UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

For Quarterly Period Ended September 30, 2007     Commission file number 0-10661
---------------------------------------------     ------------------------------

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

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

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

Registrant's telephone number, including area code:  (530) 898-0300


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

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

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

     Indicate by check mark whether the Registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer" and "large accelerated filer" in Rule 12b-2 of the Act (check one).

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

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act).

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Title of Class:  Common stock, no par value

Outstanding shares as of November 6, 2007:  15,907,550


<PAGE>

                               TABLE OF CONTENTS

                                                                          Page

Forward-Looking Statements                                                  1

PART I - FINANCIAL INFORMATION                                              2

      Item 1 - Financial Statements                                         2

      Notes to Unaudited Condensed Consolidated Financial Statements        6

      Financial Summary                                                    16

      Item 2 - Management's Discussion and Analysis of Financial           17
      Condition and Results of Operations

      Item 3 - Quantitative and Qualitative Disclosures about Market Risk  28

      Item 4 - Controls and Procedures                                     29

PART II - OTHER INFORMATION                                                30

      Item 1 - Legal Proceedings                                           30

      Item 1A - Risk Factors                                               30

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

      Item 6 - Exhibits                                                    31

      Signatures                                                           33

      Exhibits                                                             34



<PAGE>


                           FORWARD-LOOKING STATEMENTS

This  report  on Form  10-Q  contains  forward-looking  statements  about  TriCo
Bancshares (the "Company") for which it claims the protection of the safe harbor
provisions  contained in the Private  Securities  Litigation Reform Act of 1995.
These forward-looking statements are based on Management's current knowledge and
belief and include  information  concerning  the  Company's  possible or assumed
future  financial  condition and results of operations.  When you see any of the
words "believes", "expects", "anticipates", "estimates", or similar expressions,
it may mean making  forward-looking  statements.  A number of  factors,  some of
which are beyond the Company's ability to predict or control, could cause future
results to differ materially from those contemplated.  The reader is directed to
the Company's  annual report on Form 10-K for the year ended  December 31, 2006,
and Part II,  Item 1A of this  report for further  discussion  of factors  which
could  affect  the  Company's  business  and  cause  actual  results  to  differ
materially  from those expressed in any  forward-looking  statement made in this
report.

                                       1
<PAGE>
<TABLE>
<CAPTION>

                         PART I - FINANCIAL INFORMATION

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

                                                                At September 30,         At December 31,
                                                            2007              2006            2006
                                                      -------------------------------   -----------------
<S>                                                         <C>               <C>              <C>
Assets:
     Cash and due from banks                              $70,791           $78,281         $102,220
     Federal funds sold                                       488             1,387              794
                                                      -------------------------------   -----------------
         Cash and cash equivalents                         71,279            79,668          103,014
     Securities available-for-sale                        239,242           209,886          198,361
     Federal Home Loan Bank stock, at cost                  8,652             8,206            8,320
     Loans, net of allowance for loan losses
         of $17,139, $16,993 and $16,914                1,517,937         1,490,166        1,492,965
     Foreclosed assets, net of allowance for
         losses of $180                                       187                 -                -
     Premises and equipment, net                           20,804            21,556           21,830
     Cash value of life insurance                          44,751            42,991           43,536
     Accrued interest receivable                            8,865             8,637            8,727
     Goodwill                                              15,519            15,519           15,519
     Other intangible assets, net                           1,298             3,361            1,666
     Other assets                                          24,989            24,014           26,028
                                                      -------------------------------   -----------------
         Total Assets                                  $1,953,523        $1,904,004       $1,919,966
                                                      ===============================   =================

Liabilities:
     Deposits:
         Noninterest-bearing demand                      $345,467          $357,754         $420,025
         Interest-bearing                               1,186,675         1,167,420        1,179,124
                                                      -------------------------------   -----------------
         Total deposits                                 1,532,142         1,525,174        1,599,149
     Federal funds purchased                               66,000           106,500           38,000
     Accrued interest payable                               6,899             7,341            7,548
     Reserve for unfunded commitments                       2,040             1,849            1,849
     Other liabilities                                     22,483            20,913           22,835
     Other borrowings                                      99,996            35,848           39,911
     Junior subordinated debt                              41,238            41,238           41,238
                                                      -------------------------------   -----------------
         Total Liabilities                              1,770,798         1,738,863        1,750,530
                                                      -------------------------------   -----------------

Commitments and contingencies
Shareholders' Equity:
     Common stock, no par value: 50,000,000 shares
         authorized; issued and outstanding:
         15,891,300 at September 30, 2007                  78,331
         15,857,107 at September 30, 2006                                    73,545
         15,857,207 at December 31, 2006                                                      73,739
     Retained earnings                                    108,022            95,203          100,218
     Accumulated other comprehensive loss, net             (3,628)           (3,607)          (4,521)
                                                      -------------------------------   -----------------
         Total Shareholders' Equity                       182,725           165,141          169,436
                                                      -------------------------------   -----------------
     Total Liabilities and Shareholders' Equity        $1,953,523        $1,904,004       $1,919,966
                                                      ===============================   =================
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.

                                       2

<PAGE>

<TABLE>
<CAPTION>

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

                                          Three months ended September 30,  Nine months ended September 30,
                                                 2007            2006               2007           2006
                                         -----------------------------------------------------------------
<S>                                                <C>             <C>               <C>            <C>
     Interest and dividend income:
     Loans, including fees                       $30,099         $28,901         $88,404        $80,525
     Debt securities:
     Taxable                                       1,874           1,938           5,216          6,548
     Tax exempt                                      354             431           1,123          1,338
     Dividends                                       109             144             332            322
     Federal funds sold                                6               7              14             45
                                         -----------------------------------------------------------------
     Total interest income                        32,442          31,421          95,089         88,778
                                         -----------------------------------------------------------------

     Interest expense:
     Deposits                                      8,078           6,844          23,016         17,707
     Federal funds purchased                         922           1,448           2,458          3,367
     Other borrowings                                768             442           1,764          1,186
     Junior subordinated debt                        834             842           2,475          2,364
                                         ----------------------------------------------------------------
     Total interest expense                       10,602           9,576          29,713         24,624
                                         ----------------------------------------------------------------
     Net interest income                          21,840          21,845          65,376         64,154
                                         ----------------------------------------------------------------
     Provision for loan losses                       700             235           1,682          1,289
                                         ----------------------------------------------------------------
     Net interest income after provision          21,140          21,610          63,694         62,865
        for loan losses                  ----------------------------------------------------------------

     Noninterest income:
     Service charges and fees                      5,218           5,056          15,654         14,869
     Gain on sale of loans                           211             264             756            875
     Commissions on sale of non-deposit              583             447           1,633          1,529
        investment products
     Increase in cash value of life insurance        405             420           1,215          1,223
     Other                                           430             462           1,218          1,132
                                         ----------------------------------------------------------------
     Total noninterest income                      6,847           6,649          20,476         19,628
                                         ----------------------------------------------------------------

     Noninterest expense:
     Salaries and related benefits                 8,975           9,276          28,336         27,050
     Other                                         7,777           7,750          22,819         22,674
                                         ---------------------------------------------------------------
     Total noninterest expense                    16,752          17,026          51,155         49,724
                                         ----------------------------------------------------------------
     Income before income taxes                   11,235          11,233          33,015         32,769
     Provision for income taxes                    4,442           4,413          13,023         12,857
                                         ----------------------------------------------------------------
     Net income                                   $6,793          $6,820         $19,992        $19,912
                                         ================================================================

     Average shares outstanding               15,889,061      15,855,933      15,894,768     15,797,014
     Diluted average shares outstanding       16,310,631      16,365,858      16,396,615     16,378,796
     Per share data:
     Basic earnings                                 $0.43           $0.43      $1.26          $1.26
     Diluted earnings                               $0.42           $0.42      $1.22          $1.22
     Dividends paid                                 $0.13           $0.12      $0.39          $0.36
</TABLE>
     See accompanying notes to unaudited condensed consolidated financial
statements.

                                       3

<PAGE>

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

                                                                     Accumulated
                                    Shares of                            Other
                                    Common     Common    Retained   Comprehensive
                                     Stock      Stock    Earnings       Loss           Total
                                 --------------------------------------------------------------
<S>                                   <C>         <C>        <C>          <C>           <C>
Balance at December 31, 2005      15,707,835     $71,412     $81,906     ($3,825)     $149,493
Comprehensive income:                                                                 --------
Net income                                                    19,912                    19,912
Change in net unrealized gain on
   Securities available for sale, net                                        218           218
                                                                                      ---------
Total comprehensive income                                                              20,130
Stock option vesting                                 468                                   468
Stock options exercised              190,187       1,646                                 1,646
Tax benefit of stock options exercised               205                                   205
Repurchase of common stock           (40,915)       (186)       (923)                   (1,109)
Dividends paid ($0.24 per share)                              (5,692)                   (5,692)
                                 --------------------------------------------------------------
Balance at September 30, 2006     15,857,107     $73,545     $95,203     ($3,607)     $165,141
                                 ==============================================================

Balance at December 31, 2006      15,857,207     $73,739    $100,218     ($4,521)     $169,436
Comprehensive income:                                                                ---------
Net income                                                    19,992                    19,992
Change in net unrealized gain on
   Securities available for sale, net                                        893           893

Total comprehensive income                                                              20,885
Stock option vesting                                 579                                   579
Stock options exercised              362,100       3,863                                 3,863
Tax benefit of stock options exercised             1,707                                 1,707
Repurchase of common stock          (328,007)     (1,557)     (5,987)                   (7,544)
Dividends paid ($0.26 per share)                              (6,201)                   (6,201)
                                 --------------------------------------------------------------
Balance at September 30, 2007     15,891,300     $78,331    $108,022     ($3,628)     $182,725
                                 ==============================================================
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.

                                       4


<PAGE>
<TABLE>
<CAPTION>
                                TRICO BANCSHARES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands; unaudited)
                                                              For the nine months ended September 30,
                                                                     2007               2006
                                                              --------------------------------------
<S>                                                                   <C>                <C>
Operating activities:
Net income                                                         $19,992             $19,912
Adjustments to reconcile net income to net cash provided
   by operating activities:
       Depreciation of property and equipment, and amortization      2,829               2,816
       Amortization of intangible assets                               367               1,046
       Provision for loan losses                                     1,682               1,289
       Amortization of investment securities premium, net              528                 689
       Originations of loans for resale                            (48,628)            (51,959)
       Proceeds from sale of loans originated for resale            48,878              52,338
       Gain on sale of loans                                          (756)               (875)
       Change in market value of mortgage servicing rights             226                 256
       Gain on sale of investments                                       -                 (12)
       Loss on disposal of fixed assets                                  5                  27
       Increase in cash value of life insurance                     (1,215)             (1,223)
       Stock option vesting expense                                    579                 468
       Change in:
         Interest receivable                                          (138)               (996)
         Interest payable                                             (649)              2,835
         Other assets and liabilities, net                           1,525              (1,392)
                                                              --------------------------------------
           Net cash provided by operating activities                23,518              25,219
                                                              --------------------------------------
Investing activities:
Proceeds from maturities of securities available-for-sale           38,954              40,208
Proceeds from sales of securities available-for-sale                     -              10,780
Purchases of securities available-for-sale                         (78,822)               (896)
Purchases of Federal Home Loan Bank stock                             (332)               (604)
Loan originations and principal collections, net                   (26,841)           (122,646)
Proceeds from sale of premises and equipment                            11                   3
Purchases of premises and equipment                                 (2,610)             (2,715)
                                                              --------------------------------------
           Net cash used by investing activities                   (69,640)            (75,870)
                                                              --------------------------------------
Financing activities:
Net (decrease) increase in deposits                                (67,007)             28,377
Net increase in Federal funds purchased                             28,000               9,700
Payments of principal on long-term other borrowings                    (51)                (44)
Proceeds from issuance of long-term other borrowings                50,000                   -
Net change in short-term other borrowings                           10,136               4,502
Repurchase of common stock                                          (2,685)                  -
Dividends paid                                                      (6,201)             (5,692)
Exercise of stock options                                              488                 537
                                                              --------------------------------------
           Net cash provided by financing activities                14,387              37,380
                                                              --------------------------------------
Net change in cash and cash equivalents                            (31,735)            (13,271)
                                                              --------------------------------------
Cash and cash equivalents and beginning of period                  103,014              92,939
                                                              --------------------------------------
Cash and cash equivalents at end of period                         $71,279             $79,668
                                                              ======================================
Supplemental disclosure of noncash activities:
Unrealized gain on securities available for sale                    $1,541                $377
Income tax benefit from stock option exercises                      $1,707                $205
Value of common stock tendered, in lieu of cash,
  to pay for exercise of stock options                              $4,859              $1,109
Supplemental disclosure of cash flow activity:
Cash paid for interest expense                                     $30,362             $21,789
Cash paid for income taxes                                         $12,300             $15,100

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

                                       5

<PAGE>

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: General  Summary of  Significant  Accounting  Policies The  accompanying
unaudited  condensed  consolidated  financial  statements  have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and pursuant to the rules and  regulations  of the  Securities  and
Exchange Commission. The results of operations reflect interim adjustments,  all
of  which  are of a  normal  recurring  nature  and  which,  in the  opinion  of
management, are necessary for a fair presentation of the results for the interim
periods  presented.  The interim results are not  necessarily  indicative of the
results  expected  for the full year.  These  unaudited  condensed  consolidated
financial statements should be read in conjunction with the audited consolidated
financial  statements  and  accompanying  notes  as  well as  other  information
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2006.

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

Nature of Operations
The Company  operates 32 branch  offices and 25 in-store  branch  offices in the
California  counties of Butte,  Contra Costa, Del Norte,  Fresno,  Glenn,  Kern,
Lake, Lassen,  Madera,  Mendocino,  Merced,  Napa, Nevada,  Placer,  Sacramento,
Shasta,  Siskiyou,  Stanislaus,  Sutter,  Tehama,  Tulare,  Yolo and  Yuba.  The
Company's  operating  policy since its inception has emphasized  retail banking.
Most of the Company's  customers are retail  customers and small to medium-sized
businesses.

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

Significant Group Concentration of Credit Risk

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

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

Investment Securities
The Company  classifies its debt and marketable  equity  securities  into one of
three  categories:  trading,  available-for-sale  or  held-to-maturity.  Trading
securities  are bought and held  principally  for the  purpose of selling in the
near term.  Held-to-maturity  securities are those  securities which the Company
has the  ability and intent to hold until  maturity.  All other  securities  not
included in trading or  held-to-maturity  are classified as  available-for-sale.
During the nine months  ended  September  30, 2007,  and  throughout  2006,  the
Company did not have any  securities  classified as either  held-to-maturity  or
trading.

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

                                       6

<PAGE>

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

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

Loans Held for Sale
Loans  originated  and intended for sale in the secondary  market are carried at
the  lower  of  aggregate  cost  or  fair  value,  as  determined  by  aggregate
outstanding  commitments from investors of current investor yield  requirements.
Net unrealized losses are recognized through a valuation allowance by charges to
income.  At September  30, 2007 and 2006,  and December 31, 2006,  the Company's
balance of loans held for sale was immaterial.

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

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

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

                                       7

<PAGE>

Allowance for Loan Losses

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

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

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

The Company's method for assessing the appropriateness of the allowance for loan
losses and the reserve for unfunded commitments includes specific allowances for
identified problem loans and leases as determined by SFAS 114, formula allowance
factors for pools of credits, and allowances for changing  environmental factors
(e.g., interest rates, growth, economic conditions, etc.). Allowance factors for
loan  pools are based on the  previous 5 years  historical  loss  experience  by
product type.  Allowances  for specific  loans are based on SFAS 114 analysis of
individual   credits.   Allowances  for  changing   environmental   factors  are
Management's  best estimate of the probable impact these changes have had on the
loan  portfolio as a whole.  This process is explained in detail in the notes to
the Company's audited consolidated  financial statements in its Annual Report on
Form 10-K for the year ended December 31, 2006.

Based on the current conditions of the loan portfolio,  Management believes that
the  allowance for loan losses and the reserve for unfunded  commitments,  which
collectively  stand at $19,179,000 at September 30, 2007, are adequate to absorb
probable losses  inherent in the Company's loan  portfolio.  No assurance can be
given, however, that adverse economic conditions or other circumstances will not
result in increased losses in the portfolio.

                                       8

<PAGE>

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

<TABLE>
<CAPTION>

                                             Three months ended             Nine months ended
                                                September 30,                  September 30,
                                           ------------------------------------------------------
                                              2007          2006           2007           2006
                                           ------------------------------------------------------
<S>                                            <C>           <C>            <C>           <C>
     Allowance for loan losses:
     Balance at beginning of period         $16,999       $16,893         $16,914       $16,226
     Provision for loan losses                  700           235           1,682         1,289
     Loans charged off                         (843)         (368)         (2,333)       (1,289)
     Recoveries of previously
       charged-off loans                        283           233             876           767
                                           ------------------------------------------------------
       Net charge-offs                         (560)         (135)         (1,457)         (522)
                                           ------------------------------------------------------
     Balance at end of period               $17,139       $16,993         $17,139       $16,993
                                           ======================================================

     Reserve for unfunded commitments:
     Balance at beginning of period          $2,040        $1,849          $1,849        $1,813
     Provision for losses -
       Unfunded commitments                       -             -             191            36
                                           ------------------------------------------------------
     Balance at end of period                $2,040        $1,849          $2,040        $1,849
                                           ======================================================

     Balance at end of period:
     Allowance for loan losses                                            $17,139       $16,993
     Reserve for unfunded commitments                                       2,040         1,849
                                                                          ---------------------
     Allowance for losses                                                 $19,179       $18,842
                                                                          =====================

     As a percentage of total loans:
     Allowance for loan losses                                              1.12%          1.13%
     Reserve for unfunded commitments                                       0.13%          0.12%
                                                                          ----------------------
     Allowance for losses                                                   1.25%          1.25%
                                                                          ======================
</TABLE>

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

Effective with the Company's early adoption of SFAS 156, beginning as of January
1, 2006 MSRs are carried at fair value,  with changes in fair value  reported in
noninterest  income  in the  period  in which the  change  occurs.  On or before
December  31, 2005,  MSRs were carried at the lower of amortized  cost or market
value.  The  cumulative  effect  related  to the  adoption  of  this  change  in
accounting from lower of amortized cost or market value to fair value on January
1, 2006 was immaterial.

