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TriCo Bancshares Announces Quarterly Results

Salary and benefit expenses increased $1,573,000 (14.6%) to $12,338,000 during the three months ended December 31, 2012 compared to the three months ended December 31, 2011. Base salaries increased $253,000 (3.1%) to $8,324,000 during the three months ended December 31, 2012. The increase in base salaries was mainly due to annual merit increases. Incentive and commission related salary expenses increased $974,000 (518%) to $1,162,000 during three months ended December 31, 2012 due primarily to large net income related bonus accrual reversals made during the three months ended December 31, 2011. These reversals were made in the year-ago period when it became apparent that certain production targets would not be achieved. Benefits expense, including retirement, medical and workers’ compensation insurance, and taxes, increased $346,000 (13.8%) to $2,852,000 during the three months ended December 31, 2012 primarily due to increased medical insurance costs.

Other noninterest expenses increased $1,477,000 (13.1%) to $12,788,000 during the three months ended December 31, 2012 when compared to the three months ended December 31, 2011. The increase in other noninterest expense is primarily due to a $960,000 increase in change in reserve for unfunded commitments to $1,060,000 for the three months ended December 31, 2012. This increase in change in reserve for unfunded commitments is primarily due to an increase in unfunded construction loan commitments during the three months ended December 31, 2012. Other changes in the various categories of other noninterest expense are reflected in the table below. The changes are indicative of the economic environment which has led to increases, or fluctuations, in professional loan collection expenses, provision for foreclosed asset losses, and foreclosed asset expenses.

The following table presents the key components of the Company’s noninterest expense for the periods indicated:
  Three months ended    
December 31,
(dollars in thousands) 2012   2011 $Change % Change
Salaries $ 8,324 $ 8,071 $ 253 3.1 %
Commissions and incentives 1,162 188 974 518.1 %
Employee benefits   2,852   2,506   346   13.8 %
Total salaries and benefits expense   12,338   10,765   1,573   14.6 %
Occupancy 1,839 1,815 24 1.3 %
Equipment 1,063 1,020 43 4.2 %
Change in reserve for unfunded commitments 1,060 100 960
Data processing and software 1,204 1,232 (28 ) (2.3 %)
Telecommunications 575 567 8 1.4 %
ATM network charges 762 525 237 45.1 %
Professional fees 763 682 81 11.9 %
Advertising and marketing 805 871 (66 ) (7.6 %)
Postage 216 337 (121 ) (35.9 %)
Courier service 298 302 (4 ) (1.3 %)
Intangible amortization 52 52 0 0.0 %
Operational losses 357 207 150 72.5 %
Provision for foreclosed asset losses 208 592 (384 ) (64.9 %)
Foreclosed asset expense 398 258 140 54.3 %
Assessments 607 589 18 3.1 %
Other   2,581   2,162   419   19.4 %
Total other noninterest expense   12,788   11,311   1,477   13.1 %
Total noninterest expense $ 25,126 $ 22,076 $ 3,050   13.8 %

In addition to the historical information contained herein, this press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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, 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 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, 2011. 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. Any forward-looking statement may turn out to be wrong and cannot be guaranteed. The Company does not intend to update any of the forward-looking statements after the date of this release.

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