<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, 1998              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.)

                 63 Constitution Drive, Chico, California 95973
               (Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code                  530/898-0300



--------------------------------------------------------------------------------
(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 10, 1998:  7,040,490





<PAGE>
<TABLE>
<CAPTION>


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

                                                                                 September 30,         December 31,
                                                                                    1998                  1997
                                                                             --------------------   ------------------ 
Assets:
<S>                                                                             <C>                   <C>            
Cash and due from banks                                                         $         35,828      $        48,476
Federal funds sold                                                                             -               15,000
                                                                             --------------------   ------------------
   Cash and cash equivalents                                                              35,828               63,476
Securities held-to-maturity
 (approximate fair value $79,438 and $88,950)                                             78,901               90,764
Securities available-for-sale, net of
 unrealized gain of $2,135 and $471                                                      206,290              175,753
Loans, net of allowance for loan losses of $(7,861) and $(6,459)                         511,034              442,508
Premises and equipment, net                                                               16,387               18,901
Investment in real estate properties                                                         274                  856
Other real estate owned                                                                    1,218                2,230
Accrued interest receivable                                                                5,677                5,701
Other assets                                                                              25,899               25,976
                                                                             --------------------   ------------------
     Total assets                                                                $       881,508      $       826,165
                                                                             ====================   ==================

Liabilities:
Deposits
 Noninterest-bearing demand                                                      $       121,312      $       122,069
 Interest-bearing demand                                                                 134,278              130,958
 Savings                                                                                 208,455              216,402
 Time certificates                                                                       260,947              254,665
                                                                             --------------------   ------------------
     Total deposits                                                                      724,992              724,094
Fed funds purchased                                                                       38,800               15,300
Accrued interest payable and other liabilities                                            10,598               10,207
Long term borrowings                                                                      36,428               11,440
                                                                             --------------------   ------------------
     Total liabilities                                                                   810,818              761,041

Shareholders' equity:
Common stock                                                                              48,517               48,161
Retained earnings                                                                         21,018               16,956
Unrealized gain on securities available for sale, net                                      1,155                    7
                                                                             --------------------   ------------------
     Total shareholders' equity                                                           70,690               65,124
                                                                             --------------------   ------------------
     Total liabilities and shareholders' equity                                  $       881,508      $       826,165
                                                                             ====================   ==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                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,
                                            ----------------------------------        ----------------------------------
                                                   1998                1997                  1998                1997
Interest income:
<S>                                          <C>                 <C>                   <C>                 <C>         
  Interest and fees on loans                 $      12,666       $     11,767          $      35,909       $     33,338
  Interest on investment
   securities-taxable                                3,696              3,519                 11,186             10,165
  Interest on investment
   securities-tax exempt                               545                189                  1,230                440
  Interest on federal funds sold                         5                 24                    133                292
                                           ----------------    ---------------       ----------------     --------------
     Total interest income                          16,912             15,499                 48,458             44,235
                                           ----------------    ---------------       ----------------     --------------

Interest expense:
  Interest on deposits                               5,874              5,885                 17,453             16,775
  Interest on federal funds purchased                  199                 29                    267                160
  Interest on repurchase agreements                    153                  -                    365                  -
  Interest on other borrowings                         516                213                  1,095                899
                                           ----------------    ---------------       ----------------     --------------
     Total interest expense                          6,742              6,127                 19,180             17,834
                                           ----------------    ---------------       ----------------     --------------

     Net interest income                            10,170              9,372                 29,278             26,401

Provision for loan losses                              920              1,000                  2,980              2,200
                                           ----------------    ---------------       ----------------     --------------
    Net interest income after
     provision for loan losses                       9,250              8,372                 26,298             24,201

Noninterest income:
  Service charges and fees                           1,798              1,748                  5,555              4,923
  Other income                                         964                729                  4,168              2,059
                                           ----------------    ---------------       ----------------     --------------
     Total noninterest income                        2,762              2,477                  9,723              6,982
                                           ----------------    ---------------       ----------------     --------------

Noninterest expenses:
  Salaries and related expenses                      4,177              3,997                 12,592             11,604
  Other, net                                         4,282              4,203                 13,362             12,708
                                           ----------------    ---------------       ----------------     --------------
     Total noninterest expenses                      8,459              8,200                 25,954             24,312
                                           ----------------    ---------------       ----------------     --------------

Net income before income taxes                       3,553              2,649                 10,067              6,871

  Income taxes                                       1,269              1,035                  3,712              2,614
                                           ----------------    ---------------       ----------------     --------------
     Net income                                      2,284              1,614                  6,355              4,257

Basic earnings per common share*                 $    0.33          $    0.23             $     0.91          $    0.61
                                           ================    ===============       ================     ==============
Diluted earnings per common share*               $    0.31          $    0.22             $     0.87          $    0.59
                                           ================    ===============       ================     ==============

* Calculated  and restated to reflect the Company's  3-for-2  common stock split
effected October 30, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

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


                                                                                           
                                                  Common stock                              Unrealized
                                          ------------------------------                      Gain on 
                                             Number                          Retained       Securities,
                                            of shares         Amount         earnings           net            Total
                                          --------------   -------------   -------------   --------------   -------------

<S>                                           <C>              <C>             <C>           <C>                <C>     
Balance, December 31, 1997                    4,662,649        $ 48,161        $ 16,956      $         7        $ 65,124

Exercise of common stock
 options                                         33,081             253                                         $    253

3-for-2 Common Stock split*                   2,346,815                                                         $      -

Repurchase of common stock                       (2,055)            (21)            (38)                        $    (59)
  
Common stock cash
 dividends                                                                       (2,255)                        $ (2,255)
  
Change in unrealized
 gain on securities                                                                                1,148        $  1,148

Stock option amortization                                           124                                         $    124

Net income                                                                        6,355                         $  6,355
                                          --------------   -------------   -------------   --------------   -------------

Balance, September 30, 1998                   7,040,490        $ 48,517        $ 21,018        $   1,155        $ 70,690
                                          ==============   =============   =============   ==============   =============

* Represents  the effect of the Company's  3-for-2  common stock split  effected
October 30, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                             TRICO BANCSHARES
                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              (in thousands)
                                                                             For the nine months
                                                                             ended September 30,
                                                                         1998                   1997
                                                                   -----------------       ----------------
Operating activities:
<S>                                                                   <C>                    <C>          
Net income                                                            $       6,355          $       4,257
Adjustments to reconcile net income to net cash provided
 by operating activities:
    Provision for loan losses                                                 2,980                  2,200
    Provision for losses on other real estate owned                             586                    169
    Depreciation and amortization                                             1,942                  1,759
    Amortization of intangible assets                                         1,004                    957
    Accretion of investment security discounts                                  (77)                   (62)
    Deferred income taxes                                                      (715)                   (97)
    Investment security (gains) losses (net)                                   (250)                   (18)
    (Gain) loss on sale of OREO                                                 (23)                    33
    (Gain) loss on sale of loans                                               (351)                  (139)
    (Gain) loss on sale of fixed assets                                          79                    (14)
    Amortization of stock options                                               124                    146
    (Increase) decrease in interest receivable                                   24                   (504)
    Increase (decrease) in interest payable                                     203                    771
    (Increase) decrease in other assets and liabilities                        (898)               (10,771)
                                                                   -----------------       ----------------
         Net cash provided (used) by operating activities                    10,983                 (1,313)

Investing activities:
    Proceeds from maturities of securities held-to-maturity                  12,022                  8,595
    Proceeds from maturities of securities available-for-sale                67,019                 18,815
    Proceeds from sale of securities available-for-sale                      77,121                 29,033
    Purchases of securities available-for-sale                             (172,682)              (131,695)
    Net (increase) decrease in loans                                        (69,805)               (31,930)
    Proceeds from sales of fixed assets                                         183                      -
    Purchases of premises and equipment                                      (1,232)                (3,940)
    Purchases and additions to real estate properties                           (21)                     -
    Proceeds from the sale of OREO                                            1,439                    470
                                                                   -----------------       ----------------
         Net cash provided (used) by investing activities                   (85,956)              (110,652)

Financing activities:
    Net increase (decrease) in deposits                                         898                113,332
    Net increase (decrease) in Fed funds purchased                           23,500                 (4,900)
    Net increase (decrease) in repurchase agreements                              -                  4,700
    Borrowings under long-term debt agreements                               30,000                      -
    Payments of principal on long-term debt agreements                       (5,012)               (12,838)
    Cash dividends - Common                                                  (2,255)                (2,226)
    Repurchase of common stock                                                  (59)                   (30)
    Exercise of common stock options                                            253                    143
                                                                   -----------------       ----------------
         Net cash provided (used) by financing activities                    47,325                 98,181
                                                                   -----------------       ----------------

         Increase (decrease) in cash and cash equivalents                   (27,648)               (13,784)
         Cash and cash equivalents at beginning of year                      63,476                 52,231
                                                                   -----------------       ----------------
         Cash and cash equivalents at end of period                   $      35,828          $      38,447
                                                                   =================       ================

Supplemental information:
    Cash paid for taxes                                               $       5,035          $       2,924
    Cash paid for interest expense                                    $      18,977          $      18,187
</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, 1998 and 1997, 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, 1997.


