845		$	5,638,162		$	4,457,660		$	4,380,596
Average total assets	$	6,426,227		$	6,316,337		$	6,168,344		$	4,814,523		$	4,741,227
Average deposits	$	5,393,188		$	5,242,139		$	5,068,841		$	4,042,110		$	4,004,332
Average borrowings and subordinated debt	$	72,459		$	179,774		$	303,610		$	196,235		$	164,663
Average total equity	$	843,090		$	812,525		$	709,762		$	510,433		$	506,013
Capital Ratio Data
Total risk based capital ratio		14.4	%		14.4	%		13.9	%		13.9	%		13.9	%
Tier 1 capital ratio		13.6	%		13.7	%		13.2	%		13.1	%		13.0	%
Tier 1 common equity ratio		12.5	%		12.5	%		12.0	%		11.7	%		11.6	%
Tier 1 leverage ratio		10.6	%		10.7	%		10.7	%		10.9	%		10.8	%
Tangible capital ratio ⁽¹⁾		9.7	%		9.5	%		9.1	%		9.3	%		9.3	%

⁽¹⁾

Tangible capital ratio is calculated by subtracting goodwill and other intangible assets from total shareholders’ equity and total assets and then dividing the adjusted assets by the adjusted equity. Management believes that the tangible capital ratio is meaningful because it is a measure that the Company and investors commonly use to assess capital adequacy.

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