UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

For Quarterly Period Ended March 31,2008          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 a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer" and "large accelerated filer" in Rule 12b-2 of the Act (check one).

Large accelerated filer      Accelerated filer  X   Non-accelerated filer
                       -----                  -----                      -----

     Indicate  by check mark  whether  the  registrant  is a shell  company  (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 April 30, 2008:  15,744,950


<PAGE>


                                TABLE OF CONTENTS

                                                                           Page

Forward-Looking Statements                                                    1

PART I - FINANCIAL INFORMATION                                                2

        Item 1 - Financial Statements                                         2

        Notes to Unaudited Condensed Consolidated Financial Statements        6

        Financial Summary                                                    18

        Item 2 - Management's Discussion and Analysis of Financial           19
                 Condition and Results of Operations

        Item 3 - Quantitative and Qualitative Disclosures about Market Risk  28

        Item 4 - Controls and Procedures                                     29

PART II - OTHER INFORMATION                                                  30

        Item 1 - Legal Proceedings                                           30

        Item 1A - Risk Factors                                               30

        Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds 30

        Item 6 - Exhibits                                                    30

        Signatures                                                           33

        Exhibits                                                             34


<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,
it may mean the  Company  is  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.  The
reader is  directed  to the  Company's  annual  report on Form 10-K for the year
ended  December  31,  2007,  and Part II,  Item 1A of this  report  for  further
discussion of factors which could affect the Company's business and cause actual
results  to  differ  materially  from  those  suggested  by any  forward-looking
statement made in this report.  Such Form 10-K and this report should be read to
put any  forward-looking  statements  in  context  and to  gain a more  complete
understanding of the risks and uncertainties involved in the Company's business.
Any forward-looking statement may turn out to be wrong and cannot be guaranteed.
The Company does not intend to update any  forward-looking  statement  after the
date of this report.

                                       1

PAGE>

<PAGE>
<TABLE>
<CAPTION>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
                                TRICO BANCSHARES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  (In thousands, except share data; unaudited)

                                                                At March 31,             At December 31,
                                                            2008              2007            2007
                                                       -----------------------------    ----------------
     <S>                                                    <C>               <C>              <C>
     Assets:
     Cash and due from banks                              $74,713           $75,263          $88,798
     Federal funds sold                                         -                 -                -
                                                       -----------------------------    ----------------
         Cash and cash equivalents                         74,713            75,263           88,798
     Securities available-for-sale                        272,276           188,478          232,427
     Federal Home Loan Bank stock, at cost                  8,885             8,442            8,766
     Loans, net of allowance for loan losses
         of $19,383, $16,895 and $17,331                1,528,561         1,478,719        1,534,635
     Foreclosed assets, net of allowance for
         losses of $180                                       836               187              187
     Premises and equipment, net                           20,069            20,924           20,492
     Cash value of life insurance                          45,341            43,941           44,981
     Accrued interest receivable                            8,096             8,355            8,554
     Goodwill                                              15,519            15,519           15,519
     Other intangible assets, net                           1,053             1,543            1,176
     Other assets                                          24,001            24,950           25,086
                                                       -----------------------------    ----------------
         Total Assets                                  $1,999,350        $1,866,321       $1,980,621
                                                       =============================    ================
     Liabilities:
     Deposits:
         Noninterest-bearing demand                      $358,684          $364,401         $378,680
         Interest-bearing                               1,169,791         1,172,448        1,166,543
                                                       -----------------------------    ----------------
         Total deposits                                 1,528,475         1,536,849        1,545,223
     Federal funds purchased                              102,300            38,000           56,000
     Accrued interest payable                               6,201             7,602            7,871
     Reserve for unfunded commitments                       2,915             1,966            2,090
     Other liabilities                                     25,154            24,922           23,195
     Other borrowings                                     103,767            41,347          116,126
     Junior subordinated debt                              41,238            41,238           41,238
                                                        ----------------------------    ---------------
         Total Liabilities                              1,810,050         1,691,924        1,791,743
                                                        ----------------------------    ---------------
    Commitments and contingencies
    Shareholders' Equity:
    Common stock, no par value: 50,000,000 shares
         authorized; issued and outstanding:
         15,744,950 at March 31, 2008                      78,142
         15,910,291 at March 31, 2007                                        76,087
         15,911,550 at December 31, 2007                                                      78,775
    Retained earnings                                     111,133           102,298          111,655
    Accumulated other comprehensive income (loss), net         25            (3,988)          (1,552)
                                                       -----------------------------    ----------------
         Total Shareholders' Equity                       189,300           174,397          188,878
                                                       -----------------------------    ----------------
         Total Liabilities and Shareholders' Equity    $1,999,350        $1,866,321       $1,980,621
                                                       =============================    ================
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>

                                       2

<PAGE>


                                TRICO BANCSHARES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  (In thousands, except share data; unaudited)

                                                 Three months ended March 31,
                                                      2008           2007
                                                 ----------------------------
Interest and dividend income:
Loans, including fees                                $27,726       $28,423
Debt securities:
Taxable                                                2,959         1,719
Tax exempt                                               324           394
Dividends                                                119           122
Federal funds sold                                         2             3
                                                   -------------------------
Total interest income                                 31,130        30,661
                                                   -------------------------
Interest Expense:
Deposits                                               7,177         7,388
Federal funds purchased                                  812           522
Other borrowings                                       1,063           490
Junior subordinated debt                                 713           816
                                                   -------------------------
Total interest expense                                 9,765         9,216
Net interest income                                   21,365        21,445
                                                   -------------------------
Provision for loan losses                              4,100           482
                                                   -------------------------
Net interest income after provision for loan losses   17,265        20,963
                                                   -------------------------
Noninterest income:
Service charges and fees                                5,128         5,061
Gain on sale of loans                                     258           266
Commissions on sale of non-deposit investment products    420           500
Increase in cash value of life insurance                  360           405
Other                                                     684           368
                                                   -------------------------
Total noninterest income                                6,850         6,600
                                                   -------------------------
Noninterest expense:
Salaries and related benefits                           9,480         9,742
Other                                                   8,093         7,218
                                                   -------------------------
Total noninterest expense                              17,573        16,960
                                                   -------------------------
Income before income taxes                              6,542        10,603
                                                   -------------------------
Provision for income taxes                              2,494         4,159
                                                   -------------------------
Net income                                             $4,048        $6,444
                                                   =========================
Average shares outstanding                         15,842,085    15,878,929
Diluted average shares outstanding                 16,081,722    16,415,845

Per share data:
Basic earnings                                          $0.26         $0.41
Diluted earnings                                        $0.25         $0.39
Dividends paid                                          $0.13         $0.13

See accompanying notes to unaudited condensed consolidated financial statements.

                                       3

<PAGE>

<TABLE>
<CAPTION>
                                TRICO BANCSHARES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                  (In thousands, except share data; unaudited)

                                                                     Accumulated
                                    Shares of                            Other
                                    Common     Common    Retained   Comprehensive
                                     Stock      Stock    Earnings       Loss           Total
                                 --------------------------------------------------------------
<S>                                   <C>         <C>        <C>          <C>           <C>

Balance at December 31, 2006      15,857,207    $73,739    $100,218       ($4,521)   $169,436
Comprehensive income:                                                                --------
Net income                                                    6,444                     6,444
Change in net unrealized loss on
   Securities available for sale, net                                         533         533
                                                                                      --------
Total comprehensive income                                                               6,977
Stock option vesting                                175                                    175
Stock options exercised              170,600      1,867                                  1,867
Tax benefit of stock option exercise                852                                    852
Repurchase of common stock          (117,516)      (546)     (2,295)                    (2,841)
Dividends paid ($0.13 per share)                             (2,069)                    (2,069)
                                 --------------------------------------------------------------
Balance at March 31, 2007          15,910,291    $76,087   $102,298       ($3,988)    $174,397
                                 ==============================================================

Balance at December 31, 2007       15,911,550    $78,775   $111,655       ($1,552)    $188,878
Comprehensive income:                                                                 ---------
Net income                                                    4,048                      4,048
Change in net unrealized loss on
   Securities available for sale, net                                       1,577        1,577
                                                                                       --------
Total comprehensive income                                                               5,625
Cumulative effect of change in
   accounting principle, net of tax                            (522)                      (522)
Stock option vesting                                192                                    192
Repurchase of common stock           (166,600)     (825)     (1,996)                    (2,821)
Dividends paid ($0.13 per share)                             (2,052)                    (2,052)
                                 --------------------------------------------------------------
Balance at March 31, 2008          15,744,950   $78,142    $111,133           $25     $189,300
                                 ==============================================================

See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>

                                       4

<PAGE>
<TABLE>
<CAPTION>
                                TRICO BANCSHARES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands; unaudited)
                                                               For the three months ended March 31,
                                                                     2008               2007
                                                              --------------------------------------
<S>                                                                   <C>                <C>
Operating activities:
Net income                                                        $4,048               $6,444
Adjustments to reconcile net income to net cash provided
  by operating activities:
    Depreciation of premises and equipment, and amortization         869                  930
    Amortization of intangible assets                                123                 123
    Provision for loan losses                                      4,100                 482
    Amortization of investment securities premium, net                84                 200
    Originations of loans for resale                             (17,403)            (18,666)
    Proceeds from sale of loans originated for resale             17,484              18,737
    Gain on sale of loans                                          (258)               (266)
    Change in fair value of mortgage servicing rights                340                  12
    Loss on sale of fixed assets                                       2                   5
    Increase in cash value of life insurance                        (360)               (405)
    Stock option expense                                             192                 175
    Change in:
      Interest receivable                                            458                 372
      Interest payable                                            (1,670)                 54
      Other assets and liabilities, net                            2,815               4,074
                                                              ---------------------------------
        Net cash provided by operating activities                 10,824              12,271
                                                              ---------------------------------
Investing activities:
Proceeds from maturities of securities available-for-sale         13,007              10,604
Purchases of securities available-for-sale                       (50,219)                  -
Purchase of Federal Home Loan Bank stock                            (119)               (122)
Loan originations and principal collections, net                   1,325              13,577
Proceeds from sale of premises and equipment                           1                  11
Purchases of premises and equipment                               (1,224)               (856)
                                                              ---------------------------------
        Net cash (used) provided by investing activities         (37,229)            23,214
                                                              ---------------------------------
Financing activities:
Net (decrease) increase in deposits                              (16,748)            (62,300)
Net increase in federal funds purchased                           46,300                   -
Payments of principal on long-term other borrowings                  (20)                (18)
Net (decrease) increase in short-term other borrowings           (12,339)              1,454
Repurchase of Common Stock                                        (2,821)               (470)
Dividends paid                                                    (2,052)             (2,069)
Exercise of stock options                                              -                 167
                                                              ---------------------------------
        Net cash provided (used) by financing activities          12,320             (63,236)
                                                              ---------------------------------
Net decrease in cash and cash equivalents                        (14,085)            (27,751)
                                                              ---------------------------------
Cash and cash equivalents at beginning of period                  88,798             103,014
                                                              ---------------------------------
Cash and cash equivalents at end of period                       $74,713             $75,263
                                                              ---------------------------------
Supplemental disclosure of noncash activities:
Loans transferred to other real estate owned                        $649                $187
Unrealized net gain on securities available for sale              $2,721                $921
Value of shares tendered in lieu of cash paid to
  exercise stock options and to pay related tax withholding            -              $2,371
Supplemental disclosure of cash flow activity:
Cash paid for interest expense                                   $11,435              $9,162
Cash paid for income taxes                                             -                   -
Income tax benefit from stock option exercises                         -                $852

See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>

                                       5

<PAGE>

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: General Summary of Significant Accounting Policies
The accompanying unaudited condensed 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 periods  presented.  The interim results for the three month periods
ended  March 31,  2008 and 2007 are not  necessarily  indicative  of the results
expected for the full year.  These unaudited  condensed  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, 2007.

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 32 branch  offices and 25 in-store  branch  offices in the
California  counties of Butte,  Contra Costa, Del Norte,  Fresno,  Glenn,  Kern,
Lake, Lassen,  Madera,  Mendocino,  Merced,  Napa, Nevada,  Placer,  Sacramento,
Shasta,  Siskiyou,  Stanislaus,  Sutter,  Tehama,  Tulare,  Yolo 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 allowance for loan losses, goodwill and other intangible assets,
income  taxes,  and the  valuation of mortgage  servicing  rights,  are the only
accounting estimates that materially affect the Company's consolidated financial
statements.

Reclassifications
Certain amounts previously  reported in the 2007 financial  statements have been
reclassified to conform to the 2008 presentation.  These  reclassifications  did
not affect previously reported net income or total shareholders' equity.

Significant Group Concentration of Credit Risk
The Company grants agribusiness,  commercial, consumer, and residential loans to
customers  located  throughout the northern San Joaquin  Valley,  the Sacramento
Valley  and  northern  mountain  regions  of  California.   The  Company  has  a
diversified  loan  portfolio  within  the  business  segments  located  in  this
geographical area.

Cash and Cash Equivalents
For  purposes  of the  consolidated  statements  of cash  flows,  cash  and cash
equivalents include cash on hand, amounts due from banks and federal funds sold.

                                       6

<PAGE>

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 which 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, 2008, and  throughout  2007, 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  accumulated  comprehensive  income
(loss) 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 an other than temporary decline in value has occurred.

Federal Home Loan Bank Stock
The Bank is a member of the Federal  Home Loan Bank of San  Francisco  ("FHLB"),
and as a condition of membership,  it is required to purchase stock.  The amount
of FHLB  stock  required  to be  purchased  is based on the  borrowing  capacity
desired by the Bank. While technically  these are considered equity  securities,
there is no market for the FHLB stock.  Therefore,  the shares are considered as
restricted investment securities. Such investment is carried at cost.

Loans Held for Sale
Loans  originated  and intended for sale in the secondary  market are carried at
the  lower  of  aggregate  cost  or  fair  value,  as  determined  by  aggregate
outstanding  commitments from investors of current investor yield  requirements.
Net unrealized losses are recognized through a valuation allowance by charges to
income. At March 31, 2008 and 2007, and December 31, 2007, the Company's balance
of loans held for sale was immaterial.

Mortgage  loans held for sale are  generally  sold with the  mortgage  servicing
rights  retained by the Company.  The carrying  value of mortgage  loans sold is
reduced by the cost allocated to the associated mortgage servicing rights. Gains
or losses on sales of  mortgage  loans are  recognized  based on the  difference
between the selling price and the carrying  value of the related  mortgage loans
sold.

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 be  classified  as  accrual.  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.
All impaired loans are classified as nonaccrual loans.

                                       7

<PAGE>

 Allowance for Loan Losses
The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans and deposit related overdrafts 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  and  leases,   based  on  evaluations  of  the  collectibility,
impairment and prior loss experience of loans and leases.  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, 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.

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.

The Company's method for assessing the appropriateness of the allowance for loan
losses and the reserve for unfunded commitments includes specific allowances for
identified  problem  loans and leases,  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  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  audited
consolidated financial statements in its Annual Report on Form 10-K for the year
ended December 31, 2007.

Based on the current conditions of the loan portfolio,  Management believes that
the  allowance for loan losses and the reserve for unfunded  commitments,  which
collectively  stand at  $22,298,000  at March 31,  2008,  are 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.

                                       8

<PAGE>

The  following  tables  summarize the activity in the allowance for loan losses,
reserve for unfunded  commitments,  and allowance for losses (which is comprised
of the allowance for loan losses and the reserve for unfunded  commitments)  for
the periods indicated (dollars in thousands):

                                        Three months ended March 31,
                                        ----------------------------
                                             2008          2007
                                        ----------------------------
     Allowance for loan losses:
     Balance at beginning of period         $17,331       $16,914
     Provision for loan losses                4,100           482
     Loans charged off:
       Real estate mortgage:
         Residential                            (54)            -
         Commercial                             (19)            -
       Consumer:
         Home equity lines                     (159)         (141)
         Home equity loans                      (89)            -
         Auto indirect                         (549)         (251)
         Other consumer                        (302)         (240)
       Commercial                              (135)         (107)
       Construction:
         Residential                         (1,078)            -
         Commercial                               -             -
                                        ----------------------------
     Total loans charged off                 (2,385)         (739)
     Recoveries of previously
       charged-off loans:
       Real estate mortgage:
         Residential                              -             -
         Commercial                              14            13
       Consumer:
         Home equity lines                        -             -
         Home equity loans                        -             -
         Auto indirect                          122            48
         Other consumer                         193           161
       Commercial                                 8            16
       Construction:
         Residential                              -             -
         Commercial                               -             -
                                        ----------------------------
     Total recoveries of
       previously charged off loans             337           238
                                        ----------------------------
         Net charge-offs                     (2,048)         (501)
                                        ----------------------------
     Balance at end of period               $19,383       $16,895
                                        ============================

     Reserve for unfunded commitments:
     Balance at beginning of period          $2,090        $1,849
     Provision for losses -
       unfunded commitments                     825           117
                                        ----------------------------
     Balance at end of period                $2,915        $1,966
                                        ============================

     Balance at end of period:
     Allowance for loan losses              $19,383       $16,895
     Reserve for unfunded commitments         2,915         1,966
                                        ----------------------------
     Allowance for losses                   $22,298       $18,861
                                        ============================
     As a percentage of total loans:
     Allowance for loan losses                  1.25%        1.13%
     Reserve for unfunded commitments           0.19%        0.13%
                                        ----------------------------
     Allowance for losses                       1.44%        1.26%
                                        ============================

                                       9

<PAGE>

Reserve for Unfunded Commitments
The reserve for unfunded  commitments  is  established  through a provision  for
losses - unfunded  commitments charged to noninterest  expense.  The reserve for
unfunded  commitments is an amount that Management  believes will be adequate to
absorb  probable  losses  inherent in  existing  commitments,  including  unused
portions of  revolving  lines of credits  and other  loans,  standby  letters of
credits,  and unused  deposit  account  overdraft  privilege.  The  reserve  for
unfunded  commitments is based on evaluations of the  collectibility,  and prior
loss experience of unfunded commitments. The evaluations take into consideration
such  factors as changes in the nature and size of the loan  portfolio,  overall
loan portfolio quality, loan concentrations,  specific problem loans and related
unfunded  commitments,  and  current  economic  conditions  that may  affect the
borrower's or depositor's ability to pay.

Mortgage Servicing Rights
Mortgage  servicing  rights (MSRs)  represent  the  Company's  right to a future
stream of cash flows based upon the  contractual  servicing fee associated  with
servicing mortgage loans. Our MSRs arise from residential mortgage loans that we
originate  and sell,  but retain the right to  service  the loans.  For sales of
residential  mortgage  loans, a portion of the cost of  originating  the loan is
allocated  to the  servicing  right  based  on fair  values  of the loan and the
servicing  right.  The net gain from the  retention  of the  servicing  right is
included in gain on sale of loans in  noninterest  income when the loan is sold.
Fair  value  is  based  on  market  prices  for  comparable  mortgage  servicing
contracts, when available, or alternatively,  is based on a valuation model that
calculates  the present  value of estimated  future net  servicing  income.  The
valuation model incorporates  assumptions that market  participants would use in
estimating  future  net  servicing  income,  such as the  cost to  service,  the
discount rate, the custodial earnings rate, an inflation rate, ancillary income,
prepayment  speeds and  default  rates and  losses.  MSRs are  included in other
assets.  Servicing fees are recorded in noninterest income when earned. MSRs are
carried at fair value, with changes in fair value reported in noninterest income
in the period in which the change occurs.

