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, 2002              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
                                -----        -----

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                             Yes           No  X
                                -----        -----

                      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 12, 2002:  7,045,050


<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

Forward Looking Statements                                                    1

PART I - FINANCIAL INFORMATION                                                2

      Item 1 - Financial Statements                                           2

         Financial Summary                                                    6

         Notes to Unaudited Condensed Consolidated Financial Statements       7

      Item 2 - Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                         11

      Item 3 - Quantitative and Qualitative Disclosure about Market Risk     23

      Item 4 - Controls and Procedures                                       24

PART II - OTHER INFORMATION                                                  25

      Item 1 - Legal Proceedings                                             25

      Item 6 - Exhibits and Reports on Form 8-K                              25

      Signatures                                                             25

      Certifications                                                         26

      Exhibits                                                               28

      Exhibit 11.1 - Computation of Earnings Per Share                       28

      Exhibit 99.1 - Certification Required by 18 U.S.C. Section 1350        29

      Exhibit 99.2 - Certification Required by 18 U.S.C. Section 1350        29


<PAGE>

                           FORWARD-LOOKING STATEMENTS

This  report  on Form  10-Q  contains  forward-looking  statements  about  TriCo
Bancshares (the "Company") for which it claims the protection of the safe harbor
provisions  contained in the Private  Securities  Litigation Reform Act of 1995.
These forward-looking statements are based on Management's current knowledge and
belief and include  information  concerning  the  Company's  possible or assumed
future financial condition and results of operations.  A number of factors, some
of which are beyond the  Company's  ability to predict or  control,  could cause
future  results to differ  materially  from those  contemplated.  These  factors
include  but are not limited to (1) a continued  slowdown  in the  national  and
California  economies;  (2) increased economic uncertainty created by the recent
terrorist  attacks in the United States and the uncertain effect of these events
on the  national  and  regional  economies;  (4)  changes in the  interest  rate
environment;  (5)  changes  in the  regulatory  environment;  (6)  significantly
increasing  competitive pressure in the banking industry;  (7) operational risks
including  data  processing   system  failures  or  fraud;  (8)  the  effect  of
acquisitions  and  integration  of acquired  businesses;  (9) volatility of rate
sensitive deposits; (10) asset/liability matching risks and liquidity risks; and
(11) changes in the securities markets.

The reader is directed to the Company's  annual report on Form 10-K for the year
ended  December 31, 2001,  for further  discussion of factors which could affect
the Company's  business and cause actual results to differ materially from those
expressed in any forward-looking statement made in this report.


                                       1

<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>
<CAPTION>

                                            TRICO BANCSHARES
                                      CONSOLIDATED BALANCE SHEETS
                                             (In thousands)
                                                                  (Unaudited)               (Unaudited)
                                                               At September 30,           At December 31,
                                                            2002              2001             2001
<S>                                                          <C>               <C>              <C>
                                                     ---------------------------------------------------
Assets:
     Cash and due from banks                              $56,749           $48,317          $59,264
     Federal funds sold                                    23,400            27,000           18,700
                                                     ---------------------------------------------------
         Cash and cash equivalents                         80,149            75,317           77,964

     Investment securities available for sale             268,921           210,789          224,590
     Loans
         Commercial                                       142,290           151,772          130,054
         Consumer                                         191,601           149,258          155,046
         Real estate mortgages                            313,191           322,096          326,897
         Real estate construction                          36,472            45,031           46,735
                                                     ---------------------------------------------------
                                                          683,554           668,157          658,732

     Allowance for loan losses                            (14,382)          (12,437)         (13,058)
                                                     ---------------------------------------------------
         Loans, net of allowance for loan losses          669,172           655,720          645,674
     Premises and equipment, net                           16,583            16,510           16,457
     Cash value of life insurance                          15,045            14,559           14,602
     Other real estate owned                                    -               723               71
     Accrued interest receivable                            5,552             6,087            5,522
     Deferred income taxes                                  7,957             8,164            9,334
     Intangible assets                                      4,387             5,262            5,070
     Other assets                                           5,757             3,019            6,163
                                                     ---------------------------------------------------
         Total Assets                                  $1,073,523          $996,150       $1,005,447
                                                     ===================================================

Liabilities:
     Deposits:
         Noninterest-bearing demand                      $202,895          $177,970         $190,386
         Interest-bearing demand                          175,883           155,304          165,542
         Savings                                          268,182           228,367          247,399
         Time certificates, $100,000 and over              86,945            80,865           70,302
         Other time certificates                          203,990           216,974          206,764
                                                     ---------------------------------------------------
         Total deposits                                   937,895           859,480          880,393
     Accrued interest payable                               2,608             4,350            3,488
     Other Liabilities                                     13,667            10,977           11,677
     Long-term debt and other borrowings                   22,932            32,963           22,956
                                                     ---------------------------------------------------
         Total Liabilities                                977,102           907,770          918,514
                                                     ===================================================

Shareholders' Equity:
     Authorized - 20,000,000 shares of common stock
     Issued and outstanding:
           7,035,590 at September 30, 2002                 50,188
           7,018,080 at September 30, 2001                                   49,395
           7,000,980 at December 31, 2001                                                     49,679
     Retained earnings                                     43,900            37,974           37,909
     Accumulated other comprehensive income, net            2,333             1,011             (655)
                                                     ---------------------------------------------------
         Total Shareholders' Equity                        96,421            88,380           86,933
                                                     ===================================================
Total Liabilities and Shareholders' Equity             $1,073,523          $996,150       $1,005,447
                                                     ===================================================


                                       2

</TABLE>
<PAGE>
<TABLE>
<CAPTION>



                                             TRICO BANCSHARES
                        CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                  (In thousands, except per share data)

                                                             (Unaudited)                (Unaudited)
                                                         Three months ended          Nine months ended
                                                         2002           2001       2002           2001
<S>                                                       <C>            <C>        <C>            <C>
                                                     -------------------------------------------------------
Interest Income:
  Interest and fees on loans                            $13,333        $15,132    $39,387        $44,993
  Interest on federal funds sold                            143            370        476          1,321
  Interest on investment securities available for sale
     Taxable                                              2,410          2,202      6,949          7,158
     Tax exempt                                             549            555      1,656          1,666
                                                     -------------------------------------------------------
     Total interest income                               16,435         18,259     48,468         55,138
                                                     -------------------------------------------------------
Interest Expense:
  Interest on interest-bearing demand deposits              115            368        350          1,325
  Interest on savings                                       656          1,107      2,011          3,899
  Interest on time certificates of deposit                2,129          3,623      6,340         12,380
  Interest on short-term borrowing                            1              2          1              3
  Interest on long-term debt                                326            512        967          1,523
                                                     -------------------------------------------------------
     Total interest expense                               3,227          5,612      9,669         19,130
                                                     -------------------------------------------------------
Net Interest Income                                      13,208         12,647     38,799         36,008
                                                     -------------------------------------------------------
Provision for loan losses                                   700            600      2,000          3,250
                                                     -------------------------------------------------------
Net Interest Income After Provision for Loan Losses      12,508         12,047     36,799         32,758
                                                     -------------------------------------------------------

Noninterest Income:
  Service charges and fees                                3,521          2,045      7,635          6,015
  Gain on sale of investments                                 -              -          -          1,756
  Gain on sale of loans                                     752            494      2,254          1,292
  Commissions on sale of non-deposit investment products    712            678      1,989          1,865
  Other                                                     428            496      1,304          1,390
                                                     -------------------------------------------------------
  Total Noninterest Income                                5,413          3,713     13,182         12,318
                                                     -------------------------------------------------------
Noninterest Expense:
  Salaries and related benefits                           6,344          5,431     17,856         15,765
  Other                                                   5,789          5,034     15,642         14,672
                                                     -------------------------------------------------------
  Total Noninterest Expense                              12,133         10,465     33,498         30,437
                                                     -------------------------------------------------------
Income Before Income Taxes                               5,788          5,295     16,483          14,639
                                                     -------------------------------------------------------
  Provision for income taxes                             2,161          2,050      6,163           5,578
                                                     -------------------------------------------------------
Net Income                                              $3,627         $3,245    $10,320          $9,061
                                                     -------------------------------------------------------

Comprehensive Income:
  Change in unrealized gain (loss) on
     securities available for sale, net                    940          1,411      2,988           1,695
  Net change in minimum pension liability                    -              -          -            (360)
                                                     -------------------------------------------------------
Comprehensive Income                                    $4,567         $4,656    $13,308         $10,396
                                                     =======================================================

Average Shares Outstanding                               7,026          7,044      7,010           7,087
Diluted Average Shares Outstanding                       7,231          7,231      7,188           7,237

Per Share Data
     Basic Earnings                                      $0.52          $0.46      $1.47           $1.28
     Diluted Earnings                                    $0.50          $0.45      $1.44           $1.25
     Dividends Paid                                      $0.20          $0.20      $0.60           $0.60


                                       3

</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                TRICO BANCSHARES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                            (In thousands, unaudited)
                                                                               Accumulated
                                                                                  Other
                                                       Common        Retained  Comprehensive
                                                        Stock        Earnings  Income, net     Total
                                                     ---------------------------------------------------
<S>                                                      <C>           <C>          <C>         <C>
Balance, December 31, 2000                             $50,428       $35,129      ($324)      $85,233
   Net income for the period                                           9,061                    9,061
   Stock issued, including
     stock option tax benefits                             386                                    386
   Repurchase of common stock                           (1,419)       (1,979)                  (3,398)
   Dividends                                                          (4,237)                  (4,237)
   Unrealized gain on securities available
     for sale, net                                                                1,695         1,695
   Change in minimum pension liability, net                                        (360)         (360)
                                                     ---------------------------------------------------
Balance September 30, 2001                             $49,395       $37,974     $1,011       $88,380
                                                     ===================================================

Balance, December 31, 2001                             $49,679       $37,909      ($655)      $86,933
   Net income for the period                                          10,320                   10,320
   Stock issued, including
     stock option tax benefits                             579                                    579
   Repurchase of common stock                              (70)         (119)                    (189)
   Dividends                                                          (4,210)                  (4,210)
   Unrealized gain on securities available
     for sale, net                                                                2,988         2,988
                                                     ---------------------------------------------------
Balance September 30, 2002                             $50,188       $43,900     $2,333       $96,421
                                                     ===================================================


                                       4

</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                        TRICO BANCSHARES
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (In thousands, unaudited)

                                                                       For the nine months
                                                                       ended September 30,
                                                                     2002               2001
                                                                 -------------------------------
<S>                                                                  <C>                  <C>
Operating Activities:
   Net income                                                      $10,320              $9,061
   Adjustments to reconcile net income to net cash provided
     by operating activities:
       Depreciation and amortization of property and equipment       1,956               1,891
       Amortization of intangible assets                               683                 683
       Provision for loan losses                                     2,000               3,250
       Amortization of investment securities premium, net            1,080                 139
       Deferred income taxes                                          (108)               (365)
       Investment security gains, net                                    -              (1,756)
       Originations of loans for resale                           (113,271)            (84,545)
       Proceeds from sale of loans originated for resale           114,227              85,028
       Gain on sale of loans                                        (2,254)             (1,292)
       Amortization of mortgage servicing rights                       498                 223
       Loss (gain) on sale of fixed assets                              10                  (4)
       Gain on sale of other real estate owned, net                     (8)                (48)
       Provision for losses on other real estate owned                   -                  18
       Change in assets and liabilities:
         (Increase) decrease in interest receivable                    (30)                848
         Decrease in interest payable                                 (880)               (895)
         Increase in other assets and liabilities                    2,547                 389
                                                                 -------------------------------
Net Cash Provided by Operating Activities                           16,770              12,625
                                                                 -------------------------------
Investing Activities:
   Proceeds from maturities of securities available-for-sale        87,365              63,331
   Proceeds from sales of securities available-for-sale                  -              14,120
   Purchases of securities available-for-sale                     (127,999)            (54,738)
   Net increase in loans                                           (25,498)            (30,576)
   Proceeds from sale of premises and equipment                         16                  23
   Purchases of property and equipment                              (1,902)             (1,426)
   Proceeds from sale of other real estate owned                        79               1,075
                                                                 -------------------------------
Net Cash Used by Investing Activities                              (67,939)             (8,191)
                                                                 -------------------------------
Financing Activities:
   Net increase in deposits                                         57,502              21,648
   Net decrease in federal funds purchased                               -                (500)
   Payments of principal on long-term debt agreements                  (24)             (1,020)
   Repurchase of Common Stock                                         (189)             (3,398)
   Dividends paid                                                   (4,210)             (4,237)
   Exercise of stock options/issuance of Common Stock                  275                 200
                                                                 -------------------------------
Net Cash Provided by Financing Activities                           53,354              12,693
                                                                 -------------------------------
Net Increase in Cash and Cash Equivalents                            2,185              17,127
                                                                 -------------------------------
Cash and Cash Equivalents and Beginning of Period                   77,964              58,190
                                                                 -------------------------------
Cash and Cash Equivalents at End of Period                         $80,149             $75,317
                                                                 ===============================
Supplemental Disclosure of Noncash Activities:
   Unrealized gain (loss) on securities available for sale          $4,777              $2,740
   Loans transferred to other real estate owned                          -                $327

Supplemental Disclosure of Cash Flow Activity:
   Cash paid for interest expense                                  $10,549             $20,025
   Cash paid for income taxes                                       $4,700              $5,775
   Income tax benefit from stock option exercises                     $304                $186


                                       5

</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                             TRICO BANCSHARES
                                             Financial Summary
                             (dollars in thousands, except per share amounts)

                                                       Three months ended            Nine months ended
                                                          September 30,                September 30,
                                                 -----------------------------------------------------------
                                                     2002              2001        2002           2001
                                                 -----------------------------------------------------------
<S>                                                  <C>               <C>         <C>            <C>
Net Interest Income (FTE)                          $13,520           $12,923     $39,742        $36,958
Provision for loan losses                             (700)             (600)     (2,000)        (3,250)
Noninterest income                                   5,413             3,713      13,182         12,318
Noninterest expense                                (12,133)          (10,465)    (33,498)       (30,437)
Provision for income taxes (FTE)                    (2,473)           (2,326)     (7,106)        (6,528)
                                                 -----------------------------------------------------------
Net income                                          $3,627            $3,245     $10,320         $9,061
                                                 ===========================================================

Average shares outstanding                           7,026             7,044       7,010          7,087
Diluted average shares outstanding                   7,231             7,231       7,188          7,237
Shares outstanding at period end                     7,036             7,018       7,036          7,018

As Reported:
   Basic earnings per share                          $0.52             $0.46       $1.47          $1.28
   Diluted earnings per share                        $0.50             $0.45       $1.44          $1.25
   Return on assets                                  1.39%             1.32%       1.36%          1.25%
   Return on equity                                 15.17%            14.75%      14.92%         13.90%
   Net interest margin                               5.67%             5.78%       5.72%          5.58%
   Net loan recoveries (losses) to average loans     0.04%            (0.05%)     (0.14%)        (0.51%)
   Efficiency ratio (FTE)                           64.08%            62.91%      63.29%         61.77%

Average Balances:
   Total assets                                 $1,044,518          $982,387  $1,015,068       $970,086
   Earning assets                                  954,611           894,670     926,387        883,816
   Total loans                                     676,009           661,630     655,682        644,447
   Total deposits                                  908,675           844,741     883,898        834,161
   Shareholders' equity                             95,645            88,005      92,212         86,886

Balances at Period End:
   Total assets                                 $1,073,523          $996,150
   Earning assets                                  975,875           905,946
   Total loans                                     683,554           668,157
   Total deposits                                  937,895           859,480
   Shareholders' equity                             96,421            88,380

Financial Ratios at Period End:
   Allowance for loan losses to loans                2.10%             1.86%
   Book value per share                             $13.70            $12.59
   Equity to assets                                  8.98%             8.87%
   Total capital to risk assets                     11.89%            11.69%

Dividends Paid Per Share                             $0.20             $0.20       $0.60          $0.60
Dividend Payout Ratio                               38.75%            43.42%      40.80%         47.07%


                                       6

</TABLE>
<PAGE>

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1:

Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information  and  pursuant  to  the  rules  and  regulations  of  the
Securities and Exchange  Commission.  The results of operations  reflect interim
adjustments,  all of which are of a normal  recurring  nature and which,  in the
opinion of management,  are necessary for a fair presentation of the results for
the interim  period  presented.  The interim  results for the nine months  ended
September  30,  2002 and  2001 are not  necessarily  indicative  of the  results
expected for the full year. These unaudited  consolidated  financial  statements
should be read in conjunction with the audited consolidated financial statements
and accompanying  notes as well as other  information  included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001.

Certain amounts previously  reported in the 2001 financial  statements have been
reclassified to conform to the 2002 presentation.  These  reclassifications  did
not affect previously reported net income or total shareholders' equity.

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standard No. 141, "Business  Combinations" (SFAS 141),
and  Statement of Financial  Accounting  Standard No. 142,  "Goodwill  and Other
Intangible  Assets" (SFAS 142).  SFAS 141 requires  that the purchase  method of
accounting be used for all business  combinations  initiated after June 30, 2001
and specifies  criteria that  intangible  assets  acquired in a purchase  method
business  combination  must  meet  to be  recognized  and  reported  apart  from
goodwill.  SFAS 142 requires that goodwill and intangible assets with indefinite
useful  lives no longer be  amortized  after 2001,  but instead be  periodically
evaluated  for  impairment.  Intangible  assets with  definite  useful lives are
required to be amortized over their  respective  estimated useful lives to their
estimated residual values, and also reviewed for impairment.

Effective  January 1, 2002,  the Company was required to adopt the provisions of
SFAS 142. Accordingly,  any goodwill and any intangible asset determined to have
an indefinite useful life that are acquired in a purchase  business  combination
will not be  amortized,  but will  continue to be evaluated  for  impairment  in
accordance  with the  appropriate  accounting  literature.  The Company was also
required to reassess the useful lives and residual values of all such intangible
assets and make any necessary amortization period adjustments by March 31, 2002.
No such adjustments were required to be made.

In  addition,  to the  extent an  intangible  asset is  identified  as having an
indefinite  useful life, the Company was required to test the  intangible  asset
for impairment in the first quarter of 2002. The Company has no intangibles with
indefinite useful life.

As of the date of  adoption,  the Company  had  identifiable  intangible  assets
consisting of core deposit premiums and minimum pension liability.  Core deposit
premiums are amortized  using an accelerated  method over a period of ten years.
Intangible  assets related to minimum  pension  liability are adjusted  annually
based upon  actuarial  estimates.  The Company  has no goodwill  (unidentifiable
intangible assets).


                                       7

<PAGE>

Acquisition, Goodwill and Other Intangible Assets

The  following  table  summarizes  the Company's  goodwill and other  intangible
assets as of January 1, 2002 and September 30, 2002.

                                  January 1,                       September 30,
  (Dollar in Thousands)              2002    Additions  Reductions     2002
                                  ----------------------------------------------
  Core Deposit Intangibles         $10,795                           $10,795
  Accumulated Amortization          (5,725)                (683)      (6,408)
                                  ----------------------------------------------
  Core Deposit Intangibles, net     $5,070                ($683)      $4,387
                                  ==============================================

Core  deposit  premiums  are  scheduled  to amortize  at a rate of $227,700  per
quarter through the quarter ended December 31, 2006.

Mortgage Operations

The Company  sold  substantially  all of its  conforming  long-term  residential
mortgage loans originated during the first nine months of 2002 for cash proceeds
equal to the fair value of the loans.  The Company records  originated  mortgage
servicing  rights as assets by allocating  the total cost basis between the loan
and the servicing right based on their relative fair values.

The following table summarizes the Company's mortgage servicing rights assets as
of January 1, 2002 and September 30, 2002.

