UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

For Quarter Ended June 30, 2003                   Commission file number 0-10661
-------------------------------                   ------------------------------

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


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

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

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


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

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

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

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

Title of Class:  Common stock, no par value

Outstanding shares as of August 14, 2003:  7,854,101


<PAGE>

                                TABLE OF CONTENTS

                                                                          Page

Forward Looking Statements                                                  1

PART I - FINANCIAL INFORMATION                                              2

  Item 1 - Financial Statements                                             2

    Financial Summary                                                       6

    Notes to Unaudited Condensed Consolidated Financial Statements          7

  Item 2 - Management's Discussion and Analysis of Financial               14
           Condition and Results of Operations

  Item 3 - Quantitative and Qualitative Disclosure about Market Risk       26

  Item 4 - Controls and Procedures                                         28

PART II - OTHER INFORMATION                                                29

  Item 1 - Legal Proceedings                                               29

  Item 4  - Submission of Matters to a Vote of Security Holders            29

  Item 6 - Exhibits and Reports on Form 8-K                                29

  Signatures                                                               31

  Exhibits                                                                 32



<PAGE>

                           FORWARD-LOOKING STATEMENTS

This  report  on Form  10-Q  contains  forward-looking  statements  about  TriCo
Bancshares (the "Company") for which it claims the protection of the safe harbor
provisions  contained in the Private  Securities  Litigation Reform Act of 1995.
These forward-looking statements are based on Management's current knowledge and
belief and include  information  concerning  the  Company's  possible or assumed
future  financial  condition and results of operations.  When you see any of the
words "believes", "expects", "anticipates", "estimates", or similar expressions,
mean making forward-looking  statements.  A number of factors, some of which are
beyond the Company's  ability to predict or control,  could cause future results
to differ materially from those contemplated.  These factors include but are not
limited to:

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

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

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


The reader is directed to the Company's  annual report on Form 10-K for the year
ended  December 31, 2002,  for further  discussion of factors which could affect
the Company's  business and cause actual results to differ materially from those
expressed in any forward-looking statement made in this report.

                                      -1-

<PAGE>
<TABLE>
<CAPTION>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                TRICO BANCSHARES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
                                                                 (Unaudited)               (Unaudited)
                                                                 At June 30,             At December 31,
                                                            2003             2002             2002
                                                      -------------------------------   -----------------
<S>                                                         <C>               <C>              <C>
Assets:
  Cash and due from banks                                 $65,051           $54,094          $67,170
  Federal funds sold                                        3,200            27,800            8,100
                                                      -------------------------------   -----------------
    Cash and cash equivalents                              68,251            81,894           75,270

  Investment securities available for sale                354,040           234,544          338,024
  Loans
    Commercial                                            147,746           138,770          125,982
    Consumer                                              237,704           171,178          201,858
    Real estate mortgages                                 407,218           321,260          319,969
    Real estate construction                               59,622            40,592           39,713
                                                      -------------------------------   -----------------
                                                          852,290           671,800          687,522

  Allowance for loan losses                               (13,455)          (13,613)         (14,377)
                                                      -------------------------------   -----------------
    Loans, net of allowance for loan losses               838,835           658,187          673,145
  Premises and equipment, net                              19,830            16,195           17,224
  Cash value of life insurance                             34,633            14,927           15,208
  Other real estate owned                                   1,551                71              932
  Accrued interest receivable                               6,001             5,419            5,644
  Deferred income taxes                                     7,154             8,411            8,429
  Intangible assets                                        22,189             4,615            4,043
  Other assets                                              8,418             5,298            6,655
                                                      -------------------------------   -----------------
         Total Assets                                  $1,360,902        $1,029,561       $1,144,574
                                                      ===============================   =================
Liabilities:
  Deposits:
    Noninterest-bearing demand                           $260,861          $188,546         $232,499
    Interest-bearing demand                               204,538           169,343          182,816
    Savings                                               393,198           255,264          297,926
    Time certificates, $100,000 and over                  111,249            81,828           90,404
    Other time certificates                               203,759           202,929          201,592
                                                      -------------------------------   -----------------
    Total deposits                                      1,173,605           897,910        1,005,237
  Federal funds purchased                                  17,400                 -                -
  Accrued interest payable                                  2,615             2,639            2,927
  Other Liabilities                                        19,810            12,950           14,472
  Long-term debt and other borrowings                      22,905            22,940           22,924
                                                      -------------------------------   -----------------
    Total Liabilities                                   1,236,335           936,439        1,045,560
                                                      -------------------------------   -----------------
Shareholders' Equity:
  Authorized - 20,000,000 shares of common
  stock Issued and outstanding:
    7,852,110 at June 30, 2003                             70,015
    7,025,690 at June 30, 2002                                               50,047
    7,060,965 at December 31, 2002                                                            50,472
  Retained earnings                                        51,119            41,682           46,239
  Accumulated other comprehensive income, net               3,433             1,393            2,303
                                                      -------------------------------   -----------------
    Total Shareholders' Equity                            124,567            93,122           99,014
                                                      -------------------------------   -----------------
Total Liabilities and Shareholders' Equity             $1,360,902        $1,029,561       $1,144,574
                                                      ===============================   =================

</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements

                                      -2-

<PAGE>
<TABLE>
<CAPTION>


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

                                                 Three months ended June 30,     Six months ended June 30,
                                                    2003            2002            2003           2002
                                                 ---------------------------------------------------------
<S>                                                 <C>             <C>             <C>            <C>
Interest Income:
  Interest and fees on loans                      $14,713         $13,046         $27,702        $26,054
  Interest on federal funds sold                       18             167             102            333
  Interest on investment securities
    available for sale
      Taxable                                       2,939           2,309           5,683          4,539
      Tax exempt                                      491             553           1,023          1,107
                                                 ---------------------------------------------------------
    Total interest income                          18,161          16,075          34,510         32,033
                                                 ---------------------------------------------------------
Interest Expense:
  Interest on interest-bearing demand deposits        132             114             250            235
  Interest on savings                                 906             675           1,626          1,354
  Interest on time certificates of deposit          2,023           2,068           3,982          4,211
  Interest on short-term borrowing                     63               -              63              1
  Interest on long-term debt                          321             322             639            641
                                                 ---------------------------------------------------------
    Total interest expense                          3,445           3,179           6,560          6,442
                                                 ---------------------------------------------------------
Net Interest Income                                14,716          12,896          27,950         25,591
                                                 ---------------------------------------------------------
Provision for loan losses                             150             500             300          1,300
                                                 ---------------------------------------------------------
Net Interest Income After Provision for
  Loan Losses                                      14,566          12,396          27,650         24,291
                                                 ---------------------------------------------------------
Noninterest Income:
  Service charges and fees                          3,985           2,141           7,485          4,114
  Gain on sale of loans                             1,319             539           2,452          1,502
  Commissions on sale of non-deposit
    investment products                               461             738             909          1,277
  Other                                               789             525           1,104            876
                                                 ---------------------------------------------------------
  Total Noninterest Income                          6,554           3,943          11,950          7,769
                                                 ---------------------------------------------------------
Noninterest Expense:
  Salaries and related benefits                     7,636           5,773          14,513         11,512
  Other                                             6,732           5,190          12,506          9,853
                                                 ---------------------------------------------------------
  Total Noninterest Expense                        14,368          10,963          27,019         21,365
                                                 ---------------------------------------------------------
Income Before Income Taxes                          6,752           5,376          12,581         10,695
                                                 ---------------------------------------------------------
  Provision for income taxes                        2,498           2,011           4,714          4,001
                                                 ---------------------------------------------------------
Net Income                                         $4,254          $3,365          $7,867         $6,694
                                                 ---------------------------------------------------------
Comprehensive Income:
  Change in unrealized gain on securities
    available for sale, net                           745           2,004           1,130          2,048
                                                 ---------------------------------------------------------
Comprehensive Income                               $4,999          $5,369          $8,997         $8,742
                                                 =========================================================
Average Shares Outstanding                          7,796           7,011           7,434          7,002
Diluted Average Shares Outstanding                  8,021           7,214           7,658          7,166
Per Share Data
  Basic Earnings                                    $0.55           $0.48           $1.06          $0.96
  Diluted Earnings                                  $0.53           $0.47           $1.03          $0.93
  Dividends Paid                                    $0.20           $0.20           $0.40          $0.40

</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements

                                      -3-

<PAGE>


                                TRICO BANCSHARES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                            (In thousands, unaudited)
                                                       Accumulated
                                                          Other
                                   Common   Retained   Comprehensive
                                   Stock    Earnings  Income (Loss), net  Total
                                 -----------------------------------------------
Balance, December 31, 2001        $49,679    $37,909      ($655)        $86,933
  Net income for the period                    6,694                      6,694
  Exercise of stock options,
    including tax benefits            439                                   439
  Repurchase of common stock          (71)      (119)                      (190)
  Dividends                                   (2,802)                    (2,802)
  Unrealized gain on securities
    available for sale, net                               2,048           2,048
                                 -----------------------------------------------
Balance June 30, 2002             $50,047    $41,682     $1,393         $93,122
                                 ===============================================

Balance, December 31, 2002        $50,472    $46,239     $2,303         $99,014
  Net income for the period                    7,867                      7,867
  Issuance of stock and options
    related to merger              18,527                                18,527
  Exercise of stock options,
    including tax benefits          1,016                                 1,016
  Dividends                                   (2,987)                    (2,987)
  Unrealized gain on securities
    available for sale, net                               1,130           1,130
                                 -----------------------------------------------
Balance June 30, 2003             $70,015    $51,119     $3,433        $124,567
                                 ===============================================

See accompanying notes to unaudited condensed consolidated financial statements





                                      -4-

<PAGE>
<TABLE>
<CAPTION>


                                TRICO BANCSHARES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands, unaudited)
                                                                       For the six months
                                                                         ended June 30,
                                                                     2003               2002
                                                                 -------------------------------
<S>                                                                   <C>                 <C>
Operating Activities:
   Net income                                                       $7,867              $6,694
   Adjustments to reconcile net income to net cash provided
     by operating activities:
       Depreciation and amortization of property and equipment       1,323               1,316
       Amortization of intangible assets                               552                 455
       Provision for loan losses                                       300               1,300
       Amortization of investment securities premium, net            1,819                 702
       Deferred income taxes                                             -                 (66)
       Investment security gains net                                  (100)                  -
       Originations of loans for resale                           (115,962)            (79,578)
       Proceeds from sale of loans originated for resale           117,135              80,154
       Gain on sale of loans                                        (2,452)             (1,502)
       Amortization of mortgage servicing rights                       543                 313
       Gain on sale of other real estate owned                         (60)                  -
       (Gain) loss on sale of fixed assets                              (3)                 19
       Change in assets and liabilities:
         Decrease in interest receivable                               185                 103
         Decrease in interest payable                                 (386)               (849)
         Decrease in other assets and liabilities                    3,329               2,287
                                                                 -------------------------------
Net Cash Provided by Operating Activities                           14,090              11,348
                                                                 -------------------------------
Investing Activities:
   Net cash obtained in mergers and acquisitions                     7,450                   -
   Proceeds from maturities of securities available-for-sale       122,570              60,067
   Proceeds from sale of securities available-for-sale              12,139                   -
   Purchases of securities available-for-sale                     (109,717)            (67,448)
   Net (increase) decrease in loans                                (90,439)            (13,813)
   Proceeds from sale of premises and equipment                         10                   8
   Purchases of property and equipment                              (1,555)               (942)
   Proceeds from sale of other real estate owned                        60                   -
   Purchase of life insurance                                      (18,910)                  -
                                                                 -------------------------------
Net Cash Used by Investing Activities                              (78,392)            (22,128)
                                                                 -------------------------------
Financing Activities:
   Net increase in deposits                                         42,319              17,517
   Net increase in Federal funds purchased                          17,400                   -
   Payments of principal on long-term debt agreements                  (19)                (16)
   Repurchase of Common Stock                                            -                (190)
   Dividends paid                                                   (2,987)             (2,802)
   Exercise of stock options/issuance of Common Stock                  570                 201
                                                                 -------------------------------
Net Cash Provided by Financing Activities                           57,283              14,710
                                                                 -------------------------------
Net (Decrease) Increase in Cash and Cash Equivalents                (7,019)              3,930
                                                                 -------------------------------
Cash and Cash Equivalents and Beginning of Period                   75,270              77,964
                                                                 -------------------------------
Cash and Cash Equivalents at End of Period                         $68,251             $81,894
                                                                 ===============================
Supplemental Disclosure of Noncash Activities:
   Unrealized gain on securities available for sale                 $1,830              $3,275
   Loans transferred to other real estate owned                       $619                   -
Supplemental Disclosure of Cash Flow Activity:
   Cash paid for interest expense                                   $6,872              $7,291
   Cash paid for income taxes                                       $3,010              $2,000
   Income tax benefit from stock option exercises                     $446                $238
The acquisition of North State National Bank
   Involved the following:
   Common stock issued                                             $18,527
   Liabilities assumed                                            $126,722
   Fair value of assets acquired, other than cash
     and cash equivalents                                        ($119,102)
   Core deposit intangible                                         ($3,365)
   Goodwill                                                       ($15,332)
   Net cash and cash equivalents received                           $7,450

</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements

                                      -5-

<PAGE>
<TABLE>
<CAPTION>


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

                                                           (Unaudited)                  (Unaudited)
                                                       Three months ended            Six months ended
                                                            June 30,                     June 30,
                                              --------------------------------------------------------------
                                                    2003               2002        2003            2002
                                              --------------------------------------------------------------
<S>                                                 <C>                <C>         <C>             <C>
Net Interest Income (FTE)                         $15,000            $13,222     $28,543         $26,222
Provision for loan losses                            (150)              (500)       (300)         (1,300)
Noninterest income                                  6,554              3,943      11,950           7,769
Noninterest expense                               (14,368)           (10,963)    (27,019)        (21,365)
Provision for income taxes (FTE)                   (2,782)            (2,337)     (5,307)         (4,632)
                                              --------------------------------------------------------------
Net income                                         $4,254             $3,365      $7,867          $6,694
                                              ==============================================================

Average shares outstanding                          7,796              7,011       7,434           7,002
Diluted average shares outstanding                  8,021              7,214       7,658           7,166
Shares outstanding at period end                    7,852              7,026       7,852           7,026

As Reported:
   Basic earnings per share                         $0.55              $0.48       $1.06           $0.96
   Diluted earnings per share                       $0.53              $0.47       $1.03           $0.93
   Return on assets                                  1.27%              1.33%       1.26%           1.34%
   Return on equity                                 13.88%             14.72%      14.07%          14.80%
   Net interest margin                               5.02%              5.74%       5.09%           5.75%
   Net loan charge-offs to average loans             0.96%              0.14%       0.58%           0.23%
   Efficiency ratio (FTE)                           66.66%             63.87%      66.73%          62.85%

Average Balances:
   Total assets                                $1,339,107         $1,009,727  $1,244,433      $1,000,099
   Earning assets                               1,194,618            921,486   1,121,452         912,041
   Total loans                                    801,493            648,618     740,734         645,350
   Total deposits                               1,146,211            879,579   1,075,032         871,304
   Shareholders' equity                          $122,567            $91,429    $111,853         $90,467

Balances at Period End:
   Total assets                                $1,360,902         $1,029,561
   Earning assets                               1,209,530            934,144
   Total loans                                    852,290            671,800
   Total deposits                               1,173,605            897,910
   Shareholders' equity                          $124,567            $93,122

Financial Ratios at Period End:
   Allowance for loan losses to loans                1.58%              2.03%
   Book value per share                            $15.86             $13.25
   Equity to assets                                  9.15%              9.04%
   Total capital to risk assets                     10.37%             12.01%

Dividends Paid Per Share                            $0.20              $0.20       $0.40           $0.40
Dividend Payout Ratio                               37.74%           42.55%        38.83%          43.01%


</TABLE>

                                      -6-

<PAGE>


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: General Summary of Significant Accounting Policies
The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information  and  pursuant  to  the  rules  and  regulations  of  the
Securities and Exchange  Commission.  The results of operations  reflect interim
adjustments,  all of which are of a normal  recurring  nature and which,  in the
opinion of management,  are necessary for a fair presentation of the results for
the interim period  presented.  The interim  results for the three and six month
periods  ended  June 30,  2003 and 2002 are not  necessarily  indicative  of the
results  expected  for the full year.  These  unaudited  consolidated  financial
statements should be read in conjunction with the audited consolidated financial
statements and accompanying  notes as well as other information  included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2002.

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

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

Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  Management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  On an on-going basis,  the Company  evaluates its
estimates,  including  those  related to the adequacy of the  allowance for loan
losses,  investments,  intangible assets,  income taxes and  contingencies.  The
Company  bases its  estimates  on  historical  experience  and on various  other
assumptions  that are believed to be  reasonable  under the  circumstances,  the
results of which form the basis for making  judgments  about the carrying values
of assets and  liabilities  that are not readily  apparent  from other  sources.
Actual results may differ from these estimates  under  different  assumptions or
conditions.  The one accounting  estimate that materially  affects the financial
statements is the allowance for loan losses.

Investment Securities
The Company  classifies its debt and marketable  equity  securities  into one of
three  categories:  trading,  available-for-sale  or  held-to-maturity.  Trading
securities  are bought and held  principally  for the  purpose of selling in the
near term. Held-to-maturity securities are those securities that the Company has
the ability and intent to hold until maturity. All other securities not included
in trading or held-to-maturity are classified as available-for-sale.  During the
six months ended June 30, 2003 and throughout 2002, the Company did not have any
securities classified as either held-to-maturity or trading.

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

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

                                      -7-

<PAGE>

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

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

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

The  Company  recognizes  a gain and a related  asset for the fair  value of the
rights to  service  loans for  others  when  loans are sold.  The  Company  sold
substantially  all  of  its  conforming  long-term  residential  mortgage  loans
originated  during six months ended June 30, 2003 for cash proceeds equal to the
fair value of the loans.

The following table summarizes the Company's mortgage servicing rights assets as
of June 30, 2003 and December 31, 2002.

                                 December 31,                           June 30,
   (Dollars in thousands)            2002     Additions   Reductions      2003
                                 -----------------------------------------------
   Mortgage Servicing Rights        $2,821      $1,279      ($543)       $3,557
                                 ===============================================

                                      -8-

<PAGE>

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

At June 30, 2003,  the Company had no mortgage  loans held for sale. At June 30,
2003 and December 31, 2002, the Company  serviced real estate mortgage loans for
others of $353 million and $307 million, respectively.

Intangible Assets
The Company  reviews for impairment of certain  intangibles  held, at the end of
each  calendar  year or whenever  events or changes  indicate  that the carrying
amount of an asset may not be  recoverable.  If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying  amount of the assets  exceeds  the fair  market  value of the  assets.
Assets to be disposed of are  reported  at the lower of the  carrying  amount or
fair value less costs to sell.

