FT Markets Data
Trico Bancshares

TriCo Bancshares Reports Third Quarter 2024 Net Income of $29.1 Million, Diluted EPS of $0.88

3Q24 Financial Highlights

  • Net income was $29.1 million or $0.88 per diluted share as compared to $29.0 million or $0.87 per diluted share in the trailing quarter
  • Deposit balances decreased $13.1 million or 0.7% (annualized) from the trailing quarter and have increased $27.4 million or 0.3% (annualized) from the same quarter of the prior year
  • Average yield on earning assets was 5.26%, an increase of 2 basis points over the 5.24% in the trailing quarter
  • Net interest margin (FTE) was 3.71% in the recent quarter, an increase of 3 basis points over 3.68% in the trailing quarter
  • Non-interest bearing deposits averaged 31.7% of total deposits during the quarter
  • The average cost of total deposits was 1.52%, an increase of 7 basis points as compared to 1.45% in the trailing quarter, and an increase of 66 basis points from 0.86% in the same quarter of the prior year; the Company's total cost of deposits have increased 148 basis points since FOMC rate actions began in March 2022, which translates to a cycle-to-date deposit beta of 31.2%

CHICO, Calif--(BUSINESS WIRE)--Oct. 24, 2024-- TriCo Bancshares (NASDAQ: TCBK):

Executive Commentary:

“Our financial performance for the third quarter demonstrates the effectiveness and strength of adhering to a long term plan and our teams' consistent ability to execute. In addition, recent strategic hires have been transitioning at an accelerated pace and we are looking forward to their more meaningful impact in 2025," said Rick Smith, President and CEO.

Peter Wiese, EVP and CFO added, “While both net interest margin and net interest income expanded during the quarter, we continue to execute incremental balance sheet strategies to minimize the forecasted impacts of recent and anticipated interest rate cuts. More notably, the reshaping of the yield curve with less inversion will likely provide longer term benefits to revenue and earnings per share growth.”

Selected Financial Highlights

  • For the quarter ended September 30, 2024, the Company’s return on average assets was 1.20%, while the return on average equity was 9.52%; for the trailing quarter ended June 30, 2024, the Company’s return on average assets was 1.19%, while the return on average equity was 9.99%
  • Diluted earnings per share were $0.88 for the third quarter of 2024, compared to $0.87 for the trailing quarter and $0.92 during the third quarter of 2023
  • The loan to deposit ratio decreased to 83.2% as of September 30, 2024, as compared to 83.8% for the trailing quarter end, as a result of loan contraction during the quarter
  • The efficiency ratio was 60.02% for the quarter ended September 30, 2024, as compared to 59.61% for the trailing quarter
  • The provision for credit losses was approximately $0.2 million during the quarter ended September 30, 2024, as compared to $0.4 million during the trailing quarter end, with reserves on individually analyzed loans increasing during the current quarter
  • The allowance for credit losses (ACL) to total loans was 1.85% as of September 30, 2024, compared to 1.83% as of the trailing quarter end, and 1.73% as of September 30, 2023. Non-performing assets to total assets were 0.45% on September 30, 2024, as compared to 0.36% as of June 30, 2024, and 0.33% at September 30, 2023. At September 30, 2024, the ACL represented 297% of non-performing loans

The financial results reported in this document are preliminary and unaudited. Final financial results and other disclosures will be reported on Form 10-Q for the period ended September 30, 2024, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, or the discovery of additional information.

Operating Results and Performance Ratios

 

Three months ended

 

 

 

 

 

September 30,
2024

 

June 30,
2024

 

 

 

 

(dollars and shares in thousands, except per share data)

 

 

$ Change

 

% Change

Net interest income

$

82,611

 

 

$

81,997

 

 

$

614

 

 

0.7

%

Provision for credit losses

 

(220

)

 

 

(405

)

 

 

185

 

 

(45.7

)%

Noninterest income

 

16,495

 

 

 

15,866

 

 

 

629

 

 

4.0

%

Noninterest expense

 

(59,487

)

 

 

(58,339

)

 

 

(1,148

)

 

2.0

%

Provision for income taxes

 

(10,348

)

 

 

(10,085

)

 

 

(263

)

 

2.6

%

Net income

$

29,051

 

 

$

29,034

 

 

$

17

 

 

0.1

%

Diluted earnings per share

$

0.88

 

 

$

0.87

 

 

$

0.01

 

 

1.1

%

Dividends per share

$

0.33

 

 

$

0.33

 

 

$

—

 

 

—

%

Average common shares

 

32,993

 

 

 

33,121

 

 

 

(128

)

 

(0.4

)%

Average diluted common shares

 

33,137

 

 

 

33,244

 

 

 

(107

)

 

(0.3

)%

Return on average total assets

 

1.20

%

 

 

1.19

%

 

 

 

 

Return on average equity

 

9.52

%

 

 

9.99

%

 

 

 

 

Efficiency ratio

 

60.02

%

 

 

59.61

%

 

 

 

 

 

Three months ended
September 30,

 

 

 

 

(dollars and shares in thousands, except per share data)

 

2024

 

 

 

2023

 

 

$ Change

 

% Change

Net interest income

$

82,611

 

 

$

88,123

 

 

$

(5,512

)

 

(6.3

)%

Provision for credit losses

 

(220

)

 

 

(4,155

)

 

 

3,935

 

 

(94.7

)%

Noninterest income

 

16,495

 

 

 

15,984

 

 

 

511

 

 

3.2

%

Noninterest expense

 

(59,487

)

 

 

(57,878

)

 

 

(1,609

)

 

2.8

%

Provision for income taxes

 

(10,348

)

 

 

(11,484

)

 

 

1,136

 

 

(9.9

)%

Net income

$

29,051

 

 

$

30,590

 

 

$

(1,539

)

 

(5.0

)%

Diluted earnings per share

$

0.88

 

 

$

0.92

 

 

$

(0.04

)

 

(4.3

)%

Dividends per share

$

0.33

 

 

$

0.30

 

 

$

0.03

 

 

10.0

%

Average common shares

 

32,993

 

 

 

33,263

 

 

 

(270

)

 

(0.8

)%

Average diluted common shares

 

33,137

 

 

 

33,319

 

 

 

(182

)

 

(0.5

)%

Return on average total assets

 

1.20

%

 

 

1.23

%

 

 

 

 

Return on average equity

 

9.52

%

 

 

10.91

%

 

 

 

 

Efficiency ratio

 

60.02

%

 

 

55.59

%

 

 

 

 

 

Nine months ended
September 30,

 

 

(dollars and shares in thousands)

 

2024

 

 

 

2023

 

 

$ Change

 

% Change

Net interest income

$

247,344

 

 

$

270,060

 

 

$

(22,716

)

 

(8.4

)%

Provision for credit losses

 

(4,930

)

 

 

(18,000

)

 

 

13,070

 

 

(72.6

)%

Noninterest income

 

48,132

 

 

 

45,360

 

 

 

2,772

 

 

6.1

%

Noninterest expense

 

(174,330

)

 

 

(172,915

)

 

 

(1,415

)

 

0.8

%

Provision for income taxes

 

(30,382

)

 

 

(33,190

)

 

 

2,808

 

 

(8.5

)%

Net income

$

85,834

 

 

$

91,315

 

 

$

(5,481

)

 

(6.0

)%

Diluted earnings per share

$

2.58

 

 

$

2.74

 

 

$

(0.16

)

 

(5.8

)%

Dividends per share

$

0.99

 

 

$

0.90

 

 

$

0.09

 

 

10.0

%

Average common shares

 

33,119

 

 

 

33,259

 

 

 

(140

)

 

(0.4

)%

Average diluted common shares

 

33,251

 

 

 

33,356

 

 

 

(105

)

 

(0.3

)%

Return on average total assets

 

1.17

%

 

 

1.24

%

 

 

 

 

Return on average equity

 

9.67

%

 

 

11.06

%

 

 

 

 

Efficiency ratio

 

59.00

%

 

 

54.82

%

 

 

 

 

Balance Sheet Data

Total loans outstanding were $6.7 billion as of September 30, 2024, a decrease of $24.8 million or 0.4% over September 30, 2023, and decreased by $58.6 million or 3.5% annualized as compared to the trailing quarter ended June 30, 2024. Investments increased by $30.4 million and decreased by $216.7 million for the three and twelve month periods ended September 30, 2024, and ended the quarter with a balance of $2.12 billion or 21.5% of total assets. Quarterly average earning assets to quarterly total average assets was 92.0% on September 30, 2024, compared to 91.7% at September 30, 2023. The loan-to-deposit ratio was 83.2% on September 30, 2024, as compared to 83.8% at September 30, 2023. The Company did not utilize brokered deposits during 2024 or 2023 and continues to rely on organic deposit customers and short-term borrowings to fund cash flow timing differences.

Total shareholders' equity increased by $64.0 million during the quarter ended September 30, 2024, as net income of $29.1 million and a $44.5 million decrease in accumulated other comprehensive losses was partially offset by cash dividend payments on common stock of approximately $10.9 million. As a result, the Company’s book value grew to $37.55 per share at September 30, 2024, compared to $32.18 at September 30, 2023. The Company’s tangible book value per share, a non-GAAP measure, calculated by subtracting goodwill and other intangible assets from total shareholders’ equity and dividing that sum by total shares outstanding, was $28.09 per share at September 30, 2024, as compared to $22.67 at September 30, 2023. Changes in the fair value of available-for-sale investment securities, net of deferred taxes continue to create moderate levels of volatility in tangible book value per share.

