UNITED STATES
                       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 March 31, 2003                  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 May 12, 2003:  7,825,060


<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                 12
           Condition and Results of Operations

  Item 3 - Quantitative and Qualitative Disclosure about Market Risk         21

  Item 4 - Controls and Procedures                                           22

PART II - OTHER INFORMATION                                                  23

  Item 1 - Legal Proceedings                                                 23

  Item 6 - Exhibits and Reports on Form 8-K                                  23

  Signatures                                                                 24

  Certifications                                                             25

  Exhibits                                                                   27



<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.  When you see any of the
words "believes", "expects", "anticipates", "estimates", or similar expressions,
mean making forward-looking  statements.  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:

    -  a continued slowdown in the national and California economies;
    -  increased economic uncertainty created  by the recent  terrorist  attacks
       on the United States and the actions taken in response;
    -  the prospect of additional terrorist attacks in the United States and the
       uncertain effect of these events on the national and regional economies;
    -  changes in the interest rate environment;
    -  changes in the regulatory environment;
    -  significantly increasing competitive pressure in the banking industry;
    -  operational risks including data processing system failures or fraud;
    -  volatility of rate sensitive deposits; and
    -  asset/liability matching risks and liquidity risks.

On April 4, 2003, the Company  acquired  North State  National Bank,  located in
Chico,  California.  Many  possible  events or factors  could  affect the future
financial results and performance of the Company after the merger including:

    -  actual cost savings resulting  from the merger are less than we expected,
       we are unable to realize  those cost savings as soon as we expected or we
       incur additional or unexpected costs;
    -  revenues after the merger are less than we expected;
    -  competition among financial services companies increases;
    -  we have more trouble integrating our businesses than we expected;
    -  changes in the interest rate environment reduces our interest margins;
    -  general economic conditions change or are worse than we expected;
    -  legislative or regulatory changes adversely affect our business;
    -  changes occur in business conditions and inflation;
    -  personal or commercial customers' bankruptcies increase;
    -  changes occur in the securities markets; and
    -  technology-related changes are  more difficult to make  or more expensive
       than we expected.

The reader is directed to the Company's  annual report on Form 10-K for the year
ended  December 31, 2002,  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>
<TABLE>
<CAPTION>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                TRICO BANCSHARES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                                                                  (Unaudited)               (Unaudited)
                                                                 At March 31,             At December 31,
                                                            2003              2002             2002
                                                      -------------------------------   -----------------
<S>                                                         <C>               <C>              <C>
Assets:
     Cash and due from banks                              $58,925           $42,647          $67,170
     Federal funds sold                                    10,100            55,200            8,100
                                                      -------------------------------   -----------------
         Cash and cash equivalents                         69,025            97,847           75,270

     Investment securities available for sale             354,007           222,594          338,024
     Loans
         Commercial                                       117,329           123,026          125,982
         Consumer                                         210,633           157,428          201,858
         Real estate mortgages                            330,001           315,591          319,969
         Real estate construction                          35,810            41,164           39,713
                                                      -------------------------------   -----------------
                                                          693,773           637,209          687,522

     Allowance for loan losses                            (14,293)          (13,338)         (14,377)
                                                      -------------------------------   -----------------
         Loans, net of allowance for loan losses          679,480           623,871          673,145
     Premises and equipment, net                           17,542            16,136           17,224
     Cash value of life insurance                          29,257            14,722           15,208
     Other real estate owned                                1,608                71              932
     Accrued interest receivable                            5,891             5,480            5,644
     Deferred income taxes                                  8,316             9,337            8,429
     Intangible assets                                      3,815             4,842            4,043
     Other assets                                           7,562             5,033            6,655
                                                      -------------------------------   -----------------
         Total Assets                                  $1,176,503          $999,933       $1,144,574
                                                      ===============================   =================
Liabilities:
     Deposits:
         Noninterest-bearing demand                      $226,373          $172,087         $232,499
         Interest-bearing demand                          188,575           174,852          182,816
         Savings                                          324,584           256,845          297,926
         Time certificates, $100,000 and over              94,089            73,134           90,404
         Other time certificates                          199,031           196,354          201,592
                                                      -------------------------------   -----------------
         Total deposits                                 1,032,652           873,272        1,005,237
     Accrued interest payable                               3,034             2,817            2,927
     Other Liabilities                                     16,010            12,179           14,472
     Long-term debt and other borrowings                   22,915            22,948           22,924
                                                      -------------------------------   -----------------
         Total Liabilities                              1,074,611           911,216        1,045,560
                                                      -------------------------------   -----------------
Shareholders' Equity:
     Authorized - 20,000,000 shares of common stock
     Issued and outstanding:
           7,080,470 at March 31, 2003                     50,768
           6,990,980 at March 31, 2002                                       49,608
           7,060,965 at December 31, 2002                                                     50,472
     Retained earnings                                     48,436            39,720           46,239
     Accumulated other comprehensive income (loss), net     2,688              (611)           2,303
                                                      -------------------------------   -----------------
         Total Shareholders' Equity                       101,892            88,717           99,014
                                                      -------------------------------   -----------------
Total Liabilities and Shareholders' Equity             $1,176,503          $999,933       $1,144,574
                                                      ===============================   =================


                                      -2-
</TABLE>

<PAGE>



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

                                                            (Unaudited)
                                                    Three months ended March 31,
                                                         2003           2002
                                                    ----------------------------
Interest Income:
  Interest and fees on loans                           $12,989        $13,008
  Interest on federal funds sold                            84            166
  Interest on investment securities
    available for sale
      Taxable                                            2,744          2,230
      Tax exempt                                           532            554
                                                    ----------------------------
    Total interest income                               16,349         15,958
                                                    ----------------------------
Interest Expense:
  Interest on interest-bearing demand deposits             118            122
  Interest on savings                                      720            680
  Interest on time certificates of deposit               1,959          2,142
  Interest on long-term debt                               318            319
                                                    ----------------------------
    Total interest expense                               3,115          3,263
                                                    ----------------------------
Net Interest Income                                     13,234         12,695
                                                    ----------------------------
Provision for loan losses                                  150            800
                                                    ----------------------------
Net Interest Income After Provision for Loan Losses     13,084         11,895
                                                    ----------------------------
Noninterest Income:
  Service charges and fees                               3,500          1,973
  Gain on sale of loans                                  1,133            963
  Commissions on sale of non-deposit investment products   448            538
  Other                                                    315            352
                                                    ----------------------------
  Total Noninterest Income                               5,396          3,826
                                                    ----------------------------
Noninterest Expense:
  Salaries and related benefits                          6,877          5,739
  Other                                                  5,774          4,663
                                                    ----------------------------
  Total Noninterest Expense                             12,651         10,402
                                                    ----------------------------
Income Before Income Taxes                               5,829          5,319
                                                    ----------------------------
  Provision for income taxes                             2,216          1,990
                                                    ----------------------------
Net Income                                              $3,613         $3,329

Comprehensive Income:
  Change in unrealized gain on securities
    available for sale, net                                385             44
                                                    ----------------------------
Comprehensive Income                                    $3,998         $3,373
                                                    ============================
Average Shares Outstanding                               7,071          6,992
Diluted Average Shares Outstanding                       7,250          7,117

Per Share Data
  Basic Earnings                                         $0.51          $0.48
  Diluted Earnings                                       $0.50          $0.47
  Dividends Paid                                         $0.20          $0.20


                                      -3-
<PAGE>

                                TRICO BANCSHARES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                            (In thousands, unaudited)
                                                       Accumulated
                                                          Other
                                   Common   Retained   Comprehensive
                                   Stock    Earnings  Income (Loss), net  Total
                                 -----------------------------------------------
Balance, December 31, 2001        $49,679    $37,909      ($655)        $86,933
  Net income for the period                    3,329                      3,329
  Repurchase of common stock          (71)      (119)                      (190)
  Dividends                                   (1,399)                    (1,399)
  Unrealized gain on securities
    available for sale, net                                  44              44
                                 -----------------------------------------------
Balance March 31, 2002            $49,608    $39,720      ($611)        $88,717
                                 ===============================================

Balance, December 31, 2002        $50,472    $46,239     $2,303         $99,014
  Net income for the period                    3,613                      3,613
  Stock issued, including
    stock option tax benefits         296                                   296
  Dividends                                   (1,416)                    (1,416)
  Unrealized gain on securities
    available for sale, net                                 385             385
                                 -----------------------------------------------
Balance March 31, 2003            $50,768    $48,436     $2,688        $101,892
                                 ===============================================



                                      -4-
<PAGE>
<TABLE>
<CAPTION>


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

                                                                       For the three months
                                                                         ended March 31,
                                                                     2003               2002
                                                                 -------------------------------
<S>                                                                    <C>                 <C>
Operating Activities:
   Net income                                                       $3,613              $3,329
   Adjustments to reconcile net income to net cash provided
     by operating activities:
       Depreciation and amortization of property and equipment         653                 668
       Amortization of intangible assets                               228                 228
       Provision for loan losses                                       150                 800
       Amortization of investment securities premium, net              757                 341
       Deferred income taxes                                           (42)                (28)
       Originations of loans for resale                            (53,210)            (46,947)
       Proceeds from sale of loans originated for resale            53,750              47,333
       Gain on sale of loans                                        (1,133)               (963)
       Amortization of mortgage servicing rights                       256                 143
       (Gain) loss on sale of fixed assets                              (2)                 20
       Change in assets and liabilities:
         (Increase) decrease in interest receivable                   (247)                 42
         Increase (decrease) in interest payable                       107                (671)
         Decrease in other assets and liabilities                      762               1,879
                                                                 -------------------------------
Net Cash Provided by Operating Activities                            5,642               6,174
                                                                 -------------------------------
Investing Activities:
   Proceeds from maturities of securities available-for-sale        36,864              28,682
   Purchases of securities available-for-sale                      (53,010)            (26,958)
   Net (increase) decrease in loans                                 (7,161)             21,003
   Proceeds from sale of premises and equipment                          2                   3
   Purchases of property and equipment                                (904)               (303)
   Purchase of life insurance                                      (13,910)                  -
                                                                 -------------------------------
Net Cash (Used) Provided by Investing Activities                   (38,119)             22,427
                                                                 -------------------------------
Financing Activities:
   Net increase (decrease) in deposits                              27,415              (7,121)
   Payments of principal on long-term debt agreements                   (9)                 (8)
   Repurchase of Common Stock                                            -                (190)
   Dividends paid                                                   (1,416)             (1,399)
   Exercise of stock options/issuance of Common Stock                  242                   -
                                                                 -------------------------------
Net Cash Provided (Used) by Financing Activities                    26,232              (8,718)
                                                                 -------------------------------
Net (Decrease) Increase in Cash and Cash Equivalents                (6,245)             19,883
                                                                 -------------------------------
Cash and Cash Equivalents and Beginning of Period                   75,270              77,964
                                                                 -------------------------------
Cash and Cash Equivalents at End of Period                         $69,025             $97,847
                                                                 ===============================
Supplemental Disclosure of Noncash Activities:
   Unrealized gain on securities available for sale                   $594                 $69
   Loans transferred to other real estate owned                       $676                   -

Supplemental Disclosure of Cash Flow Activity:
   Cash paid for interest expense                                   $3,008              $3,934
   Cash paid for income taxes                                          $10                   -
   Income tax benefit from stock option exercises                      $54                   -


                                      -5-
</TABLE>


<PAGE>


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

                                                           (Unaudited)
                                                       Three months ended
                                                            March 31,
                                                 ------------------------------
                                                     2003              2002
                                                 ------------------------------
Net Interest Income (FTE)                           $13,543          $13,000
Provision for loan losses                              (150)            (800)
Noninterest income                                    5,396            3,826
Noninterest expense                                 (12,651)         (10,402)
Provision for income taxes (FTE)                     (2,525)          (2,295)
                                                 ------------------------------
Net income                                           $3,613           $3,329
                                                 ==============================

Average shares outstanding                            7,071            6,992
Diluted average shares outstanding                    7,250            7,117
Shares outstanding at period end                      7,080            6,991

As Reported:
   Basic earnings per share                           $0.51            $0.48
   Diluted earnings per share                         $0.50            $0.47
   Return on assets                                   1.26%            1.34%
   Return on equity                                  14.29%           14.88%
   Net interest margin                                5.17%            5.76%
   Net loan charge-offs to average loans              0.14%            0.32%
   Efficiency ratio (FTE)                            66.80%           61.82%

Average Balances:
   Total assets                                  $1,149,759         $990,471
   Earning assets                                 1,048,286          902,596
   Total loans                                      679,975          642,082
   Total deposits                                 1,003,853          863,029
   Shareholders' equity                            $101,139          $89,505

Balances at Period End:
   Total assets                                  $1,176,503         $999,933
   Earning assets                                 1,057,880          915,003
   Total loans                                      693,773          637,209
   Total deposits                                 1,032,652          873,272
   Shareholders' equity                            $101,892          $88,717

Financial Ratios at Period End:
   Allowance for loan losses to loans                 2.06%            2.09%
   Book value per share                              $14.39           $12.69
   Equity to assets                                   8.66%            8.87%
   Total capital to risk assets                      11.63%           12.12%

Dividends Paid Per Share                              $0.20            $0.20
Dividend Payout Ratio                                39.19%           42.02%

                                      -6-
<PAGE>

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: General  Summary of  Significant  Accounting  Policies
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 three months ended
March 31, 2003 and 2002 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, 2002.

Principles of Consolidation
The consolidated  financial  statements include the accounts of the Company, and
its  wholly-owned  subsidiary,  Tri Counties Bank (the "Bank").  All significant
intercompany accounts and transactions have been eliminated in consolidation.

Nature of Operations
The Company  operates 33 branch  offices and 10 in-store  branch  offices in the
California  counties of Butte,  Contra Costa, Del Norte,  Fresno,  Glenn,  Kern,
Lake, Lassen, Madera, Mendocino,  Merced, Nevada, Sacramento,  Shasta, Siskiyou,
Stanislaus,  Sutter,  Tehama,  Tulare and Yuba. The Company's  operating  policy
since  its  inception  has  emphasized  retail  banking.  Most of the  Company's
customers are retail customers and small to medium sized businesses.

Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  Management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  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.  The one accounting  estimate that materially  affects the financial
statements is the allowance for loan losses.

Investment Securities
The Company  classifies its debt and marketable  equity  securities  into one of
three  categories:  trading,  available-for-sale  or  held-to-maturity.  Trading
securities  are bought and held  principally  for the  purpose of selling in the
near term. Held-to-maturity securities are those securities that the Company has
the ability and intent to hold until maturity. All other securities not included
in trading or held-to-maturity are classified as available-for-sale.  During the
three months ended March 31, 2003 and throughout  2002, the Company did not have
any securities classified as either held-to-maturity or trading.

Available-for-sale  securities are recorded at fair value.  Unrealized gains and
losses,  net of the related tax effect,  on  available-for-sale  securities  are
reported as a separate component of other comprehensive  income in shareholders'
equity until realized.

Premiums and  discounts  are  amortized or accreted over the life of the related
investment  security  as an  adjustment  to yield using the  effective  interest
method.  Dividend and interest income are recognized when earned. Realized gains
and losses for  securities  are included in earnings  and are derived  using the
specific  identification  method for  determining  the cost of securities  sold.
Unrealized  losses  due to  fluctuations  in fair  value of  securities  held to
maturity  or  available  for sale are  recognized  through  earnings  when it is
determined that a permanent decline in value has occurred.


                                      -7-
<PAGE>

Loans
Loans are reported at the principal amount  outstanding,  net of unearned income
and the allowance for loan losses.  Loan  origination  and  commitment  fees and
certain  direct  loan  origination  costs are  deferred,  and the net  amount is
amortized as an adjustment of the related  loan's yield over the estimated  life
of the loan.  Loans on which the accrual of interest has been  discontinued  are
designated  as  nonaccrual  loans.  Accrual of  interest  on loans is  generally
discontinued  either  when  reasonable  doubt  exists  as to  the  full,  timely
collection  of interest or principal or when a loan becomes  contractually  past
due by 90 days or more with respect to interest or principal.  When loans are 90
days past due, but in Management's  judgment are well secured and in the process
of collection,  they may not be classified as nonaccrual.  When a loan is placed
on  nonaccrual  status,  all interest  previously  accrued but not  collected 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.

Allowance for Loan Losses
The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
Management  believes  that the  collectibility  of the principal is unlikely or,
with  respect  to  consumer  installment  loans,  according  to  an  established
delinquency  schedule.  The allowance is an amount that Management believes will
be adequate to absorb probable  losses  inherent in existing  loans,  leases and
commitments  to  extend  credit,  based on  evaluations  of the  collectibility,
impairment and prior loss experience of loans,  leases and commitments to extend
credit.  The evaluations take into  consideration such factors as changes in the
nature   and  size  of  the   portfolio,   overall   portfolio   quality,   loan
concentrations,  specific  problem  loans,  commitments,  and  current  economic
conditions that may affect the borrower's  ability to pay. The Company defines a
loan as impaired  when it is probable  the Company will be unable to collect all
amounts due according to the contractual  terms of the loan agreement.  Impaired
loans are  measured  based on the present  value of  expected  future cash flows
discounted  at the loan's  original  effective  interest  rate.  As a  practical
expedient,  impairment  may be measured  based on the loan's  observable  market
price or the fair value of the  collateral if the loan is collateral  dependent.
When the measure of the impaired  loan is less than the recorded  investment  in
the loan, the impairment is recorded through a valuation allowance.

Mortgage Operations
Transfers and servicing of financial assets and  extinguishments  of liabilities
are  accounted  for  and  reported   based  on  consistent   application   of  a
financial-components  approach  that focuses on control.  Transfers of financial
assets  that are  sales  are  distinguished  from  transfers  that  are  secured
borrowings.  Retained  interests  (mortgage  servicing rights) in loans sold are
measured by allocating the previous  carrying amount of the  transferred  assets
between the loans sold and retained  interest,  if any,  based on their relative
fair value at the date of transfer.  Fair values are estimated using  discounted
cash flows based on a current market interest rate.

The  Company  recognizes  a gain and a related  asset for the fair  value of the
rights to  service  loans for  others  when  loans are sold.  The  Company  sold
substantially  all  of  its  conforming  long-term  residential  mortgage  loans
originated  during three months ended March 31, 2003 for cash proceeds  equal to
the fair value of the loans.

The following table summarizes the Company's mortgage servicing rights assets as
of March 31, 2003 and December 31, 2002.

                                 December 31,                          March 31,
   (Dollars in thousands)            2002     Additions   Reductions     2003
                                 -----------------------------------------------
   Mortgage Servicing Rights        $2,821       $593       ($256)      $3,158
                                 ===============================================


                                      -8-
<PAGE>

The recorded value of mortgage servicing rights is included in other assets, and
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 March 31, 2003, the Company had no mortgage loans held for sale. At March 31,
2003 and December 31, 2002, the Company  serviced real estate mortgage loans for
others of $336 million and $307 million, respectively.

Identifiable Intangible Assets
Identifiable  intangible assets consist of core deposit  intangibles and minimum
pension liability.

The following table summarizes the Company's core deposit intangible as of March
31, 2003 and December 31, 2002.
                                  December 31,                         March 31,
  (Dollar in Thousands)              2002      Additions   Reductions    2003
                                  ----------------------------------------------
  Core deposit intangibles         $10,278                             $10,278
  Accumulated amortization          (6,636)                  ($228)     (6,864)
                                  ----------------------------------------------
  Core deposit intangibles, net     $3,642                   ($228)     $3,414
                                  ==============================================

Core  deposit  premiums  are  scheduled  to amortize  at a rate of $227,700  per
quarter through the quarter ended December 31, 2006.  Core deposit  premiums are
amortized  using an accelerated  method over a period of ten years.  The Company
reviews for impairment of certain  intangibles held,  whenever events or changes
indicate that the carrying  amount of an asset may not be  recoverable.  If such
assets are  considered  to be  impaired,  the  impairment  to be  recognized  is
measured by the amount by which the  carrying  amount of the assets  exceeds the
fair market  value of the assets.  Assets to be disposed of are  reported at the
lower of the carrying amount or fair value less costs to sell.

The  following  table  summarizes  the  Company's   minimum  pension   liability
intangible as of March 31, 2003 and December 31, 2002.

                                      December 31,                     March 31,
  (Dollar in Thousands)                  2002     Additions  Reductions   2003
                                      ------------------------------------------
  Minimum pension liability intangible   $401          -           -      $401
                                      ==========================================

Intangible  assets related to minimum  pension  liability are adjusted  annually
based upon actuarial estimates.

Income Taxes
The  Company's  accounting  for income taxes is based on an asset and  liability
approach.  The Company  recognizes the amount of taxes payable or refundable for
the current  year,  and deferred tax assets and  liabilities  for the future tax
consequences  that have  been  recognized  in its  financial  statements  or tax
returns.  The  measurement  of  tax  assets  and  liabilities  is  based  on the
provisions of enacted tax laws.


                                      -9-
<PAGE>

Stock-Based Compensation
The Company  uses the  intrinsic  value  method to account for its stock  option
plans (in accordance with the provisions of Accounting  Principles Board Opinion
No. 25).  Under this method,  compensation  expense is recognized  for awards of
options to purchase shares of common stock to employees under compensatory plans
only if the fair  market  value of the stock at the option  grant date (or other
measurement  date, if later) is greater than the amount the employee must pay to
acquire  the  stock.  Statement  of  Financial  Accounting  Standards  No.  123,
Accounting for Stock-Based Compensation (SFAS 123) permits companies to continue
using the  intrinsic  value  method  or to adopt a fair  value  based  method to
account  for  stock  option  plans.  The fair  value  based  method  results  in
recognizing as expense over the vesting period the fair value of all stock-based
awards on the date of grant.  The  Company  has  elected to  continue to use the
intrinsic value method.

Had  compensation  cost  for the  Company's  option  plans  been  determined  in
accordance  with SFAS 123, the Company's net income and earnings per share would
have been reduced to the pro forma amounts indicated below:
                                                    Three Months Ended March 31,
(in thousands, except per share amounts)                2003             2002
                                                        ----             ----
Net income                           As reported       $3,613           $3,329
                                       Pro forma       $3,561           $3,280
Basic earnings per share             As reported        $0.51            $0.48
                                       Pro forma        $0.50            $0.47
Diluted earnings per share           As reported        $0.50            $0.47
                                       Pro forma        $0.49            $0.46
Stock-based employee compensation
   cost, net of related tax effects,
   included in net income            As reported           $0               $0
                                       Pro forma          $52              $49

Comprehensive Income
For the  Company,  comprehensive  income  includes  net income  reported  on the
statement  of  income,  changes  in the  fair  value  of its  available-for-sale
investments,  and  changes  in  the  minimum  pension  liability  reported  as a
component of shareholders' equity.

The changes in the components of accumulated other  comprehensive  income (loss)
for the three months ended March 31, 2003 and 2002 are reported as follows:

                                         Three Months Ended March 31,
                                             2003             2002
                                         ----------------------------
Unrealized Gain on Securities                   (in thousands)

Beginning Balance                          $3,048             $117
Unrealized gain arising during the
   period, net of tax                         385               44
                                         ----------------------------
Ending Balance                             $3,433             $161
                                         ----------------------------
Minimum Pension Liability
Beginning Balance                           ($745)           ($772)
Change in minimum pension liability,
   net of tax                                   -                -
                                         ----------------------------
Ending Balance                              ($745)           ($772)
                                         ----------------------------
Total accumulated other comprehensive
   income (loss), net                      $2,688            ($611)
                                         ----------------------------


                                      -10-
<PAGE>

Reclassifications
Certain amounts previously  reported in the 2002 financial  statements have been
reclassified to conform to the 2003 presentation.  These  reclassifications  did
not affect previously reported net income or total shareholders' equity.

Subsequent Events
TriCo Bancshares  (NASDAQ:TCBK),  parent company of Tri Counties Bank,  acquired
North State National  Bank, a national  banking  organization  located in Chico,
California,  by the merger of North State into its wholly owned subsidiary,  Tri
Counties  Bank,  effective  5:01 pm on April 4, 2003.  The  acquisition  and the
related merger  agreement  dated October 3, 2002, was approved by the California
Department of Financial Institutions, the Federal Deposit Insurance Corporation,
and the shareholders of North State National Bank on March 4, March 7, and March
19, 2003,  respectively.  At the time of the acquisition,  North State had total
assets of $144  million.  The  acquisition  was accounted for using the purchase
method of accounting.

Under the terms of the merger  agreement,  TriCo will issue $13,090,105 in cash,
723,511 shares of TriCo common stock,  and options to purchase  79,587 shares of
TriCo common stock at an average  exercise  price of $6.22 per share in exchange
for all of the  1,234,375  common  shares and options to purchase  79,937 common
shares of North State National Bank  outstanding as of April 4, 2003. The shares
of TriCo common stock to be issued were  registered  on a Form S-4  Registration
Statement  declared  effective  on February 3, 2003.  At March 31,  2003,  TriCo
Bancshares had 7,080,470 shares of common stock outstanding.  Based upon TriCo's
closing stock price of $25.65 on April 4, 2003, the aggregate  value of the cash
and the TriCo  options  and  common  stock to be issued in the  merger  would be
approximately $33,195,000.

On April 15, 2003,  TriCo filed a current report on Form 8-K, which contains pro
forma financial information concerning the merger.



                                      -11-
<PAGE>

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.

Critical Accounting Policies and Estimates
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, intangible assets, 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).

Results of Operations
The  following   discussion  and  analysis  is  designed  to  provide  a  better
understanding  of the significant  changes and trends related to the Company and
the  Bank's  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 quarterly  earnings of  $3,613,000,  or $0.50 per diluted share,
for the three  months  ended  March 31,  2003.  These  results  represent a 6.5%
increase from the $0.47 earnings per diluted share reported for the three months
ended March 31, 2002 on earnings of $3,329,000.  The improvement in results from
the  year-ago   quarter  was  due  to  a  $543,000   (4.2%)  increase  in  fully
tax-equivalent  net interest income to $13,543,000,  a $650,000 (81.3%) decrease
in provision for loan losses to $150,000,  and a $1,570,000  (41.0%) increase in
noninterest income to $5,396,000.  These contributing  factors where offset by a
$2,249,000  (21.6%)  increase  in  noninterest  expense to  $12,651,000  for the
quarter ended March 31, 2003.

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

                                           Three months ended
                                                March 31,
                                       --------------------------
                                         2003              2002
                                       --------------------------
Net Interest Income (FTE)               $13,543          $13,000
Provision for loan losses                  (150)            (800)
Noninterest income                        5,396            3,826
Noninterest expense                     (12,651)         (10,402)
Provision for income taxes (FTE)         (2,525)          (2,295)
                                       --------------------------
Net income                               $3,613           $3,329
                                       ==========================


                                      -12-
<PAGE>

Net income for the first  quarter of 2003 was $284,000  (8.5%) more than for the
same quarter of 2002. A  significant  increase in  noninterest  income (up $1.57
million or 41.0%), a $650,000 (81.3%) decrease in provision for loan losses, and
a $543,000 (4.2%) increase in fully taxable  equivalent net interest income more
than offset an increase in noninterest expenses (up $2.25 million or 21.6%). 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 $1,527,000 or
77.4% to  $3,500,000),  and an increase in gain on sale of loans (up $170,000 or
17.7% to $1,133,000).  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 decrease in provision for loan
losses (down  $650,000 or 81.3% to $150,000)  was due to stable loan quality and
the  maintenance of adequate loss reserve  levels.  The increase in net interest
income  (FTE) was due to an  increase  in average  balance  of  interest-earning
assets (up  $145.7  million or 16.1%)  that was  partially  offset by a 59 basis
point decrease in net interest margin.  The increase in noninterest  expense was
mainly due to an increase in salary and benefit  expense (up $1,138,000 or 19.8%
to  $6,877,000).  The increase in salary and benefits  expense was mainly due to
annual salary increases,  increased  commission and incentive  expense,  and new
employees at four new branches the Company opened during 2002. Other noninterest
expense also  increased (up  $1,111,000 or 23.8% to  $5,774,000)  due to the new
branch  openings in 2002,  and expenses  related to increased  mortgage  banking
activity and a new deposit product introduced in July 2002.

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

                                          Three months ended
                                               March 31,
                                      --------------------------
                                           2003         2002
                                      --------------------------
  Interest income                        $16,349      $15,958
  Interest expense                        (3,115)      (3,263)
  FTE adjustment                             309          305
                                      --------------------------
     Net interest income (FTE)           $13,543      $13,000
                                      ==========================
  Average earning assets              $1,048,286     $902,596

  Net interest margin (FTE)                5.17%        5.76%

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 first quarter
of 2003 increased  $543,000  (4.2%) from the same period in 2002 to $13,543,000.
The  increase in net  interest  income  (FTE) was due to the  increased  average
balances of earning assets (up $145.7  million or 16.1% to $1.048  billion) that
was partially offset by a 59 basis point decrease in net interest margin (FTE).

Interest and Fee Income
Interest and fee income (FTE) for the first quarter of 2003  increased  $391,000
(2.4%) from the first quarter of 2002. The increase was the net effect of higher
average  interest-earning  assets (up $145.7 million or 16.1% to $1.048 billion)
that was  partially  offset by an 85 basis point  decrease in the yield on those
average earning assets to 6.36%. The growth in  interest-earning  assets was led
by a $119.1 million (53.9%) increase in average investment  security balances to
$298.7  million,  and a $37.9 million (5.9%)  increase in average loan balances.
The average  balance of federal funds sold  decreased  $11.3 million  (28.4%) to
$28.4 million.


                                      -13-
<PAGE>

The average yield on the  Company's  earning  assets  decreased to 6.36% for the
quarter  ended March 31, 2003 from 7.21% for the quarter  ended March 31,  2002.
This downward  trend in yields was  reflective of general  interest rate markets
during much of 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.

Interest Expense
Interest expense decreased $148,000 (4.5%) in the first quarter of 2003 compared
to the year-ago quarter.  The decrease was due to a decrease in the average rate
paid on interest-bearing  liabilities from 1.82% in the first quarter of 2002 to
1.52% in the first quarter of 2003.

The average balance of  interest-bearing  liabilities  increased  $100.3 million
(14.0%) in the first quarter compared to the year-ago  quarter.  The increase in
interest-bearing   liabilities   was   concentrated   in   the   lower   earning
interest-bearing demand deposit (up $15.4 million or 9.0%), and savings deposits
(up $62.7  million or 24.7%).  The average  balance of the higher  earning  time
deposits was up $22.2 million (8.2%) from the year-ago quarter. In addition, the
average balance of noninterest-bearing  deposits increased $40.5 million (24.2%)
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.

Net Interest Margin (FTE)
The  following  table  summarizes  the  components of the Company's net interest
margin for the periods indicated:

                                             Three months ended
                                                  March 31,
                                          -------------------------
                                              2003         2002
                                          -------------------------
Yield on earning assets                       6.36%        7.21%
Rate paid on interest-bearing
   Liabilities                                1.52%        1.82%
                                          -------------------------
   Net interest spread                        4.84%        5.39%
Impact of all other net
   noninterest-bearing funds                  0.33%        0.37%
                                          -------------------------
      Net interest margin                     5.17%        5.76%
                                          =========================

Net  interest  margin in the first  quarter of 2003  decreased  59 basis  points
compared to the first quarter of 2002.  Throughout much of 2002, the Company was
able to decrease the rates it paid on interest-bearing deposits approximately as
fast as the rates on interest-earning assets decreased. By doing so, the Company
was able to maintain a relatively  high net interest  margin  throughout much of
2002. However,  in the fourth quarter of 2002, it became increasingly  difficult
to  reduce  the  rates  paid on  interest-bearing  deposits.  As a  result,  the
Company's net interest  margin began to decrease.  Also,  during this time,  the
Company  grew  deposits  faster  than it grew  loans.  As a result,  much of the
available  funds from these  deposits were  invested in  securities  rather than
higher yielding loans,  and this also  contributed to a decrease in net interest
margin.


                                      -14-
<PAGE>

Summary of Average Balances, Yields/Rates and Interest Differential
The following table presents,  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
                                       ----------------------------------------------------------------
                                                March 31, 2003                  March 31, 2002
                                       -----------------------------     ------------------------------
                                                   Interest    Rates               Interest    Rates
                                         Average   Income/    Earned     Average   Income/    Earned
                                         Balance   Expense     Paid      Balance   Expense     Paid
                                       -----------------------------     ------------------------------
<S>                                       <C>        <C>       <C>          <C>      <C>        <C>
Assets:
Loans                                    $679,975  $12,989    7.64%       $642,082 $13,008     8.10%
Investment securities - taxable           298,737    2,744    3.67%        176,257   2,230     5.06%
Investment securities - nontaxable         41,136      841    8.17%         44,535     859     7.72%
Federal funds sold                         28,438       84    1.18%         39,722     166     1.67%

Total earning assets                    1,048,286   16,658    6.36%        902,596  16,263     7.21%
Other assets                              101,473                           87,875
                                       ----------                        ---------
Total assets                           $1,149,759                         $990,471
                                       ==========                        =========
Liabilities and shareholders' equity:
Interest-bearing demand deposits         $187,017      118    0.25%       $171,606     122     0.28%
Savings deposits                          316,366      720    0.91%        253,679     680     1.07%
Time deposits                             292,924    1,959    2.68%        270,692   2,142     3.17%
Other borrowings                           22,918      318    5.55%         22,951     319     5.56%
                                       -----------------------------     ------------------------------
Total interest-bearing liabilities        819,225    3,115    1.52%        718,928   3,263     1.82%
Noninterest-bearing deposits              207,546                          167,052
Other liabilities                          21,849                           14,986
Shareholders' equity                      101,139                           89,505
                                       ----------                        ---------
Total liabilities and
  shareholders' equity                 $1,149,759                         $990,471
                                       ==========                        =========
Net interest spread(1)                                        4.84%                           5.39%
Net interest income and interest margin(2)         $13,543    5.17%                $13,000    5.76%
                                                  ==================               ====================

(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>

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

The following  table sets 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 March 31, 2003
                                                compared with three months
                                                   ended March 31, 2002
                                             ---------------------------------
                                              Volume       Rate       Total
                                             ---------------------------------
Increase (decrease) in interest income:
Loans                                           $767       (786)       (19)
Investment securities                          1,666     (1,170)       496
Federal funds sold                               (47)       (35)       (82)
                                             ---------------------------------
   Total earning assets                        2,386     (1,991)       395
                                             ---------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                  11        (14)        (3)
Savings deposits                                 168       (128)        40
Time deposits                                    176       (360)      (184)
Other borrowings                                   -         (1)        (1)
                                             ---------------------------------
   Total interest-bearing liabilities            355       (503)      (148)
                                             ---------------------------------
Increase (decrease) in Net Interest Income    $2,031    ($1,488)      $543
                                             =================================

Provision for Loan Losses
The  Company  provided  $150,000  for loan  losses in the first  quarter of 2003
versus $800,000 in the first quarter of 2002.  During the first quarter of 2003,
the Company  recorded  $234,000  of net loan charge offs versus  $521,000 of net
loan charge-offs in the year earlier quarter.

