<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-Q
                   Quarterly Report Under Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934

For Quarter Ended September 30, 1997              Commission file number 0-10661
------------------------------------              ------------------------------

                                TRICO BANCSHARES
             (Exact name of registrant as specified in its charter)


        California                                               94-2792841
------------------------------                               -------------------
(State or other jurisdiction                                  (I.R.S. Employer
incorporation or organization)                               Identification No.)

                 15 Independence Circle, Chico, California 95973
               (Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code                  916/898-0300

--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
 report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                      Yes      X                 No
                             -----                    -----
                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.
Title of Class:  Common stock, no par value

Outstanding shares as of November 4, 1997:  4,658,949





<PAGE>


                                TRICO BANCSHARES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>


                                                                            September 30,       December 31,
                                                                         --------------------------------------
                                                                               1997                 1996
<S>                                                                        <C>                  <C>            
Assets:
Cash and due from banks                                                    $       38,447       $       52,231
Securities held-to-maturity
 (approximate fair value $95,876 and $103,488)                                     96,245              104,713
Securities available-for-sale, net of unrealized
 gain (loss) of $196 and $(991)                                                   150,423               65,316
Loans, net of allowance for loan losses of $(6,364) and $(6,097)                  461,697              433,192
Premises and equipment, net                                                        17,731               14,717
Investment in real estate properties                                                  606                1,173
Other real estate owned                                                             2,081                1,389
Accrued interest receivable                                                         5,076                4,572
Intangible assets                                                                   9,286                1,036
Other assets                                                                       16,549               16,520
                                                                         -----------------    -----------------

     Total assets                                                           $     798,141        $     694,859
                                                                         =================    =================

Liabilities:
Deposits
 Noninterest-bearing demand                                                 $     113,610        $     100,879
 Interest-bearing demand                                                          127,545               97,178
 Savings                                                                          208,271              172,789
Time certificates                                                                 259,527              224,775
                                                                         -----------------    -----------------
     Total deposits                                                               708,953              595,621
Fed funds purchased                                                                     -                4,900
Repurchase agreements                                                               4,700                    -
Accrued interest payable and other liabilities                                      9,214                9,280
Long term borrowings                                                               11,443               24,281
                                                                         -----------------    -----------------

     Total liabilities                                                            734,310              634,082

Shareholders' equity:
Common stock                                                                       47,930               47,652
Retained earnings                                                                  16,088               14,076
Unrealized loss on securities available for sale, net                                (187)                (951)
                                                                         -----------------    -----------------

     Total shareholders' equity                                                    63,831               60,777
                                                                         -----------------    -----------------

     Total liabilities and shareholders' equity                             $     798,141        $     694,859
                                                                         =================    =================
</TABLE>
<PAGE>
                                               TRICO BANCSHARES
                                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                  (unaudited)
                                (in thousands except earnings per common share)
<TABLE>
<CAPTION>

                                                  For the three months                 For the nine months
                                                   ended September 30,                 ended September 30,
                                             1997                1996                1997               1996
<S>                                      <C>                 <C>                 <C>                <C>        
Interest income:
  Interest and fees on loans             $      11,767       $       9,955       $      33,338      $      27,548
  Interest on investment
   securities-taxable                            3,519               2,577              10,165              7,916
  Interest on investment
   securities-tax exempt                           189                  30                 440                 93
  Interest on federal funds sold                    24                   -                 292                332
                                         --------------       -------------       -------------      -------------
     Total interest income                      15,499              12,562              44,235             35,889
                                         --------------       -------------       -------------      -------------

Interest expense:
  Interest on deposits                           5,885               4,196              16,775             12,295
  Interest on federal funds purchased               29                 204                 160                348
  Interest on other borrowings                     213                 456                 899              1,246
                                         --------------       -------------       -------------      -------------
     Total interest expense                      6,127               4,856              17,834             13,889
                                         --------------       -------------       -------------      -------------

     Net interest income                         9,372               7,706              26,401             22,000

Provision for loan losses                        1,000                 537               2,200                627
                                         --------------       -------------       -------------      -------------
    Net interest income after
     provision for loan losses                   8,372               7,169              24,201             21,373

Noninterest income:
  Service charges and fees                       1,748               1,296               4,923              3,591
  Other income                                     729                 449               2,041              1,200
  Securities gains (losses), net                     -                   -                  18                  -
                                         --------------       -------------       -------------      -------------
     Total noninterest income                    2,477               1,745               6,982              4,791
                                         --------------       -------------       -------------      -------------

Noninterest expenses:
  Salaries and related expenses                  3,997               2,941              11,604              8,905
  Other, net                                     4,203               2,876              12,708              8,241
                                         --------------       -------------       -------------      -------------
     Total noninterest expenses                  8,200               5,817              24,312             17,146
                                         --------------       -------------       -------------      -------------

Net income before income taxes                   2,649               3,097               6,871              9,018

  Income taxes                                   1,035               1,276               2,614              3,749
                                         --------------       -------------       -------------      -------------

     Net income                                  1,614               1,821               4,257              5,269


Primary earnings per common share        $        0.33        $       0.39        $       0.88       $       1.13
                                         ==============       =============       =============      =============
Fully diluted earnings per common share  $        0.33        $       0.39        $       0.88       $       1.13
                                         ==============       =============       =============      =============
</TABLE>
<PAGE>

                                                   TRICO BANCSHARES
                                         CONDENSED CONSOLIDATED STATEMENTS OF
                                           CHANGES IN SHAREHOLDERS' EQUITY
                                                     (unaudited)
                                       (in thousands, except number of shares)
<TABLE>
<CAPTION>


                                                    Common stock                           Unrealized
                                          ------------------------------                   (loss) on
                                             Number                          Retained      securities,
                                            of shares         Amount         earnings          net            Total
                                          --------------   -------------   -------------   ------------    ------------
<S>                                           <C>              <C>             <C>           <C>              <C>     
Balance,
 December 31, 1996                            4,641,223        $ 47,652        $ 14,076      $    (951)       $ 60,777

Exercise of common stock
 options                                         18,826             143                                       $    143

Repurchase of common stock                       (1,100)            (11)            (19)                      $    (30)

Common stock cash
 dividends                                                                       (2,226)                      $ (2,226)

Change in unrealized
 loss on securities                                                                                764        $    764

Stock option amortization                                           146                                       $    146

Net income, September 30, 1997                                                    4,257                       $  4,257
                                          --------------   -------------   -------------   ------------    ------------

Balance, September 30, 1997                   4,658,949        $ 47,930        $ 16,088      $    (187)       $ 63,831
                                          ==============   =============   =============   ============    ============
</TABLE>
<PAGE>

                                   TRICO BANCSHARES
                           CONDENSED CONSOLIDATED STATEMENTS
                                     OF CASH FLOWS
                                      (unaudited)
                                    (in thousands)
<TABLE>
<CAPTION>

                                                                   For the nine months
                                                                   ended September 30,
                                                                 1997              1996
<S>                                                          <C>                <C>   
Operating activities:
Net income                                                   $        4,257     $        5,269
Adjustments to reconcile net income to net cash provided
 by operating activities:
    Provision for loan losses                                         2,200                627
    Provision for losses on OREO                                        169                  -
    Depreciation and amortization                                     1,759              1,328
    Amortization of investment security discounts                       (62)                42
    Deferred income taxes                                               (97)               107
    Investment security (gains) losses (net)                            (18)                 -
    (Gain) loss on sale of other real estate owned                       33                 (5)
    (Gain) loss on sale of premises and equipment                       (14)                (7)
    (Gain) loss on sale of loans                                       (139)                 8
    Proceeds from loan sales                                         15,130             13,217
    Origination of loans held for sale                              (22,325)           (20,483)
    Amortization of stock options                                       146                156
    (Increase) decrease in interest receivable                         (504)               527
    Increase (decrease) in interest payable                             771               (729)
    (Increase) decrease in other assets and liabilities              (9,814)            (2,195)
                                                                ------------        -----------
      Net cash provided (used) by operating activities               (8,508)            (2,138)
                                                                ------------        -----------

Investing activities:
    Proceeds from maturities of securities held-to-maturity           8,595             16,627
    Purchases of securities held-to-maturity                              -             (5,516)
    Proceeds from maturities of securities available-for-sale        18,815             19,777
    Proceeds from sales of securities available-for-sale             29,033                  -
    Purchases of securities available-for-sale                     (131,695)           (13,644)
    Net (increase) decrease in loans                                (24,735)           (56,023)
    Purchases of premises and equipment                              (3,940)            (2,030)
    Proceeds from sale of other real estate owned                       470                515
                                                                ------------        -----------
      Net cash provided (used) by investing activities             (103,457)           (40,294)
                                                                ------------        -----------

Financing activities:
    Net increase (decrease) in deposits                             113,332              9,426
    Net increase (decrease) in federal funds purchased               (4,900)             7,500
    Borrowings under repurchase agreements                            4,700                  -
    Payments of principal on long-term debt agreements              (12,838)            (2,008)
    Repurchase of common stock                                          (30)              (146)
    Cash dividends - Common                                          (2,226)            (1,779)
    Exercise of common stock options                                    143                356
                                                                ------------        -----------
      Net cash provided (used) by financing activities               98,181             13,349
                                                                ------------        -----------

      Increase (decrease) in cash and cash equivalents              (13,784)           (29,083)
      Cash and cash equivalents at beginning of year                 52,231             65,273
                                                                ------------        -----------
      Cash and cash equivalents at end of period              $      38,447     $       36,190
                                                                ============        ===========

Supplemental information:
    Cash paid for taxes                                       $       2,924     $        4,097
    Cash paid for interest expense                            $      18,187     $       14,618

</TABLE>
<PAGE>


                     Item 1. Notes to Condensed Consolidated
                              Financial Statements

Note A - Basis of Presentation

The accompanying  condensed consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange  Commission
(SEC) and in Management's opinion,  include all adjustments  (consisting only of
normal recurring  adjustments)  necessary for a fair presentation of results for
such interim periods. Certain information and note disclosures normally included
in annual financial  statements  prepared in accordance with generally  accepted
accounting  principles  have been omitted  pursuant to SEC rules or regulations;
however, the Company believes that the disclosures made are adequate to make the
information presented not misleading.

The interim  results for the nine months ended  September 30, 1997 and 1996, are
not  necessarily  indicative of results for the full year. It is suggested  that
these financial  statements be read in conjunction with the financial statements
and the  notes  included  in the  Company's  Annual  Report  for the year  ended
December 31, 1996.


Note B - Recently Issued Accounting Pronouncements

In February of 1997, the Financial  Accounting  Standards Board issued Statement
of Financial  Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). The
Company is required to adopt SFAS 128 in the fourth  quarter of 1997 and at that
time will restate earnings per share data for prior periods to conform with SFAS
128. Earlier application is not permitted.

SFAS 128 replaces current earnings per share reporting requirements and requires
a dual presentation of basic and diluted earnings per share.  Basic earnings per
share  excludes  dilution and is computed by dividing net income by the weighted
average common shares outstanding  during the reported period.  Diluted earnings
per share reflects the potential dilution that could occur if common shares were
issued  pursuant to the exercise of options under the Bank's Stock Option Plans.
Diluted earnings per share under SFAS 128 should not be significantly  different
than primary earnings per share currently reported for the periods.