The determination of fair value of our MSRs requires management judgment because
they are not actively traded.  The determination of fair value for MSRs requires
valuation  processes  which combine the use of  discounted  cash flow models and
extensive  analysis  of current  market  data to arrive at an  estimate  of fair
value. The cash flow and prepayment assumptions used in our discounted cash flow
model are based on empirical data drawn from the  historical  performance of our
MSRs,   which  we  believe  are  consistent  with  assumptions  used  by  market
participants  valuing similar MSRs, and from data obtained on the performance of
similar MSRs. The key assumptions used in the valuation of MSRs include mortgage
prepayment  speeds and the discount  rate.  These  variables  can, and generally
will, change from quarter to quarter as market conditions and projected interest
rates change.  The key risks inherent with MSRs are prepayment speed and changes
in discount rates.

The following tables summarize the activity in, and the main assumptions we used
to  determine  the fair  value of  mortgage  servicing  rights  for the  periods
indicated (dollars in thousands):

                                        Three months ended March 31,
                                        ----------------------------
                                               2008         2007
                                        ----------------------------
Mortgage servicing rights:
Balance at beginning of period               $4,088        $3,912
Additions                                       177           195
Change in fair value                           (340)          (12)
                                        ----------------------------
Balance at end of period                     $3,925        $4,095
                                        ============================
Servicing fees received                        $253          $243
Balance of loans serviced at:
     Beginning of period                   $406,743      $389,636
     End of period                         $407,246      $393,594
Weighted-average prepayment speed (CPR)        14.1%         11.2%
Discount rate                                  10.0%         10.0%

                                       10

<PAGE>

Off-Balance Sheet Credit Related Financial Instruments
In the ordinary course of business,  the Company has entered into commitments to
extend credit, including commitments under credit card arrangements,  commercial
letters of credit, and standby letters of credit. Such financial instruments are
recorded when they are funded.

Premises and Equipment
Land is carried at cost. Buildings and equipment, including those acquired under
capital  lease,   are  stated  at  cost  less   accumulated   depreciation   and
amortization.  Depreciation  and  amortization  expenses are computed  using the
straight-line  method over the estimated  useful lives of the related  assets or
lease terms.  Asset lives range from 3-10 years for  furniture and equipment and
15-40 years for land improvements and buildings.

Foreclosed Assets
Assets acquired  through,  or in lieu of, loan foreclosure are held for sale and
are initially recorded at fair value at the date of foreclosure,  establishing a
new cost basis.  Subsequent to  foreclosure,  management  periodically  performs
valuations  and the assets are carried at the lower of  carrying  amount or fair
value less cost to sell. Revenue and expenses from operations and changes in the
valuation allowance are included in other noninterest expense.

Goodwill and Other Intangible Assets
Goodwill  represents the excess of costs over fair value of assets of businesses
acquired.  Goodwill and other intangible  assets acquired in a purchase business
combination and determined to have an indefinite  useful life are not amortized,
but instead  tested for  impairment at least  annually.  Intangible  assets with
estimable  useful lives are amortized  over their  respective  estimated  useful
lives to their estimated residual values, and reviewed for impairment.

The  Company has  identifiable  intangible  assets  consisting  of core  deposit
premiums and minimum  pension  liability.  Core deposit  premiums are  amortized
using an  accelerated  method  over a period  of ten  years.  Intangible  assets
related to minimum pension  liability are adjusted annually based upon actuarial
estimates.

The following table summarizes the Company's goodwill intangible as of March 31,
2008 and December 31, 2007.

                         December 31,                                  March 31,
                             2007       Additions     Reductions         2008
   (Dollar in Thousands) -------------------------------------------------------
   Goodwill                 $15,519         -              -            $15,519
                         =======================================================

The following  table  summarizes  the Company's  core deposit  intangibles as of
March 31, 2008 and December 31, 2007.

                          December 31,                                 March 31,
                             2007       Additions     Reductions         2008
   (Dollar in Thousands   ------------------------------------------------------
   Core deposit intangibles  $3,365          -                -          $3,365
   Accumulated amortization  (2,189)         -             ($123)        (2,312)
                           -----------------------------------------------------
   Core deposit intangibles, $1,176          -             ($123)        $1,053
     net                   =====================================================

Core deposit  intangibles are amortized over their expected  useful lives.  Such
lives are  periodically  reassessed  to  determine  if any  amortization  period
adjustments  are  indicated.   The  following  table  summarizes  the  Company's
estimated core deposit  intangible  amortization for each of the five succeeding
years:

                                              Estimated Core Deposit
                                              Intangible Amortization
                Years Ended                    (Dollar in thousands)
                -----------                   -----------------------
                   2008                                 $523
                   2009                                 $328
                   2010                                 $260
                   2011                                  $65
                Thereafter                                 -

                                       11

<PAGE>

Impairment of Long-Lived Assets and Goodwill
Long-lived  assets,  such as premises and equipment,  and purchased  intangibles
subject to amortization,  are reviewed for impairment whenever events or changes
in  circumstances  indicate  that the  carrying  amount  of an asset  may not be
recoverable.  Recoverability  of  assets  to be held and used is  measured  by a
comparison of the carrying amount of an asset to estimated  undiscounted  future
cash flows expected to be generated by the asset.  If the carrying  amount of an
asset  exceeds  its  estimated  future  cash  flows,  an  impairment  charge  is
recognized  by the amount by which the carrying  amount of the asset exceeds the
fair value of the asset. Assets to be disposed of would be separately  presented
in the balance  sheet and reported at the lower of the  carrying  amount or fair
value  less  costs  to sell,  and are no  longer  depreciated.  The  assets  and
liabilities of a disposed  group  classified as held for sale would be presented
separately in the appropriate asset and liability sections of the balance sheet.

On December 31 of each year,  goodwill is tested for  impairment,  and is tested
for impairment  more  frequently if events and  circumstances  indicate that the
asset might be impaired. An impairment loss is recognized to the extent that the
carrying amount exceeds the asset's fair value.  This  determination  is made at
the  reporting  unit  level  and  consists  of two  steps.  First,  the  Company
determines  the fair value of a reporting  unit and  compares it to its carrying
amount.  Second,  if the  carrying  amount of a reporting  unit exceeds its fair
value, an impairment loss is recognized for any excess of the carrying amount of
the reporting unit's goodwill over the implied fair value of that goodwill.  The
implied fair value of goodwill is determined by allocating the fair value of the
reporting unit in a manner similar to a purchase price allocation.  The residual
fair value after this allocation is the implied fair value of the reporting unit
goodwill.

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.

Stock-Based Compensation
The following table shows the number, weighted-average exercise price, intrinsic
value,  weighted average remaining  contractual life,  average remaining vesting
period,  and remaining  compensation  cost to be  recognized  over the remaining
vesting period of options  exercisable,  options not yet exercisable,  and total
options outstanding as of March 31, 2008:
<TABLE>
<CAPTION>

                                                      Currently     Currently Not     Total
(dollars in thousands except exercise price)         Exercisable     Exercisable   Outstanding
<S>                                                      <C>             <C>           <C>
(dollars in thousands except exercise price)
Number of options                                    1,079,131        292,050       1,371,181
Weighted average exercise price                         $12.70         $22.15          $14.71
Intrinsic value                                         $4,972              -          $4,972
Weighted average remaining contractual term (yrs.)        2.78           8.96            4.10
</TABLE>

The options for 292,050  shares that are not currently  exercisable  as of March
31, 2008 are expected to vest, on a  weighted-average  basis, over the next 3.09
years, and the Company is expected to recognize $1,709,000 of compensation costs
related to these options as they vest.

Earnings Per Share
Basic  earnings per share  represents  income  available to common  shareholders
divided by the  weighted-average  number of common shares outstanding during the
period.  Diluted earnings per share reflects additional common shares that would
have been outstanding if dilutive  potential  common shares had been issued,  as
well as any  adjustments  to income  that would  result from  assumed  issuance.
Potential  common  shares that may be issued by the Company  relate  solely from
outstanding stock options, and are determined using the treasury stock method.

                                       12

<PAGE>

Earnings per share have been computed based on the following:

                                                 Three months ended March 31,
                                                     2008             2007
(in thousands)                                   ----------------------------
Net income                                           $4,048           $6,444
Average number of common shares outstanding          15,842           15,879
Effect of dilutive stock options                        240              537
                                                 ----------------------------
Average number of common shares outstanding
   used to calculate diluted earnings per share      16,082           16,416
                                                 ============================

There were 424,050 and 42,000 options  excluded from the  computation of diluted
earnings  per share for the three month  periods  ended March 31, 2008 and 2007,
respectively, because the effect of these options was antidilutive.

Comprehensive Income
Accounting principles generally require that recognized revenue, expenses, gains
and losses be  included in net income.  Although  certain  changes in assets and
liabilities,   such  as  unrealized  gains  and  losses  on   available-for-sale
securities,  are reported as a separate  component of the equity  section of the
balance  sheet,   such  items,   along  with  net  income,   are  components  of
comprehensive income.

The components of other comprehensive  income (loss) and related tax effects are
as follows:
                                              Three months ended March 31,
                                                2008                 2007
(in thousands)                                ----------------------------
Unrealized holding gains (losses) on
  available-for-sale securities                 $2,721               $921
Tax effect                                      (1,144)              (388)
                                              ----------------------------
    Unrealized holding gains (losses) on
    available-for-sale securities, net of tax   $1,577               $533
                                              ============================

The   components  of  accumulated   other   comprehensive   loss,   included  in
shareholders' equity, are as follows:
                                                        March 31,   December 31,
                                                          2008           2007
(in thousands)                                         -------------------------
Net unrealized gains on available-for-sale securities   $4,013          $1,292
Tax effect                                              (1,687)           (543)
                                                       -------------------------
    Unrealized holding gains on
    available-for-sale securities, net of tax            2,326             749
                                                       -------------------------
Minimum pension liability                               (3,970)         (3,970)
Tax effect                                               1,669           1,669
                                                       -------------------------
   Minimum pension liability, net of tax                (2,301)         (2,301)
                                                       -------------------------
Accumulated other comprehensive loss                       $25         ($1,552)
                                                       =========================
Retirement Plans
The Company has  supplemental  retirement plans for current and former directors
and key executives.  These plans are non-qualified defined benefit plans and are
unsecured and unfunded.  The Company has purchased insurance on the lives of the
participants  and  intends to use the cash  values of these  policies to pay the
retirement obligations.

                                       13

<PAGE>

The following table sets forth the net periodic benefit cost recognized for the
plans:

                                                    Three months ended March 31,
                                                         2008            2007
 (in thousands)                                     ----------------------------
Net pension cost included the following components:
Service cost-benefits earned during the period           $139            $150
Interest cost on projected benefit obligation             166             146
Amortization of net obligation at transition                -               -
Amortization of prior service cost                         45              45
Recognized net actuarial loss                              37              28
                                                    ----------------------------
Net periodic pension cost                                $387            $369
                                                    ============================

During the three months ended March 31, 2008 and 2007,  the Company  contributed
and paid out as benefits  $161,000 and $149,000,  respectively,  to participants
under the plans.  For the year ending  December 31, 2008, the Company expects to
contribute and pay out as benefits $587,000 to participants under the plans.

Fair Value Measurement

The Company utilizes fair value measurements to record fair value adjustments to
certain  assets  and  liabilities  and  to  determine  fair  value  disclosures.
Securities available-for-sale and mortgage servicing rights are recorded at fair
value on a recurring basis. Additionally,  from time to time, the Company may be
required to record at fair value other assets on a nonrecurring  basis,  such as
loans held for sale,  loans held for investment and certain other assets.  These
nonrecurring  fair value adjustments  typically involve  application of lower of
cost or market accounting or impairment write-downs of individual assets.

The Company groups assets and  liabilities at fair value in three levels,  based
on the  markets  in  which  the  assets  and  liabilities  are  traded  and  the
reliability of the assumptions used to determine fair value. These levels are:

Level 1 - Valuation is based upon quoted prices for identical instruments traded
          in active markets
Level 2 - Valuation  is based upon  quoted  prices for  similar  instruments  in
          active markets,  quoted prices for identical or similar instruments in
          markets that are not active, and model-based  valuation techniques for
          which all significant assumptions are observable in the market.

Level 3 - Valuation is generated from  model-based  techniques that use at least
          one  significant  assumption  not  observable  in  the  market.  These
          unobservable  assumptions reflect estimates of assumptions that market
          participants  would use in pricing the asset or  liability.  Valuation
          techniques include use of option pricing models,  discounted cash flow
          models and similar techniques.

Securities  available-for-sale  are recorded at fair value on a recurring basis.
Fair value  measurement  is based upon quoted  prices,  if available.  If quoted
prices are not  available,  fair values are measured using  independent  pricing
models or other  model-based  valuation  techniques such as the present value of
future  cash  flows,  adjusted  for the  security's  credit  rating,  prepayment
assumptions  and  other  factors  such  as  credit  loss  assumptions.  Level  1
securities  include  those  traded on an active  exchange,  such as the New York
Stock Exchange,  U.S. Treasury  securities that are traded by dealers or brokers
in active  over-the-counter  markets and money market funds.  Level 2 securities
include  mortgage-backed  securities  issued by government  sponsored  entities,
municipal bonds and corporate debt securities.  Securities classified as Level 3
include asset-backed securities in less liquid markets.

The Company does not record loans at fair value on a recurring  basis.  However,
from time to time,  a loan is  considered  impaired  and an  allowance  for loan
losses is  established.  Loans for which it is probable that payment of interest
and principal will not be made in accordance with the  contractual  terms of the
loan  agreement  are  considered   impaired.   Once  a  loan  is  identified  as
individually  impaired,  management  measures impairment in accordance with SFAS
114, Accounting by Creditors for Impairment of a Loan (SFAS 114). The fair value
of  impaired  loans  is  estimated  using  one  of  several  methods,  including
collateral value,  market value of similar debt,  enterprise value,  liquidation
value and discounted cash flows. Those impaired loans not requiring an allowance
represent  loans  for  which  the  fair  value  of the  expected  repayments  or
collateral  exceed the recorded  investments  in such loans.  At March 31, 2008,
substantially  all of the total impaired loans were evaluated  based on the fair
value of the collateral.  In accordance  with SFAS 157,  impaired loans where an
allowance  is  established  based  on  the  fair  value  of  collateral  require
classification  in  the  fair  value  hierarchy.  When  the  fair  value  of the
collateral is based on an observable  market price or a current  appraised value
which  uses   observable   data,  the  Company  records  the  impaired  loan  as
nonrecurring  Level 2. When an appraised  value is not  available or  management
determines  the fair  value of the  collateral  is  further  impaired  below the
appraised value, or the appraised value contains a significant  assumption,  and
there is no observable  market price,  the Company  records the impaired loan as
nonrecurring Level 3.

                                       14

<PAGE>

Mortgage  servicing rights are carried at fair value. A valuation  model,  which
utilizes a discounted  cash flow analysis  using a discount rate and  prepayment
speed assumptions  currently quoted for comparable  instruments,  is used in the
completion  of the fair  value  measurement.  As such,  the  Company  classifies
mortgage servicing rights subjected to recurring fair value adjustments as Level
2.

Goodwill and identified  intangible assets are subject to impairment  testing. A
projected  cash flow  valuation  method is used in the  completion of impairment
testing.  This  valuation  method  requires a  significant  degree of management
judgment as there are  unobservable  inputs for these  assets.  In the event the
projected  undiscounted  net  operating  cash  flows are less than the  carrying
value, the asset is recorded at fair value as determined by the valuation model.
As such, the Company  classifies  goodwill and other intangible assets subjected
to nonrecurring fair value adjustments as Level 3.

The table below presents the recorded amount of assets and liabilities  measured
at fair value on a recurring basis:

Fair value at March 31, 2008              Total    Level 1    Level 2    Level 3
Securities available-for-sale           $272,276         -    $272,276        -
Mortgage servicing rights                  3,925         -      $3,925        -
                                        ----------------------------------------
Total assets measured at fair value     $276,201         -    $276,201        -
                                        ========================================

The table below presents the recorded amount of assets and liabilities measured
at fair value on a nonrecurring basis:

Fair value at March 31, 2008              Total    Level 1    Level 2    Level 3
Impaired loans                           $12,956         -         -     $12,956
                                        ----------------------------------------
Total assets measured at fair value      $12,956         -         -     $12,956
                                        ========================================

Recent Accounting Pronouncements
In February 2006, the Financial  Accounting  Standards  Board (FASB) issued FASB
Statement of Financial  Accounting  Standards  No. 155,  Accounting  for Certain
Hybrid  Financial  Instruments  an amendment of FASB  Statements No. 133 and 140
(SFAS 155). SFAS 155 amends SFAS 133, Accounting for Derivative  Instruments and
Hedging  Activities  and SFAS 140,  Accounting  for  Transfers  and Servicing of
Financial Assets and  Extinguishments of Liabilities.  SFAS 155 (i) permits fair
value  remeasurement  for any  hybrid  financial  instrument  that  contains  an
embedded  derivative  that otherwise would require  bifurcation,  (ii) clarifies
which  interest-only  strips and  principal-only  strips are not  subject to the
requirements of SFAS 133, (iii) establishes a requirement to evaluate  interests
in securitized  financial  assets to identify  interests  that are  freestanding
derivatives or that are hybrid  financial  instruments  that contain an embedded
derivative requiring  bifurcation,  (iv) clarifies that concentrations of credit
risk in the form of subordination are not embedded  derivatives,  and (v) amends
SFAS 140 to eliminate the  prohibition  on a qualifying  special  purpose entity
from holding a derivative  financial  instrument  that  pertains to a beneficial
interest  other  than  another  derivative  financial  instrument.  SFAS  155 is
effective  for the  Company on  January  1, 2007 and did not have a  significant
impact on the Company's consolidated financial statements.

                                       15

<PAGE>

In  September  2006,  the FASB issued FASB  Statement  of  Financial  Accounting
Standards No. 157,  Fair Value  Measurements  (SFAS 157).  SFAS 157 defines fair
value,  establishes a framework for measuring  fair value in generally  accepted
accounting  principles,  and expands  disclosures about fair value measurements.
SFAS 157 was  effective  for the  Company  on January 1, 2008 and did not have a
significant impact on the Company's consolidated financial statements.