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

The following table summarizes the Company's core deposit  intangible as of June
30, 2003 and December 31, 2002.
                                 December 31,                           June 30,
   (Dollar in Thousands)             2002     Additions   Reductions      2003
                                 -----------------------------------------------
   Core deposit intangibles        $10,278      $3,365          -       $13,643
   Accumulated amortization         (6,636)          -      ($552)       (7,188)
                                 -----------------------------------------------
   Core deposit intangibles, net    $3,642      $3,365      ($552)       $6,455
                                 ===============================================

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)
               -----------         -----------------------
                  2003                     $1,207
                  2004                     $1,358
                  2005                     $1,381
                  2006                     $1,395
                  2007                       $490
               Thereafter                  $1,176

The  following  table  summarizes  the  Company's   minimum  pension   liability
intangible as of June 30, 2003 and December 31, 2002.
                                      December 31,                      June 30,
  (Dollar in Thousands)                   2002     Additions Reductions   2003
                                      ------------------------------------------
  Minimum pension liability intangible    $401          -          -      $401
                                      ==========================================

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

                                      -9-

<PAGE>

Goodwill
The following table summarizes the Company's goodwill  intangible as of June 30,
2003 and December 31, 2002.
                                 December 31,                           June 30,
   (Dollar in Thousands)             2002     Additions   Reductions      2003
                                 -----------------------------------------------
   Goodwill                             -      $15,332          -       $15,332
                                 ===============================================

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

Had  compensation  cost  for the  Company's  option  plans  been  determined  in
accordance  with SFAS 123, the Company's net income and earnings per share would
have been reduced to the pro forma amounts indicated below:

<TABLE>
<CAPTION>

                                           Three Months Ended June 30,      Six Months Ended June 30,
(in thousands, except per share amounts)   2003                   2002       2003                2002
                                           ----                   ----       ----                ----
<S>                                         <C>                    <C>        <C>                 <C>
Net income                  As reported   $4,254                 $3,365     $7,867              $6,694
                              Pro forma   $4,198                 $3,312     $7,755              $6,588
Basic earnings per share    As reported    $0.55                  $0.48      $1.06               $0.96
                              Pro forma    $0.54                  $0.47      $1.04               $0.94
Diluted earnings per share  As reported    $0.53                  $0.47      $1.03               $0.93
                              Pro forma    $0.52                  $0.46      $1.01               $0.92
Stock-based employee compensation
  cost, net of related tax effects,
  included in net income    As reported       $0                     $0         $0                  $0
                              Pro forma      $56                    $53       $108                $102

</TABLE>

                                      -10-

<PAGE>

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

The changes in the components of accumulated other  comprehensive  income (loss)
for the six months ended June 30, 2003 and 2002 are reported as follows:
                                           Six Months Ended June 30,
                                            2003               2002
                                         -----------------------------
Unrealized Gain on Securities                    (in thousands)

Beginning Balance                          $3,048               $117
Unrealized gain arising during the
   period, net of tax                       1,130              2,048
                                         -----------------------------
Ending Balance                             $4,178             $2,165
                                         -----------------------------
Minimum Pension Liability
Beginning Balance                           ($745)            ($772)
Change in minimum pension liability,
   net of tax                                   -                 -
                                         -----------------------------
Ending Balance                              ($745)            ($772)
                                         -----------------------------
Total accumulated other comprehensive
   income (loss), net                      $3,433            $1,393
                                         -----------------------------

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

Acquisition
TriCo Bancshares  (NASDAQ:TCBK),  parent company of Tri Counties Bank,  acquired
North State National  Bank, a national  banking  organization  located in Chico,
California,  by the merger of North State into its wholly owned subsidiary,  Tri
Counties  Bank,  effective  5:01 pm on April 4, 2003.  The  acquisition  and the
related merger  agreement  dated October 3, 2002, was approved by the California
Department of Financial Institutions, the Federal Deposit Insurance Corporation,
and the shareholders of North State National Bank on March 4, March 7, and March
19, 2003,  respectively.  At the time of the acquisition,  North State had total
assets of $140  million,  investment  securities  of $41  million,  loans of $76
million,  and deposits of $126 million.  The acquisition was accounted for using
the purchase  method of  accounting.  The amount of goodwill  recorded as of the
merger date,  which  represented the excess of the total purchase price over the
estimated fair value of net asset acquired, was approximately $15.3 million. The
Company recorded a core deposit  intangible,  which represents the excess of the
fair value of North State's  deposits  over their book value on the  acquisition
date, of approximately  $3.4 million.  This core deposit intangible is scheduled
to be amortized over a seven-year average life.

Under the terms of the merger agreement,  TriCo paid $13,090,057 in cash, issued
723,512  shares of TriCo common  stock,  and issued  options to purchase  79,587
shares of TriCo common stock at an average  exercise price of $6.22 per share in
exchange for all of the 1,234,375  common shares and options to purchase  79,937
common shares of North State National Bank outstanding as of April 4, 2003.

                                      -11-

<PAGE>

The pro forma  financial  information  in the following  table  illustrates  the
combined  operating  results of TriCo and North State  National Bank for the six
months  ended  June  30,  2003  and 2002 as if the  acquisition  of North  State
National  Bank had  occurred  as of  January 1,  2002.  The pro forma  financial
information  is presented  for  informational  purposes  and is not  necessarily
indicative  of the results of  operations  that would have occurred if TriCo and
North State  National  Bank had  constituted a single entity as of or January 1,
2002. The pro forma financial information is also not necessarily  indicative of
the future results of operations of the combined  company.  In  particular,  any
opportunity to achieve  certain cost savings as a result of the  acquisition has
not been included in the pro forma financial information.

                                        For the six months ended June 30,
                                              2003              2002
                                              ----              ----
(in thousands except earnings per share)
Net interest income                         $29,386           $28,471
Provision for loan losses                       300             1,300
Noninterest income                           12,141             8,033
Noninterest expense                          28,175            22,973
Income tax expense                            4,891             4,645
Net income                                   $8,161            $7,586
Basic earnings per share                      $1.05            $0.98
Diluted earnings per share                    $1.01            $0.95

The only significant pro forma  adjustment is the amortization  expense relating
to core deposit  intangible,  and the income tax benefit associated with the pro
forma adjustment.

Subsequent Events
On July 30, 2003,  TriCo  declared a quarterly  cash  dividend of $0.20  (twenty
cents) per share at its meeting held on July 29,  2003.  The dividend is payable
on September 30, 2003 to holders of record at the close of business on September
9, 2003.

On July 31, 2003,  TriCo  completed an offering of 20,000  shares of  cumulative
trust preferred  securities for cash in an aggregate amount of $20,000,000.  The
trust preferred securities are due in 30 years with an interest rate that resets
quarterly  at  three-month  LIBOR plus 3.05%,  or 4.16% for the first  quarterly
interest  period.  The  trust  preferred   securities  were  issued  through  an
underwriting  syndicate to which the Company paid underwriting fees of $7.50 per
trust  preferred  security or an  aggregate  of  $150,000.  The net  proceeds of
$19,850,000  will be used to finance the opening of new  branches,  improve bank
services and  technology,  repurchase  shares of the  Company's  common stock as
described below and increase the Company's capital.

The trust preferred  securities  have not been and will not be registered  under
the Securities Act of 1933, as amended,  or applicable state securities laws and
were sold pursuant to an exemption from registration under the Securities Act of
1933.  The trust  preferred  securities may not be offered or sold in the United
States absent  registration  or an applicable  exemption  from the  registration
requirements  of the  Securities Act of 1933, as amended,  and applicable  state
securities laws.

The Company formed a subsidiary  business trust, TriCo Capital Trust I, to issue
the trust  preferred  securities.  Concurrently  with the  issuance of the trust
preferred securities, the trust issued 619 shares of common stock to the Company
for $1,000 per share or an  aggregate  of  $619,000.  In  addition,  the Company
issued  a  Junior  Subordinated   Debenture  to  the  Trust  in  the  amount  of
$20,619,000.  The terms of the  Junior  Subordinated  Debenture  are  materially
consistent  with the terms of the  trust  preferred  securities  issued by TriCo
Capital Trust I.

Also on July 31,  2003,  the  Company  announced  the  termination  of its stock
repurchase  plan  to  repurchase  150,000  shares  of  common  stock  originally
announced on October 19, 2001. There were 118,800 shares  repurchased  under the
plan and the remaining 31,200 shares had not been  repurchased.  The Company has
adopted a new stock  repurchase  plan for the repurchase of up to 250,000 shares
of the Company's common stock from time to time as market  conditions allow. The
250,000 shares authorized for repurchase under this plan represent approximately
3.2% of the Company's  approximately  7,852,000 common shares  outstanding as of
July 31, 2003. This new plan has no stated expiration date for the repurchases.

                                      -12-

<PAGE>

On August 1, 2003, the Company reported that its  nonperforming  assets,  net of
government agency guarantees,  decreased $15,127,000 (68%) to $6,963,000 at July
31, 2003 compared to $22,090,000 at June 30, 2003. The decrease is mainly due to
the  collection of two  nonperforming  commercial  real estate loans to a single
entity collateralized by a single building.  The collection was realized on July
31, 2003 via the Company's  receipt of net proceeds of $11,474,000 from the sale
of the  building.  The  collection  resulted  in a recovery  of  $346,000 of the
$1,900,000  charged-off  on these loans during the quarter  ended June 30, 2003.
The recovery  will be reflected in the Company's  results of operations  for the
quarter ended September 30, 2003.

Impact of Recently Issued Financial Accounting Pronouncements
In January  2003,  the FASB issued FIN 46, which  clarifies the  application  of
Accounting Research Bulletin ("ARB") 51, consolidated  financial statements,  to
certain entities (called variable  interest  entities) in which equity investors
do not have the  characteristics  of a controlling  financial interest or do not
have sufficient equity at risk for the entity to finance its activities  without
additional  subordinated  financial  support from other parties.  The disclosure
requirements of this  Interpretation are effective for all financial  statements
issued  after  January 31, 2003.  The  consolidation  requirements  apply to all
variable interest  entities created after January 31, 2003. In addition,  public
companies  must  apply  the  consolidation  requirements  to  variable  interest
entities  that  existed  prior to February 1, 2003 and remain in existence as of
the beginning of annual or interim periods  beginning after June 15, 2003. Given
the  nature  of the  Company's  operations,  management  does  not  expect  this
Interpretation  to  have a  significant  impact  on the  consolidated  financial
statements.

In April 2003, the FASB issued Statement No. 149,  Amendment of Statement 133 on
Derivative  Instruments  and Hedging  Activities,  to provide  clarification  of
certain  terms and  investment  characteristics  identified  in  Statement  133.
Statement  149 is to be applied  prospectively  and is effective  for  contracts
entered into or modified  after June 30,  2003.  The Company does not expect the
adoption  of the  Statement  will have a  material  impact  on the  consolidated
financial statements.

In May 2003, the FASB issued Statement No. 150, Accounting for Certain Financial
Instruments with  Characteristics of both Liabilities and Equity. The provisions
of this  Statement  are  effective  for  financial  instruments  entered into or
modified after May 31, 2003, and otherwise are effective at the beginning of the
first  interim  period  beginning  after June 15, 2003,  except for  mandatorily
redeemable financial instruments of nonpublic entities.  Given the nature of the
Company's  liability  and equity  instruments,  management  does not expect this
Statement to have a material  impact to the  consolidated  financial  statements
upon adoption of the Statement on July 1, 2003.

                                      -13-

<PAGE>

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

As TriCo  Bancshares (the  "Company") has not commenced any business  operations
independent of Tri Counties Bank (the "Bank"), the following discussion pertains
primarily  to the  Bank.  Average  balances,  including  such  balances  used in
calculating  certain financial ratios, are generally  comprised of average daily
balances  for the  Company.  Within  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations,  interest income and net interest
income are generally presented on a fully tax-equivalent (FTE) basis.

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

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

The Company had quarterly  earnings of  $4,254,000,  or $0.53 per diluted share,
for the three  months  ended June 30,  2003.  These  results  represent  a 12.8%
increase from the $0.47 earnings per diluted share reported for the three months
ended June 30, 2002 on earnings of $3,365,000.  The  improvement in results from
the  year-ago  quarter  was  due  to a  $1,778,000  (13.4%)  increase  in  fully
tax-equivalent  net interest income to $15,000,000,  a $350,000 (70.0%) decrease
in provision for loan losses to $150,000,  and a $2,611,000  (66.2%) increase in
noninterest income to $6,554,000.  These  contributing  factors were offset by a
$3,405,000  (31.1%)  increase  in  noninterest  expense to  $14,368,000  for the
quarter ended June 30, 2003. The Company  reported  earnings of  $7,867,000,  or
$1.03 per diluted share,  for the six months ended June 30, 2003.  These results
represent a 10.8%  increase from the $0.93  earnings per diluted share  reported
for  the six  months  ended  June  30,  2002  on  earnings  of  $6,694,000.  The
improvement in results from the year-ago  period was due to a $2,321,000  (8.9%)
increase  in  fully  tax-equivalent  net  interest  income  to  $28,543,000,   a
$1,000,000  (76.9%)  decrease in provision  for loan losses to  $300,000,  and a
$4,181,000  (53.8%)  increase  in  noninterest  income  to  $11,950,000.   These
contributing factors were offset by a $5,654,000 (26.5%) increase in noninterest
expense to $27,019,000  for the six months ended June 30, 2003.  Included in the
Company's  results of operations for the three-month and six-month periods ended
June 30, 2003,  are the effects of the  acquisition of North State National Bank
on April 4, 2003.

                                      -14-

<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        Six months ended
                                         June 30,                 June 30,
                                   ---------------------------------------------
                                     2003        2002         2003        2002
                                   ---------------------------------------------
Net Interest Income (FTE)          $15,000     $13,222      $28,543     $26,222
Provision for loan losses             (150)       (500)        (300)     (1,300)
Noninterest income                   6,554       3,943       11,950       7,769
Noninterest expense                (14,368)    (10,963)     (27,019)    (21,365)
Provision for income taxes (FTE)    (2,782)     (2,337)      (5,307)     (4,632)
                                   ---------------------------------------------
Net income                          $4,254      $3,365       $7,867      $6,694
                                   =============================================

Net income for the second quarter of 2003 was $889,000 (26.4%) more than for the
same  quarter  of  2002.  A  significant  increase  in  noninterest  income  (up
$2,611,000 or 66.2%),  a $350,000 (70.0%) decrease in provision for loan losses,
and a  $1,778,000  (13.5%)  increase in fully  taxable  equivalent  net interest
income more than offset an increase in  noninterest  expenses (up  $3,405,000 or
31.1%).  The increase in noninterest income from the year-ago quarter was mainly
due to an increase in service  charges  and fee income on deposit  products  (up
$1,844,000 or 86.1% to $3,985,000), and an increase in gain on sale of loans (up
$780,000  or 144.7% to  $1,319,000).  The  increase  in service  charges and fee
income was mainly due to the  introduction  of an  overdraft  privilege  deposit
product  in July  2002  that has added a new  stream  of  recurring  noninterest
income. The increase in gain on sale of loans is due to the Company's ability to
originate and sell an increased volume of residential real estate mortgage loans
in the  current  environment  of record  mortgage  refinance.  The  decrease  in
provision for loan losses (down $350,000 or 70.0% to $150,000) was due to stable
loan quality and the maintenance of adequate loss reserve  levels.  The increase
in net  interest  income  (FTE) was due to an  increase  in  average  balance of
interest-earning  assets (up $273 million or 29.6%) that was partially offset by
a 72 basis point  decrease in net interest  margin.  The increase in noninterest
expense  was  mainly  due to an  increase  in salary  and  benefit  expense  (up
$1,863,000 or 32.3% to $7,636,000).  The increase in salary and benefits expense
was mainly due to annual salary  increases,  increased  commission and incentive
expense,  and new employees at four new branches the Company  opened during 2002
and from the  merger  with North  State  National  Bank on April 4, 2003.  Other
noninterest expense also increased (up $1,542,000 or 29.7% to $6,732,000) due to
the new branch  openings in 2002,  the merger  with North  State,  and  expenses
related  to  increased  mortgage  banking  activity  and a new  deposit  product
introduced in July 2002.

Net income for the six months  ended June 30, 2003 was  $1,173,000  (17.5%) more
than for the same period of 2002. A significant  increase in noninterest  income
(up $4,181,000 or 53.8%),  a $1,000,000  (76.9%)  decrease in provision for loan
losses,  and a  $2,321,000  (8.9%)  increase  in fully  taxable  equivalent  net
interest  income  more than  offset an  increase  in  noninterest  expenses  (up
$5,654,000  or 26.5%).  The  increase in  noninterest  income from the  year-ago
period was  mainly  due to an  increase  in  service  charges  and fee income on
deposit products (up $3,371,000 or 81.9% to $7,485,000), and an increase in gain
on sale of loans (up $950,000 or 63.2% to  $2,452,000).  The increase in service
charges  and fee  income  was mainly  due to the  introduction  of an  overdraft
privilege  deposit product in July 2002 that has added a new stream of recurring
noninterest  income.  The  increase  in  gain on  sale  of  loans  is due to the
Company's  ability to originate and sell an increased volume of residential real
estate mortgage loans in the current  environment of record mortgage  refinance.
The decrease in provision for loan losses (down $1,000,000 or 76.9% to $300,000)
was due to stable loan  quality and the  maintenance  of adequate  loss  reserve
levels.  The  increase in net  interest  income  (FTE) was due to an increase in
average balance of interest-earning assets (up $209.4 million or 23.0%) that was
partially  offset by a 66 basis  point  decrease  in net  interest  margin.  The
increase  in  noninterest  expense  was mainly due to an  increase in salary and
benefit expense (up $3,001,000 or 26.1% to $14,513,000).  The increase in salary
and  benefits  expense  was mainly  due to annual  salary  increases,  increased
commission  and  incentive  expense,  and new employees at four new branches the
Company opened during 2002 and from the merger with North State National Bank on
April 4, 2003. Other noninterest  expense also increased (up $2,653,000 or 26.9%
to  $12,506,000)  due to the new branch  openings in 2002, the merger with North
State,  and expenses  related to increased  mortgage  banking activity and a new
deposit product introduced in July 2002.

                                      -15-

<PAGE>

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

                                    Three months ended        Six months ended
                                         June 30,                 June 30,
                                ------------------------------------------------
                                     2003        2002         2003        2002
                                ------------------------------------------------
     Interest income               $18,161     $16,075      $34,510     $32,033
     Interest expense               (3,445)     (3,179)      (6,560)     (6,442)
     FTE adjustment                    284         326          593         631
                                ------------------------------------------------
       Net interest income (FTE)   $15,000     $13,222      $28,543     $26,222
                                ================================================
     Average earning assets     $1,194,618    $921,486   $1,121,452    $912,041

     Net interest margin (FTE)        5.02%       5.74%        5.09%       5.75%

The  Company's  primary  source  of  revenue  is  net  interest  income,  or the
difference  between  interest  income on earning assets and interest  expense in
interest-bearing liabilities. Net interest income (FTE) during the first quarter
of  2003  increased   $1,778,000  (13.4%)  from  the  same  period  in  2002  to
$15,000,000.  The increase in net interest income (FTE) was due to the increased
average  balances of earning assets (up  $273,132,000 or 29.6% to $1.19 billion)
that was partially  offset by a 72 basis point  decrease in net interest  margin
(FTE).

