<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

For Quarter Ended June 30, 1997                   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.)

                 15 Independence Circle, Chico, California 95973
               (Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code                  916/898-0300


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

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Title of Class:  Common stock, no par value

Outstanding shares as of August  4, 1997:  4,659,299





<PAGE>

                                TRICO BANCSHARES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>


                                                                            June 30,         December 31,
                                                                        -----------------    -----------------
                                                                             1997                  1996
<S>                                                                       <C>                  <C>
Assets:
Cash and due from banks                                                   $       44,149       $       52,231
Federal funds sold                                                                 4,400                    -
Securities held-to-maturity
 (approximate fair value $97,848 and $103,488)                                    99,285              104,713
Securities available-for-sale, net of
 unrealized gain(loss) of $(567) and $(991)                                      144,234               65,316
Loans, net of allowance for loan losses of $(6,233) and $(6,097)                 454,508              433,192
Premises and equipment, net                                                       16,775               14,717
Investment in real estate properties                                               1,410                1,173
Other real estate owned                                                            1,522                1,389
Accrued interest receivable                                                        5,634                4,572
Intangible assets                                                                  9,673                1,036
Other assets                                                                      15,547               16,520
                                                                        -----------------    -----------------

     Total assets                                                          $     797,137        $     694,859
                                                                        =================    =================

Liabilities:
Deposits
 Noninterest-bearing demand                                                $     111,803        $     100,879
 Interest-bearing demand                                                         123,198               97,178
 Savings                                                                         208,255              172,789
 Time certificates                                                               260,439              224,775
                                                                        -----------------    -----------------
     Total deposits                                                              703,695              595,621
Fed funds purchased                                                                    -                4,900
Accrued interest payable and other liabilities                                     9,772                9,280
Long term borrowings                                                              21,275               24,281
                                                                        -----------------    -----------------

     Total liabilities                                                           734,742              634,082

Shareholders' equity:
Common stock                                                                      47,841               47,652
Retained earnings                                                                 15,240               14,076
Unrealized loss on securities available for sale, net                               (686)                (951)
                                                                        -----------------    -----------------

     Total shareholders' equity                                                   62,395               60,777
                                                                        -----------------    -----------------

     Total liabilities and shareholders' equity                            $     797,137        $     694,859
                                                                        =================    =================

</TABLE>
<PAGE>
                                TRICO BANCSHARES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
                 (in thousands except earnings per common share)

<TABLE>
<CAPTION>

                                              For the three months              For the six months
                                                ended June 30,                   ended June 30,
                                            1997             1996             1997            1996
<S>                                   <C>              <C>              <C>              <C>
Interest income:
  Interest and fees on loans          $      10,840    $       9,030    $      21,571    $      17,593
  Interest on investment
   securities-taxable                         3,702            2,641            6,646            5,339
  Interest on investment
   securities-tax exempt                        183               30              251               63
  Interest on federal funds sold                 53               21              268              332
                                        ------------      -----------     ------------      -----------
     Total interest income                   14,778           11,722           28,736           23,327
                                        ------------      -----------     ------------      -----------

Interest expense:
  Interest on deposits                        5,681            3,946           10,890            8,099
  Interest on federal funds purchased            92              144              131              144
  Interest on other borrowings                  326              408              686              790
                                        ------------      -----------     ------------      -----------
     Total interest expense                   6,099            4,498           11,707            9,033
                                        ------------      -----------     ------------      -----------

     Net interest income                      8,679            7,224           17,029           14,294

Provision for loan losses                       600               50            1,200               90
                                        ------------      -----------     ------------      -----------
    Net interest income after
     provision for loan losses                8,079            7,174           15,829           14,204

Noninterest income:
  Service charges and fees                    1,684            1,176            3,175            2,295
  Other income                                  724              404            1,330              751
                                        ------------      -----------     ------------      -----------
     Total noninterest income                 2,408            1,580            4,505            3,046
                                        ------------      -----------     ------------      -----------

Noninterest expenses:
  Salaries and related expenses               4,031            3,005            7,607            5,964
  Other, net                                  4,789            2,819            8,505            5,365
                                        ------------      -----------     ------------      -----------

     Total noninterest expenses               8,820            5,824           16,112           11,329
                                        ------------      -----------     ------------      -----------

Net income before income taxes                1,667            2,930            4,222            5,921

  Income taxes                                  588            1,226            1,579            2,473
                                        ------------      -----------     ------------      -----------

     Net income                               1,079            1,704            2,643            3,448

Primary earnings per common share   $          0.22    $        0.37   $         0.55   $         0.74
                                        ============      ===========     ============      ===========
Fully diluted earnings per
                     common share   $          0.22    $        0.37   $         0.55   $         0.74
                                        ============      ===========     ============      ===========
</TABLE>
<PAGE>
                                TRICO BANCSHARES
                      CONDENSED CONSOLIDATED STATEMENTS OF
                         CHANGES IN SHAREHOLDERS' EQUITY
                                   (unaudited)
                     (in thousands, except number of shares)
<TABLE>
<CAPTION>



                                             Common stock
                                    -----------------------------                      Unrealized
                                       Number                         Retained          loss on
                                     of shares         Amount         earnings      securities, net       Total
                                    -------------   -------------   -------------   ---------------   -------------
<S>                                    <C>              <C>             <C>             <C>              <C>
Balance,
 December 31, 1996                     4,641,223        $ 47,652        $ 14,076        $    (951)       $ 60,777

Exercise of common stock
 options                                  10,250              84                                         $     84

Common stock cash
 dividends                                                                (1,479)                        $ (1,479)

Change in unrealized
 loss on securities                                                                           265        $    265

Stock option amortization                                    105                                         $    105

Net income, June 30, 1997                                                  2,643                         $  2,643
                                    -------------   -------------   -------------   --------------   -------------

Balance,
 June 30, 1997                         4,651,473        $ 47,841        $ 15,240        $    (686)       $ 62,395
                                    =============   =============   =============   ==============   =============


</TABLE>
<PAGE>
                                TRICO BANCSHARES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                            For the six months
                                                                              ended June 30,
                                                                         1997               1996
<S>                                                                  <C>                <C>
Operating activities:
Net income                                                           $       2,643      $       3,448
Adjustments   to  reconcile  net  income  to  net  cash  provided  by  operating
 activities:
    Provision for loan losses                                                1,200                 90
    Provision for losses on other real estate owned                             52                  -
    Depreciation and amortization                                            1,156                856
    Amortization of investment security discounts                              (39)                30
    Deferred income taxes                                                      438                106
    Investment security (gains) losses (net)                                   (19)                 -
    (Gain) loss on sale of OREO, net                                            31                (31)
    (Gain) loss on sale of loans, net                                          (17)                 6
    (Gain) loss on sale of fixed assets                                         14                  -
    Origination of loans held for sale                                      (9,625)           (13,896)
    Proceeds from loan sales                                                 9,580              5,256
    Amortization of stock options                                              105                104
    (Increase) decrease in interest receivable                              (1,062)               (77)
    Increase (decrease) in interest payable                                  1,197               (818)
    (Increase) decrease in other assets and liabilities                         19             (1,532)
                                                                       ------------       ------------
         Net cash provided (used) by operating activities                    5,673             (6,458)

Investing activities:
    Proceeds from maturities of securities held-to-maturity                  5,517             14,256
    Purchases of securities held-to-maturity                                     -             (5,516)
    Proceeds from maturities of securities available-for-sale               16,206             12,677
    Proceeds from sale of securities available-for-sale                     27,036                  -
    Purchases of securities available-for-sale                            (121,688)           (13,587)
    Net (increase) decrease in loans                                       (22,884)           (46,485)
    Proceeds from sales of fixed assets                                         23                  -
    Purchases of premises and equipment                                     (2,408)            (1,813)
    Purchases and additions to real estate properties                         (237)                 -
    Proceeds from the sale of OREO                                             397                446
    Net cash received from purchase of Wells Fargo branch deposits         140,000                  -
                                                                       ------------       ------------
         Net cash provided (used) by investing activities                   41,962            (40,022)

Financing activities:
    Net increase (decrease) in deposits (excluding
       effects of purchase of Wells Fargo branch deposits)                 (42,016)           (25,184)
    Fed funds purchased                                                          -             30,000
    Repayment of fed funds purchased                                        (4,900)                 -
    Borrowings under long-term debt agreements                                   -             10,000
    Payments of principal on long-term debt agreements                      (3,006)            (2,006)
    Cash dividends - Common                                                 (1,479)            (1,175)
    Repurchase of common stock                                                   -               (146)
    Exercise of common stock options                                            84                290
                                                                       ------------       ------------
         Net cash provided (used) by financing activities                  (51,317)            11,779
                                                                       ------------       ------------

         Increase (decrease) in cash and cash equivalents                   (3,682)           (34,701)
         Cash and cash equivalents at beginning of year                     52,231             65,273
                                                                       ------------       ------------
         Cash and cash equivalents at end of period                   $     48,549       $     30,572
                                                                       ============       ============

Supplemental information:
    Cash paid for taxes                                               $      1,808       $      3,182
    Cash paid for interest expense                                    $     10,510       $      9,329

</TABLE>
<PAGE>
                         Item 1. Notes to Condensed Consolidated
                                  Financial Statements

Note A - Basis of Presentation

The accompanying  condensed consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange  Commission
(SEC) and in Management's opinion,  include all adjustments  (consisting only of
normal recurring  adjustments)  necessary for a fair presentation of results for
such interim periods. Certain information and note disclosures normally included
in annual financial  statements  prepared in accordance with generally  accepted
accounting  principles  have been omitted  pursuant to SEC rules or regulations;
however, the Company believes that the disclosures made are adequate to make the
information presented not misleading.

The  interim  results for the six months  ended June 30, 1997 and 1996,  are not
necessarily  indicative of results for the full year. It is suggested that these
financial  statements be read in conjunction  with the financial  statements and
the notes  included in the Company's  Annual Report for the year ended  December
31, 1996.


Note B - Recently Issued Accounting Pronouncements

In February of 1997, the Financial  Accounting  Standards Board issued Statement
of Financial  Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). The
Company is required to adopt SFAS 128 in the fourth  quarter of 1997 and at that
time will restate earnings per share data for prior periods to conform with SFAS
128. Earlier application is not permitted.

SFAS 128 replaces current earnings per share reporting requirements and requires
a dual presentation of basic and diluted earnings per share.  Basic earnings per
share  excludes  dilution and is computed by dividing net income by the weighted
average common shares outstanding  during the reported period.  Diluted earnings
per share reflects the potential dilution that could occur if common shares were
issued  pursuant to the exercise of options under the Bank's Stock Option Plans.
Diluted earnings per share under SFAS 128 should not be significantly  different
than primary earnings per share currently reported for the periods.

Pro forma amounts for basic and diluted earnings per share assuming SFAS 128 had
been in effect for the three  months and six months ended June 30, 1997 and 1996
are as follows:
<TABLE>
<CAPTION>

                                    Three months ended June 30,         Six Months ended June 30,
                                      1997           1996                1997           1996

<S>                                   <C>            <C>                 <C>            <C>
   Basic earnings per share           $0.23          $0.38               $0.57          $0.77
   Diluted earnings per share         $0.22          $0.37               $0.55          $0.74
</TABLE>
<PAGE>
                 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As TriCo  Bancshares (the  "Company") has not commenced any business  operations
independent of Tri Counties Bank (the "Bank"), the following discussion pertains
primarily  to the  Bank.  Average  balances,  including  such  balances  used in
calculating  certain financial ratios, are generally  comprised of average daily
balances for the Company. Except within the "overview" section,  interest income
and net interest income are presented on a tax equivalent basis.

