TRICO BANCSHARES /
For the period ended Mar 31, 2026. Filed May 8, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0000356171-25-000079
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0000356171-26-000042
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 110 current paragraphs.
63 unchanged; 38 reworded; 9 added; 11 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 35 previous and 29 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
•Average non-interest bearing deposits grew by 1.5% year over year and were 30.6% of total deposits at quarter end
Current report
•Yield on average earning assets was 5.26%, an increase of 3 basis points over the 5.23% in the trailing quarter; yield on average loans was 5.78%, an increase of 1 basis point over the 5.77% in the trailing quarter
Current report
•Shares of common stock outstanding decreased by 424,384 during the quarter as 447,211 shares were repurchased at an average price of $48.30 per share
Current report
The allowance for credit losses (ACL) was $127.9 million or 1.81% of total loans as of March 31, 2026. The provision for credit losses on loans of $3.3 million recorded allocated approximately $2.9 million toward individually evaluated loans and $0.4 million to replenish quarterly net charge-offs.
Current report
The net charge-offs incurred during the quarter were spread amongst numerous borrowers and loan types.
Current report
Total non-interest expense decreased $0.5 million or 0.9% to $59.1 million during the three months ended March 31, 2026, as compared to $59.6 million for the quarter ended March 31, 2025. Total salaries and benefits expense decreased by $0.7 million or 1.9% on a net basis, largely attributed to the reductions in FTE. Changes in other non-interest expense line items were mixed during the quarter ended March 31, 2026, but essentially flat and due to timing differences rather than unique changes in operations, resulting in a net increase of $0.2 million, led by an increase in occupancy expense of $0.4 million following the Company's expansion in the Bay Area.
Current report
Deposit balances increased by $139.7 million or 6.8% annualized during the period. There were no deposits sold as of March 31, 2026, compared to $72.9 million as of the trailing quarter end.
Current report
(in thousands)
Current report
During the three months ended March 31, 2026, the Company repurchased 447,211 shares with market value totaling $21.6 million. There were no shares repurchased in 2025 under the 2025 Program, however, during the three months ended March 31, 2025 the Company purchased 89,654 shares with market value of $3.7 million under the 2021 Share Repurchase Program. As of March 31, 2026, approximately 1,553,000 shares remain authorized for repurchase.
Removed paragraphs (11)
Previous report
•Average yield on earning assets was 5.25%, an increase of 4 basis points over the 5.21% in the trailing quarter; average yield on loans was 5.75%, a decrease of 1 basis points over the 5.76% in the trailing quarter
Previous report
•Non-interest bearing deposits averaged 30.5% of total deposits during the quarter
Previous report
Net interest income (FTE) during the nine months ended September 30, 2025, increased $11.2 million, or 4.5%, to $259.4 million compared to $248.2 million during the nine months ended September 30, 2024. In addition, net interest margin increased 15 basis points to 3.84%, compared to 3.69% for the same period in the prior year. The increase in net interest income during the nine month period is primarily attributed to a decrease in interest expense; specifically, decreases in the volume of other average borrowings contributed to a decrease in interest expense of $12.0 million.
Previous report
Net interest income (FTE) during the nine months ended September 30, 2025 increased $11.2 million to $259.4 million compared to $248.2 million during the nine months ended September 30, 2024. The increase in net interest income (FTE) was nearly entirely due to the decrease in other (short-term FHLB debt) borrowings.
Previous report
The allowance for credit losses (ACL) was $124.6 million or 1.78% of total loans as of September 30, 2025. The provision for credit losses on loans of $0.7 million recorded during the current quarter resulted largely from a need to replenish reserves following net charge-offs of $0.6 million during the quarter. Reserves on individually evaluated loans or loan relationships declined by $0.7 million during the period, while general reserve requirements grew by $0.8 million, resulting in a required net reserve increase of $0.1 million in the quarter. The charge-offs incurred during the quarter ended September 30, 2025, were primarily related to non-performing relationships which had been fully reserved for by Management on an individual basis in previous quarters.
Previous report
The $0.7 million decrease in individually evaluated reserves was largely attributed to the pay-down of loan balances and/or obtaining additional collateral from the largely cooperative borrowers. Observable market valuations associated with agricultural real estate remain consistent as compared to the trailing quarter, while the stable water supply and improving commodity prices for the crops associated with collateral for these loans are reflected by improving cash flows. Management believes the provisioning for these individually analyzed relationships is sufficient relative to expected future losses, if any.
Previous report
Non-interest income increased $3.0 million or 6.3% to $51.2 million during the nine months ended September 30, 2025, compared to $48.1 million during the comparative nine months ended September 30, 2024. As noted above increased balances and transaction volume in both deposits and assets under management, service charges and customer fees are elevated in the 2025 period, along with asset management and commission income. Other income increased by $3.5 million due to $2.5 million gain on early extinguishment of subordinated debt mentioned above, in addition to $1.2 million gain on life insurance benefits during the first quarter. As a partial offset, the Company incurred losses on the sale of investment securities totaling approximately $3.2 million, resulting in proceeds of $58.5 million.