Pro forma amounts for basic and diluted earnings per share assuming SFAS 128 had
been in effect for the three months and nine months ended September 30, 1997 and
1996 are as follows:

                                 Three months ended         Nine months ended
                                    September 30,              September 30,
                                 1997           1996       1997           1996
                                 ----           ----       ----           ----

   Basic earnings per share      $0.35          $0.41      $0.92          $1.18
   Diluted earnings per share    $0.33          $0.39      $0.88          $1.13


<PAGE>


                 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As TriCo  Bancshares (the  "Company") has not commenced any business  operations
independent of Tri Counties Bank (the "Bank"), the following discussion pertains
primarily  to the  Bank.  Average  balances,  including  such  balances  used in
calculating  certain financial ratios, are generally  comprised of average daily
balances for the Company. Except within the "overview" section,  interest income
and net interest income are presented on a tax equivalent basis.

In addition to the  historical  information  contained  herein,  this  Quarterly
Report contains certain forward-looking statements. The reader of this Quarterly
Report 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 Quarterly Report 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.


Overview

The Company  earned  $1,614,000  for the third quarter ended  September 30, 1997
versus  $1,821,000 for the same period in 1996. Fully diluted earnings per share
for the third quarter periods were $0.33 and $0.39,  respectively.  Earnings for
the nine months ended September 30, 1997 were $4,257,000 versus year ago results
of $5,269,000.  The fully diluted earnings per share were $.88 and $1.13 for the
respective nine month periods.

Pretax earnings for the third quarter of 1997 were $2,649,000  versus $3,097,000
for the same period in 1996. While quarterly pretax earnings  declined  $448,000
from the prior year,  the 1997 third  quarter  pretax  earnings rose $982,000 or
58.9% above the second quarter 1997 results.  Higher  operating costs related to
the February 21, 1997  acquisition  and  integration of nine branches from Wells
Fargo Bank,  N.A.  continued to adversely  impact  earnings as compared to prior
year results.  Additionally,  the Bank made  provisions for loan losses totaling
$1,000,000 in the quarter  versus  $537,000 in the third quarter last year.  The
higher  provision was made due to loan growth and an increase of $669,000in  net
loans  charged off in the third  quarter of 1997 from a total of $200,000 in the
third  quarter  of  1996.  Net  interest  income  reflected  growth  of 21.6% to
$9,372,000.  The interest  income  component  was up  $2,937,000  (23.4%) due to
higher  quarter over quarter  volume of both loans and securities and a 23 basis
point  increase in yields on  securities.  Average  rates  received on loans was
lower by 39 basis  points due  primarily  to the  effect of lower rate  mortgage
loans  acquired in the Sutter  Buttes  Savings  Bank  acquisition  in the fourth
quarter of last year.  Interest expense increased  $1,271,000  (26.1%) which was
due  predominately  to increased  volume of interest  bearing  liabilities.  Net
interest  margin  was 5.12% for the third  quarter of 1997  versus  5.39% in the
prior year.  This lower net  interest  margin  reflects the change in the mix of
earning assets and deposits as a result of the Sutter Buttes acquisition and the
first quarter purchase of the Wells' branches.  The acquired deposits from Wells
were invested in government  securities.  The net interest  margin for 1997 will
most likely  continue to be lower than prior year levels until  additional  loan
production replaces more of the investment securities.

Noninterest  income  reflected  growth of 42.0% to a total of $2,477,000 for the
third quarter of 1997 over the prior year third quarter.  The service charge and
fee income portion  increased  34.9% to $1,748,000 due to an increase in account
volumes.  Other  income  increased  from  $449,000  in 1996 to $711,000 in 1997.
Commissions on the sale of mutual funds and annuities  accounted for $227,000 of
the increase.

Noninterest expense increased $2,383,000 to $8,200,000 in the third quarter 1997
versus 1996. Of the higher costs,  $851,000 were directly  related to continuing
operations of the purchased branches.  Additionally,  amortization of intangible
assets associated with the Sutter Buttes and Wells branch acquisitions  amounted
to $386,000.  Increased staffing in various support departments and loan offices
to service the new  branches in addition  to normal  salary  progressions  added
$530,000  (18.0%) to salary and benefit expense on a quarter over quarter basis.
Occupancy  costs exclusive of the new branches was $141,000  (14.5%) higher.  Of
this amount,  depreciation  on  equipment  had the largest  single  increase and
accounted for $101,000.  Much of the depreciation  related to improved  computer
and communication  networks.  Other expense  categories such as courier service,
telephone, ATM charges and postage, had significant increases as a result of the
Sutter Buttes and Wells Fargo branch acquisitions. The provision for OREO losses
was  $117,000  in the third  quarter  of 1997  versus no  provision  in the same
quarter last year. Noninterest expenses related to ongoing operations, exclusive
of onetime acquisition costs, dropped $214,000 in the third quarter of 1997 from
the second quarter 1997 results. Management will continue to focus its attention
on increasing efficiencies and reducing the noninterest expenses.

Assets of the Company  totaled  $798,141,000  at September 30, 1997 which was an
increase of $103,282,000  (14.9%) and $177,102,000 (28.5%) from the December 31,
1996 and September 30, 1996 ending  balances,  respectively.  Changes in earning
assets from the prior year quarter end balances included an increase in loans of
$88,111,000  to  $468,061,000  and an increase in securities of  $72,571,000  to
$246,668,000.  Nonperforming  assets decreased $2,241,000 from December 31, 1996
to a balance of $8,212,000 at September 30, 1997.

Year to date 1997, the Company had an annualized  return on assets of .73% and a
return on equity of 9.12%  versus  1.17% and  12.80% in 1996.  TriCo  Bancshares
ended the quarter with a Tier 1 capital  ratio of 10.48% and a total  risk-based
capital ratio of 11.7%.

The  following  tables  provide a summary  of the major  elements  of income and
expense for the third  quarter of 1997  compared  with the third quarter of 1996
and for the first nine  months of 1997  compared  with the first nine  months of
1996.

<PAGE>
                                TRICO BANCSHARES
                              CONDENSED COMPARATIVE
                                INCOME STATEMENT
                (in thousands, except earnings per common share)

                                               Three months
                                           ended September 30,       Percentage
                                         1997            1996          Change
                                          (in thousands, except       increase
                                           earnings per share)       (decrease)
Interest income                      $    15,597     $    12,584        23.9%
Interest expense                           6,127           4,856        26.2%
                                     ------------    ------------

Net interest income                        9,470           7,728        22.6%

Provision for loan losses                  1,000             537        86.2%
                                     ------------    ------------

Net interest income after                  8,470           7,191        17.8%
  provision for loan losses

Noninterest income                         2,477           1,745        41.9%
Noninterest expenses                       8,200           5,817        41.0%
                                     ------------    ------------

Net income before income taxes             2,747           3,119       (11.9%)
Income taxes                               1,035           1,276       (18.9%)
Tax equivalent adjustment1                    98              22       355.0%
                                     ------------    ------------

Net income                                 1,614           1,821       (11.4%)
                                     ============    ============

Primary earnings per common share    $      0.33     $      0.39       (15.4%)

1 Interest on tax-free securities is reported on a tax equivalent basis of 1.52
 and 1.72 for September 30, 1997 and 1996.


                                TRICO BANCSHARES
                              CONDENSED COMPARATIVE
                                INCOME STATEMENT
                (in thousands, except earnings per common share)

                                             Nine months
                                         ended September 30,         Percentage
                                       1997             1996           Change
                                        (in thousands, except         increase
                                         earnings per share)         (decrease)
Interest income                    $    44,464     $    35,956          23.7%
Interest expense                        17,834          13,889          28.4%
                                   ------------    ------------

Net interest income                     26,630          22,067          20.7%

Provision for loan losses                2,200             627         250.9%
                                   ------------    ------------

Net interest income after               24,430          21,440          13.9%
  provision for loan losses

Noninterest income                       6,982           4,791          45.7%
Noninterest expenses                    24,312          17,146          41.8%
                                   ------------    ------------

Net income before income taxes           7,100           9,085         (21.9%)
Income taxes                             2,614           3,749         (30.3%)
Tax equivalent adjustment1                 229              67         241.7%
                                   ------------    ------------

Net income                               4,257           5,269         (19.2%)
                                   ============    ============

Primary earnings per common share  $      0.88     $      1.13         (22.1%)

1 Interest on tax-free  securities is reported on a tax equivalent basis of 1.52
and 1.72 for September 30, 1997 and 1996.
<PAGE>


Net Interest Income / Net Interest Margin

Net  interest  income  represents  the  excess of  interest  and fees  earned on
interest-earning  assets  (loans,  securities  and Federal  Funds sold) over the
interest  paid on  deposits  and  borrowed  funds.  Net  interest  margin is net
interest  income  expressed  as a  percentage  of average  earning  assets.  Net
interest income comprises the major portion of the Bank's income.

For the quarter ended September 30, 1997,  interest income increased  $3,013,000
or  23.9%over  the same  period in 1996.  The average  balance of total  earning
assets was higher by $159,654,000 which was a 28.4% increase. The acquisition of
Sutter  Buttes  Savings  Bank in the fourth  quarter of 1996 and the purchase of
deposits from Wells Fargo in February 1997 were the major  contributing  factors
for the increase in earning assets.  The average  balances of loans  outstanding
and securities increased  $86,299,000 and $71,618,000,  respectively.  These two
volume  increases  accounted for  additional  interest  income of $2,270,000 and
$1,029,000,  respectively.  The  average  rate  received  on loans in the  third
quarter of 1997 was 10.1% which was a decrease of 39 basis points from the third
quarter  last year.  The lower  rate  resulted  in an  unfavorable  variance  in
interest  income of $458,000.  The large number of mortgage  loans in the Sutter
Buttes portfolio was the major cause in lowering the average rate for loans. The
average rate received on securities rose 23 basis points to 6.0% which accounted
for a $148,000 increase in interest income.

For the third quarter of 1997, interest expense increased by $1,271,000 or 26.2%
over the year earlier period.  Due to the two acquisitions,  average balances of
interest bearing deposit  liabilities  increased in all categories from the same
period of the previous year. These average balances rose  $160,213,000  (36.8%).
The higher volumes of interest bearing deposit  liabilities  increased  interest
expense by $1,567,000. Average balances of Federal Funds purchased and debt fell
$25,406,000 to $18,801,000  which resulted in a decrease of $381,000 in interest
expense on a quarter  over  quarter  basis.  Average  rates paid on all interest
bearing  liabilities  were down 6 basis points in the third  quarter 1997 versus
1996.

The combined effect of the increase in both interest income and interest expense
for the third  quarter of 1997  versus the same  period in 1996  resulted  in an
increase of $1,742,000  (22.6%) in net interest income.  Net interest margin for
the  comparative  quarters  fell from  5.51% to 5.25%.  Net  interest  margin is
affected by the rates received on earning assets, the mix of products i.e. loans
and  securities  within  the  assets,   the  yields  paid  on  interest  bearing
liabilities  and  the mix  within  these  liabilities.  As a  result  of the two
acquisitions,  all four of these  variables  changed  in the  third  quarter  as
compared to the third  quarter of last year.  While net interest  margin for the
third  quarter of 1997  improved 29 basis  points over the second  quarter  1997
level,  management  expects the net  interest  margin will  continue to be lower
overall in 1997 versus  1996.  The margin  will  probably  remain  lower than in
periods prior to the acquisition until higher loan volume can replace investment
securities.


The nine month period ending September 30, 1997, was essentially impacted by the
same  factors as the third  quarter.  The mix and  volume of earning  assets and
interest  bearing  liabilities  changed  because of the two  acquisitions.  As a
result,  interest income increased  $8,508,000 or 23.7% in the first nine months
of 1997 over the same period in 1996. Most of the increase  resulted from higher
average  balances on loans and investment  securities.  Interest income from the
volume  increase  for these two items  totaled  $9,916,000.  It was  offset by a
$1,865,000  decrease in interest  income due to a lower  average yield on loans.
The average rate received on all earning  assets for the nine month period ended
September  30,  1997 was 8.54% or 25 basis  points  lower than the 8.79% for the
same period in 1996.