In addition to the  historical  information  contained  herein,  this  Quarterly
Report contains certain forward-looking statements. The reader of this Quarterly
Report should understand that all such forward-looking statements are subject to
various  uncertainties and risks that could affect their outcome.  The Company's
actual   results  could  differ   materially   from  those   suggested  by  such
forward-looking  statements.  Factors  that could  cause or  contribute  to such
differences  include,  but are not limited to,  variances  in the actual  versus
projected  growth in assets,  return on assets,  loan  losses,  expenses,  rates
charged on loans and earned on securities  investments,  rates paid on deposits,
competition  effects,  fee and other noninterest  income earned as well as other
factors. This entire Quarterly Report should be read to put such forward-looking
statements  in  context  and  to  gain  a  more  complete  understanding  of the
uncertainties and risks involved in the Company's business.


Overview

The Company earned  $1,079,000 for the second quarter ended June 30, 1997 versus
$1,704,000 for the same period in 1996. Fully diluted earnings per share for the
second quarter periods were $0.22 and $0.37, respectively.  Earnings for the six
months  ended  June  30,  1997  were  $2,643,000  versus  year  ago  results  of
$3,448,000.  The fully  diluted  earnings  per share  were $.55 and $.74 for the
respective six month periods.

Pretax earnings for the second quarter of 1997 were $1,667,000 versus $2,930,000
for the same period in 1996.  Direct and indirect  costs related to the February
21, 1997  acquisition  and  integration  of nine branches from Wells Fargo Bank,
N.A. were major contributing  factors to the lower earnings.  Additionally,  the
Bank made  provisions  for loan losses  totaling  $600,000 in the quarter versus
$50,000 in the second  quarter last year.  The higher  provision was made due to
loan  growth and an increase in  nonperforming  loans from the first  quarter of
1997. Net interest income reflected growth of 20.2% to $8,679,000.  The interest
income  component was up $3,056,000  (26.1%) due to higher  quarter over quarter
volume of both loans and  securities  and a 33 basis point increase in yields on
securities.  Average  rates  received on loans were lower by 52 basis points due
primarily  to the effect of lower rate  mortgage  loans  acquired  in the Sutter
Buttes Savings Bank  acquisition  in the fourth  quarter of last year.  Interest
expense  increased  $1,601,000  (35.6%) which was due predominately to increased
volume of interest  bearing  liabilities.  Net interest margin was 4.96% for the
second  quarter of 1997 versus 5.38% in the prior year.  This lower net interest
margin reflects the change in the mix of earning assets and deposits as a result
of the Sutter Buttes  acquisition  and the first  quarter  purchase of the Wells
Fargo  branches.  The acquired  deposits  from Wells were invested in government
securities.  The net  interest  margin for 1997 will most likely  continue to be
lower than prior year levels until  additional loan production  replaces more of
the investment  securities.  Noninterest  income  reflected growth of 52.4% to a
total of  $2,408,000  for the second  quarter of 1997 over the prior year second
quarter. The service charge and fee income portion increased 43.2% to $1,684,000
due to an increase in account  volumes and selective fee increases  made in June
1996.  Other  income  increased  from  $404,000  in 1996 to  $724,000  in  1997.
Commissions on the sale of mutual funds and annuities  accounted for $236,000 of
the increase.

Noninterest  expense  increased  $2,996,000 to $8,820,000 in the second  quarter
1997 versus 1996.  Most of the higher costs were directly or indirectly  related
to the Wells Fargo branch and Sutter Buttes  acquisitions.  One time integration
and ongoing  operating costs for the nine acquired Wells Fargo branches  totaled
$894,000 in the second  quarter.  Amortization of intangible  assets  associated
with both the Sutter Buttes and Wells acquisitions  amounted to $386,000.  Also,
the Bank increased  staffing in various support  departments and loan offices to
service the new branches and customers.  As a result, salary and benefit expense
not directly related to the nine new branches  increased  $476,000 or 15.8% on a
quarter over quarter basis.  Occupancy costs exclusive of the nine branches were
$290,000  (34.2%)  higher.  Of this amount,  depreciation  on equipment  had the
largest  single  increase and accounted for $183,000.  Much of the  depreciation
related  to  improved  computer  and  communication   networks.   Other  expense
categories  such as courier  service,  telephone,  ATM charges and postage,  had
significant  increases  as a result of the Sutter  Buttes and Wells Fargo branch
acquisitions. Now that the new branches are operationally integrated, management
has turned its attention to increasing efficiencies and reducing the noninterest
expenses.

Assets  of the  Company  totaled  $797,137,000  at June 30,  1997  which  was an
increase of $102,278,000  (14.7%) and $180,201,000 (29.2%) from the December 31,
1996 and June 30, 1996 ending balances, respectively.  Changes in earning assets
from the prior year  quarter  end  balances  included:  an  increase in loans of
$87,823,000 to $460,741,000;  and an increase in the cost basis of securities of
$58,428,000 to $244,085,000.

Year to date 1997, the Company had an annualized  return on assets of .69% and a
return on equity of 8.57%  versus  1.16% and  12.68% in 1996.  TriCo  Bancshares
ended the quarter with a leverage ratio of 7.6%, a Tier 1 capital ratio of 10.6%
and a total risk-based capital ratio of 11.8%.

The  following  tables  provide a summary  of the major  elements  of income and
expense for the second  quarter of 1997 compared with the second quarter of 1996
and for the first six months of 1997 compared with the first six months of 1996.

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

                                             Three months
                                            ended June 30,          Percentage
                                         1997             1996        Change
                                        (in thousands, except        increase
                                         earnings per share)        (decrease)
Interest income                     $    14,873      $    11,744       26.6%
Interest expense                          6,099            4,498       35.6%
                                    ------------     ------------

Net interest income                       8,774            7,246       21.1%

Provision for loan losses                   600               50     1100.0%
                                    ------------     ------------

Net interest income after                 8,174            7,196       13.6%
  provision for loan losses

Noninterest income                        2,408            1,580       52.4%
Noninterest expenses                      8,820            5,824       51.4%
                                    ------------     ------------

Net income before income taxes            1,762            2,952      (40.3%)
Income taxes                                588            1,226      (52.0%)
Tax equivalent adjustment1                   95               22      340.6%
                                    ------------     ------------

Net income                                1,079            1,704      (36.7%)
                                    ============     ============


Primary earnings per common share   $      0.22      $      0.37      (40.5%)

1 Interest on tax-free  securities is reported on a tax equivalent basis of 1.52
and 1.72 for June 30, 1997 and 1996.


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

                                           Six months
                                         ended June 30,          Percentage
                                      1997           1996          Change
                                      (in thousands, except       increase
                                       earnings per share)       (decrease)
Interest income                   $    28,867    $    23,372         23.5%
Interest expense                       11,707          9,033         29.6%
                                  ------------   ------------

Net interest income                    17,160         14,339         19.7%

Provision for loan losses               1,200             90       1233.3%
                                  ------------   ------------

Net interest income after              15,960         14,249         12.0%
  provision for loan losses

Noninterest income                      4,505          3,046         47.9%
Noninterest expenses                   16,112         11,329         42.2%
                                  ------------   ------------

Net income before income taxes          4,353          5,966        (27.0%)
Income taxes                            1,579          2,473        (36.2%)
Tax equivalent adjustment1                131             45        187.7%
                                  ------------   ------------

Net income                              2,643          3,448        (23.3%)
                                  ============   ============


Primary earnings per common share $      0.55    $      0.74        (25.7%)

1 Interest on tax-free  securities is reported on a tax equivalent basis of 1.52
and 1.72 for June 30, 1997 and 1996.
<PAGE>


Net Interest Income / Net Interest Margin

Net  interest  income  represents  the  excess of  interest  and fees  earned on
interest-earning  assets  (loans,  securities  and Federal  Funds sold) over the
interest  paid on  deposits  and  borrowed  funds.  Net  interest  margin is net
interest  income  expressed  as a  percentage  of average  earning  assets.  Net
interest income comprises the major portion of the Bank's income.

In the quarter  ended June 30, 1997,  interest  income  increased  $3,129,000 or
26.6%over the same period in 1996.  The average  balance of total earning assets
was higher by $168,948,000 which was a 31.4% increase. The acquisition of Sutter
Buttes  Savings Bank in the fourth  quarter of 1996 and the purchase of deposits
from Wells Fargo in February  1997 were the major  contributing  factors for the
increase in earning  assets.  The  average  balances  of loans  outstanding  and
securities increased $92,034,000 and $74,699,000, respectively. These two volume
increases accounted for additional interest income of $2,383,000 and $1,068,000,
respectively.  The average rate received on loans in the second  quarter of 1997
was 9.84% which was a decrease of 52 basis  points from the second  quarter last
year.  Interest income was negatively  affected by $573,000 because of the lower
rate. The large number of mortgage loans in the Sutter Buttes portfolio were the
major cause in lowering  the average rate for loans.  However,  the average rate
received  on  securities  rose 33 basis  points to 6.05% which  accounted  for a
$219,000 increase in interest income.

For the second  quarter of 1997,  interest  expense  increased by  $1,601,000 or
35.6%  over  the  year  earlier  period.  Due to the two  acquisitions,  average
balances of interest  bearing  deposit  liabilities  increased in all categories
from the previous year. These average balances rose  $173,586,000  (41.9%).  The
higher  volumes of  interest  bearing  deposit  liabilities  increased  interest
expense by $1,704,000. Average balances of Federal Funds purchased and long-term
debt fell $11,535,000 to $27,863,000 which resulted in a decrease of $157,000 in
interest  expense on a quarter over  quarter  basis.  Average  rates paid on all
interest  bearing  liabilities  were essentially flat in the second quarter 1997
versus 1996.

The combined effect of the increase in both interest income and interest expense
for the second  quarter of 1997  versus the same  period in 1996  resulted in an
increase of $1,528,000  (21.1%) in net interest income.  Net interest margin for
the  comparative  quarters  fell from  5.38% to 4.96%.  Net  interest  margin is
affected by the rates received on earning assets, the mix of products i.e. loans
and  securities  within  the  assets,   the  yields  paid  on  interest  bearing
liabilities  and  the mix  within  these  liabilities.  As a  result  of the two
acquisitions,  all four of these  variables  changed  in the  second  quarter as
compared to the second quarter of last year. Management expects the net interest
margin will  continue to be somewhat  lower in 1997 until higher loan volume can
replace investment securities.


The six month period ending June 30, 1997, was essentially  impacted by the same
factors as the second quarter. The mix and volume of earning assets and interest
bearing  liabilities  changed  because  of the two  acquisitions.  As a  result,
interest income increased $5,495,000 or 23.5% over the same period in 1996. Most
of the increase  resulted from higher  average  balances on loans and investment
securities. Interest income from the volume increase for these two items totaled
$6,607,000.  It was offset by a  $1,399,000  decrease in interest  income due to
lower  average rates on loans.  The average rate received on all earning  assets
for the six month  period ended June 30, 1997 was 8.49% or 21 basis points lower
than the 8.70% for the same period in 1996.

Interest expense for the six month period increased $2,674,000 from that for the
same period in 1996.  Volume  increases in deposits added $2,918,000 of interest
expense. This was offset in part by slightly lower rates and a reduction in long
term  debt   outstanding.   Overall  average  rates  paid  on   interest-bearing
liabilities  in the first six months of 1997  decreased 3 basis  points to 3.96%
from the same period in 1996.

