Trico Bancshares · NASDAQ:TCBK
Trico Bancshares — Investor Presentation (July 2024)
39 slides from Trico Bancshares's investor presentation, July 2024
Slide 1: Investor Presentation Second Quarter 2024
Richard P. Smith, President & Chief Executive Officer Investor Presentation Daniel K. Bailey, EVP & Chief Banking Officer Second Quarter 2024 John S. Fleshood, EVP & Chief Operating Officer Peter G. Wiese, EVP & Chief Financial Officer Investor Presentation | Second Quarter 2024
Slide 2: Safe Harbor Statement
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 uncertaintie
Slide 3: Tri Counties Bank Awards
Tri Counties Bank Awards Forbes Magazine Gustine Press-Standard Record Searchlight America’s Best Banks Best Bank Best Bank in the North State 2024 2023 2015, 2016, 2018, 2022, 2023 Best-In-State Bank Style Magazine Chico Enterprise Record 2021 Reader's Choice – Readers' Choice Best Bank Roseville,
Slide 4: Executive Team
Executive Team Rick Smith Dan Bailey Craig Carney John Fleshood Peter Wiese President & EVP EVP EVP EVP Chief Executive Officer Chief Banking Officer Chief Credit Officer Chief Operating Officer Chief Financial Officer Greg Gehlmann Judi Giem Jason Levingston Scott Robertson Angela Rudd SVP SVP SVP
Slide 5: Agenda
Agenda Most Recent Quarter Recap Company Overview Lending Overview Deposit Overview Financials Investor Presentation | Second Quarter 2024 5
Slide 6: Most Recent Quarter Highlights
Most Recent Quarter Highlights Pre-tax pre-provision ROAA and ROAE were 1.63% and 13.19%, respectively, for the quarter ended June 30, Operating Leverage 2024, and 1.76% and 15.54%, respectively, for the same quarter in the prior year Our efficiency ratio was 59.6% for the quarter ended June 30,
Slide 7: Company Overview
Company Overview Nasdaq: TCBK Headquarters: Chico, California Stock Price*: $39.57 Market Cap.: $1.31 Billion Asset Size: $9.74 Billion Loans: $6.74 Billion Deposits: $8.05 Billion Bank Branches: 68 ATMs: 85 Bank ATMs, with access to ~ 40,000 in network Market Area: TriCo currently serves 31 countie
Slide 8: Recurring Critical and Strategic Themes Noted in Recent Executive Discussions
“Recurring Critical and Strategic Themes Noted in Recent Executive Discussions” Scaling and Leverage: Active Credit Management: Finding the right partner(s) at the right time Continual and proactive monitoring for early to cross $10 Billion in total assets while warning signs of credit risk, res
Slide 9: Positive Earnings Track Record
Positive Earnings Track Record 2020 March 2022 Elevated ACL Provisioning Acquired Valley Republic Bancorp Associated with COVID ($1.4B assets) $40 Related Risks $1.20 $36 $32 $28 Earnings (in Millions) $0.80 $24 Qtrly EPS (diluted) $20 $16 $0.40 $12 $8 $4 $0 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20
Slide 10: Shareholder Returns
Shareholder Returns Dividends per Share: 10% CAGR* Return on Avg. Shareholder Equity 12.10% 11.67% Q1 Q2 Q3 Q4 $1.20 10.75% 10.49% 10.65% $1.25 $1.10 9.74% $1.00 $0.88 $0.30 $0.30 $1.00 $0.82 7.18% $0.70 $0.25 $0.75 $0.22 $0.22 $0.30 $0.19 $0.25 $0.30 $0.22 $0.22 $0.33 $0.30 $0.50 $0.17 $0.25 $0.25
Slide 11: Asset Growth
CAGR, Assets Asset Growth 5 yrs. 10 yrs. 8.9% 13.7% Organic Growth and Disciplined Acquisitions Trailing 10 years Trailing 5 quarters Asset Dollars in Billions Investor Presentation | Second Quarter 2024 11
Slide 12: Deposits
Deposits Investor Presentation | Second Quarter 2024 12
Slide 13: Liability Mix: Strength in Funding
Liability Mix: Strength in Funding Liability Mix 06/30/2024 Loans to Core Deposits (%) Borrowings & Other TCBK Peers Subordinated liabilities, 120 Debt, 4.1% 2.0% Time 100 Deposits, 12.1% 80 87.7 87.7 86.6 84.0 80.4 79.5 76.5 60 72.1 70.1 69.1 66.9 66.4 66.0 40 20 Non Interest- bearing Demand 0 Depo
Slide 14: Deposits: Strength in Cost of Funds
Deposits: Strength in Cost of Funds Continued best in class total deposit Beta, 26.9% cycle to date $8,757 9,000 $8,714 $8,656 $8,329 $8,026 $8,095 $8,010 $7,988 $8,050 8,000 $7,834 $7,237 $7,367 $6,992 7,000 $3,583 $3,604 $3,678 $2,600 $2,557 $3,502 $3,073 $2,858 $2,723 $3,237 6,000 $2,943 $2,980