Interest  expense for the nine month period  increased  $3,945,000 from that for
the same period in 1996.  Volume  increases  in  deposits  added  $4,487,000  of
interest  expense.  This  was  offset  in part by  slightly  lower  rates  and a
$12,105,000  reduction in Federal Funds purchased and debt outstanding.  Overall
average rates paid on  interest-bearing  liabilities in the first nine months of
1997 decreased 4 basis points to 3.97% from the same period in 1996.

The combined effect of the increase in both interest income and interest expense
for the  first  six  months of 1997  versus  1996  resulted  in an  increase  of
$2,821,000 or 20.4% in net interest  income.  Net interest  margin  decreased 29
basis points from 5.34% to 5.05%.

The following  four tables  provide  summaries of the components of the interest
income,  interest  expense and net  interest  margins on earning  assets for the
quarter and nine month periods ended  September 30, 1997 versus the same periods
in 1996.


<PAGE>

                                TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                  30-Sep-97                                    30-Sep-96

                                  Average          Income/     Yield/          Average          Income/     Yield/
                                  Balance1         Expense     Rate            Balance1         Expense     Rate
<S>                              <C>              <C>          <C>            <C>              <C>          <C>  
Assets
Earning assets
  Loans 2,3                      $  464,748       $ 11,767     10.13%         $  378,449       $   9,955    10.52%
  Securities4                       254,517          3,806      5.98%            182,899           2,629     5.75%
  Federal funds sold                  1,737             24      5.53%                  -             -
                               -------------    -----------                  ------------     -----------
    Total earning assets            721,002         15,597      8.65%            561,348          12,584     8.97%
                                                -----------                                   -----------
Cash and due from bank               31,777                                       33,374
Premises and equipment               16,936                                       14,293
Other assets, net                    30,388                                       18,603
Less:  allowance
  for loan losses                    (6,208)                                      (5,338)
                               -------------                                 ------------
      Total                      $  793,896                                   $  622,280
                               =============                                 ============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                $  126,420            720      2.28%        $    90,215            519      2.30%
  Savings deposits                  208,147          1,613      3.10%            158,640           1,229     3.10%
  Time deposits                     261,630          3,552      5.43%            187,129           2,448     5.23%
Federal funds purchased               1,989             29      5.83%             13,701             204     5.96%
Short-term debt                       5,368             42      3.13%              6,196              88     5.68%
Long-term debt                       11,444            171      5.98%             24,310             368     6.06%
                               -------------    -----------                  ------------     -----------
   Total interest-bearing
      liabilities                   614,998          6,127      3.99%            480,191           4,856     4.05%
                                                -----------                                   -----------
Noninterest-bearing deposits        105,264                                       78,999
Other liabilities                    10,299                                        7,166
Shareholders' equity                 63,335                                       55,924
                               -------------                                 ------------
    Total liabilities
      and shareholders' equity   $  793,896                                   $  622,280
                               =============                                 ============
           
Net interest rate spread5                                       4.67%                                        4.92%
Net interest income/net                          $   9,470                                    $   7,728
                                                ===========                                  ===========
  interest margin6                                    5.25%                                     5.51%
                                                ===========                                  ===========




1 Average  balances are  computed  principally  on the basis of daily  balances.
  Average balance of securities is based on amortized cost.
2 Nonaccrual loans are included.
3 Interest income on loans includes fees on loans of $496,000 in 1997 and $502,000 in 1996.
4 Interest income is stated on a tax equivalent basis of  1.52 and 1.72 at September 30, 1997 and
1996.
5 Net interest rate spread represents the average yield earned on interest-earning assets less the
  average rate paid on interest-bearing liabilities.
6 Net  interest  margin is  computed by dividing  net  interest  income by total
average earning assets.
</TABLE>
<PAGE>

                                TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                    Nine Months Ended
                                 30-Sep-97                                        30-Sep-96

                                   Average         Income/        Yield/           Average          Income/       Yield/
                                   Balance1        Expense        Rate             Balance1         Expense       Rate
<S>                                <C>           <C>               <C>             <C>            <C>             <C>   
Assets
Earning assets
  Loans 2,3                        $ 445,908     $   33,338        9.97%           $ 348,943      $   27,548      10.53%
  Securities4                        240,781         10,834        6.00%             188,123           8,076       5.72%
  Federal funds sold                   7,224            292        5.39%               8,383             332       5.28%
                                -------------   ------------                     ------------   -------------
    Total earning assets             693,913         44,464        8.54%             545,449          35,956       8.79%
                                                ------------                                    -------------      
Cash and due from bank                37,107                                          30,716
Premises and equipment                16,301                                          13,917
Other assets, net                     31,551                                          18,316
Less:  allowance
  for loan losses                     (6,086)                                         (5,438)
                                -------------                                    ------------
      Total                        $ 772,786                                       $ 602,960
                                =============                                    ============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                  $ 118,924          2,019        2.26%         $   86,313            1,472       2.27%
  Savings deposits                   206,087          4,736        3.06%            161,712            3,721       3.07%
  Time deposits                      250,038         10,020        5.34%            177,373            7,102       5.34%
Federal funds purchased                3,807            160        5.60%              8,397              348       5.53%
Short-term debt                        8,325            354        5.67%              3,285              137       5.56%
Long-term debt                        12,316            545        5.90%             24,871            1,109       5.95%
                                -------------   ------------                    ------------    -------------
   Total interest-bearing
      liabilities                    599,497         17,834        3.97%            461,951           13,889       4.01%
                                                ------------                                    -------------
Noninterest-bearing deposits         100,955                                         77,905
Other liabilities                     10,081                                          8,202
Shareholders' equity                  62,253                                         54,902
                                -------------                                   ------------
    Total liabilities
      and shareholders' equity     $ 772,786                                      $ 602,960
                                =============                                   ============

Net interest rate spread5                                          4.58%                                          4.78%
Net interest income/net                          $   26,630                                       $   22,067
                                                ============                                    =============
  interest margin6                                     5.12%                                            5.39%
                                                ============                                    =============


1 Average  balances are  computed  principally  on the basis of daily  balances.
  Average balance of securities is based on amortized cost.
2 Nonaccrual loans are included.
3 Interest income on loans includes fees on loans of $1,520,000 in 1997 and $1,407,000 in 1996.
4 Interest income is stated on a tax equivalent basis of  1.52 and 1.72 at September 30, 1997 and
1996.
5 Net interest rate spread represents the average yield earned on interest-earning assets less the
  average rate paid on interest-bearing liabilities.
6 Net  interest  margin is  computed by dividing  net  interest  income by total
average earning assets.
</TABLE>
<PAGE>

                                TRICO BANCSHARES
                       ANALYSIS OF VOLUME AND RATE CHANGES
                       ON NET INTEREST INCOME AND EXPENSE
                                 (in thousands)

                    For the three months ended September 30,
                                 1997 over 1996
                                                        Yield/
                                    Volume               Rate4          Total
                           ----------------   -----------------   ------------
Increase (decrease) in interest income:
    Loans 1,2              $         2,270    $           (458)   $     1,812
    Investment securities3           1,029                 148          1,177
    Federal funds sold                  24                   -             24
                           ----------------   -----------------   ------------
      Total                          3,323                (310)         3,013
                           ----------------   -----------------   ------------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)                208                 (7)           201
    Savings deposits                    384                  -            384
    Time deposits                       975                129          1,104
    Federal funds purchased            (174)                (1)          (175)
    Short-term debt                     (12)               (34)           (46)
    Long-term debt                     (195)                (2)          (197)
                            ----------------  -----------------   ------------
      Total                           1,186                 85          1,271
                            ----------------  -----------------   ------------

Increase (decrease) in
  net interest income       $         2,137   $           (395)   $     1,742
                            ================  =================   ============

1 Nonaccrual loans are included.
2 Interest income on loans includes fee income on loans of $496,000 in 1997 and
 $502,000  in 1996.
3 Interest income is stated on a tax equivalent basis of 1.52 and 1.72 for
 September 30, 1997 and 1996.
4 The rate/volume variance has been included in the rate variance.



                                TRICO BANCSHARES
                       ANALYSIS OF VOLUME AND RATE CHANGES
                       ON NET INTEREST INCOME AND EXPENSE
                                 (in thousands)

                     For the nine months ended September 30,
                                 1997 over 1996
                                                           Yield/
                                             Volume         Rate4         Total
                                        ------------   -----------   -----------
Increase (decrease) in interest income:
    Loans 1,2                           $     7,655    $   (1,865)   $    5,790
    Investment securities3                    2,261           497         2,758
    Federal funds sold                          (46)            6           (40)
                                        ------------   -----------   -----------
      Total                                   9,870        (1,362)        8,508
                                        ------------   -----------   -----------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)                        556            (9)          547
    Savings deposits                          1,021            (6)        1,015
    Time deposits                             2,910             8         2,918
    Federal funds purchased                    (190)            2          (188)
    Short-term debt                             210             7           217
    Long-term debt                             (560)           (4)         (564)
                                        ------------   -----------   -----------
      Total                                   3,947            (2)        3,945
                                        ------------   -----------   -----------

Increase (decrease) in
  net interest income                   $     5,923    $   (1,360)   $    4,563
                                        ============   ===========   ===========

1 Nonaccrual loans are included.
2 Interest income on loans includes fee income on loans of $1,520,000 in 1997
and $1,407,000 in 1996.
3 Interest income is stated on a tax equivalent basis of 1.52 and 1.72 for
 September 30, 1997 and 1996.
4 The rate/volume variance has been included in the rate variance.
<PAGE>
Provision for Loan Losses

During the third quarter of 1997,  the Bank provided  $1,000,000 for loan losses
which was  $463,000  higher than  provided in the year ago  quarter.  The higher
provision was  necessitated by higher net charge offs which were $869,000 in the
third quarter versus $200,000 in the third quarter of 1996.
Charged off loans were higher in all loan categories.

For the nine month period ended September  30,1997 the Bank provided  $2,200,000
for loan losses versus  $627,000 in the same period of 1996. Net charge offs for
the  nine  month  periods  in  1997  and  1996  were   $1,933,000  and  $636,000
respectively.  Net charge offs of  commercial  loans during the nine months were
$863,000  in 1997  versus  $35,000 in 1996.  Credit  card net charge offs in the
first nine months of 1997 increased $246,000 to $695,000 as compared to the same
period in 1996. These two loan categories accounted for the major portion of the
higher charge offs.

It is expected  that the Bank will continue to provide for loan losses at higher
levels than were recorded in 1996 as a result of loan growth and higher level of
adversely rated credits in the loan portfolio.


Noninterest Income

Total noninterest  income for the third quarter of 1997 was up $732,000 or 42.0%
from the same  period in 1996.  Service  charges  and fees on  deposit  accounts
increased 34.9% to $1,748,000 in the third quarter versus year ago results. This
change  was due to  increases  in  account  volumes  mainly  as a result  of the
previously  mentioned  acquisitions.  Other  income was up from  $449,000 in the
third  quarter of 1996 to $711,000 in 1997.  Much of the change was related to a
$227,000  (83.5%)  increase  in  commissions  on the sale of  mutual  funds  and
annuities.


Results for the nine months were  consistent  with the third  quarter.  Overall,
noninterest income was higher by $2,191,000 or 45.7% in the first nine months of
1997 versus the same period in 1996.  Service charges and fee income reflected a
37.1%  increase to  $4,923,000.  Both the increased  volume of accounts from the
acquisitions and selective fee increases made in June of 1996 contributed to the
higher  income.  Other income was up $841,000 to $2,041,000 of which $559,000 of
the increase was  attributable  to  commissions  on the sale of mutual funds and
annuities.  Gains on the sale of real estate loans accounted for $147,000 of the
increase.

