TriCo Bancshares 8K Results of Operations and Financial Condition | TCBK 23 Oct 24

Exhibit 99.1


For Immediate Release \| October 24, 2024 \| Chico, California

TriCo Bancshares reports third quarter 2024 net income of $29.1 million, diluted EPS of $0.88


3Q24 Financial Highlights

•Net income was $29.1 million or $0.88 per diluted share as compared to $29.0 million or $0.87 per diluted share in the trailing quarter

•Deposit balances decreased $13.1 million or 0.7% (annualized) from the trailing quarter and have increased $27.4 million or 0.3% (annualized) from the same quarter of the prior year

•Average yield on earning assets was 5.26%, an increase of 2 basis points over the 5.24% in the trailing quarter

•Net interest margin (FTE) was 3.71% in the recent quarter, an increase of 3 basis points over 3.68% in the trailing quarter

•Non-interest bearing deposits averaged 31.7% of total deposits during the quarter

•The average cost of total deposits was 1.52%, an increase of 7 basis points as compared to 1.45% in the trailing quarter, and an increase of 66 basis points from 0.86% in the same quarter of the prior year; the Company's total cost of deposits have increased 148 basis points since FOMC rate actions began in March 2022, which translates to a cycle-to-date deposit beta of 31.2%


Executive Commentary: “Our financial performance for the third quarter demonstrates the effectiveness and strength of adhering to a long term plan and our teams' consistent ability to execute. In addition, recent strategic hires have been transitioning at an accelerated pace and we are looking forward to their more meaningful impact in 2025," said Rick Smith, President and CEO. Peter Wiese, EVP and CFO added, “While both net interest margin and net interest income expanded during the quarter, we continue to execute incremental balance sheet strategies to minimize the forecasted impacts of recent and anticipated interest rate cuts. More notably, the reshaping of the yield curve with less inversion will likely provide longer term benefits to revenue and earnings per share growth.”


Selected Financial Highlights

•For the quarter ended September 30, 2024, the Company’s return on average assets was 1.20%, while the return on average equity was 9.52%; for the trailing quarter ended June 30, 2024, the Company’s return on average assets was 1.19%, while the return on average equity was 9.99%

•Diluted earnings per share were $0.88 for the third quarter of 2024, compared to $0.87 for the trailing quarter and $0.92 during the third quarter of 2023

•The loan to deposit ratio decreased to 83.2% as of September 30, 2024, as compared to 83.8% for the trailing quarter end, as a result of loan contraction during the quarter

•The efficiency ratio was 60.02% for the quarter ended September 30, 2024, as compared to 59.61% for the trailing quarter

•The provision for credit losses was approximately $0.2 million during the quarter ended September 30, 2024, as compared to $0.4 million during the trailing quarter end, with reserves on individually analyzed loans increasing during the current quarter

•The allowance for credit losses (ACL) to total loans was 1.85% as of September 30, 2024, compared to 1.83% as of the trailing quarter end, and 1.73% as of September 30, 2023. Non-performing assets to total assets were 0.45% on September 30, 2024, as compared to 0.36% as of June 30, 2024, and 0.33% at September 30, 2023. At September 30, 2024, the ACL represented 297% of non-performing loans

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 September 30, 2024, 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
	September 30, 2024			June 30, 2024
(dollars and shares in thousands, except per share data)							$ Change		% Change
Net interest income	$	82,611		$	81,997		$	614	0.7	%
Provision for credit losses	(220)			(405)			185		(45.7)	%
Noninterest income	16,495			15,866			629		4.0	%
Noninterest expense	(59,487)			(58,339)			(1,148)		2.0	%
Provision for income taxes	(10,348)			(10,085)			(263)		2.6	%
Net income	$	29,051		$	29,034		$	17	0.1	%
Diluted earnings per share	$	0.88		$	0.87		$	0.01	1.1	%
Dividends per share	$	0.33		$	0.33		$	—	—	%
Average common shares	32,993			33,121			(128)		(0.4)	%
Average diluted common shares	33,137			33,244			(107)		(0.3)	%
Return on average total assets	1.20		%	1.19		%
Return on average equity	9.52		%	9.99		%
Efficiency ratio	60.02		%	59.61		%


	Three months ended September 30,
(dollars and shares in thousands, except per share data)	2024			2023			$ Change		% Change
Net interest income	$	82,611		$	88,123		$	(5,512)	(6.3)	%
Provision for credit losses	(220)			(4,155)			3,935		(94.7)	%
Noninterest income	16,495			15,984			511		3.2	%
Noninterest expense	(59,487)			(57,878)			(1,609)		2.8	%
Provision for income taxes	(10,348)			(11,484)			1,136		(9.9)	%
Net income	$	29,051		$	30,590		$	(1,539)	(5.0)	%
Diluted earnings per share	$	0.88		$	0.92		$	(0.04)	(4.3)	%
Dividends per share	$	0.33		$	0.30		$	0.03	10.0	%
Average common shares	32,993			33,263			(270)		(0.8)	%
Average diluted common shares	33,137			33,319			(182)		(0.5)	%
Return on average total assets	1.20		%	1.23		%
Return on average equity	9.52		%	10.91		%
Efficiency ratio	60.02		%	55.59		%


	Nine months ended September 30,
(dollars and shares in thousands)	2024			2023			$ Change		% Change
Net interest income	$	247,344		$	270,060		$	(22,716)	(8.4)	%
Provision for credit losses	(4,930)			(18,000)			13,070		(72.6)	%
Noninterest income	48,132			45,360			2,772		6.1	%
Noninterest expense	(174,330)			(172,915)			(1,415)		0.8	%
Provision for income taxes	(30,382)			(33,190)			2,808		(8.5)	%
Net income	$	85,834		$	91,315		$	(5,481)	(6.0)	%
Diluted earnings per share	$	2.58		$	2.74		$	(0.16)	(5.8)	%
Dividends per share	$	0.99		$	0.90		$	0.09	10.0	%
Average common shares	33,119			33,259			(140)		(0.4)	%
Average diluted common shares	33,251			33,356			(105)		(0.3)	%
Return on average total assets	1.17		%	1.24		%
Return on average equity	9.67		%	11.06		%
Efficiency ratio	59.00		%	54.82		%

Balance Sheet Data

Total loans outstanding were $6.7 billion as of September 30, 2024, a decrease of $24.8 million or 0.4% over September 30, 2023, and decreased by $58.6 million or 3.5% annualized as compared to the trailing quarter ended June 30, 2024. Investments increased by $30.4 million and decreased by $216.7 million for the three and twelve month periods ended September 30, 2024, and ended the quarter with a balance of $2.12 billion or 21.5% of total assets. Quarterly average earning assets to quarterly total average assets was 92.0% on September 30, 2024, compared to 91.7% at September 30, 2023. The loan-to-deposit ratio was 83.2% on September 30, 2024, as compared to 83.8% at September 30, 2023. The Company did not utilize brokered deposits during 2024 or 2023 and continues to rely on organic deposit customers and short-term borrowings to fund cash flow timing differences.

Total shareholders' equity increased by $64.0 million during the quarter ended September 30, 2024, as net income of $29.1 million and a $44.5 million decrease in accumulated other comprehensive losses was partially offset by cash dividend payments on common stock of approximately $10.9 million. As a result, the Company’s book value grew to $37.55 per share at September 30, 2024, compared to $32.18 at September 30, 2023. 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 $28.09 per share at September 30, 2024, as compared to $22.67 at September 30, 2023. Changes in the fair value of available-for-sale investment securities, net of deferred taxes continue to create moderate levels of volatility in tangible book value per share.

