TriCo Bancshares (NASDAQ: TCBK) (the “Company”), parent company of Tri Counties Bank, today announced net income of $24.9 million for the quarter ended June 30, 2023, compared to $35.8 million during the trailing quarter ended March 31, 2023, and $31.4 million during the quarter ended June 30, 2022. Diluted earnings per share were $0.75 for the second quarter of 2023, compared to $1.07 for the first quarter of 2023 and $0.93 during the second quarter of 2022.
Financial Highlights
Performance highlights for the Company as of or for the three and six months ended June 30, 2023, included the following:
- For the quarter ended June 30, 2023, the Company’s return on average assets was 1.01%, while the return on average equity was 8.98%.
- Deposit balances for the quarter ended June 30, 2023, increased by $69.5 million as compared to March 31, 2023. Loan growth for the quarter exceeded deposit growth, resulting in the loan to deposit ratio increasing to 80.5% as of June 30, 2023, as compared to 80.0% as of the trailing quarter.
- The efficiency ratio was 54.4% and 55.67% for the six months ended June 30, 2023 and 2022, respectively.
- The provision for credit losses for loans and debt securities was approximately $9.7 million during the quarter ended June 30, 2023, as compared to a provision for credit losses of $4.2 million during the trailing quarter ended March 31, 2023, and a provision for credit losses of $2.1 million for the three-month period ended June 30, 2022.
- The allowance for credit losses to total loans was 1.80% as of June 30, 2023, compared to 1.69% as of the trailing quarter end, and 1.60% as of June 30, 2022. Non-performing assets to total assets were 0.41% on June 30, 2023, as compared to 0.20% as of March 31, 2023, and 0.15% at June 30, 2022.
Financial results reported in this document are preliminary. Final financial results and other disclosures will be reported in our Quarterly Report on Form 10-Q for the period ended June 30, 2023, 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.
Summary Results
The following is a summary of the components of the Company’s operating results and performance ratios for the periods indicated:
Three months ended | ||||||||||||||
June 30, | March 31, | |||||||||||||
(dollars and shares in thousands, except per share data) | 2023 | 2023 | $ Change | % Change | ||||||||||
Net interest income | $ | 88,601 | $ | 93,336 | $ | (4,735 | ) | (5.1 | )% | |||||
Provision for credit losses | (9,650 | ) | (4,195 | ) | (5,455 | ) | 130.0 | % | ||||||
Noninterest income | 15,741 | 13,635 | 2,106 | 15.4 | % | |||||||||
Noninterest expense | (61,243 | ) | (53,794 | ) | (7,449 | ) | 13.8 | % | ||||||
Provision for income taxes | (8,557 | ) | (13,149 | ) | 4,592 | (34.9 | )% | |||||||
Net income | $ | 24,892 | $ | 35,833 | $ | (10,941 | ) | (30.5 | )% | |||||
Diluted earnings per share | $ | 0.75 | $ | 1.07 | $ | (0.32 | ) | (29.9 | )% | |||||
Dividends per share | $ | 0.30 | $ | 0.30 | $ | — | — | % | ||||||
Average common shares | 33,219 | 33,296 | (77 | ) | (0.2 | )% | ||||||||
Average diluted common shares | 33,302 | 33,438 | (136 | ) | (0.4 | )% | ||||||||
Return on average total assets | 1.01 | % | 1.47 | % | ||||||||||
Return on average equity | 8.98 | % | 13.36 | % | ||||||||||
Efficiency ratio | 58.69 | % | 50.29 | % | ||||||||||
Three months ended
| ||||||||||||||
(dollars and shares in thousands, except per share data) | 2023 | 2022 | $ Change | % Change | ||||||||||
Net interest income | $ | 88,601 | $ | 85,046 | $ | 3,555 | 4.2 | % | ||||||