The combined effect of the increase in both interest income and interest expense
for the  first  six  months of 1997  versus  1996  resulted  in an  increase  of
$2,821,000 or 20.4% in net interest  income.  Net interest  margin  decreased 29
basis points from 5.34% to 5.05%.

The following  four tables  provide  summaries of the components of the interest
income,  interest  expense and net  interest  margins on earning  assets for the
quarter and six month  periods  ended June 30,  1997 versus the same  periods in
1996.
<PAGE>

                                TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                         6/30/97                                       6/30/97

                                        Average          Income/     Yield/          Average           Income/     Yield/
                                        Balance1         Expense      Rate           Balance1          Expense      Rate
<S>                                    <C>              <C>          <C>            <C>             <C>           <C>
Assets
Earning assets
  Loan 2,3                             $  440,813       $ 10,840     9.84%          $  348,779      $   9,030     10.36%
  Securities4                             262,975          3,980     6.05%             188,276          2,693      5.72%
  Federal funds sold                        3,807             53     5.57%               1,592             21      5.28%
                                     -------------    -----------                 -------------    -----------
    Total earning assets                  707,595         14,873     8.41%             538,647         11,744      8.72%
                                                      -----------                                  -----------
Cash and due from bank                     38,664                                       29,113
Premises and equipment                     16,440                                       14,121
Other assets,net                           35,172                                       18,486
Less:  allowance
  for loan losses                          (6,030)                                      (5,383)
                                     -------------                                -------------
      Total                            $  791,841                                   $  594,984
                                     =============                                =============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                      $  123,443            695     2.25%          $   84,062            477      2.27%
  Savings deposits                        213,186          1,630     3.06%             160,453          1,226      3.06%
  Time deposits                           250,988          3,356     5.35%             169,516          2,243      5.29%
Federal funds purchased                     6,587             92     5.59%              11,490            144      5.01%
Short-term debt                             9,828            156     6.35%               9,828            146      5.94%
Long-term debt                             11,448            170     5.94%              18,080            262      5.80%
                                     -------------    -----------                 -------------    -----------
   Total interest-bearing
      liabilities                         615,480          6,099     3.96%             453,429          4,498      3.97%
                                                      -----------                                  -----------
Noninterest-bearing deposits              104,508                                       77,941
Other liabilities                          10,268                                        8,842
Shareholders' equity                       61,585                                       54,772
                                     -------------                                -------------
    Total liabilities
      and shareholders' equity         $  791,841                                   $  594,984
                                     =============                                =============

Net interest rate spread5                                            4.44%                                         4.75%
Net interest income/net                                $   8,774                                    $   7,246
                                                      ===========                                  ===========
  interest margin6                                          4.96%                                        5.38%
                                                      ===========                                  ===========


1 Average  balances are  computed  principally  on the basis of daily  balances.
  Average balance of securities is based on amortized cost.
2 Nonaccrual loans are included.
3 Interest income on loans includes fees on loans of $448,000 in 1997 and $498,000 in 1996.
4 Interest income is stated on a tax equivalent basis of  1.52 and 1.72 at June 30, 1997 and 1996.
5 Net interest rate spread represents the average yield earned on interest-earning assets less the
  average rate paid
  on interest-bearing liabilities.
6 Net  interest  margin is  computed by dividing  net  interest  income by total
average earning assets.
</TABLE>
<PAGE>
                                TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                          Six Months Ended
                                                          6/30/97                                     6/30/97

                                          Average         Income/         Yield/      Average         Income/         Yield/
                                          Balance1        Expense         Rate        Balance1        Expense         Rate
<S>                                     <C>             <C>               <C>       <C>             <C>              <C>
Assets
Earning assets
  Loan 2,3                              $  436,332      $   21,571        9.89%     $  334,190      $   17,593       10.53%
  Securities4                              233,799           7,028        6.01%        190,735           5,447        5.71%
  Federal funds sold                        10,013             268        5.35%         12,620             332        5.26%
                                      -------------   -------------               -------------   -------------
    Total earning assets                   680,144          28,867        8.49%        537,545          23,372        8.70%
                                                      -------------                               -------------
Cash and due from bank                      39,816                                      29,387
Premises and equipment                      15,978                                      13,729
Other assets,net                            32,142                                      18,127
Less:  allowance
  for loan losses                           (6,024)                                     (5,488)
                                      -------------                               -------------
      Total                             $  762,056                                  $  593,300
                                      =============                               =============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                       $  115,114           1,299        2.26%    $    84,362             953        2.26%
  Savings deposits                         205,040           3,123        3.05%        163,248           2,492        3.05%
  Time deposits                            244,146           6,468        5.30%        172,495           4,654        5.40%
Federal funds purchased                      4,731             131        5.54%          5,745             144        5.01%
Short-term debt                              9,828             312        6.35%          9,828             291        5.92%
Long-term debt                              12,759             374        5.86%         17,153             499        5.82%
                                      -------------   -------------               -------------   -------------
   Total interest-bearing
      liabilities                          591,618          11,707        3.96%        452,831           9,033        3.99%
                                                      -------------                               -------------
Noninterest-bearing deposits                98,765                                      77,358
Other liabilities                            9,970                                       8,720
Shareholders' equity                        61,703                                      54,391
                                      -------------                               -------------
    Total liabilities
      and shareholders' equity          $  762,056                                  $  593,300
                                      =============                               =============

Net interest rate spread5                                                 4.53%                                       4.71%
Net interest income/net                                 $   17,160                                  $   14,339
                                                      =============                               =============
  interest margin6                                            5.05%                                       5.34%
                                                      =============                               =============



1 Average  balances are  computed  principally  on the basis of daily  balances.
  Average balance of securities is based on amortized cost.
2 Nonaccrual loans are included.
3 Interest income on loans includes fees on loans of $1,024,000 in 1997 and $905,000 in 1996.
4 Interest income is stated on a tax equivalent basis of  1.52 and 1.72 at June 30, 1997 and 1996.
5 Net interest rate spread represents the average yield earned on interest-earning assets less the
  average rate paid on interest-bearing liabilities.
6 Net  interest  margin is  computed by dividing  net  interest  income by total
average earning assets.
</TABLE>
<PAGE>
                                TRICO BANCSHARES
                       ANALYSIS OF VOLUME AND RATE CHANGES
                       ON NET INTEREST INCOME AND EXPENSE
                                 (in thousands)



                                  For the three months ended June 30,
                                           1997 over 1996
                                                                  Yield/
                               Volume           Rate4             Total
                           -----------     -----------      ------------
Increase (decrease) in interest income:
    Loans 1,2              $    2,383       $    (573)      $     1,810
    Investment securities3      1,068             219             1,287
    Federal funds sold             29               3                32
                           -----------     -----------      ------------
      Total                     3,480            (351)            3,129
                           -----------     -----------      ------------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)          223              (5)              218
    Savings deposits              403               1               404
    Time deposits               1,078              35             1,113
    Federal funds purchased       (61)              9               (52)
    Short-term debt                 0              10                10
    Long-term debt                (96)              4               (92)
                           -----------     -----------      ------------
      Total                     1,547              54             1,601
                           -----------     -----------      ------------

Increase (decrease) in
  net interest income      $    1,933       $    (405)      $     1,528
                           ===========     ===========      ============

1 Nonaccrual loans are included.
2 Interest  income on loans includes fee income on loans of $448,000 in 1997 and
$498,000 in 1996. 3 Interest income is stated on a tax equivalent  basis of 1.52
and 1.72 for June 30, 1997 and 1996.
4 The rate/volume variance has been included in the rate variance.


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


                                    For the six months ended June 30,
                                          1997 over 1996
                                                                   Yield/
                                 Volume            Rate4            Total
                              ----------     ------------     ------------
Increase (decrease) in interest income:
    Loans 1,2                 $   5,377       $   (1,399)     $     3,978
    Investment securities3        1,230              351            1,581
    Federal funds sold              (69)               5              (64)
                              ----------     ------------     ------------
      Total                       6,538           (1,043)           5,495
                              ----------     ------------     ------------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)            347               (1)             346
    Savings deposits                638               (7)             631
    Time deposits                 1,933             (119)           1,814
    Federal funds purchased         (25)              12              (13)
    Short-term debt                   0               21               21
    Long-term debt                 (128)               3             (125)
                              ----------     ------------     ------------
      Total                       2,765              (91)           2,674
                              ----------     ------------     ------------

Increase (decrease) in
  net interest income         $   3,773      $      (952)     $     2,821
                              ==========     ============     ============

1 Nonaccrual loans are included.
2 Interest  income on loans  includes fee income on loans of  $1,024,000 in 1997
  and $905,000 in 1996.
3 Interest income is stated on a tax equivalent  basis of 1.52 and 1.72 for June
  30, 1997 and 1996.
4 The rate/volume variance has been included in the rate variance.

<PAGE>

Provision for Loan Losses

During the second  quarter of 1997,  the Bank provided  $600,000 for loan losses
which matched its provision of the first quarter.  Net charge offs in the second
quarter  decreased to $233,000 versus $831,000 in the first quarter and $522,000
in  the  second  quarter  of  1996.   While  the  loan  charge  offs  decreased,
nonperforming  loans  increased to $9,488,000  at the end of the quarter  versus
$6,920,000 at the end of the first  quarter.  Because of the higher  balances of
nonperforming loans and loan growth in 1997, management will continue to provide
for loan  losses at higher  levels  than were  recorded  in 1996  until a higher
coverage ratio is attained.

Noninterest Income

Total noninterest income for the second quarter of 1997 was up $828,000 or 52.4%
from the same  period in 1996.  Service  charges  and fees on  deposit  accounts
increased  43.2% to  $1,684,000 in the second  quarter  versus year ago results.
This change is due to  increases  in account  volumes  mainly as a result of the
previously mentioned acquisitions and selective fee increases made in June 1996.
Other income was up from  $404,000 in the second  quarter of 1996 to $724,000 in
1997.  Much  of the  change  was  related  to a  $236,000  (69.6%)  increase  in
commissions on the sale of mutual funds and annuities.


Results  for the first six  months  were  consistent  with the  second  quarter.
Overall,  noninterest  income was higher by $1,459,000 or 47.9% in the first six
months of 1997  versus the same period in 1996.  Service  charges and fee income
reflected  a 38.4%  increase  to  $3,175,000.  Other  income was up  $579,000 to
$1,330,000 of which $332,000 of the increase was  attributable to commissions on
the sale of mutual funds and annuities.

Noninterest Expense

Noninterest  expense is comprised  of operating  expenses of the Company and the
Bank,  plus the total  noninterest  (income)  expenses of the Bank's real estate
development subsidiary.  Noninterest expenses increased $2,996,000 to $8,820,000
in the second  quarter 1997 versus 1996.  Most of the higher costs were directly
or indirectly related to the two acquisitions.  One time integration and ongoing
operating  costs for the nine acquired  Wells branches  totaled  $894,000 in the
second  quarter.  Amortization  of intangible  assets  associated  with both the
Sutter  Buttes and Wells  acquisitions  amounted  to  $386,000.  Also,  the Bank
increased  staffing in various  support  departments and loan offices to service
the new  branches and  customers.  As a result,  salary and benefit  expense not
directly  related  to the nine new  branches  increased  $476,000  or 15.8% on a
quarter over quarter basis.  Occupancy  costs exclusive of the nine branches was
$290,000  (34.2%)  higher.  Of this amount,  depreciation  on equipment  had the
largest  single  increase and accounted for $183,000.  Much of the  depreciation
related  to  improved  computer  and  communication   networks.   Other  expense
categories  such as courier  service,  telephone,  ATM charges and postage,  had
significant  increases  as a result of the Sutter  Buttes and Wells Fargo branch
acquisitions. Management is addressing issues to increase efficiencies to reduce
the noninterest expenses.

