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  4. TriCo Bancshares Reports Second Quarter 2026 Net Income of $34.2 Million, Diluted EPS of $1.06 Following Merger Announcement

TriCo Bancshares Reports Second Quarter 2026 Net Income of $34.2 Million, Diluted EPS of $1.06 Following Merger Announcement

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Key Terms

fte financial
A full-time equivalent (FTE) is a way to count labor by converting part-time and variable hours into the number of full-time workers they equal; for example, two half-time employees equal one FTE. Investors use FTEs to compare staffing levels, payroll exposure, and productivity across periods or companies, similar to comparing vehicle fleet size rather than counting drivers who work varying shifts. It helps standardize workforce cost and capacity measures.
net interest margin financial
Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.
allowance for credit losses financial
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
tangible book value per share financial
Tangible book value per share is the company's total physical and financial assets minus its liabilities and intangible items (like goodwill and brand value), divided by the number of outstanding shares. It gives investors a conservative, per‑share estimate of what would remain if the business sold only its hard assets and paid its debts—useful for judging whether a stock is priced above or below its underlying, tangible worth, like valuing a property by its bricks and cash rather than its reputation.
loan-to-deposit ratio financial
Loan-to-deposit ratio measures how much a bank has lent out compared with the money customers have deposited, expressed as a percentage. Think of it like the share of a household’s savings that has been loaned to others: a higher ratio can boost earnings but reduce cash on hand and increase risk, while a lower ratio means more liquidity but potentially lower returns—key for investors assessing a bank’s balance of profit and safety.
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2Q2026 Financial Highlights

  • Net income was $34.2 million or $1.06 per diluted share as compared to $33.7 million or $1.04 per diluted share in the trailing quarter, and an increase of $6.6 million or 24.1% from the second quarter of 2025
  • Net interest income (FTE) was $93.9 million, an increase of $2.4 million or 2.6% over the trailing quarter; net interest margin (FTE) was 4.11%, an increase of 4 basis points over 4.07% in the trailing quarter
  • Loan balances increased $242.9 million or 13.7% (annualized) from the trailing quarter and increased $352.1 million or 5.1% from the same quarter of the prior year
  • Deposit balances decreased $34.8 million or 1.7% (annualized) from the trailing quarter and $7.0 million or 0.1% from the same quarter of the prior year. One-way sell deposit balances totaled $68.8 million at quarter end, as compared to zero for both the trailing quarter and same quarter of the prior period
  • Average non-interest bearing deposits grew by 2.5% year over year and were 30.7% of total deposits at quarter end
  • Yield on average earning assets was 5.31%, an increase of 5 basis points over the 5.26% in the trailing quarter; yield on average loans was 5.85%, an increase of 7 basis points over the 5.78% in the trailing quarter
  • The average cost of total deposits was 1.27%, an increase of 1 basis point as compared to 1.26% in the trailing quarter, and a decrease of 10 basis points from 1.37% in the same quarter of the prior year

CHICO, Calif.--(BUSINESS WIRE)-- TriCo Bancshares (NASDAQ: TCBK):

Executive Commentary:

 

“Our second quarter results are highlighted by robust loan growth across our markets, reflecting the continued trust that customers and communities place in Tri Counties Bank. This continued growth, combined with the synergies we expect to develop over time with First Hawaiian Bank, further supports the merits and thesis of our recent merger announcement. In addition to the obvious size and scale that will be created, our capacity and resources to serve California communities will continue to expand following the union of TCBK and FHB,” said Rick Smith, Chairman and CEO.

 

Peter Wiese, EVP and CFO, added, “Growth in loans and earning assets, continued repricing of loans and investment securities, and disciplined balance sheet management all contributed to the expansion of net interest income and margin. Despite the slight increase in our efficiency ratio, after adjusting for merger-related expenses and elevated incentive compensation related to loan growth and overall bank performance, expense control also remains disciplined. While capital deployment remains top of mind for management, we expect that share repurchase activities, if any, will be limited given the merger announcement.”

Selected Financial Highlights

  • For the quarter ended June 30, 2026, the Company’s return on average assets was 1.37%, while the return on average equity was 10.15%; for the trailing quarter ended March 31, 2026, the Company’s return on average assets was 1.38%, while the return on average equity was 10.08%
  • Diluted earnings per share were $1.06 for the second quarter of 2026, compared to $1.04 for the trailing quarter and $0.84 during the second quarter of 2025
  • The loan to deposit ratio was 87.36% as of June 30, 2026, as compared to 84.11% for the trailing quarter end
  • The efficiency ratio was 56.25% for the quarter ended June 30, 2026, as compared to 54.55% for the trailing quarter, inclusive of $0.9 million in merger related expenses during the current quarter, versus none in the trailing quarter
  • The provision for credit losses was $2.7 million during the quarter ended June 30, 2026, as compared to $3.3 million during the trailing quarter
  • The allowance for credit losses (ACL) to total loans was 1.78% as of June 30, 2026, compared to 1.81% as of the trailing quarter end, and 1.79% as of June 30, 2025. Non-performing assets to total assets were 0.76% on June 30, 2026, as compared to 0.77% as of March 31, 2026, and 0.68% on June 30, 2025

The financial results reported in this document are preliminary and unaudited. Final financial results and other disclosures will be reported on Form 10-Q for the period ended June 30, 2026, 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.

Operating Results and Performance Ratios

 

Three months ended

 

 

 

 

 

 

 

(dollars and shares in thousands, except per share data)

June 30,

 

March 31,

 

 

 

 

 

2026

 

2026

 

$ Change

 

% Change

Net interest income

$

93,630

 

$

91,226

 

$

2,404

 

2.6

%

Provision for credit losses

 

(2,655

)

 

(3,325

)

 

670

 

(20.2

)%

Noninterest income

 

18,246

 

 

17,032

 

 

1,214

 

7.1

%

Noninterest expense

 

(62,925

)

 

(59,052

)

 

(3,873

)

6.6

%

Provision for income taxes

 

(12,127

)

 

(12,196

)

 

69

 

(0.6

)%

Net income

$

34,169

 

$

33,685

 

$

484

 

1.4

%

Diluted earnings per share

$

1.06

 

$

1.04

 

$

0.02

 

1.9

%

Dividends per share

$

0.36

 

$

0.36

 

$

—

 

—

%

Average common shares

 

31,924

 

 

32,195

 

 

(271

)

(0.8

)%

Average diluted common shares

 

32,107

 

 

32,391

 

 

(284

)

(0.9

)%

Return on average total assets

 

1.37

%

 

1.38

%

 

 

Return on average equity

 

10.15

%

 

10.08

%

 

 

Efficiency ratio

 

56.25

%

 

54.55

%

 

 

(dollars and shares in thousands, except per share data)

Three months ended
June 30,

 

 

 

 

2026

 

2025

 

$ Change

 

% Change

Net interest income

$

93,630

 

 

$

86,519

 

 

$

7,111

 

 

8.2

%

Provision for credit losses

 

(2,655

)

 

 

(4,665

)

 

 

2,010

 

 

(43.1

)%

Noninterest income

 

18,246

 

 

 

17,090

 

 

 

1,156

 

 

6.8

%

Noninterest expense

 

(62,925

)

 

 

(61,131

)

 

 

(1,794

)

 

2.9

%

Provision for income taxes

 

(12,127

)

 

 

(10,271

)

 

 

(1,856

)

 

18.1

%

Net income

$

34,169

 

 

$

27,542

 

 

$

6,627

 

 

24.1

%

Diluted earnings per share

$

1.06

 

 

$

0.84

 

 

$

0.22

 

 

26.2

%

Dividends per share

$

0.36

 

 

$

0.33

 

 

$

0.03

 

 

9.1

%

Average common shares

 

31,924

 

 

 

32,757

 

 

 

(833

)

 

(2.5

)%

Average diluted common shares

 

32,107

 

 

 

32,936

 

 

 

(829

)

 

(2.5

)%

Return on average total assets

 

1.37

%

 

 

1.13

%

 

 

 

 

Return on average equity

 

10.15

%

 

 

8.68

%

 

 

 

 

Efficiency ratio

 

56.25

%

 

 

59.00

%

 

 

 

 

(dollars and shares in thousands, except per share data)

Six months ended
June 30,

 

 

2026

 

2025

 

$ Change

 

% Change

Net interest income

$

184,856

 

 

$

169,061

 

 

$

15,795

 

 

9.3

%

Provision for credit losses

 

(5,980

)

 

 

(8,393

)

 

 

2,413

 

 

(28.8

)%

Noninterest income

 

35,278

 

 

 

33,163

 

 

 

2,115

 

 

6.4

%

Noninterest expense

 

(121,977

)

 

 

(120,716

)

 

 

(1,261

)

 

1.0

%

Provision for income taxes

 

(24,323

)

 

 

(19,210

)

 

 

(5,113

)

 

26.6

%

Net income

$

67,854

 

 

$

53,905

 

 

$

13,949

 

 

25.9

%

Diluted earnings per share

$

2.10

 

 

$

1.63

 

 

$

0.47

 

 

28.8

%

Dividends per share

$

0.72

 

 

$

0.66

 

 

$

0.06

 

 

9.1

%

Average common shares

 

32,059

 

 

 

32,854

 

 

 

(795

)

 

(2.4

)%

Average diluted common shares

 

32,248

 

 

 

33,033

 

 

 

(785

)

 

(2.4

)%

Return on average total assets

 

1.38

%

 

 

1.11

%

 

 

 

 

Return on average equity

 

10.11

%

 

 

8.61

%

 

 

 

 

Efficiency ratio

 

55.41

%

 

 

59.69

%

 

 

 

 

Balance Sheet Data

Total loans outstanding were $7.3 billion as of June 30, 2026, an increase of $352.1 million or 5.1% over June 30, 2025, and an increase of $242.9 million or 13.7% annualized as compared to the trailing quarter ended March 31, 2026. Investments decreased by $74.8 million and decreased $140.6 million for the three- and twelve-month periods ended June 30, 2026, respectively, and ended the quarter with a balance of $1.80 billion or 18.1% of total assets. Quarterly average earning assets to quarterly total average assets was 91.9% on June 30, 2026, compared to 91.8% on June 30, 2025. The loan-to-deposit ratio was 87.4% on June 30, 2026, as compared to 83.1% on June 30, 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 increased by $19.6 million during the quarter ended June 30, 2026, as net income of $34.2 million was partially offset by a $2.5 million increase in accumulated other comprehensive losses and $11.5 million in cash dividends on common stock. As a result, the Company’s book value increased to $42.03 per share at June 30, 2026, compared to $41.49 at March 31, 2026. 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 $32.40 per share at June 30, 2026, as compared to $31.82 at March 31, 2026.