In  September  2006,  the FASB issued FASB  Statement  of  Financial  Accounting
Standards No. 158,  Employers'  Accounting for Defined Benefit Pension and Other
Postretirement Plans, an amendment of FASB Statements No. 87, 88 106, and 132(R)
(SFAS  158).  SFAS 158  requires  an employer to  recognize  the  overfunded  or
underfunded  status of  defined  benefit  postretirement  plans as an asset or a
liability in its statement of financial position.  The funded status is measured
as the difference  between plan assets at fair value and the benefit  obligation
(the projected benefit  obligation for pension plans or the accumulated  benefit
obligation for other postretirement benefit plans). An employer is also required
to measure the funded status of a plan as of the date of its year-end  statement
of financial  position  with  changes in the funded  status  recognized  through
comprehensive  income. SFAS 158 also requires certain disclosures  regarding the
effects on net  periodic  benefit  cost for the next fiscal year that arise from
delayed recognition of gains or losses,  prior service costs or credits, and the
transition asset or obligation. The Company was required to recognize the funded
status of its defined benefit  post-retirement benefit plans in its consolidated
financial  statements  for the year ended  December  31,  2006.  The Company had
previously   recognized   the  funded  status  of  its  Executive  and  Director
Supplemental  Retirement plans in prior consolidated  financial statements.  The
Company  has  no  other  defined  benefit  post-retirement  benefit  plans.  The
requirement to measure plan assets and benefit obligations as of the date of the
year-end  statement  of  financial  position  is  effective  for  the  Company's
consolidated  financial  statements  beginning  with the fiscal year ended after
December 15, 2008.  The Company  currently  uses December 31 as the  measurement
date for its defined benefit post-retirement benefit plans.

In February  2007,  the FASB  issued  FASB  Statement  of  Financial  Accounting
Standards  No. 159, The Fair Value  Option for  Financial  Assets and  Financial
Liabilities - Including an amendment to FASB Statement No. 115 (SFAS 159).  SFAS
159 permits entities to choose to measure many financial instruments and certain
other items at fair value.  The objective is to improve  financial  reporting by
providing  entities  with the  opportunity  to mitigate  volatility  in reported
earnings caused by measuring related assets and liabilities  differently without
having to apply complex hedge accounting provisions.  SFAS 159 was effective for
the  Company  on January  1, 2008 and did not have a  significant  impact on the
Company's consolidated financial statements.

In June  2006,  the FASB  issued  FASB  Interpretation  No. 48,  Accounting  for
Uncertainty in Income Taxes, an  interpretation  of FASB Statement 109 (FIN 48).
FIN 48  prescribes a recognition  threshold and a measurement  attribute for the
financial  statement  recognition  and  measurement  of a tax position  taken or
expected  to be taken in a tax return.  Benefits  from tax  positions  should be
recognized in the financial statements only when it is more likely than not that
the tax position will be sustained upon  examination by the  appropriate  taxing
authority  that would have full  knowledge  of all relevant  information.  A tax
position that meets the  more-likely-than-not  recognition threshold is measured
at the largest  amount of benefit that is greater than fifty  percent  likely of
being realized upon ultimate settlement. Tax positions that previously failed to
meet the more-likely-than-not  recognition threshold should be recognized in the
first  subsequent  financial  reporting  period in which that  threshold is met.
Previously recognized tax positions that no longer meet the more-likely-than-not
recognition  threshold should be derecognized in the first subsequent  financial
reporting  period in which that threshold is no longer met. FIN 48 also provides
guidance on the  accounting  for and  disclosure of  unrecognized  tax benefits,
interest and penalties.  FIN 48 was effective for the Company on January 1, 2007
and did not have a significant  impact on the Company's  consolidated  financial
statements.

FASB  Emerging  Issues  Task Force  ("EITF")  Issue No.  06-4,  "Accounting  for
Deferred  Compensation and  Postretirement  Benefit Aspects of Endorsement Split
Dollar Life  Insurance  Arrangements."  EITF 06-4 requires the  recognition of a
liability  and  related  compensation  expense  for bank  owned  life  insurance
policies with joint beneficiary agreements that provide a benefit to an employee
that  extends  to  post-retirement  periods.  Under EITF  06-4,  life  insurance
policies purchased for the purpose of providing such benefits do not effectively
settle an entity's  obligation  to the  employee.  Accordingly,  the entity must
recognize a liability and related  compensation  expense  during the  employee's
active  service  period  based on the future  cost of  insurance  to be incurred
during the  employee's  retirement.  If the  entity  has  agreed to provide  the
employee with a death  benefit,  then the liability for the future death benefit
should  be  recognized  by  following  the  guidance  in SFAS  106,  "Employer's
Accounting for Postretirement Benefits Other Than Pensions." The Company adopted
EITF 06-4  effective as of January 1, 2008 as a change in  accounting  principle
through a  cumulative-effect  adjustment to retained earnings of $522,000 net of
tax.

                                       16

<PAGE>

In November 2007, the SEC issued Staff Accounting Bulletin No. 109, Written Loan
Commitments  Recorded at Fair Value through Earnings (SAB 109). SAB 109 provides
guidance on the accounting for written loan  commitments  recorded at fair value
under generally accepted  accounting  principles (GAAP).  Specifically,  the SAB
revises  the  Staff's  views on  incorporating  expected  net future  cash flows
related to loan servicing  activities in the fair value measurement of a written
loan commitment.  SAB 109, which  supersedes SAB 105,  Application of Accounting
Principles  to Loan  Commitments,  requires  the  expected net future cash flows
related to the associated  servicing of the loan be included in the  measurement
of all written loan  commitments  that are  accounted  for at fair value through
earnings. SAB 109 was effective on January 1, 2008 for the Company.  Adoption of
SAB 109 did not a material impact on the Company's financial statements.

                                       17

<PAGE>

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

                                                           (Unaudited)
                                                       Three months ended
                                                            March 31,
                                                   ----------------------------
                                                     2008              2007
                                                   ----------------------------
Net Interest Income (FTE)                           $21,546          $21,666
Provision for loan losses                            (4,100)            (482)
Noninterest income                                    6,850            6,600
Noninterest expense                                 (17,573)         (16,960)
Provision for income taxes (FTE)                     (2,675)          (4,380)
                                                   ----------------------------
Net income                                           $4,048           $6,444
                                                   ============================

Earnings per share:
     Basic                                             $0.26           $0.41
     Diluted                                           $0.25           $0.39
Per share:
     Dividends paid                                    $0.13           $0.13
     Book value at period end                          12.02           10.96
     Tangible book value at period end                 10.97            9.89

Average common shares outstanding                      15,842         15,879
Average diluted common shares outstanding              16,082         16,416
Shares outstanding at period end                       15,745         15,910
At period end:
     Loans, net                                    $1,528,561     $1,478,719
     Total assets                                   1,999,350      1,866,321
     Total deposits                                 1,528,475      1,536,849
     Federal funds purchased                          102,300         38,000
     Other borrowings                                 103,767         41,347
     Junior subordinated debt                          41,238         41,238
     Shareholders' equity                             189,300        174,397

Financial Ratios:
During the period (annualized):
     Return on assets                                  0.81%           1.38%
     Return on equity                                  8.37%          14.79%
     Net interest margin(1)                            4.74%           5.12%
     Net loan charge-offs to average loans             0.53%           0.13%
     Efficiency ratio(1)                              61.89%          60.00%
     Average equity to average assets                  9.73%           9.34%
At period end:
     Equity to assets                                  9.47%           9.34%
     Total capital to risk-adjusted assets            12.02%          11.76%
     Allowance for losses to loans(2)                  1.44%           1.26%

(1) Fully taxable equivalent (FTE)
(2) Allowance  for losses  includes  allowance  for loan losses and reserve for
     unfunded commitments.

                                       18

<PAGE>

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

As TriCo  Bancshares (the  "Company") has not commenced any business  operations
independent of Tri Counties Bank (the "Bank"), the following discussion pertains
primarily  to the  Bank.  Average  balances,  including  such  balances  used in
calculating  certain financial ratios, are generally  comprised of average daily
balances  for the  Company.  Within  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations,  interest income and net interest
income are  generally  presented  on a fully  tax-equivalent  (FTE)  basis.  The
presentation  of  interest  income and net  interest  income on a FTE basis is a
common  practice within the banking  industry.  Interest income and net interest
income  are  shown on a  non-FTE  basis in the  Part I -  Financial  Information
section  of  this  Form  10-Q,  and a  reconciliation  of the  FTE  and  non-FTE
presentations is provided below in the discussion of net interest income.

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  Condensed  Consolidated  Financial  Statements  of the Company and the
Notes thereto located at Item 1 of this report.

The Company had quarterly  earnings of  $4,048,000,  or $0.25 per diluted share,
for the three  months  ended  March 31,  2008.  This  represents  a decrease  of
$2,396,000  (37.2%) when compared  with  earnings of $6,444,000  for the quarter
ended March 31, 2007. Diluted earnings per share for the quarter ended March 31,
2008 decreased  35.9% to $0.25 compared to $0.39 for the quarter ended March 31,
2007.  The decrease in earnings from the prior year quarter was primarily due to
the Federal  Reserve's  decrease in interest rates during the quarter along with
the Company's  decision to increase by $3,618,000  (751%) the provision for loan
losses to  $4,100,000  from  $482,000,  and to increase  by $708,000  (605%) the
provision  for credit losses on unfunded  commitments  from $117,000 to $825,000
for the quarter ended March 31, 2008.

                                       19

<PAGE>

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

                                                Three months ended
                                                     March 31,
                                            --------------------------
                                              2008              2007
                                            --------------------------
Net Interest Income (FTE)                    $21,546          $21,666
Provision for loan losses                     (4,100)            (482)
Noninterest income                             6,850            6,600
Noninterest expense                          (17,573)         (16,960)
Provision for income taxes (FTE)              (2,675)          (4,380)
                                            --------------------------
Net income                                    $4,048           $6,444
                                            ==========================
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,
                                            --------------------------
                                                 2008         2007
                                            --------------------------
     Interest income                            $31,130      $30,661
     Interest expense                            (9,765)      (9,216)
     FTE adjustment                                 181          221
                                            --------------------------
        Net interest income (FTE)               $21,546      $21,666
                                            ==========================
     Average interest-earning assets         $1,817,212   $1,692,574
     Net interest margin (FTE)                     4.74%        5.12%

The  Company's  primary  source  of  revenue  is  net  interest  income,  or the
difference  between  interest  income on  interest-earning  assets and  interest
expense on  interest-bearing  liabilities.  Net interest income (FTE) during the
first quarter of 2008 decreased  $120,000 (0.6%) from the same period in 2007 to
$21,546,000.  The  decrease  in net  interest  income  (FTE)  was due to a 0.38%
decrease in net interest  margin (FTE) to 4.74% that was  partially  offset by a
$124,638,000 (7.4%) increase in average balances of  interest-earning  assets to
$1,817,212,000.

Interest and Fee Income
Interest and fee income (FTE) for the first quarter of 2008  increased  $429,000
(1.4%) from the first  quarter of 2007.  The increase was due to a  $124,638,000
(7.4%) increase in average  interest-earning assets that was partially offset by
a 0.41% decrease in the yield on those average interest-earning assets to 6.89%.
The growth in  interest-earning  assets was the result of a $79,266,000  (39.2%)
increase in average  balance of  investments to  $281,503,000  and a $45,302,000
(3.0%) increase in average loan balances to $1,535,357.

Contributing to the 0.41% decrease in average yield on  interest-earning  assets
was a 0.41%  decrease in average  yield on loans to 7.22% in the  quarter  ended
March 31, 2008 compared to 7.63% in the prior year quarter.  This 0.41% decrease
in average  yield on loans is primarily  the result of  decreases in  short-term
lending rates  including the prime rate of lending which  averaged  8.25% during
the quarter  ended March 31, 2007 compared to an average of 6.22% in the quarter
ended March 31, 2008.  The average yield on the Company's  combined  taxable and
nontaxable  investment  balances  increased  0.23% to 5.09% in the quarter ended
March 31, 2008  compared to 4.86% in the prior year quarter as the Company added
investments during the later part of 2007 and early 2008.

                                       20

<PAGE>

Interest Expense

Interest expense increased $549,000 (6.0%) in the first quarter of 2008 compared
to the prior year  quarter.  The increase was  primarily  due to a  $111,979,000
(8.7%) increase in average  interest-bearing  liabilities to $1,407,193,000 that
was  partially  offset  by  a  0.07%  decrease  in  the  average  rate  paid  on
interest-bearing liabilities from 2.85% in the first quarter of 2007 to 2.78% in
the first quarter of 2008. The average  balances of all deposit  categories were
flat to slightly down, from the prior year quarter while the average balances of
Federal funds  purchased and other  borrowings  were up  $64,041,000  (162%) and
$63,409,000 (152%), respectively, from the prior year quarter. The average rates
paid for all categories of interest-bearing liabilities were down except for the
average rate paid on savings  deposits.  These trends in liability  balances and
rates are indicative of the competitive environment for these balances.

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,
                                             -------------------
                                              2008         2007
                                             -------------------
Yield on interest-earning assets              6.89%        7.30%
Rate paid on interest-bearing liabilities     2.78%        2.85%
                                             -------------------
     Net interest spread                      4.11%        4.45%
Impact of all other net
     noninterest-bearing funds                0.63%        0.67%
                                             -------------------
        Net interest margin                   4.74%        5.12%
                                             ===================

Net interest margin in the first quarter of 2008 decreased 0.38% compared to the
first quarter of 2007.  This decrease in net interest  margin was due to a 0.34%
decrease in net interest  spread and a 0.04% decrease in the impact of all other
net  noninterest-bearing  funds when  compared  to the prior year  quarter.  The
decrease in net  interest  margin was mainly due to an  increase  in  nondeposit
interest-bearing  liabilities,  or wholesale  funding,  as a percentage of total
funding sources,  and a lag in reductions of interest rates on  interest-bearing
liabilities compared to interest rates on interest-earning assets.

                                       21

<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  interest-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, 2008                   March 31, 2007
                                       -----------------------------    -------------------------------
                                                   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                                  $1,535,357  $27,726    7.22%     $1,490,055 $28,423     7.63%
Investment securities - taxable           254,778    3,078    4.83%        170,072   1,841     4.33%
Investment securities - nontaxable         26,725      505    7.57%         32,165     615     7.64%
Federal funds sold                            352        2    2.27%            282       3     4.26%
                                       ----------------------------     ------------------------------
   Total interest-earning assets        1,817,212   31,311    6.89%      1,692,574  30,882     7.30%
Other assets                              171,454                          172,874
                                       ----------                       ----------
Total assets                           $1,988,666                       $1,865,448
                                       ==========                       ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits          218,487       87    0.16%       $230,072     122     0.21%
Savings deposits                          387,490    1,502    1.55%        381,883     797     0.83%
Time deposits                             551,420    5,588    4.05%        560,913   6,469     4.61%
Federal funds purchased                   103,565      812    3.14%         39,524     522     5.28%
Other borrowings                          104,993    1,063    4.05%         41,584     490     4.71%
Junior subordinated debt                   41,238      713    6.92%         41,238     816     7.92%
                                       ----------------------------     ----------------------------
   Total interest-bearing liabilities   1,407,193    9,765    2.78%      1,295,214   9,216     2.85%
Noninterest-bearing deposits              354,207                          361,605
Other liabilities                          33,817                           34,367
Shareholders' equity                      193,449                          174,262
                                        ---------                        ---------
Total liabilities and shareholders'    $1,988,666                       $1,865,448
  equity                               ==========                       ==========
Net interest spread(1)                                        4.11%                            4.45%
Net interest income and interest margin(2)         $21,546    4.74%                $21,666     5.12%
                                                   ================                =================
(1) Net interest spread represents the average yield earned 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 interest expense, divided by the average balance of
    interest-earning assets.
</TABLE>

                                       22

<PAGE>

Summary of  Changes in  Interest  Income and  Expense  due to Changes in Average
Asset and Liability Balances and Yields Earned and 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, 2008
                                                   compared with three months
                                                      ended March 31, 2007
                                               ---------------------------------
                                                Volume        Rate        Total
                                               ---------------------------------
Increase (decrease) in interest income:
Loans                                             $864     ($1,561)      ($697)
Investment securities                              962         165       1,127
Federal funds sold                                   1          (2)         (1)
                                               ---------------------------------
   Total interest-earning assets                 1,827      (1,398)        429
                                               ---------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                    (6)        (29)        (35)
Savings deposits                                    12         693         705
Time deposits                                     (109)       (772)       (881)
Federal funds purchased                            845        (555)        290
Other borrowings                                   747        (174)        573
Junior subordinated debt                             -        (103)       (103)
                                               ---------------------------------
   Total interest-bearing liabilities            1,489        (940)        549
                                               ---------------------------------
Increase (decrease) in Net Interest Income        $338       ($458)      ($120)
                                               =================================

Provision for Loan Losses
The Company  decided to increase  the  provision  for loan losses by  $3,618,000
(751%) to  $4,100,000  in the first  quarter of 2008 from  $482,000 in the first
quarter of 2007. The increase in the provision for loan losses was primarily due
to higher net loan charge-offs, increased nonperforming loans, and downgrades in
loan  classifications  during the first  quarter of 2008  compared  to the first
quarter  of 2007.  During  the  first  quarter  of 2008,  the  Company  recorded
$2,048,000 of net loan  charge-offs  versus $501,000 of net loan  charge-offs in
the  first  quarter  of  2007.  The  $1,547,000  (309%)  increase  in  net  loan
charge-offs  was primarily  related to  nonperforming  residential  construction
loans  for  which  appraised  values  indicated  declines  in the  value  of the
underlying collateral.

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

                                            Three months ended March 31,
                                            ----------------------------
                                                   2008          2007
                                            ----------------------------
     Service charges on deposit accounts          $3,838        $3,559
     ATM fees and interchange                      1,079           949
     Other service fees                              551           565
     Change in value of mortgage servicing rights   (340)          (12)
     Gain on sale of loans                           258           266
     Commissions on sale of
       nondeposit investment products                420           500
     Increase in cash value of life insurance        360           405
     Gain from VISA IPO                              396             -
     Other noninterest income                        288           368
                                            ----------------------------
     Total noninterest income                     $6,850        $6,600
                                            ============================

Noninterest  income for the first quarter of 2008 increased $250,000 (3.8%) from
the first  quarter of 2007.  due primarily to a $396,000 gain from the Company's
membership in VISA, Inc. and VISA's initial public offering (IPO) in March 2008,
a $279,000 (7.8%) increase in service charges on deposit  accounts to $3,838,000
and a  $130,000  (13.7%)  increase  in  ATM  fees  and  interchange  revenue  to
$1,079,000.  The increases in service  charges on deposit  accounts and ATM fees
and interchange  revenue are mainly due to growth in number of customers.  These
positive  factors were partially  offset by an increased  negative change in the
value of mortgage  servicing  rights of $328,000 and an $80,000 (16.0%) decrease
in commission on sale of nondeposit investment products.  The increased negative
change  in the  value of  mortgage  servicing  rights  was  primarily  due to an
increase in estimated prepayment speeds of the mortgages being serviced.

