TriCo Bancshares (NASDAQ: TCBK) (the “Company”), parent company
of Tri Counties Bank, today announced net income of $23,395,000 for
the quarter ended September 30, 2019, compared to $23,061,000
during the trailing quarter ended June 30, 2019 and $16,170,000
during the quarter ended September 30, 2018. Diluted earnings per
share were $0.76 for the third quarter of 2019, compared to $0.75
for the second quarter of 2019 and $0.53 for the third quarter of
2018.
Financial Highlights
Performance highlights and other developments for the Company as
of or for the three and nine months ended September 30, 2019
included the following:
- For the three and nine months ended September 30, 2019, the
Company’s return on average assets was 1.44% and 1.44%,
respectively, and the return on average equity was 10.42% and
10.67%, respectively.
- As of September 30, 2019, the Company reported total loans,
total assets and total deposits of $4.18 billion, $6.38 billion and
$5.30 billion, respectively.
- The loan to deposit ratio was 79.0% as of September 30, 2019 as
compared to 76.8% at June 30, 2019 and 79.0% at September 30,
2018.
- For the current quarter, net interest margin was 4.44% on a tax
equivalent basis as compared to 4.29% in the quarter ended
September 30, 2018 and decreased 6 basis points from the trailing
quarter.
- Non-interest bearing deposits as a percentage of total deposits
were 33.6% at September 30, 2019, as compared to 33.3% at June 30,
2019 and 33.6% at September 30, 2018.
- The average rate of interest paid on deposits, including
non-interest-bearing deposits, remained low but increased slightly
to 0.23% for the third quarter of 2019 as compared with 0.22% for
the trailing quarter, and an increase of 7 basis points from the
average rate paid during the same quarter of the prior year.
- Non-performing assets to total assets were 0.31% at September
30, 2019, as compared to 0.35% as of June 30, 2019, and 0.47% at
December 31, 2018.
- The balance of nonperforming loans decreased by $2.0 million,
and was facilitated by the sale of loans and charge-offs. Net
charge-offs (recoveries) for the quarter ended September 30, 2019
and 2018 were $1.0 million and ($0.2) million, respectively, while
net charge-offs (recoveries) for the nine months ended September
30, 2019 were ($0.3) million and $0.5 million, respectively.
- The efficiency ratio declined to 58.8%, as compared to 60.1%,
in the trailing quarter and 65.3% in the same quarter of the 2018
year. Excluding merger and acquisition costs from the 2018 year
results in an efficiency ratio of 59.56%.
- Non-interest income associated with service charges and fees
increased by 4.6% over the trailing quarter and 8.7% over the same
quarter in the prior year.
President and CEO, Rick Smith commented, “Our record earnings
for the third quarter were a direct result of a full team effort
across every department of the Bank. We increased our loan to
deposit ratio through a reduction in investment security balances
whose proceeds were utilized to fund loan growth. In addition,
through asset sales, we accomplished a substantial reduction in
nonperforming loans and underperforming municipal investment
securities. Our mortgage loan processors pushed forward at near
capacity levels resulting in almost a doubling of gains from the
sale of loans as compared to the trailing quarter. The market
leading cash management services we offer continue to drive growth
in transaction volume and the number of customers we serve.
Further, we continue to focus on cost containment and increased
efficiency measures. We believe that the continued execution of
these and other strategies combined with our long history paying
quarterly cash dividends, which were recently increased to $0.22
per share, create a noteworthy value proposition for our
shareholders.”
Summary Results
For the three and nine months ended September 30, 2019, the
Company’s return on average assets was 1.44% and 1.44%,
respectively, and the return on average equity was 10.42% and
10.67%, respectively. For the three and nine months ended September
30, 2018, the Company’s return on average assets was 1.05% and
1.15%, respectively, and the return on average equity was 9.11% and
10.44%, respectively. While there were no merger and acquisition
expenses incurred during the 2019 periods as compared to $4,150,000
and $5,227,000 during the three and nine months ended September 30,
2018, the increases in return on average assets and average equity
were also benefited by increases in net interest income of
$4,199,000 and $41,529,000, respectively, during the three and nine
months ended September 30, 2019.
The following is a summary of the components of the Company’s
operating results and performance ratios for the periods
indicated:
Three months ended
September 30,
June 30,
(dollars and shares in thousands)
2019
2019
$ Change
% Change
Net interest income
64,688
$
64,315
$
373
0.6
%
Reversal of (provision for) loan
losses
329
(537
)
866
nm
Noninterest income
14,108
13,423
685
5.1
%
Noninterest expense
(46,344
)
(46,697
)
353
(0.8
)%
Provision for income taxes
(9,386
)
(7,443
)
(1,943
)
26.1
%
Net income
$
23,395
$
23,061
$
334
1.4
%
Diluted earnings per share
$
0.76
$
0.75
$
0.01
1.33
%
Dividends per share
$
0.22
$
0.19
$
0.03
15.80
%
Average common shares
30,509
30,458
51
0.2
%
Average diluted common shares
30,629
30,643
(14
)
(0.0
)%
Return on average total assets
1.44
%
1.45
%
Return on average equity
10.42
%
10.68
%
Efficiency ratio
58.82
%
60.07
%
Three months ended September
30,
(dollars and shares in thousands)
2019
2018
$ Change
% Change
Net interest income
64,688
$
60,489
$
4,199
6.9
%
Reversal of (provision for) loan
losses
329
(2,651
)
2,980
nm
Noninterest income
14,108
12,336
1,772
14.4
%
Noninterest expense
(46,344
)
(47,528
)
1,184
(2.5
)%
Provision for income taxes
(9,386
)
(6,476
)
(2,910
)
44.9
%
Net income
$
23,395
$
16,170
$
7,225
44.7
%
Diluted earnings per share
$
0.76
$
0.53
$
0.23
43.4
%
Dividends per share
$
0.22
$
0.17
$
0.05
29.4
%
Average common shares
30,509
30,011
498
1.7
%
Average diluted common shares
30,629
30,291
338
1.1
%
Return on average total assets
1.44
%
1.05
%
Return on average equity
10.42
%
9.11
%
Efficiency ratio
58.82
%
65.26
%
Nine months ended September
30,
(dollars and shares in thousands)
2019
2018
$ Change
% Change
Net interest income
$
192,873
$
151,344
$
41,529
27.4
%
Reversal of (provision for) loan
losses
1,392
(1,777
)
3,169
nm
Noninterest income
39,334
36,466
2,868
7.9
%
Noninterest expense
(138,493
)
(123,226
)
(15,267
)
12.4
%
Provision for income taxes
(25,924
)
(17,698
)
(8,226
)
46.5
%
Net income
$
69,182
$
45,109
$
17,735
53.4
%
Diluted earnings per share
$
2.25
$
1.76
$
0.49
27.8
%
Dividends per share
$
0.60
$
0.51
$
0.09
17.6
%
Average common shares
30,441
25,317
5,124
20.2
%
Average diluted common shares
30,650
25,617
5,033
19.6
%
Return on average total assets
1.44
%
1.15
%
Return on average equity
10.67
%
10.44
%
Efficiency ratio
59.64
%
65.65
%
Balance Sheet
Total loans outstanding reached a record high of $4.18 billion
as of September 30, 2019, an increase of 3.8% over the trailing
twelve month period and an annualized increase of 7.7% over the
trailing quarter. In general, year over year increases in deposit
balances and reductions in investment security balances were
utilized to fund loan growth and pay down outstanding balances of
other borrowings.