Previous report
Total non-interest expense increased $0.9 million or 1.6% to $60.4 million during the three months ended September 30, 2025, as compared to $59.5 million for the quarter ended September 30, 2024. Total salaries and benefits expense increased by $2.2 million or 6.1%, reflecting the increase of $0.9 million in salaries, largely the result of routine merit increases and more recently strategic hiring focused on loan and deposit production; incentive compensation costs also increased by $1.0 million, reflecting elevated levels of loan production and overall Bank performance during the third quarter of 2025, as compared to the equivalent period in 2024. Other non-interest expense line items generally evidenced broad based incremental improvements for the quarter ended September 30, 2025, resulting in a net decrease of $1.2 million.
Previous report
Non-interest expense increased $6.8 million or 3.9% to $181.1 million during the nine months ended September 30, 2025, as compared to $174.3 million for the nine months ended September 30, 2024. The largest component was salaries and benefits expense which increased $7.6 million or 7.2% to $112.9 million, largely for the reasons mentioned above. Other non-interest expense line items evidenced broad based but incremental decreases, resulting in a net decrease of $0.8 million.
Previous report
Deposit balances decreased by $41.3 million or 2.0% annualized during the period due to declines in primarily savings deposit account balances.
Previous report
During the three and nine months ended September 30, 2025, the Company repurchased 52,106 and 521,738 shares with market values of $2.3 million and $21.3 million, respectively. In addition, the Company’s Tier 1 common equity and tangible capital ratios increased to 13.4% and 10.4%, respectively as of September 30, 2025, compared to 13.2% and 9.7%, respectively, as of December 31, 2024.
Reworded paragraphs (38)
Previous wording
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 us. 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: macroeconomic, geopolitical, and other challenges and uncertainties, including those related to actual or potential policies and actions from the new U.S. administration, such as tariffs, and reciprocal actions by other countries or regions, significant volatility and disruptions in financial markets, a resurgence of inflation, increases in unemployment rates, increases in interest rates and slowing economic growth or recession in the U.S. and other countries or regions; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit; the impact of changes in financial services industry policies, laws and regulations; regulatory restrictions or adverse regulatory findings affecting our ability to successfully market and price our products to consumers; adverse developments in the financial services industry generally such as bank failures and any related impact on depositor behavior or investor sentiment; the impacts of international hostilities, wars, terrorism or geopolitical events; risks related to the sufficiency of liquidity, including our ability to attract and maintain deposits; 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 and their effects on our customers and the economic and business environments in which we operate; current and future economic and market conditions of the local economies in which we conduct operations; declines in housing and commercial real estate prices and changes in the financial performance and/or condition of our borrowers; 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; 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 bus…
Excerpt shortened here; the source contains the full paragraph.
Current wording
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 us. 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: macroeconomic, geopolitical, and other challenges and uncertainties, including those related to actual or potential policies and actions from the U.S. administration, such as tariffs and reciprocal actions by other countries or regions and their ultimate impact on us, our customers, financial markets, and the overall U.S. and global economies; the uncertainty of rapidly evolving and changing U.S. trade policies and practices; inflation/deflation, interest rate, market and monetary fluctuations/volatility; increases in unemployment rates; slowing economic growth or recession in the U.S. and other countries or regions; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit; the impact of changes in financial services industry policies, laws and regulations; regulatory restrictions or adverse regulatory findings affecting our ability to successfully market and price our products to consumers; systemic or non-systemic bank failures or crises and any related impact on depositor behavior or investor sentiment; the impacts of international hostilities, wars, terrorism or geopolitical events; risks related to the sufficiency of liquidity, including our ability to attract and maintain deposits; 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 and their effects on our customers and the economic and business environments in which we operate; current and future economic and market conditions of the local economies in which we conduct operations; declines in housing and commercial real estate prices and changes in the financial performance and/or condition of our borrowers; 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; 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, as well as whether we are able to obtain any required governmental approvals in connection with any such activities, or identify a…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Performance highlights and other developments for the Company as of or for the three and nine months ended September 30, 2025, included the following:
Current wording
