third quarter 2026
Filed Oct 21, 2026TriCo Bancshares reports third quarter 2026 net income of $38.0 million, diluted EPS of $1.18 and declares $0.36 cash dividend
Third-quarter net income, diluted EPS, net interest income, net interest margin and returns improved from both the trailing and prior-year quarters, supported by loan growth, higher asset yields, lower deposit costs and a benefit from credit losses. Merger-related expense increased and nonperforming assets rose.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest income, three months ended September 30, 2026GAAP | $96.55M | 3.1% | 7.8% |
| Net interest income (FTE), three months ended September 30, 2026other | $96.81M | 3.1% | 7.8% |
| Benefit from credit losses, three months ended September 30, 2026GAAP | $1.88M | (170.8)% | (380.7)% |
| Noninterest income, three months ended September 30, 2026GAAP | $20.17M | 10.5% | 12.0% |
| Service charges and fees, three months ended September 30, 2026GAAP | $14.27M | 2.0% | 3.8% |
| Other non-interest income, three months ended September 30, 2026GAAP | $5.89M | 38.7% | 38.4% |
| Noninterest expense, three months ended September 30, 2026GAAP | $66.48M | 5.7% | 10.0% |
| Merger and acquisition expenses, three months ended September 30, 2026GAAP | $3.87M | 355.3% | n/m |
| Provision for income taxes, three months ended September 30, 2026GAAP | $14.14M | 16.6% | 13.6% |
| Net income, three months ended September 30, 2026GAAP | $37.97M | 11.1% | 11.6% |
| Basic earnings per share, three months ended September 30, 2026GAAP | $1.19 | – | – |
| Diluted earnings per share, three months ended September 30, 2026GAAP | $1.18 | 11.3% | 13.5% |
| Return on average total assets, three months ended September 30, 2026GAAP | 1.50% | – | – |
| Return on average equity, three months ended September 30, 2026GAAP | 11.08% | – | – |
| Net interest margin (FTE), three months ended September 30, 2026other | 4.16% | – | – |
| Net interest margin less effect of acquired loan discount accretion, three months ended September 30, 2026non-GAAP | 4.11% | 0.04% | – |
| Efficiency ratio, three months ended September 30, 2026GAAP | 56.96% | – | – |
| Effective tax rate, three months ended September 30, 2026GAAP | 27.1% | – | – |
| Net income, nine months ended September 30, 2026GAAP | $105.8M | – | 20.4% |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $3.29 | – | 23.2% |
| Net interest income, nine months ended September 30, 2026GAAP | $281.4M | – | 8.8% |
| Noninterest income, nine months ended September 30, 2026GAAP | $55.44M | – | 8.4% |
| Noninterest expense, nine months ended September 30, 2026GAAP | $188.5M | – | 4.0% |
| Total assets, September 30, 2026GAAP | $9.98B | 1.9% | 1.0% |
| Total loans, gross, September 30, 2026GAAP | $7.41B | 5.4% annualized | 5.8% |
| Total deposits, September 30, 2026GAAP | $8.44B | 3.6% annualized | 1.3% |
| Total investments, September 30, 2026GAAP | $1.63B | (36.3) annualized | (12.0)% |
| Allowance for credit losses to gross loans, September 30, 2026GAAP | 1.73% | – | – |
| Nonperforming assets, September 30, 2026GAAP | $78.96M | – | – |
| Non-performing assets to total assets, September 30, 2026GAAP | 0.79% | – | – |
| Tangible book value per share, September 30, 2026non-GAAP | $31.93 | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- The Company declared a quarterly cash dividend of $0.36 (thirty-six cents) per share on its common stock, no par value, on October 20, 2026.
- The dividend is payable on November 27, 2026, to holders of record as of November 16, 2026.
- Cash dividends paid on common stock were $11.5 million during the quarter ended September 30, 2026.
- Dividends per share were $0.36 for the three months ended September 30, 2026 and $1.08 for the nine months ended September 30, 2026.
What drove it
- Loan balances increased $99.1 million or 5.4% annualized from the trailing quarter and increased $403.4 million or 5.8% from the same quarter of the prior year.
- Net interest income (FTE) increased primarily because interest income on earning assets increased $3.1 million, led by $3.8 million attributed to lending income.
- The yield on average earning assets was 5.35%, compared with 5.31% in the trailing quarter, while the average cost of total deposits was 1.26%, compared with 1.27% in the trailing quarter and 1.39% in the prior-year quarter.
- Average noninterest-bearing deposits increased $50.5 million from the three-month average for the period ended June 30, 2026, and represented 31.0% of total average deposits.
- The benefit from credit losses reflected a $1.3 million reduction in loss reserves associated with individually evaluated loans, improved risk ratings and general economic forecast data for collectively evaluated loan pools, net of $0.3 million in net charge-offs.
- Third-quarter other income included death benefit insurance proceeds totaling $2.2 million, compared with $0.6 million during the trailing quarter.
Concerns
- Noninterest expense increased $3.6 million or 5.7% from the trailing quarter, largely due to $3.9 million in merger and acquisition expenses related to First Hawaiian, Inc.
- Non-performing assets were $79.0 million, or 0.79% of total assets, compared with $75.6 million, or 0.76%, as of June 30, 2026.