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

                                             Three months ended
                                                  March 31,
                                            ----------------------
                                              2003          2002
                                            ----------------------
   Service charges on deposit accounts      $2,858        $1,465
   ATM fees and interchange                    520           373
   Other service fees                          122           135
   Gain on sale of loans                     1,133           963
   Commissions on sale of
     nondeposit investment products            448           538
   Increase in cash value of life insurance    139           119
   Other noninterest income                    176           233
                                            ----------------------
   Total noninterest income                 $5,396        $3,826
                                            ======================


                                      -16-
<PAGE>

Noninterest  income for the first quarter of 2003 increased  $1,570,000  (41.0%)
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
$1,393,000 or 95.1% to $2,858,000), and an increase in gain on sale of loans (up
$170,000 or 17.7% to  $1,133,000).  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 $147,000 or 39.4% to $520,000)  due to
expansion of Company's ATM network and increased debit card usage.

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

                                            Three months ended
                                                 March 31,
                                          ------------------------
                                             2003          2002
                                          ------------------------
   Salaries                                 $4,250        $3,645
   Commissions and incentives                1,111           851
   Employee benefits                         1,516         1,243
   Equipment                                   791           688
   Occupancy                                   747           730
   Professional fees                           574           233
   Telecommunications                          391           339
   Data processing and software                291           238
   Advertising and marketing                   272           165
   Courier service                             248           220
   ATM network charges                         232           192
   Intangible amortization                     228           228
   Postage                                     198           142
   Operational losses                          130            39
   Assessments                                  60            56
   Other                                     1,612         1,393
                                          ------------------------
   Total                                   $12,651       $10,402
                                          ========================
   Average full time equivalent staff          467           417
   Noninterest expense to revenue (FTE)     66.80%        61.82%

Noninterest expense for the first quarter of 2003 increased  $2,249,000 (21.6%).
The  increase  in  noninterest  expense was mainly due to a  $1,138,000  (19.8%)
increase in salary and benefit expense to $6,877,000. 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  four newly opened
branches in 2002.  Noninterest  expense  excluding  salaries and  benefits  also
increased (up $1,111,000 or 23.8% to $5,774,000). Approximately $206,000 of this
increase was 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 a $75,000 increase in operational
losses from the year-ago quarter.  Increased  advertising expenses accounted for
$113,000 of the increase in other noninterest expense.

Provision for Income Tax
The  effective  tax rate for the three months ended March 31, 2003 was 38.0% and
reflects an increase  from 37.4% for the three months ended March 31, 2002.  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.


                                      -17-
<PAGE>

Classified Assets
The  Company  closely  monitors  the  markets in which it  conducts  its lending
operations  and  continues  its strategy to control  exposure to loans with high
credit risk.  Asset reviews are performed  using grading  standards and criteria
similar to those employed by bank regulatory  agencies.  Assets receiving lesser
grades  fall  under  the  "classified  assets"  category,   which  includes  all
nonperforming  assets and potential problem loans, and receive an elevated level
of attention to ensure collection.

The following is a summary of classified assets  on the dates indicated (dollars
in thousands):

                               At March 31, 2003           At December 31, 2002
                           -------------------------    ------------------------
                             Gross Guaranteed  Net       Gross Guaranteed   Net
                           -----------------------------------------------------
Classified loans           $49,510  $11,973  $37,537    $52,642 $12,280  $40,062
Other classified assets      1,608        -    1,608        932       -      932
                           -----------------------------------------------------
Total classified assets    $51,118  $11,973  $39,145    $53,574 $12,280  $40,994
                           =====================================================
Allowance for loan losses/
     Classified loans                          36.5%                       35.1%

Classified  assets,  net of  guarantees  of the U.S.  Government,  including its
agencies and its government-sponsored agencies at March 31, 2003, decreased $1.8
million (4.5%) to $39.1 million from $41.0 million at December 31, 2002.

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
three  months,  ended  March 31,  2003,  if all such  loans had been  current in
accordance with their original terms, totaled $345,000. Interest income actually
recognized  on these  loans  during the three  months  ended  March 31, 2003 was
$14,500.

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.


                                      -18-
<PAGE>

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.

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, increased $13.1 million (144%) to $22.2 million during the first three
months of 2003.  The increase in  nonperforming  assets is due to two commercial
real estate loans collateralized by a single building.  Nonperforming assets net
of  guarantees  represent  1.89% of  total  assets.  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 March 31, 2003           At December 31, 2002
                                              -------------------------    -------------------------
                                                Gross Guaranteed  Net       Gross Guaranteed   Net
                                              ------------------------------------------------------
<S>                                           <C>       <C>      <C>       <C>      <C>      <C>
Performing nonaccrual loans                   $12,943   $8,265   $4,678    $13,199  $8,432   $4,767
Nonperforming, nonaccrual loans                16,163      502   15,661      4,091     718    3,373
                                              ------------------------------------------------------
Total nonaccrual loans                         29,106    8,767   20,339     17,290   9,150    8,140
Loans 90 days past due and still accruing         271        -      271         40       -       40
                                              ------------------------------------------------------
Total nonperforming loans                      29,377    8,767   20,610     17,330   9,150    8,180
Other real estate owned                         1,608        -    1,608        932       -      932
                                              ------------------------------------------------------
Total nonperforming assets                    $30,985   $8,767  $22,218    $18,262  $9,150   $9,112
                                              ======================================================
Nonperforming loans to total loans                                2.97%                       1.19%
Allowance for loan losses/nonperforming loans                       69%                        176%
Nonperforming assets to total assets                              1.89%                       0.80%
Allowance for loan losses to nonperforming assets                   64%                        158%

</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.


                                      -19-
<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,
2002.

Based on the current conditions of the loan portfolio,  Management believes that
the  $14,293,000  allowance  for loan  losses at March 31,  2003 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
                                                       March 31,
                                                ------------------------
                                                   2003          2002
                                                ------------------------
   Balance, beginning of period                  $14,377       $13,058
   Loan loss provision                               150           800
   Loans charged off                                (280)         (561)
   Recoveries of previously
     charged-off loans                                46            41
                                                ------------------------
   Net charge-offs                                  (234)         (520)
                                                ------------------------
   Balance, end of period                        $14,293       $13,338
                                                ========================
   Allowance for loan losses/loans outstanding     2.06%         2.09%


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.

The Company's primary capital resource is shareholders' equity, which was $101.9
million at March 31, 2003.  This amount  represents  an increase of $2.9 million
from December 31, 2002,  the net result of  comprehensive  income for the period
($4.0  million)  and the  issuance  of common  shares via the  exercise of stock
options ($0.3 million),  partially offset by dividends paid ($1.4 million).  The
Company's  ratio of equity to total  assets  was 8.66%,  8.87%,  and 8.65% as of
March 31, 2003, March 31, 2002, and December 31, 2002, respectively.


                                      -20-
<PAGE>
<TABLE>
<CAPTION>

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

                                                                                   To Be Well
                                At March 31,         At            Minimum    Capitalized Under
                             ----------------    December 31,    Regulatory   Prompt Corrective
                             2003       2002        2002         Requirement  Action Provisions
                             ------------------------------------------------------------------
   <S>                        <C>        <C>        <C>              <C>              <C>
   Tier I Capital            10.38%     10.86%     10.71%           4.00%            6.00%
   Total Capital             11.63%     12.12%     11.97%           8.00%           10.00%
   Leverage ratio             8.23%      8.48%      8.27%           4.00%            5.00%

</TABLE>

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 March 31, 2003 and 2002, 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.


                                      -21-
<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 March 31, 2003 and 2002, 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 March 31, 2003, federal
funds sold and  investment  securities  available for sale totaled $364 million,
representing  an increase of $18 million or 5.2% from December 31, 2002,  and an
increase of $86 million or 30.9% from March 31, 2002.  In addition,  the Company
generates  additional  liquidity  from its operating  activities.  The Company's
profitability  during the first three months of 2003  generated  cash flows from
operations  of $5.6  million  compared  to $6.2  million  during the first three
months of 2002.  Additional cash flows may be provided by financing  activities,
primarily  the  acceptance  of deposits  and  borrowings  from banks.  Sales and
maturities  of  investment  securities  produced  cash inflows of $36.9  million
during the three months ended March 31, 2003  compared to $28.7  million for the
three months ended March 31, 2002. During the three months ended March 31, 2003,
the  Company  invested  $53.0  million,  $7.2  million,  and  $13.9  million  in
securities, net loan growth, and life insurance policies, respectively, compared
to $27.0 million used to purchase  investments  and $21.0 million  provided by a
net decrease in loan  balances,  respectively,  during the first three months of
2002. These changes in investment, loan, and life insurance balances contributed
to net cash used for  investing  activities  of $38.1  million  during the three
months  ended March 31,  2003,  compared  to net cash  provided  from  investing
activities  of $22.4  million  during the three  months  ended  March 31,  2002.
Financing  activities provided net cash of $26.2 million during the three months
ended March 31, 2003, compared to net cash used by financing  activities of $8.7
million during the three months ended March 31, 2002.  Deposit balance increases
and exercise of common stock options accounted for $27.4 million and $242,000 of
financing  sources of funds,  respectively,  during the three months ended March
31, 2003,  compared to deposit balance decreases and repurchases of common stock
that  accounted  for  $7.1  million  and  $190,000   financing  uses  of  funds,
respectively,  during the three months ended March 31, 2002. Dividends paid used
$1.4 million of cash during the three months ended both March 31, 2003 and March
31, 2002. 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

(a)       The Chief Executive  Officer,  Richard Smith,  and the Chief Financial
          Officer, Thomas Reddish,  evaluated the effectiveness of the Company's
          disclosure  controls and procedures as of a date within 90 days of the
          filing of this report ("Evaluation  Date").  Based on that evaluation,
          they concluded that as of the Evaluation Date the Company's disclosure
          controls and procedures are effective to allow timely communication to
          them of  information  relating to the Company and the Bank required to
          be  disclosed  in  its  filings  with  the   Securities  and  Exchange
          Commission  ("SEC")  under the  Securities  Exchange  Act of 1934,  as
          amended  ("Exchange  Act").  Disclosure  controls and  procedures  are
          Company controls and other procedures that are designed to ensure that
          information  required  to be  disclosed  by the Company in the reports
          that  it  files  under  the  Exchange  Act  is  recorded,   processed,
          summarized and reported within the time periods specified in the SEC's
          rules and forms.

(b)       There  have been no  significant  changes  in the  Company's  internal
          controls or in other  factors  that could  significantly  affect these
          controls subsequent to the Evaluation Date.


                                      -22-
<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 - Exhibits and Reports on Form 8-K

(a) Exhibits

     3.1      Restated Articles of Incorporation dated May 9, 2003

     3.2*     Bylaws of TriCo  Bancshares,  as amended,  filed as Exhibit 3.2 to
              TriCo's Form  S-4 Registration  Statement  dated  January 16, 2003
              (No. 333-102546)

     4*       Certificate of  Determination  of Preferences of Series  AA Junior
              Participating  Preferred  Stock  filed as  Exhibit 3.3 to  TriCo's
              Quarterly  Report on Form 10-Q for the quarter ended September 30,
              2001

     10.1*    Rights  Agreement dated  June 25, 2001,  between  TriCo and Mellon
              Investor Services LLC filed as Exhibit 1 to TriCo's Form 8-A dated
              July 25, 2001

     10.2*    Form of  Change of  Control  Agreement  between TriCo and  each of
              Craig Carney  (dated February 27, 2003), Richard O'Sullivan  (date
              February 24, 2003),  and  Thomas Reddish  (dated  April 10, 2001),
              filed  as Exhibit  10.9 to  TriCo's  Report on  Form 10-Q  for the
              quarter ended September 30, 2001

     10.3*    TriCo's 1993 Non-Qualified Stock  Option Plan filed as Exhibit 4.1
              to TriCo's Form S-8  Registration Statement dated January 18, 1995
              (No. 33-88704)

     10.4*    TriCo's  Non-Qualified  Stock Option  Plan filed as Exhibit 4.2 to
              TriCo's Form S-8  Registration   Statement dated  January 18, 1995
              (No. 33-88704)

     10.5*    TriCo's  Incentive  Stock  Option  Plan  filed  as Exhibit  4.3 to
              TriCo's  Form S-8  Registration  Statement  dated January 18, 1995
              (No. 33-88704)

     10.6*    TriCo's 1995 Incentive  Stock Option Plan  filed as Exhibit 4.1 to
              TriCo's  Form S-8  Registration  Statement  dated  August 23, 1995
              (No. 33-62063)

     10.7*    TriCo's  2001 Stock Option Plan filed as Exhibit 4 to TriCo's Form
              S-8 Registration Statement dated July 27, 2001 (No. 33-66064)

     10.8*    Employment Agreement between  TriCo and Richard  Smith dated April
              10, 2001,  filed as Exhibit 10.8 to TriCo's  Form S-4 Registration
              Statement dated January 16, 2003 (No. 333-102546)


                                      -23-
<PAGE>

     10.9*    Tri  Counties  Bank Executive  Deferred  Compensation  Plan  dated
              September 1, 1987, as restated April 1, 1992, and amended November
              12, 2002, filed as  Exhibit 10.9 to TriCo's  Form S-4 Registration
              Statement dated January 16, 2003 (No. 333-102546)

     10.10*   Tri Counties Bank Supplemental Retirement Plan for Directors dated
              September 1, 1987, as  restated January 1, 2001, filed  as Exhibit
              10.10 to TriCo's Form S-4 Registration Statement dated January 16,
              2003 (No. 333-102546)

     10.11*   Tri Counties Bank Supplemental Executive Retirement Plan effective
              September 1,  1987, filed  as Exhibit  10.11 to  TriCo's  Form S-4
              Registration Statement dated January 16, 2003 (No. 333-102546)

     10.12*   Tri  Counties  Bank  Deferred  Compensation   Plan  for  Directors
              effective  April 1, 1992,  filed as Exhibit  10.12 to TriCo's Form
              S-4 Registration Statement dated January 16, 2003 (No. 333-102546)

     10.13    Employment Agreement between TriCo and Richard O'Sullivan dated
              April 10, 2001

     11.1     Computation of earnings per share

     21.1     Tri Counties  Bank, a California  banking corporation, is the sole
              subsidiary of Registrant

     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

     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 and incorporated by reference.

(b) Reports on Form 8-K

     During the quarter  ended March 31,  2003 the Company  filed the  following
     Current Reports on Form 8-K:

              Description                               Date of Report
              ----------------------------------        ---------------------
              Closing of acquisition of North           April 15, 2003
              State National Bank by TriCo
              Bancshares and Tri Counties Bank.

              Quarterly results of operations.          April 23, 2003

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:  May 12, 2003                  /s/ Thomas J. Reddish
                                     -----------------------------------
                                     Thomas J. Reddish
                                     Vice President and Chief Financial Officer


                                      -24-
<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: May 12, 2003                      /s/ Richard P. Smith
                                        -------------------------------------
                                        Richard P. Smith
                                        President and Chief Executive Officer


                                      -25-
<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: May 12, 2003                      /s/ Thomas J. Reddish
                                        -------------------------------------
                                        Thomas J. Reddish
                                        Vice President and Chief Financial
                                        Officer


                                      -26-
<PAGE>

EXHIBITS

Exhibit 3.1

Restated Articles of Incorporation dated May 9, 2003

                CERTIFICATE OF RESTATED ARTICLES OF INCORPORATION

                                       OF

                                TRICO BANCSHARES



         The undersigned certify that:

    1.    They  are the  president  and the  secretary,  respectively,  of TriCo
          Bancshares, a California corporation.

    2.    The original  Articles of Incorporation of this corporation were filed
          by the Secretary of State on October 13, 1981.

    3.    The Articles of  Incorporation  of this  corporation as amended to the
          date of this Certificate are restated on the attached Exhibit which is
          incorporated by reference as if fully set forth herein.

    4.    The  foregoing  Restated  Articles  of  Incorporation  have  been duly
          approved by the Board of Directors.

    5.    The Restated  Articles of  Incorporation  shall be, and said  Articles
          are, amended through the date of the filing of this Certificate.

    6.    These Restated  Articles of Incorporation do not alter or amend in any
          respect  the  Articles  of  Incorporation  of  this  corporation  and,
          pursuant to Section 910 of the  California  Corporations  Code,  these
          Restated  Articles may be approved by the Board of Directors alone and
          do not require the approval of the outstanding shares.

    7.    We further  declare,  under  penalty of perjury  under the laws of the
          State of  California,  that the matters set forth in this  Certificate
          are true and correct of our own knowledge.


Dated:  May 9, 2003.

                                   /s/ Richard P. Smith
                                   ---------------------------------------------
                                   Richard P. Smith, President


                                   /s/ Wendell J. Lundberg
                                   ---------------------------------------------
                                   Wendell J. Lundberg, Secretary


                                      -27-
<PAGE>


                   EXHIBIT TO CERTIFICATE OF RESTATED ARTICLES
                      OF INCORPORATION OF TRICO BANCSHARES


                       RESTATED ARTICLES OF INCORPORATION

                                       OF

                                TRICO BANCSHARES


                                     First

         The name of this Corporation is TriCo Bancshares.

                                     Second

     The purpose of this  Corporation is to engage in any lawful act or activity
for which a corporation  may be organized  under the General  Corporation Law of
California  other than the banking  business,  the trust company business or the
practice  of a  profession  permitted  to  be  incorporated  by  the  California
Corporations Code.

                                     Third

     3.1 The Corporation is authorized to issue two classes of shares designated
"Preferred  Stock" and  "Common  Stock,"  respectively.  The number of shares of
Preferred  Stock  authorized  to be issued is one million  (1,000,000),  and the
number  of  shares of Common  Stock  authorized  to be issued is twenty  million
(20,000,000).

     3.2 The  Preferred  Stock may be divided  into such number of series as the
Board of  Directors  may  determine.  The Board of Directors  is  authorized  to
determine and alter the rights, preferences, privileges and restrictions granted
to or imposed upon any wholly unissued series of Preferred Stock, and to fix the
number of shares of any series of  Preferred  Stock and the  designation  of any
such series of Preferred  Stock.  The Board of Directors,  within the limits and
restrictions  stated in any  resolution or resolutions of the Board of Directors
originally fixing the number of shares  constituting any series, may increase or
decrease  (but not below the number of shares of such series  then  outstanding)
the  number of shares of any  series  subsequent  to the issue of shares of that
series.

     3.3 Series A Preferred Stock. The rights, preferences and privileges of the
Series A Preferred  Stock of the  Corporation  are as set forth in this  Section
3.3.

        3.3.1   Designation and Amount.  Thirty Thousand Six Hundred (30,600) of
     the shares of the Preferred Stock of the Corporation are designated  Series
     A Preferred Stock (hereinafter referred to as "Series A Stock").


                                      -28-
<PAGE>

        3.3.2   Dividends.

          (a) The  holders  of  shares of Series A Stock  shall be  entitled  to
     receive cash dividends,  when and as declared by the Board of Directors out
     of funds legally available for the purpose,  from the date of issue of such
     shares to and  including  August 31,  1985,  and for each  Dividend  Period
     commencing  on the first day of each  month in each year  after  August 31,
     1985 and ending on and  including  the day next  preceding the first day of
     the next month (such period  ending  August 31, 1985 and each of such other
     periods herein referred to in this Section 3.3 as a "Dividend Period"),  at
     an annual  rate of $11.00  per  share.  The  amount of  dividend  per share
     payable  for the portion of the  Dividend  Period from the date of original
     issue of a share of Series A Stock to and including August 31, 1985 and for
     any other Dividend Period more or less than a full Dividend Period shall be
     computed  on the basis of a 360-day  year of twelve  30-day  months and the
     actual number of days elapsed in the period for which  payable.  The amount
     of dividend  per share  payable for each full  Dividend  Period  commencing
     after  August 31, 1985 shall be computed  by dividing  the annual  dividend
     rate for each Dividend  Period by twelve.  Dividends  shall be payable when
     and as declared by the Board of Directors,  out of funds legally  available
     therefor,  to holders of record on such  respective  dates not exceeding 15
     days  preceding  the payment date thereof as may be determined by the Board
     of  Directors  in advance of such  payment  date.  Dividends  on account of
     arrears for any past Dividend Periods may be declared and paid at any time,
     without  reference  to any regular  dividend  payment  date,  to holders of
     record  on such date not  exceeding  15 days  preceding  the  payment  date
     thereof as may be fixed by the Board of  Directors.  No dividends  shall be
     declared on any other series or class or classes of Preferred Stock ranking
     on a parity (as that term is defined in Section 3.3.5(d)) with the Series A
     Stock as to dividends in respect of any Dividend  Period unless there shall
     likewise  be or have keen  declared  on all shares of Series A Stock at the
     time outstanding like dividends for all Dividend Periods coinciding with or
     ending before such Dividend Period, ratably in proportion to the respective
     dividend  rates  fixed for all such  other  series or class or  classes  of
     Preferred  Stock and the Series A Stock.  Dividends shall be cumulative and
     will  accrue  on each  share of  Series A Stock  from the date of  original
     issuance thereof. No interest,  or sum of money in lieu of interest,  shall
     be payable in respect of any dividend  payment or payments  which may be in
     arrears.

          (b) If dividends at the rate per share set out in Section 3.3.2(a) for
     any Dividend  Period shall not have been declared and paid or set apart for
     payment  on all  outstanding  shares of  Series A Stock  for such  Dividend
     Period and all preceding  Dividend Periods from and after the date of issue
     thereof,  then, until the aggregate  deficiency shall be declared and fully
     paid or set apart for payment, the Corporation shall not (i) declare or pay
     or set apart for payment any  dividends or make any other  distribution  on
     the  Common  Stock of the  Corporation  or any other  capital  stock of the
     Corporation  ranking  junior  to the  Series A Stock  with  respect  to the
     payment of dividends or distribution of assets on liquidation,  dissolution
     or winding up of the  Corporation  (which for all  purposes  shall mean any
     liquidation,   dissolution  or  winding  up  of  the  Corporation,  whether
     voluntary  or  involuntary)  (the  Common  Stock and such other stock being
     herein  referred  to in this  Section  3.3 as "Junior  Stock"),  other than
     dividends  or  distributions  paid in shares of, or  options,  warrants  or
     rights to subscribe for or purchase  shares of, Junior Stock,  or (ii) make
     any payment on account of the purchase,  redemption or other  retirement of
     any Junior Stock.

        3.3.3   Liquidation  Preference.  Upon  the  voluntary  or   involuntary
     liquidation,  winding  up or  dissolution  of the  Corporation,  out of the
     assets  available for  distribution to shareholders the holders of Series A
     Stock shall be entitled to  receive,  in  preference  to any payment on the
     Junior  Stock,  an  amount  equal to  $100.00  per  share  plus  cumulative
     dividends as provided in Section 3.3.2 above accrued and unpaid to the date
     payment is made available to the Series A Stock and no more. Subject to the
     rights of the  holders of shares of any series or class or classes of stock
     ranking on a parity  with or prior to the Series A Stock upon  liquidation,
     dissolution or winding up, after the full preferential  liquidation  amount
     has been paid to, or determined and set apart for, the Series A Stock,  the
     remaining   assets  shall  be  paid  to  the  Junior  Stock.  If  upon  any
     liquidation,  dissolution or winding up of the  Corporation,  the assets of
     the Corporation,  or proceeds thereof,  distributable  among the holders of
     the shares of the Series A Stock shall be  insufficient  to pay in full the
     preferential  amount  aforesaid  and  liquidating  payments  on  any  other
     Preferred Stock ranking, as to liquidation, dissolution or winding up, on a
     parity with the Series A Stock,  then such assets, or the proceeds thereof,
     shall be distributed  among the shareholders of Series A Stock and any such
     other  Preferred  Stock ratably in accordance  with the respective  amounts
     which  would be payable on such shares of Series A Stock and any such other
     Preferred  Stock if all  amounts  payable  thereon  were  paid in  full.  A
     reorganization  shall not be considered to be a liquidation,  winding up or
     dissolution  within the meaning of this Section 3.3.3 and in such event the
     Series A Stock shall be entitled only to the rights provided in the plan of
     reorganization and Chapters 12 and 13 of the California General Corporation
     Law and elsewhere in the Corporation's Articles of Incorporation.


                                      -29-
<PAGE>

        3.3.4   Redemption.

          (a) The Series A Stock is subject to redemption,  out of funds legally
     available  therefor,  in whole, or from time to time in part, at the option
     of the board of directors of the  Corporation  at or any time after July 1,
     1988 or prior  thereto  upon the  approval  of at least a  majority  of the
     outstanding  shares of Series A Stock. If only a part of the Series A Stock
     is to be redeemed,  the redemption shall be carried out pro rata (as nearly
     as may be). The redemption price shall be $100.00 per share plus cumulative
     dividends as provided in Section 3.3.2 above accrued and unpaid to the date
     fixed for redemption (herein called the "redemption price"). In the case of
     a redemption of less than all of the Series A Stock at anytime outstanding,
     no such shares may be redeemed  until all  dividends  accrued and unpaid on
     all Series A Stock then outstanding,  other than the shares to be redeemed,
     shall have been paid or declared and the full amount  thereof set apart for
     payment.

          (b) The  Corporation  shall mail a notice of redemption to each holder
     of record of shares to be redeemed  addressed  to the holder at the address
     of such holder  appearing on the books of the  Corporation  or given by the
     holder to the Corporation for the purpose of notice,  or if no such address
     appears or is given at the place where the  principal  executive  office of
     the  Corporation  is located,  not  earlier  than 60 nor later than 20 days
     before  the date  fixed for  redemption.  The  notice of  redemption  shall
     include  (i) the  class of  shares  or the part of a class of  shares to be
     redeemed,  (ii) the date fixed for redemption,  (iii) the redemption  price
     and (iv) the place at which the  shareholders  may  obtain  payment  of the
     redemption price upon surrender of their share  certificates.  If funds are
     available  on the date fixed for the  redemption,  then  whether or not the
     share certificates are surrendered for payment of the redemption price, the
     shares shall no longer be outstanding  and the holders  thereof shall cease
     to be shareholders  of the Corporation  with respect to the shares redeemed
     on and after the date fixed for  redemption  and shall be entitled  only to
     receive the redemption  price without  interest upon surrender of the share
     certificate.  If  less  than  all  the  shares  represented  by  one  share
     certificate  are to be redeemed,  the  Corporation  shall issue a new share
     certificate for the shares not redeemed.

          (c)  The  Corporation  shall  also  cause  a  copy  of the  notice  of
     redemption  to be published in a newspaper  of general  circulation  in the
     county in which  the  principal  executive  office  of the  Corporation  is
     located at least once a week for two successive  weeks, in each instance on
     any day of the week,  commencing not earlier than 60 nor later than 20 days
     before the date fixed for  redemption.  If the  Corporation  publishes  the
     notice of redemption as provided in this  paragraph (c), the failure of the
     Corporation  to  comply  with  the  provision  for  mailing  of  notice  of
     redemption  in paragraph  (b) shall not  invalidate  the  redemption of the
     shares.

          (d) If, on or prior to any date fixed for redemption,  the Corporation
     deposits  with any bank or trust  company  in this  state  (which may be an
     affiliate of the  Corporation)  as a trust fund a sum sufficient to redeem,
     on the date fixed for redemption thereof, the shares called for redemption,
     with irrevocable instructions and authority to the bank or trust company to
     publish the notice of redemption  thereof (or to complete such  publication
     if  theretofore  commenced)  and to pay,  on and after  the date  fixed for
     redemption or prior thereto,  the  redemption  price of the shares to their
     respective  holders upon surrender of their share  certificates,  then from
     and after the date of the  deposit  (although  prior to the date  fixed for
     redemption)  the shares so called shall be redeemed and  dividends on those
     shares  shall  cease to accrue  after the date  fixed for  redemption.  The
     deposit  shall  constitute  full payment of the shares to their holders and
     from and  after  the date of the  deposit  the  shares  shall no  longer be
     outstanding  and the holders  thereof shall cease to be  shareholders  with
     respect to such shares and shall have no rights with respect thereto except
     the  right  to  receive  from  the bank or  trust  company  payment  of the
     redemption  price of the shares without  interest,  upon surrender of their
     certificates  therefor. Any interest accrued on such funds shall be paid to
     the Corporation from time to time. If less than all the shares  represented
     by one share certificate are to be redeemed,  the Corporation shall issue a
     new share  certificate  for the shares not redeemed.  After two years,  the
     bank or trust company shall return to the  Corporation  funds deposited and
     not claimed and  thereafter  the holder of a share  certificate  for shares
     redeemed shall look to the Corporation for payment.


                                      -30-
<PAGE>

        3.3.5   Voting Rights.

          (a) Except as hereinafter in this Section 3.3.5 expressly provided for
     and as  otherwise  required  by the laws of the  State of  California,  the
     Series A Stock shall have no voting rights.  If there is a default in whole
     or in  part in the  payment  of 24 or more  cumulative  monthly  dividends,
     whether  or not  consecutive,  on the  Series  A Stock as  provided  for in
     Section 3.3.2 above,  the holders of the  outstanding  Series A Stock shall
     have the right,  voting separately as a class with holders of shares of any
     one or more other  series of Preferred  Stock  ranking on a parity with the
     Series A Stock either as to dividends  or the  distribution  of assets upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been  conferred and are  exercisable,  to elect two of the  authorized
     number of  members  of the Board of  Directors  of the  Corporation  at the
     Corporation's  next annual meeting of  shareholders.  At elections for such
     directors,  each holder of Series A Stock shall be entitled to one vote for
     each share held (the  holders  of shares of any other  series of  Preferred
     Stock ranking on such a parity and having like voting rights being entitled
     to such number of votes,  if any,  for each share of such stock held as may
     be granted  to them).  The right of the  holders of Series A Stock,  voting
     separately as a class,  to elect (either alone or together with the holders
     of shares of any one or more other  series of  Preferred  Stock  ranking on
     such a parity  and  having  like  voting  rights)  members  of the Board of
     Directors of the Corporation as aforesaid shall continue until such time as
     all dividends  accumulated on the Series A Stock shall have been fully paid
     or set apart for payment, at which time such right shall terminate,  except
     as herein or by law expressly  provided,  subject to revesting in the event
     of each and every subsequent default of the character above mentioned. Upon
     any  termination  of the right of the  holders  of the  Series A Stock as a
     class to vote for directors as herein  provided,  the term of office of all
     directors  then in office  elected  by the Series A Stock  shall  terminate
     immediately.  Any director who shall have been so elected  pursuant to this
     paragraph may be removed at any time, either with or without cause, and any
     vacancy thereby created may be filled,  only by the affirmative vote of the
     holders of Series A Stock voting  separately  as a class  (either  alone or
     together  with the  holders  of shares of any one or more  other  series of
     Preferred Stock ranking on such a parity and having like voting rights). If
     the office of any director  elected by the holders of Series A Stock voting
     as a class becomes  vacant for any reason other than removal from office as
     aforesaid,  the  remaining  director may choose a successor  who shall hold
     office for the unexpired term in respect of which such vacancy occurred.

          (b) So long as any shares of Series A Stock  remain  outstanding,  the
     consent of the  holders  of at least a  majority  of the shares of Series A
     Stock  outstanding at the time (voting  separately as a class together with
     all other series of Preferred  Stock  ranking on a parity with the Series A
     Stock  either  as  to  dividends  or  the   distribution   of  assets  upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been  conferred  and are  exercisable)  shall be  necessary to permit,
     effect or validate any one or more of the following:

               (i) the  authorization,  creation  or  issuance of a new class or
          series of shares having rights,  preferences  or privileges  prior (as
          that term is defined in Section  3.3.5(d)) to the shares of the Series
          A Stock,  or any  increase in the number of  authorized  shares of any
          class or series having rights,  preferences or privileges prior to the
          shares of Series A Stock; or
                                      -31-
<PAGE>

               (ii) the  amendment,  alteration  or  repeal,  whether by merger,
          consolidation  or otherwise,  of any of the provisions of the Articles
          of  Incorporation  of  the  Corporation  which  would  materially  and
          adversely affect any right,  preference,  privilege or voting power of
          the Series A Stock or of the holders thereof,  provided,  however that
          any increase in the amount of  authorized  Common Stock or  authorized
          Preferred Stock or the creation and issuance of other series of Common
          Stock or  Preferred  Stock,  in each case  ranking on a parity with or
          junior to the Series A Stock with  respect to the payment of dividends
          and the  distribution  of  assets  upon  liquidation,  dissolution  or
          winding up, shall not be deemed to  materially  and  adversely  affect
          such rights, preferences, privileges or voting powers.

          (c) The foregoing voting provisions shall not apply if, at or prior to
     the time when the act with  respect to which such vote would  otherwise  be
     required shall be effected,  all outstanding shares of Series A Stock shall
     have been redeemed or called for redemption and sufficient funds shall have
     been deposited in trust to effect such redemption.

          (d) Any class or classes of stock of the  Corporation  shall be deemed
     to rank:

          (i) prior to the Series A Stock as to dividends or as to  distribution
     of assets  upon  liquidation,  dissolution  or winding up if the holders of
     such class  shall be entitled  to the  receipt of  dividends  or of amounts
     distributable upon liquidation,  dissolution or winding up, as the case may
     be, in preference or priority to the holders of Series A Stock; and

          (ii) on a parity  with the  Series  A Stock as to  dividends  or as to
     distribution of assets upon liquidation, dissolution or winding up, whether
     or not  the  dividend  rates,  dividend  payment  dates  or  redemption  or
     liquidation prices per share thereof are different from those of the Series
     A Stock if the  holders  of such  class of stock and of the  Series A Stock
     shall be entitled to the receipt of dividends  or of amounts  distributable
     upon  liquidation,  dissolution  or  winding  up,  as the case  may be,  in
     proportion  to  their  respective  dividend  rates or  liquidation  prices,
     without preference or priority one over the other.

     3.4 Series B Preferred Stock. The rights, preferences and privileges of the
Series B Preferred  Stock of the  Corporation  are as set forth in this  Section
3.4.

        3.4.1   Designation and Amount.  Eight Thousand (8,000) of the shares of
     the Preferred Stock of the  Corporation  are designated  Series B Preferred
     Stock (hereinafter referred to as "Series B Stock").


                                      -32-
<PAGE>

        3.4.2   Dividends.

          (a) The  holders  of  shares of Series B Stock  shall be  entitled  to
     receive cash dividends,  when and as declared by the Board of Directors out
     of funds legally available for the purpose,  from the date of issue of such
     shares to and including  November 30, 1988,  and for each  Dividend  Period
     commencing  on the first day of each month in each year after  November 30,
     1988 and ending on and  including  the day next  preceding the first day of
     the next month (such period ending November 30, 1988 and each of such other
     periods herein referred to in this Section 3.4 as a "Dividend Period"),  at
     an annual  rate of $52.50  per  share.  The  amount of  dividend  per share
     payable  for the portion of the  Dividend  Period from the date of original
     issue of a share of Series B Stock to and  including  November 30, 1988 and
     for any other  Dividend  Period  more or less than a full  Dividend  Period
     shall be computed on the basis of a 360-day  year of twelve  30-day  months
     and the actual number of days elapsed in the period for which payable.  The
     amount  of  dividend  per  share  payable  for each  full  Dividend  Period
     commencing after November 30, 1988 shall be computed by dividing the annual
     dividend  rate for each  Dividend  Period  by  twelve.  Dividends  shall be
     payable  when  and as  declared  by the  Board of  Directors,  out of funds
     legally available  therefor,  to holders of record on such respective dates
     not  exceeding  15  days  preceding  the  payment  date  thereof  as may be
     determined  by the Board of  Directors  in  advance of such  payment  date.
     Dividends  on account  of  arrears  for any past  Dividend  Periods  may be
     declared and paid at any time,  without  reference to any regular  dividend
     payment  date,  to  holders  of record on such date not  exceeding  15 days
     preceding  the  payment  date  thereof  as may be  fixed  by the  Board  of
     Directors.  No dividends  shall be declared on any other series or class or
     classes of Preferred  Stock ranking on a parity (as that term is defined in
     Section 3.4.5(d)) with the Series B Stock as to dividends in respect of any
     Dividend Period unless there shall likewise be or have been declared on all
     shares of Series B Stock at the time  outstanding  like  dividends  for all
     Dividend  Periods  coinciding  with or ending before such Dividend  Period,
     ratably in proportion to the  respective  dividend rates fixed for all such
     other series or class or classes of Preferred Stock and the Series B Stock.
     Dividends  shall be  cumulative  and will  accrue on each share of Series B
     Stock from the date of original  issuance thereof.  No interest,  or sum of
     money in lieu of  interest,  shall be payable  in  respect of any  dividend
     payment or payments which may be in arrears.

