KBW Winter Financial Services Symposium

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Transcription:

KBW Winter Financial Services Symposium Richard P. Smith President & Chief Executive Officer John S. Fleshood EVP & Chief Operating Officer

SAFE HARBOR STATEMENT The statements contained herein that are not historical facts are forward-looking statements based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond our control. There can be no assurance that future developments affecting us will be the same as those anticipated by management. We caution readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; the impact of changes in financial services policies, laws and regulations; technological changes; mergers and acquisitions; changes in the level of our nonperforming assets and charge-offs; any deterioration in values of California real estate, both residential and commercial; the effect of changes in accounting standards and practices; possible other-than-temporary impairment of securities held by us; changes in consumer spending, borrowing and savings habits; our ability to attract deposits and other sources of liquidity; changes in the financial performance and/or condition of our borrowers; the impact of competition from other financial service providers; the possibility that any of the anticipated benefits of our recent merger with FNBB will not be realized or will not be realized within the expected time period, or that integration of FNBB s operations will be more costly or difficult than expected; the challenges of integrating and retaining key employees; unanticipated regulatory or judicial proceedings; the costs and effects of litigation and of unexpected or adverse outcomes in such litigation; and our ability to manage the risks involved in the foregoing. Additional factors that could cause results to differ materially from those described above can be found in our Annual Report on Form 10-K for the year ended December 31, 2017, which is on file with the Securities and Exchange Commission (the SEC ) and available in the Investor Relations section of our website, https://www.tcbk.com/investor-relations and in other documents we file with the SEC. Annualized, pro forma, projections and estimates are not forecasts and may not reflect actual results. 2

AGENDA Most Recent Quarter Recap Company Overview Lending Overview Deposit Overview Financials 3

MOST RECENT QUARTER HIGHLIGHTS Q4 2018 return on average assets of 1.47% versus 1.05% linked quarter. Loans to deposits ratio of 75% in Q4 2018, down slightly from 79% in Q3 Robust Earnings 2018. Net Interest Margin increased 14 bps versus Q3 2018 and 20 bps versus Industry Leading Net Interest Q4 2017. Net Interest Income grew 23.2% on an annualized linked quarter basis Margin versus prior quarter. Yield on loans increased by 26 basis points linked quarter and 35 basis points versus prior year. Revenue growth and operating expense management resulted in improvement in the efficiency ratio to 59.1% for Q4 compared to 65.2% Low Efficiency Ratio in the prior quarter and 66.1% for the prior year. Average cost of total deposits rose 4 bps versus the prior quarter to 0.20%. Profitable Deposit Base Total deposits grew 21.5% on an annualized linked quarter basis, with non-interest bearing demand deposits comprising 33% of total deposits. Tangible capital consistent at 9.5%. Common dividend increased to $0.19 during Q4 2018, and 11.8% Strong Capital Levels increase over Q4 2017. 4

COMPANY OVERVIEW 5

COMPANY OVERVIEW Asset Size: $6.4 Billion Founded: 1975 Deposits: $5.4 Billion Loans (net): $4.0 Billion Bank Branches: 79 ATMs: Market Area: 99 TriCo currently serves 29 counties throughout Northern and Central California. These counties represent over 30% of California s population. 6

COMPANY OVERVIEW Nasdaq: TCBK Stock Price*: $37.76 Market Capitalization: $1.15 billion Price to Book stated: Price to TBVPS 1.4x 2.00x Rank (Total Assets) among CA Publicly Traded Banks: 12 (Source: SNL Financial) *as of 02/08/2019 COB 7

EXECUTIVE TEAM 8 Rick Smith President & CEO TriCo since 1993 John Fleshood EVP Chief Operating Officer TriCo since 2016 Peter Wiese EVP Chief Financial Officer TriCo since 2018 Craig Carney EVP Chief Credit Officer TriCo since 1996 Richard O Sullivan EVP Chief Commercial Lending Officer TriCo since 1984 Dan Bailey EVP Chief Retail Banking Officer TriCo since 2007

CONSISTENT EARNINGS TRACK RECORD $24 $0.80 $22 $0.70 $20 $0.60 $16 $0.50 $14 $0.40 $12 $0.30 $10 $8 $0.20 $6 $0.10 $4 $2 9 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Earnings $12.2 $12.5 $12.1 $13.6 $11.9 $3.0 $13.9 $15.0 $16.2 $23.2 E.P.S. (Diluted) $0.53 $0.54 $0.52 $0.58 $0.51 $0.13 $0.60 $0.65 $0.53 $0.76 $0.00 E.P.S (Diluted) Earnings (in Millions) $18

DILUTED EARNINGS PER SHARE $3.00 $2.50 $0.76 $2.00 $1.50 $1.00 $0.32 $0.45 $0.39 $0.50 $0.25 $0.50 $0.30 $0.53 $0.45 2013 2014 $- $0.53 $0.55 $0.13 $0.51 $0.58 $0.53 $0.65 $0.49 $0.41 $0.36 $0.46 $0.52 $0.60 2015 2016 2017 2018 Q1 10 $0.54 $0.50 Q2 Q3 Q4

CONSISTENT ORGANIC GROWTH AND DISCIPLINED ACQUIRER CAGR 5 yrs. 18.3% 10 yrs. 12.0% 11 *Total Assets for years ending 2000-2018.

