2016 Community Bank Conference

Transcription

1 Richard P. Smith, President & CEO Raymond James 2016 Community Bank Conference September 6, 2016

2 SAFE HARBOR STATEMENT Certain comments included in this presentation may involve forwardlooking statements, for which TriCo claims the protection of the safe harbor provisions credited by Federal securities laws. Such forwardlooking statements are subject to risks and uncertainties which may cause TriCo s actual results to differ materially from those contemplated by such statements. Additional information concerning certain of these risks and uncertainties are described in TriCo s Annual Report of Form 10-K for the fiscal year ended December 31, 2015 and TriCo s Quarterly Reports on Form 10-Q as filed with the SEC in fiscal September 2016

3 AGENDA Company Overview Recent Activities & Focus Merger Announcement Key Revenue Drivers Challenges & Opportunities Financials Questions 3 September 2016

4 OVERVIEW Asset Size: $4.4 Billion Location: Chico, CA Founded: 1975 Deposits: $3.7 Billion Loans (net): $2.6 Billion Customers: 190,000 Bank Branches: 68 ATMs: 80 4 September 2016

5 OVERVIEW Nasdaq: TCBK Stock Price: $27.98 Market Capitalization: *Price to TBVPS: 1.59x **Asset Size Rank of CA Publicly Traded Banks: 13 $638 million *Valuation Information as of Market Close 07/27/2016 **Ranking as of 06/30/2015 Source: SNL Financial 5 September 2016

6 EXECUTIVE TEAM Rick Smith President & CEO TriCo since 1993 Tom Reddish EVP Chief Financial Officer TriCo since 1994 Carol Ward EVP Chief Operating Officer TriCo since September 2016 Craig Carney EVP Chief Credit Officer TriCo since 1996 Richard O Sullivan EVP Commercial Banking TriCo since 1984 Dan Bailey EVP Retail Banking TriCo since 2007

7 RECENT ACTIVITIES Purchase of 3 branches from Bank of America Completed in March, 2016 Completion of merger of North Valley 2015 Closed 13 branches in 2015 as result of merger and customer migration to technology tools Opened new branch in Roseville, CA in 2016 Several new technology projects for 2016: New Mobile Banking program New Business On-Line Banking Loan and Operational Imaging projects Core Conversion 7 September 2016

8 POSITIONED FOR TODAY, PREPARED FOR THE FUTURE Strong and growing bank capital Competitive product set to compete with banks both large and small Superior reputation versus large bank competitors Continue to see strong organic growth in current environment Double digit loan growth Double deposit growth 8 September 2016

9 POSITIONED FOR TODAY, PREPARED FOR THE FUTURE continued Strong focus on risk management and new regulatory realities Experienced project teams, well prepared for continued growth through acquisition 9 September 2016

10 WHAT IS LONG TERM SUCCESS? Rewarding our shareholders A winning culture with a motivated and talented work force Significant and growing market share Low cost core deposit base Strong credit culture Diversified revenue sources Efficient operations Strong risk management practices 10 September 2016

11 KEY DRIVERS OF BANK REVENUES Deposits & Margin Average Cost of Deposits of.09% as of 06/30/2016 Net Interest Margin at 06/30/2016 is 4.13% Commercial Loans Commercial Real Estate Commercial & Industry Lines and Loans & Leases Agricultural Loans Asset Based Loans Non-Interest Income Mortgage Finance Service Charge & Fee Income Bank Wealth Management Program 11 September 2016

12 KEY DRIVERS OF BANK REVENUES continued Consumer Loans Home Equity Lines/Loans Small Business Growth Opportunities Wealth Management Bank Managed Program Raymond James as Broker-Dealer Merchant Fee Opportunities Growth Opportunity with North Valley Bank New markets for TriCo 12 September 2016

13 DEPOSIT STRUCTURE Savings 36% Time Deposits 9% Wtd. Avg. Rate 0.39% Non Interest Bearing 32% Wtd. Avg. Rate 0.12% Interest Demand 23% Wtd. Avg. Rate 0.05% Data as of September 2016

14 TOTAL ENDING DEPOSITS $4,000,000 $3,631,266 $3,741,396 $3,500,000 $3,380,423 $3,000,000 $2,500,000 $2,289,702 $2,410,483 $2,000, Q Data as of September 2016

15 MARKET SHARE OF ALL BRANCHES SORTED BY ZIP CODE Rank Institution Name State (Hdqtrd) Charter Deposit ($000) Market Share 1 Wells Fargo Bank, National Association 2 Bank of America, National Association SD Federal 8,418, % NC Federal 4,528, % 3 Rabobank, National Association CA Federal 4,076, % 4 Tri Counties Bank CA State 3,271, % 5 JP Morgan Chase Bank, National Association OH Federal 2,280, % 6 Umpqua Bank OR State 1,609, % 7 U.S. Bank National Association OH Federal 1,570, % 8 Bank of the West CA State 1,091, % Source: FDIC Summary of Deposits, June 2015 Total Deposits 06/30/2015: $3,895, September 2016