Note B - Comprehensive Income

As of  January  1,  1998,  the  Company  adopted  FASB  Statement  of  Financial
Accounting Standards No. 130, Reporting  Comprehensive  Income, (SFAS 130). This
Statement  established  standards for the reporting and display of comprehensive
income  and  its  components  in the  financial  statements.  For  the  Company,
comprehensive income includes net income reported on the statement of income and
changes in the fair value of its  available-for-sale  investments  reported as a
component of  shareholders'  equity.  The  following  table  presents net income
adjusted by the change in unrealized  gains or losses on the  available-for-sale
investments as a component of comprehensive income (in thousands).
<TABLE>
<CAPTION>

                                           Three months ended            Nine  months ended
                                                September 30,              September 30,
                                             1998          1997           1998        1997
                                             ------------------           ----------------
<S>                                          <C>          <C>             <C>         <C>    
Net income                                   $ 2,284      $ 1,614         $ 6,355     $ 4,257
Net change in unrealized gains (losses)
  on available-for-sale investments              996          499           1,148         764
                                            --------     --------        --------     -------

Comprehensive income                         $ 3,280      $ 2,113         $ 7,503     $ 5,021
                                             =======      =======         ========    =======

</TABLE>
<PAGE>


Note C - Earnings per Share

On October 30, 1998, the Company effected a 3-for-2 stock split for shareholders
of record on October 9, 1998. Basic and diluted earnings per share retroactively
restated to reflect  this stock split are as follows  (in  thousands  except per
share data):
<TABLE>
<CAPTION>

                                                         Three Months Ended September 30, 1998
                                                                      Weighted
                                                                       Average      Per-Share
                                                          Income       Shares        Amount
Basic Earnings per Share
<S>                                                      <C>           <C>            <C>   
  Net income available to common shareholders            $ 2,284       7,025,057      $ 0.33
Common stock options outstanding                              --         240,061
Diluted Earnings per Share
  Net income available to common shareholders            $ 2,284       7,265,118      $ 0.31
                                                         =======       =========


                                                         Three Months Ended September 30, 1997
                                                                      Weighted
                                                                       Average      Per-Share
                                                          Income       Shares        Amount
Basic Earnings per Share
  Net income available to common shareholders            $ 1,614       6,986,579      $ 0.23
Common stock options outstanding                              --         262,585
Diluted Earnings per Share
  Net income available to common shareholders            $ 1,614       7,249,164      $ 0.22
                                                         =======       =========


                                                         Nine Months Ended September 30, 1998
                                                                      Weighted
                                                                       Average      Per-Share
                                                          Income       Shares        Amount
Basic Earnings per Share
  Net income available to common shareholders            $ 6,355       7,016,220      $ 0.91
Common stock options outstanding                              --         260,516
Diluted Earnings per Share
  Net income available to common shareholders            $ 6,355       7,276,736      $ 0.87
                                                         =======       =========


                                                         Nine Months Ended September 30, 1997
                                                                      Weighted
                                                                       Average      Per-Share
                                                          Income       Shares        Amount
Basic Earnings per Share
  Net income available to common shareholders            $ 4,257       6,974,565      $ 0.61
Common stock options outstanding                              --         266,129
Diluted Earnings per Share
  Net income available to common shareholders            $ 4,257       7,240,694      $ 0.59
                                                         =======       =========
</TABLE>
<PAGE>

Note D - Derivative Instruments and Hedging Activities

In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging  Activities.  The  Statement  establishes  accounting  and reporting
standards  requiring  that  every  derivative   instrument   (including  certain
derivative  instruments  embedded in other contracts) be recorded in the balance
sheet as either an asset or liability  measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized  currently in
earnings unless specific hedge accounting  criteria are met. Special  accounting
for qualifying  hedges allows a derivative's  gains and losses to offset related
results on the hedged item in the income statement,  and requires that a company
must formally document,  designate, and assess the effectiveness of transactions
that receive hedge accounting.

Statement  133 is effective for fiscal years  beginning  after June 15, 1999 and
the Company plans to adopt its provisions  effective  January 1, 2000. While the
Company  does not  currently  utilize  any  traditional  derivative  instruments
(options, swaps, forwards, etc.) in its business, certain of its investments and
long-term  borrowings may have embedded options due to call or put features that
may be required to be accounted for differently under this Statement as compared
to current accounting principles. The Company has not yet quantified the impacts
of adopting Statement 133 on its consolidated financial statements, however, the
Statement   could  increase  the   volatility  of  future   earnings  and  other
comprehensive income.



<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 had record  quarterly  earnings of $2,284,000  for the third quarter
ended  September 30, 1998. The quarterly  earnings  represented a 41.5% increase
over the $1,614,000  reported for the same period of 1997.  Diluted earnings per
share for the third  quarter  1998 were $0.31  versus  $0.22 in the year earlier
period.  Earnings for the nine months ended  September 30, 1998 were  $6,355,000
versus year ago results of $4,257,000. The diluted earnings per share were $0.87
and $0.59 for the respective nine-month periods.

Pretax earnings for the third quarter of 1998 were $3,553,000  versus $2,649,000
for the same period in 1997.  Net interest  income  reflected  growth of 8.5% to
$10,170,000.  The interest  income  component  was up  $1,413,000  (9.1%) due to
higher  quarter  over  quarter  volume of earning  assets  ($792,701,000  versus
$721,002,000)  and a 2 basis point increase in yield on average  earning assets.
Interest expense  increased  $615,000  (10.0%) which was due  predominately to a
$54,317,000 (8.8%) increase in interest-bearing liabilities.  Average rates paid
for interest-bearing liabilities increased 4 basis points over the third quarter
of 1997.  Net  interest  margin was 5.27% for the third  quarter of 1998  versus
5.25% in the prior year. This higher net interest margin reflects the effects of
the higher growth rate in earning  assets versus  interest-bearing  liabilities.
The  provision  for loan  losses of $920,000  for the third  quarter of 1998 was
$80,000 lower than in the same quarter of 1997.

Noninterest income increased $285,000 (11.5%) for the third quarter of 1998 over
the prior  year  third  quarter.  The  service  charge  and fee  income  portion
increased 2.9% to $1,798,000.  Other income  increased  $235,000  (32.2%) in the
third  quarter of 1998 versus the same  quarter in 1997.  The  increase in other
income  includes gains on the sale of investments of $114,000 versus none in the
third quarter of 1997 and an additional  gain of $58,000  realized from the sale
of the credit card portfolio which took place in May 1998.  Noninterest  expense
increased  $259,000  (3.2%) in the third  quarter 1998 versus  1997.  Salary and
benefit  expense  increased  $180,000  (4.5%)  mostly  due to higher  commission
payments to sales personnel and accruals for incentive programs.  Other expenses
increased  $79,000  (1.9%).  On a quarter  over  quarter  basis,  marketing  and
advertising  expenses were up by $114,000 and all other  expenses were favorable
by a total of $35,000.

Assets of the Company totaled  $881,508,000 at September 30, 1998,  which was an
increase of  $55,343,000  (6.7%) and  $83,367,000  (10.5%) from the December 31,
1997 and September 30, 1997 ending  balances,  respectively.  Changes in earning
asset  balances  from  September  30,  1997  included  an  increase  in loans of
$50,834,000  to  $518,895,000  and an increase in securities of  $38,523,000  to
$285,191,000.  From year end 1997 balances,  nonperforming assets have decreased
$1,672,000 and total $5,807,000 at September 30, 1998. Nonperforming assets were
0.66% of total assets at quarter end.

Year to date 1998, on an annualized  basis, the Company has realized a return on
assets of 1.01% and a return on equity of 12.55%  versus  0.73% and 9.12% in the
first nine months of 1997.  TriCo  Bancshares  ended the  quarter  with a Tier 1
capital ratio of 10.5% and a total risk-based capital ratio of 11.8%.

The  following  tables  provide a summary  of the major  elements  of income and
expense for the third  quarter of 1998  compared  with the third quarter of 1997
and for the first nine  months of 1998  compared  with the first nine  months of
1997.

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



                                          Three months
                                         ended September 30,         Percentage
                                       1998            1997            Change
                                        (in thousands, except         increase
                                         earnings per share)         (decrease)
Interest income                    $    17,190     $    15,597          10.2%
Interest expense                         6,742           6,127          10.0%
                                   ------------    ------------

Net interest income                     10,448           9,470          10.3%

Provision for loan losses                  920           1,000         (8.0%)
                                   ------------    ------------

Net interest income after                9,528           8,470          12.5%
  provision for loan losses

Noninterest income                       2,762           2,477          11.5%
Noninterest expenses                     8,459           8,200           3.2%
                                   ------------    ------------

Net income before income taxes           3,831           2,747          39.5%
Income taxes                             1,269           1,035          22.6%
Tax equivalent adjustment1                 278              98         183.2%
                                   ------------    ------------

Net income                               2,284           1,614          41.5%
                                   ============    ============


Diluted earnings per common share2 $      0.31     $      0.22          40.9%



1 Interest on tax-free  securities is reported on a tax equivalent basis of 1.51
  and 1.52 for September 30, 1998 and 1997.
2 Calculated  and restated to reflect the Company's  3-for-2  common stock split
  effected October 30, 1998.
<PAGE>

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



                                             Nine months
                                         ended September 30,         Percentage
                                       1998            1997            Change
                                        (in thousands, except         increase
                                         earnings per share)         (decrease)
Interest income                    $    49,085     $    44,464          10.4%
Interest expense                        19,180          17,834           7.5%
                                   ------------    ------------

Net interest income                     29,905          26,630          12.3%

Provision for loan losses                2,980           2,200          35.5%
                                   ------------    ------------

Net interest income after               26,925          24,430          10.2%
  provision for loan losses

Noninterest income                       9,723           6,982          39.3%
Noninterest expenses                    25,954          24,312           6.8%
                                   ------------    ------------

Net income before income taxes          10,694           7,100          50.6%
Income taxes                             3,712           2,614          42.0%
Tax equivalent adjustment1                 627             229         174.2%
                                   ------------    ------------

Net income                               6,355           4,257          49.3%
                                   ============    ============


Diluted earnings per common share2 $      0.87     $      0.59          47.5%


1 Interest on tax-free  securities is reported on a tax equivalent basis of 1.51
  and 1.52 for September 30, 1998 and 1997.
2 Calculated  and restated to reflect the Company's  3-for-2  common stock split
  effected October 30, 1998.

<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, 1998,  interest income increased  $1,593,000
(10.2%)  over the same  period in 1997.  The  average  balance of total  earning
assets  was  higher  by  $71,699,000  (9.9%).  The  average  balances  of  loans
outstanding and securities increased $40,629,000 and $32,362,000,  respectively.
These  two  volume  increases   accounted  for  additional  interest  income  of
$1,029,000 and $484,000, respectively. The average rate received on loans in the
third  quarter of 1998 was 10.02%  which was a decrease of 11 basis  points from
the third  quarter last year.  The lower rate resulted in a decrease in interest
income of $130,000. The average rate received on securities rose 32 basis points
to 6.30% which accounted for a $229,000 increase in interest income. The overall
yield on average earning assets rose 2 basis points to 8.67%.

For the third quarter of 1998,  interest  expense  increased by $615,000 (10.0%)
over the year earlier period.  Average balances of interest-bearing  liabilities
were up  $54,317,000  (8.8%) which  resulted in a $665,000  increase in interest
expense.  Average balances of long-term debt and overnight  borrowings increased
$24,987,000  (218%)  and  $16,778,000  (228%)  respectively  and  accounted  for
$584,000   of  the   change  in   interest   expense.   Rate   variances   on  a
quarter-over-quarter basis resulted in a decrease of $50,000 in interest expense
for the third quarter of 1998. The overall rate on average  earning  liabilities
rose 4 basis points to 4.03%

The combined effect of the increases in interest income and interest expense for
the third quarter of 1998 versus the same period in 1997 resulted in an increase
of  $978,000  (10.3%)  in net  interest  income.  Net  interest  margin  for the
comparative quarters increased from 5.25% to 5.27%. The increase in net interest
margin was  mainly due to average  earning  assets  outgrowing  average  earning
liabilities by $17,382,000 for the comparative  quarters. A $14,460,000 increase
in the average balance of noninterest bearing deposits accounted for most of the
difference in growth between earning assets and interest-bearing liabilities.