Slide 15: Deposits by Region
$0-$100k >$100k-$250k >$250k - $500k >$500k - $1mln >$1mln $1.192 billion, total Prior Quarter Deposits by Region 800 700 600 500 $590 400 Northern 300 200 $281 100 $154 - $77 $90 800 700 $822 $2.244 billion, total 600 Greater Chico 500 400 $490 300 $425 200 $297 100 $210 - 800 Sacramento Valley 700
Slide 16: Deposits: Demand & Savings Deposit Mix
Deposits: Demand & Savings Deposit Mix Consumer Total Demand & Savings Balance Tier, $ millions [1] Business ($ millions exterior, count interior) Prior Quarter, Total 361 # 35,176 1,464 Consumer Business $3,306 $3,250 # 200,016 1,523 756 403 263 476 448 433 429 [1] Excludes time deposits, bank owne
Slide 17: Deposits: CD Balance and Maturity Composition
Deposits: CD Balance and Maturity Composition 5.00% CD Growth CDs by Remaining Maturity 5.00% $600 $1,000.00 4.31% 4.50% 4.55% 4.50% 4.15% $979 $500 4.20% 4.00% 3.90% $904 4.00% 3.50% 3.63% $400 $800.00 3.00% 3.50% 3.22% $300 $603 2.50% 2.00% 3.00% $200 2.76% 1.50% $600.00 $630 1.13% 1.00% 2.50% $10
Slide 18: Liquidity
Liquidity Pledged Securities as % of Total Securities [3] TCBK Peers 56.3 55.7 55.8 54.9 In addition to a strong deposit base, 50.4 Tri Counties Bank maintains a variety 39.6 37.2 35.7 34.9 37.1 36.3 35.7 of easily accessible funding sources. 37.9 33.6 30.7 25.3 25.3 25.3 21.9 21.8 22.8 19.0 17.6 18
Slide 19: Loans and Credit Quality
Loans and Credit Quality 19 Investor Presentation | Second Quarter 2024 19
Slide 20: Loan Portfolio and Yield
Loan Portfolio and Yield 6.50% $6,795 $6,802 $6,743 $6,709 $6,452 $6,521 $6,422 $6,313 $6,000 $6,097 $5,796 $5,000 5.82% 5.72% $4,859 5.44% 5.64% $4,711 $4,739 5.50% $4,610 5.52% 5.24% $4,381 $4,386 $4,407 $4,443 5.38% $4,000 $4,111 5.15% $4,022 5.09% 5.23% 5.21% 4.92% 4.96% 5.10% 5.05% $3,000 4.86%
Slide 21: Gross Production vs. Payoff
Gross Production vs. Payoff TCBK originated nearly Originations and net loan Slower pace of originations $1.5 billion in 2021, while growth in 2022 were commensurate with market facing headwinds of an supportive of the positive mix rate changes, liquidity increased $372 million in shift in earning a
Slide 22: Diversified Loan Portfolio
Diversified Loan Portfolio CRE Non- Multifamily Occupied Occupied 1Q-2024 $2,242 CRE-Owner Owner 1Q-2023 $2,143 1Q-2024 $952 1Q-2023 $972 1Q-2024 $1,001 1Q-2023 $952 1Q-2024 $885 SFR 1-4 Term 1Q-2023 $830 Agriculture & Auto & Other Agriculture Constructio HELOC and Commercial Junior Liens & Industri
Slide 23: Office RE Collateral
Office RE Collateral Office RE Collateral Top 5 Custom ers w ithin Largest Regions Loan Net Book Per Loan Avg Wtd Avg Loan Net Book Per Loan Avg Wtd Avg TCBK Regions Count Com m itm ents Balance Book Balance LTV Count Com m itm ents Balance Book Balance LTV Central Valley 305 $335,966,175 $311,358,5
Slide 24: CRE Collateral Values
CRE Collateral Values Distribution by LTV (1) 100% LTV Range 90% <= 60% > 60% - 75% 80% > 75% 81% 79% 75% 70% 69% 64% 60% 57% 50% 54% 50% 40% 43% 43% 42% 36% 30% 29% 20% 21% 22% 19% 10% 7% 2% 3% 0% 0% 0% 3% 1% 0% Retail Building Office Building Hotel/Motel Light Industrial Mixed Use - Retail Other M
Slide 25: Unfunded Loan Commitments
Unfunded Loan Commitments Outstanding Principal ($MM) Unfunded Commitment ($MM) HELOCs – by vintage, with weighted avg. coupon (9.21% total WAC) 10.00% $225 9.73% 9.66% 9.80% 9.54% $200 9.60% 9.40% 9.37% $175 9.33% 9.33% 9.31% 9.40% 9.10% 9.04% 9.11% $150 9.20% $148 8.90% $125 $173 9.00% 8.82% 8.78%
Slide 26: C&I Utilization
C&I Utilization C&I Utilization by NAICS Industry: 2Q-2024 Utilization has remained stable $193$191 Outstanding (mln) Unfunded (mln) $179 throughout the rising rate environment 20000% C&I yields are generally tied to 15000% $101 changes in the Prime Rate. 10000% $77 $61 $58 $53 $51 $38 $45 $50
Slide 27: Loan Yield Composition
Floating Fixed 14% 38% Loan Yield Composition 62% Adjustable + Floating 99% of Floating Predominantly benchmarked Adjustable benchmarked to Prime to 5 Year Treasury 48% 1,000 10.00% 9.12% 900 9.06% 9.00% 800 8.00% 7.56% 7.39% 7.24% 7.28% 7.23% 700 7.20% 7.00% 600 6.02% 6.00% 5.43% 500 5.07% 5.21% 5.