For the six month period noninterest  expenses increased  $4,783,000 or 42.2% in
1997 over 1996. In addition to the ongoing costs  associated  with the Wells and
Sutter Buttes acquisitions,  the year to date expenses reflect one time costs to
integrate the Wells branches of approximately $358,000. Other expenses which had
significant  increases on a year over year basis include:  Advertising $140,000,
telephone  $124,000,  ATM charges  $140,000,  courier service  $88,000,  postage
$38,000  and  FDIC  insurance  $42,000.   Most  of  these  are  related  to  the
acquisitions.

The overhead  efficiency ratio for the first six months of 1997 was 74.8% versus
65.1% in the like period of 1996.

Provision for Income Taxes

The  effective  tax rate for the six  months  ended  June 30,  1997 is 37.4% and
reflects a decrease from 41.8% in the year earlier  period.  The decrease in tax
rate is the result of higher  nontaxable  earnings from municipal bonds and life
insurance on a smaller  income base from the prior year.  The Bank has increased
its holdings of tax-exempt municipal bonds in the first half of 1997, so the tax
rate should continue to be somewhat lower during 1997.

Loans

In the second quarter of 1997, loan balances increased  $31,125,000 or 7.2% from
the  ending  balances  at March  31,  1997.  Loan  balances  were  higher in all
categories. The balances also exceeded year end balances by $21,451,000 and 1996
second  quarter  ending  balances by  $87,822,000.  The year over year gains are
attributable to the Sutter Buttes  acquisition and about a 7.2% loan growth. The
Bank has increased its commercial  lending staff in the Sacramento,  Bakersfield
and northern San Joaquin  Valley loan offices.  Management  believes loan growth
should continue through the third quarter.

Securities

At June 30, 1997,  securities  held-to-maturity  had a cost basis of $99,285,000
and  an  approximate  fair  value  of  $97,848,000.   This  portfolio  contained
mortgage-backed securities totaling $76,802,000 of which $32,703,000 were CMO's.
The securities available-for-sale portfolio had a fair value of $144,234,000 and
an amortized  cost of  $144,801,000.  This portfolio  contained  mortgage-backed
securities  with an amortized  cost of  $28,385,000  of which  $20,521,000  were
CMO's.

At  December  31,  1996,  securities   held-to-maturity  had  a  cost  basis  of
$104,713,000  and an  approximate  fair value of  $103,488,000.  This  portfolio
contained  mortgage-backed  securities totaling $81,202,000 of which $33,936,000
were CMO's.  The  securities  available-for-sale  portfolio  had a fair value of
$65,316,000  and an amortized  cost of  $66,307,000.  This  portfolio  contained
mortgage-backed  securities  with an  amortized  cost of  $30,260,000  of  which
$21,603,000 were CMO's.

Growth in the  securities  portfolio  resulted  from the  investment  of the net
proceeds generated from the acquisition of the Wells Fargo deposits in the first
quarter.

Nonperforming Loans

As shown in the following  table,  total  nonperforming  assets have risen about
5.3% to  $11,009,000  in the first  six  months  of 1997.  At June 30,  1997 non
performing  assets  represent 1.38% of total assets versus 1.50% at year end. No
one sector of loans accounted for the $423,000 increase in nonperforming  loans.
OREO  increased  $133,000  as the net result of six  properties  being added and
eight being sold during this period.  All nonaccrual  loans are considered to be
impaired when  determining the valuation  allowance under SFAS 114. The increase
in nonperforming loans is of concern to Management. Progress was made during the
second  quarter  to  identify  problem  and  potential  problem  loans  earlier.
Collection  processes are being  changed to help improve the  timeliness of loan
payments.


                                            June 30,    December 31,
                                              1997          1996

Nonaccrual loans                           $   9,265      $   9,044
Accruing loans past due 90 days or more          222             20
Restructured loans (in compliance with
  modified terms)                                  0              0
                                           ----------     ----------

     Total nonperforming loans                 9,487          9,064

Other real estate owned                        1,522          1,389
                                           ----------     ----------

     Total nonperforming assets             $ 11,009       $ 10,453
                                           ==========     ==========

Nonincome producing investments in real
  estate held by Bank's real estate
    development subsidiary                 $   1,410      $   1,173
                                           ==========     ==========

Nonperforming loans to total loans              2.06%          2.06%
Allowance for loan losses to
  nonperforming loans                             66%            67%
Nonperforming assets to total assets            1.38%          1.50%
Allowance for loan losses to
  nonperforming assets                            57%            58%



Allowance for Loan Loss

The Bank maintains its allowance for loan losses at a level Management  believes
will be adequate to absorb probable  losses  inherent in existing loans,  leases
and  commitments to extend credit,  based on evaluations of the  collectibility,
impairment and prior loss experience of loans,  leases and commitments to extend
credit.

The following table presents information  concerning the allowance and provision
for loan losses.

                                          June 30,              June 30,
                                           1997                  1996
                                                 (in thousands)
Balance, Beginning of period           $     6,097          $      5,580
Provision charged to operations              1,200                    90
Loans charged off                           (1,167)                 (697)
Recoveries of loans previously
  charged off                                  103                   261
                                       ============         =============
Balance, end of period                 $     6,233          $      5,234
                                       ============         =============

Ending loan portfolio                  $   460,741          $    438,426
                                       ============         =============
Allowance for loan losses as a
  percentage of ending loan portfolio         1.35%                 1.19%
                                       ============         =============


Fixed Assets

During the second quarter of 1997 the Bank entered into a $2.5 million  contract
for a building which will house most of the administrative functions of the Bank
and the Company.  Operations which are now performed in four separate  locations
will be consolidated in the new building. Completion of the building is targeted
for late December 1997 to early January 1998.

<PAGE>

Equity

The following table indicates the amounts of regulatory capital of the Company.
<TABLE>
<CAPTION>

                                                                                     To Be Well
                                                                                  Capitalized Under
                                                                For Capital       Prompt Corrective
                                         Actual            Adequacy Purposes     Action Provisions
                                     Amount     Ratio        Amount     Ratio      Amount   Ratio
<S>                                  <C>       <C>            <C>       <C>        <C>       <C>
As of  June 30, 1997:
Total Capital
    to Risk Weighted Assets          $59,642   11.78%       =>$40,506 =>8.0%     =>$50,634 =>10.0%
Tier I Capital
    to Risk Weighted Assets          $53,409   10.55%       =>$20,253 =>4.0%     =>$30,380 => 6.0%
</TABLE>


<PAGE>


                                     PART II


Other Information

(a)   Item 4.      Submission of Matters to a Vote of Security Holders

          (a.)     Annual   Meeting  held  May  20,   1997.   Number  of  shares
                   represented in person or by proxy and  constituting a quorum.
                   3,559,549 77%

          (c.)     Election of directors                VOTES FOR
                                                       ---------
                    Everett B. Beich                   3.480,563
                                                       ---------
                    William J. Casey                   3,479,897
                                                       ---------
                    Craig S. Compton                   3,467,039
                                                       ---------
                    Richard C. Guiton                  3,480,400
                                                       ---------
                    Douglas F. Hignell                 3,480,400
                                                       ---------
                    Brian D. Leidig                    3,480,400
                                                       ---------
                    Wendell J. Lundberg                3,480,400
                                                       ---------
                    Donald E. Murphy                   3,480.400
                                                       ---------
                    Rodney W. Peterson                 3,480,294
                                                       ---------
                    Robert H. Steveson                 3,479,441
                                                       ---------
                    Alex A. Vereschagin, Jr.           3,480,400
                                                       ---------

                   Ratify the  appointment of Arthur Andersen LLP as independent
                   public  accountants  of the  Company  for  1997.  Votes:  FOR
                   3,533,453, AGAINST 878 , ABSTAIN 25,293

(b)  Item 6.       Exhibits Filed Herewith

Exhibit No.                                           Exhibits

         3.1         Articles  of  Incorporation,  as amended to date,  filed as
                     Exhibit 3.1 to Registrant's  Report on Form 10-K, filed for
                     the year ended December 31, 1989, are  incorporated  herein
                     by reference.

         3.2         Bylaws,  as  amended  to  1992,  filed  as  Exhibit  3.2 to
                     Registrant's  Report on Form 10-K, filed for the year ended
                     December 31, 1992, are incorporated herein by reference.

         4.2         Certificate  of  Determination  of  Preferences of Series B
                     Preferred  Stock,  filed  as  Appendix  A  to  Registrant's
                     Registration  Statement  on Form  S-1  (No.  33-22738),  is
                     incorporated herein by reference.

         10.1        Lease for Park Plaza  Branch  premises  entered  into as of
                     September  29,  1978,  by and  between  Park Plaza  Limited
                     Partnership  as lessor  and Tri  Counties  Bank as  lessee,
                     filed as Exhibit 10.9 to the TriCo Bancshares  Registration
                     Statement on Form S-14 (Registration No. 2-74796) is
                     incorporated herein by reference.

         10.2        Lease for Administration Headquarters premises entered into
                     as of April 25, 1986, by and between  Fortress-Independence
                     Partnership (A California  Limited  Partnership)  as lessor
                     and Tri Counties  Bank as lessee,  filed as Exhibit 10.6 to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1986, is incorporated herein by reference.

         10.3        Lease for Data Processing premises entered into as of April
                     25, 1986, by and between Fortress-Independence  Partnership
                     (A  California  Limited  Partnership)  as  lessor  and  Tri
                     Counties   Bank  as  lessee,   filed  as  Exhibit  10.7  to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1986, is incorporated
                     herein by reference.

         10.4        Lease for Chico Mall premises  entered into as of March 11,
                     1988,  by and between  Chico Mall  Associates as lessor and
                     Tri  Counties  Bank as  lessee,  filed as  Exhibit  10.4 to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1988, is incorporated by reference.

         10.5        First amendment to lease entered into as of May 31, 1988 by
                     and between Chico Mall  Associates  and Tri Counties  Bank,
                     filed as Exhibit 10.5 to  Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1988, is incorporated
                     by reference.

         10.9        Employment Agreement of Robert H. Steveson,  dated December
                     12, 1989 between Tri Counties Bank and Robert H.  Steveson,
                     filed as Exhibit 10.9 to  Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1989, is incorporated
                     by reference.

         10.11       Lease  for  Purchasing  and  Printing  Department  premises
                     entered into as of February 1, 1990, by and between  Dennis
                     M.  Casagrande  as lessor and Tri Counties  Bank as lessee,
                     filed as Exhibit 10.11 to Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1991, is incorporated
                     herein by reference.

         10.12       Addendum to  Employment  Agreement  of Robert H.  Steveson,
                     dated April 9, 1991, filed as Exhibit 10.12 to Registrant's
                     Report on Form 10-K filed for the year ended  December  31,
                     1991, is incorporated herein by reference.