The retention of earnings generated from the balance sheet
changes discussed below was the primary driver in total equity
increasing to $896,665,000 at September 30, 2019 as compared to
$875,886,000 at June 30, 2019, which is inclusive of $1,499,000 and
$(2,198,000) in accumulated other comprehensive income (loss) at
the same periods, respectively. As a result, the Company’s book
value per share increased to $29.39 per share at September 30, 2019
from $28.71 at June 30, 2019. The Company’s tangible book value per
share, calculated by subtracting goodwill and other intangible
assets from total shareholders’ equity and dividing that sum by
total shares outstanding, increased to $21.33 per share at
September 30, 2019 from $20.60 per share June 30, 2019. Excluding
accumulated other comprehensive losses from total equity for both
quarters, tangible book value per share increased to $21.28 at
September 30, 2019 from $20.68 at June 30, 2019.
Trailing Quarter Balance Sheet
Change
Ending balances
As of September 30,
As of June 30,
$ Change
Annualized % Change
($’s in thousands)
2019
2019
Total assets
$
6,384,883
$
6,395,172
$
(10,289
)
(0.6
)%
Total loans
4,182,348
4,103,687
78,661
7.7
%
Total investments
1,397,753
1,566,720
(168,967
)
(43.1
)%
Total deposits
$
5,295,407
$
5,342,173
$
(46,766
)
(3.5
)%
Loan growth of $78,661,000 or 7.7% on an annualized basis during
the third quarter of 2019 provided benefit to the yield on earning
assets and net interest margin as prepayments and sales of
investment securities were utilized to fund loans and to reduce the
need for overnight borrowings from the Federal Home Loan Bank.
Average Trailing Quarter Balance Sheet
Change
Qtrly avg balances
As of September 30,
As of June 30,
$ Change
Annualized % Change
($’s in thousands)
2019
2019
Total assets
$
6,452,470
$
6,385,889
$
66,581
4.2
%
Total loans
4,142,602
4,044,044
98,558
9.7
%
Total investments
1,536,691
1,573,112
(36,421
)
(9.3
)%
Total deposits
$
5,327,235
$
5,370,879
$
(43,644
)
(3.3
)%
The growth in average loans of $98,558,000 or 9.7%, on an
annualized basis, during the third quarter was greater than the end
of period growth as nearly all of the growth for the second quarter
occurred during the month of June and third quarter growth was
concentrated in July and August.
Year Over Year Balance Sheet
Change
Ending balances
As of September 30,
($’s in thousands)
2019
2018
$ Change
% Change
Total assets
$
6,384,883
$
6,318,865
$
66,018
1.0
%
Total loans
4,182,348
4,027,436
154,912
3.8
%
Total investments
1,397,753
1,535,953
(138,200
)
(9.0
)%
Total deposits
$
5,295,407
$
5,093,117
$
202,290
4.0
%
Total assets have grown by $66,018,000 or 1.0% between September
2018 and September 2019. This growth was led by $154,912,000 or
3.8% in loan growth which was funded by $202,290,000 or 4.0% in
deposit growth. Deposit growth in excess of loan growth and the
reduction in investment security balances was utilized to reduce
other borrowings.
Net Interest Income and Net Interest
Margin
The following is a summary of the components of net interest
income for the periods indicated:
Three months ended
September 30,
June 30,
(dollars in thousands)
2019
2019
$ Change
% Change
Interest income
$
68,889
$
68,180
$
709
1.0
%
Interest expense
(4,201
)
(3,865
)
(336
)
8.7
%
Fully tax-equivalent adjustment (FTE)
(1)
289
298
(9
)
(3.0
)%
Net interest income (FTE)
$
64,977
$
64,613
$
364
0.6
%
Net interest margin (FTE)
4.44
%
4.50
%
Acquired loans discount accretion,
net:
Amount (included in interest income)
$
2,360
$
1,904
$
456
23.9
%
Effect on average loan yield
0.23
%
0.19
%
Effect on net interest margin (FTE)
0.16
%
0.13
%
Three months ended September
30,
(dollars in thousands)
2019
2018
$ Change
% Change
Interest income
$
68,889
$
64,554
$
4,335
6.7
%
Interest expense
(4,201
)
(4,065
)
(136
)
3.3
%
Fully tax-equivalent adjustment (FTE)
(1)
289
357
(68
)
(19.0
)%
Net interest income (FTE)
$
64,977
$
60,846
$
4,131
6.8
%
Net interest margin (FTE)
4.44
%
4.29
%
Acquired loans discount accretion,
net:
Amount (included in interest income)
$
2,360
$
2,098
$
262
12.5
%
Effect on average loan yield
0.23
%
0.21
%
Effect on net interest margin (FTE)
0.16
%
0.14
%
Nine months ended September
30,
(dollars in thousands)
2019
2018
$ Change
% Change
Interest income
$
204,526
$
160,153
$
44,373
27.7
%
Interest expense
(11,653
)
(8,809
)
(2,844
)
32.3
%
Fully tax-equivalent adjustment (FTE)
(1)
929
982
(53
)
(5.4
)%
Net interest income (FTE)
$
193,802
$
152,326
$
41,476
27.2
%
Net interest margin (FTE)
4.48
%
4.22
%
Acquired loans discount accretion,
net:
Amount (included in interest income)
$
5,919
$
3,289
$
2,630
80.0
%
Effect on average loan yield
0.19
%
0.13
%
0.06
%
Effect on net interest margin (FTE)
0.08
%
0.05
%
0.03
%
(1)
Information is presented on a
fully tax-equivalent (FTE) basis. The Company believes the use of
this non-generally accepted accounting principles (non-GAAP)
measure provides additional clarity in assessing its results, and
the presentation of these measures on a FTE basis is a common
practice within the banking industry.