                                       23

<PAGE>

Noninterest Expense
The components of noninterest expense were as follows (in thousands):

                                              Three months ended March 31,
                                              ----------------------------
                                                    2008          2007
                                              ----------------------------
     Base salaries, net of
        deferred loan origination costs         $6,333        $5,995
     Incentive compensation                        560         1,203
     Benefits and other compensation costs       2,587         2,544
                                              --------------------------
       Total salaries and benefits expense       9,480         9,742
                                              --------------------------

     Occupancy                                   1,188         1,170
     Equipment                                     982         1,098
     Provision for losses - unfunded commitments   825           117
     Data processing and software                  615           419
     Telecommunications                            597           409
     ATM network charges                           494           428
     Professional fees                             493           347
     Advertising and marketing                     319           404
     Postage                                       282           221
     Courier service                               263           298
     Intangible amortization                       123           123
     Operational losses                            113            60
     Assessments                                    82            81
     Other                                       1,717         2,043
                                               -------------------------
       Total other noninterest expense           8,093         7,218
                                               -------------------------
         Total noninterest expense             $17,573       $16,960
                                               =========================
     Average full time equivalent staff            626           632
     Noninterest expense to revenue (FTE)        61.89%        60.00%

Noninterest  expense for the first  quarter of 2008  increased  $613,000  (3.6%)
compared to the first quarter of 2007.  Salaries and benefits expense  decreased
$262,000 (2.7%) to $9,480,000. The decrease in salaries and benefits expense was
mainly due to decreased incentive  compensation and the effect of a reduction in
the number of  full-time  equivalent  employees  that were  partially  offset by
annual salary increases.  Provision for losses - unfunded commitments  increased
$708,000  (605%) to $825,000 for the quarter  ended March 31, 2008 due primarily
to  estimated  losses  related to home equity  lines of credit and  construction
loans. Data processing and software, telecommunications, and ATM network charges
were up due to  additional  products  and  services  obtained  from third  party
providers,  and were  partially  offset by  reductions  in equipment and courier
service  expense.  Professional  fees increased due to increased  consulting and
legal fees.

Provision for Income Tax The effective tax rate for the three months ended March
31, 2008 was 38.1%  compared to 39.2% for the three months ended March 31, 2007.
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  increase  in  cash  value  of  life  insurance,
tax-exempt loans and state and municipal securities.

                                       24

<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, 2008           At December 31, 2007
                          -------------------------    -------------------------
                            Gross Guaranteed  Net       Gross Guaranteed   Net
                          ------------------------------------------------------
Classified loans          $32,505   $5,790  $26,715    $18,570  $5,948  $12,622
Other classified assets       836        -      836        187       -      187
                          ------------------------------------------------------
Total classified assets   $33,341   $5,790  $27,551    $18,757  $5,948  $12,809
                          ======================================================
Allowance for loan losses/classified loans     72.6%                      137.3%

Classified  assets,  net of  guarantees  of the U.S.  Government,  including its
agencies and its government-sponsored  agencies,  increased $14,742,000 (115.1%)
to $27,551,000 at March 31, 2008 from $12,809,000 at December 31, 2007.

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,  2008,  if all such  loans had been  current  in
accordance with their original terms, totaled $445,000. Interest income actually
recognized  on these  loans  during the three  months  ended  March 31, 2008 was
$155,000.

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

                                       25

<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  $2,988,000  (38.8%) to $10,686,000  during the first three
months of 2008.  Nonperforming assets net of guarantees represent 0.53% 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>

                                        At March 31, 2008        At December 31, 2007
                                    ------------------------    ------------------------
                                     Gross Guaranteed  Net       Gross Guaranteed   Net
                                    ------------------------    ------------------------
<S>                                   <C>      <C>       <C>        <C>      <C>     <C>
(dollars in thousands):
Performing nonaccrual loans         $9,222   $5,660   $3,562     $9,098  $5,814   $3,284
Nonperforming, nonaccrual loans      5,508        -    5,508      4,227       -    4,227
                                   ------------------------------------------------------
     Total nonaccrual loans         14,730    5,660    9,070     13,325   5,814    7,511
Loans 90 days past due and still       780        -      780          -       -        -
  accruing                         -----------------------------------------------------
otal nonperforming loans            15,510    5,660    9,850     13,325   5,814    7,511
Other real estate owned                836        -      836        187       -      187
                                   ------------------------------------------------------
Total nonperforming assets         $16,346   $5,660  $10,686    $13,512  $5,814   $7,698
                                   =====================================================
Nonperforming loans to total loans                      0.64%                       0.48%
Nonperforming assets to total assets                    0.53%                       0.39%
Allowance for loan losses/nonperforming loans            197%                        231%
</TABLE>

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.

The Company adopted and announced a stock repurchase plan on August 21, 2007 for
the repurchase of up to 500,000  shares of the Company's  common stock from time
to time as market conditions allow. The 500,000 shares authorized for repurchase
under this plan represented  approximately  3.2% of the Company's  approximately
15,815,000  common shares  outstanding  as of August 21, 2007.  This plan has no
stated  expiration date for the  repurchases.  As of March 31, 2008, the Company
had  repurchased  166,600  shares  under this plan,  which left  333,400  shares
available for repurchase under the plan.

The  Company's  primary  capital  resource is  shareholders'  equity,  which was
$189,300,000 at March 31, 2008.  This amount  represents an increase of $422,000
from December 31, 2007, the net result of comprehensive income for the period of
$5,625,000, and the effect of stock option vesting of $192,000, partially offset
by the  repurchase of common stock with value of  $2,821,000,  dividends paid of
$2,052,000,  and the cumulative effect of a change in accounting principle,  net
of tax, of $522,000.  The  Company's  ratio of equity to total assets was 9.47%,
9.34%,  and 9.54% as of March 31, 2008,  March 31, 2007,  and December 31, 2007,
respectively.

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

                              At March 31,         At           Minimum
                           ------------------    December 31,   Regulatory
                            2008       2007        2007         Requirement
                           ------------------------------------------------
     Tier I Capital         10.88%     10.75%     10.90%          4.00%
     Total Capital          12.02%     11.76%     11.90%          8.00%
     Leverage ratio         10.77%     10.87%     11.16%          4.00%

                                       26

<PAGE>

Liquidity
The discussion of "Liquidity" under Item 3 of this report is incorporated herein
by reference..

Off-Balance Sheet Items
The Bank has certain  ongoing  commitments  under  operating and capital leases.
These commitments do not significantly impact operating results. As of March 31,
2008 commitments to extend credit and commitments  related to the Bank's deposit
overdraft  privilege  product were the Bank's only  financial  instruments  with
off-balance  sheet  risk.  The  Bank has not  entered  into  any  contracts  for
financial  derivative   instruments  such  as  futures,   swaps,  options,  etc.
Commitments to extend credit were  $688,737,000  and  $690,633,000  at March 31,
2008 and December 31, 2007, respectively, and represent 44.5% of the total loans
outstanding at both March 31, 2008 and December 31, 2007. Commitments related to
the  Bank's  deposit  overdraft   privilege  product  totaled   $33,456,000  and
$33,517,000 at March 31, 2008 and December 31, 2007, respectively.

                                       27

<PAGE>

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, 2008,  the results of the  simulations  noted above  indicate  that
given a "flat"  balance  sheet  scenario,  and if deposit  rates  track  general
interest  rate changes by  approximately  50%, the  Company's  balance  sheet is
slightly  liability  sensitive.  "Liability  sensitive"  implies  that  earnings
decrease when interest rates rise,  and increase when interest  rates  decrease.
The  magnitude of all the  simulation  results  noted above is within the Bank'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.

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, 2008 and 2007,  the Company  had no material  derivative  financial
instruments.

                                       28

<PAGE>

Liquidity
The  Company's  principal  source of asset  liquidity is federal  funds sold and
marketable  investment securities available for sale. At March 31, 2008, federal
funds sold and investment  securities  available for sale totaled  $272,276,000,
representing  an increase of $39,849,000  (17.1%) from December 31, 2007, and an
increase of  $83,798,000  (44.5%) from March 31, 2007. In addition,  the Company
generates  additional  liquidity  from its operating  activities.  The Company's
profitability  during the first three months of 2008  generated  cash flows from
operations of $10,824,000  compared to $12,271,000 during the first three months
of  2007.  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 $13,007,000 during
the three  months  ended March 31, 2008  compared to  $10,604,000  for the three
months ended March 31, 2007.  During the three months ended March 31, 2008,  the
Company invested  $50,338,000 in securities and received  $1,325,000 of net loan
principal   reductions,   compared  to  $122,000  and  $13,577,000  invested  in
securities and net loan  principal  reductions,  respectively,  during the first
three months of 2007. These changes in investment and loan balances  contributed
to net cash used by investing  activities of $37,229,000 during the three months
ended March 31, 2008,  compared to net cash provided by investing  activities of
$23,214,000 during the three months ended March 31, 2007.  Financing  activities
provided net cash of  $12,320,000  during the three months ended March 31, 2008,
compared to net cash used in  financing  activities  of  $63,236,000  during the
three months ended March 31,  2007.  Deposit  balance  decreases  accounted  for
$16,748,000  of financing  uses of funds during the three months ended March 31,
2008,  compared to $62,300,000 of funds used by decreases in deposits during the
three months ended March 31, 2007. A net decrease in short-term other borrowings
accounted  for  $12,339,000  of financing  uses of funds during the three months
ended March 31, 2008, compared to $1,454,000 of funds provided by an increase in
short-term  other  borrowings  during the three  months  ended  March 31,  2007.
Dividends  paid used  $2,052,000  and $2,069,000 of cash during the three months
ended  March 31,  2008 and 2007,  respectively.  An  increase  in Federal  funds
purchased provided  $46,300,000 of cash during the quarter ended March 31, 2008.
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
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  March  31,  2008  ("Evaluation  Date").  Based  on  that
evaluation,  they each concluded  that as of the  Evaluation  Date the Company's
disclosure  controls and procedures are effective to ensure that the information
required to be  disclosed by the Company in this  Quarterly  Report on Form 10-Q
was  recorded,  processed,  summarized  and  reported  within  the time  periods
specified in the SEC's rules and forms for Form 10-Q.

No changes in the Company's  internal control over financial  reporting occurred
during  the  first  quarter  of  2008  that  have  materially  affected,  or are
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

                                       29

<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 1A - Risk Factors

There have been no material changes to the risk factors previously  disclosed in
Item 1A to Part I of our Annual Report on Form 10-K for the year ended  December
31, 2007.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

The following table shows information concerning the common stock repurchased by
the Company  during the first quarter of 2008  pursuant to the  Company's  stock
repurchase  plan adopted on August 21,  2007,  which is discussed in more detail
under  "Capital  Resources"  in  this  report  and  is  incorporated  herein  by
reference:

<TABLE>
<CAPTION>

Period          (a) Total number    (b) Average price   (c) Total number of    (d) Maximum number
                of Shares purchased  paid per share     shares purchased as    of shares that may yet
                                                        part of publicly       be purchased under the
                                                        announced plans or     plans or programs
                                                        programs
------------------------------------------------------------------------------------------------------
<S>                        <C>            <C>               <C>                      <C>
Jan. 1-31, 2008             -                 -                  -                 500,000
Feb. 1-29, 2008        70,100            $17.44             70,100                 429,900
Mar. 1-31, 2008        96,500            $16.57             96,500                 333,400
------------------------------------------------------------------------------------------------------
Total                 166,600            $16.93            166,600                 333,400
</TABLE>


Item 6 - Exhibits

     3.1*      Restated  Articles of  Incorporation  dated May 9, 2003, filed as
               Exhibit  3.1 to  TriCo's  Quarterly  Report  on Form 10-Q for the
               quarter ended March 31, 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 dated as of August 23, 2005,
               between  TriCo,  Tri Counties Bank and each of Bruce Belton,  Dan
               Bailey,  Craig Carney, Gary Coelho,  W.R. Hagstrom,  Rick Miller,
               Richard O'Sullivan, Thomas Reddish, and Ray Rios filed as Exhibit
               10.2 to  TriCo's  Quarterly  Report on Form 10-Q for the  quarter
               ended September 30, 2005.

     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).

                                       30

<PAGE>

     10.7*     TriCo's 2001 Stock Option Plan, as amended, filed as Exhibit 10.7
               to TriCo's  Quarterly  Report on Form 10-Q for the quarter  ended
               June 30, 2005.

     10.8*     Amended  Employment  Agreement  between  TriCo and Richard  Smith
               dated as of August  23,  2005  filed as  Exhibit  10.8 to TriCo's
               Quarterly Report on Form 10-Q for the quarter ended September 30,
               2005.

     10.9*     Tri Counties Bank Executive  Deferred  Compensation Plan restated
               April 1, 1992,  and  January  1, 2005  filed as  Exhibit  10.9 to
               TriCo's  Quarterly  Report  on Form  10-Q for the  quarter  ended
               September 30, 2005.

     10.10*    Tri  Counties  Bank  Deferred  Compensation  Plan  for  Directors
               effective  January  1, 2005  filed as  Exhibit  10.10 to  TriCo's
               Quarterly Report on Form 10-Q for the quarter ended September 30,
               2005.

     10.11*    2005 Tri Counties Bank Deferred  Compensation Plan for Executives
               and Directors effective January 1, 2005 filed as Exhibit 10.11 to
               TriCo's  Quarterly  Report  on Form  10-Q for the  quarter  ended
               September 30, 2005.

     10.13*    Tri Counties  Bank  Supplemental  Retirement  Plan for  Directors
               dated September 1, 1987, as restated January 1, 2001, and amended
               and  restated  January 1, 2004 filed as Exhibit  10.12 to TriCo's
               Quarterly  Report on Form  10-Q for the  quarter  ended  June 30,
               2004.

     10.14*    2004 TriCo Bancshares  Supplemental Retirement Plan for Directors
               effective  January  1, 2004  filed as  Exhibit  10.13 to  TriCo's
               Quarterly  Report on Form  10-Q for the  quarter  ended  June 30,
               2004.

     10.15*    Tri  Counties  Bank   Supplemental   Executive   Retirement  Plan
               effective  September 1, 1987, as amended and restated  January 1,
               2004 filed as Exhibit 10.14 to TriCo's  Quarterly  Report on Form
               10-Q for the quarter ended June 30, 2004.

     10.16*    2004 TriCo  Bancshares  Supplemental  Executive  Retirement  Plan
               effective  January  1, 2004  filed as  Exhibit  10.15 to  TriCo's
               Quarterly  Report on Form  10-Q for the  quarter  ended  June 30,
               2004.

     10.17*    Form of Joint  Beneficiary  Agreement  effective  March 31,  2003
               between Tri Counties  Bank and each of George  Barstow,  Dan Bay,
               Ron Bee, Craig Carney,  Robert Elmore, Greg Gill, Richard Miller,
               Richard  O'Sullivan,  Thomas  Reddish,  Jerald  Sax,  and Richard
               Smith, filed as Exhibit 10.14 to TriCo's Quarterly Report on Form
               10-Q for the quarter ended September 30, 2003.

     10.18*    Form of Joint  Beneficiary  Agreement  effective  March 31,  2003
               between Tri Counties Bank and each of Don Amaral,  William Casey,
               Craig Compton,  John Hasbrook,  Michael  Koehnen,  Donald Murphy,
               Carroll Taresh,  and Alex  Vereshagin,  filed as Exhibit 10.15 to
               TriCo's  Quarterly  Report  on Form  10-Q for the  quarter  ended
               September 30, 2003.

                                       31

<PAGE>

     10.19*    Form of  Tri-Counties  Bank  Executive  Long Term Care  Agreement
               effective  June 10, 2003  between Tri  Counties  Bank and each of
               Craig Carney,  Richard  Miller,  Richard  O'Sullivan,  and Thomas
               Reddish,  filed as Exhibit 10.16 to TriCo's  Quarterly  Report on
               Form 10-Q for the quarter ended September 30, 2003.

     10.20*    Form of  Tri-Counties  Bank  Director  Long Term  Care  Agreement
               effective June 10, 2003 between Tri Counties Bank and each of Don
               Amaral,  William  Casey,  Craig Compton,  John Hasbrook,  Michael
               Koehnen,  Donald Murphy,  Carroll Taresh,  and Alex  Vereschagin,
               filed as Exhibit 10.17 to TriCo's  Quarterly  Report on Form 10-Q
               for the quarter ended September 30, 2003.

     10.21*    Form of  Indemnification  Agreement between TriCo  Bancshares/Tri
               Counties Bank and each of the  directors of TriCo  Bancshares/Tri
               Counties  Bank  effective on the date that each director is first
               elected,  filed as Exhibit 10.18 to TriCo'S Annual Report on Form
               10-K for the year ended December 31, 2003.

     10.22*    Form of  Indemnification  Agreement between TriCo  Bancshares/Tri
               Counties  Bank  and  each  of  Dan  Bailey,  Craig  Carney,  W.R.
               Hagstrom,  Rick Miller,  Richard O'Sullivan,  Thomas Reddish, Ray
               Rios,  and  Richard  Smith  filed as  Exhibit  10.21  to  TriCo's
               Quarterly  Report on Form  10-Q for the  quarter  ended  June 30,
               2004.

     21.1      Tri  Counties  Bank,  a  California  banking  corporation,  TriCo
               Capital  Trust I, a Delaware  business  trust,  and TriCo Capital
               Trust II, a Delaware business trust, are the only subsidiaries of
               Registrant

     31.1      Rule 13a-14(a)/15d-14(a) Certification of CEO

     31.1      Rule 13a-14(a)/15d-14(a) Certification of CFO

     32.1      Section 1350 Certification of CEO

     32.2      Section 1350 Certification of CFO

     * Previously filed and incorporated by reference.

                                       32

<PAGE>

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

                                TRICO BANCSHARES
                                  (Registrant)

                            /s/Thomas J. Reddish
Date:  May 8, 2008          ---------------------
                            Thomas J. Reddish
                            Executive Vice President and Chief Financial Officer
                            (Principal financial officer)

                                       33

<PAGE>

EXHIBITS

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification of CEO

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-15(e) and  15d-15(e))  and internal
          control  over  financial  reporting  (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and we have:
          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  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.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;
          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and procedures  and presented in this  quarterly  report
               our  conclusions   about  the  effectiveness  of  the  disclosure
               controls and  procedures,  as of the end of the period covered by
               this quarterly report based on such evaluation; and
          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most  recent  fiscal  quarter  that has  materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting; and
    5.    The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's board of directors:
          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability to record, process,  summarize and report financial data;
               and
          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.


                                        /s/ Richard P. Smith
Date: May 8, 2008                       --------------------
                                        Richard P. Smith
                                        President and Chief Executive Officer

                                       34

<PAGE>

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification of CFO

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-15(e) and  15d-15(e))  and internal
          control  over  financial  reporting  (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and we have:
          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  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.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;
          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and procedures  and presented in this  quarterly  report
               our  conclusions   about  the  effectiveness  of  the  disclosure
               controls and  procedures,  as of the end of the period covered by
               this quarterly report based on such evaluation; and
          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most  recent  fiscal  quarter  that has  materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting; and
    5.    The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's board of directors:
          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability to record, process,  summarize and report financial data;
               and
          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.