Trailing Quarter Balance Sheet Change

 

 

Ending balances

June 30,
2026

 

March 31,
2026

 

$ Change

 

Annualized

% Change

(dollars in thousands)

 

 

Total assets

$

9,930,763

 

 

$

9,948,211

 

 

$

(17,448

)

 

(0.7

)%

Total loans

 

7,311,090

 

 

 

7,068,198

 

 

 

242,892

 

 

13.7

 

Total investments

 

1,796,373

 

 

 

1,871,138

 

 

 

(74,765

)

 

(16.0

)

Total deposits

 

8,368,830

 

 

 

8,403,588

 

 

 

(34,758

)

 

(1.7

)

Total other borrowings

 

10,519

 

 

 

11,455

 

 

 

(936

)

 

(32.7

)

Loans outstanding increased by $242.9 million or 13.7% on an annualized basis during the quarter ended June 30, 2026. During the quarter, gross loan originations/draws totaled approximately $632.9 million while gross payoffs/repayments of loans totaled $412.8 million, which compares to gross originations/draws and gross payoffs/repayments during the trailing quarter ended of $388.7 million and $442.2 million, respectively. Origination volume was elevated relative to historical norms, while repayments were in line with recent periods. 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.

Investment security balances decreased $74.8 million or 16.0% on an annualized basis during the quarter as a result of prepayments / maturities of $113.1 million and net decreases in the market value of securities of $3.6 million, partially offset by purchases totaling $42.1 million. Investment security purchases were comprised of fixed rate agency mortgage-backed securities and collateralized loan 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 decreased by $34.8 million or 1.7% annualized during the period, inclusive of $68.8 million in one-way sell activity at June 30, 2026, as a short-term method to reduce the Company's overall balance sheet size. There were no deposits sold in the trailing quarter or the same quarter of the prior year.

Average Trailing Quarter Balance Sheet Change

 

 

Quarterly average balances for the period ended

June 30,
2026

March 31,
2026

$ Change

Annualized

% Change

(dollars in thousands)

Total assets

$

9,967,548

 

$

9,912,485

 

$

55,063

 

2.2

%

Total loans

 

7,176,963

 

 

7,041,552

 

 

135,411

 

7.7

 

Total investments

 

1,856,574

 

 

1,855,250

 

 

1,324

 

0.3

 

Total deposits

 

8,409,202

 

 

8,334,291

 

 

74,911

 

3.6

 

Total other borrowings

 

11,340

 

 

10,742

 

 

598

 

22.3

 

 

Year Over Year Balance Sheet Change

 

Ending balances

As of June 30,

$ Change

% Change

(dollars in thousands)

 

2026

 

 

2025

 

Total assets

$

9,930,763

 

$

9,923,983

 

$

6,780

 

0.1

%

Total loans

 

7,311,090

 

 

6,958,993

 

 

352,097

 

5.1

 

Total investments

 

1,796,373

 

 

1,936,954

 

 

(140,581

)

(7.3

)

Total deposits

 

8,368,830

 

 

8,375,809

 

 

(6,979

)

(0.1

)

Total other borrowings

 

10,519

 

 

17,788

 

 

(7,269

)

(40.9

)

Net Interest Income and Net Interest Margin

The Company's yield on loans for the current quarter was 5.85%, an increase of 7 basis points from 5.78% as of the trailing quarter end and an increase of 9 basis points as compared to 5.76% for the quarter ended June 30, 2025. The tax equivalent yield on the Company's investment security portfolio was 3.33% for the quarter ended June 30, 2026, a decrease of 12 basis points from the trailing quarter end of 3.45% and an increase of 3 basis points from the 3.30% earned during the three months ended June 30, 2025. As compared to the trailing quarter, costs on interest-bearing deposits increased by 1 basis point, while the costs on interest-bearing liabilities increased by 2 basis points. The cost of total interest-bearing deposits decreased by 14 basis points, while the costs of total interest-bearing liabilities decreased by 18 basis points, respectively, between the three-month periods ended June 30, 2026 and 2025, respectively.

The FOMC left short-term interest rates unchanged during the current and prior quarters. The fully tax-equivalent net interest income and net interest margin was $93.9 million and 4.11%, respectively, for the quarter ended June 30, 2026, and was $91.5 million and 4.07%, respectively, for the trailing quarter ended March 31, 2026. More specifically, the net interest rate spread improved by 3 basis points to 3.44% for the quarter ended June 30, 2026, as compared to the trailing quarter, while the net interest margin improved by 4 basis points to 4.11% 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 June 30, 2026, March 31, 2026, and June 30, 2025, deposits priced utilizing these customized strategies totaled $1.0 billion, respectively, and carried weighted average rates of 3.07%, 3.06% and 3.38%, respectively.

 

Three months ended

 

 

 

 

 

June 30,
2026

 

March 31,
2026

 

 

 

 

(dollars in thousands)

 

 

Change

 

% Change

Interest income

$

120,986

 

 

$

117,827

 

 

$

3,159

 

 

2.7

%

Interest expense

 

(27,356

)

 

 

(26,601

)

 

 

(755

)

 

2.8

%

Fully tax-equivalent adjustment (FTE) (1)

 

259

 

 

 

260

 

 

 

(1

)

 

(0.4

)%

Net interest income (FTE)

$

93,889

 

 

$

91,486

 

 

$

2,403

 

 

2.6

%

Net interest margin (FTE)

 

4.11

%

 

 

4.07

%

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans discount accretion, net:

 

 

 

 

 

 

 

Amount (included in interest income)

$

990

 

 

$

1,386

 

 

$

(396

)

 

(28.6

)%

Net interest margin less effect of acquired loan discount accretion(1)

 

4.07

%

 

 

4.01

%

 

 

0.06

%

 

 

 

 

 

 

 

 

 

 

Three months ended
June 30,

 

 

 

 

(dollars in thousands)

2026

 

2025

 

Change

 

% Change

Interest income

$

120,986

 

 

$

116,361

 

 

$

4,625

 

 

4.0

%

Interest expense

 

(27,356

)

 

 

(29,842

)

 

 

2,486

 

 

(8.3

)%

Fully tax-equivalent adjustment (FTE) (1)

 

259

 

 

 

264

 

 

 

(5

)

 

(1.9

)%

Net interest income (FTE)

$

93,889

 

 

$

86,783

 

 

$

7,106

 

 

8.2

%

Net interest margin (FTE)

 

4.11

%

 

 

3.88

%

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans discount accretion, net:

 

 

 

 

 

 

 

Amount (included in interest income)

$

990

 

 

$

1,247

 

 

$

(257

)

 

(20.6

)%

Net interest margin less effect of acquired loan discount accretion(1)

 

4.07

%

 

 

3.82

%

 

 

0.25

%

 

 

 

Six months ended
June 30,

 

 

 

 

(dollars in thousands)

 

2026

 

 

 

2025

 

 

Change

 

% Change

Interest income

$

238,813

 

 

$

230,438

 

 

$

8,375

 

 

3.6

%

Interest expense

 

(53,957

)

 

 

(61,377

)

 

 

7,420

 

 

(12.1

)%

Fully tax-equivalent adjustment (FTE) (1)

 

519

 

 

 

529

 

 

 

(10

)

 

(1.9

)%

Net interest income (FTE)

$

185,375

 

 

$

169,590

 

 

$

15,785

 

 

9.3

%

Net interest margin (FTE)

 

4.09

%

 

 

3.81

%

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans discount accretion, net:

 

 

 

 

 

 

 

Amount (included in interest income)

$

2,376

 

 

$

3,242

 

 

$

(866

)

 

(26.7

)%

Net interest margin less effect of acquired loan discount accretion(1)

 

4.04

%

 

 

3.73

%

 

 

0.31

%

 

 

Analysis Of Change in Net Interest Margin on Earning Assets

Three months ended

 

Three months ended

 

Three months ended

 

June 30, 2026

 

March 31, 2026

 

June 30, 2025

(dollars in thousands)

Average

Balance

 

Income/

Expense

 

Yield/

Rate

 

Average

Balance

 

Income/

Expense

 

Yield/

Rate

 

Average

Balance

 

Income/

Expense

 

Yield/

Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

7,176,963

 

 

$

104,595

 

 

5.85

%

 

$

7,041,552

 

 

$

100,349

 

 

5.78

%

 

$

6,878,186

 

 

$

98,695

 

 

5.76

%

Investments-taxable

 

1,726,567

 

 

 

14,306

 

 

3.32

%

 

 

1,724,884

 

 

 

14,662

 

 

3.45

%

 

 

1,818,814

 

 

 

14,921

 

 

3.29

%

Investments-nontaxable (1)

 

130,007

 

 

 

1,124

 

 

3.47

%

 

 

130,366

 

 

 

1,126

 

 

3.50

%

 

 

132,576

 

 

 

1,143

 

 

3.46

%

Total investments

 

1,856,574

 

 

 

15,430

 

 

3.33

%

 

 

1,855,250

 

 

 

15,788

 

 

3.45

%

 

 

1,951,390

 

 

 

16,064

 

 

3.30

%

Cash at Fed Reserve and other banks

 

131,367

 

 

 

1,220

 

 

3.72

%

 

 

213,361

 

 

 

1,950

 

 

3.71

%

 

 

144,383

 

 

 

1,866

 

 

5.18

%

Total earning assets

 

9,164,904

 

 

 

121,245

 

 

5.31

%

 

 

9,110,163

 

 

 

118,087

 

 

5.26

%

 

 

8,973,959

 

 

 

116,625

 

 

5.21

%

Other assets, net

 

802,644

 

 

 

 

 

 

 

802,322

 

 

 

 

 

 

 

804,875

 

 

 

 

 

Total assets

$

9,967,548

 

 

 

 

 

 

$

9,912,485

 

 

 

 

 

 

$

9,778,834

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

1,915,877

 

 

$

7,067

 

 

1.48

%

 

$

1,851,122

 

 

$

6,384

 

 

1.40

%

 

$

1,804,856

 

 

$

6,076

 

 

1.35

%

Savings deposits

 

2,764,893

 

 

 

10,430

 