Trailing Quarter Balance Sheet Change


Ending balances	September 30, 2024		June 30, 2024				Annualized % Change
(dollars in thousands)					$ Change
Total assets	$	9,823,890	$	9,741,399	$	82,491	3.4	%
Total loans	6,683,891		6,742,526		(58,635)		(3.5)
Total investments	2,116,469		2,086,090		30,379		5.8
Total deposits	8,037,091		8,050,230		(13,139)		(0.7)
Total other borrowings	266,767		247,773		18,994		30.7

Loans outstanding decreased by $58.6 million or 3.5% on an annualized basis during the quarter ended September 30, 2024. During the quarter, loan originations/draws totaled approximately $351.5 million while payoffs/repayments of loans totaled $418.8 million, which compares to originations/draws and payoffs/repayments during the trailing quarter ended of $310.1 million and $368.7 million, respectively. Origination volume and activity levels remain slightly lower relative to the comparative period in 2023 due in part to disciplined pricing and underwriting, as well as decreased borrower demand given economic uncertainties. The increase in payoffs/repayments as compared to the trailing quarter was spread amongst numerous borrowers, regions and loan types.

Investment security balances increased $30.4 million or 5.8% on an annualized basis during the quarter as a result of security purchases totaling $69.4 million, in addition to net increases in the market value of securities of $63.2 million, partially offset by net prepayments, and maturities, collectively totaling approximating $99.3 million and, to a lesser extent, sales totaling $3.0 million. Investment security purchases were comprised of floating rate instruments tied to SOFR with an initial weighted average coupon of 6.68% and a weighted average life of 5.9 years. 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 $13.1 million or 0.7% annualized during the period, primarily due to declines in interest-bearing demand deposits, partially offset by increases in time certificates and savings deposits.

Other borrowings totaled $266.8 million at September 30, 2024, representing a net increase of $19.0 million from the trailing quarter. However, on balance sheet liquidity increased during the quarter by $113.6 million to $320.1 million as of September 30, 2024.

Average Trailing Quarter Balance Sheet Change


Quarterly average balances for the period ended	September 30, 2024		June 30, 2024				Annualized % Change
(dollars in thousands)					$ Change
Total assets	$	9,666,979	$	9,782,228	$	(115,249)	(4.7)	%
Total loans	6,690,326		6,792,303		(101,977)		(6.0)
Total investments	2,108,359		2,141,291		(32,932)		(6.2)
Total deposits	8,020,936		8,024,441		(3,505)		(0.2)
Total other borrowings	175,268		325,604		(150,336)		(184.7)

Year Over Year Balance Sheet Change


Ending balances	As of September 30,						% Change
(dollars in thousands)	2024		2023		$ Change
Total assets	$	9,823,890	$	9,897,006	$	(73,116)	(0.7)	%
Total loans	6,683,891		6,708,666		(24,775)		(0.4)
Total investments	2,116,469		2,333,162		(216,693)		(9.3)
Total deposits	8,037,091		8,009,643		27,448		0.3
Total other borrowings	266,767		537,975		(271,208)		(50.4)

Primary Sources of Liquidity


(dollars in thousands)	September 30, 2024		June 30, 2024		September 30, 2023
Borrowing capacity at correspondent banks and FRB	$	2,757,640	$	2,998,009	$	2,927,065
Less: borrowings outstanding	(250,000)		(225,000)		(500,000)
Unpledged available-for-sale (AFS) investment securities	1,312,745		1,285,185		1,702,265
Cash held or in transit with FRB	274,908		163,809		72,049
Total primary liquidity	$	4,095,293	$	4,222,003	$	4,201,379


Estimated uninsured deposit balances			$	2,513,313					$	2,486,910					$	2,406,552

On September 30, 2024, the Company's primary sources of liquidity represented 51% of total deposits and 163% of estimated total uninsured (excluding collateralized municipal deposits and intercompany balances) deposits, respectively. As secondary sources of liquidity, the Company's held-to-maturity investment securities had a fair value of $112.0 million, including approximately $5.3 million in net unrealized losses.

Net Interest Income and Net Interest Margin

During the twelve-month period ended September 30, 2024, the Company's yield on total loans increased 32 basis points to 5.83% for the three months ended September 30, 2024, from 5.51% for the three months ended September 30, 2023. The tax equivalent yield on the Company's investment security portfolio was 3.46% for the quarter ended September 30, 2024, an increase of 7 basis points from the 3.39% for the three months ended September 30, 2023. The cost of total interest-bearing deposits and total interest-bearing liabilities increased by 87 basis points and 69 basis points, respectively, between the three-month periods ended September 30, 2024 and 2023. Since FOMC rate actions began in March 2022, the Company's cost of total deposits has increased 148 basis points which translates to a cycle to date deposit beta of 31.2%.

The Company continues to manage its cost of deposits through the use of various pricing and product mix strategies. As of September 30, 2024, December 31, 2023, and September 30, 2023, deposits priced utilizing these strategies totaled $1.4 billion, $1.3 billion and $1.2 billion, respectively, and carried weighted average rates of 3.80%, 3.80%, and 3.53%, respectively.


	Three months ended
	September 30, 2024			June 30, 2024
(dollars in thousands)							Change			% Change
Interest income	$	117,347		$	117,032		$	315		0.3	%
Interest expense	(34,736)			(35,035)			299			(0.9)	%
Fully tax-equivalent adjustment (FTE) (1)	269			275			(6)			(2.2)	%
Net interest income (FTE)	$	82,880		$	82,272		$	608		0.7	%
Net interest margin (FTE)	3.71		%	3.68		%

Acquired loans discount accretion, net:
Amount (included in interest income)	$	1,018		$	850		$	168		19.8	%
Net interest margin less effect of acquired loan discount accretion(1)	3.66		%	3.64		%	0.02		%


	Three months ended September 30,
(dollars in thousands)	2024			2023			Change			% Change
Interest income	$	117,347		$	112,380		$	4,967		4.4	%
Interest expense	(34,736)			(24,257)			(10,479)			43.2	%
Fully tax-equivalent adjustment (FTE) (1)	269			405			(136)			(33.6)	%
Net interest income (FTE)	$	82,880		$	88,528		$	(5,648)		(6.4)	%
Net interest margin (FTE)	3.71		%	3.88		%

Acquired loans discount accretion, net:
Amount (included in interest income)	$	1,018		$	1,324		$	(306)		(23.1)	%
Net interest margin less effect of acquired loan discount accretion(1)	3.66		%	3.82		%	(0.16)		%


	Nine months ended September 30,
(dollars in thousands)	2024			2023			Change			% Change
Interest income	$	349,796		$	322,445		$	27,351		8.5	%
Interest expense	(102,452)			(52,385)			(50,067)			95.6	%
Fully tax-equivalent adjustment (FTE) (1)	819			1,176			(357)			(30.4)	%
Net interest income (FTE)	$	248,163		$	271,236		$	(23,073)		(8.5)	%
Net interest margin (FTE)	3.69		%	4.01		%

Acquired loans discount accretion, net:
Amount (included in interest income)	$	3,200		$	4,192		$	(992)		(23.7)	%
Net interest margin less effect of acquired loan discount accretion(1)	3.64		%	3.95		%	(0.31)		%

(1)Certain information included herein is presented on a fully tax-equivalent (FTE) basis and / or to present additional financial details which may be desired by users of this financial information. The Company believes the use of these non-generally accepted accounting principles (non-GAAP) measures provide additional clarity in assessing its results, and the presentation of these measures are common practice within the banking industry. See additional information related to non-GAAP measures at the back of this document.