Performance highlights and other developments for the Company as of or for the three months ended March 31, 2026, included the following:
Previous wording
•Net income was $34.0 million or $1.04 per diluted share as compared to $27.5 million or $0.84 per diluted share in the trailing quarter, and an increase of $5.0 million or 17.1% from the third quarter of 2024
Current wording
•Net income was $33.7 million or $1.04 per diluted share as compared to $33.6 million or $1.03 per diluted share in the trailing quarter, and an increase of $7.3 million or 27.8% from the first quarter of 2025
Previous wording
•Net interest income (FTE) was $89.8 million, an increase of $3.0 million or 3.51% over the trailing quarter; net interest margin (FTE) was 3.92% in the recent quarter, an increase of 4 basis points over 3.88% in the trailing quarter
Current wording
•Net interest income (FTE) was $91.5 million, a decrease of $1.0 million or 1.1% over the trailing quarter; net interest margin (FTE) was 4.07%, an increase of 5 basis points over 4.02% in the trailing quarter
Previous wording
•Loan balances increased $47.8 million or 2.7% (annualized) from the trailing quarter and increased $322.9 million or 4.8% from the same quarter of the prior year
Current wording
•Loan balances decreased $42.9 million or 2.4% (annualized) from the trailing quarter and increased $247.4 million or 3.6% from the same quarter of the prior year
Previous wording
•Deposit balances decreased $41.3 million or 2.0% (annualized) from the trailing quarter and increased $297.4 million or 3.7% from the same quarter of the prior year
Current wording
•Deposit balances increased $139.7 million or 6.8% (annualized) from the trailing quarter and increased $198.3 million or 2.4% from the same quarter of the prior year
Previous wording
•The average cost of total deposits was 1.39%, an increase of 2 basis points as compared to 1.37% in the trailing quarter, and a decrease of 13 basis points from 1.52% in the same quarter of the prior year
Current wording
•The average cost of total deposits was 1.26%, a decrease of 3 basis points as compared to 1.29% in the trailing quarter, and a decrease of 17 basis points from 1.43% in the same quarter of the prior year
Previous wording
•For the quarter ended September 30, 2025, the Company’s return on average assets was 1.36%, while the return on average equity was 10.47%; for the trailing quarter ended June 30, 2025, the Company’s return on average assets was 1.13%, while the return on average equity was 8.68%
Current wording
•For the quarter ended March 31, 2026, the Company’s return on average assets was 1.38%, while the return on average equity was 10.08%; for the trailing quarter ended December 31, 2025, the Company’s return on average assets was 1.34%, while the return on average equity was 10.02%
Previous wording
•Diluted earnings per share were $1.04 for the third quarter of 2025, compared to $0.84 for the trailing quarter and $0.88 during the third quarter of 2024
Current wording
•Diluted earnings per share were $1.04 for the first quarter of 2026, compared to $1.03 for the trailing quarter and $0.80 during the first quarter of 2025
Previous wording
•The loan to deposit ratio was 84.07% as of September 30, 2025, as compared to 83.08% for the trailing quarter end. Management's ability to maintain this ratio proximate to 85.0% will drive growth in revenue and earnings, as demonstrated in the current period
Current wording
•The loan to deposit ratio was 84.11% as of March 31, 2026, as compared to 86.05% for the trailing quarter end
Previous wording
•The efficiency ratio was 56.18% for the quarter ended September 30, 2025, as compared to 59.00% for the trailing quarter
Current wording
•The efficiency ratio was 54.55% for the quarter ended March 31, 2026, as compared to 54.68% for the trailing quarter
Previous wording
•The provision for credit losses was $0.7 million during the quarter ended September 30, 2025, as compared to $4.7 million during the trailing quarter end
Current wording
•The provision for credit losses was $3.3 million during the quarter ended March 31, 2026, as compared to $3.0 million during the trailing quarter
Previous wording
•The allowance for credit losses (ACL) to total loans was 1.78% as of September 30, 2025, compared to 1.79% as of the trailing quarter end, and 1.85% as of September 30, 2024. Non-performing assets to total assets were 0.72% on September 30, 2025, as compared to 0.68% as of June 30, 2025, and 0.45% at September 30, 2024. At September 30, 2025, the ACL represented 190% of non-performing loans
Current wording
•The allowance for credit losses (ACL) to total loans was 1.81% as of March 31, 2026, compared to 1.77% as of the trailing quarter end, and 1.88% as of March 31, 2025. Non-performing assets to total assets were 0.77% on March 31, 2026, as compared to 0.72% as of December 31, 2025, and 0.59% on March 31, 2025
Previous wording
Loans may be acquired at a premium or discount to par value, in which case, the premium is amortized (subtracted from) or the discount is accreted (added to) interest income over the remaining life of the loan. The dollar impact of loan discount accretion and loan premium amortization decrease as the purchased loans mature or pay off early. Upon the early pay off of a loan, any remaining unaccreted discount or unamortized premium is immediately taken into interest income; and as loan payoffs may vary significantly from quarter to quarter, so may the impact of discount accretion and premium amortization on interest income. Despite the elevated rate environment, the prepayment rate of portfolio loans, inclusive of those acquired at a premium or discount, remains generally consistent. During the quarters ended September 30, 2025, June 30, 2025 and September 30, 2024, the purchased loan discount accretion was $1.0 million, $1.2 million and $1.0 million, respectively.