 

1.51

%

 

 

2,803,853

 

 

 

10,366

 

 

1.50

%

 

 

2,799,470

 

 

 

12,246

 

 

1.75

%

Time deposits

 

1,148,788

 

 

 

9,168

 

 

3.20

%

 

 

1,127,816

 

 

 

9,173

 

 

3.30

%

 

 

1,102,025

 

 

 

9,716

 

 

3.54

%

Total interest-bearing deposits

 

5,829,558

 

 

 

26,665

 

 

1.83

%

 

 

5,782,791

 

 

 

25,923

 

 

1.82

%

 

 

5,706,351

 

 

 

28,038

 

 

1.97

%

Other borrowings

 

11,340

 

 

 

7

 

 

0.25

%

 

 

10,742

 

 

 

1

 

 

0.04

%

 

 

22,707

 

 

 

92

 

 

1.63

%

Junior subordinated debt

 

41,238

 

 

 

684

 

 

6.65

%

 

 

41,238

 

 

 

677

 

 

6.66

%

 

 

101,236

 

 

 

1,712

 

 

6.78

%

Total interest-bearing liabilities

 

5,882,136

 

 

 

27,356

 

 

1.87

%

 

 

5,834,771

 

 

 

26,601

 

 

1.85

%

 

 

5,830,294

 

 

 

29,842

 

 

2.05

%

Noninterest-bearing deposits

 

2,579,644

 

 

 

 

 

 

 

2,551,500

 

 

 

 

 

 

 

2,516,631

 

 

 

 

 

Other liabilities

 

155,380

 

 

 

 

 

 

 

170,938

 

 

 

 

 

 

 

158,817

 

 

 

 

 

Shareholders’ equity

 

1,350,388

 

 

 

 

 

 

 

1,355,276

 

 

 

 

 

 

 

1,273,092

 

 

 

 

 

Total liabilities and shareholders’ equity

$

9,967,548

 

 

 

 

 

 

$

9,912,485

 

 

 

 

 

 

$

9,778,834

 

 

 

 

 

Net interest rate spread (1) (2)

 

 

 

 

3.44

%

 

 

 

 

 

3.41

%

 

 

 

 

 

3.16

%

Net interest income and margin (1) (3)

 

 

$

93,889

 

 

4.11

%

 

 

 

$

91,486

 

 

4.07

%

 

 

 

$

86,783

 

 

3.88

%

(1)

Fully taxable equivalent (FTE). All yields and rates are calculated using specific day counts for the period and year as applicable.

(2)

Net interest spread is the average yield earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.

(3)

Net interest margin is computed by calculating the difference between interest income and interest expense, divided by the average balance of interest-earning assets.

Net interest income (FTE) during the three months ended June 30, 2026, increased $2.4 million or 2.6% to $93.9 million compared to $91.5 million during the three months ended March 31, 2026. Net interest margin totaled 4.11% for the three months ended June 30, 2026, an increase of 4 basis points from the trailing quarter. The increase in net interest income is primarily attributed to a $3.2 million increase in interest income on earnings assets, led by $4.2 million attributed to lending income. Interest expense increased from deposit costs of $0.7 million as compared to the trailing quarter. The average balance of noninterest-bearing deposits increased by $28.1 million from the three-month average for the period ended March 31, 2026.

As compared to the same quarter in the prior year, average loan yields increased 9 basis points from 5.76% during the three months ended June 30, 2025, to 5.85% during the three months ended June 30, 2026. The accretion of discounts from acquired loans added 6 basis points to loan yields during the quarter ended June 30, 2026, as compared to adding 8 basis points for the quarter ended June 30, 2025. The cost of interest-bearing deposits decreased by 14 basis points between the quarter ended June 30, 2026, and the same quarter of the prior year. The average balance of noninterest-bearing deposits increased by $63.0 million from the three-month average for the period ended June 30, 2025.

For the quarter ended June 30, 2026, the ratio of average total noninterest-bearing deposits to total average deposits was 30.7%, as compared to 30.6% and 30.6% for the quarters ended March 31, 2026 and June 30, 2025, respectively.

 

Six months ended June 30, 2026

 

Six months ended June 30, 2025

(dollars in thousands)

Average

Balance

 

Income/

Expense

 

Yield/

Rate

 

Average

Balance

 

Income/

Expense

 

Yield/

Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

Loans

$

7,109,631

 

 

$

204,944

 

 

5.81

%

 

$

6,827,469

 

 

$

194,073

 

 

5.73

%

Investments-taxable

 

1,725,730

 

 

 

28,968

 

 

3.39

%

 

 

1,851,439

 

 

 

30,673

 

 

3.34

%

Investments-nontaxable (1)

 

130,186

 

 

 

2,250

 

 

3.49

%

 

 

132,980

 

 

 

2,292

 

 

3.48

%

Total investments

 

1,855,916

 

 

 

31,218

 

 

3.39

%

 

 

1,984,419

 

 

 

32,965

 

 

3.35

%

Cash at Fed Reserve and other banks

 

172,138

 

 

 

3,170

 

 

3.71

%

 

 

175,315

 

 

 

3,929

 

 

4.52

%

Total earning assets

 

9,137,685

 

 

 

239,332

 

 

5.28

%

 

 

8,987,203

 

 

 

230,967

 

 

5.18

%

Other assets, net

 

802,484

 

 

 

 

 

 

 

806,241

 

 

 

 

 

Total assets

$

9,940,169

 

 

 

 

 

 

$

9,793,444

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

1,883,678

 

 

$

13,451

 

 

1.44

%

 

$

1,817,515

 

 

$

12,297

 

 

1.36

%

Savings deposits

 

2,784,265

 

 

 

20,796

 

 

1.51

%

 

 

2,765,057

 

 

 

24,444

 

 

1.78

%

Time deposits

 

1,138,360

 

 

 

18,341

 

 

3.25

%

 

 

1,111,382

 

 

 

20,162

 

 

3.66

%

Total interest-bearing deposits

 

5,806,303

 

 

 

52,588

 

 

1.83

%

 

 

5,693,954

 

 

 

56,903

 

 

2.02

%

Other borrowings

 

11,043

 

 

 

8

 

 

0.15

%

 

 

55,902

 

 

 

1,061

 

 

3.83

%

Junior subordinated debt

 

41,238

 

 

 

1,361

 

 

6.66

%

 

 

101,219

 

 

 

3,413

 

 

6.80

%

Total interest-bearing liabilities

 

5,858,584

 

 

 

53,957

 

 

1.86

%

 

 

5,851,075

 

 

 

61,377

 

 

2.12

%

Noninterest-bearing deposits

 

2,565,650

 

 

 

 

 

 

 

2,515,508

 

 

 

 

 

Other liabilities

 

163,117

 

 

 

 

 

 

 

164,259

 

 

 

 

 

Shareholders’ equity

 

1,352,818

 

 

 

 

 

 

 

1,262,602

 

 

 

 

 

Total liabilities and shareholders’ equity

$

9,940,169

 

 

 

 

 

 

$

9,793,444

 

 

 

 

 

Net interest rate spread (1) (2)

 

 

 

 

3.42

%

 

 

 

 

 

3.06

%

Net interest income and margin (1) (3)

 

 

$

185,375

 

 

4.09

%

 

 

 

$

169,590

 

 

3.81

%

(1)

Fully taxable equivalent (FTE). All yields and rates are calculated using specific day counts for the period and year as applicable.

(2)

Net interest spread is the average yield earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.

(3)

Net interest margin is computed by calculating the difference between interest income and interest expense, divided by the average balance of interest-earning assets.

Interest Rates and Earning Asset Composition

As of June 30, 2026, the Company's loan portfolio consisted of approximately $7.3 billion in outstanding principal with a weighted average coupon rate of 5.64%. During the three-month periods ending June 30, 2026, March 31, 2026, and June 30, 2025, the weighted average coupon on loan production in the quarter was 6.50%, 6.33% and 6.87%, respectively. Included in the June 30, 2026 total loans balance are adjustable rate loans totaling $5.0 billion, of which $1.0 billion are considered floating based on the Wall Street Prime index. In addition, the Company holds certain investment securities with fair values totaling $259.0 million which are subject to repricing on not less than a quarterly basis.

Asset Quality and Credit Loss Provisioning

During the three months ended June 30, 2026, the Company recorded a provision for credit losses of $2.7 million, as compared to $3.3 million during the trailing quarter, and $4.7 million during the second quarter of 2025.

 

Three months ended

 

Six months ended

(dollars in thousands)

June 30,
2026

 

March 31,
2026

 

June 30,
2025

 

June 30,
2026

 

June 30,
2025

Addition to allowance for credit losses on loans and leases

$

2,585

 

 

$

2,970

 

 

$

4,525

 

 

$

5,555

 

 

$

7,188

 

Addition to reserve for unfunded loan commitments

 

70

 

 

 

355

 

 

 

140

 

 

 

425

 

 

 

1,205

 

Total provision for credit losses

$

2,655

 

 

$

3,325

 

 

$

4,665

 

 

$

5,980

 

 

$

8,393

 

 

Three months ended

 

Six months ended

(dollars in thousands)

June 30,
2026

 

March 31,
2026

 

June 30,
2025

 

June 30,
2026

 

June 30,
2025

Balance, beginning of period

$

127,939

 

 

$

125,762

 

 

$

128,423

 

 

$

125,762

 

 

$

125,366

 

Provision for credit losses on loans and leases

 

2,585

 

 

 

2,970

 

 

 

4,525

 

 

 

5,555

 

 

 

7,188

 

Loans charged-off

 

(455

)

 

 

(912

)

 

 

(8,595

)

 

 

(1,367

)

 

 

(8,969

)

Recoveries of previously charged-off loans

 

118

 

 

 

119

 

 

 

102

 

 

 

237

 

 

 

870

 

Balance, end of period

$

130,187

 

 

$

127,939

 

 

$

124,455

 

 

$

130,187

 

 

$

124,455

 

The ACL was $130.2 million or 1.78% of total loans as of June 30, 2026. The provision for credit losses on loans of $2.6 million recorded allocated approximately $2.3 million toward collectively evaluated loans and $0.3 million to replenish quarterly net charge-offs.

