TRICO BANCSHARES /
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
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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.
Jun 30, 2025 · Filed Aug 11, 2025
TCBK$52.17-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001628280-25-024390
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0001628280-25-039501
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 109 previous paragraphs and 116 current paragraphs.
68 unchanged; 37 reworded; 10 added; 4 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 30 previous and 35 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 (10)
Current report
Net interest income (FTE) during the six months ended June 30, 2025, increased $4.3 million, or 2.6%, to $169.6 million compared to $165.3 million during the six months ended June 30, 2024. In addition, net interest margin increased 13 basis points to 3.81%, compared to 3.68% for the same period in the prior year. The increase in net interest income during the six 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 $10.1 million while increases in the volume of average time deposits increased interest expense by approximately $4.0 million. The changes in rate resulted in a $1.4 million decrease in net interest income during the comparable period.
Current report
The allowance for credit losses (ACL) was $124.5 million or 1.79% of total loans as of June 30, 2025. The provision for credit losses on loans of $4.5 million recorded during the current quarter resulted from a net increase of $2.8 million in reserves on individually evaluated loans or loan relationships, in addition to a net increase of $1.7 million in general reserves. The charge-offs incurred during the quarter ended June 30, 2025, were primarily related to non-performing relationships which had been fully reserved for by Management on an individual basis in previous quarters.
Current report
The $2.8 million increase in individually evaluated reserves was largely attributed to changes in observable market valuations associated with agricultural real estate despite what appears to be a stable water supply and improving commodity prices for the crops associated with collateral for these loans. Management believes the provisioning for this individually analyzed relationship is sufficient relative to expected future losses, if any.
Current report
The $1.7 million recorded for general reserves is primarily attributed to net loan growth for the quarter of approximately $138.2 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 March 31, 2025, which is aligned with the Company's direct experiences with borrowers. Steepening of the yield curve or actions by the Federal Reserve to 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, geopolitical policy risks remain 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 March 31, 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 report
The ratio of classified loans to total loans of 1.94% as of June 30, 2025, was unchanged from March 31, 2025, and increased 38 basis points from the comparative quarter ended 2024. The change in classified loans outstanding as compared to the trailing quarter represented an increase of $2.6 million. While the increase is concentrated within commercial real estate farmland, the corresponding loans are current as of the reporting date with no history of delinquency.
Current report
Non-interest income increased $1.5 million or 4.8% to $33.2 million during the six months ended June 30, 2025, compared to $31.6 million during the comparative six months ended June 30, 2024. Service charges and customer fees are elevated in the 2025 period and resulted in an increase of $0.9 million as compared to the six months ended June 30, 2024. Further, as noted previously, elevated activity within asset management and commission income contributed to overall improvement in total non-interest income.
Current report
Non-interest expense increased $5.9 million or 5.1% to $120.7 million during the six months ended June 30, 2025, as compared to $114.8 million for the six months ended June 30, 2024. The largest component was salaries and benefits expense which increased $5.4 million or 7.8% to $75.1 million, largely for the reasons mentioned above. Other non-interest expense line items evidenced broad based but incremental increases, led by elevated business travel, donations, and non-recurring contract termination costs.
Current report
Prior to September 30, 2025, management anticipates repayment to the holders of the North Valley Trust II, III and IV as well as the VRB Subordinated debt issued by TriCo, which had a total face value of $57.7 million, recorded book value of $60.0 million, and weighted average rate of 6.54% as of June 30, 2025.
Current report
In the second quarter of 2025, the Company recorded $8.6 million in loan charge-offs and $0.1 million in loan recoveries which collectively resulted in $8.5 million in net charge-offs. Nearly all of the charge-offs were associated with loans that were individually analyzed and reserved for in prior periods and thus had limited impact on the provision for credit losses during the three months ended June 30, 2025.
Current report
Prior to September 30, 2025, management anticipates providing notice of and repayment to the holders of the North Valley Trust II, III and IV as well as the VRB Subordinated debt issued by TriCo, which had a total face value of $57.7 million, recorded book value of $60.0 million, and weighted average rate of 6.54% as of June 30, 2025. The repayment of this debt will be facilitated through a cash dividend from the Bank to the Company, however, it is not anticipated to have any significant impact on the Bank's liquidity, shareholder equity or regulatory capital positions.
Removed paragraphs (4)
Previous report
The provision for credit losses on loans of $2.7 million recorded during the current quarter resulted from an increase of $4.9 million in net reserves on individually evaluated loans or loan relationships, which were offset by net recoveries ($0.3 million) and decreases in qualitative factors attributed to general improvement in observable economic indicators as compared to the trailing quarter.
Previous report
The allowance for credit losses (ACL) was $128.4 million or 1.88% of total loans as of March 31, 2025. 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.