- Total shareholders’ equity decreased $15.1 million during the quarter as net income of $38.0 million was offset by a $42.6 million increase in accumulated other comprehensive losses and $11.5 million in cash dividends paid.
- Book value per common share declined to $41.56 at September 30, 2026, from $42.03 at June 30, 2026, while tangible book value per share declined to $31.93 from $32.40.
- Investment security balances decreased $163.1 million during the quarter and ended at $1.63 billion, or 16.4% of total assets.
What to watch
- The pending merger with First Hawaiian Bank and the associated merger and acquisition expenses.
- Whether loan growth continues to be funded through organic deposit growth and investment portfolio cash flows.
- Net interest margin performance as loan yields, deposit pricing strategies, interest rates and acquired-loan discount accretion evolve.
- Credit quality trends, including nonperforming assets, nonperforming loans, classified loans and agricultural real estate secured and agricultural commercial loans.
- The effect of accumulated other comprehensive losses on shareholders’ equity and book value per common share.
Balance sheet and cash flow
- Cash and due from banks were $195,691 (dollars in thousands) as of September 30, 2026, compared with $105,221 (dollars in thousands) as of June 30, 2026 and $298,820 (dollars in thousands) as of September 30, 2025.
- Total shareholders’ equity was $1,328,450 (dollars in thousands) as of September 30, 2026, compared with $1,343,593 (dollars in thousands) as of June 30, 2026.
- Other borrowings were — as of September 30, 2026, compared with $10,519 (dollars in thousands) as of June 30, 2026 and $17,039 (dollars in thousands) as of September 30, 2025.
- Junior subordinated debt was $41,238 (dollars in thousands) as of September 30, 2026.
- Total risk-based capital ratio was 15.1%, Tier 1 capital ratio was 13.9%, Tier 1 common equity ratio was 13.4%, and Tier 1 leverage ratio was 12.2% as of September 30, 2026.
- The filing did not report operating cash flow or free cash flow.
Analysis
TriCo reported stronger third-quarter earnings. Net income was $37.967 million and diluted earnings per share were $1.18, compared with $34.169 million and $1.06 in the trailing quarter and $34.019 million and $1.04 in the prior-year quarter. For the first nine months, net income was $105.821 million and diluted earnings per share were $3.29, up from $87.924 million and $2.67 in the comparable 2025 period. Return on average assets reached 1.50% and return on average equity reached 11.08%, both above the trailing and prior-year quarter levels reported in the filing.
Core spread income improved. Net interest income was $96.546 million, while fully tax-equivalent net interest income was $96.805 million. Fully tax-equivalent net interest margin expanded to 4.16% from 4.11% in the trailing quarter and 3.92% in the prior-year quarter. The filing attributes the sequential increase in net interest income primarily to higher earning-asset interest income, led by lending income. Average loan yield rose to 5.87%, the yield on average earning assets increased to 5.35%, and average cost of total deposits declined to 1.26%.
Balance-sheet growth was led by loans, which reached $7.410 billion, up $99.1 million from June 30, 2026 and $403.4 million from September 30, 2025. Deposits increased $74.6 million sequentially to $8.443 billion. The loan-to-deposit ratio was 87.76%. Investment balances declined $163.1 million sequentially to $1.633 billion as prepayments and maturities and lower market values exceeded purchases. The company stated that it intends primarily to use investment portfolio cash flows and organic deposit growth to support loan growth.
Credit costs were favorable, with a $1.881 million benefit from credit losses, compared with a $2.655 million provision in the trailing quarter and a $670 thousand provision in the prior-year quarter. The allowance for credit losses to gross loans declined to 1.73%. Classified loans to total loans and loans past due 30 days or more to total loans both declined from the trailing quarter. However, nonperforming assets increased to $78.959 million, or 0.79% of total assets, and nonperforming loans increased to $69.573 million.
Fee income also rose, although the quarter included insurance proceeds. Noninterest income increased to $20.166 million, with other income increasing $1.552 million sequentially; the company attributed the movement largely to $2.2 million in death benefit insurance proceeds. Expenses increased to $66.483 million, principally because merger and acquisition expenses rose to $3.870 million from $850 thousand. These costs contributed to an efficiency ratio of 56.96%, above 56.25% in the trailing quarter. Equity declined during the quarter because accumulated other comprehensive losses and common dividends more than offset net income, reducing book value and tangible book value per share. The release provided no forward financial guidance.
Management, verbatim
We are very pleased with our strong third-quarter results. As we prepare for our merger with First Hawaiian Bank, we remain focused on serving our customers and delivering growth and strong financial results. This performance demonstrates the value Tri Counties Bank will bring to the combined bank. We are excited about the future and look forward to continuing our journey as ‘California’s Local Bank,’
Rick Smith, Chairman and CEO
I am deeply grateful to our customers, communities, vendors, employees, and shareholders for their enduring support, loyalty, and contributions throughout our 51-year history. It is a privilege to serve you, and we look to the future with confidence that Tri Counties Bank will continue to be a significant force in California banking.
Rick Smith, Chairman and CEO
Not in the filing
stated, not guessed- Total revenue
- Gross margin
- Operating income
- GAAP operating margin
- Non-GAAP earnings per share
- Operating cash flow
- Free cash flow
- Share repurchases
- Forward financial guidance
- Reportable operating segments
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.