Loans may be acquired at a premium or discount to par value, in
which case, the premium is amortized (subtracted from) or accreted
(added to) 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. As
a result of the declining rate environment, the prepayment rate of
portfolio loans, inclusive of those acquired at a premium or
discount, accelerated and this is evidenced by the 23.9% increase
in discount accretion included in interest income during the third
quarter of 2019 as compared to the trailing quarter. During the
three months ended September 30, 2019, June 30, 2019 and March 31,
2019, purchased loan discount accretion was $2,360,000, $1,904,000,
and $1,655,000, respectively. During the three months ended March
31, 2019, loans purchased at net premium several years ago were
repaid prior to expected maturity resulting in approximately
$259,000 of accelerated amortization.
The following table shows the components of net interest income
and net interest margin on a fully tax-equivalent (FTE) basis for
the quarterly 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, 2019
June 30, 2019
September 30, 2018
Average Balance
Income/ Expense
Yield/ Rate
Average Balance
Income/ Expense
Yield/ Rate
Average Balance
Income/ Expense
Yield/ Rate
Assets
Loans
$
4,142,602
$
56,999
5.46
%
$
4,044,044
$
55,491
5.50
%
$
4,019,391
$
53,102
5.24
%
Investments-taxable
1,403,653
10,172
2.88
%
1,432,550
10,763
3.01
%
1,326,756
9,648
2.89
%
Investments-nontaxable (1)
133,038
1,250
3.73
%
140,562
1,358
3.88
%
163,309
1,546
3.76
%
Total investments
1,536,691
11,422
2.95
%
1,573,112
12,121
3.14
%
1,490,065
11,194
2.98
%
Cash at Federal Reserve and other
banks
130,955
757
2.29
%
147,810
866
2.35
%
119,635
615
2.04
%
Total earning assets
5,810,248
69,178
4.72
%
5,764,966
68,478
4.76
%
5,629,091
64,911
4.57
%
Other assets, net
642,222
620,923
626,622
Total assets
$
6,452,470
$
6,385,889
$
6,255,713
Liabilities and shareholders’ equity
Interest-bearing demand deposits
$
1,240,548
284
0.09
%
$
1,276,388
289
0.09
%
$
1,125,159
$
248
0.09
%
Savings deposits
1,861,166
1,192
0.25
%
1,888,234
1,307
0.28
%
1,803,022
833
0.18
%
Time deposits
447,669
1,574
1.39
%
441,116
1,403
1.28
%
430,286
991
0.91
%
Total interest-bearing deposits
3,549,383
3,050
0.34
%
3,605,738
2,999
0.33
%
3,358,467
2,072
0.24
%
Other borrowings
73,350
334
1.81
%
17,963
37
0.83
%
246,637
1,178
1.89
%
Junior subordinated debt
57,156
817
5.67
%
57,222
829
5.81
%
56,973
815
5.68
%
Total interest-bearing liabilities
3,679,889
4,201
0.45
%
3,680,923
3,865
0.42
%
3,662,077
4,065
0.44
%
Noninterest-bearing deposits
1,777,852
1,765,141
1,710,374
Other liabilities
104,062
73,541
86,131
Shareholders’ equity
890,667
866,284
797,131
Total liabilities and shareholders’
equity
$
6,452,470
$
6,385,889
$
6,255,713
Net interest rate spread (1) (2)
4.27
%
4.34
%
4.13
%
Net interest income and margin (1) (3)
$
64,977
4.44
%
$
64,613
4.50
%
$
60,846
4.29
%
(1)
Fully taxable equivalent (FTE)
(2)
Net interest spread is the average yield
earned on interest-earning assets minus the average rate paid on
interest-bearing liabilities.
(3)
Net interest margin is computed by
calculating the difference between interest income and interest
expense, divided by the average balance of interest-earning assets.
All yields and rates are calculated using the specific day counts
for the period and the total number of days for the year.
Net interest income (FTE) during the three months ended
September 30, 2019 increased $364,000 or 0.6% to $64,977,000
compared to $64,613,000 during the three months ended June 30,
2019. At the same time net interest margin declined 6 basis points
to 4.44% as compared to 4.50% in the trailing quarter. The increase
in net interest income (FTE) was due primarily to a shift in
average balances from investments and excess liquidity maintained
with the Federal Reserve yielding 2.95% and 2.29%, respectively
during the third quarter to loans which yielded 5.46% during the
same period. The yield on interest earning assets was 4.72% for the
quarter ended September 30, 2019, which represents a decrease of 4
basis points over the trailing quarter and an increase of 15 basis
points over the same quarter in the prior year.
The index utilized in a significant portion of the Company’s
variable rate loans, Wall Street Journal Prime, has decreased by 50
basis points during the quarter to 5.00% at September 30, 2019, as
compared to 5.25% at September 30, 2018. The index decreased by 25
basis points each month in both August and September, 2019. As
such, there were minimal changes to loan yields as compared to the
trailing quarter. However, as compared to the same quarter in the
prior year, average loan yields increased 22 basis points from
5.24% during the three months ended September 30, 2018 to 5.46%
during the three months ended September 30, 2019. Of the 22 basis
point increase in yields on loans, 20 basis points was attributable
to increases in market rates while 2 basis points was from
increased accretion of purchased loans.
