TriCo Bancshares (TCBK)

California regional bank TriCo Bancshares (NASDAQ:TCBK) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 8.6% year on year to $107.6 million. Its GAAP profit of $1.04 per share was 14.3% above analysts’ consensus estimates.

Company Overview

Founded in 1975 and headquartered in Chico, California, TriCo Bancshares (NASDAQ:TCBK) operates Tri Counties Bank, providing personal, small business, and commercial banking services through branches across California.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

TriCo Bancshares competes with other California regional banks like Bank of Marin (NASDAQ:BMRC), CVB Financial (NASDAQ:CVBF), and Pacific Premier Bancorp (NASDAQ:PPBI), as well as larger national banks operating in California such as Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and JPMorgan Chase (NYSE:JPM).

In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees. Thankfully, TriCo Bancshares’s 5.8% annualized revenue growth over the last five years was decent. Its growth was slightly above the average banking company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. TriCo Bancshares’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 2.5% over the last two years. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, TriCo Bancshares reported year-on-year revenue growth of 8.6%, and its $107.6 million of revenue exceeded Wall Street’s estimates by 1.2%.

Net interest income made up 83.2% of the company’s total revenue during the last five years, meaning TriCo Bancshares barely relies on non-interest income to drive its overall growth.

Our experience and research show the market cares primarily about a bank’s net interest income growth as non-interest income is considered a lower-quality and non-recurring revenue source.

Topline growth carries importance, but the overall profitability behind this expansion determines true value creation. For banks, the efficiency ratio captures this relationship by measuring non-interest expenses, including salaries, facilities, technology, and marketing, against total revenue.

Markets understand that a bank’s expense base depends on its revenue mix and what mostly drives share price performance is the change in this ratio, rather than its absolute value. It’s somewhat counterintuitive, but a lower efficiency ratio is better.

Over the last five years, TriCo Bancshares’s efficiency ratio has swelled by 1.1 percentage points, going from 52.9% to 58.5%. Said differently, the company’s expenses have grown at a slower rate than revenue, which typically signals prudent management.

TriCo Bancshares’s efficiency ratio came in at 56.2% this quarter, beating analysts’ expectations by 192.7 basis points (100 basis points = 1 percentage point). This result was 3.8 percentage points better than the same quarter last year.

For the next 12 months, Wall Street expects TriCo Bancshares to maintain its trailing one-year ratio with a projection of 58.3%.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

TriCo Bancshares’s EPS grew at an astounding 10.9% compounded annual growth rate over the last five years, higher than its 5.8% annualized revenue growth. However, we take this with a grain of salt because its efficiency ratio didn’t improve and it didn’t repurchase its shares, meaning the delta came from factors we consider non-core or less sustainable over the long term.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For TriCo Bancshares, its two-year annual EPS declines of 3.6% mark a reversal from its (seemingly) healthy five-year trend. We hope TriCo Bancshares can return to earnings growth in the future.

In Q3, TriCo Bancshares reported EPS of $1.04, up from $0.88 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects TriCo Bancshares’s full-year EPS of $3.56 to grow 3.9%.

Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.

Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.

TriCo Bancshares’s TBVPS grew at a solid 6.6% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 16.2% annually over the last two years from $22.67 to $30.61 per share.

Over the next 12 months, Consensus estimates call for TriCo Bancshares’s TBVPS to grow by 7.8% to $33.00, decent growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, TriCo Bancshares has averaged a Tier 1 capital ratio of 12.9%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.

Over the last five years, TriCo Bancshares has averaged an ROE of 10.9%, impressive for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This is a bright spot for TriCo Bancshares.

It was good to see TriCo Bancshares beat analysts’ EPS expectations this quarter. We were also happy its tangible book value per share outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 1.7% to $43.23 immediately following the results.

Updated: December 4, 2025 at 11:23 PM EST

A common mistake we notice when investors are deciding whether to buy a stock or not is that they simply look at the latest earnings results. Business quality and valuation matter more, so we urge you to understand these dynamics as well.

TriCo Bancshares’s business quality ultimately falls short of our standards. To kick things off, its revenue growth was uninspiring over the last five years, and analysts don’t see anything changing over the next 12 months. And while its TBVPS growth was solid over the last five years, the downside is its net interest income growth was weak over the last five years. On top of that, its declining net interest margin shows its loan book is becoming less profitable.

TriCo Bancshares’s P/B ratio based on the next 12 months is 1.2x. This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're pretty confident there are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $49.33 on the company (compared to the current share price of $48.69).