The $2.2 million increase in allowance for credit losses was primarily attributed to net loan growth during the quarter, which totaled $242.9 million. Additionally, Management notes that economic indicators through the end of the current quarter, as well as actual and forecasted trends including, but not limited to, unemployment, gross domestic product, and corporate borrowing rates, continued to evidence stability and were supportive of general economic expansion, and were consistent with, if not slightly improved from the period ended March 31, 2026, which is aligned with the Company's direct experiences with borrowers. Management's proactive portfolio management policies and ongoing dialogue with borrowers suggest caution continues to be warranted, with emphasis on the consumer portfolio. Actions by the Federal Reserve during 2026 or stimulative policies by the Federal government may impact this outlook overall, but the uncertainty associated with the extent and timing of these potential reductions has inhibited a material change to monetary policy assumptions. Furthermore, political policy risks both domestic and international remain unresolved, which could quickly lead to further negative effects on domestic economic outcomes. The lingering uncertainties related to the extent and duration of escalation within the Middle East, and potential domestic economic impact from volatility in oil prices and the impact on inflation risks, continue to present challenges in correlating potential improvement of credit risks within the Company's loan portfolio. Therefore, 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.

While the required reserves on individually evaluated credits remained flat as compared to the trailing quarter, the Company continues to work closely with these largely cooperative borrowers and is diligently monitoring for any further changes in financial conditions. Management believes the provisioning for these individually analyzed relationships is sufficient relative to expected future losses, if any. The net charge-offs incurred during the quarter were spread amongst numerous borrowers and loan types.

(dollars in thousands)

As of June 30,
2026

 

% of Loans
Outstanding

 

As of March 31,
2026

 

% of Loans
Outstanding

 

As of June 30,
2025

 

% of Loans
Outstanding

Risk Rating:

 

 

 

 

 

 

 

 

 

 

 

Pass

$

7,050,687

 

 

96.5

%

 

$

6,813,091

 

 

96.4

%

 

$

6,751,005

 

 

97.0

%

Special Mention

 

119,600

 

 

1.6

%

 

 

113,778

 

 

1.6

%

 

 

73,215

 

 

1.1

%

Substandard

 

140,803

 

 

1.9

%

 

 

141,329

 

 

2.0

%

 

 

134,773

 

 

1.9

%

Total

$

7,311,090

 

 

100.0

%

 

$

7,068,198

 

 

100.0

%

 

$

6,958,993

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Classified loans to total loans

 

1.93

%

 

 

 

 

2.00

%

 

 

 

 

1.94

%

 

 

Loans past due 30+ days to total loans

 

0.68

%

 

 

 

 

0.69

%

 

 

 

 

0.62

%

 

 

ACL to non-performing loans

 

189.11

%

 

 

 

 

184.20

%

 

 

 

 

192.11

%

 

 

The ratio of classified loans to total loans of 1.93% as of June 30, 2026, was a decrease of 7 basis points from March 31, 2026, and 1 basis point from the comparative quarter ended 2025. The change in classified loans outstanding as compared to the trailing quarter represented a decrease of approximately $0.5 million.

Loans past due 30 days or more increased by $0.7 million during the quarter ended June 30, 2026, to $49.6 million, as compared to $48.9 million at March 31, 2026. The majority of loans identified as past due are well-secured by collateral, and approximately $27.5 million are less than 90 days delinquent.

Non-performing loans decreased by $0.6 million during the quarter ended June 30, 2026, to $68.8 million as compared to $69.5 million at March 31, 2026. The credit and collateral profiles of non-performing loans remain generally consistent with the trailing quarter. As noted previously, management continues to proactively work with these borrowers to identify actionable and appropriate resolution strategies which are customary for the industries. Management anticipates that these proactive strategies, specifically within agricultural real estate secured and agricultural commercial loans, will further benefit from the continued improvement in agricultural commodity prices, stable water supply, and growing crop demand. Of the $68.8 million loans designated as non-performing as of June 30, 2026, approximately $43.9 million are current or less than 30 days past due with respect to payments required under their existing loan agreements.

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 June 30, 2026, other real estate owned consisted of 14 properties with a carrying value of approximately $6.8 million, as compared to 14 properties with a carrying value of $7.0 million at March 31, 2026. Non-performing assets of $75.6 million at June 30, 2026, represented 0.76% of total assets, a change from $76.4 million or 0.77% and $67.5 million or 0.68% as of March 31, 2026 and June 30, 2025, respectively.

Allocation of Credit Loss Reserves by Loan Type

 

 

As of June 30, 2026

 

As of March 31, 2026

 

As of June 30, 2025

(dollars in thousands)

Amount

 

% of Loans Outstanding

 

Amount

 

% of Loans Outstanding

 

Amount

 

% of Loans Outstanding

Commercial real estate:

 

 

 

 

 

 

 

 

 

 

 

CRE - Non-Owner Occupied

$

42,183

 

 

1.64

%

 

$

41,647

 

 

1.64

%

 

$

40,921

 

 

1.68

%

CRE - Owner Occupied

 

16,048

 

 

1.54

%

 

 

16,286

 

 

1.60

%

 

 

11,578

 

 

1.16

%

Multifamily

 

16,688

 

 

1.44

%

 

 

16,384

 

 

1.47

%

 

 

15,097

 

 

1.47

%

Farmland

 

4,741

 

 

1.98

%

 

 

5,593

 

 

2.33

%

 

 

6,888

 

 

2.60

%

Total commercial real estate loans

 

79,660

 

 

1.59

%

 

 

79,910

 

 

1.63

%

 

 

74,484

 

 

1.57

%

Consumer:

 

 

 

 

 

 

 

 

 

 

 

SFR 1-4 1st Liens

 

10,451

 

 

1.26

%

 

 

9,929

 

 

1.22

%

 

 

11,135

 

 

1.31

%

SFR HELOCs and Junior Liens

 

12,872

 

 

3.00

%

 

 

12,297

 

 

2.86

%

 

 

12,021

 

 

3.08

%

Other

 

1,646

 

 

5.06

%

 

 

1,560

 

 

4.30

%

 

 

2,162

 

 

4.49

%

Total consumer loans

 

24,969

 

 

1.94

%

 

 

23,786

 

 

1.86

%

 

 

25,318

 

 

1.96

%

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

13,487

 

 

2.41

%

 

 

12,435

 

 

2.67

%

 

 

10,024

 

 

2.14

%

Construction

 

8,451

 

 

2.83

%

 

 

8,239

 

 

3.13

%

 

 

10,995

 

 

3.61

%

Agricultural Production

 

3,602

 

 

2.46

%

 

 

3,548

 

 

2.44

%

 

 

3,609

 

 

2.24

%

Leases

 

18

 

 

0.48

%

 

 

21

 

 

0.48

%

 

 

25

 

 

0.44

%

Allowance for credit losses

 

130,187

 

 

1.78

%

 

 

127,939

 

 

1.81

%

 

 

124,455

 

 

1.79

%

Reserve for unfunded loan commitments

 

8,170

 

 

 

 

 

8,100

 

 

 

 

 

7,205

 

 

 

Total allowance for credit losses

$

138,357

 

 

1.89

%

 

$

136,039

 

 

1.92

%

 

$

131,660

 

 

1.89

%

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 are expected to be amortized over the life of the loans. As of June 30, 2026, the unamortized discount associated with acquired loans totaled $12.6 million, which, when combined with the total allowance for credit losses above, represents 2.06% of total loans.

Non-interest Income

Three months ended

 

 

 

 

(dollars in thousands)

June 30, 2026

 

March 31, 2026

 

Change

 

% Change

ATM and interchange fees

$

6,771

 

 

$

6,269

 

 

$

502

 

 

8.0

%

Service charges on deposit accounts

 

5,453

 

 

 

5,209

 

 

 

244

 

 

4.7

%

Other service fees

 

1,529

 

 

 

1,487

 

 

 

42

 

 

2.8

%

Mortgage banking service fees

 

419

 

 

 

427

 

 

 

(8

)

 

(1.9

)%

Change in value of mortgage servicing rights

 

(174

)

 

 

(232

)

 

 

58

 

 

25.0

%

Total service charges and fees

 

13,998

 

 

 

13,160

 

 

 

838

 

 

6.4

%

Increase in cash value of life insurance

 

875

 

 

 

816

 

 

 

59

 

 

7.2

%

Asset management and commission income

 

1,761

 

 

 

2,049

 

 

 

(288

)

 

(14.1

)%

Gain on sale of loans

 

485

 

 

 

397

 

 

 

88

 

 

22.2

%

Lease brokerage income

 

48

 

 

 

97

 

 

 

(49

)

 

(50.5

)%

Sale of customer checks

 

319

 

 

 

364

 

 

 

(45

)

 

(12.4

)%

(Loss) gain on sale of investment securities

 

—

 

 

 

17

 

 

 

(17

)

 

(100.0

)%

(Loss) gain on marketable equity securities

 

(11

)

 

 

(17

)

 

 

6

 

 

(35.3

)%

Other income

 

771

 

 

 

149

 

 

 

622

 

 

417.4

%

Total other non-interest income

 

4,248

 

 

 

3,872

 

 

 

376

 

 

9.7

%

Total non-interest income

$

18,246

 

 

$

17,032

 

 

$

1,214

 

 

7.1

%

Total non-interest income increased $1.2 million or 7.1% to $18.2 million during the three months ended June 30, 2026, compared to $17.0 million during the quarter ended March 31, 2026. Non-interest income activity during the quarter benefitted from an increase in interchange and service charge income of $0.8 million as compared to the trailing quarter. Other income during the three months ended June 30, 2026 increased by $0.6 million, largely attributed to various proceeds from insurance matters totaling $560,000.