          (b) If dividends at the rate per share set out in Section 3.4.2(a) for
     any Dividend  Period shall not have been declared and paid or set apart for
     payment  on all  outstanding  shares of  Series B Stock  for such  Dividend
     Period and all preceding  Dividend Periods from and after the date of issue
     thereof,  then, until the aggregate  deficiency shall be declared and fully
     paid or set apart for payment, the Corporation shall not (i) declare or pay
     or set apart for payment any  dividends or make any other  distribution  on
     the  Common  Stock of the  Corporation  or any other  capital  stock of the
     Corporation  ranking  junior  to the  Series B Stock  with  respect  to the
     payment of dividends or distribution of assets on liquidation,  dissolution
     or winding up of the  Corporation  (which for all  purposes  shall mean any
     liquidation,   dissolution  or  winding  up  of  the  Corporation,  whether
     voluntary  or  involuntary)  (the  Common  Stock and such other stock being
     herein  referred  to in this  Section  3.4 as "Junior  Stock"),  other than
     dividend or distributions paid in shares of, or options, warrants or rights
     to subscribe  for or purchase  shares of,  Junior  Stock,  or (ii) make any
     payment on account of the purchase,  redemption or other  retirement of any
     Junior Stock.

        3.4.3   Liquidation  Preference.  Upon  the  voluntary   or  involuntary
     liquidation,  winding  up or  dissolution  of the  Corporation,  out of the
     assets  available for  distribution to shareholders the holders of Series B
     Stock shall be entitled to  receive,  in  preference  to any payment on the
     Junior  Stock,  an  amount  equal to  $500.00  per  share  plus  cumulative
     dividends as provided in Section 3.4.2 above accrued and unpaid to the date
     payment is made available to the Series B Stock and no more. Subject to the
     rights of the  holders of shares of any series or class or classes of stock
     ranking on a parity  with or prior to the Series B Stock upon  liquidation,
     dissolution or winding up, after the full preferential  liquidation  amount
     has been paid to, or determined and set apart for, the Series B Stock,  the
     remaining   assets  shall  be  paid  to  the  Junior  Stock.  If  upon  any
     liquidation,  dissolution or winding up of the  Corporation,  the assets of
     the Corporation,  or proceeds thereof,  distributable  among the holders of
     the shares of the Series B Stock shall be  insufficient  to pay in full the
     preferential  amount  aforesaid  and  liquidating  payments  on  any  other
     Preferred Stock ranking, as to liquidation, dissolution or winding up, on a
     parity with the Series B Stock,  then such assets, or the proceeds thereof,
     shall be distributed  among the shareholders of Series B Stock and any such
     other  Preferred  Stock ratably in accordance  with the respective  amounts
     which  would be payable on such shares of Series B Stock and any such other
     Preferred  Stock if all  amounts  payable  thereon  were  paid in  full.  A
     reorganization  shall not be considered to be a liquidation,  winding up or
     dissolution  within the meaning of this Section 3.4.3 and in such event the
     Series B Stock shall be entitled only to the rights provided in the plan of
     reorganization and Chapters 12 and 13 of the California General Corporation
     Law and elsewhere in the Corporation's Articles of Incorporation.


                                      -33-
<PAGE>

        3.4.4   Redemption.

          (a) The Series B Stock is subject to redemption,  out of funds legally
     available  therefor,  in whole, or from time to time in part, at the option
     of the board of directors of the Corporation at or any time after August 1,
     1995 or prior  thereto  upon the  approval  of at least a  majority  of the
     outstanding  shares of Series B Stock. If only a part of the Series B Stock
     is to be redeemed,  the redemption shall be carried out pro rata (as nearly
     as may be). The redemption price shall be $500.00 per share plus cumulative
     dividends as provided in Section 3.4.2 above accrued and unpaid to the date
     fixed for redemption (herein called the "redemption price"). In the case of
     a redemption of less than all of the Series B Stock at anytime outstanding,
     no such shares may be redeemed  until all  dividends  accrued and unpaid on
     all Series B Stock then outstanding,  other than the shares to be redeemed,
     shall have been paid or declared and the full amount  thereof set apart for
     payment.

          (b) The  Corporation  shall mail a notice of redemption to each holder
     of record of shares to be redeemed  addressed  to the holder at the address
     of such holder  appearing on the books of the  Corporation  or given by the
     holder to the Corporation for the purpose of notice,  or if no such address
     appears or is given at the place where the  principal  executive  office of
     the  Corporation  is located,  not  earlier  than 60 nor later than 20 days
     before  the date  fixed for  redemption.  The  notice of  redemption  shall
     include  (i) the  class of  shares  or the part of a class of  shares to be
     redeemed,  (ii) the date fixed for redemption,  (iii) the redemption  price
     and (iv) the place at which the  shareholders  may  obtain  payment  of the
     redemption price upon surrender of their share  certificates.  If funds are
     available  on the date fixed for the  redemption,  then  whether or not the
     share certificates are surrendered for payment of the redemption price, the
     shares shall no longer be outstanding  and the holders  thereof shall cease
     to be shareholders  of the Corporation  with respect to the shares redeemed
     on and after the date fixed for  redemption  and shall be entitled  only to
     receive the redemption  price without  interest upon surrender of the share
     certificate.  If  less  than  all  the  shares  represented  by  one  share
     certificate  are to be redeemed,  the  Corporation  shall issue a new share
     certificate for the shares not redeemed.

          (c)  The  Corporation  shall  also  cause  a  copy  of the  notice  of
     redemption  to be published in a newspaper  of general  circulation  in the
     county in which  the  principal  executive  office  of the  Corporation  is
     located at least once a week for two successive  weeks, in each instance on
     any day of the week,  commencing not earlier than 60 nor later than 20 days
     before the date fixed for  redemption.  If the  Corporation  publishes  the
     notice of redemption as provided in this  paragraph (c), the failure of the
     Corporation  to  comply  with  the  provision  for  mailing  of  notice  of
     redemption  in paragraph  (b) shall not  invalidate  the  redemption of the
     shares.

          (d) If, on or prior to any date fixed for redemption,  the Corporation
     deposits  with any bank or trust  company  in this  state  (which may be an
     affiliate of the  Corporation)  as a trust fund a sum sufficient to redeem,
     on the date fixed for redemption thereof, the shares called for redemption,
     with irrevocable instructions and authority to the bank or trust company to
     publish the notice of redemption  thereof (or to complete such  publication
     if  theretofore  commenced)  and to pay,  on and after  the date  fixed for
     redemption or prior thereto,  the  redemption  price of the shares to their
     respective  holders upon surrender of their share  certificates,  then from
     and after the date of the  deposit  (although  prior to the date  fixed for
     redemption)  the shares so called shall be redeemed and  dividends on those
     shares  shall  cease to accrue  after the date  fixed for  redemption.  The
     deposit  shall  constitute  full payment of the shares to their holders and
     from and  after  the date of the  deposit  the  shares  shall no  longer be
     outstanding  and the holders  thereof shall cease to be  shareholders  with
     respect to such shares and shall have no rights with respect thereto except
     the  right  to  receive  from  the bank or  trust  company  payment  of the
     redemption  price of the shares without  interest,  upon surrender of their
     certificates  therefor. Any interest accrued on such funds shall be paid to
     the Corporation from time to time. If less than all the shares  represented
     by one share certificate are to be redeemed,  the Corporation shall issue a
     new share  certificate  for the shares not redeemed.  After two years,  the
     bank or trust company shall return to the  Corporation  funds deposited and
     not claimed and  thereafter  the holder of a share  certificate  for shares
     redeemed shall look to the Corporation for payment.


                                      -34-
<PAGE>

        3.4.5   Voting Rights.

          (a) Except as hereinafter in this Section 3.4.5 expressly provided for
     and as  otherwise  required  by the laws of the  State of  California,  the
     Series B Stock shall have no voting rights.  If there is a default in whole
     or in  part in the  payment  of 24 or more  cumulative  monthly  dividends,
     whether  or not  consecutive,  on the  Series  B Stock as  provided  for in
     Section 3.4.2 above,  the holders of the  outstanding  Series B Stock shall
     have the right,  voting separately as a class with holders of shares of any
     one or more other  series of Preferred  Stock  ranking on a parity with the
     Series B Stock either as to dividends  or the  distribution  of assets upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been  conferred and are  exercisable,  to elect two of the  authorized
     number of  members  of the Board of  Directors  of the  Corporation  at the
     Corporation's  next annual meeting of  shareholders.  At elections for such
     directors,  each holder of Series B Stock shall be entitled to one vote for
     each share held (the  holders  of shares of any other  series of  Preferred
     Stock ranking on such a parity and having like voting rights being entitled
     to such number of votes,  if any,  for each share of such stock held as may
     be granted  to them).  The right of the  holders of Series B Stock,  voting
     separately as a class,  to elect (either alone or together with the holders
     of shares of any one or more other  series of  Preferred  Stock  ranking on
     such a parity  and  having  like  voting  rights)  members  of the Board of
     Directors of the Corporation as aforesaid shall continue until such time as
     all dividends  accumulated on the Series B Stock shall have been fully paid
     or set apart for payment, at which time such right shall terminate,  except
     as herein or by law expressly  provided,  subject to revesting in the event
     of each and every subsequent default of the character above mentioned. Upon
     any  termination  of the right of the  holders  of the  Series B Stock as a
     class to vote for directors as herein  provided,  the term of office of all
     directors  then in office  elected  by the Series B Stock  shall  terminate
     immediately.  Any director who shall have been so elected  pursuant to this
     paragraph may be removed at any time, either with or without cause, and any
     vacancy thereby created may be filled,  only by the affirmative vote of the
     holders of Series B Stock voting  separately  as a class  (either  alone or
     together  with the  holders  of shares of any one or more  other  series of
     Preferred Stock ranking on such a parity and having like voting rights). If
     the office of any director  elected by the holders of Series B Stock voting
     as a class becomes  vacant for any reason other than removal from office as
     aforesaid,  the  remaining  director may choose a successor  who shall hold
     office for the unexpired term in respect of which such vacancy occurred.

          (b) So long as any shares of Series B Stock  remain  outstanding,  the
     consent of the  holders  of at least a  majority  of the shares of Series B
     Stock  outstanding at the time (voting  separately as a class together with
     all other series of Preferred  Stock  ranking on a parity with the Series B
     Stock  either  as  to  dividends  or  the   distribution   of  assets  upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been  conferred  and are  exercisable)  shall be  necessary to permit,
     effect or validate any one or more of the following:

               (i) the  authorization,  creation  or  issuance of a new class or
          series of shares having rights,  preferences  or privileges  prior (as
          that term is defined in Section  3.4.5(d)) to the shares of the Series
          B Stock,  or any  increase in the number of  authorized  shares of any
          class or series having rights,  preferences or privileges prior to the
          shares of Series B Stock; or


                                      -35-
<PAGE>

               (ii) the  amendment,  alteration  or  repeal,  whether by merger,
          consolidation  or otherwise,  of any of the provisions of the Articles
          of  Incorporation  of  the  Corporation  which  would  materially  and
          adversely affect any right,  preference,  privilege or voting power of
          the Series B Stock or of the holders thereof,  provided,  however that
          any increase in the amount of  authorized  Common Stock or  authorized
          Preferred Stock or the creation and issuance of other series of Common
          Stock or  Preferred  Stock,  in each case  ranking on a parity with or
          junior to the Series B Stock with  respect to the payment of dividends
          and the  distribution  of  assets  upon  liquidation,  dissolution  or
          winding up, shall not be deemed to  materially  and  adversely  affect
          such rights, preferences, privileges or voting powers.

          (c) The foregoing voting provisions shall not apply if, at or prior to
     the time when the act with  respect to which such vote would  otherwise  be
     required shall be effected,  all outstanding shares of Series B Stock shall
     have been redeemed or called for redemption and sufficient funds shall have
     been deposited in trust to effect such redemption.

          (d) Any class or classes of stock of the  Corporation  shall be deemed
     to rank:

               (i)  prior  to  the  Series  B  Stock  as to  dividends  or as to
          distribution of assets upon liquidation,  dissolution or winding up if
          the  holders  of such  class  shall  be  entitled  to the  receipt  of
          dividends or of amounts distributable upon liquidation, dissolution or
          winding  up,  as the case may be, in  preference  or  priority  to the
          holders of Series B Stock; and

               (ii) on a parity with the Series B Stock as to dividends or as to
          distribution  of assets upon  liquidation,  dissolution or winding up,
          whether  or  not  the  dividend  rates,   dividend  payment  dates  or
          redemption or liquidation  prices per share thereof are different from
          those of the Series B Stock, if the holders of such class of stock and
          of the Series B Stock shall be entitled to the receipt of dividends or
          of amounts distributable upon liquidation,  dissolution or winding up,
          as the case may be, in proportion to their  respective  dividend rates
          or  liquidation  prices,  without  preference or priority one over the
          other.

        3.4.6   Series  A  Preferred  Stock.  For  purposes  of   the  foregoing
     provisions, the Series A Preferred Stock of the Corporation shall be deemed
     to rank on a parity with the Series B Stock for purposes of Sections 3.4.2,
     3.4.3 and 3.4.5 hereof.

     3.5 Series C Preferred Stock. The rights, preferences and privileges of the
Series C Preferred  Stock of the  Corporation  are as set forth in this  Section
3.5.

        3.5.1   Designation  and  Amount.  Seventeen  Thousand  (17,000) of  the
     shares of the Preferred Stock of the  Corporation  are designated  Series C
     Preferred Stock (hereinafter referred to as "Series C Stock").


                                      -36-
<PAGE>

        3.5.2   Dividends.

          (a) The  holders  of  shares of Series C Stock  shall be  entitled  to
     receive cash dividends,  when and as declared by the Board of Directors out
     of funds legally available for the purpose,  from the date of issue of such
     shares to and  including  the last day of the month  following the month in
     which such issuance occurred (the "Initial Dividend Period"),  and for each
     whole month thereafter (such Initial Dividend Period and each whole,  month
     thereafter  shall be herein  referred to in this Section 3.5 as a "Dividend
     Period"), at an annual rate of $13.50 per share. The amount of dividend per
     share payable for the Initial  Dividend  Period and for any other  Dividend
     Period  more or less than a full month  shall be computed on the basis of a
     360-day year of twelve  30-day months and the actual number of days elapsed
     in the period for which  payable.  The amount of dividend per share payable
     for each full Dividend Period commencing after the Initial Dividend Period,
     shall be computed by dividing the annual  dividend  rate for each  Dividend
     Period by twelve.  Dividends  shall be payable  when and as declared by the
     Board of Directors,  out of funds legally available therefor, to holders of
     record on such respective dates not exceeding 15 days preceding the payment
     date thereof as may be  determined  by the Board of Directors in advance of
     such payment  date.  Dividends on account of arrears for any past  Dividend
     Periods  may be declared  and paid at any time,  without  reference  to any
     regular  dividend  payment  date,  to  holders  of  record on such date not
     exceeding 15 days preceding the payment date thereof as may be fixed by the
     Board of Directors.  No dividends  shall be declared on any other series or
     class or classes of Preferred Stock on a parity (as that term is defined in
     Section 3.5.5(d)) with the Series C Stock as to dividends in respect of any
     Dividend Period unless there shall likewise be or have been declared on all
     shares of Series C Stock at the time  outstanding  like  dividends  for all
     Dividend  Periods  coinciding  with or ending before such Dividend  Period,
     ratably in proportion to the  respective  dividend rates fixed for all such
     other series or class or classes of Preferred Stock and the Series C Stock.
     Dividends  shall be  cumulative  and will  accrue on each share of Series C
     Stock from the date of original  issuance thereof.  No interest,  or sum of
     money in lieu of  interest,  shall be payable  in  respect of any  dividend
     payment or payments which may be in arrears.

          (b) If dividends at the rate per share set out in Section 3.5.2(a) for
     any Dividend  Period shall not have been declared and paid or set apart for
     payment  on all  outstanding  shares of  Series C Stock  for such  Dividend
     Period and all preceding  Dividend Periods from and after the date of issue
     thereof,  then, until the aggregate  deficiency shall be declared and fully
     paid or set apart for payment, the Corporation shall not (i) declare or pay
     or set apart for payment any  dividends or make any other  distribution  on
     the  Common  Stock of the  Corporation  or any other  capital  stock of the
     Corporation  ranking  junior  to the  series C Stock  with  respect  to the
     payment of dividends or distribution of assets on liquidation,  dissolution
     or winding up of the  Corporation  (which for all  purposes  shall mean any
     liquidation,   dissolution  or  winding  up  of  the  Corporation,  whether
     voluntary  or  involuntary)  (the  Common  Stock and such other stock being
     herein  referred  to in this  Section  3.5 as "Junior  Stock"),  other than
     dividends  or  distributions  paid in shares of, or  options,  warrants  or
     rights to subscribe for or purchase  shares of, Junior Stock,  or (ii) make
     any payment on account of the purchase,  redemption or other  retirement of
     any Junior Stock.

        3.5.3   Liquidation  Preference.  Upon  the  voluntary  or   involuntary
     liquidation,  winding  up or  dissolution  of the  Corporation,  out of the
     assets  available for  distribution to shareholders the holders of Series C
     Stock shall be entitled to  receive,  in  preference  to any payment on the
     Junior  Stock,  an  amount  equal to  $135.00  per  share  plus  cumulative
     dividends as provided in Section 3.5.2 above accrued and unpaid to the date
     payment is made available to the Series C Stock and no more. Subject to the
     rights of the  holders of shares of any series or class or classes of stock
     ranking on a parity  with or prior to the Series C Stock upon  liquidation,
     dissolution or winding up, after the full preferential  liquidation  amount
     has been paid to, or determined and set apart for, the Series C Stock,  the
     remaining   assets  shall  be  paid  to  the  Junior  Stock.  If  upon  any
     liquidation,  dissolution or winding up of the  Corporation,  the assets of
     the Corporation,  or proceeds thereof,  distributable  among the holders of
     the shares of the Series C Stock shall be  insufficient  to pay in full the
     preferential  amount  aforesaid  and  liquidating  payments  on  any  other
     Preferred Stock ranking, as to liquidation, dissolution or winding up, on a
     parity with the Series C Stock,  then such assets, or the proceeds thereof,
     shall be distributed  among the shareholders of Series C Stock and any such
     other  Preferred  Stock ratably in accordance  with the respective  amounts
     which  would be payable on such shares of Series C Stock and any such other
     Preferred  Stock if all  amounts  payable  thereon  were  paid in  full.  A
     reorganization  shall not be considered to be a liquidation,  winding up or
     dissolution  within the meaning of this Section 3.5.3 and in such event the
     Series C Stock shall be entitled only to the rights provided in the plan of
     reorganization and Chapters 12 and 13 of the California General Corporation
     Law and elsewhere in the Corporation's Articles of Incorporation.


                                      -37-
<PAGE>

        3.5.4   Redemption.

          (a) The Series C Stock is subject to redemption,  out of funds legally
     available  therefor,  in whole, or from time to time in part, at the option
     of the board of  directors  of the  Corporation  at or any time  after four
     years from the date such Series C Stock is issued,  or prior  thereto  upon
     the approval of at least a majority of the  outstanding  shares of Series C
     Stock.  If  only a part  of the  Series  C  Stock  is to be  redeemed,  the
     redemption  shall  be  carried  out pro  rata (as  nearly  as may be).  The
     redemption  price shall be $135.00 per share plus  cumulative  dividends as
     provided in Section  3.5.2  above  accrued and unpaid to the date fixed for
     redemption  (herein  called  the  "redemption  price").  In the  case  of a
     redemption  of less than all of the Series C Stock at anytime  outstanding,
     no such shares may be redeemed  until all  dividends  accrued and unpaid on
     all Series C Stock then outstanding,  other than the shares to be redeemed,
     shall have been paid or declared and the full amount  thereof set apart for
     payment.

          (b) The  Corporation  shall mail a notice of redemption to each holder
     of record of shares to be redeemed  addressed  to the holder at the address
     of such holder  appearing on the books of the  Corporation  or given by the
     holder to the Corporation for the purpose of notice,  or if no such address
     appears or is given at the place when the principal executive office of the
     Corporation  is located,  not earlier than 60 nor later than 20 days before
     the date fixed for redemption.  The notice of redemption  shall include (i)
     the class of shares or the part of a class of shares to be  redeemed,  (ii)
     the date  fixed for  redemption,  (iii) the  redemption  price and (iv) the
     place at which the  shareholders may obtain payment of the redemption price
     upon surrender of their share  certificates.  If funds are available on the
     date fixed for the redemption,  then whether or not the share  certificates
     are  surrendered for payment of the redemption  price,  the shares shall no
     longer  be  outstanding   and  the  holders   thereof  shall  cease  to  be
     shareholders of the Corporation  with respect to the shares redeemed on and
     after the date fixed for  redemption  and shall be entitled only to receive
     the  redemption   price  without  interest  upon  surrender  of  the  share
     certificates.  If  less  than  all  the  shares  represented  by one  share
     certificate  are to be redeemed,  the  Corporation  shall issue a new share
     certificate for the shares not redeemed.

          (c)  The  Corporation  shall  also  cause  a  copy  of the  notice  of
     redemption  to be published in a newspaper  of general  circulation  in the
     county in which  the  principal  executive  office  of the  Corporation  is
     located at least once a week for two successive  weeks, in each instance on
     any day of the week,  commencing not earlier than 60 nor later than 20 days
     before the date fixed for  redemption.  If the  Corporation  publishes  the
     notice of redemption as provided in this  paragraph (c), the failure of the
     Corporation  to  comply  with  the  provision  for  mailing  of  notice  of
     redemption  in paragraph  (b) shall not  invalidate  the  redemption of the
     shares.

          (d) If, on or prior to any date fixed for redemption,  the Corporation
     deposits  with any bank or trust  company  in this  state  (which may be an
     affiliate of the  Corporation)  as a trust fund a sum sufficient to redeem,
     on the date fixed for redemption thereof, the shares called for redemption,
     with irrevocable instructions and authority to the bank or trust company to
     publish the notice of redemption  thereof (or to complete such  publication
     if  theretofore  commenced)  and to pay,  on and after  the date  fixed for
     redemption or prior thereto,  the  redemption  price of the shares to their
     respective  holders upon surrender of their share  certificates,  then from
     and after the date of the  deposit  (although  prior to the date  fixed for
     redemption)  the shares so called shall be redeemed and  dividends on those
     shares  shall  cease to accrue  after the date  fixed for  redemption.  The
     deposit  shall  constitute  full payment of the shares to their holders and
     from and  after  the date of the  deposit  the  shares  shall no  longer be
     outstanding  and the holders  thereof shall cease to be  shareholders  with
     respect to such shares and shall have no rights with respect thereto except
     the  right  to  receive  from  the bank or  trust  company  payment  of the
     redemption  price of the shares without  interest,  upon surrender of their
     certificates  therefor. Any interest accrued on such funds shall be paid to
     the Corporation from time to time. If less than all the shares  represented
     by one share certificate are to be redeemed,  the Corporation shall issue a
     new share  certificate  for the shares not redeemed.  After two years,  the
     bank or trust company shall return to the  Corporation  funds deposited and
     not claimed and  thereafter  the holder of a share  certificate  for shares
     redeemed shall look to the Corporation for payment.


                                      -38-
<PAGE>

        3.5.5   Voting Rights.

          (a) Except as hereinafter in this Section 3.5.5 expressly provided for
     and as  otherwise  required  by the laws of the  State of  California,  the
     Series C Stock shall have no voting rights.  If there is a default in whole
     or in  part in the  payment  of 24 or more  cumulative  monthly  dividends,
     whether  or not  consecutive,  on the  Series  C Stock as  provided  for in
     Section 3.5.2 above,  the holders of the  outstanding  Series C Stock shall
     have the right,  voting separately as a class with holders of shares of any
     one or more other  series of Preferred  Stock  ranking on a parity with the
     Series C Stock either as to dividends  or the  distribution  of assets upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been, conferred and are exercisable,  to elect a majority of the Board
     of Directors of the Corporation at the Corporation's next annual meeting of
     shareholders.  At  elections  for such  directors,  each holder of Series C
     Stock  shall be  entitled  to one vote for each share held (the  holders of
     shares of any other series of Preferred  Stock ranking on such a parity and
     having like voting rights being  entitled to such number of votes,  if any,
     for each share of such stock held as may be granted to them).  The right of
     the  holders  of Series C Stock,  voting  separately  as a class,  to elect
     (either  alone or  together  with the  holders of shares of any one or more
     other  series of Preferred  Stock  ranking on such a parity and having like
     voting  rights)  members of the Board of  Directors of the  Corporation  as
     aforesaid  shall continue  until such time as all dividends  accumulated on
     the Series C Stock shall have been fully paid or set apart for payment,  at
     which time such right shall terminate, except as herein or by law expressly
     provided,  subject to reverting  in the event of each and every  subsequent
     default of the character above mentioned. Upon any termination of the right
     of the  holders of the Series C Stock as a class to vote for  directors  as
     herein provided, the term of office of all directors then in office elected
     by the Series C Stock shall terminate  immediately.  Any director who shall
     have been so elected pursuant to this paragraph may be removed at any time,
     either  with or without  cause,  and any  vacancy  thereby  created  may be
     filled,  only by the  affirmative  vote of the  holders  of  Series C Stock
     voting  separately as a class (either alone or together with the holders of
     shares of any one or more other series of Preferred Stock ranking on such a
     parity and  having  like  voting  rights).  If the  office of any  director
     elected by the holders of Series C Stock voting as a class  becomes  vacant
     for any reason other than removal from office as  aforesaid,  the remaining
     director  may choose a successor  who shall hold  office for the  unexpired
     term in respect of which such vacancy occurred.

          (b) So long as any shares of Series C Stock  remain  outstanding,  the
     consent of the  holders  of at least a  majority  of the shares of Series C
     Stock  outstanding at the time (voting  separately as a class together with
     all other series of Preferred  Stock  ranking on a parity with the Series C
     Stock  either  as  to  dividends  or  the   distribution   of  assets  upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been  conferred  and are  exercisable)  shall be  necessary to permit,
     effect or validate any one or more of the following:

               (i) the  authorization,  creation  or  issuance of a new class or
          series of shares having rights,  preferences  or privileges  prior (as
          that term is defined in Section  3.5.5(d)) to the shares of the Series
          C Stock,  or any  increase in the number of  authorized  shares of any
          class or series having rights,  preferences or privileges prior to the
          shares of Series C Stock; or


                                      -39-
<PAGE>

               (ii) the  amendment,  alteration  or  repeal,  whether by merger,
          consolidation  or otherwise,  of any of the provisions of the Articles
          of  Incorporation  of  the  Corporation  which  would  materially  and
          adversely affect any right,  preference,  privilege or voting power of
          the Series C Stock or of the holders thereof,  provided,  however that
          any increase in the amount of  authorized  Common Stock or  authorized
          Preferred Stock or the creation and issuance of other series of Common
          Stock or  Preferred  Stock,  in each case  ranking on a parity with or
          junior to the Series C Stock with  respect to the payment of dividends
          and the  distribution  of  assets  upon  liquidation,  dissolution  or
          winding up, shall not be deemed to  materially  and  adversely  affect
          such rights, preferences, privileges or voting powers.

          (c) The foregoing voting provisions shall not apply if, at or prior to
     the time when the act with  respect to which such vote would  otherwise  be
     required shall be effected,  all outstanding shares of Series C Stock shall
     have been redeemed or called for redemption and sufficient funds shall have
     been deposited in trust to effect such redemption.

          (d) Any class or classes of stock of the  Corporation  shall be deemed
     to rank:

               (i)  prior  to  the  Series  C  Stock  as to  dividends  or as to
          distribution of assets upon liquidation,  dissolution or winding up if
          the  holders  of such  class  shall  be  entitled  to the  receipt  of
          dividends or of amounts distributable upon liquidation, dissolution or
          winding  up,  as the case may be, in  preference  or  priority  to the
          holders of Series C Stock; and

               (ii) on a parity with the Series C Stock as to dividends or as to
          distribution  of assets upon  liquidation,  dissolution or winding up,
          whether  or  not  the  dividend  rates,   dividend  payment  dates  or
          redemption or liquidation  prices per share thereof are different from
          those of the Series C Stock, if the holders of such class of stock and
          of the Series C Stock shall be entitled to the receipt of dividends or
          of amounts distributable upon liquidation,  dissolution or winding up,
          as the case may be, in proportion to their  respective  dividend rates
          or  liquidation  prices,  without  preference or priority one over the
          other.

        3.5.6   Series A  Preferred  Stock and  Series B  Preferred  Stock.  For
     purposes of the foregoing provisions,  the Series A Preferred Stock and the
     Series B Preferred  Stock of the  Corporation  shall be deemed to rank on a
     parity with the Series C Stock for  purposes of Sections  3.5.2,  3.5.3 and
     3.5.5 hereof.

     3.6 Series AA Preferred  Stock.  The rights,  preferences and privileges of
the  Series  AA  Preferred  Stock of the  Corporation  are as set  forth in this
Section 3.6.

        3.6.1   Designation and Amount.  One Hundred Fifty Thousand (150,000) of
     the shares of the  Preferred  Stock of the  Corporation  are  designated as
     Series AA Junior  Participating  Preferred  Stock (the "Series AA Preferred
     Stock").  Such number of shares may be increased or decreased by resolution
     of the Board of  Directors;  provided  that no  decrease  shall  reduce the
     number of shares of  Series AA  Preferred  Stock to a number  less than the
     number of shares then  outstanding  plus the number of shares  reserved for
     issuance upon the exercise of  outstanding  options,  rights or warrants or
     upon the conversion of any outstanding securities issued by the Corporation
     convertible into Series AA Preferred Stock.


                                      -40-
<PAGE>

        3.6.2   Dividends and Distributions.

          (a)  Subject to the rights of the  holders of any shares of any series
     of Series AA  Preferred  stock (or any  similar  stock)  ranking  prior and
     superior to the Series AA Preferred  Stock with respect to  dividends,  the
     holders  of shares  of Series AA  Preferred  Stock,  in  preference  to the
     holders of shares of Common Stock, and of any other junior stock,  shall be
     entitled to receive, when, as and if declared by the Board of Directors out
     of funds legally available for the purpose,  quarterly dividends payable in
     cash on any regular quarterly dividend payment date as shall be established
     by the Board of  Directors  (each such date being  referred  to herein as a
     "Quarterly  Dividend  Payment  Date"),  commencing  on the first  Quarterly
     Dividend  Payment Date after the first issuance of a share or fraction of a
     share of Series AA Preferred  Stock, in an amount per share (rounded to the
     nearest  cent)  equal  to the  greater  of (a)  $1 or  (b)  subject  to the
     provision for adjustment hereinafter set forth, 100 times the aggregate per
     share amount of all cash  dividends,  and 100 times the aggregate per share
     amount (payable in kind) of all non-cash dividends or other  distributions,
     other than a dividend payable in shares of Common Stock or a subdivision of
     the outstanding shares of Common Stock (by  reclassification or otherwise),
     declared on the Common  Stock  since the  immediately  preceding  Quarterly
     Dividend  Payment  Date or, with  respect to the first  Quarterly  Dividend
     Payment Date,  since the first issuance of any share or fraction of a share
     of Series AA Preferred  Stock.  In the event the  Corporation  shall at any
     time after July 10, 2001 (the "Rights  Declaration  Date"),  declare or pay
     any  dividend on the Common  Stock  payable in shares of Common  Stock,  or
     effect a subdivision  or combination or  consolidation  of the  outstanding
     shares of Common Stock (by reclassification or otherwise than by payment of
     a dividend in shares of Common  Stock)  into a greater or lesser  number of
     shares of Common Stock,  then in each such case the amount to which holders
     of shares of Series AA Preferred Stock were entitled  immediately  prior to
     such event under clause (b) of the preceding  sentence shall be adjusted by
     multiplying such amount by a fraction, the numerator of which is the number
     of shares of Common Stock outstanding  immediately after such event and the
     denominator  of which is the  number of shares  of Common  Stock  that were
     outstanding immediately prior to such event.

          (b) The  Corporation  shall declare a dividend or  distribution on the
     Series AA Preferred Stock as provided in Section 3.6.2(d) immediately after
     it declares a dividend or  distribution  on the Common  Stock (other than a
     dividend payable in shares of Common Stock); provided that, in the event no
     dividend  or  distribution  shall have been  declared  on the Common  Stock
     during the period between any Quarterly  Dividend Payment Date and the next
     subsequent  Quarterly  Dividend Payment Date, a dividend of $1 per share on
     the  Series AA  Preferred  Stock  shall  nevertheless  be  payable  on such
     subsequent Quarterly Dividend Payment Date.

          (c) Dividends  shall begin to accrue and be cumulative on  outstanding
     shares of Series AA Preferred  Stock from the  Quarterly  Dividend  Payment
     Date next  preceding  the date of issue of such shares,  unless the date of
     issue of such  shares is prior to the record  date for the first  Quarterly
     Dividend  Payment Date, in which case  dividends on such shares shall begin
     to accrue  from the date of issue of such  shares,  or  unless  the date of
     issue is a Quarterly  Dividend  Payment  Date or is a date after the record
     date for the  determination  of  holders  of shares of Series AA  Preferred
     Stock  entitled to receive a quarterly  dividend and before such  Quarterly
     Dividend Payment Date, in either of which events such dividends shall begin
     to accrue and be  cumulative  from such  Quarterly  Dividend  Payment Date.
     Accrued but unpaid dividends shall not bear interest. Dividends paid on the
     shares of Series AA Preferred Stock in an amount less than the total amount
     of such  dividends  at the time accrued and payable on such shares shall be
     allocated pro rata on a  share-by-share  basis among all such shares at the
     time outstanding. The Board of Directors may, in accordance with applicable
     law, fix a record date for the determination of holders of shares of Series
     AA  Preferred   Stock  entitled  to  receive   payment  of  a  dividend  or
     distribution  declared  thereon,  which  record date shall be not more than
     such number of days prior to the date fixed for the payment  thereof as may
     be allowed by applicable law.


                                      -41-
<PAGE>

        3.6.3   Voting  Rights.  The  holders of  shares of Series AA  Preferred
     Stock shall have the following voting rights:


          (a) Each share of Series AA Preferred  Stock shall  entitle the holder
     thereof to 100 votes on all matters submitted to a vote of the stockholders
     of the Corporation.

          (b) Except as  otherwise  provided  in the  Corporation's  Articles of
     Incorporation,  or by law,  the  holders  of shares of Series AA  Preferred
     Stock,  the holders of shares of Common Stock, and the holders of shares of
     any other capital stock of the  Corporation  having  general voting rights,
     shall vote  together  as one class on all  matters  submitted  to a vote of
     stockholders of the Corporation.