Analysis Of Change In Net Interest Margin On Earning Assets


	Three months ended						Three months ended						Three months ended
(dollars in thousands)	September 30, 2024						June 30, 2024						September 30, 2023
	Average Balance		Income/ Expense		Yield/ Rate		Average Balance		Income/ Expense		Yield/ Rate		Average Balance		Income/ Expense		Yield/ Rate
Assets
Loans	$	6,690,326	$	98,085	5.83	%	$	6,792,303	$	98,229	5.82	%	$	6,597,400	$	91,707	5.51	%
Investments-taxable	1,972,859		17,188		3.47	%	2,003,124		17,004		3.41	%	2,246,569		18,990		3.35	%
Investments-nontaxable (1)	135,500		1,166		3.42	%	138,167		1,190		3.46	%	182,766		1,755		3.81	%
Total investments	2,108,359		18,354		3.46	%	2,141,291		18,194		3.42	%	2,429,335		20,745		3.39	%
Cash at Fed Reserve and other banks	93,538		1,177		5.01	%	68,080		884		5.22	%	26,654		333		4.96	%
Total earning assets	8,892,223		117,616		5.26	%	9,001,674		117,307		5.24	%	9,053,389		112,785		4.94	%
Other assets, net	774,756						780,554						820,851
Total assets	$	9,666,979					$	9,782,228					$	9,874,240
Liabilities and shareholders’ equity
Interest-bearing demand deposits	$	1,736,442	$	6,132	1.40	%	$	1,769,370	$	6,215	1.41	%	$	1,751,625	$	3,916	0.89	%
Savings deposits	2,686,303		13,202		1.96	%	2,673,272		12,260		1.84	%	2,790,197		9,526		1.35	%
Time deposits	1,055,612		11,354		4.28	%	1,016,190		10,546		4.17	%	535,715		3,937		2.92	%
Total interest-bearing deposits	5,478,357		30,688		2.23	%	5,458,832		29,021		2.14	%	5,077,537		17,379		1.36	%
Other borrowings	175,268		2,144		4.87	%	325,604		4,118		5.09	%	449,274		5,106		4.51	%
Junior subordinated debt	101,150		1,904		7.49	%	101,128		1,896		7.54	%	101,070		1,772		6.96	%
Total interest-bearing liabilities	5,754,775		34,736		2.40	%	5,885,564		35,035		2.39	%	5,627,881		24,257		1.71	%
Noninterest-bearing deposits	2,542,579						2,565,609						2,965,564
Other liabilities	155,115						161,731						168,391
Shareholders’ equity	1,214,510						1,169,324						1,112,404
Total liabilities and shareholders’ equity	$	9,666,979					$	9,782,228					$	9,874,240
Net interest rate spread (1) (2)					2.86	%					2.85	%					3.23	%
Net interest income and margin (1) (3)			$	82,880	3.71	%			$	82,272	3.68	%			$	88,528	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 September 30, 2024, increased $0.6 million or 0.7% to $82.9 million compared to $82.3 million during the three months ended June 30, 2024. Net interest margin totaled 3.71% for the three months ended September 30, 2024, an increase of 3 basis points from the trailing quarter. The increase in net interest income is primarily attributed to a $2.0 million decline in interest expense on borrowings due to a $150.3 million decrease in the average balance of borrowings during the three months ended September 30, 2024 compared to the trailing quarter. This decline in borrowing expense was partially offset by an increase in deposit interest expense totaling $1.7 million related to changes in product mix, as customers continued to migrate towards higher yielding term deposit accounts during the quarter. Deposit cost increases during the current quarter were also influenced by continued competitive pricing pressures.

As compared to the same quarter in the prior year, average loan yields increased 32 basis points from 5.51% during the three months ended September 30, 2023, to 5.83% during the three months ended September 30, 2024. The accretion of discounts from acquired loans added 6 basis points and 8 basis points to loan yields during the quarters ended September 30, 2024 and September 30, 2023, respectively. The cost of interest-bearing deposits increased by 87 basis points between the quarter ended September 30, 2024, and the same quarter of the prior year. In addition, the average balance of noninterest-bearing deposits decreased by $423.0 million from the three-month average for the period ended September 30, 2023 amidst a continued migration of customer funds to interest-bearing products.

For the quarter ended September 30, 2024, the ratio of average total noninterest-bearing deposits to total average deposits was 31.7%, as compared to 32.0% and 36.9% for the quarters ended June 30, 2024 and September 30, 2023, respectively.


(dollars in thousands)	Nine months ended September 30, 2024						Nine months ended September 30, 2023
	Average Balance		Income/ Expense		Yield/ Rate		Average Balance		Income/ Expense		Yield/ Rate
Assets
Loans	$	6,755,916	$	292,799	5.79	%	$	6,493,585	$	260,868	5.37	%
Investments-taxable	2,034,336		52,021		3.42	%	2,328,883		56,681		3.25	%
Investments-nontaxable (1)	137,515		3,548		3.45	%	184,524		5,096		3.69	%
Total investments	2,171,851		55,569		3.42	%	2,513,407		61,777		3.29	%
Cash at Fed Reserve and other banks	58,792		2,247		5.11	%	27,606		976		4.73	%
Total earning assets	8,986,559		350,615		5.21	%	9,034,598		323,621		4.79	%
Other assets, net	781,406						832,501
Total assets	$	9,767,965					$	9,867,099
Liabilities and shareholders’ equity
Interest-bearing demand deposits	$	1,738,876	$	17,294	1.33	%	$	1,694,438	$	6,476	0.51	%
Savings deposits	2,670,555		36,362		1.82	%	2,818,817		20,616		0.98	%
Time deposits	961,577		29,582		4.11	%	413,359		6,889		2.23	%
Total interest-bearing deposits	5,371,008		83,238		2.07	%	4,926,614		33,981		0.92	%
Other borrowings	361,175		13,640		5.04	%	402,016		13,318		4.43	%
Junior subordinated debt	101,128		5,574		7.36	%	101,057		5,086		6.73	%
Total interest-bearing liabilities	5,833,311		102,452		2.35	%	5,429,687		52,385		1.29	%
Noninterest-bearing deposits	2,584,705						3,153,807
Other liabilities	163,704						179,483
Shareholders’ equity	1,186,245						1,104,122
Total liabilities and shareholders’ equity	$	9,767,965					$	9,867,099
Net interest rate spread (1) (2)					2.86	%					3.50	%
Net interest income and margin (1) (3)			$	248,163	3.69	%			$	271,236	4.01	%

(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 September 30, 2024, the Company's loan portfolio consisted of approximately $6.7 billion in outstanding principal with a weighted average coupon rate of 5.49%. During the three-month periods ending September 30, 2024, June 30, 2024, and September 30, 2023, the weighted average coupon on loan production in the quarter was 7.63%, 7.98% and 7.31%, respectively. Included in the September 30, 2024, total loans are adjustable rate loans totaling $4.2 billion, of which, $891.6 million are considered floating based on the Wall Street Prime index. In addition, the Company holds certain investment securities with fair values totaling $371.1 million which are subject to repricing on not less than a quarterly basis.


