Trico Bancshares · NASDAQ:TCBK
Trico Bancshares — Q4 2023 Earnings Presentation
35 slides from Trico Bancshares's earnings presentation, Jan 25, 2024
Slide 1: Investor Presentation Fourth Quarter 2023
Investor Presentation Fourth Quarter 2023 Richard P. Smith, President & Chief Executive Officer Dan K. Bailey, EVP & Chief Banking 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: Tri Counties Bank
Tri Counties Bank 3 Investor Presentation | Fourth Quarter 2023
Slide 4: Agenda and Executive Team
Agenda Executive Team (left to right) • Most Recent Quarter Recap • Judi Giem, SVP & Chief Human Resources Officer • Company Overview • Peter Wiese, EVP & Chief Financial Officer • Lending Overview • Dan Bailey, EVP & Chief Banking Officer • Deposit Overview • Rick Smith, President & Chief Executive
Slide 5: Most Recent Quarter Highlights
Most Recent Quarter Highlights Operating Leverage • Pre-tax pre-provision ROAA and ROAE were 1.70% and 15.32%, respectively, for the quarter ended and Profitability December 31, 2023, and 2.21% and 21.59%, respectively, for the same quarter in the prior year • Our efficiency ratio was 58.7% for the
Slide 6: Company Overview
Company Overview Nasdaq: TCBK Headquarters: Chico, California Stock Price*: $42.97 Market Cap.: $1.43 Billion Asset Size: $9.91 Billion Loans: $6.79 Billion Deposits: $7.83 Billion Bank Branches: 69 ATMs: 86 Bank ATMs, with access to ~ 40,000 in network Market Area: TriCo currently serves 31 countie
Slide 7: Recurring Critical and Strategic Themes Noted in Recent Executive Discussions
“Recurring Critical and Strategic Themes Noted in Recent Executive Discussions” • Continued Identification and Acquisition of New Customer Relationships While Expanding Services to Existing Customers – A Holistic Understanding of Their Balance Sheet and Ours • Capital – Balance of Regulatory and Sha
Slide 8: Positive Earnings Track Record
Positive Earnings Track Record July 2018 2020 March 2022 Acquired FNB Bancorp Elevated ACL Provisioning Acquired Valley Republic Bancorp ($1.2B assets) 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 $
Slide 9: Shareholder Returns
Shareholder Returns Dividends per Share: 11.4% CAGR* Return on Avg. Shareholder Equity $1.20 12.10% 11.67% Q1 Q2 Q3 Q4 $1.10 $1.25 $1.00 10.75% 10.49% 10.65% $0.30 $1.00 $0.88 $0.30 $0.82 8.10% $0.25 $0.66 $0.70 $0.22 7.18% $0.75 $0.22 $0.30 $0.19 $0.25 $0.30 $0.17 $0.22 $0.50 $0.22 $0.30 $0.17 $0.1
Slide 10: Consistent Growth
CAGR, Assets 5 yrs. 10 yrs. Consistent Growth 9.2% 13.6% Organic Growth and Disciplined Acquisitions Trailing 10 years Trailing 4 quarters Asset Dollars in Billions. 10 Investor Presentation | Fourth Quarter 2023
Slide 11: Deposits
Deposits 11 11 Investor Presentation | Fourth Quarter 2023
Slide 12: Liability Mix: Strength in Funding
Liability Mix: Strength in Funding Liability Mix 12/31/2023 Loans to Core Deposits (%) Other TCBK Peers Borrowings & 120 liabilities, Subordinated 2.1% Debt, 8.4% 100 80 87.7 Time 84.0 80.4 79.5 76.5 Deposits, 60 72.6 72.1 71.8 70.1 69.1 66.9 66.4 66.0 8.0% 40 Non Interest- 20 bearing Demand Deposit
Slide 13: Deposits: Strength in Cost of Funds
Deposits: Strength in Cost of Funds Relationship focused pricing for retention and acquisition 9,000 $8,714 $8,757 $8,656 $8,329 $8,026 $8,095 $8,010 Continued best in class total deposit Beta, 8,000 $7,834 19.2% cycle to date $7,237 $7,367 $6,863 $6,992 7,000 $3,583 $3,604 $6,506 $3,678 $3,502
Slide 14: Deposits by Region