 

Three months ended June 30,

 

 

 

 

(dollars in thousands)

2026

 

2025

 

Change

 

% Change

ATM and interchange fees

$

6,771

 

 

$

6,590

 

 

$

181

 

 

2.7

%

Service charges on deposit accounts

 

5,453

 

 

 

5,189

 

 

 

264

 

 

5.1

%

Other service fees

 

1,529

 

 

 

1,485

 

 

 

44

 

 

3.0

%

Mortgage banking service fees

 

419

 

 

 

438

 

 

 

(19

)

 

(4.3

)%

Change in value of mortgage servicing rights

 

(174

)

 

 

(52

)

 

 

(122

)

 

(234.6

)%

Total service charges and fees

 

13,998

 

 

 

13,650

 

 

 

348

 

 

2.5

%

Increase in cash value of life insurance

 

875

 

 

 

842

 

 

 

33

 

 

3.9

%

Asset management and commission income

 

1,761

 

 

 

1,635

 

 

 

126

 

 

7.7

%

Gain on sale of loans

 

485

 

 

 

503

 

 

 

(18

)

 

(3.6

)%

Lease brokerage income

 

48

 

 

 

50

 

 

 

(2

)

 

(4.0

)%

Sale of customer checks

 

319

 

 

 

318

 

 

 

1

 

 

0.3

%

(Loss) gain on sale or exchange of investment securities

 

—

 

 

 

4

 

 

 

(4

)

 

100.0

%

(Loss) gain on marketable equity securities

 

(11

)

 

 

8

 

 

 

(19

)

 

(237.5

)%

Other income

 

771

 

 

 

80

 

 

 

691

 

 

863.8

%

Total other non-interest income

 

4,248

 

 

 

3,440

 

 

 

808

 

 

23.5

%

Total non-interest income

$

18,246

 

 

$

17,090

 

 

$

1,156

 

 

6.8

%

Non-interest income increased $1.2 million or 6.8% to $18.2 million during the three months ended June 30, 2026, compared to $17.1 million during the comparative quarter ended June 30, 2025. Excluding the insurance proceeds noted above, changes in non-interest income line items were modest but generally improved during the quarter.

 

Six months ended June 30,

 

 

 

 

(dollars in thousands)

2026

 

2025

 

Change

 

% Change

ATM and interchange fees

$

13,040

 

 

$

12,696

 

 

$

344

 

 

2.7

%

Service charges on deposit accounts

 

10,662

 

 

 

10,103

 

 

 

559

 

 

5.5

%

Other service fees

 

3,016

 

 

 

2,844

 

 

 

172

 

 

6.0

%

Mortgage banking service fees

 

846

 

 

 

877

 

 

 

(31

)

 

(3.5

)%

Change in value of mortgage servicing rights

 

(406

)

 

 

(192

)

 

 

(214

)

 

(111.5

)%

Total service charges and fees

 

27,158

 

 

 

26,328

 

 

 

830

 

 

3.2

%

Increase in cash value of life insurance

 

1,691

 

 

 

1,662

 

 

 

29

 

 

1.7

%

Asset management and commission income

 

3,810

 

 

 

3,123

 

 

 

687

 

 

22.0

%

Gain on sale of loans

 

882

 

 

 

847

 

 

 

35

 

 

4.1

%

Lease brokerage income

 

145

 

 

 

116

 

 

 

29

 

 

25.0

%

Sale of customer checks

 

683

 

 

 

663

 

 

 

20

 

 

3.0

%

(Loss) gain on sale or exchange of investment securities

 

17

 

 

 

(1,142

)

 

 

1,159

 

 

101.5

%

(Loss) gain on marketable equity securities

 

(28

)

 

 

47

 

 

 

(75

)

 

(159.6

)%

Other income

 

920

 

 

 

1,519

 

 

 

(599

)

 

(39.4

)%

Total other non-interest income

 

8,120

 

 

 

6,835

 

 

 

1,285

 

 

18.8

%

Total non-interest income

$

35,278

 

 

$

33,163

 

 

$

2,115

 

 

6.4

%

Non-interest income increased $2.1 million or 6.4% to $35.3 million during the six months ended June 30, 2026, compared to $33.2 million during the comparative period ended June 30, 2025. As noted above, service charges and customer fees in the 2026 period drove an increase of $0.8 million. Further, elevated activity and volume of assets under management resulted in an increase of $0.7 million or 22.0% in related income. Other income for the six months ended June 30, 2026 and 2025 included excess insurance related proceeds of $560,000 and $1,207,000, respectively.

Non-interest Expense

 

Three months ended

 

 

 

 

(dollars in thousands)

June 30, 2026

 

March 31, 2026

 

Change

 

% Change

Base salaries, net of deferred loan origination costs

$

25,481

 

 

$

24,238

 

 

$

1,243

 

 

5.1

%

Incentive compensation

 

6,530

 

 

 

4,726

 

 

 

1,804

 

 

38.2

%

Benefits and other compensation costs

 

6,961

 

 

 

7,181

 

 

 

(220

)

 

(3.1

)%

Total salaries and benefits expense

 

38,972

 

 

 

36,145

 

 

 

2,827

 

 

7.8

%

Occupancy

 

4,360

 

 

 

4,459

 

 

 

(99

)

 

(2.2

)%

Data processing and software

 

5,439

 

 

 

5,287

 

 

 

152

 

 

2.9

%

Equipment

 

1,301

 

 

 

1,354

 

 

 

(53

)

 

(3.9

)%

Intangible amortization

 

430

 

 

 

430

 

 

 

—

 

 

—

%

Advertising

 

729

 

 

 

835

 

 

 

(106

)

 

(12.7

)%

ATM and POS network charges

 

2,051

 

 

 

1,668

 

 

 

383

 

 

23.0

%

Professional fees

 

1,591

 

 

 

1,639

 

 

 

(48

)

 

(2.9

)%

Telecommunications

 

477

 

 

 

442

 

 

 

35

 

 

7.9

%

Regulatory assessments and insurance

 

1,300

 

 

 

1,305

 

 

 

(5

)

 

(0.4

)%

Merger and acquisition expenses

 

850

 

 

 

—

 

 

 

850

 

 

—

%

Postage

 

407

 

 

 

346

 

 

 

61

 

 

17.6

%

Operational loss

 

267

 

 

 

520

 

 

 

(253

)

 

(48.7

)%

Courier service

 

576

 

 

 

520

 

 

 

56

 

 

10.8

%

(Gain) loss on disposal of fixed assets

 

—

 

 

 

(15

)

 

 

15

 

 

(100.0

)%

Other miscellaneous expense

 

4,175

 

 

 

4,117

 

 

 

58

 

 

1.4

%

Total other non-interest expense

 

23,953

 

 

 

22,907

 

 

 

1,046

 

 

4.6

%

Total non-interest expense

$

62,925

 

 

$

59,052

 

 

$

3,873

 

 

6.6

%

Average full-time equivalent staff

 

1,110

 

 

1,117

 

 

 

(7

)

 

(0.6

)%

Total non-interest expense for the quarter ended June 30, 2026, increased $3.9 million or 6.6% to $62.9 million as compared to $59.1 million during the trailing quarter ended March 31, 2026. Total salaries and benefits expense, the largest non-interest expense component, increased by $2.8 million or 7.8%, reflecting the increase of $1.8 million in incentive compensation expense related to loan production activities and overall bank performance as well as a $1.2 million increase in base salary expense following routine merit increases effective late March. Merger and acquisitions costs during the quarter totaled $0.9 million and were related to the proposed merger with First Hawaiian, Inc. announced on July 13, 2026.

 

Three months ended June 30,

 

 

 

 

(dollars in thousands)

2026

 

2025

 

Change

 

% Change

Base salaries, net of deferred loan origination costs

$

25,481

 

$

25,757

 

$

(276

)

(1.1

)%

Incentive compensation

 

6,530

 

 

5,223

 

 

1,307

 

25.0

%

Benefits and other compensation costs

 

6,961

 

 

7,306

 

 

(345

)

(4.7

)%

Total salaries and benefits expense

 

38,972

 

 

38,286

 

 

686

 

1.8

%

Occupancy

 

4,360

 

 

4,200

 

 

160

 

3.8

%

Data processing and software

 

5,439

 

 

4,959

 

 

480

 

9.7

%

Equipment

 

1,301

 

 

1,189

 

 

112

 

9.4

%

Intangible amortization

 

430

 

 

483

 

 

(53

)

(11.0

)%

Advertising

 

729

 

 

808

 

 

(79

)

(9.8

)%

ATM and POS network charges

 

2,051

 

 

1,843

 

 

208

 

11.3

%

Professional fees

 

1,591

 

 

1,667

 

 

(76

)

(4.6

)%

Telecommunications

 

477

 

 

513

 

 

(36

)

(7.0

)%

Regulatory assessments and insurance

 

1,300

 

 

1,297

 

 

3

 

0.2

%

Merger and acquisition expenses

 

850

 

 

—

 

 

850

 

n/m

 

Postage

 

407

 

 

385

 

 

22

 

5.7

%

Operational loss

 

267

 

 

270

 

 

(3

)

(1.1

)%

Courier service

 

576

 

 

544

 

 

32

 

5.9

%

(Gain) loss on disposal of fixed assets

 

—

 

 

5

 

 

(5

)

(100.0

)%

Other miscellaneous expense

 

4,175

 

 

4,682

 

 

(507

)

(10.8

)%

Total other non-interest expense

 

23,953

 

 

22,845

 

 

1,108

 

4.9

%

Total non-interest expense

$

62,925

 

$

61,131

 

$

1,794

 

2.9

%

Average full-time equivalent staff

 

1,110

 

 

1,171

 

 

(61

)

(5.2

)%

Total non-interest expense increased $1.8 million or 2.9% to $62.9 million during the three months ended June 30, 2026, as compared to $61.1 million for the quarter ended June 30, 2025. Total salaries and benefits expense increased by $0.7 million or 1.8% on a net basis, led by incentive compensation attributed to the elevated loan origination activity. Excluding the aforementioned merger expenses, changes in other non-interest expense line items were mixed during the quarter ended June 30, 2026, but essentially flat and due to timing differences rather than unique changes in operations.