         11.1        Computation of earnings per share.

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


(b)  Reports on Form 8-K:

         None


<PAGE>


                                   SIGNATURES



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


                                                   TRICO BANCSHARES



Date       August 4, 1997                           /s/  Robert H. Steveson
          ---------------                           ------------------------
                                                    Robert H. Steveson
                                                    President and
                                                    Chief Executive Officer


Date       August 4, 1997                           /s/  Robert M. Stanberry
          ---------------                           ------------------------
                                                    Robert M. Stanberry
                                                    Vice President and
                                                    Chief Financial Officer
[{"type": "10-Q", "sequence": "1", "description": "10-Q", "secsgml_size_bytes": 71154}]
{"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": "97651387"}, "business-address": {"street1": "TRI COUNTIES BANK ADMINISTRATION", "street2": "40 PHILADELPHIA DRIVE", "city": "CHICO", "state": "CA", "zip": "95973", "phone": "9168980300"}, "mail-address": {"street1": "TRI COUNTIES BANK ADMINISTRATION", "street2": "40 PHILADELPHIA DRIVE", "city": "CHICO", "state": "CA", "zip": "95973"}}
SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

For Quarter Ended June 30, 1997                   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.)

                 15 Independence Circle, Chico, California 95973
               (Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code                  916/898-0300

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

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Title of Class:  Common stock, no par value

Outstanding shares as of August  4, 1997:  4,659,299
TRICO BANCSHARES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
                                 (in thousands)
June 30,         December 31,
                                                                        -----------------    -----------------
                                                                             1997                  1996
Assets:
Cash and due from banks                                                   $       44,149       $       52,231
Federal funds sold                                                                 4,400                    -
Securities held-to-maturity
 (approximate fair value $97,848 and $103,488)                                    99,285              104,713
Securities available-for-sale, net of
 unrealized gain(loss) of $(567) and $(991)                                      144,234               65,316
Loans, net of allowance for loan losses of $(6,233) and $(6,097)                 454,508              433,192
Premises and equipment, net                                                       16,775               14,717
Investment in real estate properties                                               1,410                1,173
Other real estate owned                                                            1,522                1,389
Accrued interest receivable                                                        5,634                4,572
Intangible assets                                                                  9,673                1,036
Other assets                                                                      15,547               16,520
                                                                        -----------------    -----------------

     Total assets                                                          $     797,137        $     694,859
                                                                        =================    =================

Liabilities:
Deposits
 Noninterest-bearing demand                                                $     111,803        $     100,879
 Interest-bearing demand                                                         123,198               97,178
 Savings                                                                         208,255              172,789
 Time certificates                                                               260,439              224,775
                                                                        -----------------    -----------------
     Total deposits                                                              703,695              595,621
Fed funds purchased                                                                    -                4,900
Accrued interest payable and other liabilities                                     9,772                9,280
Long term borrowings                                                              21,275               24,281
                                                                        -----------------    -----------------

     Total liabilities                                                           734,742              634,082

Shareholders' equity:
Common stock                                                                      47,841               47,652
Retained earnings                                                                 15,240               14,076
Unrealized loss on securities available for sale, net                               (686)                (951)
                                                                        -----------------    -----------------

     Total shareholders' equity                                                   62,395               60,777
                                                                        -----------------    -----------------

     Total liabilities and shareholders' equity                            $     797,137        $     694,859
                                                                        =================    =================
TRICO BANCSHARES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
                 (in thousands except earnings per common share)
For the three months              For the six months
                                                ended June 30,                   ended June 30,
                                            1997             1996             1997            1996
Interest income:
  Interest and fees on loans          $      10,840    $       9,030    $      21,571    $      17,593
  Interest on investment
   securities-taxable                         3,702            2,641            6,646            5,339
  Interest on investment
   securities-tax exempt                        183               30              251               63
  Interest on federal funds sold                 53               21              268              332
                                        ------------      -----------     ------------      -----------
     Total interest income                   14,778           11,722           28,736           23,327
                                        ------------      -----------     ------------      -----------

Interest expense:
  Interest on deposits                        5,681            3,946           10,890            8,099
  Interest on federal funds purchased            92              144              131              144
  Interest on other borrowings                  326              408              686              790
                                        ------------      -----------     ------------      -----------
     Total interest expense                   6,099            4,498           11,707            9,033
                                        ------------      -----------     ------------      -----------

     Net interest income                      8,679            7,224           17,029           14,294

Provision for loan losses                       600               50            1,200               90
                                        ------------      -----------     ------------      -----------
    Net interest income after
     provision for loan losses                8,079            7,174           15,829           14,204

Noninterest income:
  Service charges and fees                    1,684            1,176            3,175            2,295
  Other income                                  724              404            1,330              751
                                        ------------      -----------     ------------      -----------
     Total noninterest income                 2,408            1,580            4,505            3,046
                                        ------------      -----------     ------------      -----------

Noninterest expenses:
  Salaries and related expenses               4,031            3,005            7,607            5,964
  Other, net                                  4,789            2,819            8,505            5,365
                                        ------------      -----------     ------------      -----------

     Total noninterest expenses               8,820            5,824           16,112           11,329
                                        ------------      -----------     ------------      -----------

Net income before income taxes                1,667            2,930            4,222            5,921

  Income taxes                                  588            1,226            1,579            2,473
                                        ------------      -----------     ------------      -----------

     Net income                               1,079            1,704            2,643            3,448

Primary earnings per common share   $          0.22    $        0.37   $         0.55   $         0.74
                                        ============      ===========     ============      ===========
Fully diluted earnings per
                     common share   $          0.22    $        0.37   $         0.55   $         0.74
                                        ============      ===========     ============      ===========
TRICO BANCSHARES
                      CONDENSED CONSOLIDATED STATEMENTS OF
                         CHANGES IN SHAREHOLDERS' EQUITY
                                   (unaudited)
                     (in thousands, except number of shares)
Common stock
                                    -----------------------------                      Unrealized
                                       Number                         Retained          loss on
                                     of shares         Amount         earnings      securities, net       Total
                                    -------------   -------------   -------------   ---------------   -------------
Balance,
 December 31, 1996                     4,641,223        $ 47,652        $ 14,076        $    (951)       $ 60,777

Exercise of common stock
 options                                  10,250              84                                         $     84

Common stock cash
 dividends                                                                (1,479)                        $ (1,479)

Change in unrealized
 loss on securities                                                                           265        $    265

Stock option amortization                                    105                                         $    105

Net income, June 30, 1997                                                  2,643                         $  2,643
                                    -------------   -------------   -------------   --------------   -------------

Balance,
 June 30, 1997                         4,651,473        $ 47,841        $ 15,240        $    (686)       $ 62,395
                                    =============   =============   =============   ==============   =============
TRICO BANCSHARES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
For the six months
                                                                              ended June 30,
                                                                         1997               1996
Operating activities:
Net income                                                           $       2,643      $       3,448
Adjustments   to  reconcile  net  income  to  net  cash  provided  by  operating
 activities:
    Provision for loan losses                                                1,200                 90
    Provision for losses on other real estate owned                             52                  -
    Depreciation and amortization                                            1,156                856
    Amortization of investment security discounts                              (39)                30
    Deferred income taxes                                                      438                106
    Investment security (gains) losses (net)                                   (19)                 -
    (Gain) loss on sale of OREO, net                                            31                (31)
    (Gain) loss on sale of loans, net                                          (17)                 6
    (Gain) loss on sale of fixed assets                                         14                  -
    Origination of loans held for sale                                      (9,625)           (13,896)
    Proceeds from loan sales                                                 9,580              5,256
    Amortization of stock options                                              105                104
    (Increase) decrease in interest receivable                              (1,062)               (77)
    Increase (decrease) in interest payable                                  1,197               (818)
    (Increase) decrease in other assets and liabilities                         19             (1,532)
                                                                       ------------       ------------
         Net cash provided (used) by operating activities                    5,673             (6,458)

Investing activities:
    Proceeds from maturities of securities held-to-maturity                  5,517             14,256
    Purchases of securities held-to-maturity                                     -             (5,516)
    Proceeds from maturities of securities available-for-sale               16,206             12,677
    Proceeds from sale of securities available-for-sale                     27,036                  -
    Purchases of securities available-for-sale                            (121,688)           (13,587)
    Net (increase) decrease in loans                                       (22,884)           (46,485)
    Proceeds from sales of fixed assets                                         23                  -
    Purchases of premises and equipment                                     (2,408)            (1,813)
    Purchases and additions to real estate properties                         (237)                 -
    Proceeds from the sale of OREO                                             397                446
    Net cash received from purchase of Wells Fargo branch deposits         140,000                  -
                                                                       ------------       ------------
         Net cash provided (used) by investing activities                   41,962            (40,022)

Financing activities:
    Net increase (decrease) in deposits (excluding
       effects of purchase of Wells Fargo branch deposits)                 (42,016)           (25,184)
    Fed funds purchased                                                          -             30,000
    Repayment of fed funds purchased                                        (4,900)                 -
    Borrowings under long-term debt agreements                                   -             10,000
    Payments of principal on long-term debt agreements                      (3,006)            (2,006)
    Cash dividends - Common                                                 (1,479)            (1,175)
    Repurchase of common stock                                                   -               (146)
    Exercise of common stock options                                            84                290
                                                                       ------------       ------------
         Net cash provided (used) by financing activities                  (51,317)            11,779
                                                                       ------------       ------------

         Increase (decrease) in cash and cash equivalents                   (3,682)           (34,701)
         Cash and cash equivalents at beginning of year                     52,231             65,273
                                                                       ------------       ------------
         Cash and cash equivalents at end of period                   $     48,549       $     30,572
                                                                       ============       ============

Supplemental information:
    Cash paid for taxes                                               $      1,808       $      3,182
    Cash paid for interest expense                                    $     10,510       $      9,329
Item 1. Notes to Condensed Consolidated
                                  Financial Statements

Note A - Basis of Presentation

The accompanying  condensed consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange  Commission
(SEC) and in Management's opinion,  include all adjustments  (consisting only of
normal recurring  adjustments)  necessary for a fair presentation of results for
such interim periods. Certain information and note disclosures normally included
in annual financial  statements  prepared in accordance with generally  accepted
accounting  principles  have been omitted  pursuant to SEC rules or regulations;
however, the Company believes that the disclosures made are adequate to make the
information presented not misleading.

The  interim  results for the six months  ended June 30, 1997 and 1996,  are not
necessarily  indicative of results for the full year. It is suggested that these
financial  statements be read in conjunction  with the financial  statements and
the notes  included in the Company's  Annual Report for the year ended  December
31, 1996.

Note B - Recently Issued Accounting Pronouncements

In February of 1997, the Financial  Accounting  Standards Board issued Statement
of Financial  Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). The
Company is required to adopt SFAS 128 in the fourth  quarter of 1997 and at that
time will restate earnings per share data for prior periods to conform with SFAS
128. Earlier application is not permitted.

SFAS 128 replaces current earnings per share reporting requirements and requires
a dual presentation of basic and diluted earnings per share.  Basic earnings per
share  excludes  dilution and is computed by dividing net income by the weighted
average common shares outstanding  during the reported period.  Diluted earnings
per share reflects the potential dilution that could occur if common shares were
issued  pursuant to the exercise of options under the Bank's Stock Option Plans.
Diluted earnings per share under SFAS 128 should not be significantly  different
than primary earnings per share currently reported for the periods.

Pro forma amounts for basic and diluted earnings per share assuming SFAS 128 had
been in effect for the three  months and six months ended June 30, 1997 and 1996
are as follows:
Three months ended June 30,         Six Months ended June 30,
                                      1997           1996                1997           1996
Basic earnings per share           $0.23          $0.38               $0.57          $0.77
   Diluted earnings per share         $0.22          $0.37               $0.55          $0.74
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As TriCo  Bancshares (the  "Company") has not commenced any business  operations
independent of Tri Counties Bank (the "Bank"), the following discussion pertains
primarily  to the  Bank.  Average  balances,  including  such  balances  used in
calculating  certain financial ratios, are generally  comprised of average daily
balances for the Company. Except within the "overview" section,  interest income
and net interest income are presented on a tax equivalent basis.