Net interest income and net interest margin  comparisons  between the first nine
months  of 1998 and 1997 are  influenced  by the  inclusion  of nine  months  of
operations  in 1998 of the nine  branches  purchased  from  Wells  Fargo Bank on
February 21, 1997,  compared to the  inclusion of just over seven months of such
operations  in  1997.  As  a  result  of  the  acquisition  the  Company  gained
approximately  $150,000,000 in deposits which where used to purchase securities.
In addition, during the second quarter of 1998, the Company borrowed $30,000,000
from the Federal Home Loan Bank and negotiated for  $20,000,000 in  certificates
of  deposits  with  the  State of  California.  These  funds  were  invested  in
securities at an average spread of 149 basis points. The ongoing effect of these
transactions  will be to increase net interest  income and slightly  depress net
interest  margin.  To the extent the Company is successful in replacing  some of
the investment  portfolio with higher yielding  loans,  net interest margin will
tend to move higher.  From March 31, 1997 to September  30, 1998,  the Company's
loans balance has grown $89,280,000 (20.8%).

The  nine-month  period ending  September  30, 1998 reflects an interest  income
increase  of  $4,621,000  (10.4%)  over the  same  period  in 1997.  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
$4,220,000.  The  balance of the  increase  came from  higher  yields on earning
assets.  The average  rate  received  on all  earning  assets for the nine month
period  ended  September  30, 1998 was 8.58% or 4 basis  points  higher than the
8.54% for the same period in 1997.

Interest expense for the nine-month period increased $1,346,000 (7.5%) from that
for the same period in 1997.  Volume  increases in deposits and borrowings added
$1,490,000 of interest expense.  This was offset in part by slightly lower rates
on time deposits and long-term debt  outstanding.  Overall average rates paid on
interest-bearing  liabilities in the first nine months of 1998 decreased 1 basis
point to 3.96% from the same period in 1997.

The combined effect of the increase in both interest income and interest expense
for the first  nine  months of 1998  versus  1997  resulted  in an  increase  of
$3,275,000 (12.3%) in net interest income.
Net interest margin rose 11 basis points to 5.23% from 5.12%.

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, 1998 versus the same periods
in 1997.
<PAGE>
<TABLE>
<CAPTION>
                                TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands)
                                                                 Three Months Ended
                                               30-Sep-98                                       30-Sep-97

                                  Average          Income/        Yield/          Average          Income/         Yield/
                                  Balance1         Expense        Rate            Balance1         Expense         Rate
Assets
Earning assets
<S>                              <C>              <C>              <C>          <C>               <C>               <C>   
  Loans 2,3                      $  505,377       $ 12,666         10.02%       $  464,748        $ 11,767          10.13%
  Securities4                       286,879          4,519          6.30%          254,517           3,806           5.98%
  Federal funds sold                    445              5          4.49%            1,737              24           5.53%
                               -------------    -----------                    ------------     -----------
    Total earning assets            792,701         17,190          8.67%          721,002          15,597           8.65%
                                                -----------                                     -----------
Cash and due from bank               35,150                                         31,777
Premises and equipment               16,665                                         16,936
Other assets, net                    32,091                                         30,389
Less:  allowance
  for loan losses                    (7,424)                                        (6,208)
                               -------------                                   ------------
      Total                      $  869,183                                     $  793,896
                               =============                                   ============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                $  136,991            788          2.30%       $  126,420             720           2.28%
  Savings deposits                  209,166          1,623          3.10%          208,147           1,613           3.10%
  Time deposits                     262,592          3,463          5.28%          261,630           3,552           5.43%
Federal funds purchased              13,552            199          5.87%            1,989              29           5.83%
Short-term debt                      10,583            153          5.78%            5,368              42           3.13%
Long-term debt                       36,431            516          5.67%           11,444             171           5.98%
                               -------------    -----------                    ------------     -----------
   Total interest-bearing
      liabilities                   669,315          6,742          4.03%          614,998           6,127           3.99%
                                                -----------                                     -----------
Noninterest-bearing deposits        119,724                                        105,264
Other liabilities                    11,164                                         10,299
Shareholders' equity                 68,980                                         63,335
                               -------------                                   ------------
    Total liabilities
      and shareholders' equity   $  869,183                                     $  793,896
                               =============                                   ============

Net interest rate spread5                                           4.64%                                            4.66%
Net interest income/net                           $ 10,448                                       $   9,470
                                                ===========                                     ===========
  interest margin6                                   5.27%                                           5.25%
                                                ===========                                     ===========


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 $744,000 in 1998 and $496,000 in 1997.
4 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 at September 30, 1998 and
1997.
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>
<TABLE>
<CAPTION>
                                TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands) 

                                                                     Nine Months Ended
                                               30-Sep-98                                        30-Sep-97

                                   Average         Income/         Yield/           Average        Income/         Yield/
                                   Balance1        Expense         Rate             Balance1       Expense         Rate
Assets 
Earning assets
<S>                                <C>           <C>                <C>            <C>            <C>                <C>  
  Loans 2,3                        $ 477,493     $   35,909         10.03%         $ 445,908      $   33,338         9.97%
  Securities4                        282,063         13,043          6.17%           240,781          10,834         6.00%
  Federal funds sold                   3,083            133          5.75%             7,224             292         5.39%
                                -------------   ------------                     ------------   -------------
    Total earning assets             762,639         49,085          8.58%           693,913          44,464         8.54%
                                                ------------                                    -------------
Cash and due from bank                32,939                                          37,107
Premises and equipment                17,836                                          16,301
Other assets, net                     33,330                                          31,551
Less:  allowance
  for loan losses                    (7,025)                                         (6,086)
                                -------------                                    ------------
      Total                        $ 839,719                                       $ 772,786
                                =============                                    ============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                  $ 134,599          2,291          2.27%         $ 118,924           2,019         2.26%
  Savings deposits                   211,141          4,860          3.07%           206,087           4,736         3.06%
  Time deposits                      260,365         10,302          5.28%           250,038          10,020         5.34%
Federal funds purchased                6,151            267          5.79%             3,807             160         5.60%
Short-term debt                        8,521            365          5.71%             8,325             354         5.67%
Long-term debt                        25,610          1,095          5.70%            12,316             545         5.90%
                                -------------   ------------                     ------------   -------------
   Total interest-bearing
      liabilities                    646,387         19,180          3.96%           599,497          17,834         3.97%
                                                ------------                                    -------------
Noninterest-bearing deposits         114,503                                         100,955
Other liabilities                     11,297                                          10,081
Shareholders' equity                  67,532                                          62,253
                                -------------                                    ------------
    Total liabilities
      and shareholders' equity     $ 839,719                                       $ 772,786
                                =============                                    ============

Net interest rate spread5                                            4.62%                                           4.57%
Net interest income/net                          $   29,905                                       $   26,630
                                                ============                                    =============
  interest margin6                                    5.23%                                            5.12%
                                                ============                                    =============



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 $2,173,000 in 1998 and $1,520,000 in 1997.
4 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 at September 30, 1998 and
1997.
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,
                                               1998 over 1997

                                                                  Yield/
                                        Volume       Rate4        Total
                                  -------------  ----------   ----------
Increase (decrease) in interest income:
    Loans 1,2                       $    1,029   $    (130)   $     899
    Investment securities3                 484         229          713
    Federal funds sold                     (18)         (1)         (19)
                                  -------------  ----------   ----------
      Total                              1,495          98        1,593
                                  -------------  ----------   ----------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)                                             
                                            60           8           68
    Savings deposits                                                 
                                             8           2           10
    Time deposits                                                  
                                            13        (102)         (89)
    Federal funds purchased                                         
                                           169           1          170 
    Short-term debt                                                
                                            41          70          111
    Long-term debt                                                  
                                           374         (29)         345
                                  -------------  ----------   ----------
      Total                                665         (50)         615
                                  -------------  ----------   ----------

Increase (decrease) in
  net interest income                $     830   $     148     $    978
                                  =============  ==========   ==========



1 Nonaccrual loans are included.
2 Interest income on loans includes fee income on loans of $744,000 in 1998 and
  $496,000  in 1997.
3 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 for
  September 30, 1998 and 1997.
4 The rate/volume variance has been included in the rate variance.
<PAGE>

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



                                        For the nine months ended September 30,
                                                    1998 over 1997

                                                                     Yield/
                                            Volume        Rate4       Total
                                         ----------   ----------  ----------
Increase (decrease) in interest income:
    Loans 1,2                            $   2,362     $    209   $   2,571
    Investment securities3                   1,858          351       2,209
    Federal funds sold                       (167)            8        (159)
                                         ----------   ----------  ----------
      Total                                  4,053          568       4,621
                                         ----------   ----------  ----------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)                       266            6         272
    Savings deposits                           116            8         124
    Time deposits                              414         (132)        282
    Federal funds purchased                     98            9         107
    Short-term debt                              8            3         11
    Long-term debt                             588          (38)        550
                                         ----------   ----------  ----------
      Total                                  1,490         (144)      1,346
                                         ----------   ----------  ----------

Increase (decrease) in
  net interest income                    $   2,563     $    712   $   3,275
                                         ==========   ==========  ==========


1 Nonaccrual loans are included.
2 Interest income on loans includes fee income on loans of $2,173,000 in 1998
  and $1,520,000 in 1997.
3 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 for
  September 30, 1998 and 1997.
4 The rate/volume variance has been included in the rate variance.

<PAGE>


Provision for Loan Losses

The Bank  provided  $920,000 for loan losses in the third quarter of 1998 versus
$1,000,000 in 1997. Net  charge-offs  for all loans in the third quarter of 1998
totaled  $197,000  versus  $869,000  in  the  year  earlier  period.  Additional
provisions  required  to cover the  effects of changes in the  overall  economic
environment on the loan  portfolio  amounted to $723,000 in the third quarter of
1998. As reported in the Form 10-Q for the first quarter of 1998,  the Bank sold
its credit card  portfolio  effective  May 1, 1998,  and is no longer liable for
charge-offs  in that  portfolio.  For all of 1997,  net credit card  charge-offs
totaled $958,000  representing  36.3% of the total net charge-offs for the year.
For the nine months  ended  September  30,  1998,  net credit  card  charge-offs
totaled $316,000  (through the sale date of May 1, 1998)  representing  20.0% of
total net charge-offs of $1,578,000.

Noninterest Income

Noninterest  income for the third quarter of 1998,  increased  $285,000  (11.5%)
from the same period in 1997.  Income from  service  charges and fees  increased
2.9% to $1,798,000. Other income increased $235,000 (32.2%) in the third quarter
of 1998 versus the same quarter in 1997.  The increase in other income  includes
gains on the sale of investments of $114,000 versus none in the third quarter of
1997 and an additional gain of $58,000 realized from the sale of the credit card
portfolio which took place in May 1998.

