TriCo Bancshares (NASDAQ: TCBK) (the "Company"), parent company
of Tri Counties Bank, today announced earnings of $11,897,000, or
$0.51 per diluted share, for the three months ended September 30,
2017. For the three months ended September 30, 2016 the Company
reported earnings of $12,199,000, or $0.53 per diluted share.
The following is a summary of the components of the Company’s
consolidated net income, average common shares, and average diluted
common shares outstanding for the periods indicated:
Three months ended September 30, (dollars and
shares in thousands) 2017 2016 $ Change % Change Net
Interest Income $44,084 $42,270 $1,814 4.3% Reversal of (provision
for) loan losses (765 ) 3,973 (4,738 ) Noninterest income 12,930
11,066 1,864 16.8% Noninterest expense (37,222 ) (37,416 ) 194
(0.5%) Provision for income taxes (7,130 ) (7,694 ) 564
(7.3%) Net income $11,897 $12,199 ($302 ) (2.5%)
Average common shares 22,932 22,825 107 0.5% Average diluted
common shares 23,244 23,099 145 0.6%
The following is a summary of certain of the Company’s
consolidated assets and deposits as of the dates indicated:
Ending balances
As of September 30,
($'s in thousands) 2017 2016
$ Change
% Change Total assets $4,656,435 $4,467,131 $189,304
4.2% Total loans 2,931,613 2,712,226 219,387 8.1% Total investments
1,231,759 1,168,314 63,445 5.4% Total deposits $3,927,456
$3,836,012 $91,444 2.4% Qtrly avg balances
As of September 30,
($'s in thousands) 2017 2016
$ Change
% Change Total assets $4,572,424 $4,407,322 $165,102 3.7%
Total loans 2,878,944 2,669,954 208,990 7.8% Total investments
1,250,207 1,199,941 50,266 4.2% Total deposits $3,878,183
$3,784,748 $93,435 2.5%
Performance highlights for the Company during the three months
ended September 30, 2017 included the following:
- Loan balances increased $105,220,000
representing a 3.7% increase in total loans, and an annualized
growth rate of 14.9%, during the three months ended September 30,
2017.
- Service charge and fee income increased
$1,453,000, or 18.1%, compared to the three months ended September
30, 2016.
- The average rate of interest paid on
deposits, including the effect of noninterest-bearing deposits,
remained low at 0.11%.
- Total noninterest expense decreased
$194,000, or 0.5%, compared to the three months ended September 30,
2016.
Included in the Company’s results of operations for the three
months ended September 30, 2017 is a gain of $961,000 recorded in
noninterest income from the sale of $24,797,000 of available for
sale mortgage backed investment securities on September 28,
2017.
Also, included in the Company’s results of operations for the
three months ended September 30, 2017 is $150,000 of excess tax
benefits (a reduction of tax expense) related to equity
compensation instruments during this time period. Prior to January
1, 2017, generally accepted accounting principles required these
types of excess tax benefits, and tax deficiencies, be recorded
directly to shareholders’ equity, and not affect tax expense.
During the three month period ended September 30, 2016, the Company
recorded no equity compensation related tax benefit or deficiency
to shareholders’ equity.
Included in the Company’s results of operations for the three
months ended September 30, 2016 is the impact of the sale on August
22, 2016, of two performing loans with recorded book value of
$166,000, and 48 nonperforming loans with recorded book value,
including pre-sale write downs and purchase discounts, of
approximately $2,757,000. The loans sold on August 22, 2016 had
contractual amounts outstanding of $6,558,000. Net sale proceeds of
$4,980,000 resulted in the recovery of loan balances previously
charged off of $1,727,000, additional loan charge offs of $159,000,
and interest income of $488,000 from the recovery of interest
payments previously applied to principal balances.
Also, included in the Company’s results of operations for the
three months ended September 30, 2016 was a $716,000 valuation
allowance expense related to a closed branch building held for
sale, the value of which was written down to current market value,
and subsequently sold during the three months ended September 30,
2016. Net proceeds from the sale of this building were $1,218,000,
and resulted in no gain or additional loss being recorded upon the
sale of this building.