In addition to the  historical  information  contained  herein,  this  Quarterly
Report contains certain forward-looking statements. The reader of this Quarterly
Report should understand that all such forward-looking statements are subject to
various  uncertainties and risks that could affect their outcome.  The Company's
actual   results  could  differ   materially   from  those   suggested  by  such
forward-looking  statements.  Factors  that could  cause or  contribute  to such
differences  include,  but are not limited to,  variances  in the actual  versus
projected  growth in assets,  return on assets,  loan  losses,  expenses,  rates
charged on loans and earned on securities  investments,  rates paid on deposits,
competition  effects,  fee and other noninterest  income earned as well as other
factors. This entire Quarterly Report should be read to put such forward-looking
statements  in  context  and  to  gain  a  more  complete  understanding  of the
uncertainties and risks involved in the Company's business.

Overview

The Company earned  $1,079,000 for the second quarter ended June 30, 1997 versus
$1,704,000 for the same period in 1996. Fully diluted earnings per share for the
second quarter periods were $0.22 and $0.37, respectively.  Earnings for the six
months  ended  June  30,  1997  were  $2,643,000  versus  year  ago  results  of
$3,448,000.  The fully  diluted  earnings  per share  were $.55 and $.74 for the
respective six month periods.

Pretax earnings for the second quarter of 1997 were $1,667,000 versus $2,930,000
for the same period in 1996.  Direct and indirect  costs related to the February
21, 1997  acquisition  and  integration  of nine branches from Wells Fargo Bank,
N.A. were major contributing  factors to the lower earnings.  Additionally,  the
Bank made  provisions  for loan losses  totaling  $600,000 in the quarter versus
$50,000 in the second  quarter last year.  The higher  provision was made due to
loan  growth and an increase in  nonperforming  loans from the first  quarter of
1997. Net interest income reflected growth of 20.2% to $8,679,000.  The interest
income  component was up $3,056,000  (26.1%) due to higher  quarter over quarter
volume of both loans and  securities  and a 33 basis point increase in yields on
securities.  Average  rates  received on loans were lower by 52 basis points due
primarily  to the effect of lower rate  mortgage  loans  acquired  in the Sutter
Buttes Savings Bank  acquisition  in the fourth  quarter of last year.  Interest
expense  increased  $1,601,000  (35.6%) which was due predominately to increased
volume of interest  bearing  liabilities.  Net interest margin was 4.96% for the
second  quarter of 1997 versus 5.38% in the prior year.  This lower net interest
margin reflects the change in the mix of earning assets and deposits as a result
of the Sutter Buttes  acquisition  and the first  quarter  purchase of the Wells
Fargo  branches.  The acquired  deposits  from Wells were invested in government
securities.  The net  interest  margin for 1997 will most likely  continue to be
lower than prior year levels until  additional loan production  replaces more of
the investment  securities.  Noninterest  income  reflected growth of 52.4% to a
total of  $2,408,000  for the second  quarter of 1997 over the prior year second
quarter. The service charge and fee income portion increased 43.2% to $1,684,000
due to an increase in account  volumes and selective fee increases  made in June
1996.  Other  income  increased  from  $404,000  in 1996 to  $724,000  in  1997.
Commissions on the sale of mutual funds and annuities  accounted for $236,000 of
the increase.

Noninterest  expense  increased  $2,996,000 to $8,820,000 in the second  quarter
1997 versus 1996.  Most of the higher costs were directly or indirectly  related
to the Wells Fargo branch and Sutter Buttes  acquisitions.  One time integration
and ongoing  operating costs for the nine acquired Wells Fargo branches  totaled
$894,000 in the second  quarter.  Amortization of intangible  assets  associated
with both the Sutter Buttes and Wells acquisitions  amounted to $386,000.  Also,
the Bank increased  staffing in various support  departments and loan offices to
service the new branches and customers.  As a result, salary and benefit expense
not directly related to the nine new branches  increased  $476,000 or 15.8% on a
quarter over quarter basis.  Occupancy costs exclusive of the nine branches were
$290,000  (34.2%)  higher.  Of this amount,  depreciation  on equipment  had the
largest  single  increase and accounted for $183,000.  Much of the  depreciation
related  to  improved  computer  and  communication   networks.   Other  expense
categories  such as courier  service,  telephone,  ATM charges and postage,  had
significant  increases  as a result of the Sutter  Buttes and Wells Fargo branch
acquisitions. Now that the new branches are operationally integrated, management
has turned its attention to increasing efficiencies and reducing the noninterest
expenses.

Assets  of the  Company  totaled  $797,137,000  at June 30,  1997  which  was an
increase of $102,278,000  (14.7%) and $180,201,000 (29.2%) from the December 31,
1996 and June 30, 1996 ending balances, respectively.  Changes in earning assets
from the prior year  quarter  end  balances  included:  an  increase in loans of
$87,823,000 to $460,741,000;  and an increase in the cost basis of securities of
$58,428,000 to $244,085,000.

Year to date 1997, the Company had an annualized  return on assets of .69% and a
return on equity of 8.57%  versus  1.16% and  12.68% in 1996.  TriCo  Bancshares
ended the quarter with a leverage ratio of 7.6%, a Tier 1 capital ratio of 10.6%
and a total risk-based capital ratio of 11.8%.

The  following  tables  provide a summary  of the major  elements  of income and
expense for the second  quarter of 1997 compared with the second quarter of 1996
and for the first six months of 1997 compared with the first six months of 1996.

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

                                             Three months
                                            ended June 30,          Percentage
                                         1997             1996        Change
                                        (in thousands, except        increase
                                         earnings per share)        (decrease)
Interest income                     $    14,873      $    11,744       26.6%
Interest expense                          6,099            4,498       35.6%
                                    ------------     ------------

Net interest income                       8,774            7,246       21.1%

Provision for loan losses                   600               50     1100.0%
                                    ------------     ------------

Net interest income after                 8,174            7,196       13.6%
  provision for loan losses

Noninterest income                        2,408            1,580       52.4%
Noninterest expenses                      8,820            5,824       51.4%
                                    ------------     ------------

Net income before income taxes            1,762            2,952      (40.3%)
Income taxes                                588            1,226      (52.0%)
Tax equivalent adjustment1                   95               22      340.6%
                                    ------------     ------------

Net income                                1,079            1,704      (36.7%)
                                    ============     ============

Primary earnings per common share   $      0.22      $      0.37      (40.5%)

1 Interest on tax-free  securities is reported on a tax equivalent basis of 1.52
and 1.72 for June 30, 1997 and 1996.

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

                                           Six months
                                         ended June 30,          Percentage
                                      1997           1996          Change
                                      (in thousands, except       increase
                                       earnings per share)       (decrease)
Interest income                   $    28,867    $    23,372         23.5%
Interest expense                       11,707          9,033         29.6%
                                  ------------   ------------

Net interest income                    17,160         14,339         19.7%

Provision for loan losses               1,200             90       1233.3%
                                  ------------   ------------

Net interest income after              15,960         14,249         12.0%
  provision for loan losses

Noninterest income                      4,505          3,046         47.9%
Noninterest expenses                   16,112         11,329         42.2%
                                  ------------   ------------

Net income before income taxes          4,353          5,966        (27.0%)
Income taxes                            1,579          2,473        (36.2%)
Tax equivalent adjustment1                131             45        187.7%
                                  ------------   ------------

Net income                              2,643          3,448        (23.3%)
                                  ============   ============

Primary earnings per common share $      0.55    $      0.74        (25.7%)

1 Interest on tax-free  securities is reported on a tax equivalent basis of 1.52
and 1.72 for June 30, 1997 and 1996.
Net Interest Income / Net Interest Margin

Net  interest  income  represents  the  excess of  interest  and fees  earned on
interest-earning  assets  (loans,  securities  and Federal  Funds sold) over the
interest  paid on  deposits  and  borrowed  funds.  Net  interest  margin is net
interest  income  expressed  as a  percentage  of average  earning  assets.  Net
interest income comprises the major portion of the Bank's income.

In the quarter  ended June 30, 1997,  interest  income  increased  $3,129,000 or
26.6%over the same period in 1996.  The average  balance of total earning assets
was higher by $168,948,000 which was a 31.4% increase. The acquisition of Sutter
Buttes  Savings Bank in the fourth  quarter of 1996 and the purchase of deposits
from Wells Fargo in February  1997 were the major  contributing  factors for the
increase in earning  assets.  The  average  balances  of loans  outstanding  and
securities increased $92,034,000 and $74,699,000, respectively. These two volume
increases accounted for additional interest income of $2,383,000 and $1,068,000,
respectively.  The average rate received on loans in the second  quarter of 1997
was 9.84% which was a decrease of 52 basis  points from the second  quarter last
year.  Interest income was negatively  affected by $573,000 because of the lower
rate. The large number of mortgage loans in the Sutter Buttes portfolio were the
major cause in lowering  the average rate for loans.  However,  the average rate
received  on  securities  rose 33 basis  points to 6.05% which  accounted  for a
$219,000 increase in interest income.

For the second  quarter of 1997,  interest  expense  increased by  $1,601,000 or
35.6%  over  the  year  earlier  period.  Due to the two  acquisitions,  average
balances of interest  bearing  deposit  liabilities  increased in all categories
from the previous year. These average balances rose  $173,586,000  (41.9%).  The
higher  volumes of  interest  bearing  deposit  liabilities  increased  interest
expense by $1,704,000. Average balances of Federal Funds purchased and long-term
debt fell $11,535,000 to $27,863,000 which resulted in a decrease of $157,000 in
interest  expense on a quarter over  quarter  basis.  Average  rates paid on all
interest  bearing  liabilities  were essentially flat in the second quarter 1997
versus 1996.

The combined effect of the increase in both interest income and interest expense
for the second  quarter of 1997  versus the same  period in 1996  resulted in an
increase of $1,528,000  (21.1%) in net interest income.  Net interest margin for
the  comparative  quarters  fell from  5.38% to 4.96%.  Net  interest  margin is
affected by the rates received on earning assets, the mix of products i.e. loans
and  securities  within  the  assets,   the  yields  paid  on  interest  bearing
liabilities  and  the mix  within  these  liabilities.  As a  result  of the two
acquisitions,  all four of these  variables  changed  in the  second  quarter as
compared to the second quarter of last year. Management expects the net interest
margin will  continue to be somewhat  lower in 1997 until higher loan volume can
replace investment securities.

The six month period ending June 30, 1997, was essentially  impacted by the same
factors as the second quarter. The mix and volume of earning assets and interest
bearing  liabilities  changed  because  of the two  acquisitions.  As a  result,
interest income increased $5,495,000 or 23.5% over the same period in 1996. Most
of the increase  resulted from higher  average  balances on loans and investment
securities. Interest income from the volume increase for these two items totaled
$6,607,000.  It was offset by a  $1,399,000  decrease in interest  income due to
lower  average rates on loans.  The average rate received on all earning  assets
for the six month  period ended June 30, 1997 was 8.49% or 21 basis points lower
than the 8.70% for the same period in 1996.

Interest expense for the six month period increased $2,674,000 from that for the
same period in 1996.  Volume  increases in deposits added $2,918,000 of interest
expense. This was offset in part by slightly lower rates and a reduction in long
term  debt   outstanding.   Overall  average  rates  paid  on   interest-bearing
liabilities  in the first six months of 1997  decreased 3 basis  points to 3.96%
from the same period in 1996.

