Richard P. Smith, President & CEO Raymond James 2016 Community Bank Conference September 6, 2016
2016 Community Bank Conference 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, 2015 and TriCo’s Quarterly Reports on Form 10-Q as filed with the SEC in fiscal 2016. 2 | September 2016
2016 Community Bank Conference AGENDA • Company Overview • Recent Activities & Focus – Merger Announcement • Key Revenue Drivers • Challenges & Opportunities • Financials • Questions 3 | September 2016
2016 Community Bank Conference OVERVIEW Asset Size: $4.4 Billion Location: Chico, CA Founded: 1975 Deposits: $3.7 Billion Loans (net) : $2.6 Billion Customers: 190,000 Bank Branches: 68 ATMs: 80 4 | September 2016
2016 Community Bank Conference OVERVIEW Nasdaq: TCBK Stock Price: $27.98 Market Capitalization: $638 million *Price to TBVPS: 1.59x **Asset Size Rank of CA Publicly Traded Banks: 13 *Valuation Information as of Market Close 07/27/2016 **Ranking as of 06/30/2015 – Source: SNL Financial 5 | September 2016
2016 Community Bank Conference EXECUTIVE TEAM Rick Smith Carol Ward Tom Reddish President & CEO EVP Chief Operating Officer EVP Chief Financial Officer TriCo since 1993 TriCo since 2012 TriCo since 1994 Craig Carney Richard O’Sullivan Dan Bailey EVP Chief Credit Officer EVP Commercial Banking EVP Retail Banking TriCo since 1996 TriCo since 1984 TriCo since 2007 6 | September 2016
2016 Community Bank Conference RECENT ACTIVITIES • Purchase of 3 branches from Bank of America – Completed 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 • Opened new branch in Roseville, CA in 2016 • Several new technology projects for 2016: – New Mobile Banking program – New Business On-Line Banking – Loan and Operational Imaging projects – Core Conversion 7 | September 2016
2016 Community Bank Conference 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 – Double deposit growth 8 | September 2016
2016 Community Bank Conference 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 | September 2016
2016 Community Bank Conference 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 | September 2016
2016 Community Bank Conference KEY DRIVERS OF BANK REVENUES • Deposits & Margin – Average Cost of Deposits of .09 % as of 06/30/2016 – Net Interest Margin at 06/30/2016 is 4.13 % • Commercial Loans – Commercial Real Estate – Commercial & Industry Lines and Loans & Leases – Agricultural Loans – Asset Based Loans • Non-Interest Income – Mortgage Finance – Service Charge & Fee Income – Bank Wealth Management Program 11 | September 2016
2016 Community Bank Conference KEY DRIVERS OF BANK REVENUES continued • Consumer Loans – – Home Equity Lines/Loans – Small Business • Growth Opportunities –Wealth Management – Bank Managed Program – Raymond James as Broker-Dealer – Merchant Fee Opportunities – Growth Opportunity with North Valley Bank New markets for TriCo 12 | September 2016
2016 Community Bank Conference DEPOSIT STRUCTURE Time Deposits 9% Non Interest Wtd. Bearing Avg. Rate – 32% 0.39% Savings 36% Wtd. Avg. Rate – 0.12% Interest Demand 23% Wtd. Avg. Rate – 0.05% Data as of 06.30.2016 13 | September 2016
2016 Community Bank Conference TOTAL ENDING DEPOSITS $3,741,396 $4,000,000 $3,631,266 $3,380,423 $3,500,000 $3,000,000 $2,410,483 $2,289,702 $2,500,000 $2,000,000 2012 2013 2014 2015 Q2 2016 Data as of 06.30.2016 14 | September 2016
2016 Community Bank Conference 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 8,418,824 24.27% Association 2 Bank of America, National NC Federal 4,528,537 13.05% Association 3 Rabobank, National Association CA Federal 4,076,603 11.75% 4 Tri Counties Bank CA State 3,271,795 9.43% 5 JP Morgan Chase Bank, National OH Federal 2,280,105 6.86% Association 6 Umpqua Bank OR State 1,609,334 4.64% 7 U.S. Bank National Association OH Federal 1,570,801 4.53% 8 Bank of the West CA State 1,091,336 3.15% Source: FDIC Summary of Deposits, June 2015 Total Deposits 06/30/2015: $3,895,680 15 | September 2016
2016 Community Bank Conference 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 | September 2016
2016 Community Bank Conference 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 2015 17 | September 2016
2016 Community Bank Conference CONSUMER LOANS • Increased demand for consumer loans – Home equity values have increased – Borrowers still reluctant to leverage their homes • Low rate environment led to historically high refi activity – $40MM in Q2 2016 HELOC volume resulted in $5MM reduction in outstandings – Home equity lines/loans increasing in demand but cannot outpace 1 st lien refi volume • Auto loans demand constant 18 | September 2016
2016 Community Bank Conference HOME EQUITY LOANS OUTSTANDING $400,000 $383,898 $390,000 $380,000 $362,854 $370,000 $355,582 $354,454 $348,680 $360,000 $350,000 $340,000 $330,000 $320,000 $310,000 $300,000 2012 2013 2014 2015 Q2 2016 Data as of 06.30.2016 19 | September 2016
2016 Community Bank Conference LOAN PORTFOLIO BY TYPE Construction - RE Construction - Commercial 2% Commercial 8% 3% Consumer - Other Secured by RE - 1% Residential 1-4 12% Consumer - Home Eq 2% Consumer - HELOCS 12% Secured by RE - Com'l 60% Data as of 06.30.2016 20 | September 2016
2016 Community Bank Conference COMMERCIAL LOANS Total Consumer 26% Total Commercial 74% Data as of 06.30.2016 21 | September 2016
2016 Community Bank Conference 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 $191 million in CRE & C&I production in Q2 resulted in $58 million • in net growth, excluding loan purchases 22 | September 2016
2016 Community Bank Conference 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 23 | September 2016
2016 Community Bank Conference COMMERCIAL REAL ESTATE PORTFOLIO AS OF 06.30.2016 Real Estate Loan Type # of Outstandings* % to Total Avg. Commitment Loans Loans Amount Office 584 340,862,000 13% 596,000 Retail 410 287,945,000 11% 731,000 Multi-Family 344 237,042,000 9% 719,000 Special Purpose 186 178,938,000 7% 997,000 Gas Station, Mini Storage, Hotel/Motel, Restaurant Other 1,206 553,747,000 21% 498,000 Warehouse, Manufacturing, Bare Land, Agricultural Land + Structures Totals 2,730 1,598,533,000 60% - Averages - - - 615,000 * RE Loan Type segment totals do not include all purchase discount adjustments 24 | September 2016
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