Trico Bancshares · NASDAQ:TCBK
Trico Bancshares — Investor Presentation (April 2023)
35 slides from Trico Bancshares's investor presentation, April 2023
Slide 1: Investor Presentation First Quarter 2023
Investor Presentation First Quarter 2023 Richard P. Smith, President & Chief Executive Officer Peter G. Wiese, EVP & Chief Financial Officer Dan K. Bailey, EVP & Chief Banking Officer John S. Fleshood, EVP & Chief Operating 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 | First 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 2.18% and 19.83%, respectively, for the quarter ended and Profitability March 31, 2023, and 1.69% and 14.70%, respectively, for the same quarter in the prior year • Our efficiency ratio was 50.3% for the qua
Slide 6: Company Overview
Company Overview Nasdaq: TCBK Headquarters: Chico, California Stock Price*: $41.59 Market Cap.: $1.38 Billion Asset Size: $9.84 Billion Loans: $6.42 Billion Deposits: $8.03 Billion Bank Branches: 70 ATMs: 88 Bank ATMs, with access to over 37,000 in network Market Area: TriCo currently serves 31 coun
Slide 7: Top of Mind for Today and Tomorrow
“Top of Mind for Today and Tomorrow” Key Executive Management Themes and Topics • Deposit Granularity and Liquidity – the Ability to Remain in a Position of Strength While Shifts in Money Supply Occur • Active Monitoring of Loans for Early Warning Signs While Maintaining Sufficient Reserves • Domest
Slide 8: Positive Earnings Track Record
Positive Earnings Track Record March 2022 Acquired Valley Republic Bancorp $40 ($1.4B assets) $1.20 July 2018 Acquired FNB Bancorp $36 ($1.2B assets) 2020 Elevated ACL Provisioning Associated with COVID Related Risks $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 $1.25 Q1 Q2 Q3 Q4 $1.10 13.36% $1.00 12.10% 11.67% $0.88 10.75% 10.49% $0.30 $1.00 $0.82 $0.25 $0.66 $0.70 $0.22 8.10% $0.22 7.18% $0.75 $0.19 $0.25 $0.30 $0.17 $0.22 $0.50 $0.22 $0.17 $0.17 $0.25 $0.25 $0.19 $0.2
Slide 10: Consistent Growth
CAGR, Assets Consistent Growth 5 yrs. 10 yrs. 15.5% 14.2% Organic Growth and Disciplined Acquisitions Asset Dollars in Billions. Trailing 10 years Trailing 5 quarters 10 Investor Presentation | First Quarter 2023
Slide 11: Deposits
Deposits 11 11 Investor Presentation | First Quarter 2023
Slide 12: Liability Mix: Strength in Funding
Liability Mix: Strength in Funding Liability Mix 03/31/2023 Loans to Core Deposits (%) Borrowings & Other TCBK Peers liabilities, 120 Subordinated Debt, 6.1% 2.2% Time 100 Deposits, 3.9% 80 81.6 77.8 76.9 76.5 75.9 60 72.6 72.1 71.8 70.1 69.1 66.9 66.4 66.0 40 20 Non Interest- bearing Demand 0 Depos
Slide 13: Deposits: Strength in Cost of Funds
Deposits: Strength in Cost of Funds $8,714 $8,757 Relationship focused market share growth. $8,656 9,000 $8,329 $8,026 Continued best in class total deposit Beta; 8,000 (less than 4.42% rate rise cycle to date) $7,237 $7,367 $6,863 $6,992 7,000 $3,583 $3,604 $6,506 $3,678 $6,248 $6,341 $3,502 $3
Slide 14: Deposits by Region
800 Prior 700 $730 $1.626 billion, total Quarter 600 Deposits by Region 500 400 $392 Northern 300 200 $225 100 $132 $147 - 800 700 600 $1.862 billion, total 500 $627 Greater Chico 400 300 $422 $326 200 $285 100 $202 - 800 700 Sacramento Valley 600 $1.225 billion, total 500 400 300 $400 200 $284 $189