Noninterest Expense

Noninterest  expense is comprised  of operating  expenses of the Company and the
Bank,  plus the total  noninterest  (income)  expenses of the Bank's real estate
development  subsidiary.  Noninterest expense increased $2,383,000 to $8,200,000
in the third  quarter  1997 versus  1996.  Of the higher  costs,  $851,000  were
directly   related  to  continuing   operations   of  the  purchased   branches.
Additionally,  amortization  of  intangible  assets  associated  with the Sutter
Buttes and Wells branch acquisitions amounted to $386,000. Increased staffing in
various  support  departments  and loan  offices to service the new  branches in
addition to normal  salary  progressions  added  $530,000  (18.0%) to salary and
benefit  expense on a quarter over quarter basis.  Occupancy  costs exclusive of
the new branches was $141,000  (14.5%) higher.  Of this amount,  depreciation on
equipment had the largest  single  increase and accounted for $101,000.  Much of
the depreciation related to improved computer and communication networks.  Other
expense categories such as courier service,  telephone, ATM charges and postage,
had  significant  increases  as a result of the Sutter  Buttes  and Wells  Fargo
branch  acquisitions.  The  provision  for OREO losses was $117,000 in the third
quarter  of 1997  versus  no  provision  in the same  quarter  last  year.  This
provision  was made on five  different  OREO  properties.  Noninterest  expenses
related to ongoing operations,  exclusive of onetime acquisition costs,  dropped
$214,000  in the third  quarter of 1997 from the second  quarter  1997  results.
Management will continue to focus its attention on increasing  efficiencies  and
reducing the noninterest expenses.

For the nine month period noninterest  expenses increased $7,166,000 or 41.8% in
1997 over 1996. Of this amount  conversion and direct operating costs associated
with the acquired branches accounted for $2,257,000.  Amortization of intangible
assets  associated with the  acquisitions  amounted to $957,000.  Other expenses
which had  significant  increases  on a year over  year  basis and were  closely
related to providing services to the new branches and customers include:  Salary
and benefits $1,405,000, premise and equipment $572,000, telephone $158,000, ATM
charges $136,000,  courier service $152,000,  postage $58,000 and FDIC insurance
$70,000. Provision for OREO loss and other OREO expenses increased $238,000.

The overhead efficiency ratio for the first nine months of 1997 was 72.8% versus
64.0% in the like period of 1996.

Provision for Income Taxes

The effective tax rate for the nine months ended September 30, 1997 is 38.1% and
reflects a decrease from 41.6% in the year earlier  period.  The decrease in tax
rate is the result of higher  nontaxable  earnings from municipal bonds and life
insurance on a smaller  income base from the prior year.  The Bank has increased
its holdings of tax-exempt municipal bonds in the first half of 1997, so the tax
rate should continue to be somewhat lower during 1997.

Loans

In the third quarter of 1997,  loan balances  increased  $7,320,000 or 1.6% from
the  ending  balances  at June  30,  1997.  Loan  balances  were  higher  in all
categories. The balances also exceeded year end balances by $28,771,000 and 1996
third  quarter  ending  balances  by  $88,111,000.  The year over year gains are
attributable to the Sutter Buttes  acquisition and loan growth of 7.2%. The Bank
has increased its commercial  lending staff in the  Sacramento,  Bakersfield and
northern  San  Joaquin  Valley loan  offices.  Seasonal  agricultural  loans are
expected  to start  paying  down in the fourth  quarter so no net loan growth is
anticipated during the remainder of the 1997.

Securities

At  September  30,  1997,  securities  held-to-maturity  had  a  cost  basis  of
$96,245,000  and an  approximate  fair  value  of  $95,876,000.  This  portfolio
contained  mortgage-backed  securities totaling $73,936,000 of which $31,575,000
were CMO's.  The  securities  available-for-sale  portfolio  had a fair value of
$150,423,000  and an amortized cost of  $150,227,000.  This portfolio  contained
mortgage-backed  securities  with an  amortized  cost of  $26,929,000  of  which
$19,486,000 were CMO's.

At  December  31,  1996,  securities   held-to-maturity  had  a  cost  basis  of
$104,713,000  and an  approximate  fair value of  $103,488,000.  This  portfolio
contained  mortgage-backed  securities totaling $81,202,000 of which $33,936,000
were CMO's.  The  securities  available-for-sale  portfolio  had a fair value of
$65,316,000  and an amortized  cost of  $66,307,000.  This  portfolio  contained
mortgage-backed  securities  with an  amortized  cost of  $30,260,000  of  which
$21,603,000 were CMO's.

Growth in the  securities  portfolio  resulted  from the  investment  of the net
proceeds generated from the acquisition of the Wells Fargo deposits in the first
quarter.

Nonperforming Loans

As shown in the following  table,  total  nonperforming  assets at September 30,
1997 were $8,212,000 which is a decrease of 21.4% from the year end balance.  At
September 30, 1997 non performing  assets represent 1.03% of total assets versus
1.50%  at  year  end.   Nonaccrual   loans  secured  by  real  estate  decreased
approximately $3,227,000 (43.7%) to $4,154,000,  which accounted for the largest
single change.  Commercial and consumer installment nonperforming loans also had
decreases.  Agricultural  nonperforming  loans  reflected  some  increase.  OREO
increased $692,000 as the net result of ten properties being added and ten being
sold  during this period and an  additional  OREO  provision  of  $170,000.  All
nonaccrual  loans are considered to be impaired when  determining  the valuation
allowance under SFAS 114. The increase in  nonperforming  loans is of concern to
Management.  Progress  has been made in the  process  to  identify  problem  and
potential problem loans earlier.  Collection processes are being changed to help
improve the timeliness of loan payments.

                                          September 30,            December 31,
                                               1997                    1996

Nonaccrual loans                          $    5,515              $     9,044
Accruing loans past due 90 days or more          616                       20
Restructured loans (in compliance with
  modified terms)                                  -                        -
                                          -----------             ------------
     Total nonperforming loans                 6,131                    9,064
Other real estate owned                        2,081                    1,389
                                          -----------             ------------
     Total nonperforming assets           $    8,212              $    10,453
                                          ===========             ============
Nonincome producing investments in real
  estate held by Bank's real estate
    development subsidiary                $      606              $     1,173
                                          ===========             ============
Nonperforming loans to total loans              1.31%                    2.06%
Allowance for loan losses to
  nonperforming loans                            104%                      67%
Nonperforming assets to total assets            1.03%                    1.50%
Allowance for loan losses to
  nonperforming assets                            77%                      58%


Allowance for Loan Loss

The Bank maintains its allowance for loan losses at a level Management  believes
will be adequate to absorb probable  losses  inherent in existing loans,  leases
and  commitments to extend credit,  based on evaluations of the  collectibility,
impairment and prior loss experience of loans,  leases and commitments to extend
credit.

The following table presents information  concerning the allowance and provision
for loan losses.

                                       For the nine months ended September 30
                                             1997                    1996
                                                    (in thousands)
Balance, Beginning of period           $    6,097             $     5,580

Provision charged to operations             2,200                     627

Loans charged off                          (2,105)                   (919)

Recoveries of loans previously
  charged off                                 172                     283

Balance, end of period                 $    6,364             $     5,571
                                       ===========            ============

Ending loan portfolio                  $  468,061             $   379,950
                                       ===========            ============

Allowance for loans as a
  percentage of ending loan portfolio        1.36%                   1.47%
                                       ===========            ============



Equity

The following table indicates the amounts of regulatory capital of the Company.
<TABLE>
<CAPTION>

                                                                                     To Be Well
                                                                                  Capitalized Under
                                                                For Capital       Prompt Corrective
                                         Actual            Adequacy Purposes     Action Provisions
                                     Amount     Ratio        Amount     Ratio      Amount   Ratio
<S>                                  <C>       <C>            <C>       <C>        <C>       <C> 
As of  September 30, 1997:
Total Capital
    to Risk Weighted Assets          $61,096   11.70%       =>$41,790 =>8.0%     =>$52,237 =>10.0%
Tier I Capital
    to Risk Weighted Assets          $54,732   10.48%       =>$20,895 =>4.0%     =>$31,342 => 6.0%
</TABLE>
<PAGE>


                                               PART II


Other Information

 (a)  Item 6.     Exhibits Filed Herewith

Exhibit No.                                           Exhibits

         3.1         Articles  of  Incorporation,  as amended to date,  filed as
                     Exhibit 3.1 to Registrant's  Report on Form 10-K, filed for
                     the year ended December 31, 1989, are  incorporated  herein
                     by reference.

         3.2         Bylaws,  as  amended  to  1992,  filed  as  Exhibit  3.2 to
                     Registrant's  Report on Form 10-K, filed for the year ended
                     December 31, 1992, are incorporated herein by reference.

         4.2         Certificate  of  Determination  of  Preferences of Series B
                     Preferred  Stock,  filed  as  Appendix  A  to  Registrant's
                     Registration  Statement  on Form  S-1  (No.  33-22738),  is
                     incorporated herein by reference.

         10.1        Lease for Park Plaza  Branch  premises  entered  into as of
                     September  29,  1978,  by and  between  Park Plaza  Limited
                     Partnership  as lessor  and Tri  Counties  Bank as  lessee,
                     filed as Exhibit 10.9 to the TriCo Bancshares  Registration
                     Statement on Form S-14 (Registration No. 2-74796) is
                     incorporated herein by reference.

         10.2        Lease for Administration Headquarters premises entered into
                     as of April 25, 1986, by and between  Fortress-Independence
                     Partnership (A California  Limited  Partnership)  as lessor
                     and Tri Counties  Bank as lessee,  filed as Exhibit 10.6 to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1986, is incorporated herein by reference.

         10.3        Lease for Data Processing premises entered into as of April
                     25, 1986, by and between Fortress-Independence  Partnership
                     (A  California  Limited  Partnership)  as  lessor  and  Tri
                     Counties   Bank  as  lessee,   filed  as  Exhibit  10.7  to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1986, is incorporated
                     herein by reference.

         10.4        Lease for Chico Mall premises  entered into as of March 11,
                     1988,  by and between  Chico Mall  Associates as lessor and
                     Tri  Counties  Bank as  lessee,  filed as  Exhibit  10.4 to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1988, is incorporated by reference.

         10.5        First amendment to lease entered into as of May 31, 1988 by
                     and between Chico Mall  Associates  and Tri Counties  Bank,
                     filed as Exhibit 10.5 to  Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1988, is incorporated
                     by reference.

         10.9        Employment Agreement of Robert H. Steveson,  dated December
                     12, 1989 between Tri Counties Bank and Robert H.  Steveson,
                     filed as Exhibit 10.9 to  Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1989, is incorporated
                     by reference.

         10.11       Lease  for  Purchasing  and  Printing  Department  premises
                     entered into as of February 1, 1990, by and between  Dennis
                     M.  Casagrande  as lessor and Tri Counties  Bank as lessee,
                     filed as Exhibit 10.11 to Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1991, is incorporated
                     herein by reference.

         10.12       Addendum to  Employment  Agreement  of Robert H.  Steveson,
                     dated April 9, 1991, filed as Exhibit 10.12 to Registrant's
                     Report on Form 10-K filed for the year ended  December  31,
                     1991, is incorporated herein by reference.

         11.1        Computation of earnings per share.

         22.1        Tri Counties Bank, a California banking corporation, is the
                     only subsidiary of Registrant.