Despite the slight decreases in the average balances of interest
bearing deposits which reduced interest expense, these benefits
were offset by the single basis point increase in the cost of
interest deposits. Further, while the average balance of interest
bearing liabilities remained flat, the rate paid on other
borrowings grew by 98 basis points to 1.81% for the third quarter
of 2019 which was the primary driver of the cost of interest
bearing liabilities growing 3 basis points to 0.45% for the third
quarter of 2019 as compared to 0.83% for the second quarter of
2019. The impact of changes in rates and volumes of interest
bearing liabilities resulted in an increase in interest expense of
$336,000 during the current quarter. Comparing the quarter ended
September 30, 2019 to the same quarter in the prior year, the cost
of interest bearing deposits increased by 10 basis points to 0.34%
from 0.24% as a direct result of market competition for deposits
and the overall rise in the rate environment experienced subsequent
to 2017.
The following table shows the components of net interest income
and net interest margin on a fully tax-equivalent (FTE) basis for
the year-to-date periods indicated:
ANALYSIS OF CHANGE IN NET
INTEREST MARGIN ON EARNING ASSETS
(unaudited, dollars in
thousands)
Nine months ended
Nine months ended
September 30, 2019
September 30, 2018
Average Balance
Income/ Expense
Yield/ Rate
Average Balance
Income/ Expense
Yield/ Rate
Assets
Loans
$
4,070,568
$
166,888
5.48
%
$
3,387,390
$
130,455
5.15
%
Investments–taxable
1,420,426
31,849
3.00
%
1,192,304
25,042
2.81
%
Investments-nontaxable (1)
138,580
4,024
3.88
%
145,298
4,254
3.91
%
Total investments
1,559,006
35,873
3.08
%
1,337,602
29,296
2.93
%
Cash at Federal Reserve and other
banks
148,995
2,694
2.42
%
101,889
1,384
1.82
%
Total earning assets
5,778,569
205,455
4.75
%
4,826,881
161,135
4.46
%
Other assets, net
643,130
449,020
Total assets
$
6,421,699
$
5,275,901
Liabilities and shareholders’ equity
Interest-bearing demand deposits
$
1,263,312
860
0.09
%
$
1,038,775
673
0.09
%
Savings deposits
1,892,122
3,631
0.26
%
1,524,048
1,671
0.15
%
Time deposits
443,546
4,277
1.29
%
350,559
2,058
0.78
%
Total interest-bearing deposits
3,598,980
8,768
0.33
%
2,913,382
4,402
0.20
%
Other borrowings
35,814
384
1.43
%
165,026
2,106
1.70
%
Junior subordinated debt
57,109
2,501
5.86
%
56,928
2,301
5.39
%
Total interest-bearing liabilities
3,691,903
11,653
0.42
%
3,135,336
8,809
0.38
%
Noninterest-bearing deposits
1,761,037
1,462,209
Other liabilities
101,947
72,772
Shareholders’ equity
866,812
605,584
Total liabilities and shareholders’
equity
$
6,421,699
$
5,275,901
Net interest rate spread (1) (2)
4.33
%
4.08
%
Net interest income and margin (1) (3)
$
193,802
4.48
%
$
152,326
4.22
%
(1)
Fully taxable equivalent
(FTE)
(2)
Net interest spread is the
average yield earned on interest-earning assets minus the average
rate paid on interest-bearing liabilities.
(3)
Net interest margin is computed
by calculating the difference between interest income and interest
expense, divided by the average balance of interest-earning assets.
All yields and rates are calculated using the specific day counts
for the period and the total number of days for the year.
Net interest income (FTE) during the nine months ended September
30, 2019 increased $41,476,000 or 27.2% to $193,802,000 compared to
$152,326,000 during the nine months ended September 30, 2018. The
increase was substantially attributable to changes in volume of
earning assets from the acquisition of FNB Bancorp in July 2018 in
addition to organic loan growth experienced during the second and
third quarters of 2019. The yield on interest earning assets was
4.75% and 4.46% for the nine months ended September 30, 2019 and
2018, respectively. This 29 basis point increase in earning asset
yield was primarily attributable to a 33 basis point increase in
loan yields and a 19 basis point increase in yields on investments.
Of the 33 basis point increase in yields on loans, 27 basis points
was attributable to increases in market rates while 6 basis points
was from increased accretion of purchased loans.
The increases in yields on earning assets were partially offset
by increased funding costs as the costs of total interest bearing
liabilities increased 4 basis points to 0.42% during the nine
months ended September 30, 2019, as compared to 0.38% for the nine
months ended September 30, 2018. During the same period, costs
associated with interest bearing deposits increased by 13 basis
points to 0.33% as compared to 0.20% in the prior year. The
increase in interest expense for the nine months ended September
30, 2019 as compared to the prior period was due entirely to the
increases in volume associated with interest-bearing deposits,
offset partially with declines in volume of overnight
borrowings.
Asset Quality and Loan Loss
Provisioning
The Company recorded a benefit from the reversal of loan losses
of $329,000 during the three months ended September 30, 2019 as
compared to a provision of $537,000 for the trailing quarter, as
well as provision of $2,651,000 in the same quarter of the prior
year. The reversal of loan losses during the quarter ended
September 30, 2019 was driven by a reduction in calculated specific
reserves following the sale and charge-off of non-performing loans
with carrying values totaling $4,279,000. The amount of required
provision reversal was partially offset by loan growth of
$78,661,000 during the third quarter. For the nine months ended
September 30, 2019 the Company recorded a benefit from the reversal
of loan losses of $1,392,000. While year to date loan growth in
2019 totaled $160,334,000, nonperforming loans decreased by
$8,929,000, past due loans decreased by $9,279,000 and net
recoveries were $347,000 during the same period. Net charge-offs
(recoveries) for the quarter ended September 30, 2019 and 2018 were
$1.0 million and ($0.2) million, respectively, while net
charge-offs (recoveries) for the nine months ended September 30,
2019 were ($0.3) million and $0.5 million, respectively.