Current wording
Loans may be acquired at a premium or discount to par value, in which case, the premium is amortized (subtracted from) or the discount is accreted (added to) interest income over the remaining life of the loan. The dollar impact of loan discount accretion and loan premium amortization decrease as the purchased loans mature or pay off early. Upon the early pay off of a loan, any remaining unaccreted discount or unamortized premium is immediately taken into interest income; and as loan payoffs may vary significantly from quarter to quarter, so may the impact of discount accretion and premium amortization on interest income. Despite the elevated rate environment, the prepayment rate of portfolio loans, inclusive of those acquired at a premium or discount, remains generally consistent. During the quarters ended March 31, 2026, December 31, 2025 and March 31, 2025, the purchased loan discount accretion was $1.4 million, $0.9 million and $2.0 million, respectively.
Previous wording
Net interest income (FTE) during the three months ended September 30, 2025, increased $6.9 million or 8.4% to $89.8 million compared to $82.9 million during the three months ended September 30, 2024. Net interest margin totaled 3.92% for the three months ended September 30, 2025, an increase of 21 basis points from the same quarter in 2024. The primary drivers behind the change in net interest margin was related to a reduction in volume and an improvement (decrease) in yield on interest-bearing liabilities, namely, the cost of other borrowings decreased to just 7 basis points following the repayment of all FHLB advances. Further, interest-bearing deposits yield declined by 24 basis points between the quarter ended September 30, 2025, and the same quarter of the prior year. The accretion of discounts from acquired loans added 6 basis points and 6 basis points to loan yields during the quarters ended September 30, 2025 and September 30, 2024, respectively. Finally, the average balance of noninterest-bearing deposits increased by $4.9 million from the three-month average as of September 30, 2025, reversing the recent trends of customers migrating funds to interest-bearing products.
Current wording
Net interest income (FTE) during the three months ended March 31, 2026, increased $8.7 million or 10.5% to $91.5 million compared to $82.8 million during the three months ended March 31, 2025. Net interest margin totaled 4.07% for the three months ended March 31, 2026, an increase of 34 basis points from the same quarter in 2025. The primary drivers behind the change in net interest margin is related to an increase in average loan balances, improving interest income by $3.8 million, coupled with a decline in yields paid on interest-bearing deposits improving net interest income by $2.9 million, with yields paid declining by 24 basis points between the quarter ended March 31, 2026, and the same quarter of the prior year. The accretion of discounts from acquired loans added 8 basis points and 12 basis points to loan yields during the quarters ended March 31, 2026 and March 31, 2025, respectively. Finally, the average balance of noninterest-bearing deposits increased by $37.1 million from the three-month average as of March 31, 2026.
Previous wording
Net interest income (FTE) during the three months ended September 30, 2025 increased $6.9 million to $89.8 million compared to $82.9 million during the three months ended September 30, 2024. The increase in net interest income (FTE) was due largely to shifts in the mix of earning assets and funding sources, resulting in a decrease in short-term FHLB borrowings and an increase in loan balances, both of which have a beneficial impact on net interest income.
Current wording
Net interest income (FTE) during the three months ended March 31, 2026 increased $8.7 million to $91.5 million compared to $82.8 million during the three months ended March 31, 2025. As noted above, the increase in net interest income (FTE) was due largely to higher average loan balances and lower rates paid for interest-bearing deposits, both of which have a beneficial impact on net interest income.
Previous wording
During the three months ended September 30, 2025, the Company recorded a provision for credit losses of $0.7 million, as compared to $4.7 million during the trailing quarter, and $0.2 million during the third quarter of 2024.
Current wording
During the three months ended March 31, 2026, the Company recorded a provision for credit losses of $3.3 million, as compared to $3.0 million during the trailing quarter, and $3.7 million during the first quarter of 2025.
Previous wording
The $0.8 million recorded for general reserves is primarily attributed to net loan growth for the quarter of approximately $47.8 million. Additionally, Management notes that economic indicators through the end of the current quarter, as well as actual and forecasted trends including, but not limited to, unemployment, gross domestic product, and corporate borrowing rates continued to evidence stability and were supportive of general economic expansion, and generally consistent with the trailing period ended June 30, 2025, which is aligned with the Company's direct experiences with borrowers. Steepening of the yield curve or actions by the Federal Reserve to further cut rates during 2025 and beyond may help further improve this outlook overall, but the uncertainty associated with the extent and timing of these potential reductions has inhibited a material change to monetary policy assumptions. Furthermore, political policy risks both domestic and international are elevated, which may lead to further negative effects on domestic economic outcomes. The uncertainties related to the nature, duration and potential economic impact of proposed tariffs, while modestly improved since the period ended June 30, 2025, continue to present challenges in correlating potential improvement of credit risks within the Company's loan portfolio. Therefore, in conjunction with most economists' belief that tariffs may have a generally unfavorable impact on the economy as a whole, 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.