                                  January 1,                       September 30,
  (Dollar in Thousands)              2002    Additions  Reductions     2002
                                  ----------------------------------------------
  Mortgage Servicing Rights         $1,512     $1,298     ($498)      $2,312
                                  ==============================================

The recorded value of mortgage  servicing  rights is amortized in proportion to,
and over the period of, estimated net servicing  revenues.  The Company assesses
capitalized  mortgage  servicing rights for impairment based upon the fair value
of those rights at each reporting  date.  For purposes of measuring  impairment,
the rights are stratified  based upon the product type, term and interest rates.
Fair value is  determined  by  discounting  estimated net future cash flows from
mortgage  servicing  activities  using discount rates that  approximate  current
market rates and estimated prepayment rates, among other assumptions. The amount
of  impairment  recognized,  if any,  is the  amount  by which  the  capitalized
mortgage servicing rights for a stratum exceeds their fair value. Impairment, if
any, is recognized through a valuation allowance for each individual stratum.

At  September  30,  2002,  the Company had no mortgage  loans held for sale.  At
September  30, 2002 and  December  31, 2001,  the Company  serviced  real estate
mortgage loans for others of $269 million and $196 million, respectively.

Noninterest Income

Included in the results for the nine  months  ended  September  30, 2001 and the
three  months  ended  March  31,  2001  is a  one-time  pre-tax  income  item of
$1,756,000.  This  one-time  item  represents  the realized gain recorded by the
Company  upon  the  sale of  88,796  common  shares  of John  Hancock  Financial
Services, Inc. (JHF) for proceeds of $3,265,000.


                                       8

<PAGE>

Stock Repurchase Plan

On March 15, 2001, the Company  announced the completion of its stock repurchase
plan  initially  announced on July 20, 2000.  Under this  repurchase  plan,  the
Company  repurchased  a total of 150,000  shares of which  110,000  shares  were
repurchased since December 31, 2000.

On  October  19,  2001,  the  Company  announced  the  completion  of its  stock
repurchase  plan initially  announced on March 15, 2001.  Under this  repurchase
plan, the Company repurchased a total of 150,000 shares.

Also on October 19,  2001,  the Company  announced  that its Board of  Directors
approved  a new  plan  to  repurchase,  as  conditions  warrant,  up to  150,000
additional  shares of the  Company's  stock on the open  market or in  privately
negotiated transactions.  The timing of purchases and the exact number of shares
to be purchased will depend on market conditions.  The 150,000 shares covered by
this repurchase  plan represent  approximately  2.2% of the Company's  6,992,080
common  shares  outstanding  on October 19, 2001.  As of December 31, 2001,  the
Company  repurchased  108,800  shares  under this new plan.  During the quarters
ended March 31,  2002,  June 30,  2002,  and  September  30,  2002,  the Company
repurchased 10,000, 0, and 0 shares under this new plan, respectively.

Shareholder Rights Plan

On June 25, 2001, the Company  announced that its Board of Directors adopted and
entered  into a  Shareholder  Rights  Plan  designed  to  protect  and  maximize
shareholder  value and to assist the Board of  Directors  in  ensuring  fair and
equitable  benefit to all  shareholders in the event of a hostile bid to acquire
the Company.

The Company  adopted this Rights Plan to protect  stockholders  from coercive or
otherwise unfair takeover  tactics.  In general terms, the Rights Plan imposes a
significant  penalty  upon any person or group that  acquires 15% or more of the
Company's  outstanding  common stock without the approval of the Company's Board
of  Directors.  The Rights Plan was not adopted in response to any known attempt
to acquire control of the Company.

Under the Rights  Plan, a dividend of one  Preferred  Stock  Purchase  Right was
declared  for each  common  share held of record as of the close of  business on
July 10, 2001.  No separate  certificates  evidencing  the Rights will be issued
unless and until they become exercisable.

The Rights  generally  will not become  exercisable  unless an acquiring  entity
accumulates or initiates a tender offer to purchase 15% or more of the Company's
common stock. In that event, each Right will entitle the holder,  other than the
unapproved acquirer and its affiliates,  to purchase either the Company's common
stock or shares in an acquiring entity at one-half of market value.

The Right's initial exercise price,  which is subject to adjustment,  is $49.00.
The Company's Board of Directors generally will be entitled to redeem the Rights
at a redemption price of $.01 per Right until an acquiring entity acquires a 15%
position. The Rights expire on July 10, 2011.

Business Segments

The Company is principally  engaged in traditional  community banking activities
provided  through its twenty-nine  branches and eight in-store  branches located
throughout Northern California.  Community banking activities include the Bank's
commercial and retail  lending,  deposit  gathering and investment and liquidity
management  activities.  In addition to its community banking services, the Bank
offers investment  brokerage and leasing  services.  The results of the separate
branches  have  been  aggregated  into a single  reportable  segment,  Community
Banking. The Company's leasing, investment brokerage and real estate segments do
not meet  prescribed  aggregation or materiality  criteria and,  therefore,  are
reported as "Other" in the following table.


                                       9

<PAGE>

Summarized financial information concerning the Bank's reportable segments is as
follows (in thousands):

                                          Community
                                           Banking          Other         Total
Three Months Ended September 30, 2002
Net interest income                         $12,948          $260        $13,208
Noninterest income                            4,534           879          5,413
Noninterest expense                          11,567           566         12,133
Net income                                    3,272           355          3,627
Assets                                   $1,057,071       $16,452     $1,073,523

Three Months Ended September 30, 2001
Net interest income                         $12,478          $169        $12,647
Noninterest income                            2,954           759          3,713
Noninterest expense                           9,826           639         10,465
Net income                                    3,066           179          3,245
Assets                                     $980,270       $15,880       $996,150

Nine Months Ended September 30, 2002
Net interest income                         $38,053          $746        $38,799
Noninterest income                           10,809         2,373         13,182
Noninterest expense                          31,871         1,627         33,498
Net income                                    9,395           925         10,320
Assets                                   $1,057,071       $16,452     $1,073,523

Nine Months Ended September 30, 2001
Net interest income                         $35,388          $620        $36,008
Noninterest income                           10,233         2,085         12,318
Noninterest expense                          28,692         1,745         30,437
Net income                                    8,466           595          9,061
Assets                                     $980,270       $15,880       $996,150


Recently Issued Accounting Pronouncement

On October 3, 2001, the FASB issued Statement of Financial  Accounting  Standard
No. 144,  "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS
144), which addresses  financial  accounting and reporting for the impairment or
disposal of long-lived assets.  While SFAS 144 supersedes Statement of Financial
Accounting Standard No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of", it retains many of the fundamental
provisions  of that  Statement.  SFAS 144 also  supersedes  the  accounting  and
reporting   provisions  of  APB  Opinion  No.  30,  "Reporting  the  Results  of
Operations,  Reporting  the Effects of Disposal of a Segment of a Business,  and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions,  for
the disposal of a segment of a business". However, it retains the requirement in
Opinion  30 to  report  separately  discontinued  operations  and  extends  that
reporting to a component of an entity that either has been disposed of (by sale,
abandonment,  or in a distribution to owners) or is classified as held for sale.
By  broadening  the  presentation  of  discontinued  operations  to include more
disposal  transactions,  the FASB has enhanced  management's  ability to provide
information  that helps  financial  statement  users to assess the  effects of a
disposal transaction on the ongoing operations of an entity. The Company adopted
the  provisions of SFAS 144 on January 1, 2002. The adoption of SFAS 144 did not
have a material  impact on the financial  condition or operating  results of the
Company.


                                       10

<PAGE>

Subsequent Event

On October 7, 2002, TriCo Bancshares announced that on October 3, 2002 it signed
a definitive agreement with Tri Counties Bank, its wholly owned subsidiary,  and
North State National Bank,  pursuant to which TriCo  Bancshares will acquire all
of the  outstanding  stock of North State  National Bank in exchange for cash of
approximately  $13 million,  approximately  716,000  shares of TriCo  Bancshares
common  stock and  options  to  purchase  approximately  92,450  shares of TriCo
Bancshares  common stock,  subject to adjustments as set forth in the agreement.
Based upon a closing price of $23.92 per share of TriCo Bancshares  common stock
on October 3, 2002, the transaction was valued at $31.8 million.


Item 2. Management's Discussion and Analysis of Financial Conditions 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.  Within  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations,  interest income and net interest
income are generally presented on a fully tax-equivalent (FTE) basis.

The Company's  discussion and analysis of its financial condition and results of
operations are based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting  principles  generally accepted
in the United States. The preparation of these financial statements requires the
Company to make  estimates  and  judgments  that affect the reported  amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets  and  liabilities.  On an  on-going  basis,  the  Company  evaluates  its
estimates,  including  those  related to the adequacy of the  allowance for loan
losses,  investments,  intangible assets,  income taxes and  contingencies.  The
Company  bases its  estimates  on  historical  experience  and on various  other
assumptions  that are believed to be  reasonable  under the  circumstances,  the
results of which form the basis for making  judgments  about the carrying values
of assets and  liabilities  that are not readily  apparent  from other  sources.
Actual results may differ from these estimates  under  different  assumptions or
conditions.  (See  caption  "Allowance  for  Loan  Losses"  for a more  detailed
discussion).

The  following   discussion  and  analysis  is  designed  to  provide  a  better
understanding  of the significant  changes and trends related to the Company and
its subsidiaries'  financial condition,  operating results,  asset and liability
management,  liquidity and capital  resources and should be read in  conjunction
with the Consolidated Financial Statements of the Company and the Notes thereto.

The Company had earnings of $3,627,000 for the quarter ended September 30, 2002.
The quarterly earnings represent an 11.8% increase over the $3,245,000  reported
for the same period of 2001. Diluted earnings per share for the third quarter of
2002 were $0.50 versus $0.45 in the year earlier  period.  Earnings for the nine
months  ended  September  30, 2002 were  $10,320,000  versus year ago results of
$9,061,000,  and  represented a 13.9% increase.  The diluted  earnings per share
were $1.44 and $1.25 for the  nine-month  periods  ended  September 30, 2002 and
2001, respectively.  Included in the results for the nine months ended September
30, 2001, was a one-time  pre-tax gain of $1,756,000  from the sale of insurance
company stock.  Excluding the one-time gain noted above,  the Company would have
reported diluted earnings per share of $1.44 and $1.10 in the nine month periods
ended September 30, 2002 and 2001, respectively.



                                       11

<PAGE>

Following is a summary of the components of fully taxable equivalent ("FTE") net
income for the periods indicated (dollars in thousands):

                                    Three months ended       Nine months ended
                                       September 30,           September 30,
                                   ---------------------------------------------
                                     2002         2001       2002         2001
                                   ---------------------------------------------
Net interest income (FTE)          $13,520      $12,923    $39,742      $36,958
Provision for loan losses             (700)        (600)    (2,000)      (3,250)
Noninterest income                   5,413        3,713     13,182       12,318
Noninterest expense                (12,133)     (10,465)   (33,498)     (30,437)
Provision for income taxes (FTE)    (2,473)      (2,326)    (7,106)      (6,528)
                                   ---------------------------------------------
Net income                          $3,627       $3,245    $10,320       $9,061
                                   =============================================

Net income for the third quarter of 2002 was $382,000  (11.8%) more than for the
same quarter of 2001. A  significant  increase in  noninterest  income (up $1.70
million or 45.8%),  and an increase in net interest income (FTE) (up $597,000 or
4.6%) more than offset  increases in  noninterest  expenses (up $1.67 million or
15.9%) and  provision  for loan losses (up  $100,000 or 16.7%).  The increase in
noninterest  income from the  year-ago  quarter was mainly due to an increase in
service  charges and fee income on deposit  products (up  $1,476,000 or 72.2% to
$3,521,000),  and an increase in gain on sale of loans (up  $258,000 or 52.2% to
$752,000).  The increase in service charges and fee income was mainly due to the
introduction  of an overdraft  privilege  deposit  product in July 2002 that has
added a new stream of recurring noninterest income. The increase in gain on sale
of loans is due to the  Company's  ability to  originate  and sell an  increased
volume of residential  real estate mortgage loans in the current  environment of
record mortgage refinance.  The increase in net interest income (FTE) was due to
an increase in average  balance of  interest-earning  assets (up $59.9  million)
that was partially  offset by an 11 basis point decrease in net interest margin.
The increase in noninterest  expense was mainly due to an increase in salary and
benefit expense (up $913,000 or 16.8% to $6,344,000). The increase in salary and
benefits expense was mainly due to annual salary increases, increased commission
and incentive expense,  and new employees at the Company's newly opened branches
in Oroville  (June  2002) and  Brentwood  (September  2002).  Other  noninterest
expense  also  increased  (up  $755,000 or 15.0% to  $5,789,000).  Approximately
$350,000  of this  increase  was  recurring  expenses  related to the  overdraft
privilege  product   introduced  in  July  2002,  and  noted  above.   Increased
advertising expenses accounted for $190,000 of the increase in other noninterest
expense.

Comparing  the first nine  months of 2002 to the first nine  months of the prior
year, net income increased $1,259,000 (13.9%).  Increases in net interest income
(FTE) (up $2.78 million or 7.5%) and  noninterest  income (up $864,000 or 7.0%),
and a decrease in  provision  for loan loss (down  $1.25  million or 38.5%) were
only partially offset by an increase in noninterest expense (up $3.06 million or
10.1%).  The increase in net  interest  income (FTE) was the result of increased
average earning asset balance (up $42.6 million or 4.8% to $926.4 million),  and
a 14 basis point  increase in net  interest  margin  (FTE).  The decrease in the
provision for loan losses was due to reduced loan losses  (charge-offs) from the
year-ago period, and relatively stable loan credit quality. Driving the increase
in  noninterest  income  was gain on sale of loans and fees  from the  overdraft
privilege product noted above.  Driving the increase in noninterest expense were
annual salary increases,  increased  commission and incentive  expense,  and new
employees at the  Company's  newly opened  branches in Oroville  (June 2002) and
Brentwood (September 2002).


                                       12

<PAGE>

Net Interest Income

Following is a summary of the components of net interest  income for the periods
indicated (dollars in thousands):

                                  Three months ended         Nine months ended
                                     September 30,             September 30,
                                ------------------------------------------------
                                   2002         2001         2002         2001
                                ------------------------------------------------
  Interest income                $16,435      $18,259      $48,468      $55,138
  Interest expense                (3,227)      (5,612)      (9,669)     (19,130)
  FTE adjustment                     312          276          943          950
                                ------------------------------------------------
    Net interest income (FTE)    $13,520      $12,923      $39,742      $36,958
                                ================================================

  Average earning assets        $954,611     $894,670     $926,387     $883,816

  Net interest margin (FTE)        5.67%        5.78%        5.72%        5.58%

The  Company's  primary  source  of  revenue  is  net  interest  income,  or the
difference  between  interest  income on earning assets and interest  expense in
interest-bearing liabilities. Net interest income (FTE) during the third quarter
of 2002 increased  $597,000  (4.6%) from the same period in 2001 to $13,520,000.
The  increase in net  interest  income  (FTE) was due to the  increased  average
balances  of  earning  assets (up $59.9  million or 6.7%)  offset by an 11 basis
point decrease in net interest margin (FTE).

Comparing  the first nine months of 2002 with the first nine months of the prior
year, net interest income (FTE) increased  $2,784,000 (7.5%),  with the increase
attributable  to an increase in the average balance of  interest-earning  assets
(up $42.5 million or 4.8%) and a 14 basis point increase in net interest  margin
(FTE).

Interest and Fee Income

Interest  and fee income  (FTE) for the third  quarter of 2002  decreased  $1.79
million  (9.7%) from the third quarter of 2002.  The decrease was the net effect
of higher average  interest-earning assets (up $59.9 million or 6.7%), more than
offset by a 127 basis  point  decrease  in the  yield on those  average  earning
assets  to  7.02%.  The  growth in  interest-earning  assets  was led by a $54.3
million  (28.4%)  increase  in average  investment  security  balances to $245.6
million,  and a $14.4  million  (2.2%)  increase in average loan  balances.  The
average  balance of federal funds sold decreased  $8.8 million  (21.0%) to $33.0
million.

The average yield on the Company's earning assets decreased for the quarter from
8.29% in 2001 to 7.02% in 2002.  This downward trend in yields was reflective of
general  interest  rate markets  during much of 2001 and into 2002. In addition,
deposit  growth  outstripped  loan growth during the periods,  which resulted in
most of the growth in interest-earning assets being in lower yielding investment
securities instead of relatively higher yielding loans.

Comparing  the first nine months of 2002 to 2001,  interest and fee income (FTE)
decreased $6.67 million (11.9%).  Consistent with the third quarter  comparison,
the decrease was due to higher average balances of interest-earning assets, more
than offset by lower  yields.  The average  balance of  interest-earning  assets
increased $42.6 million (4.8%).  Average investment balances accounted for $34.9
million of the increase, while average loan balances accounted for $11.2 million
of the increase. Average federal funds sold balances decreased $3.6 million.

The average yield on  interest-earning  assets  decreased  from 8.46% in 2001 to
7.11% in 2002. This downward trend in yields was reflective of general  interest
rate  markets  during  much of 2001  and  into  2002.  As in the  third  quarter
comparison,  deposit growth  outstripped  loan growth during the periods,  which
resulted  in most of the  growth  in  interest-earning  assets  being  in  lower
yielding investment securities instead of relatively higher yielding loans.


                                       13

<PAGE>

Interest Expense

Interest  expense  decreased  $2.39 million (42.5%) in the third quarter of 2002
compared to the year-ago  quarter.  The decrease was mainly due to a decrease in
the average rate paid on  interest-bearing  liabilities  from 3.15% in the third
quarter of 2001 to 1.72% in the third quarter of 2002.

Average interest-bearing liabilities increased $35.2 million (4.9%) in the third
quarter  compared to the  year-ago  quarter.  The  increase in  interest-bearing
liabilities  was  concentrated  in the  lower  earning  interest-bearing  demand
deposit (up $18.6 million or 11.9%),  and savings  deposits (up $37.2 million or
16.6%).  The average  balances of the higher  earning time deposits  (down $10.5
million or 3.5%) and long-term debt (down $10.2 million or 30.9%) were down from
the year-ago quarter.  In addition,  the average balance of  noninterest-bearing
deposits increased $18.6 million (11.3%) from the year-ago quarter.  The average
rate paid for all categories of interest-bearing  liabilities decreased from the
average rate paid in the year-ago quarter as a result of general market interest
rate changes.

Interest  expense  decreased  $9.46 million  (49.5%) in the first nine months of
2002  compared  to the first  nine  months of 2001.  The  decrease  was due to a
decrease in the average rate paid on interest-bearing  liabilities from 3.58% in
the first nine months of 2001 to 1.76% in first nine months of 2002.

Average interest-bearing liabilities increased $20.9 million (2.9%) in the first
nine months of 2002 compared to the year-ago  nine-month period. The increase in
interest-bearing   liabilities   was   concentrated   in   the   lower   earning
interest-bearing  demand  deposits  (up $20.4  million  or 13.3%),  and  savings
deposits (up $37.4 million or 17.0%). The average balances of the higher earning
time  deposits  (down  $26.7  million or 8.8%) and  long-term  debt (down  $10.1
million or 30.5%) were down from the year-ago  nine-month  period.  In addition,
the average  balance of  noninterest-bearing  deposits  increased  $18.7 million
(12.0%)  from the  year-ago  nine-month  period.  The average  rate paid for all
categories of interest-bearing  liabilities decreased from the average rate paid
in the year-ago quarter as a result of general market interest rate changes.


