KBW 20th Annual Community Bank Investor Conference...July 2019. KBW 20 th Annual Community Investor Conference July 2019 ... management's current expectations and beliefs concerning

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


July 2019

AGENDA• Most Recent Quarter Recap

• Company Overview

• Lending Overview

• Deposit Overview

• Financials

3


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.


July 2019

COMPANY OVERVIEW

5


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


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


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


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.


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


July 201911 *Total Assets for years ending 2000-2018.

CONSISTENT ORGANIC GROWTH AND DISCIPLINED ACQUIRER

CAGR5 yrs. 18.3%10 yrs.12.0%


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


July 2019

LOANS

13


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


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%


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


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


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


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

<<


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)


July 2019

DEPOSITS

21


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%




July 2019

Wtd. Avg. Rate – 0.18%



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%


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


July 2019

FINANCIALS

25


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


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%


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%


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%


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


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


July 201932

TRICO BANCSHARES IS COMMITTED TO:

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

communities and employees.July 2019

Documents

KBW 20th Annual Community Bank Investor Conference...July 2019. KBW 20 th Annual Community Investor Conference July 2019 ... management's current expectations and beliefs concerning