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 # 34,897 Business 346 $3,184 1,255 Consumer # 209,845 $4,007 1,721 1,003 588 349 479 497 481 472 $0-$100k >$100k-$250k >$250k-$500k
Slide 16: Liquidity
TCBK Liquidity Pledged Securities as % of Total Securities [3] Peers 45.1 43.4 42.9 40.1 39.1 37.5 37.2 35.7 36.5 35.6 35.1 34.2 In addition to a strong deposit base, the bank 35.9 33.9 31.6 maintains a variety of 26.9 25.2 easily accessible funding 21.5 21.9 21.8 22.8 19.0 17.6 18.6 19.8 sources
Slide 17: Loans and Credit Quality
Loans and Credit Quality 17 17 Investor Presentation | First Quarter 2023
Slide 18: Loan Portfolio and Yield
Loan Portfolio and Yield 6.50% $6,452 $6,422 $6,313 $6,097 $6,000 $5,796 $5,000 $4,859 $4,711 $4,739 5.44% $4,610 5.50% $4,381 $4,386 $4,407 $4,443 $4,000 $4,111 $4,022 5.15% 5.24% 5.09% 5.23% 5.21% 4.92% 4.96% 5.10% 5.05% $3,000 4.86% 4.88% 4.78% 4.69% 4.73% 4.50% $2,000 $1,000 $0 3.50% 2018 2019 Q
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 billion in non-PPP loan billion in 2021, while facing growth in 2022 were supportive originations in 2020, TCBK headwinds of an increased $372 of the positive mix shift in originated over
Slide 20: Diversified Loan Portfolio
Diversified Loan Portfolio 1Q-2023 $2,161 CRE Non- Occupied Owner 1Q-2022 $1,891 $971 CRE-Owner 1Q-2023 Occupied 1Q-2022 $851 1Q-2023 $947 Industrial SFR 1-4 Term Multifamily 1Q-2022 $840 1Q-2023 $804 Agriculture & 1Q-2022 $712 Farmland Auto & Other Construction 5% 1% and Junior Commercial & 1Q-2023
Slide 21: Office RE Collateral
Office RE Collateral TCBK Community Net Book Balance Wtd Avg CRE loans secured Banking Regions Loan Count Commitments Net Book Balance (Avg) LTV by office collateral Central Valley Bay Area 296 118 $309,868,158 168,961,869 $272,445,290 156,308,282 $920,423 1,324,646 60.7% 51.6% represent 9.6% of S
Slide 22: CRE Collateral Values
CRE Collateral Values Avg Loan Outstanding Loan Segment LTV # Loans Size ($MM) 100% (000s) CRE Non Owner Occupied $2,183 53% 1,535 $1,422 Retail Building $573 53% 348 $1,646 Office Building $462 57% 374 $1,236 90% Distribution by LTV (1) Hotel/Motel Light Industrial $325 $171 50% 52% 98 176 $3,311 $
Slide 23: Unfunded Loan Commitments
Unfunded Loan Commitments HELOCs – by vintage, with weighted avg. coupon (6.52% total WAC) 10.00% 8.61% $275 Outstanding Principal ($MM) 8.13% 8.11% 8.25% $250 9.00% 7.88% 7.65% 7.72% 7.57% 7.68% 7.79% 7.56% Unfunded Commitment ($MM) 6.82% $225 8.00% 6.80% 7.00% $200 5.08% 5.24% $175 $162 6.00% 5.00
Slide 24: C&I Utilization
C&I Utilization C&I Utilization by NAICS Industry: 1Q-2023 C&I utilization is expected to $196 $178 grow incrementally through 20000% $162 Outstanding (mln) Unfunded (mln) the remainder of 2023. 15000% 10000% $88 $67 Paired with treasury $43 $52 $53 $55 $46 $55 $44 $29 management services, C&I $
Slide 25: Loan Yield Composition
Floating Fixed 13% 44% Loan Yield Composition 56% Adjustable + Floating 97% of Floating Predominantly benchmarked Adjustable benchmarked to Prime to 5 Year Treasury 43% 1,000 10.00% 900 8.74% 9.00% 8.68% 800 8.00% 7.41% 700 7.00% 6.52% 6.52% 6.37% 6.52% 6.34% 600 6.00% 5.53% 500 5.00% 4.77% 4.88% 4.