Net Interest Margin (FTE)

The  following  table  summarizes  the  components of the Company's net interest
margin for the periods indicated:

                                 Three months ended         Nine months ended
                                    September 30,             September 30,
                                 ---------------------------------------------
                                  2002         2001         2002         2001
                                 ---------------------------------------------
Yield on earning assets           7.02%        8.29%        7.11%        8.46%
Rate paid on interest-bearing
   Liabilities                    1.72%        3.15%        1.76%        3.58%
                                 ---------------------------------------------
   Net interest spread            5.30%        5.14%        5.35%        4.88%
Impact of all other net
   noninterest-bearing funds      0.37%        0.64%        0.37%        0.70%
                                 ---------------------------------------------
     Net interest margin          5.67%        5.78%        5.72%        5.58%
                                 =============================================

The Company's  aggressive reaction to declining market rates throughout 2001 and
into 2002 has allowed it to maintain a relatively  stable net  interest  margin.
Net  interest  margin in the third  quarter of 2002  decreased  11 basis  points
compared to the third quarter of 2001.  While the Company was able to reduce the
average rate paid on interest-bearing  liabilities faster than the average yield
on  interest-earning  assets,  and thus  increase its net interest  spread,  the
positive  impact  of all  other net  noninterest-bearing  funds on net  interest
margin was reduced due to the lower market rates of interest at which they could
be invested.


                                       14

<PAGE>

Net interest  margin for the first nine months of 2002 increased 14 basis points
compared to the first nine months of 2001.  Lower yields on earning  assets were
more than  offset by the  declining  cost of  interest-bearing  liabilities  and
resulted  in a 47 basis point  increase in net  interest  spread.  The  positive
impact of all other net  noninterest-bearing  funds on net  interest  margin was
reduced 33 basis  points due to the lower market rates of interest at which they
could be invested.

Summary of Average Balances, Yields/Rates and Interest Differential

The following tables present, for the periods indicated,  information  regarding
the Company's consolidated average assets, liabilities and shareholders' equity,
the amounts of interest income from average earning assets and resulting yields,
and the amount of interest expense paid on interest-bearing liabilities. Average
loan balances include  nonperforming  loans.  Interest income includes  proceeds
from  loans on  nonaccrual  loans  only to the extent  cash  payments  have been
received and applied to interest income.  Yields on securities and certain loans
have been adjusted  upward to reflect the effect of income  thereon  exempt from
federal  income  taxation  at  the  current   statutory  tax  rate  (dollars  in
thousands).
<TABLE>
<CAPTION>

                                                                   For the three months ended
                                               ---------------------------------------------------------------
                                                      September 30, 2002               September 30, 2001
                                               ---------------------------------------------------------------
                                                            Interest   Rates               Interest    Rates
                                                  Average    Income/   Earned     Average   Income/    Earned
                                                  Balance    Expense   Paid       Balance   Expense    Paid
                                               -------------------------------  ------------------------------
<S>                                                <C>         <C>     <C>          <C>        <C>      <C>
Assets:
Fed funds sold                                    $32,961     $143     1.74%      $41,744    $370       3.55%
Investment securities                             245,641    3,272     5.33%      191,296   3,045       6.37%
Loans                                             676,009   13,332     7.89%      661,630  15,120       9.14%
                                               -------------------------------  ------------------------------
  Total earning assets                            954,611   16,747     7.02%      894,670  18,535       8.29%
Other assets                                       89,907                          87,717
                                               -----------                      ----------
  Total assets                                 $1,044,518                        $982,387
                                               ===========                      ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits                 $175,964      115     0.26%     $157,315     368       0.94%
Savings deposits                                  261,510      656     1.00%      224,338   1,111       1.98%
Time deposits                                     288,021    2,129     2.96%      298,505   3,618       4.85%
Fed funds purchased                                   246        1     1.63%          235       3       5.11%
Long-term debt                                     22,772      326     5.73%       32,963     512       6.21%
                                               -------------------------------  ------------------------------
  Total interest-bearing liabilities              748,513    3,227     1.72%      713,356   5,612       3.15%
Noninterest-bearing deposits                      183,180                         164,583
Other liabilities                                  17,180                          16,443
Shareholders' equity                               95,645                          88,005
                                               -----------                      ----------
  Total liabilities and shareholders' equity   $1,044,518                        $982,387
                                               ===========                      ==========
Net interest spread(1)                                       5.30%                          5.14%

Net interest income and interest margin(2)        $13,520    5.67%                $12,923   5.78%
                                               ====================             ==================

(1) Net interest spread represents the  average yield earned on assets minus the
    average rate paid on interest-earning  assets minus the average rate paid on
    interest-bearing liabilities
(2) Net interest  margin  is computed  by  calculating  the  difference  between
    interest  income  and expense,  divided  by the average  balance of  earning
    assets.

</TABLE>

                                       15

<PAGE>
<TABLE>
<CAPTION>


                                                                   For the nine months ended
                                               ---------------------------------------------------------------
                                                      September 30, 2002               September 30, 2001
                                               ---------------------------------------------------------------
                                                            Interest   Rates               Interest    Rates
                                                  Average    Income/   Earned     Average   Income/    Earned
                                                  Balance    Expense   Paid       Balance   Expense    Paid
                                               -------------------------------  ------------------------------
<S>                                                <C>         <C>     <C>          <C>        <C>      <C>
Assets:
Fed funds sold                                    $37,089     $476     1.71%      $40,680   $1,321      4.33%
Investment securities                             233,616    9,549     5.45%      198,689    9,690      6.50%
Loans                                             655,682   39,386     8.01%      644,447   45,077      9.33%
                                               -------------------------------  ------------------------------
   Total earning assets                           926,387   49,411     7.11%      883,816   56,088      8.46%
Other assets                                       88,681                          86,260
                                               -----------                      ----------
   Total assets                                $1,015,068                        $970,076
                                               ===========                      ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits                 $173,796      350     0.27%     $153,412    1,325      1.15%
Savings deposits                                  257,138    2,011     1.04%      219,750    3,898      2.37%
Time deposits                                     278,690    6,340     3.03%      305,436   12,380      5.40%
Fed funds purchased                                    83        1     1.61%          113        4      4.25%
Long-term debt                                     22,943      967     5.62%       33,026    1,523      6.15%
                                               -------------------------------  ------------------------------
   Total interest-bearing liabilities             732,650    9,669     1.76%      711,737   19,130      3.58%
Noninterest-bearing deposits                      174,274                         155,563
Other liabilities                                  15,932                          15,890
Shareholders' equity                               92,212                          86,886
                                               -----------                      ----------
   Total liabilities and shareholders' equity  $1,015,068                        $970,076
                                               ===========                      ==========
Net interest spread(1)                                                 5.35%                            4.88%

Net interest income and interest margin(2)                 $39,742     5.72%               $36,958      5.58%
                                               ====================             ==================

(1) Net interest spread  represents the average yield earned on assets minus the
    average rate paid on  interest-earning assets minus the average rate paid on
    interest-bearing liabilities
(2) Net  interest  margin  is computed  by  calculating  the  difference between
    interest income  and  expense, divided  by the  average balance  of  earning
    assets.
</TABLE>

                                       16
<PAGE>

Summary  of Changes in  Interest Income and  Expense due  to Changes in  Average
     Asset & Liability Balances and Yields Earned & Rates Paid

The following  tables set forth a summary of the changes in interest  income and
interest expense from changes in average asset and liability  balances  (volume)
and changes in average  interest  rates for the periods  indicated.  Changes not
solely  attributable to volume or rates have been allocated in proportion to the
respective volume and rate components (dollars in thousands).

                                           Three months ended September 30, 2002
                                                 compared with three months
                                                 ended September 30, 2001
                                           -------------------------------------
                                             Volume         Rate         Total
                                           -------------------------------------
Increase (decrease) in interest income:
Fed funds sold                                 ($78)        (149)        (227)
Investment securities                           865         (638)         227
Loans                                           329       (2,117)      (1,788)
                                           -------------------------------------
   Total earning assets                       1,116       (2,904)      (1,788)
                                           -------------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                 44         (297)        (253)
Savings deposits                                184         (639)        (455)
Time deposits                                  (127)      (1,362)      (1,489)
Fed funds purchased                               -           (2)          (2)
Long-term debt                                 (158)         (28)        (186)
                                           -------------------------------------
   Total interest-bearing liabilities           (57)      (2,328)      (2,385)
                                           -------------------------------------
Increase (decrease) in Net Interest Income   $1,173        ($576)        $597
                                           =====================================


                                            Nine months ended September 30, 2002
                                                 compared with nine months
                                                 ended September 30, 2001
                                           -------------------------------------
                                             Volume         Rate         Total
                                           -------------------------------------
Increase (decrease) in interest income:
Fed funds sold                                ($117)       ($728)       ($845)
Investment securities                         1,703       (1,844)        (141)
Loans                                           786       (6,477)      (5,691)
                                           -------------------------------------
   Total earning assets                       2,372       (9,049)      (6,677)
                                           -------------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                176       (1,151)        (975)
Savings deposits                                665       (2,552)      (1,887)
Time deposits                                (1,083)      (4,957)      (6,040)
Fed funds purchased                              (1)          (2)          (3)
Long-term debt                                 (465)         (91)        (556)
                                           -------------------------------------
   Total interest-bearing liabilities          (708)      (8,753)      (9,461)
                                           -------------------------------------
Increase (decrease) in Net Interest Income   $3,080        ($296)      $2,784
                                           =====================================


                                       17

<PAGE>

Provision for Loan Losses

The  Company  provided  $700,000  for loan  losses in the third  quarter of 2002
versus $600,000 in the third quarter of 2001.  During the third quarter of 2002,
the Company recorded  $69,000 of net recoveries of previously  charged off loans
versus $83,000 of net loan charge-offs in the year earlier quarter.

For the nine months  ended  September  30, 2002 and 2001,  the Company  provided
$2,000,000 and $3,250,000 for loan losses, respectively. Net charge-offs for all
loans during the nine months ended September 30, 2002 and 2001 were $676,000 and
$2,483,000, respectively. Included in the net charge-offs during the nine months
ended  September  30,  2001 is  $2,000,000  of charge  offs  related to a single
borrower.

Noninterest Income

The following  table  summarizes the  components of  noninterest  income for the
periods indicated (dollars in thousands).

                                         Three months ended    Nine months ended
                                            September 30,        September 30,
                                         ---------------------------------------
                                           2002       2001      2002       2001
                                         ---------------------------------------
  Service charges on deposit accounts    $2,886     $1,500     $5,918    $4,392
  ATM fees and interchange                  487        370      1,299     1,053
  Other service fees                        148        175        418       570
  Gain on sale of investments                 -          -          -     1,756
  Gain on sale of loans                     752        494      2,254     1,292
  Commissions on sale of
    nondeposit investment products          712        678      1,989     1,865
  Increase in cash value of life insurance  119        144        443       433
  Other noninterest income                  309        352        861       957
                                         ---------------------------------------
  Total noninterest income               $5,413     $3,713    $13,182   $12,318
                                         =======================================

Noninterest  income for the third quarter  increased  $1.70 million (45.8%) from
the  year-ago  quarter.  The  increase in  noninterest  income from the year-ago
quarter was mainly due to an increase in service charges on deposit products (up
$1,386,000 or 92.4% to $2,886,000), and an increase in gain on sale of loans (up
$258,000  or 52.2% to  $752,000).  The  increase in service  charges  income was
mainly due to the introduction of an overdraft privilege deposit product in July
2002 that has added a new stream of recurring  noninterest  income. The increase
in gain on sale of loans is due to the  Company's  ability to originate and sell
an increased  volume of  residential  real estate  mortgage loans in the current
environment  of  record  mortgage  refinance.  ATM fees and  interchange  income
increased  from the year-ago  quarter (up $117,000 or 31.6% to $487,000)  due to
expansion of Company's ATM network and increased debit card usage.

Noninterest  income for the first nine months of 2002 increased  $864,000 (7.0%)
from the year-ago  nine-month  period.  Included in  noninterest  income for the
first  nine  months of 2001 was a  one-time  gain of  $1,756,000  on the sale of
insurance company stock.  Excluding this one-time gain,  noninterest  income for
the first nine months of 2002 would have  increased  $2.62 million  (24.8%) from
the year-ago  nine-month  period.  The increase in  noninterest  income from the
year-ago  quarter was mainly due to an  increase  in service  charges on deposit
products (up $1,526,000 or 34.7% to $5,918,000), and an increase in gain on sale
of loans (up  $962,000 or 74.5% to  $2,254,000).  As described in the results of
the third quarter of 2002, the increase in service charges income was mainly due
to the introduction of an overdraft  privilege deposit product in July 2002, and
the  increase  in gain  on sale of  loans  is due to the  Company's  ability  to
originate and sell an increased volume of residential real estate mortgage loans
in  the  current  environment  of  record  mortgage  refinance.   ATM  fees  and
interchange  income increased from the year-ago quarter (up $246,000 or 23.4% to
$1,299,000)  due to expansion of Company's ATM network and increased  debit card
usage.


                                       18

<PAGE>

Noninterest Expense

The following  table  summarizes the  components of noninterest  expense for the
periods indicated (dollars in thousands).

                                        Three months ended     Nine months ended
                                           September 30,         September 30,
                                        ----------------------------------------
                                          2002       2001       2002       2001
                                        ----------------------------------------
  Salaries                               $4,225     $3,671    $11,616    $10,747
  Commissions and incentives                889        701      2,579      1,850
  Employee benefits                       1,230      1,059      3,661      3,168
  Equipment                                 741        680      2,247      2,033
  Occupancy                                 752        735      2,157      2,094
  Professional fees                         567        229      1,196        865
  Telecommunications                        364        350      1,035        895
  Advertising and marketing                 468        278        934        931
  Data processing and software              272        233        764        715
  Courier service                           236        210        684        622
  Intangible amortization                   228        228        683        683
  ATM network charges                       205        250        611        689
  Postage                                   212        152        543        464
  Operational losses                        191         51        295        140
  Assessments                                64         56        175        167
  Other noninterest expense               1,489      1,582      4,318      4,374
                                        ----------------------------------------
  Total                                 $12,133    $10,465    $33,498    $30,437
                                        ========================================
  Average full time equivalent staff        437        407        427        399

  Noninterest expense to revenue (FTE)    64.1%      62.9%     63.3%       61.8%

Noninterest expense for the third quarter of 2002 increased  $1,668,000 (15.9%).
The  increase  in  noninterest  expense  was mainly  due to a  $913,000  (16.8%)
increase in salary and benefit expense to $6,344,000. The increase in salary and
benefits expense was mainly due to annual salary increases, increased commission
and incentive expense,  and new employees at the Company's newly opened branches
in Oroville  (June  2002) and  Brentwood  (September  2002).  Other  noninterest
expense  also  increased  (up  $755,000 or 15.0% to  $5,789,000).  Approximately
$350,000  of this  increase  was  recurring  expenses  related to the  overdraft
privilege  product  introduced in July 2002, and included in professional  fees.
Also related to the overdraft privilege product introduced in July 2002, was the
$140,000  increase in operational  losses from the year-ago  quarter.  Increased
advertising expenses accounted for $190,000 of the increase in other noninterest
expense.

Comparing  the first nine  months of 2002 to the prior year  nine-month  period,
noninterest expense increased  $3,061,000  (10.1%).  The increase in noninterest
expense was mainly due to a  $2,091,000  (13.3%)  increase in salary and benefit
expense to  $17,856,000.  As in the third  quarter  comparison,  the increase in
salary and benefits expense was mainly due to annual salary increases, increased
commission  and incentive  expense,  and new  employees at the  Company's  newly
opened branches in Oroville (June 2002) and Brentwood  (September  2002).  Other
noninterest  expense  also  increased  (up  $970,000  or 6.6%  to  $15,642,000).
Approximately  $350,000 of this increase was recurring  expenses  related to the
overdraft   privilege   product   introduced  in  July  2002,  and  included  in
professional fees. Also related to the overdraft privilege product introduced in
July 2002,  was the $140,000  increase in  operational  losses from the year-ago
quarter.


                                       19

<PAGE>

Provision for Income Tax

The  effective  tax rate for the nine months ended  September 30, 2002 was 37.4%
and reflects a decrease from 38.1% in the year earlier period. The provision for
income  taxes  for  all  periods  presented  is  primarily  attributable  to the
respective  level  of  earnings  and  the  incidence  of  allowable  deductions,
particularly from tax-exempt loans and state and municipal securities.

Nonperforming Loans

Loans are reviewed on an  individual  basis for  reclassification  to nonaccrual
status when any one of the following  occurs:  the loan becomes 90 days past due
as to  interest  or  principal,  the full and timely  collection  of  additional
interest or principal becomes  uncertain,  the loan is classified as doubtful by
internal credit review or bank regulatory  agencies,  a portion of the principal
balance has been charged off, or the Company takes possession of the collateral.
Loans that are placed on Nonaccrual even though the borrowers  continue to repay
the  loans as  scheduled  are  classified  as  "performing  nonaccrual"  and are
included  in  total  nonperforming  loans.  The  reclassification  of  loans  as
nonaccrual does not necessarily reflect Management's judgment as to whether they
are collectible.

Interest income is not accrued on loans where Management has determined that the
borrowers  will  be  unable  to  meet  contractual   principal  and/or  interest
obligations,  unless the loan is well secured and in the process of  collection.
When a loan is placed on nonaccrual,  any previously accrued but unpaid interest
is  reversed.  Income on such loans is then  recognized  only to the extent that
cash is received  and where the future  collection  of  principal  is  probable.
Interest  accruals  are resumed on such loans only when they are  brought  fully
current  with  respect to interest and  principal  and when,  in the judgment of
Management, the loans are estimated to be fully collectible as to both principal
and interest.

Interest income on nonaccrual loans, which would have been recognized during the
nine months,  ended  September  30, 2002,  if all such loans had been current in
accordance  with their  original  terms,  totaled  $1,022,000.  Interest  income
actually  recognized  on these loans during the nine months ended  September 30,
2002 was $422,000.

The  Company's  policy is to place loans 90 days or more past due on  nonaccrual
status.  In some instances  when a loan is 90 days past due Management  does not
place  it on  nonaccrual  status  because  the loan is well  secured  and in the
process of  collection.  A loan is considered to be in the process of collection
if, based on a probable  specific  event,  it is expected  that the loan will be
repaid or brought current. Generally, this collection period would not exceed 30
days. Loans where the collateral has been repossessed are classified as OREO or,
if the collateral is personal  property,  the loan is classified as other assets
on the Company's financial statements.

Management considers both the adequacy of the collateral and the other resources
of the  borrower  in  determining  the steps to be taken to  collect  nonaccrual
loans.   Alternatives  that  are  considered  are  foreclosure,   collecting  on
guarantees, restructuring the loan or collection lawsuits.


                                       20

<PAGE>

As shown in the following table, total nonperforming assets net of guarantees of
the  U.S.  Government,  including  its  agencies  and  its  government-sponsored
agencies,  have  increased $4.9 million (80%) to $11.0 million in the first nine
months of 2002.  Nonperforming assets net of guarantees represent 1.03% of total
assets.  Included in the balance of performing nonaccrual loans at September 30,
2002, are loans to one  agriculture  related  borrower  totaling  $10,592,000 of
which  $8,351,000  is  guaranteed by a U.S.  Government  sponsored  agency as to
principal and ninety days of interest.  To date, the borrower has paid principal
and  interest in  accordance  with the terms of the loans;  however,  due to the
financial  condition  of the  borrower  the  Company  has  placed  the  loans in
performing nonaccrual status. All nonaccrual loans are considered to be impaired
when  determining  the need for a  specific  valuation  allowance.  The  Company
continues to make a concerted effort to work problem and potential problem loans
to reduce risk of loss.
<TABLE>
<CAPTION>

 (dollars in thousands):
                                                At September 30, 2002         At December 31, 2001
                                              -------------------------   -------------------------
                                               Gross  Guaranteed   Net      Gross  Guaranteed  Net
                                              -----------------------------------------------------
<S>                                             <C>       <C>      <C>        <C>      <C>     <C>
Performing nonaccrual loans                   $14,042   $8,504   $5,538     $2,733       -   $2,733
Nonperforming, nonaccrual loans                 5,468      547    4,921      3,120    $387    2,733
                                              -----------------------------------------------------
     Total nonaccrual loans                    19,510    9,051   10,459      5,853     387    5,466
Loans 90 days past due and still accruing         572        -      572        584       -      584
                                              -----------------------------------------------------
     Total nonperforming loans                 20,082    9,051   11,031      6,437     387    6,050
Other real estate owned                             -        -        -         71       -       71
                                              -----------------------------------------------------
     Total nonperforming loans and OREO       $20,082   $9,051  $11,031     $6,508    $387   $6,121
                                              =====================================================
Nonperforming loans to total loans                                1.61%                       0.92%
Allowance for loan losses/nonperforming loans                      130%                       216%
Nonperforming assets to total assets                              1.03%                       0.61%
Allowance for loan losses to nonperforming assets                  130%                       213%

</TABLE>

Allowance for Loan Losses

Credit  risk is inherent in the  business of lending.  As a result,  the Company
maintains  an  Allowance  for Loan  Losses  to  absorb  losses  inherent  in the
Company's  loan  portfolio.  This is  maintained  through  periodic  charges  to
earnings.  These  charges are shown in the  Consolidated  Income  Statements  as
provision for loan losses. All specifically identifiable and quantifiable losses
are  immediately  charged off against the allowance.  However,  for a variety of
reasons,  not all losses are immediately known to the Company and, of those that
are known,  the full extent of the loss may not be quantifiable at that point in
time.  The balance of the Company's  Allowance for Loan Losses is meant to be an
estimate of these unknown but probable  losses  inherent in the  portfolio.  For
purposes of this discussion, "loans" shall include all loans and lease contracts
that are part of the Company's portfolio.

