TriCo Sells Out

TriCo Bancshares , parent company of Tri Counties Bank, Thursday reported record quarterly earnings of $2,751,000 for the second quarter ended June 30, 1999.

The quarterly earnings represented a 28.5% increase over the $2,141,000 reported for the same period of 1998. Diluted earnings per share for the second quarter 1999 were $0.38 versus $0.29 in the year earlier period. Earnings for the six months ended June 30, 1999 were $5,385,000 versus year ago results of $4,071,000, and represent a 32.3% increase. The diluted earnings per share were $0.74 and $0.56 for the respective six-month periods.

Factors contributing to the improved operating results included continued loan growth, an increase in net interest rate spread, a reduction in provision for loan losses, and a reduction in noninterest expenses.

Pretax earnings for the second quarter of 1999 were $4,352,000 versus $3,393,000 for the same period in 1998. During the second quarter of 1998, the Bank sold its credit card portfolio of $14,365,000 for a gain of $793,000 that is included in noninterest income for 1998. Net interest income reflected growth of 9.8% to $10,741,000.

The interest income component was up $313,000 (1.9%) due to higher quarter-over-quarter volume of earning assets ($807,687,000 versus $769,550,000) partially offset by the effect of a 22 basis point decrease in yield on average earning assets. Interest expense decreased $647,000 (10.0%) which was due predominately to a 49 basis point decrease in the average rate paid on interest bearing liabilities. Net interest margin was 5.46% for the second quarter of 1999 versus 5.20% in the same quarter of the prior year.

This higher net interest margin reflects the effects of a higher growth rate in earning assets versus interest-bearing liabilities, and a larger decrease in the average rate paid on interest bearing liabilities as compared to the decrease in the average yield earned on interest bearing assets.

The decrease in rates and yields from June of 1998 to June of 1999 is a reflection of the general decrease in market interest rates that occurred in the fall of 1998. The provision for loan losses of $870,000 for the second quarter of 1999 was $365,000 lower than the $1,235,000 recorded in the same quarter of 1998.

Excluding the gain on the sale of the credit card portfolio in 1998, noninterest income for the second quarter of 1999 increased $206,000 (6.5%) from the same period in 1998. Income from service charges and fees decreased $95,000 (5.1%), primarily due to the absence of credit card fees that contributed $122,000 of income in the second quarter of 1998.

Other income, excluding the gain on the sale of the credit card portfolio, increased $301,000 (23.4%) in the second quarter of 1999 versus the same quarter in 1998. Gain on sale of other real estate owned accounted for $156,000 of the increase. Gains on the sale of loans were up $115,000 to $195,000. Commissions on the sale of mutual funds and annuities were up $16,000 to $665,000.

Noninterest expense decreased $221,000 (2.4%) in the second quarter 1999 versus 1998. Salary and benefit expense increased $252,000 (6.0%) mostly due to higher commission payments to sales personnel and accruals for performance incentive programs. Base salaries increased $103,000 (3%). Other expenses decreased $473,000 (9.7%). On a quarter-over-quarter basis, provision for OREO valuation was reduced $148,000 to $10,000 and all other expenses were favorable by a total of $325,000.

Assets of the Company totaled $888,425,000 at June 30, 1999 and represented a decrease of $16,174,000 (1.8%) and an increase of $15,130,000 (1.7%) from the December 31, 1998 and June 30, 1998 ending balances, respectively. Changes in earning assets from the prior year quarter end balances included an increase in loans of $73,339,000 to $564,642,000 and a decrease in securities of $60,442,000 to $237,435,000. From year end 1998 balances, nonperforming assets have decreased $529,000 and total $2,548,000 at June 30, 1999. Nonperforming assets were 0.29% of total assets at quarter end.

Year to date 1999, on an annualized basis, the Company realized a return on assets of 1.21% and a return on equity of 14.68% versus 0.99% and 12.19% in the first half of 1998. TriCo Bancshares ended the quarter with a Tier 1 capital ratio of 10.5% a nd a total risk-based capital ratio of 11.7%.