In addition to the nonrecurring income statement items noted
above, there were other expense and revenue items during the three
months ended September 30, 2017 and 2016 of less significance that
may be considered nonrecurring, and these items are described below
in various sections of this announcement.
The Company’s primary source of revenue is net interest income,
or the difference between interest income on interest-earning
assets and interest expense on interest-bearing liabilities.
Included in the Company’s net interest income is interest income
from municipal bonds that is almost entirely exempt from Federal
income tax. These municipal bonds are classified as investments –
nontaxable, and the Company may present the interest income from
these bonds on a fully tax equivalent (FTE) basis.
Loans acquired through purchase, or acquisition of other banks,
are classified by the Company as Purchased Not Credit Impaired
(PNCI), Purchased Credit Impaired – cash basis (PCI – cash basis),
or Purchased Credit Impaired – other (PCI – other). Loans not
acquired in an acquisition or otherwise “purchased” are classified
as “originated”. Often, such purchased loans are purchased at a
discount to face value, and part of this discount is accreted into
(added to) interest income over the remaining life of the loan. A
loan may also be purchased at a premium to face value, in which
case, the premium is amortized into (subtracted from) interest
income over the remaining life of the loan. Generally, as time goes
on, the effects of loan discount accretion and loan premium
amortization decrease as the purchased loans mature or pay off
early. Upon the early pay off of a loan, any remaining (unaccreted)
discount or (unamortized) premium is immediately taken into
interest income; and as loan payoffs may vary significantly from
quarter to quarter, so may the impact of discount accretion and
premium amortization on interest income. Further details regarding
interest income from loans, including fair value discount
accretion, may be found under the heading “Supplemental Loan
Interest Income Data” in the Consolidated Financial Data table at
the end of this announcement.
Following is a summary of the components of net interest income
for the periods indicated (dollars in thousands):
Three months ended
September 30,
(dollars and shares in thousands) 2017 2016
$ Change
% Change
Interest income $45,913 $43,709 $2,204 5.0% Interest expense (1,829
) (1,439 ) (390 ) 27.1% FTE adjustment 624 587 37
6.4% Net interest income (FTE) $44,708 $42,857
$1,851 4.3% Net interest margin (FTE) 4.24 % 4.23 %
Purchased loan discount accretion: Amount (included in interest
income) $1,364 $2,229 Effect on average loan yield 0.19 % 0.33 %
Effect on net interest margin (FTE) 0.13 % 0.22 % Interest income
recovered via loan sales: Amount (included in interest income) -
$488 Effect on average loan yield 0.00 % 0.07 % Effect on net
interest margin (FTE) 0.00 % 0.05 %
The following table shows the components of net interest income
and net interest margin on a fully tax-equivalent (FTE) basis for
the periods indicated:
ANALYSIS OF CHANGE IN NET INTEREST MARGIN ON EARNING ASSETS
(unaudited, dollars in thousands)
Three Months
Ended
Three Months
Ended
Three Months
Ended
September 30,
2017
June 30,
2017
September 30,
2016
Average Income/ Yield/ Average Income/
Yield/ Average Income/ Yield/ Balance Expense Rate
Balance Expense Rate Balance Expense Rate Assets Earning assets
Loans $ 2,878,944 $ 37,268 5.18 % $ 2,783,686 $ 36,418 5.23 % $
2,669,954 $ 35,769 5.36 % Investments - taxable 1,114,112 7,312
2.63 % 1,077,703 7,231 2.68 % 1,073,030 6,687 2.49 % Investments -
nontaxable 136,095 1,665 4.89 % 136,256 1,667 4.89 % 126,910 1,565
4.93 % Cash at Federal Reserve and other banks 85,337
292 1.37 % 137,376 353
1.03 % 185,552 275 0.59 % Total earning
assets 4,214,488 46,537 4.42 % 4,135,021
45,669 4.42 % 4,055,446 44,296 4.37 % Other
assets, net 357,937 357,368 351,875 Total
assets $ 4,572,424 $ 4,492,389 $ 4,407,322 Liabilities and
shareholders' equity Interest-bearing Demand deposits $ 949,348 206
0.09 % $ 936,482 201 0.09 % $ 888,377 111 0.05 % Savings deposits
1,365,249 419 0.12 % 1,353,132 410 0.12 % 1,357,359 426 0.13 % Time
deposits 310,325 403 0.52 % 321,515 363 0.45 % 340,709 338 0.40 %
Other borrowings 65,234 149 0.91 % 20,011 13 0.26 % 18,951 2 0.05 %
Trust preferred securities 56,784 652
4.59 % 56,736 623 4.39 % 56,584
562 3.97 % Total interest-bearing liabilities
2,746,941 1,829 0.27 % 2,687,876 1,610
0.24 % 2,661,981 1,439 0.22 % Noninterest-bearing
deposits 1,253,261 1,240,390 1,198,302 Other liabilities 64,834