Net  interest  income  (FTE)  during  the  first six  months  of 2003  increased
$2,321,000  (8.9%) from the same period in 2002 to $28,543,000.  The increase in
net interest income (FTE) was due to the increased  average  balances of earning
assets (up  $209,411,000 or 23.0% to $1.12 billion) that was partially offset by
a 66 basis point decrease in net interest margin (FTE).

Interest and Fee Income
Interest  and  fee  income  (FTE)  for the  second  quarter  of  2003  increased
$2,044,000  (12.5%)  from the second  quarter of 2002.  The increase was the net
effect of higher average  interest-earning assets (up $273.1 million or 29.6% to
$1.19  billion)  that was partially  offset by a 94 basis point  decrease in the
yield on those average earning assets to 6.18%.  The growth in  interest-earning
assets  was led by a $152.9  million  (65.3%)  increase  in  average  investment
security  balances to $387.2 million,  and a $152.9 million (23.6%)  increase in
average loan balances. The average balance of federal funds sold decreased $32.7
million (84.6%) to $5,970,000.

The average yield on the Company's  earning assets decreased to 6.18% from 7.12%
for the  quarter  ended  June  30,  2002.  This  downward  trend in  yields  was
reflective  of general  interest  rate markets  during much of the twelve months
ended June 30, 2003.

Interest and fee income  (FTE) for the six months ended June 30, 2003  increased
$2,439,000  (7.5%) from the same period of 2002. The increase was the net effect
of higher average  interest-earning  assets (up $209.4 million or 23.0% to $1.12
billion) that was partially  offset by a 90 basis point decrease in the yield on
those average earning assets to 6.26%. The growth in interest-earning assets was
led by a $136.0 million (59.8%) increase in average investment security balances
to $363.5 million, and a $95.4 million (14.8%) increase in average loan balances
to $740.7  million.  The average  balance of federal funds sold decreased  $22.0
million (56.1%) to $17.2 million.

The average yield on the Company's earning assets decreased to 6.26% for the six
month  period  ended June 30, 2003 from 7.16% for the same period in 2002.  This
downward trend in yields was reflective of general  interest rate markets during
the twelve months ended June 30, 2003. In addition,  deposit growth  outstripped
loan  growth  during  this  period,  which  resulted  in most of the  growth  in
interest-earning assets being in lower yielding investment securities instead of
relatively higher yielding loans.

                                      -16-

<PAGE>

Interest Expense
Interest expense  increased  $266,000 (8.4%) to $3,445,000 in the second quarter
of 2003 compared to $3,179,000 in the year-ago  quarter.  The average balance of
interest-bearing  liabilities increased $221.9 million (30.4%) to $952.1 million
in the second quarter  compared to $730.2 million in the year-ago  quarter.  The
increase in  interest-bearing  liabilities was concentrated in the lower earning
interest-bearing  demand  deposits  (up $37.8  million  or 21.7%),  and  savings
deposits (up $121.7 million or 47.5%). The average balance of the higher earning
time  deposits  was up $43.1  million  (15.5%)  from the  year-ago  quarter.  In
addition,  the average balance of  noninterest-bearing  deposits increased $64.1
million  (37.2%) from the year-ago  quarter,  and the average balance of Federal
funds purchased was $19.6 million in the quarter ended June 30, 2003 compared to
$0 in the  year-ago  quarter.  The  average  rate  paid  for all  categories  of
interest-bearing  liabilities  decreased  from  the  average  rate  paid  in the
year-ago quarter as a result of general market interest rate changes.

Interest  expense  increased  $118,000  (1.8%) to $6,560,000  for the six months
ended June 30, 2003 compared to $6,442,000 in the year-ago  period.  The average
balance of  interest-bearing  liabilities  increased  $161.1 million  (22.2%) to
$885.7 million for the six months ended June 30, 2003 compared to $724.6 million
in the  year-ago  period.  The  increase  in  interest-bearing  liabilities  was
concentrated  in the lower earning  interest-bearing  demand  deposits (up $26.6
million or 15.4%), and savings deposits (up $92.2 million or 36.2%). The average
balance of the higher  earning time deposits was up $32.6  million  (11.9%) from
the year-ago  period.  In addition,  for the six months ended June 30, 2003, the
average balance of noninterest-bearing  deposits increased $52.3 million (30.8%)
from the year-ago period, and the average balance of Federal funds purchased was
$9.8  million  in the six  months  ended  June 30,  2003  compared  to $0 in the
year-ago  six  month  period.  The  average  rate  paid  for all  categories  of
interest-bearing  liabilities  decreased  from  the  average  rate  paid  in the
year-ago quarter as a result of general market interest rate changes.

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

                                   Three months ended         Six months ended
                                        June 30,                  June 30,
                                  ----------------------------------------------
                                   2003         2002         2003         2002
                                  ----------------------------------------------
Yield on earning assets            6.18%        7.12%        6.26%        7.16%
Rate paid on interest-bearing
  Liabilities                      1.45%        1.74%        1.48%        1.78%
                                  ----------------------------------------------
  Net interest spread              4.73%        5.38%        4.78%        5.38%
Impact of all other net
  noninterest-bearing funds        0.29%        0.36%        0.31%        0.37%
                                  ----------------------------------------------
    Net interest margin            5.02%        5.74%        5.09%        5.75%
                                  ==============================================

Net  interest  margin in the second  quarter of 2003  decreased  72 basis points
compared to the second quarter of 2002.  Net interest  margin for the six months
ended June 30, 2003  decreased 66 basis points  compared to the six months ended
June 30,  2002.  Throughout  much of 2002,  the Company was able to decrease the
rates it paid on interest-bearing deposits approximately as fast as the rates on
interest-earning assets decreased. By doing so, the Company was able to maintain
a relatively high net interest margin throughout much of 2002.  However,  in the
fourth  quarter of 2002,  it became  increasingly  difficult to reduce the rates
paid on  interest-bearing  deposits.  As a result,  the  Company's  net interest
margin  began to  decrease.  Also,  throughout  much of 2002,  the Company  grew
deposits  faster than it grew loans.  As a result,  much of the available  funds
from these  deposits  were invested in  securities  rather than higher  yielding
loans, and this also  contributed to a decrease in net interest  margin.  During
the quarter ended June 30, 2003,  the Company's  growth rate for loans  exceeded
its growth  rate for  deposits,  and this faster loan growth rate helped to slow
down the rate of decrease in the Company's net interest margin.

                                      -17-

<PAGE>

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

<TABLE>
<CAPTION>

                                                          For the three months ended
                                       ----------------------------------------------------------------
                                               June 30, 2003                    June 30, 2002
                                       -----------------------------     ------------------------------
                                                  Interest    Rates                Interest    Rates
                                         Average   Income/   Earned      Average    Income/   Earned
                                         Balance   Expense    Paid       Balance    Expense    Paid
                                       -----------------------------     ------------------------------
<S>                                       <C>        <C>       <C>          <C>      <C>        <C>
Assets:
Loans                                    $801,493  $14,713    7.34%       $648,618  $13,046     8.05%
Investment securities - taxable           348,375    2,939    3.37%        189,675    2,309     4.87%
Investment securities - nontaxable         38,780      775    8.00%         44,541      879     7.89%
Federal funds sold                          5,970       18    1.21%         38,652      167     1.73%

Total earning assets                    1,194,618   18,445    6.18%        921,486   16,401     7.12%
Other assets                              144,489                           88,241
                                       ----------                       ----------
Total assets                           $1,339,107                       $1,009,727
                                       ==========                       ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits         $211,561      132    0.25%       $173,782      114     0.26%
Savings deposits                          377,830      906    0.96%        256,153      675     1.05%
Time deposits                             320,268    2,023    2.53%        277,202    2,068     2.98%
Federal funds purchased                    19,556       63    1.29%              -        -         -
Other borrowings                           22,908      321    5.61%         23,109      322     5.57%
                                       -----------------------------     ------------------------------
Total interest-bearing liabilities        952,123    3,445    1.45%        730,246    3,179     1.74%
Noninterest-bearing deposits              236,552                          172,442
Other liabilities                          27,865                           15,610
Shareholders' equity                      122,567                           91,429
                                       ----------                       ----------
Total liabilities and
  shareholders' equity                 $1,339,107                       $1,009,727
                                       ==========                       ==========
Net interest spread(1)                                        4.73%                             5.38%
Net interest income and interest margin(2)         $15,000    5.02%                 $13,222     5.74%
                                                  ==================               ====================

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

</TABLE>

                                      -18-

<PAGE>
<TABLE>
<CAPTION>

                                                           For the six months ended
                                       ----------------------------------------------------------------
                                               June 30, 2003                    June 30, 2002
                                       -----------------------------     ------------------------------
                                                  Interest    Rates                Interest    Rates
                                         Average   Income/   Earned      Average    Income/   Earned
                                         Balance   Expense    Paid       Balance    Expense    Paid
                                       -----------------------------     ------------------------------
<S>                                       <C>        <C>       <C>          <C>      <C>        <C>
Assets:
Loans                                    $740,734  $27,702    7.48%       $645,350  $26,054     8.07%
Investment securities - taxable           323,556    5,683    3.51%        182,966    4,539     4.96%
Investment securities - nontaxable         39,958    1,616    8.09%         44,538    1,738     7.80%
Federal funds sold                         17,204      102    1.19%         39,187      333     1.70%

Total earning assets                    1,121,452   35,103    6.26%        912,041   32,664     7.16%
Other assets                              122,981                           88,058
                                       ----------                       ----------
Total assets                           $1,244,433                       $1,000,099
                                       ==========                       ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits         $199,289      250    0.25%       $172,694      235     0.27%
Savings deposits                          347,098    1,626    0.94%        254,916    1,355     1.06%
Time deposits                             306,596    3,982    2.60%        273,947    4,211     3.07%
Federal funds purchased                     9,778       63    1.29%              -        -         -
Other borrowings                           22,913      639    5.58%         23,030      641     5.57%
                                       -----------------------------     ------------------------------
Total interest-bearing liabilities        885,674    6,560    1.48%        724,587    6,442     1.78%
Noninterest-bearing deposits              222,049                          169,747
Other liabilities                          24,857                           15,298
Shareholders' equity                      111,853                           90,467
                                       ----------                       ----------
Total liabilities and
  shareholders' equity                 $1,244,433                       $1,000,099
                                       ==========                       ==========
Net interest spread(1)                                        4.78%                             5.38%
Net interest income and interest margin(2)         $28,543    5.09%                 $26,222     5.75%
                                                  ==================               ====================

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

</TABLE>

                                      -19-

<PAGE>

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

The following tables set forth a summary of the changes in interest income (FTE)
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 June 30, 2003
                                                compared with three months
                                                    ended June 30, 2002
                                             ---------------------------------
                                              Volume       Rate        Total
                                             ---------------------------------
Increase (decrease) in interest income:
Loans                                         $3,077     ($1,410)     $1,667
Investment securities                          2,082      (1,556)        526
Federal funds sold                              (141)         (8)       (149)
                                             ---------------------------------
   Total earning assets                        5,018      (2,974)      2,044
                                             ---------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                  25          (7)         18
Savings deposits                                 319         (88)        231
Time deposits                                    321        (366)        (45)
Federal funds purchased                           63           -          63
Other borrowings                                  (3)          2          (1)
                                             ---------------------------------
   Total interest-bearing liabilities            725        (459)        266
                                             ---------------------------------
Increase (decrease) in Net Interest Income    $4,293     ($2,515)     $1,778
                                             =================================


                                              Six months ended June 30, 2003
                                                 compared with six months
                                                   ended June 30, 2002
                                             ---------------------------------
                                              Volume       Rate        Total
                                             ---------------------------------
Increase (decrease) in interest income:
Loans                                         $3,849      (2,201)      1,648
Investment securities                          3,753      (2,731)      1,022
Federal funds sold                              (187)        (44)       (231)
                                             ---------------------------------
   Total earning assets                        7,415      (4,976)      2,439
                                             ---------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                  36         (21)         15
Savings deposits                                 489        (218)        271
Time deposits                                    501        (730)       (229)
Federal funds purchased                           63           -          63
Other borrowings                                  (3)          1          (2)
                                             ---------------------------------
   Total interest-bearing liabilities          1,086        (968)        118
                                             ---------------------------------
Increase (decrease) in Net Interest Income    $6,329     ($4,008)     $2,321
                                             =================================

                                      -20-

<PAGE>

Provision for Loan Losses
The Company  provided  $150,000  for loan  losses in the second  quarter of 2003
versus  $500,000  in the second  quarter of 2002.  During the second  quarter of
2003, the Company recorded $1,916,000 of net loan charge offs versus $224,000 of
net loan charge-offs in the year earlier quarter. The increase in charge-offs is
primarily due to a $1,900,000  charge-off  related to two commercial real estate
loans to a single entity  collateralized  by a single building.  The Company had
previously  established a specific  allowance for the two commercial real estate
loans noted above in its  allowance  for loan losses.  See  "Subsequent  Events"
beginning on Page 12 for a description of the Company's  collection of these two
commercial real estate loans.

The Company  provided  $300,000 for loan losses during the six months ended June
30, 2003 versus $1,300,000 during the six months ended June 30, 2002. During the
six months  ended June 30, 2003,  the Company  recorded  $2,150,000  of net loan
charge  offs  versus  $745,000  of net  loan  charge-offs  in the  year  earlier
six-month period.

Noninterest Income
The following  table  summarizes the  components of  noninterest  income for the
periods indicated (dollars in thousands).
                                    Three months ended         Six months ended
                                         June 30,                  June 30,
                                    --------------------------------------------
                                     2003        2002          2003        2002
                                    --------------------------------------------
  Service charges on deposit
    accounts                        $3,192      $1,566        $6,050      $3,031
  ATM fees and interchange             597         438         1,117         811
  Other service fees                   196         137           318         272
  Gain on sale of loans              1,319         539         2,452       1,502
  Commissions on sale of
    nondeposit investment products     461         738           909       1,277
  Gain on sale of investments          100           -           100           -
  Increase in cash value of life
    insurance                          376         205           515         324
  Other noninterest income             313         320           489         552
                                    --------------------------------------------
  Total noninterest income          $6,554      $3,943       $11,950      $7,769
                                    ============================================


Noninterest  income for the second quarter of 2003 increased  $2,611,000 (66.2%)
to  $6,554,000  from  $3,943,000  in  the  year-ago  quarter.  The  increase  in
noninterest  income from the  year-ago  quarter was mainly due to an increase in
service charges on deposit  products (up $1,626,000 or 104% to $3,192,000),  and
an increase in gain on sale of loans (up  $780,000 or 145% to  $1,319,000).  The
increase  in service  charges  income was mainly due to the  introduction  of an
overdraft  privilege deposit product in July 2002 that has added a new stream of
recurring  noninterest  income.  The increase in gain on sale of loans is due to
the Company's  ability to originate and sell an increased  volume of residential
real  estate  mortgage  loans in the  current  environment  of  record  mortgage
refinance.  This high level of mortgage refinance activity may not continue. ATM
fees and interchange  income increased from the year-ago quarter (up $159,000 or
36.3% to $597,000) due to expansion of Company's ATM network and increased debit
card usage.

Noninterest  income for the six months ended June 30, 2003 increased  $4,181,000
(53.8%) to $11,950,000  from $7,769,000 in the same period in 2002. The increase
in noninterest  income from the year-ago period was mainly due to an increase in
service charges on deposit products (up $3,019,000 or 99.6% to $6,050,000),  and
an increase in gain on sale of loans (up $950,000 or 63.2% to  $2,452,000).  The
increase  in service  charges  income was mainly due to the  introduction  of an
overdraft  privilege deposit product in July 2002 that has added a new stream of
recurring  noninterest  income.  The increase in gain on sale of loans is due to
the Company's  ability to originate and sell an increased  volume of residential
real  estate  mortgage  loans in the  current  environment  of  record  mortgage
refinance.  This high level of mortgage refinance activity may not continue. ATM
fees and interchange  income increased from the year-ago quarter (up $306,000 or
37.7% to  $1,117,000)  due to expansion of Company's  ATM network and  increased
debit card usage.

                                      -21-

<PAGE>

Noninterest Expense
The following  table  summarizes the  components of noninterest  expense for the
periods indicated (dollars in thousands).
                                   Three months ended         Six months ended
                                        June 30,                  June 30,
                                  ----------------------------------------------
                                    2003        2002          2003        2002
                                  ----------------------------------------------
  Salaries                         $4,792      $3,746        $9,042      $7,391
  Commissions and incentives        1,361         839         2,472       1,690
  Employee benefits                 1,483       1,188         2,999       2,431
  Equipment                           890         717         1,682       1,405
  Occupancy                           832         776         1,579       1,506
  Professional fees                   641         396         1,215         629
  Telecommunications                  392         332           783         671
  Data processing and software        349         254           640         492
  Advertising and marketing           370         301           642         466
  Courier service                     260         229           508         449
  ATM network charges                 255         214           487         406
  Intangible amortization             324         227           552         455
  Postage                             230         189           428         331
  Operational losses                  176          64           306         103
  Assessments                          65          55           125         111
  Other                             1,948       1,436         3,559       2,829
                                  ----------------------------------------------
  Total                           $14,368     $10,963       $27,019     $21,365
                                  ==============================================
  Average full time
     equivalent staff                 513         427           490         422
  Noninterest expense
     to revenue (FTE)               66.66%      63.87%        66.73%      62.85%

Noninterest expense for the second quarter of 2003 increased  $3,405,000 (31.1%)
to $14,368,000  from  $10,963,000 in the second quarter of 2002. The increase in
noninterest  expense was mainly due to a $1,863,000  (32.3%)  increase in salary
and benefit expense to $7,636,000.  The increase in salary and benefits  expense
was mainly due to annual salary  increases,  increased  commission and incentive
expense,  and new employees at the Company's four newly opened  branches in 2002
and from the merger with North State National Bank on April 4, 2003. Noninterest
expense  excluding  salaries and benefits also increased (up $1,542,000 or 29.7%
to $6,732,000).  Approximately $236,000 of this increase was expenses related to
the  overdraft  privilege  product  introduced  in July 2002,  and  included  in
professional fees. Also related to the overdraft privilege product introduced in
July 2002,  was a $112,000  increase in  operational  losses  from the  year-ago
quarter. Increased advertising expenses accounted for $69,000 of the increase in
other noninterest expense.

