TriCo Bancshares : Announces Quarterly Results
TCBK
For Immediate Release | January 23, 2025 | Chico, California
TriCo Bancshares reports fourth quarter 2024 net income of $29.0 million, diluted EPS of $0.88
4Q24 Financial Highlights
Executive Commentary:
"With the close of 2024 representing nearly 50 years of strong and steady value delivery to our stakeholders, we remain focused on our path forward. The next several years may bring a number of changes to the financial services industry and to Tri Counties Bank; however, we believe that these changes will likely create significant opportunity for us to further differentiate and elevate our performance," said Rick Smith, President and CEO.
Peter Wiese, EVP and CFO added, "Both net interest margin and net interest income expanded for the second consecutive quarter despite three Federal Funds rate cuts totaling 100 basis points since mid-September. These benefits were realized primarily through a reduction in funding costs and the deployment of balance sheet cash into higher yielding earning assets."
Selected Financial Highlights
The financial results reported in this document are preliminary and unaudited. Final financial results and other disclosures will be reported on Form 10-K for the period ended December 31, 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.
1
Operating Results and Performance Ratios
Three months ended
(dollars and shares in thousands, except per share data)
December 31,
September 30,
$ Change
% Change
2024
2024
Net interest income
$
84,090
$
82,611
$
1,479
1.8 %
Provision for credit losses
(1,702)
(220)
(1,482)
673.6 %
Noninterest income
16,275
16,495
(220)
(1.3)%
Noninterest expense
(59,775)
(59,487)
(288)
0.5 %
Provision for income taxes
(9,854)
(10,348)
494
(4.8)%
Net income
$
29,034
$
29,051
$
(17)
(0.1)%
Diluted earnings per share
$
0.88
$
0.88
$
-
- %
Dividends per share
$
0.33
$
0.33
$
-
- %
Average common shares
32,994
32,993
1
nm
Average diluted common shares
33,162
33,137
25
0.1 %
Return on average total assets
1.19 %
1.20 %
Return on average equity
9.30 %
9.52 %
Efficiency ratio
59.56 %
60.02 %
Three months ended
December 31,
(dollars and shares in thousands, except per share data)
2024
2023
$ Change
% Change
Net interest income
$
84,090
$
86,617
$
(2,527)
(2.9)%
Provision for credit losses
(1,702)
(5,990)
4,288
(71.6)%
Noninterest income
16,275
16,040
235
1.5 %
Noninterest expense
(59,775)
(60,267)
492
(0.8)%
Provision for income taxes
(9,854)
(10,325)
471
(4.6)%
Net income
$
29,034
$
26,075
$
2,959
11.3 %
Diluted earnings per share
$
0.88
$
0.78
$
0.10
12.8 %
Dividends per share
$
0.33
$
0.30
$
0.03
10.0 %
Average common shares
32,994
33,267
(273)
(0.8)%
Average diluted common shares
33,162
33,352
(190)
(0.6)%
Return on average total assets
1.19 %
1.05 %
Return on average equity
9.30 %
9.43 %
Efficiency ratio
59.56 %
58.71 %
Twelve months ended
December 31,
(dollars and shares in thousands)
2024
2023
$ Change
% Change
Net interest income
$
331,434
$
356,677
$
(25,243)
(7.1)%
Provision for credit losses
(6,632)
(23,990)
17,358
(72.4)%
Noninterest income
64,407
61,400
3,007
4.9 %
Noninterest expense
(234,105)
(233,182)
(923)
0.4 %
Provision for income taxes
(40,236)
(43,515)
3,279
(7.5)%
Net income
$
114,868
$
117,390
$
(2,522)
(2.1)%
Diluted earnings per share
$
3.46
$
3.52
$
(0.06)
(1.7)%
Dividends per share
$
1.32
$
1.20
$
0.12
10.0 %
Average common shares
33,088
33,261
(173)
(0.5)%
Average diluted common shares
33,230
33,355
(125)
(0.4)%
Return on average total assets
1.18 %
1.19 %
Return on average equity
9.57 %
10.65 %
Efficiency ratio
59.14 %
55.77 %
2
Balance Sheet Data