16 NON-INTEREST INCOME Consistently Represents Approximately 25% of Total Bank Revenues Residential Home Mortgage Lending Refinances remain consistent Increasing numbers of purchase transactions and increasing overall activity for home loans 16 September 2016

17 NON-INTEREST INCOME continued Wealth Management revenues Lower revenues from service charges but increased interchange income Cash Management fees continue to increase following merger integration Merchant Card Services $1.2 million in September 2016

18 CONSUMER LOANS Increased demand for consumer loans Home equity values have increased Borrowers still reluctant to leverage their homes Low rate environment led to historically high refi activity $40MM in Q HELOC volume resulted in $5MM reduction in outstandings Home equity lines/loans increasing in demand but cannot outpace 1 st lien refi volume Auto loans demand constant 18 September 2016

19 HOME EQUITY LOANS OUTSTANDING $400,000 $390,000 $383,898 $380,000 $370,000 $360,000 $355,582 $354,454 $362,854 $348,680 $350,000 $340,000 $330,000 $320,000 $310,000 $300, Q Data as of September 2016

20 LOAN PORTFOLIO BY TYPE Consumer - Other 1% Consumer - Home Eq 2% Commercial 8% Construction - RE 2% Consumer - HELOCS 12% Construction - Commercial 3% Secured by RE - Residential % Secured by RE - Com'l 60% Data as of September 2016

21 COMMERCIAL LOANS Total Consumer 26% Total Commercial 74% Data as of September 2016

22 COMMERCIAL BANKING Target loans of $2,000,000 to $10,000,000 Personalized banking Assigned Relationship Managers Assigned Cash Management Officers In-market lending Competition is as fierce and diverse as it has ever been $191 million in CRE & C&I production in Q2 resulted in $58 million in net growth, excluding loan purchases 22 September 2016

23 COMMERCIAL BANKING continued Agricultural lending Improving drought conditions Ag prices declining may well be a positive Loans <$1,000,000 served through alternate channel Business Relationship Managers Credit scoring combined with traditional underwriting SBA 7A program now offered 23 September 2016

24 COMMERCIAL REAL ESTATE PORTFOLIO AS OF Real Estate Loan Type # of Loans Outstandings* % to Total Loans Avg. Commitment Amount Office ,862,000 13% 596,000 Retail ,945,000 11% 731,000 Multi-Family ,042,000 9% 719,000 Special Purpose Gas Station, Mini Storage, Hotel/Motel, Restaurant ,938,000 7% 997,000 Other Warehouse, Manufacturing, Bare Land, Agricultural Land + Structures 1, ,747,000 21% 498,000 Totals 2,730 1,598,533,000 60% - Averages ,000 * RE Loan Type segment totals do not include all purchase discount adjustments 24 September 2016

25 AG PORTFOLIO AS OF Agricultural Loans (excluding RE secured) total $74 million in total commitments with $39 million outstanding The highest crop concentrations by commitments are: Rice $30.3 million 69 loans $439,000 Avg. Commitment Multiple Crop $19.7million 19 loans $1,039,000 Avg. Commitment Almonds $4.0 million 8 loans $502,000 Avg. Commitment Beef $2.4 million 10 loans $243,000 Avg. Commitment Walnuts $1.5 million 6 loans $248,000 Avg. Commitment Dairy $719 thousand 4 loans $180,000 Avg. Commitment 25 September 2016

26 CONSTRUCTION AND A&D Construction lending totals approx. $149,786,000 outstanding with $226,699,000 in commitments Residential construction approx. $62,019,000 Commercial construction approx. $87,767,000 Total construction, land development and land acquisition loans represent 5.6% of total loans outstanding Data as of September 2016

27 TOTAL LOANS NET OF UNAMORTIZED DEFERRED LOAN FEES AND DISCOUNTS ($000 S) $2,700,000 $2,522,937 $2,653,630 $2,500,000 $2,300,000 $2,282,524 $2,100,000 $1,900,000 $1,700,000 $1,564,823 $1,672,007 $1,500, Q September 2016 Data as of

28 GROWTH OPPORTUNITIES Mergers and Acquisitions 3 Branch purchase Bank of America 2016 North Valley Bancorp 2014 Citizens Bank of Northern California 2011 Granite Community Bank 2010 North State National Bank Branch purchase Wells Fargo 1997 Sutter Butte Savings 1996 Country National Bank 1993 Branch purchase from Wells Fargo 1987 Shasta County Bank September 2016