Slide 28: Adjustable Rate Loans
Adjustable Rate Loans 7.22% 7.01% 5.07% 5.00% 5.07% 5.74% 5.68% WAR WAR WAR Quarter-over-quarter change Scaled to $3,000MM Adj Rate Loans WAR 4.61% $3,400 5.20% WAR $3,300 5.07% 5.10% 5.00% $3,200 5.00% Year-over-year $3,100 4.90% change $3,000 4.80% $2,900 4.80% $2,800 4.61% WAR 4.70% $2,700 4.60%
Slide 29: Fixed Rate Loans
Fixed Rate Loans $2,800 4.90% 4.80% 4.80% 7.81% $2,700 4.72% Includes 4.70% principal $2,600 amortization 4.60% as well as transfers of 4.51% $2,500 loans out of 4.50% construction $2,400 4.40% 5.39% Fixed Rate Loans WAR 7.68% 5.28% 4.51% 4.80% 4.72% 4.80% WAR Year-over-year WAR WAR Quarter-over-qua
Slide 30: Allowance for Credit Losses
Allowance for Credit Losses Drivers of Change under CECL 1.83% 1.83% of Total of Total Loans Loan portfolio Gross charge-offs Driven by specific Primarily driven Loans declined $58 $1.610 million reserve decrease by Qualitative million in Q2 $0.465 million, factors for Gross recoveries pre
Slide 31: Allowance for Credit Losses
Allowance for Credit Losses Allocation of Allowance by Segment Investor Presentation | Second Quarter 2024 31
Slide 32: Risk Grade Migration
Risk Grade Migration 100% 1.0% 1.0% 1.2% 1.3% 1.1% 1.6% 2.0% 2.4% 1.4% 1.5% 1.6% 1.5% 9.2% 8.8% 11.4% 12.1% 13.8% 13.3% 80% 60% 87.8% 87.8% 86.0% 85.0% 83.5% 83.6% 40% 20% 0% 1Q-2023 2Q-2023 3Q-2023 4Q-2023 1Q-2024 2Q-2024 Pass Watch Special Mention Substandard Zero balance in Doubtful and Loss Inve
Slide 33: Asset Quality
Asset Quality Non-Performing Assets as a % of Total Assets The Bank continues to actively and TCBK Peers aggressively address potential credit 0.64% 0.60% issues with short resolution timelines. 0.50% 0.46% 0.48% 0.53% 0.53% 0.42% 0.37% 0.39% Over the past three years, both the 0.37% 0.38% 0.34%
Slide 34: Financials
Financials 34 Investor Presentation | Second Quarter 2024 34
Slide 35: Net Interest Income (NII) and Margin (NIM)
Net Interest Income (NII) and Margin (NIM) Investor Presentation | Second Quarter 2024 35
Slide 36: Net Interest Income (NII) and Margin (NIM)
Net Interest Income (NII) and Margin (NIM) Investor Presentation | Second Quarter 2024 36
Slide 37: Current Operating Metrics
Current Operating Metrics Net Interest Margin (FTE) Efficiency Ratio 4.30% 4.47% 3.96% 3.88% 3.96% 3.58% 3.68% 63.7% 59.7% 58.4% 55.8% 58.5% 53.2% 53.0% 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 PPNR as % of Average Assets ROAA 1.43% 1.43% 1.94% 1.91% 1.97% 1.87% 1.28% 1.
Slide 38: Well Capitalized
Well Capitalized Tier 1 Capital Ratio CET1 Ratio 14.4% 14.2% 13.3% 13.2% 13.7% 14.0% 12.9% 13.4% 12.5% 12.7% 12.9% 12.2% 12.4% 11.7% 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 Total Risk Based Capital Tangible Capital Ratio 15.4% 10.6% 15.1% 15.2% 15.2% 14.4% 14.7% 9.5% 14
Slide 39: Our Mission, Core Values, Team Ethos
Our Mission Core Values Team Ethos Tri Counties Bank exists for Trust We are one team, aligned, just one purpose: to improve Respect customer-focused and the financial success and collaborative to achieve well-being of our shareholders, Integrity next-level performance. customers, communities and Co