66,898 66,464 Shareholders' equity 507,389 497,225
480,575 Total liabilities and shareholders' equity $
4,572,424 $ 4,492,389 $ 4,407,322 Net interest rate spread 4.15 %
4.18 % 4.15 % Net interest income/net interest margin (FTE)
44,708 4.24 % 44,059 4.26 % 42,857
4.23 % FTE adjustment (624 ) (625 )
(587 ) Net interest income (not FTE) $ 44,084 $ 43,434
$ 42,270 Purchase loan discount accretion
effect: Amount (included in interest income) $ 1,364 $ 2,170 $
2,229 Effect on avg loan yield 0.19 % 0.31 % 0.33 % Effect on net
interest margin 0.13 % 0.21 % 0.22 % Loan sale effect: Amount
(included in interest income) - - $ 488 Effect on avg loan yield
0.00 % 0.00 % 0.07 % Effect on net interest margin 0.00 % 0.00 %
0.05 %
Net interest income (FTE) during the three months ended
September 30, 2017 increased $1,851,000 (4.3%) to $44,708,000
compared to $42,857,000 during the three months ended September 30,
2016. The increase in net interest income (FTE) was due primarily
to increases in the average balance of loans and investments, and
an increase in yield on investments – taxable, that were partially
offset by a decrease in yield on loans and an increase in other
borrowings compared to the three months ended September 30,
2016.
During the three months ended September 30, 2017, loan interest
income increased $1,499,000 (4.2%) to $37,268,000. The increase in
loan interest income was due to a $208,990,000 (7.8%) increase in
the average balance of loans that was partially offset by an 18
basis point decrease in the average yield on loans to 5.18%
compared to 5.36% during the three months ended September 30, 2016.
Included in loan interest income for the quarter ended September
30, 2017 was $1,364,000 of purchased loan discount accretion.
Included in loan interest income for the quarter ended September
30, 2016 was $2,229,000 of purchased loan discount accretion, and
$488,000 of interest income recovered upon the sale of certain
nonperforming loans. During the three months ended September 30,
2017, investment interest income (FTE) increased $725,000 (8.8%)
from the year-ago quarter to $8,977,000. The increase in investment
interest income was due to a $50,267,000 (4.2%) increase in the
average balance of investments and a 12 basis point increase in the
average investment yield to 2.87% compared to 2.75% in the year-ago
quarter. The increase in loan and investment balances noted above
was funded primarily by a $93,436,000 (2.5%) increase in the
average balance of total deposits, a $100,215,000 (54.0%) decrease
in the average balance of interest earning cash at banks, and a
$46,283,000 (244%) increase in other borrowings during the three
months ended September 30, 2017 compared to the three months ended
September 30, 2016. Despite the 54.0% decrease in the average
balance of interest earning cash at banks, interest income from
cash at banks increased $17,000 (6.2%) to $292,000 due to a 78
basis point increase in the average yield on cash at banks to 1.37%
during the three months ended September 30, 2017 compared to 0.59%
during the three months ended September 30, 2016. While the average
balance of total deposits grew $93,435,000 (2.5%) from the three
months ended September 30, 2016 to the three months ended September
30, 2017, the average balance of interest bearing deposits grew
$38,477,000 (1.5%), and the average rate paid on those interest
bearing deposits increased 2 basis points to 0.16%. The $46,283,000
increase in the average balance of other borrowings was due to the
addition of borrowings from the FHLB, and resulted in an 86 basis
point increase in the average rate paid on other borrowings during
the three months ended September 30, 2017 compared to the three
months ended September 30, 2016. The average rate paid on junior
subordinated debt increased 62 basis points to 4.59% during the
three months ended September 30, 2017 compared to 3.97% during the
three months ended September 30, 2016. The changes in the average
balances of interest bearing assets and liabilities, and their
respective yields and rates, from the three months ended September
30, 2016 to the three months ended September 30, 2017 is indicative
of moderate to strong loan demand and loan origination capabilities
of the Company from September 30, 2016 to September 30, 2017, and
the increases in short-term interest rates during this time frame
that did not result in significant increases in deposit rates or
long-term fixed-rate loan rates. For more information related to
loan interest income, including loan purchase discount accretion,
see the Supplemental Loan Interest Income Data in the tables at the
end of this announcement.