The Company  formally  assesses  the  adequacy of the  allowance  on a quarterly
basis.  Determination  of the  adequacy is based on ongoing  assessments  of the
probable  risk in the  outstanding  loan  portfolio,  and to a lesser extent the
Company's loan commitments. These assessments include the periodic re-grading of
credits based on changes in their individual  credit  characteristics  including
delinquency,  seasoning,  recent financial performance of the borrower, economic
factors, changes in the interest rate environment,  growth of the portfolio as a
whole or by segment, and other factors as warranted.  Loans are initially graded
when  originated.  They are  re-graded as they are renewed,  when there is a new
loan to the same borrower,  when identified facts demonstrate heightened risk of
nonpayment,  or if they become  delinquent.  Re-grading of larger  problem loans
occur at least quarterly.  Confirmation of the quality of the grading process is
obtained by  independent  credit reviews  conducted by consultants  specifically
hired for this purpose and by various bank regulatory agencies.


                                       21

<PAGE>

The Company's method for assessing the appropriateness of the allowance includes
specific  allowances  for  identified  problem loans and leases as determined by
SFAS 114,  formula  allowance  factors for pools of credits,  and allowances for
changing   environmental  factors  (e.g.,   interest  rates,  growth,   economic
conditions,  etc.). Allowance factors for loan pools are based on the previous 5
years historical loss experience by product type.  Allowances for specific loans
are based on SFAS 114 analysis of individual  credits.  Allowances  for changing
environmental  factors are  Management's  best  estimate of the probable  impact
these  changes  have  had on the loan  portfolio  as a whole.  This  process  is
explained  in  detail  in the  notes  to the  Company's  Consolidated  Financial
Statements  in its Annual  Report on Form 10-K for the year ended  December  31,
2001.

Based on the current conditions of the loan portfolio,  Management believes that
the  $14,382,000  allowance for loan losses at September 30, 2002 is adequate to
absorb probable  losses  inherent in the Company's loan portfolio.  No assurance
can be given,  however,  that adverse economic conditions or other circumstances
will not result in increased losses in the portfolio.

The following table  summarizes the loan loss  provision,  net credit losses and
allowance for loan losses for the periods indicated (dollars in thousands):

                                     Three months ended        Nine months ended
                                        September 30,            September 30,
                                    --------------------------------------------
                                      2002        2001        2002        2001
                                    --------------------------------------------
  Balance, beginning of period      $13,613     $11,920     $13,058     $11,670
  Loan loss provision                   700         600       2,000       3,250
  Loans charged off                     (72)       (110)       (915)     (2,647)
  Recoveries of previously
    charged-off loans                   141          27         239         164
                                    --------------------------------------------
  Net credit (losses) recoveries         69         (83)       (676)     (2,483)
                                    --------------------------------------------
  Balance, end of period            $14,382     $12,437     $14,382     $12,437
                                    ============================================
  Allowance for loan losses/loans outstanding                 2.10%       1.86%


Capital Resources

The  current  and  projected  capital  position of the Company and the impact of
capital plans and long-term strategies are reviewed regularly by Management.  As
previously announced on October 19, 2001, the Board of Directors approved a plan
to  repurchase,  as conditions  warrant,  up to 150,000  shares of the Company's
common stock on the open market or in  privately  negotiated  transactions.  The
timing of purchases  and the exact number of shares to be purchased  will depend
on market conditions. This repurchase plan represented approximately 2.2% of the
Company's  6,992,080  common  shares  outstanding  on October 19,  2001,  and is
open-ended.  As of this date, the Company has  repurchased  118,800 shares under
this plan, with 10,000 and 0 of those shares being repurchased in the nine-month
and three-month periods ended September 30, 2002, respectively.

The Company's primary capital resource is shareholders'  equity, which was $96.4
million at  September  30,  2002.  This  amount  represents  an increase of $9.5
million from December 31, 2001, the net result of  comprehensive  income for the
period  ($13.3  million) and the  issuance of common  shares via the exercise of
stock  options  ($0.6  million),  partially  offset by share  repurchases  ($0.2
million) and dividends  paid ($4.2  million).  The Company's  ratio of equity to
total assets was 8.98%, 8.87%, and 8.65% as of September 30, 2002, September 30,
2001, and December 31, 2001, respectively.


                                       22

<PAGE>

The following  summarizes the ratios of capital to risk-adjusted  assets for the
periods indicated:

                                                                   To Be Well
                   At September 30,     At          Minimum    Capitalized Under
                 ------------------ December 31,  Regulatory   Prompt Corrective
                  2002        2001     2001       Requirement  Action Provisions
                 ---------------------------------------------------------------
 Tier I Capital  10.63%      10.44%   10.43%         4.00%           6.00%
 Total Capital   11.89%      11.69%   11.68%         8.00%          10.00%
 Leverage ratio   8.53%       8.35%    8.17%         4.00%           5.00%


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Asset and Liability Management

The goal for managing the assets and  liabilities  of the Company is to maximize
shareholder  value and earnings while  maintaining a high quality  balance sheet
without exposing the Company to undue interest rate risk. The Board of Directors
has overall  responsibility  for the  Company's  interest  rate risk  management
policies.  The Company has an Asset and Liability  Management  Committee  (ALCO)
which establishes and monitors guidelines to control the sensitivity of earnings
to changes in interest rates.

Activities involved in asset/liability management include but are not limited to
lending,  accepting and placing  deposits,  investing in securities  and issuing
debt.   Interest  rate  risk  is  the  primary  market  risk   associated   with
asset/liability  management.  Sensitivity  of earnings to interest  rate changes
arises when yields on assets change in a different time period or in a different
amount from that of interest  costs on  liabilities.  To mitigate  interest rate
risk, the structure of the balance sheet is managed with the goal that movements
of interest  rates on assets and  liabilities  are  correlated and contribute to
earnings  even in  periods  of  volatile  interest  rates.  The  asset/liability
management  policy  sets  limits on the  acceptable  amount of  variance  in net
interest margin,  net income and market value of equity under changing  interest
environments.  Market value of equity is the net present value of estimated cash
flows from the Company's  assets,  liabilities and off-balance  sheet items. The
Company uses simulation  models to forecast net interest margin,  net income and
market value of equity.

Simulation of net interest  margin,  net income and market value of equity under
various  interest  rate  scenarios is the primary tool used to measure  interest
rate risk. Using computer-modeling  techniques,  the Company is able to estimate
the potential  impact of changing  interest  rates on net interest  margin,  net
income and market value of equity.  A balance sheet  forecast is prepared  using
inputs  of  actual  loan,   securities  and  interest-bearing   liability  (i.e.
deposits/borrowings) positions as the beginning base.

In the simulation of net interest  margin and net income under various  interest
rate scenarios,  the forecast balance sheet is processed  against seven interest
rate  scenarios.  These  seven  interest  rate  scenarios  include  a flat  rate
scenario,  which assumes  interest  rates are  unchanged in the future,  and six
additional rate ramp scenarios ranging from +300 to -300 basis points around the
flat scenario in 100 basis point  increments.  These ramp scenarios  assume that
interest  rates  increase  or  decrease  evenly  (in a  "ramp"  fashion)  over a
twelve-month period and remain at the new levels beyond twelve months.

In the  simulation  of  market  value of  equity  under  various  interest  rate
scenarios,  the forecast balance sheet is processed  against seven interest rate
scenarios.  These seven interest rate  scenarios  include the flat rate scenario
described  above,  and six additional rate shock scenarios  ranging from +300 to
-300 basis points around the flat scenario in 100 basis point increments.  These
rate shock scenarios assume that interest rates increase or decrease immediately
(in a "shock" fashion) and remain at the new level in the future.

At  September  30,  2002 and 2001,  the results of the  simulations  noted above
indicate that the balance sheet is slightly asset sensitive  (earnings  increase
when interest  rates rise).  The magnitude of all the  simulation  results noted
above is within the Company's policy guidelines.  The asset liability management
policy  limits  aggregate  market  risk,  as  measured  in this  fashion,  to an
acceptable  level within the context of risk-return  trade-offs.


                                       23

<PAGE>

The simulation  results noted above do not incorporate  any management  actions,
which might  moderate the negative  consequences  of interest  rate  deviations.
Therefore,  they do not reflect likely actual results, but serve as conservative
estimates of interest rate risk.

At  September  30,  2002 and  2001,  the  Company  had no  derivative  financial
instruments.

Liquidity

The  Company's  principal  source of asset  liquidity is federal  funds sold and
marketable  investment  securities  available  for sale.  At September 30, 2002,
federal  funds sold and  investment  securities  available for sale totaled $292
million,  representing  an increase of $49 million from  December  31, 2001.  In
addition,   the  Company  generates  additional  liquidity  from  its  operating
activities. The Company's profitability during the first nine months of 2002 and
2001  generated  cash flows from  operations of $16.8 million and $12.6 million,
respectively.  Additional  cash flows may be provided by  financing  activities,
primarily the acceptance of deposits and borrowings from banks.  During the nine
months ended September 30, 2002,  sales and maturities of investment  securities
produced  cash  inflows of $87.4  million.  Also,  during the nine months  ended
September 30, 2002,  the Company  invested  $128.0  million and $25.5 million in
securities  and net loan growth,  respectively.  These changes in investment and
loan balances  contributed  to net cash used for  investing  activities of $67.9
million during the nine months ended  September 30, 2002.  Financing  activities
provided net cash of $53.4  million  during the nine months ended  September 30,
2002. Deposit balance increases, and exercise of common stock options, accounted
for $57.5  million and  $275,000 of  financing  sources of funds,  respectively.
Dividends paid and the repurchase of common stock used $4.2 million and $189,000
of cash during the nine months ended September 30, 2002, respectively. Also, the
Company's liquidity is dependent on dividends received from the Bank.  Dividends
from the Bank are subject to certain regulatory restrictions.


Item 4.  Controls and Procedures

Within ninety days of the filing date of this Form 10-Q, the Company carried out
an evaluation, under the supervision and with the participation of the Company's
management,  including the Company's  President/Chief  Executive Officer and the
Vice  President/Chief  Financial Officer, of the effectiveness of the design and
operation  of the  Company's  disclosure  controls  and  procedures  pursuant to
Exchange  Act Rule  13a-14.  Based  upon that  evaluation,  the  President/Chief
Executive Officer and the Vice President/Chief  Financial Officer concluded that
the  Company's  disclosure  controls  and  procedures  are  effective  in timely
alerting them of material  information  relating to the Company  (including  the
Bank) required to be included in the Company's periodic SEC filings.


                                       24

<PAGE>

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

Due to the nature of the banking business, the Bank is at times party to various
legal actions;  all such actions are of a routine nature and arise in the normal
course of business of the Bank.

Item 6 - Items and Reports on Form 8-K

(a) Exhibits

     Exhibit 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.

     Exhibit 3.2*:  Bylaws,  as  amended  to  date,  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.

     Exhibit 11.1:  Computation  of  Earnings  Per  Share on  Common and  Common
     Equivalent Shares and on Common Shares Assuming Full Dilution.

     Exhibit 21.1: Tri Counties  Bank, a California  banking corporation, is the
     only subsidiary of Registrant.

     Exhibit 99.1: CEO  Certification  Pursuant  to 18 U.S.C. Section  1350,  as
     Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

     Exhibit 99.2: CFO  Certification  Pursuant to 18 U.S.C.  Section  1350,  as
     Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

     * Previously filed.

(b) Reports on Form 8-K

     During the quarter ended September 30, 2002 the Company filed the following
     Current Reports on Form 8-K:

              Description                                   Date of Report
              -----------------------------------           --------------------
              Acquisition agreement and plan of merger      October 3, 2002
              by and  among TriCo Bancshares, Tri
              Counties Bank and North State National Bank


SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                TRICO BANCSHARES
                                  (Registrant)

Date:  November 12, 2002            /s/ Thomas J. Reddish
                                    ------------------------------------------
                                    Thomas J. Reddish
                                    Vice President and Chief Financial Officer


                                       25

<PAGE>

CERTIFICATIONS

I, Richard P. Smith, certify that;

   1.  I have reviewed  this quarterly report  on Form 10-Q of TriCo Bancshares;
   2.  Based on my knowledge, this quarterly  report does not contain any untrue
       statement  of a material  fact or omit to state a material fact necessary
       to make  the statements made, in  light of the circumstances  under which
       such statements  were  made,  not misleading  with respect to the  period
       covered by this quarterly report;
   3.  Based  on  my  knowledge,  the financial  statements, and other financial
       information  included in  this  quarterly report,  fairly  present in all
       material respects the financial condition, results of operations and cash
       flows of the registrant  as of, and for, the  periods presented  in  this
       quarterly report;
   4.  The registrant's  other  certifying  officer and  I are  responsible  for
       establishing  and  maintaining  disclosure  controls  and procedures  (as
       defined in Exchange Act Rules 13a-14  and 15d-14) for the registrant  and
       we have;
         a.  Designed  such  disclosure controls  and procedures to  ensure that
             material  information  relating to  the registrant,  including  its
             consolidated subsidiary, is made known to us by others within those
             entities,  particularly  during the period in which this  quarterly
             report is being prepared;
         b.  Evaluated the effectiveness of the registrant's disclosure controls
             and procedures as of a date within 90 days prior to the filing date
             of this quarterly report (the "Evaluation Date"); and
         c.  Presented in  this  quarterly  report  our  conclusions  about  the
             effectiveness of  the disclosure  controls and procedures  based on
             our evaluation as of the Evaluation Date;
   5.  The registrant's other certifying officer and I have disclosed,  based on
       our  most recent evaluation,  to the registrant's auditors and  the audit
       committee of the registrant's board of directors;
         a.  All significant deficiencies in the design or operation of internal
             controls which  could adversely affect  the registrant's ability to
             record,  process,  summarize  and report  financial data  and  have
             identified  for the registrant's  auditors any material weakness in
             internal controls; and
         b.  Any fraud, whether  or not  material, that  involves  management or
             other  employees who  have a  significant role in the  registrant's
             internal controls; and
   6.  The registrant's  other certifying  officer and  I have indicated in this
       quarterly  report  whether  or  not  there  were significant  changes  in
       internal  controls or in  other factors that  could significantly  affect
       internal  controls subsequent  to the date of our most recent evaluation,
       including any corrective actions with  regard to significant deficiencies
       and material weaknesses.



Date:  November 12, 2002                /s/ Richard P. Smith
                                        ----------------------------------------
                                        Richard P. Smith
                                        President and Chief Executive Officer


                                       26

<PAGE>

I, Thomas J. Reddish, certify that;

   1.  I have reviewed  this quarterly report  on Form 10-Q of TriCo Bancshares;
   2.  Based on my knowledge, this quarterly  report does not contain any untrue
       statement  of a material  fact or omit to state a material fact necessary
       to make  the statements made, in  light of the circumstances  under which
       such statements  were  made,  not misleading  with respect to the  period
       covered by this quarterly report;
   3.  Based  on  my  knowledge,  the financial  statements, and other financial
       information  included in  this  quarterly report,  fairly  present in all
       material respects the financial condition, results of operations and cash
       flows of the registrant  as of, and for, the  periods presented  in  this
       quarterly report;
   4.  The registrant's  other  certifying  officer and  I are  responsible  for
       establishing  and  maintaining  disclosure  controls  and procedures  (as
       defined in Exchange Act Rules 13a-14  and 15d-14) for the registrant  and
       we have;
         a.  Designed  such  disclosure controls  and procedures to  ensure that
             material  information  relating to  the registrant,  including  its
             consolidated subsidiary, is made known to us by others within those
             entities,  particularly  during the period in which this  quarterly
             report is being prepared;
         b.  Evaluated the effectiveness of the registrant's disclosure controls
             and procedures as of a date within 90 days prior to the filing date
             of this quarterly report (the "Evaluation Date"); and
         c.  Presented in  this  quarterly  report  our  conclusions  about  the
             effectiveness of  the disclosure  controls and procedures  based on
             our evaluation as of the Evaluation Date;
   5.  The registrant's other certifying officer and I have disclosed,  based on
       our  most recent evaluation,  to the registrant's auditors and  the audit
       committee of the registrant's board of directors;
         a.  All significant deficiencies in the design or operation of internal
             controls which  could adversely affect  the registrant's ability to
             record,  process,  summarize  and report  financial data  and  have
             identified  for the registrant's  auditors any material weakness in
             internal controls; and
         b.  Any fraud, whether  or not  material, that  involves  management or
             other  employees who  have a  significant role in the  registrant's
             internal controls; and
   6.  The registrant's  other certifying  officer and  I have indicated in this
       quarterly  report  whether  or  not  there  were significant  changes  in
       internal  controls or in  other factors that  could significantly  affect
       internal  controls subsequent  to the date of our most recent evaluation,
       including any corrective actions with  regard to significant deficiencies
       and material weaknesses.



Date:  November 12, 2002                /s/ Thomas J. Reddish
                                        ----------------------------------------
                                        Thomas J. Reddish
                                        Vice President and Chief
                                        Financial Officer


                                       27

<PAGE>

EXHIBITS

Exhibit 11.1

TRICO BANCSHARES
Computation of Earnings Per Share on Common and Common  Equivalent Shares and on
Common Shares Assuming Full Dilution

                                              For the              For the
                                            three months         nine months
                                        ended September 30,  ended September 30,
(In thousands, except per share data)     2002       2001      2002       2001
                                        ----------------------------------------
Weighted average number of common
   shares outstanding - basic            7,026      7,044     7,010      7,087

Add exercise of options reduced by
   the number of shares that could
   have been purchased with the
   proceeds of such exercise               205        187       178        150
                                        ----------------------------------------
Weighted average number of common
   shares outstanding - diluted          7,231      7,231     7,188      7,237
                                        ========================================

Net income                              $3,627     $3,245   $10,320     $9,061

Basic earnings per share                 $0.52      $0.46     $1.47      $1.28

Diluted earnings per share               $0.50      $0.45     $1.44      $1.25


                                       28

<PAGE>

Exhibit 99.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ending  September 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"),  I, Richard P. Smith,
President and Chief Executive  Officer of the Company,  certify,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that:

   (1)  The  Report fully  complies  with the requirements  of section 13(a)  or
        15(d) of the Securities Exchange Act of 1934; and
   (2)  The information contained in the Report fairly presents, in all material
        respects,  the  financial condition  and  results of  operations  of the
        Company.