                            /s/ Thomas J. Reddish
Date: May 8, 2008           ---------------------
                            Thomas J. Reddish
                            Executive Vice President and Chief Financial Officer

                                       35

<PAGE>

Exhibit 32.1

Section 1350 Certification of CEO

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ended March 31, 2008 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 32.2

Section 1350 Certification of CFO

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ended March 31, 2008 as filed with the  Securities  and
Exchange  Commission  on the date hereof (the  "Report"),  I, Thomas J. Reddish,
Executive 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
    Executive 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.


                                       36
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{"company-data": {"conformed-name": "TRICO BANCSHARES /", "cik": "0000356171", "assigned-sic": "6022", "irs-number": "942792841", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-10661", "film-number": "08817738"}, "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 Pursuant Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For Quarterly Period Ended March 31,2008          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 a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer" and "large accelerated filer" in Rule 12b-2 of the Act (check one).

Large accelerated filer      Accelerated filer  X   Non-accelerated filer
                       -----                  -----                      -----

     Indicate  by check mark  whether  the  registrant  is a shell  company  (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 April 30, 2008:  15,744,950
TABLE OF CONTENTS

                                                                           Page

Forward-Looking Statements                                                    1

PART I - FINANCIAL INFORMATION                                                2

        Item 1 - Financial Statements                                         2

        Notes to Unaudited Condensed Consolidated Financial Statements        6

        Financial Summary                                                    18

        Item 2 - Management's Discussion and Analysis of Financial           19
                 Condition and Results of Operations

        Item 3 - Quantitative and Qualitative Disclosures about Market Risk  28

        Item 4 - Controls and Procedures                                     29

PART II - OTHER INFORMATION                                                  30

        Item 1 - Legal Proceedings                                           30

        Item 1A - Risk Factors                                               30

        Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds 30

        Item 6 - Exhibits                                                    30

        Signatures                                                           33

        Exhibits                                                             34
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,
it may mean the  Company  is  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.  The
reader is  directed  to the  Company's  annual  report on Form 10-K for the year
ended  December  31,  2007,  and Part II,  Item 1A of this  report  for  further
discussion of factors which could affect the Company's business and cause actual
results  to  differ  materially  from  those  suggested  by any  forward-looking
statement made in this report.  Such Form 10-K and this report should be read to
put any  forward-looking  statements  in  context  and to  gain a more  complete
understanding of the risks and uncertainties involved in the Company's business.
Any forward-looking statement may turn out to be wrong and cannot be guaranteed.
The Company does not intend to update any  forward-looking  statement  after the
date of this report.

                                       1

PAGE>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
                                TRICO BANCSHARES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  (In thousands, except share data; unaudited)

                                                                At March 31,             At December 31,
                                                            2008              2007            2007
                                                       -----------------------------    ----------------
Assets:
     Cash and due from banks                              $74,713           $75,263          $88,798
     Federal funds sold                                         -                 -                -
                                                       -----------------------------    ----------------
         Cash and cash equivalents                         74,713            75,263           88,798
     Securities available-for-sale                        272,276           188,478          232,427
     Federal Home Loan Bank stock, at cost                  8,885             8,442            8,766
     Loans, net of allowance for loan losses
         of $19,383, $16,895 and $17,331                1,528,561         1,478,719        1,534,635
     Foreclosed assets, net of allowance for
         losses of $180                                       836               187              187
     Premises and equipment, net                           20,069            20,924           20,492
     Cash value of life insurance                          45,341            43,941           44,981
     Accrued interest receivable                            8,096             8,355            8,554
     Goodwill                                              15,519            15,519           15,519
     Other intangible assets, net                           1,053             1,543            1,176
     Other assets                                          24,001            24,950           25,086
                                                       -----------------------------    ----------------
         Total Assets                                  $1,999,350        $1,866,321       $1,980,621
                                                       =============================    ================
     Liabilities:
     Deposits:
         Noninterest-bearing demand                      $358,684          $364,401         $378,680
         Interest-bearing                               1,169,791         1,172,448        1,166,543
                                                       -----------------------------    ----------------
         Total deposits                                 1,528,475         1,536,849        1,545,223
     Federal funds purchased                              102,300            38,000           56,000
     Accrued interest payable                               6,201             7,602            7,871
     Reserve for unfunded commitments                       2,915             1,966            2,090
     Other liabilities                                     25,154            24,922           23,195
     Other borrowings                                     103,767            41,347          116,126
     Junior subordinated debt                              41,238            41,238           41,238
                                                        ----------------------------    ---------------
         Total Liabilities                              1,810,050         1,691,924        1,791,743
                                                        ----------------------------    ---------------
    Commitments and contingencies
    Shareholders' Equity:
    Common stock, no par value: 50,000,000 shares
         authorized; issued and outstanding:
         15,744,950 at March 31, 2008                      78,142
         15,910,291 at March 31, 2007                                        76,087
         15,911,550 at December 31, 2007                                                      78,775
    Retained earnings                                     111,133           102,298          111,655
    Accumulated other comprehensive income (loss), net         25            (3,988)          (1,552)
                                                       -----------------------------    ----------------
         Total Shareholders' Equity                       189,300           174,397          188,878
                                                       -----------------------------    ----------------
         Total Liabilities and Shareholders' Equity    $1,999,350        $1,866,321       $1,980,621
                                                       =============================    ================
See accompanying notes to unaudited condensed consolidated financial statements.
2
TRICO BANCSHARES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  (In thousands, except share data; unaudited)

                                                 Three months ended March 31,
                                                      2008           2007
                                                 ----------------------------
Interest and dividend income:
Loans, including fees                                $27,726       $28,423
Debt securities:
Taxable                                                2,959         1,719
Tax exempt                                               324           394
Dividends                                                119           122
Federal funds sold                                         2             3
                                                   -------------------------
Total interest income                                 31,130        30,661
                                                   -------------------------
Interest Expense:
Deposits                                               7,177         7,388
Federal funds purchased                                  812           522
Other borrowings                                       1,063           490
Junior subordinated debt                                 713           816
                                                   -------------------------
Total interest expense                                 9,765         9,216
Net interest income                                   21,365        21,445
                                                   -------------------------
Provision for loan losses                              4,100           482
                                                   -------------------------
Net interest income after provision for loan losses   17,265        20,963
                                                   -------------------------
Noninterest income:
Service charges and fees                                5,128         5,061
Gain on sale of loans                                     258           266
Commissions on sale of non-deposit investment products    420           500
Increase in cash value of life insurance                  360           405
Other                                                     684           368
                                                   -------------------------
Total noninterest income                                6,850         6,600
                                                   -------------------------
Noninterest expense:
Salaries and related benefits                           9,480         9,742
Other                                                   8,093         7,218
                                                   -------------------------
Total noninterest expense                              17,573        16,960
                                                   -------------------------
Income before income taxes                              6,542        10,603
                                                   -------------------------
Provision for income taxes                              2,494         4,159
                                                   -------------------------
Net income                                             $4,048        $6,444
                                                   =========================
Average shares outstanding                         15,842,085    15,878,929
Diluted average shares outstanding                 16,081,722    16,415,845

Per share data:
Basic earnings                                          $0.26         $0.41
Diluted earnings                                        $0.25         $0.39
Dividends paid                                          $0.13         $0.13

See accompanying notes to unaudited condensed consolidated financial statements.

                                       3
TRICO BANCSHARES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                  (In thousands, except share data; unaudited)

                                                                     Accumulated
                                    Shares of                            Other
                                    Common     Common    Retained   Comprehensive
                                     Stock      Stock    Earnings       Loss           Total
                                 --------------------------------------------------------------
Balance at December 31, 2006      15,857,207    $73,739    $100,218       ($4,521)   $169,436
Comprehensive income:                                                                --------
Net income                                                    6,444                     6,444
Change in net unrealized loss on
   Securities available for sale, net                                         533         533
                                                                                      --------
Total comprehensive income                                                               6,977
Stock option vesting                                175                                    175
Stock options exercised              170,600      1,867                                  1,867
Tax benefit of stock option exercise                852                                    852
Repurchase of common stock          (117,516)      (546)     (2,295)                    (2,841)
Dividends paid ($0.13 per share)                             (2,069)                    (2,069)
                                 --------------------------------------------------------------
Balance at March 31, 2007          15,910,291    $76,087   $102,298       ($3,988)    $174,397
                                 ==============================================================

Balance at December 31, 2007       15,911,550    $78,775   $111,655       ($1,552)    $188,878
Comprehensive income:                                                                 ---------
Net income                                                    4,048                      4,048
Change in net unrealized loss on
   Securities available for sale, net                                       1,577        1,577
                                                                                       --------
Total comprehensive income                                                               5,625
Cumulative effect of change in
   accounting principle, net of tax                            (522)                      (522)
Stock option vesting                                192                                    192
Repurchase of common stock           (166,600)     (825)     (1,996)                    (2,821)
Dividends paid ($0.13 per share)                             (2,052)                    (2,052)
                                 --------------------------------------------------------------
Balance at March 31, 2008          15,744,950   $78,142    $111,133           $25     $189,300
                                 ==============================================================

See accompanying notes to unaudited condensed consolidated financial statements.
4
TRICO BANCSHARES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands; unaudited)
                                                               For the three months ended March 31,
                                                                     2008               2007
                                                              --------------------------------------
Operating activities:
Net income                                                        $4,048               $6,444
Adjustments to reconcile net income to net cash provided
  by operating activities:
    Depreciation of premises and equipment, and amortization         869                  930
    Amortization of intangible assets                                123                 123
    Provision for loan losses                                      4,100                 482
    Amortization of investment securities premium, net                84                 200
    Originations of loans for resale                             (17,403)            (18,666)
    Proceeds from sale of loans originated for resale             17,484              18,737
    Gain on sale of loans                                          (258)               (266)
    Change in fair value of mortgage servicing rights                340                  12
    Loss on sale of fixed assets                                       2                   5
    Increase in cash value of life insurance                        (360)               (405)
    Stock option expense                                             192                 175
    Change in:
      Interest receivable                                            458                 372
      Interest payable                                            (1,670)                 54
      Other assets and liabilities, net                            2,815               4,074
                                                              ---------------------------------
        Net cash provided by operating activities                 10,824              12,271
                                                              ---------------------------------
Investing activities:
Proceeds from maturities of securities available-for-sale         13,007              10,604
Purchases of securities available-for-sale                       (50,219)                  -
Purchase of Federal Home Loan Bank stock                            (119)               (122)
Loan originations and principal collections, net                   1,325              13,577
Proceeds from sale of premises and equipment                           1                  11
Purchases of premises and equipment                               (1,224)               (856)
                                                              ---------------------------------
        Net cash (used) provided by investing activities         (37,229)            23,214
                                                              ---------------------------------
Financing activities:
Net (decrease) increase in deposits                              (16,748)            (62,300)
Net increase in federal funds purchased                           46,300                   -
Payments of principal on long-term other borrowings                  (20)                (18)
Net (decrease) increase in short-term other borrowings           (12,339)              1,454
Repurchase of Common Stock                                        (2,821)               (470)
Dividends paid                                                    (2,052)             (2,069)
Exercise of stock options                                              -                 167
                                                              ---------------------------------
        Net cash provided (used) by financing activities          12,320             (63,236)
                                                              ---------------------------------
Net decrease in cash and cash equivalents                        (14,085)            (27,751)
                                                              ---------------------------------
Cash and cash equivalents at beginning of period                  88,798             103,014
                                                              ---------------------------------
Cash and cash equivalents at end of period                       $74,713             $75,263
                                                              ---------------------------------
Supplemental disclosure of noncash activities:
Loans transferred to other real estate owned                        $649                $187
Unrealized net gain on securities available for sale              $2,721                $921
Value of shares tendered in lieu of cash paid to
  exercise stock options and to pay related tax withholding            -              $2,371
Supplemental disclosure of cash flow activity:
Cash paid for interest expense                                   $11,435              $9,162
Cash paid for income taxes                                             -                   -
Income tax benefit from stock option exercises                         -                $852

See accompanying notes to unaudited condensed consolidated financial statements.
5
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: General Summary of Significant Accounting Policies
The accompanying unaudited condensed 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 periods  presented.  The interim results for the three month periods
ended  March 31,  2008 and 2007 are not  necessarily  indicative  of the results
expected for the full year.  These unaudited  condensed  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, 2007.

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 32 branch  offices and 25 in-store  branch  offices in the
California  counties of Butte,  Contra Costa, Del Norte,  Fresno,  Glenn,  Kern,
Lake, Lassen,  Madera,  Mendocino,  Merced,  Napa, Nevada,  Placer,  Sacramento,
Shasta,  Siskiyou,  Stanislaus,  Sutter,  Tehama,  Tulare,  Yolo 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 allowance for loan losses, goodwill and other intangible assets,
income  taxes,  and the  valuation of mortgage  servicing  rights,  are the only
accounting estimates that materially affect the Company's consolidated financial
statements.

Reclassifications
Certain amounts previously  reported in the 2007 financial  statements have been
reclassified to conform to the 2008 presentation.  These  reclassifications  did
not affect previously reported net income or total shareholders' equity.

Significant Group Concentration of Credit Risk
The Company grants agribusiness,  commercial, consumer, and residential loans to
customers  located  throughout the northern San Joaquin  Valley,  the Sacramento
Valley  and  northern  mountain  regions  of  California.   The  Company  has  a
diversified  loan  portfolio  within  the  business  segments  located  in  this
geographical area.

Cash and Cash Equivalents
For  purposes  of the  consolidated  statements  of cash  flows,  cash  and cash
equivalents include cash on hand, amounts due from banks and federal funds sold.

                                       6
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 which 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, 2008, and  throughout  2007, 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  accumulated  comprehensive  income
(loss) 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 an other than temporary decline in value has occurred.

Federal Home Loan Bank Stock
The Bank is a member of the Federal  Home Loan Bank of San  Francisco  ("FHLB"),
and as a condition of membership,  it is required to purchase stock.  The amount
of FHLB  stock  required  to be  purchased  is based on the  borrowing  capacity
desired by the Bank. While technically  these are considered equity  securities,
there is no market for the FHLB stock.  Therefore,  the shares are considered as
restricted investment securities. Such investment is carried at cost.

Loans Held for Sale
Loans  originated  and intended for sale in the secondary  market are carried at
the  lower  of  aggregate  cost  or  fair  value,  as  determined  by  aggregate
outstanding  commitments from investors of current investor yield  requirements.
Net unrealized losses are recognized through a valuation allowance by charges to
income. At March 31, 2008 and 2007, and December 31, 2007, the Company's balance
of loans held for sale was immaterial.

Mortgage  loans held for sale are  generally  sold with the  mortgage  servicing
rights  retained by the Company.  The carrying  value of mortgage  loans sold is
reduced by the cost allocated to the associated mortgage servicing rights. Gains
or losses on sales of  mortgage  loans are  recognized  based on the  difference
between the selling price and the carrying  value of the related  mortgage loans
sold.

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 be  classified  as  accrual.  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.
All impaired loans are classified as nonaccrual loans.

                                       7
Allowance for Loan Losses
The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans and deposit related overdrafts 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  and  leases,   based  on  evaluations  of  the  collectibility,
impairment and prior loss experience of loans and leases.  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, 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.

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.

The Company's method for assessing the appropriateness of the allowance for loan
losses and the reserve for unfunded commitments includes specific allowances for
identified  problem  loans and leases,  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  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  audited
consolidated financial statements in its Annual Report on Form 10-K for the year
ended December 31, 2007.

Based on the current conditions of the loan portfolio,  Management believes that
the  allowance for loan losses and the reserve for unfunded  commitments,  which
collectively  stand at  $22,298,000  at March 31,  2008,  are 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.

                                       8
The  following  tables  summarize the activity in the allowance for loan losses,
reserve for unfunded  commitments,  and allowance for losses (which is comprised
of the allowance for loan losses and the reserve for unfunded  commitments)  for
the periods indicated (dollars in thousands):

                                        Three months ended March 31,
                                        ----------------------------
                                             2008          2007
                                        ----------------------------
     Allowance for loan losses:
     Balance at beginning of period         $17,331       $16,914
     Provision for loan losses                4,100           482
     Loans charged off:
       Real estate mortgage:
         Residential                            (54)            -
         Commercial                             (19)            -
       Consumer:
         Home equity lines                     (159)         (141)
         Home equity loans                      (89)            -
         Auto indirect                         (549)         (251)
         Other consumer                        (302)         (240)
       Commercial                              (135)         (107)
       Construction:
         Residential                         (1,078)            -
         Commercial                               -             -
                                        ----------------------------
     Total loans charged off                 (2,385)         (739)
     Recoveries of previously
       charged-off loans:
       Real estate mortgage:
         Residential                              -             -
         Commercial                              14            13
       Consumer:
         Home equity lines                        -             -
         Home equity loans                        -             -
         Auto indirect                          122            48
         Other consumer                         193           161
       Commercial                                 8            16
       Construction:
         Residential                              -             -
         Commercial                               -             -
                                        ----------------------------
     Total recoveries of
       previously charged off loans             337           238
                                        ----------------------------
         Net charge-offs                     (2,048)         (501)
                                        ----------------------------
     Balance at end of period               $19,383       $16,895
                                        ============================

     Reserve for unfunded commitments:
     Balance at beginning of period          $2,090        $1,849
     Provision for losses -
       unfunded commitments                     825           117
                                        ----------------------------
     Balance at end of period                $2,915        $1,966
                                        ============================

     Balance at end of period:
     Allowance for loan losses              $19,383       $16,895
     Reserve for unfunded commitments         2,915         1,966
                                        ----------------------------
     Allowance for losses                   $22,298       $18,861
                                        ============================
     As a percentage of total loans:
     Allowance for loan losses                  1.25%        1.13%
     Reserve for unfunded commitments           0.19%        0.13%
                                        ----------------------------
     Allowance for losses                       1.44%        1.26%
                                        ============================

                                       9
Reserve for Unfunded Commitments
The reserve for unfunded  commitments  is  established  through a provision  for
losses - unfunded  commitments charged to noninterest  expense.  The reserve for
unfunded  commitments is an amount that Management  believes will be adequate to
absorb  probable  losses  inherent in  existing  commitments,  including  unused
portions of  revolving  lines of credits  and other  loans,  standby  letters of
credits,  and unused  deposit  account  overdraft  privilege.  The  reserve  for
unfunded  commitments is based on evaluations of the  collectibility,  and prior
loss experience of unfunded commitments. The evaluations take into consideration
such  factors as changes in the nature and size of the loan  portfolio,  overall
loan portfolio quality, loan concentrations,  specific problem loans and related
unfunded  commitments,  and  current  economic  conditions  that may  affect the
borrower's or depositor's ability to pay.

