2016 Community Bank Investor Conference

Transcription

1 Richard P. Smith, President & CEO FIG Partners 2016 Community Bank Investor Conference February 3-4, 2016

2 SAFE HARBOR STATEMENT Certain comments included in this presentation may involve forwardlooking statements, for which TriCo claims the protection of the safe harbor provisions credited by Federal securities laws. Such forwardlooking statements are subject to risks and uncertainties which may cause TriCo s actual results to differ materially from those contemplated by such statements. Additional information concerning certain of these risks and uncertainties are described in TriCo s Annual Report of Form 10-K for the fiscal year ended December 31, 2014 and TriCo s Quarterly Reports on Form 10-Q as filed with the SEC in fiscal February 2016

3 AGENDA Company Overview Recent Activities & Focus Merger Announcement Key Revenue Drivers Challenges & Opportunities Financials Questions 3 February 2016

4 OVERVIEW Asset Size: $4.2 Billion Location: Chico, CA Founded: 1975 Deposits: $3.6 Billion Loans (net): $2.5 Billion Customers: 190,000 Bank Branches: 68 ATMs: 80 4 February 2016

5 OVERVIEW Nasdaq: TCBK Stock Price: $25.77 Market Capitalization: *Price to TBVPS: 1.67x **Asset Size Rank of CA Publicly Traded Banks: 13 $586 million *Valuation Information as of Market Close 02/01/2016 **Ranking as of 06/30/2015 Source: SNL Financial 5 February 2016

6 EXECUTIVE TEAM Rick Smith President & CEO TriCo since 1993 Tom Reddish EVP Chief Financial Officer TriCo since 1994 Carol Ward EVP Chief Operating Officer TriCo since February 2016 Craig Carney EVP Chief Credit Officer TriCo since 1996 Richard O Sullivan EVP Commercial Banking TriCo since 1984 Dan Bailey EVP Retail Banking TriCo since 2007

7 RECENT ACTIVITIES Purchase of 3 branches from Bank of America Completion in March, 2016 Completion of merger of North Valley 2015 Closed 13 branches in 2015 as result of merger and customer migration to technology tools Opening new branch in Roseville, Ca. Several new technology projects for 2016: New Mobile Banking program New Business On-Line Banking Loan and Operational Imaging projects Several vendor changes for electronic banking 7 February 2016

8 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 Double digit loan growth Strong deposit growth 8 February 2016

9 POSITIONED FOR TODAY, PREPARED FOR THE FUTURE continued Strong focus on risk management and new regulatory realities Experienced project teams, well prepared for continued growth through acquisition 9 February 2016

10 WHAT IS LONG TERM SUCCESS? Rewarding our shareholders A winning culture with a motivated and talented work force Significant and growing market share Low cost core deposit base Strong credit culture Diversified revenue sources Efficient operations Strong risk management practices 10 February 2016

11 KEY DRIVERS OF BANK REVENUES Deposits & Margin Average Cost of Deposits of.10% as of 12/31/2015 Net Interest Margin at 12/31/2015 is 4.39% Non-Interest Income Mortgage Finance Service Charge & Fee Income Bank Wealth Management Program Consumer Loans Home Equity Lines/Loans Installment Lending Small Business 11 February 2016

12 KEY DRIVERS OF BANK REVENUES continued Commercial Loans Commercial Real Estate Commercial & Industry Lines and Loans & Leases Agricultural Loans Asset Based Loans Growth Opportunities Wealth Management Bank Managed Program Raymond James as Broker-Dealer Merchant Fee Opportunities Growth Opportunity with North Valley Bank 12 February 2016

13 DEPOSIT STRUCTURE Savings 35% Time Deposits 9% Wtd. Avg. Rate 0.39% Non Interest Bearing 32% Wtd. Avg. Rate 0.13% Interest Demand 24% Wtd. Avg. Rate 0.06% Data as of February 2016

14 TOTAL ENDING DEPOSITS $4,000,000 $3,631,266 $3,380,423 $3,500,000 $3,000,000 $2,500,000 $2,190,536 $2,289,702 $2,410,483 $2,000,000 $1,500, Data as of February 2016

15 MARKET SHARE OF ALL BRANCHES SORTED BY ZIP CODE Rank Institution Name State (Hdqtrd) Charter Deposit ($000) Market Share 1 Wells Fargo Bank, National Association 2 Bank of America, National Association SD Federal 8,418, % NC Federal 4,528, % 3 Rabobank, National Association CA Federal 4,076, % 4 Tri Counties Bank CA State 3,271, % 5 JP Morgan Chase Bank, National Association OH Federal 2,280, % 6 Umpqua Bank OR State 1,609, % 7 U.S. Bank National Association OH Federal 1,570, % 8 Bank of the West CA State 1,091, % Source: FDIC Summary of Deposits, June 2015 Total Deposits 06/30/2015: $3,895, February 2016