          /s/ Richard P. Smith
          ----------------------------------------------
          Richard P. Smith
          President and Chief Executive Officer


Exhibit 99.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ending  September 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Thomas J. Reddish,
Vice President and Chief Financial Officer of the Company,  certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

   (1)  The  Report fully  complies  with the requirements  of section 13(a)  or
        15(d) of the Securities Exchange Act of 1934; and
   (2)  The information contained in the Report fairly presents, in all material
        respects,  the  financial condition  and  results of  operations  of the
        Company.


          /s/ Thomas J. Reddish
          ----------------------------------------------
          Thomas J. Reddish
          Vice President and Chief Financial Officer


                                       29
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{"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": "02823196"}, "business-address": {"street1": "TRICO BANCSHARES", "street2": "63 CONSTITUTION DRIVE", "city": "CHICO", "state": "CA", "zip": "95973", "phone": "5308980300"}, "mail-address": {"street1": "TRICO BANCSHARES", "street2": "63 CONSTITUTION 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, 2002              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
                                -----        -----

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                             Yes           No  X
                                -----        -----

                      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 12, 2002:  7,045,050
TABLE OF CONTENTS

                                                                            Page

Forward Looking Statements                                                    1

PART I - FINANCIAL INFORMATION                                                2

      Item 1 - Financial Statements                                           2

         Financial Summary                                                    6

         Notes to Unaudited Condensed Consolidated Financial Statements       7

      Item 2 - Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                         11

      Item 3 - Quantitative and Qualitative Disclosure about Market Risk     23

      Item 4 - Controls and Procedures                                       24

PART II - OTHER INFORMATION                                                  25

      Item 1 - Legal Proceedings                                             25

      Item 6 - Exhibits and Reports on Form 8-K                              25

      Signatures                                                             25

      Certifications                                                         26

      Exhibits                                                               28

      Exhibit 11.1 - Computation of Earnings Per Share                       28

      Exhibit 99.1 - Certification Required by 18 U.S.C. Section 1350        29

      Exhibit 99.2 - Certification Required by 18 U.S.C. Section 1350        29
FORWARD-LOOKING STATEMENTS

This  report  on Form  10-Q  contains  forward-looking  statements  about  TriCo
Bancshares (the "Company") for which it claims the protection of the safe harbor
provisions  contained in the Private  Securities  Litigation Reform Act of 1995.
These forward-looking statements are based on Management's current knowledge and
belief and include  information  concerning  the  Company's  possible or assumed
future financial condition and results of operations.  A number of factors, some
of which are beyond the  Company's  ability to predict or  control,  could cause
future  results to differ  materially  from those  contemplated.  These  factors
include  but are not limited to (1) a continued  slowdown  in the  national  and
California  economies;  (2) increased economic uncertainty created by the recent
terrorist  attacks in the United States and the uncertain effect of these events
on the  national  and  regional  economies;  (4)  changes in the  interest  rate
environment;  (5)  changes  in the  regulatory  environment;  (6)  significantly
increasing  competitive pressure in the banking industry;  (7) operational risks
including  data  processing   system  failures  or  fraud;  (8)  the  effect  of
acquisitions  and  integration  of acquired  businesses;  (9) volatility of rate
sensitive deposits; (10) asset/liability matching risks and liquidity risks; and
(11) changes in the securities markets.

The reader is directed to the Company's  annual report on Form 10-K for the year
ended  December 31, 2001,  for further  discussion of factors which could affect
the Company's  business and cause actual results to differ materially from those
expressed in any forward-looking statement made in this report.

                                       1
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
TRICO BANCSHARES
                                      CONSOLIDATED BALANCE SHEETS
                                             (In thousands)
                                                                  (Unaudited)               (Unaudited)
                                                               At September 30,           At December 31,
                                                            2002              2001             2001
---------------------------------------------------
Assets:
     Cash and due from banks                              $56,749           $48,317          $59,264
     Federal funds sold                                    23,400            27,000           18,700
                                                     ---------------------------------------------------
         Cash and cash equivalents                         80,149            75,317           77,964

     Investment securities available for sale             268,921           210,789          224,590
     Loans
         Commercial                                       142,290           151,772          130,054
         Consumer                                         191,601           149,258          155,046
         Real estate mortgages                            313,191           322,096          326,897
         Real estate construction                          36,472            45,031           46,735
                                                     ---------------------------------------------------
                                                          683,554           668,157          658,732

     Allowance for loan losses                            (14,382)          (12,437)         (13,058)
                                                     ---------------------------------------------------
         Loans, net of allowance for loan losses          669,172           655,720          645,674
     Premises and equipment, net                           16,583            16,510           16,457
     Cash value of life insurance                          15,045            14,559           14,602
     Other real estate owned                                    -               723               71
     Accrued interest receivable                            5,552             6,087            5,522
     Deferred income taxes                                  7,957             8,164            9,334
     Intangible assets                                      4,387             5,262            5,070
     Other assets                                           5,757             3,019            6,163
                                                     ---------------------------------------------------
         Total Assets                                  $1,073,523          $996,150       $1,005,447
                                                     ===================================================

Liabilities:
     Deposits:
         Noninterest-bearing demand                      $202,895          $177,970         $190,386
         Interest-bearing demand                          175,883           155,304          165,542
         Savings                                          268,182           228,367          247,399
         Time certificates, $100,000 and over              86,945            80,865           70,302
         Other time certificates                          203,990           216,974          206,764
                                                     ---------------------------------------------------
         Total deposits                                   937,895           859,480          880,393
     Accrued interest payable                               2,608             4,350            3,488
     Other Liabilities                                     13,667            10,977           11,677
     Long-term debt and other borrowings                   22,932            32,963           22,956
                                                     ---------------------------------------------------
         Total Liabilities                                977,102           907,770          918,514
                                                     ===================================================

Shareholders' Equity:
     Authorized - 20,000,000 shares of common stock
     Issued and outstanding:
           7,035,590 at September 30, 2002                 50,188
           7,018,080 at September 30, 2001                                   49,395
           7,000,980 at December 31, 2001                                                     49,679
     Retained earnings                                     43,900            37,974           37,909
     Accumulated other comprehensive income, net            2,333             1,011             (655)
                                                     ---------------------------------------------------
         Total Shareholders' Equity                        96,421            88,380           86,933
                                                     ===================================================
Total Liabilities and Shareholders' Equity             $1,073,523          $996,150       $1,005,447
                                                     ===================================================

                                       2
TRICO BANCSHARES
                        CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                  (In thousands, except per share data)

                                                             (Unaudited)                (Unaudited)
                                                         Three months ended          Nine months ended
                                                         2002           2001       2002           2001
-------------------------------------------------------
Interest Income:
  Interest and fees on loans                            $13,333        $15,132    $39,387        $44,993
  Interest on federal funds sold                            143            370        476          1,321
  Interest on investment securities available for sale
     Taxable                                              2,410          2,202      6,949          7,158
     Tax exempt                                             549            555      1,656          1,666
                                                     -------------------------------------------------------
     Total interest income                               16,435         18,259     48,468         55,138
                                                     -------------------------------------------------------
Interest Expense:
  Interest on interest-bearing demand deposits              115            368        350          1,325
  Interest on savings                                       656          1,107      2,011          3,899
  Interest on time certificates of deposit                2,129          3,623      6,340         12,380
  Interest on short-term borrowing                            1              2          1              3
  Interest on long-term debt                                326            512        967          1,523
                                                     -------------------------------------------------------
     Total interest expense                               3,227          5,612      9,669         19,130
                                                     -------------------------------------------------------
Net Interest Income                                      13,208         12,647     38,799         36,008
                                                     -------------------------------------------------------
Provision for loan losses                                   700            600      2,000          3,250
                                                     -------------------------------------------------------
Net Interest Income After Provision for Loan Losses      12,508         12,047     36,799         32,758
                                                     -------------------------------------------------------

Noninterest Income:
  Service charges and fees                                3,521          2,045      7,635          6,015
  Gain on sale of investments                                 -              -          -          1,756
  Gain on sale of loans                                     752            494      2,254          1,292
  Commissions on sale of non-deposit investment products    712            678      1,989          1,865
  Other                                                     428            496      1,304          1,390
                                                     -------------------------------------------------------
  Total Noninterest Income                                5,413          3,713     13,182         12,318
                                                     -------------------------------------------------------
Noninterest Expense:
  Salaries and related benefits                           6,344          5,431     17,856         15,765
  Other                                                   5,789          5,034     15,642         14,672
                                                     -------------------------------------------------------
  Total Noninterest Expense                              12,133         10,465     33,498         30,437
                                                     -------------------------------------------------------
Income Before Income Taxes                               5,788          5,295     16,483          14,639
                                                     -------------------------------------------------------
  Provision for income taxes                             2,161          2,050      6,163           5,578
                                                     -------------------------------------------------------
Net Income                                              $3,627         $3,245    $10,320          $9,061
                                                     -------------------------------------------------------

Comprehensive Income:
  Change in unrealized gain (loss) on
     securities available for sale, net                    940          1,411      2,988           1,695
  Net change in minimum pension liability                    -              -          -            (360)
                                                     -------------------------------------------------------
Comprehensive Income                                    $4,567         $4,656    $13,308         $10,396
                                                     =======================================================

Average Shares Outstanding                               7,026          7,044      7,010           7,087
Diluted Average Shares Outstanding                       7,231          7,231      7,188           7,237

Per Share Data
     Basic Earnings                                      $0.52          $0.46      $1.47           $1.28
     Diluted Earnings                                    $0.50          $0.45      $1.44           $1.25
     Dividends Paid                                      $0.20          $0.20      $0.60           $0.60

                                       3
TRICO BANCSHARES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                            (In thousands, unaudited)
                                                                               Accumulated
                                                                                  Other
                                                       Common        Retained  Comprehensive
                                                        Stock        Earnings  Income, net     Total
                                                     ---------------------------------------------------
Balance, December 31, 2000                             $50,428       $35,129      ($324)      $85,233
   Net income for the period                                           9,061                    9,061
   Stock issued, including
     stock option tax benefits                             386                                    386
   Repurchase of common stock                           (1,419)       (1,979)                  (3,398)
   Dividends                                                          (4,237)                  (4,237)
   Unrealized gain on securities available
     for sale, net                                                                1,695         1,695
   Change in minimum pension liability, net                                        (360)         (360)
                                                     ---------------------------------------------------
Balance September 30, 2001                             $49,395       $37,974     $1,011       $88,380
                                                     ===================================================

Balance, December 31, 2001                             $49,679       $37,909      ($655)      $86,933
   Net income for the period                                          10,320                   10,320
   Stock issued, including
     stock option tax benefits                             579                                    579
   Repurchase of common stock                              (70)         (119)                    (189)
   Dividends                                                          (4,210)                  (4,210)
   Unrealized gain on securities available
     for sale, net                                                                2,988         2,988
                                                     ---------------------------------------------------
Balance September 30, 2002                             $50,188       $43,900     $2,333       $96,421
                                                     ===================================================

                                       4
TRICO BANCSHARES
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (In thousands, unaudited)

                                                                       For the nine months
                                                                       ended September 30,
                                                                     2002               2001
                                                                 -------------------------------
Operating Activities:
   Net income                                                      $10,320              $9,061
   Adjustments to reconcile net income to net cash provided
     by operating activities:
       Depreciation and amortization of property and equipment       1,956               1,891
       Amortization of intangible assets                               683                 683
       Provision for loan losses                                     2,000               3,250
       Amortization of investment securities premium, net            1,080                 139
       Deferred income taxes                                          (108)               (365)
       Investment security gains, net                                    -              (1,756)
       Originations of loans for resale                           (113,271)            (84,545)
       Proceeds from sale of loans originated for resale           114,227              85,028
       Gain on sale of loans                                        (2,254)             (1,292)
       Amortization of mortgage servicing rights                       498                 223
       Loss (gain) on sale of fixed assets                              10                  (4)
       Gain on sale of other real estate owned, net                     (8)                (48)
       Provision for losses on other real estate owned                   -                  18
       Change in assets and liabilities:
         (Increase) decrease in interest receivable                    (30)                848
         Decrease in interest payable                                 (880)               (895)
         Increase in other assets and liabilities                    2,547                 389
                                                                 -------------------------------
Net Cash Provided by Operating Activities                           16,770              12,625
                                                                 -------------------------------
Investing Activities:
   Proceeds from maturities of securities available-for-sale        87,365              63,331
   Proceeds from sales of securities available-for-sale                  -              14,120
   Purchases of securities available-for-sale                     (127,999)            (54,738)
   Net increase in loans                                           (25,498)            (30,576)
   Proceeds from sale of premises and equipment                         16                  23
   Purchases of property and equipment                              (1,902)             (1,426)
   Proceeds from sale of other real estate owned                        79               1,075
                                                                 -------------------------------
Net Cash Used by Investing Activities                              (67,939)             (8,191)
                                                                 -------------------------------
Financing Activities:
   Net increase in deposits                                         57,502              21,648
   Net decrease in federal funds purchased                               -                (500)
   Payments of principal on long-term debt agreements                  (24)             (1,020)
   Repurchase of Common Stock                                         (189)             (3,398)
   Dividends paid                                                   (4,210)             (4,237)
   Exercise of stock options/issuance of Common Stock                  275                 200
                                                                 -------------------------------
Net Cash Provided by Financing Activities                           53,354              12,693
                                                                 -------------------------------
Net Increase in Cash and Cash Equivalents                            2,185              17,127
                                                                 -------------------------------
Cash and Cash Equivalents and Beginning of Period                   77,964              58,190
                                                                 -------------------------------
Cash and Cash Equivalents at End of Period                         $80,149             $75,317
                                                                 ===============================
Supplemental Disclosure of Noncash Activities:
   Unrealized gain (loss) on securities available for sale          $4,777              $2,740
   Loans transferred to other real estate owned                          -                $327

Supplemental Disclosure of Cash Flow Activity:
   Cash paid for interest expense                                  $10,549             $20,025
   Cash paid for income taxes                                       $4,700              $5,775
   Income tax benefit from stock option exercises                     $304                $186

                                       5
TRICO BANCSHARES
                                             Financial Summary
                             (dollars in thousands, except per share amounts)

                                                       Three months ended            Nine months ended
                                                          September 30,                September 30,
                                                 -----------------------------------------------------------
                                                     2002              2001        2002           2001
                                                 -----------------------------------------------------------
Net Interest Income (FTE)                          $13,520           $12,923     $39,742        $36,958
Provision for loan losses                             (700)             (600)     (2,000)        (3,250)
Noninterest income                                   5,413             3,713      13,182         12,318
Noninterest expense                                (12,133)          (10,465)    (33,498)       (30,437)
Provision for income taxes (FTE)                    (2,473)           (2,326)     (7,106)        (6,528)
                                                 -----------------------------------------------------------
Net income                                          $3,627            $3,245     $10,320         $9,061
                                                 ===========================================================

Average shares outstanding                           7,026             7,044       7,010          7,087
Diluted average shares outstanding                   7,231             7,231       7,188          7,237
Shares outstanding at period end                     7,036             7,018       7,036          7,018

As Reported:
   Basic earnings per share                          $0.52             $0.46       $1.47          $1.28
   Diluted earnings per share                        $0.50             $0.45       $1.44          $1.25
   Return on assets                                  1.39%             1.32%       1.36%          1.25%
   Return on equity                                 15.17%            14.75%      14.92%         13.90%
   Net interest margin                               5.67%             5.78%       5.72%          5.58%
   Net loan recoveries (losses) to average loans     0.04%            (0.05%)     (0.14%)        (0.51%)
   Efficiency ratio (FTE)                           64.08%            62.91%      63.29%         61.77%

Average Balances:
   Total assets                                 $1,044,518          $982,387  $1,015,068       $970,086
   Earning assets                                  954,611           894,670     926,387        883,816
   Total loans                                     676,009           661,630     655,682        644,447
   Total deposits                                  908,675           844,741     883,898        834,161
   Shareholders' equity                             95,645            88,005      92,212         86,886

Balances at Period End:
   Total assets                                 $1,073,523          $996,150
   Earning assets                                  975,875           905,946
   Total loans                                     683,554           668,157
   Total deposits                                  937,895           859,480
   Shareholders' equity                             96,421            88,380

Financial Ratios at Period End:
   Allowance for loan losses to loans                2.10%             1.86%
   Book value per share                             $13.70            $12.59
   Equity to assets                                  8.98%             8.87%
   Total capital to risk assets                     11.89%            11.69%

Dividends Paid Per Share                             $0.20             $0.20       $0.60          $0.60
Dividend Payout Ratio                               38.75%            43.42%      40.80%         47.07%

                                       6
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1:

Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information  and  pursuant  to  the  rules  and  regulations  of  the
Securities and Exchange  Commission.  The results of operations  reflect interim
adjustments,  all of which are of a normal  recurring  nature and which,  in the
opinion of management,  are necessary for a fair presentation of the results for
the interim  period  presented.  The interim  results for the nine months  ended
September  30,  2002 and  2001 are not  necessarily  indicative  of the  results
expected for the full year. These unaudited  consolidated  financial  statements
should be read in conjunction with the audited consolidated financial statements
and accompanying  notes as well as other  information  included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001.

Certain amounts previously  reported in the 2001 financial  statements have been
reclassified to conform to the 2002 presentation.  These  reclassifications  did
not affect previously reported net income or total shareholders' equity.

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standard No. 141, "Business  Combinations" (SFAS 141),
and  Statement of Financial  Accounting  Standard No. 142,  "Goodwill  and Other
Intangible  Assets" (SFAS 142).  SFAS 141 requires  that the purchase  method of
accounting be used for all business  combinations  initiated after June 30, 2001
and specifies  criteria that  intangible  assets  acquired in a purchase  method
business  combination  must  meet  to be  recognized  and  reported  apart  from
goodwill.  SFAS 142 requires that goodwill and intangible assets with indefinite
useful  lives no longer be  amortized  after 2001,  but instead be  periodically
evaluated  for  impairment.  Intangible  assets with  definite  useful lives are
required to be amortized over their  respective  estimated useful lives to their
estimated residual values, and also reviewed for impairment.

Effective  January 1, 2002,  the Company was required to adopt the provisions of
SFAS 142. Accordingly,  any goodwill and any intangible asset determined to have
an indefinite useful life that are acquired in a purchase  business  combination
will not be  amortized,  but will  continue to be evaluated  for  impairment  in
accordance  with the  appropriate  accounting  literature.  The Company was also
required to reassess the useful lives and residual values of all such intangible
assets and make any necessary amortization period adjustments by March 31, 2002.
No such adjustments were required to be made.

In  addition,  to the  extent an  intangible  asset is  identified  as having an
indefinite  useful life, the Company was required to test the  intangible  asset
for impairment in the first quarter of 2002. The Company has no intangibles with
indefinite useful life.

As of the date of  adoption,  the Company  had  identifiable  intangible  assets
consisting of core deposit premiums and minimum pension liability.  Core deposit
premiums are amortized  using an accelerated  method over a period of ten years.
Intangible  assets related to minimum  pension  liability are adjusted  annually
based upon  actuarial  estimates.  The Company  has no goodwill  (unidentifiable
intangible assets).

                                       7
Acquisition, Goodwill and Other Intangible Assets

The  following  table  summarizes  the Company's  goodwill and other  intangible
assets as of January 1, 2002 and September 30, 2002.

                                  January 1,                       September 30,
  (Dollar in Thousands)              2002    Additions  Reductions     2002
                                  ----------------------------------------------
  Core Deposit Intangibles         $10,795                           $10,795
  Accumulated Amortization          (5,725)                (683)      (6,408)
                                  ----------------------------------------------
  Core Deposit Intangibles, net     $5,070                ($683)      $4,387
                                  ==============================================

Core  deposit  premiums  are  scheduled  to amortize  at a rate of $227,700  per
quarter through the quarter ended December 31, 2006.

Mortgage Operations

The Company  sold  substantially  all of its  conforming  long-term  residential
mortgage loans originated during the first nine months of 2002 for cash proceeds
equal to the fair value of the loans.  The Company records  originated  mortgage
servicing  rights as assets by allocating  the total cost basis between the loan
and the servicing right based on their relative fair values.