 

Six months ended June 30,

 

 

 

 

(dollars in thousands)

2026

 

2025

 

Change

 

% Change

Base salaries, net of deferred loan origination costs

$

49,719

 

 

$

51,158

 

 

$

(1,439

)

 

(2.8

)%

Incentive compensation

 

11,256

 

 

 

9,261

 

 

 

1,995

 

 

21.5

%

Benefits and other compensation costs

 

14,142

 

 

 

14,722

 

 

 

(580

)

 

(3.9

)%

Total salaries and benefits expense

 

75,117

 

 

 

75,141

 

 

 

(24

)

 

(0.03

)%

Occupancy

 

8,819

 

 

 

8,277

 

 

 

542

 

 

6.5

%

Data processing and software

 

10,726

 

 

 

10,017

 

 

 

709

 

 

7.1

%

Equipment

 

2,655

 

 

 

2,473

 

 

 

182

 

 

7.4

%

Intangible amortization

 

860

 

 

 

997

 

 

 

(137

)

 

(13.7

)%

Advertising

 

1,564

 

 

 

2,012

 

 

 

(448

)

 

(22.3

)%

ATM and POS network charges

 

3,719

 

 

 

3,694

 

 

 

25

 

 

0.7

%

Professional fees

 

3,230

 

 

 

3,185

 

 

 

45

 

 

1.4

%

Telecommunications

 

919

 

 

 

1,001

 

 

 

(82

)

 

(8.2

)%

Regulatory assessments and insurance

 

2,605

 

 

 

2,580

 

 

 

25

 

 

1.0

%

Merger and acquisition expenses

 

850

 

 

 

—

 

 

 

850

 

 

n/m

 

Postage

 

753

 

 

 

705

 

 

 

48

 

 

6.8

%

Operational loss

 

787

 

 

 

694

 

 

 

93

 

 

13.4

%

Courier service

 

1,096

 

 

 

1,032

 

 

 

64

 

 

6.2

%

(Gain) loss on sale or acquisition of foreclosed assets

 

—

 

 

 

(3

)

 

 

3

 

 

(100.0

)%

(Gain) loss on disposal of fixed assets

 

(15

)

 

 

90

 

 

 

(105

)

 

(116.7

)%

Other miscellaneous expense

 

8,292

 

 

 

8,821

 

 

 

(529

)

 

(6.0

)%

Total other non-interest expense

 

46,860

 

 

 

45,575

 

 

 

1,285

 

 

2.8

%

Total non-interest expense

$

121,977

 

 

$

120,716

 

 

$

1,261

 

 

1.0

%

Average full-time equivalent staff

 

1,114

 

 

 

1,183

 

 

 

(69

)

 

(5.8

)%

Non-interest expense increased $1.3 million or 1.0% to $122.0 million during the six months ended June 30, 2026, as compared to $120.7 million for the trailing six months ended. Excluding the aforementioned merger expenses, changes in other non-interest expense line items were mixed during the six months period ended June 30, 2026, but essentially flat and due to timing differences rather than unique changes in operations.

Provision for Income Taxes

The Company’s effective tax rate was 26.2% for the quarter ended June 30, 2026, as compared to 26.6% for the quarter ended March 31, 2026, and 27.2% for the quarter ended June 30, 2025. Differences between the Company's effective tax rate and applicable federal and state blended statutory rate of approximately 29.6% are due to the proportion of non-taxable revenues, non-deductible expenses, and benefits from tax credits as compared to the levels of pre-tax earnings.

TriCo Bancshares—Condensed Consolidated Financial Data (unaudited)
 

(dollars in thousands, except per share data)

Three months ended

 

June 30,
2026

 

March 31,
2026

 

December 31,
2025

 

September 30,
2025

 

June 30,
2025

Revenue and Expense Data

 

 

 

 

 

 

 

 

 

Interest income

$

120,986

 

 

$

117,827

 

 

$

120,147

 

 

$

119,987

 

 

$

116,361

 

Interest expense

 

27,356

 

 

 

26,601

 

 

 

27,920

 

 

 

30,432

 

 

 

29,842

 

Net interest income

 

93,630

 

 

 

91,226

 

 

 

92,227

 

 

 

89,555

 

 

 

86,519

 

Provision for credit losses

 

2,655

 

 

 

3,325

 

 

 

3,000

 

 

 

670

 

 

 

4,665

 

Noninterest income:

 

 

 

 

 

 

 

 

 

Service charges and fees

 

13,998

 

 

 

13,160

 

 

 

13,366

 

 

 

13,751

 

 

 

13,650

 

(Loss) gain on sale or exchange of investment securities

 

—

 

 

 

17

 

 

 

19

 

 

 

(2,124

)

 

 

4

 

Other income

 

4,248

 

 

 

3,855

 

 

 

3,783

 

 

 

6,380

 

 

 

3,436

 

Total noninterest income

 

18,246

 

 

 

17,032

 

 

 

17,168

 

 

 

18,007

 

 

 

17,090

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

38,972

 

 

 

36,145

 

 

 

36,901

 

 

 

37,729

 

 

 

38,286

 

Occupancy and equipment

 

5,661

 

 

 

5,813

 

 

 

5,932

 

 

 

5,657

 

 

 

5,389

 

Data processing and network

 

7,490

 

 

 

6,955

 

 

 

7,344

 

 

 

6,749

 

 

 

6,802

 

Other noninterest expense

 

10,802

 

 

 

10,139

 

 

 

9,642

 

 

 

10,289

 

 

 

10,654

 

Total noninterest expense

 

62,925

 

 

 

59,052

 

 

 

59,819

 

 

 

60,424

 

 

 

61,131

 

Total income before taxes

 

46,296

 

 

 

45,881

 

 

 

46,576

 

 

 

46,468

 

 

 

37,813

 

Provision for income taxes

 

12,127

 

 

 

12,196

 

 

 

12,942

 

 

 

12,449

 

 

 

10,271

 

Net income

$

34,169

 

 

$

33,685

 

 

$

33,634

 

 

$

34,019

 

 

$

27,542

 

Share Data

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

1.07

 

 

$

1.05

 

 

$

1.04

 

 

$

1.04

 

 

$

0.84

 

Diluted earnings per share

$

1.06

 

 

$

1.04

 

 

$

1.03

 

 

$

1.04

 

 

$

0.84

 

Dividends per share

$

0.36

 

 

$

0.36

 

 

$

0.36

 

 

$

0.36

 

 

$

0.33

 

Book value per common share

$

42.03

 

 

$

41.49

 

 

$

41.07

 

 

$

40.12

 

 

$

38.92

 

Tangible book value per common share (1)

$

32.40

 

 

$

31.82

 

 

$

31.52

 

 

$

30.61

 

 

$

29.40

 

Shares outstanding

 

31,965,507

 

 

 

31,910,590

 

 

 

32,334,974

 

 

 

32,506,880

 

 

 

32,550,264

 

Weighted average common shares

 

31,923,652

 

 

 

32,194,905

 

 

 

32,444,684

 

 

 

32,542,401

 

 

 

32,757,378

 

Weighted average diluted common shares

 

32,106,594

 

 

 

32,391,466

 

 

 

32,630,819

 

 

 

32,723,358

 

 

 

32,935,750

 

Credit Quality

 

 

 

 

 

 

 

 

 

Allowance for credit losses to gross loans

 

1.78

%

 

 

1.81

%

 

 

1.77

%

 

 

1.78

%

 

 

1.79

%

Loans past due 30 days or more

$

49,611

 

 

$

48,887

 

 

$

37,931

 

 

$

45,712

 

 

$

42,965

 

Total nonperforming loans

$

68,843

 

 

$

69,458

 

 

$

64,218

 

 

$

65,647

 

 

$

64,783

 

Total nonperforming assets

$

75,621

 

 

$

76,424

 

 

$

70,464

 

 

$

71,077

 

 

$

67,466

 

Loans charged-off

$

455

 

 

$

912

 

 

$

1,345

 

 

$

737

 

 

$

8,595

 

Loans recovered

$

118

 

 

$

119

 

 

$

136

 

 

$

123

 

 

$

102

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

Return on average total assets

 

1.37

%

 

 

1.38

%

 

 

1.34

%

 

 

1.36

%

 

 

1.13

%

Return on average equity

 

10.15

%

 

 

10.08

%

 

 

10.02

%

 

 

10.47

%

 

 

8.68

%

Average yield on loans

 

5.85

%

 

 

5.78

%

 

 

5.77

%

 

 

5.75

%

 

 

5.76

%

Average yield on interest-earning assets

 

5.31

%

 

 

5.26

%

 

 

5.23

%

 

 

5.25

%

 

 

5.21

%

Average rate on interest-bearing deposits

 

1.83

%

 

 

1.82

%

 

 

1.87

%

 

 

1.99

%

 

 

1.97

%

Average cost of total deposits

 

1.27

%

 

 

1.26

%

 

 

1.29

%

 

 

1.39

%

 

 

1.37

%

Average cost of total deposits and other borrowings

 

1.27

%

 

 

1.26

%

 

 

1.29

%

 

 

1.38

%

 

 

1.37

%

Average rate on borrowings & subordinated debt

 

5.27

%

 

 

5.29

%

 

 

5.19

%

 

 

5.49

%

 

 

5.84

%

Average rate on interest-bearing liabilities

 

1.87

%

 

 

1.85

%

 

 

1.90

%

 

 

2.05

%

 

 

2.05

%

Net interest margin (fully tax-equivalent) (1)

 

4.11

%

 

 

4.07

%

 

 

4.02

%

 

 

3.92

%

 

 

3.88

%

Loans to deposits

 

87.36

%

 

 

84.11

%

 

 

86.05

%

 

 

84.07

%

 

 

83.08

%

Efficiency ratio

 

56.25

%

 

 

54.55

%

 

 

54.68

%

 

 

56.18

%

 

 

59.00

%

Supplemental Loan Interest Income Data

 

 

 

 

 

 

 

 

 

Discount accretion on acquired loans

$

990

 

 

$

1,386

 

 

$

915

 

 

$

996

 

 

$

1,247

 

All other loan interest income (1)

$

103,605

 

 

$

98,963

 

 

$

101,316

 

 

$

100,008

 

 

$

97,448

 

Total loan interest income (1)

$

104,595

 

 

$

100,349

 

 

$

102,231

 

 

$

101,004

 

 

$

98,695

 

(1)

Non-GAAP measure

TriCo Bancshares—Condensed Consolidated Financial Data (unaudited)
 

(dollars in thousands, except per share data)

 

Balance Sheet Data

June 30,
2026

 

March 31,
2026

 

December 31,
2025

 

September 30,
2025

 

June 30,
2025

Cash and due from banks

$

105,221

 

 

$

301,305

 

 

$

157,014

 

 

$

298,820

 

 

$

314,268

 

Securities, available for sale, net

 

1,698,334

 

 

 

1,768,148

 

 

 

1,734,623

 

 

 

1,743,437

 

 

 

1,818,032

 

Securities, held to maturity, net

 

80,789

 

 

 

85,740

 

 

 

90,544

 

 

 

95,446

 

 

 

101,672

 

Restricted equity securities

 

17,250

 

 

 

17,250

 

 

 

17,250

 

 

 

17,250

 

 

 

17,250

 

Loans held for sale

 

1,880

 

 

 

4,186

 

 

 

2,695

 

 

 

2,785

 

 

 

1,577

 

Loans:

 

 

 

 

 

 

 

 

 

Commercial real estate

 

5,013,880

 

 

 

4,908,229

 