800 700 Prior Quarter 600 $1.218 billion, total Deposits by Region $589 500 400 300 Northern 200 $288 100 $151 - $88 $102 800 700 $815 600 $2.292 billion, total 500 Greater Chico 400 $495 $470 300 200 $307 100 $205 - 800 Sacramento Valley 700 600 $1.258 billion, total 500 400 300 $411 200 $281 $237
Slide 15: Deposits: Demand & Savings Deposit Mix
Deposits: Demand & Savings Deposit Mix Total Demand & Savings Balance Tier, $ millions [1] Consumer ($ millions exterior, count interior) Business Prior Quarter, Total # 374 35,031 1,366 Business Consumer $3,342 $3,169 $3,708 $3,523 # 201,891 1,563 837 469 280 483 455 428 437 [1] Excludes time depos
Slide 16: Liquidity
TCBK Pledged Securities as % of Total Securities [3] Liquidity 50.4 55.9 55.3 Peers 40.1 39.6 In addition to a strong 37.5 37.2 35.7 37.1 36.3 35.7 34.2 deposit base, the bank maintains a variety of 30.8 easily accessible funding 25.2 25.3 25.3 25.3 sources 21.5 21.9 21.8 22.8 19.0 17.6 18.6 19.8
Slide 17: Loans and Credit Quality
Loans and Credit Quality 17 17 Investor Presentation | Fourth Quarter 2023
Slide 18: Loan Portfolio and Yield
Loan Portfolio and Yield 6.50% $6,795 $6,709 $6,452 $6,521 $6,422 $6,313 $6,000 $6,097 $5,796 $5,000 5.44% $4,859 5.64% $4,711 $4,739 5.50% $4,610 $4,443 5.52% 5.24% $4,381 $4,386 $4,407 $4,000 5.38% $4,111 5.15% $4,022 5.09% 5.23% 5.21% 4.92% 4.96% 5.10% 5.05% $3,000 4.86% 4.88% 4.78% 4.73% 4.69% 4
Slide 19: Gross Production vs. Payoff
Gross Production vs. Payoff In addition to the nearly $0.8 TCBK originated nearly $1.5 Originations and net loan Slower pace of originations billion in non-PPP loan billion in 2021, while facing growth in 2022 were supportive commensurate with market originations in 2020, TCBK headwinds of an increa
Slide 20: Diversified Loan Portfolio
Diversified Loan Portfolio CRE Non- Multifamily Occupied Occupied 4Q-2023 $2,218 Owner 4Q-2022 $2,150 4Q-2023 $956 Owner CRE- 4Q-2022 $982 4Q-2023 $950 4Q-2022 $945 4Q-2023 $884 Agriculture Constructio and Junior Commercial SFR 1-4 Term 4Q-2022 $792 Agriculture & Farmland Auto & Other & Industrial 1
Slide 21: Office RE Collateral
Office RE Collateral TCBK Community Net Book Balance Wtd Avg Loan Count Commitments Net Book Balance CRE loans secured Banking Regions (Avg) LTV Central Valley 302 $ 331,917,917 $ 305,701,666 $ 1,002,301 60.4% by office collateral Bay Area 121 177,180,724 166,146,827 1,373,114 50.8% represents 9.6
Slide 22: CRE Collateral Values
CRE Collateral Values Distribution by LTV (1) 100% LTV Range 90% <= 60% 89% > 60% - 75% 80% > 75% 80% 70% 72% 70% 60% 62% 60% 50% 52% 49% 46% 40% 44% 38% 39% 30% 29% 20% 24% 20% 10% 11% 7% 2% 3% 0% 0% 0% 4% 1% 0% Retail Building Office Building Hotel/Motel Light Industrial Self Storage Other Multifa
Slide 23: Unfunded Loan Commitments
Unfunded Loan Commitments Outstanding Principal ($MM) Unfunded Commitment ($MM) HELOCs – by vintage, with weighted avg. coupon (8.86% total WAC) 10.00% $225 9.63% 9.63% $200 9.37% 9.23% 9.27% 9.27% 9.50% $175 8.95% 8.99% 8.91% $150 9.00% 8.77% 8.72% 8.71% 8.64% $125 $151 8.55% $150 8.28% $100 8.50%
Slide 24: C&I Utilization
C&I Utilization C&I Utilization by NAICS Industry: 4Q-2023 C&I yield change generally $209 remain tied to changes in the 20000% $190 Outstanding (mln) Unfunded (mln) $180 Prime Rate. 15000% $95 Paired with treasury 10000% $60 $52 $74 $73 $50 management services, C&I 5000% $43 $37 $33 $27 $37 $28
Slide 25: Loan Yield Composition
Floating 14% Loan Yield Composition Fixed 39% 61% Adjustable + Floating 99% of Floating Predominantly benchmarked Adjustable benchmarked to Prime to 5 Year Treasury 47% 1,000 10.00% 9.11% 900 9.07% 9.00% 800 8.00% 7.47% 7.03% 7.06% 700 6.81% 6.77% 6.93% 7.00% 600 6.22% 6.00% 5.26% 500 5.00% 4.54% 4.