The Bank sold its credit card portfolio of $14,365,000 for a gain of $793,000 in
the second  quarter of 1998.  For the nine  months  ended  September  30,  1998,
excluding the gain on the sale of the credit card portfolio,  noninterest income
was up $1,890,000 (27.1%) over the same period for 1997. Part of the increase is
attributable  to  full  first  quarter  1998  operations  of the  nine  branches
purchased  from Wells Fargo Bank versus only five weeks of operations  for those
branches  in the first  quarter of 1997.  Service  charges and fee income was up
$632,000  (12.8%)  as a result  of  increased  volume  of  accounts  and fees on
non-Bank  customer ATM  transactions  implemented in the fourth quarter of 1997.
Other income,  exclusive of the credit card gain,  increased $1,258,000 (61.1%).
Significant  increases  in  the  following  items  contributed  to  the  overall
increase:  vendor rebates $324,000,  gain on sale of investments $232,000,  loan
recoveries in excess of amounts previously charged-off $228,000, gain on sale of
mortgage loans $212,000.

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  $259,000 (3.2%) in the
third quarter 1998 versus 1997.  Salary and benefit expense  increased  $180,000
(4.5%) mostly due to higher commission  payments to sales personnel and accruals
for various incentive  programs.  Other expenses  increased $79,000 (1.9%). On a
quarter-over-quarter  basis,  the  provision for OREO  property  valuations  was
reduced by $49,000 and all other expenses were reduced by a total of $30,000.

For the nine-month period noninterest  expenses  increased  $1,642,000 (6.8%) in
1998 over 1997.  Part of the increase is attributable to full first quarter 1998
operations of the nine branches purchased from Wells Fargo Bank versus only five
weeks of operations  for those  branches in the first quarter of 1997.  One time
direct  costs  related  to the  conversion  of the nine Wells  branches  totaled
$358,000 in the first nine months of 1997.  Salary and benefit expense increased
$988,000 (8.5%) on a year-over-year  basis. The salary expense was higher due to
first quarter effect of increased staff from the 1997 Wells branch  acquisition,
higher  benefit  costs,  commissions  paid to  sales  staff,  various  incentive
programs,  and normal salary progression.  Other noninterest  expenses increased
$654,000 (5.2%) in 1998 over 1997. Occupancy costs increased $165,000 mostly due
to higher depreciation  relating to equipment for the acquired branches,  leases
for five of the acquired branches and upgraded  technology.  Other expenses such
as computer communications,  telephone, ATM charges, courier service and postage
were higher as a result of the branch  acquisition.  Amortization  of intangible
assets  related to the acquired  branches  added $47,000 of expense in the first
nine months of 1998.  Provisions for OREO property valuations increased $417,000
to $586,000 for the nine months.

Provision for Income Taxes

The effective tax rate for the nine months ended September 30, 1998 is 36.9% and
reflects a decrease from 38.0% in the year earlier period. The tax rate is lower
than the  statutory  rate of 40.4% due to  nontaxable  earnings  from  municipal
bonds.  The Bank has been increasing its holdings of tax-exempt  municipal bonds
so the tax rate should continue to be lower than the statutory rate.

Securities

At  September  30,  1998,  securities  held-to-maturity  had  a  cost  basis  of
$78,901,000  and an  approximate  fair  value  of  $79,438,000.  This  portfolio
contained  mortgage-backed  securities totaling $56,683,000 of which $21,946,000
were    collateralized    mortgage    obligations    (CMOs).    The   securities
available-for-sale  portfolio had a fair value of $206,290,000  and an amortized
cost of $204,155,000.  This portfolio contained mortgage-backed  securities with
an amortized cost of $99,545,000 of which $14,831,000 were CMOs.

At  December  31,  1997,  securities   held-to-maturity  had  a  cost  basis  of
$90,764,000  and an  approximate  fair  value  of  $88,950,000.  This  portfolio
contained  mortgage-backed  securities totaling $68,429,000 of which $27,821,000
were  CMOs.  The  securities  available-for-sale  portfolio  had a fair value of
$175,753,000  and an amortized cost of  $175,282,000.  This portfolio  contained
mortgage-backed  securities  with an  amortized  cost of  $36,556,000  of  which
$19,677,000 were CMOs.

Loans

At September 30, 1998,  loan balances were  $50,834,000  (10.9%) higher than the
ending  balances at September 30, 1997 and  $69,928,000  (15.6%) higher than the
ending  balances at December 31, 1997.  The Bank sold its credit card  portfolio
totaling  $14,365,000  in the  second  quarter  of 1998.  Had these  loans  been
included at quarter  end,  loan growth on a year over year basis would have been
13.9%.  On a year over year basis at September  30,  commercial  and real estate
loan  balances  were higher while there was a decrease in consumer  loans due to
the sale of the credit cards.  Real estate  construction  loans were  relatively
flat.





Nonperforming Loans

As shown in the following table, total nonperforming assets have decreased 22.4%
to $5,807,000 in the first nine months of 1998.  Nonperforming  assets represent
only 0.66% of total assets. Both nonaccrual loans and OREO decreased during this
period.  All nonaccrual loans are considered to be impaired when determining the
valuation allowance under SFAS 114. The Bank's Collections  Department personnel
continue to make a concerted effort to work problem and potential  problem loans
to reduce risk of loss.


                                          September 30,       December 31,
                                              1998              1997

Nonaccrual loans                          $    4,356        $    4,721
Accruing loans past due 90 days or more          233               528
Restructured loans (in compliance with
  modified terms)                                  -                 -
                                         ------------      ------------
     Total nonperforming loans                 4,589             5,249
Other real estate owned                        1,218             2,230
                                         ------------      ------------
     Total nonperforming assets            $   5,807             7,479
                                         ============      ============
Nonincome producing investments in real
  estate held by Bank's real estate
    development subsidiary                 $    274         $      856
                                         ============      ============
Nonperforming loans to total loans             0.88%             1.17%
Allowance for loan losses to
  nonperforming loans                           171%              123%
Nonperforming assets to total assets           0.66%             0.91%
Allowance for loan losses to
  nonperforming assets                          135%               86%



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
                                     1998                          1997
                                               (in thousands)
Balance, Beginning of period     $         6,459          $         6,097
Provision charged to operations            2,980                    2,200
Loans charged off                         (1,831)                  (2,105)
Recoveries of loans previously
  charged off                                253                      172
Balance, end of period           $         7,861          $         6,364
                                 ================         ================

Ending loan portfolio            $       518,895          $       468,061
                                 ================         ================
Allowance as a percentage
  of ending loan portfolio                 1.51%                    1.36%
                                 ================         ================

<TABLE>
<CAPTION>

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, 1998:
Total Capital
<S>                                 <C>        <C>          <C>          <C>      <C>         <C>  
    to Risk Weighted Assets         $68,968    $11.76%    =>$46,918    =>8.0%   =>$58,647   =>10.0%
Tier I Capital
    to Risk Weighted Assets         $61,636    $10.51%    =>$23,459    =>4.0%   =>$35,189   => 6.0%
Tier I Capital
    to Average Assets               $61,636     $7.16%    =>$23,459    =>4.0%   =>$29,323   => 5.0%

</TABLE>
<PAGE>
Matters Related to the Year 2000

The Company utilizes software and related information  technologies that will be
affected by the date change in the year 2000.  Additionally,  the Company relies
on certain noninformation technology systems such as communications and building
operations  systems that could also be affected by the date change.  The failure
of these noninformation  technology systems could interrupt or shutdown business
operations for some period of time.  Based on ongoing  assessments  and testing,
the  Company  has  determined  that it will be  required  to modify  or  replace
portions of its software so that its  computer  systems  will  properly  utilize
dates  beyond  December  31,  1999.  The Company  presently  believes  that with
modifications to existing software and conversions to new software,  the adverse
effects of the year 2000 issue can be mitigated.  However, if such modifications
and conversions are not made, or are not completed in a timely manner,  the year
2000  issue  could  have a  material  impact  on the  operations  and  financial
condition  of the Company and could lead to  enforcement  actions by  regulatory
agencies.

The Company is committed to attaining  Year 2000  compliance,  ensuring that its
information systems accurately process dates and times,  including  calculating,
comparing  and  sequencing  data  from,  into  and  between  the  20th  and 21st
centuries. Non-information technology systems that may use embedded technologies
are included in the process.

The Year 2000 Project Plan underway at the Company covers five phases; awareness
and planning,  assessment,  renovation,  validation/testing  and implementation.
Within  this  project,  the  Company  has  focused  on  the  identification  and
priortization  of  in-house  systems,  reliance on vendor  supplied  systems and
software,  the  exchange/transmission  of data with external parties,  corporate
borrower  compliance  efforts and ongoing customer  awareness/communication.  In
addition,  the  Company  is  addressing  contingency  planning  at  the  system,
department and bank levels,  with focus on mission  critical systems and Company
functions.  The assessment phase is complete and the Company is completing tasks
concurrently  within  the  renovation,   validation/testing  and  implementation
phases.  The  majority  of mission  critical  systems  testing is  targeted  for
completion  by December  31,  1998.  The target date to complete all testing and
implementations is June 30, 1999.

For all phases,  the Company  budgeted an incremental  $175,000 for  programming
changes and testing of internally  developed  systems and software licensed from
third  parties.  Most of the $175,000  budgeted will be incurred and expensed in
1999. The estimated costs of and time frames related to these projects are based
on  estimates of the  Company's  management  and there can be no assurance  that
actual costs will not differ  materially  from the current  expectations or that
the proposed time frames can be  maintained.  Specific  factors that might cause
such material  differences include, but are not limited to, the availability and
cost of  personnel  trained in this area,  the ability to locate and correct all
relevant  computer  code,  the ability to formulate  and  implement  contingency
plans,  if required,  and similar  uncertainties.  The Company relies on various
third party systems or services to conduct its business,  including regional and
national  telecommunications and data processing services providers. The failure
of any of these  entities  to  satisfactorily  address the year 2000 issue could
have a  material  adverse  affect  on the  Company's  operations  and  financial
condition.  The Company is presently  monitoring the progress of these and other
entities' year 2000 compliance.

                                   Item 3. MARKET RISK MANAGEMENT

There have not been any  significant  changes in the market risk  profile of the
Bank since December 31, 1997.



                                               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.

