Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
KBW 20th Annual Community Bank Investor Conference
Richard P. Smith – President & Chief Executive OfficerPeter Wiese – EVP & Chief Financial Officer
July 2019
KBW 20th AnnualCommunity Investor Conference
July 2019
SAFE HARBOR STATEMENTThe 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 uncertainties, many of which are difficult to predict and are generally beyond our control. There can be no assurance that future developments affecting us will be the same as those anticipated by management. We caution readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; the impact of changes in financial services policies, laws and regulations; technological changes; mergers and acquisitions; changes in the level of our nonperforming assets and charge-offs; any deterioration in values of California real estate, both residential and commercial; the effect of changes in accounting standards and practices; possible other-than-temporary impairment of securities held by us; changes in consumer spending, borrowing and savings habits; our ability to attract deposits and other sources of liquidity; changes in the financial performance and/or condition of our borrowers; the impact of competition from other financial service providers; the possibility that any of the anticipated benefits of our recent merger with FNBB will not be realized or will not be realized within the expected time period, or that integration of FNBB’s operations will be more costly or difficult than expected; the challenges of integrating and retaining key employees; unanticipated regulatory or judicial proceedings; the costs and effects of litigation and of unexpected or adverse outcomes in such litigation; and our ability to manage the risks involved in the foregoing. Additional factors that could cause results to differ materially from those described above can be found in our Annual Report on Form 10-K for the year ended December 31, 2018, which is on file with the Securities and Exchange Commission (the “SEC”) and available in the “Investor Relations” section of our website, https://www.tcbk.com/investor-relations and in other documents we file with the SEC. Annualized, pro forma, projections and estimates are not forecasts and may not reflect actual results.
2
KBW 20th AnnualCommunity Investor Conference
July 2019
AGENDA• Most Recent Quarter Recap
• Company Overview
• Lending Overview
• Deposit Overview
• Financials
3
KBW 20th AnnualCommunity Investor Conference
July 2019
MOST RECENT QUARTER HIGHLIGHTS
4
Earnings Consistency•Q2 2019 return on average assets of 1.44% versus 1.25% in Q2 2018 and 1.41% in the
linked quarter.•Average yield on earnings assets of 4.75% in Q2 2019 compared to 4.38% in Q2 2018 and
4.71% in the linked quarter.
Industry Leading Net Interest Margin
•Net interest margin of 4.48% for Q2 2019 versus 4.14% in Q2 2018 and 4.46% in the linked quarter.
• Loan to deposit ratio increased to 77% at Q2 2019 compared to 74% in the linked quarter and consistent with 77% at Q2 2018. Annualized loan growth for Q2 2019 was 6.9%.
Superior Credit Quality•Non-performing assets to total assets of 0.35% as of Q2 2019 which was generally
consistent with the 0.34% in the trailing quarter and down from 0.47% at Q4 2018.• Third consecutive quarter of net recoveries on charged-off loans with net recoveries
during the last four quarters totaling nearly $950,000.
Focus on Expense Control
• Continued expense control has resulted in a stable or declining efficiency ratio which was 60.1% for each of the first two quarters of 2019 as compared to 65.2% in Q2 2018.
• Increases in expenses were primarily attributable to production incentives.
Diverse Deposit Base•Average cost of total deposits increased slightly to 0.22% versus the prior two quarters
which were 0.20%.• Total deposits declined 1.2% on an annualized linked quarter basis due to seasonality,
with non-interest bearing demand deposits comprising 33% of total deposits.Strong Capital Levels • Tangible capital consistent at 10.2%.
• Consistent payment of quarterly cash dividend with a history of periodic increases.
KBW 20th AnnualCommunity Investor Conference
July 2019
COMPANY OVERVIEW
5
KBW 20th AnnualCommunity Investor Conference
July 2019
COMPANY OVERVIEWAsset Size: $6.4 Billion
Founded: 1975
Deposits: $5.3 Billion
Loans (net): $4.1 Billion
Bank Branches: 79
ATMs: 99Market Area: TriCo currently serves 29 counties
throughout Northern and Central California. These counties represent over 30% of California’s population.