Trailing Quarter Balance Sheet Change

Ending balances

September 30,
2024

 

June 30,
2024

 

 

 

Annualized
% Change

(dollars in thousands)

 

 

$ Change

Total assets

$

9,823,890

 

$

9,741,399

 

$

82,491

 

 

3.4

%

Total loans

 

6,683,891

 

 

6,742,526

 

 

(58,635

)

 

(3.5

)

Total investments

 

2,116,469

 

 

2,086,090

 

 

30,379

 

 

5.8

 

Total deposits

 

8,037,091

 

 

8,050,230

 

 

(13,139

)

 

(0.7

)

Total other borrowings

 

266,767

 

 

247,773

 

 

18,994

 

 

30.7

 

Loans outstanding decreased by $58.6 million or 3.5% on an annualized basis during the quarter ended September 30, 2024. During the quarter, loan originations/draws totaled approximately $351.5 million while payoffs/repayments of loans totaled $418.8 million, which compares to originations/draws and payoffs/repayments during the trailing quarter ended of $310.1 million and $368.7 million, respectively. Origination volume and activity levels remain slightly lower relative to the comparative period in 2023 due in part to disciplined pricing and underwriting, as well as decreased borrower demand given economic uncertainties. The increase in payoffs/repayments as compared to the trailing quarter was spread amongst numerous borrowers, regions and loan types.

Investment security balances increased $30.4 million or 5.8% on an annualized basis during the quarter as a result of security purchases totaling $69.4 million, in addition to net increases in the market value of securities of $63.2 million, partially offset by net prepayments, and maturities, collectively totaling approximating $99.3 million and, to a lesser extent, sales totaling $3.0 million. Investment security purchases were comprised of floating rate instruments tied to SOFR with an initial weighted average coupon of 6.68% and a weighted average life of 5.9 years. While management intends to primarily utilize cash flows from the investment security portfolio and organic deposit growth to support loan growth, excess liquidity will be utilized for purchases of investment securities to support net interest income growth and net interest margin expansion.

Deposit balances decreased by $13.1 million or 0.7% annualized during the period, primarily due to declines in interest-bearing demand deposits, partially offset by increases in time certificates and savings deposits.

Other borrowings totaled $266.8 million at September 30, 2024, representing a net increase of $19.0 million from the trailing quarter. However, on balance sheet liquidity increased during the quarter by $113.6 million to $320.1 million as of September 30, 2024.

Average Trailing Quarter Balance Sheet Change

Quarterly average balances for the period ended

September 30,
2024

 

June 30,
2024

 

 

 

Annualized

% Change

(dollars in thousands)

 

 

$ Change

 

Total assets

$

9,666,979

 

$

9,782,228

 

$

(115,249

)

 

(4.7

)%

Total loans

 

6,690,326

 

 

6,792,303

 

 

(101,977

)

 

(6.0

)

Total investments

 

2,108,359

 

 

2,141,291

 

 

(32,932

)

 

(6.2

)

Total deposits

 

8,020,936

 

 

8,024,441

 

 

(3,505

)

 

(0.2

)

Total other borrowings

 

175,268

 

 

325,604

 

 

(150,336

)

 

(184.7

)

Year Over Year Balance Sheet Change

Ending balances

As of September 30,

 

 

 

% Change

(dollars in thousands)

 

2024

 

 

2023

 

$ Change

 

Total assets

$

9,823,890

 

$

9,897,006

 

$

(73,116

)

 

(0.7

)%

Total loans

 

6,683,891

 

 

6,708,666

 

 

(24,775

)

 

(0.4

)

Total investments

 

2,116,469

 

 

2,333,162

 

 

(216,693

)

 

(9.3

)

Total deposits

 

8,037,091

 

 

8,009,643

 

 

27,448

 

 

0.3

 

Total other borrowings

 

266,767

 

 

537,975

 

 

(271,208

)

 

(50.4

)

Primary Sources of Liquidity

(dollars in thousands)

September 30, 2024

 

June 30, 2024

 

September 30, 2023

Borrowing capacity at correspondent banks and FRB

$

2,757,640

 

 

$

2,998,009

 

 

$

2,927,065

 

Less: borrowings outstanding

 

(250,000

)

 

 

(225,000

)

 

 

(500,000

)

Unpledged available-for-sale (AFS) investment securities

 

1,312,745

 

 

 

1,285,185

 

 

 

1,702,265

 

Cash held or in transit with FRB

 

274,908

 

 

 

163,809

 

 

 

72,049

 

Total primary liquidity

$

4,095,293

 

 

$

4,222,003

 

 

$

4,201,379

 

 

Estimated uninsured deposit balances

$

2,513,313

 

$

2,486,910

 

$

2,406,552

 

On September 30, 2024, the Company's primary sources of liquidity represented 51% of total deposits and 163% of estimated total uninsured (excluding collateralized municipal deposits and intercompany balances) deposits, respectively. As secondary sources of liquidity, the Company's held-to-maturity investment securities had a fair value of $112.0 million, including approximately $5.3 million in net unrealized losses.

Net Interest Income and Net Interest Margin

During the twelve-month period ended September 30, 2024, the Company's yield on total loans increased 32 basis points to 5.83% for the three months ended September 30, 2024, from 5.51% for the three months ended September 30, 2023. The tax equivalent yield on the Company's investment security portfolio was 3.46% for the quarter ended September 30, 2024, an increase of 7 basis points from the 3.39% for the three months ended September 30, 2023. The cost of total interest-bearing deposits and total interest-bearing liabilities increased by 87 basis points and 69 basis points, respectively, between the three-month periods ended September 30, 2024 and 2023. Since FOMC rate actions began in March 2022, the Company's cost of total deposits has increased 148 basis points which translates to a cycle to date deposit beta of 31.2%.

The Company continues to manage its cost of deposits through the use of various pricing and product mix strategies. As of September 30, 2024, December 31, 2023, and September 30, 2023, deposits priced utilizing these strategies totaled $1.4 billion, $1.3 billion and $1.2 billion, respectively, and carried weighted average rates of 3.80%, 3.80%, and 3.53%, respectively.

 

Three months ended

 

 

 

 

 

September 30,
2024

 

June 30,
2024

 

 

 

 

(dollars in thousands)

 

 

Change

 

% Change

Interest income

$

117,347

 

 

$

117,032

 

 

$

315

 

 

0.3

%

Interest expense

 

(34,736

)

 

 

(35,035

)

 

 

299

 

 

(0.9

)%

Fully tax-equivalent adjustment (FTE) (1)

 

269

 

 

 

275

 

 

 

(6

)

 

(2.2

)%

Net interest income (FTE)

$

82,880

 

 

$

82,272

 

 

$

608

 

 

0.7

%

Net interest margin (FTE)

 

3.71

%

 

 

3.68

%

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans discount accretion, net:

 

 

 

 

 

 

 

Amount (included in interest income)

$

1,018

 

 

$

850

 

 

$

168

 

 

19.8

%

Net interest margin less effect of acquired loan discount accretion(1)

 

3.66

%

 

 

3.64

%

 

 

0.02

%

 

 

 

Three months ended
September 30,

 

 

 

 

(dollars in thousands)

 

2024

 

 

 

2023

 

 

Change

 

% Change

Interest income

$

117,347

 

 

$

112,380

 

 

$

4,967

 

 

4.4

%

Interest expense

 

(34,736

)

 

 

(24,257

)

 

 

(10,479

)

 

43.2

%

Fully tax-equivalent adjustment (FTE) (1)

 

269

 

 

 

405

 

 

 

(136

)

 

(33.6

)%

Net interest income (FTE)

$

82,880

 

 

$

88,528

 

 

$

(5,648

)

 

(6.4

)%

Net interest margin (FTE)

 

3.71

%

 

 

3.88

%

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans discount accretion, net:

 

 

 

 

 

 

 

Amount (included in interest income)

$

1,018

 

 

$

1,324

 

 

$

(306

)

 

(23.1

)%

Net interest margin less effect of acquired loan discount accretion(1)

 

3.66

%

 

 

3.82

%

 

 

(0.16

)%

 

 

 

Nine months ended
September 30,

 

 

 

 

(dollars in thousands)

 

2024

 

 

 

2023

 

 

Change

 

% Change

Interest income

$

349,796

 

 

$

322,445

 

 

$

27,351

 

 

8.5

%

Interest expense

 

(102,452

)

 

 

(52,385

)

 

 

(50,067

)

 

95.6

%

Fully tax-equivalent adjustment (FTE) (1)

 

819

 

 

 

1,176

 

 

 

(357

)

 

(30.4

)%

Net interest income (FTE)

$

248,163

 

 

$

271,236

 

 

$

(23,073

)

 

(8.5

)%

Net interest margin (FTE)

 

3.69

%

 

 

4.01

%

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans discount accretion, net:

 

 

 

 

 

 

 

Amount (included in interest income)

$

3,200

 

 

$

4,192

 

 

$

(992

)

 

(23.7

)%

Net interest margin less effect of acquired loan discount accretion(1)

 

3.64

%

 

 

3.95

%

 

 

(0.31

)%

 

 

(1)

Certain information included herein is presented on a fully tax-equivalent (FTE) basis and / or to present additional financial details which may be desired by users of this financial information. The Company believes the use of these non-generally accepted accounting principles (non-GAAP) measures provide additional clarity in assessing its results, and the presentation of these measures are common practice within the banking industry. See additional information related to non-GAAP measures at the back of this document.