The following table summarizes the Company's mortgage servicing rights assets as
of January 1, 2002 and September 30, 2002.

                                  January 1,                       September 30,
  (Dollar in Thousands)              2002    Additions  Reductions     2002
                                  ----------------------------------------------
  Mortgage Servicing Rights         $1,512     $1,298     ($498)      $2,312
                                  ==============================================

The recorded value of mortgage  servicing  rights is amortized in proportion to,
and over the period of, estimated net servicing  revenues.  The Company assesses
capitalized  mortgage  servicing rights for impairment based upon the fair value
of those rights at each reporting  date.  For purposes of measuring  impairment,
the rights are stratified  based upon the product type, term and interest rates.
Fair value is  determined  by  discounting  estimated net future cash flows from
mortgage  servicing  activities  using discount rates that  approximate  current
market rates and estimated prepayment rates, among other assumptions. The amount
of  impairment  recognized,  if any,  is the  amount  by which  the  capitalized
mortgage servicing rights for a stratum exceeds their fair value. Impairment, if
any, is recognized through a valuation allowance for each individual stratum.

At  September  30,  2002,  the Company had no mortgage  loans held for sale.  At
September  30, 2002 and  December  31, 2001,  the Company  serviced  real estate
mortgage loans for others of $269 million and $196 million, respectively.

Noninterest Income

Included in the results for the nine  months  ended  September  30, 2001 and the
three  months  ended  March  31,  2001  is a  one-time  pre-tax  income  item of
$1,756,000.  This  one-time  item  represents  the realized gain recorded by the
Company  upon  the  sale of  88,796  common  shares  of John  Hancock  Financial
Services, Inc. (JHF) for proceeds of $3,265,000.

                                       8
Stock Repurchase Plan

On March 15, 2001, the Company  announced the completion of its stock repurchase
plan  initially  announced on July 20, 2000.  Under this  repurchase  plan,  the
Company  repurchased  a total of 150,000  shares of which  110,000  shares  were
repurchased since December 31, 2000.

On  October  19,  2001,  the  Company  announced  the  completion  of its  stock
repurchase  plan initially  announced on March 15, 2001.  Under this  repurchase
plan, the Company repurchased a total of 150,000 shares.

Also on October 19,  2001,  the Company  announced  that its Board of  Directors
approved  a new  plan  to  repurchase,  as  conditions  warrant,  up to  150,000
additional  shares of the  Company's  stock on the open  market or in  privately
negotiated transactions.  The timing of purchases and the exact number of shares
to be purchased will depend on market conditions.  The 150,000 shares covered by
this repurchase  plan represent  approximately  2.2% of the Company's  6,992,080
common  shares  outstanding  on October 19, 2001.  As of December 31, 2001,  the
Company  repurchased  108,800  shares  under this new plan.  During the quarters
ended March 31,  2002,  June 30,  2002,  and  September  30,  2002,  the Company
repurchased 10,000, 0, and 0 shares under this new plan, respectively.

Shareholder Rights Plan

On June 25, 2001, the Company  announced that its Board of Directors adopted and
entered  into a  Shareholder  Rights  Plan  designed  to  protect  and  maximize
shareholder  value and to assist the Board of  Directors  in  ensuring  fair and
equitable  benefit to all  shareholders in the event of a hostile bid to acquire
the Company.

The Company  adopted this Rights Plan to protect  stockholders  from coercive or
otherwise unfair takeover  tactics.  In general terms, the Rights Plan imposes a
significant  penalty  upon any person or group that  acquires 15% or more of the
Company's  outstanding  common stock without the approval of the Company's Board
of  Directors.  The Rights Plan was not adopted in response to any known attempt
to acquire control of the Company.

Under the Rights  Plan, a dividend of one  Preferred  Stock  Purchase  Right was
declared  for each  common  share held of record as of the close of  business on
July 10, 2001.  No separate  certificates  evidencing  the Rights will be issued
unless and until they become exercisable.

The Rights  generally  will not become  exercisable  unless an acquiring  entity
accumulates or initiates a tender offer to purchase 15% or more of the Company's
common stock. In that event, each Right will entitle the holder,  other than the
unapproved acquirer and its affiliates,  to purchase either the Company's common
stock or shares in an acquiring entity at one-half of market value.

The Right's initial exercise price,  which is subject to adjustment,  is $49.00.
The Company's Board of Directors generally will be entitled to redeem the Rights
at a redemption price of $.01 per Right until an acquiring entity acquires a 15%
position. The Rights expire on July 10, 2011.

Business Segments

The Company is principally  engaged in traditional  community banking activities
provided  through its twenty-nine  branches and eight in-store  branches located
throughout Northern California.  Community banking activities include the Bank's
commercial and retail  lending,  deposit  gathering and investment and liquidity
management  activities.  In addition to its community banking services, the Bank
offers investment  brokerage and leasing  services.  The results of the separate
branches  have  been  aggregated  into a single  reportable  segment,  Community
Banking. The Company's leasing, investment brokerage and real estate segments do
not meet  prescribed  aggregation or materiality  criteria and,  therefore,  are
reported as "Other" in the following table.

                                       9
Summarized financial information concerning the Bank's reportable segments is as
follows (in thousands):

                                          Community
                                           Banking          Other         Total
Three Months Ended September 30, 2002
Net interest income                         $12,948          $260        $13,208
Noninterest income                            4,534           879          5,413
Noninterest expense                          11,567           566         12,133
Net income                                    3,272           355          3,627
Assets                                   $1,057,071       $16,452     $1,073,523

Three Months Ended September 30, 2001
Net interest income                         $12,478          $169        $12,647
Noninterest income                            2,954           759          3,713
Noninterest expense                           9,826           639         10,465
Net income                                    3,066           179          3,245
Assets                                     $980,270       $15,880       $996,150

Nine Months Ended September 30, 2002
Net interest income                         $38,053          $746        $38,799
Noninterest income                           10,809         2,373         13,182
Noninterest expense                          31,871         1,627         33,498
Net income                                    9,395           925         10,320
Assets                                   $1,057,071       $16,452     $1,073,523

Nine Months Ended September 30, 2001
Net interest income                         $35,388          $620        $36,008
Noninterest income                           10,233         2,085         12,318
Noninterest expense                          28,692         1,745         30,437
Net income                                    8,466           595          9,061
Assets                                     $980,270       $15,880       $996,150

Recently Issued Accounting Pronouncement

On October 3, 2001, the FASB issued Statement of Financial  Accounting  Standard
No. 144,  "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS
144), which addresses  financial  accounting and reporting for the impairment or
disposal of long-lived assets.  While SFAS 144 supersedes Statement of Financial
Accounting Standard No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of", it retains many of the fundamental
provisions  of that  Statement.  SFAS 144 also  supersedes  the  accounting  and
reporting   provisions  of  APB  Opinion  No.  30,  "Reporting  the  Results  of
Operations,  Reporting  the Effects of Disposal of a Segment of a Business,  and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions,  for
the disposal of a segment of a business". However, it retains the requirement in
Opinion  30 to  report  separately  discontinued  operations  and  extends  that
reporting to a component of an entity that either has been disposed of (by sale,
abandonment,  or in a distribution to owners) or is classified as held for sale.
By  broadening  the  presentation  of  discontinued  operations  to include more
disposal  transactions,  the FASB has enhanced  management's  ability to provide
information  that helps  financial  statement  users to assess the  effects of a
disposal transaction on the ongoing operations of an entity. The Company adopted
the  provisions of SFAS 144 on January 1, 2002. The adoption of SFAS 144 did not
have a material  impact on the financial  condition or operating  results of the
Company.

                                       10
Subsequent Event

On October 7, 2002, TriCo Bancshares announced that on October 3, 2002 it signed
a definitive agreement with Tri Counties Bank, its wholly owned subsidiary,  and
North State National Bank,  pursuant to which TriCo  Bancshares will acquire all
of the  outstanding  stock of North State  National Bank in exchange for cash of
approximately  $13 million,  approximately  716,000  shares of TriCo  Bancshares
common  stock and  options  to  purchase  approximately  92,450  shares of TriCo
Bancshares  common stock,  subject to adjustments as set forth in the agreement.
Based upon a closing price of $23.92 per share of TriCo Bancshares  common stock
on October 3, 2002, the transaction was valued at $31.8 million.

Item 2. Management's Discussion and Analysis of Financial Conditions 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.  Within  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations,  interest income and net interest
income are generally presented on a fully tax-equivalent (FTE) basis.

The Company's  discussion and analysis of its financial condition and results of
operations are based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting  principles  generally accepted
in the United States. The preparation of these financial statements requires the
Company to make  estimates  and  judgments  that affect the reported  amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets  and  liabilities.  On an  on-going  basis,  the  Company  evaluates  its
estimates,  including  those  related to the adequacy of the  allowance for loan
losses,  investments,  intangible assets,  income taxes and  contingencies.  The
Company  bases its  estimates  on  historical  experience  and on various  other
assumptions  that are believed to be  reasonable  under the  circumstances,  the
results of which form the basis for making  judgments  about the carrying values
of assets and  liabilities  that are not readily  apparent  from other  sources.
Actual results may differ from these estimates  under  different  assumptions or
conditions.  (See  caption  "Allowance  for  Loan  Losses"  for a more  detailed
discussion).

The  following   discussion  and  analysis  is  designed  to  provide  a  better
understanding  of the significant  changes and trends related to the Company and
its subsidiaries'  financial condition,  operating results,  asset and liability
management,  liquidity and capital  resources and should be read in  conjunction
with the Consolidated Financial Statements of the Company and the Notes thereto.

The Company had earnings of $3,627,000 for the quarter ended September 30, 2002.
The quarterly earnings represent an 11.8% increase over the $3,245,000  reported
for the same period of 2001. Diluted earnings per share for the third quarter of
2002 were $0.50 versus $0.45 in the year earlier  period.  Earnings for the nine
months  ended  September  30, 2002 were  $10,320,000  versus year ago results of
$9,061,000,  and  represented a 13.9% increase.  The diluted  earnings per share
were $1.44 and $1.25 for the  nine-month  periods  ended  September 30, 2002 and
2001, respectively.  Included in the results for the nine months ended September
30, 2001, was a one-time  pre-tax gain of $1,756,000  from the sale of insurance
company stock.  Excluding the one-time gain noted above,  the Company would have
reported diluted earnings per share of $1.44 and $1.10 in the nine month periods
ended September 30, 2002 and 2001, respectively.

                                       11
Following is a summary of the components of fully taxable equivalent ("FTE") net
income for the periods indicated (dollars in thousands):

                                    Three months ended       Nine months ended
                                       September 30,           September 30,
                                   ---------------------------------------------
                                     2002         2001       2002         2001
                                   ---------------------------------------------
Net interest income (FTE)          $13,520      $12,923    $39,742      $36,958
Provision for loan losses             (700)        (600)    (2,000)      (3,250)
Noninterest income                   5,413        3,713     13,182       12,318
Noninterest expense                (12,133)     (10,465)   (33,498)     (30,437)
Provision for income taxes (FTE)    (2,473)      (2,326)    (7,106)      (6,528)
                                   ---------------------------------------------
Net income                          $3,627       $3,245    $10,320       $9,061
                                   =============================================

Net income for the third quarter of 2002 was $382,000  (11.8%) more than for the
same quarter of 2001. A  significant  increase in  noninterest  income (up $1.70
million or 45.8%),  and an increase in net interest income (FTE) (up $597,000 or
4.6%) more than offset  increases in  noninterest  expenses (up $1.67 million or
15.9%) and  provision  for loan losses (up  $100,000 or 16.7%).  The increase in
noninterest  income from the  year-ago  quarter was mainly due to an increase in
service  charges and fee income on deposit  products (up  $1,476,000 or 72.2% to
$3,521,000),  and an increase in gain on sale of loans (up  $258,000 or 52.2% to
$752,000).  The increase in service charges and fee income was mainly due to the
introduction  of an overdraft  privilege  deposit  product in July 2002 that has
added a new stream of recurring noninterest income. The increase in gain on sale
of loans is due to the  Company's  ability to  originate  and sell an  increased
volume of residential  real estate mortgage loans in the current  environment of
record mortgage refinance.  The increase in net interest income (FTE) was due to
an increase in average  balance of  interest-earning  assets (up $59.9  million)
that was partially  offset by an 11 basis point decrease in net interest margin.
The increase in noninterest  expense was mainly due to an increase in salary and
benefit expense (up $913,000 or 16.8% to $6,344,000). The increase in salary and
benefits expense was mainly due to annual salary increases, increased commission
and incentive expense,  and new employees at the Company's newly opened branches
in Oroville  (June  2002) and  Brentwood  (September  2002).  Other  noninterest
expense  also  increased  (up  $755,000 or 15.0% to  $5,789,000).  Approximately
$350,000  of this  increase  was  recurring  expenses  related to the  overdraft
privilege  product   introduced  in  July  2002,  and  noted  above.   Increased
advertising expenses accounted for $190,000 of the increase in other noninterest
expense.

Comparing  the first nine  months of 2002 to the first nine  months of the prior
year, net income increased $1,259,000 (13.9%).  Increases in net interest income
(FTE) (up $2.78 million or 7.5%) and  noninterest  income (up $864,000 or 7.0%),
and a decrease in  provision  for loan loss (down  $1.25  million or 38.5%) were
only partially offset by an increase in noninterest expense (up $3.06 million or
10.1%).  The increase in net  interest  income (FTE) was the result of increased
average earning asset balance (up $42.6 million or 4.8% to $926.4 million),  and
a 14 basis point  increase in net  interest  margin  (FTE).  The decrease in the
provision for loan losses was due to reduced loan losses  (charge-offs) from the
year-ago period, and relatively stable loan credit quality. Driving the increase
in  noninterest  income  was gain on sale of loans and fees  from the  overdraft
privilege product noted above.  Driving the increase in noninterest expense were
annual salary increases,  increased  commission and incentive  expense,  and new
employees at the  Company's  newly opened  branches in Oroville  (June 2002) and
Brentwood (September 2002).

                                       12
Net Interest Income

Following is a summary of the components of net interest  income for the periods
indicated (dollars in thousands):

                                  Three months ended         Nine months ended
                                     September 30,             September 30,
                                ------------------------------------------------
                                   2002         2001         2002         2001
                                ------------------------------------------------
  Interest income                $16,435      $18,259      $48,468      $55,138
  Interest expense                (3,227)      (5,612)      (9,669)     (19,130)
  FTE adjustment                     312          276          943          950
                                ------------------------------------------------
    Net interest income (FTE)    $13,520      $12,923      $39,742      $36,958
                                ================================================

  Average earning assets        $954,611     $894,670     $926,387     $883,816

  Net interest margin (FTE)        5.67%        5.78%        5.72%        5.58%

The  Company's  primary  source  of  revenue  is  net  interest  income,  or the
difference  between  interest  income on earning assets and interest  expense in
interest-bearing liabilities. Net interest income (FTE) during the third quarter
of 2002 increased  $597,000  (4.6%) from the same period in 2001 to $13,520,000.
The  increase in net  interest  income  (FTE) was due to the  increased  average
balances  of  earning  assets (up $59.9  million or 6.7%)  offset by an 11 basis
point decrease in net interest margin (FTE).

Comparing  the first nine months of 2002 with the first nine months of the prior
year, net interest income (FTE) increased  $2,784,000 (7.5%),  with the increase
attributable  to an increase in the average balance of  interest-earning  assets
(up $42.5 million or 4.8%) and a 14 basis point increase in net interest  margin
(FTE).

Interest and Fee Income

Interest  and fee income  (FTE) for the third  quarter of 2002  decreased  $1.79
million  (9.7%) from the third quarter of 2002.  The decrease was the net effect
of higher average  interest-earning assets (up $59.9 million or 6.7%), more than
offset by a 127 basis  point  decrease  in the  yield on those  average  earning
assets  to  7.02%.  The  growth in  interest-earning  assets  was led by a $54.3
million  (28.4%)  increase  in average  investment  security  balances to $245.6
million,  and a $14.4  million  (2.2%)  increase in average loan  balances.  The
average  balance of federal funds sold decreased  $8.8 million  (21.0%) to $33.0
million.

The average yield on the Company's earning assets decreased for the quarter from
8.29% in 2001 to 7.02% in 2002.  This downward trend in yields was reflective of
general  interest  rate markets  during much of 2001 and into 2002. In addition,
deposit  growth  outstripped  loan growth during the periods,  which resulted in
most of the growth in interest-earning assets being in lower yielding investment
securities instead of relatively higher yielding loans.

Comparing  the first nine months of 2002 to 2001,  interest and fee income (FTE)
decreased $6.67 million (11.9%).  Consistent with the third quarter  comparison,
the decrease was due to higher average balances of interest-earning assets, more
than offset by lower  yields.  The average  balance of  interest-earning  assets
increased $42.6 million (4.8%).  Average investment balances accounted for $34.9
million of the increase, while average loan balances accounted for $11.2 million
of the increase. Average federal funds sold balances decreased $3.6 million.

The average yield on  interest-earning  assets  decreased  from 8.46% in 2001 to
7.11% in 2002. This downward trend in yields was reflective of general  interest
rate  markets  during  much of 2001  and  into  2002.  As in the  third  quarter
comparison,  deposit growth  outstripped  loan growth during the periods,  which
resulted  in most of the  growth  in  interest-earning  assets  being  in  lower
yielding investment securities instead of relatively higher yielding loans.

                                       13
Interest Expense

Interest  expense  decreased  $2.39 million (42.5%) in the third quarter of 2002
compared to the year-ago  quarter.  The decrease was mainly due to a decrease in
the average rate paid on  interest-bearing  liabilities  from 3.15% in the third
quarter of 2001 to 1.72% in the third quarter of 2002.

Average interest-bearing liabilities increased $35.2 million (4.9%) in the third
quarter  compared to the  year-ago  quarter.  The  increase in  interest-bearing
liabilities  was  concentrated  in the  lower  earning  interest-bearing  demand
deposit (up $18.6 million or 11.9%),  and savings  deposits (up $37.2 million or
16.6%).  The average  balances of the higher  earning time deposits  (down $10.5
million or 3.5%) and long-term debt (down $10.2 million or 30.9%) were down from
the year-ago quarter.  In addition,  the average balance of  noninterest-bearing
deposits increased $18.6 million (11.3%) from the year-ago quarter.  The average
rate paid for all categories of interest-bearing  liabilities decreased from the
average rate paid in the year-ago quarter as a result of general market interest
rate changes.

Interest  expense  decreased  $9.46 million  (49.5%) in the first nine months of
2002  compared  to the first  nine  months of 2001.  The  decrease  was due to a
decrease in the average rate paid on interest-bearing  liabilities from 3.58% in
the first nine months of 2001 to 1.76% in first nine months of 2002.

Average interest-bearing liabilities increased $20.9 million (2.9%) in the first
nine months of 2002 compared to the year-ago  nine-month period. The increase in
interest-bearing   liabilities   was   concentrated   in   the   lower   earning
interest-bearing  demand  deposits  (up $20.4  million  or 13.3%),  and  savings
deposits (up $37.4 million or 17.0%). The average balances of the higher earning
time  deposits  (down  $26.7  million or 8.8%) and  long-term  debt (down  $10.1
million or 30.5%) were down from the year-ago  nine-month  period.  In addition,
the average  balance of  noninterest-bearing  deposits  increased  $18.7 million
(12.0%)  from the  year-ago  nine-month  period.  The average  rate paid for all
categories of interest-bearing  liabilities decreased from the average rate paid
in the year-ago quarter as a result of general market interest rate changes.