Noninterest  expense  for the first  six  months  of 2003  increased  $5,654,000
(26.5%) to  $27,019,000  from  $21,365,000  in the first six months of 2002. The
increase in noninterest  expense was mainly due to a $3,001,000 (26.1%) increase
in salary  and  benefit  expense  to  $14,513,000.  The  increase  in salary and
benefits expense was mainly due to annual salary increases, increased commission
and incentive  expense,  and new  employees at the  Company's  four newly opened
branches in 2002 and from the merger with North State  National Bank on April 4,
2003.  Noninterest  expense  excluding  salaries and benefits also increased (up
$2,653,000 or 26.9% to $12,506,000). Approximately $442,000 of this increase was
expenses related to the overdraft privilege product introduced in July 2002, and
included in professional  fees. Also related to the overdraft  privilege product
introduced in July 2002, was a $203,000 increase in operational  losses from the
year-ago period.  Increased  advertising  expenses accounted for $176,000 of the
increase in other noninterest expense.

                                      -22-

<PAGE>

Provision for Income Tax
The  effective  tax rate for the three  months ended June 30, 2003 was 37.0% and
reflects a decrease  from 37.4% for the three months  ended June 30,  2002.  The
effective tax rate for the six months ended June 30, 2003 was 37.5% and reflects
a decrease from 37.4% for the six months ended June 30, 2002.  The provision for
income  taxes  for  all  periods  presented  is  primarily  attributable  to the
respective  level  of  earnings  and  the  incidence  of  allowable  deductions,
particularly from tax-exempt  loans,  state and municipal  securities,  and bank
owned life insurance.

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 June 30, 2003           At December 31, 2002
                           -------------------------    ------------------------
                            Gross  Guaranteed  Net       Gross  Guaranteed  Net
                           -----------------------------------------------------
Classified loans           $48,321  $11,958  $36,363    $52,642  $12,280 $40,062
Other classified assets      1,551        -    1,551        932        -     932
                           -----------------------------------------------------
Total classified assets    $49,872  $11,958  $37,914    $53,574  $12,280 $40,994
                           =====================================================
Allowance for loan losses/
     Classified loans                          35.5%                       35.1%

Classified  assets,  net of  guarantees  of the U.S.  Government,  including its
agencies and its government-sponsored  agencies at June 30, 2003, decreased $3.1
million (7.5%) to $37.9 million from $41.0 million at December 31, 2002.

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

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

Interest income on nonaccrual loans, which would have been recognized during the
six  months,  ended  June 30,  2003,  if all such  loans  had  been  current  in
accordance  with their  original  terms,  totaled  $1,212,000.  Interest  income
actually recognized on these loans during the six months ended June 30, 2003 was
$154,000.

                                      -23-

<PAGE>

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

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

As shown in the following table, total nonperforming assets net of guarantees of
the  U.S.  Government,  including  its  agencies  and  its  government-sponsored
agencies,  increased  $13.0 million (142%) to $22.1 million during the first six
months of 2003.  The increase in  nonperforming  assets is primarily  due to two
commercial real estate loans collateralized by a single building.  Nonperforming
assets net of guarantees  represent 1.62% of total assets.  All nonaccrual loans
are considered to be impaired when determining the need for a specific valuation
allowance.  The Company continues to make a concerted effort to work problem and
potential problem loans to reduce risk of loss.

<TABLE>
<CAPTION>

 (dollars in thousands):
                                                  At June 30, 2003            At December 31, 2002
                                              -------------------------    -------------------------
                                                Gross Guaranteed  Net       Gross Guaranteed   Net
                                              ------------------------------------------------------
<S>                                            <C>       <C>      <C>       <C>      <C>      <C>
Performing nonaccrual loans                   $10,770   $8,157   $2,613    $13,199  $8,432   $4,767
Nonperforming, nonaccrual loans                16,045    1,668   14,377      4,091     718    3,373
                                              ------------------------------------------------------
Total nonaccrual loans                         26,815    9,825   16,990     17,290   9,150    8,140
Loans 90 days past due and still accruing       3,549        -    3,549         40       -       40
                                              ------------------------------------------------------
Total nonperforming loans                      30,364    9,825   20,539     17,330   9,150    8,180
Other real estate owned                         1,551        -    1,551        932       -      932
                                              ------------------------------------------------------
Total nonperforming assets                    $31,915   $9,825  $22,090    $18,262  $9,150   $9,112
                                              ======================================================
Nonperforming loans to total loans                                2.41%                       1.19%
Allowance for loan losses/nonperforming loans                       66%                        176%
Nonperforming assets to total assets                              1.62%                       0.80%
Allowance for loan losses to nonperforming assets                   61%                        158%

</TABLE>

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

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

                                      -24-

<PAGE>

The Company's method for assessing the appropriateness of the allowance includes
specific  allowances  for  identified  problem loans and leases as determined by
SFAS 114,  formula  allowance  factors for pools of credits,  and allowances for
changing   environmental  factors  (e.g.,   interest  rates,  growth,   economic
conditions,  etc.). Allowance factors for loan pools are based on the previous 5
years historical loss experience by product type.  Allowances for specific loans
are based on SFAS 114 analysis of individual  credits.  Allowances  for changing
environmental  factors are  Management's  best  estimate of the probable  impact
these  changes  have  had on the loan  portfolio  as a whole.  This  process  is
explained  in  detail  in the  notes  to the  Company's  Consolidated  Financial
Statements  in its Annual  Report on Form 10-K for the year ended  December  31,
2002.

Based on the current conditions of the loan portfolio,  Management believes that
the $13,455,000 allowance for loan losses at June 30, 2003 is adequate to absorb
probable losses  inherent in the Company's loan  portfolio.  No assurance can be
given, however, that adverse economic conditions or other circumstances will not
result in increased losses in the portfolio.

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

                                  Three months ended        Six months ended
                                       June 30,                 June 30,
                                 -----------------------------------------------
                                   2003        2002         2003        2002
                                 -----------------------------------------------
 Balance, beginning of period    $14,293     $13,337      $14,377     $13,058
 Addition through merger             928           -          928           -
 Loan loss provision                 150         500          300       1,300
 Loans charged off                (2,063)       (282)      (2,343)       (843)
 Recoveries of previously
   charged-off loans                 147          58          193          98
                                 -----------------------------------------------
 Net charge-offs                  (1,916)       (224)      (2,150)       (745)
                                 -----------------------------------------------
 Balance, end of period          $13,455     $13,613      $13,455     $13,613
                                 ===============================================
 Allowance for loan losses/loans outstanding                 1.58%       2.03%

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.  On
July 31, 2003,  TriCo completed an offering of 20,000 shares of cumulative trust
preferred  securities for cash in an aggregate amount of $20,000,000.  The trust
preferred  securities  are due in 30 years  with an  interest  rate that  resets
quarterly  at  three-month  LIBOR plus 3.05%,  or 4.16% for the first  quarterly
interest  period.  The  trust  preferred   securities  were  issued  through  an
underwriting  syndicate to which the Company paid underwriting fees of $7.50 per
trust  preferred  security or an  aggregate  of  $150,000.  The net  proceeds of
$19,850,000  will be used to finance the opening of new  branches,  improve bank
services and  technology,  repurchase  shares of the  Company's  common stock as
described below and increase the Company's capital.

Also on July 31,  2003,  the  Company  announced  the  termination  of its stock
repurchase  plan  to  repurchase  150,000  shares  of  common  stock  originally
announced on October 19, 2001. There were 118,800 shares  repurchased  under the
plan and the remaining 31,200 shares had not been  repurchased.  The Company has
adopted a new stock  repurchase  plan for the repurchase of up to 250,000 shares
of the Company's common stock from time to time as market  conditions allow. The
250,000 shares authorized for repurchase under this plan represent approximately
3.2% of the Company's  approximately  7,852,000 common shares  outstanding as of
July  31,  2003,  2003.  This new plan  has no  stated  expiration  date for the
repurchases.

                                      -25-

<PAGE>

The Company's primary capital resource is shareholders' equity, which was $124.6
million at June 30, 2003. This amount represents an increase of $25,553,000 from
December  31,  2002,  the net result of  issuance  of common  stock and  options
related  to  the  merger  with  North   State   National   Bank   ($18,527,000),
comprehensive  income for the period  ($8,997,000),  and the  issuance of common
shares via the exercise of stock options ($1,016  million),  partially offset by
dividends paid  ($2,987,000).  The Company's ratio of equity to total assets was
9.15%,  9.04%,  and 8.65% as of June 30, 2003,  June 30, 2002,  and December 31,
2002, respectively.

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

<TABLE>
<CAPTION>

                                                                                 To Be Well
                                At June 30,         At            Minimum     Capitalized Under
                             -----------------  December 31,    Regulatory    Prompt Corrective
                              2003       2002      2002         Requirement   Action Provisions
                             ------------------------------------------------------------------
   <S>                        <C>        <C>        <C>              <C>             <C>
   Tier I Capital             9.12%     10.75%     10.71%           4.00%           6.00%
   Total Capital             10.37%     12.01%     11.97%           8.00%          10.00%
   Leverage ratio             7.45%      8.55%      8.27%           4.00%           5.00%

</TABLE>

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

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

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

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

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

                                      -26-

<PAGE>

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 June 30, 2003 and 2002, the results of the  simulations  noted above indicate
that the balance  sheet is slightly  asset  sensitive  (earnings  increase  when
interest rates rise). The magnitude of all the simulation results noted above is
within the Company's policy  guidelines.  The asset liability  management policy
limits  aggregate  market risk,  as measured in this  fashion,  to an acceptable
level within the context of risk-return trade-offs.

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 June 30, 2003 and 2002, the Company had no derivative financial instruments.

Liquidity
The  Company's  principal  source of asset  liquidity is federal  funds sold and
marketable  investment  securities available for sale. At June 30, 2003, federal
funds sold and  investment  securities  available for sale totaled $357 million,
representing  an increase of $11 million or 3.2% from December 31, 2002,  and an
increase of $95 million or 36.3% from June 30, 2002.  In  addition,  the Company
generates  additional  liquidity  from its operating  activities.  The Company's
profitability  during  the first six  months of 2003  generated  cash flows from
operations  of $14.1  million  compared  to $11.3  million  during the first six
months of 2002.  Additional cash flows may be provided by financing  activities,
primarily  the  acceptance  of deposits  and  borrowings  from banks.  Sales and
maturities of investment securities produced cash inflows of $135 million during
the six months  ended June 30,  2003  compared to $60 million for the six months
ended June 30,  2002.  During the six months  ended June 30,  2003,  the Company
invested  $110 million,  $90 million,  and $19 million in  securities,  net loan
growth, and life insurance policies,  respectively,  compared to $67 million and
$14 million  used to purchase  investments  and net loan  growth,  respectively,
during the first six months of 2002. These changes in investment, loan, and life
insurance balances  contributed to net cash used for investing activities of $78
million during the six months ended June 30, 2003, compared to net cash used for
investing  activities of $22 million  during the six months ended June 30, 2002.
Financing  activities  provided  net cash of $57  million  during the six months
ended June 30, 2003,  compared to net cash  provided by financing  activities of
$15 million  during the six months  ended June 30,  2002.  Increases  in deposit
balances and Federal funds borrowed accounted for $42 million and $17 million of
financing sources of funds,  respectively,  during the six months ended June 30,
2003,  compared to deposit  balance  increases that accounted for $18 million of
financing sources of funds during the six months ended June 30, 2002.  Dividends
paid used $3.0 million and $2.8 million of cash during the six months ended June
30, 2003 and June 30,  2002,  respectively.  Also,  the  Company's  liquidity is
dependent  on  dividends  received  from the Bank.  Dividends  from the Bank are
subject to certain regulatory restrictions.

                                      -27-

<PAGE>

Item 4.  Controls and Procedures

(a)       The Chief Executive  Officer,  Richard Smith,  and the Chief Financial
          Officer, Thomas Reddish,  evaluated the effectiveness of the Company's
          disclosure  controls and  procedures as of June 30, 2003  ("Evaluation
          Date").  Based  on  that  evaluation,  they  concluded  that as of the
          Evaluation Date the Company's  disclosure  controls and procedures are
          effective  to  allow  timely  communication  to  them  of  information
          relating to the Company and the Bank  required to be  disclosed in its
          filings with the Securities and Exchange  Commission ("SEC") under the
          Securities   Exchange  Act  of  1934,  as  amended  ("Exchange  Act").
          Disclosure  controls  and  procedures  are Company  controls and other
          procedures that are designed to ensure that information required to be
          disclosed  by the  Company  in the  reports  that it files  under  the
          Exchange Act is recorded,  processed,  summarized and reported  within
          the time periods specified in the SEC's rules and forms.

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



                                      -28-

<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 4  - Submission of Matters to a Vote of Security Holders

   (a)  The Company's  Annual Meeting of Shareholders  was held on May 13,
        2003.

   (b) and (c)  The following nine directors were elected at the meeting:

                                 Votes For  Votes Against/Withheld  Abstentions
                                 ---------  ----------------------  -----------
       William J. Casey          5,188,013           37,956              -
       Donald J. Amaral          5,187,153           38,816              -
       Craig S. Compton          5,187,807           38,162              -
       Wendell J. Lundberg       5,188,013           37,956              -
       Donald E. Murphy          5,187,699           38,270              -
       Steve G. Nettleton        5,192,538           33,431              -
       Richard P. Smith          5,026,844          199,126              -
       Carroll R. Taresh         4,949,504          276,465              -
       Alex A. Vereschagin, Jr.  5,188,013           37,956              -

   The shareholders ratified the appointment of KPMG LLP as  independent  public
   accountants of the Company  for  2003.  5,662,636 shares  were  voted for the
   ratification, 10,541 shares against and 31,732 shares abstained.


Item 6 - Exhibits and Reports on Form 8-K

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

                                      -29-

<PAGE>

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

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

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

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

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

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

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

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

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

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

     10.13*    Employment  Agreement between TriCo and Richard  O'Sullivan dated
               April 10,  2001,  filed as  Exhibit  10.13 to  TriCo's  Quarterly
               Report on Form 10-Q for the quarter ended March 31, 2003

               Computation of earnings per share

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

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

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

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

                                      -30-

<PAGE>

     32.1      Section 1350 Certification of CEO

     32.2      Section 1350 Certification of CFO

       * Previously filed and incorporated by reference.

(b) Reports on Form 8-K

     During the  quarter  ended June 30, 2003 the  Company  filed the  following
     Current Reports on Form 8-K:

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

     Quarterly results of operations.          April 23, 2003

     Quarterly results of operations.          July 30, 2003

     Declaration of $0.20 per common           July 30, 2003
     share dividend payable September 30,
     2003 to holders of record on
     September 9, 2003; trust preferred
     issuance; cancellation of existing
     stock repurchase plan; approval of
     new stock repurchase plan;
     substantial reduction in
     nonperforming assets.

SIGNATURES

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

                                     TRICO BANCSHARES
                                       (Registrant)

Date:  August 14, 2003               /s/ Thomas J. Reddish
                                     -----------------------------------
                                     Thomas J. Reddish
                                     Vice President and Chief Financial Officer

                                      -31-

<PAGE>

Exhibit 11.1

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

                                             For the                For the
                                           three months            six months
                                          ended June 30,         ended June 30,
(In thousands, except per share data)    2003        2002       2003        2002
                                        ----------------------------------------
Weighted average number of common
    shares outstanding - basic          7,796       7,011      7,434       7,002

Add exercise of options reduced by
    the number of shares that could
    have been purchased with the
    proceeds of such exercise             225         203        224         164
                                        ----------------------------------------
Weighted average number of common
    shares outstanding - diluted        8,021       7,214      7,658       7,166
                                        ========================================

Net income                             $4,254      $3,365     $7,867      $6,694

Basic earnings per share                $0.55       $0.48      $1.06       $0.96

Diluted earnings per share              $0.53       $0.47      $1.03       $0.93




                                      -32-

<PAGE>

Exhibit 31.1

Certification  Pursuant to Rule  13a-14(a)/15d-14(a)  of the Securities Exchange
Act of 1934, as Amended

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  subsidiaries,  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  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluations; 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
               information; 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.



Date:  August 14, 2003                  /s/ Richard P. Smith
                                        -------------------------------------
                                        Richard P. Smith
                                        President and Chief Executive Officer


                                      -33-

<PAGE>

Exhibit 31.2

Certification  Pursuant to Rule  13a-14(a)/15d-14(a)  of the Securities Exchange
Act of 1934, as Amended

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  subsidiaries,  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  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluations; 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
               information; 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.



Date: August 14, 2003                   /s/ Thomas J. Reddish
                                        -------------------------------------
                                        Thomas J. Reddish
                                        Vice President and Chief Financial
                                        Officer


                                      -34-

<PAGE>

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350.

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ending June 30, 2003 as filed with the  Securities  and
Exchange  Commission  on the date hereof (the  "Report"),  I,  Richard P. Smith,
President and Chief Executive  Officer of the Company,  certify,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that:

     (1)  The Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.

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

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


Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350.

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ending June 30, 2003 as filed with the  Securities  and
Exchange  Commission  on the date hereof (the  "Report"),  I, Thomas J. Reddish,
Vice President and Chief Financial Officer of the Company,  certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

     (1)  The Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.

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

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



                                      -35-
[{"type": "10-Q", "sequence": "1", "filename": "tcb10q2q03.txt", "description": "TRICO 6/30/2003 FORM 10-Q", "secsgml_size_bytes": 146617}]
{"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": "03846243"}, "business-address": {"street1": "TRICO BANCSHARES", "street2": "63 CONSTITUTION DRIVE", "city": "CHICO", "state": "CA", "zip": "95973", "phone": "5308980300"}, "mail-address": {"street1": "TRICO BANCSHARES", "street2": "63 CONSTITUTION DRIVE", "city": "CHICO", "state": "CA", "zip": "95973"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

For Quarter Ended June 30, 2003                   Commission file number 0-10661
-------------------------------                   ------------------------------

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

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

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

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

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

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

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

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

Title of Class:  Common stock, no par value

Outstanding shares as of August 14, 2003:  7,854,101
TABLE OF CONTENTS

                                                                          Page

Forward Looking Statements                                                  1

PART I - FINANCIAL INFORMATION                                              2

  Item 1 - Financial Statements                                             2

    Financial Summary                                                       6

    Notes to Unaudited Condensed Consolidated Financial Statements          7

  Item 2 - Management's Discussion and Analysis of Financial               14
           Condition and Results of Operations

  Item 3 - Quantitative and Qualitative Disclosure about Market Risk       26

  Item 4 - Controls and Procedures                                         28

PART II - OTHER INFORMATION                                                29

  Item 1 - Legal Proceedings                                               29

  Item 4  - Submission of Matters to a Vote of Security Holders            29

  Item 6 - Exhibits and Reports on Form 8-K                                29

  Signatures                                                               31

  Exhibits                                                                 32
FORWARD-LOOKING STATEMENTS

This  report  on Form  10-Q  contains  forward-looking  statements  about  TriCo
Bancshares (the "Company") for which it claims the protection of the safe harbor
provisions  contained in the Private  Securities  Litigation Reform Act of 1995.
These forward-looking statements are based on Management's current knowledge and
belief and include  information  concerning  the  Company's  possible or assumed
future  financial  condition and results of operations.  When you see any of the
words "believes", "expects", "anticipates", "estimates", or similar expressions,
mean making forward-looking  statements.  A number of factors, some of which are
beyond the Company's  ability to predict or control,  could cause future results
to differ materially from those contemplated.  These factors include but are not
limited to:

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

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

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

The reader is directed to the Company's  annual report on Form 10-K for the year
ended  December 31, 2002,  for further  discussion of factors which could affect
the Company's  business and cause actual results to differ materially from those
expressed in any forward-looking statement made in this report.