Asset Quality and Credit Loss Provisioning

During the three months ended September 30, 2024, the Company recorded a provision for credit losses of $0.2 million, as compared to $0.4 million during the trailing quarter, and $4.2 million during the third quarter of 2023.


	Three months ended			Nine months ended
(dollars in thousands)	September 30, 2024	June 30, 2024	September 30, 2023	September 30, 2024	September 30, 2023
Addition to allowance for credit losses	320	335	3,120	4,670	16,415
Addition to (reversal of) reserve for unfunded loan commitments	(100)	70	1,035	260	1,585
Total provision for credit losses	220	405	4,155	4,930	18,000

The provision for credit losses on loans of $0.3 million during the recent quarter was the result of net charge-offs approximating $0.1 million and decreases in reserves for qualitative factors due to improved concentration levels and overall lower loan balances, offset by a $3.7 million increase in specific reserves for individually evaluated credits within the commercial and industrial portfolio.


	Three Months Ended September 30,				Nine months ended September 30,
(dollars in thousands)	2024		2023		2024		2023
Balance, beginning of period	$	123,517	$	117,329	$	121,522	$	105,680
Provision for credit losses	320		3,120		4,670		16,415
Loans charged-off	(444)		(5,357)		(3,329)		(7,391)
Recoveries of previously charged-off loans	367		720		897		1,108
Balance, end of period	$	123,760	$	115,812	$	123,760	$	115,812

The allowance for credit losses (ACL) was $123.8 million or 1.85% of total loans as of September 30, 2024. The Company utilizes a forecast period of approximately eight quarters and obtains the forecast data from publicly available sources as of the balance sheet date. This forecast data continues to evolve and includes improving shifts in the magnitude of changes for both the unemployment and GDP factors leading up to the balance sheet date. Core inflation is slowing but prices remain elevated relative to wage increases, as reflected by higher living costs such as housing, energy and general services. Actions by the Federal Reserve to cut rates during 2024 and beyond may help improve this outlook overall, but the uncertainty associated with the extent and timing of these potential reductions has inhibited a material change to forecasted reserve levels. Furthermore, geopolitical risks remain elevated and appear to be getting worse, which may lead to further negative effects on domestic economic outcomes. As a result, 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.

Loans past due 30 days or more increased by $7.5 million during the quarter ended September 30, 2024, to $37.9 million, as compared to $30.4 million at June 30, 2024. The majority of loans identified as past due are well-secured by collateral, and approximately $16.3 million is less than 90 days delinquent. Non-performing loans were $41.6 million at September 30, 2024, an increase of $8.9 million from $32.8 million as of June 30, 2024, and an increase of $11.8 million from $29.8 million as of September 30, 2023. Management continues to proactively work with these borrowers to identify actionable and appropriate resolution strategies which are customary for the industries. Of the $41.6 million loans designated as non-performing as of September 30, 2024, approximately $10.0 million are current or less than 30 days past due with respect to payments required under their existing loan agreements.


	September 30,			% of Loans Outstanding		June 30,			% of Loans Outstanding		September 30,			% of Loans Outstanding
(dollars in thousands)	2024					2024					2023
Risk Rating:
Pass	$	6,461,451		96.7	%	$	6,536,223		96.9	%	$	6,532,424		97.4	%
Special Mention	104,759			1.6	%	101,324			1.5	%	94,614			1.4	%
Substandard	117,681			1.8	%	104,979			1.6	%	81,628			1.2	%
Total	$	6,683,891				$	6,742,526				$	6,708,666

Classified loans to total loans	1.76		%			1.56		%			1.22		%
Loans past due 30+ days to total loans	0.57		%			0.45		%			0.12		%

The ratio of classified loans to total loans of 1.76% as of September 30, 2024, increased 20 basis points from June 30, 2024, and increased 55 basis points from the comparative quarter ended 2023. The change in classified loans outstanding as compared to the trailing quarter totaled $16.1 million. Loans with the risk grade classification substandard increased by $12.7 million over the trailing quarter and relate primarily to the commercial and industrial portfolio. As a percentage of total loans outstanding, classified assets remain consistent with volumes experienced prior to the recent quantitative easing cycle spurred by the COVID pandemic and reflect management's historically conservative approach to credit risk monitoring. The Company's combined criticized loan balances totaled $222.4 million as of September 30, 2024, an increase of $46.2 million from September 30, 2023.

Outstanding balances on construction loans, which have historically been associated with elevated levels of risk, experienced balance reductions of $7.3 million during the current quarter and $44.9 million since September 30, 2023. These reductions were primarily associated with balances that were converted to term loans upon the completion of construction and achievement of stabilized occupancy, and were partially offset by new draws or originations.

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 September 30, 2024, other real estate owned consisted of 10 properties with a carrying value of approximately $2.8 million, compared to 10 properties with a carrying value of approximately $2.5 million as of June 30, 2024. Non-performing assets of $44.4 million at September 30, 2024, represented 0.45% of total assets, a change from the $35.3 million or 0.36% and $32.7 million or 0.33% as of June 30, 2024 and September 30, 2023, respectively.

Allocation of Credit Loss Reserves by Loan Type


	As of September 30, 2024				As of June 30, 2024				As of September 30, 2023
(dollars in thousands)	Amount		% of Loans Outstanding		Amount		% of Loans Outstanding		Amount		% of Loans Outstanding
Commercial real estate:
CRE - Non-Owner Occupied	$	36,206	1.61	%	$	37,155	1.66	%	$	33,723	1.55	%
CRE - Owner Occupied	15,382		1.62	%	15,873		1.67	%	14,503		1.51	%
Multifamily	15,735		1.54	%	15,973		1.60	%	14,239		1.48	%
Farmland	4,016		1.50	%	4,031		1.52	%	4,210		1.51	%
Total commercial real estate loans	71,339		1.59	%	73,032		1.64	%	66,675		1.53	%
Consumer:
SFR 1-4 1st Liens	14,366		1.66	%	14,604		1.65	%	13,535		1.56	%
SFR HELOCs and Junior Liens	10,185		2.87	%	10,087		2.91	%	10,163		2.88	%
Other	2,953		4.70	%	2,983		4.30	%	2,920		4.44	%
Total consumer loans	27,504		2.14	%	27,674		2.13	%	26,618		2.07	%

Commercial and Industrial	14,453		2.98	%	12,128		2.21	%	12,290		2.05	%
Construction	7,119		2.58	%	7,466		2.63	%	8,097		2.52	%
Agricultural Production	3,312		2.30	%	3,180		2.27	%	2,125		1.72	%
Leases	33		0.44	%	37		0.44	%	7		0.09	%
Allowance for credit losses	123,760		1.85	%	123,517		1.83	%	115,812		1.73	%
Reserve for unfunded loan commitments	6,110				6,210				5,900
Total allowance for credit losses	$	129,870	1.92	%	$	129,727	1.92	%	$	121,712	1.81	%

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 is expected to be amortized over the life of the loans. As of September 30, 2024, the unamortized discount associated with acquired loans totaled $21.4 million, which, when combined with the total allowance for credit losses above, represents 2.26% of total loans.


