TriCo Loan Growth Cools After Outlier Quarter

The Tip Desk · October 24, 2026 · 3 min read

Net interest income (FTE) reached $96.8 million and the margin widened 5 bps to 4.16% as loan growth slowed to a 5.4% annualized rise.

TriCo Bancshares (TCBK), the Chico, California regional lender, reported third-quarter net interest income (FTE) of $96.8 million, up $2.9 million or 3.1% from the trailing quarter, as the net interest margin widened 5 bps to 4.16% from 4.11%.

Loan growth cooled after an outlier second quarter. Loans outstanding rose $99.1 million, or 5.4% annualized, to $7.4 billion at September 30, 2026, after a $242.9 million, or 13.7% annualized, increase in the prior quarter. Gross originations and draws were about $496.0 million against $410.8 million of payoffs, versus $632.9 million of originations in the second quarter. The company said origination and repayment volumes returned to levels consistent with recent periods.

The company attributed the $2.9 million rise in net interest income primarily to a $3.1 million increase in interest income on earning assets, led by $3.8 million from lending. Loan yield was 5.87%, up 2 bps from 5.85%. Average earning-asset yield was 5.35%. The cost of total deposits was 1.26%, down 1 bps from 1.27%. Interest expense rose only $0.2 million. Average noninterest-bearing deposits increased $50.5 million from the June quarter and were 31.0% of total average deposits.

Deposit balances increased $74.6 million, or 3.6% annualized, after a $34.8 million, or 1.7% annualized, decline in the second quarter. The increase included $68.8 million of one-way sell deposits that had been outstanding at June 30 and were returned to the balance sheet. There were no deposits sold as of September 30. The loan-to-deposit ratio was 87.76%.

Investment securities ended the quarter at $1.63 billion, down $163.1 million, as prepayments and maturities of $131.8 million and a $60.5 million decline in market value more than offset $29.2 million of purchases of fixed-rate agency mortgage-backed securities. Management said it intends to use cash flows from the securities portfolio and organic deposit growth to support loan growth, with excess liquidity directed to securities purchases.

The company recorded a $1.9 million benefit from credit losses, versus a $2.7 million provision in the trailing quarter. The allowance for credit losses was $128.2 million, or 1.73% of loans, down from 1.78%. The reversal included a $1.3 million reduction in individually evaluated reserves, which the company tied to improved collateral values, and a collective-pool reversal attributed to improved delinquency rates and risk grades in commercial real estate, net of $0.3 million in net charge-offs. Classified loans fell to 1.76% of loans from 1.93%. Loans past due 30 days or more were 0.62% of loans. Non-performing assets were $79.0 million, or 0.79% of total assets.

Noninterest income was $20.2 million. Noninterest expense was $66.5 million, inclusive of $3.8 million of merger-related expenses versus $0.9 million in the trailing quarter. The efficiency ratio was 56.96%. Return on average equity was 11.08%.

Chairman and CEO Rick Smith said the company remains focused on serving customers and delivering growth as it prepares for its merger with First Hawaiian Bank. The company declared a $0.36 quarterly cash dividend, unchanged from the trailing quarter, payable November 27, 2026.