Richard P. Smith, President & CEO Davidson Conferen… · 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

17th Annual Financial Institutions Conference

Richard P. Smith, President & CEO

D.A. Davidson

May 12, 2015

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 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 2015.


2 | May 2015

AGENDA • Company Overview • Recent Activities & Focus – Merger Announcement

• Key Revenue Drivers • Challenges & Opportunities • Financials • Questions


3 | May 2015

OVERVIEW Asset Size: $3.9 Billion Location: Chico, CA Founded: 1975 Deposits: $3.4 Billion Loans (net): $2.2 Billion Customers: 190,000 Bank Branches: 73 ATMs: 83


4 | May 2015

OVERVIEW Nasdaq: TCBK Stock Price: $24.13 Market Capitalization: $548,728,000 Book Value: $424,833,000 *Price to TBVPS: 1.61x **Asset Size Rank of CA Publicly Traded Banks: 19


5 | May 2015

*Valuation Information as of Market Close 03/31/2015 **Ranking as of 12/31/2014 – Source: SNL Financial


6 | May 2015

EXECUTIVE TEAM

Rick Smith President & CEO TriCo since 1993

Tom Reddish EVP Chief Financial Officer

TriCo since 1994

Dan Bailey EVP Retail Banking TriCo since 2007

Craig Carney EVP Chief Credit Officer

TriCo since 1996

Carol Ward EVP Chief

Operations Officer TriCo since 2012

Michael Cushman EVP Strategic Initiatives

TriCo since 2014

Richard O’Sullivan EVP Commercial Banking

TriCo since 1984

Glenn Hunter SVP Chief Human Resources Officer TriCo since 2013

RECENT ACTIVITIES • Completed merger & system integration with

North Valley Bancorp October 2014 • Acquired 2 banks through FDIC bidding process – Granite Community Bank, Granite Bay, CA in 2011 – Citizens Bank of Northern California, Nevada City, CA in 2012

• Closed 8 non-performing branches since 2011 • 3 branch closures in 2014 excluding merger with

North Valley Bank • 5 additional branch closures scheduled in 2015


7 | May 2015

RECENT ACTIVITIES continued


• Opening of new branch in Colusa, CA • Significant investments in technology – Mobile and On-line Banking – Cash Management Software – Data Security and Disaster Recovery

8 | May 2015

TRANSACTION HIGHLIGHTS • Creates the premier community bank in

Northern California (1)

– $3.9 billion in total assets – Approximately 80 branches from Bakersfield to the Oregon

Border; expands the Tri Counties brand into Humboldt, Trinity, and Sonoma counties

– Top 3 deposit market share rank in 15 of TriCo’s 26 pro forma counties of operation (2)

• Similar community banks with strong core deposit bases


9 | May 2015

(1) Based on 6/30/2013 deposit market share data per FDIC. (2) Among community banks.

• 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 organic growth in current

environment


10 | May 2015

POSITIONED FOR TODAY, PREPARED FOR THE FUTURE

• Strong focus on risk management and new regulatory realities

• Experienced project teams well prepared for continued growth through acquisition


11 | May 2015

POSITIONED FOR TODAY, PREPARED FOR THE FUTURE continued


12 | May 2015

WHAT IS LONG TERM SUCCESS?

• A winning culture with a motivated and talented work force

• Significant and growing market share • Low cost core deposit base • Diversified revenue sources • Efficient operations • Strong risk management practices • Rewarding our shareholders

KEY DRIVERS OF BANK REVENUES • Deposits & Margin – Average Cost of Deposits of .11% as of 03/31/2015 – Net Interest Margin at 03/31/2015 is 4.10% • Non-Interest Income – Mortgage Finance – Service Charge & Fee Income – Bank Wealth Management Program • Consumer Loans