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

                                       9
<PAGE>

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


                                           Nine months ended September 30,
                                           -------------------------------
                                               2007              2006
                                           -------------------------------
Mortgage servicing rights:
Balance at beginning of period               $3,912            $3,638
Additions                                       506               496
Change in fair value                           (226)             (256)
                                           -------------------------------
Balance at end of period                     $4,192            $3,878
                                           ===============================
Servicing fees received                        $737              $712
Balance of loans serviced at:
     Beginning of period                   $389,636          $373,163
     End of period                         $402,806          $384,862
Weighted-average prepayment speed (CPR)        11.6%             12.1%
Discount rate                                  10.0%             10.0%

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

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

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

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

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

The following table summarizes the Company's goodwill intangible as of September
30, 2007 and December 31, 2006.

                             December 31,                          September 30,
   (Dollars in Thousands)      2006       Additions     Reductions    2007
                            ----------------------------------------------------
   Goodwill                  $15,519         -              -            $15,519
                            ====================================================

                                       10

<PAGE>

The following table summarizes the Company's core deposit intangibles as of
September 30, 2007 and December 31, 2006.

                              December 31,                         September 30,
   (Dollars in Thousands)        2006      Additions     Reductions   2007
                            ----------------------------------------------------
   Core deposit intangibles    $13,643          -        ($10,278)     $3,365
   Accumulated amortization    (11,977)     $10,278          (368)     (2,067)
                            ----------------------------------------------------
   Core deposit intangibles,    $1,666      $10,278      ($10,646)     $1,298
     net                    ====================================================

Core deposit  intangibles are amortized over their expected  useful lives.  Such
lives are  periodically  reassessed  to  determine  if any  amortization  period
adjustments are indicated.

The following table summarizes the Company's  estimated core deposit  intangible
amortization for each of the five succeeding years:

                                                 Estimated Core Deposit
                                                 Intangible Amortization
                           Years Ended            (Dollars in thousands)
                         -----------------------------------------------
                              2007                          $490
                              2008                          $523
                              2009                          $328
                              2010                          $260
                              2011                           $65
                           Thereafter                          -

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

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

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

                                       11

<PAGE>

Stock-Based Compensation
On  January  1, 2006 the  Company  adopted  Statement  of  Financial  Accounting
Standards No. 123 (revised  2004),  Share-Based  Payment (SFAS 123R),  using the
modified-prospective   transition   method.   Under  this   transition   method,
compensation cost recognized during the nine months ended September 30, 2007 and
September 30, 2006 include:  (a)  compensation  cost for all share-based  awards
granted prior to, but not yet vested as of, January 1, 2007 and January 1, 2006,
respectively,  based on the  grant-date  fair value and related  service  period
estimates  in  accordance  with  the  original  provisions  of SFAS  123 and (b)
compensation  cost for all share-based  awards granted  subsequent to January 1,
2007 and January 1, 2006,  respectively,  based on the grant-date fair value and
related  service  periods  estimated in accordance  with the  provisions of SFAS
123R. Historically, stock options are the only type of share-based award granted
by the Company.

Prior to the adoption of SFAS 123R, the Company used the intrinsic  value method
to account for its stock  option plans (in  accordance  with the  provisions  of
Accounting  Principles Board Opinion No. 25).  Intrinsic value is the difference
between share fair market value and option  exercise  price.  Under this method,
compensation  expense was recognized for awards of options to purchase shares of
common stock to employees under compensatory plans only if the fair market value
of the stock at the option grant date (or other  measurement date, if later) was
greater  than the amount the  employee was required to pay to acquire the stock.
Statement of Financial  Accounting Standards No. 123, Accounting for Stock-Based
Compensation  (SFAS 123),  permitted  companies to continue  using the intrinsic
value  method or to adopt a fair value based  method to account for stock option
plans.  The fair value based method would have resulted in the  recognition,  as
expense over the vesting period, of the fair value of all stock-based  awards on
the date of grant.

SFAS 123R  clarifies  and  expands the  guidance  in SFAS 123 in several  areas,
including  measuring fair value and attributing  compensation  cost to reporting
periods.  SFAS 123R  includes a  requirement  to: (a)  estimate  forfeitures  of
share-based awards at the date of grant, (b) expense  share-based awards granted
to  retirement  eligible  employees  and those  employees  with  non-substantive
non-compete  agreements   immediately,   (c)  attribute  compensation  costs  of
share-based award grants to the stated future vesting period,  and (d) recognize
compensation cost of all share-based awards based upon the grant-date fair value
(including pre-2006 options).

The following table shows the number, weighted-average exercise price, intrinsic
value, and weighted average remaining  contractual life, of options exercisable,
options not yet exercisable,  and total options  outstanding as of September 30,
2007:

<TABLE>
<CAPTION>

                                                      Currently     Currently Not     Total
(dollars in thousands except exercise price)         Exercisable     Exercisable   Outstanding
<S>                                                      <C>             <C>           <C>
Number of options                                    1,044,077         322,354      1,366,431
Weighted average exercise price                         $12.46          $21.51         $14.59
Intrinsic value                                        $10,245            $245        $10,490
Weighted average remaining contractual term (yrs.)        4.97            8.86           5.89
</TABLE>

The  options  for  322,354  shares  that  are not  currently  exercisable  as of
September 30, 2007 are expected to vest, on a  weighted-average  basis, over the
next 3.04  years,  and the  Company  is  expected  to  recognize  $1,961,000  of
compensation costs related to these options as they vest.

                                       12

<PAGE>

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

Earnings per share have been computed based on the following:
<TABLE>
<CAPTION>

                                                         Three Months         Nine Months
                                                    Ended September 30,   Ended September 30,
(in thousands)                                         2007      2006      2007    2006
                                                   -------------------    --------------------
<S>                                                   <C>         <C>        <C>       <C>
Net income                                         $6,793       $6,820     $19,992    $19,912

Average number of common shares outstanding        15,889       15,856      15,895     15,797
Effect of dilutive stock options                      422          510         502        582
                                                   -------------------    --------------------
Average number of common shares outstanding
   used to calculate diluted earnings per share    16,311       16,366      16,397     16,379
                                                   ====================    ===================
</TABLE>

There were 302,050 and 42,000 options  excluded from the  computation of diluted
earnings per share for the nine month periods ended September 30, 2007 and 2006,
respectively, because the effect of these options was antidilutive.

Comprehensive Income

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

The components of other comprehensive  income (loss) and related tax effects are
as follows:

<TABLE>
<CAPTION>

                                                         Three Months         Nine Months
                                                    Ended September 30,   Ended September 30,
(in thousands)                                         2007      2006      2007    2006
                                                   -------------------   -------------------
<S>                                                   <C>         <C>        <C>       <C>
Unrealized holding gains (losses) on
   available-for-sale securities                    $1,987      $3,490      $1,541     $377
Tax effect                                            (836)     (1,468)       (648)    (159)
                                                   -------------------   -------------------
Unrealized holding gains (losses) on
   available-for-sale securities, net of tax        $1,151      $2,022        $893     $218
                                                   ===================   ====================
</TABLE>

The   components  of  accumulated   other   comprehensive   loss,   included  in
shareholders' equity, are as follows:
<TABLE>
<CAPTION>
                                                          September 30,   December 31,
                                                            2007            2006
                                                         --------------------------
<S>                                                          <C>             <C>
(in thousands)
Net unrealized losses on available-for-sale securities   ($2,314)         ($3,855)
Tax effect                                                   973            1,621
                                                         --------------------------
    Unrealized holding losses on
    available-for-sale securities, net of tax             (1,341)          (2,234)
                                                         --------------------------

Minimum pension liability                                 (3,946)          (3,946)
Tax effect                                                 1,659            1,659
                                                         --------------------------
   Minimum pension liability, net of tax                  (2,287)          (2,287)
                                                         --------------------------
Accumulated other comprehensive loss                     ($3,628)         ($4,521)
                                                         ==========================
</TABLE>

                                       13

<PAGE>

Retirement Plans

The  Company  has  supplemental  retirement  plans  covering  directors  and key
executives.  These  plans  are  non-qualified  defined  benefit  plans  and  are
unsecured and unfunded.  The Company has purchased insurance on the lives of the
participants  and  intends to use the cash  values of these  policies to pay the
retirement obligations.  The following table sets forth the net periodic benefit
cost recognized for the plans:

<TABLE>
<CAPTION>


                                                                Three Months        Nine Months
                                                             Ended September 30, Ended September 30,
                                                            ----------------------------------------
(in thousands)                                                2007       2006       2007     2006
                                                              ----       ----       ----     ----
<S>                                                            <C>        <C>        <C>      <C>
Net pension cost included the following components:
Service cost-benefits earned during the period                $150       $139       $450     $417
Interest cost on projected benefit obligation                  146        132        438      396
Amortization of net obligation at transition                     1          1          1        2
Amortization of prior service cost                              45         50        135      150
Recognized net actuarial loss                                   28         34         84      102
                                                            ---------------------------------------
Net periodic pension cost                                     $370       $356     $1,108   $1,067
                                                            =======================================
</TABLE>

During  the  nine  months  ended  September  30,  2007  and  2006,  the  Company
contributed  and paid out as benefits  $405,000 and $409,000,  respectively,  to
participants under the plans. For the year ending December 31, 2007, the Company
expects to contribute and pay out as benefits $528,000 to participants under the
plans.

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

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

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

                                       14

<PAGE>

TheCompany  has no other defined  benefit  post-retirement  benefit  plans.  The
requirement to measure plan assets and benefit obligations as of the date of the
year-end  statement  of  financial  position  is  effective  for  the  Company's
consolidated  financial  statements  beginning  with the fiscal year ended after
December 15, 2008.  The Company  currently  uses December 31 as the  measurement
date for its defined  benefit  post-retirement  benefit plans. In February 2007,
the FASB issued FASB  Statement of Financial  Accounting  Standards No. 159, The
Fair Value Option for Financial Assets and Financial  Liabilities - Including an
amendment to FASB  Statement  No. 115 (SFAS 159).  SFAS 159 permits  entities to
choose to measure many  financial  instruments  and certain  other items at fair
value.  The objective is to improve  financial  reporting by providing  entities
with the  opportunity  to mitigate  volatility  in reported  earnings  caused by
measuring  related assets and  liabilities  differently  without having to apply
complex hedge  accounting  provisions.  SFAS 159 is effective for the Company on
January  1,  2008  and is not  expected  to  have a  significant  impact  on the
Company's consolidated financial statements.

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

In September  2006,  the Emerging  Issues Task Force (EITF) of the FASB ratified
EITF Issue No. 06-4,  Accounting for Deferred  Compensation  and  Postretirement
Benefit Aspects of Endorsement Split-Dollar Life Insurance Agreements,  and EITF
Issue No. 06-5,  Accounting  for Purchases of Life  Insurance - Determining  the
Amount That Could Be Realized in  Accordance  with FASB  Technical  Bulletin No.
85-4,  Accounting  for Purchases of Life  Insurance.  EITF 06-4 provides that an
employer  should  recognize  a  liability  for  future  benefits  based  on  the
substantive  agreement with the employee.  The Issue should be applied to fiscal
years  beginning after December 15, 2007,  with earlier  application  permitted.
EITF 06-5  provides that in  determining  the amount  recognized as an asset,  a
policyholder  should consider the cash surrender value as well as any additional
amounts  included in the contractual  terms of the policy that will be paid upon
surrender.  The  amount  that  could be  realized  should be  calculated  at the
individual  policy  level and consider  any  probable  contractual  limitations,
including the exclusion of any  additional  amounts paid for the surrender of an
entire group of  policies.  The Issue is  effective  for fiscal years  beginning
after  December  15,  2007.  The Company has life  insurance  arrangements.  The
Company is  currently  evaluating  the impact of  adoption of these rules on the
Company's consolidated financial statements.

Reclassifications
Certain amounts previously  reported in the 2006 financial  statements have been
reclassified to conform to the 2007 presentation.  These  reclassifications  did
not affect previously reported net income or total shareholders' equity.

                                       15

<PAGE>

<TABLE>
<CAPTION>

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

                                                       Three months ended        Nine months ended
                                                         September 30,             September 30,
                                                ----------------------------------------------------------
                                                      2007            2006         2007          2006
                                                ----------------------------------------------------------
<S>                                                  <C>              <C>          <C>             <C>
Net Interest Income (FTE)                         22,031           22,077        66,005         $64,903
Provision for loan losses                            700              235         1,682           1,289
Noninterest income                                 6,847            6,649        20,476          19,628
Noninterest expense                               16,752           17,026        51,155          49,724
Provision for income taxes (FTE)                   4,633            4,645        13,652          13,606
                                                ----------------------------------------------------------
     Net income                                   $6,793           $6,820       $19,992         $19,912
                                                ==========================================================

Earnings per share:
     Basic                                        $0.43             $0.43         $1.26          $1.26
     Diluted                                      $0.42             $0.42         $1.22          $1.22
Per share:
     Dividends paid                               $0.13             $0.12         $0.39          $0.36
     Book value at period end                    $11.50            $10.41
     Tangible book value at period end           $10.44             $9.22

Average common shares outstanding                15,889            15,856        15,895         15,797
Average diluted shares outstanding               16,311            16,366        16,397         16,379
Shares outstanding at period end                 15,891            15,857
At period end:
     Loans, net                              $1,517,937        $1,490,166
     Total assets                             1,953,523         1,904,004
     Total deposits                           1,532,142         1,525,174
     Other borrowings                            99,996            35,848
     Junior subordinated debt                    41,238            41,238
     Shareholders' equity                       182,725          $165,141
Financial Ratios:
During the period (annualized):
      Return on assets                             1.44%             1.45%         1.42%          1.43%
      Return on equity                            14.92%            16.64%        14.94%         16.75%
      Net interest margin(1)                       5.12%             5.19%         5.16%          5.17%
      Net loan charge-offs to average loans        0.15%             0.04%         0.13%          0.05%
      Efficiency ratio(1)                         58.01%            59.27%         59.15%        58.82%
At Period End:
      Equity to assets                             9.35%            8.67%
      Total capital to risk assets                11.66%           11.08%
      Allowance for losses to loans(2)             1.25%            1.25%
</TABLE>

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

                                       16

<PAGE>

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

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

Critical Accounting Policies and Estimates
The Company's  discussion and analysis of its financial condition and results of
operations  are  based  upon  the  Company's  unaudited  condensed  consolidated
financial  statements,  which have been prepared in accordance  with  accounting
principles  generally accepted in the United States of America.  The preparation
of these  financial  statements  requires  the  Company  to make  estimates  and
judgments that affect the reported amounts of assets, liabilities,  revenues and
expenses,  and related  disclosure of contingent  assets and liabilities.  On an
on-going basis, the Company evaluates its estimates,  including those related to
the  adequacy  of  the  allowance  for  loan  losses,   intangible  assets,  and
contingencies.  The Company bases its estimates on historical  experience and on
various  other  assumptions  that  are  believed  to  be  reasonable  under  the
circumstances,  the results of which form the basis for making  judgments  about
the carrying values of assets and liabilities that are not readily apparent from
other sources.  Actual results may differ from these  estimates  under different
assumptions or conditions.  (See  "Allowance for Loan Losses" in Part I, Item 1,
for a more detailed discussion).

Results of Operations
The  following   discussion  and  analysis  is  designed  to  provide  a  better
understanding  of the significant  changes and trends related to the Company and
the  Bank's  financial  condition,   operating  results,   asset  and  liability
management,  liquidity and capital  resources and should be read in  conjunction
with the unaudited condensed  consolidated  financial  statements of the Company
and the Notes thereto at Part I, Item 1, of this Form 10-Q.

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

                                   Three months ended         Nine months ended
                                      Spetember 30,              September 30,
                                 -----------------------------------------------
                                  2007          2006           2007       2006
                                 -----------------------------------------------
Net Interest Income (FTE)        $22,031     $22,077         $66,005    $64,903
Provision for loan losses            700         235           1,682      1,289
Noninterest income                 6,847       6,649          20,476     19,628
Noninterest expense               16,752      17,026          51,155     49,724
Provision for income taxes (FTE)   4,633       4,645          13,652     13,606
                                 -----------------------------------------------
Net income                        $6,793      $6,820         $19,992    $19,912
                                 ===============================================

The Company had quarterly  earnings of  $6,793,000,  or $0.42 per diluted share,
for the three months ended September 30, 2007. These results represent no change
from the $0.42  earnings per diluted  share  reported for the three months ended
September 30, 2006 on earnings of $6,820,000.

The Company  reported  earnings of $19,992,000,  or $1.22 per diluted share, for
the nine months ended September 30, 2007. These results represent no change from
the  $1.22  earnings  per  diluted  share  reported  for the nine  months  ended
September 30, 2006 on earnings of $19,912,000.

                                       17

<PAGE>

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

                                Three months ended             Nine months ended
                                   September 30,                 September 30,
                                ------------------------------------------------
                                 2007         2006         2007         2006
                                ------------------------------------------------
   Interest income              $32,442      $31,421       $95,089      $88,778
   Interest expense             (10,602)      (9,576)      (29,713)     (24,624)
   FTE adjustment                   191          232           629          749
                                ------------------------------------------------
      Net interest income (FTE) $22,031      $22,077       $66,005      $64,903
                                ================================================
   Average interest-earning  $1,721,547   $1,701,166    $1,704,342   $1,675,027
     assets
   Net interest margin (FTE)      5.12%         5.19%         5.16%        5.17%

The  Company's  primary  source  of  revenue  is  net  interest  income,  or the
difference  between  interest  income on  interest-earning  assets and  interest
expense in interest-bearing liabilities.

Net interest  income (FTE) during the third  quarter of 2007  decreased  $46,000
(0.2%) from the same period in 2006 to $22,031,000. The decrease in net interest
income (FTE) was due to a 0.07%  decrease in net interest  margin (FTE) to 5.12%
that was  substantially  offset by a  $20,381,000  (1.2%)  increase  in  average
balances of interest-earning assets to $1,721,547,000.

Net  interest  income  (FTE)  during  the first  nine  months of 2007  increased
$1,102,000  (1.7%) from the same period in 2006 to $66,005,000.  The increase in
net interest  income (FTE) was due to a $29,315,000  (1.8%)  increase in average
balances of interest-earning  assets to $1,704,342,000 that was partially offset
by a 0.01% decrease in net interest margin (FTE) to 5.16%.


Interest and Fee Income
Interest and fee income (FTE) for the third quarter of 2007  increased  $980,000
(3.1%) from the third  quarter of 2006.  The increase  was due to a  $20,381,000
(1.2%) increase in average interest-earning assets to $1,721,547,000 and a 0.14%
increase in the yield on those  average  interest-earning  assets to 7.58%.  The
growth in  interest-earning  assets was due to a $39,868,000  (2.7%) increase in
average loan balances to $1,517,419,000  that was partially offset by a decrease
of $19,358,000  (8.7%) in average balances of investments to  $203,673,000.  The
increase  in the yield on  average  interest-earning  assets was mainly due to a
0.11%  increase  in yield on loans to 7.93% and a change  in the mix of  earning
assets from lower-earning investments towards higher-earning loans.