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



(b)  Reports on Form 8-K:

         None


<PAGE>



     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 10, 1998                              /s/ Robert H. Steveson
      ---------------------                             ------------------------
                                                        Robert H. Steveson
                                                        President and
                                                        Chief Executive Officer


Date     November 10, 1998                              /s/ Robert M. Stanberry
      ---------------------                             ------------------------
                                                        Robert M. Stanberry
                                                        Vice President and
                                                        Chief Financial Officer


<PAGE>
[{"type": "10-Q", "sequence": "1", "description": "10-Q", "secsgml_size_bytes": 80122}]
{"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": "98743327"}, "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, 1998              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.)

                 63 Constitution Drive, Chico, California 95973
               (Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code                  530/898-0300

--------------------------------------------------------------------------------
(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 10, 1998:  7,040,490
TRICO BANCSHARES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
                                 (in thousands)

                                                                                 September 30,         December 31,
                                                                                    1998                  1997
                                                                             --------------------   ------------------ 
Assets:
Cash and due from banks                                                         $         35,828      $        48,476
Federal funds sold                                                                             -               15,000
                                                                             --------------------   ------------------
   Cash and cash equivalents                                                              35,828               63,476
Securities held-to-maturity
 (approximate fair value $79,438 and $88,950)                                             78,901               90,764
Securities available-for-sale, net of
 unrealized gain of $2,135 and $471                                                      206,290              175,753
Loans, net of allowance for loan losses of $(7,861) and $(6,459)                         511,034              442,508
Premises and equipment, net                                                               16,387               18,901
Investment in real estate properties                                                         274                  856
Other real estate owned                                                                    1,218                2,230
Accrued interest receivable                                                                5,677                5,701
Other assets                                                                              25,899               25,976
                                                                             --------------------   ------------------
     Total assets                                                                $       881,508      $       826,165
                                                                             ====================   ==================

Liabilities:
Deposits
 Noninterest-bearing demand                                                      $       121,312      $       122,069
 Interest-bearing demand                                                                 134,278              130,958
 Savings                                                                                 208,455              216,402
 Time certificates                                                                       260,947              254,665
                                                                             --------------------   ------------------
     Total deposits                                                                      724,992              724,094
Fed funds purchased                                                                       38,800               15,300
Accrued interest payable and other liabilities                                            10,598               10,207
Long term borrowings                                                                      36,428               11,440
                                                                             --------------------   ------------------
     Total liabilities                                                                   810,818              761,041

Shareholders' equity:
Common stock                                                                              48,517               48,161
Retained earnings                                                                         21,018               16,956
Unrealized gain on securities available for sale, net                                      1,155                    7
                                                                             --------------------   ------------------
     Total shareholders' equity                                                           70,690               65,124
                                                                             --------------------   ------------------
     Total liabilities and shareholders' equity                                  $       881,508      $       826,165
                                                                             ====================   ==================
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,
                                            ----------------------------------        ----------------------------------
                                                   1998                1997                  1998                1997
Interest income:
Interest and fees on loans                 $      12,666       $     11,767          $      35,909       $     33,338
  Interest on investment
   securities-taxable                                3,696              3,519                 11,186             10,165
  Interest on investment
   securities-tax exempt                               545                189                  1,230                440
  Interest on federal funds sold                         5                 24                    133                292
                                           ----------------    ---------------       ----------------     --------------
     Total interest income                          16,912             15,499                 48,458             44,235
                                           ----------------    ---------------       ----------------     --------------

Interest expense:
  Interest on deposits                               5,874              5,885                 17,453             16,775
  Interest on federal funds purchased                  199                 29                    267                160
  Interest on repurchase agreements                    153                  -                    365                  -
  Interest on other borrowings                         516                213                  1,095                899
                                           ----------------    ---------------       ----------------     --------------
     Total interest expense                          6,742              6,127                 19,180             17,834
                                           ----------------    ---------------       ----------------     --------------

     Net interest income                            10,170              9,372                 29,278             26,401

Provision for loan losses                              920              1,000                  2,980              2,200
                                           ----------------    ---------------       ----------------     --------------
    Net interest income after
     provision for loan losses                       9,250              8,372                 26,298             24,201

Noninterest income:
  Service charges and fees                           1,798              1,748                  5,555              4,923
  Other income                                         964                729                  4,168              2,059
                                           ----------------    ---------------       ----------------     --------------
     Total noninterest income                        2,762              2,477                  9,723              6,982
                                           ----------------    ---------------       ----------------     --------------

Noninterest expenses:
  Salaries and related expenses                      4,177              3,997                 12,592             11,604
  Other, net                                         4,282              4,203                 13,362             12,708
                                           ----------------    ---------------       ----------------     --------------
     Total noninterest expenses                      8,459              8,200                 25,954             24,312
                                           ----------------    ---------------       ----------------     --------------

Net income before income taxes                       3,553              2,649                 10,067              6,871

  Income taxes                                       1,269              1,035                  3,712              2,614
                                           ----------------    ---------------       ----------------     --------------
     Net income                                      2,284              1,614                  6,355              4,257

Basic earnings per common share*                 $    0.33          $    0.23             $     0.91          $    0.61
                                           ================    ===============       ================     ==============
Diluted earnings per common share*               $    0.31          $    0.22             $     0.87          $    0.59
                                           ================    ===============       ================     ==============

* Calculated  and restated to reflect the Company's  3-for-2  common stock split
effected October 30, 1998.
TRICO BANCSHARES
                      CONDENSED CONSOLIDATED STATEMENTS OF
                         CHANGES IN SHAREHOLDERS' EQUITY
                                   (unaudited)
                     (in thousands, except number of shares)

                                                                                           
                                                  Common stock                              Unrealized
                                          ------------------------------                      Gain on 
                                             Number                          Retained       Securities,
                                            of shares         Amount         earnings           net            Total
                                          --------------   -------------   -------------   --------------   -------------
Balance, December 31, 1997                    4,662,649        $ 48,161        $ 16,956      $         7        $ 65,124

Exercise of common stock
 options                                         33,081             253                                         $    253

3-for-2 Common Stock split*                   2,346,815                                                         $      -

Repurchase of common stock                       (2,055)            (21)            (38)                        $    (59)
  
Common stock cash
 dividends                                                                       (2,255)                        $ (2,255)
  
Change in unrealized
 gain on securities                                                                                1,148        $  1,148

Stock option amortization                                           124                                         $    124

Net income                                                                        6,355                         $  6,355
                                          --------------   -------------   -------------   --------------   -------------

Balance, September 30, 1998                   7,040,490        $ 48,517        $ 21,018        $   1,155        $ 70,690
                                          ==============   =============   =============   ==============   =============

* Represents  the effect of the Company's  3-for-2  common stock split  effected
October 30, 1998.
TRICO BANCSHARES
                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              (in thousands)
                                                                             For the nine months
                                                                             ended September 30,
                                                                         1998                   1997
                                                                   -----------------       ----------------
Operating activities:
Net income                                                            $       6,355          $       4,257
Adjustments to reconcile net income to net cash provided
 by operating activities:
    Provision for loan losses                                                 2,980                  2,200
    Provision for losses on other real estate owned                             586                    169
    Depreciation and amortization                                             1,942                  1,759
    Amortization of intangible assets                                         1,004                    957
    Accretion of investment security discounts                                  (77)                   (62)
    Deferred income taxes                                                      (715)                   (97)
    Investment security (gains) losses (net)                                   (250)                   (18)
    (Gain) loss on sale of OREO                                                 (23)                    33
    (Gain) loss on sale of loans                                               (351)                  (139)
    (Gain) loss on sale of fixed assets                                          79                    (14)
    Amortization of stock options                                               124                    146
    (Increase) decrease in interest receivable                                   24                   (504)
    Increase (decrease) in interest payable                                     203                    771
    (Increase) decrease in other assets and liabilities                        (898)               (10,771)
                                                                   -----------------       ----------------
         Net cash provided (used) by operating activities                    10,983                 (1,313)

Investing activities:
    Proceeds from maturities of securities held-to-maturity                  12,022                  8,595
    Proceeds from maturities of securities available-for-sale                67,019                 18,815
    Proceeds from sale of securities available-for-sale                      77,121                 29,033
    Purchases of securities available-for-sale                             (172,682)              (131,695)
    Net (increase) decrease in loans                                        (69,805)               (31,930)
    Proceeds from sales of fixed assets                                         183                      -
    Purchases of premises and equipment                                      (1,232)                (3,940)
    Purchases and additions to real estate properties                           (21)                     -
    Proceeds from the sale of OREO                                            1,439                    470
                                                                   -----------------       ----------------
         Net cash provided (used) by investing activities                   (85,956)              (110,652)

Financing activities:
    Net increase (decrease) in deposits                                         898                113,332
    Net increase (decrease) in Fed funds purchased                           23,500                 (4,900)
    Net increase (decrease) in repurchase agreements                              -                  4,700
    Borrowings under long-term debt agreements                               30,000                      -
    Payments of principal on long-term debt agreements                       (5,012)               (12,838)
    Cash dividends - Common                                                  (2,255)                (2,226)
    Repurchase of common stock                                                  (59)                   (30)
    Exercise of common stock options                                            253                    143
                                                                   -----------------       ----------------
         Net cash provided (used) by financing activities                    47,325                 98,181
                                                                   -----------------       ----------------

         Increase (decrease) in cash and cash equivalents                   (27,648)               (13,784)
         Cash and cash equivalents at beginning of year                      63,476                 52,231
                                                                   -----------------       ----------------
         Cash and cash equivalents at end of period                   $      35,828          $      38,447
                                                                   =================       ================

Supplemental information:
    Cash paid for taxes                                               $       5,035          $       2,924
    Cash paid for interest expense                                    $      18,977          $      18,187
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, 1998 and 1997, 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, 1997.