– Home Equity Lines/Loans – Installment Lending – Small Business


13 | May 2015

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


14 | May 2015


15 | May 2015

DEPOSIT STRUCTURE

Non-Interest Bearing

31%

Interest Demand 24%

Savings 35%

Time Deposits 10%

Wtd. Avg. Rate – 0.12%



Data as of 03.31.2015


16 | May 2015

TOTAL ENDING DEPOSITS

$1,200,000

$1,700,000

$2,200,000

$2,700,000

$3,200,000

$3,700,000

2010 2011 2012 2013 2014 Q1 2015

$1,852,173

$2,190,536 $2,289,702

$2,410,483

$3,380,423 $3,349,488

Data as of 03.31.2015


17 | May 2015

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

SD Federal 6,367,673 21.93%

2 Bank of America, National Association

NC Federal 3,823,853 13.17%

3 Rabobank, National Association CA Federal 2,921,974 10.06%

4 Tri Counties Bank CA State 2,377,310 8.19%

12 North Valley Bank CA State 431,253 1.49%

4 Tri Counties Bank - Consolidated CA State 2,808,563 9.68%

5 JP Morgan Chase Bank, National Association

OH Federal 2,237,731 7.71%

6 Umpqua Bank OR State 1,234,794 4.25%

7 U.S. Bank National Association OH Federal 1,232,016 4.24%

Source: FDIC Summary of Deposits, June 2014 Total Deposits 03/31/2015: $3,895,680

NON-INTEREST INCOME

• Consistently Represents Approximately 25+% of Total Bank Revenues

• Residential Home Mortgage Lending – Refinances increasing as rates lower

– Increasing numbers of purchase transactions and increasing overall activity for home loans


18 | May 2015

NON-INTEREST INCOME continued

• Wealth Management revenues – New opportunities with North Valley Bank

• Lower revenues from service charges but increased interchange income

• Cash Management fees continue to increase with merger

• Merchant Card Services – $279,000 Q1 2015


19 | May 2015

CONSUMER LOANS • Increased demand for consumer loans

– Home equity values have increased – Economic uncertainty improving – Reluctance to borrow (job security concerns) – Underperforming Job Market

• Low rate environment led to historically high refi activity – $38MM in Q1 2015 HELOC volume resulted in $6MM

reduction in outstandings

• Auto loans demand constant • Home equity lines/loans increasing in demand • North Valley Bank customer base represents

tremendous opportunity for consumer cross-sale


20 | May 2015


21 | May 2015

HOME EQUITY LOANS OUTSTANDING

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

2010 2011 2012 2013 2014 Q1 2015

$376,485 $372,149 $355,582 $354,454

$383,898 $377,696

Data as of 03.31.2015


22 | May 2015

HOME EQUITY LINES OF CREDIT <80% LTV AT ORIGINATION

03/31/08 12/31/11 12/31/14 Q1 2015 Prod.

Avg CB Score 757 754 755 770

Avg Loan Commitment to Value at Origination

62% 61% 58% 59%

Avg LTV to current value N/A 92% 59% N/A

Utilization Rate 49% 48% 50% 42%

Data as of 03.31.2015


23 | May 2015

LOAN PORTFOLIO BY TYPE

Secured by RE - Residential 1-4

12.17%

Secured by RE - Com'l

58.79%

Consumer - HELOCS 14.87%

Consumer - Home Eq

1.40%

Consumer - Other 1.42%

Commercial 7.65%

Construction - RE 1.73%

Construction - Commercial

1.97%

Data as of 03.31.2015


24 | May 2015

COMMERCIAL LOANS

Total Commercial 70.14%

Total Consumer 29.86%

Data as of 03.31.2015

COMMERCIAL BANKING

• Target loans of $500,000 to $5,000,000 • Personalized banking

– Assigned Relationship Managers – Assigned Cash Management Officers

• In-market lending • Competition is as fierce and diverse as it has ever been

• $121 million in CRE & C&I production resulted in $31 million in net growth


25 | May 2015

COMMERCIAL BANKING continued

• Agricultural lending • Loans <$1,000,000 served through alternate

channel – Business Relationship Managers – Credit scoring combined with traditional underwriting