Slide 26: Allowance for Credit Losses Drivers of Change under CECL
Allowance for Credit Losses Drivers of Change under CECL 1.64% Loan decline of Gross charge-offs Reduction in Continued low 1.69% $28 million Q1 $1.758 million Criticized & loss experience of Total of Total Classified loans of offset by Loans Gross recoveries $9.0 million increases in Loan
Slide 27: Allocation of Allowance by Segment
Allowance for Credit Losses Allocation of Allowance by Segment Municipal loans included in Commercial and industrial segment within the presented table 27 Investor Presentation | First Quarter 2023
Slide 28: Risk Grade Migration
Risk Grade Migration 1.0% 1.1% 0.8% 0.8% 1.1% 1.0% 2.5% 1.6% 2.1% 1.8% 2.0% 2.0% 7.8% 9.5% 9.7% 8.0% 9.2% 9.3% 87.2% 89.6% 87.6% 87.8% 89.0% 87.8% 4Q-2021 1Q-2022 2Q-2022 3Q-2022 4Q-2022 1Q-2023 Pass Watch Special Mention Substandard Zero balance in Doubtful and Loss 28 Investor Presentation | Fir
Slide 29: Asset Quality
Asset Quality Net charge offs of $1.6MM related Non-Performing Assets as a % of Total Assets to previously identified specific 0.73% 0.75% 0.73% 0.68% TCBK Peers reserves, while forward-looking Q 0.58% 0.64% 0.62% 0.54% 0.55% factors drove increased allowance. 0.53% 0.51% 0.50% 0.42% 0.38% 0.38% 0
Slide 30: Financials
Financials 30 30 Investor Presentation | First Quarter 2023
Slide 31: Net Interest Income (NII) and Margin (NIM)
Net Interest Income (NII) and Margin (NIM) 4Q22 to1Q23 Reported Net Interest Income (NII) & NIM Walk 120. 0 7.00% NII $ in millions, NIM change in bps, all full taxable equivalent (FTE) Int Income (FTE) Net Int Income (FTE) NIM (FTE) NII NIM $103.4 $103.3 4Q22 $99.3 4.34% 100. 0 $96.8 6.00% Market r
Slide 32: Net Interest Income (NII) and Margin (NIM)
Net Interest Income (NII) and Margin (NIM) 1Q22 to1Q23 Reported Net Interest Income (NII) & NIM Walk 120. 0 7.00% NII $ in millions, NIM change in bps, all full taxable equivalent (FTE) Int Income (FTE) Net Int Income (FTE) NIM (FTE) NII NIM $103.4 $103.3 1Q22 $68.2 3.39% 100. 0 $96.8 6.00% Market r
Slide 33: Current Operating Metrics
Current Operating Metrics Net Interest Margin (FTE) Efficiency Ratio 4.30% 4.47% 4.22% 4.21% 3.96% 3.88% 3.58% 65.4% 63.7% 59.7% 58.4% 53.2% 53.0% 50.3% 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 PPNR as % of Average Assets ROAA 2.18% 1.43% 1.43% 1.47% 1.94% 1.91% 1.97% 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% 12.7% 12.0% 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% 14.8% 9.5% 14.4% 14.2% 9.
Slide 35: XYZ
Pending update – no material change to format XYZ 35 Investor Presentation | First Quarter 2023
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