The combined effect of the increase in both interest income and interest expense
for the  first  six  months of 1997  versus  1996  resulted  in an  increase  of
$2,821,000 or 20.4% in net interest  income.  Net interest  margin  decreased 29
basis points from 5.34% to 5.05%.

The following  four tables  provide  summaries of the components of the interest
income,  interest  expense and net  interest  margins on earning  assets for the
quarter and six month  periods  ended June 30,  1997 versus the same  periods in
1996.
TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands)
Three Months Ended
                                                         6/30/97                                       6/30/97

                                        Average          Income/     Yield/          Average           Income/     Yield/
                                        Balance1         Expense      Rate           Balance1          Expense      Rate
Assets
Earning assets
  Loan 2,3                             $  440,813       $ 10,840     9.84%          $  348,779      $   9,030     10.36%
  Securities4                             262,975          3,980     6.05%             188,276          2,693      5.72%
  Federal funds sold                        3,807             53     5.57%               1,592             21      5.28%
                                     -------------    -----------                 -------------    -----------
    Total earning assets                  707,595         14,873     8.41%             538,647         11,744      8.72%
                                                      -----------                                  -----------
Cash and due from bank                     38,664                                       29,113
Premises and equipment                     16,440                                       14,121
Other assets,net                           35,172                                       18,486
Less:  allowance
  for loan losses                          (6,030)                                      (5,383)
                                     -------------                                -------------
      Total                            $  791,841                                   $  594,984
                                     =============                                =============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                      $  123,443            695     2.25%          $   84,062            477      2.27%
  Savings deposits                        213,186          1,630     3.06%             160,453          1,226      3.06%
  Time deposits                           250,988          3,356     5.35%             169,516          2,243      5.29%
Federal funds purchased                     6,587             92     5.59%              11,490            144      5.01%
Short-term debt                             9,828            156     6.35%               9,828            146      5.94%
Long-term debt                             11,448            170     5.94%              18,080            262      5.80%
                                     -------------    -----------                 -------------    -----------
   Total interest-bearing
      liabilities                         615,480          6,099     3.96%             453,429          4,498      3.97%
                                                      -----------                                  -----------
Noninterest-bearing deposits              104,508                                       77,941
Other liabilities                          10,268                                        8,842
Shareholders' equity                       61,585                                       54,772
                                     -------------                                -------------
    Total liabilities
      and shareholders' equity         $  791,841                                   $  594,984
                                     =============                                =============

Net interest rate spread5                                            4.44%                                         4.75%
Net interest income/net                                $   8,774                                    $   7,246
                                                      ===========                                  ===========
  interest margin6                                          4.96%                                        5.38%
                                                      ===========                                  ===========

1 Average  balances are  computed  principally  on the basis of daily  balances.
  Average balance of securities is based on amortized cost.
2 Nonaccrual loans are included.
3 Interest income on loans includes fees on loans of $448,000 in 1997 and $498,000 in 1996.
4 Interest income is stated on a tax equivalent basis of  1.52 and 1.72 at June 30, 1997 and 1996.
5 Net interest rate spread represents the average yield earned on interest-earning assets less the
  average rate paid
  on interest-bearing liabilities.
6 Net  interest  margin is  computed by dividing  net  interest  income by total
average earning assets.
TRICO BANCSHARES
                       ANALYSIS OF CHANGE IN NET INTEREST
                            MARGIN ON EARNING ASSETS
                                 (in thousands)
Six Months Ended
                                                          6/30/97                                     6/30/97

                                          Average         Income/         Yield/      Average         Income/         Yield/
                                          Balance1        Expense         Rate        Balance1        Expense         Rate
Assets
Earning assets
  Loan 2,3                              $  436,332      $   21,571        9.89%     $  334,190      $   17,593       10.53%
  Securities4                              233,799           7,028        6.01%        190,735           5,447        5.71%
  Federal funds sold                        10,013             268        5.35%         12,620             332        5.26%
                                      -------------   -------------               -------------   -------------
    Total earning assets                   680,144          28,867        8.49%        537,545          23,372        8.70%
                                                      -------------                               -------------
Cash and due from bank                      39,816                                      29,387
Premises and equipment                      15,978                                      13,729
Other assets,net                            32,142                                      18,127
Less:  allowance
  for loan losses                           (6,024)                                     (5,488)
                                      -------------                               -------------
      Total                             $  762,056                                  $  593,300
                                      =============                               =============

Liabilities
  and shareholders' equity
Interest-bearing
  Demand deposits                       $  115,114           1,299        2.26%    $    84,362             953        2.26%
  Savings deposits                         205,040           3,123        3.05%        163,248           2,492        3.05%
  Time deposits                            244,146           6,468        5.30%        172,495           4,654        5.40%
Federal funds purchased                      4,731             131        5.54%          5,745             144        5.01%
Short-term debt                              9,828             312        6.35%          9,828             291        5.92%
Long-term debt                              12,759             374        5.86%         17,153             499        5.82%
                                      -------------   -------------               -------------   -------------
   Total interest-bearing
      liabilities                          591,618          11,707        3.96%        452,831           9,033        3.99%
                                                      -------------                               -------------
Noninterest-bearing deposits                98,765                                      77,358
Other liabilities                            9,970                                       8,720
Shareholders' equity                        61,703                                      54,391
                                      -------------                               -------------
    Total liabilities
      and shareholders' equity          $  762,056                                  $  593,300
                                      =============                               =============

Net interest rate spread5                                                 4.53%                                       4.71%
Net interest income/net                                 $   17,160                                  $   14,339
                                                      =============                               =============
  interest margin6                                            5.05%                                       5.34%
                                                      =============                               =============

1 Average  balances are  computed  principally  on the basis of daily  balances.
  Average balance of securities is based on amortized cost.
2 Nonaccrual loans are included.
3 Interest income on loans includes fees on loans of $1,024,000 in 1997 and $905,000 in 1996.
4 Interest income is stated on a tax equivalent basis of  1.52 and 1.72 at June 30, 1997 and 1996.
5 Net interest rate spread represents the average yield earned on interest-earning assets less the
  average rate paid on interest-bearing liabilities.
6 Net  interest  margin is  computed by dividing  net  interest  income by total
average earning assets.
TRICO BANCSHARES
                       ANALYSIS OF VOLUME AND RATE CHANGES
                       ON NET INTEREST INCOME AND EXPENSE
                                 (in thousands)

                                  For the three months ended June 30,
                                           1997 over 1996
                                                                  Yield/
                               Volume           Rate4             Total
                           -----------     -----------      ------------
Increase (decrease) in interest income:
    Loans 1,2              $    2,383       $    (573)      $     1,810
    Investment securities3      1,068             219             1,287
    Federal funds sold             29               3                32
                           -----------     -----------      ------------
      Total                     3,480            (351)            3,129
                           -----------     -----------      ------------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)          223              (5)              218
    Savings deposits              403               1               404
    Time deposits               1,078              35             1,113
    Federal funds purchased       (61)              9               (52)
    Short-term debt                 0              10                10
    Long-term debt                (96)              4               (92)
                           -----------     -----------      ------------
      Total                     1,547              54             1,601
                           -----------     -----------      ------------

Increase (decrease) in
  net interest income      $    1,933       $    (405)      $     1,528
                           ===========     ===========      ============

1 Nonaccrual loans are included.
2 Interest  income on loans includes fee income on loans of $448,000 in 1997 and
$498,000 in 1996. 3 Interest income is stated on a tax equivalent  basis of 1.52
and 1.72 for June 30, 1997 and 1996.
4 The rate/volume variance has been included in the rate variance.

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

                                    For the six months ended June 30,
                                          1997 over 1996
                                                                   Yield/
                                 Volume            Rate4            Total
                              ----------     ------------     ------------
Increase (decrease) in interest income:
    Loans 1,2                 $   5,377       $   (1,399)     $     3,978
    Investment securities3        1,230              351            1,581
    Federal funds sold              (69)               5              (64)
                              ----------     ------------     ------------
      Total                       6,538           (1,043)           5,495
                              ----------     ------------     ------------

Increase (decrease) in interest expense:
    Demand deposits
      (interest-bearing)            347               (1)             346
    Savings deposits                638               (7)             631
    Time deposits                 1,933             (119)           1,814
    Federal funds purchased         (25)              12              (13)
    Short-term debt                   0               21               21
    Long-term debt                 (128)               3             (125)
                              ----------     ------------     ------------
      Total                       2,765              (91)           2,674
                              ----------     ------------     ------------

Increase (decrease) in
  net interest income         $   3,773      $      (952)     $     2,821
                              ==========     ============     ============

1 Nonaccrual loans are included.
2 Interest  income on loans  includes fee income on loans of  $1,024,000 in 1997
  and $905,000 in 1996.
3 Interest income is stated on a tax equivalent  basis of 1.52 and 1.72 for June
  30, 1997 and 1996.
4 The rate/volume variance has been included in the rate variance.
Provision for Loan Losses

During the second  quarter of 1997,  the Bank provided  $600,000 for loan losses
which matched its provision of the first quarter.  Net charge offs in the second
quarter  decreased to $233,000 versus $831,000 in the first quarter and $522,000
in  the  second  quarter  of  1996.   While  the  loan  charge  offs  decreased,
nonperforming  loans  increased to $9,488,000  at the end of the quarter  versus
$6,920,000 at the end of the first  quarter.  Because of the higher  balances of
nonperforming loans and loan growth in 1997, management will continue to provide
for loan  losses at higher  levels  than were  recorded  in 1996  until a higher
coverage ratio is attained.

Noninterest Income

Total noninterest income for the second quarter of 1997 was up $828,000 or 52.4%
from the same  period in 1996.  Service  charges  and fees on  deposit  accounts
increased  43.2% to  $1,684,000 in the second  quarter  versus year ago results.
This change is due to  increases  in account  volumes  mainly as a result of the
previously mentioned acquisitions and selective fee increases made in June 1996.
Other income was up from  $404,000 in the second  quarter of 1996 to $724,000 in
1997.  Much  of the  change  was  related  to a  $236,000  (69.6%)  increase  in
commissions on the sale of mutual funds and annuities.

Results  for the first six  months  were  consistent  with the  second  quarter.
Overall,  noninterest  income was higher by $1,459,000 or 47.9% in the first six
months of 1997  versus the same period in 1996.  Service  charges and fee income
reflected  a 38.4%  increase  to  $3,175,000.  Other  income was up  $579,000 to
$1,330,000 of which $332,000 of the increase was  attributable to commissions on
the sale of mutual funds and annuities.

Noninterest Expense

Noninterest  expense is comprised  of operating  expenses of the Company and the
Bank,  plus the total  noninterest  (income)  expenses of the Bank's real estate
development subsidiary.  Noninterest expenses increased $2,996,000 to $8,820,000
in the second  quarter 1997 versus 1996.  Most of the higher costs were directly
or indirectly related to the two acquisitions.  One time integration and ongoing
operating  costs for the nine acquired  Wells branches  totaled  $894,000 in the
second  quarter.  Amortization  of intangible  assets  associated  with both the
Sutter  Buttes and Wells  acquisitions  amounted  to  $386,000.  Also,  the Bank
increased  staffing in various  support  departments and loan offices to service
the new  branches and  customers.  As a result,  salary and benefit  expense not
directly  related  to the nine new  branches  increased  $476,000  or 15.8% on a
quarter over quarter basis.  Occupancy  costs exclusive of the nine branches was
$290,000  (34.2%)  higher.  Of this amount,  depreciation  on equipment  had the
largest  single  increase and accounted for $183,000.  Much of the  depreciation
related  to  improved  computer  and  communication   networks.   Other  expense
categories  such as courier  service,  telephone,  ATM charges and postage,  had
significant  increases  as a result of the Sutter  Buttes and Wells Fargo branch
acquisitions. Management is addressing issues to increase efficiencies to reduce
the noninterest expenses.