(b)  Reports on Form 8-K:

         None


<PAGE>


                                             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     November 7, 1997                        /s/  Robert H. Steveson
        ------------------                       -----------------------
                                                 Robert H. Steveson
                                                 President and
                                                 Chief Executive Officer


Date     November 7, 1997                        /s/  Robert M. Stanberry
        ------------------                       ------------------------
                                                 Robert M. Stanberry
                                                 Vice President and
                                                 Chief Financial Officer
[{"type": "10-Q", "sequence": "1", "description": "10-Q", "secsgml_size_bytes": 71288}]
{"company-data": {"conformed-name": "TRICO BANCSHARES /", "cik": "0000356171", "assigned-sic": "6022", "irs-number": "942792841", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-10661", "film-number": "97713801"}, "business-address": {"street1": "TRI COUNTIES BANK ADMINISTRATION", "street2": "40 PHILADELPHIA DRIVE", "city": "CHICO", "state": "CA", "zip": "95973", "phone": "9168980300"}, "mail-address": {"street1": "TRI COUNTIES BANK ADMINISTRATION", "street2": "40 PHILADELPHIA DRIVE", "city": "CHICO", "state": "CA", "zip": "95973"}}
SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-Q
                   Quarterly Report Under Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934

For Quarter Ended September 30, 1997              Commission file number 0-10661
------------------------------------              ------------------------------

                                TRICO BANCSHARES
             (Exact name of registrant as specified in its charter)

        California                                               94-2792841
------------------------------                               -------------------
(State or other jurisdiction                                  (I.R.S. Employer
incorporation or organization)                               Identification No.)

                 15 Independence Circle, Chico, California 95973
               (Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code                  916/898-0300

--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
 report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                      Yes      X                 No
                             -----                    -----
                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.
Title of Class:  Common stock, no par value

Outstanding shares as of November 4, 1997:  4,658,949
TRICO BANCSHARES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
                                 (in thousands)
September 30,       December 31,
                                                                         --------------------------------------
                                                                               1997                 1996
Assets:
Cash and due from banks                                                    $       38,447       $       52,231
Securities held-to-maturity
 (approximate fair value $95,876 and $103,488)                                     96,245              104,713
Securities available-for-sale, net of unrealized
 gain (loss) of $196 and $(991)                                                   150,423               65,316
Loans, net of allowance for loan losses of $(6,364) and $(6,097)                  461,697              433,192
Premises and equipment, net                                                        17,731               14,717
Investment in real estate properties                                                  606                1,173
Other real estate owned                                                             2,081                1,389
Accrued interest receivable                                                         5,076                4,572
Intangible assets                                                                   9,286                1,036
Other assets                                                                       16,549               16,520
                                                                         -----------------    -----------------

     Total assets                                                           $     798,141        $     694,859
                                                                         =================    =================

Liabilities:
Deposits
 Noninterest-bearing demand                                                 $     113,610        $     100,879
 Interest-bearing demand                                                          127,545               97,178
 Savings                                                                          208,271              172,789
Time certificates                                                                 259,527              224,775
                                                                         -----------------    -----------------
     Total deposits                                                               708,953              595,621
Fed funds purchased                                                                     -                4,900
Repurchase agreements                                                               4,700                    -
Accrued interest payable and other liabilities                                      9,214                9,280
Long term borrowings                                                               11,443               24,281
                                                                         -----------------    -----------------

     Total liabilities                                                            734,310              634,082

Shareholders' equity:
Common stock                                                                       47,930               47,652
Retained earnings                                                                  16,088               14,076
Unrealized loss on securities available for sale, net                                (187)                (951)
                                                                         -----------------    -----------------

     Total shareholders' equity                                                    63,831               60,777
                                                                         -----------------    -----------------

     Total liabilities and shareholders' equity                             $     798,141        $     694,859
                                                                         =================    =================
TRICO BANCSHARES
                                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                  (unaudited)
                                (in thousands except earnings per common share)
For the three months                 For the nine months
                                                   ended September 30,                 ended September 30,
                                             1997                1996                1997               1996
Interest income:
  Interest and fees on loans             $      11,767       $       9,955       $      33,338      $      27,548
  Interest on investment
   securities-taxable                            3,519               2,577              10,165              7,916
  Interest on investment
   securities-tax exempt                           189                  30                 440                 93
  Interest on federal funds sold                    24                   -                 292                332
                                         --------------       -------------       -------------      -------------
     Total interest income                      15,499              12,562              44,235             35,889
                                         --------------       -------------       -------------      -------------

Interest expense:
  Interest on deposits                           5,885               4,196              16,775             12,295
  Interest on federal funds purchased               29                 204                 160                348
  Interest on other borrowings                     213                 456                 899              1,246
                                         --------------       -------------       -------------      -------------
     Total interest expense                      6,127               4,856              17,834             13,889
                                         --------------       -------------       -------------      -------------

     Net interest income                         9,372               7,706              26,401             22,000

Provision for loan losses                        1,000                 537               2,200                627
                                         --------------       -------------       -------------      -------------
    Net interest income after
     provision for loan losses                   8,372               7,169              24,201             21,373

Noninterest income:
  Service charges and fees                       1,748               1,296               4,923              3,591
  Other income                                     729                 449               2,041              1,200
  Securities gains (losses), net                     -                   -                  18                  -
                                         --------------       -------------       -------------      -------------
     Total noninterest income                    2,477               1,745               6,982              4,791
                                         --------------       -------------       -------------      -------------

Noninterest expenses:
  Salaries and related expenses                  3,997               2,941              11,604              8,905
  Other, net                                     4,203               2,876              12,708              8,241
                                         --------------       -------------       -------------      -------------
     Total noninterest expenses                  8,200               5,817              24,312             17,146
                                         --------------       -------------       -------------      -------------

Net income before income taxes                   2,649               3,097               6,871              9,018

  Income taxes                                   1,035               1,276               2,614              3,749
                                         --------------       -------------       -------------      -------------

     Net income                                  1,614               1,821               4,257              5,269

Primary earnings per common share        $        0.33        $       0.39        $       0.88       $       1.13
                                         ==============       =============       =============      =============
Fully diluted earnings per common share  $        0.33        $       0.39        $       0.88       $       1.13
                                         ==============       =============       =============      =============
TRICO BANCSHARES
                                         CONDENSED CONSOLIDATED STATEMENTS OF
                                           CHANGES IN SHAREHOLDERS' EQUITY
                                                     (unaudited)
                                       (in thousands, except number of shares)
Common stock                           Unrealized
                                          ------------------------------                   (loss) on
                                             Number                          Retained      securities,
                                            of shares         Amount         earnings          net            Total
                                          --------------   -------------   -------------   ------------    ------------
Balance,
 December 31, 1996                            4,641,223        $ 47,652        $ 14,076      $    (951)       $ 60,777

Exercise of common stock
 options                                         18,826             143                                       $    143

Repurchase of common stock                       (1,100)            (11)            (19)                      $    (30)

Common stock cash
 dividends                                                                       (2,226)                      $ (2,226)

Change in unrealized
 loss on securities                                                                                764        $    764

Stock option amortization                                           146                                       $    146

Net income, September 30, 1997                                                    4,257                       $  4,257
                                          --------------   -------------   -------------   ------------    ------------

Balance, September 30, 1997                   4,658,949        $ 47,930        $ 16,088      $    (187)       $ 63,831
                                          ==============   =============   =============   ============    ============
TRICO BANCSHARES
                           CONDENSED CONSOLIDATED STATEMENTS
                                     OF CASH FLOWS
                                      (unaudited)
                                    (in thousands)
For the nine months
                                                                   ended September 30,
                                                                 1997              1996
Operating activities:
Net income                                                   $        4,257     $        5,269
Adjustments to reconcile net income to net cash provided
 by operating activities:
    Provision for loan losses                                         2,200                627
    Provision for losses on OREO                                        169                  -
    Depreciation and amortization                                     1,759              1,328
    Amortization of investment security discounts                       (62)                42
    Deferred income taxes                                               (97)               107
    Investment security (gains) losses (net)                            (18)                 -
    (Gain) loss on sale of other real estate owned                       33                 (5)
    (Gain) loss on sale of premises and equipment                       (14)                (7)
    (Gain) loss on sale of loans                                       (139)                 8
    Proceeds from loan sales                                         15,130             13,217
    Origination of loans held for sale                              (22,325)           (20,483)
    Amortization of stock options                                       146                156
    (Increase) decrease in interest receivable                         (504)               527
    Increase (decrease) in interest payable                             771               (729)
    (Increase) decrease in other assets and liabilities              (9,814)            (2,195)
                                                                ------------        -----------
      Net cash provided (used) by operating activities               (8,508)            (2,138)
                                                                ------------        -----------

Investing activities:
    Proceeds from maturities of securities held-to-maturity           8,595             16,627
    Purchases of securities held-to-maturity                              -             (5,516)
    Proceeds from maturities of securities available-for-sale        18,815             19,777
    Proceeds from sales of securities available-for-sale             29,033                  -
    Purchases of securities available-for-sale                     (131,695)           (13,644)
    Net (increase) decrease in loans                                (24,735)           (56,023)
    Purchases of premises and equipment                              (3,940)            (2,030)
    Proceeds from sale of other real estate owned                       470                515
                                                                ------------        -----------
      Net cash provided (used) by investing activities             (103,457)           (40,294)
                                                                ------------        -----------

Financing activities:
    Net increase (decrease) in deposits                             113,332              9,426
    Net increase (decrease) in federal funds purchased               (4,900)             7,500
    Borrowings under repurchase agreements                            4,700                  -
    Payments of principal on long-term debt agreements              (12,838)            (2,008)
    Repurchase of common stock                                          (30)              (146)
    Cash dividends - Common                                          (2,226)            (1,779)
    Exercise of common stock options                                    143                356
                                                                ------------        -----------
      Net cash provided (used) by financing activities               98,181             13,349
                                                                ------------        -----------

      Increase (decrease) in cash and cash equivalents              (13,784)           (29,083)
      Cash and cash equivalents at beginning of year                 52,231             65,273
                                                                ------------        -----------
      Cash and cash equivalents at end of period              $      38,447     $       36,190
                                                                ============        ===========

Supplemental information:
    Cash paid for taxes                                       $       2,924     $        4,097
    Cash paid for interest expense                            $      18,187     $       14,618
Item 1. Notes to Condensed Consolidated
                              Financial Statements

Note A - Basis of Presentation

The accompanying  condensed consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange  Commission
(SEC) and in Management's opinion,  include all adjustments  (consisting only of
normal recurring  adjustments)  necessary for a fair presentation of results for
such interim periods. Certain information and note disclosures normally included
in annual financial  statements  prepared in accordance with generally  accepted
accounting  principles  have been omitted  pursuant to SEC rules or regulations;
however, the Company believes that the disclosures made are adequate to make the
information presented not misleading.

The interim  results for the nine months ended  September 30, 1997 and 1996, are
not  necessarily  indicative of results for the full year. It is suggested  that
these financial  statements be read in conjunction with the financial statements
and the  notes  included  in the  Company's  Annual  Report  for the year  ended
December 31, 1996.

Note B - Recently Issued Accounting Pronouncements

In February of 1997, the Financial  Accounting  Standards Board issued Statement
of Financial  Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). The
Company is required to adopt SFAS 128 in the fourth  quarter of 1997 and at that
time will restate earnings per share data for prior periods to conform with SFAS
128. Earlier application is not permitted.

SFAS 128 replaces current earnings per share reporting requirements and requires
a dual presentation of basic and diluted earnings per share.  Basic earnings per
share  excludes  dilution and is computed by dividing net income by the weighted
average common shares outstanding  during the reported period.  Diluted earnings
per share reflects the potential dilution that could occur if common shares were
issued  pursuant to the exercise of options under the Bank's Stock Option Plans.
Diluted earnings per share under SFAS 128 should not be significantly  different
than primary earnings per share currently reported for the periods.