Non-interest Income


	Three months ended
(dollars in thousands)	September 30, 2024		June 30, 2024		Change		% Change
ATM and interchange fees	$	6,472	$	6,372	$	100	1.6	%
Service charges on deposit accounts	4,979		4,847		132		2.7	%
Other service fees	1,224		1,286		(62)		(4.8)	%
Mortgage banking service fees	439		438		1		0.2	%
Change in value of mortgage servicing rights	(332)		(147)		(185)		125.9	%
Total service charges and fees	12,782		12,796		(14)		(0.1)	%
Increase in cash value of life insurance	786		831		(45)		(5.4)	%
Asset management and commission income	1,502		1,359		143		10.5	%
Gain on sale of loans	549		388		161		41.5	%
Lease brokerage income	62		154		(92)		(59.7)	%
Sale of customer checks	303		301		2		0.7	%
(Loss) gain on sale or exchange of investment securities	2		(45)		47		(104.4)	%
(Loss) gain on marketable equity securities	356		(121)		477		(394.2)	%
Other income	153		203		(50)		(24.6)	%
Total other non-interest income	3,713		3,070		643		20.9	%
Total non-interest income	$	16,495	$	15,866	$	629	4.0	%

Total non-interest income increased $0.6 million or 4.0% to $16.5 million during the three months ended September 30, 2024, compared to $15.9 million during the quarter ended June 30, 2024. Net gains on the change in value of equity securities totaled $0.4 million during the quarter and included $0.3 million in benefit from the valuation change in Visa equity securities, which were also disposed of during the quarter. The remaining various components of non-interest income are largely consistent period over period.


	Three months ended September 30,
(dollars in thousands)	2024		2023		Change		% Change
ATM and interchange fees	$	6,472	$	6,728	$	(256)	(3.8)	%
Service charges on deposit accounts	4,979		4,851		128		2.6	%
Other service fees	1,224		1,142		82		7.2	%
Mortgage banking service fees	439		445		(6)		(1.3)	%
Change in value of mortgage servicing rights	(332)		(91)		(241)		264.8	%
Total service charges and fees	12,782		13,075		(293)		(2.2)	%
Increase in cash value of life insurance	786		684		102		14.9	%
Asset management and commission income	1,502		1,141		361		31.6	%
Gain on sale of loans	549		382		167		43.7	%
Lease brokerage income	62		160		(98)		(61.3)	%
Sale of customer checks	303		396		(93)		(23.5)	%
(Loss) gain on sale or exchange of investment securities	2		—		2		—	%
(Loss) gain on marketable equity securities	356		(81)		437		(539.5)	%
Other income	153		227		(74)		(32.6)	%
Total other non-interest income	3,713		2,909		804		27.6	%
Total non-interest income	$	16,495	$	15,984	$	511	3.2	%

Non-interest income increased $0.5 million or 3.2% to $16.5 million during the three months ended September 30, 2024, compared to $16.0 million during the comparative quarter ended September 30, 2023. Elevated activity and volumes of assets under management drove an increase in asset management and commission income, in addition to the benefit mentioned above related to Visa stock. These increases were partially offset by a decline in interchange fees earned related to decreased customer activity in the third quarter of 2024 as compared to the equivalent quarter in 2023.


	Nine months ended September 30,
(dollars in thousands)	2024		2023		Change		% Change
ATM and interchange fees	$	19,013	$	19,928	$	(915)	(4.6)	%
Service charges on deposit accounts	14,489		12,863		1,626		12.6	%
Other service fees	3,876		3,300		576		17.5	%
Mortgage banking service fees	1,305		1,364		(59)		(4.3)	%
Change in value of mortgage servicing rights	(468)		(215)		(253)		117.7	%
Total service charges and fees	38,215		37,240		975		2.6	%
Increase in cash value of life insurance	2,420		2,274		146		6.4	%
Asset management and commission income	3,989		3,233		756		23.4	%
Gain on sale of loans	1,198		883		315		35.7	%
Lease brokerage income	377		332		45		13.6	%
Sale of customer checks	916		1,091		(175)		(16.0)	%
(Loss) gain on sale or exchange of investment securities	(43)		(164)		121		(73.8)	%
(Loss) gain on marketable equity securities	207		(81)		288		(355.6)	%
Other income	853		552		301		54.5	%
Total other non-interest income	9,917		8,120		1,797		22.1	%
Total non-interest income	$	48,132	$	45,360	$	2,772	6.1	%

Non-interest income increased $2.8 million or 6.1% to $48.1 million during the nine months ended September 30, 2024, compared to $45.4 million during the comparative nine months ended September 30, 2023. As noted above, interchange fees as driven by customer activities was elevated in the 2023 period and resulted in a decrease of $0.9 million as compared to the nine months ended September 30, 2024. Meanwhile, service charges on deposit accounts increased by $1.6 million or 12.6% as compared to the equivalent period in 2023 following $0.9 million in waived or reversed fees as a courtesy to customers in the 2023 year. As noted above, elevated activity within asset management and the gain on Visa stock further contributed to the overall improvement.


Non-interest Expense


	Three months ended
(dollars in thousands)	September 30, 2024		June 30, 2024		Change		% Change
Base salaries, net of deferred loan origination costs	$	24,407	$	23,852	$	555	2.3	%
Incentive compensation	4,361		4,711		(350)		(7.4)	%
Benefits and other compensation costs	6,782		6,838		(56)		(0.8)	%
Total salaries and benefits expense	35,550		35,401		149		0.4	%
Occupancy	4,191		4,063		128		3.2	%
Data processing and software	5,258		5,094		164		3.2	%
Equipment	1,374		1,330		44		3.3	%
Intangible amortization	1,030		1,030		—		—	%
Advertising	1,152		819		333		40.7	%
ATM and POS network charges	1,712		1,987		(275)		(13.8)	%
Professional fees	1,893		1,814		79		4.4	%
Telecommunications	507		558		(51)		(9.1)	%
Regulatory assessments and insurance	1,256		1,144		112		9.8	%

Postage	335		340		(5)		(1.5)	%
Operational loss	603		244		359		147.1	%
Courier service	542		559		(17)		(3.0)	%
(Gain) loss on sale or acquisition of foreclosed assets	26		—		26		—	%
(Gain) loss on disposal of fixed assets	6		1		5		500.0	%
Other miscellaneous expense	4,052		3,955		97		2.5	%
Total other non-interest expense	23,937		22,938		999		4.4	%
Total non-interest expense	$	59,487	$	58,339	$	1,148	2.0	%
Average full-time equivalent staff	1,161		1,160		1		0.1	%

Total non-interest expense for the quarter ended September 30, 2024, increased $1.1 million or 2.0% to $59.5 million as compared to $58.3 million during the trailing quarter ended June 30, 2024. Total salaries and benefits expense increased by $0.1 million or 0.4%, reflecting the increase of $0.6 million in salaries, partially offset by a decline of $0.4 million in incentive compensation accruals related to production volumes of both loans and deposits. Advertising expense increased by $0.3 million as compared to the trailing quarter following increased spend on promotional activities, and operational losses increased by $0.4 million during the same period from increases in volume of fraud and robbery losses.