Note B - Comprehensive Income

As of  January  1,  1998,  the  Company  adopted  FASB  Statement  of  Financial
Accounting Standards No. 130, Reporting  Comprehensive  Income, (SFAS 130). This
Statement  established  standards for the reporting and display of comprehensive
income  and  its  components  in the  financial  statements.  For  the  Company,
comprehensive income includes net income reported on the statement of income and
changes in the fair value of its  available-for-sale  investments  reported as a
component of  shareholders'  equity.  The  following  table  presents net income
adjusted by the change in unrealized  gains or losses on the  available-for-sale
investments as a component of comprehensive income (in thousands).
Three months ended            Nine  months ended
                                                September 30,              September 30,
                                             1998          1997           1998        1997
                                             ------------------           ----------------
Net income                                   $ 2,284      $ 1,614         $ 6,355     $ 4,257
Net change in unrealized gains (losses)
  on available-for-sale investments              996          499           1,148         764
                                            --------     --------        --------     -------

Comprehensive income                         $ 3,280      $ 2,113         $ 7,503     $ 5,021
                                             =======      =======         ========    =======
Note C - Earnings per Share

On October 30, 1998, the Company effected a 3-for-2 stock split for shareholders
of record on October 9, 1998. Basic and diluted earnings per share retroactively
restated to reflect  this stock split are as follows  (in  thousands  except per
share data):
Three Months Ended September 30, 1998
                                                                      Weighted
                                                                       Average      Per-Share
                                                          Income       Shares        Amount
Basic Earnings per Share
Net income available to common shareholders            $ 2,284       7,025,057      $ 0.33
Common stock options outstanding                              --         240,061
Diluted Earnings per Share
  Net income available to common shareholders            $ 2,284       7,265,118      $ 0.31
                                                         =======       =========

                                                         Three Months Ended September 30, 1997
                                                                      Weighted
                                                                       Average      Per-Share
                                                          Income       Shares        Amount
Basic Earnings per Share
  Net income available to common shareholders            $ 1,614       6,986,579      $ 0.23
Common stock options outstanding                              --         262,585
Diluted Earnings per Share
  Net income available to common shareholders            $ 1,614       7,249,164      $ 0.22
                                                         =======       =========

                                                         Nine Months Ended September 30, 1998
                                                                      Weighted
                                                                       Average      Per-Share
                                                          Income       Shares        Amount
Basic Earnings per Share
  Net income available to common shareholders            $ 6,355       7,016,220      $ 0.91
Common stock options outstanding                              --         260,516
Diluted Earnings per Share
  Net income available to common shareholders            $ 6,355       7,276,736      $ 0.87
                                                         =======       =========

                                                         Nine Months Ended September 30, 1997
                                                                      Weighted
                                                                       Average      Per-Share
                                                          Income       Shares        Amount
Basic Earnings per Share
  Net income available to common shareholders            $ 4,257       6,974,565      $ 0.61
Common stock options outstanding                              --         266,129
Diluted Earnings per Share
  Net income available to common shareholders            $ 4,257       7,240,694      $ 0.59
                                                         =======       =========
Note D - Derivative Instruments and Hedging Activities

In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging  Activities.  The  Statement  establishes  accounting  and reporting
standards  requiring  that  every  derivative   instrument   (including  certain
derivative  instruments  embedded in other contracts) be recorded in the balance
sheet as either an asset or liability  measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized  currently in
earnings unless specific hedge accounting  criteria are met. Special  accounting
for qualifying  hedges allows a derivative's  gains and losses to offset related
results on the hedged item in the income statement,  and requires that a company
must formally document,  designate, and assess the effectiveness of transactions
that receive hedge accounting.

Statement  133 is effective for fiscal years  beginning  after June 15, 1999 and
the Company plans to adopt its provisions  effective  January 1, 2000. While the
Company  does not  currently  utilize  any  traditional  derivative  instruments
(options, swaps, forwards, etc.) in its business, certain of its investments and
long-term  borrowings may have embedded options due to call or put features that
may be required to be accounted for differently under this Statement as compared
to current accounting principles. The Company has not yet quantified the impacts
of adopting Statement 133 on its consolidated financial statements, however, the
Statement   could  increase  the   volatility  of  future   earnings  and  other
comprehensive income.
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 had record  quarterly  earnings of $2,284,000  for the third quarter
ended  September 30, 1998. The quarterly  earnings  represented a 41.5% increase
over the $1,614,000  reported for the same period of 1997.  Diluted earnings per
share for the third  quarter  1998 were $0.31  versus  $0.22 in the year earlier
period.  Earnings for the nine months ended  September 30, 1998 were  $6,355,000
versus year ago results of $4,257,000. The diluted earnings per share were $0.87
and $0.59 for the respective nine-month periods.

Pretax earnings for the third quarter of 1998 were $3,553,000  versus $2,649,000
for the same period in 1997.  Net interest  income  reflected  growth of 8.5% to
$10,170,000.  The interest  income  component  was up  $1,413,000  (9.1%) due to
higher  quarter  over  quarter  volume of earning  assets  ($792,701,000  versus
$721,002,000)  and a 2 basis point increase in yield on average  earning assets.
Interest expense  increased  $615,000  (10.0%) which was due  predominately to a
$54,317,000 (8.8%) increase in interest-bearing liabilities.  Average rates paid
for interest-bearing liabilities increased 4 basis points over the third quarter
of 1997.  Net  interest  margin was 5.27% for the third  quarter of 1998  versus
5.25% in the prior year. This higher net interest margin reflects the effects of
the higher growth rate in earning  assets versus  interest-bearing  liabilities.
The  provision  for loan  losses of $920,000  for the third  quarter of 1998 was
$80,000 lower than in the same quarter of 1997.

Noninterest income increased $285,000 (11.5%) for the third quarter of 1998 over
the prior  year  third  quarter.  The  service  charge  and fee  income  portion
increased 2.9% to $1,798,000.  Other income  increased  $235,000  (32.2%) in the
third  quarter of 1998 versus the same  quarter in 1997.  The  increase in other
income  includes gains on the sale of investments of $114,000 versus none in the
third quarter of 1997 and an additional  gain of $58,000  realized from the sale
of the credit card portfolio which took place in May 1998.  Noninterest  expense
increased  $259,000  (3.2%) in the third  quarter 1998 versus  1997.  Salary and
benefit  expense  increased  $180,000  (4.5%)  mostly  due to higher  commission
payments to sales personnel and accruals for incentive programs.  Other expenses
increased  $79,000  (1.9%).  On a quarter  over  quarter  basis,  marketing  and
advertising  expenses were up by $114,000 and all other  expenses were favorable
by a total of $35,000.

Assets of the Company totaled  $881,508,000 at September 30, 1998,  which was an
increase of  $55,343,000  (6.7%) and  $83,367,000  (10.5%) from the December 31,
1997 and September 30, 1997 ending  balances,  respectively.  Changes in earning
asset  balances  from  September  30,  1997  included  an  increase  in loans of
$50,834,000  to  $518,895,000  and an increase in securities of  $38,523,000  to
$285,191,000.  From year end 1997 balances,  nonperforming assets have decreased
$1,672,000 and total $5,807,000 at September 30, 1998. Nonperforming assets were
0.66% of total assets at quarter end.

Year to date 1998, on an annualized  basis, the Company has realized a return on
assets of 1.01% and a return on equity of 12.55%  versus  0.73% and 9.12% in the
first nine months of 1997.  TriCo  Bancshares  ended the  quarter  with a Tier 1
capital ratio of 10.5% and a total risk-based capital ratio of 11.8%.

The  following  tables  provide a summary  of the major  elements  of income and
expense for the third  quarter of 1998  compared  with the third quarter of 1997
and for the first nine  months of 1998  compared  with the first nine  months of
1997.
TRICO BANCSHARES
                              CONDENSED COMPARATIVE
                                INCOME STATEMENT
                (in thousands, except earnings per common share)

                                          Three months
                                         ended September 30,         Percentage
                                       1998            1997            Change
                                        (in thousands, except         increase
                                         earnings per share)         (decrease)
Interest income                    $    17,190     $    15,597          10.2%
Interest expense                         6,742           6,127          10.0%
                                   ------------    ------------

Net interest income                     10,448           9,470          10.3%

Provision for loan losses                  920           1,000         (8.0%)
                                   ------------    ------------

Net interest income after                9,528           8,470          12.5%
  provision for loan losses

Noninterest income                       2,762           2,477          11.5%
Noninterest expenses                     8,459           8,200           3.2%
                                   ------------    ------------

Net income before income taxes           3,831           2,747          39.5%
Income taxes                             1,269           1,035          22.6%
Tax equivalent adjustment1                 278              98         183.2%
                                   ------------    ------------

Net income                               2,284           1,614          41.5%
                                   ============    ============

Diluted earnings per common share2 $      0.31     $      0.22          40.9%

1 Interest on tax-free  securities is reported on a tax equivalent basis of 1.51
  and 1.52 for September 30, 1998 and 1997.
2 Calculated  and restated to reflect the Company's  3-for-2  common stock split
  effected October 30, 1998.
TRICO BANCSHARES
                              CONDENSED COMPARATIVE
                                INCOME STATEMENT
                (in thousands, except earnings per common share)

                                             Nine months
                                         ended September 30,         Percentage
                                       1998            1997            Change
                                        (in thousands, except         increase
                                         earnings per share)         (decrease)
Interest income                    $    49,085     $    44,464          10.4%
Interest expense                        19,180          17,834           7.5%
                                   ------------    ------------

Net interest income                     29,905          26,630          12.3%

Provision for loan losses                2,980           2,200          35.5%
                                   ------------    ------------

Net interest income after               26,925          24,430          10.2%
  provision for loan losses

Noninterest income                       9,723           6,982          39.3%
Noninterest expenses                    25,954          24,312           6.8%
                                   ------------    ------------

Net income before income taxes          10,694           7,100          50.6%
Income taxes                             3,712           2,614          42.0%
Tax equivalent adjustment1                 627             229         174.2%
                                   ------------    ------------

Net income                               6,355           4,257          49.3%
                                   ============    ============

Diluted earnings per common share2 $      0.87     $      0.59          47.5%

1 Interest on tax-free  securities is reported on a tax equivalent basis of 1.51
  and 1.52 for September 30, 1998 and 1997.
2 Calculated  and restated to reflect the Company's  3-for-2  common stock split
  effected October 30, 1998.
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, 1998,  interest income increased  $1,593,000
(10.2%)  over the same  period in 1997.  The  average  balance of total  earning
assets  was  higher  by  $71,699,000  (9.9%).  The  average  balances  of  loans
outstanding and securities increased $40,629,000 and $32,362,000,  respectively.
These  two  volume  increases   accounted  for  additional  interest  income  of
$1,029,000 and $484,000, respectively. The average rate received on loans in the
third  quarter of 1998 was 10.02%  which was a decrease of 11 basis  points from
the third  quarter last year.  The lower rate resulted in a decrease in interest
income of $130,000. The average rate received on securities rose 32 basis points
to 6.30% which accounted for a $229,000 increase in interest income. The overall
yield on average earning assets rose 2 basis points to 8.67%.

For the third quarter of 1998,  interest  expense  increased by $615,000 (10.0%)
over the year earlier period.  Average balances of interest-bearing  liabilities
were up  $54,317,000  (8.8%) which  resulted in a $665,000  increase in interest
expense.  Average balances of long-term debt and overnight  borrowings increased
$24,987,000  (218%)  and  $16,778,000  (228%)  respectively  and  accounted  for
$584,000   of  the   change  in   interest   expense.   Rate   variances   on  a
quarter-over-quarter basis resulted in a decrease of $50,000 in interest expense
for the third quarter of 1998. The overall rate on average  earning  liabilities
rose 4 basis points to 4.03%

The combined effect of the increases in interest income and interest expense for
the third quarter of 1998 versus the same period in 1997 resulted in an increase
of  $978,000  (10.3%)  in net  interest  income.  Net  interest  margin  for the
comparative quarters increased from 5.25% to 5.27%. The increase in net interest
margin was  mainly due to average  earning  assets  outgrowing  average  earning
liabilities by $17,382,000 for the comparative  quarters. A $14,460,000 increase
in the average balance of noninterest bearing deposits accounted for most of the
difference in growth between earning assets and interest-bearing liabilities.