29 WHAT KEEPS US UP AT NIGHT? Near Zero Interest Rate Environment Aggressive Competitors Bank Regulation The Cost of Compliance with New Regulations Interest Rate Risk Economic Malaise Slow Industry Consolidation Dysfunction in Washington 29 September 2016

30 CHALLENGES WITHIN BANK STRATEGIES Big Banks Aggressive banking in community bank space Bad reputations Large banks cost saving plans a new opportunity in rural markets Technology and Banking New technology is expensive New technology will streamline banking ultimately lowering costs Bank Operations and Efficiency Managing multiple delivery channels Enterprise Risk Management Many threats, so little time 30 September 2016

31 FINANCIALS 31 September 2016

32 TOTAL ASSETS ($000 S) $4,500,000 $4,220,722 $4,352,492 $4,000,000 $3,912,358 $3,500,000 $3,000,000 $2,609,269 $2,744,066 $2,500,000 $2,000, Q September 2016 Data as of

33 CAPITAL RATIOS ($000 S) % 14.8% 14.4% % 13.5% % 15.1% 14.7% 13.8% 13.6% 12.2% 12.0% % 8.6% 9.1% 9.2% 9.4% Q Common Equity Tier 1 Tier 1 Total Risk Based Tangible Common Data as of September 2016

34 NET INCOME ($000 S) $45,000 $40,000 $35,000 $11,422 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- $12,694 $5,236 $5,650 $7,361 $4,722 $8,234 $9,405 $11,366 $5,020 $6,325 $4,859 $5,321 $10,674 $8,477 $7,365 $8,336 $3, Data as of Q1 Q2 Q3 Q4 34 September 2016

35 NET INTEREST MARGIN 5.00% 4.00% 3.00% 2.00% 4.32% 4.18% 4.17% 4.39% 4.13% 1.00% 0.00% 0.20% 0.15% 0.12% 0.10% 0.09% Q Wtd. Avg. Deposit Rate Net Interest Margin Data as of September 2016

36 NON INTEREST INCOME ($000 S) $50,000 $40,000 $11,445 $30,000 $10,011 $10,219 $9,755 $11,642 $20,000 $9,127 $10,131 $8,589 $10,000 $10,577 $9,127 $7,877 $12,080 $11,245 $- $8,265 $7,352 $8,295 $10,180 $9, Q1 Q2 Q3 Q4 36 September 2016 Data as of

37 EFFICIENCY RATIO (FULLY TAXABLE EQUIVALENT) 75.0% 70.2% 72.9% 72.2% 70.0% 67.3% 65.0% 64.7% 60.0% 55.0% 50.0% Q Data as of September 2016

38 DILUTED EARNINGS PER SHARE $2.00 $1.75 $1.50 $1.25 $1.00 $0.29 $0.32 $0.45 $0.25 $0.50 $0.50 $0.55 $0.75 $0.50 $0.25 $- $0.31 $0.39 $0.30 $0.49 $0.41 $0.33 $0.53 $0.25 $0.45 $0.36 $ Q1 Q2 Q3 Q4 Data as of September 2016

39 DIVIDENDS PER SHARE Q1 Q2 Q3 Q4 Data as of September 2016

40 NON-PERFORMING ASSETS TO TOTAL ASSETS 3.50% 3.07% 3.00% 2.50% 2.17% 2.00% 1.50% 1.00% 0.50% 1.34% 1.01% 0.55% 0.00% Q Data as of September 2016

41 ALLOWANCE FOR LOAN LOSSES TO TOTAL LOANS 2016 Community Bank Conference 3.00% 2.73% 2.50% 2.29% 2.00% 1.50% 1.60% 1.43% 1.34% 1.00% 0.50% 0.00% Q September 2016 Data as of

42 ORIGINATED ALLL TO TOTAL ORIGINATED LOANS 2016 Community Bank Conference 3.00% 2.54% 2.50% 2.00% 1.50% 2.11% 1.85% 1.57% 1.40% 1.00% 0.50% 0.00% Q September 2016 Data as of

43 ANNUALIZED NET CHARGE-OFFS TO AVERAGE LOANS 0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% -0.10% -0.20% 0.82% 0.23% -0.13% -0.14% 0.00% Data as of September 2016

44 RETURN ON AVERAGE ASSETS 1.40% 1.20% 1.04% 1.11% 1.00% 0.80% 0.75% 0.87% 0.86% 0.60% 0.40% 0.20% 0.00% Q September 2016 Data as of

45 RETURN ON AVERAGE SHAREHOLDER S EQUITY 12.00% 10.00% 8.00% 8.44% 11.34% 8.67% 10.04% 7.98% 6.00% 4.00% 2.00% 0.00% Q September 2016 Data as of

46 TRICO BANCSHARES IS COMMITTED TO: Improving the financial success and well-being of our shareholders, customers, communities and employees.