Pro forma amounts for basic and diluted earnings per share assuming SFAS 128 had
been in effect for the three months and nine months ended September 30, 1997 and
1996 are as follows:

                                 Three months ended         Nine months ended
                                    September 30,              September 30,
                                 1997           1996       1997           1996
                                 ----           ----       ----           ----

   Basic earnings per share      $0.35          $0.41      $0.92          $1.18
   Diluted earnings per share    $0.33          $0.39      $0.88          $1.13
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As TriCo  Bancshares (the  "Company") has not commenced any business  operations
independent of Tri Counties Bank (the "Bank"), the following discussion pertains
primarily  to the  Bank.  Average  balances,  including  such  balances  used in
calculating  certain financial ratios, are generally  comprised of average daily
balances for the Company. Except within the "overview" section,  interest income
and net interest income are presented on a tax equivalent basis.

In addition to the  historical  information  contained  herein,  this  Quarterly
Report contains certain forward-looking statements. The reader of this Quarterly
Report 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 Quarterly Report 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.

Overview

The Company  earned  $1,614,000  for the third quarter ended  September 30, 1997
versus  $1,821,000 for the same period in 1996. Fully diluted earnings per share
for the third quarter periods were $0.33 and $0.39,  respectively.  Earnings for
the nine months ended September 30, 1997 were $4,257,000 versus year ago results
of $5,269,000.  The fully diluted earnings per share were $.88 and $1.13 for the
respective nine month periods.

Pretax earnings for the third quarter of 1997 were $2,649,000  versus $3,097,000
for the same period in 1996. While quarterly pretax earnings  declined  $448,000
from the prior year,  the 1997 third  quarter  pretax  earnings rose $982,000 or
58.9% above the second quarter 1997 results.  Higher  operating costs related to
the February 21, 1997  acquisition  and  integration of nine branches from Wells
Fargo Bank,  N.A.  continued to adversely  impact  earnings as compared to prior
year results.  Additionally,  the Bank made  provisions for loan losses totaling
$1,000,000 in the quarter  versus  $537,000 in the third quarter last year.  The
higher  provision was made due to loan growth and an increase of $669,000in  net
loans  charged off in the third  quarter of 1997 from a total of $200,000 in the
third  quarter  of  1996.  Net  interest  income  reflected  growth  of 21.6% to
$9,372,000.  The interest  income  component  was up  $2,937,000  (23.4%) due to
higher  quarter over quarter  volume of both loans and securities and a 23 basis
point  increase in yields on  securities.  Average  rates  received on loans was
lower by 39 basis  points due  primarily  to the  effect of lower rate  mortgage
loans  acquired in the Sutter  Buttes  Savings  Bank  acquisition  in the fourth
quarter of last year.  Interest expense increased  $1,271,000  (26.1%) which was
due  predominately  to increased  volume of interest  bearing  liabilities.  Net
interest  margin  was 5.12% for the third  quarter of 1997  versus  5.39% in the
prior year.  This lower net  interest  margin  reflects the change in the mix of
earning assets and deposits as a result of the Sutter Buttes acquisition and the
first quarter purchase of the Wells' branches.  The acquired deposits from Wells
were invested in government  securities.  The net interest  margin for 1997 will
most likely  continue to be lower than prior year levels until  additional  loan
production replaces more of the investment securities.

Noninterest  income  reflected  growth of 42.0% to a total of $2,477,000 for the
third quarter of 1997 over the prior year third quarter.  The service charge and
fee income portion  increased  34.9% to $1,748,000 due to an increase in account
volumes.  Other  income  increased  from  $449,000  in 1996 to $711,000 in 1997.
Commissions on the sale of mutual funds and annuities  accounted for $227,000 of
the increase.

Noninterest expense increased $2,383,000 to $8,200,000 in the third quarter 1997
versus 1996. Of the higher costs,  $851,000 were directly  related to continuing
operations of the purchased branches.  Additionally,  amortization of intangible
assets associated with the Sutter Buttes and Wells branch acquisitions  amounted
to $386,000.  Increased staffing in various support departments and loan offices
to service the new  branches in addition  to normal  salary  progressions  added
$530,000  (18.0%) to salary and benefit expense on a quarter over quarter basis.
Occupancy  costs exclusive of the new branches was $141,000  (14.5%) higher.  Of
this amount,  depreciation  on  equipment  had the largest  single  increase and
accounted for $101,000.  Much of the depreciation  related to improved  computer
and communication  networks.  Other expense  categories such as courier service,
telephone, ATM charges and postage, had significant increases as a result of the
Sutter Buttes and Wells Fargo branch acquisitions. The provision for OREO losses
was  $117,000  in the third  quarter  of 1997  versus no  provision  in the same
quarter last year. Noninterest expenses related to ongoing operations, exclusive
of onetime acquisition costs, dropped $214,000 in the third quarter of 1997 from
the second quarter 1997 results. Management will continue to focus its attention
on increasing efficiencies and reducing the noninterest expenses.

Assets of the Company  totaled  $798,141,000  at September 30, 1997 which was an
increase of $103,282,000  (14.9%) and $177,102,000 (28.5%) from the December 31,
1996 and September 30, 1996 ending  balances,  respectively.  Changes in earning
assets from the prior year quarter end balances included an increase in loans of
$88,111,000  to  $468,061,000  and an increase in securities of  $72,571,000  to
$246,668,000.  Nonperforming  assets decreased $2,241,000 from December 31, 1996
to a balance of $8,212,000 at September 30, 1997.

Year to date 1997, the Company had an annualized  return on assets of .73% and a
return on equity of 9.12%  versus  1.17% and  12.80% in 1996.  TriCo  Bancshares
ended the quarter with a Tier 1 capital  ratio of 10.48% and a total  risk-based
capital ratio of 11.7%.

The  following  tables  provide a summary  of the major  elements  of income and
expense for the third  quarter of 1997  compared  with the third quarter of 1996
and for the first nine  months of 1997  compared  with the first nine  months of
1996.
TRICO BANCSHARES
                              CONDENSED COMPARATIVE
                                INCOME STATEMENT
                (in thousands, except earnings per common share)

                                               Three months
                                           ended September 30,       Percentage
                                         1997            1996          Change
                                          (in thousands, except       increase
                                           earnings per share)       (decrease)
Interest income                      $    15,597     $    12,584        23.9%
Interest expense                           6,127           4,856        26.2%
                                     ------------    ------------

Net interest income                        9,470           7,728        22.6%

Provision for loan losses                  1,000             537        86.2%
                                     ------------    ------------

Net interest income after                  8,470           7,191        17.8%
  provision for loan losses

Noninterest income                         2,477           1,745        41.9%
Noninterest expenses                       8,200           5,817        41.0%
                                     ------------    ------------

Net income before income taxes             2,747           3,119       (11.9%)
Income taxes                               1,035           1,276       (18.9%)
Tax equivalent adjustment1                    98              22       355.0%
                                     ------------    ------------

Net income                                 1,614           1,821       (11.4%)
                                     ============    ============

Primary earnings per common share    $      0.33     $      0.39       (15.4%)

1 Interest on tax-free securities is reported on a tax equivalent basis of 1.52
 and 1.72 for September 30, 1997 and 1996.

                                TRICO BANCSHARES
                              CONDENSED COMPARATIVE
                                INCOME STATEMENT
                (in thousands, except earnings per common share)

                                             Nine months
                                         ended September 30,         Percentage
                                       1997             1996           Change
                                        (in thousands, except         increase
                                         earnings per share)         (decrease)
Interest income                    $    44,464     $    35,956          23.7%
Interest expense                        17,834          13,889          28.4%
                                   ------------    ------------

Net interest income                     26,630          22,067          20.7%

Provision for loan losses                2,200             627         250.9%
                                   ------------    ------------

Net interest income after               24,430          21,440          13.9%
  provision for loan losses

Noninterest income                       6,982           4,791          45.7%
Noninterest expenses                    24,312          17,146          41.8%
                                   ------------    ------------

Net income before income taxes           7,100           9,085         (21.9%)
Income taxes                             2,614           3,749         (30.3%)
Tax equivalent adjustment1                 229              67         241.7%
                                   ------------    ------------

Net income                               4,257           5,269         (19.2%)
                                   ============    ============

Primary earnings per common share  $      0.88     $      1.13         (22.1%)

1 Interest on tax-free  securities is reported on a tax equivalent basis of 1.52
and 1.72 for September 30, 1997 and 1996.
Net Interest Income / Net Interest Margin

Net  interest  income  represents  the  excess of  interest  and fees  earned on
interest-earning  assets  (loans,  securities  and Federal  Funds sold) over the
interest  paid on  deposits  and  borrowed  funds.  Net  interest  margin is net
interest  income  expressed  as a  percentage  of average  earning  assets.  Net
interest income comprises the major portion of the Bank's income.

For the quarter ended September 30, 1997,  interest income increased  $3,013,000
or  23.9%over  the same  period in 1996.  The average  balance of total  earning
assets was higher by $159,654,000 which was a 28.4% increase. The acquisition of
Sutter  Buttes  Savings  Bank in the fourth  quarter of 1996 and the purchase of
deposits from Wells Fargo in February 1997 were the major  contributing  factors
for the increase in earning assets.  The average  balances of loans  outstanding
and securities increased  $86,299,000 and $71,618,000,  respectively.  These two
volume  increases  accounted for  additional  interest  income of $2,270,000 and
$1,029,000,  respectively.  The  average  rate  received  on loans in the  third
quarter of 1997 was 10.1% which was a decrease of 39 basis points from the third
quarter  last year.  The lower  rate  resulted  in an  unfavorable  variance  in
interest  income of $458,000.  The large number of mortgage  loans in the Sutter
Buttes portfolio was the major cause in lowering the average rate for loans. The
average rate received on securities rose 23 basis points to 6.0% which accounted
for a $148,000 increase in interest income.

For the third quarter of 1997, interest expense increased by $1,271,000 or 26.2%
over the year earlier period.  Due to the two acquisitions,  average balances of
interest bearing deposit  liabilities  increased in all categories from the same
period of the previous year. These average balances rose  $160,213,000  (36.8%).
The higher volumes of interest bearing deposit  liabilities  increased  interest
expense by $1,567,000. Average balances of Federal Funds purchased and debt fell
$25,406,000 to $18,801,000  which resulted in a decrease of $381,000 in interest
expense on a quarter  over  quarter  basis.  Average  rates paid on all interest
bearing  liabilities  were down 6 basis points in the third  quarter 1997 versus
1996.

The combined effect of the increase in both interest income and interest expense
for the third  quarter of 1997  versus the same  period in 1996  resulted  in an
increase of $1,742,000  (22.6%) in net interest income.  Net interest margin for
the  comparative  quarters  fell from  5.51% to 5.25%.  Net  interest  margin is
affected by the rates received on earning assets, the mix of products i.e. loans
and  securities  within  the  assets,   the  yields  paid  on  interest  bearing
liabilities  and  the mix  within  these  liabilities.  As a  result  of the two
acquisitions,  all four of these  variables  changed  in the  third  quarter  as
compared to the third  quarter of last year.  While net interest  margin for the
third  quarter of 1997  improved 29 basis  points over the second  quarter  1997
level,  management  expects the net  interest  margin will  continue to be lower
overall in 1997 versus  1996.  The margin  will  probably  remain  lower than in
periods prior to the acquisition until higher loan volume can replace investment
securities.

The nine month period ending September 30, 1997, was essentially impacted by the
same  factors as the third  quarter.  The mix and  volume of earning  assets and
interest  bearing  liabilities  changed  because of the two  acquisitions.  As a
result,  interest income increased  $8,508,000 or 23.7% in the first nine months
of 1997 over the same period in 1996. Most of the increase  resulted from higher
average  balances on loans and investment  securities.  Interest income from the
volume  increase  for these two items  totaled  $9,916,000.  It was  offset by a
$1,865,000  decrease in interest  income due to a lower  average yield on loans.
The average rate received on all earning  assets for the nine month period ended
September  30,  1997 was 8.54% or 25 basis  points  lower than the 8.79% for the
same period in 1996.