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

Tri Counties Bank headquarters are in Chico and it conducts operations through 26 traditional branches and 9 in-store branches located in 17 California counties. The Bank provides traditional deposit, lending, mortgage and commercial products and services to business and retail customers throughout its market area.

(Dollars in thousands, except share data)

3 months ended 6 months ended
June 30, June 30,
Statement of Income Data 1999 1998 1999 1998
——— ———- ———- ———-

Net interest income $ 10,741 $ 9,781 $ 21,248 $ 19,108
Provision for
loan losses 870 1,235 1,710 2,060
Noninterest income 3,368 3,955 6,330 6,961
Noninterest expense 8,887 9,108 17,373 17,495
Net income 2,751 2,141 5,385 4,071

Share Data
Earnings per share
Basic $ 0.39 $ 0.31 $ 0.76 $ 0.58
Diluted 0.38 0.29 0.74 0.56
Book value per
common share 9.99 9.70

Shares outstanding 7,127,747 7,012,788
Weighted average
shares 7,124,366 7,007,285 7,115,024 6,997,967
Weighted average
diluted shares 7,311,880 7,288,481 7,304,713 7,283,015

Balance Sheet Data
Total assets 888,425 873,295
Securities, held-to-maturity — 82,926
Securities, available-for-sale 237,435 214,951
Total loans, gross 564,642 491,303
Allowance for loan losses 9,716 7,138
Total deposits 746,095 725,478
Total shareholders’ equity 71,195 68,029
Unrealized gain (loss)
on securities
available-for-sale, net (3,441) 159

Non-performing loans 1,829 3,989
Other real estate owned 719 1,464

Selected Financial Ratios
Return on average total assets 1.21% 0.99%
Return on average equity 14.68% 12.19%
Net interest margin 5.40% 5.21%
Allowance for loan losses to total loans 1.72% 1.45%
Allowance for loan losses to NPL’s 531% 179%
Allowance for loan losses to NPA’s 381% 131%
Total risk based capital ratio 11.73% 11.82%
Tier 1 Capital ratio 10.48% 10.57%
Leverage ratio 7.71% 7.13%


Cap One

Despite serving primarily the sub-prime credit card market, Capital One said Thursday its charge-off rate has declined and “continues to be the lowest among industry leaders”. According to Cap One’s 2Q/99 earnings report the managed net charge-off rate decreased to 3.73% for the second quarter of 99 versus 3.93% for the first quarter, and 5.91% for the comparable period in the prior year. The managed delinquency rate (30+ days) increased to 4.72% as of June 30, compared with 4.56% at the end of the first quarter. During the second quarter Cap One said it has added 1.2 million net new accounts, bringing total accounts to 19.2 million. To generate the new accounts Cap One spent a record $178 million in marketing compared to $176 million in the first quarter and $86 million for 2Q/98. Second quarter 1999 revenue, defined as managed net interest income and non-interest income, rose to $927 million versus $873 million in the first quarter of 1999 and $653 million for the comparable period in the prior year. For the quarter, Capital One’s managed consumer loan balances increased by $416 million to $17.9 billion. Overall Cap One reported second quarter 99 earnings of $87.5 million versus earnings of $82.4 million, for the first quarter and $66.9 million for the comparable period in the prior year. For complete 2Q/99 financials for Capital One please visit CardData ([][1]).



2Q/99 Under $1 Billion

More second quarter results from First Tennessee, Simmons National Bank and the Navy Federal Credit Union.

First Tenn Simmons Navy FCU
Recv 562,000,000 149,697,748 852,080,304
Vol 344,700,000 73,936,124 571,694,006
YTD Vol 647,300,000 138,306,961 1,063,486,672
Accts 531,000 227,935 586,233
Actives 309,000 127,226 461,447
Card 840,000 190,839 746,504

Source: CardData (



CT-based People’s Bank expanded its credit card operation in the U.K. to include a new “relationship call center.” The move adds 100 employees, nearly tripling People’s employee base in the U.K. People’s said it achieved profitability in the 11th quarter of the U.K. operation, which exceeded its corporate goal. The new U.K. call center brings collections in house and it adds telemarketing to the mix. People’s continues to use its original credit card strategy, domestically and in the U.K., of offering a low rate card and focusing on creditworthy customers who carry a balance.



