TriCo Bancshares (TCBK)

California regional bank TriCo Bancshares (NASDAQ:TCBK) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 8.6% year on year to $109.4 million. Its non-GAAP profit of $1.03 per share was 3.6% 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).

Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Unfortunately, TriCo Bancshares’s 6% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the banking sector and is a poor baseline for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. TriCo Bancshares’s recent performance shows its demand has slowed as its revenue was flat 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 $109.4 million of revenue exceeded Wall Street’s estimates by 1.2%.

Net interest income made up 83.4% 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.

While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.

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 2 percentage points, going from 52.9% to 57.6%. 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 54.7% this quarter, beating analysts’ expectations by 162 basis points (100 basis points = 1 percentage point).

For the next 12 months, Wall Street expects TriCo Bancshares to maintain its trailing one-year ratio with a projection of 56.7%.

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 a decent 11.4% compounded annual growth rate over the last five years, higher than its 6% 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 growth of 2.4% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q4, TriCo Bancshares reported adjusted EPS of $1.03, up from $0.88 in the same quarter last year. This print beat analysts’ estimates by 3.6%. Over the next 12 months, Wall Street expects TriCo Bancshares’s full-year EPS of $3.71 to grow 5.1%.

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.

This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.

TriCo Bancshares’s TBVPS grew at a solid 6.4% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 11.4% annually over the last two years from $25.39 to $31.52 per share.

Over the next 12 months, Consensus estimates call for TriCo Bancshares’s TBVPS to grow by 6.3% to $33.49, lousy 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 13.1%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity (ROE) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.

Over the last five years, TriCo Bancshares has averaged an ROE of 10.8%, respectable for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired.

It was encouraging to see TriCo Bancshares beat analysts’ net interest income expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EPS slightly beat. Overall, this print had some key positives. The stock traded up 1.6% to $51.44 immediately after reporting.

Updated: January 22, 2026 at 3:29 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in TriCo Bancshares.

TriCo Bancshares isn’t a terrible business, but it isn’t one of our picks. First 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 net interest margin indicates a healthy starting point for the overall profitability of the business, the downside is its estimated sales for the next 12 months are weak. On top of that, its net interest income growth was uninspiring over the last five years.

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 $51.17 on the company (compared to the current share price of $51.44).