Net Interest Margin (FTE)

The  following  table  summarizes  the  components of the Company's net interest
margin for the periods indicated:

                                 Three months ended         Nine months ended
                                    September 30,             September 30,
                                 ---------------------------------------------
                                  2002         2001         2002         2001
                                 ---------------------------------------------
Yield on earning assets           7.02%        8.29%        7.11%        8.46%
Rate paid on interest-bearing
   Liabilities                    1.72%        3.15%        1.76%        3.58%
                                 ---------------------------------------------
   Net interest spread            5.30%        5.14%        5.35%        4.88%
Impact of all other net
   noninterest-bearing funds      0.37%        0.64%        0.37%        0.70%
                                 ---------------------------------------------
     Net interest margin          5.67%        5.78%        5.72%        5.58%
                                 =============================================

The Company's  aggressive reaction to declining market rates throughout 2001 and
into 2002 has allowed it to maintain a relatively  stable net  interest  margin.
Net  interest  margin in the third  quarter of 2002  decreased  11 basis  points
compared to the third quarter of 2001.  While the Company was able to reduce the
average rate paid on interest-bearing  liabilities faster than the average yield
on  interest-earning  assets,  and thus  increase its net interest  spread,  the
positive  impact  of all  other net  noninterest-bearing  funds on net  interest
margin was reduced due to the lower market rates of interest at which they could
be invested.

                                       14
Net interest  margin for the first nine months of 2002 increased 14 basis points
compared to the first nine months of 2001.  Lower yields on earning  assets were
more than  offset by the  declining  cost of  interest-bearing  liabilities  and
resulted  in a 47 basis point  increase in net  interest  spread.  The  positive
impact of all other net  noninterest-bearing  funds on net  interest  margin was
reduced 33 basis  points due to the lower market rates of interest at which they
could be invested.

Summary of Average Balances, Yields/Rates and Interest Differential

The following tables present, for the periods indicated,  information  regarding
the Company's consolidated average assets, liabilities and shareholders' equity,
the amounts of interest income from average earning assets and resulting yields,
and the amount of interest expense paid on interest-bearing liabilities. Average
loan balances include  nonperforming  loans.  Interest income includes  proceeds
from  loans on  nonaccrual  loans  only to the extent  cash  payments  have been
received and applied to interest income.  Yields on securities and certain loans
have been adjusted  upward to reflect the effect of income  thereon  exempt from
federal  income  taxation  at  the  current   statutory  tax  rate  (dollars  in
thousands).
For the three months ended
                                               ---------------------------------------------------------------
                                                      September 30, 2002               September 30, 2001
                                               ---------------------------------------------------------------
                                                            Interest   Rates               Interest    Rates
                                                  Average    Income/   Earned     Average   Income/    Earned
                                                  Balance    Expense   Paid       Balance   Expense    Paid
                                               -------------------------------  ------------------------------
Assets:
Fed funds sold                                    $32,961     $143     1.74%      $41,744    $370       3.55%
Investment securities                             245,641    3,272     5.33%      191,296   3,045       6.37%
Loans                                             676,009   13,332     7.89%      661,630  15,120       9.14%
                                               -------------------------------  ------------------------------
  Total earning assets                            954,611   16,747     7.02%      894,670  18,535       8.29%
Other assets                                       89,907                          87,717
                                               -----------                      ----------
  Total assets                                 $1,044,518                        $982,387
                                               ===========                      ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits                 $175,964      115     0.26%     $157,315     368       0.94%
Savings deposits                                  261,510      656     1.00%      224,338   1,111       1.98%
Time deposits                                     288,021    2,129     2.96%      298,505   3,618       4.85%
Fed funds purchased                                   246        1     1.63%          235       3       5.11%
Long-term debt                                     22,772      326     5.73%       32,963     512       6.21%
                                               -------------------------------  ------------------------------
  Total interest-bearing liabilities              748,513    3,227     1.72%      713,356   5,612       3.15%
Noninterest-bearing deposits                      183,180                         164,583
Other liabilities                                  17,180                          16,443
Shareholders' equity                               95,645                          88,005
                                               -----------                      ----------
  Total liabilities and shareholders' equity   $1,044,518                        $982,387
                                               ===========                      ==========
Net interest spread(1)                                       5.30%                          5.14%

Net interest income and interest margin(2)        $13,520    5.67%                $12,923   5.78%
                                               ====================             ==================

(1) Net interest spread represents the  average yield earned on assets minus the
    average rate paid on interest-earning  assets minus the average rate paid on
    interest-bearing liabilities
(2) Net interest  margin  is computed  by  calculating  the  difference  between
    interest  income  and expense,  divided  by the average  balance of  earning
    assets.
15
For the nine months ended
                                               ---------------------------------------------------------------
                                                      September 30, 2002               September 30, 2001
                                               ---------------------------------------------------------------
                                                            Interest   Rates               Interest    Rates
                                                  Average    Income/   Earned     Average   Income/    Earned
                                                  Balance    Expense   Paid       Balance   Expense    Paid
                                               -------------------------------  ------------------------------
Assets:
Fed funds sold                                    $37,089     $476     1.71%      $40,680   $1,321      4.33%
Investment securities                             233,616    9,549     5.45%      198,689    9,690      6.50%
Loans                                             655,682   39,386     8.01%      644,447   45,077      9.33%
                                               -------------------------------  ------------------------------
   Total earning assets                           926,387   49,411     7.11%      883,816   56,088      8.46%
Other assets                                       88,681                          86,260
                                               -----------                      ----------
   Total assets                                $1,015,068                        $970,076
                                               ===========                      ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits                 $173,796      350     0.27%     $153,412    1,325      1.15%
Savings deposits                                  257,138    2,011     1.04%      219,750    3,898      2.37%
Time deposits                                     278,690    6,340     3.03%      305,436   12,380      5.40%
Fed funds purchased                                    83        1     1.61%          113        4      4.25%
Long-term debt                                     22,943      967     5.62%       33,026    1,523      6.15%
                                               -------------------------------  ------------------------------
   Total interest-bearing liabilities             732,650    9,669     1.76%      711,737   19,130      3.58%
Noninterest-bearing deposits                      174,274                         155,563
Other liabilities                                  15,932                          15,890
Shareholders' equity                               92,212                          86,886
                                               -----------                      ----------
   Total liabilities and shareholders' equity  $1,015,068                        $970,076
                                               ===========                      ==========
Net interest spread(1)                                                 5.35%                            4.88%

Net interest income and interest margin(2)                 $39,742     5.72%               $36,958      5.58%
                                               ====================             ==================

(1) Net interest spread  represents the average yield earned on assets minus the
    average rate paid on  interest-earning assets minus the average rate paid on
    interest-bearing liabilities
(2) Net  interest  margin  is computed  by  calculating  the  difference between
    interest income  and  expense, divided  by the  average balance  of  earning
    assets.
16
Summary  of Changes in  Interest Income and  Expense due  to Changes in  Average
     Asset & Liability Balances and Yields Earned & Rates Paid

The following  tables set forth a summary of the changes in interest  income and
interest expense from changes in average asset and liability  balances  (volume)
and changes in average  interest  rates for the periods  indicated.  Changes not
solely  attributable to volume or rates have been allocated in proportion to the
respective volume and rate components (dollars in thousands).

                                           Three months ended September 30, 2002
                                                 compared with three months
                                                 ended September 30, 2001
                                           -------------------------------------
                                             Volume         Rate         Total
                                           -------------------------------------
Increase (decrease) in interest income:
Fed funds sold                                 ($78)        (149)        (227)
Investment securities                           865         (638)         227
Loans                                           329       (2,117)      (1,788)
                                           -------------------------------------
   Total earning assets                       1,116       (2,904)      (1,788)
                                           -------------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                 44         (297)        (253)
Savings deposits                                184         (639)        (455)
Time deposits                                  (127)      (1,362)      (1,489)
Fed funds purchased                               -           (2)          (2)
Long-term debt                                 (158)         (28)        (186)
                                           -------------------------------------
   Total interest-bearing liabilities           (57)      (2,328)      (2,385)
                                           -------------------------------------
Increase (decrease) in Net Interest Income   $1,173        ($576)        $597
                                           =====================================

                                            Nine months ended September 30, 2002
                                                 compared with nine months
                                                 ended September 30, 2001
                                           -------------------------------------
                                             Volume         Rate         Total
                                           -------------------------------------
Increase (decrease) in interest income:
Fed funds sold                                ($117)       ($728)       ($845)
Investment securities                         1,703       (1,844)        (141)
Loans                                           786       (6,477)      (5,691)
                                           -------------------------------------
   Total earning assets                       2,372       (9,049)      (6,677)
                                           -------------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                176       (1,151)        (975)
Savings deposits                                665       (2,552)      (1,887)
Time deposits                                (1,083)      (4,957)      (6,040)
Fed funds purchased                              (1)          (2)          (3)
Long-term debt                                 (465)         (91)        (556)
                                           -------------------------------------
   Total interest-bearing liabilities          (708)      (8,753)      (9,461)
                                           -------------------------------------
Increase (decrease) in Net Interest Income   $3,080        ($296)      $2,784
                                           =====================================

                                       17
Provision for Loan Losses

The  Company  provided  $700,000  for loan  losses in the third  quarter of 2002
versus $600,000 in the third quarter of 2001.  During the third quarter of 2002,
the Company recorded  $69,000 of net recoveries of previously  charged off loans
versus $83,000 of net loan charge-offs in the year earlier quarter.

For the nine months  ended  September  30, 2002 and 2001,  the Company  provided
$2,000,000 and $3,250,000 for loan losses, respectively. Net charge-offs for all
loans during the nine months ended September 30, 2002 and 2001 were $676,000 and
$2,483,000, respectively. Included in the net charge-offs during the nine months
ended  September  30,  2001 is  $2,000,000  of charge  offs  related to a single
borrower.

Noninterest Income

The following  table  summarizes the  components of  noninterest  income for the
periods indicated (dollars in thousands).

                                         Three months ended    Nine months ended
                                            September 30,        September 30,
                                         ---------------------------------------
                                           2002       2001      2002       2001
                                         ---------------------------------------
  Service charges on deposit accounts    $2,886     $1,500     $5,918    $4,392
  ATM fees and interchange                  487        370      1,299     1,053
  Other service fees                        148        175        418       570
  Gain on sale of investments                 -          -          -     1,756
  Gain on sale of loans                     752        494      2,254     1,292
  Commissions on sale of
    nondeposit investment products          712        678      1,989     1,865
  Increase in cash value of life insurance  119        144        443       433
  Other noninterest income                  309        352        861       957
                                         ---------------------------------------
  Total noninterest income               $5,413     $3,713    $13,182   $12,318
                                         =======================================

Noninterest  income for the third quarter  increased  $1.70 million (45.8%) from
the  year-ago  quarter.  The  increase in  noninterest  income from the year-ago
quarter was mainly due to an increase in service charges on deposit products (up
$1,386,000 or 92.4% to $2,886,000), and an increase in gain on sale of loans (up
$258,000  or 52.2% to  $752,000).  The  increase in service  charges  income was
mainly due to the introduction of an overdraft privilege deposit product in July
2002 that has added a new stream of recurring  noninterest  income. The increase
in gain on sale of loans is due to the  Company's  ability to originate and sell
an increased  volume of  residential  real estate  mortgage loans in the current
environment  of  record  mortgage  refinance.  ATM fees and  interchange  income
increased  from the year-ago  quarter (up $117,000 or 31.6% to $487,000)  due to
expansion of Company's ATM network and increased debit card usage.

Noninterest  income for the first nine months of 2002 increased  $864,000 (7.0%)
from the year-ago  nine-month  period.  Included in  noninterest  income for the
first  nine  months of 2001 was a  one-time  gain of  $1,756,000  on the sale of
insurance company stock.  Excluding this one-time gain,  noninterest  income for
the first nine months of 2002 would have  increased  $2.62 million  (24.8%) from
the year-ago  nine-month  period.  The increase in  noninterest  income from the
year-ago  quarter was mainly due to an  increase  in service  charges on deposit
products (up $1,526,000 or 34.7% to $5,918,000), and an increase in gain on sale
of loans (up  $962,000 or 74.5% to  $2,254,000).  As described in the results of
the third quarter of 2002, the increase in service charges income was mainly due
to the introduction of an overdraft  privilege deposit product in July 2002, and
the  increase  in gain  on sale of  loans  is due to the  Company's  ability  to
originate and sell an increased volume of residential real estate mortgage loans
in  the  current  environment  of  record  mortgage  refinance.   ATM  fees  and
interchange  income increased from the year-ago quarter (up $246,000 or 23.4% to
$1,299,000)  due to expansion of Company's ATM network and increased  debit card
usage.

                                       18
Noninterest Expense

The following  table  summarizes the  components of noninterest  expense for the
periods indicated (dollars in thousands).

                                        Three months ended     Nine months ended
                                           September 30,         September 30,
                                        ----------------------------------------
                                          2002       2001       2002       2001
                                        ----------------------------------------
  Salaries                               $4,225     $3,671    $11,616    $10,747
  Commissions and incentives                889        701      2,579      1,850
  Employee benefits                       1,230      1,059      3,661      3,168
  Equipment                                 741        680      2,247      2,033
  Occupancy                                 752        735      2,157      2,094
  Professional fees                         567        229      1,196        865
  Telecommunications                        364        350      1,035        895
  Advertising and marketing                 468        278        934        931
  Data processing and software              272        233        764        715
  Courier service                           236        210        684        622
  Intangible amortization                   228        228        683        683
  ATM network charges                       205        250        611        689
  Postage                                   212        152        543        464
  Operational losses                        191         51        295        140
  Assessments                                64         56        175        167
  Other noninterest expense               1,489      1,582      4,318      4,374
                                        ----------------------------------------
  Total                                 $12,133    $10,465    $33,498    $30,437
                                        ========================================
  Average full time equivalent staff        437        407        427        399

  Noninterest expense to revenue (FTE)    64.1%      62.9%     63.3%       61.8%

Noninterest expense for the third quarter of 2002 increased  $1,668,000 (15.9%).
The  increase  in  noninterest  expense  was mainly  due to a  $913,000  (16.8%)
increase in salary and benefit expense to $6,344,000. The increase in salary and
benefits expense was mainly due to annual salary increases, increased commission
and incentive expense,  and new employees at the Company's newly opened branches
in Oroville  (June  2002) and  Brentwood  (September  2002).  Other  noninterest
expense  also  increased  (up  $755,000 or 15.0% to  $5,789,000).  Approximately
$350,000  of this  increase  was  recurring  expenses  related to the  overdraft
privilege  product  introduced in July 2002, and included in professional  fees.
Also related to the overdraft privilege product introduced in July 2002, was the
$140,000  increase in operational  losses from the year-ago  quarter.  Increased
advertising expenses accounted for $190,000 of the increase in other noninterest
expense.

Comparing  the first nine  months of 2002 to the prior year  nine-month  period,
noninterest expense increased  $3,061,000  (10.1%).  The increase in noninterest
expense was mainly due to a  $2,091,000  (13.3%)  increase in salary and benefit
expense to  $17,856,000.  As in the third  quarter  comparison,  the increase in
salary and benefits expense was mainly due to annual salary increases, increased
commission  and incentive  expense,  and new  employees at the  Company's  newly
opened branches in Oroville (June 2002) and Brentwood  (September  2002).  Other
noninterest  expense  also  increased  (up  $970,000  or 6.6%  to  $15,642,000).
Approximately  $350,000 of this increase was recurring  expenses  related to the
overdraft   privilege   product   introduced  in  July  2002,  and  included  in
professional fees. Also related to the overdraft privilege product introduced in
July 2002,  was the $140,000  increase in  operational  losses from the year-ago
quarter.

                                       19
Provision for Income Tax

The  effective  tax rate for the nine months ended  September 30, 2002 was 37.4%
and reflects a decrease from 38.1% in the year earlier period. The provision for
income  taxes  for  all  periods  presented  is  primarily  attributable  to the
respective  level  of  earnings  and  the  incidence  of  allowable  deductions,
particularly from tax-exempt loans and state and municipal securities.

Nonperforming Loans

Loans are reviewed on an  individual  basis for  reclassification  to nonaccrual
status when any one of the following  occurs:  the loan becomes 90 days past due
as to  interest  or  principal,  the full and timely  collection  of  additional
interest or principal becomes  uncertain,  the loan is classified as doubtful by
internal credit review or bank regulatory  agencies,  a portion of the principal
balance has been charged off, or the Company takes possession of the collateral.
Loans that are placed on Nonaccrual even though the borrowers  continue to repay
the  loans as  scheduled  are  classified  as  "performing  nonaccrual"  and are
included  in  total  nonperforming  loans.  The  reclassification  of  loans  as
nonaccrual does not necessarily reflect Management's judgment as to whether they
are collectible.

Interest income is not accrued on loans where Management has determined that the
borrowers  will  be  unable  to  meet  contractual   principal  and/or  interest
obligations,  unless the loan is well secured and in the process of  collection.
When a loan is placed on nonaccrual,  any previously accrued but unpaid interest
is  reversed.  Income on such loans is then  recognized  only to the extent that
cash is received  and where the future  collection  of  principal  is  probable.
Interest  accruals  are resumed on such loans only when they are  brought  fully
current  with  respect to interest and  principal  and when,  in the judgment of
Management, the loans are estimated to be fully collectible as to both principal
and interest.

Interest income on nonaccrual loans, which would have been recognized during the
nine months,  ended  September  30, 2002,  if all such loans had been current in
accordance  with their  original  terms,  totaled  $1,022,000.  Interest  income
actually  recognized  on these loans during the nine months ended  September 30,
2002 was $422,000.

The  Company's  policy is to place loans 90 days or more past due on  nonaccrual
status.  In some instances  when a loan is 90 days past due Management  does not
place  it on  nonaccrual  status  because  the loan is well  secured  and in the
process of  collection.  A loan is considered to be in the process of collection
if, based on a probable  specific  event,  it is expected  that the loan will be
repaid or brought current. Generally, this collection period would not exceed 30
days. Loans where the collateral has been repossessed are classified as OREO or,
if the collateral is personal  property,  the loan is classified as other assets
on the Company's financial statements.

Management considers both the adequacy of the collateral and the other resources
of the  borrower  in  determining  the steps to be taken to  collect  nonaccrual
loans.   Alternatives  that  are  considered  are  foreclosure,   collecting  on
guarantees, restructuring the loan or collection lawsuits.

                                       20
As shown in the following table, total nonperforming assets net of guarantees of
the  U.S.  Government,  including  its  agencies  and  its  government-sponsored
agencies,  have  increased $4.9 million (80%) to $11.0 million in the first nine
months of 2002.  Nonperforming assets net of guarantees represent 1.03% of total
assets.  Included in the balance of performing nonaccrual loans at September 30,
2002, are loans to one  agriculture  related  borrower  totaling  $10,592,000 of
which  $8,351,000  is  guaranteed by a U.S.  Government  sponsored  agency as to
principal and ninety days of interest.  To date, the borrower has paid principal
and  interest in  accordance  with the terms of the loans;  however,  due to the
financial  condition  of the  borrower  the  Company  has  placed  the  loans in
performing nonaccrual status. All nonaccrual loans are considered to be impaired
when  determining  the need for a  specific  valuation  allowance.  The  Company
continues to make a concerted effort to work problem and potential problem loans
to reduce risk of loss.
(dollars in thousands):
                                                At September 30, 2002         At December 31, 2001
                                              -------------------------   -------------------------
                                               Gross  Guaranteed   Net      Gross  Guaranteed  Net
                                              -----------------------------------------------------
Performing nonaccrual loans                   $14,042   $8,504   $5,538     $2,733       -   $2,733
Nonperforming, nonaccrual loans                 5,468      547    4,921      3,120    $387    2,733
                                              -----------------------------------------------------
     Total nonaccrual loans                    19,510    9,051   10,459      5,853     387    5,466
Loans 90 days past due and still accruing         572        -      572        584       -      584
                                              -----------------------------------------------------
     Total nonperforming loans                 20,082    9,051   11,031      6,437     387    6,050
Other real estate owned                             -        -        -         71       -       71
                                              -----------------------------------------------------
     Total nonperforming loans and OREO       $20,082   $9,051  $11,031     $6,508    $387   $6,121
                                              =====================================================
Nonperforming loans to total loans                                1.61%                       0.92%
Allowance for loan losses/nonperforming loans                      130%                       216%
Nonperforming assets to total assets                              1.03%                       0.61%
Allowance for loan losses to nonperforming assets                  130%                       213%
Allowance for Loan Losses

Credit  risk is inherent in the  business of lending.  As a result,  the Company
maintains  an  Allowance  for Loan  Losses  to  absorb  losses  inherent  in the
Company's  loan  portfolio.  This is  maintained  through  periodic  charges  to
earnings.  These  charges are shown in the  Consolidated  Income  Statements  as
provision for loan losses. All specifically identifiable and quantifiable losses
are  immediately  charged off against the allowance.  However,  for a variety of
reasons,  not all losses are immediately known to the Company and, of those that
are known,  the full extent of the loss may not be quantifiable at that point in
time.  The balance of the Company's  Allowance for Loan Losses is meant to be an
estimate of these unknown but probable  losses  inherent in the  portfolio.  For
purposes of this discussion, "loans" shall include all loans and lease contracts
that are part of the Company's portfolio.