Net interest income and net interest margin  comparisons  between the first nine
months  of 1998 and 1997 are  influenced  by the  inclusion  of nine  months  of
operations  in 1998 of the nine  branches  purchased  from  Wells  Fargo Bank on
February 21, 1997,  compared to the  inclusion of just over seven months of such
operations  in  1997.  As  a  result  of  the  acquisition  the  Company  gained
approximately  $150,000,000 in deposits which where used to purchase securities.
In addition, during the second quarter of 1998, the Company borrowed $30,000,000
from the Federal Home Loan Bank and negotiated for  $20,000,000 in  certificates
of  deposits  with  the  State of  California.  These  funds  were  invested  in
securities at an average spread of 149 basis points. The ongoing effect of these
transactions  will be to increase net interest  income and slightly  depress net
interest  margin.  To the extent the Company is successful in replacing  some of
the investment  portfolio with higher yielding  loans,  net interest margin will
tend to move higher.  From March 31, 1997 to September  30, 1998,  the Company's
loans balance has grown $89,280,000 (20.8%).

The  nine-month  period ending  September  30, 1998 reflects an interest  income
increase  of  $4,621,000  (10.4%)  over the  same  period  in 1997.  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
$4,220,000.  The  balance of the  increase  came from  higher  yields on earning
assets.  The average  rate  received  on all  earning  assets for the nine month
period  ended  September  30, 1998 was 8.58% or 4 basis  points  higher than the
8.54% for the same period in 1997.

Interest expense for the nine-month period increased $1,346,000 (7.5%) from that
for the same period in 1997.  Volume  increases in deposits and borrowings added
$1,490,000 of interest expense.  This was offset in part by slightly lower rates
on time deposits and long-term debt  outstanding.  Overall average rates paid on
interest-bearing  liabilities in the first nine months of 1998 decreased 1 basis
point to 3.96% from the same period in 1997.

The combined effect of the increase in both interest income and interest expense
for the first  nine  months of 1998  versus  1997  resulted  in an  increase  of
$3,275,000 (12.3%) in net interest income.
Net interest margin rose 11 basis points to 5.23% from 5.12%.

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, 1998 versus the same periods
in 1997.
TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands)
                                                                 Three Months Ended
                                               30-Sep-98                                       30-Sep-97

                                  Average          Income/        Yield/          Average          Income/         Yield/
                                  Balance1         Expense        Rate            Balance1         Expense         Rate
Assets
Earning assets
Loans 2,3                      $  505,377       $ 12,666         10.02%       $  464,748        $ 11,767          10.13%
  Securities4                       286,879          4,519          6.30%          254,517           3,806           5.98%
  Federal funds sold                    445              5          4.49%            1,737              24           5.53%
                               -------------    -----------                    ------------     -----------
    Total earning assets            792,701         17,190          8.67%          721,002          15,597           8.65%
                                                -----------                                     -----------
Cash and due from bank               35,150                                         31,777
Premises and equipment               16,665                                         16,936
Other assets, net                    32,091                                         30,389
Less:  allowance
  for loan losses                    (7,424)                                        (6,208)
                               -------------                                   ------------
      Total                      $  869,183                                     $  793,896
                               =============                                   ============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                $  136,991            788          2.30%       $  126,420             720           2.28%
  Savings deposits                  209,166          1,623          3.10%          208,147           1,613           3.10%
  Time deposits                     262,592          3,463          5.28%          261,630           3,552           5.43%
Federal funds purchased              13,552            199          5.87%            1,989              29           5.83%
Short-term debt                      10,583            153          5.78%            5,368              42           3.13%
Long-term debt                       36,431            516          5.67%           11,444             171           5.98%
                               -------------    -----------                    ------------     -----------
   Total interest-bearing
      liabilities                   669,315          6,742          4.03%          614,998           6,127           3.99%
                                                -----------                                     -----------
Noninterest-bearing deposits        119,724                                        105,264
Other liabilities                    11,164                                         10,299
Shareholders' equity                 68,980                                         63,335
                               -------------                                   ------------
    Total liabilities
      and shareholders' equity   $  869,183                                     $  793,896
                               =============                                   ============

Net interest rate spread5                                           4.64%                                            4.66%
Net interest income/net                           $ 10,448                                       $   9,470
                                                ===========                                     ===========
  interest margin6                                   5.27%                                           5.25%
                                                ===========                                     ===========

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 $744,000 in 1998 and $496,000 in 1997.
4 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 at September 30, 1998 and
1997.
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-98                                        30-Sep-97

                                   Average         Income/         Yield/           Average        Income/         Yield/
                                   Balance1        Expense         Rate             Balance1       Expense         Rate
Assets 
Earning assets
Loans 2,3                        $ 477,493     $   35,909         10.03%         $ 445,908      $   33,338         9.97%
  Securities4                        282,063         13,043          6.17%           240,781          10,834         6.00%
  Federal funds sold                   3,083            133          5.75%             7,224             292         5.39%
                                -------------   ------------                     ------------   -------------
    Total earning assets             762,639         49,085          8.58%           693,913          44,464         8.54%
                                                ------------                                    -------------
Cash and due from bank                32,939                                          37,107
Premises and equipment                17,836                                          16,301
Other assets, net                     33,330                                          31,551
Less:  allowance
  for loan losses                    (7,025)                                         (6,086)
                                -------------                                    ------------
      Total                        $ 839,719                                       $ 772,786
                                =============                                    ============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                  $ 134,599          2,291          2.27%         $ 118,924           2,019         2.26%
  Savings deposits                   211,141          4,860          3.07%           206,087           4,736         3.06%
  Time deposits                      260,365         10,302          5.28%           250,038          10,020         5.34%
Federal funds purchased                6,151            267          5.79%             3,807             160         5.60%
Short-term debt                        8,521            365          5.71%             8,325             354         5.67%
Long-term debt                        25,610          1,095          5.70%            12,316             545         5.90%
                                -------------   ------------                     ------------   -------------
   Total interest-bearing
      liabilities                    646,387         19,180          3.96%           599,497          17,834         3.97%
                                                ------------                                    -------------
Noninterest-bearing deposits         114,503                                         100,955
Other liabilities                     11,297                                          10,081
Shareholders' equity                  67,532                                          62,253
                                -------------                                    ------------
    Total liabilities
      and shareholders' equity     $ 839,719                                       $ 772,786
                                =============                                    ============

Net interest rate spread5                                            4.62%                                           4.57%
Net interest income/net                          $   29,905                                       $   26,630
                                                ============                                    =============
  interest margin6                                    5.23%                                            5.12%
                                                ============                                    =============

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 $2,173,000 in 1998 and $1,520,000 in 1997.
4 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 at September 30, 1998 and
1997.
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,
                                               1998 over 1997

                                                                  Yield/
                                        Volume       Rate4        Total
                                  -------------  ----------   ----------
Increase (decrease) in interest income:
    Loans 1,2                       $    1,029   $    (130)   $     899
    Investment securities3                 484         229          713
    Federal funds sold                     (18)         (1)         (19)
                                  -------------  ----------   ----------
      Total                              1,495          98        1,593
                                  -------------  ----------   ----------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)                                             
                                            60           8           68
    Savings deposits                                                 
                                             8           2           10
    Time deposits                                                  
                                            13        (102)         (89)
    Federal funds purchased                                         
                                           169           1          170 
    Short-term debt                                                
                                            41          70          111
    Long-term debt                                                  
                                           374         (29)         345
                                  -------------  ----------   ----------
      Total                                665         (50)         615
                                  -------------  ----------   ----------

Increase (decrease) in
  net interest income                $     830   $     148     $    978
                                  =============  ==========   ==========

1 Nonaccrual loans are included.
2 Interest income on loans includes fee income on loans of $744,000 in 1998 and
  $496,000  in 1997.
3 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 for
  September 30, 1998 and 1997.
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,
                                                    1998 over 1997

                                                                     Yield/
                                            Volume        Rate4       Total
                                         ----------   ----------  ----------
Increase (decrease) in interest income:
    Loans 1,2                            $   2,362     $    209   $   2,571
    Investment securities3                   1,858          351       2,209
    Federal funds sold                       (167)            8        (159)
                                         ----------   ----------  ----------
      Total                                  4,053          568       4,621
                                         ----------   ----------  ----------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)                       266            6         272
    Savings deposits                           116            8         124
    Time deposits                              414         (132)        282
    Federal funds purchased                     98            9         107
    Short-term debt                              8            3         11
    Long-term debt                             588          (38)        550
                                         ----------   ----------  ----------
      Total                                  1,490         (144)      1,346
                                         ----------   ----------  ----------

Increase (decrease) in
  net interest income                    $   2,563     $    712   $   3,275
                                         ==========   ==========  ==========

1 Nonaccrual loans are included.
2 Interest income on loans includes fee income on loans of $2,173,000 in 1998
  and $1,520,000 in 1997.
3 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 for
  September 30, 1998 and 1997.
4 The rate/volume variance has been included in the rate variance.
Provision for Loan Losses

The Bank  provided  $920,000 for loan losses in the third quarter of 1998 versus
$1,000,000 in 1997. Net  charge-offs  for all loans in the third quarter of 1998
totaled  $197,000  versus  $869,000  in  the  year  earlier  period.  Additional
provisions  required  to cover the  effects of changes in the  overall  economic
environment on the loan  portfolio  amounted to $723,000 in the third quarter of
1998. As reported in the Form 10-Q for the first quarter of 1998,  the Bank sold
its credit card  portfolio  effective  May 1, 1998,  and is no longer liable for
charge-offs  in that  portfolio.  For all of 1997,  net credit card  charge-offs
totaled $958,000  representing  36.3% of the total net charge-offs for the year.
For the nine months  ended  September  30,  1998,  net credit  card  charge-offs
totaled $316,000  (through the sale date of May 1, 1998)  representing  20.0% of
total net charge-offs of $1,578,000.

Noninterest Income

Noninterest  income for the third quarter of 1998,  increased  $285,000  (11.5%)
from the same period in 1997.  Income from  service  charges and fees  increased
2.9% to $1,798,000. Other income increased $235,000 (32.2%) in the third quarter
of 1998 versus the same quarter in 1997.  The increase in other income  includes
gains on the sale of investments of $114,000 versus none in the third quarter of
1997 and an additional gain of $58,000 realized from the sale of the credit card
portfolio which took place in May 1998.