Viad’s MoneyGram Payment Systems unit lowered prices this week on its ten-minute payment service, ‘ExpressPayment’, giving consumers a lower-cost, guaranteed payment service nationwide. The new ‘ExpressPayment’ fees, for walk-in emergency payments, went into effect on July 12. They are now $8.95 or $6.95, depending on the payment destination. The old price was $10.50. Last year U.S. consumers sent an estimated $7.5 billion in late payments via electronic payment services such as MoneyGram’s ‘ExpressPayment’.



Checkwriting is not slowing down in the U.S. despite the promotion of electronic bill payment and presentment services. According to TowerGroup, nearly 70 billion checks are presented each year, and as a result, American financial institutions spend approximately $4.2 billion per year in operational costs processing these checks. Although TowerGroup predicts a one percent per year decrease in checks beginning in 2000, the volume will remain in the 60 billion range for years. EDS says the answer to image-based check processing. EDS by eliminating the forward presentment of the paper check and using image-based workflow automation, the industry could save as much as two-thirds in operational costs of check processing.



Western Union Commercial Services introduced its ‘Western Union Easy Pay’ service Thursday. The news service is a fully-automated information and payment processing solution that allows businesses to receive payment or payment information from consumers using IVR technology. Consumers can use the service to pay delinquent debts, or make other payments, through a full variety of payment options including telephone check drafting or credit card. Western Union says the system is ideal for businesses seeking to reduce live operator-handled calls.



Home Account, the leading developer of Internet-based financial services, unveiled Thursday a program that makes it easier than ever before for financial service companies to offer their products and services over the Internet.

The new program, called AnySourcing(tm), provides a financial institution with the ability to insource or outsource their Internet banking operations while using the same software and offering the same services, and establishes a new level of flexibility for the delivery of financial services over the Internet. AnySourcing eliminates one of the toughest issues financial service companies have traditionally faced in developing their Internet delivery strategies: should they outsource or run their program in-house?

“With AnySourcing, the ‘in versus out’ decision becomes less of an issue,” said Charles A. White, president and chief executive of Home Account. “In fact, financial service companies now have new options for using both in-house and outsourced components to build and accelerate the implementation of their Web delivery strategies,” he said.

AnySourcing eliminates “analysis paralysis” and makes the decision to offer financial services over the Internet an easy one. Instead of worrying about how the technology will evolve, financial service executives can concentrate on the products and services they want to deliver to their customers.

AnySourcing leverages Home Account’s industry-leading capabilities in in-house software development, transaction processing and complete service bureau solutions. Home Account clients can start simply with the turnkey Canopy First service bureau solution, migrate to an in-house environment over time, or utilize both in-house and outsource environments concurrently for different components of their Internet delivery strategies.

AnySourcing is made possible by Home Account’s development of an integrated technology platform supporting the Canopy product suite. “This is just the first of many examples of the versatility and power of the new Home Account,” said David J. Brewer, executive vice president and chief technology officer of Home Account. “AnySourcing enables us to tailor Internet financial service solutions for anyone, from credit unions to the largest national banks, and help our clients manage them in the years to come.”

Last month, Home Account completed the acquisition of First Data Direct Banking, creating a financial services industry powerhouse with the broadest array of products and a trademarked implementation process that offers the fastest speed-to-market implementation process in the industry. About Home Account Home Account delivers home banking, financial management and electronic commerce solutions to banks, brokerages and other financial institutions. Home Account’s products include: Canopy Server(tm), an OFX (Open Financial Exchange) financial services platform that allows distribution of services through multiple channels; Canopy Advisor(tm), a strategic financial planning system for use by individuals and financial professionals; Canopy First(tm), a family of outsourced, scalable and brandable Internet products and services for financial institutions, card issuers and brokerages; Canopy Card(tm) innovative Internet account access programs for card issuers; Canopy Business(tm) Internet-based cash management services for business customers; and Canopy Clients(tm), a series of financial management user interfaces.