Previous report
The ratio of classified loans to total loans of 1.94% as of March 31, 2025, increased 20 basis points from December 31, 2024, and increased 82 basis points from the comparative quarter ended 2024. The change in criticized loans outstanding as compared to the trailing quarter totaled $9.5 million. The Company's combined criticized loan balances totaled $238.4 million as of March 31, 2025, an increase of $54.0 million from March 31, 2024. Loans with the risk grade classification substandard increased by $14.2 million over the trailing quarter without any material changes in the mix of underlying collateral type.
Previous report
In the first quarter of 2025, the Company recorded $0.2 million in loan charge-offs and $0.1 million in deposit overdraft charge-offs less $0.7 million in loan recoveries and $0.07 million in deposit overdraft recoveries, which collectively resulted in $0.4 million in net charge-offs.
Reworded paragraphs (37)
Previous wording
Performance highlights and other developments for the Company as of or for the three months ended March 31, 2025, included the following:
Current wording
Performance highlights and other developments for the Company as of or for the three and six months ended June 30, 2025, included the following:
Previous wording
•Net income was $26.4 million or $0.80 per diluted share as compared to $29.0 million or $0.88 per diluted share in the trailing quarter
Current wording
•Net income was $27.5 million or $0.84 per diluted share as compared to $26.4 million or $0.80 per diluted share in the trailing quarter
Previous wording
•Net interest margin (FTE) was 3.73% in the recent quarter, a decrease of 3 basis points over 3.76% in the trailing quarter; net interest income (FTE) was $82.8 million, a decrease of $1.5 million over the trailing quarter
Current wording
•Net interest income (FTE) was $86.8 million, an increase of $4.0 million or 4.82% over the trailing quarter; net interest margin (FTE) was 3.88% in the recent quarter, an increase of 15 basis points over 3.73% in the trailing quarter
Previous wording
•Loan balances increased $52.3 million or 3.1% (annualized) from the trailing quarter and increased $20.1 million or 0.3% from the same quarter of the prior year
Current wording
•Loan balances increased $138.2 million or 8.1% (annualized) from the trailing quarter and increased $216.5 million or 3.2% from the same quarter of the prior year
Previous wording
•Deposit balances increased $117.8 million or 5.8% (annualized) from the trailing quarter and increased $217.7 million or 2.7% from the same quarter of the prior year
Current wording
•Deposit balances increased $170.5 million or 8.3% (annualized) from the trailing quarter and increased $325.6 million or 4.0% from the same quarter of the prior year
Previous wording
•Average yield on earning assets was 5.15%, a decrease of 7 basis points over the 5.22% in the trailing quarter; average yield on loans was 5.71%, a decrease of 7 basis points over the 5.78% in the trailing quarter
Current wording
•Average yield on earning assets was 5.21%, an increase of 6 basis points over the 5.15% in the trailing quarter; average yield on loans was 5.76%, an increase of 5 basis points over the 5.71% in the trailing quarter
Previous wording
•Non-interest bearing deposits averaged 30.7% of total deposits during the quarter
Current wording
•Non-interest bearing deposits averaged 30.6% of total deposits during the quarter
Previous wording
•The average cost of total deposits was 1.43%, a decrease of 3 basis points as compared to 1.46% in the trailing quarter, and an increase of 22 basis points from 1.21% in the same quarter of the prior year
Current wording
•The average cost of total deposits was 1.37%, a decrease of 6 basis points as compared to 1.43% in the trailing quarter, and a decrease of 8 basis points from 1.45% in the same quarter of the prior year
Previous wording
•For the quarter ended March 31, 2025, the Company’s return on average assets was 1.09%, while the return on average equity was 8.54%; for the trailing quarter ended December 31, 2024, the Company’s return on average assets was 1.19%, while the return on average equity was 9.30%
Current wording
•For the quarter ended June 30, 2025, the Company’s return on average assets was 1.13%, while the return on average equity was 8.68%; for the trailing quarter ended March 31, 2025, the Company’s return on average assets was 1.09%, while the return on average equity was 8.54%
Previous wording
•Diluted earnings per share were $0.80 for the first quarter of 2025, compared to $0.88 for the trailing quarter and $0.83 during the first quarter of 2024
Current wording
•Diluted earnings per share were $0.84 for the second quarter of 2025, compared to $0.80 for the trailing quarter and $0.87 during the second quarter of 2024
Previous wording
•The loan to deposit ratio was 83.13% as of March 31, 2025, as compared to 83.69% for the trailing quarter end
Current wording
•The loan to deposit ratio was 83.08% as of June 30, 2025, as compared to 83.13% for the trailing quarter end
Previous wording
•The efficiency ratio was 60.42% for the quarter ended March 31, 2025, as compared to 59.56% for the trailing quarter as net interest income was impacted by the quarter over quarter reduction in calendar days
Current wording
