TriCo Bancshares (NASDAQ:TCBK) Files An 8-K Other EventsItem 8.01: Other Events
On December22, 2017, President Donald Trump signed into law “H.R.1”, formerly known as the “Tax Cuts and Jobs Act”, which among other items reduces the federal corporate tax rate to 21% effective January1, 2018. As a result, TriCo Bancshares (the “Company”) has concluded that this will cause the Company’s deferred tax assets to be revalued. The Company’s deferred tax assets represent a decrease in corporate taxes expected to be paid in the future. The Company performed a preliminary analysis to determine the impact of the revaluation of the deferred tax asset. Using the information available at this time, the Company estimated that the value of the deferred tax asset would be reduced by approximately $7.7million. Under this methodology, the estimated fourth quarter earnings impact would be approximately ($0.33)per share and the estimated tangible book value impact would be approximately ($0.34)per share based on estimated fourth quarter weighted average diluted shares of approximately 23,290,000 and total shares outstanding of approximately 22,956,000 at year end.
The Company’s revaluation of its deferred tax asset is subject to further clarifications of the new law that cannot be estimated at this time, and the determination of certain accounting valuation adjustments, such as, valuation adjustments related to unrealized gain or loss on investment securities available for sale, mortgage servicing rights, pension liabilities, and allowance for loan losses that are in the process of being finalized at this time. As such, the Company is unable to make a final determination of the impact on the quarterly and year to date earnings for the period ending December31, 2017 at this time. The Company does not anticipate future cash expenditures as a result of the reduction to the deferred tax asset.
To the extent required, the Company may file one or more amendments to this Current Report.
About TriCo Bancshares (NASDAQ:TCBK)
TriCo Bancshares is the bank holding company of Tri Counties Bank (the Bank). The Company operates through community banking segment. The Bank is engaged in the general commercial banking business in approximately 30 counties in Northern and Central California. The Bank operates from over 50 traditional branches and over 10 in-store branches. It conducts a commercial banking business, including accepting demand, savings and time deposits, and making commercial, real estate and consumer loans. It also offers installment note collection, issues cashier’s checks, sells travelers checks, and provides safe deposit boxes and other customary banking services. The Bank provides brokerage services at its offices by the association with Raymond James Financial Services, Inc., which is a financial services provider and broker-dealer. The Bank is focused on retail banking operations. It focuses on serving the needs of local businesses, farmers and ranchers, retired individuals and wage earners.