Analysis Of Change In Net Interest Margin On Earning Assets

 

Three months ended

 

Three months ended

 

Three months ended

(dollars in thousands)

September 30, 2024

 

June 30, 2024

 

September 30, 2023

 

Average

Balance

 

Income/

Expense

 

Yield/

Rate

 

Average

Balance

 

Income/

Expense

 

Yield/

Rate

 

Average

Balance

 

Income/

Expense

 

Yield/

Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

6,690,326

 

$

98,085

 

5.83

%

 

$

6,792,303

 

$

98,229

 

5.82

%

 

$

6,597,400

 

$

91,707

 

5.51

%

Investments-taxable

 

1,972,859

 

 

17,188

 

3.47

%

 

 

2,003,124

 

 

17,004

 

3.41

%

 

 

2,246,569

 

 

18,990

 

3.35

%

Investments-nontaxable (1)

 

135,500

 

 

1,166

 

3.42

%

 

 

138,167

 

 

1,190

 

3.46

%

 

 

182,766

 

 

1,755

 

3.81

%

Total investments

 

2,108,359

 

 

18,354

 

3.46

%

 

 

2,141,291

 

 

18,194

 

3.42

%

 

 

2,429,335

 

 

20,745

 

3.39

%

Cash at Fed Reserve and other banks

 

93,538

 

 

1,177

 

5.01

%

 

 

68,080

 

 

884

 

5.22

%

 

 

26,654

 

 

333

 

4.96

%

Total earning assets

 

8,892,223

 

 

117,616

 

5.26

%

 

 

9,001,674

 

 

117,307

 

5.24

%

 

 

9,053,389

 

 

112,785

 

4.94

%

Other assets, net

 

774,756

 

 

 

 

 

 

780,554

 

 

 

 

 

 

820,851

 

 

 

 

Total assets

$

9,666,979

 

 

 

 

 

$

9,782,228

 

 

 

 

 

$

9,874,240

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

1,736,442

 

$

6,132

 

1.40

%

 

$

1,769,370

 

$

6,215

 

1.41

%

 

$

1,751,625

 

$

3,916

 

0.89

%

Savings deposits

 

2,686,303

 

 

13,202

 

1.96

%

 

 

2,673,272

 

 

12,260

 

1.84

%

 

 

2,790,197

 

 

9,526

 

1.35

%

Time deposits

 

1,055,612

 

 

11,354

 

4.28

%

 

 

1,016,190

 

 

10,546

 

4.17

%

 

 

535,715

 

 

3,937

 

2.92

%

Total interest-bearing deposits

 

5,478,357

 

 

30,688

 

2.23

%

 

 

5,458,832

 

 

29,021

 

2.14

%

 

 

5,077,537

 

 

17,379

 

1.36

%

Other borrowings

 

175,268

 

 

2,144

 

4.87

%

 

 

325,604

 

 

4,118

 

5.09

%

 

 

449,274

 

 

5,106

 

4.51

%

Junior subordinated debt

 

101,150

 

 

1,904

 

7.49

%

 

 

101,128

 

 

1,896

 

7.54

%

 

 

101,070

 

 

1,772

 

6.96

%

Total interest-bearing liabilities

 

5,754,775

 

 

34,736

 

2.40

%

 

 

5,885,564

 

 

35,035

 

2.39

%

 

 

5,627,881

 

 

24,257

 

1.71

%

Noninterest-bearing deposits

 

2,542,579

 

 

 

 

 

 

2,565,609

 

 

 

 

 

 

2,965,564

 

 

 

 

Other liabilities

 

155,115

 

 

 

 

 

 

161,731

 

 

 

 

 

 

168,391

 

 

 

 

Shareholders’ equity

 

1,214,510

 

 

 

 

 

 

1,169,324

 

 

 

 

 

 

1,112,404

 

 

 

 

Total liabilities and shareholders’ equity

$

9,666,979

 

 

 

 

 

$

9,782,228

 

 

 

 

 

$

9,874,240

 

 

 

 

Net interest rate spread (1) (2)

 

 

 

 

2.86

%

 

 

 

 

 

2.85

%

 

 

 

 

 

3.23

%

Net interest income and margin (1) (3)

 

 

$

82,880

 

3.71

%

 

 

 

$

82,272

 

3.68

%

 

 

 

$

88,528

 

3.88

%

(1)

Fully taxable equivalent (FTE). All yields and rates are calculated using specific day counts for the period and year as applicable.

(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.

Net interest income (FTE) during the three months ended September 30, 2024, increased $0.6 million or 0.7% to $82.9 million compared to $82.3 million during the three months ended June 30, 2024. Net interest margin totaled 3.71% for the three months ended September 30, 2024, an increase of 3 basis points from the trailing quarter. The increase in net interest income is primarily attributed to a $2.0 million decline in interest expense on borrowings due to a $150.3 million decrease in the average balance of borrowings during the three months ended September 30, 2024 compared to the trailing quarter. This decline in borrowing expense was partially offset by an increase in deposit interest expense totaling $1.7 million related to changes in product mix, as customers continued to migrate towards higher yielding term deposit accounts during the quarter. Deposit cost increases during the current quarter were also influenced by continued competitive pricing pressures.

As compared to the same quarter in the prior year, average loan yields increased 32 basis points from 5.51% during the three months ended September 30, 2023, to 5.83% during the three months ended September 30, 2024. The accretion of discounts from acquired loans added 6 basis points and 8 basis points to loan yields during the quarters ended September 30, 2024 and September 30, 2023, respectively. The cost of interest-bearing deposits increased by 87 basis points between the quarter ended September 30, 2024, and the same quarter of the prior year. In addition, the average balance of noninterest-bearing deposits decreased by $423.0 million from the three-month average for the period ended September 30, 2023 amidst a continued migration of customer funds to interest-bearing products.

For the quarter ended September 30, 2024, the ratio of average total noninterest-bearing deposits to total average deposits was 31.7%, as compared to 32.0% and 36.9% for the quarters ended June 30, 2024 and September 30, 2023, respectively.

(dollars in thousands)

Nine months ended September 30, 2024

 

Nine months ended September 30, 2023

 

Average

Balance

 

Income/

Expense

 

Yield/

Rate

 

Average

Balance

 

Income/

Expense

 

Yield/

Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

Loans

$

6,755,916

 

$

292,799

 

5.79

%

 

$

6,493,585

 

$

260,868

 

5.37

%

Investments-taxable

 

2,034,336

 

 

52,021

 

3.42

%

 

 

2,328,883

 

 

56,681

 

3.25

%

Investments-nontaxable (1)

 

137,515

 

 

3,548

 

3.45

%

 

 

184,524

 

 

5,096

 

3.69

%

Total investments

 

2,171,851

 

 

55,569

 

3.42

%

 

 

2,513,407

 

 

61,777

 

3.29

%

Cash at Fed Reserve and other banks

 

58,792

 

 

2,247

 

5.11

%

 

 

27,606

 

 

976

 

4.73

%

Total earning assets

 

8,986,559

 

 

350,615

 

5.21

%

 

 

9,034,598

 

 

323,621

 

4.79

%

Other assets, net

 

781,406

 

 

 

 

 

 

832,501

 

 

 

 

Total assets

$

9,767,965

 

 

 

 

 

$

9,867,099

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

1,738,876

 

$

17,294

 

1.33

%

 

$

1,694,438

 

$

6,476

 

0.51

%

Savings deposits

 

2,670,555

 

 

36,362

 

1.82

%

 

 

2,818,817

 

 

20,616

 

0.98

%

Time deposits

 

961,577

 

 

29,582

 

4.11

%

 

 

413,359

 

 

6,889

 

2.23

%

Total interest-bearing deposits

 

5,371,008

 

 

83,238

 

2.07

%

 

 

4,926,614

 

 

33,981

 

0.92

%

Other borrowings

 

361,175

 

 

13,640

 

5.04

%

 

 

402,016

 

 

13,318

 

4.43

%

Junior subordinated debt

 

101,128

 

 

5,574

 

7.36

%

 

 

101,057

 

 

5,086

 

6.73

%

Total interest-bearing liabilities

 

5,833,311

 

 

102,452

 

2.35

%

 

 

5,429,687

 

 

52,385

 

1.29

%

Noninterest-bearing deposits

 

2,584,705

 

 

 

 

 

 

3,153,807

 

 

 

 

Other liabilities

 

163,704

 

 

 

 

 

 

179,483

 

 

 

 

Shareholders’ equity

 

1,186,245

 

 

 

 

 

 

1,104,122

 

 

 

 

Total liabilities and shareholders’ equity

$

9,767,965

 

 

 

 

 

$

9,867,099

 

 

 

 

Net interest rate spread (1) (2)

 

 

 

 

2.86

%

 

 

 

 

 

3.50

%

Net interest income and margin (1) (3)

 

 

$

248,163

 

3.69

%

 

 

 

$

271,236

 

4.01

%

(1)

Fully taxable equivalent (FTE). All yields and rates are calculated using specific day counts for the period and year as applicable.

(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.

Interest Rates and Earning Asset Composition

As of September 30, 2024, the Company's loan portfolio consisted of approximately $6.7 billion in outstanding principal with a weighted average coupon rate of 5.49%. During the three-month periods ending September 30, 2024, June 30, 2024, and September 30, 2023, the weighted average coupon on loan production in the quarter was 7.63%, 7.98% and 7.31%, respectively. Included in the September 30, 2024, total loans are adjustable rate loans totaling $4.2 billion, of which, $891.6 million are considered floating based on the Wall Street Prime index. In addition, the Company holds certain investment securities with fair values totaling $371.1 million which are subject to repricing on not less than a quarterly basis.

Asset Quality and Credit Loss Provisioning

During the three months ended September 30, 2024, the Company recorded a provision for credit losses of $0.2 million, as compared to $0.4 million during the trailing quarter, and $4.2 million during the third quarter of 2023.

 

Three months ended

 

Nine months ended

(dollars in thousands)

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

September 30,
2024

 

September 30,
2023

Addition to allowance for credit losses

320

 

335

 

3,120

 

4,670

 

16,415

Addition to (reversal of) reserve for unfunded loan commitments

(100

)

 

70

 

1,035

 

260

 

1,585

Total provision for credit losses

220

 

405

 

4,155

 

4,930

 

18,000

The provision for credit losses on loans of $0.3 million during the recent quarter was the result of net charge-offs approximating $0.1 million and decreases in reserves for qualitative factors due to improved concentration levels and overall lower loan balances, offset by a $3.7 million increase in specific reserves for individually evaluated credits within the commercial and industrial portfolio.