Interest  expense for the nine month period  increased  $3,945,000 from that for
the same period in 1996.  Volume  increases  in  deposits  added  $4,487,000  of
interest  expense.  This  was  offset  in part by  slightly  lower  rates  and a
$12,105,000  reduction in Federal Funds purchased and debt outstanding.  Overall
average rates paid on  interest-bearing  liabilities in the first nine months of
1997 decreased 4 basis points to 3.97% from the same period in 1996.

The combined effect of the increase in both interest income and interest expense
for the  first  six  months of 1997  versus  1996  resulted  in an  increase  of
$2,821,000 or 20.4% in net interest  income.  Net interest  margin  decreased 29
basis points from 5.34% to 5.05%.

The following  four tables  provide  summaries of the components of the interest
income,  interest  expense and net  interest  margins on earning  assets for the
quarter and nine month periods ended  September 30, 1997 versus the same periods
in 1996.
TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands)
Three Months Ended
                                                  30-Sep-97                                    30-Sep-96

                                  Average          Income/     Yield/          Average          Income/     Yield/
                                  Balance1         Expense     Rate            Balance1         Expense     Rate
Assets
Earning assets
  Loans 2,3                      $  464,748       $ 11,767     10.13%         $  378,449       $   9,955    10.52%
  Securities4                       254,517          3,806      5.98%            182,899           2,629     5.75%
  Federal funds sold                  1,737             24      5.53%                  -             -
                               -------------    -----------                  ------------     -----------
    Total earning assets            721,002         15,597      8.65%            561,348          12,584     8.97%
                                                -----------                                   -----------
Cash and due from bank               31,777                                       33,374
Premises and equipment               16,936                                       14,293
Other assets, net                    30,388                                       18,603
Less:  allowance
  for loan losses                    (6,208)                                      (5,338)
                               -------------                                 ------------
      Total                      $  793,896                                   $  622,280
                               =============                                 ============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                $  126,420            720      2.28%        $    90,215            519      2.30%
  Savings deposits                  208,147          1,613      3.10%            158,640           1,229     3.10%
  Time deposits                     261,630          3,552      5.43%            187,129           2,448     5.23%
Federal funds purchased               1,989             29      5.83%             13,701             204     5.96%
Short-term debt                       5,368             42      3.13%              6,196              88     5.68%
Long-term debt                       11,444            171      5.98%             24,310             368     6.06%
                               -------------    -----------                  ------------     -----------
   Total interest-bearing
      liabilities                   614,998          6,127      3.99%            480,191           4,856     4.05%
                                                -----------                                   -----------
Noninterest-bearing deposits        105,264                                       78,999
Other liabilities                    10,299                                        7,166
Shareholders' equity                 63,335                                       55,924
                               -------------                                 ------------
    Total liabilities
      and shareholders' equity   $  793,896                                   $  622,280
                               =============                                 ============
           
Net interest rate spread5                                       4.67%                                        4.92%
Net interest income/net                          $   9,470                                    $   7,728
                                                ===========                                  ===========
  interest margin6                                    5.25%                                     5.51%
                                                ===========                                  ===========

1 Average  balances are  computed  principally  on the basis of daily  balances.
  Average balance of securities is based on amortized cost.
2 Nonaccrual loans are included.
3 Interest income on loans includes fees on loans of $496,000 in 1997 and $502,000 in 1996.
4 Interest income is stated on a tax equivalent basis of  1.52 and 1.72 at September 30, 1997 and
1996.
5 Net interest rate spread represents the average yield earned on interest-earning assets less the
  average rate paid on interest-bearing liabilities.
6 Net  interest  margin is  computed by dividing  net  interest  income by total
average earning assets.
TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands)
Nine Months Ended
                                 30-Sep-97                                        30-Sep-96

                                   Average         Income/        Yield/           Average          Income/       Yield/
                                   Balance1        Expense        Rate             Balance1         Expense       Rate
Assets
Earning assets
  Loans 2,3                        $ 445,908     $   33,338        9.97%           $ 348,943      $   27,548      10.53%
  Securities4                        240,781         10,834        6.00%             188,123           8,076       5.72%
  Federal funds sold                   7,224            292        5.39%               8,383             332       5.28%
                                -------------   ------------                     ------------   -------------
    Total earning assets             693,913         44,464        8.54%             545,449          35,956       8.79%
                                                ------------                                    -------------      
Cash and due from bank                37,107                                          30,716
Premises and equipment                16,301                                          13,917
Other assets, net                     31,551                                          18,316
Less:  allowance
  for loan losses                     (6,086)                                         (5,438)
                                -------------                                    ------------
      Total                        $ 772,786                                       $ 602,960
                                =============                                    ============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                  $ 118,924          2,019        2.26%         $   86,313            1,472       2.27%
  Savings deposits                   206,087          4,736        3.06%            161,712            3,721       3.07%
  Time deposits                      250,038         10,020        5.34%            177,373            7,102       5.34%
Federal funds purchased                3,807            160        5.60%              8,397              348       5.53%
Short-term debt                        8,325            354        5.67%              3,285              137       5.56%
Long-term debt                        12,316            545        5.90%             24,871            1,109       5.95%
                                -------------   ------------                    ------------    -------------
   Total interest-bearing
      liabilities                    599,497         17,834        3.97%            461,951           13,889       4.01%
                                                ------------                                    -------------
Noninterest-bearing deposits         100,955                                         77,905
Other liabilities                     10,081                                          8,202
Shareholders' equity                  62,253                                         54,902
                                -------------                                   ------------
    Total liabilities
      and shareholders' equity     $ 772,786                                      $ 602,960
                                =============                                   ============

Net interest rate spread5                                          4.58%                                          4.78%
Net interest income/net                          $   26,630                                       $   22,067
                                                ============                                    =============
  interest margin6                                     5.12%                                            5.39%
                                                ============                                    =============

1 Average  balances are  computed  principally  on the basis of daily  balances.
  Average balance of securities is based on amortized cost.
2 Nonaccrual loans are included.
3 Interest income on loans includes fees on loans of $1,520,000 in 1997 and $1,407,000 in 1996.
4 Interest income is stated on a tax equivalent basis of  1.52 and 1.72 at September 30, 1997 and
1996.
5 Net interest rate spread represents the average yield earned on interest-earning assets less the
  average rate paid on interest-bearing liabilities.
6 Net  interest  margin is  computed by dividing  net  interest  income by total
average earning assets.
TRICO BANCSHARES
                       ANALYSIS OF VOLUME AND RATE CHANGES
                       ON NET INTEREST INCOME AND EXPENSE
                                 (in thousands)

                    For the three months ended September 30,
                                 1997 over 1996
                                                        Yield/
                                    Volume               Rate4          Total
                           ----------------   -----------------   ------------
Increase (decrease) in interest income:
    Loans 1,2              $         2,270    $           (458)   $     1,812
    Investment securities3           1,029                 148          1,177
    Federal funds sold                  24                   -             24
                           ----------------   -----------------   ------------
      Total                          3,323                (310)         3,013
                           ----------------   -----------------   ------------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)                208                 (7)           201
    Savings deposits                    384                  -            384
    Time deposits                       975                129          1,104
    Federal funds purchased            (174)                (1)          (175)
    Short-term debt                     (12)               (34)           (46)
    Long-term debt                     (195)                (2)          (197)
                            ----------------  -----------------   ------------
      Total                           1,186                 85          1,271
                            ----------------  -----------------   ------------

Increase (decrease) in
  net interest income       $         2,137   $           (395)   $     1,742
                            ================  =================   ============

1 Nonaccrual loans are included.
2 Interest income on loans includes fee income on loans of $496,000 in 1997 and
 $502,000  in 1996.
3 Interest income is stated on a tax equivalent basis of 1.52 and 1.72 for
 September 30, 1997 and 1996.
4 The rate/volume variance has been included in the rate variance.

                                TRICO BANCSHARES
                       ANALYSIS OF VOLUME AND RATE CHANGES
                       ON NET INTEREST INCOME AND EXPENSE
                                 (in thousands)

                     For the nine months ended September 30,
                                 1997 over 1996
                                                           Yield/
                                             Volume         Rate4         Total
                                        ------------   -----------   -----------
Increase (decrease) in interest income:
    Loans 1,2                           $     7,655    $   (1,865)   $    5,790
    Investment securities3                    2,261           497         2,758
    Federal funds sold                          (46)            6           (40)
                                        ------------   -----------   -----------
      Total                                   9,870        (1,362)        8,508
                                        ------------   -----------   -----------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)                        556            (9)          547
    Savings deposits                          1,021            (6)        1,015
    Time deposits                             2,910             8         2,918
    Federal funds purchased                    (190)            2          (188)
    Short-term debt                             210             7           217
    Long-term debt                             (560)           (4)         (564)
                                        ------------   -----------   -----------
      Total                                   3,947            (2)        3,945
                                        ------------   -----------   -----------

Increase (decrease) in
  net interest income                   $     5,923    $   (1,360)   $    4,563
                                        ============   ===========   ===========

1 Nonaccrual loans are included.
2 Interest income on loans includes fee income on loans of $1,520,000 in 1997
and $1,407,000 in 1996.
3 Interest income is stated on a tax equivalent basis of 1.52 and 1.72 for
 September 30, 1997 and 1996.
4 The rate/volume variance has been included in the rate variance.
Provision for Loan Losses

During the third quarter of 1997,  the Bank provided  $1,000,000 for loan losses
which was  $463,000  higher than  provided in the year ago  quarter.  The higher
provision was  necessitated by higher net charge offs which were $869,000 in the
third quarter versus $200,000 in the third quarter of 1996.
Charged off loans were higher in all loan categories.

For the nine month period ended September  30,1997 the Bank provided  $2,200,000
for loan losses versus  $627,000 in the same period of 1996. Net charge offs for
the  nine  month  periods  in  1997  and  1996  were   $1,933,000  and  $636,000
respectively.  Net charge offs of  commercial  loans during the nine months were
$863,000  in 1997  versus  $35,000 in 1996.  Credit  card net charge offs in the
first nine months of 1997 increased $246,000 to $695,000 as compared to the same
period in 1996. These two loan categories accounted for the major portion of the
higher charge offs.

It is expected  that the Bank will continue to provide for loan losses at higher
levels than were recorded in 1996 as a result of loan growth and higher level of
adversely rated credits in the loan portfolio.

Noninterest Income

Total noninterest  income for the third quarter of 1997 was up $732,000 or 42.0%
from the same  period in 1996.  Service  charges  and fees on  deposit  accounts
increased 34.9% to $1,748,000 in the third quarter versus year ago results. This
change  was due to  increases  in  account  volumes  mainly  as a result  of the
previously  mentioned  acquisitions.  Other  income was up from  $449,000 in the
third  quarter of 1996 to $711,000 in 1997.  Much of the change was related to a
$227,000  (83.5%)  increase  in  commissions  on the sale of  mutual  funds  and
annuities.

Results for the nine months were  consistent  with the third  quarter.  Overall,
noninterest income was higher by $2,191,000 or 45.7% in the first nine months of
1997 versus the same period in 1996.  Service charges and fee income reflected a
37.1%  increase to  $4,923,000.  Both the increased  volume of accounts from the
acquisitions and selective fee increases made in June of 1996 contributed to the
higher  income.  Other income was up $841,000 to $2,041,000 of which $559,000 of
the increase was  attributable  to  commissions  on the sale of mutual funds and
annuities.  Gains on the sale of real estate loans accounted for $147,000 of the
increase.