WHAT KEEPS US UP AT NIGHT? 12 Deposit Betas Ability to Increase Loan Yields Interest Rate Risk Aggressive Competitors The Cost of Compliance with New Regulations Dysfunction in Washington

LOANS 13

CONSISTENT LOAN GROWTH CAGR 5 yrs. 19.7% 10 yrs. 9.9% $4,500,000 $4,000,000 6.06% 5.62% $3,000,000 5.52% $2,500,000 5.37% $2,000,000 5.16% 5.03% 5.06% Q1 2018 Q2 2018 5.27% 5.53% Loan Yield (%) Total Loans (000's) $3,500,000 $1,500,000 $1,000,000 $500,000 $0 2013 2014 2015 2016 Total Loans 2017 Loan Yield *Note: Q3 2018 includes acquisition of FNB Bancorp (Loan Yield was 5.04%) 14 Q3 2018 Q4 2018

LOAN PORTFOLIO MIX: CRE - Non-Owner Occupied $1,459,050 36% Junior Lien Closed-End Loans Consumer Loans Agri. Production $40,713 $47,925 $25,838 1% 1% 1% Farmland $128,995 3% CRE - Owner Occupied $537,062 13% 1st Lien Closed-End Loans $528,474 13% 15 CRE - Multifamily $485,024 12% Revolving LOC $330,132 8% Total Construction $184,333 5% Commercial & Industrial $263,094 7%

DIVERSIFIED CRE & CONSTRUCTION PORTFOLIO Restaurant, $48,347,000 Mini Storage, $92,576,000 Warehouse, $286,140,000 Retail Building, $427,452,000 Multifamily Residence, $538,303,000 16 Gas Station /Convenience, $79,623,000 SFR (14/Condo), $19,529,000 Hospitality, $247,796,000 All Other, $371,615,000 Office Building, $555,150,000 Property Type Loan Size Avg. Loan Amount Office Building $769,000 Multifamily Residence $1,092,000 Retail Building $786,000 Warehouse $705,000 Hospitality $2,503,000 Mini Storage $1,624,000 Gas Station /Convenience $959,000 Restaurant $488,000 SFR (1-4/Condo) $814,000 All Other $527,000

CONSERVATIVE CONSTRUCTION AND CRE UNDERWRITING CULTURE LTV DISTRIBUTION 35% 30% 30% % of Portfolio 25% Avg. Loan Amount <50% $637,000 51%-60% $959,000 61%-65% $1,176,000 66%-70% $898,000 71%-75% $845,000 76%-80% $706,000 81%-90% $906,000 >90% $780,000 23% 20% 16% 15% 15% 10% 10% 5% 3% 0% 17 Loan to Value LTV Range 2% 1%

DIVERSIFIED GEOGRAPHY CRE & CONSTRUCTION Principal City Outstanding Balance % of CRERelated Average Loan Amount San Francisco $628,664,000 24% $906,000 Sacramento/Elk Grove $253,822,000 10% $1,203,000 Kern Bakersfield $191,885,000 7% $1,487,000 Butte Chico $157,586,000 6% $461,000 Placer Roseville/Auburn $114,251,000 5% $1,053,000 Shasta Redding $140,287,000 5% $533,000 Stanislaus Modesto $129,068,000 5% $963,000 Fresno Fresno $84,872,000 3% $690,000 Sonoma Sonoma/Santa Rosa $78,781,000 3% $856,000 Nevada Truckee $78,158,000 3% $511,000 N.A. $779,170,000 29% $817,000 TOTAL $2,666,533,000 AVG. $825,000 County Bay Area Sacramento 17 Other Counties 18

NON-PERFORMING ASSETS & NET CHARGE OFFS 0.50% 2.50% 0.40% 2.00% 0.30% 0.23% 1.50% 1.34% Net Charge Offs Non-Performing Assets as % of Total Assets 2.17% 1.01% 1.00% 0.53% 0.50% 0.58% 0.55% 0.20% 0.10% 0.08% 0.04% 0.00% 2013 2014-0.07% -0.10% 0.00% 19-0.13% 2013 2014 2015 2016 2017 2018-0.20% 2015 2016-0.10% 2017 2018

HOME EQUITY LOANS OUTSTANDING $400,000 $383,898 $390,000 $380,000 Loans (000 s) $370,000 $363,260 $362,854 $354,454 $360,000 $350,000 $340,000 $331,537 $331,719 $330,000 $320,000 $310,000 $300,000 2013 20 2014 2015 2016 2017 2018