Mortgage Servicing Rights
Mortgage  servicing  rights (MSRs)  represent  the  Company's  right to a future
stream of cash flows based upon the  contractual  servicing fee associated  with
servicing mortgage loans. Our MSRs arise from residential mortgage loans that we
originate  and sell,  but retain the right to  service  the loans.  For sales of
residential  mortgage  loans, a portion of the cost of  originating  the loan is
allocated  to the  servicing  right  based  on fair  values  of the loan and the
servicing  right.  The net gain from the  retention  of the  servicing  right is
included in gain on sale of loans in  noninterest  income when the loan is sold.
Fair  value  is  based  on  market  prices  for  comparable  mortgage  servicing
contracts, when available, or alternatively,  is based on a valuation model that
calculates  the present  value of estimated  future net  servicing  income.  The
valuation model incorporates  assumptions that market  participants would use in
estimating  future  net  servicing  income,  such as the  cost to  service,  the
discount rate, the custodial earnings rate, an inflation rate, ancillary income,
prepayment  speeds and  default  rates and  losses.  MSRs are  included in other
assets.  Servicing fees are recorded in noninterest income when earned. MSRs are
carried at fair value, with changes in fair value reported in noninterest income
in the period in which the change occurs.

The determination of fair value of our MSRs requires management judgment because
they are not actively traded.  The determination of fair value for MSRs requires
valuation  processes  which combine the use of  discounted  cash flow models and
extensive  analysis  of current  market  data to arrive at an  estimate  of fair
value. The cash flow and prepayment assumptions used in our discounted cash flow
model are based on empirical data drawn from the  historical  performance of our
MSRs,   which  we  believe  are  consistent  with  assumptions  used  by  market
participants  valuing similar MSRs, and from data obtained on the performance of
similar MSRs. The key assumptions used in the valuation of MSRs include mortgage
prepayment  speeds and the discount  rate.  These  variables  can, and generally
will, change from quarter to quarter as market conditions and projected interest
rates change.  The key risks inherent with MSRs are prepayment speed and changes
in discount rates.

The following tables summarize the activity in, and the main assumptions we used
to  determine  the fair  value of  mortgage  servicing  rights  for the  periods
indicated (dollars in thousands):

                                        Three months ended March 31,
                                        ----------------------------
                                               2008         2007
                                        ----------------------------
Mortgage servicing rights:
Balance at beginning of period               $4,088        $3,912
Additions                                       177           195
Change in fair value                           (340)          (12)
                                        ----------------------------
Balance at end of period                     $3,925        $4,095
                                        ============================
Servicing fees received                        $253          $243
Balance of loans serviced at:
     Beginning of period                   $406,743      $389,636
     End of period                         $407,246      $393,594
Weighted-average prepayment speed (CPR)        14.1%         11.2%
Discount rate                                  10.0%         10.0%

                                       10
Off-Balance Sheet Credit Related Financial Instruments
In the ordinary course of business,  the Company has entered into commitments to
extend credit, including commitments under credit card arrangements,  commercial
letters of credit, and standby letters of credit. Such financial instruments are
recorded when they are funded.

Premises and Equipment
Land is carried at cost. Buildings and equipment, including those acquired under
capital  lease,   are  stated  at  cost  less   accumulated   depreciation   and
amortization.  Depreciation  and  amortization  expenses are computed  using the
straight-line  method over the estimated  useful lives of the related  assets or
lease terms.  Asset lives range from 3-10 years for  furniture and equipment and
15-40 years for land improvements and buildings.

Foreclosed Assets
Assets acquired  through,  or in lieu of, loan foreclosure are held for sale and
are initially recorded at fair value at the date of foreclosure,  establishing a
new cost basis.  Subsequent to  foreclosure,  management  periodically  performs
valuations  and the assets are carried at the lower of  carrying  amount or fair
value less cost to sell. Revenue and expenses from operations and changes in the
valuation allowance are included in other noninterest expense.

Goodwill and Other Intangible Assets
Goodwill  represents the excess of costs over fair value of assets of businesses
acquired.  Goodwill and other intangible  assets acquired in a purchase business
combination and determined to have an indefinite  useful life are not amortized,
but instead  tested for  impairment at least  annually.  Intangible  assets with
estimable  useful lives are amortized  over their  respective  estimated  useful
lives to their estimated residual values, and reviewed for impairment.

The  Company has  identifiable  intangible  assets  consisting  of core  deposit
premiums and minimum  pension  liability.  Core deposit  premiums are  amortized
using an  accelerated  method  over a period  of ten  years.  Intangible  assets
related to minimum pension  liability are adjusted annually based upon actuarial
estimates.

The following table summarizes the Company's goodwill intangible as of March 31,
2008 and December 31, 2007.

                         December 31,                                  March 31,
                             2007       Additions     Reductions         2008
   (Dollar in Thousands) -------------------------------------------------------
   Goodwill                 $15,519         -              -            $15,519
                         =======================================================

The following  table  summarizes  the Company's  core deposit  intangibles as of
March 31, 2008 and December 31, 2007.

                          December 31,                                 March 31,
                             2007       Additions     Reductions         2008
   (Dollar in Thousands   ------------------------------------------------------
   Core deposit intangibles  $3,365          -                -          $3,365
   Accumulated amortization  (2,189)         -             ($123)        (2,312)
                           -----------------------------------------------------
   Core deposit intangibles, $1,176          -             ($123)        $1,053
     net                   =====================================================

Core deposit  intangibles are amortized over their expected  useful lives.  Such
lives are  periodically  reassessed  to  determine  if any  amortization  period
adjustments  are  indicated.   The  following  table  summarizes  the  Company's
estimated core deposit  intangible  amortization for each of the five succeeding
years:

                                              Estimated Core Deposit
                                              Intangible Amortization
                Years Ended                    (Dollar in thousands)
                -----------                   -----------------------
                   2008                                 $523
                   2009                                 $328
                   2010                                 $260
                   2011                                  $65
                Thereafter                                 -

                                       11
Impairment of Long-Lived Assets and Goodwill
Long-lived  assets,  such as premises and equipment,  and purchased  intangibles
subject to amortization,  are reviewed for impairment whenever events or changes
in  circumstances  indicate  that the  carrying  amount  of an asset  may not be
recoverable.  Recoverability  of  assets  to be held and used is  measured  by a
comparison of the carrying amount of an asset to estimated  undiscounted  future
cash flows expected to be generated by the asset.  If the carrying  amount of an
asset  exceeds  its  estimated  future  cash  flows,  an  impairment  charge  is
recognized  by the amount by which the carrying  amount of the asset exceeds the
fair value of the asset. Assets to be disposed of would be separately  presented
in the balance  sheet and reported at the lower of the  carrying  amount or fair
value  less  costs  to sell,  and are no  longer  depreciated.  The  assets  and
liabilities of a disposed  group  classified as held for sale would be presented
separately in the appropriate asset and liability sections of the balance sheet.

On December 31 of each year,  goodwill is tested for  impairment,  and is tested
for impairment  more  frequently if events and  circumstances  indicate that the
asset might be impaired. An impairment loss is recognized to the extent that the
carrying amount exceeds the asset's fair value.  This  determination  is made at
the  reporting  unit  level  and  consists  of two  steps.  First,  the  Company
determines  the fair value of a reporting  unit and  compares it to its carrying
amount.  Second,  if the  carrying  amount of a reporting  unit exceeds its fair
value, an impairment loss is recognized for any excess of the carrying amount of
the reporting unit's goodwill over the implied fair value of that goodwill.  The
implied fair value of goodwill is determined by allocating the fair value of the
reporting unit in a manner similar to a purchase price allocation.  The residual
fair value after this allocation is the implied fair value of the reporting unit
goodwill.

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.

Stock-Based Compensation
The following table shows the number, weighted-average exercise price, intrinsic
value,  weighted average remaining  contractual life,  average remaining vesting
period,  and remaining  compensation  cost to be  recognized  over the remaining
vesting period of options  exercisable,  options not yet exercisable,  and total
options outstanding as of March 31, 2008:
Currently     Currently Not     Total
(dollars in thousands except exercise price)         Exercisable     Exercisable   Outstanding
(dollars in thousands except exercise price)
Number of options                                    1,079,131        292,050       1,371,181
Weighted average exercise price                         $12.70         $22.15          $14.71
Intrinsic value                                         $4,972              -          $4,972
Weighted average remaining contractual term (yrs.)        2.78           8.96            4.10
The options for 292,050  shares that are not currently  exercisable  as of March
31, 2008 are expected to vest, on a  weighted-average  basis, over the next 3.09
years, and the Company is expected to recognize $1,709,000 of compensation costs
related to these options as they vest.

Earnings Per Share
Basic  earnings per share  represents  income  available to common  shareholders
divided by the  weighted-average  number of common shares outstanding during the
period.  Diluted earnings per share reflects additional common shares that would
have been outstanding if dilutive  potential  common shares had been issued,  as
well as any  adjustments  to income  that would  result from  assumed  issuance.
Potential  common  shares that may be issued by the Company  relate  solely from
outstanding stock options, and are determined using the treasury stock method.

                                       12
Earnings per share have been computed based on the following:

                                                 Three months ended March 31,
                                                     2008             2007
(in thousands)                                   ----------------------------
Net income                                           $4,048           $6,444
Average number of common shares outstanding          15,842           15,879
Effect of dilutive stock options                        240              537
                                                 ----------------------------
Average number of common shares outstanding
   used to calculate diluted earnings per share      16,082           16,416
                                                 ============================

There were 424,050 and 42,000 options  excluded from the  computation of diluted
earnings  per share for the three month  periods  ended March 31, 2008 and 2007,
respectively, because the effect of these options was antidilutive.

Comprehensive Income
Accounting principles generally require that recognized revenue, expenses, gains
and losses be  included in net income.  Although  certain  changes in assets and
liabilities,   such  as  unrealized  gains  and  losses  on   available-for-sale
securities,  are reported as a separate  component of the equity  section of the
balance  sheet,   such  items,   along  with  net  income,   are  components  of
comprehensive income.

The components of other comprehensive  income (loss) and related tax effects are
as follows:
                                              Three months ended March 31,
                                                2008                 2007
(in thousands)                                ----------------------------
Unrealized holding gains (losses) on
  available-for-sale securities                 $2,721               $921
Tax effect                                      (1,144)              (388)
                                              ----------------------------
    Unrealized holding gains (losses) on
    available-for-sale securities, net of tax   $1,577               $533
                                              ============================

The   components  of  accumulated   other   comprehensive   loss,   included  in
shareholders' equity, are as follows:
                                                        March 31,   December 31,
                                                          2008           2007
(in thousands)                                         -------------------------
Net unrealized gains on available-for-sale securities   $4,013          $1,292
Tax effect                                              (1,687)           (543)
                                                       -------------------------
    Unrealized holding gains on
    available-for-sale securities, net of tax            2,326             749
                                                       -------------------------
Minimum pension liability                               (3,970)         (3,970)
Tax effect                                               1,669           1,669
                                                       -------------------------
   Minimum pension liability, net of tax                (2,301)         (2,301)
                                                       -------------------------
Accumulated other comprehensive loss                       $25         ($1,552)
                                                       =========================
Retirement Plans
The Company has  supplemental  retirement plans for current and former directors
and key executives.  These plans are non-qualified defined benefit plans and are
unsecured and unfunded.  The Company has purchased insurance on the lives of the
participants  and  intends to use the cash  values of these  policies to pay the
retirement obligations.

                                       13
The following table sets forth the net periodic benefit cost recognized for the
plans:

                                                    Three months ended March 31,
                                                         2008            2007
 (in thousands)                                     ----------------------------
Net pension cost included the following components:
Service cost-benefits earned during the period           $139            $150
Interest cost on projected benefit obligation             166             146
Amortization of net obligation at transition                -               -
Amortization of prior service cost                         45              45
Recognized net actuarial loss                              37              28
                                                    ----------------------------
Net periodic pension cost                                $387            $369
                                                    ============================

During the three months ended March 31, 2008 and 2007,  the Company  contributed
and paid out as benefits  $161,000 and $149,000,  respectively,  to participants
under the plans.  For the year ending  December 31, 2008, the Company expects to
contribute and pay out as benefits $587,000 to participants under the plans.

Fair Value Measurement

The Company utilizes fair value measurements to record fair value adjustments to
certain  assets  and  liabilities  and  to  determine  fair  value  disclosures.
Securities available-for-sale and mortgage servicing rights are recorded at fair
value on a recurring basis. Additionally,  from time to time, the Company may be
required to record at fair value other assets on a nonrecurring  basis,  such as
loans held for sale,  loans held for investment and certain other assets.  These
nonrecurring  fair value adjustments  typically involve  application of lower of
cost or market accounting or impairment write-downs of individual assets.

The Company groups assets and  liabilities at fair value in three levels,  based
on the  markets  in  which  the  assets  and  liabilities  are  traded  and  the
reliability of the assumptions used to determine fair value. These levels are:

Level 1 - Valuation is based upon quoted prices for identical instruments traded
          in active markets
Level 2 - Valuation  is based upon  quoted  prices for  similar  instruments  in
          active markets,  quoted prices for identical or similar instruments in
          markets that are not active, and model-based  valuation techniques for
          which all significant assumptions are observable in the market.

Level 3 - Valuation is generated from  model-based  techniques that use at least
          one  significant  assumption  not  observable  in  the  market.  These
          unobservable  assumptions reflect estimates of assumptions that market
          participants  would use in pricing the asset or  liability.  Valuation
          techniques include use of option pricing models,  discounted cash flow
          models and similar techniques.

Securities  available-for-sale  are recorded at fair value on a recurring basis.
Fair value  measurement  is based upon quoted  prices,  if available.  If quoted
prices are not  available,  fair values are measured using  independent  pricing
models or other  model-based  valuation  techniques such as the present value of
future  cash  flows,  adjusted  for the  security's  credit  rating,  prepayment
assumptions  and  other  factors  such  as  credit  loss  assumptions.  Level  1
securities  include  those  traded on an active  exchange,  such as the New York
Stock Exchange,  U.S. Treasury  securities that are traded by dealers or brokers
in active  over-the-counter  markets and money market funds.  Level 2 securities
include  mortgage-backed  securities  issued by government  sponsored  entities,
municipal bonds and corporate debt securities.  Securities classified as Level 3
include asset-backed securities in less liquid markets.

The Company does not record loans at fair value on a recurring  basis.  However,
from time to time,  a loan is  considered  impaired  and an  allowance  for loan
losses is  established.  Loans for which it is probable that payment of interest
and principal will not be made in accordance with the  contractual  terms of the
loan  agreement  are  considered   impaired.   Once  a  loan  is  identified  as
individually  impaired,  management  measures impairment in accordance with SFAS
114, Accounting by Creditors for Impairment of a Loan (SFAS 114). The fair value
of  impaired  loans  is  estimated  using  one  of  several  methods,  including
collateral value,  market value of similar debt,  enterprise value,  liquidation
value and discounted cash flows. Those impaired loans not requiring an allowance
represent  loans  for  which  the  fair  value  of the  expected  repayments  or
collateral  exceed the recorded  investments  in such loans.  At March 31, 2008,
substantially  all of the total impaired loans were evaluated  based on the fair
value of the collateral.  In accordance  with SFAS 157,  impaired loans where an
allowance  is  established  based  on  the  fair  value  of  collateral  require
classification  in  the  fair  value  hierarchy.  When  the  fair  value  of the
collateral is based on an observable  market price or a current  appraised value
which  uses   observable   data,  the  Company  records  the  impaired  loan  as
nonrecurring  Level 2. When an appraised  value is not  available or  management
determines  the fair  value of the  collateral  is  further  impaired  below the
appraised value, or the appraised value contains a significant  assumption,  and
there is no observable  market price,  the Company  records the impaired loan as
nonrecurring Level 3.

                                       14
Mortgage  servicing rights are carried at fair value. A valuation  model,  which
utilizes a discounted  cash flow analysis  using a discount rate and  prepayment
speed assumptions  currently quoted for comparable  instruments,  is used in the
completion  of the fair  value  measurement.  As such,  the  Company  classifies
mortgage servicing rights subjected to recurring fair value adjustments as Level
2.

Goodwill and identified  intangible assets are subject to impairment  testing. A
projected  cash flow  valuation  method is used in the  completion of impairment
testing.  This  valuation  method  requires a  significant  degree of management
judgment as there are  unobservable  inputs for these  assets.  In the event the
projected  undiscounted  net  operating  cash  flows are less than the  carrying
value, the asset is recorded at fair value as determined by the valuation model.
As such, the Company  classifies  goodwill and other intangible assets subjected
to nonrecurring fair value adjustments as Level 3.

The table below presents the recorded amount of assets and liabilities  measured
at fair value on a recurring basis:

Fair value at March 31, 2008              Total    Level 1    Level 2    Level 3
Securities available-for-sale           $272,276         -    $272,276        -
Mortgage servicing rights                  3,925         -      $3,925        -
                                        ----------------------------------------
Total assets measured at fair value     $276,201         -    $276,201        -
                                        ========================================

The table below presents the recorded amount of assets and liabilities measured
at fair value on a nonrecurring basis:

Fair value at March 31, 2008              Total    Level 1    Level 2    Level 3
Impaired loans                           $12,956         -         -     $12,956
                                        ----------------------------------------
Total assets measured at fair value      $12,956         -         -     $12,956
                                        ========================================

Recent Accounting Pronouncements
In February 2006, the Financial  Accounting  Standards  Board (FASB) issued FASB
Statement of Financial  Accounting  Standards  No. 155,  Accounting  for Certain
Hybrid  Financial  Instruments  an amendment of FASB  Statements No. 133 and 140
(SFAS 155). SFAS 155 amends SFAS 133, Accounting for Derivative  Instruments and
Hedging  Activities  and SFAS 140,  Accounting  for  Transfers  and Servicing of
Financial Assets and  Extinguishments of Liabilities.  SFAS 155 (i) permits fair
value  remeasurement  for any  hybrid  financial  instrument  that  contains  an
embedded  derivative  that otherwise would require  bifurcation,  (ii) clarifies
which  interest-only  strips and  principal-only  strips are not  subject to the
requirements of SFAS 133, (iii) establishes a requirement to evaluate  interests
in securitized  financial  assets to identify  interests  that are  freestanding
derivatives or that are hybrid  financial  instruments  that contain an embedded
derivative requiring  bifurcation,  (iv) clarifies that concentrations of credit
risk in the form of subordination are not embedded  derivatives,  and (v) amends
SFAS 140 to eliminate the  prohibition  on a qualifying  special  purpose entity
from holding a derivative  financial  instrument  that  pertains to a beneficial
interest  other  than  another  derivative  financial  instrument.  SFAS  155 is
effective  for the  Company on  January  1, 2007 and did not have a  significant
impact on the Company's consolidated financial statements.

                                       15
In  September  2006,  the FASB issued FASB  Statement  of  Financial  Accounting
Standards No. 157,  Fair Value  Measurements  (SFAS 157).  SFAS 157 defines fair
value,  establishes a framework for measuring  fair value in generally  accepted
accounting  principles,  and expands  disclosures about fair value measurements.
SFAS 157 was  effective  for the  Company  on January 1, 2008 and did not have a
significant impact on the Company's consolidated financial statements.