Provision for credit losses | (9,650 | ) | (2,100 | ) | (7,550 | ) | 359.5 | % | ||||||
Noninterest income | 15,741 | 16,430 | (689 | ) | (4.2 | )% | ||||||||
Noninterest expense | (61,243 | ) | (56,264 | ) | (4,979 | ) | 8.8 | % | ||||||
Provision for income taxes | (8,557 | ) | (11,748 | ) | 3,191 | (27.2 | )% | |||||||
Net income | $ | 24,892 | $ | 31,364 | $ | (6,472 | ) | (20.6 | )% | |||||
Diluted earnings per share | $ | 0.75 | $ | 0.93 | $ | (0.18 | ) | (19.4 | )% | |||||
Dividends per share | $ | 0.30 | $ | 0.25 | $ | 0.05 | 20.0 | % | ||||||
Average common shares | 33,219 | 33,561 | (342 | ) | (1.0 | )% | ||||||||
Average diluted common shares | 33,302 | 33,705 | (403 | ) | (1.2 | )% | ||||||||
Return on average total assets | 1.01 | % | 1.24 | % | ||||||||||
Return on average equity | 8.98 | % | 11.53 | % | ||||||||||
Efficiency ratio | 58.69 | % | 55.45 | % | ||||||||||
Six months ended
| ||||||||||||||
(dollars and shares in thousands) | 2023 | 2022 | $ Change | % Change | ||||||||||
Net interest income | $ | 181,937 | $ | 152,970 | $ | 28,967 | 18.9 | % | ||||||
Provision for credit losses | (13,845 | ) | (10,430 | ) | (3,415 | ) | 32.7 | % | ||||||
Noninterest income | 29,376 | 31,526 | (2,150 | ) | (6.8 | )% | ||||||||
Noninterest expense | (115,037 | ) | (102,711 | ) | (12,326 | ) | 12.0 | % | ||||||
Provision for income taxes | (21,706 | ) | (19,617 | ) | (2,089 | ) | 10.6 | % | ||||||
Net income | $ | 60,725 | $ | 51,738 | $ | 8,987 | 17.4 | % | ||||||
Diluted earnings per share | $ | 1.82 | $ | 1.62 | $ | 0.20 | 12.4 | % | ||||||
Dividends per share | $ | 0.60 | $ | 0.50 | $ | 0.10 | 20.0 | % | ||||||
Average common shares | 33,257 | 31,815 | 1,442 | 4.5 | % | |||||||||
Average diluted common shares | 33,371 | 31,963 | 1,408 | 4.4 | % | |||||||||
Return on average total assets | 1.24 | % | 1.10 | % | ||||||||||
Return on average equity | 11.13 | % | 9.93 | % | ||||||||||
Efficiency ratio | 54.44 | % | 55.67 | % | ||||||||||
Balance Sheet
Total loans outstanding, excluding PPP, grew to $6.5 billion as of June 30, 2023, an increase of 7.0% over the prior twelve months, and is entirely related to organic loan growth. As compared to March 31, 2023, total loans outstanding increased by $98.3 million or 6.1% annualized. Investments decreased to $2.49 billion as of June 30, 2023, an annualized decrease of 14.3% over the prior year quarter end. Quarterly average earning assets to quarterly total average assets were 91.6% on June 30, 2023, as compared to 91.4% and 92.2% at December 31, 2022, and June 30, 2022, respectively. The loan-to-deposit ratio was 80.5% on June 30, 2023, as compared to 80.0% and 69.8% at December 31, 2022, and June 30, 2022, respectively. During the current year to date period, and throughout the 2022 fiscal year, the Company held no brokered deposits and relied solely on short-term borrowings to fund cash flow timing differences.
Total shareholders' equity increased by $2.5 million during the quarter ended June 30, 2023, as a result of accumulated other comprehensive losses increasing by $11.9 million and cash dividend payments on common stock of approximately $10.0 million, offset by net income of $24.9 million. As a result, the Company’s book value was $32.86 per share at June 30, 2023, as compared to $32.84 and $31.25 at December 31, 2022 and June 30, 2022, respectively. 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 $23.30 per share at June 30, 2023, as compared to $23.22 and $21.41 at December 31, 2022, a