Interest  and fee income  (FTE) for the nine  months  ended  September  30, 2007
increased  $6,191,000  (6.9%) from the same period of 2006. The increase was the
net effect of a $29,315,000 (1.8%) increase in average  interest-earning  assets
to  $1,704,342,000   and  a  0.36%  increase  in  the  yield  on  those  average
interest-earning  assets to 7.49%. The growth in interest-earning assets was due
to a $74,661,000 (5.2%) increase in average loan balances to $1,504,865,000 that
was partially offset by a decrease of $44,491,000 (18.3%) in average balances of
investments   to   $199,099,000.   The   increase   in  the  yield  on   average
interest-earning  assets was mainly due to a 0.32% increase in yield on loans to
7.83% and a change in the mix of earning assets from  lower-earning  investments
towards higher-earning loans.

                                       18

<PAGE>

Interest Expense
Interest  expense  increased  $1,026,000  (10.7%)  to  $10,602,000  in the third
quarter  of 2007  compared  to the  year-ago  quarter.  The  average  balance of
interest-bearing  liabilities  decreased  $3,648,000 (0.3%) to $1,333,948,000 in
the third quarter compared to the year-ago quarter.  The decrease in the average
balance of  interest-bearing  liabilities  was  concentrated  in  Federal  funds
purchased (down  $36,600,000 or 34.1%) and demand deposits (down  $11,337,000 or
4.9%). In addition, the average balance of other borrowings and savings deposits
increased  $28,655,000  (78.9%) and $10,969,000 (2.9%),  respectively,  from the
year-ago quarter.  The average rate paid on interest-bearing  liabilities in the
quarter  ended  September  30,  2007  increased  0.32% to 3.18%  compared to the
year-ago  quarter as a result of increases in market  interest rates and changes
in the mix of interest-bearing liabilities towards higher paying liabilities.

Interest expense increased $5,089,000 (20.7%) to $29,713,000 for the nine months
ended September 30, 2007 compared to the year-ago nine month period. The average
balance  of  interest-bearing   liabilities   decreased   $1,902,000  (0.1%)  to
$1,313,548,000  for the nine months  ended  September  30, 2007  compared to the
year-ago period. The decrease in  interest-bearing  liabilities was concentrated
in Federal funds purchased (down  $27,477,000 or 30.7%),  savings deposits (down
$19,733,000  or 4.9%)  and  demand  deposits  (down  $14,983,000  or  6.2%).  In
addition,  for the nine months ended  September 30, 2007, the average balance of
time deposits and other borrowings increased  $44,190,000 (8.7%) and $16,101,000
(48.0%),  respectively,  from the  year-ago  period.  The  average  rate paid on
interest-bearing  liabilities in the nine month period ended  September 30, 2007
increased  0.52%  to 3.02%  compared  to the  year-ago  period  as a  result  of
increases in market  interest  rates and changes in the mix of  interest-bearing
liabilities towards higher paying liabilities.

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

                                     Three months ended        Nine months ended
                                        September 30,              September 30,
                                     -------------------------------------------
                                      2007         2006         2007       2006
                                     -------------------------------------------
Yield on interest-earning assets      7.58%        7.44%        7.49%      7.13%
Rate paid on interest-bearing
     Liabilities                      3.18%        2.86%        3.02%      2.50%
                                     -------------------------------------------
     Net interest spread              4.40%        4.58%        4.47%      4.63%
Impact of all other net
     noninterest-bearing funds        0.72%        0.61%        0.69%      0.54%
                                     -------------------------------------------
        Net interest margin           5.12%        5.19%        5.16%      5.17%
                                     ===========================================

Net  interest  margin for the three months ended  September  30, 2007  decreased
0.07%  compared to the three months ended  September 30, 2006.  This decrease in
net  interest  margin was mainly due to an 0.11%  increase  in the impact of net
noninterest-bearing funds to 0.72% from 0.61% in the year-ago three month period
that was more than  offset by a 0.18%  decrease  in net  interest  spread as the
average yield on interest-earning  assets increased 0.14% while the average rate
paid on  interest-bearing  liabilities  increased  0.32% from the year-ago three
month period.

Net interest margin for the nine months ended September 30, 2007 decreased 0.01%
compared to the nine months  ended  September  30,  2006.  This  decrease in net
interest  margin  was  mainly  due to a  0.15%  increase  in the  impact  of net
noninterest-bearing  funds to 0.69% from 0.54% in the year-ago nine month period
that was more than  offset by a 0.16%  decrease  in net  interest  spread as the
average yield on interest-earning  assets increased 0.36% while the average rate
paid on  interest-bearing  liabilities  increased  0.52% from the year-ago three
month period.

                                       19

<PAGE>

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

<TABLE>
<CAPTION>

                                                          For the three months ended
                                       ----------------------------------------------------------------
                                           September 30, 2007                   September 30, 2006
                                       -----------------------------    -------------------------------
                                                   Interest    Rates               Interest    Rates
                                         Average   Income/    Earned     Average   Income/    Earned
                                         Balance   Expense     Paid      Balance   Expense     Paid
                                       -----------------------------    ------------------------------
<S>                                       <C>        <C>       <C>          <C>      <C>        <C>
Assets:
Loans                                  $1,517,419  $30,099    7.93%     $1,477,551 $28,901     7.82%
Investment securities - taxable           174,472    1,983    4.55%        188,021   2,082     4.43%
Investment securities - nontaxable         29,201      545    7.47%         35,010     663     7.58%
Federal funds sold                            455        6    5.27%            584       7     4.79%
                                       -----------------------------    ------------------------------
Total interest-earning assets           1,721,547   32,633    7.58%      1,701,166  31,653     7.44%
                                                    ------                          ------
Other assets                              170,445                          178,863
                                          -------                          -------
Total assets                           $1,891,992                       $1,880,029
                                       ==========                       ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits         $220,582      114    0.21%       $231,919     118     0.20%
Savings deposits                          388,315    1,761    1.81%        377,346     906     0.96%
Time deposits                             548,229    6,203    4.53%        543,564   5,820     4.28%
Federal funds purchased                    70,602      922    5.22%        107,202   1,448     5.40%
Other borrowings                           64,982      768    4.73%         36,327     442     4.87%
Junior subordinated debt                   41,238      834    8.09%         41,238     842     8.17%
                                       -----------------------------    ------------------------------
Total interest-bearing liabilities      1,333,948   10,602    3.18%      1,337,596   9,576     2.86%
                                                    ------                          ------
Noninterest-bearing deposits              342,667                          348,801
Other liabilities                                   33,297                              29,713
Shareholders' equity                      182,080                          163,919
                                          -------                          -------
Total liabilities and shareholders'    $1,891,992                       $1,880,029
  equity                               ==========                       ==========
Net interest spread(1)                                        4.40%                            4.58%
Net interest income and interest margin(2)         $22,031    5.12%                $22,077     5.19%
                                                   ================                =================
</TABLE>

(1)  Net interest spread represents the average yield earned on interest-earning
     assets minus the average rate paid on interest-bearing liabilities.

(2)  Net  interest  margin is computed by  calculating  the  difference  between
     interest   income  and   expense,   divided  by  the  average   balance  of
     interest-earning assets.

                                       20

<PAGE>

<TABLE>
<CAPTION>

                                                           For the nine months ended
                                       ---------------------------------------------------------------
                                           September 30, 2007                 September 30, 2006
                                       -----------------------------    ------------------------------
                                                   Interest    Rates               Interest    Rates
                                         Average   Income/    Earned     Average   Income/    Earned
                                         Balance   Expense     Paid      Balance   Expense     Paid
                                       -----------------------------    ------------------------------
<S>                                       <C>        <C>       <C>          <C>      <C>        <C>
Assets:
Loans                                  $1,504,865  $88,404    7.83%     $1,430,204 $80,525     7.51%
Investment securities - taxable           168,363    5,548    4.39%        208,667   6,870     4.39%
Investment securities - nontaxable         30,736    1,752    7.60%         34,923   2,087     7.97%
Federal funds sold                            378       14    4.94%          1,233      45     4.87%
                                       ----------------------------     ------------------------------

Total interest-earning assets           1,704,342   95,718    7.49%      1,675,027  89,527     7.13%
                                                   -------                         -------
Other assets                              171,978                          176,118
                                          -------                          -------
Total assets                           $1,876,320                       $1,851,145
                                       ==========                       ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits         $225,402      343    0.20%       $240,385     362     0.20%
Savings deposits                          384,366    4,418    1.53%        404,099   2,562     0.85%
Time deposits                             550,783   18,255    4.42%        506,593  14,783     3.89%
Federal funds purchased                    62,115    2,458    5.28%         89,592   3,367     5.01%
Other borrowings                           49,644    1,764    4.74%         33,543   1,186     4.71%
Junior subordinated debt                   41,238    2,475    8.00%         41,238   2,364     7.64%
                                       ----------------------------     -----------------------------
Total interest-bearing liabilities      1,313,548   29,713    3.02%      1,315,450  24,624     2.50%
                                                   -------                         -------
Noninterest-bearing deposits              351,050                          348,278
Other liabilities                                   33,309                              28,867
Shareholders' equity                      178,413                          158,550
                                       ----------                       -----------
Total liabilities and shareholders'    $1,876,320                       $1,851,145
  equity                               ==========                       ===========
Net interest spread(1)                                        4.47%                            4.63%
Net interest income and interest margin(2)         $66,005    5.16%                 64,903     5.17%
                                                   ================                =================
</TABLE>


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

                                       21

<PAGE>

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

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

                                           Three months ended September 30, 2007
                                                 compared with three months
                                                  ended September 30, 2006
                                           -------------------------------------
                                               Volume        Rate        Total
                                           -------------------------------------
Increase (decrease) in interest income:
Loans                                            $779        $419      $1,198
Investment securities                            (260)         43        (217)
Federal funds sold                                 (2)          1          (1)
                                           -------------------------------------
   Total interest-earning assets                  517         463         980
                                           -------------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                   (6)          2          (4)
Savings deposits                                   26         829         855
Time deposits                                      50         333         383
Federal funds purchased                          (494)        (32)       (526)
Other borrowings                                  349         (23)        326
Junior subordinated debt                            -          (8)         (8)
                                           -------------------------------------
   Total interest-bearing liabilities             (75)      1,101       1,026
                                           -------------------------------------
Increase in Net Interest Income                  $592       ($638)       ($46)
                                           =====================================


                                           Nine  months ended September 30, 2007
                                            compared with nine months ended
                                                  September 30, 2006
                                          --------------------------------------
                                           Volume           Rate           Total
                                          --------------------------------------
Increase (decrease) in interest income:
Loans                                      $4,205         $3,674         $7,879
Investment securities                      (1,577)           (80)        (1,657)
Federal funds sold                            (31)             -            (31)
                                          --------------------------------------
   Total interest-earning assets            2,597          3,594          6,191
                                          --------------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits              (22)             3            (19)
Savings deposits                             (126)         1,982          1,856
Time deposits                               1,289          2,183          3,472
Federal funds purchased                    (1,032)           123           (909)
Other borrowings                              569              9            578
Junior subordinated debt                        -            111            111
                                          --------------------------------------
   Total interest-bearing liabilities         678          4,411          5,089
                                          --------------------------------------
Increase in Net Interest Income            $1,919          ($817)        $1,102
                                          ======================================

                                       22

<PAGE>

Provision for Loan Losses
The  Company  provided  $700,000  for loan  losses in the third  quarter of 2007
versus $235,000 in the third quarter of 2006.  During the third quarter of 2007,
the Company  recorded  $560,000 of net loan  charge-offs  versus $135,000 of net
loan charge-offs in the year earlier quarter.

The Company  provided  $1,682,000  for loan losses  during the nine months ended
September 30, 2007 versus  $1,289,000 during the nine months ended September 30,
2006.  During the nine months ended  September  30, 2007,  the Company  recorded
$1,457,000 of net loan  charge-offs  versus $522,000 of net loan  charge-offs in
the year earlier nine-month period.

Noninterest Income

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

 <TABLE>
<CAPTION>

                                                     Three months ended             Nine months ended
                                                        September 30,                  September 30,
                                                   ---------------------------------------------------
                                                     2007          2006            2007          2006
                                                   ---------------------------------------------------
     <S>                                              <C>           <C>             <C>           <C>
      Service charges on deposit accounts           $3,819        $3,703         $11,236       $10,883
     ATM fees and interchange                        1,016           927           3,011         2,641
     Other service fees                                523           544           1,633         1,601
     Change in value of mortgage servicing rights     (141)         (118)           (226)         (256)
     Gain on sale of loans                             211           264             756           875
     Commissions on sale of
       nondeposit investment products                  583           447           1,633         1,529
     Increase in cash value of life insurance          405           420           1,215         1,223
     Gain on sale of investments                         -             -               -            12
     Other noninterest income                          431           462           1,218         1,120
                                                   ----------------------------------------------------
     Total noninterest income                       $6,847        $6,649         $20,476       $19,628
                                                   ====================================================
</TABLE>

Noninterest  income for the third quarter of 2007 increased $198,000 (3.0%) from
the  year-ago  quarter.  The  increase in  noninterest  income from the year-ago
quarter was mainly due to a $136,000  (30.4%) increase in commissions on sale of
nondeposit  investment  products  to  $583,000,  a $116,000  (3.1%)  increase in
service  charges on  deposit  accounts  to  $3,819,000,  and an  $89,000  (9.6%)
increase in ATM fees and interchange to $1,016,000,  that were partially  offset
by a $53,000 (20.1%) decrease in gain on sale of loans to $211,000. The increase
in  commissions on sale of nondeposit  investment  products was primarily due to
improved  market  conditions and increased  resources  focused in this area. The
increase in service  charges on deposit  accounts was primarily due to growth in
customer  count.  The increase in ATM fees and  interchange was due to growth in
customer count and expansion of ATM network as part of new branch openings.  The
decrease in gain on sale of loans is due to a slowdown in  residential  mortgage
refinance activity.

Noninterest  income for the nine  months  ended  September  30,  2007  increased
$848,000  (4.3%) to  $20,476,000  from the same period in 2006.  The increase in
noninterest  income from the year-ago  nine months ended  September 30, 2006 was
mainly due mainly due to a $104,000  (6.8%)  increase in  commissions on sale of
nondeposit  investment  products to $1,633,000,  a $353,000  (3.2%)  increase in
service  charges on deposit  accounts  to  $11,236,000,  and a $370,000  (14.0%)
increase in ATM fees and interchange to $3,011,000,  that were partially  offset
by a  $119,000  (13.6%)  decrease  in gain on sale of  loans  to  $756,000.  The
increase in commissions on sale of nondeposit  investment products was primarily
due to improved market conditions and increased  resources focused in this area.
The increase in service charges on deposit  accounts was primarily due to growth
in customer count. The increase in ATM fees and interchange was due to growth in
customer count and expansion of ATM network as part of new branch openings.  The
decrease in gain on sale of loans is due to a slowdown in  residential  mortgage
refinance activity.

                                       23

<PAGE>

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

<TABLE>
<CAPTION>

                                                 Three months ended             Nine months ended
                                                    September 30,                  September 30,
                                               ----------------------------------------------------
                                                 2007          2006            2007          2006
                                               ----------------------------------------------------
     <S>                                        <C>           <C>             <C>           <C>
     Salaries & benefits                     $8,975        $9,276         $28,336       $27,050
     Occupancy                                1,178         1,170           3,526         3,298
     Equipment                                1,052         1,018           3,222         3,187
     Advertising and marketing                  620           655           1,624         1,628
     Data processing and software               564           453           1,482         1,259
     ATM network charges                        463           475           1,389         1,375
     Telecommunications                         412           380           1,240         1,165
     Professional fees                          408           375           1,217         1,265
     Courier service                            285           312             867           925
     Postage                                    178           261             602           753
     Operational losses                         128            89             313           218
     Intangible amortization                    122           350             367         1,046
     Assessments                                 82            83             247           243
     Other                                    2,285         2,129           6,723         6,312
                                            -----------------------------------------------------
     Total                                  $16,752       $17,026         $51,155       $49,724
                                            =====================================================
     Average full time equivalent staff         646           630             636           619
     Noninterest expense to revenue (FTE)     58.01%        59.27%         59.12%         59.82%
</TABLE>

Noninterest  expense for the third  quarter of 2007  decreased  $274,000  (1.6%)
compared to the third quarter of 2006.  Salaries and benefits expense  decreased
$301,000 (3.2%) to $8,975,000. The decrease in salaries and benefits expense was
mainly due to reduced commission and incentive expense that was partially offset
by annual salary increases,  and new employees at the Company's  recently opened
branches.  The reduced commission and incentive expense was due to the Company's
employees not earning certain bonus and incentive  compensation which is tied to
the Company satisfying internal targeted  performance goals. The Company did not
meet such goals for the third quarter of 2007 and thus did not incur the related
compensation  expense.  Intangible  amortization  decreased  $228,000  (65%)  to
$122,000 during the third quarter of 2007 as the core deposit intangible related
to the purchase of several branches in 1997 became fully amortized in the fourth
quarter of 2006.

Noninterest  expense  for the nine months  ended  September  30, 2007  increased
$1,431,000 (2.9%) compared to the nine months ended September 30, 2006. Salaries
and benefits expense increased $1,286,000 (4.8%) to $28,336,000. The increase in
salaries and benefits  expense was mainly due to annual salary increases and new
employees at the Company's  recently opened branches that were partially  offset
by reduced commission and incentive expense.  Intangible  amortization decreased
$679,000  (65%) to $367,000  during the nine months ended  September 30, 2007 as
the core deposit  intangible related to the purchase of several branches in 1997
became fully amortized in the fourth quarter of 2006.

Provision for Income Tax
The effective  tax rate for the three months ended  September 30, 2007 was 39.5%
compared to 39.3% for the three months ended  September 30, 2006.  The effective
tax rate for the nine months ended  September 30, 2007 was 39.2% and reflects no
change from 39.2% for the nine months ended  September  30, 2006.  The provision
for income  taxes for all periods  presented is  primarily  attributable  to the
respective  level  of  earnings  and  the  incidence  of  allowable  deductions,
particularly from increase in cash value of life insurance, tax-exempt loans and
state and municipal securities.