•The efficiency ratio was 59.00% for the quarter ended June 30, 2025, as compared to 60.42% for the trailing quarter
Previous wording
•The provision for credit losses was approximately $3.7 million during the quarter ended March 31, 2025, as compared to $1.7 million during the trailing quarter end. The change was attributed to an increase in required reserves totaling $4.9 million on individually evaluated loans and an increase of $1.1 million in reserves for unfunded commitments, which were offset by net recoveries and decreases in qualitative factors attributed to general improvement in economic indicators
Current wording
•The provision for credit losses was approximately $4.7 million during the quarter ended June 30, 2025, as compared to $3.7 million during the trailing quarter end. The change was attributed to an increase in required reserves totaling $2.8 million on individually evaluated loans and an increase of $1.7 million general reserves, which was primary attributed to loan growth
Previous wording
•The allowance for credit losses (ACL) to total loans was 1.88% as of March 31, 2025, compared to 1.85% as of the trailing quarter end, and 1.83% as of March 31, 2024. Non-performing assets to total assets were 0.59% on March 31, 2025, as compared to 0.48% as of December 31, 2024, and 0.37% at March 31, 2024. At March 31, 2025, the ACL represented 234% of non-performing loans
Current wording
•The allowance for credit losses (ACL) to total loans was 1.79% as of June 30, 2025, compared to 1.88% as of the trailing quarter end, and 1.83% as of June 30, 2024. Non-performing assets to total assets were 0.68% on June 30, 2025, as compared to 0.59% as of March 31, 2025, and 0.36% at June 30, 2024. At June 30, 2025, the ACL represented 192% of non-performing loans
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 March 31, 2025, December 31, 2024 and March 31, 2024, the purchased loan discount accretion was $2.0 million, $1.1 million and $1.3 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 June 30, 2025, March 31, 2025 and June 30, 2024, the purchased loan discount accretion was $1.2 million, $2.0 million and $0.9 million, respectively.
Previous wording
Net interest income (FTE) during the three months ended March 31, 2025, decreased $0.2 million or 0.2% to $82.8 million compared to $83.0 million during the three months ended March 31, 2024. Net interest margin totaled 3.73% for the three months ended March 31, 2025, an increase of 5 basis points from the same quarter in 2024. The primary drivers behind the change in net interest margin was related to a slight improvement in yield on both interest-earnings assets and interest-bearing liabilities. The accretion of discounts from acquired loans added 12 basis points and 8 basis points to loan yields during the quarters ended March 31, 2025 and March 31, 2024, respectively. The cost of interest-bearing deposits increased by 23 basis points between the quarter ended March 31, 2025, and the same quarter of the prior year. In addition, the average balance of noninterest-bearing deposits decreased by $132.0 million from the three-month average for the period ended March 31, 2024 amidst a continued migration of customer funds to interest-bearing products.
Current wording
Net interest income (FTE) during the three months ended June 30, 2025, increased $4.5 million or 5.5% to $86.8 million compared to $82.3 million during the three months ended June 30, 2024. Net interest margin totaled 3.88% for the three months ended June 30, 2025, an increase of 20 basis points from the same quarter in 2024. The primary drivers behind the change in net interest margin was related to an improvement in yield on interest-bearing liabilities, namely, the cost of interest-bearing deposits decreased by 17 basis points between the quarter ended June 30, 2025, and the same quarter of the prior year. The accretion of discounts from acquired loans added 8 basis points and 5 basis points to loan yields during the quarters ended June 30, 2025 and June 30, 2024, respectively. In addition, the average balance of noninterest-bearing deposits decreased by $49.0 million from the three-month average for the period ended June 30, 2024 amidst a continued migration of customer funds to interest-bearing products.
Previous wording
Net interest income (FTE) during the three months ended March 31, 2025 decreased $0.2 million to $82.8 million compared to $83.0 million during the three months ended March 31, 2024. The modest decrease in net interest income (FTE) was due largely to a shift in deposit mix, resulting in a more significant percentage of interest-bearing deposits, which more than offset the benefit on expense from lower interest rates.
Current wording
Net interest income (FTE) during the three months ended June 30, 2025 increased $4.5 million to $86.8 million compared to $82.3 million during the three months ended June 30, 2024. The increase in net interest income (FTE) was due largely to a shift in funding mix, resulting in a decrease in short-term FHLB borrowings and an increase in interest-bearing deposits, which provided a favorable mix in interest expense.
Previous wording
During the three months ended March 31, 2025, the Company recorded a provision for credit losses of $3.7 million, as compared to $1.7 million during the trailing quarter, and $4.3 million during the first quarter of 2024.