Total loans outstanding were $6.8 billion as of December 31, 2024, a decrease of $25.9 million or 0.4% over December 31, 2023, but an increase of $84.6 million or 5.1% annualized as compared to the trailing quarter ended September 30, 2024. Investments decreased by $79.9 million and $269.3 million for the three and twelve month periods ended December 31, 2024, respectively, and ended the quarter with a balance of $2.04 billion or 21.1% of total assets. Quarterly average earning assets to quarterly total average assets was 91.8% on December 31, 2024, compared to 91.6% at December 31, 2023. The loan-to-deposit ratio was 83.7% on December 31, 2024, as compared to 86.7% at December 31, 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 decreased by $18.1 million during the quarter ended December 31, 2024, as net income of $29.0 million was partially offset by a $35.5 million increase in accumulated other comprehensive losses and cash dividend payments on common stock of approximately $10.9 million. As a result, the Company's book value declined to $37.03 per share at December 31, 2024, compared to $37.55 at September 30, 2024. 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 $27.60 per share at December 31, 2024, as compared to $28.09 at September 30, 2024. 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
December 31,
September 30,
Annualized
(dollars in thousands)
2024
2024
$ Change
% Change
Total assets
$
9,673,728
$
9,823,890
$
(150,162)
(6.1)%
Total loans
6,768,523
6,683,891
84,632
5.1
Total investments
2,036,610
2,116,469
(79,859)
(15.1)
Total deposits
8,087,576
8,037,091
50,485
2.5
Total other borrowings
89,610
266,767
(177,157)
(265.6)
Loans outstanding increased by $84.6 million or 5.1% on an annualized basis during the quarter ended December 31, 2024. During the quarter, loan originations/draws totaled approximately $487.9 million while payoffs/repayments of loans totaled $408.5 million, which compares to originations/draws and payoffs/repayments during the trailing quarter ended of $351.1 million and $418.8 million, respectively. Origination volume was elevated relative to the comparative period in 2023 due in large part to a dip in benchmark interest rates leading to increased borrower demand. The activity within loan payoffs/repayments remains spread amongst numerous borrowers, regions and loan types.
Investment security balances decreased $79.9 million or 15.1% on an annualized basis during the quarter as a result of net decreases in the market value of securities of $53.1 million and net prepayments and maturities, collectively totaling approximating $91.0 million, offset partially by purchases totaling $64.8 million. There were no investment securities sold during the quarter. Investment security purchases were comprised of fixed rate agency mortgage backed securities and fixed rate agency collateralized mortgage obligations. 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 increased by $50.5 million or 2.5% annualized during the period, primarily due to increases in interest-bearing demand deposits and time certificates, partially offset by decreases in savings deposits.
Average Trailing Quarter Balance Sheet Change
Quarterly average balances for the period ended
December 31,
September 30,
Annualized
(dollars in thousands)
$ Change
2024
2024
% Change
Total assets
$
9,725,643
$
9,666,979
$
58,664
2.4 %
Total loans
6,720,732
6,690,326
30,406
1.8
Total investments
2,066,437
2,108,359
(41,922)
(8.0)
Total deposits
8,118,663
8,020,936
97,727
4.9
Total other borrowings
95,202
175,268
(80,066)
(182.7)
3
Year Over Year Balance Sheet Change
Ending balances
As of December 31,
(dollars in thousands)
2024
2023
$ Change
% Change
Total assets
$
9,673,728
$
9,910,089
$
(236,361)
(2.4)%
Total loans
6,768,523
6,794,470
(25,947)
(0.4)
Total investments
2,036,610
2,305,882
(269,272)
(11.7)
Total deposits
8,087,576
7,834,038
253,538
3.2
Total other borrowings
89,610
632,582
(542,972)
(85.8)
Primary Sources of Liquidity
(dollars in thousands)
December 31, 2024
September 30, 2024
December 31, 2023
Borrowing capacity at correspondent banks and FRB
$
2,821,678
$
2,757,640
$
2,927,065
Less: borrowings outstanding
(75,000)
(250,000)
(500,000)
Unpledged available-for-sale (AFS) investment securities
1,279,422
1,312,745
1,702,265
Cash held or in transit with FRB
96,395
274,908
72,049
Total primary liquidity
$
4,122,495
$
4,095,293
$
4,201,379
Estimated uninsured deposit balances
$
2,584,265
$
2,513,313
$
2,406,552
On December 31, 2024, the Company's primary sources of liquidity represented 51% of total deposits and 160% 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 $104.3 million, including approximately $7.5 million in net unrealized losses.