	Three months ended September 30,
(dollars in thousands)	2024		2023		Change		% Change
Base salaries, net of deferred loan origination costs	$	24,407	$	23,616	$	791	3.3	%
Incentive compensation	4,361		4,391		(30)		(0.7)	%
Benefits and other compensation costs	6,782		6,456		326		5.0	%
Total salaries and benefits expense	35,550		34,463		1,087		3.2	%
Occupancy	4,191		3,948		243		6.2	%
Data processing and software	5,258		5,246		12		0.2	%
Equipment	1,374		1,503		(129)		(8.6)	%
Intangible amortization	1,030		1,590		(560)		(35.2)	%
Advertising	1,152		881		271		30.8	%
ATM and POS network charges	1,712		1,606		106		6.6	%
Professional fees	1,893		1,752		141		8.0	%
Telecommunications	507		567		(60)		(10.6)	%
Regulatory assessments and insurance	1,256		1,194		62		5.2	%

Postage	335		306		29		9.5	%
Operational loss	603		474		129		27.2	%
Courier service	542		492		50		10.2	%
(Gain) loss on sale or acquisition of foreclosed assets	26		(152)		178		(117.1)	%
(Gain) loss on disposal of fixed assets	6		4		2		50.0	%
Other miscellaneous expense	4,052		4,004		48		1.2	%
Total other non-interest expense	23,937		23,415		522		2.2	%
Total non-interest expense	$	59,487	$	57,878	$	1,609	2.8	%
Average full-time equivalent staff	1,161		1,215		(54)		(4.4)	%

Total non-interest expense increased $1.6 million or 2.8% to $59.5 million during the three months ended September 30, 2024, as compared to $57.9 million for the quarter ended September 30, 2023. Total salaries and benefits expense increased by $1.1 million or 3.2%, reflecting the increase of $0.8 million in salaries and $0.3 million in benefits and other costs.


	Nine months ended September 30,
(dollars in thousands)	2024		2023		Change		% Change
Base salaries, net of deferred loan origination costs	$	72,279	$	70,675	$	1,604	2.3	%
Incentive compensation	12,329		11,663		666		5.7	%
Benefits and other compensation costs	20,647		19,402		1,245		6.4	%
Total salaries and benefits expense	105,255		101,740		3,515		3.5	%
Occupancy	12,205		12,099		106		0.9	%
Data processing and software	15,459		13,916		1,543		11.1	%
Equipment	4,060		4,322		(262)		(6.1)	%
Intangible amortization	3,090		4,902		(1,812)		(37.0)	%
Advertising	2,733		2,656		77		2.9	%
ATM and POS network charges	5,360		5,217		143		2.7	%
Professional fees	5,047		5,326		(279)		(5.2)	%
Telecommunications	1,576		1,971		(395)		(20.0)	%
Regulatory assessments and insurance	3,651		3,979		(328)		(8.2)	%

Postage	983		916		67		7.3	%
Operational loss	1,199		1,999		(800)		(40.0)	%
Courier service	1,581		1,314		267		20.3	%
(Gain) loss on sale or acquisition of foreclosed assets	(12)		(152)		140		(92.1)	%
(Gain) loss on disposal of fixed assets	12		22		(10)		(45.5)	%
Other miscellaneous expense	12,131		12,688		(557)		(4.4)	%
Total other non-interest expense	69,075		71,175		(2,100)		(3.0)	%
Total non-interest expense	$	174,330	$	172,915	$	1,415	0.8	%
Average full-time equivalent staff	1,170		1,215		(45)		(3.7)	%

Total non-interest expense increased $1.4 million or 0.8% to $174.3 million during the nine months ended September 30, 2024, as compared to $172.9 million for the nine months ended September 30, 2023. This was largely attributed to an increase of $3.5 million or 3.5% in total salaries and benefits expense to $105.3 million, from annual compensation adjustments and other routine increases in benefits and compensation. Salaries expense was also impacted by an increase in average compensation per employee as various strategic talent acquisitions were made in order to further prepare the Company to execute its growth objectives beyond $10 billion in total assets. Additionally, data processing and software expenses increased by $1.5 million or 11.1% related to ongoing investments in the Company's data management and security infrastructure. These increases were partially offset by declines in non-cash intangible amortization expense of $1.8 million or 37.0% and reductions in operational losses of $0.8 million or 40.0% due to non-recurring ATM burglary expenses totaling $0.7 million in the comparative period.


Provision for Income Taxes

The Company’s effective tax rate was 26.3% for the quarter ended September 30, 2024, as compared to 25.8% for the quarter ended June 30, 2024, and 28.4% for the year ended December 31, 2023. 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.


Investor Contact

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


About TriCo Bancshares

Established in 1975, Tri Counties Bank is a wholly-owned subsidiary of TriCo Bancshares (NASDAQ: TCBK) headquartered in Chico, California, providing a unique brand of customer Service with Solutions available 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 management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond our control. We 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: the conditions of the United States economy in general and the strength of the local economies in which we conduct operations; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit or changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; the impacts of inflation, interest rate, market and monetary fluctuations on the Company's business condition and financial operating results; the impact of changes in financial services industry policies, laws and regulations; regulatory restrictions affecting our ability to successfully market and price our products to consumers; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learning; extreme weather, natural disasters and other catastrophic events that may or may not be caused by climate change and their effects on the Company's customers and the economic and business environments in which the Company operates; the impact of a slowing U.S. economy, decreases in housing and commercial real estate prices, and potentially increased unemployment on the performance of our loan portfolio, the market value of our investment securities and possible other-than-temporary impairment of securities held by us due to changes in credit quality or rates; the availability of, and cost of, sources of funding and the demand for our products; adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, commodities prices, inflationary pressures and labor shortages on the economic recovery and our business; the impacts of international hostilities, wars, terrorism or geopolitical events; adverse developments in the financial services industry generally such as the recent bank failures and any related impact on depositor behavior or investor sentiment; risks related to the sufficiency of liquidity; the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; the costs or effects of mergers, acquisitions or dispositions we may make, as well as whether we are able to obtain any required governmental approvals in connection with any such activities, or identify and complete favorable transactions in the future, and/or realize the anticipated financial and business benefits; the regulatory and financial impacts associated with exceeding $10 billion in total assets; the negative impact on our reputation and profitability in the event customers experience economic harm or in the event that regulatory violations are identified; the ability to execute our business plan in new markets; the future operating or financial performance of the Company, including our outlook for future growth and changes in the level and direction of our nonperforming assets and charge-offs; the appropriateness of the allowance for credit losses, including the assumptions made under our current expected credit losses model; any deterioration in values of California real estate, both residential and commercial; the effectiveness of the Company's asset management activities managing the mix of earning assets and in improving, resolving or liquidating lower-quality assets; the effect of changes in the financial performance and/or condition of our borrowers; changes in accounting standards and practices; changes in consumer spending, borrowing and savings habits; our ability to attract and maintain deposits and other sources of liquidity; the effects of changes in the level or cost of checking or savings account deposits on our funding costs and net interest margin; increasing noninterest expense and its impact on our financial performance; competition and innovation with respect to financial products and services by banks, financial institutions and non-traditional competitors including retail businesses and technology companies; the challenges of attracting, integrating and retaining key employees; the vulnerability of the Company's operational or security systems or infrastructure, the systems of third-party vendors or other service providers with whom the Company contracts, and the Company's customers to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and data/security breaches and the cost to defend against and respond to such incidents; the impact of the 2023 cyber security ransomware incident, including the pending litigation, on our operations and reputation; increased data security risks due to work from home arrangements and email vulnerability; failure to safeguard personal information, and any resulting litigation; the effect of a fall in stock market prices on our brokerage and wealth management businesses; the transition from the LIBOR to new interest rate benchmarks; the emergence or continuation of widespread health emergencies or pandemics; the Company’s potential judgments, orders, settlements, penalties, fines and reputational damage resulting from pending or future litigation and regulatory investigations, proceedings and enforcement actions; and our ability to manage the risks involved in the foregoing. There can be no assurance that future developments affecting us will be the same as those anticipated by management. Additional factors that could cause results to differ materially from those described above can be found in our Annual Report on Form 10-K for the year ended December 31, 2023, which has been filed with the Securities and Exchange Commission (the “SEC”) and all subsequent filings with the SEC under Sections 13(a), 13(c), 14, and 15(d) of the Securities Act of 1934, as amended. Such filings are also available in the “Investor Relations” section of our website, https://www.tcbk.com/investor-relations and in other documents we file with the SEC. Annualized, pro forma, projections and estimates are not forecasts and may not reflect actual results. We undertake no obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.