Provision for Income
Taxes
The Company’s effective tax rate was 28.6% for the quarter ended
September 30, 2019 as compared to 28.6% for the same quarter in the
prior year. During the three and nine months ended September 30,
2019 as compared to the same periods in the 2018 year, the Company
received non-taxable death benefits from life insurance proceeds.
These benefits were offset by an increase in the estimated level of
non-deductible compensation associated with increases in
compensation to covered employees.
Non-interest Income
The following table presents the key components of non-interest
income for the current and trailing quarterly periods
indicated:
Three months ended
(dollars in thousands)
September 30, 2019
June 30, 2019
$ Change
% Change
ATM and interchange fees
$
5,427
$
5,404
$
23
0.4
%
Service charges on deposit accounts
4,327
4,182
145
3.5
%
Other service fees
808
619
189
30.5
%
Mortgage banking service fees
483
475
8
1.7
%
Change in value of mortgage servicing
rights
(455
)
(552
)
97
(17.6
)%
Total service charges and fees
10,590
10,128
462
4.6
%
Increase in cash value of life
insurance
773
746
27
3.6
%
Asset management and commission income
721
739
(18
)
(2.4
)%
Gain on sale of loans
1,236
575
661
115.0
%
Lease brokerage income
172
239
(67
)
(28.0
)%
Sale of customer checks
126
135
(9
)
(6.7
)%
Gain on sale of investment securities
107
—
107
—%
Gain on marketable equity securities
22
42
(20
)
(47.6
)%
Other
361
819
(458
)
(55.9
)%
Total other non-interest income
3,518
3,295
223
6.8
%
Total non-interest income
$
14,108
$
13,423
$
685
5.1
%
Non-interest income increased $685,000 or 5.1% to $14,108,000
during the three months ended September 30, 2019 compared to the
trailing quarter June 30, 2019. The increase in non-interest income
was due primarily to increases in fees charged for various services
and increases in usage associated with both services and
interchange transactions. As a result, service charges on deposit
accounts increased over the linked quarter by $145,000 or 3.5% and
other service fees increased by $189,000 or 30.5%. Rates associated
with mortgage loans, which declined significantly late in the
second quarter of 2019, remained at near historic lows during the
third quarter and resulted in a $661,000 increase in gains from the
sale of loans due to an increase in the volume of mortgage loans
sold. Similar to the second quarter of 2019, the value of mortgage
servicing rights continued to decline which is consistent with the
declining rate environment and changes in the assumptions utilized
in determining their fair value. Specifically, further increases in
prepayment speeds resulting from decreases in the 15 and 30 year
mortgage rates continued to be the largest contributors to the
decline in fair value of the mortgage servicing asset. These
positive changes in non-interest income were offset by a reduction
in other non-interest income which included $104,000 and $696,000
in death benefit insurance proceeds during the third and second
quarters of 2019, respectively. During the three months ended
September 30, 2019, net gains of $107,000 were realized from the
sale of investment securities and there were no security sales in
the trailing quarter.
The following table presents the key components of non-interest
income for the current and prior year quarterly periods
indicated:
Three months ended September
30,
(dollars in thousands)
2019
2018
$ Change
% Change
ATM and interchange fees
$
5,427
$
4,590
$
837
18.2
%
Service charges on deposit accounts
4,327
4,015
312
7.8
%
Other service fees
808
676
132
19.5
%
Mortgage banking service fees
483
499
(16
)
(3.2
)%
Change in value of mortgage servicing
rights
(455
)
(37
)
(418
)
1,129.7
%
Total service charges and fees
10,590
9,743
847
8.7
%
Increase in cash value of life
insurance
773
732
41
5.6
%
Asset management and commission income
721
728
(7
)
(1.0
)%
Gain on sale of loans
1,236
539
697
129.3
%
Lease brokerage income
172
186
(14
)
(7.5
)%
Sale of customer checks
126
88
38
43.2
%
Gain on sale of investment securities
107
207
(100
)
(48.3
)%
Gain (loss) on marketable equity
securities
22
(22
)
44
(200.0
)%
Other
361
135
226
167.4
%
Total other non-interest income
3,518
2,593
925
35.7
%
Total non-interest income
$
14,108
$
12,336
$
1,772
14.4
%
Non-interest income increased $1,772,000 (14.4%) to $14,108,000
during the three months ended September 30, 2019 compared to the
same period in 2018. As noted previously, the increase in
non-interest income was largely driven by increases in fees charged
for various services and increases in usage associated with both
services and interchange transactions. As a result, ATM and
interchange fees increased by $837,000 (18.2%) during the three
months ended September 30, 2019 compared to 2018, and service
charges on deposit accounts increased by $312,000 (7.8%) over the
same period. Other significant increases in non-interest income for
the three months ended September 30, 2019 include the
aforementioned increase in gain on sale of loans totaling $697,000
and death benefit insurance proceeds of $104,000 realized during
the third quarters of 2019. There were no death benefit insurance
proceeds received during 2018.