Current wording
The net change in reserves on collective loan pools was minimal as of the quarter ended March 31, 2026. On a gross basis, the Company did benefit from declining required general reserves for consumer loans, which was offset by increases in required general reserves for commercial real estate lending. Additionally, Management notes that economic indicators through the end of the current quarter, as well as actual and forecasted trends including, but not limited to, unemployment, gross domestic product, and corporate borrowing rates continued to evidence stability and were supportive of general economic expansion, and generally consistent with the trailing period ended December 31, 2025, which is aligned with the Company's direct experiences with borrowers. Management's proactive portfolio management policies and ongoing dialogue with borrowers suggests caution continues to be warranted. Actions by the Federal Reserve to further cut rates during 2026 or stimulative policies by the Federal government may help further improve this outlook overall, but the uncertainty associated with the extent and timing of these potential reductions has inhibited a material change to monetary policy assumptions. Furthermore, political policy risks both domestic and international remain unresolved, which could quickly lead to further negative effects on domestic economic outcomes. The uncertainties related to the extent and duration of escalation within the Middle East, and potential domestic economic impact from volatility in oil prices and the impact on inflation risks, continue to present challenges in correlating potential improvement of credit risks within the Company's loan portfolio. Therefore, 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.
Previous wording
The ratio of classified loans to total loans of 1.88% as of September 30, 2025, was down 6 basis points from June 30, 2025, and increased 12 basis points from the comparative quarter ended 2024. The change in classified loans outstanding as compared to the trailing quarter represented a decrease of $3.0 million.
Current wording
The ratio of classified loans to total loans of 2.00% as of March 31, 2026, was an increase of 22 basis points from December 31, 2025, and 6 basis points from the comparative quarter ended 2025. The change in classified loans outstanding as compared to the trailing quarter represented an increase of approximately $14.6 million.
Previous wording
Loans past due 30 days or more increased by $2.7 million during the quarter ended September 30, 2025, to $45.7 million, as compared to $43.0 million at June 30, 2025. The majority of loans identified as past due are well-secured by collateral, and approximately $28.1 million are less than 90 days delinquent.
Current wording
Loans past due 30 days or more increased by $11.0 million during the quarter ended March 31, 2026, to $48.9 million, as compared to $37.9 million at December 31, 2025. The majority of loans identified as past due are well-secured by collateral, and approximately $22.9 million are less than 90 days delinquent.
Previous wording
Non-performing loans increased by $0.8 million during the quarter ended September 30, 2025 to $65.6 million as compared to $64.8 million at June 30, 2025. The credit and collateral profiles of non-performing loans remain generally consistent with the trailing quarter. As noted previously, management continues to proactively work with these borrowers to identify actionable and appropriate resolution strategies which are customary for the industries. We anticipate that these proactive strategies within agriculture commercial real estate loans will further benefit from the continued improvement in agricultural commodity prices, stable water supply, and growing crop demand. Of the $65.6 million loans designated as non-performing as of September 30, 2025, approximately $30.3 million are current or less than 30 days past due with respect to payments required under their existing loan agreements.
Current wording
Non-performing loans increased by $5.2 million during the quarter ended March 31, 2026 to $69.5 million as compared to $64.2 million at December 31, 2025. The credit and collateral profiles of non-performing loans remain generally consistent with the trailing quarter. As noted previously, management continues to proactively work with these borrowers to identify actionable and appropriate resolution strategies which are customary for the industries. Management anticipates that these proactive strategies, specifically within agricultural real estate secured and agricultural commercial loans, will further benefit from the continued improvement in agricultural commodity prices, stable water supply, and growing crop demand. Of the $69.5 million loans designated as non-performing as of March 31, 2026, approximately $38.2 million are current or less than 30 days past due with respect to payments required under their existing loan agreements.
Previous wording
As of September 30, 2025, other real estate owned consisted of 10 properties with a carrying value of approximately $5.4 million, as compared to 9 properties with a carrying value of $2.7 million at June 30, 2025. Non-performing assets of $71.1 million at September 30, 2025, represented 0.72% of total assets, a change from $67.5 million or 0.68% and $44.4 million or 0.45% as of June 30, 2025 and September 30, 2024, respectively.
Current wording
As of March 31, 2026, other real estate owned consisted of 14 properties with a carrying value of approximately $7.0 million, as compared to 12 properties with a carrying value of $6.2 million at December 31, 2025. Non-performing assets of $76.4 million at March 31, 2026, represented 0.77% of total assets, a change from $70.5 million or 0.72% and $57.5 million or 0.59% as of December 31, 2025 and March 31, 2025, respectively.