The Company  formally  assesses  the  adequacy of the  allowance  on a quarterly
basis.  Determination  of the  adequacy is based on ongoing  assessments  of the
probable  risk in the  outstanding  loan  portfolio,  and to a lesser extent the
Company's loan commitments. These assessments include the periodic re-grading of
credits based on changes in their individual  credit  characteristics  including
delinquency,  seasoning,  recent financial performance of the borrower, economic
factors, changes in the interest rate environment,  growth of the portfolio as a
whole or by segment, and other factors as warranted.  Loans are initially graded
when  originated.  They are  re-graded as they are renewed,  when there is a new
loan to the same borrower,  when identified facts demonstrate heightened risk of
nonpayment,  or if they become  delinquent.  Re-grading of larger  problem loans
occur at least quarterly.  Confirmation of the quality of the grading process is
obtained by  independent  credit reviews  conducted by consultants  specifically
hired for this purpose and by various bank regulatory agencies.

                                       21
The Company's method for assessing the appropriateness of the allowance includes
specific  allowances  for  identified  problem loans and leases as determined by
SFAS 114,  formula  allowance  factors for pools of credits,  and allowances for
changing   environmental  factors  (e.g.,   interest  rates,  growth,   economic
conditions,  etc.). Allowance factors for loan pools are based on the previous 5
years historical loss experience by product type.  Allowances for specific loans
are based on SFAS 114 analysis of individual  credits.  Allowances  for changing
environmental  factors are  Management's  best  estimate of the probable  impact
these  changes  have  had on the loan  portfolio  as a whole.  This  process  is
explained  in  detail  in the  notes  to the  Company's  Consolidated  Financial
Statements  in its Annual  Report on Form 10-K for the year ended  December  31,
2001.

Based on the current conditions of the loan portfolio,  Management believes that
the  $14,382,000  allowance for loan losses at September 30, 2002 is adequate to
absorb probable  losses  inherent in the Company's loan portfolio.  No assurance
can be given,  however,  that adverse economic conditions or other circumstances
will not result in increased losses in the portfolio.

The following table  summarizes the loan loss  provision,  net credit losses and
allowance for loan losses for the periods indicated (dollars in thousands):

                                     Three months ended        Nine months ended
                                        September 30,            September 30,
                                    --------------------------------------------
                                      2002        2001        2002        2001
                                    --------------------------------------------
  Balance, beginning of period      $13,613     $11,920     $13,058     $11,670
  Loan loss provision                   700         600       2,000       3,250
  Loans charged off                     (72)       (110)       (915)     (2,647)
  Recoveries of previously
    charged-off loans                   141          27         239         164
                                    --------------------------------------------
  Net credit (losses) recoveries         69         (83)       (676)     (2,483)
                                    --------------------------------------------
  Balance, end of period            $14,382     $12,437     $14,382     $12,437
                                    ============================================
  Allowance for loan losses/loans outstanding                 2.10%       1.86%

Capital Resources

The  current  and  projected  capital  position of the Company and the impact of
capital plans and long-term strategies are reviewed regularly by Management.  As
previously announced on October 19, 2001, the Board of Directors approved a plan
to  repurchase,  as conditions  warrant,  up to 150,000  shares of the Company's
common stock on the open market or in  privately  negotiated  transactions.  The
timing of purchases  and the exact number of shares to be purchased  will depend
on market conditions. This repurchase plan represented approximately 2.2% of the
Company's  6,992,080  common  shares  outstanding  on October 19,  2001,  and is
open-ended.  As of this date, the Company has  repurchased  118,800 shares under
this plan, with 10,000 and 0 of those shares being repurchased in the nine-month
and three-month periods ended September 30, 2002, respectively.

The Company's primary capital resource is shareholders'  equity, which was $96.4
million at  September  30,  2002.  This  amount  represents  an increase of $9.5
million from December 31, 2001, the net result of  comprehensive  income for the
period  ($13.3  million) and the  issuance of common  shares via the exercise of
stock  options  ($0.6  million),  partially  offset by share  repurchases  ($0.2
million) and dividends  paid ($4.2  million).  The Company's  ratio of equity to
total assets was 8.98%, 8.87%, and 8.65% as of September 30, 2002, September 30,
2001, and December 31, 2001, respectively.

                                       22
The following  summarizes the ratios of capital to risk-adjusted  assets for the
periods indicated:

                                                                   To Be Well
                   At September 30,     At          Minimum    Capitalized Under
                 ------------------ December 31,  Regulatory   Prompt Corrective
                  2002        2001     2001       Requirement  Action Provisions
                 ---------------------------------------------------------------
 Tier I Capital  10.63%      10.44%   10.43%         4.00%           6.00%
 Total Capital   11.89%      11.69%   11.68%         8.00%          10.00%
 Leverage ratio   8.53%       8.35%    8.17%         4.00%           5.00%

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Asset and Liability Management

The goal for managing the assets and  liabilities  of the Company is to maximize
shareholder  value and earnings while  maintaining a high quality  balance sheet
without exposing the Company to undue interest rate risk. The Board of Directors
has overall  responsibility  for the  Company's  interest  rate risk  management
policies.  The Company has an Asset and Liability  Management  Committee  (ALCO)
which establishes and monitors guidelines to control the sensitivity of earnings
to changes in interest rates.

Activities involved in asset/liability management include but are not limited to
lending,  accepting and placing  deposits,  investing in securities  and issuing
debt.   Interest  rate  risk  is  the  primary  market  risk   associated   with
asset/liability  management.  Sensitivity  of earnings to interest  rate changes
arises when yields on assets change in a different time period or in a different
amount from that of interest  costs on  liabilities.  To mitigate  interest rate
risk, the structure of the balance sheet is managed with the goal that movements
of interest  rates on assets and  liabilities  are  correlated and contribute to
earnings  even in  periods  of  volatile  interest  rates.  The  asset/liability
management  policy  sets  limits on the  acceptable  amount of  variance  in net
interest margin,  net income and market value of equity under changing  interest
environments.  Market value of equity is the net present value of estimated cash
flows from the Company's  assets,  liabilities and off-balance  sheet items. The
Company uses simulation  models to forecast net interest margin,  net income and
market value of equity.

Simulation of net interest  margin,  net income and market value of equity under
various  interest  rate  scenarios is the primary tool used to measure  interest
rate risk. Using computer-modeling  techniques,  the Company is able to estimate
the potential  impact of changing  interest  rates on net interest  margin,  net
income and market value of equity.  A balance sheet  forecast is prepared  using
inputs  of  actual  loan,   securities  and  interest-bearing   liability  (i.e.
deposits/borrowings) positions as the beginning base.

In the simulation of net interest  margin and net income under various  interest
rate scenarios,  the forecast balance sheet is processed  against seven interest
rate  scenarios.  These  seven  interest  rate  scenarios  include  a flat  rate
scenario,  which assumes  interest  rates are  unchanged in the future,  and six
additional rate ramp scenarios ranging from +300 to -300 basis points around the
flat scenario in 100 basis point  increments.  These ramp scenarios  assume that
interest  rates  increase  or  decrease  evenly  (in a  "ramp"  fashion)  over a
twelve-month period and remain at the new levels beyond twelve months.

In the  simulation  of  market  value of  equity  under  various  interest  rate
scenarios,  the forecast balance sheet is processed  against seven interest rate
scenarios.  These seven interest rate  scenarios  include the flat rate scenario
described  above,  and six additional rate shock scenarios  ranging from +300 to
-300 basis points around the flat scenario in 100 basis point increments.  These
rate shock scenarios assume that interest rates increase or decrease immediately
(in a "shock" fashion) and remain at the new level in the future.

At  September  30,  2002 and 2001,  the results of the  simulations  noted above
indicate that the balance sheet is slightly asset sensitive  (earnings  increase
when interest  rates rise).  The magnitude of all the  simulation  results noted
above is within the Company's policy guidelines.  The asset liability management
policy  limits  aggregate  market  risk,  as  measured  in this  fashion,  to an
acceptable  level within the context of risk-return  trade-offs.

                                       23
The simulation  results noted above do not incorporate  any management  actions,
which might  moderate the negative  consequences  of interest  rate  deviations.
Therefore,  they do not reflect likely actual results, but serve as conservative
estimates of interest rate risk.

At  September  30,  2002 and  2001,  the  Company  had no  derivative  financial
instruments.

Liquidity

The  Company's  principal  source of asset  liquidity is federal  funds sold and
marketable  investment  securities  available  for sale.  At September 30, 2002,
federal  funds sold and  investment  securities  available for sale totaled $292
million,  representing  an increase of $49 million from  December  31, 2001.  In
addition,   the  Company  generates  additional  liquidity  from  its  operating
activities. The Company's profitability during the first nine months of 2002 and
2001  generated  cash flows from  operations of $16.8 million and $12.6 million,
respectively.  Additional  cash flows may be provided by  financing  activities,
primarily the acceptance of deposits and borrowings from banks.  During the nine
months ended September 30, 2002,  sales and maturities of investment  securities
produced  cash  inflows of $87.4  million.  Also,  during the nine months  ended
September 30, 2002,  the Company  invested  $128.0  million and $25.5 million in
securities  and net loan growth,  respectively.  These changes in investment and
loan balances  contributed  to net cash used for  investing  activities of $67.9
million during the nine months ended  September 30, 2002.  Financing  activities
provided net cash of $53.4  million  during the nine months ended  September 30,
2002. Deposit balance increases, and exercise of common stock options, accounted
for $57.5  million and  $275,000 of  financing  sources of funds,  respectively.
Dividends paid and the repurchase of common stock used $4.2 million and $189,000
of cash during the nine months ended September 30, 2002, respectively. Also, the
Company's liquidity is dependent on dividends received from the Bank.  Dividends
from the Bank are subject to certain regulatory restrictions.

Item 4.  Controls and Procedures

Within ninety days of the filing date of this Form 10-Q, the Company carried out
an evaluation, under the supervision and with the participation of the Company's
management,  including the Company's  President/Chief  Executive Officer and the
Vice  President/Chief  Financial Officer, of the effectiveness of the design and
operation  of the  Company's  disclosure  controls  and  procedures  pursuant to
Exchange  Act Rule  13a-14.  Based  upon that  evaluation,  the  President/Chief
Executive Officer and the Vice President/Chief  Financial Officer concluded that
the  Company's  disclosure  controls  and  procedures  are  effective  in timely
alerting them of material  information  relating to the Company  (including  the
Bank) required to be included in the Company's periodic SEC filings.

                                       24
PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

Due to the nature of the banking business, the Bank is at times party to various
legal actions;  all such actions are of a routine nature and arise in the normal
course of business of the Bank.

Item 6 - Items and Reports on Form 8-K

(a) Exhibits

     Exhibit 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.

     Exhibit 3.2*:  Bylaws,  as  amended  to  date,  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.

     Exhibit 11.1:  Computation  of  Earnings  Per  Share on  Common and  Common
     Equivalent Shares and on Common Shares Assuming Full Dilution.

     Exhibit 21.1: Tri Counties  Bank, a California  banking corporation, is the
     only subsidiary of Registrant.

     Exhibit 99.1: CEO  Certification  Pursuant  to 18 U.S.C. Section  1350,  as
     Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

     Exhibit 99.2: CFO  Certification  Pursuant to 18 U.S.C.  Section  1350,  as
     Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

     * Previously filed.

(b) Reports on Form 8-K

     During the quarter ended September 30, 2002 the Company filed the following
     Current Reports on Form 8-K:

              Description                                   Date of Report
              -----------------------------------           --------------------
              Acquisition agreement and plan of merger      October 3, 2002
              by and  among TriCo Bancshares, Tri
              Counties Bank and North State National Bank

SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                TRICO BANCSHARES
                                  (Registrant)

Date:  November 12, 2002            /s/ Thomas J. Reddish
                                    ------------------------------------------
                                    Thomas J. Reddish
                                    Vice President and Chief Financial Officer

                                       25
CERTIFICATIONS

I, Richard P. Smith, certify that;

   1.  I have reviewed  this quarterly report  on Form 10-Q of TriCo Bancshares;
   2.  Based on my knowledge, this quarterly  report does not contain any untrue
       statement  of a material  fact or omit to state a material fact necessary
       to make  the statements made, in  light of the circumstances  under which
       such statements  were  made,  not misleading  with respect to the  period
       covered by this quarterly report;
   3.  Based  on  my  knowledge,  the financial  statements, and other financial
       information  included in  this  quarterly report,  fairly  present in all
       material respects the financial condition, results of operations and cash
       flows of the registrant  as of, and for, the  periods presented  in  this
       quarterly report;
   4.  The registrant's  other  certifying  officer and  I are  responsible  for
       establishing  and  maintaining  disclosure  controls  and procedures  (as
       defined in Exchange Act Rules 13a-14  and 15d-14) for the registrant  and
       we have;
         a.  Designed  such  disclosure controls  and procedures to  ensure that
             material  information  relating to  the registrant,  including  its
             consolidated subsidiary, is made known to us by others within those
             entities,  particularly  during the period in which this  quarterly
             report is being prepared;
         b.  Evaluated the effectiveness of the registrant's disclosure controls
             and procedures as of a date within 90 days prior to the filing date
             of this quarterly report (the "Evaluation Date"); and
         c.  Presented in  this  quarterly  report  our  conclusions  about  the
             effectiveness of  the disclosure  controls and procedures  based on
             our evaluation as of the Evaluation Date;
   5.  The registrant's other certifying officer and I have disclosed,  based on
       our  most recent evaluation,  to the registrant's auditors and  the audit
       committee of the registrant's board of directors;
         a.  All significant deficiencies in the design or operation of internal
             controls which  could adversely affect  the registrant's ability to
             record,  process,  summarize  and report  financial data  and  have
             identified  for the registrant's  auditors any material weakness in
             internal controls; and
         b.  Any fraud, whether  or not  material, that  involves  management or
             other  employees who  have a  significant role in the  registrant's
             internal controls; and
   6.  The registrant's  other certifying  officer and  I have indicated in this
       quarterly  report  whether  or  not  there  were significant  changes  in
       internal  controls or in  other factors that  could significantly  affect
       internal  controls subsequent  to the date of our most recent evaluation,
       including any corrective actions with  regard to significant deficiencies
       and material weaknesses.

Date:  November 12, 2002                /s/ Richard P. Smith
                                        ----------------------------------------
                                        Richard P. Smith
                                        President and Chief Executive Officer

                                       26
I, Thomas J. Reddish, certify that;

   1.  I have reviewed  this quarterly report  on Form 10-Q of TriCo Bancshares;
   2.  Based on my knowledge, this quarterly  report does not contain any untrue
       statement  of a material  fact or omit to state a material fact necessary
       to make  the statements made, in  light of the circumstances  under which
       such statements  were  made,  not misleading  with respect to the  period
       covered by this quarterly report;
   3.  Based  on  my  knowledge,  the financial  statements, and other financial
       information  included in  this  quarterly report,  fairly  present in all
       material respects the financial condition, results of operations and cash
       flows of the registrant  as of, and for, the  periods presented  in  this
       quarterly report;
   4.  The registrant's  other  certifying  officer and  I are  responsible  for
       establishing  and  maintaining  disclosure  controls  and procedures  (as
       defined in Exchange Act Rules 13a-14  and 15d-14) for the registrant  and
       we have;
         a.  Designed  such  disclosure controls  and procedures to  ensure that
             material  information  relating to  the registrant,  including  its
             consolidated subsidiary, is made known to us by others within those
             entities,  particularly  during the period in which this  quarterly
             report is being prepared;
         b.  Evaluated the effectiveness of the registrant's disclosure controls
             and procedures as of a date within 90 days prior to the filing date
             of this quarterly report (the "Evaluation Date"); and
         c.  Presented in  this  quarterly  report  our  conclusions  about  the
             effectiveness of  the disclosure  controls and procedures  based on
             our evaluation as of the Evaluation Date;
   5.  The registrant's other certifying officer and I have disclosed,  based on
       our  most recent evaluation,  to the registrant's auditors and  the audit
       committee of the registrant's board of directors;
         a.  All significant deficiencies in the design or operation of internal
             controls which  could adversely affect  the registrant's ability to
             record,  process,  summarize  and report  financial data  and  have
             identified  for the registrant's  auditors any material weakness in
             internal controls; and
         b.  Any fraud, whether  or not  material, that  involves  management or
             other  employees who  have a  significant role in the  registrant's
             internal controls; and
   6.  The registrant's  other certifying  officer and  I have indicated in this
       quarterly  report  whether  or  not  there  were significant  changes  in
       internal  controls or in  other factors that  could significantly  affect
       internal  controls subsequent  to the date of our most recent evaluation,
       including any corrective actions with  regard to significant deficiencies
       and material weaknesses.

Date:  November 12, 2002                /s/ Thomas J. Reddish
                                        ----------------------------------------
                                        Thomas J. Reddish
                                        Vice President and Chief
                                        Financial Officer

                                       27
EXHIBITS

Exhibit 11.1

TRICO BANCSHARES
Computation of Earnings Per Share on Common and Common  Equivalent Shares and on
Common Shares Assuming Full Dilution

                                              For the              For the
                                            three months         nine months
                                        ended September 30,  ended September 30,
(In thousands, except per share data)     2002       2001      2002       2001
                                        ----------------------------------------
Weighted average number of common
   shares outstanding - basic            7,026      7,044     7,010      7,087

Add exercise of options reduced by
   the number of shares that could
   have been purchased with the
   proceeds of such exercise               205        187       178        150
                                        ----------------------------------------
Weighted average number of common
   shares outstanding - diluted          7,231      7,231     7,188      7,237
                                        ========================================

Net income                              $3,627     $3,245   $10,320     $9,061

Basic earnings per share                 $0.52      $0.46     $1.47      $1.28

Diluted earnings per share               $0.50      $0.45     $1.44      $1.25

                                       28
Exhibit 99.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ending  September 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"),  I, Richard P. Smith,
President and Chief Executive  Officer of the Company,  certify,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that:

   (1)  The  Report fully  complies  with the requirements  of section 13(a)  or
        15(d) of the Securities Exchange Act of 1934; and
   (2)  The information contained in the Report fairly presents, in all material
        respects,  the  financial condition  and  results of  operations  of the
        Company.

          /s/ Richard P. Smith
          ----------------------------------------------
          Richard P. Smith
          President and Chief Executive Officer

Exhibit 99.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ending  September 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Thomas J. Reddish,
Vice President and Chief Financial Officer of the Company,  certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

   (1)  The  Report fully  complies  with the requirements  of section 13(a)  or
        15(d) of the Securities Exchange Act of 1934; and
   (2)  The information contained in the Report fairly presents, in all material
        respects,  the  financial condition  and  results of  operations  of the
        Company.

          /s/ Thomas J. Reddish
          ----------------------------------------------
          Thomas J. Reddish
          Vice President and Chief Financial Officer

                                       29