                                       24

<PAGE>

Classified Assets

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

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

                            At September 30, 2007         At December 31, 2006
                          -------------------------   --------------------------
                            Gross Guaranteed  Net       Gross Guaranteed   Net
                          -------------------------   --------------------------
Classified loans          $18,982   $6,114  $12,868    $13,116  $6,514   $6,602
Other classified assets       187        -      187          -       -        -
                          ------------------------------------------------------
Total classified assets   $19,169   $6,114  $13,055    $13,116  $6,514   $6,602
                          ======================================================
Allowance for loan losses/classified loans    133.2%                      256.2%

Classified  assets,  net of  guarantees  of the U.S.  Government,  including its
agencies and its government-sponsored  agencies at September 30, 2007, increased
$ 6,453,000 (97.7%) to $ 13,055,000 from $6,602,000 at December 31, 2006.

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

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

Interest income on nonaccrual loans, which would have been recognized during the
nine months,  ended  September  30, 2007,  if all such loans had been current in
accordance  with their  original  terms,  totaled  $1,112,000.  Interest  income
actually  recognized  on these loans during the nine months ended  September 30,
2007 was $650,000.

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

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

                                       25

<PAGE>

As shown in the following table, total nonperforming assets net of guarantees of
the  U.S.  Government,  including  its  agencies  and  its  government-sponsored
agencies,  increased  $3,182,000  (70.5%)  to  $7,694,000  during the first nine
months of 2007.  Nonperforming assets net of guarantees represent 0.39% of total
assets.  All nonaccrual loans are considered to be impaired when determining the
need  for a  specific  valuation  allowance.  The  Company  continues  to make a
concerted  effort to work problem and potential  problem loans to reduce risk of
loss.
<TABLE>
<CAPTION>

 (dollars in thousands):
                                                 At September 30, 2007         At December 31, 2006
                                              -------------------------    -------------------------
                                                Gross Guaranteed  Net       Gross Guaranteed   Net
                                              ------------------------------------------------------
<S>                                             <C>       <C>      <C>       <C>      <C>      <C>
Performing nonaccrual loans                    $9,521   $5,980   $3,541    $10,255  $6,372   $3,883
Nonperforming, nonaccrual loans                 3,952        -    3,952        561       -      561
                                              ------------------------------------------------------
     Total nonaccrual loans                    13,473    5,980    7,493     10,816   6,372    4,444
Loans 90 days past due and still accruing          14        -       14         68       -       68
                                              ------------------------------------------------------
Total nonperforming loans                      13,487    5,980    7,507     10,884   6,372    4,512
Other real estate owned                           187        -      187          -       -        -
                                              ------------------------------------------------------
Total nonperforming assets                    $13,674   $5,980   $7,694    $10,884  $6,372   $4,512
                                              ======================================================
Nonperforming loans to total loans                               0.49%                        0.30%
Nonperforming assets to total assets                             0.39%                        0.24%
Allowance for loan losses to nonperforming loans                  228%                        375%
</TABLE>

Capital Resources
The  current  and  projected  capital  position of the Company and the impact of
capital plans and long-term strategies are reviewed regularly by Management.

On August 21, 2007, the Company announced the completion of its stock repurchase
plan  originally  adopted on July 31, 2003 and  amended on April 9, 2004.  Under
this plan, the Company repurchased a total of 500,000 shares of its common stock
with the final 105,629 shares being repurchased during August 2007 at an average
price of $20.97 per share.

Also  on  August  21,  2007,  the  Board  of  Directors  adopted  a new  plan to
repurchase,  as conditions warrant, up to 500,000 shares of the Company's common
stock on the open market. The timing of purchases and the exact number of shares
to be purchased will depend on market conditions.  The 500,000 shares authorized
for repurchase under this new stock  repurchase plan  represented  approximately
3.2% of the  Company's  15,814,662  outstanding  common  shares as of August 21,
2007. This new stock repurchase plan has no expiration date.

The  Company's  primary  capital  resource is  shareholders'  equity,  which was
$182,725,000  at  September  30,  2007.  This amount  represents  an increase of
$13,289,000 from December 31, 2006, the net result of  comprehensive  income for
the period of  $20,885,000,  the  issuance of common  shares via the exercise of
stock  options for  proceeds  of  $3,863,000,  the tax  effects of stock  option
exercises of  $1,707,000,  and the effect of stock  option  vesting of $579,000,
partially  offset by the  repurchase of common stock with an aggregate  value of
$2,685,000, the retirement of common stock with an aggregate value of $4,859,000
tendered by employees, in lieu of cash, to exercise stock options, and dividends
paid of  $6,201,000.  The  Company's  ratio of equity to total assets was 9.35%,
8.67%, and 8.82% as of September 30, 2007,  September 30, 2006, and December 31,
2006, respectively.

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

                                At September 30,       At            Minimum
                               -----------------   December 31,    Regulatory
                               2007       2006        2006         Requirement
                               -----------------------------------------------
     Tier I Capital            10.68%     10.07%     10.44%           4.00%
     Total Capital             11.66%     11.08%     11.44%           8.00%
     Leverage ratio            11.28%     10.13%     10.49%           4.00%

The  information  presented  under  "Liquidity"  at  Item 3 of  this  Report  is
incorporated herein by reference.

                                       26

<PAGE>

Off-Balance Sheet Items
The Bank has certain  ongoing  commitments  under  operating and capital leases.
These commitments do not significantly impact operating results. As of September
30, 2007  commitments  to extend  credit and  commitments  related to the Bank's
deposit overdraft  privilege product were the Bank's only financial  instruments
with  off-balance  sheet risk.  The Bank has not entered into any  contracts for
financial  derivative   instruments  such  as  futures,   swaps,  options,  etc.
Commitments to extend credit were $ 695,913,000  and  $623,133,000  at September
30, 2007 and December 31, 2006,  respectively,  and represent 45.3% of the total
loans  outstanding  at  September  30, 2007 versus  41.3% at December  31, 2006.
Commitments  related to the Bank's deposit  overdraft  privilege product totaled
$33,596,000  and  $33,290,000  at  September  30, 2007 and  December  31,  2006,
respectively.

                                       27

<PAGE>


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

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

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

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

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

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

At September 30, 2007, the results of the simulations  noted above indicate that
given a "flat"  balance  sheet  scenario,  and if deposit  rates  track  general
interest  rate changes by  approximately  50%, the  Company's  balance  sheet is
slightly  liability  sensitive.  "Liability  sensitive"  implies  that  earnings
decrease when interest rates rise,  and increase when interest  rates  decrease.
The  magnitude of all the  simulation  results  noted above is within the Bank's
policy guidelines. The asset liability management policy limits aggregate market
risk, as measured in this fashion,  to an acceptable level within the context of
risk-return trade-offs.

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

At September 30, 2007 and 2006, the Company had no material derivative financial
instruments.

There have been no material  changes from the information  regarding market risk
disclosed  under  Market Risk  Management"  at Item 7 of the  Company's  Annual
Report on Form 10-K for the year ended December 31, 2006.

                                       28

<PAGE>

Liquidity
The  Company's  principal  source of asset  liquidity is federal  funds sold and
marketable  investment  securities  available  for sale.  At September 30, 2007,
federal  funds  sold  and  investment  securities  available  for  sale  totaled
$239,730,000,  representing an increase of $40,575,000 (20.4%) from December 31,
2006,  and an increase of  $28,457,000  (13.5%)  from  September  30,  2006.  In
addition,   the  Company  generates  additional  liquidity  from  its  operating
activities.  The  Company's  profitability  during the first nine months of 2007
generated  cash flows from  operations of  $23,518,000  compared to  $25,219,000
during the first nine months of 2006.  Additional  cash flows may be provided by
financing  activities,  primarily the acceptance of deposits and borrowings from
banks.  Maturities and sales of investment  securities  produced cash inflows of
$38,954,000 and $0 respectively, during the nine months ended September 30, 2007
compared to  $40,208,000  and $10,780,  respectively,  for the nine months ended
September 30, 2006. During the nine months ended September 30, 2007, the Company
invested $78,822,000 in securities and $26,841,000 in net loan growth,  compared
to  investing  $896,000  and  $122,648,000  in  securities  and net loan growth,
respectively,  during the first nine months of 2006. These changes in investment
and loan  balances  contributed  to net cash  used by  investing  activities  of
$69,640,000 and $75,870,000  during the nine months ended September 30, 2007 and
2006,  respectively.  Financing  activities provided net cash of $14,387,000 and
$37,380 during the nine months ended September 30, 2007 and 2006,  respectively.
A decrease in deposit  balances  accounted  for a  $67,007,000  use of financing
funds during the nine months ended  September 30, 2007 compared to a $28,377,000
source of financing  funds during the nine months ended  September 30, 2006 from
an increase in deposit balances.  Federal funds borrowed  increased  $28,000,000
and  $9,700,000  in the first nine  months of 2007 and 2006,  respectively.  The
issuance of  long-term  other  borrowings  provided  $50,000,000  and $0 of cash
during  the  nine  months  ended  September  30,  2007 and  2006,  respectively.
Increases in short-term other borrowings provided  $10,136,000 and $4,502,000 of
cash during the nine months  ended  September  30, 2007 and 2006,  respectively.
Dividends  paid used  $6,201,000  and  $5,692,000 of cash during the nine months
ended September 30, 2007 and 2006, respectively. Repurchase of common stock used
$2,685,000  and $0 of cash during the nine months ended  September  30, 2007 and
2006,  respectively.  Also,  the  Company's  liquidity is dependent on dividends
received  from  the  Bank.  Dividends  from  the Bank  are  subject  to  certain
regulatory restrictions.

Item 4.  Controls and Procedures
The Chief Executive  Officer,  Richard Smith,  and the Chief Financial  Officer,
Thomas Reddish, evaluated the effectiveness of the Company's disclosure controls
and  procedures  as of September  30, 2007  ("Evaluation  Date").  Based on that
evaluation,  they  concluded  that  as of  the  Evaluation  Date  the  Company's
disclosure  controls and procedures are effective to allow timely  communication
to them of  information  relating  to the  Company  and the Bank  required to be
disclosed in its filings with the  Securities  and Exchange  Commission  ("SEC")
under  the  Securities  Exchange  Act of  1934,  as  amended  ("Exchange  Act").
Disclosure  controls and  procedures are Company  controls and other  procedures
that are  designed to ensure that  information  required to be  disclosed by the
Company  in the  reports  that it files  under  the  Exchange  Act is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms.

No changes in the Company's  internal control over financial  reporting occurred
during  the first  nine  months of 2007 that have  materially  affected,  or are
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

                                       29

<PAGE>

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

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

Item 1A - Risk Factors

There have been no material changes to the risk factors previously  disclosed in
Item 1A to Part I of our Annual Report on Form 10-K for the year ended  December
31, 2006.

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

The following table shows information concerning the common stock repurchased by
the Company during the third quarter of 2007 pursuant to (i) the Company's stock
repurchase plan  originally  announced on July 31, 2003, as amended on March 11,
2004, to conform with the Company's  two-for-one  stock split effective on April
9, 2004, and (ii) the Company's stock  repurchase  plan originally  announced on
August 21, 2007 which are discussed in more detail under "Capital  Resources" at
Part I, Item 2, of this report:

<TABLE>
<CAPTION>

Period          (a) Total number    (b) Average price   (c) Total number of    (d) Maximum number
                of Shares purchased  paid per share     shares purchased as    of shares that may yet
                                                        part of publicly       be purchased under the
                                                        announced plans or     plans or programs
                                                        programs
-------------------------------------------------------------------------------------------------------
<S>                        <C>            <C>               <C>                      <C>
Jul. 1-31, 2007             -              -                     -                 105,629
Aug. 1-31, 2007       105,629            $20.97            105,629                 500,000
Sep. 1-30, 2007             -                 -                  -                 500,000
--------------------------------------------------------------------------------------------------------
Total                 105,629            $20.97            105,629                 500,000
</TABLE>

During the quarter ended September 30, 2007,  employees  tendered 202,378 shares
of the Company's common stock with an aggregate value of $4,859,000,  in lieu of
cash, to exercise stock options.

                                       30

<PAGE>

Item 6 - Exhibits

3.1*      Restated Articles of Incorporation dated May 9, 2003, filed as Exhibit
          3.1 to TriCo's  Quarterly  Report on Form 10-Q for the  quarter  ended
          March 31, 2003.

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

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

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

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

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

10.4*     TriCo's  2001 Stock  Option Plan as amended  filed as Exhibit  10.7 to
          TriCo's  Annual  Report on Form 10-K for the year ended  December  31,
          2004.

10.5*     Amended  Employment  Agreement  between  TriCo and Richard Smith dated
          March 20,  2007  filed as Exhibit  10.1 to TriCo's  Report on Form 8-K
          dated March 20, 2007.

10.6*     Tri Counties Bank Executive Deferred Compensation Plan dated September
          1, 1987, as restated April 1, 1992, and amended and restated effective
          as of  January 1, 2004  filed as  Exhibit  10.9 to  TriCo's  Quarterly
          Report on Form 10-Q for the quarter ended September 30, 2005.

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

10.8*     2005 Tri Counties Bank Deferred  Compensation  Plan for Executives and
          Directors  effective January 1, 2005 filed as Exhibit 10.11 to TriCo's
          Quarterly  Report on Form 10-Q for the  quarter  ended  September  30,
          2005.

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

10.10*    2004  TriCo  Bancshares  Supplemental  Retirement  Plan for  Directors
          effective  January 1, 2004 filed as Exhibit 10.13 to TriCo's Quarterly
          Report on Form 10-Q for the quarter ended June 30, 2004.

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

                                       31

<PAGE>

10.12*    2004 TriCo Bancshares Supplemental Executive Retirement Plan effective
          January 1, 2004 filed as Exhibit 10.15 to TriCo's  Quarterly Report on
          Form 10-Q for the quarter ended June 30, 2004.

10.13*    Form of Joint Beneficiary  Agreement  effective March 31, 2003 between
          Tri Counties Bank and each of Craig Carney,  Richard  Miller,  Richard
          O'Sullivan,  Thomas Reddish, and Richard Smith, filed as Exhibit 10.14
          to  TriCo's  Quarterly  Report  on Form  10-Q  for the  quarter  ended
          September 30, 2003.

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

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

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

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

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

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

31.1     Rule 13a-14(a)/15d-14(a) Certification of CEO
31.2     Rule 13a-14(a)/15d-14(a) Certification of CFO
32.1     Section 1350 Certification of CEO
32.2     Section 1350 Certification of CFO

       * Previously filed and incorporated by reference.

                                       32

<PAGE>

SIGNATURES

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

                                TRICO BANCSHARES
                                  (Registrant)


Date:  November 6, 2007     /s/ Thomas J. Reddish
                            ------------------------
                            Thomas J. Reddish
                            Executive Vice President and
                            Chief Financial Officer

                                       33

<PAGE>

EXHIBITS

Exhibit 31.1

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

I, Richard P. Smith, certify that;

1.        I  have  reviewed  this  quarterly   report  on  Form  10-Q  of  TriCo
          Bancshares;
2.        Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;
3.        Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly  report;
4.        The registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange Act Rules  13a-15(e) and  15d-15(e))  and internal
          control  over  financial  reporting  (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and we have:
          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including its consolidated subsidiary, is made known
               to us by others within those  entities,  particularly  during the
               period in which this quarterly report is being prepared;
          b.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;
          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and procedures  and presented in this  quarterly  report
               our  conclusions   about  the  effectiveness  of  the  disclosure
               controls and  procedures,  as of the end of the period covered by
               this quarterly report based on such evaluation; and
          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most  recent  fiscal  quarter  that has  materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting;
5.        The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's board of directors:
          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and
          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.



Date: November 6, 2007                  /s/ Richard P. Smith
                                        -------------------------------------
                                        Richard P. Smith
                                        President and Chief Executive Officer


                                       34

<PAGE>

Exhibit 31.2

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

I, Thomas J. Reddish, certify that;

1.        I  have  reviewed  this  quarterly   report  on  Form  10-Q  of  TriCo
          Bancshares;
2.        Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;
3.        Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly  report;
4.        The registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange Act Rules  13a-15(e) and  15d-15(e))  and internal
          control  over  financial  reporting  (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and we have:
          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including its consolidated subsidiary, is made known
               to us by others within those  entities,  particularly  during the
               period in which this quarterly report is being prepared;
          b.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;
          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and procedures  and presented in this  quarterly  report
               our  conclusions   about  the  effectiveness  of  the  disclosure
               controls and  procedures,  as of the end of the period covered by
               this quarterly report based on such evaluation; and
          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most  recent  fiscal  quarter  that has  materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting;
5.        The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's board of directors:
          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and
          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.



Date: November 6, 2007                     /s/ Thomas J. Reddish
                                           ------------------------------------
                                           Thomas J. Reddish
                                           Executive Vice President and
                                           Chief Financial Officer


                                       35

<PAGE>

Exhibit 32.1

Section 1350 Certification of CEO

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ended  September 30, 2007 as filed with the  Securities
and Exchange Commission on the date hereof (the "Report"),  I, Richard P. Smith,
President and Chief Executive  Officer of the Company,  certify,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that:

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

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

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

Exhibit 32.2

Section 1350 Certification of CFO

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ended  September 30, 2007 as filed with the  Securities
and Exchange Commission on the date hereof (the "Report"), I, Thomas J. Reddish,
Executive Vice President and Chief  Financial  Officer of the Company,  certify,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

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

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

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


                                       36
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{"company-data": {"conformed-name": "TRICO BANCSHARES /", "cik": "0000356171", "assigned-sic": "6022", "irs-number": "942792841", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-10661", "film-number": "071226880"}, "business-address": {"street1": "TRICO BANCSHARES", "street2": "63 CONSTITUTION DRIVE", "city": "CHICO", "state": "CA", "zip": "95973", "phone": "5308980300"}, "mail-address": {"street1": "TRICO BANCSHARES", "street2": "63 CONSTITUTION DRIVE", "city": "CHICO", "state": "CA", "zip": "95973"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

For Quarterly Period Ended September 30, 2007     Commission file number 0-10661
---------------------------------------------     ------------------------------

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

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

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

Registrant's telephone number, including area code:  (530) 898-0300

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

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

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

     Indicate by check mark whether the Registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer" and "large accelerated filer" in Rule 12b-2 of the Act (check one).

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

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act).