The table below that sets forth a summary of the changes in
interest income and interest expense from changes in average asset
and liability balances (volume) and changes in average interest
yields and rates for each category of interest earning asset and
interest paying liability for the periods indicated:
Three months ended September 30,
2017compared with three months ended September 30, 2016
Volume Yield/Rate Total Increase (decrease) in
interest income: Loans $ 2,800 $ (1,301 ) $ 1,499
Investments - taxable 256 369 625 Investments - nontaxable 113 (13
) 100 Federal funds sold (148 ) 165
17 Total 3,021
(780 ) 2,241 Increase (decrease) in interest
expense: Demand deposits (interest-bearing) 8 87 95 Savings
deposits 3 (10 ) (7 ) Time deposits (30 ) 95 65 Other borrowings 6
141 147 Junior subordinated debt 2 88
90 Total (11 ) 401
390 Increase (decrease) in net interest
income $ 3,032 $ (1,181 ) $ 1,851
The Company recorded a provision for loan losses of $765,000
during the three months ended September 30, 2017 compared to a
reversal of provision for loan losses of $3,973,000 during the
three months ended September 30, 2016. The $765,000 provision for
loan losses during the three months ended September 30, 2017 was
primarily due to an increase in nonperforming loans, and an
increase in the concentration of nonowner-occupied commercial real
estate secured loans that were partially offset by continued low
historical loan loss experience, and stable to improving economic
environmental factors. Nonperforming loans were $21,955,000, or
0.75% of loans outstanding as of September 30, 2017, and
represented an increase from 0.73% of loans outstanding at December
31, 2016, and a decrease from 0.77% of loans outstanding as of
September 30, 2016. Net loan charge-offs during the three months
ended September 30, 2017 were $161,000, and included $187,000 of
charge-offs related to purchased credit impaired (PCI-other) loans
for which an allowance was previously provided. Excluding these PCI
loan charge-offs, charge-offs for the three months ended September
30, 2017 would have been $675,000, and charge-offs, net of
recoveries, would have been a net recovery of $26,000.
The following table presents the key components of noninterest
income for the periods indicated:
Three months ended September 30, (dollars in
thousands) 2017 2016
$ Change
% Change
Service charges on deposit accounts 4,160 3,641 $519 14.3% ATM fees
and interchange 4,209 3,851 358 9.3% Other service fees 917 792 125
15.8% Mortgage banking service fees 514 537 (23 ) (4.3%) Change in
value of mortgage servicing rights (325 ) (799 ) 474 (59.3%)
Total service charges and fees 9,475 8,022 1,453
18.1% Gain on sale of loans 606 953 (347 ) (36.4%)
Commission on nondeposit investment products 672 747 (75 ) (10.0%)
Increase in cash value of life insurance 732 709 23 3.2% Gain on
sale of investment securities 961 - 961 Change in indemnification
asset - (10 ) 10 (100.0%) Gain on sale of foreclosed assets 37 69
(32 ) (46.4%) Other noninterest income 447 576 (129 )
(22.4%) Total other noninterest income 3,455 3,044
411 13.5% Total noninterest income $12,930 $11,066
$1,864 16.8%
Noninterest income increased $1,864,000 (16.8%) to $12,930,000
during the three months ended September 30, 2017 compared to the
three months ended September 30, 2016. The increase in noninterest
income was due primarily to a $519,000 (14.3%) increase in service
charges on deposit accounts, a $358,000 (9.3%) increase in ATM fees
and interchange income, a $474,000 improvement in change in value
of mortgage servicing rights, and a $961,000 gain on sale of
investment securities that were partially offset by a $347,000
decrease in gain on sale of loans. The $519,000 increase in service
charges on deposit accounts was due primarily to increased fee
generation from both consumer and business checking customers. The
$358,000 increase in ATM fees and interchange revenue was due
primarily to the Company’s continued focus in this area, and growth
in electronic payments volume. The $474,000 improvement in change
in value of mortgage servicing rights (MSRs) was due primarily to
an increase in the discount rate used by investors to calculate the
present value of future servicing fee income that caused the fair
value of the servicing asset to decrease during the three months
ended September 30, 2016 while no similar discount rate increase
occurred during the three months ended September 30, 2017. The
$347,000 decrease in gain on sale of loans was due primarily to
decreased residential mortgage refinance activity compared to the
year-ago quarter.