          (c)   Except  as  set   forth  in  the   Corporation's   Articles   of
     Incorporation,  and except as otherwise  provided by law, holders of Series
     AA Preferred  Stock shall have no special  voting  rights and their consent
     shall not be required  (except to the extent they are entitled to vote with
     holders of Common Stock as set forth herein) for taking any corporate
         action.

        3.6.4   Certain Restrictions.


          (a) Whenever  quarterly  dividends or other dividends or distributions
     payable on the Series AA Preferred  Stock as provided in Section  3.6.2 are
     in  arrears,  thereafter  and until all accrued  and unpaid  dividends  and
     distributions,  whether or not  declared,  on shares of Series AA Preferred
     Stock outstanding shall have been paid in full, the Corporation shall not:

               (i) declare or pay dividends, or make any other distributions, on
          any shares of stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the Series AA  Preferred
          Stock;

               (ii) declare or pay dividends,  or make any other  distributions,
          on any shares of stock ranking on a parity  (either as to dividends or
          upon  liquidation,  dissolution  or  winding  up) with the  Series  AA
          Preferred  Stock,  except  dividends  paid  ratably  on the  Series AA
          Preferred  Stock  and all such  parity  stock on which  dividends  are
          payable or in arrears in  proportion to the total amounts to which the
          holders of all such shares are then entitled;

               (iii) redeem or purchase or otherwise  acquire for  consideration
          shares of any stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the Series AA  Preferred
          Stock, provided that the Corporation may at any time redeem,  purchase
          or otherwise  acquire  shares of any such junior stock in exchange for
          shares of any stock of the  Corporation  ranking  junior (either as to
          dividends  or upon  dissolution,  liquidation  or  winding  up) to the
          Series AA Preferred Stock; or

               (iv) redeem or purchase or  otherwise  acquire for  consideration
          any  shares of  Series  AA  Preferred  Stock,  or any  shares of stock
          ranking on a parity  with the  Series AA  Preferred  Stock,  except in
          accordance with a purchase offer made in writing or by publication (as
          determined  by the Board of  Directors)  to all holders of such shares
          upon such terms as the Board of Directors,  after consideration of the
          respective  annual  dividend  rates  and  other  relative  rights  and
          preferences of the respective  series and classes,  shall determine in
          good  faith  will  result in fair and  equitable  treatment  among the
          respective series or classes.

          (b) The Corporation shall not permit any subsidiary of the Corporation
     to purchase or otherwise  acquire for  consideration any shares of stock of
     the  Corporation  unless the  Corporation  could,  under Section  3.6.4(a),
     purchase or otherwise acquire such shares at such time and in such manner.


                                      -42-
<PAGE>

        3.6.5   Reacquired  Shares.  Any  shares  of Series AA  Preferred  Stock
     purchased or otherwise acquired by the Corporation in any manner whatsoever
     shall become  authorized but unissued  shares of Series AA Preferred  Stock
     and may be  reissued as part of a new series of Series AA  Preferred  Stock
     subject to the  conditions  and  restrictions  on issuance set forth in the
     Corporation's Articles of Incorporation,  and by any subsequent amendments,
     or as otherwise required by law.

        3.6.6   Liquidation,  Dissolution or  Winding Up. Upon  any liquidation,
     dissolution or winding up of the Corporation, no distribution shall be made
     (1) to the  holders  of  shares  of  stock  ranking  junior  (either  as to
     dividends or upon liquidation,  dissolution or winding up) to the Series AA
     Preferred Stock unless,  prior thereto,  the holders of shares of Series AA
     Preferred Stock shall have received $100.00 per share, plus an amount equal
     to accrued and unpaid dividends and distributions  thereon,  whether or not
     declared, to the date of such payment,  provided that the holders of shares
     of Series AA  Preferred  Stock shall be  entitled  to receive an  aggregate
     amount per share,  subject to the provision for adjustment  hereinafter set
     forth,  equal to 100 times the aggregate amount to be distributed per share
     to holders of shares of Common  Stock,  or (2) to the  holders of shares of
     stock  ranking on a parity  (either as to  dividends  or upon  liquidation,
     dissolution  or winding  up) with the  Series AA  Preferred  Stock,  except
     distributions  made ratably on the Series AA  Preferred  Stock and all such
     parity stock in proportion to the total amounts to which the holders of all
     such shares are entitled upon such liquidation,  dissolution or winding up.
     In the event the Corporation shall at any time after the Rights Declaration
     Date declare or pay any  dividend on the Common Stock  payable in shares of
     Common Stock,  or effect a subdivision or combination or  consolidation  of
     the outstanding  shares of Common Stock (by  reclassification  or otherwise
     than by payment of a dividend in shares of Common  Stock) into a greater or
     lesser  number  of  shares  of  Common  Stock,  then in each  such case the
     aggregate  amount to which  holders of shares of Series AA Preferred  Stock
     were entitled immediately prior to such event under the provision in clause
     (1) of the preceding  sentence shall be adjusted by multiplying such amount
     by a  fraction,  the  numerator  of which is the number of shares of Common
     Stock outstanding immediately after such event and the denominator of which
     is the number of shares of Common Stock that were  outstanding  immediately
     prior to such event.

        3.6.7   Consolidation,  Merger, Etc. In case the Corporation shall enter
     into any consolidation,  merger,  statutory share exchange,  combination or
     other  transaction in which the shares of Common Stock are exchanged for or
     changed  into other stock or  securities,  cash and/or any other  property,
     then in any such case each share of Series AA Preferred  Stock shall at the
     same time be  similarly  exchanged  or  changed  into an amount  per share,
     subject to the provision for adjustment hereinafter set forth, equal to 100
     times the  aggregate  amount of stock,  securities,  cash  and/or any other
     property  (payable  in kind),  as the case may be,  into which or for which
     each  share of  Common  Stock is  changed  or  exchanged.  In the event the
     Corporation shall at any time after the Rights  Declaration Date declare or
     pay any dividend on the Common Stock payable in shares of Common Stock,  or
     effect a subdivision  or combination or  consolidation  of the  outstanding
     shares of Common Stock (by reclassification or otherwise than by payment of
     a dividend in shares of Common  Stock)  into a greater or lesser  number of
     shares of Common Stock,  then in each such case the amount set forth in the
     preceding  sentence  with  respect to the  exchange  or change of shares of
     Series AA Preferred Stock shall be adjusted by multiplying such amount by a
     fraction,  the  numerator  of which is the number of shares of Common Stock
     outstanding  immediately  after such event and the  denominator of which is
     the number of shares of Common Stock that are outstanding immediately prior
     to such event.

        3.6.8   No Redemption. The shares of Series AA Preferred Stock shall not
     be redeemable.


        3.6.9   Rank. The Series AA Preferred  Stock shall rank, with respect to
     the payment of  dividends  and the  distribution  of assets,  junior to all
     series of any other class of the Corporation's Preferred Stock.


                                      -43-
<PAGE>

        3.6.10  Amendment.  The  Articles of  Incorporation  of the  Corporation
     shall not be amended in any manner which would  materially  alter or change
     the powers,  preferences or special rights of the Series AA Preferred Stock
     so as to affect them adversely  without the affirmative vote of the holders
     of at least  two-thirds  of the  outstanding  shares of Series AA Preferred
     Stock, voting together as a single class.

        3.6.11  Fractional  Shares.  Series AA Preferred  Stock may be issued in
     fractions of a share which shall entitle the holder,  in proportion to such
     holder's  fractional shares, to exercise voting rights,  receive dividends,
     participate in distributions and to have the benefit of all other rights of
     holders of Series AA Preferred Stock.

                                     Fourth

     The  number  of  directors  of this  Corporation  shall be set forth in the
Bylaws of the Corporation as adopted and amended from time to time in the manner
authorized by law.

                                     Fifth

     The liability of the  directors of this  Corporation  for monetary  damages
shall be eliminated to the fullest extent  permissible  under California law. No
amendment  or  repeal  of  this  Article  FIFTH  by  the  shareholders  of  this
Corporation shall adversely affect any right or protection of a director of this
Corporation existing at the time of such amendment or repeal.

                                     Sixth

     This  Corporation  is authorized to provide  indemnification  of agents (as
defined  in Section  317 of the  California  Corporations  Code)  through  bylaw
provisions,  agreements with such agents, votes of shareholders or disinterested
directors or otherwise,  or any  combination of the foregoing,  in excess of the
indemnification  otherwise  permitted  by Section 317 of the  Corporation  Code,
subject  only to the limits set forth in Section  204 of the  Corporations  Code
with  respect  to  actions  for  breach  of  duty  to the  Corporation  and  its
shareholders.  No amendment or repeal of this Article SIXTH by the  Shareholders
of this Corporation shall adversely affect any Corporation existing at the time
of such amendment or repeal.

                                    Seventh

     7.1 The Board of Directors,  when  evaluating any offer of another party to
(a) make a tender or exchange offer for the equity securities of the Corporation
or any  subsidiary,  (b) merge or consolidate  the Corporation or any subsidiary
with  another  corporation,   or  (c)  purchase  or  otherwise  acquire  all  or
substantially  all of the  properties  or assets of the  Corporation,  or of any
subsidiary,   shall,  in  connection  with  the  exercise  of  its  judgment  in
determining   what  is  in  the  best  interests  of  the  Corporation  and  its
stockholders,  give due consideration to all relevant factors,  including by way
of illustration, but not limitation, any or all of the following:

        7.1.1   Whether the  offer is acceptable  based on historical  operating
     results  and  the   financial   condition  of  the   Corporation   and  its
     subsidiaries, and its future prospects;

        7.1.2   Whether  a more  favorable  offer  could  be  obtained  for  the
     Corporation's or its subsidiaries,  securities or assets in the foreseeable
     future;

        7.1.3   The  social,  economic  or any other  material  impact  which an
     acquisition of the equity  securities of the  Corporation or  substantially
     all of its  assets  would  have upon the  employees  and  customers  of the
     Corporation and its subsidiaries and the community which they serve;

        7.1.4   The  reputation  and  business  practices of the offeror and its
     management  and affiliates as they would affect the employees and customers
     of the  Corporation  and its  subsidiaries  and  the  future  value  of the
     Corporation's stock;


                                      -44-
<PAGE>

        7.1.5   The  value of the  securities,  if any,  which  the  offeror  is
     offering in exchange for the Corporation's or its subsidiaries'  securities
     or assets  based on an analysis of the worth of the  Corporation  or of its
     subsidiaries  as compared to the offeror  corporation or other entity whose
     securities are being offered; and

        7.1.6   Any antitrust or other legal or regulatory issues  raised by the
     offer.

     7.2 If the Board of Directors  determines  an offer should be rejected,  it
may take any lawful action to accomplish its purpose including,  but not limited
to, any or all of the following:

        7.2.1   Advising shareholders not to accept the offer;

        7.2.2   Litigation against the offeror;

        7.2.3   Filing   complaints   with  any   governmental   and  regulatory
     authorities;

        7.2.4   Acquiring the Corporation's securities;

        7.2.5   Selling or otherwise issuing authorized but unissued  securities
     or treasury stock or granting options with respect thereto;

        7.2.6   Acquiring a company  to create an antitrust or other  regulatory
     problem for the offeror;

        7.2.7   Obtaining a  more  favorable  offer from another  individual  or
     entity.

     7.3  Notwithstanding  the fact that by law or by agreement  with a national
securities  exchange or otherwise,  no vote, or lesser vote, of shareholders may
be specified or permitted,  the affirmative vote of the holders of two-thirds of
the outstanding  shares of Common Stock of the Corporation  shall be required to
approve any offer described in Section 7.1.

     The  provisions  of  Sections  7.1,  7.2  and  7.3  of  these  Articles  of
Incorporation  may be amended only by the affirmative  vote of two-thirds of the
outstanding  shares of Common Stock of the  Corporation,  and by the affirmative
vote  of  two-thirds  of  the  outstanding  shares  of  Preferred  Stock  of the
Corporation, if any.


                                      -45-
<PAGE>

Exhibit 10.13

Employment Agreement between TriCo and Richard O'Sullivan dated April 10, 2001

                              EMPLOYMENT AGREEMENT


     This  EMPLOYMENT  AGREEMENT  ("Agreement")  is entered into as of April 10,
2001 between TRI  COUNTIES  BANK  ("EMPLOYER"),  having its  principal  place of
business  at  63  Constitution  Drive,  Chico,   California  95973  and  Richard
O'Sullivan ("Employee").

                                   WITNESSETH

     WHEREAS,  EMPLOYER desires to employ Employee pursuant to the terms of this
Agreement  and  Employee  is  desirous  of and  wishes  to  enter  into  such an
employment arrangement, on the terms and conditions hereinafter set forth

     NOW,  THEREFORE,  in  consideration  of the premises,  mutual covenants and
agreements  contained  herein,  and other good and valuable  consideration,  the
receipt and  sufficiency  of which is hereby  acknowledged,  the parties  hereby
agree as follows:

     1.   EMPLOYMENT

     EMPLOYER hereby employs Employee,  and Employee hereby accepts appointment,
as  Executive  Vice-President.  Employee  shall  report  to  and  be  under  the
supervision of the Board of Directors of EMPLOYER and Employee  hereby agrees to
devote his full and exclusive time and attention to the business of EMPLOYER, to
faithfully  perform  the  duties  assigned  to  him by the  Board  of  Directors
consistent  with his office,  and to conduct himself in such a way as shall best
serve the interests of EMPLOYER.

     2.   TERM OF AGREEMENT

     Unless  sooner  terminated  by  EMPLOYER  or the  Employee  pursuant to the
provisions  of  Sections  4 or 6  hereof,  the  employment  provisions  of  this
Agreement  shall  terminate on the second (2nd)  anniversary of the date of this
Agreement. This Agreement shall automatically extended for an additional year on
the first anniversary of this Agreement and each anniversary thereafter unless a
party  notifies the other party to the contrary in writing within 30 days of and
anniversary.

     3.   COMPENSATION

     For  and  in  consideration  of the  performance  by  the  Employee  of the
services,  terms,  conditions,  covenants and promises herein recited,  EMPLOYER
agrees and promises to pay to the Employee at the times and in the manner herein
stated, the following:

          3.1 Salary.  As the  compensation  for the services to be performed by
     the Employee  hereunder  during the employment  period,  the Employee shall
     receive,  as gross salary before any  withholding of whatever sort, the sum
     of $173,250.00 per year,  payable in the manner in which EMPLOYER's payroll
     is customarily  handled.  Additionally,  Employee will be eligible for such
     annual increases in salary as EMPLOYER's Board of Directors shall from time
     to time decide.

          3.2   Bonus/Incentive   Plan.   Employee   shall   participate   in  a
     bonus/incentive  plan to be agreed upon  between  Employee and EMPLOYER and
     approved by the Board of Directors of EMPLOYER. It is contemplated that the
     incentive  bonus/plan will allow for an annual bonus of up to 40% of annual
     salary  based upon the meeting of certain  criteria  specified  therein and
     that the first year's minimum  incentive annual bonus will be guaranteed at
     $25,000.00.


                                      -46-
<PAGE>

          3.3 Stock Options. Employee will be granted options to purchase ______
     shares of TRICO BANCSHARES ("TRICO") common stock pursuant to and under the
     terms of TRICO's Employee Stock Option Plan

          3.4  Employee  Benefits.  In  addition  to the above,  EMPLOYER  shall
     provide the Employee with the following:


          (a)  participation for the Employee and his dependents, in any present
               or future  disability,  health,  dental or other  insurance  plan
               generally  available  to  all  employees  of  the  Company,  such
               participation   to  be  on  the   same   basis   as  such   other
               executives/employees,  except that the 90 day waiting  period for
               inclusion shall be waived;

          (b)  participation  for the Employee in any present or future employee
               savings plans,  including,  but not limited to EMPLOYER's  401(k)
               Savings  Plan;  Employee  Stock  Ownership  Plan;  and  Executive
               Deferred Compensation Plan;

          (c)  twenty (20) paid vacation days annually; and

          (d)  a car allowance of $850.00 per month and  reimbursement  of other
               reasonable  out-of-pocket  expenses,  including  $0.30  per mile,
               incurred  by the  Employee  in  the  performance  of  the  duties
               hereunder in accordance with the policies of EMPLOYER.

     4.   EARLY TERMINATION OF EMPLOYMENT

          4.1  Termination  For  Cause.  EMPLOYER  may at any time,  in its sole
     discretion,  terminate  the  employment  provisions  of this  Agreement for
     "cause,"  effective  immediately upon providing the Employee with notice of
     his dismissal.  The only occurrences which shall constitute  "cause" within
     the meaning of this paragraph shall be the following:

          (a)  the   conviction   of  the  Employee  by  a  court  of  competent
               jurisdiction  of  a  crime  involving  moral  turpitude  (or  the
               entering of a no-contest or nolo  contendere  plea by Employee in
               regard to such crime);

          (b)  the  commission  by the  Employee of an act of fraud or bad faith
               upon EMPLOYER;

          (c)  the willful misappropriation of any funds or property of EMPLOYER
               by the Employee;

          (d)  the willful,  continued and unreasonable  failure by the Employee
               to perform his duties or obligations under this Agreement; or

          (e)  the breach of any material provisions hereof or the engagement by
               the Employee,  without the prior written approval of EMPLOYER, in
               any activity  which would violate the  provisions of Section 7 of
               this Agreement.

          4.2 Termination  Without Cause.  EMPLOYER may at any time, in its sole
     discretion,  terminate the employment  provisions of this Agreement without
     "cause," which term is defined in Section 4.1 hereof.

          4.3 Voluntary Termination. The employment provisions of this Agreement
     shall also terminate upon:


                                      -47-
<PAGE>

          (a)  the  death or  permanent  physical  or mental  disability  of the
               Employee;

          (b)  the voluntary retirement of the Employee; or

          (c)  the voluntary resignation of the Employee.

     For  purposes  hereof,  permanent  physical or mental  disability  shall be
deemed  to  have  occurred  when  Employee  has  been  unable,  with  reasonable
accommodation, to perform the essential functions of his job (i) for a period of
six (6)  consecutive  months or (ii) on 80% or more of the normal  working  days
during any nine (9) consecutive months.

     5.   RIGHTS UPON EARLY TERMINATION OF EMPLOYMENT

          5.1  Termination  Pursuant  to  Section  4.1  or  4.3.  If  Employee's
     employment  is  terminated  pursuant to paragraph  4.1 or 4.3 hereof,  then
     EMPLOYER will have no  obligation  to pay any amount to the Employee  other
     than amounts earned or accrued pursuant to the provisions of Section 3, but
     which  have not yet  been  paid as of the  date of the  termination  of the
     Employee, and the Employee shall have no further claims against EMPLOYER or
     EMPLOYER  Entities with respect to this  Agreement  (except with respect to
     payments due and payable under this paragraph 5.1.

          5.2 Termination  Pursuant to Section 4.2. If Employee's  employment is
     terminated pursuant to paragraph 4.2 hereof, then EMPLOYER shall pay to the
     Employee  all  amounts  earned or accrued  pursuant  to the  provisions  of
     Section  3 hereof,  but which  have not yet been paid as of the date of the
     termination  of the Employee.  In addition,  EMPLOYER  shall pay Employee a
     prorated amount of Employee's minimum guaranteed annual bonus (as set forth
     in Section 3.3)  through the date of  termination.  In  addition,  EMPLOYER
     shall pay through the then remaining term of this Agreement,  the amount of
     salary that would be payable  pursuant to paragraph  3.1 if the  Employee's
     employment had not been terminated,  at such times and in such amounts that
     would have been paid if Employee's employment had not been terminated.

     6.   CHANGE IN CONTROL

          6.1  Benefits.  In the event of a "Change in  Control"  of EMPLOYER as
     defined herein,  and in the event that, within ninety days of the Change of
     Control, either: (i) Employee's employment is terminated;  or (ii) Employee
     gives written notice that he is terminating his employment and invoking the
     provisions of this Section 6, subject to the  provisions of paragraph  6.3,
     Employee shall be entitled to receive his salary at the rate then in effect
     for a period of twenty  -four (24)  months  following  the  termination  of
     Employee's  employment,  as well as an amount  equal to 200% of the  annual
     bonuses earned by the Employee for the last complete  calendar year or year
     of employment,  whichever is greater,  provided,  however, that the present
     value of said  payments  shall  not be more  than two  hundred  ninety-nine
     percent (299%) of Employee's compensation as defined by Section 280G of the
     Internal  Revenue Code of 1954, as amended.  EMPLOYER  shall be relieved of
     its obligation to make payments under this Section if, at the time it is to
     make such payment, it is insolvent, in conservatorship or receivership,  is
     in a troubled  condition,  is operating under a supervisory  agreement with
     any  regulatory  agency  having  jurisdiction,  has been given a  financial
     soundness  rating of "4" or "5", or is subject to a proceeding to terminate
     or suspend federal deposit insurance.

          6.2 Defined.  For purposes of this Section 6, a "Change in Control" of
     EMPLOYER shall occur:


               (a) upon  EMPLOYER's  knowledge  that any person (as such term is
          used in Section 13(d) and 14(d)(2) of the  Securities  Exchange Act of
          1934, as amended) is or becomes "the beneficial  owner" (as defined in
          Rule 13d-3 of the Exchange  Act),  directly or  indirectly,  of shares
          representing  40% or more of the  combined  voting  power  of the then
          outstanding securities of EMPLOYER's Parent; or


                                      -48-
<PAGE>

               (b) upon the first  purchase  of the common  stock of  EMPLOYER's
          Parent  pursuant to a tender or exchange offer (other than a tender or
          exchange offer made by EMPLOYER's Parent); or

               (c) upon the approval by the stockholders of EMPLOYER's Parent of
          a merger or  consolidation  (other than a merger of  consolidation  in
          which  EMPLOYER's  Parent is the surviving  corporation and which does
          not result in any  reclassification  or  reorganization  of EMPLOYER's
          Parent's then outstanding securities), a sale or disposition of all or
          substantially all of EMPLOYER's Parent assets or a plan of liquidation
          or dissolution of EMPLOYER's Parent; or

               (d) if, during any period of two consecutive  years,  individuals
          who at the beginning of such period  constitute the Board of Directors
          of  EMPLOYER's  Parent cease for any reason to  constitute  at least a
          majority  thereof,  unless the election or nomination for the election
          by the  stockholders  of  EMPLOYER's  Parent of each new  director was
          approved by a vote of at least  two-thirds of the directors then still
          in office who were directors at the beginning of the period.

          6.3   Limitations.   Anything  in  this   Agreement  to  the  contrary
     notwithstanding,  prior to the  payment  of any  compensation  or  benefits
     payable  under  Section 6.1 hereof,  the certified  public  accountants  of
     EMPLOYER  immediately  prior to a Change of Control (the "Certified  Public
     Accountants")  shall  determine as promptly as  practical  and in any event
     with 20 business days following the sale of EMPLOYER whether any payment or
     distribution by EMPLOYER to or for the benefit of Employee (whether paid or
     payable  or  distributed  or  distributable  pursuant  to the terms of this
     Agreement,  any other  agreements or  otherwise)  (a "Payment")  would more
     likely  than not be  nondeductible  by  EMPLOYER  for  Federal  income  tax
     purposes  because of section 280G of the Internal  Revenue Code of 1986, as
     amended (the  "Code"),  and if it is, then the  aggregate  present value of
     amounts payable or distributable to or for the benefit of EMPLOYER pursuant
     to  this  Agreement  (such  payments  or  distributions  pursuant  to  this
     Agreement are  thereinafter  referred to as "Contract  Payments")  shall be
     reduced  (but not below zero) to the Reduced  Amount.  For purposes of this
     Section, the "Reduced Amount" shall be an amount expressed in present value
     which maximizes the aggregate  present value of Contract  Payments  without
     causing any payment to be nondeductible by EMPLOYER because of said Section
     280G of the Code.

     If under this Section the certified Public  Accountants  determine that any
payment  would more likely  than not be  nondeductible  by  EMPLOYER  because of
Section 280G of the Code,  EMPLOYER shall promptly give Employee  notice to that
effect and a copy of the detailed calculation thereof and of the Reduced Amount,
and the Employee may then elect, in his sole  discretion,  which and how much of
the Contract  Payments or any other  payments shall be eliminated or reduced (as
long as after  such  election  the  aggregate  present  value  of the  Agreement
Payments or any other payments equals the Reduced Amount),  and shall advise the
EMPLOYER in writing of his  election  within 20 business  days of his receipt of
notice.  If no such  election  is made by Employee  within  such 20-day  period,
EMPLOYER  may elect  which and how much of the  Contract  Payments  or any other
payments  shall be  eliminated  or reduced (as long as after such  election  the
Aggregate  present value of the Contract Payments equals the Reduced Amount) and
shall notify Employee  promptly of such election.  For purposes of this Section,
present value shall be determined in accordance  with Section  280G(d)(4) of the
Code.  All  determinations  made by the Certified  Public  Accountants  shall be
binding upon  EMPLOYER  and  Employee and the payment to Employee  shall be made
within 20 days of sale of  EMPLOYER.  EMPLOYER may suspend for a period of up to
30 days  after  the sale of  EMPLOYER  the  Payment  and any other  payments  or
benefits  due to Employee  until the  Certified  Public  Accountants  finish the
determination  and  Employee  (or  EMPLOYER,  as the case may be)  elects how to
reduce the Contract Payments or any other payments, if necessary. As promptly as
practicable  following such determination and the elections hereunder,  EMPLOYER
shall pay to or distribute to or for the benefit of Employee such amounts as are
then due to Employee under this Agreement.


                                      -49-
<PAGE>

     As a result of the  uncertainty  in the  application of Section 280G of the
Code, it is possible that Contract Payments may have been made by EMPLOYER which
should not have been made  ("Overpayment"),  in each case,  consistent  with the
calculation  of the Reduced  Amount  hereunder.  In the event that the Certified
Public  Accountants,  based upon the  assertion of a deficiency  by the Internal
Revenue  Service  against  EMPLOYER  or  Employee  which said  Certified  Public
Accountants  believe  has a high  probability  of  success,  determines  that an
Overpayment  has been  made,  any such  Overpayment  shall  be  treated  for all
purposes as a loan to Employee which  Employee shall repay to EMPLOYER  together
with  interest  at  the   applicable   Federal  rate  provided  for  in  Section
7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable by
Employee  to EMPLOYER  in and to the extent  such  payment  would not reduce the
amount which is subject to taxation under Section 4999 of the Code. In the event
that  the  Certified  Public  Accountants,  based  upon  controlling  precedent,
determine that an  Underpayment  has occurred,  any such  Underpayment  shall be
promptly  paid by  EMPLOYER  to or for the  benefit of  Employee  together  with
interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code.

          6.4 Continuing Obligations. The triggering of this Section 6 shall not
     relieve  Employee  or  EMPLOYER  of  their  obligations   pursuant  to  the
     provisions  of  Section  7  hereof,  such  Section  containing  independent
     agreements and obligations.

     7.   COVENANTS

          7.1  Non-disturbance  with Employees.  Employee hereby agrees that (a)
     during the term of his employment  with EMPLOYER and for a period of twelve
     (12)  months  following  the  termination  of his  employment,  he will not
     directly or indirectly solicit, cause any other person to solicit or assist
     any other person with  soliciting,  the employment of any person who is, at
     the  time  of  such  solicitation,  or who  was  within  30  days  of  such
     solicitation,  an employee of EMPLOYER or its  subsidiaries  or  employees.
     Employment   for  purposes  of  this  Section  shall  include   consulting,
     performing  services for commissions or otherwise  performing  services for
     cash or other compensation.

          7.2  Confidential  Information.  The parties hereto recognize that the
     services  performed  and to be performed by Employee are special and unique
     and that by  reason  of this  employment  Employee  has  acquired  and will
     continue to acquire  information  regarding the strategic  plans,  business
     plans, policies,  finances and customers and trade secrets of that EMPLOYER
     in  the  course  of  its   business   takes  steps  to  keep   confidential
     ("Confidential  Information").  Employee  hereby  agrees  not to divulge to
     anyone, either during or after his employment with EMPLOYER or for a period
     of three (3) years  following the  termination  of his  employment any such
     Confidential  Information.  Employee  further  agrees  that all  memoranda,
     notes,  records,  reports,  letters,  and other documents  made,  compiled,
     received,  held, or used by Employee while employed by EMPLOYER  concerning
     any phase of the  business of EMPLOYER  shall be  EMPLOYER's  property  and
     shall be  delivered  by  Employee to  EMPLOYER  on the  termination  of his
     employment,  or at  any  earlier  time  on the  request  of  the  Board  of
     Directors.

          7.3 Non-use of Confidential  Information.  Employee hereby agrees that
     (a) during the term of his employment  with EMPLOYER;  and (b) for a period
     of one year following the  termination of his  employment,  he will not use
     any  Confidential   Information,   and  especially  information  concerning
     EMPLOYER'S  customers to directly or  indirectly  solicit,  cause any other
     person to solicit or assist any other person with  soliciting any customer,
     depositor  or borrower of EMPLOYER or its  subsidiaries  or  affiliates  to
     become a customer, depositor or borrower of another bank, savings and loan,
     or financial institution.

          7.4 Enforcement. The agreement of Employee contained in this Section 7
     shall  be  enforceable  both  at  law  and in  equity,  by  injunction  and
     otherwise;  and the rights and remedies of EMPLOYER  hereunder with respect
     thereto shall be cumulative and not  alternative and shall not be exhausted
     by any one or more uses thereof.

     8.   ENTIRE AGREEMENT: WAIVERS AND AMENDMENTS

     This  Agreement  sets forth the entire  agreement  between the parties with
respect to the terms and  conditions of the  relationship  between  Employee and
EMPLOYER  and  any and  all  matters  related  thereto,  and  any and all  prior
agreements with respect to any thereof,  whether oral or written, are superseded
hereby.  Neither  this  Agreement  nor any term or condition  hereof,  including
without limitation,  the terms and conditions of this Section,  any be waived or
modified in whole or in part as against  EMPLOYER or  Employee,  as the case may
be, except by written instrument signed by an authorized officer of EMPLOYER and
by  Employee,  expressly  stating  that it is intended to operate as a waiver or
modification of this Agreement, and any such written waiver by either party of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach hereof.


                                      -50-
<PAGE>

     9.   NOTICE

     Any notices,  consents or other communication  required to be sent or given
hereunder  by any of the parties  shall in every case be in writing and shall be
deemed  properly served if (a) delivered  personally,  (b) sent by registered or
certified  mail,  in all such cases with first  class  postage  prepaid,  return
receipt requested,  or (c) delivered by a recognized  overnight courier service,
if to  EMPLOYER  at the  address  of its main  office  to the  attention  of its
President and, if to Employee,  at his last address on the personnel  records of
EMPLOYER or at such other  addresses  as may be  furnished by a party in writing
according to the provisions of this Section 9, except that either party may from
time to time,  in writing by certified  mail,  designate  another  address which
shall  thereupon  become his or its  effective  address for the purposes of this
Section.

     10.  SEVERABILITY

     If any term or provision of this  Agreement or the  application  thereof to
any  person,  property  or  circumstance  shall  to any  extent  be  invalid  or
unenforceable,  the remainder of this Agreement or the  application of such term
or provision to persons,  property or circumstances other than those as to which
it is invalid or  unenforceable,  shall not be effected  thereby,  and each term
provision of this  Agreement  shall be valid and enforced to the fullest  extent
permitted by law.

     11.  NO RESTRICTIONS

     Employee hereby  represents and warrants that he is not now and will not be
subject to any agreement,  restriction,  lien,  encumbrance,  or right, title or
interest in any one,  limiting in any way the scope of this  Agreement or in any
way inconsistent with this Agreement.

     12.  NO ASSIGNMENT: BINDING EFFECT

     This Agreement  shall be binding upon and inure to the benefit of EMPLOYER,
its  successors  or assigns.  Except as to the  obligation of Employee to render
personal services which shall be non-assignable, this Agreement shall be binding
upon and inure to the heirs, executors, administrators, and assigns of Employee.

     13.  ARBITRATION

     EXCEPT AS TO ANY  ACTION  BROUGHT TO ENFORCE  THE  PROVISIONS  OF SECTION 7
ABOVE,  ANY  CONTROVERSY,  DISPUTE OR CLAIM  ARISING  OUT OF OR  RELATING TO THE
TERMINATION  OF THE  EMPLOYEE'S  EMPLOYMENT,  AND  THE  INTERPRETATION  OF  THIS
AGREEMENT,   AND  ANY  AND  ALL  CLAIMS   INCLUDING  ANY  STATUTORY   CLAIMS  OF
DISCRIMINATION,  SHALL BE RESOLVED BY BINDING  ARBITRATION  UNDER THE EMPLOYMENT
DISPUTE RESOLUTION RULES OF THE AMERICAN ARBITRATION  ASSOCIATION  PROVISIONS OF
THE FEDERAL UNIFORM ARBITRATION ACT.

     The parties agree that arbitration  shall be the exclusive forum to resolve
any and all claims between the parties, their agents and employees regarding the
termination  of  employment,  or of this  Agreement,  including  any  claims  of
discrimination under any state or federal statute, wrongful discharge theory, or
any other claim  whether  based on specific  state or federal  statute or common
law.

     ANY CLAIM MADE UNDER THIS  PROVISION MAY BE SUBMITTED IN WRITING  WITHIN 60
DAYS AFTER THE  TERMINATION OF EMPLOYMENT OR THIS  AGREEMENT.  THE WRITTEN CLAIM
MUST DETAIL THE FACTS WHICH  SUPPORT THE CLAIM ALONG WITH ANY LEGAL  THEORIES OR
STATUS UPON WHICH THE CLAIM IS BASED.


                                      -51-
<PAGE>

     The parties  agree to abide by any  determination  of the  arbitrator as to
which party is to be responsible  for the costs and attorneys'  fees in any such
proceeding.  It is agreed that the  arbitrator  shall be  empowered  to hear all
legal and equitable claims, including claims for discrimination.  The arbitrator
shall be governed by the law  applicable  to any claims  based upon any state or
federal  statute,  and will also be empowered to award any remedies  appropriate
under any such statues.

     This provision shall survive the  termination of Employee's  employment and
this Agreement.

     14.  HEADINGS

     The  captions  and  headings   contained  herein  have  been  inserted  for
convenience or reference only and shall not affect the meaning or interpretation
of this Agreement.

     15.  GOVERNING LAW AND CHOICE OF FORUM

     This Agreement  shall be construed and enforced in accordance with the laws
of the State of California  and shall be enforced in the State or Federal Courts
sitting in California.


                                                     EMPLOYEE


                                                     /s/ Richard O'Sullivan

                                                     Richard O'Sullivan

ATTEST:

/s/ Kathleen Richardson
-----------------------
                                                     TRI COUNTIES BANK



ATTEST:
                                                     BY: /s/ Richard P. Smith
                                                         President and Chief
                                                         Executive Officer
/s/ Kathleen Richardson
-----------------------





                                      -52-
<PAGE>

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
                                                three months
                                               ended March 31,
(In thousands, except per share data)        2003           2002
                                           ----------------------
Weighted average number of common
    shares outstanding - basic              7,071          6,992

Add exercise of options reduced by
    the number of shares that could
    have been purchased with the
    proceeds of such exercise                 179            125
                                           ----------------------
Weighted average number of common
    shares outstanding - diluted            7,250          7,117
                                           ======================

Net income                                  $3,613         $3,329

Basic earnings per share                     $0.51          $0.48

Diluted earnings per share                   $0.50          $0.47








                                      -53-
<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 March 31, 2003 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

A signed  original of this  written  statement  required by Section 906 has been
provided  to TriCo  Bancshares  and will be  retained  by TriCo  Bancshares  and
furnished to the Securities and Exchange Commission or its staff upon request.