16 NON-INTEREST INCOME Consistently Represents Approximately 25+% of Total Bank Revenues Residential Home Mortgage Lending Refinances remain consistent Increasing numbers of purchase transactions and increasing overall activity for home loans 16 February 2016

17 NON-INTEREST INCOME continued Wealth Management revenues Lower revenues from service charges but increased interchange income Cash Management fees continue to increase following merger integration Merchant Card Services $1.2 million in February 2016

18 CONSUMER LOANS Increased demand for consumer loans Home equity values have increased Economic uncertainty still negative factor Reluctance to borrow (job security concerns) Underperforming job market Low rate environment led to historically high refi activity $36MM in Q HELOC volume resulted in $7MM reduction in outstandings Auto loans demand constant Home equity lines/loans increasing in demand 18 February 2016

19 HOME EQUITY LOANS OUTSTANDING $400,000 $372,149 $355,582 $354,454 $383,898 $362,854 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $ Data as of February 2016

20 HOME EQUITY LINES OF CREDIT <80% LTV AT ORIGINATION 03/31/08 12/31/11 12/31/15 Q Prod. Avg CB Score Avg Loan Commitment to Value at Origination 62% 61% 57% 59% Avg LTV to Current Value N/A 92% 55% N/A Utilization Rate 49% 48% 45% 46% Data as of February 2016

21 LOAN PORTFOLIO BY TYPE Consumer - Other 1.29% Consumer - Home Eq 1.40% Commercial 7.73% Construction - RE 1.83% Consumer - HELOCS 12.78% Construction - Commercial 2.96% Secured by RE - Residential % Secured by RE - Com'l 59.36% Data as of February 2016

22 COMMERCIAL LOANS Total Consumer 28% Total Commercial 72% Data as of February 2016

23 COMMERCIAL BANKING Target loans of $2,000,000 to $10,000,000 Personalized banking Assigned Relationship Managers Assigned Cash Management Officers In-market lending Competition is as fierce and diverse as it has ever been $150 million in CRE & C&I production resulted in $38 million in net growth Q4 23 February 2016

24 COMMERCIAL BANKING continued Agricultural lending Improving drought conditions Ag prices declining may well be a positive Loans <$1,000,000 served through alternate channel Business Relationship Managers Credit scoring combined with traditional underwriting SBA 7A program now offered 24 February 2016

25 COMMERCIAL REAL ESTATE PORTFOLIO AS OF Real Estate Loan Type # of Loans Outstandings* % to Total Loans Avg. Commitment Amount Office ,293,000 12% 559,000 Retail ,392,000 11% 705,000 Multi-Family ,512,000 8% 695,000 Special Purpose Gas Station, Mini Storage, Hotel/Motel, Restaurant ,651,000 6% 887,000 Other Warehouse, Manufacturing, Bare Land, Agricultural Land + Structures 1, ,040,000 21% 446,000 Totals 2,656 1,458,888,000 58% - Averages ,000 * RE Loan Type segment totals do not include all purchase discount adjustments 25 February 2016

26 AG PORTFOLIO AS OF Agricultural Loans (excluding RE secured) total $69 million in total commitments with $39 million outstanding The highest crop concentrations by commitments are: Rice $27.0 million 66 loans $410,000 Avg. Commitment Multiple Crop $20.2 million 21 loans $962,000 Avg. Commitment Almonds $5.1 million 10 loans $505,000 Avg. Commitment Walnuts $3.1 million 3 loans $1,026,000 Avg. Commitment Beef $1.9 million 11 loans $173,000 Avg. Commitment Dairy $970 thousand 6 loans $162,000 Avg. Commitment 26 February 2016

27 CONSTRUCTION AND A&D Construction lending totals approx. $120,909,000 outstanding with $187,894,000 in commitments Residential construction approx. $46,135,000 Commercial construction approx. $74,774,000 Total construction, land development and land acquisition loans represent 4.8% of total loans outstanding Data as of February 2016

28 TOTAL LOANS NET OF UNAMORTIZED DEFERRED LOAN FEES AND DISCOUNTS ($000 S) $3,000,000 $2,500,000 $2,282,524 $2,522,937 $2,000,000 $1,500,000 $1,551,032 $1,564,823 $1,672,007 $1,000,000 $500,000 $ February 2016 Data as of

29 GROWTH OPPORTUNITIES Mergers and Acquisitions North Valley Bancorp 2014 Citizens Bank of Northern California 2011 Granite Community Bank 2010 North State National Bank Branch purchase Wells Fargo 1997 Sutter Butte Savings 1996 Country National Bank 1993 Branch purchase from Wells Fargo 1987 Shasta County Bank February 2016

30 WHAT KEEPS US UP AT NIGHT? Near Zero Interest Rate Environment Aggressive Competitors Bank Regulation The Cost of Compliance with New Regulations Interest Rate Risk Economic Malaise Slow Industry Consolidation Dysfunction in Washington 30 February 2016