                                      -1-
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                TRICO BANCSHARES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
                                                                 (Unaudited)               (Unaudited)
                                                                 At June 30,             At December 31,
                                                            2003             2002             2002
                                                      -------------------------------   -----------------
Assets:
  Cash and due from banks                                 $65,051           $54,094          $67,170
  Federal funds sold                                        3,200            27,800            8,100
                                                      -------------------------------   -----------------
    Cash and cash equivalents                              68,251            81,894           75,270

  Investment securities available for sale                354,040           234,544          338,024
  Loans
    Commercial                                            147,746           138,770          125,982
    Consumer                                              237,704           171,178          201,858
    Real estate mortgages                                 407,218           321,260          319,969
    Real estate construction                               59,622            40,592           39,713
                                                      -------------------------------   -----------------
                                                          852,290           671,800          687,522

  Allowance for loan losses                               (13,455)          (13,613)         (14,377)
                                                      -------------------------------   -----------------
    Loans, net of allowance for loan losses               838,835           658,187          673,145
  Premises and equipment, net                              19,830            16,195           17,224
  Cash value of life insurance                             34,633            14,927           15,208
  Other real estate owned                                   1,551                71              932
  Accrued interest receivable                               6,001             5,419            5,644
  Deferred income taxes                                     7,154             8,411            8,429
  Intangible assets                                        22,189             4,615            4,043
  Other assets                                              8,418             5,298            6,655
                                                      -------------------------------   -----------------
         Total Assets                                  $1,360,902        $1,029,561       $1,144,574
                                                      ===============================   =================
Liabilities:
  Deposits:
    Noninterest-bearing demand                           $260,861          $188,546         $232,499
    Interest-bearing demand                               204,538           169,343          182,816
    Savings                                               393,198           255,264          297,926
    Time certificates, $100,000 and over                  111,249            81,828           90,404
    Other time certificates                               203,759           202,929          201,592
                                                      -------------------------------   -----------------
    Total deposits                                      1,173,605           897,910        1,005,237
  Federal funds purchased                                  17,400                 -                -
  Accrued interest payable                                  2,615             2,639            2,927
  Other Liabilities                                        19,810            12,950           14,472
  Long-term debt and other borrowings                      22,905            22,940           22,924
                                                      -------------------------------   -----------------
    Total Liabilities                                   1,236,335           936,439        1,045,560
                                                      -------------------------------   -----------------
Shareholders' Equity:
  Authorized - 20,000,000 shares of common
  stock Issued and outstanding:
    7,852,110 at June 30, 2003                             70,015
    7,025,690 at June 30, 2002                                               50,047
    7,060,965 at December 31, 2002                                                            50,472
  Retained earnings                                        51,119            41,682           46,239
  Accumulated other comprehensive income, net               3,433             1,393            2,303
                                                      -------------------------------   -----------------
    Total Shareholders' Equity                            124,567            93,122           99,014
                                                      -------------------------------   -----------------
Total Liabilities and Shareholders' Equity             $1,360,902        $1,029,561       $1,144,574
                                                      ===============================   =================
See accompanying notes to unaudited condensed consolidated financial statements

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

                                                 Three months ended June 30,     Six months ended June 30,
                                                    2003            2002            2003           2002
                                                 ---------------------------------------------------------
Interest Income:
  Interest and fees on loans                      $14,713         $13,046         $27,702        $26,054
  Interest on federal funds sold                       18             167             102            333
  Interest on investment securities
    available for sale
      Taxable                                       2,939           2,309           5,683          4,539
      Tax exempt                                      491             553           1,023          1,107
                                                 ---------------------------------------------------------
    Total interest income                          18,161          16,075          34,510         32,033
                                                 ---------------------------------------------------------
Interest Expense:
  Interest on interest-bearing demand deposits        132             114             250            235
  Interest on savings                                 906             675           1,626          1,354
  Interest on time certificates of deposit          2,023           2,068           3,982          4,211
  Interest on short-term borrowing                     63               -              63              1
  Interest on long-term debt                          321             322             639            641
                                                 ---------------------------------------------------------
    Total interest expense                          3,445           3,179           6,560          6,442
                                                 ---------------------------------------------------------
Net Interest Income                                14,716          12,896          27,950         25,591
                                                 ---------------------------------------------------------
Provision for loan losses                             150             500             300          1,300
                                                 ---------------------------------------------------------
Net Interest Income After Provision for
  Loan Losses                                      14,566          12,396          27,650         24,291
                                                 ---------------------------------------------------------
Noninterest Income:
  Service charges and fees                          3,985           2,141           7,485          4,114
  Gain on sale of loans                             1,319             539           2,452          1,502
  Commissions on sale of non-deposit
    investment products                               461             738             909          1,277
  Other                                               789             525           1,104            876
                                                 ---------------------------------------------------------
  Total Noninterest Income                          6,554           3,943          11,950          7,769
                                                 ---------------------------------------------------------
Noninterest Expense:
  Salaries and related benefits                     7,636           5,773          14,513         11,512
  Other                                             6,732           5,190          12,506          9,853
                                                 ---------------------------------------------------------
  Total Noninterest Expense                        14,368          10,963          27,019         21,365
                                                 ---------------------------------------------------------
Income Before Income Taxes                          6,752           5,376          12,581         10,695
                                                 ---------------------------------------------------------
  Provision for income taxes                        2,498           2,011           4,714          4,001
                                                 ---------------------------------------------------------
Net Income                                         $4,254          $3,365          $7,867         $6,694
                                                 ---------------------------------------------------------
Comprehensive Income:
  Change in unrealized gain on securities
    available for sale, net                           745           2,004           1,130          2,048
                                                 ---------------------------------------------------------
Comprehensive Income                               $4,999          $5,369          $8,997         $8,742
                                                 =========================================================
Average Shares Outstanding                          7,796           7,011           7,434          7,002
Diluted Average Shares Outstanding                  8,021           7,214           7,658          7,166
Per Share Data
  Basic Earnings                                    $0.55           $0.48           $1.06          $0.96
  Diluted Earnings                                  $0.53           $0.47           $1.03          $0.93
  Dividends Paid                                    $0.20           $0.20           $0.40          $0.40
See accompanying notes to unaudited condensed consolidated financial statements

                                      -3-
TRICO BANCSHARES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                            (In thousands, unaudited)
                                                       Accumulated
                                                          Other
                                   Common   Retained   Comprehensive
                                   Stock    Earnings  Income (Loss), net  Total
                                 -----------------------------------------------
Balance, December 31, 2001        $49,679    $37,909      ($655)        $86,933
  Net income for the period                    6,694                      6,694
  Exercise of stock options,
    including tax benefits            439                                   439
  Repurchase of common stock          (71)      (119)                      (190)
  Dividends                                   (2,802)                    (2,802)
  Unrealized gain on securities
    available for sale, net                               2,048           2,048
                                 -----------------------------------------------
Balance June 30, 2002             $50,047    $41,682     $1,393         $93,122
                                 ===============================================

Balance, December 31, 2002        $50,472    $46,239     $2,303         $99,014
  Net income for the period                    7,867                      7,867
  Issuance of stock and options
    related to merger              18,527                                18,527
  Exercise of stock options,
    including tax benefits          1,016                                 1,016
  Dividends                                   (2,987)                    (2,987)
  Unrealized gain on securities
    available for sale, net                               1,130           1,130
                                 -----------------------------------------------
Balance June 30, 2003             $70,015    $51,119     $3,433        $124,567
                                 ===============================================

See accompanying notes to unaudited condensed consolidated financial statements

                                      -4-
TRICO BANCSHARES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands, unaudited)
                                                                       For the six months
                                                                         ended June 30,
                                                                     2003               2002
                                                                 -------------------------------
Operating Activities:
   Net income                                                       $7,867              $6,694
   Adjustments to reconcile net income to net cash provided
     by operating activities:
       Depreciation and amortization of property and equipment       1,323               1,316
       Amortization of intangible assets                               552                 455
       Provision for loan losses                                       300               1,300
       Amortization of investment securities premium, net            1,819                 702
       Deferred income taxes                                             -                 (66)
       Investment security gains net                                  (100)                  -
       Originations of loans for resale                           (115,962)            (79,578)
       Proceeds from sale of loans originated for resale           117,135              80,154
       Gain on sale of loans                                        (2,452)             (1,502)
       Amortization of mortgage servicing rights                       543                 313
       Gain on sale of other real estate owned                         (60)                  -
       (Gain) loss on sale of fixed assets                              (3)                 19
       Change in assets and liabilities:
         Decrease in interest receivable                               185                 103
         Decrease in interest payable                                 (386)               (849)
         Decrease in other assets and liabilities                    3,329               2,287
                                                                 -------------------------------
Net Cash Provided by Operating Activities                           14,090              11,348
                                                                 -------------------------------
Investing Activities:
   Net cash obtained in mergers and acquisitions                     7,450                   -
   Proceeds from maturities of securities available-for-sale       122,570              60,067
   Proceeds from sale of securities available-for-sale              12,139                   -
   Purchases of securities available-for-sale                     (109,717)            (67,448)
   Net (increase) decrease in loans                                (90,439)            (13,813)
   Proceeds from sale of premises and equipment                         10                   8
   Purchases of property and equipment                              (1,555)               (942)
   Proceeds from sale of other real estate owned                        60                   -
   Purchase of life insurance                                      (18,910)                  -
                                                                 -------------------------------
Net Cash Used by Investing Activities                              (78,392)            (22,128)
                                                                 -------------------------------
Financing Activities:
   Net increase in deposits                                         42,319              17,517
   Net increase in Federal funds purchased                          17,400                   -
   Payments of principal on long-term debt agreements                  (19)                (16)
   Repurchase of Common Stock                                            -                (190)
   Dividends paid                                                   (2,987)             (2,802)
   Exercise of stock options/issuance of Common Stock                  570                 201
                                                                 -------------------------------
Net Cash Provided by Financing Activities                           57,283              14,710
                                                                 -------------------------------
Net (Decrease) Increase in Cash and Cash Equivalents                (7,019)              3,930
                                                                 -------------------------------
Cash and Cash Equivalents and Beginning of Period                   75,270              77,964
                                                                 -------------------------------
Cash and Cash Equivalents at End of Period                         $68,251             $81,894
                                                                 ===============================
Supplemental Disclosure of Noncash Activities:
   Unrealized gain on securities available for sale                 $1,830              $3,275
   Loans transferred to other real estate owned                       $619                   -
Supplemental Disclosure of Cash Flow Activity:
   Cash paid for interest expense                                   $6,872              $7,291
   Cash paid for income taxes                                       $3,010              $2,000
   Income tax benefit from stock option exercises                     $446                $238
The acquisition of North State National Bank
   Involved the following:
   Common stock issued                                             $18,527
   Liabilities assumed                                            $126,722
   Fair value of assets acquired, other than cash
     and cash equivalents                                        ($119,102)
   Core deposit intangible                                         ($3,365)
   Goodwill                                                       ($15,332)
   Net cash and cash equivalents received                           $7,450
See accompanying notes to unaudited condensed consolidated financial statements

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

                                                           (Unaudited)                  (Unaudited)
                                                       Three months ended            Six months ended
                                                            June 30,                     June 30,
                                              --------------------------------------------------------------
                                                    2003               2002        2003            2002
                                              --------------------------------------------------------------
Net Interest Income (FTE)                         $15,000            $13,222     $28,543         $26,222
Provision for loan losses                            (150)              (500)       (300)         (1,300)
Noninterest income                                  6,554              3,943      11,950           7,769
Noninterest expense                               (14,368)           (10,963)    (27,019)        (21,365)
Provision for income taxes (FTE)                   (2,782)            (2,337)     (5,307)         (4,632)
                                              --------------------------------------------------------------
Net income                                         $4,254             $3,365      $7,867          $6,694
                                              ==============================================================

Average shares outstanding                          7,796              7,011       7,434           7,002
Diluted average shares outstanding                  8,021              7,214       7,658           7,166
Shares outstanding at period end                    7,852              7,026       7,852           7,026

As Reported:
   Basic earnings per share                         $0.55              $0.48       $1.06           $0.96
   Diluted earnings per share                       $0.53              $0.47       $1.03           $0.93
   Return on assets                                  1.27%              1.33%       1.26%           1.34%
   Return on equity                                 13.88%             14.72%      14.07%          14.80%
   Net interest margin                               5.02%              5.74%       5.09%           5.75%
   Net loan charge-offs to average loans             0.96%              0.14%       0.58%           0.23%
   Efficiency ratio (FTE)                           66.66%             63.87%      66.73%          62.85%

Average Balances:
   Total assets                                $1,339,107         $1,009,727  $1,244,433      $1,000,099
   Earning assets                               1,194,618            921,486   1,121,452         912,041
   Total loans                                    801,493            648,618     740,734         645,350
   Total deposits                               1,146,211            879,579   1,075,032         871,304
   Shareholders' equity                          $122,567            $91,429    $111,853         $90,467

Balances at Period End:
   Total assets                                $1,360,902         $1,029,561
   Earning assets                               1,209,530            934,144
   Total loans                                    852,290            671,800
   Total deposits                               1,173,605            897,910
   Shareholders' equity                          $124,567            $93,122

Financial Ratios at Period End:
   Allowance for loan losses to loans                1.58%              2.03%
   Book value per share                            $15.86             $13.25
   Equity to assets                                  9.15%              9.04%
   Total capital to risk assets                     10.37%             12.01%

Dividends Paid Per Share                            $0.20              $0.20       $0.40           $0.40
Dividend Payout Ratio                               37.74%           42.55%        38.83%          43.01%
-6-
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: General Summary of Significant Accounting Policies
The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information  and  pursuant  to  the  rules  and  regulations  of  the
Securities and Exchange  Commission.  The results of operations  reflect interim
adjustments,  all of which are of a normal  recurring  nature and which,  in the
opinion of management,  are necessary for a fair presentation of the results for
the interim period  presented.  The interim  results for the three and six month
periods  ended  June 30,  2003 and 2002 are not  necessarily  indicative  of the
results  expected  for the full year.  These  unaudited  consolidated  financial
statements should be read in conjunction with the audited consolidated financial
statements and accompanying  notes as well as other information  included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2002.

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

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

Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  Management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  On an on-going basis,  the Company  evaluates its
estimates,  including  those  related to the adequacy of the  allowance for loan
losses,  investments,  intangible assets,  income taxes and  contingencies.  The
Company  bases its  estimates  on  historical  experience  and on various  other
assumptions  that are believed to be  reasonable  under the  circumstances,  the
results of which form the basis for making  judgments  about the carrying values
of assets and  liabilities  that are not readily  apparent  from other  sources.
Actual results may differ from these estimates  under  different  assumptions or
conditions.  The one accounting  estimate that materially  affects the financial
statements is the allowance for loan losses.

Investment Securities
The Company  classifies its debt and marketable  equity  securities  into one of
three  categories:  trading,  available-for-sale  or  held-to-maturity.  Trading
securities  are bought and held  principally  for the  purpose of selling in the
near term. Held-to-maturity securities are those securities that the Company has
the ability and intent to hold until maturity. All other securities not included
in trading or held-to-maturity are classified as available-for-sale.  During the
six months ended June 30, 2003 and throughout 2002, the Company did not have any
securities classified as either held-to-maturity or trading.

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

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

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

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

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

The  Company  recognizes  a gain and a related  asset for the fair  value of the
rights to  service  loans for  others  when  loans are sold.  The  Company  sold
substantially  all  of  its  conforming  long-term  residential  mortgage  loans
originated  during six months ended June 30, 2003 for cash proceeds equal to the
fair value of the loans.

The following table summarizes the Company's mortgage servicing rights assets as
of June 30, 2003 and December 31, 2002.

                                 December 31,                           June 30,
   (Dollars in thousands)            2002     Additions   Reductions      2003
                                 -----------------------------------------------
   Mortgage Servicing Rights        $2,821      $1,279      ($543)       $3,557
                                 ===============================================

                                      -8-
The recorded value of mortgage servicing rights is included in other assets, and
is amortized in proportion  to, and over the period of,  estimated net servicing
revenues.  The  Company  assesses  capitalized  mortgage  servicing  rights  for
impairment based upon the fair value of those rights at each reporting date. For
purposes  of  measuring  impairment,  the rights are  stratified  based upon the
product type, term and interest  rates.  Fair value is determined by discounting
estimated  net future  cash  flows  from  mortgage  servicing  activities  using
discount rates that  approximate  current market rates and estimated  prepayment
rates, among other assumptions.  The amount of impairment recognized, if any, is
the  amount by which the  capitalized  mortgage  servicing  rights for a stratum
exceeds their fair value. Impairment,  if any, is recognized through a valuation
allowance for each individual stratum.

At June 30, 2003,  the Company had no mortgage  loans held for sale. At June 30,
2003 and December 31, 2002, the Company  serviced real estate mortgage loans for
others of $353 million and $307 million, respectively.

Intangible Assets
The Company  reviews for impairment of certain  intangibles  held, at the end of
each  calendar  year or whenever  events or changes  indicate  that the carrying
amount of an asset may not be  recoverable.  If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying  amount of the assets  exceeds  the fair  market  value of the  assets.
Assets to be disposed of are  reported  at the lower of the  carrying  amount or
fair value less costs to sell.