 

Three Months Ended September 30,

 

Nine months ended September 30,

(dollars in thousands)

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Balance, beginning of period

$

123,517

 

 

$

117,329

 

 

$

121,522

 

 

$

105,680

 

Provision for credit losses

 

320

 

 

 

3,120

 

 

 

4,670

 

 

 

16,415

 

Loans charged-off

 

(444

)

 

 

(5,357

)

 

 

(3,329

)

 

 

(7,391

)

Recoveries of previously charged-off loans

 

367

 

 

 

720

 

 

 

897

 

 

 

1,108

 

Balance, end of period

$

123,760

 

 

$

115,812

 

 

$

123,760

 

 

$

115,812

 

The allowance for credit losses (ACL) was $123.8 million or 1.85% of total loans as of September 30, 2024. The Company utilizes a forecast period of approximately eight quarters and obtains the forecast data from publicly available sources as of the balance sheet date. This forecast data continues to evolve and includes improving shifts in the magnitude of changes for both the unemployment and GDP factors leading up to the balance sheet date. Core inflation is slowing but prices remain elevated relative to wage increases, as reflected by higher living costs such as housing, energy and general services. Actions by the Federal Reserve to cut rates during 2024 and beyond may help improve this outlook overall, but the uncertainty associated with the extent and timing of these potential reductions has inhibited a material change to forecasted reserve levels. Furthermore, geopolitical risks remain elevated and appear to be getting worse, which may lead to further negative effects on domestic economic outcomes. As a result, management continues to believe that certain credit weaknesses are present in the overall economy and that it is appropriate to maintain a reserve level that incorporates such risk factors.

Loans past due 30 days or more increased by $7.5 million during the quarter ended September 30, 2024, to $37.9 million, as compared to $30.4 million at June 30, 2024. The majority of loans identified as past due are well-secured by collateral, and approximately $16.3 million is less than 90 days delinquent. Non-performing loans were $41.6 million at September 30, 2024, an increase of $8.9 million from $32.8 million as of June 30, 2024, and an increase of $11.8 million from $29.8 million as of September 30, 2023. Management continues to proactively work with these borrowers to identify actionable and appropriate resolution strategies which are customary for the industries. Of the $41.6 million loans designated as non-performing as of September 30, 2024, approximately $10.0 million are current or less than 30 days past due with respect to payments required under their existing loan agreements.

 

September 30,

 

% of Loans
Outstanding

 

June 30,

 

% of Loans
Outstanding

 

September 30,

 

% of Loans
Outstanding

(dollars in thousands)

 

2024

 

 

 

 

2024

 

 

 

 

2023

 

 

Risk Rating:

 

 

 

 

 

 

 

 

 

 

 

Pass

$

6,461,451

 

 

96.7

%

 

$

6,536,223

 

 

96.9

%

 

$

6,532,424

 

 

97.4

%

Special Mention

 

104,759

 

 

1.6

%

 

 

101,324

 

 

1.5

%

 

 

94,614

 

 

1.4

%

Substandard

 

117,681

 

 

1.8

%

 

 

104,979

 

 

1.6

%

 

 

81,628

 

 

1.2

%

Total

$

6,683,891

 

 

 

 

$

6,742,526

 

 

 

 

$

6,708,666

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified loans to total loans

 

1.76

%

 

 

 

 

1.56

%

 

 

 

 

1.22

%

 

 

Loans past due 30+ days to total loans

 

0.57

%

 

 

 

 

0.45

%

 

 

 

 

0.12

%

 

 

The ratio of classified loans to total loans of 1.76% as of September 30, 2024, increased 20 basis points from June 30, 2024, and increased 55 basis points from the comparative quarter ended 2023. The change in classified loans outstanding as compared to the trailing quarter totaled $16.1 million. Loans with the risk grade classification substandard increased by $12.7 million over the trailing quarter and relate primarily to the commercial and industrial portfolio. As a percentage of total loans outstanding, classified assets remain consistent with volumes experienced prior to the recent quantitative easing cycle spurred by the COVID pandemic and reflect management's historically conservative approach to credit risk monitoring. The Company's combined criticized loan balances totaled $222.4 million as of September 30, 2024, an increase of $46.2 million from September 30, 2023.

Outstanding balances on construction loans, which have historically been associated with elevated levels of risk, experienced balance reductions of $7.3 million during the current quarter and $44.9 million since September 30, 2023. These reductions were primarily associated with balances that were converted to term loans upon the completion of construction and achievement of stabilized occupancy, and were partially offset by new draws or originations.

Management continues to proactively assess the repayment capacity of borrowers that will be subject to rate resets in the near term. To date this analysis as well as management's observations of loans that have experienced a rate reset, have resulted in an insignificant need to provide concessions to borrowers.

As of September 30, 2024, other real estate owned consisted of 10 properties with a carrying value of approximately $2.8 million, compared to 10 properties with a carrying value of approximately $2.5 million as of June 30, 2024. Non-performing assets of $44.4 million at September 30, 2024, represented 0.45% of total assets, a change from the $35.3 million or 0.36% and $32.7 million or 0.33% as of June 30, 2024 and September 30, 2023, respectively.

Allocation of Credit Loss Reserves by Loan Type

 

As of September 30, 2024

 

As of June 30, 2024

 

As of September 30, 2023

(dollars in thousands)

Amount

 

% of Loans Outstanding

 

Amount

 

% of Loans Outstanding

 

Amount

 

% of Loans Outstanding

Commercial real estate:

 

 

 

 

 

 

 

 

 

 

 

CRE - Non-Owner Occupied

$

36,206

 

1.61

%

 

$

37,155

 

1.66

%

 

$

33,723

 

1.55

%

CRE - Owner Occupied

 

15,382

 

1.62

%

 

 

15,873

 

1.67

%

 

 

14,503

 

1.51

%

Multifamily

 

15,735

 

1.54

%

 

 

15,973

 

1.60

%

 

 

14,239

 

1.48

%

Farmland

 

4,016

 

1.50

%

 

 

4,031

 

1.52

%

 

 

4,210

 

1.51

%

Total commercial real estate loans

 

71,339

 

1.59

%

 

 

73,032

 

1.64

%

 

 

66,675

 

1.53

%

Consumer:

 

 

 

 

 

 

 

 

 

 

 

SFR 1-4 1st Liens

 

14,366

 

1.66

%

 

 

14,604

 

1.65

%

 

 

13,535

 

1.56

%

SFR HELOCs and Junior Liens

 

10,185

 

2.87

%

 

 

10,087

 

2.91

%

 

 

10,163

 

2.88

%

Other

 

2,953

 

4.70

%

 

 

2,983

 

4.30

%

 

 

2,920

 

4.44

%

Total consumer loans

 

27,504

 

2.14

%

 

 

27,674

 

2.13

%

 

 

26,618

 

2.07

%

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

14,453

 

2.98

%

 

 

12,128

 

2.21

%

 

 

12,290

 

2.05

%

Construction

 

7,119

 

2.58

%

 

 

7,466

 

2.63

%

 

 

8,097

 

2.52

%

Agricultural Production

 

3,312

 

2.30

%

 

 

3,180

 

2.27

%

 

 

2,125

 

1.72

%

Leases

 

33

 

0.44

%

 

 

37

 

0.44

%

 

 

7

 

0.09

%

Allowance for credit losses

 

123,760

 

1.85

%

 

 

123,517

 

1.83

%

 

 

115,812

 

1.73

%

Reserve for unfunded loan commitments

 

6,110

 

 

 

 

6,210

 

 

 

 

5,900

 

 

Total allowance for credit losses

$

129,870

 

1.92

%

 

$

129,727

 

1.92

%

 

$

121,712

 

1.81

%

In addition to the allowance for credit losses above, the Company has acquired various performing loans whose fair value as of the acquisition date was determined to be less than the principal balance owed on those loans. This difference represents the collective discount of credit, interest rate and liquidity measurements which is expected to be amortized over the life of the loans. As of September 30, 2024, the unamortized discount associated with acquired loans totaled $21.4 million, which, when combined with the total allowance for credit losses above, represents 2.26% of total loans.

Non-interest Income

 

Three months ended

 

 

 

 

(dollars in thousands)

September 30, 2024

 

June 30, 2024

 

Change

 

% Change

ATM and interchange fees

$

6,472

 

 

$

6,372

 

 

$

100

 

 

1.6

%

Service charges on deposit accounts

 

4,979

 

 

 

4,847

 

 

 

132

 

 

2.7

%

Other service fees

 

1,224

 

 

 

1,286

 

 

 

(62

)

 

(4.8

)%

Mortgage banking service fees

 

439

 

 

 

438

 

 

 

1

 

 

0.2

%

Change in value of mortgage servicing rights

 

(332

)

 

 

(147

)

 

 

(185

)

 

125.9

%

Total service charges and fees

 

12,782

 

 

 

12,796

 

 

 

(14

)

 

(0.1

)%

Increase in cash value of life insurance

 

786

 

 

 

831

 

 

 

(45

)

 

(5.4

)%

Asset management and commission income

 

1,502

 

 

 

1,359

 

 

 

143

 

 

10.5

%

Gain on sale of loans

 

549

 

 

 

388

 

 

 

161

 

 

41.5

%

Lease brokerage income

 

62

 

 

 

154

 

 

 

(92

)

 

(59.7

)%

Sale of customer checks

 

303

 

 

 

301

 

 

 

2

 

 

0.7

%

(Loss) gain on sale or exchange of investment securities

 

2

 

 

 

(45

)

 

 

47

 

 

(104.4

)%

(Loss) gain on marketable equity securities

 

356

 

 

 

(121

)

 

 

477

 

 

(394.2

)%

Other income

 

153

 

 

 

203

 

 

 

(50

)

 

(24.6

)%

Total other non-interest income

 

3,713

 

 

 

3,070

 

 

 

643

 

 

20.9

%

Total non-interest income

$

16,495

 

 

$

15,866

 

 

$

629

 

 

4.0

%

Total non-interest income increased $0.6 million or 4.0% to $16.5 million during the three months ended September 30, 2024, compared to $15.9 million during the quarter ended June 30, 2024. Net gains on the change in value of equity securities totaled $0.4 million during the quarter and included $0.3 million in benefit from the valuation change in Visa equity securities, which were also disposed of during the quarter. The remaining various components of non-interest income are largely consistent period over period.