Previous wording
Non-interest income increased $1.5 million or 9.2% to $18.0 million during the three months ended September 30, 2025, compared to $16.5 million during the comparative quarter ended September 30, 2024. Growth in deposit related transactional activities during the quarter contributed to the elevated service fees, which increased by a combined $0.7 million as compared to the three-month ended September 30, 2024. Further, elevated activity and volume of assets under management drove an increase of $0.4 million or 28.6% in asset management and commission income for the period ended September 30, 2025, as compared to the same period in 2024. During the quarter, the Company realized a gain of approximately $2.5 million related to the early retirement of $59.9 million in subordinated debt, recorded within other income. As a partial offset, the Company incurred losses on the sale of investment securities totaling approximately $2.1 million, resulting in proceeds of $28.5 million.
Current wording
Non-interest income increased $1.0 million or 6.0% to $17.0 million during the three months ended March 31, 2026, compared to $16.1 million during the comparative quarter ended March 31, 2025. Growth in deposit related transactional activities contributed to the elevated service fees, which increased by a combined $0.5 million as compared to the equivalent period in 2025. Further, elevated activity and volume of assets under management drove an increase of $0.6 million or 37.7% in asset management and commission income for the period ended March 31, 2026, as compared to the same period in 2025. Other income during the three months ended March 31, 2026 decreased by $1.3 million, reflecting the absence of excess cash flows from death benefit proceeds totaling $1.2 million in the comparative quarter. In addition, gains on investment security sales totaling $17.0 thousand were recorded during the current quarter as compared to losses on sales of $1.1 million during the same quarter of the prior year.
Previous wording
The Company’s effective tax rate was 26.8% for the quarter ended September 30, 2025, as compared to 27.2% for the quarter ended June 30, 2025, and 26.3% for the quarter ended September 30, 2024. 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.
Current wording
The Company’s effective tax rate was 26.6% for the quarter ended March 31, 2026, as compared to 27.8% for the quarter ended December 31, 2025, and 26.3% for the quarter ended March 31, 2025. 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.
Previous wording
Loans outstanding increased by $47.8 million or 2.7% on an annualized basis during the quarter ended September 30, 2025. During the quarter, loan originations/draws totaled approximately $424.6 million while payoffs/repayments of loans totaled $377.1 million, which compares to originations/draws and payoffs/repayments during the trailing quarter ended of $457.7 million and $329.3 million, respectively. Origination volume was down relative to the robust prior quarter but remains in-line in with forecasted levels. As interest rates continue to contract from the highs experienced in early 2025, and the macro-economic outlook remains optimistic for borrowers following the passage of tax and spending legislation that is expected to promote continued economic expansion, in addition to progress made finalizing tariff policies with the United States' largest trade partners. The activity within loan payoffs/repayments, while elevated in the most recent quarter, remains spread amongst numerous borrowers, regions and loan types.
Current wording
Loans outstanding decreased by $42.9 million or 2.4% on an annualized basis during the quarter ended March 31, 2026. During the quarter, gross loan originations/draws totaled approximately $388.7 million while gross payoffs/repayments of loans totaled $442.2 million, which compares to gross originations/draws and gross payoffs/repayments during the trailing quarter ended of $502.8 million and $418.1 million, respectively. Origination volume contracted from the trailing quarter but expanded by comparison with the same quarter of prior years. However, the level of payoff and paydown was elevated during the quarter by comparison to both the trailing and prior year quarters. Domestically, the macro-economic outlook remains optimistic for borrowers following the passage of tax and spending legislation that is expected to promote continued economic expansion through the remainder of 2026. The activity within loan payoffs/repayments remains generally consistent with recent quarters and spread amongst numerous borrowers, regions and loan types.
Previous wording
Investment security balances decreased $80.8 million or 16.7% on an annualized basis during the quarter as a result of net prepayments/maturities of $143.6 million, and sales of $28.5 million, partially offset by net increases in the market value of securities of $12.8 million and purchases of $73.4 million. Investment security purchases were comprised of fixed rate agency mortgage-backed securities, non-agency collateralized mortgage securities and collateralized loan obligations. 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.
Current wording
Investment security balances increased $28.7 million or 6.2% on an annualized basis during the quarter as a result of purchases of $90.7 million, partially offset by net prepayments/maturities of $55.2 million and net decreases in the market value of securities of $6.6 million. Investment security purchases were comprised of fixed rate agency mortgage-backed securities. 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.
Previous wording
Investment securities held to maturity decreased $16.4 million to $95.4 million as of September 30, 2025, as compared to December 31, 2024. This decrease is attributable to calls and principal repayments of $16.3 million, and amortization of net purchase premiums of $0.1 million.