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

The following table summarizes the Company's core deposit  intangible as of June
30, 2003 and December 31, 2002.
                                 December 31,                           June 30,
   (Dollar in Thousands)             2002     Additions   Reductions      2003
                                 -----------------------------------------------
   Core deposit intangibles        $10,278      $3,365          -       $13,643
   Accumulated amortization         (6,636)          -      ($552)       (7,188)
                                 -----------------------------------------------
   Core deposit intangibles, net    $3,642      $3,365      ($552)       $6,455
                                 ===============================================

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)
               -----------         -----------------------
                  2003                     $1,207
                  2004                     $1,358
                  2005                     $1,381
                  2006                     $1,395
                  2007                       $490
               Thereafter                  $1,176

The  following  table  summarizes  the  Company's   minimum  pension   liability
intangible as of June 30, 2003 and December 31, 2002.
                                      December 31,                      June 30,
  (Dollar in Thousands)                   2002     Additions Reductions   2003
                                      ------------------------------------------
  Minimum pension liability intangible    $401          -          -      $401
                                      ==========================================

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

                                      -9-
Goodwill
The following table summarizes the Company's goodwill  intangible as of June 30,
2003 and December 31, 2002.
                                 December 31,                           June 30,
   (Dollar in Thousands)             2002     Additions   Reductions      2003
                                 -----------------------------------------------
   Goodwill                             -      $15,332          -       $15,332
                                 ===============================================

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

Had  compensation  cost  for the  Company's  option  plans  been  determined  in
accordance  with SFAS 123, the Company's net income and earnings per share would
have been reduced to the pro forma amounts indicated below:
Three Months Ended June 30,      Six Months Ended June 30,
(in thousands, except per share amounts)   2003                   2002       2003                2002
                                           ----                   ----       ----                ----
Net income                  As reported   $4,254                 $3,365     $7,867              $6,694
                              Pro forma   $4,198                 $3,312     $7,755              $6,588
Basic earnings per share    As reported    $0.55                  $0.48      $1.06               $0.96
                              Pro forma    $0.54                  $0.47      $1.04               $0.94
Diluted earnings per share  As reported    $0.53                  $0.47      $1.03               $0.93
                              Pro forma    $0.52                  $0.46      $1.01               $0.92
Stock-based employee compensation
  cost, net of related tax effects,
  included in net income    As reported       $0                     $0         $0                  $0
                              Pro forma      $56                    $53       $108                $102
-10-
Comprehensive Income
For the  Company,  comprehensive  income  includes  net income  reported  on the
statement  of  income,  changes  in the  fair  value  of its  available-for-sale
investments,  and  changes  in  the  minimum  pension  liability  reported  as a
component of shareholders' equity.

The changes in the components of accumulated other  comprehensive  income (loss)
for the six months ended June 30, 2003 and 2002 are reported as follows:
                                           Six Months Ended June 30,
                                            2003               2002
                                         -----------------------------
Unrealized Gain on Securities                    (in thousands)

Beginning Balance                          $3,048               $117
Unrealized gain arising during the
   period, net of tax                       1,130              2,048
                                         -----------------------------
Ending Balance                             $4,178             $2,165
                                         -----------------------------
Minimum Pension Liability
Beginning Balance                           ($745)            ($772)
Change in minimum pension liability,
   net of tax                                   -                 -
                                         -----------------------------
Ending Balance                              ($745)            ($772)
                                         -----------------------------
Total accumulated other comprehensive
   income (loss), net                      $3,433            $1,393
                                         -----------------------------

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

Acquisition
TriCo Bancshares  (NASDAQ:TCBK),  parent company of Tri Counties Bank,  acquired
North State National  Bank, a national  banking  organization  located in Chico,
California,  by the merger of North State into its wholly owned subsidiary,  Tri
Counties  Bank,  effective  5:01 pm on April 4, 2003.  The  acquisition  and the
related merger  agreement  dated October 3, 2002, was approved by the California
Department of Financial Institutions, the Federal Deposit Insurance Corporation,
and the shareholders of North State National Bank on March 4, March 7, and March
19, 2003,  respectively.  At the time of the acquisition,  North State had total
assets of $140  million,  investment  securities  of $41  million,  loans of $76
million,  and deposits of $126 million.  The acquisition was accounted for using
the purchase  method of  accounting.  The amount of goodwill  recorded as of the
merger date,  which  represented the excess of the total purchase price over the
estimated fair value of net asset acquired, was approximately $15.3 million. The
Company recorded a core deposit  intangible,  which represents the excess of the
fair value of North State's  deposits  over their book value on the  acquisition
date, of approximately  $3.4 million.  This core deposit intangible is scheduled
to be amortized over a seven-year average life.

Under the terms of the merger agreement,  TriCo paid $13,090,057 in cash, issued
723,512  shares of TriCo common  stock,  and issued  options to purchase  79,587
shares of TriCo common stock at an average  exercise price of $6.22 per share in
exchange for all of the 1,234,375  common shares and options to purchase  79,937
common shares of North State National Bank outstanding as of April 4, 2003.

                                      -11-
The pro forma  financial  information  in the following  table  illustrates  the
combined  operating  results of TriCo and North State  National Bank for the six
months  ended  June  30,  2003  and 2002 as if the  acquisition  of North  State
National  Bank had  occurred  as of  January 1,  2002.  The pro forma  financial
information  is presented  for  informational  purposes  and is not  necessarily
indicative  of the results of  operations  that would have occurred if TriCo and
North State  National  Bank had  constituted a single entity as of or January 1,
2002. The pro forma financial information is also not necessarily  indicative of
the future results of operations of the combined  company.  In  particular,  any
opportunity to achieve  certain cost savings as a result of the  acquisition has
not been included in the pro forma financial information.

                                        For the six months ended June 30,
                                              2003              2002
                                              ----              ----
(in thousands except earnings per share)
Net interest income                         $29,386           $28,471
Provision for loan losses                       300             1,300
Noninterest income                           12,141             8,033
Noninterest expense                          28,175            22,973
Income tax expense                            4,891             4,645
Net income                                   $8,161            $7,586
Basic earnings per share                      $1.05            $0.98
Diluted earnings per share                    $1.01            $0.95

The only significant pro forma  adjustment is the amortization  expense relating
to core deposit  intangible,  and the income tax benefit associated with the pro
forma adjustment.

Subsequent Events
On July 30, 2003,  TriCo  declared a quarterly  cash  dividend of $0.20  (twenty
cents) per share at its meeting held on July 29,  2003.  The dividend is payable
on September 30, 2003 to holders of record at the close of business on September
9, 2003.

On July 31, 2003,  TriCo  completed an offering of 20,000  shares of  cumulative
trust preferred  securities for cash in an aggregate amount of $20,000,000.  The
trust preferred securities are due in 30 years with an interest rate that resets
quarterly  at  three-month  LIBOR plus 3.05%,  or 4.16% for the first  quarterly
interest  period.  The  trust  preferred   securities  were  issued  through  an
underwriting  syndicate to which the Company paid underwriting fees of $7.50 per
trust  preferred  security or an  aggregate  of  $150,000.  The net  proceeds of
$19,850,000  will be used to finance the opening of new  branches,  improve bank
services and  technology,  repurchase  shares of the  Company's  common stock as
described below and increase the Company's capital.

The trust preferred  securities  have not been and will not be registered  under
the Securities Act of 1933, as amended,  or applicable state securities laws and
were sold pursuant to an exemption from registration under the Securities Act of
1933.  The trust  preferred  securities may not be offered or sold in the United
States absent  registration  or an applicable  exemption  from the  registration
requirements  of the  Securities Act of 1933, as amended,  and applicable  state
securities laws.

The Company formed a subsidiary  business trust, TriCo Capital Trust I, to issue
the trust  preferred  securities.  Concurrently  with the  issuance of the trust
preferred securities, the trust issued 619 shares of common stock to the Company
for $1,000 per share or an  aggregate  of  $619,000.  In  addition,  the Company
issued  a  Junior  Subordinated   Debenture  to  the  Trust  in  the  amount  of
$20,619,000.  The terms of the  Junior  Subordinated  Debenture  are  materially
consistent  with the terms of the  trust  preferred  securities  issued by TriCo
Capital Trust I.

Also on July 31,  2003,  the  Company  announced  the  termination  of its stock
repurchase  plan  to  repurchase  150,000  shares  of  common  stock  originally
announced on October 19, 2001. There were 118,800 shares  repurchased  under the
plan and the remaining 31,200 shares had not been  repurchased.  The Company has
adopted a new stock  repurchase  plan for the repurchase of up to 250,000 shares
of the Company's common stock from time to time as market  conditions allow. The
250,000 shares authorized for repurchase under this plan represent approximately
3.2% of the Company's  approximately  7,852,000 common shares  outstanding as of
July 31, 2003. This new plan has no stated expiration date for the repurchases.

                                      -12-
On August 1, 2003, the Company reported that its  nonperforming  assets,  net of
government agency guarantees,  decreased $15,127,000 (68%) to $6,963,000 at July
31, 2003 compared to $22,090,000 at June 30, 2003. The decrease is mainly due to
the  collection of two  nonperforming  commercial  real estate loans to a single
entity collateralized by a single building.  The collection was realized on July
31, 2003 via the Company's  receipt of net proceeds of $11,474,000 from the sale
of the  building.  The  collection  resulted  in a recovery  of  $346,000 of the
$1,900,000  charged-off  on these loans during the quarter  ended June 30, 2003.
The recovery  will be reflected in the Company's  results of operations  for the
quarter ended September 30, 2003.

Impact of Recently Issued Financial Accounting Pronouncements
In January  2003,  the FASB issued FIN 46, which  clarifies the  application  of
Accounting Research Bulletin ("ARB") 51, consolidated  financial statements,  to
certain entities (called variable  interest  entities) in which equity investors
do not have the  characteristics  of a controlling  financial interest or do not
have sufficient equity at risk for the entity to finance its activities  without
additional  subordinated  financial  support from other parties.  The disclosure
requirements of this  Interpretation are effective for all financial  statements
issued  after  January 31, 2003.  The  consolidation  requirements  apply to all
variable interest  entities created after January 31, 2003. In addition,  public
companies  must  apply  the  consolidation  requirements  to  variable  interest
entities  that  existed  prior to February 1, 2003 and remain in existence as of
the beginning of annual or interim periods  beginning after June 15, 2003. Given
the  nature  of the  Company's  operations,  management  does  not  expect  this
Interpretation  to  have a  significant  impact  on the  consolidated  financial
statements.

In April 2003, the FASB issued Statement No. 149,  Amendment of Statement 133 on
Derivative  Instruments  and Hedging  Activities,  to provide  clarification  of
certain  terms and  investment  characteristics  identified  in  Statement  133.
Statement  149 is to be applied  prospectively  and is effective  for  contracts
entered into or modified  after June 30,  2003.  The Company does not expect the
adoption  of the  Statement  will have a  material  impact  on the  consolidated
financial statements.

In May 2003, the FASB issued Statement No. 150, Accounting for Certain Financial
Instruments with  Characteristics of both Liabilities and Equity. The provisions
of this  Statement  are  effective  for  financial  instruments  entered into or
modified after May 31, 2003, and otherwise are effective at the beginning of the
first  interim  period  beginning  after June 15, 2003,  except for  mandatorily
redeemable financial instruments of nonpublic entities.  Given the nature of the
Company's  liability  and equity  instruments,  management  does not expect this
Statement to have a material  impact to the  consolidated  financial  statements
upon adoption of the Statement on July 1, 2003.

                                      -13-
Item 2. Management's Discussion and Analysis of Financial Conditions and Results
of Operations

As TriCo  Bancshares (the  "Company") has not commenced any business  operations
independent of Tri Counties Bank (the "Bank"), the following discussion pertains
primarily  to the  Bank.  Average  balances,  including  such  balances  used in
calculating  certain financial ratios, are generally  comprised of average daily
balances  for the  Company.  Within  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations,  interest income and net interest
income are generally presented on a fully tax-equivalent (FTE) basis.

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

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

The Company had quarterly  earnings of  $4,254,000,  or $0.53 per diluted share,
for the three  months  ended June 30,  2003.  These  results  represent  a 12.8%
increase from the $0.47 earnings per diluted share reported for the three months
ended June 30, 2002 on earnings of $3,365,000.  The  improvement in results from
the  year-ago  quarter  was  due  to a  $1,778,000  (13.4%)  increase  in  fully
tax-equivalent  net interest income to $15,000,000,  a $350,000 (70.0%) decrease
in provision for loan losses to $150,000,  and a $2,611,000  (66.2%) increase in
noninterest income to $6,554,000.  These  contributing  factors were offset by a
$3,405,000  (31.1%)  increase  in  noninterest  expense to  $14,368,000  for the
quarter ended June 30, 2003. The Company  reported  earnings of  $7,867,000,  or
$1.03 per diluted share,  for the six months ended June 30, 2003.  These results
represent a 10.8%  increase from the $0.93  earnings per diluted share  reported
for  the six  months  ended  June  30,  2002  on  earnings  of  $6,694,000.  The
improvement in results from the year-ago  period was due to a $2,321,000  (8.9%)
increase  in  fully  tax-equivalent  net  interest  income  to  $28,543,000,   a
$1,000,000  (76.9%)  decrease in provision  for loan losses to  $300,000,  and a
$4,181,000  (53.8%)  increase  in  noninterest  income  to  $11,950,000.   These
contributing factors were offset by a $5,654,000 (26.5%) increase in noninterest
expense to $27,019,000  for the six months ended June 30, 2003.  Included in the
Company's  results of operations for the three-month and six-month periods ended
June 30, 2003,  are the effects of the  acquisition of North State National Bank
on April 4, 2003.

                                      -14-
Following is a summary of the components of fully taxable equivalent ("FTE") net
income for the periods indicated (dollars in thousands):

                                    Three months ended        Six months ended
                                         June 30,                 June 30,
                                   ---------------------------------------------
                                     2003        2002         2003        2002
                                   ---------------------------------------------
Net Interest Income (FTE)          $15,000     $13,222      $28,543     $26,222
Provision for loan losses             (150)       (500)        (300)     (1,300)
Noninterest income                   6,554       3,943       11,950       7,769
Noninterest expense                (14,368)    (10,963)     (27,019)    (21,365)
Provision for income taxes (FTE)    (2,782)     (2,337)      (5,307)     (4,632)
                                   ---------------------------------------------
Net income                          $4,254      $3,365       $7,867      $6,694
                                   =============================================

Net income for the second quarter of 2003 was $889,000 (26.4%) more than for the
same  quarter  of  2002.  A  significant  increase  in  noninterest  income  (up
$2,611,000 or 66.2%),  a $350,000 (70.0%) decrease in provision for loan losses,
and a  $1,778,000  (13.5%)  increase in fully  taxable  equivalent  net interest
income more than offset an increase in  noninterest  expenses (up  $3,405,000 or
31.1%).  The increase in noninterest income from the year-ago quarter was mainly
due to an increase in service  charges  and fee income on deposit  products  (up
$1,844,000 or 86.1% to $3,985,000), and an increase in gain on sale of loans (up
$780,000  or 144.7% to  $1,319,000).  The  increase  in service  charges and fee
income was mainly due to the  introduction  of an  overdraft  privilege  deposit
product  in July  2002  that has added a new  stream  of  recurring  noninterest
income. The increase in gain on sale of loans is due to the Company's ability to
originate and sell an increased volume of residential real estate mortgage loans
in the  current  environment  of record  mortgage  refinance.  The  decrease  in
provision for loan losses (down $350,000 or 70.0% to $150,000) was due to stable
loan quality and the maintenance of adequate loss reserve  levels.  The increase
in net  interest  income  (FTE) was due to an  increase  in  average  balance of
interest-earning  assets (up $273 million or 29.6%) that was partially offset by
a 72 basis point  decrease in net interest  margin.  The increase in noninterest
expense  was  mainly  due to an  increase  in salary  and  benefit  expense  (up
$1,863,000 or 32.3% to $7,636,000).  The increase in salary and benefits expense
was mainly due to annual salary  increases,  increased  commission and incentive
expense,  and new employees at four new branches the Company  opened during 2002
and from the  merger  with North  State  National  Bank on April 4, 2003.  Other
noninterest expense also increased (up $1,542,000 or 29.7% to $6,732,000) due to
the new branch  openings in 2002,  the merger  with North  State,  and  expenses
related  to  increased  mortgage  banking  activity  and a new  deposit  product
introduced in July 2002.

Net income for the six months  ended June 30, 2003 was  $1,173,000  (17.5%) more
than for the same period of 2002. A significant  increase in noninterest  income
(up $4,181,000 or 53.8%),  a $1,000,000  (76.9%)  decrease in provision for loan
losses,  and a  $2,321,000  (8.9%)  increase  in fully  taxable  equivalent  net
interest  income  more than  offset an  increase  in  noninterest  expenses  (up
$5,654,000  or 26.5%).  The  increase in  noninterest  income from the  year-ago
period was  mainly  due to an  increase  in  service  charges  and fee income on
deposit products (up $3,371,000 or 81.9% to $7,485,000), and an increase in gain
on sale of loans (up $950,000 or 63.2% to  $2,452,000).  The increase in service
charges  and fee  income  was mainly  due to the  introduction  of an  overdraft
privilege  deposit product in July 2002 that has added a new stream of recurring
noninterest  income.  The  increase  in  gain on  sale  of  loans  is due to the
Company's  ability to originate and sell an increased volume of residential real
estate mortgage loans in the current  environment of record mortgage  refinance.
The decrease in provision for loan losses (down $1,000,000 or 76.9% to $300,000)
was due to stable loan  quality and the  maintenance  of adequate  loss  reserve
levels.  The  increase in net  interest  income  (FTE) was due to an increase in
average balance of interest-earning assets (up $209.4 million or 23.0%) that was
partially  offset by a 66 basis  point  decrease  in net  interest  margin.  The
increase  in  noninterest  expense  was mainly due to an  increase in salary and
benefit expense (up $3,001,000 or 26.1% to $14,513,000).  The increase in salary
and  benefits  expense  was mainly  due to annual  salary  increases,  increased
commission  and  incentive  expense,  and new employees at four new branches the
Company opened during 2002 and from the merger with North State National Bank on
April 4, 2003. Other noninterest  expense also increased (up $2,653,000 or 26.9%
to  $12,506,000)  due to the new branch  openings in 2002, the merger with North
State,  and expenses  related to increased  mortgage  banking activity and a new
deposit product introduced in July 2002.

                                      -15-
Net Interest Income
Following is a summary of the components of net interest  income for the periods
indicated (dollars in thousands):

                                    Three months ended        Six months ended
                                         June 30,                 June 30,
                                ------------------------------------------------
                                     2003        2002         2003        2002
                                ------------------------------------------------
     Interest income               $18,161     $16,075      $34,510     $32,033
     Interest expense               (3,445)     (3,179)      (6,560)     (6,442)
     FTE adjustment                    284         326          593         631
                                ------------------------------------------------
       Net interest income (FTE)   $15,000     $13,222      $28,543     $26,222
                                ================================================
     Average earning assets     $1,194,618    $921,486   $1,121,452    $912,041

     Net interest margin (FTE)        5.02%       5.74%        5.09%       5.75%

The  Company's  primary  source  of  revenue  is  net  interest  income,  or the
difference  between  interest  income on earning assets and interest  expense in
interest-bearing liabilities. Net interest income (FTE) during the first quarter
of  2003  increased   $1,778,000  (13.4%)  from  the  same  period  in  2002  to
$15,000,000.  The increase in net interest income (FTE) was due to the increased
average  balances of earning assets (up  $273,132,000 or 29.6% to $1.19 billion)
that was partially  offset by a 72 basis point  decrease in net interest  margin
(FTE).