 

Three months ended September 30,

 

 

 

 

(dollars in thousands)

 

2024

 

 

 

2023

 

 

Change

 

% Change

ATM and interchange fees

$

6,472

 

 

$

6,728

 

 

$

(256

)

 

(3.8

)%

Service charges on deposit accounts

 

4,979

 

 

 

4,851

 

 

 

128

 

 

2.6

%

Other service fees

 

1,224

 

 

 

1,142

 

 

 

82

 

 

7.2

%

Mortgage banking service fees

 

439

 

 

 

445

 

 

 

(6

)

 

(1.3

)%

Change in value of mortgage servicing rights

 

(332

)

 

 

(91

)

 

 

(241

)

 

264.8

%

Total service charges and fees

 

12,782

 

 

 

13,075

 

 

 

(293

)

 

(2.2

)%

Increase in cash value of life insurance

 

786

 

 

 

684

 

 

 

102

 

 

14.9

%

Asset management and commission income

 

1,502

 

 

 

1,141

 

 

 

361

 

 

31.6

%

Gain on sale of loans

 

549

 

 

 

382

 

 

 

167

 

 

43.7

%

Lease brokerage income

 

62

 

 

 

160

 

 

 

(98

)

 

(61.3

)%

Sale of customer checks

 

303

 

 

 

396

 

 

 

(93

)

 

(23.5

)%

(Loss) gain on sale or exchange of investment securities

 

2

 

 

 

—

 

 

 

2

 

 

—

%

(Loss) gain on marketable equity securities

 

356

 

 

 

(81

)

 

 

437

 

 

(539.5

)%

Other income

 

153

 

 

 

227

 

 

 

(74

)

 

(32.6

)%

Total other non-interest income

 

3,713

 

 

 

2,909

 

 

 

804

 

 

27.6

%

Total non-interest income

$

16,495

 

 

$

15,984

 

 

$

511

 

 

3.2

%

Non-interest income increased $0.5 million or 3.2% to $16.5 million during the three months ended September 30, 2024, compared to $16.0 million during the comparative quarter ended September 30, 2023. Elevated activity and volumes of assets under management drove an increase in asset management and commission income, in addition to the benefit mentioned above related to Visa stock. These increases were partially offset by a decline in interchange fees earned related to decreased customer activity in the third quarter of 2024 as compared to the equivalent quarter in 2023.

 

Nine months ended September 30,

 

 

 

 

(dollars in thousands)

 

2024

 

 

 

2023

 

 

Change

 

% Change

ATM and interchange fees

$

19,013

 

 

$

19,928

 

 

$

(915

)

 

(4.6

)%

Service charges on deposit accounts

 

14,489

 

 

 

12,863

 

 

 

1,626

 

 

12.6

%

Other service fees

 

3,876

 

 

 

3,300

 

 

 

576

 

 

17.5

%

Mortgage banking service fees

 

1,305

 

 

 

1,364

 

 

 

(59

)

 

(4.3

)%

Change in value of mortgage servicing rights

 

(468

)

 

 

(215

)

 

 

(253

)

 

117.7

%

Total service charges and fees

 

38,215

 

 

 

37,240

 

 

 

975

 

 

2.6

%

Increase in cash value of life insurance

 

2,420

 

 

 

2,274

 

 

 

146

 

 

6.4

%

Asset management and commission income

 

3,989

 

 

 

3,233

 

 

 

756

 

 

23.4

%

Gain on sale of loans

 

1,198

 

 

 

883

 

 

 

315

 

 

35.7

%

Lease brokerage income

 

377

 

 

 

332

 

 

 

45

 

 

13.6

%

Sale of customer checks

 

916

 

 

 

1,091

 

 

 

(175

)

 

(16.0

)%

(Loss) gain on sale or exchange of investment securities

 

(43

)

 

 

(164

)

 

 

121

 

 

(73.8

)%

(Loss) gain on marketable equity securities

 

207

 

 

 

(81

)

 

 

288

 

 

(355.6

)%

Other income

 

853

 

 

 

552

 

 

 

301

 

 

54.5

%

Total other non-interest income

 

9,917

 

 

 

8,120

 

 

 

1,797

 

 

22.1

%

Total non-interest income

$

48,132

 

 

$

45,360

 

 

$

2,772

 

 

6.1

%

Non-interest income increased $2.8 million or 6.1% to $48.1 million during the nine months ended September 30, 2024, compared to $45.4 million during the comparative nine months ended September 30, 2023. As noted above, interchange fees as driven by customer activities was elevated in the 2023 period and resulted in a decrease of $0.9 million as compared to the nine months ended September 30, 2024. Meanwhile, service charges on deposit accounts increased by $1.6 million or 12.6% as compared to the equivalent period in 2023 following $0.9 million in waived or reversed fees as a courtesy to customers in the 2023 year. As noted above, elevated activity within asset management and the gain on Visa stock further contributed to the overall improvement.

Non-interest Expense

 

Three months ended

 

 

 

 

(dollars in thousands)

September 30, 2024

 

June 30, 2024

 

Change

 

% Change

Base salaries, net of deferred loan origination costs

$

24,407

 

$

23,852

 

$

555

 

 

2.3

%

Incentive compensation

 

4,361

 

 

4,711

 

 

(350

)

 

(7.4

)%

Benefits and other compensation costs

 

6,782

 

 

6,838

 

 

(56

)

 

(0.8

)%

Total salaries and benefits expense

 

35,550

 

 

35,401

 

 

149

 

 

0.4

%

Occupancy

 

4,191

 

 

4,063

 

 

128

 

 

3.2

%

Data processing and software

 

5,258

 

 

5,094

 

 

164

 

 

3.2

%

Equipment

 

1,374

 

 

1,330

 

 

44

 

 

3.3

%

Intangible amortization

 

1,030

 

 

1,030

 

 

—

 

 

—

%

Advertising

 

1,152

 

 

819

 

 

333

 

 

40.7

%

ATM and POS network charges

 

1,712

 

 

1,987

 

 

(275

)

 

(13.8

)%

Professional fees

 

1,893

 

 

1,814

 

 

79

 

 

4.4

%

Telecommunications

 

507

 

 

558

 

 

(51

)

 

(9.1

)%

Regulatory assessments and insurance

 

1,256

 

 

1,144

 

 

112

 

 

9.8

%

Postage

 

335

 

 

340

 

 

(5

)

 

(1.5

)%

Operational loss

 

603

 

 

244

 

 

359

 

 

147.1

%

Courier service

 

542

 

 

559

 

 

(17

)

 

(3.0

)%

(Gain) loss on sale or acquisition of foreclosed assets

 

26

 

 

—

 

 

26

 

 

—

%

(Gain) loss on disposal of fixed assets

 

6

 

 

1

 

 

5

 

 

500.0

%

Other miscellaneous expense

 

4,052

 

 

3,955

 

 

97

 

 

2.5

%

Total other non-interest expense

 

23,937

 

 

22,938

 

 

999

 

 

4.4

%

Total non-interest expense

$

59,487

 

$

58,339

 

$

1,148

 

 

2.0

%

Average full-time equivalent staff

 

1,161

 

 

1,160

 

 

1

 

 

0.1

%

Total non-interest expense for the quarter ended September 30, 2024, increased $1.1 million or 2.0% to $59.5 million as compared to $58.3 million during the trailing quarter ended June 30, 2024. Total salaries and benefits expense increased by $0.1 million or 0.4%, reflecting the increase of $0.6 million in salaries, partially offset by a decline of $0.4 million in incentive compensation accruals related to production volumes of both loans and deposits. Advertising expense increased by $0.3 million as compared to the trailing quarter following increased spend on promotional activities, and operational losses increased by $0.4 million during the same period from increases in volume of fraud and robbery losses.

 

Three months ended September 30,

 

 

 

 

(dollars in thousands)

 

2024

 

 

2023

 

 

Change

 

% Change

Base salaries, net of deferred loan origination costs

$

24,407

 

$

23,616

 

 

$

791

 

 

3.3

%

Incentive compensation

 

4,361

 

 

4,391

 

 

 

(30

)

 

(0.7

)%

Benefits and other compensation costs

 

6,782

 

 

6,456

 

 

 

326

 

 

5.0

%

Total salaries and benefits expense

 

35,550

 

 

34,463

 

 

 

1,087

 

 

3.2

%

Occupancy

 

4,191

 

 

3,948

 

 

 

243

 

 

6.2

%

Data processing and software

 

5,258

 

 

5,246

 

 

 

12

 

 

0.2

%

Equipment

 

1,374

 

 

1,503

 

 

 

(129

)

 

(8.6

)%

Intangible amortization

 

1,030

 

 

1,590

 

 

 

(560

)

 

(35.2

)%

Advertising

 

1,152

 

 

881

 

 

 

271

 

 

30.8

%

ATM and POS network charges

 

1,712

 

 

1,606

 

 

 

106

 

 

6.6

%

Professional fees

 

1,893

 

 

1,752

 

 

 

141

 

 

8.0

%

Telecommunications

 

507

 

 

567

 

 

 

(60

)

 

(10.6

)%

Regulatory assessments and insurance

 

1,256

 

 

1,194

 

 

 

62

 

 

5.2

%

Postage

 

335

 

 

306

 

 

 

29

 

 

9.5

%

Operational loss

 

603

 

 

474

 

 

 

129

 

 

27.2

%

Courier service

 

542

 

 

492

 

 

 

50

 

 

10.2

%

(Gain) loss on sale or acquisition of foreclosed assets

 

26

 

 

(152

)

 

 

178

 

 

(117.1

)%

(Gain) loss on disposal of fixed assets

 

6

 

 

4

 

 

 

2

 

 

50.0

%

Other miscellaneous expense

 

4,052

 

 

4,004

 

 

 

48

 

 

1.2

%

Total other non-interest expense

 

23,937

 

 

23,415

 

 

 

522

 

 

2.2

%

Total non-interest expense

$

59,487

 

$

57,878

 

 

$

1,609

 

 

2.8

%

Average full-time equivalent staff

 

1,161

 

 

1,215

 

 

 

(54

)

 

(4.4

)%

Total non-interest expense increased $1.6 million or 2.8% to $59.5 million during the three months ended September 30, 2024, as compared to $57.9 million for the quarter ended September 30, 2023. Total salaries and benefits expense increased by $1.1 million or 3.2%, reflecting the increase of $0.8 million in salaries and $0.3 million in benefits and other costs.