The following table presents the key components of non-interest
income for the current and prior year-to-date periods
indicated:
Nine months ended September
30,
(dollars in thousands)
2019
2018
$ Change
% Change
ATM and interchange fees
$
15,412
$
13,335
$
2,077
15.6
%
Service charges on deposit accounts
12,389
11,407
982
8.6
%
Other service fees
2,198
2,020
178
8.8
%
Mortgage banking service fees
1,441
1,527
(86
)
(5.6
)%
Change in value of mortgage servicing
rights
(1,652
)
38
(1,690
)
(4,447.4
)%
Total service charges and fees
29,788
28,327
1,461
5.2
%
Increase in cash value of life
insurance
2,294
1,996
298
14.9
%
Asset management and commission income
2,102
2,414
(312
)
(12.9
)%
Gain on sale of loans
2,223
1,831
392
21.4
%
Lease brokerage income
631
514
117
22.8
%
Sale of customer checks
401
327
74
22.6
%
Gain on sale of investment securities
107
207
(100
)
(48.3
)%
Gain (loss) on marketable equity
securities
100
(92
)
192
(208.7
)%
Other
1,688
942
746
79.2
%
Total other non-interest income
9,546
8,139
1,407
17.3
%
Total non-interest income
$
39,334
$
36,466
$
2,868
7.9
%
Non-interest income increased $2,868,000 (7.9%) to $39,334,000
during the nine months ended September 30, 2019 compared to the
comparable nine month period in 2018. Non-interest income for the
nine months ended 2019 as compared to the same period in 2018 was
impacted by changes in the fair value of the Company’s mortgage
servicing assets, which contributed to a $1,690,000 decline,
coupled with the previously discussed increase in income charged
for interchange fees and service charges, which increased by
$2,077,000 (15.6%) and $982,000 (8.6%), respectively. Other
non-interest income was positively impacted by the receipt of
$831,000 in death benefit insurance proceeds during the nine months
ended September 30, 2019 compared to none in the same 2018
period.
Non-interest Expense
The following table presents the key components of non-interest
expense for the current and trailing quarterly periods
indicated:
Three months ended
(dollars in thousands)
September 30, 2019
June 30, 2019
$ Change
% Change
Base salaries, net of deferred loan
origination costs
$
17,656
$
17,211
$
445
2.6
%
Incentive compensation
3,791
3,706
85
2.3
%
Benefits and other compensation costs
5,452
5,802
(350
)
(6.0
)%
Total salaries and benefits expense
26,899
26,719
180
0.7
%
Occupancy
3,711
3,738
(27
)
(0.7
)%
Data processing and software
3,411
3,354
57
1.7
%
Equipment
1,679
1,752
(73
)
(4.2
)%
Intangible amortization
1,431
1,431
—
—
%
Advertising
1,358
1,533
(175
)
(11.4
)%
ATM and POS network charges
1,343
1,270
73
5.7
%
Professional fees
999
1,057
(58
)
(5.5
)%
Telecommunications
867
773
94
12.2
%
Regulatory assessments and insurance
94
490
(396
)
(80.8
)%
Postage
438
315
123
39.0
%
Operational losses
228
226
2
0.9
%
Courier service
357
412
(55
)
(13.3
)%
Gain on sale of foreclosed assets
(50
)
(197
)
147
(74.6
)%
Loss on disposal of fixed assets
2
42
(40
)
(95.2
)%
Other miscellaneous expense
3,577
3,782
(205
)
(5.4
)%
Total other non-interest expense
19,445
19,978
(533
)
(2.7
)%
Total non-interest expense
$
46,344
$
46,697
$
(353
)
(0.8
)%
Average full-time equivalent staff
1,160
1,138
22
1.9
%
Non-interest expense for the quarter ended September 30, 2019
decreased $353,000 (0.8%) to $46,344,000 as compared to $46,697,000
during the trailing quarter ended June 30, 2019. Increases in
salaries were primarily attributable to the increase in average
full-time equivalent staff and to a lesser extent, compensation
adjustments associated with changes in the Company's management
structure. The nominal increase in incentive compensation cost,
which contributed to an $85,000 increase in non-interest expense as
compared to the trailing quarter, relates directly to loan
originations and net loan growth. By comparison, incentive
compensation expense of $2,567,000 was incurred during the first
quarter of 2019, a period when loan growth approximated
$12,317,000. The decrease in regulatory assessment expense totaled
$396,000 during the third quarter of 2019, following a credit from
the Deposit Insurance Fund totaling $435,000. While other
miscellaneous expenses declined by $205,000 in the third quarter of
2019 as compared to the trailing quarter, there were no singularly
significant items of change that were identified.
The following table presents the key components of non-interest
expense for the current and prior year quarterly periods
indicated:
Three months ended September
30,
(dollars in thousands)
2019
2018
$ Change
% Change
Base salaries, net of deferred loan
origination costs
$
17,656
$
15,685
$
1,971
12.6
%
Incentive compensation
3,791
4,515
(724
)
(16.0
)%
Benefits and other compensation costs
5,452
5,623
(171
)
(3.0
)%
Total salaries and benefits expense
26,899
25,823
1,076
4.2
%
Occupancy
3,711
3,173
538
17.0
%
Data processing and software
3,411
2,786
625
22.4
%
Equipment
1,679
1,750
(71
)
(4.1
)%
Intangible amortization
1,431
1,390
41
2.9
%
Advertising
1,358
1,341
17
1.3
%
ATM and POS network charges
1,343
1,197
146
12.2
%
Professional fees
999
1,352
(353
)
(26.1
)%
Telecommunications
867
819
48
5.9
%
Regulatory assessments and insurance
94
537
(443
)
(82.5
)%
Merger and acquisition expense
—
4,150
(4,150
)
(100.0
)%
Postage
438
275
163
59.3
%
Operational losses
228
217
11
5.1
%
Courier service
357
278
79
28.4
%
Gain on sale of foreclosed assets
(50
)
(2
)
(48
)
2,400.0
%
Loss on disposal of fixed assets
2
152
(150
)
(98.7
)%
Other miscellaneous expense
3,577
2,290
1,287
56.2
%
Total other non-interest expense
19,445
21,705
(2,260
)
(10.4
)%
Total non-interest expense
$
46,344
$
47,528
$
(1,184
)
(2.5
)%
Average full-time equivalent staff
1,160
1,146
14
1.2
%
Non-interest expense decreased by $1,184,000 (2.5)% to
$46,344,000 during the three months ended September 30, 2019 as
compared to $47,528,000 for the three months ended September 30,
2018. The acquisition of FNB Bancorp was completed in July 2018,
thereby eliminating merger related expenses of $4,150,000 for the
three months ended September 30, 2019 as compared to the same
period in 2018.