Net Interest Income and Net Interest Margin
The Company's yield on total loans increased 14 basis points to 5.78% for the three months ended December 31, 2024, from 5.64% for the three months ended December 31, 2023. The tax equivalent yield on the Company's investment security portfolio was 3.38% for the quarter ended December 31, 2024, a decrease of 9 basis points from the 3.47% for the three months ended December 31, 2023. The cost of total interest-bearing deposits and total interest-bearing liabilities increased by 53 basis points and 26 basis points, respectively, between the three-month periods ended December 31, 2024 and 2023. In September 2024, the FOMC began reducing short term rates and through December 2024 there were three rate cuts totaling 100 basis points. Net interest income and net interest margin increased in both the third and fourth quarters of 2024. More specifically, the fully tax-equivalent net interest income and net interest margin was $82.3 million and 3.68%, respectively for the quarter ended June 30, 2024, and was $84.4 million and 3.76%, respectively for the quarter ended December 31, 2024.
The Company continues to manage its cost of deposits through the use of various pricing and product mix strategies. As of December 31, 2024 and December 31, 2023, deposits priced utilizing these strategies totaled $1.05 billion and $1.3 billion and carried weighted average rates of 3.59% and 3.60%, respectively.
Three months ended
(dollars in thousands)
December 31,
September 30,
Change
% Change
2024
2024
Interest income
$
116,842
$
117,347
$
(505)
(0.4)%
Interest expense
(32,752)
(34,736)
1,984
(5.7)%
Fully tax-equivalent adjustment (FTE) (1)
266
269
(3)
(1.1)%
Net interest income (FTE)
$
84,356
$
82,880
$
1,476
1.8 %
Net interest margin (FTE)
3.76 %
3.71 %
Acquired loans discount accretion, net:
Amount (included in interest income)
$
1,129
$
1,018
$
111
10.9 %
Net interest margin less effect of acquired loan discount accretion(1)
3.71 %
3.66 %
0.05 %
4
Three months ended
December 31,
(dollars in thousands)
2024
2023
Change
% Change
Interest income
$
116,842
$
115,909
$
933
0.8 %
Interest expense
(32,752)
(29,292)
(3,460)
11.8 %
Fully tax-equivalent adjustment (FTE) (1)
266
360
(94)
(26.1)%
Net interest income (FTE)
$
84,356
$
86,977
$
(2,621)
(3.0)%
Net interest margin (FTE)
3.76 %
3.81 %
Acquired loans discount accretion, net:
Amount (included in interest income)
$
1,129
$
1,459
$
(330)
(22.6)%
Net interest margin less effect of acquired loan discount accretion(1)
3.71 %
3.75 %
(0.04)%
Twelve months ended
December 31,
(dollars in thousands)
2024
2023
Change
% Change
Interest income
$
466,638
$
438,354
$
28,284
6.5 %
Interest expense
(135,204)
(81,677)
(53,527)
65.5 %
Fully tax-equivalent adjustment (FTE) (1)
1,085
1,536
(451)
(29.4)%
Net interest income (FTE)
$
332,519
$
358,213
$
(25,694)
(7.2)%
Net interest margin (FTE)
3.71 %
3.96 %
Acquired loans discount accretion, net:
Amount (included in interest income)
$
4,329
$
5,651
$
(1,322)
(23.4)%
Net interest margin less effect of acquired loan discount accretion(1)
3.66 %
3.90 %
(0.24)%
5
Analysis Of Change In Net Interest Margin On Earning Assets
Three months ended
Three months ended
Three months ended
(dollars in thousands)
December 31, 2024
September 30, 2024
December 31, 2023
Average
Income/
Yield/
Average
Income/
Yield/
Average
Income/
Yield/
Balance
Expense
Rate
Balance
Expense
Rate
Balance
Expense
Rate
Assets
Loans
$
6,720,732
$
97,692
5.78 %
$
6,690,326
$
98,085
5.83 %
$
6,746,153
$
95,841
5.64 %
Investments-taxable
1,932,839
16,413
3.38 %
1,972,859
17,188
3.47 %