 

Nine months ended September 30,

 

 

 

 

(dollars in thousands)

 

2024

 

 

 

2023

 

 

Change

 

% Change

Base salaries, net of deferred loan origination costs

$

72,279

 

 

$

70,675

 

 

$

1,604

 

 

2.3

%

Incentive compensation

 

12,329

 

 

 

11,663

 

 

 

666

 

 

5.7

%

Benefits and other compensation costs

 

20,647

 

 

 

19,402

 

 

 

1,245

 

 

6.4

%

Total salaries and benefits expense

 

105,255

 

 

 

101,740

 

 

 

3,515

 

 

3.5

%

Occupancy

 

12,205

 

 

 

12,099

 

 

 

106

 

 

0.9

%

Data processing and software

 

15,459

 

 

 

13,916

 

 

 

1,543

 

 

11.1

%

Equipment

 

4,060

 

 

 

4,322

 

 

 

(262

)

 

(6.1

)%

Intangible amortization

 

3,090

 

 

 

4,902

 

 

 

(1,812

)

 

(37.0

)%

Advertising

 

2,733

 

 

 

2,656

 

 

 

77

 

 

2.9

%

ATM and POS network charges

 

5,360

 

 

 

5,217

 

 

 

143

 

 

2.7

%

Professional fees

 

5,047

 

 

 

5,326

 

 

 

(279

)

 

(5.2

)%

Telecommunications

 

1,576

 

 

 

1,971

 

 

 

(395

)

 

(20.0

)%

Regulatory assessments and insurance

 

3,651

 

 

 

3,979

 

 

 

(328

)

 

(8.2

)%

Postage

 

983

 

 

 

916

 

 

 

67

 

 

7.3

%

Operational loss

 

1,199

 

 

 

1,999

 

 

 

(800

)

 

(40.0

)%

Courier service

 

1,581

 

 

 

1,314

 

 

 

267

 

 

20.3

%

(Gain) loss on sale or acquisition of foreclosed assets

 

(12

)

 

 

(152

)

 

 

140

 

 

(92.1

)%

(Gain) loss on disposal of fixed assets

 

12

 

 

 

22

 

 

 

(10

)

 

(45.5

)%

Other miscellaneous expense

 

12,131

 

 

 

12,688

 

 

 

(557

)

 

(4.4

)%

Total other non-interest expense

 

69,075

 

 

 

71,175

 

 

 

(2,100

)

 

(3.0

)%

Total non-interest expense

$

174,330

 

 

$

172,915

 

 

$

1,415

 

 

0.8

%

Average full-time equivalent staff

 

1,170

 

 

 

1,215

 

 

 

(45

)

 

(3.7

)%

Total non-interest expense increased $1.4 million or 0.8% to $174.3 million during the nine months ended September 30, 2024, as compared to $172.9 million for the nine months ended September 30, 2023. This was largely attributed to an increase of $3.5 million or 3.5% in total salaries and benefits expense to $105.3 million, from annual compensation adjustments and other routine increases in benefits and compensation. Salaries expense was also impacted by an increase in average compensation per employee as various strategic talent acquisitions were made in order to further prepare the Company to execute its growth objectives beyond $10 billion in total assets. Additionally, data processing and software expenses increased by $1.5 million or 11.1% related to ongoing investments in the Company's data management and security infrastructure. These increases were partially offset by declines in non-cash intangible amortization expense of $1.8 million or 37.0% and reductions in operational losses of $0.8 million or 40.0% due to non-recurring ATM burglary expenses totaling $0.7 million in the comparative period.

Provision for Income Taxes

The Company’s effective tax rate was 26.3% for the quarter ended September 30, 2024, as compared to 25.8% for the quarter ended June 30, 2024, and 28.4% for the year ended December 31, 2023. Differences between the Company's effective tax rate and applicable federal and state blended statutory rate of approximately 29.6% are due to the proportion of non-taxable revenues, non-deductible expenses, and benefits from tax credits as compared to the levels of pre-tax earnings.

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 and loan production offices in communities throughout 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 ATMs, online and mobile banking access. Brokerage services are provided by Tri Counties Advisors through affiliation with Raymond James Financial Services, Inc. Visit www.TriCountiesBank.com to learn more.

Forward-Looking Statements

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. 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 conditions of the United States economy in general and the strength of the local economies in which we conduct operations; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit or changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; the impacts of inflation, interest rate, market and monetary fluctuations on the Company's business condition and financial operating results; the impact of changes in financial services industry policies, laws and regulations; regulatory restrictions affecting our ability to successfully market and price our products to consumers; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learning; extreme weather, natural disasters and other catastrophic events that may or may not be caused by climate change and their effects on the Company's customers and the economic and business environments in which the Company operates; the impact of a slowing U.S. economy, decreases in housing and commercial real estate prices, and potentially increased unemployment on the performance of our loan portfolio, the market value of our investment securities and possible other-than-temporary impairment of securities held by us due to changes in credit quality or rates; the availability of, and cost of, sources of funding and the demand for our products; adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, commodities prices, inflationary pressures and labor shortages on the economic recovery and our business; the impacts of international hostilities, wars, terrorism or geopolitical events; adverse developments in the financial services industry generally such as the recent bank failures and any related impact on depositor behavior or investor sentiment; risks related to the sufficiency of liquidity; the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; the costs or effects of mergers, acquisitions or dispositions we may make, as well as whether we are able to obtain any required governmental approvals in connection with any such activities, or identify and complete favorable transactions in the future, and/or realize the anticipated financial and business benefits; the regulatory and financial impacts associated with exceeding $10 billion in total assets; the negative impact on our reputation and profitability in the event customers experience economic harm or in the event that regulatory violations are identified; the ability to execute our business plan in new markets; the future operating or financial performance of the Company, including our outlook for future growth and changes in the level and direction of our nonperforming assets and charge-offs; the appropriateness of the allowance for credit losses, including the assumptions made under our current expected credit losses model; any deterioration in values of California real estate, both residential and commercial; the effectiveness of the Company's asset management activities managing the mix of earning assets and in improving, resolving or liquidating lower-quality assets; the effect of changes in the financial performance and/or condition of our borrowers; changes in accounting standards and practices; changes in consumer spending, borrowing and savings habits; our ability to attract and maintain deposits and other sources of liquidity; the effects of changes in the level or cost of checking or savings account deposits on our funding costs and net interest margin; increasing noninterest expense and its impact on our financial performance; competition and innovation with respect to financial products and services by banks, financial institutions and non-traditional competitors including retail businesses and technology companies; the challenges of attracting, integrating and retaining key employees; the vulnerability of the Company's operational or security systems or infrastructure, the systems of third-party vendors or other service providers with whom the Company contracts, and the Company's customers to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and data/security breaches and the cost to defend against and respond to such incidents; the impact of the 2023 cyber security ransomware incident, including the pending litigation, on our operations and reputation; increased data security risks due to work from home arrangements and email vulnerability; failure to safeguard personal information, and any resulting litigation; the effect of a fall in stock market prices on our brokerage and wealth management businesses; the transition from the LIBOR to new interest rate benchmarks; the emergence or continuation of widespread health emergencies or pandemics; the Company’s potential judgments, orders, settlements, penalties, fines and reputational damage resulting from pending or future litigation and regulatory investigations, proceedings and enforcement actions; and our ability to manage the risks involved in the foregoing. There can be no assurance that future developments affecting us will be the same as those anticipated by management. 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, 2023, which has been filed with the Securities and Exchange Commission (the “SEC”) and all subsequent filings with the SEC under Sections 13(a), 13(c), 14, and 15(d) of the Securities Act of 1934, as amended. Such filings are also 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. We undertake no obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

TriCo Bancshares—Condensed Consolidated Financial Data (unaudited)

 

(dollars in thousands, except per share data)

Three months ended

 

September 30,
2024

 

June 30,
2024

 

March 31,
2024

 

December 31,
2023

 

September 30,
2023

Revenue and Expense Data

 

 

 

 

 

 

 

 

 

Interest income

$

117,347

 

 

$

117,032

 

 

$

115,417

 

 

$

115,909

 

 

$

112,380

 

Interest expense

 

34,736

 

 

 

35,035

 

 

 

32,681

 

 

 

29,292

 

 

 

24,257

 

Net interest income

 

82,611

 

 

 

81,997

 

 

 

82,736

 

 

 

86,617

 

 

 

88,123

 

Provision for credit losses

 

220

 

 

 

405

 

 

 

4,305

 

 

 

5,990

 

 

 

4,155

 

Noninterest income:

 

 

 

 

 

 

 

 

 

Service charges and fees

 

12,782

 

 

 

12,796

 

 

 

12,637

 

 

 

12,848

 

 

 

13,075

 

(Loss) gain on sale or exchange of investment securities

 

2

 

 

 

(45

)

 

 

—

 

 

 

(120

)

 

 

—

 

Other income

 

3,711

 

 

 

3,115

 

 

 

3,134

 

 

 

3,312

 

 

 

2,909

 

Total noninterest income

 

16,495

 

 

 

15,866

 

 

 

15,771

 

 

 

16,040

 

 

 

15,984

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

35,550

 

 

 

35,401

 

 

 

34,304

 

 

 

34,055

 

 

 

34,463

 

Occupancy and equipment

 

5,565

 

 

 

5,393

 

 

 

5,307

 

 

 

5,358

 

 

 

5,451

 

Data processing and network

 

6,970

 

 

 

7,081

 

 

 

6,768

 

 

 

6,880

 

 

 

6,852

 

Other noninterest expense

 

11,402

 

 

 

10,464

 

 

 

10,125

 

 

 

13,974

 

 

 

11,112

 