Slide 26: Allowance for Credit Losses Drivers of Change under CECL
Allowance for Credit Losses Drivers of Change under CECL 1.79% of Total Loans Loan portfolio Gross charge-offs Driven by specific Primarily driven growth of $86 $0.749 million reserve increase by econometric 1.73% million in Q4 $1.528MM, factor BBB yield Gross recoveries majority in Ag of
Slide 27: Allowance for Credit Losses Allocation of Allowance by Segment
Allowance for Credit Losses Allocation of Allowance by Segment 27 Investor Presentation | Fourth Quarter 2023
Slide 28: Risk Grade Migration
Risk Grade Migration 0.8% 1.1% 1.0% 1.0% 1.2% 1.3% 100% 1.8% 2.0% 2.0% 2.4% 1.4% 1.5% 9.7% 8.0% 9.2% 8.8% 11.4% 12.1% 80% 60% 87.8% 89.0% 87.8% 87.8% 86.0% 85.0% 40% 20% 0% 3Q-2022 4Q-2022 1Q-2023 2Q-2023 3Q-2023 4Q-2023 Pass Watch Special Mention Substandard Zero balance in Doubtful and Loss 28 I
Slide 29: Asset Quality
Asset Quality The Bank continues to actively and Non-Performing Assets as a % of Total Assets aggressively address potential 0.75% 0.68% TCBK Peers credit issues with short resolution 0.64% 0.60% timelines. 0.50% 0.46% 0.48% 0.42% 0.37% 0.39% 0.38% 0.38% 0.37% 0.38% 0.34% 0.34% 0.32% 0.35% 0.40% 0
Slide 30: Financials
Financials 30 30 Investor Presentation | Fourth Quarter 2023
Slide 31: Net Interest Income (NII) and Margin (NIM)
Net Interest Income (NII) and Margin (NIM) 31 Investor Presentation | Fourth Quarter 2023
Slide 32: Net Interest Income (NII) and Margin (NIM)
Net Interest Income (NII) and Margin (NIM) 32 Investor Presentation | Fourth Quarter 2023
Slide 33: Current Operating Metrics
Current Operating Metrics Net Interest Margin (FTE) Efficiency Ratio 4.30% 4.47% 4.22% 3.96% 3.88% 3.96% 3.58% 65.4% 63.7% 59.7% 58.4% 55.8% 53.2% 53.0% 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 PPNR as % of Average Assets ROAA 1.43% 1.43% 1.94% 1.91% 1.97% 1.87% 1.28% 1.
Slide 34: Well Capitalized
Well Capitalized Tier 1 Capital Ratio CET1 Ratio 14.4% 14.2% 13.3% 14.0% 13.2% 13.7% 12.9% 13.2% 12.5% 12.9% 12.2% 12.4% 11.7% 11.7% 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 Total Risk Based Capital Tangible Capital Ratio 10.6% 15.2% 15.4% 15.1% 14.7% 9.5% 14.4% 14.2% 9.
Slide 35: XYZ
Pending update – no material change to format XYZ 35 Investor Presentation | Fourth Quarter 2023