The Bank sold its credit card portfolio of $14,365,000 for a gain of $793,000 in
the second  quarter of 1998.  For the nine  months  ended  September  30,  1998,
excluding the gain on the sale of the credit card portfolio,  noninterest income
was up $1,890,000 (27.1%) over the same period for 1997. Part of the increase is
attributable  to  full  first  quarter  1998  operations  of the  nine  branches
purchased  from Wells Fargo Bank versus only five weeks of operations  for those
branches  in the first  quarter of 1997.  Service  charges and fee income was up
$632,000  (12.8%)  as a result  of  increased  volume  of  accounts  and fees on
non-Bank  customer ATM  transactions  implemented in the fourth quarter of 1997.
Other income,  exclusive of the credit card gain,  increased $1,258,000 (61.1%).
Significant  increases  in  the  following  items  contributed  to  the  overall
increase:  vendor rebates $324,000,  gain on sale of investments $232,000,  loan
recoveries in excess of amounts previously charged-off $228,000, gain on sale of
mortgage loans $212,000.

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  $259,000 (3.2%) in the
third quarter 1998 versus 1997.  Salary and benefit expense  increased  $180,000
(4.5%) mostly due to higher commission  payments to sales personnel and accruals
for various incentive  programs.  Other expenses  increased $79,000 (1.9%). On a
quarter-over-quarter  basis,  the  provision for OREO  property  valuations  was
reduced by $49,000 and all other expenses were reduced by a total of $30,000.

For the nine-month period noninterest  expenses  increased  $1,642,000 (6.8%) in
1998 over 1997.  Part of the increase is attributable to full first quarter 1998
operations of the nine branches purchased from Wells Fargo Bank versus only five
weeks of operations  for those  branches in the first quarter of 1997.  One time
direct  costs  related  to the  conversion  of the nine Wells  branches  totaled
$358,000 in the first nine months of 1997.  Salary and benefit expense increased
$988,000 (8.5%) on a year-over-year  basis. The salary expense was higher due to
first quarter effect of increased staff from the 1997 Wells branch  acquisition,
higher  benefit  costs,  commissions  paid to  sales  staff,  various  incentive
programs,  and normal salary progression.  Other noninterest  expenses increased
$654,000 (5.2%) in 1998 over 1997. Occupancy costs increased $165,000 mostly due
to higher depreciation  relating to equipment for the acquired branches,  leases
for five of the acquired branches and upgraded  technology.  Other expenses such
as computer communications,  telephone, ATM charges, courier service and postage
were higher as a result of the branch  acquisition.  Amortization  of intangible
assets  related to the acquired  branches  added $47,000 of expense in the first
nine months of 1998.  Provisions for OREO property valuations increased $417,000
to $586,000 for the nine months.

Provision for Income Taxes

The effective tax rate for the nine months ended September 30, 1998 is 36.9% and
reflects a decrease from 38.0% in the year earlier period. The tax rate is lower
than the  statutory  rate of 40.4% due to  nontaxable  earnings  from  municipal
bonds.  The Bank has been increasing its holdings of tax-exempt  municipal bonds
so the tax rate should continue to be lower than the statutory rate.

Securities

At  September  30,  1998,  securities  held-to-maturity  had  a  cost  basis  of
$78,901,000  and an  approximate  fair  value  of  $79,438,000.  This  portfolio
contained  mortgage-backed  securities totaling $56,683,000 of which $21,946,000
were    collateralized    mortgage    obligations    (CMOs).    The   securities
available-for-sale  portfolio had a fair value of $206,290,000  and an amortized
cost of $204,155,000.  This portfolio contained mortgage-backed  securities with
an amortized cost of $99,545,000 of which $14,831,000 were CMOs.

At  December  31,  1997,  securities   held-to-maturity  had  a  cost  basis  of
$90,764,000  and an  approximate  fair  value  of  $88,950,000.  This  portfolio
contained  mortgage-backed  securities totaling $68,429,000 of which $27,821,000
were  CMOs.  The  securities  available-for-sale  portfolio  had a fair value of
$175,753,000  and an amortized cost of  $175,282,000.  This portfolio  contained
mortgage-backed  securities  with an  amortized  cost of  $36,556,000  of  which
$19,677,000 were CMOs.

Loans

At September 30, 1998,  loan balances were  $50,834,000  (10.9%) higher than the
ending  balances at September 30, 1997 and  $69,928,000  (15.6%) higher than the
ending  balances at December 31, 1997.  The Bank sold its credit card  portfolio
totaling  $14,365,000  in the  second  quarter  of 1998.  Had these  loans  been
included at quarter  end,  loan growth on a year over year basis would have been
13.9%.  On a year over year basis at September  30,  commercial  and real estate
loan  balances  were higher while there was a decrease in consumer  loans due to
the sale of the credit cards.  Real estate  construction  loans were  relatively
flat.

Nonperforming Loans

As shown in the following table, total nonperforming assets have decreased 22.4%
to $5,807,000 in the first nine months of 1998.  Nonperforming  assets represent
only 0.66% of total assets. Both nonaccrual loans and OREO decreased during this
period.  All nonaccrual loans are considered to be impaired when determining the
valuation allowance under SFAS 114. The Bank's Collections  Department personnel
continue to make a concerted effort to work problem and potential  problem loans
to reduce risk of loss.

                                          September 30,       December 31,
                                              1998              1997

Nonaccrual loans                          $    4,356        $    4,721
Accruing loans past due 90 days or more          233               528
Restructured loans (in compliance with
  modified terms)                                  -                 -
                                         ------------      ------------
     Total nonperforming loans                 4,589             5,249
Other real estate owned                        1,218             2,230
                                         ------------      ------------
     Total nonperforming assets            $   5,807             7,479
                                         ============      ============
Nonincome producing investments in real
  estate held by Bank's real estate
    development subsidiary                 $    274         $      856
                                         ============      ============
Nonperforming loans to total loans             0.88%             1.17%
Allowance for loan losses to
  nonperforming loans                           171%              123%
Nonperforming assets to total assets           0.66%             0.91%
Allowance for loan losses to
  nonperforming assets                          135%               86%

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
                                     1998                          1997
                                               (in thousands)
Balance, Beginning of period     $         6,459          $         6,097
Provision charged to operations            2,980                    2,200
Loans charged off                         (1,831)                  (2,105)
Recoveries of loans previously
  charged off                                253                      172
Balance, end of period           $         7,861          $         6,364
                                 ================         ================

Ending loan portfolio            $       518,895          $       468,061
                                 ================         ================
Allowance as a percentage
  of ending loan portfolio                 1.51%                    1.36%
                                 ================         ================
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, 1998:
Total Capital
to Risk Weighted Assets         $68,968    $11.76%    =>$46,918    =>8.0%   =>$58,647   =>10.0%
Tier I Capital
    to Risk Weighted Assets         $61,636    $10.51%    =>$23,459    =>4.0%   =>$35,189   => 6.0%
Tier I Capital
    to Average Assets               $61,636     $7.16%    =>$23,459    =>4.0%   =>$29,323   => 5.0%
Matters Related to the Year 2000

The Company utilizes software and related information  technologies that will be
affected by the date change in the year 2000.  Additionally,  the Company relies
on certain noninformation technology systems such as communications and building
operations  systems that could also be affected by the date change.  The failure
of these noninformation  technology systems could interrupt or shutdown business
operations for some period of time.  Based on ongoing  assessments  and testing,
the  Company  has  determined  that it will be  required  to modify  or  replace
portions of its software so that its  computer  systems  will  properly  utilize
dates  beyond  December  31,  1999.  The Company  presently  believes  that with
modifications to existing software and conversions to new software,  the adverse
effects of the year 2000 issue can be mitigated.  However, if such modifications
and conversions are not made, or are not completed in a timely manner,  the year
2000  issue  could  have a  material  impact  on the  operations  and  financial
condition  of the Company and could lead to  enforcement  actions by  regulatory
agencies.

The Company is committed to attaining  Year 2000  compliance,  ensuring that its
information systems accurately process dates and times,  including  calculating,
comparing  and  sequencing  data  from,  into  and  between  the  20th  and 21st
centuries. Non-information technology systems that may use embedded technologies
are included in the process.

The Year 2000 Project Plan underway at the Company covers five phases; awareness
and planning,  assessment,  renovation,  validation/testing  and implementation.
Within  this  project,  the  Company  has  focused  on  the  identification  and
priortization  of  in-house  systems,  reliance on vendor  supplied  systems and
software,  the  exchange/transmission  of data with external parties,  corporate
borrower  compliance  efforts and ongoing customer  awareness/communication.  In
addition,  the  Company  is  addressing  contingency  planning  at  the  system,
department and bank levels,  with focus on mission  critical systems and Company
functions.  The assessment phase is complete and the Company is completing tasks
concurrently  within  the  renovation,   validation/testing  and  implementation
phases.  The  majority  of mission  critical  systems  testing is  targeted  for
completion  by December  31,  1998.  The target date to complete all testing and
implementations is June 30, 1999.

For all phases,  the Company  budgeted an incremental  $175,000 for  programming
changes and testing of internally  developed  systems and software licensed from
third  parties.  Most of the $175,000  budgeted will be incurred and expensed in
1999. The estimated costs of and time frames related to these projects are based
on  estimates of the  Company's  management  and there can be no assurance  that
actual costs will not differ  materially  from the current  expectations or that
the proposed time frames can be  maintained.  Specific  factors that might cause
such material  differences include, but are not limited to, the availability and
cost of  personnel  trained in this area,  the ability to locate and correct all
relevant  computer  code,  the ability to formulate  and  implement  contingency
plans,  if required,  and similar  uncertainties.  The Company relies on various
third party systems or services to conduct its business,  including regional and
national  telecommunications and data processing services providers. The failure
of any of these  entities  to  satisfactorily  address the year 2000 issue could
have a  material  adverse  affect  on the  Company's  operations  and  financial
condition.  The Company is presently  monitoring the progress of these and other
entities' year 2000 compliance.

                                   Item 3. MARKET RISK MANAGEMENT

There have not been any  significant  changes in the market risk  profile of the
Bank since December 31, 1997.

                                               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.

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

(b)  Reports on Form 8-K:

         None
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 10, 1998                              /s/ Robert H. Steveson
      ---------------------                             ------------------------
                                                        Robert H. Steveson
                                                        President and
                                                        Chief Executive Officer

Date     November 10, 1998                              /s/ Robert M. Stanberry
      ---------------------                             ------------------------
                                                        Robert M. Stanberry
                                                        Vice President and
                                                        Chief Financial Officer