Total noninterest expense

 

59,487

 

 

 

58,339

 

 

 

56,504

 

 

 

60,267

 

 

 

57,878

 

Total income before taxes

 

39,399

 

 

 

39,119

 

 

 

37,698

 

 

 

36,400

 

 

 

42,074

 

Provision for income taxes

 

10,348

 

 

 

10,085

 

 

 

9,949

 

 

 

10,325

 

 

 

11,484

 

Net income

$

29,051

 

 

$

29,034

 

 

$

27,749

 

 

$

26,075

 

 

$

30,590

 

Share Data

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

0.88

 

 

$

0.88

 

 

$

0.83

 

 

$

0.78

 

 

$

0.92

 

Diluted earnings per share

$

0.88

 

 

$

0.87

 

 

$

0.83

 

 

$

0.78

 

 

$

0.92

 

Dividends per share

$

0.33

 

 

$

0.33

 

 

$

0.33

 

 

$

0.30

 

 

$

0.30

 

Book value per common share

$

37.55

 

 

$

35.62

 

 

$

35.06

 

 

$

34.86

 

 

$

32.18

 

Tangible book value per common share (1)

$

28.09

 

 

$

26.13

 

 

$

25.60

 

 

$

25.39

 

 

$

22.67

 

Shares outstanding

 

33,000,508

 

 

 

32,989,327

 

 

 

33,168,770

 

 

 

33,268,102

 

 

 

33,263,324

 

Weighted average shares

 

32,992,855

 

 

 

33,121,271

 

 

 

33,245,377

 

 

 

33,266,959

 

 

 

33,262,798

 

Weighted average diluted shares

 

33,136,858

 

 

 

33,243,955

 

 

 

33,370,118

 

 

 

33,351,737

 

 

 

33,319,291

 

Credit Quality

 

 

 

 

 

 

 

 

 

Allowance for credit losses to gross loans

 

1.85

%

 

 

1.83

%

 

 

1.83

%

 

 

1.79

%

 

 

1.73

%

Loans past due 30 days or more

$

37,888

 

 

$

30,372

 

 

$

16,474

 

 

$

19,415

 

 

$

8,072

 

Total nonperforming loans

$

41,636

 

 

$

32,774

 

 

$

34,242

 

 

$

31,891

 

 

$

29,799

 

Total nonperforming assets

$

44,400

 

 

$

35,267

 

 

$

36,735

 

 

$

34,595

 

 

$

32,651

 

Loans charged-off

$

444

 

 

$

1,610

 

 

$

1,275

 

 

$

749

 

 

$

5,357

 

Loans recovered

$

367

 

 

$

398

 

 

$

132

 

 

$

419

 

 

$

720

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

Return on average total assets

 

1.20

%

 

 

1.19

%

 

 

1.13

%

 

 

1.05

%

 

 

1.23

%

Return on average equity

 

9.52

%

 

 

9.99

%

 

 

9.50

%

 

 

9.43

%

 

 

10.91

%

Average yield on loans

 

5.83

%

 

 

5.82

%

 

 

5.72

%

 

 

5.64

%

 

 

5.52

%

Average yield on interest-earning assets

 

5.26

%

 

 

5.24

%

 

 

5.13

%

 

 

5.09

%

 

 

4.94

%

Average rate on interest-bearing deposits

 

2.23

%

 

 

2.14

%

 

 

1.83

%

 

 

1.62

%

 

 

1.36

%

Average cost of total deposits

 

1.52

%

 

 

1.45

%

 

 

1.21

%

 

 

1.05

%

 

 

0.86

%

Average cost of total deposits and other borrowings

 

1.59

%

 

 

1.59

%

 

 

1.47

%

 

 

1.28

%

 

 

1.05

%

Average rate on borrowings & subordinated debt

 

5.83

%

 

 

5.65

%

 

 

5.35

%

 

 

5.26

%

 

 

4.96

%

Average rate on interest-bearing liabilities

 

2.40

%

 

 

2.39

%

 

 

2.24

%

 

 

2.01

%

 

 

1.71

%

Net interest margin (fully tax-equivalent) (1)

 

3.71

%

 

 

3.68

%

 

 

3.68

%

 

 

3.81

%

 

 

3.88

%

Loans to deposits

 

83.16

%

 

 

83.76

%

 

 

85.14

%

 

 

86.73

%

 

 

83.76

%

Efficiency ratio

 

60.02

%

 

 

59.61

%

 

 

57.36

%

 

 

58.71

%

 

 

55.59

%

Supplemental Loan Interest Income Data

 

 

 

 

 

 

 

 

 

Discount accretion on acquired loans

$

1,018

 

 

$

850

 

 

$

1,332

 

 

$

1,459

 

 

$

1,324

 

All other loan interest income (1)

$

97,067

 

 

$

97,379

 

 

$

95,153

 

 

$

94,382

 

 

$

90,383

 

Total loan interest income (1)

$

98,085

 

 

$

98,229

 

 

$

96,485

 

 

$

95,841

 

 

$

91,707

 

(1)

Non-GAAP measure

TriCo Bancshares—Condensed Consolidated Financial Data (unaudited)

 

(dollars in thousands, except per share data)

 

Balance Sheet Data

September 30,
2024

 

June 30,
2024

 

March 31,
2024

 

December 31,
2023

 

September 30,
2023

Cash and due from banks

$

320,114

 

 

$

206,558

 

 

$

82,836

 

 

$

98,701

 

 

$

111,099

 

Securities, available for sale, net

 

1,981,960

 

 

 

1,946,167

 

 

 

2,076,494

 

 

 

2,155,138

 

 

 

2,176,854

 

Securities, held to maturity, net

 

117,259

 

 

 

122,673

 

 

 

127,811

 

 

 

133,494

 

 

 

139,058

 

Restricted equity securities

 

17,250

 

 

 

17,250

 

 

 

17,250

 

 

 

17,250

 

 

 

17,250

 

Loans held for sale

 

1,995

 

 

 

474

 

 

 

1,346

 

 

 

458

 

 

 

644

 

Loans:

 

 

 

 

 

 

 

 

 

Commercial real estate

 

4,487,524

 

 

 

4,461,111

 

 

 

4,443,768

 

 

 

4,394,802

 

 

 

4,367,445

 

Consumer

 

1,283,963

 

 

 

1,300,727

 

 

 

1,303,757

 

 

 

1,313,268

 

 

 

1,288,810

 

Commercial and industrial

 

484,763

 

 

 

548,625

 

 

 

549,780

 

 

 

586,455

 

 

 

599,757

 

Construction

 

276,095

 

 

 

283,374

 

 

 

348,981

 

 

 

347,198

 

 

 

320,963

 

Agriculture production

 

144,123

 

 

 

140,239

 

 

 

145,159

 

 

 

144,497

 

 

 

123,472

 

Leases

 

7,423

 

 

 

8,450

 

 

 

9,250

 

 

 

8,250

 

 

 

8,219

 

Total loans, gross

 

6,683,891

 

 

 

6,742,526

 

 

 

6,800,695

 

 

 

6,794,470

 

 

 

6,708,666

 

Allowance for credit losses

 

(123,760

)

 

 

(123,517

)

 

 

(124,394

)

 

 

(121,522

)

 

 

(115,812

)

Total loans, net

 

6,560,131

 

 

 

6,619,009

 

 

 

6,676,301

 

 

 

6,672,948

 

 

 

6,592,854

 

Premises and equipment

 

70,423

 

 

 

70,621

 

 

 

71,001

 

 

 

71,347

 

 

 

71,760

 

Cash value of life insurance

 

139,312

 

 

 

138,525

 

 

 

137,695

 

 

 

136,892

 

 

 

136,016

 

Accrued interest receivable

 

33,061

 

 

 

35,527

 

 

 

35,783

 

 

 

36,768

 

 

 

34,595

 

Goodwill

 

304,442

 

 

 

304,442

 

 

 

304,442

 

 

 

304,442

 

 

 

304,442

 

Other intangible assets

 

7,462

 

 

 

8,492

 

 

 

9,522

 

 

 

10,552

 

 

 

11,768

 

Operating leases, right-of-use

 

24,716

 

 

 

25,113

 

 

 

26,240

 

 

 

26,133

 

 

 

27,363

 

Other assets

 

245,765

 

 

 

246,548

 

 

 

247,046

 

 

 

245,966

 

 

 

273,303

 

Total assets

$

9,823,890

 

 

$

9,741,399

 

 

$

9,813,767

 

 

$

9,910,089

 

 

$

9,897,006

 

Deposits:

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

$

2,547,736

 

 

$

2,557,063

 

 

$

2,600,448

 

 

$

2,722,689

 

 

$

2,857,512

 

Interest-bearing demand deposits

 

1,708,726

 

 

 

1,791,466

 

 

 

1,742,875

 

 

 

1,731,814

 

 

 

1,746,882

 

Savings deposits

 

2,690,045

 

 

 

2,667,006

 

 

 

2,672,537

 

 

 

2,682,068

 

 

 

2,816,816

 

Time certificates

 

1,090,584

 

 

 

1,034,695

 

 

 

971,798

 

 

 

697,467

 

 

 

588,433

 

Total deposits

 

8,037,091

 

 

 

8,050,230

 

 

 

7,987,658

 

 

 

7,834,038

 

 

 

8,009,643

 

Accrued interest payable

 

11,664

 

 

 

12,018

 

 

 

10,224

 

 

 

8,445

 

 

 

6,688

 

Operating lease liability

 

26,668

 

 

 

27,122

 

 

 

28,299

 

 

 

28,261

 

 

 

29,527

 

Other liabilities

 

141,521

 

 

 

128,063

 

 

 

131,006

 

 

 

145,982

 

 

 

141,692

 

Other borrowings

 

266,767

 

 

 

247,773

 

 

 

392,409

 

 

 

632,582

 

 

 

537,975

 

Junior subordinated debt

 

101,164

 

 

 

101,143

 

 

 

101,120

 

 

 

101,099

 

 

 

101,080

 

Total liabilities

 