Salary and benefit expenses increased $1,076,000 or 4.2% to
$26,899,000 during the three months ended September 30, 2019
compared to $25,823,000 during the three months ended June 30,
2018. Base salaries, net of deferred loan origination costs
increased by $1,971,000 or 12.6% to $17,656,000. These increases
were the result of annual merit increases as well as compensation
adjustments associated with changes in the organizational structure
of management. Commissions and incentive compensation decreased
$724,000 or (16.0)% to $3,791,000 during the three months ended
September 30, 2019 compared to the year-ago quarter due primarily
to accruals associated with the retention of personnel through the
integration of the FNB Bancorp acquisition. Benefits and other
compensation expense decreased $171,000 or (3.0)% to $5,452,000
during the three months ended September 30, 2019 due to
improvements in loss rates associated with employer provided health
insurance.
The following table presents the key components of non-interest
expense for the current and prior year to date periods
indicated:
Nine months ended September
30,
(dollars in thousands)
2019
2018
$ Change
% Change
Base salaries, net of deferred loan
origination costs
$
51,624
$
44,076
$
7,548
17.1
%
Incentive compensation
10,064
9,126
938
10.3
%
Benefits and other compensation costs
17,058
15,726
1,332
8.5
%
Total salaries and benefits expense
78,746
68,928
9,818
14.2
%
Occupancy
11,223
8,574
2,649
30.9
%
Data processing and software
10,114
7,979
2,135
26.8
%
Equipment
5,298
4,938
360
7.3
%
Intangible amortization
4,293
2,068
2,225
107.6
%
Advertising
4,222
3,214
1,008
31.4
%
ATM and POS network charges
3,936
3,860
76
2.0
%
Professional fees
2,895
2,898
(3
)
(0.1
)%
Telecommunications
2,437
2,201
236
10.7
%
Regulatory assessments and insurance
1,095
1,384
(289
)
(20.9
)%
Merger and acquisition expense
—
5,227
(5,227
)
(100.0
)%
Postage
1,063
934
129
13.8
%
Operational losses
679
763
(84
)
(11.0
)%
Courier service
1,039
769
270
35.1
%
Gain on sale of foreclosed assets
(246
)
(390
)
144
(36.9
)%
Loss on disposal of fixed assets
82
206
(124
)
(60.2
)%
Other miscellaneous expense
11,617
9,673
1,944
20.1
%
Total other non-interest expense
59,747
54,298
5,449
10.0
%
Total non-interest expense
$
138,493
$
123,226
$
15,267
12.4
%
Average full-time equivalent staff
1,145
1,050
95
9.0
%
Non-interest expense increased by $15,267,000 (12.4%) to
$138,493,000 during the nine months ended September 30, 2019 as
compared to the $123,226,000 for the nine months ended September
30, 2018. Virtually all significant increases in non-interest
expense can be attributed to the acquisition of FNB Bancorp that
took place in July 2018, which is reflected in all periods during
the nine months ended September 30, 2019.
About TriCo Bancshares
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.
Forward-Looking
Statement
The 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.
TRICO BANCSHARES—CONDENSED
CONSOLIDATED FINANCIAL DATA
(Unaudited. Dollars in thousands,
except share data)
Three months ended
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
September 30, 2018
Revenue and Expense Data
Interest income
$
68,889
$
68,180
$
67,457
$
68,065
$
64,554
Interest expense
4,201
3,865
3,587
4,063
4,065
Net interest income
64,688
64,315
63,870
64,002
60,489
Provision for (benefit from) loan
losses
(329
)
537
(1,600
)
806
2,651
Noninterest income:
Service charges and fees
10,590
10,128
9,070
10,132
9,743
Gain on sale of investment securities
107
—
—
—
207
Other income
3,411
3,295
2,733
2,541
2,386
Total noninterest income
14,108
13,423
11,803
12,673
12,336
Noninterest expense:
Salaries and benefits
26,899
26,719
25,128
25,014
25,823
Occupancy and equipment
5,390
5,490
5,641
5,278
5,056
Data processing and network
4,754
4,624
4,672
4,455
3,981
Other noninterest expense
9,301
9,864
10,011
10,577
12,668
Total noninterest expense
46,344
46,697
45,452
45,324
47,528
Total income before taxes
32,781
30,504
31,821
30,545
22,646
Provision for income taxes
9,386
7,443
9,095
7,334
6,476
Net income
$
23,395
$
23,061
$
22,726
$
23,211
$
16,170
Share Data
Basic earnings per share
$
0.77
$
0.76
$
0.75
$
0.76
$
0.54
Diluted earnings per share
$
0.76
$
0.75
$
0.74
$
0.76
$
0.53
Dividends per share
$
0.22
$
0.19
$
0.19
$
0.19
$
0.17
Book value per common share
$
29.39
$
28.71
$
28.04
$
27.20
$
26.37
Tangible book value per common share
(1)
$
21.33
$
20.60
$
19.86
$
18.97
$
18.10
Shares outstanding
30,512,187
30,502,757
30,432,419
30,417,223
30,417,818
Weighted average shares
30,509,057
30,458,427
30,424,184
30,422,687
30,011,307
Weighted average diluted shares
30,629,027
30,642,518
30,657,833
30,671,723
30,291,225
Credit Quality
Loans past due 30 days or more
$
8,089
$
14,580
$
16,761
$
17,368
$
13,218
Nonperforming originated loans
$
11,260
$
14,087
$
13,737
$
19,416
$
17,087
Total nonperforming loans
$
18,565
$
20,585
$
19,565
$
27,494
$
27,148
Total nonperforming assets
$
20,111
$
22,133
$
21,880
$
29,774
$
28,980
Loans charged-off
$
1,522
$
293
$
726
$
424
$
1,142
Loans recovered
$
520
$
560
$
1,808
$
596
$
570
Selected Financial Ratios
Return on average total assets
1.44
%
1.45
%
1.43
%
1.46
%
1.05
%
Return on average equity
10.42
%
10.68
%
10.93
%
11.33
%
9.11
%
Average yield on loans
5.46
%
5.50
%
5.48
%
5.48
%
5.24
%
Average yield on interest-earning
assets
4.72
%
4.76
%
4.77
%
4.78
%
4.57
%
Average rate on interest-bearing
deposits
0.34
%
0.33
%
0.30
%
0.29
%
0.24
%
Average cost of total deposits
0.23
%
0.22
%
0.20
%
0.20
%
0.16
%
Average rate on borrowings and
subordinated debt
3.50
%
4.62
%
4.75
%
3.24
%
2.60
%
Average rate on interest-bearing
liabilities
0.45
%
0.42
%
0.39
%
0.44
%
0.44
%
Net interest margin (fully
tax-equivalent)
4.44
%
4.50
%
4.52
%
4.49
%
4.29
%
Loans to deposits
78.98
%
76.82
%
74.29
%
74.95
%
79.08
%
Efficiency ratio
58.82
%
60.07
%
60.06
%
59.11
%
65.26
%
Supplemental Loan Interest Income
Data
Discount accretion on acquired loans
$
2,360
$
1,904
$
1,655
$
1,982
$
2,098
All other loan interest income
$
54,639
$
53,587
$
52,743
$
53,680
$
51,004
Total loan interest income
$
56,999
$
55,491
$
54,398
$
55,662
$
53,102
(1)
Tangible book value per share is
calculated by subtracting goodwill and other intangible assets from
total shareholders’ equity and dividing that result by the shares
outstanding at the end of the period. Management believes that
tangible book value per common share is meaningful because it is a
measure that the Company and investors commonly use to assess
shareholder value.