TriCo Bancshares—Condensed Consolidated Financial Data (unaudited)


(dollars in thousands, except per share data)	Three months ended
	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Revenue and Expense Data
Interest income	$	117,347		$	117,032		$	115,417		$	115,909		$	112,380
Interest expense	34,736			35,035			32,681			29,292			24,257
Net interest income	82,611			81,997			82,736			86,617			88,123
Provision for credit losses	220			405			4,305			5,990			4,155
Noninterest income:
Service charges and fees	12,782			12,796			12,637			12,848			13,075
(Loss) gain on sale or exchange of investment securities	2			(45)			—			(120)			—
Other income	3,711			3,115			3,134			3,312			2,909
Total noninterest income	16,495			15,866			15,771			16,040			15,984
Noninterest expense:
Salaries and benefits	35,550			35,401			34,304			34,055			34,463
Occupancy and equipment	5,565			5,393			5,307			5,358			5,451
Data processing and network	6,970			7,081			6,768			6,880			6,852
Other noninterest expense	11,402			10,464			10,125			13,974			11,112
Total noninterest expense	59,487			58,339			56,504			60,267			57,878
Total income before taxes	39,399			39,119			37,698			36,400			42,074
Provision for income taxes	10,348			10,085			9,949			10,325			11,484
Net income	$	29,051		$	29,034		$	27,749		$	26,075		$	30,590
Share Data
Basic earnings per share	$	0.88		$	0.88		$	0.83		$	0.78		$	0.92
Diluted earnings per share	$	0.88		$	0.87		$	0.83		$	0.78		$	0.92
Dividends per share	$	0.33		$	0.33		$	0.33		$	0.30		$	0.30
Book value per common share	$	37.55		$	35.62		$	35.06		$	34.86		$	32.18
Tangible book value per common share (1)	$	28.09		$	26.13		$	25.60		$	25.39		$	22.67
Shares outstanding	33,000,508			32,989,327			33,168,770			33,268,102			33,263,324
Weighted average shares	32,992,855			33,121,271			33,245,377			33,266,959			33,262,798
Weighted average diluted shares	33,136,858			33,243,955			33,370,118			33,351,737			33,319,291
Credit Quality
Allowance for credit losses to gross loans	1.85		%	1.83		%	1.83		%	1.79		%	1.73		%
Loans past due 30 days or more	$	37,888		$	30,372		$	16,474		$	19,415		$	8,072
Total nonperforming loans	$	41,636		$	32,774		$	34,242		$	31,891		$	29,799
Total nonperforming assets	$	44,400		$	35,267		$	36,735		$	34,595		$	32,651
Loans charged-off	$	444		$	1,610		$	1,275		$	749		$	5,357
Loans recovered	$	367		$	398		$	132		$	419		$	720
Selected Financial Ratios
Return on average total assets	1.20		%	1.19		%	1.13		%	1.05		%	1.23		%
Return on average equity	9.52		%	9.99		%	9.50		%	9.43		%	10.91		%
Average yield on loans	5.83		%	5.82		%	5.72		%	5.64		%	5.52		%
Average yield on interest-earning assets	5.26		%	5.24		%	5.13		%	5.09		%	4.94		%
Average rate on interest-bearing deposits	2.23		%	2.14		%	1.83		%	1.62		%	1.36		%
Average cost of total deposits	1.52		%	1.45		%	1.21		%	1.05		%	0.86		%
Average cost of total deposits and other borrowings	1.59		%	1.59		%	1.47		%	1.28		%	1.05		%
Average rate on borrowings & subordinated debt	5.83		%	5.65		%	5.35		%	5.26		%	4.96		%
Average rate on interest-bearing liabilities	2.40		%	2.39		%	2.24		%	2.01		%	1.71		%
Net interest margin (fully tax-equivalent) (1)	3.71		%	3.68		%	3.68		%	3.81		%	3.88		%
Loans to deposits	83.16		%	83.76		%	85.14		%	86.73		%	83.76		%
Efficiency ratio	60.02		%	59.61		%	57.36		%	58.71		%	55.59		%
Supplemental Loan Interest Income Data
Discount accretion on acquired loans	$	1,018		$	850		$	1,332		$	1,459		$	1,324
All other loan interest income (1)	$	97,067		$	97,379		$	95,153		$	94,382		$	90,383
Total loan interest income (1)	$	98,085		$	98,229		$	96,485		$	95,841		$	91,707

(1) Non-GAAP measure


TriCo Bancshares—Condensed Consolidated Financial Data (unaudited)


