Trico Bancshares · NASDAQ:TCBK
Trico Bancshares — Shareholder Meeting (May 2017)
38 slides from Trico Bancshares's shareholder meeting presentation, May 23, 2017
Slide 1: Annual Meeting of Shareholders Presentation
Richard P. Smith, President & CEO 2017 Annual Meeting of Shareholders Presentation May 23, 2017
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT Certain comments included in this presentation may involve forward- looking statements, for which TriCo claims the protection of the “safe harbor” provisions credited by Federal securities laws. Such forward- looking statements are subject to risks and uncertainties which may c
Slide 3: Agenda
AGENDA • Company Overview • Recent Activities & Focus • Key Revenue Drivers • Challenges & Opportunities • Financials • Questions 3 | May 9, 2017
Slide 4: Overview
OVERVIEW Asset Size: $4.5 Billion Location: Chico, CA Founded: 1975 Deposits: $3.9 Billion Loans (net): $2.7 Billion Customers: 190,000 Bank Branches: 67 ATMs: 85 4 | May 9, 2017
Slide 5: Overview
OVERVIEW Nasdaq: TCBK *Stock Price: $35.06 Market Capitalization: $801.94 million *Price to Book stated: 1.7x *Price to TBVPS 2.0x **Asset Size Rank of CA Publicly Traded Banks: 14 *Valuation Information as of Market Close 05/22/2017 **Ranking as of 01/25/2015 – Source: SNL Financial 5 | May 9, 2017
Slide 6: 1 Year Stock Price
1 year Stock Price P 38.00 ast Price T High on 02/21/ * Average 30.9726 | © | Low on 08/02/16 25.40 / p 36.00 / + L .00 P32.00 p 30.00 NA noo Ww p licaekatd tos | Lae May Jun Jul Aug Oct Nov Dec Jan Feb Mar Apr May 2017 TCBK US Equity (TriCo Bancshares) Line Chart Daily 221 -22MAY2017 Copyrigl 1017
Slide 7: Ownership Summary
Ownership Summary = Security Ownership TRICO BANCSHARES 09510 ) Current 2 Historical 3 Matrix 4 Ownership Summary 9 Insider Transactions Options =| 51) Institutional C7247) Curr Change 52) Insider 05/21/1 Curr Change } le | 21) L le le Ie 1! Ix be kK Ed 6 le 1! } le be 8) Cd) 1 1) > oe > oe 53) Geog
Slide 8: Executive Team
EXECUTIVE TEAM Rick Smith John Fleshood Tom Reddish President & CEO EVP Chief Operating Officer EVP Chief Financial Officer TriCo since 1993 TriCo since 2016 TriCo since 1994 Craig Carney Richard O’Sullivan Dan Bailey EVP Chief Credit Officer EVP Commercial Banking EVP Retail Banking TriCo since 199
Slide 9: 2016 Accomplishments
2016 ACCOMPLISHMENTS • Purchase of 3 branches from Bank of America – Completed in March, 2016 • Several new technology projects for 2016: – New Mobile Banking program – New Business On-Line Banking – Loan and Operational Imaging projects – Core Conversion • Continued deposit market share expansion 7
Slide 10: Positioned for Today, Prepared for the Future
POSITIONED FOR TODAY, PREPARED FOR THE FUTURE • Strong and growing bank capital • Competitive product set to compete with banks both large and small • Superior reputation versus large bank competitors • Continue to see strong organic growth in current environment – Loan growth of 9.4% – Deposit grow
Slide 11: Positioned for Today, Prepared for the Future continued
POSITIONED FOR TODAY, PREPARED FOR THE FUTURE continued • Strong focus on risk management and new regulatory realities – Enterprise Risk – Strong focus on CRA – HMDA Reporting – Fair Lending • Experienced project teams, well prepared for continued growth through acquisition 9 | May 9, 2017
Slide 12: What Is Long Term Success?