Although Home Account’s products are designed as components which can operate separately, the Home Account product suite when combined provides an integrated customer relationship management system, the Canopy Continuum(tm), that assists financial institutions in building profitable, long-term relationships with their customers. Using the Canopy NetSpeed(tm) process as a template, financial institutions can have fully functional, branded web sites up and running in just 30 business days.

Home Account is headquartered in Emeryville, Calif., with offices in Charleston, S.C., Omaha, Neb., Los Angeles and Atlanta.


HomeBase StoreFronts

AltaVista, the Internet’s premier media and commerce network, in partnership with Intershop Communications and CyberSource Corporation, announced Thursday Homebase StoreFronts, a new e-commerce solution created for merchants who want to capitalize on the traffic-generating power of the AltaVista network.

Homebase StoreFronts significantly raises the level of service Homebase local media partners can offer to their advertisers by expanding beyond basic advertising to full-blown e-commerce transaction capability, all within the partner’s portal site. Developed by AltaVista’s Zip2 division, Homebase is the leading local portal service that enables media organizations to combine their highly relevant local content with the vast resources of a standard portal.

Intershop Communications, the leading provider of sell-side electronic commerce hosting solutions, will provide the critical underlying technology to power Homebase StoreFronts. AltaVista will offer Intershop ePages to provide merchants with the ability to rapidly launch e-commerce Web sites and to drive local traffic directly to their storefronts from sites throughout the AltaVista network.

AltaVista also announced that CyberSource, a developer and provider of real-time e-commerce transaction services, is providing its Credit Card Processing and Internet Fraud Screening services to power the buy buttons of Homebase StoreFronts. Used by many of the Internet’s most successful merchants, CyberSource Credit Card Processing enables rapid, real-time payments worldwide in over 150 currencies, including the EURO. The popular CyberSource Internet Fraud Screen enables AltaVista to offer Internet merchants highly effective customized fraud screen.

“Homebase StoreFronts offers a powerful answer to the two questions that most plague prospective e-merchants — ‘How do I quickly get my e-commerce site up and running, and how do I get shoppers there?'” said Bruce Murray, vice president of marketing at AltaVista Zip2.

“We selected Intershop as a technology provider based on their focused expertise in the e-commerce field. Our additional partner, CyberSource, provides the Internet’s most complete range of outsourced e-commerce transaction services. With AltaVista’s one-stop solution, merchants no longer have to pursue hosting, advertising and site maintenance solutions from an assortment of unrelated vendors.”

AltaVista’s new e-commerce package, Homebase StoreFronts, will enable small-to-medium-sized businesses to build and manage online stores quickly, easily and affordably. Using a step-through setup interface and wide range of template-based designs, merchants can build a basic site in minutes or work in their spare time over several sessions to create an advanced StoreFront.

With Homebase StoreFronts, merchants can create a secure Web store with shipping options, tax information, and real time credit card processing. A robust upgrade path for merchants in need of more advanced functionality, including hosting and professional services, is planned for the end of the year.

AltaVista’s innovative e-commerce package will deliver both worldwide and local traffic directly to the merchant’s storefront. A user searching for an item in a specified geographic area can now access the merchant’s information through AltaVista and, using Intershop’s e-commerce technology, can order the item and either have it delivered or pick it up immediately. This full-circle solution will allow merchants to follow consumers’ impulse-to-buy to completion.

“We are excited to be working together with AltaVista to provide e-commerce technology to local merchants,” said Stephan Schambach, CEO of Intershop. “AltaVista is known and respected as the pioneer of the most powerful search engine to date and is one of the top 10 most trafficked sites on the Web today. The Intershop-powered e-commerce offering will further cement AltaVista’s reputation in the online commerce world.”