• SBA 7A program now offered


26 | May 2015


27 | May 2015

COMMERCIAL REAL ESTATE PORTFOLIO as of 03.31.2015

Real Estate Loan Type # of Loans

Outstandings* % to Total Loans

Avg. Commitment Amount

Office 559 278,521,000 12% 513,000

Retail 403 272,933,000 12% 705,000

Multi-Family 291 182,446,000 8% 668,000

Special Purpose Gas Station, Mini Storage, Hotel/Motel, Restaurant

149 130,035,000 6% 906,000

Other Warehouse, Manufacturing, Bare Land, Agricultural Land + Structures

1,178 630,580,000 27% 452,000

Totals 2,580 1,364,480,000 59% -

Averages - - - 555,000

* RE Loan Type segment totals do not include all purchase discount adjustments Data as of 03.31.2015

AG PORTFOLIO as of 03.31.2015


28 | May 2015

• Agricultural loans (excluding RE secured) total $72.6 million in total commitments with $26 million outstanding

• The highest crop concentrations by commitments are:

Multiple Crop $22.2 million 24 loans $925,000 Avg. Commitment

Rice $21.9 million 58 loans $378,000 Avg. Commitment Almonds $6.3 million 11 loans $573,000 Avg. Commitment Dairy $3.4 million 10 loans $340,000 Avg. Commitment

Beef $2.8 million 10 loans $280,000 Avg. Commitment

Data as of 03.31.2015

• Construction lending totals approximately $85,753,000 outstanding with $122,058,000 in commitments

• Residential construction approx. $40,105,000 • Commercial construction approx. $45,648,000 • Total construction, land development and land

acquisition loans represent 3.7% of total loans outstanding


29 | May 2015

CONSTRUCTION AND A&D

Data as of 03.31.2015


30 | May 2015

TOTAL LOANS NET OF UNAMORTIZED DEFERRED LOAN FEES AND DISCOUNTS ($000’S)

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

2010 2011 2012 2013 2014 Q1 2015

$1,419,571 $1,551,032 $1,564,823 $1,672,007

$2,282,524 $2,320,883

Data as of 03.31.2015

• Mergers and Acquisitions – North Valley Bancorp 2014 – Citizens Bank of Northern California 2011 – Granite Community Bank 2010 – North State National Bank 2003 – 9 branch purchase Wells Fargo 1997 – Sutter Butte Savings 1996 – Country National Bank 1993 – Branch purchase from Wells Fargo 1987 – Shasta County Bank 1981


31 | May 2015

GROWTH OPPORTUNITIES

• 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


32 | May 2015

WHAT KEEPS US UP AT NIGHT?

• Big Banks – Aggressive banking in community bank space – Bad reputations

• Technology and Banking – New competitors like Google and Apple

• Bank Operations and Efficiency – Managing multiple delivery channels

• Enterprise Risk Management – Many threats, so little time


33 | May 2015

CHALLENGES WITHIN BANK STRATEGIES


34 | May 2015

FINANCIALS


35 | May 2015

TOTAL ASSETS ($000’S)

$1,200,000

$1,700,000

$2,200,000

$2,700,000

$3,200,000

$3,700,000

$4,200,000

2010 2011 2012 2013 2014 Q1 2015

$2,189,789

$2,555,597 $2,609,269 $2,744,066

$3,912,358 $3,895,860

Data as of 03.31.2015

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

2010 2011 2012 2013 2014 Q1 2015

11.70% 12.90% 12.70% 13.30% 13.50%

14.40% 13.60%

14.20% 13.90% 14.50% 14.80%

15.60% 14.80%

8.50% 7.90% 8.20% 8.60%

9.00% 9.30%

Common Equity Tier 1 Tier 1 Total Risk Based Tangible Common


36 | May 2015

CAPITAL RATIOS ($000’S)

Data as of 03.31.2015


43 | May 2015

NET INCOME ($000’S)