WHAT IS LONG TERM SUCCESS? • Rewarding our shareholders – A winning culture with a motivated and talented work force (good people) – Significant and growing market share – Low cost core deposit base – Strong credit culture – Diversified revenue sources – Efficient operations – Strong risk management
Slide 13: Key Drivers of Bank Revenues
KEY DRIVERS OF BANK REVENUES • Deposits & Margin – Average Cost of Deposits of .09% as of 03/31/2017 – Net Interest Margin in Q1 2017 was 4.13% • Commercial Loans – Commercial Real Estate • Diverse portfolio of property types and geographies – Commercial & Industry Lines and Loans & Leases – Agricul
Slide 14: Key Drivers of Bank Revenues continued
KEY DRIVERS OF BANK REVENUES continued • Consumer Loans – Home Equity Lines/Loans • Rising rates a positive for growth – Small Business • Growth Opportunities Mortgage Banking Wealth Management Merchant Fee Opportunities Higher Stock Valuations a Plus for M&A Activity 12 | May 9, 2017
Slide 15: Total Ending Deposits
TOTAL ENDING DEPOSITS $3,895,560 $3,898,884 $4,000,000 $3,631,266 $3,380,423 $3,500,000 $3,000,000 $2,410,483 $2,500,000 $2,000,000 2013 2014 2015 2016 Q1 2017 Data as of 03.31.2017 14 | May 9, 2017
Slide 16: Market Share of All Branches
MARKET SHARE OF ALL BRANCHES SORTED BY ZIP CODE Rank Institution Name State Charter Deposit Market Share (Hdqtrd) ($000) 1 Wells Fargo Bank, National SD Federal 8,700,167 24.56% Association 2 Bank of America, National NC Federal 4,135,930 11.68% Association 3 Rabobank, National Association CA Federa
Slide 17: Loan Portfolio by Type
LOAN PORTFOLIO BY TYPE Construction - RE Construction - Commercial 2% Commercial Consumer - Other 8% 2% 1% Secured by RE - Residential 1-4 11% Consumer - Home Eq 2% Consumer - HELOCS 10% Secured by RE - Com'l 64% Data as of 03.31.2017 20 | May 9, 2017
Slide 18: Commercial Banking
COMMERCIAL BANKING • Target loans of $2,000,000 to $15,000,000 • Personalized banking • Assigned Relationship Managers • Assigned Cash Management Officers • In-market lending • Competition is as fierce and diverse as it has ever been • $101 million in CRE & C&I production in Q1 resulted in $9 millio
Slide 19: Commercial Banking continued
COMMERCIAL BANKING continued • Agricultural lending • Improving drought conditions • Ag prices weaker • Loans <$1,000,000 served through alternate channel • Business Relationship Managers • Credit scoring combined with traditional underwriting • SBA 7A program now offered 23 | May 9, 2017
Slide 20: Construction and A&D
CONSTRUCTION AND A&D • Construction lending totals approx. $124,542,000 outstanding with $208,626,000 in commitments • Residential construction approx. $59,699,000 • Commercial construction approx. $64,843,000 • Total construction, land development and land acquisition loans represent 4.5% of total
Slide 21: Total Loans
TOTAL LOANS NET OF UNAMORTIZED DEFERRED LOAN FEES AND DISCOUNTS ($000’S) $2,900,000 $2,759,593 $2,761,192 $2,700,000 $2,522,937 $2,500,000 $2,282,524 $2,300,000 $2,100,000 $1,900,000 $1,672,007 $1,700,000 $1,500,000 2013 2014 2015 2016 Q1 2017 Data as of 03.31.2017 27 | May 9, 2017
Slide 22: Growth Opportunities
GROWTH OPPORTUNITIES • Mergers and Acquisitions – 3 Branch purchase from Bank of America 2016 – North Valley Bancorp 2014 – Citizens Bank of Northern California 2011 – Granite Community Bank 2010 – North State National Bank 2003 – 9 Branch purchase from Wells Fargo 1997 – Sutter Butte Savings 1996 –
Slide 23: What Keeps Us Up at Night?