 

 

4,853,762

 

 

 

4,793,394

 

 

 

4,730,732

 

Consumer

 

1,288,973

 

 

 

1,282,181

 

 

 

1,314,610

 

 

 

1,293,909

 

 

 

1,288,691

 

Commercial and industrial

 

559,886

 

 

 

465,081

 

 

 

464,428

 

 

 

453,221

 

 

 

467,564

 

Construction

 

298,388

 

 

 

262,872

 

 

 

301,045

 

 

 

298,774

 

 

 

304,920

 

Agriculture production

 

146,190

 

 

 

145,463

 

 

 

172,494

 

 

 

162,338

 

 

 

161,457

 

Leases

 

3,773

 

 

 

4,372

 

 

 

4,748

 

 

 

5,188

 

 

 

5,629

 

Total loans, gross

 

7,311,090

 

 

 

7,068,198

 

 

 

7,111,087

 

 

 

7,006,824

 

 

 

6,958,993

 

Allowance for credit losses

 

(130,187

)

 

 

(127,939

)

 

 

(125,762

)

 

 

(124,571

)

 

 

(124,455

)

Total loans, net

 

7,180,903

 

 

 

6,940,259

 

 

 

6,985,325

 

 

 

6,882,253

 

 

 

6,834,538

 

Premises and equipment

 

69,356

 

 

 

68,944

 

 

 

69,724

 

 

 

70,509

 

 

 

70,092

 

Cash value of life insurance

 

137,465

 

 

 

138,070

 

 

 

137,253

 

 

 

136,391

 

 

 

135,520

 

Accrued interest receivable

 

33,510

 

 

 

32,661

 

 

 

33,652

 

 

 

32,126

 

 

 

32,534

 

Goodwill

 

304,442

 

 

 

304,442

 

 

 

304,442

 

 

 

304,442

 

 

 

304,442

 

Other intangible assets

 

3,611

 

 

 

4,041

 

 

 

4,471

 

 

 

4,953

 

 

 

5,435

 

Operating leases, right-of-use

 

23,647

 

 

 

24,812

 

 

 

25,505

 

 

 

25,917

 

 

 

22,158

 

Other assets

 

274,355

 

 

 

258,353

 

 

 

259,565

 

 

 

264,507

 

 

 

266,465

 

Total assets

$

9,930,763

 

 

$

9,948,211

 

 

$

9,822,063

 

 

$

9,878,836

 

 

$

9,923,983

 

Deposits:

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

$

2,606,809

 

 

$

2,559,060

 

 

$

2,594,032

 

 

$

2,544,306

 

 

$

2,559,788

 

Interest-bearing demand deposits

 

1,849,252

 

 

 

1,887,823

 

 

 

1,784,769

 

 

 

1,836,550

 

 

 

1,826,041

 

Savings deposits

 

2,769,758

 

 

 

2,809,855

 

 

 

2,775,058

 

 

 

2,847,168

 

 

 

2,879,212

 

Time certificates

 

1,143,011

 

 

 

1,146,850

 

 

 

1,110,042

 

 

 

1,106,437

 

 

 

1,110,768

 

Total deposits

 

8,368,830

 

 

 

8,403,588

 

 

 

8,263,901

 

 

 

8,334,461

 

 

 

8,375,809

 

Accrued interest payable

 

7,149

 

 

 

7,758

 

 

 

8,795

 

 

 

8,241

 

 

 

10,172

 

Operating lease liability

 

25,300

 

 

 

26,525

 

 

 

27,278

 

 

 

27,683

 

 

 

23,965

 

Other liabilities

 

134,134

 

 

 

133,621

 

 

 

141,137

 

 

 

145,869

 

 

 

128,162

 

Other borrowings

 

10,519

 

 

 

11,455

 

 

 

11,713

 

 

 

17,039

 

 

 

17,788

 

Junior subordinated debt

 

41,238

 

 

 

41,238

 

 

 

41,238

 

 

 

41,238

 

 

 

101,264

 

Total liabilities

 

8,587,170

 

 

 

8,624,185

 

 

 

8,494,062

 

 

 

8,574,531

 

 

 

8,657,160

 

Common stock

 

674,014

 

 

 

673,507

 

 

 

682,362

 

 

 

685,594

 

 

 

685,489

 

Retained earnings

 

771,368

 

 

 

749,769

 

 

 

740,244

 

 

 

723,668

 

 

 

702,690

 

Accumulated other comprehensive loss, net of tax

 

(101,789

)

 

 

(99,250

)

 

 

(94,605

)

 

 

(104,957

)

 

 

(121,356

)

Total shareholders’ equity

$

1,343,593

 

 

$

1,324,026

 

 

$

1,328,001

 

 

$

1,304,305

 

 

$

1,266,823

 

Quarterly Average Balance Data

 

 

 

 

 

 

 

 

 

Average loans

$

7,176,963

 

 

$

7,041,552

 

 

$

7,023,749

 

 

$

6,971,860

 

 

$

6,878,186

 

Average interest-earning assets

$

9,164,904

 

 

$

9,110,163

 

 

$

9,127,429

 

 

$

9,090,900

 

 

$

8,973,959

 

Average total assets

$

9,967,548

 

 

$

9,912,485

 

 

$

9,929,582

 

 

$

9,900,675

 

 

$

9,778,834

 

Average deposits

$

8,409,202

 

 

$

8,334,291

 

 

$

8,376,361

 

 

$

8,361,600

 

 

$

8,222,982

 

Average borrowings and subordinated debt

$

52,578

 

 

$

51,980

 

 

$

54,943

 

 

$

88,972

 

 

$

123,943

 

Average total equity

$

1,350,388

 

 

$

1,355,276

 

 

$

1,332,304

 

 

$

1,289,535

 

 

$

1,273,092

 

Capital Ratio Data

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

15.0

%

 

 

15.1

%

 

 

15.1

%

 

 

15.1

%

 

 

15.6

%

Tier 1 capital ratio

 

13.7

%

 

 

13.8

%

 

 

13.8

%

 

 

13.9

%

 

 

13.9

%

Tier 1 common equity ratio

 

13.3

%

 

 

13.3

%

 

 

13.3

%

 

 

13.4

%

 

 

13.1

%

Tier 1 leverage ratio

 

12.0

%

 

 

11.9

%

 

 

11.8

%

 

 

11.7

%

 

 

11.8

%

Tangible capital ratio (1)

 

10.8

%

 

 

10.5

%

 

 

10.7

%

 

 

10.4

%

 

 

10.0

%

(1)

Non-GAAP measure

TriCo Bancshares—Non-GAAP Financial Measures (unaudited)

In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. Management has presented these non-GAAP financial measures in this press release because it believes that they provide useful and comparative information to assess trends in the Company's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below:

 

Three months ended

 

Six months ended

(dollars in thousands)

June 30,
2026

 

March 31,
2026

 

June 30,
2025

 

June 30,
2026

 

June 30,
2025

Net interest margin

 

 

 

 

 

 

 

 

 

Acquired loans discount accretion, net:

 

 

 

 

 

 

 

 

 

Amount (included in interest income)

$990

 

 

$1,386

 

 

$1,247

 

 

$2,376

 

 

$3,242

 

Effect on average loan yield

0.06

%

 

0.08

%

 

0.08

%

 

0.06

%

 

0.09

%

Effect on net interest margin (FTE)

0.04

%

 

0.06

%

 

0.06

%

 

0.05

%

 

0.07

%

Net interest margin (FTE)

4.11

%

 

4.07

%

 

3.88

%

 

4.09

%

 

3.81

%

Net interest margin less effect of acquired loan discount accretion (Non-GAAP)

4.07

%

 

4.01

%

 

3.82

%

 

4.04

%

 

3.73

%

 

Three months ended

 

Six months ended

(dollars in thousands)

June 30,
2026

 

March 31,
2026

 

June 30,
2025

 

June 30,
2026

 

June 30,
2025

Pre-tax pre-provision return on average assets or equity

Net income (GAAP)

$34,169

 

 

$33,685

 

 

$27,542

 

 

$67,854

 

 

$53,905

 

Exclude provision for income taxes

12,127

 

 

12,196

 

 

10,271

 

 

24,323

 

 

19,210

 

Exclude provision for credit losses

2,655

 

 

3,325

 

 

4,665

 

 

5,980

 

 

8,393

 

Net income before provisions for income taxes and credit losses (Non-GAAP)

$48,951

 

 

$49,206

 

 

$42,478

 

 

$98,157

 

 

$81,508

 

 

 

 

 

 

 

 

 

 

 

Average assets (GAAP)

$9,967,548

 

 

$9,912,485

 

 

$9,778,834

 

 

$9,940,169

 

 

$9,793,444

 

Average equity (GAAP)

$1,350,388

 

 

$1,355,276

 

 

$1,273,092

 

 

$1,352,818

 

 

$1,262,602

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (GAAP) (annualized)

1.37

%

 

1.38

%

 

1.13

%

 

1.38

%

 

1.11

%

Pre-tax pre-provision return on average assets (Non-GAAP) (annualized)

1.97

%

 

2.01

%

 

1.74

%

 

1.99

%

 

1.68

%

Return on average equity (GAAP) (annualized)

10.15

%

 

10.08

%

 

8.68

%

 

10.11

%

 

8.61

%

Pre-tax pre-provision return on average equity (Non-GAAP) (annualized)

14.54

%

 

14.72

%

 

13.38

%

 

14.63

%

 

13.02

%

 

Three months ended

 

Six months ended

(dollars in thousands)

June 30,
2026

 

March 31,
2026

 

June 30,
2025

 

June 30,
2026

 

June 30,
2025

Return on tangible common equity

 

 

 

 

 

 

 

 

 

Average total shareholders' equity

$1,350,388

 

 

$1,355,276

 

 

$1,273,092

 

 

$1,352,818

 

 

$1,262,602

 

Exclude average goodwill

304,442

 

 

304,442

 

 

304,442

 

 

304,442

 

 

304,442

 

Exclude average other intangibles

3,890

 

 

4,319

 

 

5,743

 

 

4,103

 

 

5,987

 

Average tangible common equity (Non-GAAP)

$1,042,056

 

 

$1,046,515

 

 

$962,907

 

 

$1,044,273

 

 

$952,173

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

$34,169

 

 

$33,685

 

 

$27,542

 

 

$67,854

 

 

$53,905

 

Exclude amortization of intangible assets, net of tax effect

303

 