2,121,652
18,522
3.46 %
Investments-nontaxable (1)
133,598
1,152
3.43 %
135,500
1,166
3.42 %
173,583
1,561
3.57 %
Total investments
2,066,437
17,565
3.38 %
2,108,359
18,354
3.46 %
2,295,235
20,083
3.47 %
Cash at Fed Reserve and other banks
144,908
1,851
5.08 %
93,538
1,177
5.01 %
23,095
345
5.93 %
Total earning assets
8,932,077
117,108
5.22 %
8,892,223
117,616
5.26 %
9,047,233
116,269
5.09 %
Other assets, net
793,566
774,756
814,872
Total assets
$
9,725,643
$
9,666,979
$
9,879,355
Liabilities and shareholders' equity
Interest-bearing demand deposits
$
1,723,059
$
5,704
1.32 %
$
1,736,442
$
6,132
1.40 %
$
1,755,900
$
4,714
1.07 %
Savings deposits
2,699,084
12,666
1.87 %
2,686,303
13,202
1.96 %
2,765,679
10,828
1.55 %
Time deposits
1,111,024
11,518
4.12 %
1,055,612
11,354
4.28 %
652,709
5,564
3.38 %
Total interest-bearing deposits
5,533,167
29,888
2.15 %
5,478,357
30,688
2.23 %
5,174,288
21,106
1.62 %
Other borrowings
95,202
1,066
4.45 %
175,268
2,144
4.87 %
515,959
6,394
4.92 %
Junior subordinated debt
101,173
1,798
7.07 %
101,150
1,904
7.49 %
101,087
1,792
7.03 %
Total interest-bearing liabilities
5,729,542
32,752
2.27 %
5,754,775
34,736
2.40 %
5,791,334
29,292
2.01 %
Noninterest-bearing deposits
2,585,496
2,542,579
2,816,705
Other liabilities
169,083
155,115
173,885
Shareholders' equity
1,241,522
1,214,510
1,097,431
Total liabilities and shareholders'
$
9,725,643
$
9,666,979
$
9,879,355
equity
Net interest rate spread (1) (2)
2.95 %
2.86 %
3.09 %
Net interest income and margin (1) (3)
$
84,356
3.76 %
$
82,880
3.71 %
$
86,977
3.81 %
Net interest income (FTE) during the three months ended December 31, 2024, increased $1.5 million or 1.8% to $84.4 million compared to $82.9 million during the three months ended September 30, 2024. Net interest margin totaled 3.76% for the three months ended December 31, 2024, an increase of 5 basis points from the trailing quarter. The increase in net interest income is primarily attributed to a $1.1 million decline in interest expense on other borrowings due to a $80.1 million decrease in the average balance of borrowings and a $0.8 million decrease in interest expense on deposits from an improved product rate mix, during the three months ended December 31, 2024 as compared to the trailing quarter. This decline in interest expense was partially offset by a decrease in total interest income from earning assets totaling $0.5 million, primarily related to a decline in yields on loans and declines in the average balance of investments totaling $42.0 million, as compared to the trailing quarter.
As compared to the same quarter in the prior year, average loan yields increased 14 basis points from 5.64% during the three months ended December 31, 2023, to 5.78% during the three months ended December 31, 2024. The accretion of discounts from acquired loans added 6 basis points and 9 basis points to loan yields during the quarters ended December 31, 2024 and December 31, 2023, respectively. The cost of interest-bearing deposits increased by 53 basis points between the quarter ended December 31, 2024, and the same quarter of the prior year. In addition, the average balance of noninterest-bearing deposits decreased by $231.2 million from the three-month average for the period ended December 31, 2023 amidst a continued migration of customer funds to interest-bearing products.
For the quarter ended December 31, 2024, the ratio of average total noninterest-bearing deposits to total average deposits was 31.8%, as compared to 31.7% and 35.2% for the quarters ended September 30, 2024 and December 31, 2023, respectively.