For the six month period noninterest  expenses increased  $4,783,000 or 42.2% in
1997 over 1996. In addition to the ongoing costs  associated  with the Wells and
Sutter Buttes acquisitions,  the year to date expenses reflect one time costs to
integrate the Wells branches of approximately $358,000. Other expenses which had
significant  increases on a year over year basis include:  Advertising $140,000,
telephone  $124,000,  ATM charges  $140,000,  courier service  $88,000,  postage
$38,000  and  FDIC  insurance  $42,000.   Most  of  these  are  related  to  the
acquisitions.

The overhead  efficiency ratio for the first six months of 1997 was 74.8% versus
65.1% in the like period of 1996.

Provision for Income Taxes

The  effective  tax rate for the six  months  ended  June 30,  1997 is 37.4% and
reflects a decrease from 41.8% in the year earlier  period.  The decrease in tax
rate is the result of higher  nontaxable  earnings from municipal bonds and life
insurance on a smaller  income base from the prior year.  The Bank has increased
its holdings of tax-exempt municipal bonds in the first half of 1997, so the tax
rate should continue to be somewhat lower during 1997.

Loans

In the second quarter of 1997, loan balances increased  $31,125,000 or 7.2% from
the  ending  balances  at March  31,  1997.  Loan  balances  were  higher in all
categories. The balances also exceeded year end balances by $21,451,000 and 1996
second  quarter  ending  balances by  $87,822,000.  The year over year gains are
attributable to the Sutter Buttes  acquisition and about a 7.2% loan growth. The
Bank has increased its commercial  lending staff in the Sacramento,  Bakersfield
and northern San Joaquin  Valley loan offices.  Management  believes loan growth
should continue through the third quarter.

Securities

At June 30, 1997,  securities  held-to-maturity  had a cost basis of $99,285,000
and  an  approximate  fair  value  of  $97,848,000.   This  portfolio  contained
mortgage-backed securities totaling $76,802,000 of which $32,703,000 were CMO's.
The securities available-for-sale portfolio had a fair value of $144,234,000 and
an amortized  cost of  $144,801,000.  This portfolio  contained  mortgage-backed
securities  with an amortized  cost of  $28,385,000  of which  $20,521,000  were
CMO's.

At  December  31,  1996,  securities   held-to-maturity  had  a  cost  basis  of
$104,713,000  and an  approximate  fair value of  $103,488,000.  This  portfolio
contained  mortgage-backed  securities totaling $81,202,000 of which $33,936,000
were CMO's.  The  securities  available-for-sale  portfolio  had a fair value of
$65,316,000  and an amortized  cost of  $66,307,000.  This  portfolio  contained
mortgage-backed  securities  with an  amortized  cost of  $30,260,000  of  which
$21,603,000 were CMO's.

Growth in the  securities  portfolio  resulted  from the  investment  of the net
proceeds generated from the acquisition of the Wells Fargo deposits in the first
quarter.

Nonperforming Loans

As shown in the following  table,  total  nonperforming  assets have risen about
5.3% to  $11,009,000  in the first  six  months  of 1997.  At June 30,  1997 non
performing  assets  represent 1.38% of total assets versus 1.50% at year end. No
one sector of loans accounted for the $423,000 increase in nonperforming  loans.
OREO  increased  $133,000  as the net result of six  properties  being added and
eight being sold during this period.  All nonaccrual  loans are considered to be
impaired when  determining the valuation  allowance under SFAS 114. The increase
in nonperforming loans is of concern to Management. Progress was made during the
second  quarter  to  identify  problem  and  potential  problem  loans  earlier.
Collection  processes are being  changed to help improve the  timeliness of loan
payments.

                                            June 30,    December 31,
                                              1997          1996

Nonaccrual loans                           $   9,265      $   9,044
Accruing loans past due 90 days or more          222             20
Restructured loans (in compliance with
  modified terms)                                  0              0
                                           ----------     ----------

     Total nonperforming loans                 9,487          9,064

Other real estate owned                        1,522          1,389
                                           ----------     ----------

     Total nonperforming assets             $ 11,009       $ 10,453
                                           ==========     ==========

Nonincome producing investments in real
  estate held by Bank's real estate
    development subsidiary                 $   1,410      $   1,173
                                           ==========     ==========

Nonperforming loans to total loans              2.06%          2.06%
Allowance for loan losses to
  nonperforming loans                             66%            67%
Nonperforming assets to total assets            1.38%          1.50%
Allowance for loan losses to
  nonperforming assets                            57%            58%

Allowance for Loan Loss

The Bank maintains its allowance for loan losses at a level Management  believes
will be adequate to absorb probable  losses  inherent in existing loans,  leases
and  commitments to extend credit,  based on evaluations of the  collectibility,
impairment and prior loss experience of loans,  leases and commitments to extend
credit.

The following table presents information  concerning the allowance and provision
for loan losses.

                                          June 30,              June 30,
                                           1997                  1996
                                                 (in thousands)
Balance, Beginning of period           $     6,097          $      5,580
Provision charged to operations              1,200                    90
Loans charged off                           (1,167)                 (697)
Recoveries of loans previously
  charged off                                  103                   261
                                       ============         =============
Balance, end of period                 $     6,233          $      5,234
                                       ============         =============

Ending loan portfolio                  $   460,741          $    438,426
                                       ============         =============
Allowance for loan losses as a
  percentage of ending loan portfolio         1.35%                 1.19%
                                       ============         =============

Fixed Assets

During the second quarter of 1997 the Bank entered into a $2.5 million  contract
for a building which will house most of the administrative functions of the Bank
and the Company.  Operations which are now performed in four separate  locations
will be consolidated in the new building. Completion of the building is targeted
for late December 1997 to early January 1998.
Equity

The following table indicates the amounts of regulatory capital of the Company.
To Be Well
                                                                                  Capitalized Under
                                                                For Capital       Prompt Corrective
                                         Actual            Adequacy Purposes     Action Provisions
                                     Amount     Ratio        Amount     Ratio      Amount   Ratio
As of  June 30, 1997:
Total Capital
    to Risk Weighted Assets          $59,642   11.78%       =>$40,506 =>8.0%     =>$50,634 =>10.0%
Tier I Capital
    to Risk Weighted Assets          $53,409   10.55%       =>$20,253 =>4.0%     =>$30,380 => 6.0%
PART II

Other Information

(a)   Item 4.      Submission of Matters to a Vote of Security Holders

          (a.)     Annual   Meeting  held  May  20,   1997.   Number  of  shares
                   represented in person or by proxy and  constituting a quorum.
                   3,559,549 77%

          (c.)     Election of directors                VOTES FOR
                                                       ---------
                    Everett B. Beich                   3.480,563
                                                       ---------
                    William J. Casey                   3,479,897
                                                       ---------
                    Craig S. Compton                   3,467,039
                                                       ---------
                    Richard C. Guiton                  3,480,400
                                                       ---------
                    Douglas F. Hignell                 3,480,400
                                                       ---------
                    Brian D. Leidig                    3,480,400
                                                       ---------
                    Wendell J. Lundberg                3,480,400
                                                       ---------
                    Donald E. Murphy                   3,480.400
                                                       ---------
                    Rodney W. Peterson                 3,480,294
                                                       ---------
                    Robert H. Steveson                 3,479,441
                                                       ---------
                    Alex A. Vereschagin, Jr.           3,480,400
                                                       ---------

                   Ratify the  appointment of Arthur Andersen LLP as independent
                   public  accountants  of the  Company  for  1997.  Votes:  FOR
                   3,533,453, AGAINST 878 , ABSTAIN 25,293

(b)  Item 6.       Exhibits Filed Herewith

Exhibit No.                                           Exhibits

         3.1         Articles  of  Incorporation,  as amended to date,  filed as
                     Exhibit 3.1 to Registrant's  Report on Form 10-K, filed for
                     the year ended December 31, 1989, are  incorporated  herein
                     by reference.

         3.2         Bylaws,  as  amended  to  1992,  filed  as  Exhibit  3.2 to
                     Registrant's  Report on Form 10-K, filed for the year ended
                     December 31, 1992, are incorporated herein by reference.

         4.2         Certificate  of  Determination  of  Preferences of Series B
                     Preferred  Stock,  filed  as  Appendix  A  to  Registrant's
                     Registration  Statement  on Form  S-1  (No.  33-22738),  is
                     incorporated herein by reference.

         10.1        Lease for Park Plaza  Branch  premises  entered  into as of
                     September  29,  1978,  by and  between  Park Plaza  Limited
                     Partnership  as lessor  and Tri  Counties  Bank as  lessee,
                     filed as Exhibit 10.9 to the TriCo Bancshares  Registration
                     Statement on Form S-14 (Registration No. 2-74796) is
                     incorporated herein by reference.

         10.2        Lease for Administration Headquarters premises entered into
                     as of April 25, 1986, by and between  Fortress-Independence
                     Partnership (A California  Limited  Partnership)  as lessor
                     and Tri Counties  Bank as lessee,  filed as Exhibit 10.6 to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1986, is incorporated herein by reference.

         10.3        Lease for Data Processing premises entered into as of April
                     25, 1986, by and between Fortress-Independence  Partnership
                     (A  California  Limited  Partnership)  as  lessor  and  Tri
                     Counties   Bank  as  lessee,   filed  as  Exhibit  10.7  to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1986, is incorporated
                     herein by reference.

         10.4        Lease for Chico Mall premises  entered into as of March 11,
                     1988,  by and between  Chico Mall  Associates as lessor and
                     Tri  Counties  Bank as  lessee,  filed as  Exhibit  10.4 to
                     Registrant's  Report on Form 10-K  filed for the year ended
                     December 31, 1988, is incorporated by reference.

         10.5        First amendment to lease entered into as of May 31, 1988 by
                     and between Chico Mall  Associates  and Tri Counties  Bank,
                     filed as Exhibit 10.5 to  Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1988, is incorporated
                     by reference.

         10.9        Employment Agreement of Robert H. Steveson,  dated December
                     12, 1989 between Tri Counties Bank and Robert H.  Steveson,
                     filed as Exhibit 10.9 to  Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1989, is incorporated
                     by reference.

         10.11       Lease  for  Purchasing  and  Printing  Department  premises
                     entered into as of February 1, 1990, by and between  Dennis
                     M.  Casagrande  as lessor and Tri Counties  Bank as lessee,
                     filed as Exhibit 10.11 to Registrant's  Report on Form 10-K
                     filed for the year ended December 31, 1991, is incorporated
                     herein by reference.

         10.12       Addendum to  Employment  Agreement  of Robert H.  Steveson,
                     dated April 9, 1991, filed as Exhibit 10.12 to Registrant's
                     Report on Form 10-K filed for the year ended  December  31,
                     1991, is incorporated herein by reference.

         11.1        Computation of earnings per share.

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

(b)  Reports on Form 8-K:

         None
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 thereunto duly authorized.

                                                   TRICO BANCSHARES

Date       August 4, 1997                           /s/  Robert H. Steveson
          ---------------                           ------------------------
                                                    Robert H. Steveson
                                                    President and
                                                    Chief Executive Officer

Date       August 4, 1997                           /s/  Robert M. Stanberry
          ---------------                           ------------------------
                                                    Robert M. Stanberry
                                                    Vice President and
                                                    Chief Financial Officer