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Title of Class:  Common stock, no par value

Outstanding shares as of November 6, 2007:  15,907,550
TABLE OF CONTENTS

                                                                          Page

Forward-Looking Statements                                                  1

PART I - FINANCIAL INFORMATION                                              2

      Item 1 - Financial Statements                                         2

      Notes to Unaudited Condensed Consolidated Financial Statements        6

      Financial Summary                                                    16

      Item 2 - Management's Discussion and Analysis of Financial           17
      Condition and Results of Operations

      Item 3 - Quantitative and Qualitative Disclosures about Market Risk  28

      Item 4 - Controls and Procedures                                     29

PART II - OTHER INFORMATION                                                30

      Item 1 - Legal Proceedings                                           30

      Item 1A - Risk Factors                                               30

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

      Item 6 - Exhibits                                                    31

      Signatures                                                           33

      Exhibits                                                             34
FORWARD-LOOKING STATEMENTS

This  report  on Form  10-Q  contains  forward-looking  statements  about  TriCo
Bancshares (the "Company") for which it claims the protection of the safe harbor
provisions  contained in the Private  Securities  Litigation Reform Act of 1995.
These forward-looking statements are based on Management's current knowledge and
belief and include  information  concerning  the  Company's  possible or assumed
future  financial  condition and results of operations.  When you see any of the
words "believes", "expects", "anticipates", "estimates", or similar expressions,
it may mean making  forward-looking  statements.  A number of  factors,  some of
which are beyond the Company's ability to predict or control, could cause future
results to differ materially from those contemplated.  The reader is directed to
the Company's  annual report on Form 10-K for the year ended  December 31, 2006,
and Part II,  Item 1A of this  report for further  discussion  of factors  which
could  affect  the  Company's  business  and  cause  actual  results  to  differ
materially  from those expressed in any  forward-looking  statement made in this
report.

                                       1
PART I - FINANCIAL INFORMATION

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

                                                                At September 30,         At December 31,
                                                            2007              2006            2006
                                                      -------------------------------   -----------------
Assets:
     Cash and due from banks                              $70,791           $78,281         $102,220
     Federal funds sold                                       488             1,387              794
                                                      -------------------------------   -----------------
         Cash and cash equivalents                         71,279            79,668          103,014
     Securities available-for-sale                        239,242           209,886          198,361
     Federal Home Loan Bank stock, at cost                  8,652             8,206            8,320
     Loans, net of allowance for loan losses
         of $17,139, $16,993 and $16,914                1,517,937         1,490,166        1,492,965
     Foreclosed assets, net of allowance for
         losses of $180                                       187                 -                -
     Premises and equipment, net                           20,804            21,556           21,830
     Cash value of life insurance                          44,751            42,991           43,536
     Accrued interest receivable                            8,865             8,637            8,727
     Goodwill                                              15,519            15,519           15,519
     Other intangible assets, net                           1,298             3,361            1,666
     Other assets                                          24,989            24,014           26,028
                                                      -------------------------------   -----------------
         Total Assets                                  $1,953,523        $1,904,004       $1,919,966
                                                      ===============================   =================

Liabilities:
     Deposits:
         Noninterest-bearing demand                      $345,467          $357,754         $420,025
         Interest-bearing                               1,186,675         1,167,420        1,179,124
                                                      -------------------------------   -----------------
         Total deposits                                 1,532,142         1,525,174        1,599,149
     Federal funds purchased                               66,000           106,500           38,000
     Accrued interest payable                               6,899             7,341            7,548
     Reserve for unfunded commitments                       2,040             1,849            1,849
     Other liabilities                                     22,483            20,913           22,835
     Other borrowings                                      99,996            35,848           39,911
     Junior subordinated debt                              41,238            41,238           41,238
                                                      -------------------------------   -----------------
         Total Liabilities                              1,770,798         1,738,863        1,750,530
                                                      -------------------------------   -----------------

Commitments and contingencies
Shareholders' Equity:
     Common stock, no par value: 50,000,000 shares
         authorized; issued and outstanding:
         15,891,300 at September 30, 2007                  78,331
         15,857,107 at September 30, 2006                                    73,545
         15,857,207 at December 31, 2006                                                      73,739
     Retained earnings                                    108,022            95,203          100,218
     Accumulated other comprehensive loss, net             (3,628)           (3,607)          (4,521)
                                                      -------------------------------   -----------------
         Total Shareholders' Equity                       182,725           165,141          169,436
                                                      -------------------------------   -----------------
     Total Liabilities and Shareholders' Equity        $1,953,523        $1,904,004       $1,919,966
                                                      ===============================   =================
See accompanying notes to unaudited condensed consolidated financial statements.

                                       2
TRICO BANCSHARES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                (In thousands, except per share data; unaudited)

                                          Three months ended September 30,  Nine months ended September 30,
                                                 2007            2006               2007           2006
                                         -----------------------------------------------------------------
Interest and dividend income:
     Loans, including fees                       $30,099         $28,901         $88,404        $80,525
     Debt securities:
     Taxable                                       1,874           1,938           5,216          6,548
     Tax exempt                                      354             431           1,123          1,338
     Dividends                                       109             144             332            322
     Federal funds sold                                6               7              14             45
                                         -----------------------------------------------------------------
     Total interest income                        32,442          31,421          95,089         88,778
                                         -----------------------------------------------------------------

     Interest expense:
     Deposits                                      8,078           6,844          23,016         17,707
     Federal funds purchased                         922           1,448           2,458          3,367
     Other borrowings                                768             442           1,764          1,186
     Junior subordinated debt                        834             842           2,475          2,364
                                         ----------------------------------------------------------------
     Total interest expense                       10,602           9,576          29,713         24,624
                                         ----------------------------------------------------------------
     Net interest income                          21,840          21,845          65,376         64,154
                                         ----------------------------------------------------------------
     Provision for loan losses                       700             235           1,682          1,289
                                         ----------------------------------------------------------------
     Net interest income after provision          21,140          21,610          63,694         62,865
        for loan losses                  ----------------------------------------------------------------

     Noninterest income:
     Service charges and fees                      5,218           5,056          15,654         14,869
     Gain on sale of loans                           211             264             756            875
     Commissions on sale of non-deposit              583             447           1,633          1,529
        investment products
     Increase in cash value of life insurance        405             420           1,215          1,223
     Other                                           430             462           1,218          1,132
                                         ----------------------------------------------------------------
     Total noninterest income                      6,847           6,649          20,476         19,628
                                         ----------------------------------------------------------------

     Noninterest expense:
     Salaries and related benefits                 8,975           9,276          28,336         27,050
     Other                                         7,777           7,750          22,819         22,674
                                         ---------------------------------------------------------------
     Total noninterest expense                    16,752          17,026          51,155         49,724
                                         ----------------------------------------------------------------
     Income before income taxes                   11,235          11,233          33,015         32,769
     Provision for income taxes                    4,442           4,413          13,023         12,857
                                         ----------------------------------------------------------------
     Net income                                   $6,793          $6,820         $19,992        $19,912
                                         ================================================================

     Average shares outstanding               15,889,061      15,855,933      15,894,768     15,797,014
     Diluted average shares outstanding       16,310,631      16,365,858      16,396,615     16,378,796
     Per share data:
     Basic earnings                                 $0.43           $0.43      $1.26          $1.26
     Diluted earnings                               $0.42           $0.42      $1.22          $1.22
     Dividends paid                                 $0.13           $0.12      $0.39          $0.36
See accompanying notes to unaudited condensed consolidated financial
statements.

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

                                                                     Accumulated
                                    Shares of                            Other
                                    Common     Common    Retained   Comprehensive
                                     Stock      Stock    Earnings       Loss           Total
                                 --------------------------------------------------------------
Balance at December 31, 2005      15,707,835     $71,412     $81,906     ($3,825)     $149,493
Comprehensive income:                                                                 --------
Net income                                                    19,912                    19,912
Change in net unrealized gain on
   Securities available for sale, net                                        218           218
                                                                                      ---------
Total comprehensive income                                                              20,130
Stock option vesting                                 468                                   468
Stock options exercised              190,187       1,646                                 1,646
Tax benefit of stock options exercised               205                                   205
Repurchase of common stock           (40,915)       (186)       (923)                   (1,109)
Dividends paid ($0.24 per share)                              (5,692)                   (5,692)
                                 --------------------------------------------------------------
Balance at September 30, 2006     15,857,107     $73,545     $95,203     ($3,607)     $165,141
                                 ==============================================================

Balance at December 31, 2006      15,857,207     $73,739    $100,218     ($4,521)     $169,436
Comprehensive income:                                                                ---------
Net income                                                    19,992                    19,992
Change in net unrealized gain on
   Securities available for sale, net                                        893           893

Total comprehensive income                                                              20,885
Stock option vesting                                 579                                   579
Stock options exercised              362,100       3,863                                 3,863
Tax benefit of stock options exercised             1,707                                 1,707
Repurchase of common stock          (328,007)     (1,557)     (5,987)                   (7,544)
Dividends paid ($0.26 per share)                              (6,201)                   (6,201)
                                 --------------------------------------------------------------
Balance at September 30, 2007     15,891,300     $78,331    $108,022     ($3,628)     $182,725
                                 ==============================================================
See accompanying notes to unaudited condensed consolidated financial statements.

                                       4
TRICO BANCSHARES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands; unaudited)
                                                              For the nine months ended September 30,
                                                                     2007               2006
                                                              --------------------------------------
Operating activities:
Net income                                                         $19,992             $19,912
Adjustments to reconcile net income to net cash provided
   by operating activities:
       Depreciation of property and equipment, and amortization      2,829               2,816
       Amortization of intangible assets                               367               1,046
       Provision for loan losses                                     1,682               1,289
       Amortization of investment securities premium, net              528                 689
       Originations of loans for resale                            (48,628)            (51,959)
       Proceeds from sale of loans originated for resale            48,878              52,338
       Gain on sale of loans                                          (756)               (875)
       Change in market value of mortgage servicing rights             226                 256
       Gain on sale of investments                                       -                 (12)
       Loss on disposal of fixed assets                                  5                  27
       Increase in cash value of life insurance                     (1,215)             (1,223)
       Stock option vesting expense                                    579                 468
       Change in:
         Interest receivable                                          (138)               (996)
         Interest payable                                             (649)              2,835
         Other assets and liabilities, net                           1,525              (1,392)
                                                              --------------------------------------
           Net cash provided by operating activities                23,518              25,219
                                                              --------------------------------------
Investing activities:
Proceeds from maturities of securities available-for-sale           38,954              40,208
Proceeds from sales of securities available-for-sale                     -              10,780
Purchases of securities available-for-sale                         (78,822)               (896)
Purchases of Federal Home Loan Bank stock                             (332)               (604)
Loan originations and principal collections, net                   (26,841)           (122,646)
Proceeds from sale of premises and equipment                            11                   3
Purchases of premises and equipment                                 (2,610)             (2,715)
                                                              --------------------------------------
           Net cash used by investing activities                   (69,640)            (75,870)
                                                              --------------------------------------
Financing activities:
Net (decrease) increase in deposits                                (67,007)             28,377
Net increase in Federal funds purchased                             28,000               9,700
Payments of principal on long-term other borrowings                    (51)                (44)
Proceeds from issuance of long-term other borrowings                50,000                   -
Net change in short-term other borrowings                           10,136               4,502
Repurchase of common stock                                          (2,685)                  -
Dividends paid                                                      (6,201)             (5,692)
Exercise of stock options                                              488                 537
                                                              --------------------------------------
           Net cash provided by financing activities                14,387              37,380
                                                              --------------------------------------
Net change in cash and cash equivalents                            (31,735)            (13,271)
                                                              --------------------------------------
Cash and cash equivalents and beginning of period                  103,014              92,939
                                                              --------------------------------------
Cash and cash equivalents at end of period                         $71,279             $79,668
                                                              ======================================
Supplemental disclosure of noncash activities:
Unrealized gain on securities available for sale                    $1,541                $377
Income tax benefit from stock option exercises                      $1,707                $205
Value of common stock tendered, in lieu of cash,
  to pay for exercise of stock options                              $4,859              $1,109
Supplemental disclosure of cash flow activity:
Cash paid for interest expense                                     $30,362             $21,789
Cash paid for income taxes                                         $12,300             $15,100
See accompanying notes to unaudited condensed consolidated financial statements

                                       5
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: General  Summary of  Significant  Accounting  Policies The  accompanying
unaudited  condensed  consolidated  financial  statements  have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and pursuant to the rules and  regulations  of the  Securities  and
Exchange Commission. The results of operations reflect interim adjustments,  all
of  which  are of a  normal  recurring  nature  and  which,  in the  opinion  of
management, are necessary for a fair presentation of the results for the interim
periods  presented.  The interim results are not  necessarily  indicative of the
results  expected  for the full year.  These  unaudited  condensed  consolidated
financial statements should be read in conjunction with the audited consolidated
financial  statements  and  accompanying  notes  as  well as  other  information
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2006.

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

Nature of Operations
The Company  operates 32 branch  offices and 25 in-store  branch  offices in the
California  counties of Butte,  Contra Costa, Del Norte,  Fresno,  Glenn,  Kern,
Lake, Lassen,  Madera,  Mendocino,  Merced,  Napa, Nevada,  Placer,  Sacramento,
Shasta,  Siskiyou,  Stanislaus,  Sutter,  Tehama,  Tulare,  Yolo and  Yuba.  The
Company's  operating  policy since its inception has emphasized  retail banking.
Most of the Company's  customers are retail  customers and small to medium-sized
businesses.

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

Significant Group Concentration of Credit Risk

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

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

Investment Securities
The Company  classifies its debt and marketable  equity  securities  into one of
three  categories:  trading,  available-for-sale  or  held-to-maturity.  Trading
securities  are bought and held  principally  for the  purpose of selling in the
near term.  Held-to-maturity  securities are those  securities which the Company
has the  ability and intent to hold until  maturity.  All other  securities  not
included in trading or  held-to-maturity  are classified as  available-for-sale.
During the nine months  ended  September  30, 2007,  and  throughout  2006,  the
Company did not have any  securities  classified as either  held-to-maturity  or
trading.

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

                                       6
Premiums and  discounts  are  amortized or accreted over the life of the related
investment  security  as an  adjustment  to yield using the  effective  interest
method.  Dividend and interest income are recognized when earned. Realized gains
and losses for  securities  are included in earnings  and are derived  using the
specific  identification  method for  determining  the cost of securities  sold.
Unrealized  losses  due to  fluctuations  in fair  value of  securities  held to
maturity  or  available  for sale are  recognized  through  earnings  when it is
determined that an other than temporary decline in value has occurred.

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

Loans Held for Sale
Loans  originated  and intended for sale in the secondary  market are carried at
the  lower  of  aggregate  cost  or  fair  value,  as  determined  by  aggregate
outstanding  commitments from investors of current investor yield  requirements.
Net unrealized losses are recognized through a valuation allowance by charges to
income.  At September  30, 2007 and 2006,  and December 31, 2006,  the Company's
balance of loans held for sale was immaterial.

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

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

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

                                       7
Allowance for Loan Losses

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

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

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

The Company's method for assessing the appropriateness of the allowance for loan
losses and the reserve for unfunded commitments includes specific allowances for
identified problem loans and leases as determined by SFAS 114, formula allowance
factors for pools of credits, and allowances for changing  environmental factors
(e.g., interest rates, growth, economic conditions, etc.). Allowance factors for
loan  pools are based on the  previous 5 years  historical  loss  experience  by
product type.  Allowances  for specific  loans are based on SFAS 114 analysis of
individual   credits.   Allowances  for  changing   environmental   factors  are
Management's  best estimate of the probable impact these changes have had on the
loan  portfolio as a whole.  This process is explained in detail in the notes to
the Company's audited consolidated  financial statements in its Annual Report on
Form 10-K for the year ended December 31, 2006.

Based on the current conditions of the loan portfolio,  Management believes that
the  allowance for loan losses and the reserve for unfunded  commitments,  which
collectively  stand at $19,179,000 at September 30, 2007, are adequate to absorb
probable losses  inherent in the Company's loan  portfolio.  No assurance can be
given, however, that adverse economic conditions or other circumstances will not
result in increased losses in the portfolio.

                                       8
The  following  tables  summarize the activity in the allowance for loan losses,
reserve for unfunded  commitments,  and allowance for losses (which is comprised
of the allowance for loan losses and the reserve for unfunded  commitments)  for
the periods indicated (dollars in thousands):
Three months ended             Nine months ended
                                                September 30,                  September 30,
                                           ------------------------------------------------------
                                              2007          2006           2007           2006
                                           ------------------------------------------------------
Allowance for loan losses:
     Balance at beginning of period         $16,999       $16,893         $16,914       $16,226
     Provision for loan losses                  700           235           1,682         1,289
     Loans charged off                         (843)         (368)         (2,333)       (1,289)
     Recoveries of previously
       charged-off loans                        283           233             876           767
                                           ------------------------------------------------------
       Net charge-offs                         (560)         (135)         (1,457)         (522)
                                           ------------------------------------------------------
     Balance at end of period               $17,139       $16,993         $17,139       $16,993
                                           ======================================================

     Reserve for unfunded commitments:
     Balance at beginning of period          $2,040        $1,849          $1,849        $1,813
     Provision for losses -
       Unfunded commitments                       -             -             191            36
                                           ------------------------------------------------------
     Balance at end of period                $2,040        $1,849          $2,040        $1,849
                                           ======================================================

     Balance at end of period:
     Allowance for loan losses                                            $17,139       $16,993
     Reserve for unfunded commitments                                       2,040         1,849
                                                                          ---------------------
     Allowance for losses                                                 $19,179       $18,842
                                                                          =====================

     As a percentage of total loans:
     Allowance for loan losses                                              1.12%          1.13%
     Reserve for unfunded commitments                                       0.13%          0.12%
                                                                          ----------------------
     Allowance for losses                                                   1.25%          1.25%
                                                                          ======================
Mortgage Servicing Rights
Mortgage  servicing  rights (MSRs)  represent  the  Company's  right to a future
stream of cash flows based upon the  contractual  servicing fee associated  with
servicing mortgage loans. Our MSRs arise from residential mortgage loans that we
originate  and sell,  but retain the right to  service  the loans.  For sales of
residential  mortgage  loans, a portion of the cost of  originating  the loan is
allocated to the  servicing  right based on relative fair values of the loan and
the servicing  right.  The net gain from the retention of the servicing right is
included in gain on sale of loans in  noninterest  income when the loan is sold.
Fair  value  is  based  on  market  prices  for  comparable  mortgage  servicing
contracts, when available, or alternatively,  is based on a valuation model that
calculates  the present  value of estimated  future net  servicing  income.  The
valuation model incorporates  assumptions that market  participants would use in
estimating  future  net  servicing  income,  such as the  cost to  service,  the
discount rate, the custodial earnings rate, an inflation rate, ancillary income,
prepayment  speeds and  default  rates and  losses.  MSRs are  included in other
assets. Servicing fees are recorded in noninterest income when earned.

