TriCo Bancshares 2024年度报告

Dear Fellow Shareholders: Last year at this time,I wrote aboutthegroup of local farmers and businesspeoplewho–morethan 50 years ago-channeled their frustration with big banks intoa new venture that wouldbecome Tri Counties Bank.We remembertheenthusiasm and determination of those whoformedTri Counties Bank and now,upon the occasion of our50thanniversary, I’m remindedthat wecontinue to stand on the shoulders ofleaders such as Alex Vereschagin, Dewayne Caviness,theCasey family, DonaldMurphy, SankeyM.Hall, Jr., EverettBeich,Bob Steveson,Carroll Taresh andJoan Jones.As we gathered over the course of 2024to celebratethismilestone in our Company’shistory, Iwas–and continue to be-filled with immense pride and gratitude.In March2024, wekicked off our anniversary celebration withacontributionto support the Foundation for CaliforniaCommunity Colleges’Student Ambassadors. This incredible programhelpsstudents access food,housing, and other basic needs and resources,providing crucial supportand easing their pathwayto success.Throughout 2024and into early2025,anniversary events not onlymarkedamomentous occasionbutreflectedour rich historyandunderscoredour unwavering commitmentto the communities we serve across California. Over the years, we have witnessed significant changes in the banking landscape, including the riseof digital banking and the evolution of customer expectations. However, one thing has remainedconstant: our dedication tolocal businesses, consumersand communities. This anniversary is notjust a celebration of our past; it’s a reaffirmation of our mission to support the financial well-beingof our customers and to continue to be an integral part of the economic engine that drives theneighborhoods weserve. Muchink has been spilled before, during, and after the recent presidential election–thethirteenthsuch election to have occurred during the history of your Company–and many predictions havebeen offered regardingthe future course ofregulationinthe financial services industry.To be clear,we believe that much of the foundation of regulation in our industry is both essential andastabilizing force that makes the United Stateseconomy andfinancial systemthe envy of the world.This frameworkwas born out of a severe economic depression and testedover subsequentdecadesand inspiresthe confidence and trust ofthe many businesses and consumers we serve.Weremain hopeful thatregulationthatwouldbecumbersome or detrimental tobusinesses andconsumers will be reconsidered.We look forward topositiveand better-balancedproposals thatcontinue to supportbroadeconomic growth andthe banking industry. Financial HighlightsFor the full year 2024, TriCo Bancshares reported earnings of$114.9 million, or $3.46 per diluted share.This compares with earnings of $117.4 million, or $3.52 per diluted share in 2023. Thedramatic rise inshort-terminterest rates that began in2022 and concludedin mid-2023 continuestodepressnet interestincome,our largest revenue source,and ultimately our net income,asourloan portfolio continues to reprice and as the cost for deposits, our primary source of funding,adjuststo current market conditions and evolving customer behavior. Asillustrated in thetable above,thecost of interest-bearing deposits,thecriticalraw materialthatsupports lending,has increased bya total of 199basis points since 2022 while the yieldon loans–our primaryrevenue source–has increased byjust95 basis points.I noted in last year’s letter that“. . . as we contemplate the Federal Reserve maintaining interest rates ata level that is ‘higher forlonger’, we will likely continue to see pressure on our funding costs and ultimately, on our netinterest income”.Tofurtherillustrate this point, considerthatmore than 80% of the residentialmortgages in the United States have an interest rate at or below 5.00%,and 61% have rates below4.00%, even ascurrent mortgage rates are approximately6.75%.There’s no rush to pay downa loanwhen current rates are much higher! The unusually low rates(essentially 0.00%)we sawduringtheCOVIDpandemiccreatedbothdislocations and disinterest on the part of depositors.Dramatic swings in the value of anycommodity (oil, grains, etc.)cancreate short-term dislocations andthe same is true for money.When money has no earning power, depositors become indifferent betweena checking account, asavings account, oraCD,for example.With interest ratesnowseeminglysettling into anarrowerrangein late2024 andearly2025, we’renow seeingdepositor behavior that is moreconsistentwithlong termtrends,and this is a very healthy sign for banks. In short, the repricing of loans and deposits as interest rates adjust is simply part of our businessand we manage the Bank for successacross a broad range of interest rate scenarios. Ourcompany continues to be consistently profitable andhas built strong reserves and capital thatwill allow ustoweather economic challengesandremainthe partner of choice forsmallercommunity banks that are looking for a better strategicpath