 

303

 

 

340

 

 

605

 

 

702

 

Tangible net income available to common shareholders (Non-GAAP)

$34,472

 

 

$33,988

 

 

$27,882

 

 

$68,459

 

 

$54,607

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (GAAP) (annualized)

10.15

%

 

10.08

%

 

8.68

%

 

10.11

%

 

8.61

%

Return on average tangible common equity (Non-GAAP)

13.27

%

 

13.17

%

 

11.61

%

 

13.22

%

 

11.57

%

 

Three months ended

(dollars in thousands)

June 30,
2026

 

March 31,
2026

 

December 31,
2025

 

September 30,
2025

 

June 30,
2025

Tangible shareholders' equity to tangible assets

 

 

 

 

 

 

 

 

 

Shareholders' equity (GAAP)

$1,343,593

 

 

$1,324,026

 

 

$1,328,001

 

 

$1,304,305

 

 

$1,266,823

 

Exclude goodwill and other intangible assets, net

308,053

 

 

308,483

 

 

308,913

 

 

309,395

 

 

309,877

 

Tangible shareholders' equity (Non-GAAP)

$1,035,540

 

 

$1,015,543

 

 

$1,019,088

 

 

$994,910

 

 

$956,946

 

 

 

 

 

 

 

 

 

 

 

Total assets (GAAP)

$9,930,763

 

 

$9,948,211

 

 

$9,822,063

 

 

$9,878,836

 

 

$9,923,983

 

Exclude goodwill and other intangible assets, net

308,053

 

 

308,483

 

 

308,913

 

 

309,395

 

 

309,877

 

Total tangible assets (Non-GAAP)

$9,622,710

 

 

$9,639,728

 

 

$9,513,150

 

 

$9,569,441

 

 

$9,614,106

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity to total assets (GAAP)

13.53

%

 

13.31

%

 

13.52

%

 

13.20

%

 

12.77

%

Tangible shareholders' equity to tangible assets (Non-GAAP)

10.76

%

 

10.53

%

 

10.71

%

 

10.40

%

 

9.95

%

 

Three months ended

(dollars in thousands)

June 30,
2026

 

March 31,
2026

 

December 31,
2025

 

September 30,
2025

 

June 30,
2025

Tangible common shareholders' equity per share

 

 

 

 

 

 

 

 

 

Tangible shareholders' equity (Non-GAAP)

$1,035,540

 

 

$1,015,543

 

 

$1,019,088

 

 

$994,910

 

 

$956,946

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding at end of period

31,965,507

 

 

31,910,590

 

 

32,334,974

 

 

32,506,880

 

 

32,550,264

 

 

 

 

 

 

 

 

 

 

 

Common shareholders' equity (book value) per share (GAAP)

$42.03

 

 

$41.49

 

 

$41.07

 

 

$40.12

 

 

$38.92

 

Tangible common shareholders' equity (tangible book value) per share (Non-GAAP)

$32.40

 

 

$31.82

 

 

$31.52

 

 

$30.61

 

 

$29.40

 

About TriCo Bancshares

Established in 1975, Tri Counties Bank is a wholly-owned subsidiary of TriCo Bancshares (NASDAQ: TCBK) headquartered in Chico, California, providing services in traditional stand-alone and in-store bank branches and loan production offices in communities throughout California. Tri Counties Bank provides an extensive and competitive breadth of consumer, small business and commercial banking financial services, along with convenient around-the-clock ATMs, online and mobile banking access. Brokerage services are provided by Tri Counties Advisors through affiliation with Raymond James Financial Services, Inc. Visit www.TriCountiesBank.com to learn more.

Forward-Looking Statements

The statements contained herein that are not historical facts are forward-looking statements based on current expectations and beliefs of the Company ("TriCo") and First Hawaiian, Inc. and its subsidiaries (including First Hawaiian Bank) ("FHI") concerning future developments and their potential effects on TriCo and FHI. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of TriCo and FHI. TriCo and FHI caution readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: changes in general economic, political, or industry conditions, and in conditions impacting the banking industry specifically; uncertainty in U.S. fiscal, monetary and trade policy, including the interest rate policies of the Federal Reserve Board or the effects of any declines in housing and commercial real estate prices, high or increasing unemployment rates, continued or renewed inflation, the impact of proposed or imposed tariffs by the U.S. government or retaliatory tariffs proposed or imposed by U.S. trading partners that could have an adverse impact on customers or any recession or slowdown in economic growth particularly in the markets in which TriCo and FHI conduct business, including California, Hawaii, Guam and Saipan; volatility and disruptions in global capital and credit markets; the impact of bank failures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources, including impacts on prepayment speeds; competitive pressures among financial institutions and nontraditional providers of financial services, including on product pricing and services; concentrations within TriCo's or FHI’s loan portfolio (including commercial real estate loans) or other asset classes, and the parties’ ability to attract and retain customer deposits, large loans to certain borrowers, access liquidity and capital, and manage deposit costs and funding sources; the success, impact, and timing of TriCo's and FHI’s respective business strategies, including market acceptance of any new products or services and TriCo's and FHI’s ability to successfully implement strategic, operational, technology and integration initiatives; the failure to properly use and protect customer and employee information and data; cybersecurity risks (such as TriCo's 2023 cyber security ransomware incident), including the occurrence of fraudulent activity or a material breach of, or disruption to, the security of FHI’s, TriCo’s or their vendors’ systems; risks related to the development, implementation, use and management of artificial intelligence and other emerging technologies; the effects of failures or interruptions of information, communications or third-party service-provider systems; the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations; changes in laws or regulations; adverse weather conditions, natural disasters and other catastrophic events such as wildfires; the challenges of attracting, integrating and retaining key employees, especially while the merger of TriCo with FHI (the "Transaction") is pending; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement to which TriCo and FHI are parties; the outcome of any legal proceedings that may be instituted against TriCo or FHI, including potential litigation relating to the Transaction; delays in completing the Transaction; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transaction); the failure to obtain stockholder or shareholder approvals, as applicable, or to satisfy any of the other conditions to the closing of the Transaction on a timely basis or at all; changes in TriCo's or FHI’s share price before closing, including as a result of the financial performance of the other party prior to closing, or more generally due to broader stock market movements, and the performance of financial companies and peer group companies; the possibility that the anticipated benefits of the Transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where TriCo and FHI do business; certain restrictions during the pendency of the proposed Transaction that may impact the parties’ ability to pursue certain business opportunities or strategic transactions; the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Transaction; the ability to complete the Transaction and integration of TriCo and FHI promptly and successfully; the dilution caused by FHI’s issuance of additional shares of its capital stock in connection with the Transaction; potential judgments, orders, settlements, penalties, fines and reputational damage resulting from pending or future litigation and regulatory investigations, proceedings and enforcement actions; each company's ability to manage the risks involved in the foregoing; and other factors that may affect the future results of TriCo and FHI. The foregoing factors should not be considered an exhaustive list and should be read together with the other cautionary statements set forth in TriCo’s Annual Report on Form 10-K for the year ended December 31, 2025 and its latest Quarterly Report on Form 10-Q, which are on file with the Securities and Exchange Commission (the "SEC") and available on TriCo’s website, in the “Investor Relations” section of TriCo's website, www.tcbk.com, under the “About” tab and the “Investor Relations” link and then under the heading “SEC Filings” and in other documents TriCo files with the SEC, and in FHI’s Annual Report on Form 10-K for the year ended December 31, 2025 and its latest Quarterly Report on Form 10-Q, which are on file with the SEC and available on FHI’s investor relations website, https://ir.fhb.com, under the heading “SEC Filings,” and in other documents FHI files with the SEC. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Annualized, pro forma, projections and estimates are not forecasts and may not reflect actual results. Neither TriCo nor FHI undertakes any obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law.

Additional Information

IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT

In connection with the proposed Transaction, FHI will file with the SEC a Registration Statement on Form S-4 that will include a Joint Proxy Statement of FHI and TriCo and a Prospectus of FHI, as well as other relevant documents concerning the Transaction. Certain matters in respect of the Transaction involving FHI and TriCo will be submitted to FHI’s stockholders and TriCo’s shareholders, as applicable, for their consideration.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS, FHI STOCKHOLDERS AND TRICO SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Stockholders or shareholders, as applicable, will be able to obtain a free copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about the Transaction, FHI and TriCo, without charge, at the SEC’s website, www.sec.gov. Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to First Hawaiian, Inc., Attention: Secretary, 999 Bishop Street, Honolulu, HI 96813, (808) 525-7000 or to TriCo Bancshares, Attention: Shareholder Services, 63 Constitution Drive, Chico, CA 95973, (530) 898-0300.

PARTICIPANTS IN THE SOLICITATION

FHI, TriCo, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from FHI stockholders or TriCo shareholders in connection with the Transaction under the rules of the SEC. Information regarding FHI’s directors and executive officers is available in the sections entitled “Directors, Executive Officers and Corporate Governance” and “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in FHI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on February 27, 2026 (available here); in the sections entitled “Corporate Governance and Board Matters,” “Compensation Discussion and Analysis,” “Executive Compensation Tables,” “Biographies of Executive Officers” and “Security Ownership of Certain Beneficial Owners, Directors and Management” in FHI’s definitive proxy statement relating to its 2026 Annual Meeting of Stockholders, which was filed with the SEC on March 12, 2026 (available here); and other documents filed by FHI with the SEC. Information regarding TriCo’s directors and executive officers is available in the sections entitled “Directors, Executive Officers and Corporate Governance” and “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters;” in TriCo’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on March 2, 2026 (available here); in the sections entitled “Board of Directors,” “Corporate Governance, Board Nominations and Board Committees,” “Compensation of Directors,” “Ownership of Voting Securities,” “Compensation Discussion and Analysis” and “Compensation of Named Executive Officers” in TriCo’s definitive proxy statement relating to its 2026 Annual Meeting of Shareholders, which was filed with the SEC on April 17, 2026 (available here); and other documents filed by TriCo with the SEC. To the extent holdings of FHI common stock by the directors and executive officers of FHI or holdings of TriCo common stock by directors and executive officers of TriCo have changed from the amounts held by such persons as reflected in the documents described above, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus relating to the Transaction. Free copies of this document, when available, may be obtained as described in the preceding paragraph.

Investor Contact
Peter G. Wiese, EVP & CFO, (530) 898-0300

Source: TriCo Bancshares

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