Net  interest  income  (FTE)  during  the  first six  months  of 2003  increased
$2,321,000  (8.9%) from the same period in 2002 to $28,543,000.  The increase in
net interest income (FTE) was due to the increased  average  balances of earning
assets (up  $209,411,000 or 23.0% to $1.12 billion) that was partially offset by
a 66 basis point decrease in net interest margin (FTE).

Interest and Fee Income
Interest  and  fee  income  (FTE)  for the  second  quarter  of  2003  increased
$2,044,000  (12.5%)  from the second  quarter of 2002.  The increase was the net
effect of higher average  interest-earning assets (up $273.1 million or 29.6% to
$1.19  billion)  that was partially  offset by a 94 basis point  decrease in the
yield on those average earning assets to 6.18%.  The growth in  interest-earning
assets  was led by a $152.9  million  (65.3%)  increase  in  average  investment
security  balances to $387.2 million,  and a $152.9 million (23.6%)  increase in
average loan balances. The average balance of federal funds sold decreased $32.7
million (84.6%) to $5,970,000.

The average yield on the Company's  earning assets decreased to 6.18% from 7.12%
for the  quarter  ended  June  30,  2002.  This  downward  trend in  yields  was
reflective  of general  interest  rate markets  during much of the twelve months
ended June 30, 2003.

Interest and fee income  (FTE) for the six months ended June 30, 2003  increased
$2,439,000  (7.5%) from the same period of 2002. The increase was the net effect
of higher average  interest-earning  assets (up $209.4 million or 23.0% to $1.12
billion) that was partially  offset by a 90 basis point decrease in the yield on
those average earning assets to 6.26%. The growth in interest-earning assets was
led by a $136.0 million (59.8%) increase in average investment security balances
to $363.5 million, and a $95.4 million (14.8%) increase in average loan balances
to $740.7  million.  The average  balance of federal funds sold decreased  $22.0
million (56.1%) to $17.2 million.

The average yield on the Company's earning assets decreased to 6.26% for the six
month  period  ended June 30, 2003 from 7.16% for the same period in 2002.  This
downward trend in yields was reflective of general  interest rate markets during
the twelve months ended June 30, 2003. In addition,  deposit growth  outstripped
loan  growth  during  this  period,  which  resulted  in most of the  growth  in
interest-earning assets being in lower yielding investment securities instead of
relatively higher yielding loans.

                                      -16-
Interest Expense
Interest expense  increased  $266,000 (8.4%) to $3,445,000 in the second quarter
of 2003 compared to $3,179,000 in the year-ago  quarter.  The average balance of
interest-bearing  liabilities increased $221.9 million (30.4%) to $952.1 million
in the second quarter  compared to $730.2 million in the year-ago  quarter.  The
increase in  interest-bearing  liabilities was concentrated in the lower earning
interest-bearing  demand  deposits  (up $37.8  million  or 21.7%),  and  savings
deposits (up $121.7 million or 47.5%). The average balance of the higher earning
time  deposits  was up $43.1  million  (15.5%)  from the  year-ago  quarter.  In
addition,  the average balance of  noninterest-bearing  deposits increased $64.1
million  (37.2%) from the year-ago  quarter,  and the average balance of Federal
funds purchased was $19.6 million in the quarter ended June 30, 2003 compared to
$0 in the  year-ago  quarter.  The  average  rate  paid  for all  categories  of
interest-bearing  liabilities  decreased  from  the  average  rate  paid  in the
year-ago quarter as a result of general market interest rate changes.

Interest  expense  increased  $118,000  (1.8%) to $6,560,000  for the six months
ended June 30, 2003 compared to $6,442,000 in the year-ago  period.  The average
balance of  interest-bearing  liabilities  increased  $161.1 million  (22.2%) to
$885.7 million for the six months ended June 30, 2003 compared to $724.6 million
in the  year-ago  period.  The  increase  in  interest-bearing  liabilities  was
concentrated  in the lower earning  interest-bearing  demand  deposits (up $26.6
million or 15.4%), and savings deposits (up $92.2 million or 36.2%). The average
balance of the higher  earning time deposits was up $32.6  million  (11.9%) from
the year-ago  period.  In addition,  for the six months ended June 30, 2003, the
average balance of noninterest-bearing  deposits increased $52.3 million (30.8%)
from the year-ago period, and the average balance of Federal funds purchased was
$9.8  million  in the six  months  ended  June 30,  2003  compared  to $0 in the
year-ago  six  month  period.  The  average  rate  paid  for all  categories  of
interest-bearing  liabilities  decreased  from  the  average  rate  paid  in the
year-ago quarter as a result of general market interest rate changes.

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

                                   Three months ended         Six months ended
                                        June 30,                  June 30,
                                  ----------------------------------------------
                                   2003         2002         2003         2002
                                  ----------------------------------------------
Yield on earning assets            6.18%        7.12%        6.26%        7.16%
Rate paid on interest-bearing
  Liabilities                      1.45%        1.74%        1.48%        1.78%
                                  ----------------------------------------------
  Net interest spread              4.73%        5.38%        4.78%        5.38%
Impact of all other net
  noninterest-bearing funds        0.29%        0.36%        0.31%        0.37%
                                  ----------------------------------------------
    Net interest margin            5.02%        5.74%        5.09%        5.75%
                                  ==============================================

Net  interest  margin in the second  quarter of 2003  decreased  72 basis points
compared to the second quarter of 2002.  Net interest  margin for the six months
ended June 30, 2003  decreased 66 basis points  compared to the six months ended
June 30,  2002.  Throughout  much of 2002,  the Company was able to decrease the
rates it paid on interest-bearing deposits approximately as fast as the rates on
interest-earning assets decreased. By doing so, the Company was able to maintain
a relatively high net interest margin throughout much of 2002.  However,  in the
fourth  quarter of 2002,  it became  increasingly  difficult to reduce the rates
paid on  interest-bearing  deposits.  As a result,  the  Company's  net interest
margin  began to  decrease.  Also,  throughout  much of 2002,  the Company  grew
deposits  faster than it grew loans.  As a result,  much of the available  funds
from these  deposits  were invested in  securities  rather than higher  yielding
loans, and this also  contributed to a decrease in net interest  margin.  During
the quarter ended June 30, 2003,  the Company's  growth rate for loans  exceeded
its growth  rate for  deposits,  and this faster loan growth rate helped to slow
down the rate of decrease in the Company's net interest margin.

                                      -17-
Summary of Average Balances, Yields/Rates and Interest Differential
The following tables present, for the periods indicated,  information  regarding
the Company's consolidated average assets, liabilities and shareholders' equity,
the amounts of interest income from average earning assets and resulting yields,
and the amount of interest expense paid on interest-bearing liabilities. Average
loan balances include  nonperforming  loans.  Interest income includes  proceeds
from  loans on  nonaccrual  loans  only to the extent  cash  payments  have been
received and applied to interest income.  Yields on securities and certain loans
have been adjusted  upward to reflect the effect of income  thereon  exempt from
federal  income  taxation  at  the  current   statutory  tax  rate  (dollars  in
thousands).
For the three months ended
                                       ----------------------------------------------------------------
                                               June 30, 2003                    June 30, 2002
                                       -----------------------------     ------------------------------
                                                  Interest    Rates                Interest    Rates
                                         Average   Income/   Earned      Average    Income/   Earned
                                         Balance   Expense    Paid       Balance    Expense    Paid
                                       -----------------------------     ------------------------------
Assets:
Loans                                    $801,493  $14,713    7.34%       $648,618  $13,046     8.05%
Investment securities - taxable           348,375    2,939    3.37%        189,675    2,309     4.87%
Investment securities - nontaxable         38,780      775    8.00%         44,541      879     7.89%
Federal funds sold                          5,970       18    1.21%         38,652      167     1.73%

Total earning assets                    1,194,618   18,445    6.18%        921,486   16,401     7.12%
Other assets                              144,489                           88,241
                                       ----------                       ----------
Total assets                           $1,339,107                       $1,009,727
                                       ==========                       ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits         $211,561      132    0.25%       $173,782      114     0.26%
Savings deposits                          377,830      906    0.96%        256,153      675     1.05%
Time deposits                             320,268    2,023    2.53%        277,202    2,068     2.98%
Federal funds purchased                    19,556       63    1.29%              -        -         -
Other borrowings                           22,908      321    5.61%         23,109      322     5.57%
                                       -----------------------------     ------------------------------
Total interest-bearing liabilities        952,123    3,445    1.45%        730,246    3,179     1.74%
Noninterest-bearing deposits              236,552                          172,442
Other liabilities                          27,865                           15,610
Shareholders' equity                      122,567                           91,429
                                       ----------                       ----------
Total liabilities and
  shareholders' equity                 $1,339,107                       $1,009,727
                                       ==========                       ==========
Net interest spread(1)                                        4.73%                             5.38%
Net interest income and interest margin(2)         $15,000    5.02%                 $13,222     5.74%
                                                  ==================               ====================

(1) Net interest spread represents the average yield earned on assets minus the
    average rate paid on interest-earning assets minus the average rate paid on
    interest-bearing liabilities
(2) Net interest margin is computed by calculating the difference between
    interest income and expense, divided by the average balance of earning
    assets.
-18-
For the six months ended
                                       ----------------------------------------------------------------
                                               June 30, 2003                    June 30, 2002
                                       -----------------------------     ------------------------------
                                                  Interest    Rates                Interest    Rates
                                         Average   Income/   Earned      Average    Income/   Earned
                                         Balance   Expense    Paid       Balance    Expense    Paid
                                       -----------------------------     ------------------------------
Assets:
Loans                                    $740,734  $27,702    7.48%       $645,350  $26,054     8.07%
Investment securities - taxable           323,556    5,683    3.51%        182,966    4,539     4.96%
Investment securities - nontaxable         39,958    1,616    8.09%         44,538    1,738     7.80%
Federal funds sold                         17,204      102    1.19%         39,187      333     1.70%

Total earning assets                    1,121,452   35,103    6.26%        912,041   32,664     7.16%
Other assets                              122,981                           88,058
                                       ----------                       ----------
Total assets                           $1,244,433                       $1,000,099
                                       ==========                       ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits         $199,289      250    0.25%       $172,694      235     0.27%
Savings deposits                          347,098    1,626    0.94%        254,916    1,355     1.06%
Time deposits                             306,596    3,982    2.60%        273,947    4,211     3.07%
Federal funds purchased                     9,778       63    1.29%              -        -         -
Other borrowings                           22,913      639    5.58%         23,030      641     5.57%
                                       -----------------------------     ------------------------------
Total interest-bearing liabilities        885,674    6,560    1.48%        724,587    6,442     1.78%
Noninterest-bearing deposits              222,049                          169,747
Other liabilities                          24,857                           15,298
Shareholders' equity                      111,853                           90,467
                                       ----------                       ----------
Total liabilities and
  shareholders' equity                 $1,244,433                       $1,000,099
                                       ==========                       ==========
Net interest spread(1)                                        4.78%                             5.38%
Net interest income and interest margin(2)         $28,543    5.09%                 $26,222     5.75%
                                                  ==================               ====================

(1) Net interest spread represents the average yield earned on assets minus the
    average rate paid on interest-earning assets minus the average rate paid on
    interest-bearing liabilities
(2) Net interest margin is computed by calculating the difference between
    interest income and expense, divided by the average balance of earning
    assets.
-19-
Summary of  Changes in  Interest  Income and  Expense  due to Changes in Average
Asset & Liability Balances and Yields Earned & Rates Paid

The following tables set forth a summary of the changes in interest income (FTE)
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 June 30, 2003
                                                compared with three months
                                                    ended June 30, 2002
                                             ---------------------------------
                                              Volume       Rate        Total
                                             ---------------------------------
Increase (decrease) in interest income:
Loans                                         $3,077     ($1,410)     $1,667
Investment securities                          2,082      (1,556)        526
Federal funds sold                              (141)         (8)       (149)
                                             ---------------------------------
   Total earning assets                        5,018      (2,974)      2,044
                                             ---------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                  25          (7)         18
Savings deposits                                 319         (88)        231
Time deposits                                    321        (366)        (45)
Federal funds purchased                           63           -          63
Other borrowings                                  (3)          2          (1)
                                             ---------------------------------
   Total interest-bearing liabilities            725        (459)        266
                                             ---------------------------------
Increase (decrease) in Net Interest Income    $4,293     ($2,515)     $1,778
                                             =================================

                                              Six months ended June 30, 2003
                                                 compared with six months
                                                   ended June 30, 2002
                                             ---------------------------------
                                              Volume       Rate        Total
                                             ---------------------------------
Increase (decrease) in interest income:
Loans                                         $3,849      (2,201)      1,648
Investment securities                          3,753      (2,731)      1,022
Federal funds sold                              (187)        (44)       (231)
                                             ---------------------------------
   Total earning assets                        7,415      (4,976)      2,439
                                             ---------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                  36         (21)         15
Savings deposits                                 489        (218)        271
Time deposits                                    501        (730)       (229)
Federal funds purchased                           63           -          63
Other borrowings                                  (3)          1          (2)
                                             ---------------------------------
   Total interest-bearing liabilities          1,086        (968)        118
                                             ---------------------------------
Increase (decrease) in Net Interest Income    $6,329     ($4,008)     $2,321
                                             =================================

                                      -20-
Provision for Loan Losses
The Company  provided  $150,000  for loan  losses in the second  quarter of 2003
versus  $500,000  in the second  quarter of 2002.  During the second  quarter of
2003, the Company recorded $1,916,000 of net loan charge offs versus $224,000 of
net loan charge-offs in the year earlier quarter. The increase in charge-offs is
primarily due to a $1,900,000  charge-off  related to two commercial real estate
loans to a single entity  collateralized  by a single building.  The Company had
previously  established a specific  allowance for the two commercial real estate
loans noted above in its  allowance  for loan losses.  See  "Subsequent  Events"
beginning on Page 12 for a description of the Company's  collection of these two
commercial real estate loans.

The Company  provided  $300,000 for loan losses during the six months ended June
30, 2003 versus $1,300,000 during the six months ended June 30, 2002. During the
six months  ended June 30, 2003,  the Company  recorded  $2,150,000  of net loan
charge  offs  versus  $745,000  of net  loan  charge-offs  in the  year  earlier
six-month period.

Noninterest Income
The following  table  summarizes the  components of  noninterest  income for the
periods indicated (dollars in thousands).
                                    Three months ended         Six months ended
                                         June 30,                  June 30,
                                    --------------------------------------------
                                     2003        2002          2003        2002
                                    --------------------------------------------
  Service charges on deposit
    accounts                        $3,192      $1,566        $6,050      $3,031
  ATM fees and interchange             597         438         1,117         811
  Other service fees                   196         137           318         272
  Gain on sale of loans              1,319         539         2,452       1,502
  Commissions on sale of
    nondeposit investment products     461         738           909       1,277
  Gain on sale of investments          100           -           100           -
  Increase in cash value of life
    insurance                          376         205           515         324
  Other noninterest income             313         320           489         552
                                    --------------------------------------------
  Total noninterest income          $6,554      $3,943       $11,950      $7,769
                                    ============================================

Noninterest  income for the second quarter of 2003 increased  $2,611,000 (66.2%)
to  $6,554,000  from  $3,943,000  in  the  year-ago  quarter.  The  increase  in
noninterest  income from the  year-ago  quarter was mainly due to an increase in
service charges on deposit  products (up $1,626,000 or 104% to $3,192,000),  and
an increase in gain on sale of loans (up  $780,000 or 145% to  $1,319,000).  The
increase  in service  charges  income was mainly due to the  introduction  of an
overdraft  privilege deposit product in July 2002 that has added a new stream of
recurring  noninterest  income.  The increase in gain on sale of loans is due to
the Company's  ability to originate and sell an increased  volume of residential
real  estate  mortgage  loans in the  current  environment  of  record  mortgage
refinance.  This high level of mortgage refinance activity may not continue. ATM
fees and interchange  income increased from the year-ago quarter (up $159,000 or
36.3% to $597,000) due to expansion of Company's ATM network and increased debit
card usage.

Noninterest  income for the six months ended June 30, 2003 increased  $4,181,000
(53.8%) to $11,950,000  from $7,769,000 in the same period in 2002. The increase
in noninterest  income from the year-ago period was mainly due to an increase in
service charges on deposit products (up $3,019,000 or 99.6% to $6,050,000),  and
an increase in gain on sale of loans (up $950,000 or 63.2% to  $2,452,000).  The
increase  in service  charges  income was mainly due to the  introduction  of an
overdraft  privilege deposit product in July 2002 that has added a new stream of
recurring  noninterest  income.  The increase in gain on sale of loans is due to
the Company's  ability to originate and sell an increased  volume of residential
real  estate  mortgage  loans in the  current  environment  of  record  mortgage
refinance.  This high level of mortgage refinance activity may not continue. ATM
fees and interchange  income increased from the year-ago quarter (up $306,000 or
37.7% to  $1,117,000)  due to expansion of Company's  ATM network and  increased
debit card usage.

                                      -21-
Noninterest Expense
The following  table  summarizes the  components of noninterest  expense for the
periods indicated (dollars in thousands).
                                   Three months ended         Six months ended
                                        June 30,                  June 30,
                                  ----------------------------------------------
                                    2003        2002          2003        2002
                                  ----------------------------------------------
  Salaries                         $4,792      $3,746        $9,042      $7,391
  Commissions and incentives        1,361         839         2,472       1,690
  Employee benefits                 1,483       1,188         2,999       2,431
  Equipment                           890         717         1,682       1,405
  Occupancy                           832         776         1,579       1,506
  Professional fees                   641         396         1,215         629
  Telecommunications                  392         332           783         671
  Data processing and software        349         254           640         492
  Advertising and marketing           370         301           642         466
  Courier service                     260         229           508         449
  ATM network charges                 255         214           487         406
  Intangible amortization             324         227           552         455
  Postage                             230         189           428         331
  Operational losses                  176          64           306         103
  Assessments                          65          55           125         111
  Other                             1,948       1,436         3,559       2,829
                                  ----------------------------------------------
  Total                           $14,368     $10,963       $27,019     $21,365
                                  ==============================================
  Average full time
     equivalent staff                 513         427           490         422
  Noninterest expense
     to revenue (FTE)               66.66%      63.87%        66.73%      62.85%

Noninterest expense for the second quarter of 2003 increased  $3,405,000 (31.1%)
to $14,368,000  from  $10,963,000 in the second quarter of 2002. The increase in
noninterest  expense was mainly due to a $1,863,000  (32.3%)  increase in salary
and benefit expense to $7,636,000.  The increase in salary and benefits  expense
was mainly due to annual salary  increases,  increased  commission and incentive
expense,  and new employees at the Company's four newly opened  branches in 2002
and from the merger with North State National Bank on April 4, 2003. Noninterest
expense  excluding  salaries and benefits also increased (up $1,542,000 or 29.7%
to $6,732,000).  Approximately $236,000 of this increase was expenses related to
the  overdraft  privilege  product  introduced  in July 2002,  and  included  in
professional fees. Also related to the overdraft privilege product introduced in
July 2002,  was a $112,000  increase in  operational  losses  from the  year-ago
quarter. Increased advertising expenses accounted for $69,000 of the increase in
other noninterest expense.