Effective with the Company's early adoption of SFAS 156, beginning as of January
1, 2006 MSRs are carried at fair value,  with changes in fair value  reported in
noninterest  income  in the  period  in which the  change  occurs.  On or before
December  31, 2005,  MSRs were carried at the lower of amortized  cost or market
value.  The  cumulative  effect  related  to the  adoption  of  this  change  in
accounting from lower of amortized cost or market value to fair value on January
1, 2006 was immaterial.

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

                                       9
The following tables summarize the activity in, and the main assumptions we used
to  determine  the fair  value of  mortgage  servicing  rights  for the  periods
indicated (dollars in thousands):

                                           Nine months ended September 30,
                                           -------------------------------
                                               2007              2006
                                           -------------------------------
Mortgage servicing rights:
Balance at beginning of period               $3,912            $3,638
Additions                                       506               496
Change in fair value                           (226)             (256)
                                           -------------------------------
Balance at end of period                     $4,192            $3,878
                                           ===============================
Servicing fees received                        $737              $712
Balance of loans serviced at:
     Beginning of period                   $389,636          $373,163
     End of period                         $402,806          $384,862
Weighted-average prepayment speed (CPR)        11.6%             12.1%
Discount rate                                  10.0%             10.0%

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

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

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

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

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

The following table summarizes the Company's goodwill intangible as of September
30, 2007 and December 31, 2006.

                             December 31,                          September 30,
   (Dollars in Thousands)      2006       Additions     Reductions    2007
                            ----------------------------------------------------
   Goodwill                  $15,519         -              -            $15,519
                            ====================================================

                                       10
The following table summarizes the Company's core deposit intangibles as of
September 30, 2007 and December 31, 2006.

                              December 31,                         September 30,
   (Dollars in Thousands)        2006      Additions     Reductions   2007
                            ----------------------------------------------------
   Core deposit intangibles    $13,643          -        ($10,278)     $3,365
   Accumulated amortization    (11,977)     $10,278          (368)     (2,067)
                            ----------------------------------------------------
   Core deposit intangibles,    $1,666      $10,278      ($10,646)     $1,298
     net                    ====================================================

Core deposit  intangibles are amortized over their expected  useful lives.  Such
lives are  periodically  reassessed  to  determine  if any  amortization  period
adjustments are indicated.

The following table summarizes the Company's  estimated core deposit  intangible
amortization for each of the five succeeding years:

                                                 Estimated Core Deposit
                                                 Intangible Amortization
                           Years Ended            (Dollars in thousands)
                         -----------------------------------------------
                              2007                          $490
                              2008                          $523
                              2009                          $328
                              2010                          $260
                              2011                           $65
                           Thereafter                          -

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

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

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

                                       11
Stock-Based Compensation
On  January  1, 2006 the  Company  adopted  Statement  of  Financial  Accounting
Standards No. 123 (revised  2004),  Share-Based  Payment (SFAS 123R),  using the
modified-prospective   transition   method.   Under  this   transition   method,
compensation cost recognized during the nine months ended September 30, 2007 and
September 30, 2006 include:  (a)  compensation  cost for all share-based  awards
granted prior to, but not yet vested as of, January 1, 2007 and January 1, 2006,
respectively,  based on the  grant-date  fair value and related  service  period
estimates  in  accordance  with  the  original  provisions  of SFAS  123 and (b)
compensation  cost for all share-based  awards granted  subsequent to January 1,
2007 and January 1, 2006,  respectively,  based on the grant-date fair value and
related  service  periods  estimated in accordance  with the  provisions of SFAS
123R. Historically, stock options are the only type of share-based award granted
by the Company.

Prior to the adoption of SFAS 123R, the Company used the intrinsic  value method
to account for its stock  option plans (in  accordance  with the  provisions  of
Accounting  Principles Board Opinion No. 25).  Intrinsic value is the difference
between share fair market value and option  exercise  price.  Under this method,
compensation  expense was recognized for awards of options to purchase shares of
common stock to employees under compensatory plans only if the fair market value
of the stock at the option grant date (or other  measurement date, if later) was
greater  than the amount the  employee was required to pay to acquire the stock.
Statement of Financial  Accounting Standards No. 123, Accounting for Stock-Based
Compensation  (SFAS 123),  permitted  companies to continue  using the intrinsic
value  method or to adopt a fair value based  method to account for stock option
plans.  The fair value based method would have resulted in the  recognition,  as
expense over the vesting period, of the fair value of all stock-based  awards on
the date of grant.

SFAS 123R  clarifies  and  expands the  guidance  in SFAS 123 in several  areas,
including  measuring fair value and attributing  compensation  cost to reporting
periods.  SFAS 123R  includes a  requirement  to: (a)  estimate  forfeitures  of
share-based awards at the date of grant, (b) expense  share-based awards granted
to  retirement  eligible  employees  and those  employees  with  non-substantive
non-compete  agreements   immediately,   (c)  attribute  compensation  costs  of
share-based award grants to the stated future vesting period,  and (d) recognize
compensation cost of all share-based awards based upon the grant-date fair value
(including pre-2006 options).

The following table shows the number, weighted-average exercise price, intrinsic
value, and weighted average remaining  contractual life, of options exercisable,
options not yet exercisable,  and total options  outstanding as of September 30,
2007:
Currently     Currently Not     Total
(dollars in thousands except exercise price)         Exercisable     Exercisable   Outstanding
Number of options                                    1,044,077         322,354      1,366,431
Weighted average exercise price                         $12.46          $21.51         $14.59
Intrinsic value                                        $10,245            $245        $10,490
Weighted average remaining contractual term (yrs.)        4.97            8.86           5.89
The  options  for  322,354  shares  that  are not  currently  exercisable  as of
September 30, 2007 are expected to vest, on a  weighted-average  basis, over the
next 3.04  years,  and the  Company  is  expected  to  recognize  $1,961,000  of
compensation costs related to these options as they vest.

                                       12
Earnings Per Share
Basic  earnings per share  represents  income  available to common  shareholders
divided by the  weighted-average  number of common shares outstanding during the
period.  Diluted earnings per share reflects additional common shares that would
have been outstanding if dilutive  potential  common shares had been issued,  as
well as any  adjustments  to income  that would  result from  assumed  issuance.
Potential  common  shares that may be issued by the Company  relate  solely from
outstanding  stock options,  and are determined using the treasury stock method.
In applying  the treasury  method,  the Company uses the excess tax benefit that
would result from the assumed issuance.

Earnings per share have been computed based on the following:
Three Months         Nine Months
                                                    Ended September 30,   Ended September 30,
(in thousands)                                         2007      2006      2007    2006
                                                   -------------------    --------------------
Net income                                         $6,793       $6,820     $19,992    $19,912

Average number of common shares outstanding        15,889       15,856      15,895     15,797
Effect of dilutive stock options                      422          510         502        582
                                                   -------------------    --------------------
Average number of common shares outstanding
   used to calculate diluted earnings per share    16,311       16,366      16,397     16,379
                                                   ====================    ===================
There were 302,050 and 42,000 options  excluded from the  computation of diluted
earnings per share for the nine month periods ended September 30, 2007 and 2006,
respectively, because the effect of these options was antidilutive.

Comprehensive Income

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

The components of other comprehensive  income (loss) and related tax effects are
as follows:
Three Months         Nine Months
                                                    Ended September 30,   Ended September 30,
(in thousands)                                         2007      2006      2007    2006
                                                   -------------------   -------------------
Unrealized holding gains (losses) on
   available-for-sale securities                    $1,987      $3,490      $1,541     $377
Tax effect                                            (836)     (1,468)       (648)    (159)
                                                   -------------------   -------------------
Unrealized holding gains (losses) on
   available-for-sale securities, net of tax        $1,151      $2,022        $893     $218
                                                   ===================   ====================
The   components  of  accumulated   other   comprehensive   loss,   included  in
shareholders' equity, are as follows:
September 30,   December 31,
                                                            2007            2006
                                                         --------------------------
(in thousands)
Net unrealized losses on available-for-sale securities   ($2,314)         ($3,855)
Tax effect                                                   973            1,621
                                                         --------------------------
    Unrealized holding losses on
    available-for-sale securities, net of tax             (1,341)          (2,234)
                                                         --------------------------

Minimum pension liability                                 (3,946)          (3,946)
Tax effect                                                 1,659            1,659
                                                         --------------------------
   Minimum pension liability, net of tax                  (2,287)          (2,287)
                                                         --------------------------
Accumulated other comprehensive loss                     ($3,628)         ($4,521)
                                                         ==========================
13
Retirement Plans

The  Company  has  supplemental  retirement  plans  covering  directors  and key
executives.  These  plans  are  non-qualified  defined  benefit  plans  and  are
unsecured and unfunded.  The Company has purchased insurance on the lives of the
participants  and  intends to use the cash  values of these  policies to pay the
retirement obligations.  The following table sets forth the net periodic benefit
cost recognized for the plans:
Three Months        Nine Months
                                                             Ended September 30, Ended September 30,
                                                            ----------------------------------------
(in thousands)                                                2007       2006       2007     2006
                                                              ----       ----       ----     ----
Net pension cost included the following components:
Service cost-benefits earned during the period                $150       $139       $450     $417
Interest cost on projected benefit obligation                  146        132        438      396
Amortization of net obligation at transition                     1          1          1        2
Amortization of prior service cost                              45         50        135      150
Recognized net actuarial loss                                   28         34         84      102
                                                            ---------------------------------------
Net periodic pension cost                                     $370       $356     $1,108   $1,067
                                                            =======================================
During  the  nine  months  ended  September  30,  2007  and  2006,  the  Company
contributed  and paid out as benefits  $405,000 and $409,000,  respectively,  to
participants under the plans. For the year ending December 31, 2007, the Company
expects to contribute and pay out as benefits $528,000 to participants under the
plans.

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

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

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

                                       14
TheCompany  has no other defined  benefit  post-retirement  benefit  plans.  The
requirement to measure plan assets and benefit obligations as of the date of the
year-end  statement  of  financial  position  is  effective  for  the  Company's
consolidated  financial  statements  beginning  with the fiscal year ended after
December 15, 2008.  The Company  currently  uses December 31 as the  measurement
date for its defined  benefit  post-retirement  benefit plans. In February 2007,
the FASB issued FASB  Statement of Financial  Accounting  Standards No. 159, The
Fair Value Option for Financial Assets and Financial  Liabilities - Including an
amendment to FASB  Statement  No. 115 (SFAS 159).  SFAS 159 permits  entities to
choose to measure many  financial  instruments  and certain  other items at fair
value.  The objective is to improve  financial  reporting by providing  entities
with the  opportunity  to mitigate  volatility  in reported  earnings  caused by
measuring  related assets and  liabilities  differently  without having to apply
complex hedge  accounting  provisions.  SFAS 159 is effective for the Company on
January  1,  2008  and is not  expected  to  have a  significant  impact  on the
Company's consolidated financial statements.

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

In September  2006,  the Emerging  Issues Task Force (EITF) of the FASB ratified
EITF Issue No. 06-4,  Accounting for Deferred  Compensation  and  Postretirement
Benefit Aspects of Endorsement Split-Dollar Life Insurance Agreements,  and EITF
Issue No. 06-5,  Accounting  for Purchases of Life  Insurance - Determining  the
Amount That Could Be Realized in  Accordance  with FASB  Technical  Bulletin No.
85-4,  Accounting  for Purchases of Life  Insurance.  EITF 06-4 provides that an
employer  should  recognize  a  liability  for  future  benefits  based  on  the
substantive  agreement with the employee.  The Issue should be applied to fiscal
years  beginning after December 15, 2007,  with earlier  application  permitted.
EITF 06-5  provides that in  determining  the amount  recognized as an asset,  a
policyholder  should consider the cash surrender value as well as any additional
amounts  included in the contractual  terms of the policy that will be paid upon
surrender.  The  amount  that  could be  realized  should be  calculated  at the
individual  policy  level and consider  any  probable  contractual  limitations,
including the exclusion of any  additional  amounts paid for the surrender of an
entire group of  policies.  The Issue is  effective  for fiscal years  beginning
after  December  15,  2007.  The Company has life  insurance  arrangements.  The
Company is  currently  evaluating  the impact of  adoption of these rules on the
Company's consolidated financial statements.

Reclassifications
Certain amounts previously  reported in the 2006 financial  statements have been
reclassified to conform to the 2007 presentation.  These  reclassifications  did
not affect previously reported net income or total shareholders' equity.

                                       15
TRICO BANCSHARES
                                Financial Summary
           (dollars in thousands, except per share amounts; unaudited)

                                                       Three months ended        Nine months ended
                                                         September 30,             September 30,
                                                ----------------------------------------------------------
                                                      2007            2006         2007          2006
                                                ----------------------------------------------------------
Net Interest Income (FTE)                         22,031           22,077        66,005         $64,903
Provision for loan losses                            700              235         1,682           1,289
Noninterest income                                 6,847            6,649        20,476          19,628
Noninterest expense                               16,752           17,026        51,155          49,724
Provision for income taxes (FTE)                   4,633            4,645        13,652          13,606
                                                ----------------------------------------------------------
     Net income                                   $6,793           $6,820       $19,992         $19,912
                                                ==========================================================

Earnings per share:
     Basic                                        $0.43             $0.43         $1.26          $1.26
     Diluted                                      $0.42             $0.42         $1.22          $1.22
Per share:
     Dividends paid                               $0.13             $0.12         $0.39          $0.36
     Book value at period end                    $11.50            $10.41
     Tangible book value at period end           $10.44             $9.22

Average common shares outstanding                15,889            15,856        15,895         15,797
Average diluted shares outstanding               16,311            16,366        16,397         16,379
Shares outstanding at period end                 15,891            15,857
At period end:
     Loans, net                              $1,517,937        $1,490,166
     Total assets                             1,953,523         1,904,004
     Total deposits                           1,532,142         1,525,174
     Other borrowings                            99,996            35,848
     Junior subordinated debt                    41,238            41,238
     Shareholders' equity                       182,725          $165,141
Financial Ratios:
During the period (annualized):
      Return on assets                             1.44%             1.45%         1.42%          1.43%
      Return on equity                            14.92%            16.64%        14.94%         16.75%
      Net interest margin(1)                       5.12%             5.19%         5.16%          5.17%
      Net loan charge-offs to average loans        0.15%             0.04%         0.13%          0.05%
      Efficiency ratio(1)                         58.01%            59.27%         59.15%        58.82%
At Period End:
      Equity to assets                             9.35%            8.67%
      Total capital to risk assets                11.66%           11.08%
      Allowance for losses to loans(2)             1.25%            1.25%
(1) Fully taxable equivalent (FTE)
(2)  Allowance  for losses  includes  allowance  for loan losses and reserve for
unfunded commitments.

                                       16
Item 2. Management's Discussion and Analysis of Financial Conditions and Results
of Operations

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

Critical Accounting Policies and Estimates
The Company's  discussion and analysis of its financial condition and results of
operations  are  based  upon  the  Company's  unaudited  condensed  consolidated
financial  statements,  which have been prepared in accordance  with  accounting
principles  generally accepted in the United States of America.  The preparation
of these  financial  statements  requires  the  Company  to make  estimates  and
judgments that affect the reported amounts of assets, liabilities,  revenues and
expenses,  and related  disclosure of contingent  assets and liabilities.  On an
on-going basis, the Company evaluates its estimates,  including those related to
the  adequacy  of  the  allowance  for  loan  losses,   intangible  assets,  and
contingencies.  The Company bases its estimates on historical  experience and on
various  other  assumptions  that  are  believed  to  be  reasonable  under  the
circumstances,  the results of which form the basis for making  judgments  about
the carrying values of assets and liabilities that are not readily apparent from
other sources.  Actual results may differ from these  estimates  under different
assumptions or conditions.  (See  "Allowance for Loan Losses" in Part I, Item 1,
for a more detailed discussion).

Results of Operations
The  following   discussion  and  analysis  is  designed  to  provide  a  better
understanding  of the significant  changes and trends related to the Company and
the  Bank's  financial  condition,   operating  results,   asset  and  liability
management,  liquidity and capital  resources and should be read in  conjunction
with the unaudited condensed  consolidated  financial  statements of the Company
and the Notes thereto at Part I, Item 1, of this Form 10-Q.

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

                                   Three months ended         Nine months ended
                                      Spetember 30,              September 30,
                                 -----------------------------------------------
                                  2007          2006           2007       2006
                                 -----------------------------------------------
Net Interest Income (FTE)        $22,031     $22,077         $66,005    $64,903
Provision for loan losses            700         235           1,682      1,289
Noninterest income                 6,847       6,649          20,476     19,628
Noninterest expense               16,752      17,026          51,155     49,724
Provision for income taxes (FTE)   4,633       4,645          13,652     13,606
                                 -----------------------------------------------
Net income                        $6,793      $6,820         $19,992    $19,912
                                 ===============================================

The Company had quarterly  earnings of  $6,793,000,  or $0.42 per diluted share,
for the three months ended September 30, 2007. These results represent no change
from the $0.42  earnings per diluted  share  reported for the three months ended
September 30, 2006 on earnings of $6,820,000.

The Company  reported  earnings of $19,992,000,  or $1.22 per diluted share, for
the nine months ended September 30, 2007. These results represent no change from
the  $1.22  earnings  per  diluted  share  reported  for the nine  months  ended
September 30, 2006 on earnings of $19,912,000.

                                       17
Net Interest Income
Following is a summary of the components of net interest  income for the periods
indicated (dollars in thousands):

                                Three months ended             Nine months ended
                                   September 30,                 September 30,
                                ------------------------------------------------
                                 2007         2006         2007         2006
                                ------------------------------------------------
   Interest income              $32,442      $31,421       $95,089      $88,778
   Interest expense             (10,602)      (9,576)      (29,713)     (24,624)
   FTE adjustment                   191          232           629          749
                                ------------------------------------------------
      Net interest income (FTE) $22,031      $22,077       $66,005      $64,903
                                ================================================
   Average interest-earning  $1,721,547   $1,701,166    $1,704,342   $1,675,027
     assets
   Net interest margin (FTE)      5.12%         5.19%         5.16%        5.17%

The  Company's  primary  source  of  revenue  is  net  interest  income,  or the
difference  between  interest  income on  interest-earning  assets and  interest
expense in interest-bearing liabilities.

Net interest  income (FTE) during the third  quarter of 2007  decreased  $46,000
(0.2%) from the same period in 2006 to $22,031,000. The decrease in net interest
income (FTE) was due to a 0.07%  decrease in net interest  margin (FTE) to 5.12%
that was  substantially  offset by a  $20,381,000  (1.2%)  increase  in  average
balances of interest-earning assets to $1,721,547,000.