WHAT KEEPS US UP AT NIGHT? • Rising Rate Pricing Adjustments • Interest Rate Risk • Aggressive Competitors • Compliance Regulations – The Cost of Compliance with New Regulations • Will Washington DC make America great again? 29 | May 9, 2017
Slide 24: Financials
FINANCIALS 31 | May 9, 2017 ® trico bancshares
Slide 25: Total Assets ($000's)
TOTAL ASSETS ($000’S) $5,000,000 $4,517,968 $4,527,954 $4,500,000 $4,220,722 $3,912,358 $4,000,000 $3,500,000 $3,000,000 $2,744,066 $2,500,000 $2,000,000 2013 2014 2015 2016 Q1 2017 Data as of 03.31.2017 32 | May 9, 2017
Slide 26: Capital Ratios ($000's)
CAPITAL RATIOS ($000’S) 15.6% 0.16 14.8% 15.1% 14.7% 14.9% 14.4% 13.8% 13.6% 13.9% 13.5% 0.14 12.2% 12.1% 12.3% 0.12 9.1% 9.2% 9.1% 9.3% 0.1 8.6% 0.08 0.06 0.04 0.02 0 2013 2014 2015 2016 Q1 2017 Common Equity Tier 1 Tier 1 Total Risk Based Tangible Common Data as of 03.31.2017 33 | May 9, 2017
Slide 27: Net Income ($000's)
NET INCOME ($000’S) $45,000 $40,000 $11,422 $12,533 $35,000 $30,000 $12,694 $12,199 $25,000 $5,236 $5,650 $20,000 $7,361 $8,234 $15,000 $11,366 $9,405 $6,325 $10,000 $4,859 $12,079 $5,000 $8,477 $8,336 $10,674 $7,365 $- 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Data as of 03.31.2017 34 | May 9, 2017
Slide 28: Net Interest Margin
NET INTEREST MARGIN 5.00% 4.00% 3.00% 4.18% 4.17% 4.39% 4.23% 4.13% 2.00% 1.00% 0.00% 0.15% 0.12% 0.10% 0.09% 0.09% 2013 2014 2015 2016 Q1 2017 Wtd. Avg. Deposit Rate Net Interest Margin Data as of 03.31.2017 35 | May 9, 2017
Slide 29: Non-Interest Income ($000's)
NON-INTEREST INCOME ($000’S) $50,000 $40,000 $11,445 $12,462 $10,219 $30,000 $9,755 $11,642 $11,066 $10,131 $20,000 $8,589 $12,080 $11,245 $9,127 $7,877 $10,000 $10,180 $9,790 $11,703 $7,352 $8,295 $- 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Data as of 03.31.2017 36 | May 9, 2017
Slide 30: Efficiency Ratio (Fully Taxable Equivalent)
EFFICIENCY RATIO (FULLY TAXABLE EQUIVALENT) 75.0% 72.9% 70.0% 67.3% 67.9% 66.0% 64.7% 65.0% 60.0% 55.0% 50.0% 2013 2014 2015 2016 Q1 2017 Data as of 03.31.2017 37 | May 9, 2017
Slide 31: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE $2.00 $1.75 $0.50 $0.54 $1.50 $0.32 $0.25 $1.25 $0.45 $0.55 $0.53 $1.00 $0.50 $0.75 $0.39 $0.41 $0.30 $0.49 $0.50 $0.25 $0.53 $0.45 $0.46 $0.52 $0.36 $- 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Data as of 03.31.2017 38 | May 9, 2017
Slide 32: Dividends Per Share
DIVIDENDS PER SHARE 0.6 0.15 0.5 0.15 0.4 0.11 0.11 0.15 0.3 0.13 0.11 0.11 0.15 0.2 0.11 0.13 0.11 0.1 0.15 0.15 0.09 0.11 0.11 0 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Data as of 03.31.2017 39 | May 9, 2017
Slide 33: Non-Performing Assets to Total Assets
NON-PERFORMING ASSETS TO TOTAL ASSETS 2.50% 2.17% 2.00% 1.34% 1.50% 1.01% 1.00% 0.53% 0.51% 0.50% 0.00% 2013 2014 2015 2016 Q1 2017 Data as of 03.31.2017 40 | May 9, 2017
Slide 34: Originated ALLL to Total Originated Loans
ORIGINATED ALLL TO TOTAL ORIGINATED LOANS 2.50% 2.11% 1.85% 2.00% 1.57% 1.50% 1.19% 1.14% 1.00% 0.50% 0.00% 2013 2014 2015 2016 Q1 2017 Data as of 03.31.2017 42 | May 9, 2017
Slide 35: Annualized Net Charge-Offs to Average Loans
ANNUALIZED NET CHARGE-OFFS TO AVERAGE LOANS 0.23% 0.25% 0.20% 0.15% 0.10% 0.05% -0.13% -0.07% -0.10% -0.01% 0.00% -0.05% -0.10% -0.15% 2013 2014 2015 2016 Q1 2017 Data as of 03.31.2017 43 | May 9, 2017
Slide 36: Return on Average Assets
RETURN ON AVERAGE ASSETS 1.40% 1.11% 1.08% 1.20% 1.04% 1.03% 1.00% 0.87% 0.80% 0.60% 0.40% 0.20% 0.00% 2013 2014 2015 2016 Q1 2017 Data as of 03.31.2017 44 | May 9, 2017
Slide 37: Return on Average Shareholder's Equity
RETURN ON AVERAGE SHAREHOLDER’S EQUITY 11.34% 12.00% 10.04% 9.97% 9.47% 10.00% 8.67% 8.00% 6.00% 4.00% 2.00% 0.00% 2013 2014 2015 2016 Q1 2017 Data as of 03.31.2017 45 | May 9, 2017
Slide 38: TriCo Bancshares Is Committed To
TRICO BANCSHARES IS COMMITTED TO: Improving the financial success and well-being of our shareholders, customers, communities and employees.