Current wording
Investment securities held to maturity decreased $4.8 million to $85.7 million as of March 31, 2026, as compared to December 31, 2025. This decrease is attributable to calls and principal repayments of $47.4 million, and amortization of net purchase premiums of $0.1 million.
Previous wording
Changes in nonperforming assets during the three and nine months ended September 30, 2025
Current wording
Changes in nonperforming assets during the three months ended March 31, 2026
Previous wording
Nonperforming assets increased during the three months ended September 30, 2025 by $3.6 million or 5.4% to $71.1 million compared to $67.5 million at June 30, 2025. The increase in nonperforming assets during the third quarter of 2025 was primarily the result of nonperforming loan additions totaling $9.9 million, partially offset by pay-downs and upgrades, which totaled $5.7 million during the quarter, as well as $0.6 million in charge-offs. Management is actively engaged in the collection and recovery efforts for all nonperforming assets and believes that the loan loss reserves associated with these loans is sufficient as of September 30, 2025.
Current wording
Nonperforming assets increased during the three months ended March 31, 2026 by $6.0 million or 8.5% to $76.4 million compared to $70.5 million at December 31, 2025. The increase in nonperforming assets during the first quarter of 2026 was primarily the result of nonperforming loan additions totaling $15.2 million, partially offset by pay-downs and upgrades, which totaled $8.4 million during the quarter, as well as $0.8 million in charge-offs. Management is actively engaged in the collection and recovery efforts for all nonperforming assets and believes that the loan loss reserves associated with these loans is sufficient as of March 31, 2026.
Previous wording
For additional information regarding the allowance for loan losses, including changes in specific, formula, and environmental factors allowance categories, see“Asset Quality and Loan Loss Provisioning”at“Results of Operations”, above. For additional information on the current ACL methodology, see"Allowance for Credit Losses - Loans"within footnote 1 of the Company's 10-Q/10-K. Based on the current conditions of the loan portfolio, management believes that the $124.6 million allowance for credit losses at September 30, 2025 is adequate to absorb expected losses inherent in the Bank’s loan portfolio. No assurance can be given, however, that adverse economic conditions or other circumstances will not result in increased losses in the portfolio.
Current wording
For additional information regarding the allowance for loan losses, including changes in specific, formula, and environmental factors allowance categories, see“Asset Quality and Loan Loss Provisioning”at“Results of Operations”, above. For additional information on the current ACL methodology, see"Allowance for Credit Losses - Loans"within footnote 1 of the Company's 10-Q/10-K. Based on the current conditions of the loan portfolio, management believes that the $127.9 million allowance for credit losses at March 31, 2026 is adequate to absorb expected losses inherent in the Bank’s loan portfolio. No assurance can be given, however, that adverse economic conditions or other circumstances will not result in increased losses in the portfolio.
Previous wording
The following table details the components and summarize the activity in foreclosed assets, net of allowances for losses, for the nine months ended September 30, 2025:
Current wording
The following table details the components and summarize the activity in foreclosed assets, net of allowances for losses, for the three months ended March 31, 2026:
Previous wording
During the nine months ended September 30, 2025, the Company’s deposits increased by $246.9 million to $8.3 billion at quarter end. There were no brokered deposits included in the deposit balances as of September 30, 2025 and December 31, 2024. Estimated uninsured deposits totaled $2.7 billion and $2.5 billion as of September 30, 2025 and December 31, 2024, respectively.
Current wording
During the three months ended March 31, 2026, the Company’s deposits increased by $139.7 million to $8.4 billion at quarter end. There were no brokered deposits included in the deposit balances as of March 31, 2026 and December 31, 2025. Estimated uninsured deposits totaled $2.7 billion and $2.9 billion as of March 31, 2026 and December 31, 2025, respectively.
Previous wording
On February 25, 2021 the Board of Directors authorized the repurchase of up to 2,000,000 shares of the Company's common stock (the 2021 Repurchase Plan), which approximated 6.7% of the shares outstanding as of the approval date. The actual timing of any share repurchases will be determined by the Company's management and therefore the total value of the shares to be purchased under the 2021 Repurchase Plan is subject to change. The Company may repurchase its outstanding shares of common stock from time to time in open market or privately-negotiated transactions, including block trades, or pursuant to 10b5-1 trading plans. The 2021 Repurchase Plan has no expiration date (in accordance with applicable laws and regulations).
Current wording
The Company's Board of Directors has approved the authorization to repurchase up to 2.0 million shares of the Company's common stock (the 2025 Repurchase Plan or the 2025 Program). The Company’s 2025 Share Repurchase Program replaces and supersedes the 2021 Share Repurchase Program which has been terminated as of December 31, 2025. The actual timing of any share repurchases will be determined by the Company's management and therefore the total value of the shares to be purchased under the 2025 Program is subject to change. The 2025 Program has no expiration date but the Board may suspend or discontinue the program at any time.