“CyberSource e-commerce transaction services coupled with Intershop product offerings and AltaVista’s market-leading position and reach make Homebase StoreFronts a formidable turnkey solution,” said Erna Arnesen, VP of Channels and Partners for CyberSource. “CyberSource has a strong history of delivering reliable and scalable commerce transaction capabilities. We look forward to increasing the acceptance of Internet commerce among small to mid-sized businesses through this relationship.”

Homebase StoreFronts will be available to AltaVista Homebase partners and their advertisers during the 3rd quarter of 1999.

About AltaVista Company

AltaVista Company is the premier online media and commerce network. The company integrates unique Internet technology and services to deliver relevant results faster for both individuals and Web-based businesses. By combining distinctive AltaVista brand services with “best of the Web” partnerships, the AltaVista Network creates the most satisfying Internet experience.

AltaVista is building on its heritage of technology and innovation leadership, offering award-winning services including: AltaVista Search, AltaVista Local Portal Services (Zip2), and AltaVista’s For more information, visit AltaVista at [][1].

About Intershop Communications, Inc.

Intershop Communications, Inc. is the world’s leading provider of sell-side electronic commerce software for complete business-to-business and business-to-consumer solutions. Intershop customers include many of the world’s largest telecommunications companies and commerce service providers such as BCE Emergis, Bell South, Concentric, Deutsche Telekom, France Telecom, Mindspring, PSINet, Swisscom, Telecom New Zealand, and Ticketmaster Online-CitySearch.

Major corporations have chosen Intershop as their enterprise e-commerce application including Bosch, Canon USA, Celestial Seasonings, Electronic Arts, Hewlett-Packard, Mercedes Benz U.S. International, Nat West and Silicon Graphics. To date, Intershop is the global leader in Internet commerce licenses with more than 20,000 store licenses sold.

Founded in 1992, Intershop is headquartered in San Francisco with offices in the U.S., Germany, France, Australia, Canada, Brazil, Sweden and the United Kingdom. For more information, call Intershop at 800/736-5197 or send e-mail to or visit[][2]

About CyberSource

CyberSource Corporation is a leading developer and provider of Internet commerce services. More than 400 Internet merchants worldwide have chosen to use CyberSource services. CyberSource provides mission-critical reliability with the CyberSource Internet Commerce Suite(SM) offering merchant-controlled, real-time services including, Payment Services, Tax Services, Risk Management Services, Distribution Control Services, and Fulfillment Management Services. Customers of CyberSource include, BUY.COM, Compaq Computer,, Fawcette Technical Publications,, Remedy and



2Q/99 Billion+

Notwithstanding its pull back from the national card market, First Union added nearly 100,000 accounts during the second quarter, according to data gathered by CardData for 2Q/99. Keycorp held its account base together but slipped in receivables and actives during the second quarter. The data come from CardData’s ‘2Q/99 Portfolio Survey’ ([][1]).

First Union $5,297,099,624 $3,132,558,564 3,811,024 1,699,994 5,909,314
KeyCorp $1,322,153,812 $1,113,361,595 1,082,598 620,212 1,427,804
Norwest $1,223,711,482 $1,237,008,299 1,359,240 728,628 1,740,298

Source: CardData (



Down Under Rewards

Australians will be able to earn rewards for both credit and debit cards under a new co-branded program announced Wednesday by Woolworths, Commonwealth Bank of Australia and MasterCard International. ‘Woolworths Ezy Banking’ run by Commonwealth Bank of Australia enables customers to perform a range of transactions such as deposits, withdrawals and account balances at in-store kiosks, or at the check out. The service is also accessible via telephone and Internet. Through MasterCard, customers will earn rewards for using the MasterCard brand credit and Maestro/Cirrus debit cards in store. Reward points can be claimed as vouchers for purchases at Woolworths and affiliated stores including Big W, Crazy Prices, Rockmans and Dick Smith. There are now over nine million MasterCard debit cards in Australia.