Noninterest  expense  for the first  six  months  of 2003  increased  $5,654,000
(26.5%) to  $27,019,000  from  $21,365,000  in the first six months of 2002. The
increase in noninterest  expense was mainly due to a $3,001,000 (26.1%) increase
in salary  and  benefit  expense  to  $14,513,000.  The  increase  in salary and
benefits expense was mainly due to annual salary increases, increased commission
and incentive  expense,  and new  employees at the  Company's  four newly opened
branches in 2002 and from the merger with North State  National Bank on April 4,
2003.  Noninterest  expense  excluding  salaries and benefits also increased (up
$2,653,000 or 26.9% to $12,506,000). Approximately $442,000 of this increase was
expenses related to the overdraft privilege product introduced in July 2002, and
included in professional  fees. Also related to the overdraft  privilege product
introduced in July 2002, was a $203,000 increase in operational  losses from the
year-ago period.  Increased  advertising  expenses accounted for $176,000 of the
increase in other noninterest expense.

                                      -22-
Provision for Income Tax
The  effective  tax rate for the three  months ended June 30, 2003 was 37.0% and
reflects a decrease  from 37.4% for the three months  ended June 30,  2002.  The
effective tax rate for the six months ended June 30, 2003 was 37.5% and reflects
a decrease from 37.4% for the six months ended June 30, 2002.  The provision for
income  taxes  for  all  periods  presented  is  primarily  attributable  to the
respective  level  of  earnings  and  the  incidence  of  allowable  deductions,
particularly from tax-exempt  loans,  state and municipal  securities,  and bank
owned life insurance.

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 June 30, 2003           At December 31, 2002
                           -------------------------    ------------------------
                            Gross  Guaranteed  Net       Gross  Guaranteed  Net
                           -----------------------------------------------------
Classified loans           $48,321  $11,958  $36,363    $52,642  $12,280 $40,062
Other classified assets      1,551        -    1,551        932        -     932
                           -----------------------------------------------------
Total classified assets    $49,872  $11,958  $37,914    $53,574  $12,280 $40,994
                           =====================================================
Allowance for loan losses/
     Classified loans                          35.5%                       35.1%

Classified  assets,  net of  guarantees  of the U.S.  Government,  including its
agencies and its government-sponsored  agencies at June 30, 2003, decreased $3.1
million (7.5%) to $37.9 million from $41.0 million at December 31, 2002.

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

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

Interest income on nonaccrual loans, which would have been recognized during the
six  months,  ended  June 30,  2003,  if all such  loans  had  been  current  in
accordance  with their  original  terms,  totaled  $1,212,000.  Interest  income
actually recognized on these loans during the six months ended June 30, 2003 was
$154,000.

                                      -23-
The  Company's  policy is to place loans 90 days or more past due on  nonaccrual
status.  In some instances  when a loan is 90 days past due Management  does not
place  it on  nonaccrual  status  because  the loan is well  secured  and in the
process of  collection.  A loan is considered to be in the process of collection
if, based on a probable  specific  event,  it is expected  that the loan will be
repaid or brought current. Generally, this collection period would not exceed 30
days. Loans where the collateral has been repossessed are classified as OREO or,
if the collateral is personal  property,  the loan is classified as other assets
on the Company's financial statements.

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

As shown in the following table, total nonperforming assets net of guarantees of
the  U.S.  Government,  including  its  agencies  and  its  government-sponsored
agencies,  increased  $13.0 million (142%) to $22.1 million during the first six
months of 2003.  The increase in  nonperforming  assets is primarily  due to two
commercial real estate loans collateralized by a single building.  Nonperforming
assets net of guarantees  represent 1.62% of total assets.  All nonaccrual loans
are considered to be impaired when determining the need for a specific valuation
allowance.  The Company continues to make a concerted effort to work problem and
potential problem loans to reduce risk of loss.
(dollars in thousands):
                                                  At June 30, 2003            At December 31, 2002
                                              -------------------------    -------------------------
                                                Gross Guaranteed  Net       Gross Guaranteed   Net
                                              ------------------------------------------------------
Performing nonaccrual loans                   $10,770   $8,157   $2,613    $13,199  $8,432   $4,767
Nonperforming, nonaccrual loans                16,045    1,668   14,377      4,091     718    3,373
                                              ------------------------------------------------------
Total nonaccrual loans                         26,815    9,825   16,990     17,290   9,150    8,140
Loans 90 days past due and still accruing       3,549        -    3,549         40       -       40
                                              ------------------------------------------------------
Total nonperforming loans                      30,364    9,825   20,539     17,330   9,150    8,180
Other real estate owned                         1,551        -    1,551        932       -      932
                                              ------------------------------------------------------
Total nonperforming assets                    $31,915   $9,825  $22,090    $18,262  $9,150   $9,112
                                              ======================================================
Nonperforming loans to total loans                                2.41%                       1.19%
Allowance for loan losses/nonperforming loans                       66%                        176%
Nonperforming assets to total assets                              1.62%                       0.80%
Allowance for loan losses to nonperforming assets                   61%                        158%
Allowance for Loan Losses
Credit  risk is inherent in the  business of lending.  As a result,  the Company
maintains  an  Allowance  for Loan  Losses  to  absorb  losses  inherent  in the
Company's  loan  portfolio.  This is  maintained  through  periodic  charges  to
earnings.  These  charges are shown in the  Consolidated  Income  Statements  as
provision for loan losses. All specifically identifiable and quantifiable losses
are  immediately  charged off against the allowance.  However,  for a variety of
reasons,  not all losses are immediately known to the Company and, of those that
are known,  the full extent of the loss may not be quantifiable at that point in
time.  The balance of the Company's  Allowance for Loan Losses is meant to be an
estimate of these unknown but probable  losses  inherent in the  portfolio.  For
purposes of this discussion, "loans" shall include all loans and lease contracts
that are part of the Company's portfolio.

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

                                      -24-
The Company's method for assessing the appropriateness of the allowance includes
specific  allowances  for  identified  problem loans and leases as determined by
SFAS 114,  formula  allowance  factors for pools of credits,  and allowances for
changing   environmental  factors  (e.g.,   interest  rates,  growth,   economic
conditions,  etc.). Allowance factors for loan pools are based on the previous 5
years historical loss experience by product type.  Allowances for specific loans
are based on SFAS 114 analysis of individual  credits.  Allowances  for changing
environmental  factors are  Management's  best  estimate of the probable  impact
these  changes  have  had on the loan  portfolio  as a whole.  This  process  is
explained  in  detail  in the  notes  to the  Company's  Consolidated  Financial
Statements  in its Annual  Report on Form 10-K for the year ended  December  31,
2002.

Based on the current conditions of the loan portfolio,  Management believes that
the $13,455,000 allowance for loan losses at June 30, 2003 is adequate to absorb
probable losses  inherent in the Company's loan  portfolio.  No assurance can be
given, however, that adverse economic conditions or other circumstances will not
result in increased losses in the portfolio.

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

                                  Three months ended        Six months ended
                                       June 30,                 June 30,
                                 -----------------------------------------------
                                   2003        2002         2003        2002
                                 -----------------------------------------------
 Balance, beginning of period    $14,293     $13,337      $14,377     $13,058
 Addition through merger             928           -          928           -
 Loan loss provision                 150         500          300       1,300
 Loans charged off                (2,063)       (282)      (2,343)       (843)
 Recoveries of previously
   charged-off loans                 147          58          193          98
                                 -----------------------------------------------
 Net charge-offs                  (1,916)       (224)      (2,150)       (745)
                                 -----------------------------------------------
 Balance, end of period          $13,455     $13,613      $13,455     $13,613
                                 ===============================================
 Allowance for loan losses/loans outstanding                 1.58%       2.03%

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.  On
July 31, 2003,  TriCo completed an offering of 20,000 shares of cumulative trust
preferred  securities for cash in an aggregate amount of $20,000,000.  The trust
preferred  securities  are due in 30 years  with an  interest  rate that  resets
quarterly  at  three-month  LIBOR plus 3.05%,  or 4.16% for the first  quarterly
interest  period.  The  trust  preferred   securities  were  issued  through  an
underwriting  syndicate to which the Company paid underwriting fees of $7.50 per
trust  preferred  security or an  aggregate  of  $150,000.  The net  proceeds of
$19,850,000  will be used to finance the opening of new  branches,  improve bank
services and  technology,  repurchase  shares of the  Company's  common stock as
described below and increase the Company's capital.

Also on July 31,  2003,  the  Company  announced  the  termination  of its stock
repurchase  plan  to  repurchase  150,000  shares  of  common  stock  originally
announced on October 19, 2001. There were 118,800 shares  repurchased  under the
plan and the remaining 31,200 shares had not been  repurchased.  The Company has
adopted a new stock  repurchase  plan for the repurchase of up to 250,000 shares
of the Company's common stock from time to time as market  conditions allow. The
250,000 shares authorized for repurchase under this plan represent approximately
3.2% of the Company's  approximately  7,852,000 common shares  outstanding as of
July  31,  2003,  2003.  This new plan  has no  stated  expiration  date for the
repurchases.

                                      -25-
The Company's primary capital resource is shareholders' equity, which was $124.6
million at June 30, 2003. This amount represents an increase of $25,553,000 from
December  31,  2002,  the net result of  issuance  of common  stock and  options
related  to  the  merger  with  North   State   National   Bank   ($18,527,000),
comprehensive  income for the period  ($8,997,000),  and the  issuance of common
shares via the exercise of stock options ($1,016  million),  partially offset by
dividends paid  ($2,987,000).  The Company's ratio of equity to total assets was
9.15%,  9.04%,  and 8.65% as of June 30, 2003,  June 30, 2002,  and December 31,
2002, respectively.

The following  summarizes the ratios of capital to risk-adjusted  assets for the
periods indicated:
To Be Well
                                At June 30,         At            Minimum     Capitalized Under
                             -----------------  December 31,    Regulatory    Prompt Corrective
                              2003       2002      2002         Requirement   Action Provisions
                             ------------------------------------------------------------------
Tier I Capital             9.12%     10.75%     10.71%           4.00%           6.00%
   Total Capital             10.37%     12.01%     11.97%           8.00%          10.00%
   Leverage ratio             7.45%      8.55%      8.27%           4.00%           5.00%
Item 3.  Quantitative and Qualitative Disclosures about Market Risk

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

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

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

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

                                      -26-
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 June 30, 2003 and 2002, the results of the  simulations  noted above indicate
that the balance  sheet is slightly  asset  sensitive  (earnings  increase  when
interest rates rise). The magnitude of all the simulation results noted above is
within the Company's policy  guidelines.  The asset liability  management policy
limits  aggregate  market risk,  as measured in this  fashion,  to an acceptable
level within the context of risk-return trade-offs.

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 June 30, 2003 and 2002, the Company had no derivative financial instruments.

Liquidity
The  Company's  principal  source of asset  liquidity is federal  funds sold and
marketable  investment  securities available for sale. At June 30, 2003, federal
funds sold and  investment  securities  available for sale totaled $357 million,
representing  an increase of $11 million or 3.2% from December 31, 2002,  and an
increase of $95 million or 36.3% from June 30, 2002.  In  addition,  the Company
generates  additional  liquidity  from its operating  activities.  The Company's
profitability  during  the first six  months of 2003  generated  cash flows from
operations  of $14.1  million  compared  to $11.3  million  during the first six
months of 2002.  Additional cash flows may be provided by financing  activities,
primarily  the  acceptance  of deposits  and  borrowings  from banks.  Sales and
maturities of investment securities produced cash inflows of $135 million during
the six months  ended June 30,  2003  compared to $60 million for the six months
ended June 30,  2002.  During the six months  ended June 30,  2003,  the Company
invested  $110 million,  $90 million,  and $19 million in  securities,  net loan
growth, and life insurance policies,  respectively,  compared to $67 million and
$14 million  used to purchase  investments  and net loan  growth,  respectively,
during the first six months of 2002. These changes in investment, loan, and life
insurance balances  contributed to net cash used for investing activities of $78
million during the six months ended June 30, 2003, compared to net cash used for
investing  activities of $22 million  during the six months ended June 30, 2002.
Financing  activities  provided  net cash of $57  million  during the six months
ended June 30, 2003,  compared to net cash  provided by financing  activities of
$15 million  during the six months  ended June 30,  2002.  Increases  in deposit
balances and Federal funds borrowed accounted for $42 million and $17 million of
financing sources of funds,  respectively,  during the six months ended June 30,
2003,  compared to deposit  balance  increases that accounted for $18 million of
financing sources of funds during the six months ended June 30, 2002.  Dividends
paid used $3.0 million and $2.8 million of cash during the six months ended June
30, 2003 and June 30,  2002,  respectively.  Also,  the  Company's  liquidity is
dependent  on  dividends  received  from the Bank.  Dividends  from the Bank are
subject to certain regulatory restrictions.

                                      -27-
Item 4.  Controls and Procedures

(a)       The Chief Executive  Officer,  Richard Smith,  and the Chief Financial
          Officer, Thomas Reddish,  evaluated the effectiveness of the Company's
          disclosure  controls and  procedures as of June 30, 2003  ("Evaluation
          Date").  Based  on  that  evaluation,  they  concluded  that as of the
          Evaluation Date the Company's  disclosure  controls and procedures are
          effective  to  allow  timely  communication  to  them  of  information
          relating to the Company and the Bank  required to be  disclosed in its
          filings with the Securities and Exchange  Commission ("SEC") under the
          Securities   Exchange  Act  of  1934,  as  amended  ("Exchange  Act").
          Disclosure  controls  and  procedures  are Company  controls and other
          procedures that are designed to ensure that information required to be
          disclosed  by the  Company  in the  reports  that it files  under  the
          Exchange Act is recorded,  processed,  summarized and reported  within
          the time periods specified in the SEC's rules and forms.

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

                                      -28-
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 4  - Submission of Matters to a Vote of Security Holders

   (a)  The Company's  Annual Meeting of Shareholders  was held on May 13,
        2003.

   (b) and (c)  The following nine directors were elected at the meeting:

                                 Votes For  Votes Against/Withheld  Abstentions
                                 ---------  ----------------------  -----------
       William J. Casey          5,188,013           37,956              -
       Donald J. Amaral          5,187,153           38,816              -
       Craig S. Compton          5,187,807           38,162              -
       Wendell J. Lundberg       5,188,013           37,956              -
       Donald E. Murphy          5,187,699           38,270              -
       Steve G. Nettleton        5,192,538           33,431              -
       Richard P. Smith          5,026,844          199,126              -
       Carroll R. Taresh         4,949,504          276,465              -
       Alex A. Vereschagin, Jr.  5,188,013           37,956              -

   The shareholders ratified the appointment of KPMG LLP as  independent  public
   accountants of the Company  for  2003.  5,662,636 shares  were  voted for the
   ratification, 10,541 shares against and 31,732 shares abstained.

Item 6 - Exhibits and Reports on Form 8-K

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

                                      -29-
10.3*     TriCo's 1993 Non-Qualified Stock Option Plan filed as Exhibit 4.1
               to TriCo's Form S-8 Registration Statement dated January 18, 1995
               (No. 33-88704)

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

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

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

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

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

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

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

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

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

     10.13*    Employment  Agreement between TriCo and Richard  O'Sullivan dated
               April 10,  2001,  filed as  Exhibit  10.13 to  TriCo's  Quarterly
               Report on Form 10-Q for the quarter ended March 31, 2003

               Computation of earnings per share

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

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

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

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

                                      -30-
32.1      Section 1350 Certification of CEO

     32.2      Section 1350 Certification of CFO

       * Previously filed and incorporated by reference.

(b) Reports on Form 8-K

     During the  quarter  ended June 30, 2003 the  Company  filed the  following
     Current Reports on Form 8-K:

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

     Quarterly results of operations.          April 23, 2003

     Quarterly results of operations.          July 30, 2003

     Declaration of $0.20 per common           July 30, 2003
     share dividend payable September 30,
     2003 to holders of record on
     September 9, 2003; trust preferred
     issuance; cancellation of existing
     stock repurchase plan; approval of
     new stock repurchase plan;
     substantial reduction in
     nonperforming assets.

SIGNATURES

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

                                     TRICO BANCSHARES
                                       (Registrant)

Date:  August 14, 2003               /s/ Thomas J. Reddish
                                     -----------------------------------
                                     Thomas J. Reddish
                                     Vice President and Chief Financial Officer

                                      -31-
Exhibit 11.1

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

                                             For the                For the
                                           three months            six months
                                          ended June 30,         ended June 30,
(In thousands, except per share data)    2003        2002       2003        2002
                                        ----------------------------------------
Weighted average number of common
    shares outstanding - basic          7,796       7,011      7,434       7,002

Add exercise of options reduced by
    the number of shares that could
    have been purchased with the
    proceeds of such exercise             225         203        224         164
                                        ----------------------------------------
Weighted average number of common
    shares outstanding - diluted        8,021       7,214      7,658       7,166
                                        ========================================

Net income                             $4,254      $3,365     $7,867      $6,694

Basic earnings per share                $0.55       $0.48      $1.06       $0.96

Diluted earnings per share              $0.53       $0.47      $1.03       $0.93

                                      -32-
Exhibit 31.1

Certification  Pursuant to Rule  13a-14(a)/15d-14(a)  of the Securities Exchange
Act of 1934, as Amended

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  subsidiaries,  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  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluations; 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
               information; 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.

Date:  August 14, 2003                  /s/ Richard P. Smith
                                        -------------------------------------
                                        Richard P. Smith
                                        President and Chief Executive Officer

                                      -33-
Exhibit 31.2

Certification  Pursuant to Rule  13a-14(a)/15d-14(a)  of the Securities Exchange
Act of 1934, as Amended

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  subsidiaries,  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  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluations; 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
               information; 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.

Date: August 14, 2003                   /s/ Thomas J. Reddish
                                        -------------------------------------
                                        Thomas J. Reddish
                                        Vice President and Chief Financial
                                        Officer

                                      -34-
Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350.

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ending June 30, 2003 as filed with the  Securities  and
Exchange  Commission  on the date hereof (the  "Report"),  I,  Richard P. Smith,
President and Chief Executive  Officer of the Company,  certify,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that:

     (1)  The Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.

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

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

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350.

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ending June 30, 2003 as filed with the  Securities  and
Exchange  Commission  on the date hereof (the  "Report"),  I, Thomas J. Reddish,
Vice President and Chief Financial Officer of the Company,  certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

     (1)  The Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.

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

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

                                      -35-