Net  interest  income  (FTE)  during  the first  nine  months of 2007  increased
$1,102,000  (1.7%) from the same period in 2006 to $66,005,000.  The increase in
net interest  income (FTE) was due to a $29,315,000  (1.8%)  increase in average
balances of interest-earning  assets to $1,704,342,000 that was partially offset
by a 0.01% decrease in net interest margin (FTE) to 5.16%.

Interest and Fee Income
Interest and fee income (FTE) for the third quarter of 2007  increased  $980,000
(3.1%) from the third  quarter of 2006.  The increase  was due to a  $20,381,000
(1.2%) increase in average interest-earning assets to $1,721,547,000 and a 0.14%
increase in the yield on those  average  interest-earning  assets to 7.58%.  The
growth in  interest-earning  assets was due to a $39,868,000  (2.7%) increase in
average loan balances to $1,517,419,000  that was partially offset by a decrease
of $19,358,000  (8.7%) in average balances of investments to  $203,673,000.  The
increase  in the yield on  average  interest-earning  assets was mainly due to a
0.11%  increase  in yield on loans to 7.93% and a change  in the mix of  earning
assets from lower-earning investments towards higher-earning loans.

Interest  and fee income  (FTE) for the nine  months  ended  September  30, 2007
increased  $6,191,000  (6.9%) from the same period of 2006. The increase was the
net effect of a $29,315,000 (1.8%) increase in average  interest-earning  assets
to  $1,704,342,000   and  a  0.36%  increase  in  the  yield  on  those  average
interest-earning  assets to 7.49%. The growth in interest-earning assets was due
to a $74,661,000 (5.2%) increase in average loan balances to $1,504,865,000 that
was partially offset by a decrease of $44,491,000 (18.3%) in average balances of
investments   to   $199,099,000.   The   increase   in  the  yield  on   average
interest-earning  assets was mainly due to a 0.32% increase in yield on loans to
7.83% and a change in the mix of earning assets from  lower-earning  investments
towards higher-earning loans.

                                       18
Interest Expense
Interest  expense  increased  $1,026,000  (10.7%)  to  $10,602,000  in the third
quarter  of 2007  compared  to the  year-ago  quarter.  The  average  balance of
interest-bearing  liabilities  decreased  $3,648,000 (0.3%) to $1,333,948,000 in
the third quarter compared to the year-ago quarter.  The decrease in the average
balance of  interest-bearing  liabilities  was  concentrated  in  Federal  funds
purchased (down  $36,600,000 or 34.1%) and demand deposits (down  $11,337,000 or
4.9%). In addition, the average balance of other borrowings and savings deposits
increased  $28,655,000  (78.9%) and $10,969,000 (2.9%),  respectively,  from the
year-ago quarter.  The average rate paid on interest-bearing  liabilities in the
quarter  ended  September  30,  2007  increased  0.32% to 3.18%  compared to the
year-ago  quarter as a result of increases in market  interest rates and changes
in the mix of interest-bearing liabilities towards higher paying liabilities.

Interest expense increased $5,089,000 (20.7%) to $29,713,000 for the nine months
ended September 30, 2007 compared to the year-ago nine month period. The average
balance  of  interest-bearing   liabilities   decreased   $1,902,000  (0.1%)  to
$1,313,548,000  for the nine months  ended  September  30, 2007  compared to the
year-ago period. The decrease in  interest-bearing  liabilities was concentrated
in Federal funds purchased (down  $27,477,000 or 30.7%),  savings deposits (down
$19,733,000  or 4.9%)  and  demand  deposits  (down  $14,983,000  or  6.2%).  In
addition,  for the nine months ended  September 30, 2007, the average balance of
time deposits and other borrowings increased  $44,190,000 (8.7%) and $16,101,000
(48.0%),  respectively,  from the  year-ago  period.  The  average  rate paid on
interest-bearing  liabilities in the nine month period ended  September 30, 2007
increased  0.52%  to 3.02%  compared  to the  year-ago  period  as a  result  of
increases in market  interest  rates and changes in the mix of  interest-bearing
liabilities towards higher paying liabilities.

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

                                     Three months ended        Nine months ended
                                        September 30,              September 30,
                                     -------------------------------------------
                                      2007         2006         2007       2006
                                     -------------------------------------------
Yield on interest-earning assets      7.58%        7.44%        7.49%      7.13%
Rate paid on interest-bearing
     Liabilities                      3.18%        2.86%        3.02%      2.50%
                                     -------------------------------------------
     Net interest spread              4.40%        4.58%        4.47%      4.63%
Impact of all other net
     noninterest-bearing funds        0.72%        0.61%        0.69%      0.54%
                                     -------------------------------------------
        Net interest margin           5.12%        5.19%        5.16%      5.17%
                                     ===========================================

Net  interest  margin for the three months ended  September  30, 2007  decreased
0.07%  compared to the three months ended  September 30, 2006.  This decrease in
net  interest  margin was mainly due to an 0.11%  increase  in the impact of net
noninterest-bearing funds to 0.72% from 0.61% in the year-ago three month period
that was more than  offset by a 0.18%  decrease  in net  interest  spread as the
average yield on interest-earning  assets increased 0.14% while the average rate
paid on  interest-bearing  liabilities  increased  0.32% from the year-ago three
month period.

Net interest margin for the nine months ended September 30, 2007 decreased 0.01%
compared to the nine months  ended  September  30,  2006.  This  decrease in net
interest  margin  was  mainly  due to a  0.15%  increase  in the  impact  of net
noninterest-bearing  funds to 0.69% from 0.54% in the year-ago nine month period
that was more than  offset by a 0.16%  decrease  in net  interest  spread as the
average yield on interest-earning  assets increased 0.36% while the average rate
paid on  interest-bearing  liabilities  increased  0.52% from the year-ago three
month period.

                                       19
Summary of Average Balances, Yields/Rates and Interest Differential
The following tables present, for the periods indicated,  information  regarding
the Company's consolidated average assets, liabilities and shareholders' equity,
the  amounts  of  interest  income  from  average  interest-earning  assets  and
resulting  yields,  and the amount of interest expense paid on  interest-bearing
liabilities.  Average loan balances include nonperforming loans. Interest income
includes  proceeds  from  loans on  nonaccrual  loans  only to the  extent  cash
payments have been received and applied to interest income. Yields on securities
and  certain  loans have been  adjusted  upward to reflect  the effect of income
thereon  exempt from federal income  taxation at the current  statutory tax rate
(dollars in thousands).
For the three months ended
                                       ----------------------------------------------------------------
                                           September 30, 2007                   September 30, 2006
                                       -----------------------------    -------------------------------
                                                   Interest    Rates               Interest    Rates
                                         Average   Income/    Earned     Average   Income/    Earned
                                         Balance   Expense     Paid      Balance   Expense     Paid
                                       -----------------------------    ------------------------------
Assets:
Loans                                  $1,517,419  $30,099    7.93%     $1,477,551 $28,901     7.82%
Investment securities - taxable           174,472    1,983    4.55%        188,021   2,082     4.43%
Investment securities - nontaxable         29,201      545    7.47%         35,010     663     7.58%
Federal funds sold                            455        6    5.27%            584       7     4.79%
                                       -----------------------------    ------------------------------
Total interest-earning assets           1,721,547   32,633    7.58%      1,701,166  31,653     7.44%
                                                    ------                          ------
Other assets                              170,445                          178,863
                                          -------                          -------
Total assets                           $1,891,992                       $1,880,029
                                       ==========                       ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits         $220,582      114    0.21%       $231,919     118     0.20%
Savings deposits                          388,315    1,761    1.81%        377,346     906     0.96%
Time deposits                             548,229    6,203    4.53%        543,564   5,820     4.28%
Federal funds purchased                    70,602      922    5.22%        107,202   1,448     5.40%
Other borrowings                           64,982      768    4.73%         36,327     442     4.87%
Junior subordinated debt                   41,238      834    8.09%         41,238     842     8.17%
                                       -----------------------------    ------------------------------
Total interest-bearing liabilities      1,333,948   10,602    3.18%      1,337,596   9,576     2.86%
                                                    ------                          ------
Noninterest-bearing deposits              342,667                          348,801
Other liabilities                                   33,297                              29,713
Shareholders' equity                      182,080                          163,919
                                          -------                          -------
Total liabilities and shareholders'    $1,891,992                       $1,880,029
  equity                               ==========                       ==========
Net interest spread(1)                                        4.40%                            4.58%
Net interest income and interest margin(2)         $22,031    5.12%                $22,077     5.19%
                                                   ================                =================
(1)  Net interest spread represents the average yield earned on interest-earning
     assets minus the average rate paid on interest-bearing liabilities.

(2)  Net  interest  margin is computed by  calculating  the  difference  between
     interest   income  and   expense,   divided  by  the  average   balance  of
     interest-earning assets.

                                       20
For the nine months ended
                                       ---------------------------------------------------------------
                                           September 30, 2007                 September 30, 2006
                                       -----------------------------    ------------------------------
                                                   Interest    Rates               Interest    Rates
                                         Average   Income/    Earned     Average   Income/    Earned
                                         Balance   Expense     Paid      Balance   Expense     Paid
                                       -----------------------------    ------------------------------
Assets:
Loans                                  $1,504,865  $88,404    7.83%     $1,430,204 $80,525     7.51%
Investment securities - taxable           168,363    5,548    4.39%        208,667   6,870     4.39%
Investment securities - nontaxable         30,736    1,752    7.60%         34,923   2,087     7.97%
Federal funds sold                            378       14    4.94%          1,233      45     4.87%
                                       ----------------------------     ------------------------------

Total interest-earning assets           1,704,342   95,718    7.49%      1,675,027  89,527     7.13%
                                                   -------                         -------
Other assets                              171,978                          176,118
                                          -------                          -------
Total assets                           $1,876,320                       $1,851,145
                                       ==========                       ==========
Liabilities and shareholders' equity:
Interest-bearing demand deposits         $225,402      343    0.20%       $240,385     362     0.20%
Savings deposits                          384,366    4,418    1.53%        404,099   2,562     0.85%
Time deposits                             550,783   18,255    4.42%        506,593  14,783     3.89%
Federal funds purchased                    62,115    2,458    5.28%         89,592   3,367     5.01%
Other borrowings                           49,644    1,764    4.74%         33,543   1,186     4.71%
Junior subordinated debt                   41,238    2,475    8.00%         41,238   2,364     7.64%
                                       ----------------------------     -----------------------------
Total interest-bearing liabilities      1,313,548   29,713    3.02%      1,315,450  24,624     2.50%
                                                   -------                         -------
Noninterest-bearing deposits              351,050                          348,278
Other liabilities                                   33,309                              28,867
Shareholders' equity                      178,413                          158,550
                                       ----------                       -----------
Total liabilities and shareholders'    $1,876,320                       $1,851,145
  equity                               ==========                       ===========
Net interest spread(1)                                        4.47%                            4.63%
Net interest income and interest margin(2)         $66,005    5.16%                 64,903     5.17%
                                                   ================                =================
(1) Net interest spread represents the average yield earned on interest-earning
    assets minus the average rate paid on interest-bearing liabilities.
(2) Net interest margin is computed by calculating the difference between
    interest income and expense, divided by the average balance of
    interest-earning assets.

                                       21
Summary of  Changes in  Interest  Income and  Expense  due to Changes in Average
Asset & Liability Balances and Yields Earned & Rates Paid

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

                                           Three months ended September 30, 2007
                                                 compared with three months
                                                  ended September 30, 2006
                                           -------------------------------------
                                               Volume        Rate        Total
                                           -------------------------------------
Increase (decrease) in interest income:
Loans                                            $779        $419      $1,198
Investment securities                            (260)         43        (217)
Federal funds sold                                 (2)          1          (1)
                                           -------------------------------------
   Total interest-earning assets                  517         463         980
                                           -------------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits                   (6)          2          (4)
Savings deposits                                   26         829         855
Time deposits                                      50         333         383
Federal funds purchased                          (494)        (32)       (526)
Other borrowings                                  349         (23)        326
Junior subordinated debt                            -          (8)         (8)
                                           -------------------------------------
   Total interest-bearing liabilities             (75)      1,101       1,026
                                           -------------------------------------
Increase in Net Interest Income                  $592       ($638)       ($46)
                                           =====================================

                                           Nine  months ended September 30, 2007
                                            compared with nine months ended
                                                  September 30, 2006
                                          --------------------------------------
                                           Volume           Rate           Total
                                          --------------------------------------
Increase (decrease) in interest income:
Loans                                      $4,205         $3,674         $7,879
Investment securities                      (1,577)           (80)        (1,657)
Federal funds sold                            (31)             -            (31)
                                          --------------------------------------
   Total interest-earning assets            2,597          3,594          6,191
                                          --------------------------------------
Increase (decrease) in interest expense:
Interest-bearing demand deposits              (22)             3            (19)
Savings deposits                             (126)         1,982          1,856
Time deposits                               1,289          2,183          3,472
Federal funds purchased                    (1,032)           123           (909)
Other borrowings                              569              9            578
Junior subordinated debt                        -            111            111
                                          --------------------------------------
   Total interest-bearing liabilities         678          4,411          5,089
                                          --------------------------------------
Increase in Net Interest Income            $1,919          ($817)        $1,102
                                          ======================================

                                       22
Provision for Loan Losses
The  Company  provided  $700,000  for loan  losses in the third  quarter of 2007
versus $235,000 in the third quarter of 2006.  During the third quarter of 2007,
the Company  recorded  $560,000 of net loan  charge-offs  versus $135,000 of net
loan charge-offs in the year earlier quarter.

The Company  provided  $1,682,000  for loan losses  during the nine months ended
September 30, 2007 versus  $1,289,000 during the nine months ended September 30,
2006.  During the nine months ended  September  30, 2007,  the Company  recorded
$1,457,000 of net loan  charge-offs  versus $522,000 of net loan  charge-offs in
the year earlier nine-month period.

Noninterest Income

The following  table  summarizes the  components of  noninterest  income for the
periods indicated (dollars in thousands).
Three months ended             Nine months ended
                                                        September 30,                  September 30,
                                                   ---------------------------------------------------
                                                     2007          2006            2007          2006
                                                   ---------------------------------------------------
Service charges on deposit accounts           $3,819        $3,703         $11,236       $10,883
     ATM fees and interchange                        1,016           927           3,011         2,641
     Other service fees                                523           544           1,633         1,601
     Change in value of mortgage servicing rights     (141)         (118)           (226)         (256)
     Gain on sale of loans                             211           264             756           875
     Commissions on sale of
       nondeposit investment products                  583           447           1,633         1,529
     Increase in cash value of life insurance          405           420           1,215         1,223
     Gain on sale of investments                         -             -               -            12
     Other noninterest income                          431           462           1,218         1,120
                                                   ----------------------------------------------------
     Total noninterest income                       $6,847        $6,649         $20,476       $19,628
                                                   ====================================================
Noninterest  income for the third quarter of 2007 increased $198,000 (3.0%) from
the  year-ago  quarter.  The  increase in  noninterest  income from the year-ago
quarter was mainly due to a $136,000  (30.4%) increase in commissions on sale of
nondeposit  investment  products  to  $583,000,  a $116,000  (3.1%)  increase in
service  charges on  deposit  accounts  to  $3,819,000,  and an  $89,000  (9.6%)
increase in ATM fees and interchange to $1,016,000,  that were partially  offset
by a $53,000 (20.1%) decrease in gain on sale of loans to $211,000. The increase
in  commissions on sale of nondeposit  investment  products was primarily due to
improved  market  conditions and increased  resources  focused in this area. The
increase in service  charges on deposit  accounts was primarily due to growth in
customer  count.  The increase in ATM fees and  interchange was due to growth in
customer count and expansion of ATM network as part of new branch openings.  The
decrease in gain on sale of loans is due to a slowdown in  residential  mortgage
refinance activity.

Noninterest  income for the nine  months  ended  September  30,  2007  increased
$848,000  (4.3%) to  $20,476,000  from the same period in 2006.  The increase in
noninterest  income from the year-ago  nine months ended  September 30, 2006 was
mainly due mainly due to a $104,000  (6.8%)  increase in  commissions on sale of
nondeposit  investment  products to $1,633,000,  a $353,000  (3.2%)  increase in
service  charges on deposit  accounts  to  $11,236,000,  and a $370,000  (14.0%)
increase in ATM fees and interchange to $3,011,000,  that were partially  offset
by a  $119,000  (13.6%)  decrease  in gain on sale of  loans  to  $756,000.  The
increase in commissions on sale of nondeposit  investment products was primarily
due to improved market conditions and increased  resources focused in this area.
The increase in service charges on deposit  accounts was primarily due to growth
in customer count. The increase in ATM fees and interchange was due to growth in
customer count and expansion of ATM network as part of new branch openings.  The
decrease in gain on sale of loans is due to a slowdown in  residential  mortgage
refinance activity.

                                       23
Noninterest Expense
The following  table  summarizes the  components of noninterest  expense for the
periods indicated (dollars in thousands).
Three months ended             Nine months ended
                                                    September 30,                  September 30,
                                               ----------------------------------------------------
                                                 2007          2006            2007          2006
                                               ----------------------------------------------------
Salaries & benefits                     $8,975        $9,276         $28,336       $27,050
     Occupancy                                1,178         1,170           3,526         3,298
     Equipment                                1,052         1,018           3,222         3,187
     Advertising and marketing                  620           655           1,624         1,628
     Data processing and software               564           453           1,482         1,259
     ATM network charges                        463           475           1,389         1,375
     Telecommunications                         412           380           1,240         1,165
     Professional fees                          408           375           1,217         1,265
     Courier service                            285           312             867           925
     Postage                                    178           261             602           753
     Operational losses                         128            89             313           218
     Intangible amortization                    122           350             367         1,046
     Assessments                                 82            83             247           243
     Other                                    2,285         2,129           6,723         6,312
                                            -----------------------------------------------------
     Total                                  $16,752       $17,026         $51,155       $49,724
                                            =====================================================
     Average full time equivalent staff         646           630             636           619
     Noninterest expense to revenue (FTE)     58.01%        59.27%         59.12%         59.82%
Noninterest  expense for the third  quarter of 2007  decreased  $274,000  (1.6%)
compared to the third quarter of 2006.  Salaries and benefits expense  decreased
$301,000 (3.2%) to $8,975,000. The decrease in salaries and benefits expense was
mainly due to reduced commission and incentive expense that was partially offset
by annual salary increases,  and new employees at the Company's  recently opened
branches.  The reduced commission and incentive expense was due to the Company's
employees not earning certain bonus and incentive  compensation which is tied to
the Company satisfying internal targeted  performance goals. The Company did not
meet such goals for the third quarter of 2007 and thus did not incur the related
compensation  expense.  Intangible  amortization  decreased  $228,000  (65%)  to
$122,000 during the third quarter of 2007 as the core deposit intangible related
to the purchase of several branches in 1997 became fully amortized in the fourth
quarter of 2006.