6
KBW 20th AnnualCommunity Investor Conference
July 2019
COMPANY OVERVIEWNasdaq: TCBK
Stock Price*: $37.76
Market Capitalization: $1.15 billion
Price to Book stated: 1.3xPrice to TBVPS 1.8x
Rank (Total Assets) amongCA Publicly Traded Banks: 12(Source: SNL Financial)
7
_________________________________________________________________________
*as of 7/25/2019 COB
KBW 20th AnnualCommunity Investor Conference
July 2019
EXECUTIVE TEAM
Rick SmithPresident & CEOTriCo since 1993
John FleshoodEVP Chief Operating Officer
TriCo since 2016
Dan Bailey EVP Chief Retail Banking Officer
TriCo since 2007
Craig CarneyEVP Chief Credit Officer
TriCo since 1996
Peter WieseEVP Chief Financial Officer
TriCo since 2018
Richard O’SullivanEVP Chief Commercial
Lending OfficerTriCo since 1984
8
KBW 20th AnnualCommunity Investor Conference
July 2019
CONSISTENT EARNINGS TRACK RECORD
9
Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019Earnings $12.2 $12.5 $12.1 $13.6 $11.9 $3.0 $13.9 $15.0 $16.2 $23.2 $22.7 $23.1E.P.S. (Diluted) $0.53 $0.54 $0.52 $0.58 $0.51 $0.13 $0.60 $0.65 $0.53 $0.76 $0.74 $0.75
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
$22
$24
E.P.
S (D
ilute
d)
Earn
ings
(in
Mill
ions
)
*
* Impact of the Tax Cut and Jobs Act.
KBW 20th AnnualCommunity Investor Conference
July 2019
DILUTED EARNINGS PER SHARE
10
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
2014 2015 2016 2017 2018 Q2 2019
$0.45 $0.36 $0.46 $0.52 $0.60 $0.74 $0.30 $0.49 $0.41
$0.58 $0.65
$0.75 $0.50
$0.55 $0.53 $0.51
$0.53 $0.25
$0.50 $0.54 $0.13
$0.76
Q1 Q2 Q3 Q4
KBW 20th AnnualCommunity Investor Conference
July 201911 *Total Assets for years ending 2000-2018.
CONSISTENT ORGANIC GROWTH AND DISCIPLINED ACQUIRER
CAGR5 yrs. 18.3%10 yrs.12.0%
KBW 20th AnnualCommunity Investor Conference
July 2019
• Aggressive and Irrational Competitors• Duration of Flat and Inverted Yield Curves• The Cost of Regulatory Compliance• Technology Costs and Limited Vendor
Competition• Domestic Policy and International Relationships
WHAT KEEPS US UP AT NIGHT?
12
KBW 20th AnnualCommunity Investor Conference
July 2019
LOANS
13
KBW 20th AnnualCommunity Investor Conference
July 2019
CONSISTENT LOAN GROWTH
14*Note: Q3 2018 includes acquisition of FNB Bancorp (Loan Yield was 5.04%)
5.62%
5.52%5.37%
5.16%
5.24%5.41% 5.49%
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
2014 2015 2016 2017 2018 Q1 2019 Q2 2019
Loan
s Yie
ld (%
)
Tota
l Loa
ns (0
00’s )
Total Loans Loan Yield
KBW 20th AnnualCommunity Investor Conference
July 2019
LOAN PORTFOLIO MIX:
15
*Excluding loans held-for-sale
CRE - Owner Occupied$551,760
13%
CRE - Non-Owner Occupied$1,507,908
37%
1st Lien Closed-End Loans$527,822
13%
Consumer Loans$73,731
2%Argri Production
$30,0681%Farmland$142,960
3%Total Construction
$214,5245%Commercial & Industrial
$247,4986%
CRE - Multifamily$496,311
12%Revolving LOC$319,123
8%
KBW 20th AnnualCommunity Investor Conference
July 2019
DIVERSIFIED CRE & CONSTRUCTION PORTFOLIO
16
Property Type Loan SizeAvg. Loan Amount
Office Building $769,000
Multifamily Residence $1,195,000
Retail Building $849,000
Warehouse $706,000
Hospitality $2,697,000