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 March 31, 2003 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

A signed  original of this  written  statement  required by Section 906 has been
provided  to TriCo  Bancshares  and will be  retained  by TriCo  Bancshares  and
furnished to the Securities and Exchange Commission or its staff upon request.


                                      -54-
[{"type": "10-Q", "sequence": "1", "filename": "tcb10q1q03.txt", "description": "TCBK - 3/31/03 FORM 10-Q", "secsgml_size_bytes": 221761}]
{"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": "03700404"}, "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"}}
UNITED STATES
                       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 March 31, 2003                  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 May 12, 2003:  7,825,060
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                 12
           Condition and Results of Operations

  Item 3 - Quantitative and Qualitative Disclosure about Market Risk         21

  Item 4 - Controls and Procedures                                           22

PART II - OTHER INFORMATION                                                  23

  Item 1 - Legal Proceedings                                                 23

  Item 6 - Exhibits and Reports on Form 8-K                                  23

  Signatures                                                                 24

  Certifications                                                             25

  Exhibits                                                                   27
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.  When you see any of the
words "believes", "expects", "anticipates", "estimates", or similar expressions,
mean making forward-looking  statements.  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:

    -  a continued slowdown in the national and California economies;
    -  increased economic uncertainty created  by the recent  terrorist  attacks
       on the United States and the actions taken in response;
    -  the prospect of additional terrorist attacks in the United States and the
       uncertain effect of these events on the national and regional economies;
    -  changes in the interest rate environment;
    -  changes in the regulatory environment;
    -  significantly increasing competitive pressure in the banking industry;
    -  operational risks including data processing system failures or fraud;
    -  volatility of rate sensitive deposits; and
    -  asset/liability matching risks and liquidity risks.

On April 4, 2003, the Company  acquired  North State  National Bank,  located in
Chico,  California.  Many  possible  events or factors  could  affect the future
financial results and performance of the Company after the merger including:

    -  actual cost savings resulting  from the merger are less than we expected,
       we are unable to realize  those cost savings as soon as we expected or we
       incur additional or unexpected costs;
    -  revenues after the merger are less than we expected;
    -  competition among financial services companies increases;
    -  we have more trouble integrating our businesses than we expected;
    -  changes in the interest rate environment reduces our interest margins;
    -  general economic conditions change or are worse than we expected;
    -  legislative or regulatory changes adversely affect our business;
    -  changes occur in business conditions and inflation;
    -  personal or commercial customers' bankruptcies increase;
    -  changes occur in the securities markets; and
    -  technology-related changes are  more difficult to make  or more expensive
       than we expected.

The reader is directed to the Company's  annual report on Form 10-K for the year
ended  December 31, 2002,  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 March 31,             At December 31,
                                                            2003              2002             2002
                                                      -------------------------------   -----------------
Assets:
     Cash and due from banks                              $58,925           $42,647          $67,170
     Federal funds sold                                    10,100            55,200            8,100
                                                      -------------------------------   -----------------
         Cash and cash equivalents                         69,025            97,847           75,270

     Investment securities available for sale             354,007           222,594          338,024
     Loans
         Commercial                                       117,329           123,026          125,982
         Consumer                                         210,633           157,428          201,858
         Real estate mortgages                            330,001           315,591          319,969
         Real estate construction                          35,810            41,164           39,713
                                                      -------------------------------   -----------------
                                                          693,773           637,209          687,522

     Allowance for loan losses                            (14,293)          (13,338)         (14,377)
                                                      -------------------------------   -----------------
         Loans, net of allowance for loan losses          679,480           623,871          673,145
     Premises and equipment, net                           17,542            16,136           17,224
     Cash value of life insurance                          29,257            14,722           15,208
     Other real estate owned                                1,608                71              932
     Accrued interest receivable                            5,891             5,480            5,644
     Deferred income taxes                                  8,316             9,337            8,429
     Intangible assets                                      3,815             4,842            4,043
     Other assets                                           7,562             5,033            6,655
                                                      -------------------------------   -----------------
         Total Assets                                  $1,176,503          $999,933       $1,144,574
                                                      ===============================   =================
Liabilities:
     Deposits:
         Noninterest-bearing demand                      $226,373          $172,087         $232,499
         Interest-bearing demand                          188,575           174,852          182,816
         Savings                                          324,584           256,845          297,926
         Time certificates, $100,000 and over              94,089            73,134           90,404
         Other time certificates                          199,031           196,354          201,592
                                                      -------------------------------   -----------------
         Total deposits                                 1,032,652           873,272        1,005,237
     Accrued interest payable                               3,034             2,817            2,927
     Other Liabilities                                     16,010            12,179           14,472
     Long-term debt and other borrowings                   22,915            22,948           22,924
                                                      -------------------------------   -----------------
         Total Liabilities                              1,074,611           911,216        1,045,560
                                                      -------------------------------   -----------------
Shareholders' Equity:
     Authorized - 20,000,000 shares of common stock
     Issued and outstanding:
           7,080,470 at March 31, 2003                     50,768
           6,990,980 at March 31, 2002                                       49,608
           7,060,965 at December 31, 2002                                                     50,472
     Retained earnings                                     48,436            39,720           46,239
     Accumulated other comprehensive income (loss), net     2,688              (611)           2,303
                                                      -------------------------------   -----------------
         Total Shareholders' Equity                       101,892            88,717           99,014
                                                      -------------------------------   -----------------
Total Liabilities and Shareholders' Equity             $1,176,503          $999,933       $1,144,574
                                                      ===============================   =================

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

                                                            (Unaudited)
                                                    Three months ended March 31,
                                                         2003           2002
                                                    ----------------------------
Interest Income:
  Interest and fees on loans                           $12,989        $13,008
  Interest on federal funds sold                            84            166
  Interest on investment securities
    available for sale
      Taxable                                            2,744          2,230
      Tax exempt                                           532            554
                                                    ----------------------------
    Total interest income                               16,349         15,958
                                                    ----------------------------
Interest Expense:
  Interest on interest-bearing demand deposits             118            122
  Interest on savings                                      720            680
  Interest on time certificates of deposit               1,959          2,142
  Interest on long-term debt                               318            319
                                                    ----------------------------
    Total interest expense                               3,115          3,263
                                                    ----------------------------
Net Interest Income                                     13,234         12,695
                                                    ----------------------------
Provision for loan losses                                  150            800
                                                    ----------------------------
Net Interest Income After Provision for Loan Losses     13,084         11,895
                                                    ----------------------------
Noninterest Income:
  Service charges and fees                               3,500          1,973
  Gain on sale of loans                                  1,133            963
  Commissions on sale of non-deposit investment products   448            538
  Other                                                    315            352
                                                    ----------------------------
  Total Noninterest Income                               5,396          3,826
                                                    ----------------------------
Noninterest Expense:
  Salaries and related benefits                          6,877          5,739
  Other                                                  5,774          4,663
                                                    ----------------------------
  Total Noninterest Expense                             12,651         10,402
                                                    ----------------------------
Income Before Income Taxes                               5,829          5,319
                                                    ----------------------------
  Provision for income taxes                             2,216          1,990
                                                    ----------------------------
Net Income                                              $3,613         $3,329

Comprehensive Income:
  Change in unrealized gain on securities
    available for sale, net                                385             44
                                                    ----------------------------
Comprehensive Income                                    $3,998         $3,373
                                                    ============================
Average Shares Outstanding                               7,071          6,992
Diluted Average Shares Outstanding                       7,250          7,117

Per Share Data
  Basic Earnings                                         $0.51          $0.48
  Diluted Earnings                                       $0.50          $0.47
  Dividends Paid                                         $0.20          $0.20

                                      -3-
TRICO BANCSHARES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                            (In thousands, unaudited)
                                                       Accumulated
                                                          Other
                                   Common   Retained   Comprehensive
                                   Stock    Earnings  Income (Loss), net  Total
                                 -----------------------------------------------
Balance, December 31, 2001        $49,679    $37,909      ($655)        $86,933
  Net income for the period                    3,329                      3,329
  Repurchase of common stock          (71)      (119)                      (190)
  Dividends                                   (1,399)                    (1,399)
  Unrealized gain on securities
    available for sale, net                                  44              44
                                 -----------------------------------------------
Balance March 31, 2002            $49,608    $39,720      ($611)        $88,717
                                 ===============================================

Balance, December 31, 2002        $50,472    $46,239     $2,303         $99,014
  Net income for the period                    3,613                      3,613
  Stock issued, including
    stock option tax benefits         296                                   296
  Dividends                                   (1,416)                    (1,416)
  Unrealized gain on securities
    available for sale, net                                 385             385
                                 -----------------------------------------------
Balance March 31, 2003            $50,768    $48,436     $2,688        $101,892
                                 ===============================================

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

                                                                       For the three months
                                                                         ended March 31,
                                                                     2003               2002
                                                                 -------------------------------
Operating Activities:
   Net income                                                       $3,613              $3,329
   Adjustments to reconcile net income to net cash provided
     by operating activities:
       Depreciation and amortization of property and equipment         653                 668
       Amortization of intangible assets                               228                 228
       Provision for loan losses                                       150                 800
       Amortization of investment securities premium, net              757                 341
       Deferred income taxes                                           (42)                (28)
       Originations of loans for resale                            (53,210)            (46,947)
       Proceeds from sale of loans originated for resale            53,750              47,333
       Gain on sale of loans                                        (1,133)               (963)
       Amortization of mortgage servicing rights                       256                 143
       (Gain) loss on sale of fixed assets                              (2)                 20
       Change in assets and liabilities:
         (Increase) decrease in interest receivable                   (247)                 42
         Increase (decrease) in interest payable                       107                (671)
         Decrease in other assets and liabilities                      762               1,879
                                                                 -------------------------------
Net Cash Provided by Operating Activities                            5,642               6,174
                                                                 -------------------------------
Investing Activities:
   Proceeds from maturities of securities available-for-sale        36,864              28,682
   Purchases of securities available-for-sale                      (53,010)            (26,958)
   Net (increase) decrease in loans                                 (7,161)             21,003
   Proceeds from sale of premises and equipment                          2                   3
   Purchases of property and equipment                                (904)               (303)
   Purchase of life insurance                                      (13,910)                  -
                                                                 -------------------------------
Net Cash (Used) Provided by Investing Activities                   (38,119)             22,427
                                                                 -------------------------------
Financing Activities:
   Net increase (decrease) in deposits                              27,415              (7,121)
   Payments of principal on long-term debt agreements                   (9)                 (8)
   Repurchase of Common Stock                                            -                (190)
   Dividends paid                                                   (1,416)             (1,399)
   Exercise of stock options/issuance of Common Stock                  242                   -
                                                                 -------------------------------
Net Cash Provided (Used) by Financing Activities                    26,232              (8,718)
                                                                 -------------------------------
Net (Decrease) Increase in Cash and Cash Equivalents                (6,245)             19,883
                                                                 -------------------------------
Cash and Cash Equivalents and Beginning of Period                   75,270              77,964
                                                                 -------------------------------
Cash and Cash Equivalents at End of Period                         $69,025             $97,847
                                                                 ===============================
Supplemental Disclosure of Noncash Activities:
   Unrealized gain on securities available for sale                   $594                 $69
   Loans transferred to other real estate owned                       $676                   -

Supplemental Disclosure of Cash Flow Activity:
   Cash paid for interest expense                                   $3,008              $3,934
   Cash paid for income taxes                                          $10                   -
   Income tax benefit from stock option exercises                      $54                   -

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

                                                           (Unaudited)
                                                       Three months ended
                                                            March 31,
                                                 ------------------------------
                                                     2003              2002
                                                 ------------------------------
Net Interest Income (FTE)                           $13,543          $13,000
Provision for loan losses                              (150)            (800)
Noninterest income                                    5,396            3,826
Noninterest expense                                 (12,651)         (10,402)
Provision for income taxes (FTE)                     (2,525)          (2,295)
                                                 ------------------------------
Net income                                           $3,613           $3,329
                                                 ==============================

Average shares outstanding                            7,071            6,992
Diluted average shares outstanding                    7,250            7,117
Shares outstanding at period end                      7,080            6,991

As Reported:
   Basic earnings per share                           $0.51            $0.48
   Diluted earnings per share                         $0.50            $0.47
   Return on assets                                   1.26%            1.34%
   Return on equity                                  14.29%           14.88%
   Net interest margin                                5.17%            5.76%
   Net loan charge-offs to average loans              0.14%            0.32%
   Efficiency ratio (FTE)                            66.80%           61.82%

Average Balances:
   Total assets                                  $1,149,759         $990,471
   Earning assets                                 1,048,286          902,596
   Total loans                                      679,975          642,082
   Total deposits                                 1,003,853          863,029
   Shareholders' equity                            $101,139          $89,505

Balances at Period End:
   Total assets                                  $1,176,503         $999,933
   Earning assets                                 1,057,880          915,003
   Total loans                                      693,773          637,209
   Total deposits                                 1,032,652          873,272
   Shareholders' equity                            $101,892          $88,717

Financial Ratios at Period End:
   Allowance for loan losses to loans                 2.06%            2.09%
   Book value per share                              $14.39           $12.69
   Equity to assets                                   8.66%            8.87%
   Total capital to risk assets                      11.63%           12.12%

Dividends Paid Per Share                              $0.20            $0.20
Dividend Payout Ratio                                39.19%           42.02%

                                      -6-
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: General  Summary of  Significant  Accounting  Policies
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 three months ended
March 31, 2003 and 2002 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, 2002.

Principles of Consolidation
The consolidated  financial  statements include the accounts of the Company, and
its  wholly-owned  subsidiary,  Tri Counties Bank (the "Bank").  All significant
intercompany accounts and transactions have been eliminated in consolidation.

Nature of Operations
The Company  operates 33 branch  offices and 10 in-store  branch  offices in the
California  counties of Butte,  Contra Costa, Del Norte,  Fresno,  Glenn,  Kern,
Lake, Lassen, Madera, Mendocino,  Merced, Nevada, Sacramento,  Shasta, Siskiyou,
Stanislaus,  Sutter,  Tehama,  Tulare and Yuba. The Company's  operating  policy
since  its  inception  has  emphasized  retail  banking.  Most of the  Company's
customers are retail customers and small to medium sized businesses.

Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  Management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  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.  The one accounting  estimate that materially  affects the financial
statements is the allowance for loan losses.

Investment Securities
The Company  classifies its debt and marketable  equity  securities  into one of
three  categories:  trading,  available-for-sale  or  held-to-maturity.  Trading
securities  are bought and held  principally  for the  purpose of selling in the
near term. Held-to-maturity securities are those securities that the Company has
the ability and intent to hold until maturity. All other securities not included
in trading or held-to-maturity are classified as available-for-sale.  During the
three months ended March 31, 2003 and throughout  2002, the Company did not have
any securities classified as either held-to-maturity or trading.

Available-for-sale  securities are recorded at fair value.  Unrealized gains and
losses,  net of the related tax effect,  on  available-for-sale  securities  are
reported as a separate component of other comprehensive  income in shareholders'
equity until realized.

Premiums and  discounts  are  amortized or accreted over the life of the related
investment  security  as an  adjustment  to yield using the  effective  interest
method.  Dividend and interest income are recognized when earned. Realized gains
and losses for  securities  are included in earnings  and are derived  using the
specific  identification  method for  determining  the cost of securities  sold.
Unrealized  losses  due to  fluctuations  in fair  value of  securities  held to
maturity  or  available  for sale are  recognized  through  earnings  when it is
determined that a permanent decline in value has occurred.

                                      -7-
Loans
Loans are reported at the principal amount  outstanding,  net of unearned income
and the allowance for loan losses.  Loan  origination  and  commitment  fees and
certain  direct  loan  origination  costs are  deferred,  and the net  amount is
amortized as an adjustment of the related  loan's yield over the estimated  life
of the loan.  Loans on which the accrual of interest has been  discontinued  are
designated  as  nonaccrual  loans.  Accrual of  interest  on loans is  generally
discontinued  either  when  reasonable  doubt  exists  as to  the  full,  timely
collection  of interest or principal or when a loan becomes  contractually  past
due by 90 days or more with respect to interest or principal.  When loans are 90
days past due, but in Management's  judgment are well secured and in the process
of collection,  they may not be classified as nonaccrual.  When a loan is placed
on  nonaccrual  status,  all interest  previously  accrued but not  collected 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.

Allowance for Loan Losses
The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
Management  believes  that the  collectibility  of the principal is unlikely or,
with  respect  to  consumer  installment  loans,  according  to  an  established
delinquency  schedule.  The allowance is an amount that Management believes will
be adequate to absorb probable  losses  inherent in existing  loans,  leases and
commitments  to  extend  credit,  based on  evaluations  of the  collectibility,
impairment and prior loss experience of loans,  leases and commitments to extend
credit.  The evaluations take into  consideration such factors as changes in the
nature   and  size  of  the   portfolio,   overall   portfolio   quality,   loan
concentrations,  specific  problem  loans,  commitments,  and  current  economic
conditions that may affect the borrower's  ability to pay. The Company defines a
loan as impaired  when it is probable  the Company will be unable to collect all
amounts due according to the contractual  terms of the loan agreement.  Impaired
loans are  measured  based on the present  value of  expected  future cash flows
discounted  at the loan's  original  effective  interest  rate.  As a  practical
expedient,  impairment  may be measured  based on the loan's  observable  market
price or the fair value of the  collateral if the loan is collateral  dependent.
When the measure of the impaired  loan is less than the recorded  investment  in
the loan, the impairment is recorded through a valuation allowance.

Mortgage Operations
Transfers and servicing of financial assets and  extinguishments  of liabilities
are  accounted  for  and  reported   based  on  consistent   application   of  a
financial-components  approach  that focuses on control.  Transfers of financial
assets  that are  sales  are  distinguished  from  transfers  that  are  secured
borrowings.  Retained  interests  (mortgage  servicing rights) in loans sold are
measured by allocating the previous  carrying amount of the  transferred  assets
between the loans sold and retained  interest,  if any,  based on their relative
fair value at the date of transfer.  Fair values are estimated using  discounted
cash flows based on a current market interest rate.

The  Company  recognizes  a gain and a related  asset for the fair  value of the
rights to  service  loans for  others  when  loans are sold.  The  Company  sold
substantially  all  of  its  conforming  long-term  residential  mortgage  loans
originated  during three months ended March 31, 2003 for cash proceeds  equal to
the fair value of the loans.

The following table summarizes the Company's mortgage servicing rights assets as
of March 31, 2003 and December 31, 2002.

                                 December 31,                          March 31,
   (Dollars in thousands)            2002     Additions   Reductions     2003
                                 -----------------------------------------------
   Mortgage Servicing Rights        $2,821       $593       ($256)      $3,158
                                 ===============================================

                                      -8-
The recorded value of mortgage servicing rights is included in other assets, and
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 March 31, 2003, the Company had no mortgage loans held for sale. At March 31,
2003 and December 31, 2002, the Company  serviced real estate mortgage loans for
others of $336 million and $307 million, respectively.

Identifiable Intangible Assets
Identifiable  intangible assets consist of core deposit  intangibles and minimum
pension liability.

The following table summarizes the Company's core deposit intangible as of March
31, 2003 and December 31, 2002.
                                  December 31,                         March 31,
  (Dollar in Thousands)              2002      Additions   Reductions    2003
                                  ----------------------------------------------
  Core deposit intangibles         $10,278                             $10,278
  Accumulated amortization          (6,636)                  ($228)     (6,864)
                                  ----------------------------------------------
  Core deposit intangibles, net     $3,642                   ($228)     $3,414
                                  ==============================================

Core  deposit  premiums  are  scheduled  to amortize  at a rate of $227,700  per
quarter through the quarter ended December 31, 2006.  Core deposit  premiums are
amortized  using an accelerated  method over a period of ten years.  The Company
reviews for impairment of certain  intangibles held,  whenever events or changes
indicate that the carrying  amount of an asset may not be  recoverable.  If such
assets are  considered  to be  impaired,  the  impairment  to be  recognized  is
measured by the amount by which the  carrying  amount of the assets  exceeds the
fair market  value of the assets.  Assets to be disposed of are  reported at the
lower of the carrying amount or fair value less costs to sell.

The  following  table  summarizes  the  Company's   minimum  pension   liability
intangible as of March 31, 2003 and December 31, 2002.

                                      December 31,                     March 31,
  (Dollar in Thousands)                  2002     Additions  Reductions   2003
                                      ------------------------------------------
  Minimum pension liability intangible   $401          -           -      $401
                                      ==========================================

Intangible  assets related to minimum  pension  liability are adjusted  annually
based upon actuarial estimates.

Income Taxes
The  Company's  accounting  for income taxes is based on an asset and  liability
approach.  The Company  recognizes the amount of taxes payable or refundable for
the current  year,  and deferred tax assets and  liabilities  for the future tax
consequences  that have  been  recognized  in its  financial  statements  or tax
returns.  The  measurement  of  tax  assets  and  liabilities  is  based  on the
provisions of enacted tax laws.

                                      -9-
Stock-Based Compensation
The Company  uses the  intrinsic  value  method to account for its stock  option
plans (in accordance with the provisions of Accounting  Principles Board Opinion
No. 25).  Under this method,  compensation  expense is recognized  for awards of
options to purchase shares of common stock to employees under compensatory plans
only if the fair  market  value of the stock at the option  grant date (or other
measurement  date, if later) is greater than the amount the employee must pay to
acquire  the  stock.  Statement  of  Financial  Accounting  Standards  No.  123,
Accounting for Stock-Based Compensation (SFAS 123) permits companies to continue
using the  intrinsic  value  method  or to adopt a fair  value  based  method to
account  for  stock  option  plans.  The fair  value  based  method  results  in
recognizing as expense over the vesting period the fair value of all stock-based
awards on the date of grant.  The  Company  has  elected to  continue to use the
intrinsic value method.

Had  compensation  cost  for the  Company's  option  plans  been  determined  in
accordance  with SFAS 123, the Company's net income and earnings per share would
have been reduced to the pro forma amounts indicated below:
                                                    Three Months Ended March 31,
(in thousands, except per share amounts)                2003             2002
                                                        ----             ----
Net income                           As reported       $3,613           $3,329
                                       Pro forma       $3,561           $3,280
Basic earnings per share             As reported        $0.51            $0.48
                                       Pro forma        $0.50            $0.47
Diluted earnings per share           As reported        $0.50            $0.47
                                       Pro forma        $0.49            $0.46
Stock-based employee compensation
   cost, net of related tax effects,
   included in net income            As reported           $0               $0
                                       Pro forma          $52              $49

Comprehensive Income
For the  Company,  comprehensive  income  includes  net income  reported  on the
statement  of  income,  changes  in the  fair  value  of its  available-for-sale
investments,  and  changes  in  the  minimum  pension  liability  reported  as a
component of shareholders' equity.

The changes in the components of accumulated other  comprehensive  income (loss)
for the three months ended March 31, 2003 and 2002 are reported as follows:

                                         Three Months Ended March 31,
                                             2003             2002
                                         ----------------------------
Unrealized Gain on Securities                   (in thousands)

Beginning Balance                          $3,048             $117
Unrealized gain arising during the
   period, net of tax                         385               44
                                         ----------------------------
Ending Balance                             $3,433             $161
                                         ----------------------------
Minimum Pension Liability
Beginning Balance                           ($745)           ($772)
Change in minimum pension liability,
   net of tax                                   -                -
                                         ----------------------------
Ending Balance                              ($745)           ($772)
                                         ----------------------------
Total accumulated other comprehensive
   income (loss), net                      $2,688            ($611)
                                         ----------------------------

                                      -10-
Reclassifications
Certain amounts previously  reported in the 2002 financial  statements have been
reclassified to conform to the 2003 presentation.  These  reclassifications  did
not affect previously reported net income or total shareholders' equity.

Subsequent Events
TriCo Bancshares  (NASDAQ:TCBK),  parent company of Tri Counties Bank,  acquired
North State National  Bank, a national  banking  organization  located in Chico,
California,  by the merger of North State into its wholly owned subsidiary,  Tri
Counties  Bank,  effective  5:01 pm on April 4, 2003.  The  acquisition  and the
related merger  agreement  dated October 3, 2002, was approved by the California
Department of Financial Institutions, the Federal Deposit Insurance Corporation,
and the shareholders of North State National Bank on March 4, March 7, and March
19, 2003,  respectively.  At the time of the acquisition,  North State had total
assets of $144  million.  The  acquisition  was accounted for using the purchase
method of accounting.

Under the terms of the merger  agreement,  TriCo will issue $13,090,105 in cash,
723,511 shares of TriCo common stock,  and options to purchase  79,587 shares of
TriCo common stock at an average  exercise  price of $6.22 per share in exchange
for all of the  1,234,375  common  shares and options to purchase  79,937 common
shares of North State National Bank  outstanding as of April 4, 2003. The shares
of TriCo common stock to be issued were  registered  on a Form S-4  Registration
Statement  declared  effective  on February 3, 2003.  At March 31,  2003,  TriCo
Bancshares had 7,080,470 shares of common stock outstanding.  Based upon TriCo's
closing stock price of $25.65 on April 4, 2003, the aggregate  value of the cash
and the TriCo  options  and  common  stock to be issued in the  merger  would be
approximately $33,195,000.

On April 15, 2003,  TriCo filed a current report on Form 8-K, which contains pro
forma financial information concerning the merger.

                                      -11-
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.

Critical Accounting Policies and Estimates
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, intangible assets, 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).

Results of Operations
The  following   discussion  and  analysis  is  designed  to  provide  a  better
understanding  of the significant  changes and trends related to the Company and
the  Bank's  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 quarterly  earnings of  $3,613,000,  or $0.50 per diluted share,
for the three  months  ended  March 31,  2003.  These  results  represent a 6.5%
increase from the $0.47 earnings per diluted share reported for the three months
ended March 31, 2002 on earnings of $3,329,000.  The improvement in results from
the  year-ago   quarter  was  due  to  a  $543,000   (4.2%)  increase  in  fully
tax-equivalent  net interest income to $13,543,000,  a $650,000 (81.3%) decrease
in provision for loan losses to $150,000,  and a $1,570,000  (41.0%) increase in
noninterest income to $5,396,000.  These contributing  factors where offset by a
$2,249,000  (21.6%)  increase  in  noninterest  expense to  $12,651,000  for the
quarter ended March 31, 2003.

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

                                           Three months ended
                                                March 31,
                                       --------------------------
                                         2003              2002
                                       --------------------------
Net Interest Income (FTE)               $13,543          $13,000
Provision for loan losses                  (150)            (800)
Noninterest income                        5,396            3,826
Noninterest expense                     (12,651)         (10,402)
Provision for income taxes (FTE)         (2,525)          (2,295)
                                       --------------------------
Net income                               $3,613           $3,329
                                       ==========================

                                      -12-
Net income for the first  quarter of 2003 was $284,000  (8.5%) more than for the
same quarter of 2002. A  significant  increase in  noninterest  income (up $1.57
million or 41.0%), a $650,000 (81.3%) decrease in provision for loan losses, and
a $543,000 (4.2%) increase in fully taxable  equivalent net interest income more
than offset an increase in noninterest expenses (up $2.25 million or 21.6%). 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 $1,527,000 or
77.4% to  $3,500,000),  and an increase in gain on sale of loans (up $170,000 or
17.7% to $1,133,000).  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 decrease in provision for loan
losses (down  $650,000 or 81.3% to $150,000)  was due to stable loan quality and
the  maintenance of adequate loss reserve  levels.  The increase in net interest
income  (FTE) was due to an  increase  in average  balance  of  interest-earning
assets (up  $145.7  million or 16.1%)  that was  partially  offset by a 59 basis
point decrease in net interest margin.  The increase in noninterest  expense was
mainly due to an increase in salary and benefit  expense (up $1,138,000 or 19.8%
to  $6,877,000).  The increase in salary and benefits  expense was mainly due to
annual salary increases,  increased  commission and incentive  expense,  and new
employees at four new branches the Company opened during 2002. Other noninterest
expense also  increased (up  $1,111,000 or 23.8% to  $5,774,000)  due to the new
branch  openings in 2002,  and expenses  related to increased  mortgage  banking
activity and a new deposit product introduced in July 2002.

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

                                          Three months ended
                                               March 31,
                                      --------------------------
                                           2003         2002
                                      --------------------------
  Interest income                        $16,349      $15,958
  Interest expense                        (3,115)      (3,263)
  FTE adjustment                             309          305
                                      --------------------------
     Net interest income (FTE)           $13,543      $13,000
                                      ==========================
  Average earning assets              $1,048,286     $902,596

  Net interest margin (FTE)                5.17%        5.76%

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 first quarter
of 2003 increased  $543,000  (4.2%) from the same period in 2002 to $13,543,000.
The  increase in net  interest  income  (FTE) was due to the  increased  average
balances of earning assets (up $145.7  million or 16.1% to $1.048  billion) that
was partially offset by a 59 basis point decrease in net interest margin (FTE).

Interest and Fee Income
Interest and fee income (FTE) for the first quarter of 2003  increased  $391,000
(2.4%) from the first quarter of 2002. The increase was the net effect of higher
average  interest-earning  assets (up $145.7 million or 16.1% to $1.048 billion)
that was  partially  offset by an 85 basis point  decrease in the yield on those
average earning assets to 6.36%. The growth in  interest-earning  assets was led
by a $119.1 million (53.9%) increase in average investment  security balances to
$298.7  million,  and a $37.9 million (5.9%)  increase in average loan balances.
The average  balance of federal funds sold  decreased  $11.3 million  (28.4%) to
$28.4 million.

                                      -13-
The average yield on the  Company's  earning  assets  decreased to 6.36% for the
quarter  ended March 31, 2003 from 7.21% for the quarter  ended March 31,  2002.
This downward  trend in yields was  reflective of general  interest rate markets
during much of 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.

Interest Expense
Interest expense decreased $148,000 (4.5%) in the first quarter of 2003 compared
to the year-ago quarter.  The decrease was due to a decrease in the average rate
paid on interest-bearing  liabilities from 1.82% in the first quarter of 2002 to
1.52% in the first quarter of 2003.

The average balance of  interest-bearing  liabilities  increased  $100.3 million
(14.0%) in the first quarter compared to the year-ago  quarter.  The increase in
interest-bearing   liabilities   was   concentrated   in   the   lower   earning
interest-bearing demand deposit (up $15.4 million or 9.0%), and savings deposits
(up $62.7  million or 24.7%).  The average  balance of the higher  earning  time
deposits was up $22.2 million (8.2%) from the year-ago quarter. In addition, the
average balance of noninterest-bearing  deposits increased $40.5 million (24.2%)
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.

Net Interest Margin (FTE)
The  following  table  summarizes  the  components of the Company's net interest
margin for the periods indicated:

                                             Three months ended
                                                  March 31,
                                          -------------------------
                                              2003         2002
                                          -------------------------
Yield on earning assets                       6.36%        7.21%
Rate paid on interest-bearing
   Liabilities                                1.52%        1.82%
                                          -------------------------
   Net interest spread                        4.84%        5.39%
Impact of all other net
   noninterest-bearing funds                  0.33%        0.37%
                                          -------------------------
      Net interest margin                     5.17%        5.76%
                                          =========================

Net  interest  margin in the first  quarter of 2003  decreased  59 basis  points
compared to the first quarter of 2002.  Throughout much of 2002, the Company was
able to decrease the rates it paid on interest-bearing deposits approximately as
fast as the rates on interest-earning assets decreased. By doing so, the Company
was able to maintain a relatively  high net interest  margin  throughout much of
2002. However,  in the fourth quarter of 2002, it became increasingly  difficult
to  reduce  the  rates  paid on  interest-bearing  deposits.  As a  result,  the
Company's net interest  margin began to decrease.  Also,  during this time,  the
Company  grew  deposits  faster  than it grew  loans.  As a result,  much of the
available  funds from these  deposits were  invested in  securities  rather than
higher yielding loans,  and this also  contributed to a decrease in net interest
margin.

                                      -14-
Summary of Average Balances, Yields/Rates and Interest Differential
The following table presents,  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
                                       ----------------------------------------------------------------
                                                March 31, 2003                  March 31, 2002
                                       -----------------------------     ------------------------------
                                                   Interest    Rates               Interest    Rates
                                         Average   Income/    Earned     Average   Income/    Earned
                                         Balance   Expense     Paid      Balance   Expense     Paid
                                       -----------------------------     ------------------------------
Assets:
Loans                                    $679,975  $12,989    7.64%       $642,082 $13,008     8.10%
Investment securities - taxable           298,737    2,744    3.67%        176,257   2,230     5.06%
Investment securities - nontaxable         41,136      841    8.17%         44,535     859     7.72%
Federal funds sold                         28,438       84    1.18%         39,722     166     1.67%

Total earning assets                    1,048,286   16,658    6.36%        902,596  16,263     7.21%
Other assets                              101,473                           87,875
                                       ----------                        ---------
Total assets                           $1,149,759                         $990,471
                                       ==========                        =========
Liabilities and shareholders' equity:
Interest-bearing demand deposits         $187,017      118    0.25%       $171,606     122     0.28%
Savings deposits                          316,366      720    0.91%        253,679     680     1.07%
Time deposits                             292,924    1,959    2.68%        270,692   2,142     3.17%
Other borrowings                           22,918      318    5.55%         22,951     319     5.56%
                                       -----------------------------     ------------------------------
Total interest-bearing liabilities        819,225    3,115    1.52%        718,928   3,263     1.82%
Noninterest-bearing deposits              207,546                          167,052
Other liabilities                          21,849                           14,986
Shareholders' equity                      101,139                           89,505
                                       ----------                        ---------
Total liabilities and
  shareholders' equity                 $1,149,759                         $990,471
                                       ==========                        =========
Net interest spread(1)                                        4.84%                           5.39%
Net interest income and interest margin(2)         $13,543    5.17%                $13,000    5.76%
                                                  ==================               ====================

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

The following  table sets 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 March 31, 2003
                                                compared with three months
                                                   ended March 31, 2002
                                             ---------------------------------
                                              Volume       Rate       Total
                                             ---------------------------------
Increase (decrease) in interest income:
Loans                                           $767       (786)       (19)
Investment securities                          1,666     (1,170)       496
Federal funds sold                               (47)       (35)       (82)
                                             ---------------------------------
   Total earning assets                        2,386     (1,991)       395
                                             ---------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                  11        (14)        (3)
Savings deposits                                 168       (128)        40
Time deposits                                    176       (360)      (184)
Other borrowings                                   -         (1)        (1)
                                             ---------------------------------
   Total interest-bearing liabilities            355       (503)      (148)
                                             ---------------------------------
Increase (decrease) in Net Interest Income    $2,031    ($1,488)      $543
                                             =================================

Provision for Loan Losses
The  Company  provided  $150,000  for loan  losses in the first  quarter of 2003
versus $800,000 in the first quarter of 2002.  During the first quarter of 2003,
the Company  recorded  $234,000  of net loan charge offs versus  $521,000 of net
loan charge-offs in the year earlier quarter.

