TriCo Bancshares Reports First Quarter 2026 Net Income of $33.7 Million, Diluted EPS of $1.04

Operating Results and Performance Ratios

Balance Sheet Data

Total loans outstanding were $7.1 billion as of March 31, 2026, an increase of $247.4 million or 3.6% over March 31, 2025, and a decrease of $42.9 million or 2.4% annualized as compared to the trailing quarter ended December 31, 2025. Investments increased by $28.7 million and decreased $108.0 million for the three- and twelve-month periods ended March 31, 2026, respectively, and ended the quarter with a balance of $1.87 billion or 18.8% of total assets. Quarterly average earning assets to quarterly total average assets was 91.9% on March 31, 2026, compared to 91.8% on March 31, 2025. The loan-to-deposit ratio was 84.1% on March 31, 2026, as compared to 83.1% on March 31, 2025. The Company did not utilize brokered deposits during 2026 or 2025 and continues to rely on organic deposit customers to fund cash flow timing differences.

Total shareholders' equity decreased by $4.0 million during the quarter ended March 31, 2026, as net income of $33.7 million was offset by a $4.6 million increase in accumulated other comprehensive losses, $11.5 million in cash dividends on common stock and $21.6 million in share repurchase activity. As a result, the Company’s book value increased to $41.49 per share at March 31, 2026, compared to $41.07 at December 31, 2025. 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 $31.82 per share at March 31, 2026, as compared to $31.52 at December 31, 2025.

Loans outstanding decreased by $42.9 million or 2.4% on an annualized basis during the quarter ended March 31, 2026. During the quarter, gross loan originations/draws totaled approximately $388.7 million while gross payoffs/repayments of loans totaled $442.2 million, which compares to gross originations/draws and gross payoffs/repayments during the trailing quarter ended of $502.8 million and $418.1 million, respectively. Origination volume contracted from the trailing quarter but expanded by comparison with the same quarter of prior years. However, the level of payoff and paydown was elevated during the quarter by comparison to both the trailing and prior year quarters. Domestically, the macro-economic outlook remains optimistic for borrowers following the passage of tax and spending legislation that is expected to promote continued economic expansion through the remainder of 2026. The activity within loan payoffs/repayments remains generally consistent with recent quarters and spread amongst numerous borrowers, regions and loan types.

Investment security balances increased $28.7 million or 6.2% on an annualized basis during the quarter as a result of purchases of $90.7 million, partially offset by net prepayments/maturities of $55.2 million and net decreases in the market value of securities of $6.6 million. Investment security purchases were comprised of fixed rate agency mortgage-backed securities. 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 $139.7 million or 6.8% annualized during the period. There were no deposits sold as of March 31, 2026, compared to $72.9 million as of the trailing quarter end.

Net Interest Income and Net Interest Margin

The Company's yield on loans for the fourth quarter was 5.78%, an increase of 1 basis point from 5.77% as of the trailing quarter end and an increase of 7 basis point as compared to 5.71% for the quarter ended March 31, 2025. The tax equivalent yield on the Company's investment security portfolio was 3.45% for the quarter ended March 31, 2026, an increase of 10 basis points from the trailing quarter end of 3.35% and an increase of 6 basis points from the 3.39% earned during the three months ended March 31, 2025. As compared to the trailing quarter, costs on interest-bearing deposits as well as the costs on interest-bearing liabilities both decreased by 5 basis points. The cost of total interest-bearing deposits decreased by 24 basis points, while the costs of total interest-bearing liabilities decreased by 33 basis points, respectively, between the three-month periods ended March 31, 2026 and 2025, respectively.

The FOMC left short-term interest rates unchanged during the current quarter, following 50 basis points in cumulative reduction during the trailing fourth quarter. The fully tax-equivalent net interest income and net interest margin was $91.5 million and 4.07%, respectively, for the quarter ended March 31, 2026, and was $92.5 million and 4.02%, respectively, for the trailing quarter ended December 31, 2025. More specifically, the net interest rate spread improved by 8 basis points to 3.41% for the quarter ended March 31, 2026, as compared to the trailing quarter, while the net interest margin improved by 5 basis points to 4.07% over the same period.

The Company continues to manage its cost of deposits through the use of various pricing and product mix strategies. As of March 31, 2026, December 31, 2025, and March 31, 2025, deposits priced utilizing these customized strategies totaled $1.0 billion, $898.9 million, and $927.6 million and carried weighted average rates of 3.06%, 3.05% and 3.43%, respectively.

Analysis Of Change in Net Interest Margin on Earning Assets