Trico Bancshares · NASDAQ:TCBK
Trico Bancshares — Q1 2020 Earnings Presentation
36 slides from Trico Bancshares's earnings presentation, May 2020
Slide 1: Investor Presentation First Quarter 2020
Investor Presentation First Quarter 2020 May 2020 Richard P. Smith – President & Chief Executive Officer John S. Fleshood – EVP & Chief Operating Officer Peter G. Wiese – EVP & Chief Financial Officer
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: Agenda
AGENDA • Most Recent Quarter Recap • Company Overview • Lending Overview • Deposit Overview • Financials 3 May 2020
Slide 4: Most Recent Quarter Highlights
MOST RECENT QUARTER HIGHLIGHTS Q1 2020 return on average assets was 1.00%, including an increase in loan provisioning of $8.3 Consistent Profitability million, as compared to 1.40% for the linked quarter. Average yield on earning assets of 4.57% in Q1 2020 as compared to 4.65% in Q4 2019 and 4.7
Slide 5: Company Overview
COMPANY OVERVIEW ® trico bancshares May 2020
Slide 6: Company Overview
COMPANY OVERVIEW Nasdaq: TCBK Headquarters: Chico, California Stock Price*: $30.75 Market Capitalization: $922 Million Asset Size: $6.5 Billion Deposits: $5.4 Billion Loans: $4.4 Billion Bank Branches: 75 ATMs: 99 Market Area: TriCo currently serves 29 counties throughout Northern and Central Califo
Slide 7: Executive Team
EXECUTIVE TEAM Rick Smith John Fleshood Peter Wiese President & CEO EVP Chief Operating Officer EVP Chief Financial Officer TriCo since 1993 TriCo since 2016 TriCo since 2018 Craig Carney Dan Bailey EVP Chief Credit Officer EVP Chief Retail Banking Officer TriCo since 1996 TriCo since 2007 7 May 202
Slide 8: Consistent Earnings Track Record
CONSISTENT EARNINGS TRACK RECORD $0.80 $24 $22 $0.70 $20 $0.60 $18 Earnings (in Millions) $16 $0.50 E.P.S (Diluted) $14 $0.40 $12 $0.30 $10 $8 $0.20 $6 $0.10 $4 $2 Q4 Q1 Q2 Q3 Q4 * Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 $0.00 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 Net Income $12.5
Slide 9: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE $3.00 $3.00 $2.54 $0.75 $2.50 $1.90 $1.94 $0.76 $1.74 $2.00 $0.76 $0.50 $0.54 $0.13 $1.50 $0.53 $0.51 $0.55 $0.53 $0.75 $1.00 $0.65 $0.58 $0.49 $0.41 $0.50 $0.74 $0.52 $0.60 $0.53 $0.46 $0.36 $- 2015 2016 2017 2018 2019 Q1 2020 Q1 Q2 Q3 Q4 9 May 2020
Slide 10: Consistent Organic Growth & Disciplined Acquirer
CONSISTENT ORGANIC GROWTH & DISCIPLINED ACQUIRER CAGR 5 yrs. 10.6% 10 yrs. 11.6% Dollars in millions. Total Assets for periods ending 2005 – Q1 2020. 10 May 2020
Slide 11: Monday Morning Executive Topics
“MONDAY MORNING EXECUTIVE TOPICS” • COVID-19 as a Capital Versus Earnings Event • Effectiveness of Government Mitigation Efforts • Opportunities - PPP Customer Dissatisfaction of Big Banks • Leveraging Current Technologies for Greater Efficiency and Cost Reductions • Duration of Lower Rate Environme
Slide 12: Our Response to the COVID-19 Pandemic and Its Initial Impacts
OUR RESPONSE TO THE COVID-19 PANDEMIC AND ITS INITIAL IMPACTS Organizational Readiness Serving Our Customers • Implemented Pandemic Plan – Significant experience • Consumers, small businesses, and commercial customers from past events. can request to defer loan payments for up to 90-days • Immediate
Slide 13: Loans & Allowance for Credit Losses
LOANS & ALLOWANCE FOR CREDIT LOSSES 13 May 2020
Slide 14: Consistent Loan Growth