6
(dollars in thousands)
Twelve months ended December 31, 2024
Twelve months ended December 31, 2023
Average
Income/
Yield/
Average
Income/
Yield/
Balance
Expense
Rate
Balance
Expense
Rate
Assets
Loans
$
6,747,072
$
390,491
5.79 %
$
6,557,246
$
356,710
5.44 %
Investments-taxable
2,008,823
68,434
3.41 %
2,272,301
75,203
3.31 %
Investments-nontaxable (1)
136,530
4,700
3.44 %
181,766
6,656
3.66 %
Total investments
2,145,353
73,134
3.41 %
2,454,067
81,859
3.34 %
Cash at Fed Reserve and other banks
80,439
4,098
5.09 %
26,469
1,321
4.99 %
Total earning assets
8,972,864
467,723
5.21 %
9,037,782
439,890
4.87 %
Other assets, net
784,462
832,407
Total assets
$
9,757,326
$
9,870,189
Liabilities and shareholders' equity
Interest-bearing demand deposits
$
1,734,900
$
22,998
1.33 %
$
1,709,930
$
11,190
0.65 %
Savings deposits
2,677,726
49,028
1.83 %
2,805,424
31,444
1.12 %
Time deposits
999,143
41,100
4.11 %
473,688
12,453
2.63 %
Total interest-bearing deposits
5,411,769
113,126
2.09 %
4,989,042
55,087
1.10 %
Other borrowings
294,318
14,706
5.00 %
430,736
19,712
4.58 %
Junior subordinated debt
101,139
7,372
7.29 %
101,064
6,878
6.81 %
Total interest-bearing liabilities
5,807,226
135,204
2.33 %
5,520,842
81,677
1.48 %
Noninterest-bearing deposits
2,584,904
3,068,839
Other liabilities
165,056
178,072
Shareholders' equity
1,200,140
1,102,436
Total liabilities and shareholders' equity
$
9,757,326
$
9,870,189
Net interest rate spread (1) (2)
2.88 %
3.39 %
Net interest income and margin (1) (3)
$
332,519
3.71 %
$
358,213
3.96 %
Interest Rates and Earning Asset Composition
As of December 31, 2024, the Company's loan portfolio consisted of approximately $6.8 billion in outstanding principal with a weighted average coupon rate of 5.47%. During the three-month periods ending December 31, 2024, September 30, 2024, and December 31, 2023, the weighted average coupon on loan production in the quarter was 6.94%, 7.63% and 7.31%, respectively. Included in the December 31, 2024, total loans are adjustable rate loans totaling $4.3 billion, of which, $907.1 million are considered floating based on the Wall Street Prime index. In addition, the Company holds certain investment securities with fair values totaling $355.4 million which are subject to repricing on not less than a quarterly basis.
Asset Quality and Credit Loss Provisioning
During the three months ended December 31, 2024, the Company recorded a provision for credit losses of $1.7 million, as compared to $0.2 million during the trailing quarter, and $6.0 million during the fourth quarter of 2023.
Three months ended
Twelve months ended
(dollars in thousands)
December 31,
September 30,
December 31,
December 31,
December 31,
2024
2024
2023
2024
2023
Addition to allowance for credit losses
1,812
320
6,040
6,482
22,455
Addition to (reversal of) reserve for unfunded
(110)
(100)
(50)
150
1,535
loan commitments
Total provision for credit losses
1,702
220
5,990
6,632
23,990
The provision for credit losses on loans of $1.8 million during the current quarter resulted from net charge-offs approximating $0.2 million and increases in general reserves, for both qualitative and quantitative factors, as a result of loan growth and, to a lesser extent, changes in loan risk grades. Changes in specific reserves on individually evaluated credits were not meaningful during the quarter.
7
Three Months Ended December 31,
Twelve months ended December 31,
(dollars in thousands)
2024
2023
2024
2023
Balance, beginning of period
$
123,760
$
115,812
$
121,522
$
105,680
Provision for credit losses
1,812
6,040
6,482
22,455
Loans charged-off
(722)
(749)
(4,051)
(8,140)
Recoveries of previously charged-off loans
516
419
1,413
1,527
Balance, end of period
$
125,366
$
121,522
$
125,366
$
121,522
The allowance for credit losses (ACL) was $125.4 million or 1.85% of total loans as of December 31, 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, 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 decreased by $5.2 million during the quarter ended December 31, 2024, to $32.7 million, as compared to $37.9 million at September 30, 2024. The majority of loans identified as past due are well-secured by collateral, and approximately $13.1 million is less than 90 days delinquent. Non-performing loans were $44.1 million at December 31, 2024, an increase of
$2.5 million from $41.6 million as of September 30, 2024, and an increase of $12.2 million from $31.9 million as of December 31, 2023. Management continues to proactively work with these borrowers to identify actionable and appropriate resolution strategies which are customary for the industries. Of the $44.1 million loans designated as non-performing as of December 31, 2024, approximately $13.2 million are current or less than 30 days past due with respect to payments required under their existing loan agreements.