The following table presents the key components of the Company’s
noninterest expense for the periods indicated:
Three months ended September 30, (dollars in
thousands) 2017 2016
$ Change
% Change Base salaries, overtime and temporary help, net of
deferred loan origination costs 13,600 13,419 $181 1.3% Commissions
and incentives 2,609 2,798 (189 ) (6.8%) Employee benefits 4,724
4,643 81 1.7% Total salaries and benefits expense 20,933
20,860 73 0.3% Occupancy 2,799 2,667 132 4.9%
Equipment 1,816 1,607 209 13.0% Provision for losses unfunded 390
25 365 1460.0% Data processing and software 2,495 2,068 427 20.6%
Telecommunications 716 702 14 2.0% ATM & POS network charges
1,425 1,915 (490 ) (25.6%) Professional fees 901 1,018 (117 )
(11.5%) Advertising and marketing 1,039 1,049 (10 ) (1.0%) Postage
325 381 (56 ) (14.7%) Courier service 235 280 (45 ) (16.1%)
Intangible amortization 339 359 (20 ) (5.6%) Operational losses 301
497 (196 ) (39.4%) Provision for OREO losses 134 8 126 1575.0% OREO
Expense 41 37 4 10.8% Assessments 427 654 (227 ) (34.7%) Other
2,906 3,289 (383 ) (11.6%) Total other noninterest expense 16,289
16,556 (267 ) (1.6%) Total noninterest expense $37,222 $37,416
($194 ) (0.5%) Average full time equivalent employees 993
1,022 (29 ) (2.8%)
Salary and benefit expenses increased $73,000 (0.3%) to
$20,933,000 during the three months ended September 30, 2017
compared to $20,860,000 during the three months ended September 30,
2016. Base salaries, net of deferred loan origination costs
increased $181,000 (1.3%) to 13,600,000. The increase in base
salaries was due primarily to annual merit increases that were
substantially offset by a 2.8% decrease in average full time
equivalent employees to 993 from 1,022 in the year-ago quarter.
Commissions and incentive compensation decreased $189,000 (6.8%) to
$2,609,000 during the three months ended September 30, 2017
compared to the year-ago quarter due primarily to a decrease in
commissions on loans. Benefits & other compensation expense
increased $81,000 (1.7%) to $4,724,000 during the three months
ended September 30, 2017 due primarily to increases in group
medical and workers compensation insurance, and employee stock
ownership plan (ESOP) expense.
Other noninterest expense decreased $267,000 (1.6%) to
$16,289,000 during the three months ended September 30, 2017
compared to the three months ended September 30, 2016. The decrease
in other noninterest expense was due primarily to a $490,000
decrease in ATM & POS network charges, a $227,000 decrease in
deposit insurance and other assessments, and a $384,000 decrease in
other noninterest expense that were partially offset by increases
of $427,000 in data processing and software expense, $365,000 in
change in reserve for unfunded commitments, and $341,000 in
occupancy and equipment expense. The $490,000 decrease in ATM &
POS network charges was due to nonrecurring ATM & POS network
charges that occurred during the third quarter of 2016 related to
system enhancements. The $227,000 decrease in assessments was due
the lowering of FDIC deposit insurance rates during the third
quarter of 2016. The $384,000 decrease in other noninterest expense
was due to a $716,000 valuation allowance expense taken during the
third quarter of 2016 on a closed branch building that was also
sold during the third quarter of 2016 without further loss or gain.