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

                                             Three months ended
                                                  March 31,
                                            ----------------------
                                              2003          2002
                                            ----------------------
   Service charges on deposit accounts      $2,858        $1,465
   ATM fees and interchange                    520           373
   Other service fees                          122           135
   Gain on sale of loans                     1,133           963
   Commissions on sale of
     nondeposit investment products            448           538
   Increase in cash value of life insurance    139           119
   Other noninterest income                    176           233
                                            ----------------------
   Total noninterest income                 $5,396        $3,826
                                            ======================

                                      -16-
Noninterest  income for the first quarter of 2003 increased  $1,570,000  (41.0%)
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
$1,393,000 or 95.1% to $2,858,000), and an increase in gain on sale of loans (up
$170,000 or 17.7% to  $1,133,000).  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 $147,000 or 39.4% to $520,000)  due to
expansion of Company's ATM network and increased debit card usage.

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

                                            Three months ended
                                                 March 31,
                                          ------------------------
                                             2003          2002
                                          ------------------------
   Salaries                                 $4,250        $3,645
   Commissions and incentives                1,111           851
   Employee benefits                         1,516         1,243
   Equipment                                   791           688
   Occupancy                                   747           730
   Professional fees                           574           233
   Telecommunications                          391           339
   Data processing and software                291           238
   Advertising and marketing                   272           165
   Courier service                             248           220
   ATM network charges                         232           192
   Intangible amortization                     228           228
   Postage                                     198           142
   Operational losses                          130            39
   Assessments                                  60            56
   Other                                     1,612         1,393
                                          ------------------------
   Total                                   $12,651       $10,402
                                          ========================
   Average full time equivalent staff          467           417
   Noninterest expense to revenue (FTE)     66.80%        61.82%

Noninterest expense for the first quarter of 2003 increased  $2,249,000 (21.6%).
The  increase  in  noninterest  expense was mainly due to a  $1,138,000  (19.8%)
increase in salary and benefit expense to $6,877,000. 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  four newly opened
branches in 2002.  Noninterest  expense  excluding  salaries and  benefits  also
increased (up $1,111,000 or 23.8% to $5,774,000). Approximately $206,000 of this
increase was 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 a $75,000 increase in operational
losses from the year-ago quarter.  Increased  advertising expenses accounted for
$113,000 of the increase in other noninterest expense.

Provision for Income Tax
The  effective  tax rate for the three months ended March 31, 2003 was 38.0% and
reflects an increase  from 37.4% for the three months ended March 31, 2002.  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.

                                      -17-
Classified Assets
The  Company  closely  monitors  the  markets in which it  conducts  its lending
operations  and  continues  its strategy to control  exposure to loans with high
credit risk.  Asset reviews are performed  using grading  standards and criteria
similar to those employed by bank regulatory  agencies.  Assets receiving lesser
grades  fall  under  the  "classified  assets"  category,   which  includes  all
nonperforming  assets and potential problem loans, and receive an elevated level
of attention to ensure collection.

The following is a summary of classified assets  on the dates indicated (dollars
in thousands):

                               At March 31, 2003           At December 31, 2002
                           -------------------------    ------------------------
                             Gross Guaranteed  Net       Gross Guaranteed   Net
                           -----------------------------------------------------
Classified loans           $49,510  $11,973  $37,537    $52,642 $12,280  $40,062
Other classified assets      1,608        -    1,608        932       -      932
                           -----------------------------------------------------
Total classified assets    $51,118  $11,973  $39,145    $53,574 $12,280  $40,994
                           =====================================================
Allowance for loan losses/
     Classified loans                          36.5%                       35.1%

Classified  assets,  net of  guarantees  of the U.S.  Government,  including its
agencies and its government-sponsored agencies at March 31, 2003, decreased $1.8
million (4.5%) to $39.1 million from $41.0 million at December 31, 2002.

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
three  months,  ended  March 31,  2003,  if all such  loans had been  current in
accordance with their original terms, totaled $345,000. Interest income actually
recognized  on these  loans  during the three  months  ended  March 31, 2003 was
$14,500.

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.

                                      -18-
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.

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, increased $13.1 million (144%) to $22.2 million during the first three
months of 2003.  The increase in  nonperforming  assets is due to two commercial
real estate loans collateralized by a single building.  Nonperforming assets net
of  guarantees  represent  1.89% of  total  assets.  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 March 31, 2003           At December 31, 2002
                                              -------------------------    -------------------------
                                                Gross Guaranteed  Net       Gross Guaranteed   Net
                                              ------------------------------------------------------
Performing nonaccrual loans                   $12,943   $8,265   $4,678    $13,199  $8,432   $4,767
Nonperforming, nonaccrual loans                16,163      502   15,661      4,091     718    3,373
                                              ------------------------------------------------------
Total nonaccrual loans                         29,106    8,767   20,339     17,290   9,150    8,140
Loans 90 days past due and still accruing         271        -      271         40       -       40
                                              ------------------------------------------------------
Total nonperforming loans                      29,377    8,767   20,610     17,330   9,150    8,180
Other real estate owned                         1,608        -    1,608        932       -      932
                                              ------------------------------------------------------
Total nonperforming assets                    $30,985   $8,767  $22,218    $18,262  $9,150   $9,112
                                              ======================================================
Nonperforming loans to total loans                                2.97%                       1.19%
Allowance for loan losses/nonperforming loans                       69%                        176%
Nonperforming assets to total assets                              1.89%                       0.80%
Allowance for loan losses to nonperforming assets                   64%                        158%
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.

                                      -19-
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,
2002.

Based on the current conditions of the loan portfolio,  Management believes that
the  $14,293,000  allowance  for loan  losses at March 31,  2003 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
                                                       March 31,
                                                ------------------------
                                                   2003          2002
                                                ------------------------
   Balance, beginning of period                  $14,377       $13,058
   Loan loss provision                               150           800
   Loans charged off                                (280)         (561)
   Recoveries of previously
     charged-off loans                                46            41
                                                ------------------------
   Net charge-offs                                  (234)         (520)
                                                ------------------------
   Balance, end of period                        $14,293       $13,338
                                                ========================
   Allowance for loan losses/loans outstanding     2.06%         2.09%

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.

The Company's primary capital resource is shareholders' equity, which was $101.9
million at March 31, 2003.  This amount  represents  an increase of $2.9 million
from December 31, 2002,  the net result of  comprehensive  income for the period
($4.0  million)  and the  issuance  of common  shares via the  exercise of stock
options ($0.3 million),  partially offset by dividends paid ($1.4 million).  The
Company's  ratio of equity to total  assets  was 8.66%,  8.87%,  and 8.65% as of
March 31, 2003, March 31, 2002, and December 31, 2002, respectively.

                                      -20-
The following  summarizes the ratios of capital to risk-adjusted  assets for the
periods indicated:

                                                                                   To Be Well
                                At March 31,         At            Minimum    Capitalized Under
                             ----------------    December 31,    Regulatory   Prompt Corrective
                             2003       2002        2002         Requirement  Action Provisions
                             ------------------------------------------------------------------
Tier I Capital            10.38%     10.86%     10.71%           4.00%            6.00%
   Total Capital             11.63%     12.12%     11.97%           8.00%           10.00%
   Leverage ratio             8.23%      8.48%      8.27%           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 March 31, 2003 and 2002, 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.

                                      -21-
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 March 31, 2003 and 2002, 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 March 31, 2003, federal
funds sold and  investment  securities  available for sale totaled $364 million,
representing  an increase of $18 million or 5.2% from December 31, 2002,  and an
increase of $86 million or 30.9% from March 31, 2002.  In addition,  the Company
generates  additional  liquidity  from its operating  activities.  The Company's
profitability  during the first three months of 2003  generated  cash flows from
operations  of $5.6  million  compared  to $6.2  million  during the first three
months of 2002.  Additional cash flows may be provided by financing  activities,
primarily  the  acceptance  of deposits  and  borrowings  from banks.  Sales and
maturities  of  investment  securities  produced  cash inflows of $36.9  million
during the three months ended March 31, 2003  compared to $28.7  million for the
three months ended March 31, 2002. During the three months ended March 31, 2003,
the  Company  invested  $53.0  million,  $7.2  million,  and  $13.9  million  in
securities, net loan growth, and life insurance policies, respectively, compared
to $27.0 million used to purchase  investments  and $21.0 million  provided by a
net decrease in loan  balances,  respectively,  during the first three months of
2002. These changes in investment, loan, and life insurance balances contributed
to net cash used for  investing  activities  of $38.1  million  during the three
months  ended March 31,  2003,  compared  to net cash  provided  from  investing
activities  of $22.4  million  during the three  months  ended  March 31,  2002.
Financing  activities provided net cash of $26.2 million during the three months
ended March 31, 2003, compared to net cash used by financing  activities of $8.7
million during the three months ended March 31, 2002.  Deposit balance increases
and exercise of common stock options accounted for $27.4 million and $242,000 of
financing  sources of funds,  respectively,  during the three months ended March
31, 2003,  compared to deposit balance decreases and repurchases of common stock
that  accounted  for  $7.1  million  and  $190,000   financing  uses  of  funds,
respectively,  during the three months ended March 31, 2002. Dividends paid used
$1.4 million of cash during the three months ended both March 31, 2003 and March
31, 2002. 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

(a)       The Chief Executive  Officer,  Richard Smith,  and the Chief Financial
          Officer, Thomas Reddish,  evaluated the effectiveness of the Company's
          disclosure  controls and procedures as of a date within 90 days of the
          filing of this report ("Evaluation  Date").  Based on that evaluation,
          they concluded that as of the Evaluation Date the Company's disclosure
          controls and procedures are effective to allow timely communication to
          them of  information  relating to the Company and the Bank required to
          be  disclosed  in  its  filings  with  the   Securities  and  Exchange
          Commission  ("SEC")  under the  Securities  Exchange  Act of 1934,  as
          amended  ("Exchange  Act").  Disclosure  controls and  procedures  are
          Company controls and other procedures that are designed to ensure that
          information  required  to be  disclosed  by the Company in the reports
          that  it  files  under  the  Exchange  Act  is  recorded,   processed,
          summarized and reported within the time periods specified in the SEC's
          rules and forms.

(b)       There  have been no  significant  changes  in the  Company's  internal
          controls or in other  factors  that could  significantly  affect these
          controls subsequent to the Evaluation Date.

                                      -22-
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 - Exhibits and Reports on Form 8-K

(a) Exhibits

     3.1      Restated Articles of Incorporation dated May 9, 2003

     3.2*     Bylaws of TriCo  Bancshares,  as amended,  filed as Exhibit 3.2 to
              TriCo's Form  S-4 Registration  Statement  dated  January 16, 2003
              (No. 333-102546)

     4*       Certificate of  Determination  of Preferences of Series  AA Junior
              Participating  Preferred  Stock  filed as  Exhibit 3.3 to  TriCo's
              Quarterly  Report on Form 10-Q for the quarter ended September 30,
              2001

     10.1*    Rights  Agreement dated  June 25, 2001,  between  TriCo and Mellon
              Investor Services LLC filed as Exhibit 1 to TriCo's Form 8-A dated
              July 25, 2001

     10.2*    Form of  Change of  Control  Agreement  between TriCo and  each of
              Craig Carney  (dated February 27, 2003), Richard O'Sullivan  (date
              February 24, 2003),  and  Thomas Reddish  (dated  April 10, 2001),
              filed  as Exhibit  10.9 to  TriCo's  Report on  Form 10-Q  for the
              quarter ended September 30, 2001

     10.3*    TriCo's 1993 Non-Qualified Stock  Option Plan filed as Exhibit 4.1
              to TriCo's Form S-8  Registration Statement dated January 18, 1995
              (No. 33-88704)

     10.4*    TriCo's  Non-Qualified  Stock Option  Plan filed as Exhibit 4.2 to
              TriCo's Form S-8  Registration   Statement dated  January 18, 1995
              (No. 33-88704)

     10.5*    TriCo's  Incentive  Stock  Option  Plan  filed  as Exhibit  4.3 to
              TriCo's  Form S-8  Registration  Statement  dated January 18, 1995
              (No. 33-88704)

     10.6*    TriCo's 1995 Incentive  Stock Option Plan  filed as Exhibit 4.1 to
              TriCo's  Form S-8  Registration  Statement  dated  August 23, 1995
              (No. 33-62063)

     10.7*    TriCo's  2001 Stock Option Plan filed as Exhibit 4 to TriCo's Form
              S-8 Registration Statement dated July 27, 2001 (No. 33-66064)

     10.8*    Employment Agreement between  TriCo and Richard  Smith dated April
              10, 2001,  filed as Exhibit 10.8 to TriCo's  Form S-4 Registration
              Statement dated January 16, 2003 (No. 333-102546)

                                      -23-
10.9*    Tri  Counties  Bank Executive  Deferred  Compensation  Plan  dated
              September 1, 1987, as restated April 1, 1992, and amended November
              12, 2002, filed as  Exhibit 10.9 to TriCo's  Form S-4 Registration
              Statement dated January 16, 2003 (No. 333-102546)

     10.10*   Tri Counties Bank Supplemental Retirement Plan for Directors dated
              September 1, 1987, as  restated January 1, 2001, filed  as Exhibit
              10.10 to TriCo's Form S-4 Registration Statement dated January 16,
              2003 (No. 333-102546)

     10.11*   Tri Counties Bank Supplemental Executive Retirement Plan effective
              September 1,  1987, filed  as Exhibit  10.11 to  TriCo's  Form S-4
              Registration Statement dated January 16, 2003 (No. 333-102546)

     10.12*   Tri  Counties  Bank  Deferred  Compensation   Plan  for  Directors
              effective  April 1, 1992,  filed as Exhibit  10.12 to TriCo's Form
              S-4 Registration Statement dated January 16, 2003 (No. 333-102546)

     10.13    Employment Agreement between TriCo and Richard O'Sullivan dated
              April 10, 2001

     11.1     Computation of earnings per share

     21.1     Tri Counties  Bank, a California  banking corporation, is the sole
              subsidiary of Registrant

     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

     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 and incorporated by reference.

(b) Reports on Form 8-K

     During the quarter  ended March 31,  2003 the Company  filed the  following
     Current Reports on Form 8-K:

              Description                               Date of Report
              ----------------------------------        ---------------------
              Closing of acquisition of North           April 15, 2003
              State National Bank by TriCo
              Bancshares and Tri Counties Bank.

              Quarterly results of operations.          April 23, 2003

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:  May 12, 2003                  /s/ Thomas J. Reddish
                                     -----------------------------------
                                     Thomas J. Reddish
                                     Vice President and Chief Financial Officer

                                      -24-
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: May 12, 2003                      /s/ Richard P. Smith
                                        -------------------------------------
                                        Richard P. Smith
                                        President and Chief Executive Officer

                                      -25-
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: May 12, 2003                      /s/ Thomas J. Reddish
                                        -------------------------------------
                                        Thomas J. Reddish
                                        Vice President and Chief Financial
                                        Officer

                                      -26-
EXHIBITS

Exhibit 3.1

Restated Articles of Incorporation dated May 9, 2003

                CERTIFICATE OF RESTATED ARTICLES OF INCORPORATION

                                       OF

                                TRICO BANCSHARES

         The undersigned certify that:

    1.    They  are the  president  and the  secretary,  respectively,  of TriCo
          Bancshares, a California corporation.

    2.    The original  Articles of Incorporation of this corporation were filed
          by the Secretary of State on October 13, 1981.

    3.    The Articles of  Incorporation  of this  corporation as amended to the
          date of this Certificate are restated on the attached Exhibit which is
          incorporated by reference as if fully set forth herein.

    4.    The  foregoing  Restated  Articles  of  Incorporation  have  been duly
          approved by the Board of Directors.

    5.    The Restated  Articles of  Incorporation  shall be, and said  Articles
          are, amended through the date of the filing of this Certificate.

    6.    These Restated  Articles of Incorporation do not alter or amend in any
          respect  the  Articles  of  Incorporation  of  this  corporation  and,
          pursuant to Section 910 of the  California  Corporations  Code,  these
          Restated  Articles may be approved by the Board of Directors alone and
          do not require the approval of the outstanding shares.

    7.    We further  declare,  under  penalty of perjury  under the laws of the
          State of  California,  that the matters set forth in this  Certificate
          are true and correct of our own knowledge.

Dated:  May 9, 2003.

                                   /s/ Richard P. Smith
                                   ---------------------------------------------
                                   Richard P. Smith, President

                                   /s/ Wendell J. Lundberg
                                   ---------------------------------------------
                                   Wendell J. Lundberg, Secretary

                                      -27-
EXHIBIT TO CERTIFICATE OF RESTATED ARTICLES
                      OF INCORPORATION OF TRICO BANCSHARES

                       RESTATED ARTICLES OF INCORPORATION

                                       OF

                                TRICO BANCSHARES

                                     First

         The name of this Corporation is TriCo Bancshares.

                                     Second

     The purpose of this  Corporation is to engage in any lawful act or activity
for which a corporation  may be organized  under the General  Corporation Law of
California  other than the banking  business,  the trust company business or the
practice  of a  profession  permitted  to  be  incorporated  by  the  California
Corporations Code.

                                     Third

     3.1 The Corporation is authorized to issue two classes of shares designated
"Preferred  Stock" and  "Common  Stock,"  respectively.  The number of shares of
Preferred  Stock  authorized  to be issued is one million  (1,000,000),  and the
number  of  shares of Common  Stock  authorized  to be issued is twenty  million
(20,000,000).

     3.2 The  Preferred  Stock may be divided  into such number of series as the
Board of  Directors  may  determine.  The Board of Directors  is  authorized  to
determine and alter the rights, preferences, privileges and restrictions granted
to or imposed upon any wholly unissued series of Preferred Stock, and to fix the
number of shares of any series of  Preferred  Stock and the  designation  of any
such series of Preferred  Stock.  The Board of Directors,  within the limits and
restrictions  stated in any  resolution or resolutions of the Board of Directors
originally fixing the number of shares  constituting any series, may increase or
decrease  (but not below the number of shares of such series  then  outstanding)
the  number of shares of any  series  subsequent  to the issue of shares of that
series.

     3.3 Series A Preferred Stock. The rights, preferences and privileges of the
Series A Preferred  Stock of the  Corporation  are as set forth in this  Section
3.3.

        3.3.1   Designation and Amount.  Thirty Thousand Six Hundred (30,600) of
     the shares of the Preferred Stock of the Corporation are designated  Series
     A Preferred Stock (hereinafter referred to as "Series A Stock").

                                      -28-
3.3.2   Dividends.

          (a) The  holders  of  shares of Series A Stock  shall be  entitled  to
     receive cash dividends,  when and as declared by the Board of Directors out
     of funds legally available for the purpose,  from the date of issue of such
     shares to and  including  August 31,  1985,  and for each  Dividend  Period
     commencing  on the first day of each  month in each year  after  August 31,
     1985 and ending on and  including  the day next  preceding the first day of
     the next month (such period  ending  August 31, 1985 and each of such other
     periods herein referred to in this Section 3.3 as a "Dividend Period"),  at
     an annual  rate of $11.00  per  share.  The  amount of  dividend  per share
     payable  for the portion of the  Dividend  Period from the date of original
     issue of a share of Series A Stock to and including August 31, 1985 and for
     any other Dividend Period more or less than a full Dividend Period shall be
     computed  on the basis of a 360-day  year of twelve  30-day  months and the
     actual number of days elapsed in the period for which  payable.  The amount
     of dividend  per share  payable for each full  Dividend  Period  commencing
     after  August 31, 1985 shall be computed  by dividing  the annual  dividend
     rate for each Dividend  Period by twelve.  Dividends  shall be payable when
     and as declared by the Board of Directors,  out of funds legally  available
     therefor,  to holders of record on such  respective  dates not exceeding 15
     days  preceding  the payment date thereof as may be determined by the Board
     of  Directors  in advance of such  payment  date.  Dividends  on account of
     arrears for any past Dividend Periods may be declared and paid at any time,
     without  reference  to any regular  dividend  payment  date,  to holders of
     record  on such date not  exceeding  15 days  preceding  the  payment  date
     thereof as may be fixed by the Board of  Directors.  No dividends  shall be
     declared on any other series or class or classes of Preferred Stock ranking
     on a parity (as that term is defined in Section 3.3.5(d)) with the Series A
     Stock as to dividends in respect of any Dividend  Period unless there shall
     likewise  be or have keen  declared  on all shares of Series A Stock at the
     time outstanding like dividends for all Dividend Periods coinciding with or
     ending before such Dividend Period, ratably in proportion to the respective
     dividend  rates  fixed for all such  other  series or class or  classes  of
     Preferred  Stock and the Series A Stock.  Dividends shall be cumulative and
     will  accrue  on each  share of  Series A Stock  from the date of  original
     issuance thereof. No interest,  or sum of money in lieu of interest,  shall
     be payable in respect of any dividend  payment or payments  which may be in
     arrears.

          (b) If dividends at the rate per share set out in Section 3.3.2(a) for
     any Dividend  Period shall not have been declared and paid or set apart for
     payment  on all  outstanding  shares of  Series A Stock  for such  Dividend
     Period and all preceding  Dividend Periods from and after the date of issue
     thereof,  then, until the aggregate  deficiency shall be declared and fully
     paid or set apart for payment, the Corporation shall not (i) declare or pay
     or set apart for payment any  dividends or make any other  distribution  on
     the  Common  Stock of the  Corporation  or any other  capital  stock of the
     Corporation  ranking  junior  to the  Series A Stock  with  respect  to the
     payment of dividends or distribution of assets on liquidation,  dissolution
     or winding up of the  Corporation  (which for all  purposes  shall mean any
     liquidation,   dissolution  or  winding  up  of  the  Corporation,  whether
     voluntary  or  involuntary)  (the  Common  Stock and such other stock being
     herein  referred  to in this  Section  3.3 as "Junior  Stock"),  other than
     dividends  or  distributions  paid in shares of, or  options,  warrants  or
     rights to subscribe for or purchase  shares of, Junior Stock,  or (ii) make
     any payment on account of the purchase,  redemption or other  retirement of
     any Junior Stock.

        3.3.3   Liquidation  Preference.  Upon  the  voluntary  or   involuntary
     liquidation,  winding  up or  dissolution  of the  Corporation,  out of the
     assets  available for  distribution to shareholders the holders of Series A
     Stock shall be entitled to  receive,  in  preference  to any payment on the
     Junior  Stock,  an  amount  equal to  $100.00  per  share  plus  cumulative
     dividends as provided in Section 3.3.2 above accrued and unpaid to the date
     payment is made available to the Series A Stock and no more. Subject to the
     rights of the  holders of shares of any series or class or classes of stock
     ranking on a parity  with or prior to the Series A Stock upon  liquidation,
     dissolution or winding up, after the full preferential  liquidation  amount
     has been paid to, or determined and set apart for, the Series A Stock,  the
     remaining   assets  shall  be  paid  to  the  Junior  Stock.  If  upon  any
     liquidation,  dissolution or winding up of the  Corporation,  the assets of
     the Corporation,  or proceeds thereof,  distributable  among the holders of
     the shares of the Series A Stock shall be  insufficient  to pay in full the
     preferential  amount  aforesaid  and  liquidating  payments  on  any  other
     Preferred Stock ranking, as to liquidation, dissolution or winding up, on a
     parity with the Series A Stock,  then such assets, or the proceeds thereof,
     shall be distributed  among the shareholders of Series A Stock and any such
     other  Preferred  Stock ratably in accordance  with the respective  amounts
     which  would be payable on such shares of Series A Stock and any such other
     Preferred  Stock if all  amounts  payable  thereon  were  paid in  full.  A
     reorganization  shall not be considered to be a liquidation,  winding up or
     dissolution  within the meaning of this Section 3.3.3 and in such event the
     Series A Stock shall be entitled only to the rights provided in the plan of
     reorganization and Chapters 12 and 13 of the California General Corporation
     Law and elsewhere in the Corporation's Articles of Incorporation.

                                      -29-
3.3.4   Redemption.

          (a) The Series A Stock is subject to redemption,  out of funds legally
     available  therefor,  in whole, or from time to time in part, at the option
     of the board of directors of the  Corporation  at or any time after July 1,
     1988 or prior  thereto  upon the  approval  of at least a  majority  of the
     outstanding  shares of Series A Stock. If only a part of the Series A Stock
     is to be redeemed,  the redemption shall be carried out pro rata (as nearly
     as may be). The redemption price shall be $100.00 per share plus cumulative
     dividends as provided in Section 3.3.2 above accrued and unpaid to the date
     fixed for redemption (herein called the "redemption price"). In the case of
     a redemption of less than all of the Series A Stock at anytime outstanding,
     no such shares may be redeemed  until all  dividends  accrued and unpaid on
     all Series A Stock then outstanding,  other than the shares to be redeemed,
     shall have been paid or declared and the full amount  thereof set apart for
     payment.

          (b) The  Corporation  shall mail a notice of redemption to each holder
     of record of shares to be redeemed  addressed  to the holder at the address
     of such holder  appearing on the books of the  Corporation  or given by the
     holder to the Corporation for the purpose of notice,  or if no such address
     appears or is given at the place where the  principal  executive  office of
     the  Corporation  is located,  not  earlier  than 60 nor later than 20 days
     before  the date  fixed for  redemption.  The  notice of  redemption  shall
     include  (i) the  class of  shares  or the part of a class of  shares to be
     redeemed,  (ii) the date fixed for redemption,  (iii) the redemption  price
     and (iv) the place at which the  shareholders  may  obtain  payment  of the
     redemption price upon surrender of their share  certificates.  If funds are
     available  on the date fixed for the  redemption,  then  whether or not the
     share certificates are surrendered for payment of the redemption price, the
     shares shall no longer be outstanding  and the holders  thereof shall cease
     to be shareholders  of the Corporation  with respect to the shares redeemed
     on and after the date fixed for  redemption  and shall be entitled  only to
     receive the redemption  price without  interest upon surrender of the share
     certificate.  If  less  than  all  the  shares  represented  by  one  share
     certificate  are to be redeemed,  the  Corporation  shall issue a new share
     certificate for the shares not redeemed.

          (c)  The  Corporation  shall  also  cause  a  copy  of the  notice  of
     redemption  to be published in a newspaper  of general  circulation  in the
     county in which  the  principal  executive  office  of the  Corporation  is
     located at least once a week for two successive  weeks, in each instance on
     any day of the week,  commencing not earlier than 60 nor later than 20 days
     before the date fixed for  redemption.  If the  Corporation  publishes  the
     notice of redemption as provided in this  paragraph (c), the failure of the
     Corporation  to  comply  with  the  provision  for  mailing  of  notice  of
     redemption  in paragraph  (b) shall not  invalidate  the  redemption of the
     shares.

          (d) If, on or prior to any date fixed for redemption,  the Corporation
     deposits  with any bank or trust  company  in this  state  (which may be an
     affiliate of the  Corporation)  as a trust fund a sum sufficient to redeem,
     on the date fixed for redemption thereof, the shares called for redemption,
     with irrevocable instructions and authority to the bank or trust company to
     publish the notice of redemption  thereof (or to complete such  publication
     if  theretofore  commenced)  and to pay,  on and after  the date  fixed for
     redemption or prior thereto,  the  redemption  price of the shares to their
     respective  holders upon surrender of their share  certificates,  then from
     and after the date of the  deposit  (although  prior to the date  fixed for
     redemption)  the shares so called shall be redeemed and  dividends on those
     shares  shall  cease to accrue  after the date  fixed for  redemption.  The
     deposit  shall  constitute  full payment of the shares to their holders and
     from and  after  the date of the  deposit  the  shares  shall no  longer be
     outstanding  and the holders  thereof shall cease to be  shareholders  with
     respect to such shares and shall have no rights with respect thereto except
     the  right  to  receive  from  the bank or  trust  company  payment  of the
     redemption  price of the shares without  interest,  upon surrender of their
     certificates  therefor. Any interest accrued on such funds shall be paid to
     the Corporation from time to time. If less than all the shares  represented
     by one share certificate are to be redeemed,  the Corporation shall issue a
     new share  certificate  for the shares not redeemed.  After two years,  the
     bank or trust company shall return to the  Corporation  funds deposited and
     not claimed and  thereafter  the holder of a share  certificate  for shares
     redeemed shall look to the Corporation for payment.

                                      -30-
3.3.5   Voting Rights.

          (a) Except as hereinafter in this Section 3.3.5 expressly provided for
     and as  otherwise  required  by the laws of the  State of  California,  the
     Series A Stock shall have no voting rights.  If there is a default in whole
     or in  part in the  payment  of 24 or more  cumulative  monthly  dividends,
     whether  or not  consecutive,  on the  Series  A Stock as  provided  for in
     Section 3.3.2 above,  the holders of the  outstanding  Series A Stock shall
     have the right,  voting separately as a class with holders of shares of any
     one or more other  series of Preferred  Stock  ranking on a parity with the
     Series A Stock either as to dividends  or the  distribution  of assets upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been  conferred and are  exercisable,  to elect two of the  authorized
     number of  members  of the Board of  Directors  of the  Corporation  at the
     Corporation's  next annual meeting of  shareholders.  At elections for such
     directors,  each holder of Series A Stock shall be entitled to one vote for
     each share held (the  holders  of shares of any other  series of  Preferred
     Stock ranking on such a parity and having like voting rights being entitled
     to such number of votes,  if any,  for each share of such stock held as may
     be granted  to them).  The right of the  holders of Series A Stock,  voting
     separately as a class,  to elect (either alone or together with the holders
     of shares of any one or more other  series of  Preferred  Stock  ranking on
     such a parity  and  having  like  voting  rights)  members  of the Board of
     Directors of the Corporation as aforesaid shall continue until such time as
     all dividends  accumulated on the Series A Stock shall have been fully paid
     or set apart for payment, at which time such right shall terminate,  except
     as herein or by law expressly  provided,  subject to revesting in the event
     of each and every subsequent default of the character above mentioned. Upon
     any  termination  of the right of the  holders  of the  Series A Stock as a
     class to vote for directors as herein  provided,  the term of office of all
     directors  then in office  elected  by the Series A Stock  shall  terminate
     immediately.  Any director who shall have been so elected  pursuant to this
     paragraph may be removed at any time, either with or without cause, and any
     vacancy thereby created may be filled,  only by the affirmative vote of the
     holders of Series A Stock voting  separately  as a class  (either  alone or
     together  with the  holders  of shares of any one or more  other  series of
     Preferred Stock ranking on such a parity and having like voting rights). If
     the office of any director  elected by the holders of Series A Stock voting
     as a class becomes  vacant for any reason other than removal from office as
     aforesaid,  the  remaining  director may choose a successor  who shall hold
     office for the unexpired term in respect of which such vacancy occurred.

          (b) So long as any shares of Series A Stock  remain  outstanding,  the
     consent of the  holders  of at least a  majority  of the shares of Series A
     Stock  outstanding at the time (voting  separately as a class together with
     all other series of Preferred  Stock  ranking on a parity with the Series A
     Stock  either  as  to  dividends  or  the   distribution   of  assets  upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been  conferred  and are  exercisable)  shall be  necessary to permit,
     effect or validate any one or more of the following:

               (i) the  authorization,  creation  or  issuance of a new class or
          series of shares having rights,  preferences  or privileges  prior (as
          that term is defined in Section  3.3.5(d)) to the shares of the Series
          A Stock,  or any  increase in the number of  authorized  shares of any
          class or series having rights,  preferences or privileges prior to the
          shares of Series A Stock; or
                                      -31-
(ii) the  amendment,  alteration  or  repeal,  whether by merger,
          consolidation  or otherwise,  of any of the provisions of the Articles
          of  Incorporation  of  the  Corporation  which  would  materially  and
          adversely affect any right,  preference,  privilege or voting power of
          the Series A Stock or of the holders thereof,  provided,  however that
          any increase in the amount of  authorized  Common Stock or  authorized
          Preferred Stock or the creation and issuance of other series of Common
          Stock or  Preferred  Stock,  in each case  ranking on a parity with or
          junior to the Series A Stock with  respect to the payment of dividends
          and the  distribution  of  assets  upon  liquidation,  dissolution  or
          winding up, shall not be deemed to  materially  and  adversely  affect
          such rights, preferences, privileges or voting powers.

          (c) The foregoing voting provisions shall not apply if, at or prior to
     the time when the act with  respect to which such vote would  otherwise  be
     required shall be effected,  all outstanding shares of Series A Stock shall
     have been redeemed or called for redemption and sufficient funds shall have
     been deposited in trust to effect such redemption.

          (d) Any class or classes of stock of the  Corporation  shall be deemed
     to rank:

          (i) prior to the Series A Stock as to dividends or as to  distribution
     of assets  upon  liquidation,  dissolution  or winding up if the holders of
     such class  shall be entitled  to the  receipt of  dividends  or of amounts
     distributable upon liquidation,  dissolution or winding up, as the case may
     be, in preference or priority to the holders of Series A Stock; and

          (ii) on a parity  with the  Series  A Stock as to  dividends  or as to
     distribution of assets upon liquidation, dissolution or winding up, whether
     or not  the  dividend  rates,  dividend  payment  dates  or  redemption  or
     liquidation prices per share thereof are different from those of the Series
     A Stock if the  holders  of such  class of stock and of the  Series A Stock
     shall be entitled to the receipt of dividends  or of amounts  distributable
     upon  liquidation,  dissolution  or  winding  up,  as the case  may be,  in
     proportion  to  their  respective  dividend  rates or  liquidation  prices,
     without preference or priority one over the other.

     3.4 Series B Preferred Stock. The rights, preferences and privileges of the
Series B Preferred  Stock of the  Corporation  are as set forth in this  Section
3.4.

        3.4.1   Designation and Amount.  Eight Thousand (8,000) of the shares of
     the Preferred Stock of the  Corporation  are designated  Series B Preferred
     Stock (hereinafter referred to as "Series B Stock").

                                      -32-
3.4.2   Dividends.

          (a) The  holders  of  shares of Series B Stock  shall be  entitled  to
     receive cash dividends,  when and as declared by the Board of Directors out
     of funds legally available for the purpose,  from the date of issue of such
     shares to and including  November 30, 1988,  and for each  Dividend  Period
     commencing  on the first day of each month in each year after  November 30,
     1988 and ending on and  including  the day next  preceding the first day of
     the next month (such period ending November 30, 1988 and each of such other
     periods herein referred to in this Section 3.4 as a "Dividend Period"),  at
     an annual  rate of $52.50  per  share.  The  amount of  dividend  per share
     payable  for the portion of the  Dividend  Period from the date of original
     issue of a share of Series B Stock to and  including  November 30, 1988 and
     for any other  Dividend  Period  more or less than a full  Dividend  Period
     shall be computed on the basis of a 360-day  year of twelve  30-day  months
     and the actual number of days elapsed in the period for which payable.  The
     amount  of  dividend  per  share  payable  for each  full  Dividend  Period
     commencing after November 30, 1988 shall be computed by dividing the annual
     dividend  rate for each  Dividend  Period  by  twelve.  Dividends  shall be
     payable  when  and as  declared  by the  Board of  Directors,  out of funds
     legally available  therefor,  to holders of record on such respective dates
     not  exceeding  15  days  preceding  the  payment  date  thereof  as may be
     determined  by the Board of  Directors  in  advance of such  payment  date.
     Dividends  on account  of  arrears  for any past  Dividend  Periods  may be
     declared and paid at any time,  without  reference to any regular  dividend
     payment  date,  to  holders  of record on such date not  exceeding  15 days
     preceding  the  payment  date  thereof  as may be  fixed  by the  Board  of
     Directors.  No dividends  shall be declared on any other series or class or
     classes of Preferred  Stock ranking on a parity (as that term is defined in
     Section 3.4.5(d)) with the Series B Stock as to dividends in respect of any
     Dividend Period unless there shall likewise be or have been declared on all
     shares of Series B Stock at the time  outstanding  like  dividends  for all
     Dividend  Periods  coinciding  with or ending before such Dividend  Period,
     ratably in proportion to the  respective  dividend rates fixed for all such
     other series or class or classes of Preferred Stock and the Series B Stock.
     Dividends  shall be  cumulative  and will  accrue on each share of Series B
     Stock from the date of original  issuance thereof.  No interest,  or sum of
     money in lieu of  interest,  shall be payable  in  respect of any  dividend
     payment or payments which may be in arrears.