8,584,875

 

 

 

8,566,349

 

 

 

8,650,716

 

 

 

8,750,407

 

 

 

8,826,605

 

Common stock

 

693,176

 

 

 

691,878

 

 

 

696,464

 

 

 

697,349

 

 

 

696,369

 

Retained earnings

 

662,816

 

 

 

644,687

 

 

 

630,954

 

 

 

615,502

 

 

 

599,448

 

Accumulated other comprehensive loss, net of tax

 

(116,977

)

 

 

(161,515

)

 

 

(164,367

)

 

 

(153,169

)

 

 

(225,416

)

Total shareholders’ equity

$

1,239,015

 

 

$

1,175,050

 

 

$

1,163,051

 

 

$

1,159,682

 

 

$

1,070,401

 

Quarterly Average Balance Data

 

 

 

 

 

 

 

 

 

Average loans

$

6,690,326

 

 

$

6,792,303

 

 

$

6,785,840

 

 

$

6,746,153

 

 

$

6,597,400

 

Average interest-earning assets

$

8,892,223

 

 

$

9,001,674

 

 

$

9,066,537

 

 

$

9,064,483

 

 

$

9,053,389

 

Average total assets

$

9,666,979

 

 

$

9,782,228

 

 

$

9,855,797

 

 

$

9,879,355

 

 

$

9,874,240

 

Average deposits

$

8,020,936

 

 

$

8,024,441

 

 

$

7,821,044

 

 

$

7,990,993

 

 

$

8,043,101

 

Average borrowings and subordinated debt

$

276,418

 

 

$

426,732

 

 

$

685,802

 

 

$

617,046

 

 

$

550,344

 

Average total equity

$

1,214,510

 

 

$

1,169,324

 

 

$

1,174,592

 

 

$

1,097,431

 

 

$

1,112,404

 

Capital Ratio Data

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

15.6

%

 

 

15.2

%

 

 

15.0

%

 

 

14.7

%

 

 

14.5

%

Tier 1 capital ratio

 

13.8

%

 

 

13.4

%

 

 

13.2

%

 

 

12.9

%

 

 

12.7

%

Tier 1 common equity ratio

 

13.1

%

 

 

12.7

%

 

 

12.5

%

 

 

12.2

%

 

 

12.0

%

Tier 1 leverage ratio

 

11.6

%

 

 

11.2

%

 

 

11.0

%

 

 

10.7

%

 

 

10.6

%

Tangible capital ratio (1)

 

9.7

%

 

 

9.1

%

 

 

8.9

%

 

 

8.8

%

 

 

7.9

%

(1)

Non-GAAP measure

TriCo Bancshares—Non-GAAP Financial Measures (unaudited)

In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. Management has presented these non-GAAP financial measures in this press release because it believes that they provide useful and comparative information to assess trends in the Company's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below:

 

Three months ended

 

Nine months ended

(dollars in thousands)

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

September 30,
2024

 

September 30,
2023

Net interest margin

 

 

 

 

 

 

 

 

 

Acquired loans discount accretion, net:

 

 

 

 

 

 

 

 

 

Amount (included in interest income)

$

1,018

 

 

$

850

 

 

$

1,324

 

 

$

3,200

 

 

$

4,192

 

Effect on average loan yield

 

0.06

%

 

 

0.05

%

 

 

0.08

%

 

 

0.06

%

 

 

0.09

%

Effect on net interest margin (FTE)

 

0.05

%

 

 

0.04

%

 

 

0.06

%

 

 

0.05

%

 

 

0.06

%

Net interest margin (FTE)

 

3.71

%

 

 

3.68

%

 

 

3.88

%

 

 

3.69

%

 

 

4.01

%

Net interest margin less effect of acquired loan discount accretion (Non-GAAP)

 

3.66

%

 

 

3.64

%

 

 

3.82

%

 

 

3.64

%

 

 

3.95

%

 

Three months ended

 

Nine months ended

(dollars in thousands)

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

September 30,
2024

 

September 30,
2023

Pre-tax pre-provision return on average assets or equity

Net income (GAAP)

$

29,051

 

 

$

29,034

 

 

$

30,590

 

 

$

85,834

 

 

$

91,315

 

Exclude provision for income taxes

 

10,348

 

 

 

10,085

 

 

 

11,484

 

 

 

30,382

 

 

 

33,190

 

Exclude provision for credit losses

 

220

 

 

 

405

 

 

 

4,155

 

 

 

4,930

 

 

 

18,000

 

Net income before income tax and provision expense (Non-GAAP)

$

39,619

 

 

$

39,524

 

 

$

46,229

 

 

$

121,146

 

 

$

142,505

 

 

 

 

 

 

 

 

 

 

 

Average assets (GAAP)

$

9,666,979

 

 

$

9,782,228

 

 

$

9,874,240

 

 

$

9,767,965

 

 

$

9,867,099

 

Average equity (GAAP)

$

1,214,510

 

 

$

1,169,324

 

 

$

1,112,404

 

 

$

1,186,245

 

 

$

1,104,122

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (GAAP) (annualized)

 

1.20

%

 

 

1.19

%

 

 

1.23

%

 

 

1.17

%

 

 

1.24

%

Pre-tax pre-provision return on average assets (Non-GAAP) (annualized)

 

1.63

%

 

 

1.63

%

 

 

1.86

%

 

 

1.66

%

 

 

1.93

%

Return on average equity (GAAP) (annualized)

 

9.52

%

 

 

9.99

%

 

 

10.91

%

 

 

9.67

%

 

 

11.06

%

Pre-tax pre-provision return on average equity (Non-GAAP) (annualized)

 

12.98

%

 

 

13.59

%

 

 

16.49

%

 

 

13.64

%

 

 

17.26

%

 

Three months ended

 

Nine months ended

(dollars in thousands)

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

September 30,
2024

 

September 30,
2023

Return on tangible common equity

 

 

 

 

 

 

 

 

 

Average total shareholders' equity

$

1,214,510

 

 

$

1,169,324

 

 

$

1,112,404

 

 

$

1,186,245

 

 

$

1,104,122

 

Exclude average goodwill

 

304,442

 

 

 

304,442

 

 

 

304,442

 

 

 

304,442

 

 

 

304,442

 

Exclude average other intangibles

 

8,093

 

 

 

9,007

 

 

 

12,563

 

 

 

9,098

 

 

 

14,219

 

Average tangible common equity (Non-GAAP)

$

901,975

 

 

$

855,875

 

 

$

795,399

 

 

$

872,705

 

 

$

785,461

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

$

29,051

 

 

$

29,034

 

 

$

30,590

 

 

$

85,834

 

 

$

91,315

 

Exclude amortization of intangible assets, net of tax effect

 

725

 

 

 

725

 

 

 

1,120

 

 

 

2,175

 

 

 

3,453

 

Tangible net income available to common shareholders (Non-GAAP)

$

29,776

 

 

$

29,759

 

 

$

31,710

 

 

$

88,009

 

 

$

94,768

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (GAAP) (annualized)

 

9.52

%

 

 

9.99

%

 

 

10.91

%

 

 

9.67

%

 

 

11.06

%

Return on average tangible common equity (Non-GAAP)

 

13.13

%

 

 

13.98

%

 

 

15.82

%

 

 

13.47

%

 

 

16.13

%

 

Three months ended

(dollars in thousands)

September 30,
2024

 

June 30,
2024

 

March 31,
2024

 

December 31,
2023

 

September 30,
2023

Tangible shareholders' equity to tangible assets

 

 

 

 

 

 

 

 

 

Shareholders' equity (GAAP)

$

1,239,015

 

 

$

1,175,050

 

 

$

1,163,051

 

 

$

1,159,682

 

 

$

1,070,401

 

Exclude goodwill and other intangible assets, net

 

311,904

 

 

 

312,934

 

 

 

313,964

 

 

 

314,994

 

 

 

316,210

 

Tangible shareholders' equity (Non-GAAP)

$

927,111

 

 

$

862,116

 

 

$

849,087

 

 

$

844,688

 

 

$

754,191

 

 

 

 

 

 

 

 

 

 

 

Total assets (GAAP)

$

9,823,890

 

 

$

9,741,399

 

 

$

9,813,767

 

 

$

9,910,089

 

 

$

9,897,006

 

Exclude goodwill and other intangible assets, net

 

311,904

 

 

 

312,934

 

 

 

313,964

 

 

 

314,994

 

 

 

316,210

 

Total tangible assets (Non-GAAP)

$

9,511,986

 

 

$

9,428,465

 

 

$

9,499,803

 

 

$

9,595,095

 

 

$

9,580,796

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity to total assets (GAAP)

 

12.61

%

 

 

12.06

%

 

 

11.85

%

 

 

11.70

%

 

 

10.82

%

Tangible shareholders' equity to tangible assets (Non-GAAP)

 

9.75

%

 

 

9.14

%

 

 

8.94

%

 

 

8.80

%

 

 

7.87

%

 

Three months ended

(dollars in thousands)

September 30,
2024

 

June 30,
2024

 

March 31,
2024

 

December 31,
2023

 

September 30,
2023

Tangible common shareholders' equity per share

 

 

 

 

 

 

 

 

 

Tangible shareholders' equity (Non-GAAP)

$

927,111

 

$

862,116

 

$

849,087

 

$

844,688

 

$

754,191

 

 

 

 

 

 

 

 

 

 

Common shares outstanding at end of period

 

33,000,508

 

 

32,989,327

 

 

33,168,770

 

 

33,268,102

 

 

33,263,324

 

 

 

 

 

 

 

 

 

 

Common shareholders' equity (book value) per share (GAAP)

$

37.55

 

$

35.62

 

$

35.06

 

$

34.86

 

$

32.18

Tangible common shareholders' equity (tangible book value) per share (Non-GAAP)

$

28.09

 

$

26.13

 

$

25.60

 

$

25.39

 

$

22.67

 

Investor Contact
Peter G. Wiese, EVP & CFO, (530) 898-0300

Source: TriCo Bancshares