December 31,
% of Loans
September 30,
% of Loans
December 31,
% of Loans
(dollars in thousands)
2024
2024
2023
Outstanding
Outstanding
Outstanding
Risk Rating:
Pass
$
6,539,560
96.6 % $
6,461,451
96.7 % $
6,603,161
97.2 %
Special Mention
110,935
1.6 %
104,759
1.6 %
103,812
1.5 %
Substandard
118,028
1.7 %
117,681
1.8 %
87,497
1.3 %
Total
$
6,768,523
$
6,683,891
$
6,794,470
Classified loans to total loans
1.74 %
1.76 %
1.29 %
Loans past due 30+ days to total loans
0.48 %
0.57 %
0.29 %
The ratio of classified loans to total loans of 1.74% as of December 31, 2024, increased 3 basis points from September 30, 2024, and increased 45 basis points from the comparative quarter ended 2023. The change in classified loans outstanding as compared to the trailing quarter totaled $6.5 million. Loans with the risk grade classification substandard increased by $0.3 million over the trailing quarter without any material changes in the mix of underlying collateral type. 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 $229.0 million as of December 31, 2024, an increase of $37.7 million from December 31, 2023.
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 December 31, 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 $2.8 million as of September 30, 2024. Non-performing assets of $46.9 million at December 31, 2024, represented 0.48% of total assets, a change from the $44.4 million or 0.45% and $34.6 million or 0.35% as of September 30, 2024 and December 31, 2023, respectively.
8
Allocation of Credit Loss Reserves by Loan Type
As of December 31, 2024
As of September 30, 2024
As of December 31, 2023
(dollars in thousands)
Amount
% of Loans
Amount
% of Loans
Amount
% of Loans
Outstanding
Outstanding
Outstanding
Commercial real estate:
CRE - Non-Owner Occupied
$
37,229
1.60 %
$
36,206
1.61 %
$
35,077
1.58 %
CRE - Owner Occupied
15,747
1.64 %
15,382
1.62 %
15,081
1.58 %
Multifamily
15,913
1.55 %
15,735
1.54 %
14,418
1.52 %
Farmland
3,960
1.49 %
4,016
1.50 %
4,288
1.58 %
Total commercial real estate loans
72,849
1.59 %
71,339
1.59 %
68,864
1.57 %
Consumer:
SFR 1-4 1st Liens
14,227
1.65 %
14,366
1.66 %
14,009
1.59 %
SFR HELOCs and Junior Liens
10,411
2.86 %
10,185
2.87 %
10,273
2.88 %
Other
2,825
4.87 %
2,953
4.70 %
3,171
4.34 %
Total consumer loans
27,463
2.14 %
27,504
2.14 %
27,453
2.09 %
Commercial and Industrial
14,397
3.05 %
14,453
2.98 %
12,750
2.17 %
Construction
7,224
2.58 %
7,119
2.58 %
8,856
2.55 %
Agricultural Production
3,403
2.24 %
3,312
2.30 %
3,589
2.48 %
Leases
30
0.44 %
33
0.44 %
10
0.12 %
Allowance for credit losses
125,366
1.85 %
123,760
1.85 %
121,522
1.79 %
Reserve for unfunded loan commitments
6,000
6,110
5,850
Total allowance for credit losses
$
131,366
$
129,870
1.92 %
$
127,372
1.87 %
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 December 31, 2024, the unamortized discount associated with acquired loans totaled $20.3 million, which, when combined with the total allowance for credit losses above, represents 2.24% of total loans.