          (b) If dividends at the rate per share set out in Section 3.4.2(a) for
     any Dividend  Period shall not have been declared and paid or set apart for
     payment  on all  outstanding  shares of  Series B Stock  for such  Dividend
     Period and all preceding  Dividend Periods from and after the date of issue
     thereof,  then, until the aggregate  deficiency shall be declared and fully
     paid or set apart for payment, the Corporation shall not (i) declare or pay
     or set apart for payment any  dividends or make any other  distribution  on
     the  Common  Stock of the  Corporation  or any other  capital  stock of the
     Corporation  ranking  junior  to the  Series B Stock  with  respect  to the
     payment of dividends or distribution of assets on liquidation,  dissolution
     or winding up of the  Corporation  (which for all  purposes  shall mean any
     liquidation,   dissolution  or  winding  up  of  the  Corporation,  whether
     voluntary  or  involuntary)  (the  Common  Stock and such other stock being
     herein  referred  to in this  Section  3.4 as "Junior  Stock"),  other than
     dividend or distributions paid in shares of, or options, warrants or rights
     to subscribe  for or purchase  shares of,  Junior  Stock,  or (ii) make any
     payment on account of the purchase,  redemption or other  retirement of any
     Junior Stock.

        3.4.3   Liquidation  Preference.  Upon  the  voluntary   or  involuntary
     liquidation,  winding  up or  dissolution  of the  Corporation,  out of the
     assets  available for  distribution to shareholders the holders of Series B
     Stock shall be entitled to  receive,  in  preference  to any payment on the
     Junior  Stock,  an  amount  equal to  $500.00  per  share  plus  cumulative
     dividends as provided in Section 3.4.2 above accrued and unpaid to the date
     payment is made available to the Series B Stock and no more. Subject to the
     rights of the  holders of shares of any series or class or classes of stock
     ranking on a parity  with or prior to the Series B Stock upon  liquidation,
     dissolution or winding up, after the full preferential  liquidation  amount
     has been paid to, or determined and set apart for, the Series B Stock,  the
     remaining   assets  shall  be  paid  to  the  Junior  Stock.  If  upon  any
     liquidation,  dissolution or winding up of the  Corporation,  the assets of
     the Corporation,  or proceeds thereof,  distributable  among the holders of
     the shares of the Series B Stock shall be  insufficient  to pay in full the
     preferential  amount  aforesaid  and  liquidating  payments  on  any  other
     Preferred Stock ranking, as to liquidation, dissolution or winding up, on a
     parity with the Series B Stock,  then such assets, or the proceeds thereof,
     shall be distributed  among the shareholders of Series B Stock and any such
     other  Preferred  Stock ratably in accordance  with the respective  amounts
     which  would be payable on such shares of Series B Stock and any such other
     Preferred  Stock if all  amounts  payable  thereon  were  paid in  full.  A
     reorganization  shall not be considered to be a liquidation,  winding up or
     dissolution  within the meaning of this Section 3.4.3 and in such event the
     Series B Stock shall be entitled only to the rights provided in the plan of
     reorganization and Chapters 12 and 13 of the California General Corporation
     Law and elsewhere in the Corporation's Articles of Incorporation.

                                      -33-
3.4.4   Redemption.

          (a) The Series B Stock is subject to redemption,  out of funds legally
     available  therefor,  in whole, or from time to time in part, at the option
     of the board of directors of the Corporation at or any time after August 1,
     1995 or prior  thereto  upon the  approval  of at least a  majority  of the
     outstanding  shares of Series B Stock. If only a part of the Series B Stock
     is to be redeemed,  the redemption shall be carried out pro rata (as nearly
     as may be). The redemption price shall be $500.00 per share plus cumulative
     dividends as provided in Section 3.4.2 above accrued and unpaid to the date
     fixed for redemption (herein called the "redemption price"). In the case of
     a redemption of less than all of the Series B Stock at anytime outstanding,
     no such shares may be redeemed  until all  dividends  accrued and unpaid on
     all Series B Stock then outstanding,  other than the shares to be redeemed,
     shall have been paid or declared and the full amount  thereof set apart for
     payment.

          (b) The  Corporation  shall mail a notice of redemption to each holder
     of record of shares to be redeemed  addressed  to the holder at the address
     of such holder  appearing on the books of the  Corporation  or given by the
     holder to the Corporation for the purpose of notice,  or if no such address
     appears or is given at the place where the  principal  executive  office of
     the  Corporation  is located,  not  earlier  than 60 nor later than 20 days
     before  the date  fixed for  redemption.  The  notice of  redemption  shall
     include  (i) the  class of  shares  or the part of a class of  shares to be
     redeemed,  (ii) the date fixed for redemption,  (iii) the redemption  price
     and (iv) the place at which the  shareholders  may  obtain  payment  of the
     redemption price upon surrender of their share  certificates.  If funds are
     available  on the date fixed for the  redemption,  then  whether or not the
     share certificates are surrendered for payment of the redemption price, the
     shares shall no longer be outstanding  and the holders  thereof shall cease
     to be shareholders  of the Corporation  with respect to the shares redeemed
     on and after the date fixed for  redemption  and shall be entitled  only to
     receive the redemption  price without  interest upon surrender of the share
     certificate.  If  less  than  all  the  shares  represented  by  one  share
     certificate  are to be redeemed,  the  Corporation  shall issue a new share
     certificate for the shares not redeemed.

          (c)  The  Corporation  shall  also  cause  a  copy  of the  notice  of
     redemption  to be published in a newspaper  of general  circulation  in the
     county in which  the  principal  executive  office  of the  Corporation  is
     located at least once a week for two successive  weeks, in each instance on
     any day of the week,  commencing not earlier than 60 nor later than 20 days
     before the date fixed for  redemption.  If the  Corporation  publishes  the
     notice of redemption as provided in this  paragraph (c), the failure of the
     Corporation  to  comply  with  the  provision  for  mailing  of  notice  of
     redemption  in paragraph  (b) shall not  invalidate  the  redemption of the
     shares.

          (d) If, on or prior to any date fixed for redemption,  the Corporation
     deposits  with any bank or trust  company  in this  state  (which may be an
     affiliate of the  Corporation)  as a trust fund a sum sufficient to redeem,
     on the date fixed for redemption thereof, the shares called for redemption,
     with irrevocable instructions and authority to the bank or trust company to
     publish the notice of redemption  thereof (or to complete such  publication
     if  theretofore  commenced)  and to pay,  on and after  the date  fixed for
     redemption or prior thereto,  the  redemption  price of the shares to their
     respective  holders upon surrender of their share  certificates,  then from
     and after the date of the  deposit  (although  prior to the date  fixed for
     redemption)  the shares so called shall be redeemed and  dividends on those
     shares  shall  cease to accrue  after the date  fixed for  redemption.  The
     deposit  shall  constitute  full payment of the shares to their holders and
     from and  after  the date of the  deposit  the  shares  shall no  longer be
     outstanding  and the holders  thereof shall cease to be  shareholders  with
     respect to such shares and shall have no rights with respect thereto except
     the  right  to  receive  from  the bank or  trust  company  payment  of the
     redemption  price of the shares without  interest,  upon surrender of their
     certificates  therefor. Any interest accrued on such funds shall be paid to
     the Corporation from time to time. If less than all the shares  represented
     by one share certificate are to be redeemed,  the Corporation shall issue a
     new share  certificate  for the shares not redeemed.  After two years,  the
     bank or trust company shall return to the  Corporation  funds deposited and
     not claimed and  thereafter  the holder of a share  certificate  for shares
     redeemed shall look to the Corporation for payment.

                                      -34-
3.4.5   Voting Rights.

          (a) Except as hereinafter in this Section 3.4.5 expressly provided for
     and as  otherwise  required  by the laws of the  State of  California,  the
     Series B Stock shall have no voting rights.  If there is a default in whole
     or in  part in the  payment  of 24 or more  cumulative  monthly  dividends,
     whether  or not  consecutive,  on the  Series  B Stock as  provided  for in
     Section 3.4.2 above,  the holders of the  outstanding  Series B Stock shall
     have the right,  voting separately as a class with holders of shares of any
     one or more other  series of Preferred  Stock  ranking on a parity with the
     Series B Stock either as to dividends  or the  distribution  of assets upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been  conferred and are  exercisable,  to elect two of the  authorized
     number of  members  of the Board of  Directors  of the  Corporation  at the
     Corporation's  next annual meeting of  shareholders.  At elections for such
     directors,  each holder of Series B Stock shall be entitled to one vote for
     each share held (the  holders  of shares of any other  series of  Preferred
     Stock ranking on such a parity and having like voting rights being entitled
     to such number of votes,  if any,  for each share of such stock held as may
     be granted  to them).  The right of the  holders of Series B Stock,  voting
     separately as a class,  to elect (either alone or together with the holders
     of shares of any one or more other  series of  Preferred  Stock  ranking on
     such a parity  and  having  like  voting  rights)  members  of the Board of
     Directors of the Corporation as aforesaid shall continue until such time as
     all dividends  accumulated on the Series B Stock shall have been fully paid
     or set apart for payment, at which time such right shall terminate,  except
     as herein or by law expressly  provided,  subject to revesting in the event
     of each and every subsequent default of the character above mentioned. Upon
     any  termination  of the right of the  holders  of the  Series B Stock as a
     class to vote for directors as herein  provided,  the term of office of all
     directors  then in office  elected  by the Series B Stock  shall  terminate
     immediately.  Any director who shall have been so elected  pursuant to this
     paragraph may be removed at any time, either with or without cause, and any
     vacancy thereby created may be filled,  only by the affirmative vote of the
     holders of Series B Stock voting  separately  as a class  (either  alone or
     together  with the  holders  of shares of any one or more  other  series of
     Preferred Stock ranking on such a parity and having like voting rights). If
     the office of any director  elected by the holders of Series B Stock voting
     as a class becomes  vacant for any reason other than removal from office as
     aforesaid,  the  remaining  director may choose a successor  who shall hold
     office for the unexpired term in respect of which such vacancy occurred.

          (b) So long as any shares of Series B Stock  remain  outstanding,  the
     consent of the  holders  of at least a  majority  of the shares of Series B
     Stock  outstanding at the time (voting  separately as a class together with
     all other series of Preferred  Stock  ranking on a parity with the Series B
     Stock  either  as  to  dividends  or  the   distribution   of  assets  upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been  conferred  and are  exercisable)  shall be  necessary to permit,
     effect or validate any one or more of the following:

               (i) the  authorization,  creation  or  issuance of a new class or
          series of shares having rights,  preferences  or privileges  prior (as
          that term is defined in Section  3.4.5(d)) to the shares of the Series
          B Stock,  or any  increase in the number of  authorized  shares of any
          class or series having rights,  preferences or privileges prior to the
          shares of Series B Stock; or

                                      -35-
(ii) the  amendment,  alteration  or  repeal,  whether by merger,
          consolidation  or otherwise,  of any of the provisions of the Articles
          of  Incorporation  of  the  Corporation  which  would  materially  and
          adversely affect any right,  preference,  privilege or voting power of
          the Series B Stock or of the holders thereof,  provided,  however that
          any increase in the amount of  authorized  Common Stock or  authorized
          Preferred Stock or the creation and issuance of other series of Common
          Stock or  Preferred  Stock,  in each case  ranking on a parity with or
          junior to the Series B Stock with  respect to the payment of dividends
          and the  distribution  of  assets  upon  liquidation,  dissolution  or
          winding up, shall not be deemed to  materially  and  adversely  affect
          such rights, preferences, privileges or voting powers.

          (c) The foregoing voting provisions shall not apply if, at or prior to
     the time when the act with  respect to which such vote would  otherwise  be
     required shall be effected,  all outstanding shares of Series B Stock shall
     have been redeemed or called for redemption and sufficient funds shall have
     been deposited in trust to effect such redemption.

          (d) Any class or classes of stock of the  Corporation  shall be deemed
     to rank:

               (i)  prior  to  the  Series  B  Stock  as to  dividends  or as to
          distribution of assets upon liquidation,  dissolution or winding up if
          the  holders  of such  class  shall  be  entitled  to the  receipt  of
          dividends or of amounts distributable upon liquidation, dissolution or
          winding  up,  as the case may be, in  preference  or  priority  to the
          holders of Series B Stock; and

               (ii) on a parity with the Series B Stock as to dividends or as to
          distribution  of assets upon  liquidation,  dissolution or winding up,
          whether  or  not  the  dividend  rates,   dividend  payment  dates  or
          redemption or liquidation  prices per share thereof are different from
          those of the Series B Stock, if the holders of such class of stock and
          of the Series B Stock shall be entitled to the receipt of dividends or
          of amounts distributable upon liquidation,  dissolution or winding up,
          as the case may be, in proportion to their  respective  dividend rates
          or  liquidation  prices,  without  preference or priority one over the
          other.

        3.4.6   Series  A  Preferred  Stock.  For  purposes  of   the  foregoing
     provisions, the Series A Preferred Stock of the Corporation shall be deemed
     to rank on a parity with the Series B Stock for purposes of Sections 3.4.2,
     3.4.3 and 3.4.5 hereof.

     3.5 Series C Preferred Stock. The rights, preferences and privileges of the
Series C Preferred  Stock of the  Corporation  are as set forth in this  Section
3.5.

        3.5.1   Designation  and  Amount.  Seventeen  Thousand  (17,000) of  the
     shares of the Preferred Stock of the  Corporation  are designated  Series C
     Preferred Stock (hereinafter referred to as "Series C Stock").

                                      -36-
3.5.2   Dividends.

          (a) The  holders  of  shares of Series C Stock  shall be  entitled  to
     receive cash dividends,  when and as declared by the Board of Directors out
     of funds legally available for the purpose,  from the date of issue of such
     shares to and  including  the last day of the month  following the month in
     which such issuance occurred (the "Initial Dividend Period"),  and for each
     whole month thereafter (such Initial Dividend Period and each whole,  month
     thereafter  shall be herein  referred to in this Section 3.5 as a "Dividend
     Period"), at an annual rate of $13.50 per share. The amount of dividend per
     share payable for the Initial  Dividend  Period and for any other  Dividend
     Period  more or less than a full month  shall be computed on the basis of a
     360-day year of twelve  30-day months and the actual number of days elapsed
     in the period for which  payable.  The amount of dividend per share payable
     for each full Dividend Period commencing after the Initial Dividend Period,
     shall be computed by dividing the annual  dividend  rate for each  Dividend
     Period by twelve.  Dividends  shall be payable  when and as declared by the
     Board of Directors,  out of funds legally available therefor, to holders of
     record on such respective dates not exceeding 15 days preceding the payment
     date thereof as may be  determined  by the Board of Directors in advance of
     such payment  date.  Dividends on account of arrears for any past  Dividend
     Periods  may be declared  and paid at any time,  without  reference  to any
     regular  dividend  payment  date,  to  holders  of  record on such date not
     exceeding 15 days preceding the payment date thereof as may be fixed by the
     Board of Directors.  No dividends  shall be declared on any other series or
     class or classes of Preferred Stock on a parity (as that term is defined in
     Section 3.5.5(d)) with the Series C Stock as to dividends in respect of any
     Dividend Period unless there shall likewise be or have been declared on all
     shares of Series C Stock at the time  outstanding  like  dividends  for all
     Dividend  Periods  coinciding  with or ending before such Dividend  Period,
     ratably in proportion to the  respective  dividend rates fixed for all such
     other series or class or classes of Preferred Stock and the Series C Stock.
     Dividends  shall be  cumulative  and will  accrue on each share of Series C
     Stock from the date of original  issuance thereof.  No interest,  or sum of
     money in lieu of  interest,  shall be payable  in  respect of any  dividend
     payment or payments which may be in arrears.

          (b) If dividends at the rate per share set out in Section 3.5.2(a) for
     any Dividend  Period shall not have been declared and paid or set apart for
     payment  on all  outstanding  shares of  Series C Stock  for such  Dividend
     Period and all preceding  Dividend Periods from and after the date of issue
     thereof,  then, until the aggregate  deficiency shall be declared and fully
     paid or set apart for payment, the Corporation shall not (i) declare or pay
     or set apart for payment any  dividends or make any other  distribution  on
     the  Common  Stock of the  Corporation  or any other  capital  stock of the
     Corporation  ranking  junior  to the  series C Stock  with  respect  to the
     payment of dividends or distribution of assets on liquidation,  dissolution
     or winding up of the  Corporation  (which for all  purposes  shall mean any
     liquidation,   dissolution  or  winding  up  of  the  Corporation,  whether
     voluntary  or  involuntary)  (the  Common  Stock and such other stock being
     herein  referred  to in this  Section  3.5 as "Junior  Stock"),  other than
     dividends  or  distributions  paid in shares of, or  options,  warrants  or
     rights to subscribe for or purchase  shares of, Junior Stock,  or (ii) make
     any payment on account of the purchase,  redemption or other  retirement of
     any Junior Stock.

        3.5.3   Liquidation  Preference.  Upon  the  voluntary  or   involuntary
     liquidation,  winding  up or  dissolution  of the  Corporation,  out of the
     assets  available for  distribution to shareholders the holders of Series C
     Stock shall be entitled to  receive,  in  preference  to any payment on the
     Junior  Stock,  an  amount  equal to  $135.00  per  share  plus  cumulative
     dividends as provided in Section 3.5.2 above accrued and unpaid to the date
     payment is made available to the Series C Stock and no more. Subject to the
     rights of the  holders of shares of any series or class or classes of stock
     ranking on a parity  with or prior to the Series C Stock upon  liquidation,
     dissolution or winding up, after the full preferential  liquidation  amount
     has been paid to, or determined and set apart for, the Series C Stock,  the
     remaining   assets  shall  be  paid  to  the  Junior  Stock.  If  upon  any
     liquidation,  dissolution or winding up of the  Corporation,  the assets of
     the Corporation,  or proceeds thereof,  distributable  among the holders of
     the shares of the Series C Stock shall be  insufficient  to pay in full the
     preferential  amount  aforesaid  and  liquidating  payments  on  any  other
     Preferred Stock ranking, as to liquidation, dissolution or winding up, on a
     parity with the Series C Stock,  then such assets, or the proceeds thereof,
     shall be distributed  among the shareholders of Series C Stock and any such
     other  Preferred  Stock ratably in accordance  with the respective  amounts
     which  would be payable on such shares of Series C Stock and any such other
     Preferred  Stock if all  amounts  payable  thereon  were  paid in  full.  A
     reorganization  shall not be considered to be a liquidation,  winding up or
     dissolution  within the meaning of this Section 3.5.3 and in such event the
     Series C Stock shall be entitled only to the rights provided in the plan of
     reorganization and Chapters 12 and 13 of the California General Corporation
     Law and elsewhere in the Corporation's Articles of Incorporation.

                                      -37-
3.5.4   Redemption.

          (a) The Series C Stock is subject to redemption,  out of funds legally
     available  therefor,  in whole, or from time to time in part, at the option
     of the board of  directors  of the  Corporation  at or any time  after four
     years from the date such Series C Stock is issued,  or prior  thereto  upon
     the approval of at least a majority of the  outstanding  shares of Series C
     Stock.  If  only a part  of the  Series  C  Stock  is to be  redeemed,  the
     redemption  shall  be  carried  out pro  rata (as  nearly  as may be).  The
     redemption  price shall be $135.00 per share plus  cumulative  dividends as
     provided in Section  3.5.2  above  accrued and unpaid to the date fixed for
     redemption  (herein  called  the  "redemption  price").  In the  case  of a
     redemption  of less than all of the Series C Stock at anytime  outstanding,
     no such shares may be redeemed  until all  dividends  accrued and unpaid on
     all Series C Stock then outstanding,  other than the shares to be redeemed,
     shall have been paid or declared and the full amount  thereof set apart for
     payment.

          (b) The  Corporation  shall mail a notice of redemption to each holder
     of record of shares to be redeemed  addressed  to the holder at the address
     of such holder  appearing on the books of the  Corporation  or given by the
     holder to the Corporation for the purpose of notice,  or if no such address
     appears or is given at the place when the principal executive office of the
     Corporation  is located,  not earlier than 60 nor later than 20 days before
     the date fixed for redemption.  The notice of redemption  shall include (i)
     the class of shares or the part of a class of shares to be  redeemed,  (ii)
     the date  fixed for  redemption,  (iii) the  redemption  price and (iv) the
     place at which the  shareholders may obtain payment of the redemption price
     upon surrender of their share  certificates.  If funds are available on the
     date fixed for the redemption,  then whether or not the share  certificates
     are  surrendered for payment of the redemption  price,  the shares shall no
     longer  be  outstanding   and  the  holders   thereof  shall  cease  to  be
     shareholders of the Corporation  with respect to the shares redeemed on and
     after the date fixed for  redemption  and shall be entitled only to receive
     the  redemption   price  without  interest  upon  surrender  of  the  share
     certificates.  If  less  than  all  the  shares  represented  by one  share
     certificate  are to be redeemed,  the  Corporation  shall issue a new share
     certificate for the shares not redeemed.

          (c)  The  Corporation  shall  also  cause  a  copy  of the  notice  of
     redemption  to be published in a newspaper  of general  circulation  in the
     county in which  the  principal  executive  office  of the  Corporation  is
     located at least once a week for two successive  weeks, in each instance on
     any day of the week,  commencing not earlier than 60 nor later than 20 days
     before the date fixed for  redemption.  If the  Corporation  publishes  the
     notice of redemption as provided in this  paragraph (c), the failure of the
     Corporation  to  comply  with  the  provision  for  mailing  of  notice  of
     redemption  in paragraph  (b) shall not  invalidate  the  redemption of the
     shares.

          (d) If, on or prior to any date fixed for redemption,  the Corporation
     deposits  with any bank or trust  company  in this  state  (which may be an
     affiliate of the  Corporation)  as a trust fund a sum sufficient to redeem,
     on the date fixed for redemption thereof, the shares called for redemption,
     with irrevocable instructions and authority to the bank or trust company to
     publish the notice of redemption  thereof (or to complete such  publication
     if  theretofore  commenced)  and to pay,  on and after  the date  fixed for
     redemption or prior thereto,  the  redemption  price of the shares to their
     respective  holders upon surrender of their share  certificates,  then from
     and after the date of the  deposit  (although  prior to the date  fixed for
     redemption)  the shares so called shall be redeemed and  dividends on those
     shares  shall  cease to accrue  after the date  fixed for  redemption.  The
     deposit  shall  constitute  full payment of the shares to their holders and
     from and  after  the date of the  deposit  the  shares  shall no  longer be
     outstanding  and the holders  thereof shall cease to be  shareholders  with
     respect to such shares and shall have no rights with respect thereto except
     the  right  to  receive  from  the bank or  trust  company  payment  of the
     redemption  price of the shares without  interest,  upon surrender of their
     certificates  therefor. Any interest accrued on such funds shall be paid to
     the Corporation from time to time. If less than all the shares  represented
     by one share certificate are to be redeemed,  the Corporation shall issue a
     new share  certificate  for the shares not redeemed.  After two years,  the
     bank or trust company shall return to the  Corporation  funds deposited and
     not claimed and  thereafter  the holder of a share  certificate  for shares
     redeemed shall look to the Corporation for payment.

                                      -38-
3.5.5   Voting Rights.

          (a) Except as hereinafter in this Section 3.5.5 expressly provided for
     and as  otherwise  required  by the laws of the  State of  California,  the
     Series C Stock shall have no voting rights.  If there is a default in whole
     or in  part in the  payment  of 24 or more  cumulative  monthly  dividends,
     whether  or not  consecutive,  on the  Series  C Stock as  provided  for in
     Section 3.5.2 above,  the holders of the  outstanding  Series C Stock shall
     have the right,  voting separately as a class with holders of shares of any
     one or more other  series of Preferred  Stock  ranking on a parity with the
     Series C Stock either as to dividends  or the  distribution  of assets upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been, conferred and are exercisable,  to elect a majority of the Board
     of Directors of the Corporation at the Corporation's next annual meeting of
     shareholders.  At  elections  for such  directors,  each holder of Series C
     Stock  shall be  entitled  to one vote for each share held (the  holders of
     shares of any other series of Preferred  Stock ranking on such a parity and
     having like voting rights being  entitled to such number of votes,  if any,
     for each share of such stock held as may be granted to them).  The right of
     the  holders  of Series C Stock,  voting  separately  as a class,  to elect
     (either  alone or  together  with the  holders of shares of any one or more
     other  series of Preferred  Stock  ranking on such a parity and having like
     voting  rights)  members of the Board of  Directors of the  Corporation  as
     aforesaid  shall continue  until such time as all dividends  accumulated on
     the Series C Stock shall have been fully paid or set apart for payment,  at
     which time such right shall terminate, except as herein or by law expressly
     provided,  subject to reverting  in the event of each and every  subsequent
     default of the character above mentioned. Upon any termination of the right
     of the  holders of the Series C Stock as a class to vote for  directors  as
     herein provided, the term of office of all directors then in office elected
     by the Series C Stock shall terminate  immediately.  Any director who shall
     have been so elected pursuant to this paragraph may be removed at any time,
     either  with or without  cause,  and any  vacancy  thereby  created  may be
     filled,  only by the  affirmative  vote of the  holders  of  Series C Stock
     voting  separately as a class (either alone or together with the holders of
     shares of any one or more other series of Preferred Stock ranking on such a
     parity and  having  like  voting  rights).  If the  office of any  director
     elected by the holders of Series C Stock voting as a class  becomes  vacant
     for any reason other than removal from office as  aforesaid,  the remaining
     director  may choose a successor  who shall hold  office for the  unexpired
     term in respect of which such vacancy occurred.

          (b) So long as any shares of Series C Stock  remain  outstanding,  the
     consent of the  holders  of at least a  majority  of the shares of Series C
     Stock  outstanding at the time (voting  separately as a class together with
     all other series of Preferred  Stock  ranking on a parity with the Series C
     Stock  either  as  to  dividends  or  the   distribution   of  assets  upon
     liquidation,  dissolution  or winding up and upon which like voting  rights
     have been  conferred  and are  exercisable)  shall be  necessary to permit,
     effect or validate any one or more of the following:

               (i) the  authorization,  creation  or  issuance of a new class or
          series of shares having rights,  preferences  or privileges  prior (as
          that term is defined in Section  3.5.5(d)) to the shares of the Series
          C Stock,  or any  increase in the number of  authorized  shares of any
          class or series having rights,  preferences or privileges prior to the
          shares of Series C Stock; or

                                      -39-
(ii) the  amendment,  alteration  or  repeal,  whether by merger,
          consolidation  or otherwise,  of any of the provisions of the Articles
          of  Incorporation  of  the  Corporation  which  would  materially  and
          adversely affect any right,  preference,  privilege or voting power of
          the Series C Stock or of the holders thereof,  provided,  however that
          any increase in the amount of  authorized  Common Stock or  authorized
          Preferred Stock or the creation and issuance of other series of Common
          Stock or  Preferred  Stock,  in each case  ranking on a parity with or
          junior to the Series C Stock with  respect to the payment of dividends
          and the  distribution  of  assets  upon  liquidation,  dissolution  or
          winding up, shall not be deemed to  materially  and  adversely  affect
          such rights, preferences, privileges or voting powers.

          (c) The foregoing voting provisions shall not apply if, at or prior to
     the time when the act with  respect to which such vote would  otherwise  be
     required shall be effected,  all outstanding shares of Series C Stock shall
     have been redeemed or called for redemption and sufficient funds shall have
     been deposited in trust to effect such redemption.

          (d) Any class or classes of stock of the  Corporation  shall be deemed
     to rank:

               (i)  prior  to  the  Series  C  Stock  as to  dividends  or as to
          distribution of assets upon liquidation,  dissolution or winding up if
          the  holders  of such  class  shall  be  entitled  to the  receipt  of
          dividends or of amounts distributable upon liquidation, dissolution or
          winding  up,  as the case may be, in  preference  or  priority  to the
          holders of Series C Stock; and

               (ii) on a parity with the Series C Stock as to dividends or as to
          distribution  of assets upon  liquidation,  dissolution or winding up,
          whether  or  not  the  dividend  rates,   dividend  payment  dates  or
          redemption or liquidation  prices per share thereof are different from
          those of the Series C Stock, if the holders of such class of stock and
          of the Series C Stock shall be entitled to the receipt of dividends or
          of amounts distributable upon liquidation,  dissolution or winding up,
          as the case may be, in proportion to their  respective  dividend rates
          or  liquidation  prices,  without  preference or priority one over the
          other.

        3.5.6   Series A  Preferred  Stock and  Series B  Preferred  Stock.  For
     purposes of the foregoing provisions,  the Series A Preferred Stock and the
     Series B Preferred  Stock of the  Corporation  shall be deemed to rank on a
     parity with the Series C Stock for  purposes of Sections  3.5.2,  3.5.3 and
     3.5.5 hereof.

     3.6 Series AA Preferred  Stock.  The rights,  preferences and privileges of
the  Series  AA  Preferred  Stock of the  Corporation  are as set  forth in this
Section 3.6.

        3.6.1   Designation and Amount.  One Hundred Fifty Thousand (150,000) of
     the shares of the  Preferred  Stock of the  Corporation  are  designated as
     Series AA Junior  Participating  Preferred  Stock (the "Series AA Preferred
     Stock").  Such number of shares may be increased or decreased by resolution
     of the Board of  Directors;  provided  that no  decrease  shall  reduce the
     number of shares of  Series AA  Preferred  Stock to a number  less than the
     number of shares then  outstanding  plus the number of shares  reserved for
     issuance upon the exercise of  outstanding  options,  rights or warrants or
     upon the conversion of any outstanding securities issued by the Corporation
     convertible into Series AA Preferred Stock.

                                      -40-
3.6.2   Dividends and Distributions.

          (a)  Subject to the rights of the  holders of any shares of any series
     of Series AA  Preferred  stock (or any  similar  stock)  ranking  prior and
     superior to the Series AA Preferred  Stock with respect to  dividends,  the
     holders  of shares  of Series AA  Preferred  Stock,  in  preference  to the
     holders of shares of Common Stock, and of any other junior stock,  shall be
     entitled to receive, when, as and if declared by the Board of Directors out
     of funds legally available for the purpose,  quarterly dividends payable in
     cash on any regular quarterly dividend payment date as shall be established
     by the Board of  Directors  (each such date being  referred  to herein as a
     "Quarterly  Dividend  Payment  Date"),  commencing  on the first  Quarterly
     Dividend  Payment Date after the first issuance of a share or fraction of a
     share of Series AA Preferred  Stock, in an amount per share (rounded to the
     nearest  cent)  equal  to the  greater  of (a)  $1 or  (b)  subject  to the
     provision for adjustment hereinafter set forth, 100 times the aggregate per
     share amount of all cash  dividends,  and 100 times the aggregate per share
     amount (payable in kind) of all non-cash dividends or other  distributions,
     other than a dividend payable in shares of Common Stock or a subdivision of
     the outstanding shares of Common Stock (by  reclassification or otherwise),
     declared on the Common  Stock  since the  immediately  preceding  Quarterly
     Dividend  Payment  Date or, with  respect to the first  Quarterly  Dividend
     Payment Date,  since the first issuance of any share or fraction of a share
     of Series AA Preferred  Stock.  In the event the  Corporation  shall at any
     time after July 10, 2001 (the "Rights  Declaration  Date"),  declare or pay
     any  dividend on the Common  Stock  payable in shares of Common  Stock,  or
     effect a subdivision  or combination or  consolidation  of the  outstanding
     shares of Common Stock (by reclassification or otherwise than by payment of
     a dividend in shares of Common  Stock)  into a greater or lesser  number of
     shares of Common Stock,  then in each such case the amount to which holders
     of shares of Series AA Preferred Stock were entitled  immediately  prior to
     such event under clause (b) of the preceding  sentence shall be adjusted by
     multiplying such amount by a fraction, the numerator of which is the number
     of shares of Common Stock outstanding  immediately after such event and the
     denominator  of which is the  number of shares  of Common  Stock  that were
     outstanding immediately prior to such event.

          (b) The  Corporation  shall declare a dividend or  distribution on the
     Series AA Preferred Stock as provided in Section 3.6.2(d) immediately after
     it declares a dividend or  distribution  on the Common  Stock (other than a
     dividend payable in shares of Common Stock); provided that, in the event no
     dividend  or  distribution  shall have been  declared  on the Common  Stock
     during the period between any Quarterly  Dividend Payment Date and the next
     subsequent  Quarterly  Dividend Payment Date, a dividend of $1 per share on
     the  Series AA  Preferred  Stock  shall  nevertheless  be  payable  on such
     subsequent Quarterly Dividend Payment Date.

          (c) Dividends  shall begin to accrue and be cumulative on  outstanding
     shares of Series AA Preferred  Stock from the  Quarterly  Dividend  Payment
     Date next  preceding  the date of issue of such shares,  unless the date of
     issue of such  shares is prior to the record  date for the first  Quarterly
     Dividend  Payment Date, in which case  dividends on such shares shall begin
     to accrue  from the date of issue of such  shares,  or  unless  the date of
     issue is a Quarterly  Dividend  Payment  Date or is a date after the record
     date for the  determination  of  holders  of shares of Series AA  Preferred
     Stock  entitled to receive a quarterly  dividend and before such  Quarterly
     Dividend Payment Date, in either of which events such dividends shall begin
     to accrue and be  cumulative  from such  Quarterly  Dividend  Payment Date.
     Accrued but unpaid dividends shall not bear interest. Dividends paid on the
     shares of Series AA Preferred Stock in an amount less than the total amount
     of such  dividends  at the time accrued and payable on such shares shall be
     allocated pro rata on a  share-by-share  basis among all such shares at the
     time outstanding. The Board of Directors may, in accordance with applicable
     law, fix a record date for the determination of holders of shares of Series
     AA  Preferred   Stock  entitled  to  receive   payment  of  a  dividend  or
     distribution  declared  thereon,  which  record date shall be not more than
     such number of days prior to the date fixed for the payment  thereof as may
     be allowed by applicable law.

                                      -41-
3.6.3   Voting  Rights.  The  holders of  shares of Series AA  Preferred
     Stock shall have the following voting rights:

          (a) Each share of Series AA Preferred  Stock shall  entitle the holder
     thereof to 100 votes on all matters submitted to a vote of the stockholders
     of the Corporation.

          (b) Except as  otherwise  provided  in the  Corporation's  Articles of
     Incorporation,  or by law,  the  holders  of shares of Series AA  Preferred
     Stock,  the holders of shares of Common Stock, and the holders of shares of
     any other capital stock of the  Corporation  having  general voting rights,
     shall vote  together  as one class on all  matters  submitted  to a vote of
     stockholders of the Corporation.

          (c)   Except  as  set   forth  in  the   Corporation's   Articles   of
     Incorporation,  and except as otherwise  provided by law, holders of Series
     AA Preferred  Stock shall have no special  voting  rights and their consent
     shall not be required  (except to the extent they are entitled to vote with
     holders of Common Stock as set forth herein) for taking any corporate
         action.