CONSISTENT LOAN GROWTH $5,000,000 $4,500,000 $4,000,000 $3,500,000 5.62% 5.48% 5.50% 5.46% Total Loans (000’s) 5.33% $3,000,000 5.52% 5.24% 5.23% 5.37% Loans Yield (%) $2,500,000 5.16% $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2014 2015 2016 2017 2018* Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Tota
Slide 15: Diversified Loan Portfolio
DIVERSIFIED LOAN PORTFOLIO CRE Non-Owner $1,634 Occupied $1,610 $559 Multifamily $518 CRE Non Own Loans, net % of CRE # Loans $553 by Collateral ($MM) NOO CRE Owner Occupied $546 Office $414 417 25% Retail 392 353 24% $534 Hotel/Motel 239 94 15% SFR Mortgage Warehouse 180 217 11% $543 Self Storage 8
Slide 16: CRE Collateral Values
CRE COLLATERAL VALUES 35% 30% Percent of Loan Segment by LTV Range 25% 20% 15% 10% 5% 0% CRE Non-Owner Occupied CRE Owner Occupied Multifamily 16 May 2020
Slide 17: Unfunded Loan Commitments
UNFUNDED LOAN COMMITMENTS Total Unfunded Commitments HELOC - BY VINTAGE as of Q1 2020: $1.25 billion* 7.00% $200 6.12% 6.25% 5.54% 5.35% 5.75% $82 6.00% 5.32% 5.17% 5.26% 5.34% $175 4.63% 4.81% 4.65% $150 5.00% 4.18% 3.91% 3.78% $125 4.00% $100 3.00% $75 2.00% $50 1.00% $25 0.00% $0 >2007 2007 2008
Slide 18: Loan Yield Composition
LOAN YIELD COMPOSITION Loans, Outstanding Wtd Avg Fixed vs. Variable ($MM) Rate Fixed $1,456 4.82% • Over 80% of the variable rate loans are already Variable $2,925 4.80% at floors as of Q1 2020 Variable At Floor 2,375 4.66% • The most prominent index for the variable Variable Above Floor 476 5.35%
Slide 19: At-Risk Industries
AT-RISK INDUSTRIES Credit Exposures in At-Risk Industries $254 Hotel, Recreation and Leisure Composition Hotel, Recreation and Leisure $234 2% 4% 1% $104 Healthcare $76 7% $91 Retail Hotels and Motels $75 RV Parks and Camps $61 Restaurant, Bars and Catering Casino Hotels $57 Fitness Centers $53 Gas
Slide 20: Historical NCOs
Q4 2007 Loan Portfolio HISTORICAL NCOs $1.55B 6.4% Outstanding Loss rates across the 2008-2012 cycle were 5.9% 16.5% CRE Non Own 4.5% heightened in HELOCs, Construction, and non-RE 11.4% Multifamily CRE - OO secured segments 7.4% 1-4 Fam 1st & 2nd 15.2% HELOC 20.1% C&I Cumulative NCO 6.3% vs Q4 2007
Slide 21: Hypothetical Net Charge-Offs
HYPOTHETICAL NET CHARGE-OFFS Q4 2007 Loan Portfolio Cumulative NCO 2008-2012 of $97MM (solid bars) $1.55B Outstanding vs. “through the cycle” 5-year NCO rates by loan CRE Non Own 5.9% 6.4% 16.5% segment applied to 2020 loan portfolio (dashed Multifamily 4.5% bars), for a hypothetical $188MM cumulati
Slide 22: Allowance for Credit Losses
ALLOWANCE FOR CREDIT LOSSES Drivers of Change Under CECL New originations, Changes in draws, amortize- econometric tion and payoffs factors Changes in credit Current period quality changes in GDP and unemploy- 1.32% Net of charge- ment forecasts offs and of Total recoveries CECL Day 1 1.
Slide 23: Allowance for Credit Losses
ALLOWANCE FOR CREDIT LOSSES Allocation of Allowance by Segment December 31, 2019 January 1, 2020 ($ Thousands) Probable Incurred Losses CECL Adoption March 31, 2020 % of Credit % of Credit % of Credit Allowance for Credit Losses Amount Amount Amount Outstanding Outstanding Outstanding CRE Owner Occu
Slide 24: Asset Quality Coverage Ratio
ASSET QUALITY 0.99% Non-Performing Assets as % of Total Assets TCBK Non-Performing Assets as a % of Total Assets 0.87% 0.87% 0.85% Peers 0.78% 0.79% 0.67% 0.62% 0.62% 0.65% 0.58% 0.58% NPAs have remained below peers 0.51% 0.47% 0.54% 0.54% 0.55% 0.46% 0.47% 0.51% while loss coverage has expanded, 0.