Previous wording
Total shareholders' equity increased by $37.5 million during the quarter ended September 30, 2025, as net income of $34.0 million and a $16.4 million decrease in accumulated other comprehensive losses were partially offset by $11.7 million in cash dividends on common stock and $2.5 million in share repurchase activity. As a result, the Company’s book value increased to $40.12 per share at September 30, 2025, compared to $38.92 at June 30, 2025. 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 $30.61 per share at September 30, 2025, as compared to $29.40 at June 30, 2025. 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.
Current wording
Total shareholders' equity decreased by $4.0 million during the quarter ended March 31, 2026, as net income of $33.7 million was offset by a $4.6 million increase in accumulated other comprehensive losses, $11.5 million in cash dividends on common stock and $21.6 million in share repurchase activity. As a result, the Company’s book value increased to $41.49 per share at March 31, 2026, compared to $41.07 at December 31, 2025. 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 $31.82 per share at March 31, 2026, as compared to $31.52 at December 31, 2025.
Previous wording
At September 30, 2025, the Company's primary sources of liquidity represented 50% of total deposits and 154% 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 $91.3 million, including approximately $4.1 million in net unrealized losses.
Current wording
At March 31, 2026, the Company's primary sources of liquidity represented 51% of total deposits and 156% 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 $82.0 million, including approximately $3.8 million in net unrealized losses.
Previous wording
The Company’s profitability during the first nine months of 2025 generated cash flows from operations of $98.8 million compared to $85.5 million during the first nine months of 2024. Net cash used by investing activities was $3.6 million for the nine months ended September 30, 2025, compared to net cash from investing activities of $345.0 million during the nine months ending 2024. Financing activities provided $58.7 million during the nine months ended September 30, 2025, compared to using $209.0 million during the nine months ended September 30, 2024.
Current wording
The Company’s profitability during the first three months of 2026 generated cash flows from operations of $33.7 million compared to $24.5 million during the first three months of 2025. Net cash from investing activities was $5.1 million for the three months ended March 31, 2026, compared to net cash from investing activities of $33.9 million during the three months ending 2025. Financing activities provided $105.5 million during the three months ended March 31, 2026, compared to using $104.9 million during the three months ended March 31, 2025.
Previous wording
The types of contractual obligations of the Company and Bank, include but are not limited to term subordinated debt, operating leases, deferred compensation and supplemental retirement plans as well as off-balance sheet commitments such as unfunded loans and letters of credit, are consistent with those as of December 31, 2024. However, as borrowings have been repaid, the borrowing capacity at correspondent banks has increased. In addition, as the balance of investment securities has declined, so has the balance of unpledged securities. In total, and as illustrated above, the balance of total primary liquidity has increased during the first nine months of 2025.
Current wording
The types of contractual obligations of the Company and Bank, include but are not limited to term subordinated debt, operating leases, deferred compensation and supplemental retirement plans as well as off-balance sheet commitments such as unfunded loans and letters of credit, are consistent with those as of December 31, 2025. However, as borrowings have been repaid, the borrowing capacity at correspondent banks has increased. In addition, as the balance of investment securities has declined, so has the balance of unpledged securities. In total, and as illustrated above, the balance of total primary liquidity has increased during the first three months of 2026.
Previous wording
The Company is dependent upon the payment of cash dividends by the Bank to service its commitments, which have historically included dividends to shareholders, scheduled debt service payments, and general operations. Shareholder dividends are expected to continue subject to the Board’s discretion and management's continuing evaluation of capital levels, earnings, asset quality and other factors. The Company expects that the cash dividends paid by the Bank to the Company will be sufficient to cover the Company's cash flow needs. However, the Company and its ability to generate liquidity through either the issuance of stock or debt, also serves as a potential source of strength for the Bank. Dividends paid by the Company to holders of its common stock used $33.4 million and $32.8 million of cash during the nine months ended September 30, 2025 and 2024, respectively. The Company’s liquidity is dependent on dividends received from the Bank. Dividends from the Bank are subject to certain regulatory restrictions.
Current wording
The Company is dependent upon the payment of cash dividends by the Bank to service its commitments, which have historically included dividends to shareholders, scheduled debt service payments, and general operations. Shareholder dividends are expected to continue subject to the Board’s discretion and management's continuing evaluation of capital levels, earnings, asset quality and other factors. The Company expects that the cash dividends paid by the Bank to the Company will be sufficient to cover the Company's cash flow needs. However, the Company and its ability to generate liquidity through either the issuance of stock or debt, also serves as a potential source of strength for the Bank. Dividends paid by the Company to holders of its common stock used $11.5 million of cash during the three months ended March 31, 2026. The Company’s liquidity is dependent on dividends received from the Bank. Dividends from the Bank are subject to certain regulatory restrictions.