In  September  2006,  the FASB issued FASB  Statement  of  Financial  Accounting
Standards No. 158,  Employers'  Accounting for Defined Benefit Pension and Other
Postretirement Plans, an amendment of FASB Statements No. 87, 88 106, and 132(R)
(SFAS  158).  SFAS 158  requires  an employer to  recognize  the  overfunded  or
underfunded  status of  defined  benefit  postretirement  plans as an asset or a
liability in its statement of financial position.  The funded status is measured
as the difference  between plan assets at fair value and the benefit  obligation
(the projected benefit  obligation for pension plans or the accumulated  benefit
obligation for other postretirement benefit plans). An employer is also required
to measure the funded status of a plan as of the date of its year-end  statement
of financial  position  with  changes in the funded  status  recognized  through
comprehensive  income. SFAS 158 also requires certain disclosures  regarding the
effects on net  periodic  benefit  cost for the next fiscal year that arise from
delayed recognition of gains or losses,  prior service costs or credits, and the
transition asset or obligation. The Company was required to recognize the funded
status of its defined benefit  post-retirement benefit plans in its consolidated
financial  statements  for the year ended  December  31,  2006.  The Company had
previously   recognized   the  funded  status  of  its  Executive  and  Director
Supplemental  Retirement plans in prior consolidated  financial statements.  The
Company  has  no  other  defined  benefit  post-retirement  benefit  plans.  The
requirement to measure plan assets and benefit obligations as of the date of the
year-end  statement  of  financial  position  is  effective  for  the  Company's
consolidated  financial  statements  beginning  with the fiscal year ended after
December 15, 2008.  The Company  currently  uses December 31 as the  measurement
date for its defined benefit post-retirement benefit plans.

In February  2007,  the FASB  issued  FASB  Statement  of  Financial  Accounting
Standards  No. 159, The Fair Value  Option for  Financial  Assets and  Financial
Liabilities - Including an amendment to FASB Statement No. 115 (SFAS 159).  SFAS
159 permits entities to choose to measure many financial instruments and certain
other items at fair value.  The objective is to improve  financial  reporting by
providing  entities  with the  opportunity  to mitigate  volatility  in reported
earnings caused by measuring related assets and liabilities  differently without
having to apply complex hedge accounting provisions.  SFAS 159 was effective for
the  Company  on January  1, 2008 and did not have a  significant  impact on the
Company's consolidated financial statements.

In June  2006,  the FASB  issued  FASB  Interpretation  No. 48,  Accounting  for
Uncertainty in Income Taxes, an  interpretation  of FASB Statement 109 (FIN 48).
FIN 48  prescribes a recognition  threshold and a measurement  attribute for the
financial  statement  recognition  and  measurement  of a tax position  taken or
expected  to be taken in a tax return.  Benefits  from tax  positions  should be
recognized in the financial statements only when it is more likely than not that
the tax position will be sustained upon  examination by the  appropriate  taxing
authority  that would have full  knowledge  of all relevant  information.  A tax
position that meets the  more-likely-than-not  recognition threshold is measured
at the largest  amount of benefit that is greater than fifty  percent  likely of
being realized upon ultimate settlement. Tax positions that previously failed to
meet the more-likely-than-not  recognition threshold should be recognized in the
first  subsequent  financial  reporting  period in which that  threshold is met.
Previously recognized tax positions that no longer meet the more-likely-than-not
recognition  threshold should be derecognized in the first subsequent  financial
reporting  period in which that threshold is no longer met. FIN 48 also provides
guidance on the  accounting  for and  disclosure of  unrecognized  tax benefits,
interest and penalties.  FIN 48 was effective for the Company on January 1, 2007
and did not have a significant  impact on the Company's  consolidated  financial
statements.

FASB  Emerging  Issues  Task Force  ("EITF")  Issue No.  06-4,  "Accounting  for
Deferred  Compensation and  Postretirement  Benefit Aspects of Endorsement Split
Dollar Life  Insurance  Arrangements."  EITF 06-4 requires the  recognition of a
liability  and  related  compensation  expense  for bank  owned  life  insurance
policies with joint beneficiary agreements that provide a benefit to an employee
that  extends  to  post-retirement  periods.  Under EITF  06-4,  life  insurance
policies purchased for the purpose of providing such benefits do not effectively
settle an entity's  obligation  to the  employee.  Accordingly,  the entity must
recognize a liability and related  compensation  expense  during the  employee's
active  service  period  based on the future  cost of  insurance  to be incurred
during the  employee's  retirement.  If the  entity  has  agreed to provide  the
employee with a death  benefit,  then the liability for the future death benefit
should  be  recognized  by  following  the  guidance  in SFAS  106,  "Employer's
Accounting for Postretirement Benefits Other Than Pensions." The Company adopted
EITF 06-4  effective as of January 1, 2008 as a change in  accounting  principle
through a  cumulative-effect  adjustment to retained earnings of $522,000 net of
tax.

                                       16
In November 2007, the SEC issued Staff Accounting Bulletin No. 109, Written Loan
Commitments  Recorded at Fair Value through Earnings (SAB 109). SAB 109 provides
guidance on the accounting for written loan  commitments  recorded at fair value
under generally accepted  accounting  principles (GAAP).  Specifically,  the SAB
revises  the  Staff's  views on  incorporating  expected  net future  cash flows
related to loan servicing  activities in the fair value measurement of a written
loan commitment.  SAB 109, which  supersedes SAB 105,  Application of Accounting
Principles  to Loan  Commitments,  requires  the  expected net future cash flows
related to the associated  servicing of the loan be included in the  measurement
of all written loan  commitments  that are  accounted  for at fair value through
earnings. SAB 109 was effective on January 1, 2008 for the Company.  Adoption of
SAB 109 did not a material impact on the Company's financial statements.

                                       17
TRICO BANCSHARES
                                Financial Summary
                    (in thousands, except per share amounts)

                                                           (Unaudited)
                                                       Three months ended
                                                            March 31,
                                                   ----------------------------
                                                     2008              2007
                                                   ----------------------------
Net Interest Income (FTE)                           $21,546          $21,666
Provision for loan losses                            (4,100)            (482)
Noninterest income                                    6,850            6,600
Noninterest expense                                 (17,573)         (16,960)
Provision for income taxes (FTE)                     (2,675)          (4,380)
                                                   ----------------------------
Net income                                           $4,048           $6,444
                                                   ============================

Earnings per share:
     Basic                                             $0.26           $0.41
     Diluted                                           $0.25           $0.39
Per share:
     Dividends paid                                    $0.13           $0.13
     Book value at period end                          12.02           10.96
     Tangible book value at period end                 10.97            9.89

Average common shares outstanding                      15,842         15,879
Average diluted common shares outstanding              16,082         16,416
Shares outstanding at period end                       15,745         15,910
At period end:
     Loans, net                                    $1,528,561     $1,478,719
     Total assets                                   1,999,350      1,866,321
     Total deposits                                 1,528,475      1,536,849
     Federal funds purchased                          102,300         38,000
     Other borrowings                                 103,767         41,347
     Junior subordinated debt                          41,238         41,238
     Shareholders' equity                             189,300        174,397

Financial Ratios:
During the period (annualized):
     Return on assets                                  0.81%           1.38%
     Return on equity                                  8.37%          14.79%
     Net interest margin(1)                            4.74%           5.12%
     Net loan charge-offs to average loans             0.53%           0.13%
     Efficiency ratio(1)                              61.89%          60.00%
     Average equity to average assets                  9.73%           9.34%
At period end:
     Equity to assets                                  9.47%           9.34%
     Total capital to risk-adjusted assets            12.02%          11.76%
     Allowance for losses to loans(2)                  1.44%           1.26%

(1) Fully taxable equivalent (FTE)
(2) Allowance  for losses  includes  allowance  for loan losses and reserve for
     unfunded commitments.

                                       18
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

As TriCo  Bancshares (the  "Company") has not commenced any business  operations
independent of Tri Counties Bank (the "Bank"), the following discussion pertains
primarily  to the  Bank.  Average  balances,  including  such  balances  used in
calculating  certain financial ratios, are generally  comprised of average daily
balances  for the  Company.  Within  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations,  interest income and net interest
income are  generally  presented  on a fully  tax-equivalent  (FTE)  basis.  The
presentation  of  interest  income and net  interest  income on a FTE basis is a
common  practice within the banking  industry.  Interest income and net interest
income  are  shown on a  non-FTE  basis in the  Part I -  Financial  Information
section  of  this  Form  10-Q,  and a  reconciliation  of the  FTE  and  non-FTE
presentations is provided below in the discussion of net interest income.

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  Condensed  Consolidated  Financial  Statements  of the Company and the
Notes thereto located at Item 1 of this report.

The Company had quarterly  earnings of  $4,048,000,  or $0.25 per diluted share,
for the three  months  ended  March 31,  2008.  This  represents  a decrease  of
$2,396,000  (37.2%) when compared  with  earnings of $6,444,000  for the quarter
ended March 31, 2007. Diluted earnings per share for the quarter ended March 31,
2008 decreased  35.9% to $0.25 compared to $0.39 for the quarter ended March 31,
2007.  The decrease in earnings from the prior year quarter was primarily due to
the Federal  Reserve's  decrease in interest rates during the quarter along with
the Company's  decision to increase by $3,618,000  (751%) the provision for loan
losses to  $4,100,000  from  $482,000,  and to increase  by $708,000  (605%) the
provision  for credit losses on unfunded  commitments  from $117,000 to $825,000
for the quarter ended March 31, 2008.

                                       19
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,
                                            --------------------------
                                              2008              2007
                                            --------------------------
Net Interest Income (FTE)                    $21,546          $21,666
Provision for loan losses                     (4,100)            (482)
Noninterest income                             6,850            6,600
Noninterest expense                          (17,573)         (16,960)
Provision for income taxes (FTE)              (2,675)          (4,380)
                                            --------------------------
Net income                                    $4,048           $6,444
                                            ==========================
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,
                                            --------------------------
                                                 2008         2007
                                            --------------------------
     Interest income                            $31,130      $30,661
     Interest expense                            (9,765)      (9,216)
     FTE adjustment                                 181          221
                                            --------------------------
        Net interest income (FTE)               $21,546      $21,666
                                            ==========================
     Average interest-earning assets         $1,817,212   $1,692,574
     Net interest margin (FTE)                     4.74%        5.12%

The  Company's  primary  source  of  revenue  is  net  interest  income,  or the
difference  between  interest  income on  interest-earning  assets and  interest
expense on  interest-bearing  liabilities.  Net interest income (FTE) during the
first quarter of 2008 decreased  $120,000 (0.6%) from the same period in 2007 to
$21,546,000.  The  decrease  in net  interest  income  (FTE)  was due to a 0.38%
decrease in net interest  margin (FTE) to 4.74% that was  partially  offset by a
$124,638,000 (7.4%) increase in average balances of  interest-earning  assets to
$1,817,212,000.

Interest and Fee Income
Interest and fee income (FTE) for the first quarter of 2008  increased  $429,000
(1.4%) from the first  quarter of 2007.  The increase was due to a  $124,638,000
(7.4%) increase in average  interest-earning assets that was partially offset by
a 0.41% decrease in the yield on those average interest-earning assets to 6.89%.
The growth in  interest-earning  assets was the result of a $79,266,000  (39.2%)
increase in average  balance of  investments to  $281,503,000  and a $45,302,000
(3.0%) increase in average loan balances to $1,535,357.

Contributing to the 0.41% decrease in average yield on  interest-earning  assets
was a 0.41%  decrease in average  yield on loans to 7.22% in the  quarter  ended
March 31, 2008 compared to 7.63% in the prior year quarter.  This 0.41% decrease
in average  yield on loans is primarily  the result of  decreases in  short-term
lending rates  including the prime rate of lending which  averaged  8.25% during
the quarter  ended March 31, 2007 compared to an average of 6.22% in the quarter
ended March 31, 2008.  The average yield on the Company's  combined  taxable and
nontaxable  investment  balances  increased  0.23% to 5.09% in the quarter ended
March 31, 2008  compared to 4.86% in the prior year quarter as the Company added
investments during the later part of 2007 and early 2008.

                                       20
Interest Expense

Interest expense increased $549,000 (6.0%) in the first quarter of 2008 compared
to the prior year  quarter.  The increase was  primarily  due to a  $111,979,000
(8.7%) increase in average  interest-bearing  liabilities to $1,407,193,000 that
was  partially  offset  by  a  0.07%  decrease  in  the  average  rate  paid  on
interest-bearing liabilities from 2.85% in the first quarter of 2007 to 2.78% in
the first quarter of 2008. The average  balances of all deposit  categories were
flat to slightly down, from the prior year quarter while the average balances of
Federal funds  purchased and other  borrowings  were up  $64,041,000  (162%) and
$63,409,000 (152%), respectively, from the prior year quarter. The average rates
paid for all categories of interest-bearing liabilities were down except for the
average rate paid on savings  deposits.  These trends in liability  balances and
rates are indicative of the competitive environment for these balances.

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,
                                             -------------------
                                              2008         2007
                                             -------------------
Yield on interest-earning assets              6.89%        7.30%
Rate paid on interest-bearing liabilities     2.78%        2.85%
                                             -------------------
     Net interest spread                      4.11%        4.45%
Impact of all other net
     noninterest-bearing funds                0.63%        0.67%
                                             -------------------
        Net interest margin                   4.74%        5.12%
                                             ===================

Net interest margin in the first quarter of 2008 decreased 0.38% compared to the
first quarter of 2007.  This decrease in net interest  margin was due to a 0.34%
decrease in net interest  spread and a 0.04% decrease in the impact of all other
net  noninterest-bearing  funds when  compared  to the prior year  quarter.  The
decrease in net  interest  margin was mainly due to an  increase  in  nondeposit
interest-bearing  liabilities,  or wholesale  funding,  as a percentage of total
funding sources,  and a lag in reductions of interest rates on  interest-bearing
liabilities compared to interest rates on interest-earning assets.

                                       21
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  interest-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, 2008                   March 31, 2007
                                       -----------------------------    -------------------------------
                                                   Interest    Rates               Interest    Rates
                                         Average   Income/    Earned     Average   Income/    Earned
                                         Balance   Expense     Paid      Balance   Expense     Paid
                                       -----------------------------    ------------------------------
Assets:
Loans                                  $1,535,357  $27,726    7.22%     $1,490,055 $28,423     7.63%
Investment securities - taxable           254,778    3,078    4.83%        170,072   1,841     4.33%
Investment securities - nontaxable         26,725      505    7.57%         32,165     615     7.64%
Federal funds sold                            352        2    2.27%            282       3     4.26%
                                       ----------------------------     ------------------------------
   Total interest-earning assets        1,817,212   31,311    6.89%      1,692,574  30,882     7.30%
Other assets                              171,454                          172,874
                                       ----------                       ----------
Total assets                           $1,988,666                       $1,865,448
                                       ==========                       ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits          218,487       87    0.16%       $230,072     122     0.21%
Savings deposits                          387,490    1,502    1.55%        381,883     797     0.83%
Time deposits                             551,420    5,588    4.05%        560,913   6,469     4.61%
Federal funds purchased                   103,565      812    3.14%         39,524     522     5.28%
Other borrowings                          104,993    1,063    4.05%         41,584     490     4.71%
Junior subordinated debt                   41,238      713    6.92%         41,238     816     7.92%
                                       ----------------------------     ----------------------------
   Total interest-bearing liabilities   1,407,193    9,765    2.78%      1,295,214   9,216     2.85%
Noninterest-bearing deposits              354,207                          361,605
Other liabilities                          33,817                           34,367
Shareholders' equity                      193,449                          174,262
                                        ---------                        ---------
Total liabilities and shareholders'    $1,988,666                       $1,865,448
  equity                               ==========                       ==========
Net interest spread(1)                                        4.11%                            4.45%
Net interest income and interest margin(2)         $21,546    4.74%                $21,666     5.12%
                                                   ================                =================
(1) Net interest spread represents the average yield earned 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 interest expense, divided by the average balance of
    interest-earning assets.
22
Summary of  Changes in  Interest  Income and  Expense  due to Changes in Average
Asset and Liability Balances and Yields Earned and 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, 2008
                                                   compared with three months
                                                      ended March 31, 2007
                                               ---------------------------------
                                                Volume        Rate        Total
                                               ---------------------------------
Increase (decrease) in interest income:
Loans                                             $864     ($1,561)      ($697)
Investment securities                              962         165       1,127
Federal funds sold                                   1          (2)         (1)
                                               ---------------------------------
   Total interest-earning assets                 1,827      (1,398)        429
                                               ---------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                    (6)        (29)        (35)
Savings deposits                                    12         693         705
Time deposits                                     (109)       (772)       (881)
Federal funds purchased                            845        (555)        290
Other borrowings                                   747        (174)        573
Junior subordinated debt                             -        (103)       (103)
                                               ---------------------------------
   Total interest-bearing liabilities            1,489        (940)        549
                                               ---------------------------------
Increase (decrease) in Net Interest Income        $338       ($458)      ($120)
                                               =================================

Provision for Loan Losses
The Company  decided to increase  the  provision  for loan losses by  $3,618,000
(751%) to  $4,100,000  in the first  quarter of 2008 from  $482,000 in the first
quarter of 2007. The increase in the provision for loan losses was primarily due
to higher net loan charge-offs, increased nonperforming loans, and downgrades in
loan  classifications  during the first  quarter of 2008  compared  to the first
quarter  of 2007.  During  the  first  quarter  of 2008,  the  Company  recorded
$2,048,000 of net loan  charge-offs  versus $501,000 of net loan  charge-offs in
the  first  quarter  of  2007.  The  $1,547,000  (309%)  increase  in  net  loan
charge-offs  was primarily  related to  nonperforming  residential  construction
loans  for  which  appraised  values  indicated  declines  in the  value  of the
underlying collateral.

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

                                            Three months ended March 31,
                                            ----------------------------
                                                   2008          2007
                                            ----------------------------
     Service charges on deposit accounts          $3,838        $3,559
     ATM fees and interchange                      1,079           949
     Other service fees                              551           565
     Change in value of mortgage servicing rights   (340)          (12)
     Gain on sale of loans                           258           266
     Commissions on sale of
       nondeposit investment products                420           500
     Increase in cash value of life insurance        360           405
     Gain from VISA IPO                              396             -
     Other noninterest income                        288           368
                                            ----------------------------
     Total noninterest income                     $6,850        $6,600
                                            ============================

Noninterest  income for the first quarter of 2008 increased $250,000 (3.8%) from
the first  quarter of 2007.  due primarily to a $396,000 gain from the Company's
membership in VISA, Inc. and VISA's initial public offering (IPO) in March 2008,
a $279,000 (7.8%) increase in service charges on deposit  accounts to $3,838,000
and a  $130,000  (13.7%)  increase  in  ATM  fees  and  interchange  revenue  to
$1,079,000.  The increases in service  charges on deposit  accounts and ATM fees
and interchange  revenue are mainly due to growth in number of customers.  These
positive  factors were partially  offset by an increased  negative change in the
value of mortgage  servicing  rights of $328,000 and an $80,000 (16.0%) decrease
in commission on sale of nondeposit investment products.  The increased negative
change  in the  value of  mortgage  servicing  rights  was  primarily  due to an
increase in estimated prepayment speeds of the mortgages being serviced.