The $365,000 increase in change in reserve for unfunded commitments
was due primarily to a larger increase in unfunded loan commitments
during the three months ended September 30, 2017, compared to the
three months ended September 30, 2016. The $341,000 increase in
occupancy and equipment expense was due primarily to increased
depreciation expense on equipment and maintenance and repair
expense on facilities and equipment.
The effective combined Federal and State income tax rate on
income was 37.5% and 38.7% for the three months ended September 30,
2017 and 2016, respectively. The effective combined Federal and
State income tax rate was greater than the Federal statutory tax
rate of 35.0% due to State income tax expense of $2,010,000 and
$2,123,000, respectively, in these periods that were partially
offset by the effects of tax-exempt income of $1,041,000 and
$978,000, respectively, from investment securities, $732,000 and
$709,000, respectively, from increase in cash value of life
insurance, low-income housing tax credits of $94,000 and $62,000,
respectively, and $150,000 and $0, respectively, of equity
compensation excess tax benefits. The low income housing tax
credits and the equity compensation excess tax benefits represent
direct reductions in tax expense. These offsetting items helped to
reduce the effective combined Federal and State income tax rate
from the combined Federal and State statutory income tax rate of
approximately 42.0%.
President and CEO of the Company commented, “Our bank enjoyed a
solid quarter of performance. We continue to see strong loan growth
which contributed to higher levels of net interest income during
the quarter. Loan balances grew by $105 million or 3.7% during the
quarter. Service charges and fees also increased significantly over
3rd quarter 2016 results from $8.022 million to $9.475 or 18.1%.
Improvements in service charge and fee income are largely a result
of our new deposit product lineup that was implemented during the
first quarter of 2017. Notably, our deposits costs are largely
unchanged over the past year. In addition, our total noninterest
expenses decreased $194,000 or 0.5% compared to September 30,
2016.”
Smith added, “Due to the recent firestorms throughout Northern
California many people have expressed their support and concerns.
Thank you! Currently, all of our branches are open and operating
with full staffing levels. We will be there to help our communities
as they recover from these devastating fires. Our Santa Rosa
community was hardest hit by the fires and many homes have been
destroyed. We expect a significant need for banking services in the
Santa Rosa area in the years ahead.”
In addition to the historical information contained herein, this
press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to various
uncertainties and risks that could affect their outcome. The
Company’s actual results could differ materially. Factors that
could cause or contribute to such differences include, but are not
limited to, variances in the actual versus projected growth in
assets, return on assets, interest rate fluctuations, economic
conditions in the Company's primary market area, demand for loans,
regulatory and accounting changes, loan losses, expenses, rates
charged on loans and earned on securities investments, rates paid
on deposits, competitive effects, fee and other noninterest income
earned, the outcome of litigation, as well as other factors
detailed in the Company's reports filed with the Securities and
Exchange Commission which are incorporated herein by reference,
including the Form 10-K for the year ended December 31, 2016. These
reports and this entire press release should be read to put such
forward-looking statements in context and to gain a more complete
understanding of the uncertainties and risks involved in the
Company's business. The Company does not intend to update any of
the forward-looking statements after the date of this release.
Established in 1975, Tri Counties Bank is a wholly-owned
subsidiary of TriCo Bancshares (NASDAQ: TCBK) headquartered in
Chico, California, providing a unique brand of customer Service
with Solutions available in traditional stand-alone and
in-store bank branches in communities throughout Northern and
Central California. Tri Counties Bank provides an extensive and
competitive breadth of consumer, small business and commercial
banking financial services, along with convenient around-the-clock
ATM, online and mobile banking access. Brokerage services are
provided by the Bank’s investment services through affiliation with
Raymond James Financial Services, Inc. Visit
www.TriCountiesBank.com to learn more.
TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA
(Unaudited. Dollars in thousands, except share data) Three
months ended September 30, June 30, March 31,
December 31, September 30, 2017 2017 2017 2016 2016
Statement of Income Data Interest income $45,913 $45,044
$43,484 $44,615 $43,709 Interest expense 1,829 1,610 1,491 1,460
1,439 Net interest income 44,084 43,434 41,993 43,155 42,270
Provision (benefit from reversal of provision) for loan losses 765
(796 ) (1,557 ) (1,433 ) (3,973 ) Noninterest income: Service
charges and fees 9,475 9,479 8,907 9,800 8,022 Other income 3,455
3,431 2,796 2,662 3,044 Total noninterest income 12,930 12,910
11,703 12,462 11,066 Noninterest expense:
Base salaries net of deferred loan
origination costs
13,600 13,657 13,390 14,074 13,419 Incentive compensation expense
2,609 2,173 2,198 1,864 2,798
Employee benefits and other compensation
expense
4,724 4,664 5,305 4,616 4,644 Total salaries and benefits expense
20,933 20,494 20,893 20,554 20,860 Other noninterest expense 16,289
15,410 14,929 16,009 16,556 Total noninterest expense 37,222 35,904
35,822 36,563 37,416 Income before taxes 19,027 21,236 19,431
20,487 19,893 Net income $11,897 $13,589 $12,079 $12,533 $12,199
Share Data Basic earnings per share $0.52 $0.59 $0.53 $0.55
$0.53 Diluted earnings per share $0.51 $0.58 $0.52 $0.54 $0.53 Book
value per common share $22.09 $21.76 $21.28 $20.87 $21.11 Tangible
book value per common share $19.04 $18.70 $18.20 $17.77 $17.99
Shares outstanding 22,941,464 22,925,069 22,873,305 22,867,802
22,827,277 Weighted average shares 22,931,855 22,899,600 22,870,467
22,845,623 22,824,868 Weighted average diluted shares 23,244,235
23,240,112 23,231,778 23,115,708 23,098,534
Credit Quality
Nonperforming originated loans $11,689 $10,581 $13,234 $12,894
$13,083 Total nonperforming loans 21,955 17,429 19,511 20,128
20,952 Foreclosed assets, net of allowance 3,071 3,489 3,529 3,986
4,124 Loans charged-off 862 2,512 409 635 664 Loans recovered 701
434 480 1,087 2,612
Selected Financial Ratios Return on
average total assets 1.04 % 1.21 % 1.08 % 1.13 % 1.11 % Return on
average equity 9.38 % 10.93 % 9.97 % 10.47 % 10.15 % Average yield
on loans 5.18 % 5.23 % 5.06 % 5.38 % 5.36 % Average yield on
interest-earning assets 4.42 % 4.42 % 4.27 % 4.42 % 4.37 % Average
rate on interest-bearing liabilities 0.27 % 0.24 % 0.22 % 0.22 %
0.22 % Net interest margin (fully tax-equivalent) 4.24 % 4.26 %
4.13 % 4.28 % 4.23 %
Supplemental Loan Interest Income Data:
Discount accretion PCI - cash basis loans $398 $386 $112 $483 $777
Discount accretion PCI - other loans 407 797 631 658 569 Discount
accretion PNCI loans 559 987 798 637 883 All other loan interest
income 35,904 34,248 33,373 34,463 33,540 Total loan interest
income $37,268 $36,418 $34,914 $36,241 $35,769
TRICO
BANCSHARES - CONSOLIDATED FINANCIAL DATA (Unaudited. Dollars in
thousands) Three months ended September 30,
June 30, March 31, December 31,
September 30,
Balance Sheet Data 2017 2017
2017 2016 2016 Cash and due from banks $188,034
$167,649 $323,706 $305,612 $315,088 Securities, available for sale
678,236 672,569 571,719 550,233 510,209 Securities, held to
maturity 536,567 559,518 580,137 602,536 641,149 Restricted equity
securities 16,956 16,956 16,956 16,956 16,956 Loans held for sale
2,733 2,537 1,176 2,998 7,777 Loans: Commercial loans 227,479
225,743 212,685 217,047 217,110 Consumer loans 361,320 360,782
357,593 366,111 381,250 Real estate mortgage loans 2,194,874
2,106,567 2,066,372 2,054,016 1,994,679 Real estate construction
loans 147,940 133,301 124,542 122,419 119,187 Total loans, gross