Non-interest Income
Three months ended
(dollars in thousands)
December 31, 2024
September 30, 2024
Change
% Change
ATM and interchange fees
$
6,306
$
6,472
$
(166)
(2.6)%
Service charges on deposit accounts
4,962
4,979
(17)
(0.3)%
Other service fees
1,425
1,224
201
16.4 %
Mortgage banking service fees
434
439
(5)
(1.1)%
Change in value of mortgage servicing rights
(12)
(332)
320
(96.4)%
Total service charges and fees
13,115
12,782
333
2.6 %
Increase in cash value of life insurance
837
786
51
6.5 %
Asset management and commission income
1,584
1,502
82
5.5 %
Gain on sale of loans
334
549
(215)
(39.2)%
Lease brokerage income
78
62
16
25.8 %
Sale of customer checks
300
303
(3)
(1.0)%
(Loss) gain on sale or exchange of investment securities
-
2
(2)
(100.0)%
(Loss) gain on marketable equity securities
(81)
356
(437)
(122.8)%
Other income
108
153
(45)
(29.4)%
Total other non-interest income
3,160
3,713
(553)
(14.9)%
Total non-interest income
$
16,275
$
16,495
$
(220)
(1.3)%
Total non-interest income decreased $0.2 million or 1.3% to $16.3 million during the three months ended December 31, 2024, compared to $16.5 million during the quarter ended September 30, 2024. Net gain (loss) from the change in value of equity securities declined by $0.4 million as compared to the prior quarter, largely the result of $0.3 million in non-recurring benefit earned in the trailing quarter from the valuation change in Visa equity securities. The remaining components of non-interest income are largely consistent period over period.
9
Three months ended December 31,
(dollars in thousands)
2024
2023
Change
% Change
ATM and interchange fees
$
6,306
$
6,531
$
(225)
(3.4)%
Service charges on deposit accounts
4,962
4,732
230
4.9 %
Other service fees
1,425
1,432
(7)
(0.5)%
Mortgage banking service fees
434
444
(10)
(2.3)%
Change in value of mortgage servicing rights
(12)
(291)
279
(95.9)%
Total service charges and fees
13,115
12,848
267
2.1 %
Increase in cash value of life insurance
837
876
(39)
(4.5)%
Asset management and commission income
1,584
1,284
300
23.4 %
Gain on sale of loans
334
283
51
18.0 %
Lease brokerage income
78
109
(31)
(28.4)%
Sale of customer checks
300
292
8
2.7 %
(Loss) gain on sale or exchange of investment securities
-
(120)
120
(100.0)%
(Loss) gain on marketable equity securities
(81)
117
(198)
(169.2)%
Other income
108
351
(243)
(69.2)%
Total other non-interest income
3,160
3,192
(32)
(1.0)%
Total non-interest income
$
16,275
$
16,040
$
235
1.5 %
Non-interest income increased $0.2 million or 1.5% to $16.3 million during the three months ended December 31, 2024, compared to $16.0 million during the comparative quarter ended December 31, 2023. Elevated activity and volumes of assets under management drove an increase in asset management and commission income totaling $0.3 million or 23.4%.
Twelve months ended December 31,
(dollars in thousands)
2024
2023
Change
% Change
ATM and interchange fees
$
25,319
$
26,459
$
(1,140)
(4.3)%
Service charges on deposit accounts
19,451
17,595
1,856
10.5 %
Other service fees
5,301
4,732
569
12.0 %
Mortgage banking service fees
1,739
1,808
(69)
(3.8)%
Change in value of mortgage servicing rights
(480)
(506)
26
(5.1)%
Total service charges and fees
51,330
50,088
1,242
2.5 %
Increase in cash value of life insurance
3,257
3,150
107
3.4 %
Asset management and commission income
5,573
4,517
1,056
23.4 %
Gain on sale of loans
1,532
1,166
366
31.4 %
Lease brokerage income
455
441
14
3.2 %
Sale of customer checks
1,216
1,383
(167)
(12.1)%
(Loss) gain on sale or exchange of investment securities
(43)
(284)
241
(84.9)%
(Loss) gain on marketable equity securities
126
36
90
250.0 %
Other income
961
903
58
6.4 %
Total other non-interest income
13,077
11,312
1,765
15.6 %
Total non-interest income
$
64,407
$
61,400
$
3,007
4.9 %
Non-interest income increased $3.0 million or 4.9% to $64.4 million during the twelve months ended December 31, 2024, compared to $61.4 million during the comparative twelve months ended December 31, 2023. ATM and interchange fees declined in the 2024 period and resulted in a decrease of $1.1 million as compared to the twelve months ended December 31, 2024. Meanwhile, service charges on deposit accounts and other service fees increased by $1.9 million and $0.6 million, respectively, as compared to the equivalent period in 2023 following $0.9 million in waived or reversed fees as a courtesy to customers in the prior year. As noted above, elevated activity within asset management and the increases in value of Visa equity securities further contributed to the overall improvement in income during the year ended 2024.
10
Disclaimer
TriCo Bancshares published this content on January 23, 2025, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on January 23, 2025 at 16:12:08.097.