TRICO BANCSHARES—CONDENSED
CONSOLIDATED FINANCIAL DATA
(Unaudited. Dollars in
thousands)
Balance Sheet Data
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
September 30, 2018
Cash and due from banks
$
259,047
$
175,582
$
318,708
$
227,533
$
226,543
Securities, available for sale
987,054
1,136,946
1,116,426
1,117,910
1,058,806
Securities, held to maturity
393,449
412,524
431,016
444,936
459,897
Restricted equity securities
17,250
17,250
17,250
17,250
17,250
Loans held for sale
7,604
5,875
5,410
3,687
3,824
Loans:
Commercial loans
278,458
276,045
269,163
276,548
289,645
Consumer loans
442,539
434,388
418,352
418,982
421,287
Real estate mortgage loans
3,247,156
3,178,730
3,129,339
3,143,100
3,132,202
Real estate construction loans
214,195
214,524
217,477
183,384
184,302
Total loans, gross
4,182,348
4,103,687
4,034,331
4,022,014
4,027,436
Allowance for loan losses
(31,537
)
(32,868
)
(32,064
)
(32,582
)
(31,603
)
Total loans, net
4,150,811
4,070,819
4,002,267
3,989,432
3,995,833
Premises and equipment
87,424
88,534
89,275
89,347
89,290
Cash value of life insurance
117,088
116,606
117,841
117,318
116,596
Accrued interest receivable
18,205
20,990
20,431
19,412
19,592
Goodwill
220,872
220,972
220,972
220,972
220,972
Other intangible assets
24,988
26,418
27,849
29,280
30,711
Operating leases, right-of-use
28,957
30,030
30,942
—
—
Other assets
72,134
72,626
73,465
75,364
79,551
Total assets
$
6,384,883
$
6,395,172
$
6,471,852
$
6,352,441
$
6,318,865
Deposits:
Noninterest-bearing demand deposits
$
1,777,357
$
1,780,339
$
1,761,559
$
1,760,580
$
1,710,505
Interest-bearing demand deposits
1,222,955
1,263,635
1,297,672
1,252,366
1,152,705
Savings deposits
1,843,873
1,856,749
1,925,168
1,921,324
1,801,087
Time certificates
451,222
441,450
445,863
432,196
428,820
Total deposits
5,295,407
5,342,173
5,430,262
5,366,466
5,093,117
Accrued interest payable
2,847
2,665
2,195
1,997
1,729
Operating lease liability
28,494
29,434
30,204
—
—
Other liabilities
87,867
74,590
86,362
83,724
82,077
Other borrowings
16,423
13,292
12,466
15,839
282,831
Junior subordinated debt
57,180
57,132
57,085
57,042
56,996
Total liabilities
5,488,218
5,519,286
5,618,574
5,525,068
5,516,750
Common stock
543,415
542,939
542,340
541,762
541,519
Retained earnings
351,751
335,145
319,865
303,490
287,555
Accumulated other comprehensive income
(loss)
1,499
(2,198
)
(8,927
)
(17,879
)
(26,959
)
Total shareholders’ equity
$
896,665
$
875,886
$
853,278
$
827,373
$
802,115
Quarterly Average Balance Data
Average loans
$
4,142,602
$
4,044,044
$
4,023,864
$
4,026,569
$
4,019,391
Average interest-earning assets
$
5,810,248
$
5,764,966
$
5,759,966
$
5,679,845
$
5,629,091
Average total assets
$
6,452,470
$
6,385,889
$
6,426,227
$
6,316,337
$
6,255,713
Average deposits
$
5,327,235
$
5,370,879
$
5,387,079
$
5,242,139
$
5,068,841
Average borrowings and subordinated
debt
$
130,506
$
75,185
$
72,459
$
179,774
$
303,611
Average total equity
$
890,667
$
866,284
$
843,090
$
812,525
$
797,131
Capital Ratio Data
Total risk based capital ratio
15.2
%
14.9
%
14.4
%
14.4
%
13.9
%
Tier 1 capital ratio
14.5
%
14.2
%
13.6
%
13.7
%
13.2
%
Tier 1 common equity ratio
13.4
%
13.0
%
12.5
%
12.5
%
12.0
%
Tier 1 leverage ratio
11.3
%
11.1
%
10.6
%
10.7
%
10.7
%
Tangible capital ratio (1)
10.6
%
10.2
%
9.7
%
9.5
%
9.1
%
(1)
Tangible capital ratio is
calculated by subtracting goodwill and other intangible assets from
total shareholders’ equity and total assets and then dividing the
adjusted assets by the adjusted equity. Management believes that
the tangible capital ratio is meaningful because it is a measure
that the Company and investors commonly use to assess capital
adequacy.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191028005763/en/
Richard P. Smith President & CEO (530) 898-0300
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