(dollars in thousands, except per share data)
Balance Sheet Data	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Cash and due from banks	$	320,114		$	206,558		$	82,836		$	98,701		$	111,099
Securities, available for sale, net	1,981,960			1,946,167			2,076,494			2,155,138			2,176,854
Securities, held to maturity, net	117,259			122,673			127,811			133,494			139,058
Restricted equity securities	17,250			17,250			17,250			17,250			17,250
Loans held for sale	1,995			474			1,346			458			644
Loans:
Commercial real estate	4,487,524			4,461,111			4,443,768			4,394,802			4,367,445
Consumer	1,283,963			1,300,727			1,303,757			1,313,268			1,288,810
Commercial and industrial	484,763			548,625			549,780			586,455			599,757
Construction	276,095			283,374			348,981			347,198			320,963
Agriculture production	144,123			140,239			145,159			144,497			123,472
Leases	7,423			8,450			9,250			8,250			8,219
Total loans, gross	6,683,891			6,742,526			6,800,695			6,794,470			6,708,666
Allowance for credit losses	(123,760)			(123,517)			(124,394)			(121,522)			(115,812)
Total loans, net	6,560,131			6,619,009			6,676,301			6,672,948			6,592,854
Premises and equipment	70,423			70,621			71,001			71,347			71,760
Cash value of life insurance	139,312			138,525			137,695			136,892			136,016
Accrued interest receivable	33,061			35,527			35,783			36,768			34,595
Goodwill	304,442			304,442			304,442			304,442			304,442
Other intangible assets	7,462			8,492			9,522			10,552			11,768
Operating leases, right-of-use	24,716			25,113			26,240			26,133			27,363
Other assets	245,765			246,548			247,046			245,966			273,303
Total assets	$	9,823,890		$	9,741,399		$	9,813,767		$	9,910,089		$	9,897,006
Deposits:
Noninterest-bearing demand deposits	$	2,547,736		$	2,557,063		$	2,600,448		$	2,722,689		$	2,857,512
Interest-bearing demand deposits	1,708,726			1,791,466			1,742,875			1,731,814			1,746,882
Savings deposits	2,690,045			2,667,006			2,672,537			2,682,068			2,816,816
Time certificates	1,090,584			1,034,695			971,798			697,467			588,433
Total deposits	8,037,091			8,050,230			7,987,658			7,834,038			8,009,643
Accrued interest payable	11,664			12,018			10,224			8,445			6,688
Operating lease liability	26,668			27,122			28,299			28,261			29,527
Other liabilities	141,521			128,063			131,006			145,982			141,692
Other borrowings	266,767			247,773			392,409			632,582			537,975
Junior subordinated debt	101,164			101,143			101,120			101,099			101,080
Total liabilities	8,584,875			8,566,349			8,650,716			8,750,407			8,826,605
Common stock	693,176			691,878			696,464			697,349			696,369
Retained earnings	662,816			644,687			630,954			615,502			599,448
Accumulated other comprehensive loss, net of tax	(116,977)			(161,515)			(164,367)			(153,169)			(225,416)
Total shareholders’ equity	$	1,239,015		$	1,175,050		$	1,163,051		$	1,159,682		$	1,070,401
Quarterly Average Balance Data
Average loans	$	6,690,326		$	6,792,303		$	6,785,840		$	6,746,153		$	6,597,400
Average interest-earning assets	$	8,892,223		$	9,001,674		$	9,066,537		$	9,064,483		$	9,053,389
Average total assets	$	9,666,979		$	9,782,228		$	9,855,797		$	9,879,355		$	9,874,240
Average deposits	$	8,020,936		$	8,024,441		$	7,821,044		$	7,990,993		$	8,043,101
Average borrowings and subordinated debt	$	276,418		$	426,732		$	685,802		$	617,046		$	550,344
Average total equity	$	1,214,510		$	1,169,324		$	1,174,592		$	1,097,431		$	1,112,404
Capital Ratio Data
Total risk-based capital ratio	15.6		%	15.2		%	15.0		%	14.7		%	14.5		%
Tier 1 capital ratio	13.8		%	13.4		%	13.2		%	12.9		%	12.7		%
Tier 1 common equity ratio	13.1		%	12.7		%	12.5		%	12.2		%	12.0		%
Tier 1 leverage ratio	11.6		%	11.2		%	11.0		%	10.7		%	10.6		%
Tangible capital ratio (1)	9.7		%	9.1		%	8.9		%	8.8		%	7.9		%

(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						Nine months ended
(dollars in thousands)	September 30, 2024		June 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Net interest margin
Acquired loans discount accretion, net:
Amount (included in interest income)	$1,018		$850		$1,324		$3,200		$4,192
Effect on average loan yield	0.06	%	0.05	%	0.08	%	0.06	%	0.09	%
Effect on net interest margin (FTE)	0.05	%	0.04	%	0.06	%	0.05	%	0.06	%
Net interest margin (FTE)	3.71	%	3.68	%	3.88	%	3.69	%	4.01	%
Net interest margin less effect of acquired loan discount accretion (Non-GAAP)	3.66	%	3.64	%	3.82	%	3.64	%	3.95	%


	Three months ended						Nine months ended
(dollars in thousands)	September 30, 2024		June 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Pre-tax pre-provision return on average assets or equity
Net income (GAAP)	$29,051		$29,034		$30,590		$85,834		$91,315
Exclude provision for income taxes	10,348		10,085		11,484		30,382		33,190
Exclude provision for credit losses	220		405		4,155		4,930		18,000
Net income before income tax and provision expense (Non-GAAP)	$39,619		$39,524		$46,229		$121,146		$142,505

Average assets (GAAP)	$9,666,979		$9,782,228		$9,874,240		$9,767,965		$9,867,099
Average equity (GAAP)	$1,214,510		$1,169,324		$1,112,404		$1,186,245		$1,104,122

Return on average assets (GAAP) (annualized)	1.20	%	1.19	%	1.23	%	1.17	%	1.24	%
Pre-tax pre-provision return on average assets (Non-GAAP) (annualized)	1.63	%	1.63	%	1.86	%	1.66	%	1.93	%
Return on average equity (GAAP) (annualized)	9.52	%	9.99	%	10.91	%	9.67	%	11.06	%
Pre-tax pre-provision return on average equity (Non-GAAP) (annualized)	12.98	%	13.59	%	16.49	%	13.64	%	17.26	%


	Three months ended						Nine months ended
(dollars in thousands)	September 30, 2024		June 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Return on tangible common equity
Average total shareholders' equity	$1,214,510		$1,169,324		$1,112,404		$1,186,245		$1,104,122
Exclude average goodwill	304,442		304,442		304,442		304,442		304,442
Exclude average other intangibles	8,093		9,007		12,563		9,098		14,219
Average tangible common equity (Non-GAAP)	$901,975		$855,875		$795,399		$872,705		$785,461

Net income (GAAP)	$29,051		$29,034		$30,590		$85,834		$91,315
Exclude amortization of intangible assets, net of tax effect	725		725		1,120		2,175		3,453
Tangible net income available to common shareholders (Non-GAAP)	$29,776		$29,759		$31,710		$88,009		$94,768

Return on average equity (GAAP) (annualized)	9.52	%	9.99	%	10.91	%	9.67	%	11.06	%
Return on average tangible common equity (Non-GAAP)	13.13	%	13.98	%	15.82	%	13.47	%	16.13	%


	Three months ended
(dollars in thousands)	September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023
Tangible shareholders' equity to tangible assets
Shareholders' equity (GAAP)	$1,239,015		$1,175,050		$1,163,051		$1,159,682		$1,070,401
Exclude goodwill and other intangible assets, net	311,904		312,934		313,964		314,994		316,210
Tangible shareholders' equity (Non-GAAP)	$927,111		$862,116		$849,087		$844,688		$754,191

Total assets (GAAP)	$9,823,890		$9,741,399		$9,813,767		$9,910,089		$9,897,006
Exclude goodwill and other intangible assets, net	311,904		312,934		313,964		314,994		316,210
Total tangible assets (Non-GAAP)	$9,511,986		$9,428,465		$9,499,803		$9,595,095		$9,580,796

Shareholders' equity to total assets (GAAP)	12.61	%	12.06	%	11.85	%	11.70	%	10.82	%
Tangible shareholders' equity to tangible assets (Non-GAAP)	9.75	%	9.14	%	8.94	%	8.80	%	7.87	%


	Three months ended
(dollars in thousands)	September 30, 2024	June 30, 2024	March 31, 2024	December 31, 2023	September 30, 2023
Tangible common shareholders' equity per share
Tangible shareholders' equity (Non-GAAP)	$927,111	$862,116	$849,087	$844,688	$754,191

Common shares outstanding at end of period	33,000,508	32,989,327	33,168,770	33,268,102	33,263,324

Common shareholders' equity (book value) per share (GAAP)	$37.55	$35.62	$35.06	$34.86	$32.18
Tangible common shareholders' equity (tangible book value) per share (Non-GAAP)	$28.09	$26.13	$25.60	$25.39	$22.67

TriCo Bancshares (TCBK) 8-KResults of Operations and Financial Condition