31 CHALLENGES WITHIN BANK STRATEGIES Big Banks Aggressive banking in community bank space Bad reputations Large banks cost saving a new opportunity in rural markets Technology and Banking New technology is expensive New technology will streamline banking ultimately lowering costs Bank Operations and Efficiency Managing multiple delivery channels Enterprise Risk Management Many threats, so little time 31 February 2016

32 FINANCIALS 32 February 2016

33 TOTAL ASSETS ($000 S) $4,500,000 $4,000,000 $3,912,358 $4,220,722 $3,500,000 $3,000,000 $2,500,000 $2,555,597 $2,609,269 $2,744,066 $2,000,000 $1,500, February 2016 Data as of

34 CAPITAL RATIOS ($000 S) % 14.80% 13.90% 13.30% 13.50% % % 15.60% 12.20% 13.80% 15.10% % 8.20% 8.60% 9.10% 9.20% Common Equity Tier 1 Tier 1 Total Risk Based Tangible Common Data as of February 2016

35 NET INCOME ($000 S) $45,000 $40,000 $35,000 $11,422 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- $12,694 $5,236 $5,650 $7,361 $4,722 $8,234 $6,549 $11,366 $5,020 $6,325 $6,470 $4,859 $5,321 $2,771 $8,477 $7,365 $8,336 $2,800 $3, Data as of Q1 Q2 Q3 Q4 35 February 2016

36 NET INTEREST MARGIN 5.00% 4.00% 3.00% 4.43% 4.32% 4.18% 4.17% 4.39% 2.00% 1.00% 0.00% 0.34% 0.20% 0.15% 0.12% 0.10% Wtd. Avg. Deposit Rate Net Interest Margin 36 February 2016 Data as of

37 NON INTEREST INCOME ($000 S) $50,000 $40,000 $11,445 $30,000 $10,489 $10,011 $10,219 $9,755 $11,642 $20,000 $7,198 $9,127 $10,131 $8,589 $10,000 $8,251 $10,577 $9,127 $7,877 $12,080 $9,350 $8,265 $7,352 $8,295 $10,180 $ Q1 Q2 Q3 Q4 37 February 2016 Data as of *2011 has been adjusted to remove Bargain Purchase Gains

38 EFFICIENCY RATIO (FULLY TAXABLE EQUIVALENT) 75.0% 70.2% 72.9% 70.0% 65.0% 60.0% 60.9% 67.3% 64.7% 55.0% 50.0% February 2016 Data as of

39 DILUTED EARNINGS PER SHARE $2.00 $1.75 $1.50 $1.25 $1.00 $0.75 $0.50 $0.25 $- $0.50 $0.32 $0.25 $0.45 $0.55 $0.29 $0.50 $0.41 $0.31 $0.39 $0.30 $0.49 $0.40 $0.33 $0.17 $0.53 $0.45 $0.36 $0.17 $ Q1 Q2 Q3 Q4 Data as of February 2016

40 DIVIDENDS PER SHARE Q1 Q2 Q3 Q4 Data as of February 2016

41 NON-PERFORMING ASSETS TO TOTAL ASSETS 4.00% 3.99% 3.50% 3.07% 3.00% 2.50% 2.17% 2.00% 1.50% 1.00% 0.50% 1.34% 1.01% 0.00% Data as of February 2016

42 ALLOWANCE FOR LOAN LOSSES TO TOTAL LOANS 3.00% 2.96% 2.73% 2.50% 2.29% 2.00% 1.50% 1.60% 1.43% 1.00% 0.50% 0.00% February 2016 Data as of

43 ORIGINATED ALLL TO TOTAL ORIGINATED LOANS 2016 Community Bank Investor Conference 3.50% 3.10% 3.00% 2.54% 2.50% 2.00% 2.11% 1.85% 1.57% 1.50% 1.00% 0.50% 0.00% February 2016 Data as of

44 ANNUALIZED NET CHARGE-OFFS TO AVERAGE LOANS 1.40% 1.35% 1.20% 1.00% 0.80% 0.82% 0.60% 0.40% 0.23% 0.20% 0.00% -0.20% Data as of % -0.14% 44 February 2016

45 RETURN ON AVERAGE ASSETS 1.40% 1.20% 1.04% 1.11% 1.00% 0.80% 0.82% 0.75% 0.87% 0.60% 0.40% 0.20% 0.00% February 2016 Data as of

46 RETURN ON AVERAGE SHAREHOLDER S EQUITY 12.00% 11.34% 10.56% 10.00% 8.93% 8.44% 8.67% 8.00% 6.00% 4.00% 2.94% 2.00% 0.00% Q February 2016 Data as of

47 TRICO BANCSHARES IS COMMITTED TO: Improving the financial success and well-being of our shareholders, customers, communities and employees.