        3.6.4   Certain Restrictions.

          (a) Whenever  quarterly  dividends or other dividends or distributions
     payable on the Series AA Preferred  Stock as provided in Section  3.6.2 are
     in  arrears,  thereafter  and until all accrued  and unpaid  dividends  and
     distributions,  whether or not  declared,  on shares of Series AA Preferred
     Stock outstanding shall have been paid in full, the Corporation shall not:

               (i) declare or pay dividends, or make any other distributions, on
          any shares of stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the Series AA  Preferred
          Stock;

               (ii) declare or pay dividends,  or make any other  distributions,
          on any shares of stock ranking on a parity  (either as to dividends or
          upon  liquidation,  dissolution  or  winding  up) with the  Series  AA
          Preferred  Stock,  except  dividends  paid  ratably  on the  Series AA
          Preferred  Stock  and all such  parity  stock on which  dividends  are
          payable or in arrears in  proportion to the total amounts to which the
          holders of all such shares are then entitled;

               (iii) redeem or purchase or otherwise  acquire for  consideration
          shares of any stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the Series AA  Preferred
          Stock, provided that the Corporation may at any time redeem,  purchase
          or otherwise  acquire  shares of any such junior stock in exchange for
          shares of any stock of the  Corporation  ranking  junior (either as to
          dividends  or upon  dissolution,  liquidation  or  winding  up) to the
          Series AA Preferred Stock; or

               (iv) redeem or purchase or  otherwise  acquire for  consideration
          any  shares of  Series  AA  Preferred  Stock,  or any  shares of stock
          ranking on a parity  with the  Series AA  Preferred  Stock,  except in
          accordance with a purchase offer made in writing or by publication (as
          determined  by the Board of  Directors)  to all holders of such shares
          upon such terms as the Board of Directors,  after consideration of the
          respective  annual  dividend  rates  and  other  relative  rights  and
          preferences of the respective  series and classes,  shall determine in
          good  faith  will  result in fair and  equitable  treatment  among the
          respective series or classes.

          (b) The Corporation shall not permit any subsidiary of the Corporation
     to purchase or otherwise  acquire for  consideration any shares of stock of
     the  Corporation  unless the  Corporation  could,  under Section  3.6.4(a),
     purchase or otherwise acquire such shares at such time and in such manner.

                                      -42-
3.6.5   Reacquired  Shares.  Any  shares  of Series AA  Preferred  Stock
     purchased or otherwise acquired by the Corporation in any manner whatsoever
     shall become  authorized but unissued  shares of Series AA Preferred  Stock
     and may be  reissued as part of a new series of Series AA  Preferred  Stock
     subject to the  conditions  and  restrictions  on issuance set forth in the
     Corporation's Articles of Incorporation,  and by any subsequent amendments,
     or as otherwise required by law.

        3.6.6   Liquidation,  Dissolution or  Winding Up. Upon  any liquidation,
     dissolution or winding up of the Corporation, no distribution shall be made
     (1) to the  holders  of  shares  of  stock  ranking  junior  (either  as to
     dividends or upon liquidation,  dissolution or winding up) to the Series AA
     Preferred Stock unless,  prior thereto,  the holders of shares of Series AA
     Preferred Stock shall have received $100.00 per share, plus an amount equal
     to accrued and unpaid dividends and distributions  thereon,  whether or not
     declared, to the date of such payment,  provided that the holders of shares
     of Series AA  Preferred  Stock shall be  entitled  to receive an  aggregate
     amount per share,  subject to the provision for adjustment  hereinafter set
     forth,  equal to 100 times the aggregate amount to be distributed per share
     to holders of shares of Common  Stock,  or (2) to the  holders of shares of
     stock  ranking on a parity  (either as to  dividends  or upon  liquidation,
     dissolution  or winding  up) with the  Series AA  Preferred  Stock,  except
     distributions  made ratably on the Series AA  Preferred  Stock and all such
     parity stock in proportion to the total amounts to which the holders of all
     such shares are entitled upon such liquidation,  dissolution or winding up.
     In the event the Corporation shall at any time after the Rights Declaration
     Date declare or pay any  dividend on the Common Stock  payable in shares of
     Common Stock,  or effect a subdivision or combination or  consolidation  of
     the outstanding  shares of Common Stock (by  reclassification  or otherwise
     than by payment of a dividend in shares of Common  Stock) into a greater or
     lesser  number  of  shares  of  Common  Stock,  then in each  such case the
     aggregate  amount to which  holders of shares of Series AA Preferred  Stock
     were entitled immediately prior to such event under the provision in clause
     (1) of the preceding  sentence shall be adjusted by multiplying such amount
     by a  fraction,  the  numerator  of which is the number of shares of Common
     Stock outstanding immediately after such event and the denominator of which
     is the number of shares of Common Stock that were  outstanding  immediately
     prior to such event.

        3.6.7   Consolidation,  Merger, Etc. In case the Corporation shall enter
     into any consolidation,  merger,  statutory share exchange,  combination or
     other  transaction in which the shares of Common Stock are exchanged for or
     changed  into other stock or  securities,  cash and/or any other  property,
     then in any such case each share of Series AA Preferred  Stock shall at the
     same time be  similarly  exchanged  or  changed  into an amount  per share,
     subject to the provision for adjustment hereinafter set forth, equal to 100
     times the  aggregate  amount of stock,  securities,  cash  and/or any other
     property  (payable  in kind),  as the case may be,  into which or for which
     each  share of  Common  Stock is  changed  or  exchanged.  In the event the
     Corporation shall at any time after the Rights  Declaration Date declare or
     pay any dividend on the Common Stock payable in shares of Common Stock,  or
     effect a subdivision  or combination or  consolidation  of the  outstanding
     shares of Common Stock (by reclassification or otherwise than by payment of
     a dividend in shares of Common  Stock)  into a greater or lesser  number of
     shares of Common Stock,  then in each such case the amount set forth in the
     preceding  sentence  with  respect to the  exchange  or change of shares of
     Series AA Preferred Stock shall be adjusted by multiplying such amount by a
     fraction,  the  numerator  of which is the number of shares of Common Stock
     outstanding  immediately  after such event and the  denominator of which is
     the number of shares of Common Stock that are outstanding immediately prior
     to such event.

        3.6.8   No Redemption. The shares of Series AA Preferred Stock shall not
     be redeemable.

        3.6.9   Rank. The Series AA Preferred  Stock shall rank, with respect to
     the payment of  dividends  and the  distribution  of assets,  junior to all
     series of any other class of the Corporation's Preferred Stock.

                                      -43-
3.6.10  Amendment.  The  Articles of  Incorporation  of the  Corporation
     shall not be amended in any manner which would  materially  alter or change
     the powers,  preferences or special rights of the Series AA Preferred Stock
     so as to affect them adversely  without the affirmative vote of the holders
     of at least  two-thirds  of the  outstanding  shares of Series AA Preferred
     Stock, voting together as a single class.

        3.6.11  Fractional  Shares.  Series AA Preferred  Stock may be issued in
     fractions of a share which shall entitle the holder,  in proportion to such
     holder's  fractional shares, to exercise voting rights,  receive dividends,
     participate in distributions and to have the benefit of all other rights of
     holders of Series AA Preferred Stock.

                                     Fourth

     The  number  of  directors  of this  Corporation  shall be set forth in the
Bylaws of the Corporation as adopted and amended from time to time in the manner
authorized by law.

                                     Fifth

     The liability of the  directors of this  Corporation  for monetary  damages
shall be eliminated to the fullest extent  permissible  under California law. No
amendment  or  repeal  of  this  Article  FIFTH  by  the  shareholders  of  this
Corporation shall adversely affect any right or protection of a director of this
Corporation existing at the time of such amendment or repeal.

                                     Sixth

     This  Corporation  is authorized to provide  indemnification  of agents (as
defined  in Section  317 of the  California  Corporations  Code)  through  bylaw
provisions,  agreements with such agents, votes of shareholders or disinterested
directors or otherwise,  or any  combination of the foregoing,  in excess of the
indemnification  otherwise  permitted  by Section 317 of the  Corporation  Code,
subject  only to the limits set forth in Section  204 of the  Corporations  Code
with  respect  to  actions  for  breach  of  duty  to the  Corporation  and  its
shareholders.  No amendment or repeal of this Article SIXTH by the  Shareholders
of this Corporation shall adversely affect any Corporation existing at the time
of such amendment or repeal.

                                    Seventh

     7.1 The Board of Directors,  when  evaluating any offer of another party to
(a) make a tender or exchange offer for the equity securities of the Corporation
or any  subsidiary,  (b) merge or consolidate  the Corporation or any subsidiary
with  another  corporation,   or  (c)  purchase  or  otherwise  acquire  all  or
substantially  all of the  properties  or assets of the  Corporation,  or of any
subsidiary,   shall,  in  connection  with  the  exercise  of  its  judgment  in
determining   what  is  in  the  best  interests  of  the  Corporation  and  its
stockholders,  give due consideration to all relevant factors,  including by way
of illustration, but not limitation, any or all of the following:

        7.1.1   Whether the  offer is acceptable  based on historical  operating
     results  and  the   financial   condition  of  the   Corporation   and  its
     subsidiaries, and its future prospects;

        7.1.2   Whether  a more  favorable  offer  could  be  obtained  for  the
     Corporation's or its subsidiaries,  securities or assets in the foreseeable
     future;

        7.1.3   The  social,  economic  or any other  material  impact  which an
     acquisition of the equity  securities of the  Corporation or  substantially
     all of its  assets  would  have upon the  employees  and  customers  of the
     Corporation and its subsidiaries and the community which they serve;

        7.1.4   The  reputation  and  business  practices of the offeror and its
     management  and affiliates as they would affect the employees and customers
     of the  Corporation  and its  subsidiaries  and  the  future  value  of the
     Corporation's stock;

                                      -44-
7.1.5   The  value of the  securities,  if any,  which  the  offeror  is
     offering in exchange for the Corporation's or its subsidiaries'  securities
     or assets  based on an analysis of the worth of the  Corporation  or of its
     subsidiaries  as compared to the offeror  corporation or other entity whose
     securities are being offered; and

        7.1.6   Any antitrust or other legal or regulatory issues  raised by the
     offer.

     7.2 If the Board of Directors  determines  an offer should be rejected,  it
may take any lawful action to accomplish its purpose including,  but not limited
to, any or all of the following:

        7.2.1   Advising shareholders not to accept the offer;

        7.2.2   Litigation against the offeror;

        7.2.3   Filing   complaints   with  any   governmental   and  regulatory
     authorities;

        7.2.4   Acquiring the Corporation's securities;

        7.2.5   Selling or otherwise issuing authorized but unissued  securities
     or treasury stock or granting options with respect thereto;

        7.2.6   Acquiring a company  to create an antitrust or other  regulatory
     problem for the offeror;

        7.2.7   Obtaining a  more  favorable  offer from another  individual  or
     entity.

     7.3  Notwithstanding  the fact that by law or by agreement  with a national
securities  exchange or otherwise,  no vote, or lesser vote, of shareholders may
be specified or permitted,  the affirmative vote of the holders of two-thirds of
the outstanding  shares of Common Stock of the Corporation  shall be required to
approve any offer described in Section 7.1.

     The  provisions  of  Sections  7.1,  7.2  and  7.3  of  these  Articles  of
Incorporation  may be amended only by the affirmative  vote of two-thirds of the
outstanding  shares of Common Stock of the  Corporation,  and by the affirmative
vote  of  two-thirds  of  the  outstanding  shares  of  Preferred  Stock  of the
Corporation, if any.

                                      -45-
Exhibit 10.13

Employment Agreement between TriCo and Richard O'Sullivan dated April 10, 2001

                              EMPLOYMENT AGREEMENT

     This  EMPLOYMENT  AGREEMENT  ("Agreement")  is entered into as of April 10,
2001 between TRI  COUNTIES  BANK  ("EMPLOYER"),  having its  principal  place of
business  at  63  Constitution  Drive,  Chico,   California  95973  and  Richard
O'Sullivan ("Employee").

                                   WITNESSETH

     WHEREAS,  EMPLOYER desires to employ Employee pursuant to the terms of this
Agreement  and  Employee  is  desirous  of and  wishes  to  enter  into  such an
employment arrangement, on the terms and conditions hereinafter set forth

     NOW,  THEREFORE,  in  consideration  of the premises,  mutual covenants and
agreements  contained  herein,  and other good and valuable  consideration,  the
receipt and  sufficiency  of which is hereby  acknowledged,  the parties  hereby
agree as follows:

     1.   EMPLOYMENT

     EMPLOYER hereby employs Employee,  and Employee hereby accepts appointment,
as  Executive  Vice-President.  Employee  shall  report  to  and  be  under  the
supervision of the Board of Directors of EMPLOYER and Employee  hereby agrees to
devote his full and exclusive time and attention to the business of EMPLOYER, to
faithfully  perform  the  duties  assigned  to  him by the  Board  of  Directors
consistent  with his office,  and to conduct himself in such a way as shall best
serve the interests of EMPLOYER.

     2.   TERM OF AGREEMENT

     Unless  sooner  terminated  by  EMPLOYER  or the  Employee  pursuant to the
provisions  of  Sections  4 or 6  hereof,  the  employment  provisions  of  this
Agreement  shall  terminate on the second (2nd)  anniversary of the date of this
Agreement. This Agreement shall automatically extended for an additional year on
the first anniversary of this Agreement and each anniversary thereafter unless a
party  notifies the other party to the contrary in writing within 30 days of and
anniversary.

     3.   COMPENSATION

     For  and  in  consideration  of the  performance  by  the  Employee  of the
services,  terms,  conditions,  covenants and promises herein recited,  EMPLOYER
agrees and promises to pay to the Employee at the times and in the manner herein
stated, the following:

          3.1 Salary.  As the  compensation  for the services to be performed by
     the Employee  hereunder  during the employment  period,  the Employee shall
     receive,  as gross salary before any  withholding of whatever sort, the sum
     of $173,250.00 per year,  payable in the manner in which EMPLOYER's payroll
     is customarily  handled.  Additionally,  Employee will be eligible for such
     annual increases in salary as EMPLOYER's Board of Directors shall from time
     to time decide.

          3.2   Bonus/Incentive   Plan.   Employee   shall   participate   in  a
     bonus/incentive  plan to be agreed upon  between  Employee and EMPLOYER and
     approved by the Board of Directors of EMPLOYER. It is contemplated that the
     incentive  bonus/plan will allow for an annual bonus of up to 40% of annual
     salary  based upon the meeting of certain  criteria  specified  therein and
     that the first year's minimum  incentive annual bonus will be guaranteed at
     $25,000.00.

                                      -46-
3.3 Stock Options. Employee will be granted options to purchase ______
     shares of TRICO BANCSHARES ("TRICO") common stock pursuant to and under the
     terms of TRICO's Employee Stock Option Plan

          3.4  Employee  Benefits.  In  addition  to the above,  EMPLOYER  shall
     provide the Employee with the following:

          (a)  participation for the Employee and his dependents, in any present
               or future  disability,  health,  dental or other  insurance  plan
               generally  available  to  all  employees  of  the  Company,  such
               participation   to  be  on  the   same   basis   as  such   other
               executives/employees,  except that the 90 day waiting  period for
               inclusion shall be waived;

          (b)  participation  for the Employee in any present or future employee
               savings plans,  including,  but not limited to EMPLOYER's  401(k)
               Savings  Plan;  Employee  Stock  Ownership  Plan;  and  Executive
               Deferred Compensation Plan;

          (c)  twenty (20) paid vacation days annually; and

          (d)  a car allowance of $850.00 per month and  reimbursement  of other
               reasonable  out-of-pocket  expenses,  including  $0.30  per mile,
               incurred  by the  Employee  in  the  performance  of  the  duties
               hereunder in accordance with the policies of EMPLOYER.

     4.   EARLY TERMINATION OF EMPLOYMENT

          4.1  Termination  For  Cause.  EMPLOYER  may at any time,  in its sole
     discretion,  terminate  the  employment  provisions  of this  Agreement for
     "cause,"  effective  immediately upon providing the Employee with notice of
     his dismissal.  The only occurrences which shall constitute  "cause" within
     the meaning of this paragraph shall be the following:

          (a)  the   conviction   of  the  Employee  by  a  court  of  competent
               jurisdiction  of  a  crime  involving  moral  turpitude  (or  the
               entering of a no-contest or nolo  contendere  plea by Employee in
               regard to such crime);

          (b)  the  commission  by the  Employee of an act of fraud or bad faith
               upon EMPLOYER;

          (c)  the willful misappropriation of any funds or property of EMPLOYER
               by the Employee;

          (d)  the willful,  continued and unreasonable  failure by the Employee
               to perform his duties or obligations under this Agreement; or

          (e)  the breach of any material provisions hereof or the engagement by
               the Employee,  without the prior written approval of EMPLOYER, in
               any activity  which would violate the  provisions of Section 7 of
               this Agreement.

          4.2 Termination  Without Cause.  EMPLOYER may at any time, in its sole
     discretion,  terminate the employment  provisions of this Agreement without
     "cause," which term is defined in Section 4.1 hereof.

          4.3 Voluntary Termination. The employment provisions of this Agreement
     shall also terminate upon:

                                      -47-
(a)  the  death or  permanent  physical  or mental  disability  of the
               Employee;

          (b)  the voluntary retirement of the Employee; or

          (c)  the voluntary resignation of the Employee.

     For  purposes  hereof,  permanent  physical or mental  disability  shall be
deemed  to  have  occurred  when  Employee  has  been  unable,  with  reasonable
accommodation, to perform the essential functions of his job (i) for a period of
six (6)  consecutive  months or (ii) on 80% or more of the normal  working  days
during any nine (9) consecutive months.

     5.   RIGHTS UPON EARLY TERMINATION OF EMPLOYMENT

          5.1  Termination  Pursuant  to  Section  4.1  or  4.3.  If  Employee's
     employment  is  terminated  pursuant to paragraph  4.1 or 4.3 hereof,  then
     EMPLOYER will have no  obligation  to pay any amount to the Employee  other
     than amounts earned or accrued pursuant to the provisions of Section 3, but
     which  have not yet  been  paid as of the  date of the  termination  of the
     Employee, and the Employee shall have no further claims against EMPLOYER or
     EMPLOYER  Entities with respect to this  Agreement  (except with respect to
     payments due and payable under this paragraph 5.1.

          5.2 Termination  Pursuant to Section 4.2. If Employee's  employment is
     terminated pursuant to paragraph 4.2 hereof, then EMPLOYER shall pay to the
     Employee  all  amounts  earned or accrued  pursuant  to the  provisions  of
     Section  3 hereof,  but which  have not yet been paid as of the date of the
     termination  of the Employee.  In addition,  EMPLOYER  shall pay Employee a
     prorated amount of Employee's minimum guaranteed annual bonus (as set forth
     in Section 3.3)  through the date of  termination.  In  addition,  EMPLOYER
     shall pay through the then remaining term of this Agreement,  the amount of
     salary that would be payable  pursuant to paragraph  3.1 if the  Employee's
     employment had not been terminated,  at such times and in such amounts that
     would have been paid if Employee's employment had not been terminated.

     6.   CHANGE IN CONTROL

          6.1  Benefits.  In the event of a "Change in  Control"  of EMPLOYER as
     defined herein,  and in the event that, within ninety days of the Change of
     Control, either: (i) Employee's employment is terminated;  or (ii) Employee
     gives written notice that he is terminating his employment and invoking the
     provisions of this Section 6, subject to the  provisions of paragraph  6.3,
     Employee shall be entitled to receive his salary at the rate then in effect
     for a period of twenty  -four (24)  months  following  the  termination  of
     Employee's  employment,  as well as an amount  equal to 200% of the  annual
     bonuses earned by the Employee for the last complete  calendar year or year
     of employment,  whichever is greater,  provided,  however, that the present
     value of said  payments  shall  not be more  than two  hundred  ninety-nine
     percent (299%) of Employee's compensation as defined by Section 280G of the
     Internal  Revenue Code of 1954, as amended.  EMPLOYER  shall be relieved of
     its obligation to make payments under this Section if, at the time it is to
     make such payment, it is insolvent, in conservatorship or receivership,  is
     in a troubled  condition,  is operating under a supervisory  agreement with
     any  regulatory  agency  having  jurisdiction,  has been given a  financial
     soundness  rating of "4" or "5", or is subject to a proceeding to terminate
     or suspend federal deposit insurance.

          6.2 Defined.  For purposes of this Section 6, a "Change in Control" of
     EMPLOYER shall occur:

               (a) upon  EMPLOYER's  knowledge  that any person (as such term is
          used in Section 13(d) and 14(d)(2) of the  Securities  Exchange Act of
          1934, as amended) is or becomes "the beneficial  owner" (as defined in
          Rule 13d-3 of the Exchange  Act),  directly or  indirectly,  of shares
          representing  40% or more of the  combined  voting  power  of the then
          outstanding securities of EMPLOYER's Parent; or

                                      -48-
(b) upon the first  purchase  of the common  stock of  EMPLOYER's
          Parent  pursuant to a tender or exchange offer (other than a tender or
          exchange offer made by EMPLOYER's Parent); or

               (c) upon the approval by the stockholders of EMPLOYER's Parent of
          a merger or  consolidation  (other than a merger of  consolidation  in
          which  EMPLOYER's  Parent is the surviving  corporation and which does
          not result in any  reclassification  or  reorganization  of EMPLOYER's
          Parent's then outstanding securities), a sale or disposition of all or
          substantially all of EMPLOYER's Parent assets or a plan of liquidation
          or dissolution of EMPLOYER's Parent; or

               (d) if, during any period of two consecutive  years,  individuals
          who at the beginning of such period  constitute the Board of Directors
          of  EMPLOYER's  Parent cease for any reason to  constitute  at least a
          majority  thereof,  unless the election or nomination for the election
          by the  stockholders  of  EMPLOYER's  Parent of each new  director was
          approved by a vote of at least  two-thirds of the directors then still
          in office who were directors at the beginning of the period.

          6.3   Limitations.   Anything  in  this   Agreement  to  the  contrary
     notwithstanding,  prior to the  payment  of any  compensation  or  benefits
     payable  under  Section 6.1 hereof,  the certified  public  accountants  of
     EMPLOYER  immediately  prior to a Change of Control (the "Certified  Public
     Accountants")  shall  determine as promptly as  practical  and in any event
     with 20 business days following the sale of EMPLOYER whether any payment or
     distribution by EMPLOYER to or for the benefit of Employee (whether paid or
     payable  or  distributed  or  distributable  pursuant  to the terms of this
     Agreement,  any other  agreements or  otherwise)  (a "Payment")  would more
     likely  than not be  nondeductible  by  EMPLOYER  for  Federal  income  tax
     purposes  because of section 280G of the Internal  Revenue Code of 1986, as
     amended (the  "Code"),  and if it is, then the  aggregate  present value of
     amounts payable or distributable to or for the benefit of EMPLOYER pursuant
     to  this  Agreement  (such  payments  or  distributions  pursuant  to  this
     Agreement are  thereinafter  referred to as "Contract  Payments")  shall be
     reduced  (but not below zero) to the Reduced  Amount.  For purposes of this
     Section, the "Reduced Amount" shall be an amount expressed in present value
     which maximizes the aggregate  present value of Contract  Payments  without
     causing any payment to be nondeductible by EMPLOYER because of said Section
     280G of the Code.

     If under this Section the certified Public  Accountants  determine that any
payment  would more likely  than not be  nondeductible  by  EMPLOYER  because of
Section 280G of the Code,  EMPLOYER shall promptly give Employee  notice to that
effect and a copy of the detailed calculation thereof and of the Reduced Amount,
and the Employee may then elect, in his sole  discretion,  which and how much of
the Contract  Payments or any other  payments shall be eliminated or reduced (as
long as after  such  election  the  aggregate  present  value  of the  Agreement
Payments or any other payments equals the Reduced Amount),  and shall advise the
EMPLOYER in writing of his  election  within 20 business  days of his receipt of
notice.  If no such  election  is made by Employee  within  such 20-day  period,
EMPLOYER  may elect  which and how much of the  Contract  Payments  or any other
payments  shall be  eliminated  or reduced (as long as after such  election  the
Aggregate  present value of the Contract Payments equals the Reduced Amount) and
shall notify Employee  promptly of such election.  For purposes of this Section,
present value shall be determined in accordance  with Section  280G(d)(4) of the
Code.  All  determinations  made by the Certified  Public  Accountants  shall be
binding upon  EMPLOYER  and  Employee and the payment to Employee  shall be made
within 20 days of sale of  EMPLOYER.  EMPLOYER may suspend for a period of up to
30 days  after  the sale of  EMPLOYER  the  Payment  and any other  payments  or
benefits  due to Employee  until the  Certified  Public  Accountants  finish the
determination  and  Employee  (or  EMPLOYER,  as the case may be)  elects how to
reduce the Contract Payments or any other payments, if necessary. As promptly as
practicable  following such determination and the elections hereunder,  EMPLOYER
shall pay to or distribute to or for the benefit of Employee such amounts as are
then due to Employee under this Agreement.

                                      -49-
As a result of the  uncertainty  in the  application of Section 280G of the
Code, it is possible that Contract Payments may have been made by EMPLOYER which
should not have been made  ("Overpayment"),  in each case,  consistent  with the
calculation  of the Reduced  Amount  hereunder.  In the event that the Certified
Public  Accountants,  based upon the  assertion of a deficiency  by the Internal
Revenue  Service  against  EMPLOYER  or  Employee  which said  Certified  Public
Accountants  believe  has a high  probability  of  success,  determines  that an
Overpayment  has been  made,  any such  Overpayment  shall  be  treated  for all
purposes as a loan to Employee which  Employee shall repay to EMPLOYER  together
with  interest  at  the   applicable   Federal  rate  provided  for  in  Section
7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable by
Employee  to EMPLOYER  in and to the extent  such  payment  would not reduce the
amount which is subject to taxation under Section 4999 of the Code. In the event
that  the  Certified  Public  Accountants,  based  upon  controlling  precedent,
determine that an  Underpayment  has occurred,  any such  Underpayment  shall be
promptly  paid by  EMPLOYER  to or for the  benefit of  Employee  together  with
interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code.

          6.4 Continuing Obligations. The triggering of this Section 6 shall not
     relieve  Employee  or  EMPLOYER  of  their  obligations   pursuant  to  the
     provisions  of  Section  7  hereof,  such  Section  containing  independent
     agreements and obligations.

     7.   COVENANTS

          7.1  Non-disturbance  with Employees.  Employee hereby agrees that (a)
     during the term of his employment  with EMPLOYER and for a period of twelve
     (12)  months  following  the  termination  of his  employment,  he will not
     directly or indirectly solicit, cause any other person to solicit or assist
     any other person with  soliciting,  the employment of any person who is, at
     the  time  of  such  solicitation,  or who  was  within  30  days  of  such
     solicitation,  an employee of EMPLOYER or its  subsidiaries  or  employees.
     Employment   for  purposes  of  this  Section  shall  include   consulting,
     performing  services for commissions or otherwise  performing  services for
     cash or other compensation.

          7.2  Confidential  Information.  The parties hereto recognize that the
     services  performed  and to be performed by Employee are special and unique
     and that by  reason  of this  employment  Employee  has  acquired  and will
     continue to acquire  information  regarding the strategic  plans,  business
     plans, policies,  finances and customers and trade secrets of that EMPLOYER
     in  the  course  of  its   business   takes  steps  to  keep   confidential
     ("Confidential  Information").  Employee  hereby  agrees  not to divulge to
     anyone, either during or after his employment with EMPLOYER or for a period
     of three (3) years  following the  termination  of his  employment any such
     Confidential  Information.  Employee  further  agrees  that all  memoranda,
     notes,  records,  reports,  letters,  and other documents  made,  compiled,
     received,  held, or used by Employee while employed by EMPLOYER  concerning
     any phase of the  business of EMPLOYER  shall be  EMPLOYER's  property  and
     shall be  delivered  by  Employee to  EMPLOYER  on the  termination  of his
     employment,  or at  any  earlier  time  on the  request  of  the  Board  of
     Directors.

          7.3 Non-use of Confidential  Information.  Employee hereby agrees that
     (a) during the term of his employment  with EMPLOYER;  and (b) for a period
     of one year following the  termination of his  employment,  he will not use
     any  Confidential   Information,   and  especially  information  concerning
     EMPLOYER'S  customers to directly or  indirectly  solicit,  cause any other
     person to solicit or assist any other person with  soliciting any customer,
     depositor  or borrower of EMPLOYER or its  subsidiaries  or  affiliates  to
     become a customer, depositor or borrower of another bank, savings and loan,
     or financial institution.

          7.4 Enforcement. The agreement of Employee contained in this Section 7
     shall  be  enforceable  both  at  law  and in  equity,  by  injunction  and
     otherwise;  and the rights and remedies of EMPLOYER  hereunder with respect
     thereto shall be cumulative and not  alternative and shall not be exhausted
     by any one or more uses thereof.

     8.   ENTIRE AGREEMENT: WAIVERS AND AMENDMENTS

     This  Agreement  sets forth the entire  agreement  between the parties with
respect to the terms and  conditions of the  relationship  between  Employee and
EMPLOYER  and  any and  all  matters  related  thereto,  and  any and all  prior
agreements with respect to any thereof,  whether oral or written, are superseded
hereby.  Neither  this  Agreement  nor any term or condition  hereof,  including
without limitation,  the terms and conditions of this Section,  any be waived or
modified in whole or in part as against  EMPLOYER or  Employee,  as the case may
be, except by written instrument signed by an authorized officer of EMPLOYER and
by  Employee,  expressly  stating  that it is intended to operate as a waiver or
modification of this Agreement, and any such written waiver by either party of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach hereof.

                                      -50-
9.   NOTICE

     Any notices,  consents or other communication  required to be sent or given
hereunder  by any of the parties  shall in every case be in writing and shall be
deemed  properly served if (a) delivered  personally,  (b) sent by registered or
certified  mail,  in all such cases with first  class  postage  prepaid,  return
receipt requested,  or (c) delivered by a recognized  overnight courier service,
if to  EMPLOYER  at the  address  of its main  office  to the  attention  of its
President and, if to Employee,  at his last address on the personnel  records of
EMPLOYER or at such other  addresses  as may be  furnished by a party in writing
according to the provisions of this Section 9, except that either party may from
time to time,  in writing by certified  mail,  designate  another  address which
shall  thereupon  become his or its  effective  address for the purposes of this
Section.

     10.  SEVERABILITY

     If any term or provision of this  Agreement or the  application  thereof to
any  person,  property  or  circumstance  shall  to any  extent  be  invalid  or
unenforceable,  the remainder of this Agreement or the  application of such term
or provision to persons,  property or circumstances other than those as to which
it is invalid or  unenforceable,  shall not be effected  thereby,  and each term
provision of this  Agreement  shall be valid and enforced to the fullest  extent
permitted by law.

     11.  NO RESTRICTIONS

     Employee hereby  represents and warrants that he is not now and will not be
subject to any agreement,  restriction,  lien,  encumbrance,  or right, title or
interest in any one,  limiting in any way the scope of this  Agreement or in any
way inconsistent with this Agreement.

     12.  NO ASSIGNMENT: BINDING EFFECT

     This Agreement  shall be binding upon and inure to the benefit of EMPLOYER,
its  successors  or assigns.  Except as to the  obligation of Employee to render
personal services which shall be non-assignable, this Agreement shall be binding
upon and inure to the heirs, executors, administrators, and assigns of Employee.

     13.  ARBITRATION

     EXCEPT AS TO ANY  ACTION  BROUGHT TO ENFORCE  THE  PROVISIONS  OF SECTION 7
ABOVE,  ANY  CONTROVERSY,  DISPUTE OR CLAIM  ARISING  OUT OF OR  RELATING TO THE
TERMINATION  OF THE  EMPLOYEE'S  EMPLOYMENT,  AND  THE  INTERPRETATION  OF  THIS
AGREEMENT,   AND  ANY  AND  ALL  CLAIMS   INCLUDING  ANY  STATUTORY   CLAIMS  OF
DISCRIMINATION,  SHALL BE RESOLVED BY BINDING  ARBITRATION  UNDER THE EMPLOYMENT
DISPUTE RESOLUTION RULES OF THE AMERICAN ARBITRATION  ASSOCIATION  PROVISIONS OF
THE FEDERAL UNIFORM ARBITRATION ACT.

     The parties agree that arbitration  shall be the exclusive forum to resolve
any and all claims between the parties, their agents and employees regarding the
termination  of  employment,  or of this  Agreement,  including  any  claims  of
discrimination under any state or federal statute, wrongful discharge theory, or
any other claim  whether  based on specific  state or federal  statute or common
law.

     ANY CLAIM MADE UNDER THIS  PROVISION MAY BE SUBMITTED IN WRITING  WITHIN 60
DAYS AFTER THE  TERMINATION OF EMPLOYMENT OR THIS  AGREEMENT.  THE WRITTEN CLAIM
MUST DETAIL THE FACTS WHICH  SUPPORT THE CLAIM ALONG WITH ANY LEGAL  THEORIES OR
STATUS UPON WHICH THE CLAIM IS BASED.

                                      -51-
The parties  agree to abide by any  determination  of the  arbitrator as to
which party is to be responsible  for the costs and attorneys'  fees in any such
proceeding.  It is agreed that the  arbitrator  shall be  empowered  to hear all
legal and equitable claims, including claims for discrimination.  The arbitrator
shall be governed by the law  applicable  to any claims  based upon any state or
federal  statute,  and will also be empowered to award any remedies  appropriate
under any such statues.

     This provision shall survive the  termination of Employee's  employment and
this Agreement.

     14.  HEADINGS

     The  captions  and  headings   contained  herein  have  been  inserted  for
convenience or reference only and shall not affect the meaning or interpretation
of this Agreement.

     15.  GOVERNING LAW AND CHOICE OF FORUM

     This Agreement  shall be construed and enforced in accordance with the laws
of the State of California  and shall be enforced in the State or Federal Courts
sitting in California.

                                                     EMPLOYEE

                                                     /s/ Richard O'Sullivan

                                                     Richard O'Sullivan

ATTEST:

/s/ Kathleen Richardson
-----------------------
                                                     TRI COUNTIES BANK

ATTEST:
                                                     BY: /s/ Richard P. Smith
                                                         President and Chief
                                                         Executive Officer
/s/ Kathleen Richardson
-----------------------

                                      -52-
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
                                                three months
                                               ended March 31,
(In thousands, except per share data)        2003           2002
                                           ----------------------
Weighted average number of common
    shares outstanding - basic              7,071          6,992

Add exercise of options reduced by
    the number of shares that could
    have been purchased with the
    proceeds of such exercise                 179            125
                                           ----------------------
Weighted average number of common
    shares outstanding - diluted            7,250          7,117
                                           ======================

Net income                                  $3,613         $3,329

Basic earnings per share                     $0.51          $0.48

Diluted earnings per share                   $0.50          $0.47

                                      -53-
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 March 31, 2003 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

A signed  original of this  written  statement  required by Section 906 has been
provided  to TriCo  Bancshares  and will be  retained  by TriCo  Bancshares  and
furnished to the Securities and Exchange Commission or its staff upon request.

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 March 31, 2003 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

A signed  original of this  written  statement  required by Section 906 has been
provided  to TriCo  Bancshares  and will be  retained  by TriCo  Bancshares  and
furnished to the Securities and Exchange Commission or its staff upon request.

                                      -54-