Mini Storage $1,695,000
Gas Station/Convenience $964,000
Restaurant $483,000
SFR (1-4/Condo) $379,000
Commercial - Other $559,000
Office Building, $543,369
Multifamily Residence, $601,003
Retail Building, $432,099
Warehouse, $291,511
Hospitality,$248,145
Mini Storage, $94,916
Gas Station /Convenience, $81,956
Restaurant, $48,344
SFR (1-4/Condo), $36,763
Commerical -Other, $373,608
KBW 20th AnnualCommunity Investor Conference
July 2019
CONSERVATIVE CONSTRUCTION AND CRE UNDERWRITING CULTURE – LTV DISTRIBUTION
17
Loan to Value Avg. Loan Amount
<50% $645,000
51%-60% $991,000
61%-65% $1,252,000
66%-70% $896,000
71%-75% $919,000
76%-80% $827,000
81%-90% $644,000
>90% $753,000
29%
23%
17%15%
11%
3%1% 1%
0%
5%
10%
15%
20%
25%
30%
35%
% o
f Por
tfolio
LTV Range
KBW 20th AnnualCommunity Investor Conference
July 2019
DIVERSIFIED GEOGRAPHY – CRE & CONSTRUCTION
18
County Principal City Outstanding Balance Commitments % of CRE-Related Average Loan Oustanding
SACRAMENTO Sacramento $266,100,704 $296,351,853 10% $1,162,012
SAN FRANCISCO San Francisco $240,596,090 $274,939,555 9% $1,108,738
KERN Bakersfield $212,123,364 $271,436,708 8% $1,483,380
SAN MATEO Daly City $196,727,281 $232,644,174 7% $993,572
BUTTE Chico $167,080,922 $184,284,729 6% $537,238
FRESNO Fresno $109,177,513 $169,399,423 4% $852,949
PLACER Roseville $157,817,423 $162,845,607 6% $1,066,334
SHASTA Redding $151,091,346 $154,328,509 5% $551,428
STANISLAUS Modesto $144,104,814 $147,586,690 5% $941,862
NEVADA Grass Valley $93,872,284 $106,374,176 3% $586,702
ALL OTHER COUNTIES N/A $1,009,899,527 $1,116,643,432 37% $798,971
TOTAL $2,748,591,270 $3,116,834,855 $852,276
KBW 20th AnnualCommunity Investor Conference
July 2019
NON-PERFORMING ASSETS & NET CHARGE OFFS
19
2015
-0.13%
-0.07%
-0.10%
0.08%
0.01%
-0.11%
-0.03%
-0.15%
-0.10%
-0.05%
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
Net
Cha
rge
Offs
<Re
cove
ries>
(ann
ualiz
ed)
1.34%
1.01%
0.53% 0.58%0.47%
0.34% 0.35%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
2014 2015 2016 2017 2018 Q12019
Q22019
Non
-Per
form
ing
Asse
ts a
s % o
f Tot
al A
sset
s
>
>
>>
<
>
<
<
< >
>
><
<
2014 2015 2016 2017 2018 Q1 Q22019 2019
<<
KBW 20th AnnualCommunity Investor Conference
July 2019
HOME EQUITY LOANS OUTSTANDING
20
$300,000
$310,000
$320,000
$330,000
$340,000
$350,000
$360,000
$370,000
$380,000
$390,000
$400,000
2014 2015 2016 2017 2018 Q1 2019 Q2 2019
$383,898
$362,854
$331,537 $331,719 $326,577
$318,252
$330,900
Loan
s (00
0's)
KBW 20th AnnualCommunity Investor Conference
July 2019
DEPOSITS
21
KBW 20th AnnualCommunity Investor Conference
July 2019
CONSISTENT AND BALANCED CORE DEPOSIT FUNDING*
22
*Weighted average costs of deposits for the quarter ended 6/30/2019
Non Interest Bearing
33%
Interest Demand24%
Savings35%
Time Deposits8%
Wtd.Avg. Rate - 0.28%
Wtd.Avg. Rate - 1.27%
Wtd.Avg. Rate - 0.09%
KBW 20th AnnualCommunity Investor Conference
July 2019
Wtd. Avg. Rate – 0.18%
Wtd. Avg. Rate – 0.09%
Wtd. Avg. Rate – 0.92%
MARKET SHARE OF ALL BRANCHESSORTED BY ZIP CODE
23
Source: FDIC Summary of Deposits, June 2018*Includes acquisition of FNB Bancorp – July 2018