Data as of 03.31.2015

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

2010 2011 2012 2013 2014 2015 $1,558 $2,800 $3,931

$8,477 $7,365 $8,336 $1,320

$2,771

$5,321

$6,325 $4,859

$1

$6,470

$5,020

$7,361

$8,234

$3,126

$6,549 $4,722

$5,236 $5,650

Q1 Q2 Q3 Q4


44 | May 2015

NET INTEREST MARGIN

Data as of 03.31.2015

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2010 2011 2012 2013 2014 Q1 2015

0.56% 0.34% 0.20% 0.15% 0.12% 0.11%

4.45% 4.43%

4.32% 4.18% 4.17% 4.10%

Wtd. Avg. Deposit Rate Net Interest Margin


45 | May 2015

NON-INTEREST INCOME ($000’S)

Data as of 03.31.2015

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

2010 2011 2012 2013 2014 2015

$7,547 $9,350 $8,265 $7,352 $8,295 $10,180

$7,872 $8,251 $10,577

$9,127 $7,877

$7,163 $7,198

$9,127 $10,131

$8,589

$9,881

$10,489

$10,011 $10,219

$9,755

Q1 Q2 Q3 Q4

*2010 & 2011 have been adjusted to remove Bargain Purchase Gains

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

2010 2011 2012 2013 2014 Q1 2015

62.5% 60.9%

70.2%

67.3%

71.2% 69.2%


46 | May 2015

EFFICIENCY RATIO (FULLY TAXABLE EQUIVALENT)

Data as of 03.31.2015

$-

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

2010 2011 2012 2013 2014 2015 $0.10 $0.17 $0.25

$0.53 $0.45 $0.36 $0.08 $0.17

$0.33

$0.39

$0.30 $0.40

$0.31

$0.45

$0.50

$0.20

$0.41 $0.29

$0.32

$0.25

Q1 Q2 Q3 Q4


47 | May 2015

DILUTED EARNINGS PER SHARE

Data as of 03.31.2015

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

2010 2011 2012 2013 2014 2015

0.13 0.09 0.09 0.09 0.11 0.11

0.09

0.09 0.09 0.11 0.11

0.09

0.09 0.09 0.11

0.11

0.09

0.09 0.09

0.11 0.11

Q1 Q2 Q3 Q4


48 | May 2015

DIVIDENDS PER SHARE

Data as of 03.31.2015

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

2010 2011 2012 2013 2014 Q1 2015

3.92% 3.99%

3.07%

2.17%

1.34% 1.41%


49 | May 2015

NON-PERFORMING ASSETS TO TOTAL ASSETS

Data as of 03.31.2015


50 | May 2015

ALLOWANCE FOR LOAN LOSSES TO TOTAL LOANS

Data as of 03.31.2015

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

2010 2011 2012 2013 2014 Q1 2015

3.00% 2.96% 2.73%

2.29%

1.60% 1.55%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

2010 2011 2012 2013 2014 Q1 2015

3.07% 3.10%

2.54%

2.11% 1.85% 1.79%


51 | May 2015

ORIGINATED ALLL TO TOTAL ORIGINATED LOANS

Data as of 03.31.2015

-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

2010 2011 2012 2013 2014 Q1 2015

2.07%

1.35%

0.82%

0.23% -0.13%

0.31%


52 | May 2015

ANNUALIZED NET CHARGE-OFFS TO AVG LOANS

Data as of 03.31.2015

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

2010 2011 2012 2013 2014 Q1 2015

0.27%

0.82% 0.75%

1.04%

0.87% 0.86%


53 | May 2015

Data as of 03.31.2015

RETURN ON AVERAGE ASSETS

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

2010 2011 2012 2013 2014 Q1 2015

2.94%

8.93% 8.44%

11.34%

8.67% 7.85%


54 | May 2015

Data as of 03.31.2015

RETURN ON AVERAGE SHAREHOLDER’S EQUITY

TRICO BANCSHARES IS COMMITTED TO:

Improving the financial success and well-being of our shareholders, customers,

communities and employees.

Documents

Richard P. Smith, President & CEO Davidson Conferen… · 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