Noninterest Expense

Noninterest  expense is comprised  of operating  expenses of the Company and the
Bank,  plus the total  noninterest  (income)  expenses of the Bank's real estate
development  subsidiary.  Noninterest expense increased $2,383,000 to $8,200,000
in the third  quarter  1997 versus  1996.  Of the higher  costs,  $851,000  were
directly   related  to  continuing   operations   of  the  purchased   branches.
Additionally,  amortization  of  intangible  assets  associated  with the Sutter
Buttes and Wells branch acquisitions amounted to $386,000. Increased staffing in
various  support  departments  and loan  offices to service the new  branches in
addition to normal  salary  progressions  added  $530,000  (18.0%) to salary and
benefit  expense on a quarter over quarter basis.  Occupancy  costs exclusive of
the new branches was $141,000  (14.5%) higher.  Of this amount,  depreciation on
equipment had the largest  single  increase and accounted for $101,000.  Much of
the depreciation related to improved computer and communication networks.  Other
expense categories such as courier service,  telephone, ATM charges and postage,
had  significant  increases  as a result of the Sutter  Buttes  and Wells  Fargo
branch  acquisitions.  The  provision  for OREO losses was $117,000 in the third
quarter  of 1997  versus  no  provision  in the same  quarter  last  year.  This
provision  was made on five  different  OREO  properties.  Noninterest  expenses
related to ongoing operations,  exclusive of onetime acquisition costs,  dropped
$214,000  in the third  quarter of 1997 from the second  quarter  1997  results.
Management will continue to focus its attention on increasing  efficiencies  and
reducing the noninterest expenses.

For the nine month period noninterest  expenses increased $7,166,000 or 41.8% in
1997 over 1996. Of this amount  conversion and direct operating costs associated
with the acquired branches accounted for $2,257,000.  Amortization of intangible
assets  associated with the  acquisitions  amounted to $957,000.  Other expenses
which had  significant  increases  on a year over  year  basis and were  closely
related to providing services to the new branches and customers include:  Salary
and benefits $1,405,000, premise and equipment $572,000, telephone $158,000, ATM
charges $136,000,  courier service $152,000,  postage $58,000 and FDIC insurance
$70,000. Provision for OREO loss and other OREO expenses increased $238,000.

The overhead efficiency ratio for the first nine months of 1997 was 72.8% versus
64.0% in the like period of 1996.

Provision for Income Taxes

The effective tax rate for the nine months ended September 30, 1997 is 38.1% and
reflects a decrease from 41.6% in the year earlier  period.  The decrease in tax
rate is the result of higher  nontaxable  earnings from municipal bonds and life
insurance on a smaller  income base from the prior year.  The Bank has increased
its holdings of tax-exempt municipal bonds in the first half of 1997, so the tax
rate should continue to be somewhat lower during 1997.

Loans

In the third quarter of 1997,  loan balances  increased  $7,320,000 or 1.6% from
the  ending  balances  at June  30,  1997.  Loan  balances  were  higher  in all
categories. The balances also exceeded year end balances by $28,771,000 and 1996
third  quarter  ending  balances  by  $88,111,000.  The year over year gains are
attributable to the Sutter Buttes  acquisition and loan growth of 7.2%. The Bank
has increased its commercial  lending staff in the  Sacramento,  Bakersfield and
northern  San  Joaquin  Valley loan  offices.  Seasonal  agricultural  loans are
expected  to start  paying  down in the fourth  quarter so no net loan growth is
anticipated during the remainder of the 1997.

Securities

At  September  30,  1997,  securities  held-to-maturity  had  a  cost  basis  of
$96,245,000  and an  approximate  fair  value  of  $95,876,000.  This  portfolio
contained  mortgage-backed  securities totaling $73,936,000 of which $31,575,000
were CMO's.  The  securities  available-for-sale  portfolio  had a fair value of
$150,423,000  and an amortized cost of  $150,227,000.  This portfolio  contained
mortgage-backed  securities  with an  amortized  cost of  $26,929,000  of  which
$19,486,000 were CMO's.

At  December  31,  1996,  securities   held-to-maturity  had  a  cost  basis  of
$104,713,000  and an  approximate  fair value of  $103,488,000.  This  portfolio
contained  mortgage-backed  securities totaling $81,202,000 of which $33,936,000
were CMO's.  The  securities  available-for-sale  portfolio  had a fair value of
$65,316,000  and an amortized  cost of  $66,307,000.  This  portfolio  contained
mortgage-backed  securities  with an  amortized  cost of  $30,260,000  of  which
$21,603,000 were CMO's.

Growth in the  securities  portfolio  resulted  from the  investment  of the net
proceeds generated from the acquisition of the Wells Fargo deposits in the first
quarter.

Nonperforming Loans

As shown in the following  table,  total  nonperforming  assets at September 30,
1997 were $8,212,000 which is a decrease of 21.4% from the year end balance.  At
September 30, 1997 non performing  assets represent 1.03% of total assets versus
1.50%  at  year  end.   Nonaccrual   loans  secured  by  real  estate  decreased
approximately $3,227,000 (43.7%) to $4,154,000,  which accounted for the largest
single change.  Commercial and consumer installment nonperforming loans also had
decreases.  Agricultural  nonperforming  loans  reflected  some  increase.  OREO
increased $692,000 as the net result of ten properties being added and ten being
sold  during this period and an  additional  OREO  provision  of  $170,000.  All
nonaccrual  loans are considered to be impaired when  determining  the valuation
allowance under SFAS 114. The increase in  nonperforming  loans is of concern to
Management.  Progress  has been made in the  process  to  identify  problem  and
potential problem loans earlier.  Collection processes are being changed to help
improve the timeliness of loan payments.

                                          September 30,            December 31,
                                               1997                    1996

Nonaccrual loans                          $    5,515              $     9,044
Accruing loans past due 90 days or more          616                       20
Restructured loans (in compliance with
  modified terms)                                  -                        -
                                          -----------             ------------
     Total nonperforming loans                 6,131                    9,064
Other real estate owned                        2,081                    1,389
                                          -----------             ------------
     Total nonperforming assets           $    8,212              $    10,453
                                          ===========             ============
Nonincome producing investments in real
  estate held by Bank's real estate
    development subsidiary                $      606              $     1,173
                                          ===========             ============
Nonperforming loans to total loans              1.31%                    2.06%
Allowance for loan losses to
  nonperforming loans                            104%                      67%
Nonperforming assets to total assets            1.03%                    1.50%
Allowance for loan losses to
  nonperforming assets                            77%                      58%

Allowance for Loan Loss

The Bank maintains its allowance for loan losses at a level Management  believes
will be adequate to absorb probable  losses  inherent in existing loans,  leases
and  commitments to extend credit,  based on evaluations of the  collectibility,
impairment and prior loss experience of loans,  leases and commitments to extend
credit.

The following table presents information  concerning the allowance and provision
for loan losses.

                                       For the nine months ended September 30
                                             1997                    1996
                                                    (in thousands)
Balance, Beginning of period           $    6,097             $     5,580

Provision charged to operations             2,200                     627

Loans charged off                          (2,105)                   (919)

Recoveries of loans previously
  charged off                                 172                     283

Balance, end of period                 $    6,364             $     5,571
                                       ===========            ============

Ending loan portfolio                  $  468,061             $   379,950
                                       ===========            ============

Allowance for loans as a
  percentage of ending loan portfolio        1.36%                   1.47%
                                       ===========            ============

Equity

The following table indicates the amounts of regulatory capital of the Company.
To Be Well
                                                                                  Capitalized Under
                                                                For Capital       Prompt Corrective
                                         Actual            Adequacy Purposes     Action Provisions
                                     Amount     Ratio        Amount     Ratio      Amount   Ratio
As of  September 30, 1997:
Total Capital
    to Risk Weighted Assets          $61,096   11.70%       =>$41,790 =>8.0%     =>$52,237 =>10.0%
Tier I Capital
    to Risk Weighted Assets          $54,732   10.48%       =>$20,895 =>4.0%     =>$31,342 => 6.0%
PART II

Other Information

 (a)  Item 6.     Exhibits Filed Herewith

Exhibit No.                                           Exhibits

         3.1         Articles  of  Incorporation,  as amended to date,  filed as
                     Exhibit 3.1 to Registrant's  Report on Form 10-K, filed for
                     the year ended December 31, 1989, are  incorporated  herein
                     by reference.

         3.2         Bylaws,  as  amended  to  1992,  filed  as  Exhibit  3.2 to
                     Registrant's  Report on Form 10-K, filed for the year ended
                     December 31, 1992, are incorporated herein by reference.

         4.2         Certificate  of  Determination  of  Preferences of Series B
                     Preferred  Stock,  filed  as  Appendix  A  to  Registrant's
                     Registration  Statement  on Form  S-1  (No.  33-22738),  is
                     incorporated herein by reference.

         10.1        Lease for Park Plaza  Branch  premises  entered  into as of
                     September  29,  1978,  by and  between  Park Plaza  Limited
                     Partnership  as lessor  and Tri  Counties  Bank as  lessee,
                     filed as Exhibit 10.9 to the TriCo Bancshares  Registration
                     Statement on Form S-14 (Registration No. 2-74796) is
                     incorporated herein by reference.

         10.2        Lease for Administration Headquarters premises entered into
                     as of April 25, 1986, by and between  Fortress-Independence
                     Partnership (A California  Limited  Partnership)  as lessor
                     and Tri Counties  Bank as lessee,  filed as Exhibit 10.6 to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1986, is incorporated herein by reference.

         10.3        Lease for Data Processing premises entered into as of April
                     25, 1986, by and between Fortress-Independence  Partnership
                     (A  California  Limited  Partnership)  as  lessor  and  Tri
                     Counties   Bank  as  lessee,   filed  as  Exhibit  10.7  to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1986, is incorporated
                     herein by reference.

         10.4        Lease for Chico Mall premises  entered into as of March 11,
                     1988,  by and between  Chico Mall  Associates as lessor and
                     Tri  Counties  Bank as  lessee,  filed as  Exhibit  10.4 to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1988, is incorporated by reference.

         10.5        First amendment to lease entered into as of May 31, 1988 by
                     and between Chico Mall  Associates  and Tri Counties  Bank,
                     filed as Exhibit 10.5 to  Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1988, is incorporated
                     by reference.

         10.9        Employment Agreement of Robert H. Steveson,  dated December
                     12, 1989 between Tri Counties Bank and Robert H.  Steveson,
                     filed as Exhibit 10.9 to  Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1989, is incorporated
                     by reference.

         10.11       Lease  for  Purchasing  and  Printing  Department  premises
                     entered into as of February 1, 1990, by and between  Dennis
                     M.  Casagrande  as lessor and Tri Counties  Bank as lessee,
                     filed as Exhibit 10.11 to Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1991, is incorporated
                     herein by reference.

         10.12       Addendum to  Employment  Agreement  of Robert H.  Steveson,
                     dated April 9, 1991, filed as Exhibit 10.12 to Registrant's
                     Report on Form 10-K filed for the year ended  December  31,
                     1991, is incorporated herein by reference.

         11.1        Computation of earnings per share.

         22.1        Tri Counties Bank, a California banking corporation, is the
                     only subsidiary of Registrant.

(b)  Reports on Form 8-K:

         None
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     November 7, 1997                        /s/  Robert H. Steveson
        ------------------                       -----------------------
                                                 Robert H. Steveson
                                                 President and
                                                 Chief Executive Officer

Date     November 7, 1997                        /s/  Robert M. Stanberry
        ------------------                       ------------------------
                                                 Robert M. Stanberry
                                                 Vice President and
                                                 Chief Financial Officer