Rank Institution Name State (Hdqtrd) Charter Deposits
($000) Market Share
1 U.S. Bank National Association OH Federal 9,893,012 21.2%
2 Wells Fargo & Company SD Federal 8,782,186 18.8%
3 Bank of America, National Association NC Federal 6,017,267 12.9%
4 Tri Counties Bank CA State 3,881,355 8.3%
5 JP Morgan Chase Bank, National Association OH Federal 2,994,175 6.4%
6 MUFG Union Bank, National Association CA Federal 2,177,323 4.7%
7 Bank of the West CA State 1,832,370 3.9%
8 Umpqua Bank CA State 1,636,359 3.5%
KBW 20th AnnualCommunity Investor Conference
July 2019
CONSISTENT DEPOSIT GROWTH – ATTRACTIVE COST
24 *Note: Q3 2018 includes acquisition of FNB Bancorp (Deposit cost of 0.28%)
CAGR – TO 12/31/20185 yrs. 17.4%10 yrs. 12.4%
0.12%
0.10% 0.09%
0.10%0.11%
0.12%
0.16%0.20% 0.20% 0.22%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
2014 2015 2016 2017 Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Tota
l Cos
t of D
epos
its
Tota
l Dep
osits
(000
’s)
Total Deposits Cost of Deposits
KBW 20th AnnualCommunity Investor Conference
July 2019
FINANCIALS
25
KBW 20th AnnualCommunity Investor Conference
July 2019
NET INTEREST MARGIN –CONTRIBUTION FROM DISCOUNT ACCRETION
26
1.00%
2.00%
3.00%
4.00%
5.00%
2015 2016 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
4.39% 4.23% 4.22% 4.14% 4.14%4.32%
4.53%4.46% 4.48%
0.10%0.09% 0.16%
0.06% 0.05%0.15%
0.14% 0.12% 0.13%
Net Interest Margin Effect of Loan Discount Accretion
KBW 20th AnnualCommunity Investor Conference
July 2019
RETURN ON AVERAGE ASSETS
27
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
2014 2015 2016 2017 2018 Q1 2019 Q2 2019
0.87%
1.11%1.03%
0.89%
1.24%
1.41% 1.44%
KBW 20th AnnualCommunity Investor Conference
July 2019
RETURN ON AVERAGE SHAREHOLDER’S EQUITY
28
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2014 2015 2016 2017 2018 Q1 2019 Q2 2019
8.67%
10.04%9.47%
8.10%
10.75% 10.78% 10.65%
KBW 20th AnnualCommunity Investor Conference
July 2019
EFFICIENCY RATIO (FULLY TAXABLE EQUIVALENT)
29
50.0%
55.0%
60.0%
65.0%
70.0%
75.0%
2014 2015 2016 2017 Q12018
Q22018
Q32018
Q42018
2018 Q12019
Q22019
72.9%
64.7%
67.9%
65.5% 66.3%65.2% 65.2%
59.1%
63.7%
60.1% 60.1%
KBW 20th AnnualCommunity Investor Conference
July 2019
DIVIDENDS PAID
30
$0.60$0.44 $0.52 $0.66Annual
Dividends $0.70
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
2013 2014 2015 2016 2017 2018 Q1 2019 Q2 2019
0.09 0.11 0.11 0.15 0.15 0.17 0.19 0.190.11 0.11 0.13
0.15 0.17 0.170.19 0.19
0.11 0.110.13
0.150.17 0.17
0.11 0.110.15
0.150.17
0.19
KBW 20th AnnualCommunity Investor Conference
July 2019
CAPITAL RATIOS ($000’S)
31
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
2014 2015 2016 2017 2018 Q1 2019 Q2 2019
12.2% 12.2%11.7% 11.7%
12.5%13.0%
14.4%13.8% 13.7% 13.2% 13.2%
13.6%14.2%
15.7%15.1% 14.8%
14.1% 14.1% 14.4%14.9%
9.1% 9.2% 9.1% 9.3% 9.5% 9.7%10.2%
Common Equity Tier 1 Tier 1 Total Risk Based Tangible Common
KBW 20th AnnualCommunity Investor Conference
July 201932
TRICO BANCSHARES IS COMMITTED TO:
Improving the financial success and well-being of our shareholders, customers,
communities and employees.July 2019