2,931,613 2,826,393 2,761,192 2,759,593 2,712,226 Allowance for
loan losses (28,747 ) (28,143 ) (31,017 ) (32,503 ) (33,484 )
Foreclosed assets 3,071 3,489 3,529 3,986 4,124 Premises and
equipment
54,995
51,558 49,508 48,406 49,448 Cash value of life insurance 97,142
96,410 95,783 95,912 95,281 Goodwill 64,311 64,311 64,311 64,311
64,311 Other intangible assets 5,513 5,852 6,204 6,563 6,923
Mortgage servicing rights 6,419 6,596 6,860 6,595 6,208 Accrued
interest receivable 12,656 11,605 11,236 12,027 10,819 Other assets
86,936 62,635 66,654 74,743 60,096 Total assets $4,656,435
$4,519,935 $4,527,954 $4,517,968 $4,467,131 Deposits:
Noninterest-bearing demand deposits $1,283,949 $1,261,355
$1,254,431 $1,275,745 $1,221,503 Interest-bearing demand deposits
965,480 956,690 947,006 887,625 910,638 Savings deposits 1,367,597
1,346,016 1,370,015 1,397,036 1,366,892 Time certificates 310,430
314,361 327,432 335,154 336,979 Total deposits 3,927,456 3,878,422
3,898,884 3,895,560 3,836,012 Accrued interest payable 867 781 770
818 774 Reserve for unfunded commitments 2,989 2,599 2,734 2,719
2,908 Other liabilities 62,850 59,868 66,938 67,364 69,695 Other
borrowings 98,730 22,560 15,197 17,493 19,235 Junior subordinated
debt 56,810 56,761 56,713 56,667 56,617 Total liabilities
$4,149,702 $4,020,991 $4,041,236 $4,040,621 $3,985,241 Total
shareholders' equity $506,733 $498,944 $486,718 $477,347 $481,890
Accumulated other comprehensive gain
(loss)
(4,612 ) (4,501 ) (7,402 ) (7,913 ) 4,953 Average loans $2,878,944
$2,783,686 $2,758,544 $2,695,743 $2,669,954 Average
interest-earning assets 4,214,488 4,135,021 4,130,469 4,094,011
4,055,446 Average total assets 4,572,424 4,492,389 4,493,657
4,445,310 4,407,322 Average deposits 3,878,183 3,851,519 3,862,793
3,820,773 3,784,748 Average total equity 507,389 497,225 484,811
478,993 480,575 Total risk based capital ratio 14.4 %
14.8
%
15.0
% 14.8 % 14.8 % Tier 1 capital ratio 13.6 %
13.9
%
14.0
% 13.7 % 13.7 % Tier 1 common equity ratio 12.1 %
12.3
%
12.4
% 12.2 % 12.1 % Tier 1 leverage ratio 11.0 % 11.0 % 10.8 % 10.6 %
10.6 % Tangible capital ratio 9.5 % 9.6 % 9.3 % 9.1 % 9.3 %
During the three months ended September 30, 2017, the Company
changed its classification of 1st and 2nd lien non-owner occupied
1-4 residential real estate mortgage loans from commercial real
estate mortgage loans to residential real estate mortgage loans and
consumer home equity loans, respectively. This change in loan
category classification was made to better align the Company’s
financial reporting classifications with regulatory reporting
classifications, and to properly classify these loans for
regulatory risk-based capital ratio calculations. As a result of
these reclassifications, at September 30, 2017, loans with balances
of $60,957,000, and $5,620,000, that would have been classified as
commercial real estate mortgage loans prior to this change, were
classified as residential real estate mortgage loans, and consumer
home equity loans, respectively; and the Company’s Total risk based
capital ratio, Tier 1 capital ratio, and Tier 1 common equity ratio
were all recalculated to be 0.10%-0.20% higher than they would have
been prior to this change. Similar loan reclassifications, and
related regulatory capital ratio recalculations, have been
retroactively applied to amounts reported in previous periods and
reflected in the table above. These reclassifications did not
affect previously reported net income or total shareholders’
equity.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171030006262/en/
TriCo BancsharesRichard P. Smith, 530-898-0300President &
CEO
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