Noninterest  expense  for the nine months  ended  September  30, 2007  increased
$1,431,000 (2.9%) compared to the nine months ended September 30, 2006. Salaries
and benefits expense increased $1,286,000 (4.8%) to $28,336,000. The increase in
salaries and benefits  expense was mainly due to annual salary increases and new
employees at the Company's  recently opened branches that were partially  offset
by reduced commission and incentive expense.  Intangible  amortization decreased
$679,000  (65%) to $367,000  during the nine months ended  September 30, 2007 as
the core deposit  intangible related to the purchase of several branches in 1997
became fully amortized in the fourth quarter of 2006.

Provision for Income Tax
The effective  tax rate for the three months ended  September 30, 2007 was 39.5%
compared to 39.3% for the three months ended  September 30, 2006.  The effective
tax rate for the nine months ended  September 30, 2007 was 39.2% and reflects no
change from 39.2% for the nine months ended  September  30, 2006.  The provision
for income  taxes for all periods  presented is  primarily  attributable  to the
respective  level  of  earnings  and  the  incidence  of  allowable  deductions,
particularly from increase in cash value of life insurance, tax-exempt loans and
state and municipal securities.

                                       24
Classified Assets

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

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

                            At September 30, 2007         At December 31, 2006
                          -------------------------   --------------------------
                            Gross Guaranteed  Net       Gross Guaranteed   Net
                          -------------------------   --------------------------
Classified loans          $18,982   $6,114  $12,868    $13,116  $6,514   $6,602
Other classified assets       187        -      187          -       -        -
                          ------------------------------------------------------
Total classified assets   $19,169   $6,114  $13,055    $13,116  $6,514   $6,602
                          ======================================================
Allowance for loan losses/classified loans    133.2%                      256.2%

Classified  assets,  net of  guarantees  of the U.S.  Government,  including its
agencies and its government-sponsored  agencies at September 30, 2007, increased
$ 6,453,000 (97.7%) to $ 13,055,000 from $6,602,000 at December 31, 2006.

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

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

Interest income on nonaccrual loans, which would have been recognized during the
nine months,  ended  September  30, 2007,  if all such loans had been current in
accordance  with their  original  terms,  totaled  $1,112,000.  Interest  income
actually  recognized  on these loans during the nine months ended  September 30,
2007 was $650,000.

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

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

                                       25
As shown in the following table, total nonperforming assets net of guarantees of
the  U.S.  Government,  including  its  agencies  and  its  government-sponsored
agencies,  increased  $3,182,000  (70.5%)  to  $7,694,000  during the first nine
months of 2007.  Nonperforming assets net of guarantees represent 0.39% of total
assets.  All nonaccrual loans are considered to be impaired when determining the
need  for a  specific  valuation  allowance.  The  Company  continues  to make a
concerted  effort to work problem and potential  problem loans to reduce risk of
loss.
(dollars in thousands):
                                                 At September 30, 2007         At December 31, 2006
                                              -------------------------    -------------------------
                                                Gross Guaranteed  Net       Gross Guaranteed   Net
                                              ------------------------------------------------------
Performing nonaccrual loans                    $9,521   $5,980   $3,541    $10,255  $6,372   $3,883
Nonperforming, nonaccrual loans                 3,952        -    3,952        561       -      561
                                              ------------------------------------------------------
     Total nonaccrual loans                    13,473    5,980    7,493     10,816   6,372    4,444
Loans 90 days past due and still accruing          14        -       14         68       -       68
                                              ------------------------------------------------------
Total nonperforming loans                      13,487    5,980    7,507     10,884   6,372    4,512
Other real estate owned                           187        -      187          -       -        -
                                              ------------------------------------------------------
Total nonperforming assets                    $13,674   $5,980   $7,694    $10,884  $6,372   $4,512
                                              ======================================================
Nonperforming loans to total loans                               0.49%                        0.30%
Nonperforming assets to total assets                             0.39%                        0.24%
Allowance for loan losses to nonperforming loans                  228%                        375%
Capital Resources
The  current  and  projected  capital  position of the Company and the impact of
capital plans and long-term strategies are reviewed regularly by Management.

On August 21, 2007, the Company announced the completion of its stock repurchase
plan  originally  adopted on July 31, 2003 and  amended on April 9, 2004.  Under
this plan, the Company repurchased a total of 500,000 shares of its common stock
with the final 105,629 shares being repurchased during August 2007 at an average
price of $20.97 per share.

Also  on  August  21,  2007,  the  Board  of  Directors  adopted  a new  plan to
repurchase,  as conditions warrant, up to 500,000 shares of the Company's common
stock on the open market. The timing of purchases and the exact number of shares
to be purchased will depend on market conditions.  The 500,000 shares authorized
for repurchase under this new stock  repurchase plan  represented  approximately
3.2% of the  Company's  15,814,662  outstanding  common  shares as of August 21,
2007. This new stock repurchase plan has no expiration date.

The  Company's  primary  capital  resource is  shareholders'  equity,  which was
$182,725,000  at  September  30,  2007.  This amount  represents  an increase of
$13,289,000 from December 31, 2006, the net result of  comprehensive  income for
the period of  $20,885,000,  the  issuance of common  shares via the exercise of
stock  options for  proceeds  of  $3,863,000,  the tax  effects of stock  option
exercises of  $1,707,000,  and the effect of stock  option  vesting of $579,000,
partially  offset by the  repurchase of common stock with an aggregate  value of
$2,685,000, the retirement of common stock with an aggregate value of $4,859,000
tendered by employees, in lieu of cash, to exercise stock options, and dividends
paid of  $6,201,000.  The  Company's  ratio of equity to total assets was 9.35%,
8.67%, and 8.82% as of September 30, 2007,  September 30, 2006, and December 31,
2006, respectively.

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

                                At September 30,       At            Minimum
                               -----------------   December 31,    Regulatory
                               2007       2006        2006         Requirement
                               -----------------------------------------------
     Tier I Capital            10.68%     10.07%     10.44%           4.00%
     Total Capital             11.66%     11.08%     11.44%           8.00%
     Leverage ratio            11.28%     10.13%     10.49%           4.00%

The  information  presented  under  "Liquidity"  at  Item 3 of  this  Report  is
incorporated herein by reference.

                                       26
Off-Balance Sheet Items
The Bank has certain  ongoing  commitments  under  operating and capital leases.
These commitments do not significantly impact operating results. As of September
30, 2007  commitments  to extend  credit and  commitments  related to the Bank's
deposit overdraft  privilege product were the Bank's only financial  instruments
with  off-balance  sheet risk.  The Bank has not entered into any  contracts for
financial  derivative   instruments  such  as  futures,   swaps,  options,  etc.
Commitments to extend credit were $ 695,913,000  and  $623,133,000  at September
30, 2007 and December 31, 2006,  respectively,  and represent 45.3% of the total
loans  outstanding  at  September  30, 2007 versus  41.3% at December  31, 2006.
Commitments  related to the Bank's deposit  overdraft  privilege product totaled
$33,596,000  and  $33,290,000  at  September  30, 2007 and  December  31,  2006,
respectively.

                                       27
Item 3.  Quantitative and Qualitative Disclosures about Market Risk

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

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

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

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

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

At September 30, 2007, the results of the simulations  noted above indicate that
given a "flat"  balance  sheet  scenario,  and if deposit  rates  track  general
interest  rate changes by  approximately  50%, the  Company's  balance  sheet is
slightly  liability  sensitive.  "Liability  sensitive"  implies  that  earnings
decrease when interest rates rise,  and increase when interest  rates  decrease.
The  magnitude of all the  simulation  results  noted above is within the Bank's
policy guidelines. The asset liability management policy limits aggregate market
risk, as measured in this fashion,  to an acceptable level within the context of
risk-return trade-offs.

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

At September 30, 2007 and 2006, the Company had no material derivative financial
instruments.

There have been no material  changes from the information  regarding market risk
disclosed  under  Market Risk  Management"  at Item 7 of the  Company's  Annual
Report on Form 10-K for the year ended December 31, 2006.

                                       28
Liquidity
The  Company's  principal  source of asset  liquidity is federal  funds sold and
marketable  investment  securities  available  for sale.  At September 30, 2007,
federal  funds  sold  and  investment  securities  available  for  sale  totaled
$239,730,000,  representing an increase of $40,575,000 (20.4%) from December 31,
2006,  and an increase of  $28,457,000  (13.5%)  from  September  30,  2006.  In
addition,   the  Company  generates  additional  liquidity  from  its  operating
activities.  The  Company's  profitability  during the first nine months of 2007
generated  cash flows from  operations of  $23,518,000  compared to  $25,219,000
during the first nine months of 2006.  Additional  cash flows may be provided by
financing  activities,  primarily the acceptance of deposits and borrowings from
banks.  Maturities and sales of investment  securities  produced cash inflows of
$38,954,000 and $0 respectively, during the nine months ended September 30, 2007
compared to  $40,208,000  and $10,780,  respectively,  for the nine months ended
September 30, 2006. During the nine months ended September 30, 2007, the Company
invested $78,822,000 in securities and $26,841,000 in net loan growth,  compared
to  investing  $896,000  and  $122,648,000  in  securities  and net loan growth,
respectively,  during the first nine months of 2006. These changes in investment
and loan  balances  contributed  to net cash  used by  investing  activities  of
$69,640,000 and $75,870,000  during the nine months ended September 30, 2007 and
2006,  respectively.  Financing  activities provided net cash of $14,387,000 and
$37,380 during the nine months ended September 30, 2007 and 2006,  respectively.
A decrease in deposit  balances  accounted  for a  $67,007,000  use of financing
funds during the nine months ended  September 30, 2007 compared to a $28,377,000
source of financing  funds during the nine months ended  September 30, 2006 from
an increase in deposit balances.  Federal funds borrowed  increased  $28,000,000
and  $9,700,000  in the first nine  months of 2007 and 2006,  respectively.  The
issuance of  long-term  other  borrowings  provided  $50,000,000  and $0 of cash
during  the  nine  months  ended  September  30,  2007 and  2006,  respectively.
Increases in short-term other borrowings provided  $10,136,000 and $4,502,000 of
cash during the nine months  ended  September  30, 2007 and 2006,  respectively.
Dividends  paid used  $6,201,000  and  $5,692,000 of cash during the nine months
ended September 30, 2007 and 2006, respectively. Repurchase of common stock used
$2,685,000  and $0 of cash during the nine months ended  September  30, 2007 and
2006,  respectively.  Also,  the  Company's  liquidity is dependent on dividends
received  from  the  Bank.  Dividends  from  the Bank  are  subject  to  certain
regulatory restrictions.

Item 4.  Controls and Procedures
The Chief Executive  Officer,  Richard Smith,  and the Chief Financial  Officer,
Thomas Reddish, evaluated the effectiveness of the Company's disclosure controls
and  procedures  as of September  30, 2007  ("Evaluation  Date").  Based on that
evaluation,  they  concluded  that  as of  the  Evaluation  Date  the  Company's
disclosure  controls and procedures are effective to allow timely  communication
to them of  information  relating  to the  Company  and the Bank  required to be
disclosed in its filings with the  Securities  and Exchange  Commission  ("SEC")
under  the  Securities  Exchange  Act of  1934,  as  amended  ("Exchange  Act").
Disclosure  controls and  procedures are Company  controls and other  procedures
that are  designed to ensure that  information  required to be  disclosed by the
Company  in the  reports  that it files  under  the  Exchange  Act is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms.

No changes in the Company's  internal control over financial  reporting occurred
during  the first  nine  months of 2007 that have  materially  affected,  or are
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

                                       29
PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

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

Item 1A - Risk Factors

There have been no material changes to the risk factors previously  disclosed in
Item 1A to Part I of our Annual Report on Form 10-K for the year ended  December
31, 2006.

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

The following table shows information concerning the common stock repurchased by
the Company during the third quarter of 2007 pursuant to (i) the Company's stock
repurchase plan  originally  announced on July 31, 2003, as amended on March 11,
2004, to conform with the Company's  two-for-one  stock split effective on April
9, 2004, and (ii) the Company's stock  repurchase  plan originally  announced on
August 21, 2007 which are discussed in more detail under "Capital  Resources" at
Part I, Item 2, of this report:
Period          (a) Total number    (b) Average price   (c) Total number of    (d) Maximum number
                of Shares purchased  paid per share     shares purchased as    of shares that may yet
                                                        part of publicly       be purchased under the
                                                        announced plans or     plans or programs
                                                        programs
-------------------------------------------------------------------------------------------------------
Jul. 1-31, 2007             -              -                     -                 105,629
Aug. 1-31, 2007       105,629            $20.97            105,629                 500,000
Sep. 1-30, 2007             -                 -                  -                 500,000
--------------------------------------------------------------------------------------------------------
Total                 105,629            $20.97            105,629                 500,000
During the quarter ended September 30, 2007,  employees  tendered 202,378 shares
of the Company's common stock with an aggregate value of $4,859,000,  in lieu of
cash, to exercise stock options.

                                       30
Item 6 - Exhibits

3.1*      Restated Articles of Incorporation dated May 9, 2003, filed as Exhibit
          3.1 to TriCo's  Quarterly  Report on Form 10-Q for the  quarter  ended
          March 31, 2003.

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

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

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

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

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

10.4*     TriCo's  2001 Stock  Option Plan as amended  filed as Exhibit  10.7 to
          TriCo's  Annual  Report on Form 10-K for the year ended  December  31,
          2004.

10.5*     Amended  Employment  Agreement  between  TriCo and Richard Smith dated
          March 20,  2007  filed as Exhibit  10.1 to TriCo's  Report on Form 8-K
          dated March 20, 2007.

10.6*     Tri Counties Bank Executive Deferred Compensation Plan dated September
          1, 1987, as restated April 1, 1992, and amended and restated effective
          as of  January 1, 2004  filed as  Exhibit  10.9 to  TriCo's  Quarterly
          Report on Form 10-Q for the quarter ended September 30, 2005.

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

10.8*     2005 Tri Counties Bank Deferred  Compensation  Plan for Executives and
          Directors  effective January 1, 2005 filed as Exhibit 10.11 to TriCo's
          Quarterly  Report on Form 10-Q for the  quarter  ended  September  30,
          2005.

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

10.10*    2004  TriCo  Bancshares  Supplemental  Retirement  Plan for  Directors
          effective  January 1, 2004 filed as Exhibit 10.13 to TriCo's Quarterly
          Report on Form 10-Q for the quarter ended June 30, 2004.

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

                                       31
10.12*    2004 TriCo Bancshares Supplemental Executive Retirement Plan effective
          January 1, 2004 filed as Exhibit 10.15 to TriCo's  Quarterly Report on
          Form 10-Q for the quarter ended June 30, 2004.

10.13*    Form of Joint Beneficiary  Agreement  effective March 31, 2003 between
          Tri Counties Bank and each of Craig Carney,  Richard  Miller,  Richard
          O'Sullivan,  Thomas Reddish, and Richard Smith, filed as Exhibit 10.14
          to  TriCo's  Quarterly  Report  on Form  10-Q  for the  quarter  ended
          September 30, 2003.

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

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

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

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

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

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

31.1     Rule 13a-14(a)/15d-14(a) Certification of CEO
31.2     Rule 13a-14(a)/15d-14(a) Certification of CFO
32.1     Section 1350 Certification of CEO
32.2     Section 1350 Certification of CFO

       * Previously filed and incorporated by reference.

                                       32
SIGNATURES

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

                                TRICO BANCSHARES
                                  (Registrant)

Date:  November 6, 2007     /s/ Thomas J. Reddish
                            ------------------------
                            Thomas J. Reddish
                            Executive Vice President and
                            Chief Financial Officer

                                       33
EXHIBITS

Exhibit 31.1

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

I, Richard P. Smith, certify that;

1.        I  have  reviewed  this  quarterly   report  on  Form  10-Q  of  TriCo
          Bancshares;
2.        Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;
3.        Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly  report;
4.        The registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange Act Rules  13a-15(e) and  15d-15(e))  and internal
          control  over  financial  reporting  (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and we have:
          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including its consolidated subsidiary, is made known
               to us by others within those  entities,  particularly  during the
               period in which this quarterly report is being prepared;
          b.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;
          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and procedures  and presented in this  quarterly  report
               our  conclusions   about  the  effectiveness  of  the  disclosure
               controls and  procedures,  as of the end of the period covered by
               this quarterly report based on such evaluation; and
          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most  recent  fiscal  quarter  that has  materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting;
5.        The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's board of directors:
          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and
          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

Date: November 6, 2007                  /s/ Richard P. Smith
                                        -------------------------------------
                                        Richard P. Smith
                                        President and Chief Executive Officer

                                       34
Exhibit 31.2

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

I, Thomas J. Reddish, certify that;

1.        I  have  reviewed  this  quarterly   report  on  Form  10-Q  of  TriCo
          Bancshares;
2.        Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;
3.        Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly  report;
4.        The registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange Act Rules  13a-15(e) and  15d-15(e))  and internal
          control  over  financial  reporting  (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and we have:
          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including its consolidated subsidiary, is made known
               to us by others within those  entities,  particularly  during the
               period in which this quarterly report is being prepared;
          b.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;
          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and procedures  and presented in this  quarterly  report
               our  conclusions   about  the  effectiveness  of  the  disclosure
               controls and  procedures,  as of the end of the period covered by
               this quarterly report based on such evaluation; and
          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most  recent  fiscal  quarter  that has  materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting;
5.        The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's board of directors:
          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and
          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

Date: November 6, 2007                     /s/ Thomas J. Reddish
                                           ------------------------------------
                                           Thomas J. Reddish
                                           Executive Vice President and
                                           Chief Financial Officer

                                       35
Exhibit 32.1

Section 1350 Certification of CEO

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ended  September 30, 2007 as filed with the  Securities
and Exchange Commission on the date hereof (the "Report"),  I, Richard P. Smith,
President and Chief Executive  Officer of the Company,  certify,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that:

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

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

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

Exhibit 32.2

Section 1350 Certification of CFO

In connection with the Quarterly  Report of TriCo  Bancshares (the "Company") on
Form 10-Q for the period ended  September 30, 2007 as filed with the  Securities
and Exchange Commission on the date hereof (the "Report"), I, Thomas J. Reddish,
Executive Vice President and Chief  Financial  Officer of the Company,  certify,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

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

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

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

                                       36