DEPOSITS 21

CONSISTENT AND BALANCED CORE DEPOSIT FUNDING* Time Deposits 9% Savings 36% Wtd. Avg. Rate 1.03% Wtd. Avg. Rate 0.24% Non Interest Bearing 33% Interest Demand 23% Wtd. Avg. Rate 0.09% *Weighted average costs of deposits for the quarter ended 12/31/2018 22

MARKET SHARE OF ALL BRANCHES SORTED BY ZIP CODE Rank Institution Name Charter Deposits ($000) Market Share 1 U.S. Bank National Association OH Federal 9,893,012 21.2% 2 Wells Fargo & Company SD Federal 8,782,186 18.8% NC Federal 6,017,267 12.9% CA State 3,881,355 8.3% Wtd. Avg. Rate 0.92% 3 Bank of America, National Association 4 Tri Counties Bank 5 JP Morgan Chase Bank, National Association OH Federal 2,994,175 6.4% 6 MUFG Union Bank, National Association CA Federal 2,177,323 4.7% 7 Bank of the West CA State 1,832,370 3.9% 8 Umpqua Bank CA State 1,636,359 3.5% Wtd. Avg. Rate 0.18% Wtd. Avg. Rate 0.09% Source: FDIC Summary of Deposits, June 2018 *Includes acquisition of FNB Bancorp July 2018 23 State (Hdqtrd)

CONSISTENT DEPOSIT GROWTH ATTRACTIVE COST CAGR 5 yrs. 17.4% 10 yrs. 12.4% $6,000,000 0.50% 0.40% $4,000,000 0.30% $3,000,000 $2,000,000 0.15% 0.12% $1,000,000 $0 0.16% 2013 2014 2015 2016 Total Deposits 24 0.10% 0.11% 0.09% 2017 0.20% 0.12% 0.10% 0.10% 0.20% Q1 2018 Q2 2018 Cost of Deposits *Note: Q3 2018 includes acquisition of FNB Bancorp (Deposit cost of 0.28%) Q3 2018* Q4 2018 0.00% Total Cost of Deposits Total Deposits (000 s) $5,000,000

FINANCIALS 25

NET INTEREST MARGIN CONTRIBUTION FROM DISCOUNT ACCRETION 5.00% 0.10% 0.09% 0.10% 0.11% 0.15% 0.12% 0.16% 4.00% 3.00% 4.39% 4.23% 4.22% 4.14% 4.14% 4.32% 4.46% 2015 2016 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2.00% 1.00% Effect of Loan Discount Accretion 26 Net Interest Margin

RETURN ON AVERAGE ASSETS 1.47% 1.40% 1.20% 1.11% 1.04% 1.00% 1.17% 1.25% 1.05% 1.03% 0.89% 0.87% 0.80% 0.60% 0.40% 0.20% 0.00% 27 2013 2014 2015 2016 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018

RETURN ON AVERAGE SHAREHOLDER S EQUITY 12.00% 11.34% 11.00% 10.04% 10.00% 8.67% 9.47% 11.78% 11.40% 9.11% 8.10% 8.00% 6.00% 4.00% 2.00% 28 2013 2014 2015 2016 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018

EFFICIENCY RATIO (FULLY TAXABLE EQUIVALENT) 75.0% 70.0% 72.9% 67.9% 67.3% 65.5% 64.7% 65.0% 66.3% 65.2% 65.2% 59.1% 60.0% 55.0% 50.0% 29 2013 2014 2015 2016 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018

DIVIDENDS PAID $0.70 $0.60 $0.15 $0.50 $0.15 $0.40 $0.11 $0.30 $0.11 $0.20 $0.00 Annual Dividends 30 $0.11 $0.15 $0.17 $0.13 $0.15 $0.17 $0.19 $0.17 $0.17 $0.11 $0.13 $0.09 $0.11 $0.11 $0.15 $0.15 $0.17 2013 2014 2015 2016 2017 2018 $0.44 $0.52 $0.60 $0.66 $0.70 $0.11 $0.10 $0.11 $0.17 $0.42

CAPITAL RATIOS ($000 S) 16.0% 14.0% 14.8% 13.5% 15.7% 15.1% 14.4% 14.8% 13.7% 13.8% 12.2% 12.2% 11.7% 12.0% 10.0% 9.2% 9.1% 8.6% 13.2% 14.1% 14.4% 13.7% 12.5% 9.5% 9.3% 9.1% 8.0% 6.0% 4.0% 2.0% 0.0% 2013 2014 Common Equity Tier 1 31 2015 Tier 1 2016 Total Risk Based 2017 Tangible Common Q4 2018

TRICO BANCSHARES IS COMMITTED TO: 32 Improving the financial success and well-being of our shareholders, customers, communities and employees.