TriBancshares(US:TCBK)2025-05-09 22:23PART I – FINANCIAL INFORMATION This section provides the unaudited financial information for TriCo Bancshares, including detailed financial statements, management's discussion and analysis, market risk disclosures, and internal controls Item 1 – Financial Statements (Unaudited) This section presents TriCo Bancshares' unaudited condensed consolidated financial statements for Q1 2025, covering balance sheets, income statements, and detailed accounting notes Condensed Consolidated Balance Sheets As of March 31, 2025, total assets increased to $9.82 billion from $9.67 billion at year-end 2024, driven by a rise in cash and cash equivalents and a slight increase in net loans, while liabilities and equity also grew Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $308,250 | $144,956 | | Total loans, net | $6,692,351 | $6,643,157 | | Total assets | $9,819,599 | $9,673,728 | | Liabilities & Equity | | | | Total deposits | $8,205,332 | $8,087,576 | | Total liabilities | $8,564,080 | $8,452,821 | | Total shareholders' equity | $1,255,519 | $1,220,907 | Condensed Consolidated Statements of Income For the three months ended March 31, 2025, net income decreased to $26.4 million from $27.7 million in Q1 2024, primarily due to slightly lower net interest income and higher non-interest expenses Income Statement Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net interest income | $82,542 | $82,736 | | Provision for credit losses | $3,728 | $4,305 | | Non-interest income | $16,073 | $15,771 | | Non-interest expense | $59,585 | $56,504 | | Net income | $26,363 | $27,749 | | Diluted earnings per share | $0.80 | $0.83 | Notes to Unaudited Condensed Consolidated Financial Statements These notes detail the company's accounting policies, investment and loan portfolios, credit loss allowance, lease obligations, deposit structures, and regulatory capital adequacy - The company operates as a single reportable operating segment, with operations managed on a company-wide basis27 - As of March 31, 2025, the company expects to receive all contractual cash flows from its AFS and HTM debt securities portfolio, with no allowance for credit losses recorded for investment securities45 - The company's capital levels exceed all capital adequacy requirements under Basel III Capital Rules as of March 31, 2025, and the bank is considered well capitalized119 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial performance, including net income, net interest margin, loan and deposit growth, asset quality, and the company's strong capital and liquidity positions Q1 2025 Financial Highlights | Metric | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Net Income | $26.4 million | $29.0 million | | Diluted EPS | $0.80 | $0.88 | | Net Interest Margin (FTE) | 3.73% | 3.76% | | Provision for Credit Losses | $3.7 million | $1.7 million | | Loan Growth (annualized) | 3.1% | - | | Deposit Growth (annualized) | 5.8% | - | | Non-performing Assets to Total Assets | 0.59% | 0.48% | Results of Operations In Q1 2025, net interest income (FTE) was $82.8 million with a net interest margin of 3.73%, while non-interest income increased slightly and non-interest expense rose due to higher salary costs - Net interest income (FTE) for Q1 2025 was $82.8 million, a 0.2% decrease from Q1 2024, with the net interest margin (FTE) at 3.73%, up 5 basis points from 3.68% in Q1 2024136139 - The provision for credit losses was $3.7 million in Q1 2025, driven by a $4.9 million increase in net reserves on individually evaluated loans, offset by net recoveries and improved economic forecasts140141 - Non-interest income increased 1.9% year-over-year to $16.1 million, which included a $1.1 million loss on the sale of investment securities, offset by a $1.2 million gain from life insurance death benefit proceeds148 - Total non-interest expense rose 5.5% year-over-year to $59.6 million, primarily due to a 7.4% increase in salaries and benefits from merit increases and strategic hiring150 Financial Condition As of March 31, 2025, total assets reached $9.82 billion, with loans increasing by $52.3 million and deposits growing by $117.8 million, while investment securities decreased Change in Financial Condition (Q1 2025 vs Q4 2024) | Account | March 31, 2025 | December 31, 2024 | $ Change | | :--- | :--- | :--- | :--- | | Total Loans | $6,820,774 | $6,768,523 | $52,251 | | Total Investments | $1,979,116 | $2,036,610 | ($57,494) | | Total Deposits | $8,205,332 | $8,087,576 | $117,756 | - Loan originations and draws totaled approximately $357.5 million in Q1 2025, compared to $487.9 million in the trailing quarter153 Nonperforming Assets Nonperforming assets increased by $10.7 million to $57.5 million, or 0.59% of total assets, driven by new nonperforming loan additions, though the allowance for credit losses remains strong Nonperforming Assets (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total nonperforming loans | $54,854 | $44,096 | | Foreclosed assets | $2,685 | $2,786 | | Total nonperforming assets | $57,539 | $46,882 | | NPAs to total assets | 0.59% | 0.48% | | NPLs to total loans | 0.80% | 0.65% | Capital Resources and Liquidity The company maintains a strong capital position with all regulatory ratios exceeding minimum requirements, supported by increased shareholders' equity and substantial primary liquidity - During Q1 2025, the company repurchased 89,654 shares for $3.7 million under its 2021 Repurchase Plan17485 - Tangible book value per share increased to $28.73 at March 31, 2025, from $27.60 at December 31, 2024175 Regulatory Capital Ratios | Ratio | March 31, 2025 | Minimum Requirement | | :--- | :--- | :--- | | Total risk based capital | 15.8% | 10.5% | | Tier I capital | 14.1% | 8.5% | | Common equity Tier 1 capital | 13.3% | 7.0% | | Leverage | 11.7% | 4.0% | - Total primary liquidity was $4.08 billion as of March 31, 2025, representing 156% of estimated total uninsured deposits179 Item 3 – Quantitative and Qualitative Disclosures about Market Risk The company's primary market risk is interest rate risk, with simulations indicating a 100 basis point increase would decrease net interest income by 2.3% over twelve months Interest Rate Risk Simulation (Instantaneous Shock) | Change in Rates (bps) | Estimated Change in NII (%) | Estimated Change in MVE (%) | | :--- | :--- | :--- | | +300 | (7.2)% | (4.6)% | | +200 | (4.8)% | (2.9)% | | +100 | (2.3)% | (0.6)% | | -100 | 0.1% | (3.1)% | Item 4 – Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025191 - No changes in internal controls over financial reporting materially affected, or are reasonably likely to materially affect, these controls during the first quarter of 2025192 PART II – OTHER INFORMATION This section covers other information including legal proceedings, risk factors, unregistered sales of equity securities, and a list of exhibits Item 1 – Legal Proceedings The company is involved in various legal proceedings in the ordinary course of business, with management not expecting a material adverse effect on financial position or results - The company does not expect that the ultimate costs to resolve pending legal proceedings will have a material adverse effect on its consolidated financial position, results of operations, or cash flows193 Item 1A – Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - The report refers investors to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024, indicating no material changes194 Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's stock repurchase activities for the quarter, including 99,776 shares repurchased in March 2025 at an average price of $41.20 per share Share Repurchases in Q1 2025 | Period | Total Shares Purchased | Average Price Paid | Shares Purchased Under Plan | | :--- | :--- | :--- | :--- | | Jan 2025 | — | $— | — | | Feb 2025 | — | $— | — | | Mar 2025 | 99,776 | $41.20 | 89,654 | Item 6 – Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files