Slide 25: Deposits
DEPOSITS ® trico bancshares 25 May 2020
Slide 26: Consistent and Balanced Core Deposit Funding
CONSISTENT AND BALANCED CORE DEPOSIT FUNDING* Time Deposits 8% Wtd.Avg. Rate ‐ 1.23% Non Interest Bearing Savings 34% 35% Wtd.Avg. Rate ‐ 0.23% Interest Demand 23% Wtd.Avg. Rate ‐ 0.05% *Weighted average costs of deposits for the quarter ended 3/31/2020 26 May 2020
Slide 27: Market Share of All Branches
MARKET SHARE OF ALL BRANCHES SORTED BY ZIP CODE State Deposits Rank Institution Name Charter Market Share (Hdqtrd) ($000) 1 Wells Fargo Bank, N.A. SD Federal $ 35,520,322 27.7% 2 Bank of America NC Federal $ 11,585,002 9.0% 3 U.S. Bank, N.A. OH Federal $ 10,947,425 8.6% 4 JP Morgan Chase Bank, N.A.
Slide 28: Consistent Deposit Growth – Attractive Cost
CONSISTENT DEPOSIT GROWTH – ATTRACTIVE COST CAGR – TO 3/31/2020* $6,000,000 0.50% 5 yrs. 10.0% 10 yrs. 11.1% $5,000,000 0.40% Total Cost of Deposits Total Deposits (000’s) $4,000,000 0.30% $3,000,000 0.22% 0.23% 0.22% 0.20% 0.20% 0.15% 0.19% $2,000,000 0.10% 0.10% 0.09% 0.12% 0.10% $1,000,000 $0 0.0
Slide 29: Financials
FINANCIALS ® trico bancshares
Slide 30: Net Interest Margin – Contribution from Discount Accretion
NET INTEREST MARGIN – CONTRIBUTION FROM DISCOUNT ACCRETION 5.00% 0.12% 0.13% 0.16% 0.16% 0.10% 0.10% 0.12% 0.09% 0.16% 4.50% 4.00% 4.44% 4.39% 4.34% 4.39% 4.23% 4.22% 4.34% 4.52% 4.50% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 2015 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Net Interest Margin
Slide 31: Return on Average Assets
RETURN ON AVERAGE ASSETS 1.43% 1.45% 1.44% 1.40% 1.40% 1.24% 1.20% 1.11% 1.03% 1.00% 1.00% 0.89% 0.80% 0.60% 0.40% 0.20% 0.00% 2015 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 31 May 2020
Slide 32: Return on Average Shareholder's Equity
RETURN ON AVERAGE SHAREHOLDER’S EQUITY 12.00% 10.75% 10.93% 10.68% 10.42% 10.04% 10.03% 10.00% 9.47% 8.10% 8.00% 7.14% 6.00% 4.00% 2.00% 2015 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 32 May 2020
Slide 33: Efficiency Ratio (Fully Taxable Equivalent)
EFFICIENCY RATIO (FULLY TAXABLE EQUIVALENT) 70.0% 67.9% 68.0% 65.5% 66.0% 64.7% 63.7% 64.0% 62.0% 60.1% 60.1% 59.9% 59.8% 60.0% 58.8% 58.0% 56.0% 54.0% 52.0% 50.0% 2015 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 33 May 2020
Slide 34: Dividends Paid
DIVIDENDS PAID $0.90 $0.75 $0.22 $0.60 $0.19 $0.17 $0.15 $0.22 $0.45 $0.15 $0.17 $0.17 $0.15 $0.30 $0.13 $0.19 $0.17 $0.17 $0.15 $0.15 $0.13 $0.17 $0.19 $0.22 $0.11 $0.15 $0.15 $0.00 2015 2016 2017 2018 2019 2020 Annual $0.52 $0.60 $0.66 $0.70 $0.82 $0.88* Dividends 2020 Annual Dividends and CAGR
Slide 35: Capital Ratios
CAPITAL RATIOS 16.0% 15.2% 15.1% 15.1% 14.8% 14.9% 14.1% 14.1% 14.4% 14.5% 14.4% 14.2% 13.90% 13.7% 13.6% 14.0% 13.2% 13.2% 13.4% 13.3% 13.0% 12.8% 12.2% 12.5% 11.7% 11.7% 12.0% 10.6% 10.6% 10.2% 10.0% 9.7% 10.0% 9.1% 9.3% 9.5% 8.0% 6.0% 4.0% 2.0% 0.0% 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
Slide 36: TriCo Bancshares Is Committed To
TRICO BANCSHARES IS COMMITTED TO: Improving the financial success and well-being of our shareholders, customers, communities and employees. 36 May May2020 2020