                                       23
Noninterest Expense
The components of noninterest expense were as follows (in thousands):

                                              Three months ended March 31,
                                              ----------------------------
                                                    2008          2007
                                              ----------------------------
     Base salaries, net of
        deferred loan origination costs         $6,333        $5,995
     Incentive compensation                        560         1,203
     Benefits and other compensation costs       2,587         2,544
                                              --------------------------
       Total salaries and benefits expense       9,480         9,742
                                              --------------------------

     Occupancy                                   1,188         1,170
     Equipment                                     982         1,098
     Provision for losses - unfunded commitments   825           117
     Data processing and software                  615           419
     Telecommunications                            597           409
     ATM network charges                           494           428
     Professional fees                             493           347
     Advertising and marketing                     319           404
     Postage                                       282           221
     Courier service                               263           298
     Intangible amortization                       123           123
     Operational losses                            113            60
     Assessments                                    82            81
     Other                                       1,717         2,043
                                               -------------------------
       Total other noninterest expense           8,093         7,218
                                               -------------------------
         Total noninterest expense             $17,573       $16,960
                                               =========================
     Average full time equivalent staff            626           632
     Noninterest expense to revenue (FTE)        61.89%        60.00%

Noninterest  expense for the first  quarter of 2008  increased  $613,000  (3.6%)
compared to the first quarter of 2007.  Salaries and benefits expense  decreased
$262,000 (2.7%) to $9,480,000. The decrease in salaries and benefits expense was
mainly due to decreased incentive  compensation and the effect of a reduction in
the number of  full-time  equivalent  employees  that were  partially  offset by
annual salary increases.  Provision for losses - unfunded commitments  increased
$708,000  (605%) to $825,000 for the quarter  ended March 31, 2008 due primarily
to  estimated  losses  related to home equity  lines of credit and  construction
loans. Data processing and software, telecommunications, and ATM network charges
were up due to  additional  products  and  services  obtained  from third  party
providers,  and were  partially  offset by  reductions  in equipment and courier
service  expense.  Professional  fees increased due to increased  consulting and
legal fees.

Provision for Income Tax The effective tax rate for the three months ended March
31, 2008 was 38.1%  compared to 39.2% for the three months ended March 31, 2007.
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  increase  in  cash  value  of  life  insurance,
tax-exempt loans and state and municipal securities.

                                       24
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, 2008           At December 31, 2007
                          -------------------------    -------------------------
                            Gross Guaranteed  Net       Gross Guaranteed   Net
                          ------------------------------------------------------
Classified loans          $32,505   $5,790  $26,715    $18,570  $5,948  $12,622
Other classified assets       836        -      836        187       -      187
                          ------------------------------------------------------
Total classified assets   $33,341   $5,790  $27,551    $18,757  $5,948  $12,809
                          ======================================================
Allowance for loan losses/classified loans     72.6%                      137.3%

Classified  assets,  net of  guarantees  of the U.S.  Government,  including its
agencies and its government-sponsored  agencies,  increased $14,742,000 (115.1%)
to $27,551,000 at March 31, 2008 from $12,809,000 at December 31, 2007.

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,  2008,  if all such  loans had been  current  in
accordance with their original terms, totaled $445,000. Interest income actually
recognized  on these  loans  during the three  months  ended  March 31, 2008 was
$155,000.

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

                                       25
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  $2,988,000  (38.8%) to $10,686,000  during the first three
months of 2008.  Nonperforming assets net of guarantees represent 0.53% 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.
At March 31, 2008        At December 31, 2007
                                    ------------------------    ------------------------
                                     Gross Guaranteed  Net       Gross Guaranteed   Net
                                    ------------------------    ------------------------
(dollars in thousands):
Performing nonaccrual loans         $9,222   $5,660   $3,562     $9,098  $5,814   $3,284
Nonperforming, nonaccrual loans      5,508        -    5,508      4,227       -    4,227
                                   ------------------------------------------------------
     Total nonaccrual loans         14,730    5,660    9,070     13,325   5,814    7,511
Loans 90 days past due and still       780        -      780          -       -        -
  accruing                         -----------------------------------------------------
otal nonperforming loans            15,510    5,660    9,850     13,325   5,814    7,511
Other real estate owned                836        -      836        187       -      187
                                   ------------------------------------------------------
Total nonperforming assets         $16,346   $5,660  $10,686    $13,512  $5,814   $7,698
                                   =====================================================
Nonperforming loans to total loans                      0.64%                       0.48%
Nonperforming assets to total assets                    0.53%                       0.39%
Allowance for loan losses/nonperforming loans            197%                        231%
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.

The Company adopted and announced a stock repurchase plan on August 21, 2007 for
the repurchase of up to 500,000  shares of the Company's  common stock from time
to time as market conditions allow. The 500,000 shares authorized for repurchase
under this plan represented  approximately  3.2% of the Company's  approximately
15,815,000  common shares  outstanding  as of August 21, 2007.  This plan has no
stated  expiration date for the  repurchases.  As of March 31, 2008, the Company
had  repurchased  166,600  shares  under this plan,  which left  333,400  shares
available for repurchase under the plan.

The  Company's  primary  capital  resource is  shareholders'  equity,  which was
$189,300,000 at March 31, 2008.  This amount  represents an increase of $422,000
from December 31, 2007, the net result of comprehensive income for the period of
$5,625,000, and the effect of stock option vesting of $192,000, partially offset
by the  repurchase of common stock with value of  $2,821,000,  dividends paid of
$2,052,000,  and the cumulative effect of a change in accounting principle,  net
of tax, of $522,000.  The  Company's  ratio of equity to total assets was 9.47%,
9.34%,  and 9.54% as of March 31, 2008,  March 31, 2007,  and December 31, 2007,
respectively.

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

                              At March 31,         At           Minimum
                           ------------------    December 31,   Regulatory
                            2008       2007        2007         Requirement
                           ------------------------------------------------
     Tier I Capital         10.88%     10.75%     10.90%          4.00%
     Total Capital          12.02%     11.76%     11.90%          8.00%
     Leverage ratio         10.77%     10.87%     11.16%          4.00%

                                       26
Liquidity
The discussion of "Liquidity" under Item 3 of this report is incorporated herein
by reference..

Off-Balance Sheet Items
The Bank has certain  ongoing  commitments  under  operating and capital leases.
These commitments do not significantly impact operating results. As of March 31,
2008 commitments to extend credit and commitments  related to the Bank's deposit
overdraft  privilege  product were the Bank's only  financial  instruments  with
off-balance  sheet  risk.  The  Bank has not  entered  into  any  contracts  for
financial  derivative   instruments  such  as  futures,   swaps,  options,  etc.
Commitments to extend credit were  $688,737,000  and  $690,633,000  at March 31,
2008 and December 31, 2007, respectively, and represent 44.5% of the total loans
outstanding at both March 31, 2008 and December 31, 2007. Commitments related to
the  Bank's  deposit  overdraft   privilege  product  totaled   $33,456,000  and
$33,517,000 at March 31, 2008 and December 31, 2007, respectively.

                                       27
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, 2008,  the results of the  simulations  noted above  indicate  that
given a "flat"  balance  sheet  scenario,  and if deposit  rates  track  general
interest  rate changes by  approximately  50%, the  Company's  balance  sheet is
slightly  liability  sensitive.  "Liability  sensitive"  implies  that  earnings
decrease when interest rates rise,  and increase when interest  rates  decrease.
The  magnitude of all the  simulation  results  noted above is within the Bank'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.

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, 2008 and 2007,  the Company  had no material  derivative  financial
instruments.

                                       28
Liquidity
The  Company's  principal  source of asset  liquidity is federal  funds sold and
marketable  investment securities available for sale. At March 31, 2008, federal
funds sold and investment  securities  available for sale totaled  $272,276,000,
representing  an increase of $39,849,000  (17.1%) from December 31, 2007, and an
increase of  $83,798,000  (44.5%) from March 31, 2007. In addition,  the Company
generates  additional  liquidity  from its operating  activities.  The Company's
profitability  during the first three months of 2008  generated  cash flows from
operations of $10,824,000  compared to $12,271,000 during the first three months
of  2007.  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 $13,007,000 during
the three  months  ended March 31, 2008  compared to  $10,604,000  for the three
months ended March 31, 2007.  During the three months ended March 31, 2008,  the
Company invested  $50,338,000 in securities and received  $1,325,000 of net loan
principal   reductions,   compared  to  $122,000  and  $13,577,000  invested  in
securities and net loan  principal  reductions,  respectively,  during the first
three months of 2007. These changes in investment and loan balances  contributed
to net cash used by investing  activities of $37,229,000 during the three months
ended March 31, 2008,  compared to net cash provided by investing  activities of
$23,214,000 during the three months ended March 31, 2007.  Financing  activities
provided net cash of  $12,320,000  during the three months ended March 31, 2008,
compared to net cash used in  financing  activities  of  $63,236,000  during the
three months ended March 31,  2007.  Deposit  balance  decreases  accounted  for
$16,748,000  of financing  uses of funds during the three months ended March 31,
2008,  compared to $62,300,000 of funds used by decreases in deposits during the
three months ended March 31, 2007. A net decrease in short-term other borrowings
accounted  for  $12,339,000  of financing  uses of funds during the three months
ended March 31, 2008, compared to $1,454,000 of funds provided by an increase in
short-term  other  borrowings  during the three  months  ended  March 31,  2007.
Dividends  paid used  $2,052,000  and $2,069,000 of cash during the three months
ended  March 31,  2008 and 2007,  respectively.  An  increase  in Federal  funds
purchased provided  $46,300,000 of cash during the quarter ended March 31, 2008.
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
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  March  31,  2008  ("Evaluation  Date").  Based  on  that
evaluation,  they each concluded  that as of the  Evaluation  Date the Company's
disclosure  controls and procedures are effective to ensure that the information
required to be  disclosed by the Company in this  Quarterly  Report on Form 10-Q
was  recorded,  processed,  summarized  and  reported  within  the time  periods
specified in the SEC's rules and forms for Form 10-Q.

No changes in the Company's  internal control over financial  reporting occurred
during  the  first  quarter  of  2008  that  have  materially  affected,  or are
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

                                       29
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 1A - Risk Factors

There have been no material changes to the risk factors previously  disclosed in
Item 1A to Part I of our Annual Report on Form 10-K for the year ended  December
31, 2007.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

The following table shows information concerning the common stock repurchased by
the Company  during the first quarter of 2008  pursuant to the  Company's  stock
repurchase  plan adopted on August 21,  2007,  which is discussed in more detail
under  "Capital  Resources"  in  this  report  and  is  incorporated  herein  by
reference:
Period          (a) Total number    (b) Average price   (c) Total number of    (d) Maximum number
                of Shares purchased  paid per share     shares purchased as    of shares that may yet
                                                        part of publicly       be purchased under the
                                                        announced plans or     plans or programs
                                                        programs
------------------------------------------------------------------------------------------------------
Jan. 1-31, 2008             -                 -                  -                 500,000
Feb. 1-29, 2008        70,100            $17.44             70,100                 429,900
Mar. 1-31, 2008        96,500            $16.57             96,500                 333,400
------------------------------------------------------------------------------------------------------
Total                 166,600            $16.93            166,600                 333,400
Item 6 - Exhibits

     3.1*      Restated  Articles of  Incorporation  dated May 9, 2003, filed as
               Exhibit  3.1 to  TriCo's  Quarterly  Report  on Form 10-Q for the
               quarter ended March 31, 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 dated as of August 23, 2005,
               between  TriCo,  Tri Counties Bank and each of Bruce Belton,  Dan
               Bailey,  Craig Carney, Gary Coelho,  W.R. Hagstrom,  Rick Miller,
               Richard O'Sullivan, Thomas Reddish, and Ray Rios filed as Exhibit
               10.2 to  TriCo's  Quarterly  Report on Form 10-Q for the  quarter
               ended September 30, 2005.

     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).

                                       30
10.7*     TriCo's 2001 Stock Option Plan, as amended, filed as Exhibit 10.7
               to TriCo's  Quarterly  Report on Form 10-Q for the quarter  ended
               June 30, 2005.

     10.8*     Amended  Employment  Agreement  between  TriCo and Richard  Smith
               dated as of August  23,  2005  filed as  Exhibit  10.8 to TriCo's
               Quarterly Report on Form 10-Q for the quarter ended September 30,
               2005.

     10.9*     Tri Counties Bank Executive  Deferred  Compensation Plan restated
               April 1, 1992,  and  January  1, 2005  filed as  Exhibit  10.9 to
               TriCo's  Quarterly  Report  on Form  10-Q for the  quarter  ended
               September 30, 2005.

     10.10*    Tri  Counties  Bank  Deferred  Compensation  Plan  for  Directors
               effective  January  1, 2005  filed as  Exhibit  10.10 to  TriCo's
               Quarterly Report on Form 10-Q for the quarter ended September 30,
               2005.

     10.11*    2005 Tri Counties Bank Deferred  Compensation Plan for Executives
               and Directors effective January 1, 2005 filed as Exhibit 10.11 to
               TriCo's  Quarterly  Report  on Form  10-Q for the  quarter  ended
               September 30, 2005.

     10.13*    Tri Counties  Bank  Supplemental  Retirement  Plan for  Directors
               dated September 1, 1987, as restated January 1, 2001, and amended
               and  restated  January 1, 2004 filed as Exhibit  10.12 to TriCo's
               Quarterly  Report on Form  10-Q for the  quarter  ended  June 30,
               2004.

     10.14*    2004 TriCo Bancshares  Supplemental Retirement Plan for Directors
               effective  January  1, 2004  filed as  Exhibit  10.13 to  TriCo's
               Quarterly  Report on Form  10-Q for the  quarter  ended  June 30,
               2004.

     10.15*    Tri  Counties  Bank   Supplemental   Executive   Retirement  Plan
               effective  September 1, 1987, as amended and restated  January 1,
               2004 filed as Exhibit 10.14 to TriCo's  Quarterly  Report on Form
               10-Q for the quarter ended June 30, 2004.

     10.16*    2004 TriCo  Bancshares  Supplemental  Executive  Retirement  Plan
               effective  January  1, 2004  filed as  Exhibit  10.15 to  TriCo's
               Quarterly  Report on Form  10-Q for the  quarter  ended  June 30,
               2004.

     10.17*    Form of Joint  Beneficiary  Agreement  effective  March 31,  2003
               between Tri Counties  Bank and each of George  Barstow,  Dan Bay,
               Ron Bee, Craig Carney,  Robert Elmore, Greg Gill, Richard Miller,
               Richard  O'Sullivan,  Thomas  Reddish,  Jerald  Sax,  and Richard
               Smith, filed as Exhibit 10.14 to TriCo's Quarterly Report on Form
               10-Q for the quarter ended September 30, 2003.

     10.18*    Form of Joint  Beneficiary  Agreement  effective  March 31,  2003
               between Tri Counties Bank and each of Don Amaral,  William Casey,
               Craig Compton,  John Hasbrook,  Michael  Koehnen,  Donald Murphy,
               Carroll Taresh,  and Alex  Vereshagin,  filed as Exhibit 10.15 to
               TriCo's  Quarterly  Report  on Form  10-Q for the  quarter  ended
               September 30, 2003.

                                       31
10.19*    Form of  Tri-Counties  Bank  Executive  Long Term Care  Agreement
               effective  June 10, 2003  between Tri  Counties  Bank and each of
               Craig Carney,  Richard  Miller,  Richard  O'Sullivan,  and Thomas
               Reddish,  filed as Exhibit 10.16 to TriCo's  Quarterly  Report on
               Form 10-Q for the quarter ended September 30, 2003.

     10.20*    Form of  Tri-Counties  Bank  Director  Long Term  Care  Agreement
               effective June 10, 2003 between Tri Counties Bank and each of Don
               Amaral,  William  Casey,  Craig Compton,  John Hasbrook,  Michael
               Koehnen,  Donald Murphy,  Carroll Taresh,  and Alex  Vereschagin,
               filed as Exhibit 10.17 to TriCo's  Quarterly  Report on Form 10-Q
               for the quarter ended September 30, 2003.

     10.21*    Form of  Indemnification  Agreement between TriCo  Bancshares/Tri
               Counties Bank and each of the  directors of TriCo  Bancshares/Tri
               Counties  Bank  effective on the date that each director is first
               elected,  filed as Exhibit 10.18 to TriCo'S Annual Report on Form
               10-K for the year ended December 31, 2003.

     10.22*    Form of  Indemnification  Agreement between TriCo  Bancshares/Tri
               Counties  Bank  and  each  of  Dan  Bailey,  Craig  Carney,  W.R.
               Hagstrom,  Rick Miller,  Richard O'Sullivan,  Thomas Reddish, Ray
               Rios,  and  Richard  Smith  filed as  Exhibit  10.21  to  TriCo's
               Quarterly  Report on Form  10-Q for the  quarter  ended  June 30,
               2004.

     21.1      Tri  Counties  Bank,  a  California  banking  corporation,  TriCo
               Capital  Trust I, a Delaware  business  trust,  and TriCo Capital
               Trust II, a Delaware business trust, are the only subsidiaries of
               Registrant

     31.1      Rule 13a-14(a)/15d-14(a) Certification of CEO

     31.1      Rule 13a-14(a)/15d-14(a) Certification of CFO

     32.1      Section 1350 Certification of CEO

     32.2      Section 1350 Certification of CFO

     * Previously filed and incorporated by reference.

                                       32
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)

                            /s/Thomas J. Reddish
Date:  May 8, 2008          ---------------------
                            Thomas J. Reddish
                            Executive Vice President and Chief Financial Officer
                            (Principal financial officer)

                                       33
EXHIBITS

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification of CEO

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-15(e) and  15d-15(e))  and internal
          control  over  financial  reporting  (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and we have:
          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  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.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;
          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and procedures  and presented in this  quarterly  report
               our  conclusions   about  the  effectiveness  of  the  disclosure
               controls and  procedures,  as of the end of the period covered by
               this quarterly report based on such evaluation; and
          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most  recent  fiscal  quarter  that has  materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting; and
    5.    The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's board of directors:
          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability to record, process,  summarize and report financial data;
               and
          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

                                        /s/ Richard P. Smith
Date: May 8, 2008                       --------------------
                                        Richard P. Smith
                                        President and Chief Executive Officer

                                       34
Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification of CFO

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-15(e) and  15d-15(e))  and internal
          control  over  financial  reporting  (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and we have:
          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  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.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;
          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and procedures  and presented in this  quarterly  report
               our  conclusions   about  the  effectiveness  of  the  disclosure
               controls and  procedures,  as of the end of the period covered by
               this quarterly report based on such evaluation; and
          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most  recent  fiscal  quarter  that has  materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting; and
    5.    The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's board of directors:
          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability to record, process,  summarize and report financial data;
               and
          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

                            /s/ Thomas J. Reddish
Date: May 8, 2008           ---------------------
                            Thomas J. Reddish
                            Executive Vice President and Chief Financial Officer

                                       35
Exhibit 32.1

Section 1350 Certification of CEO

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ended March 31, 2008 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 32.2

Section 1350 Certification of CFO

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ended March 31, 2008 as filed with the  Securities  and
Exchange  Commission  on the date hereof (the  "Report"),  I, Thomas J. Reddish,
Executive 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
    Executive 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.

                                       36