Current wording
During the three months ended June 30, 2025, the Company recorded a provision for credit losses of $4.7 million, as compared to $3.7 million during the trailing quarter, and $0.4 million during the second quarter of 2024.
Previous wording
Loans past due 30 days or more increased by $12.0 million during the quarter ended March 31, 2025, to $44.8 million, as compared to $32.7 million at December 31, 2024. The majority of loans identified as past due are well-secured by collateral, and approximately $27.8 million is less than 90 days delinquent. Non-performing loans were $54.9 million at March 31, 2025, an increase of $10.8 million from $44.1 million as of December 31, 2024, and an increase of $20.6 million from $34.2 million as of March 31, 2024. Management continues to proactively work with these borrowers to identify actionable and appropriate resolution strategies which are customary for the industries. Of the $54.9 million loans designated as non-performing as of March 31, 2025, approximately $19.0 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 $9.9 million during the quarter ended June 30, 2025 to $64.8 million as compared to $54.9 million at March 31, 2025. As noted above, this increase is concentrated within commercial real estate farmland and 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 actionable strategies will further benefit from the continued improvement in agricultural commodity prices, stable water supply, and growing crop demand. Of the $64.8 million loans designated as non-performing as of June 30, 2025, approximately $30.7 million are current or less than 30 days past due with respect to payments required under their existing loan agreements.
Previous wording
As of March 31, 2025, other real estate owned consisted of 9 properties with a carrying value of approximately $2.7 million, compared to 10 properties with a carrying value of approximately $2.8 million as of December 31, 2024. Non-performing assets of $57.5 million at March 31, 2025, represented 0.59% of total assets, a change from the $46.9 million or 0.48% and $36.7 million or 0.37% as of December 31, 2024 and March 31, 2024, respectively.
Current wording
As of June 30, 2025, other real estate owned consisted of 9 properties with a carrying value of approximately $2.7 million, consistent with March 31, 2025. Non-performing assets of $67.5 million at June 30, 2025, represented 0.68% of total assets, a change from $57.5 million or 0.59% and $35.3 million or 0.36% as of March 31, 2025 and June 30, 2024, respectively.
Previous wording
Non-interest income increased $0.3 million or 1.9% to $16.1 million during the three months ended March 31, 2025, compared to $15.8 million during the comparative quarter ended March 31, 2024. The Company incurred $1.1 million in losses related to the sale of investment securities during the quarter on proceeds totaling $30.0 million, offset by excess cash flows from death benefit proceeds of $1.2 million recorded within other income. Elevated activity and volumes of assets under management drove an increase in asset management and commission income totaling $0.4 million or 31.9%.
Current wording
Non-interest income increased $1.2 million or 7.7% to $17.1 million during the three months ended June 30, 2025, compared to $15.9 million during the comparative quarter ended June 30, 2024. Growth in deposit balances and related transactional activities contributed to elevated interchange fees and services charge income, which increased by $0.9 million. Further, elevated activity and volume of assets under management drove an increase of $0.3 million or 20.3% in asset management and commission income for the period ended June 30, 2025 as compared to the same period in 2024.
Previous wording
Total non-interest expense increased $3.1 million or 5.5% to $59.6 million during the three months ended March 31, 2025, as compared to $56.5 million for the quarter ended March 31, 2024. Total salaries and benefits expense increased by $2.6 million or 7.4%, reflecting the increase of $1.4 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 $0.8 million, reflecting elevated levels of production in both loans and deposits during the first quarter of 2025, as compared to 2024.
Current wording
Total non-interest expense increased $2.8 million or 4.8% to $61.1 million during the three months ended June 30, 2025, as compared to $58.3 million for the quarter ended June 30, 2024. Total salaries and benefits expense increased by $2.9 million or 8.1%, reflecting the increase of $1.9 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 $0.5 million, reflecting elevated levels of production in both loans and deposits during the second quarter of 2025, as compared to 2024. Other non-interest expense line items generally evidenced broad based incremental decreases, slightly offset by elevated business travel, donations, as well as contract termination costs as noted above.
Previous wording
The Company’s effective tax rate was 25.3% for the quarter ended March 31, 2025, as compared to 25.9% for the year ended December 31, 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 27.2% for the quarter ended June 30, 2025, as compared to 25.3% for the year 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 $52.3 million or 3.1% on an annualized basis during the quarter ended March 31, 2025. During the quarter, loan originations/draws totaled approximately $357.5 million while payoffs/repayments of loans totaled $321.3 million, which compares to originations/draws and payoffs/repayments during the trailing quarter ended of $487.9 million and $408.5 million, respectively. Origination volume was slightly elevated relative to the comparative period in 2024, despite elevated interest rates and volatility in the economic outlook of potential borrowers. The activity within loan payoffs/repayments remains spread amongst numerous borrowers, regions and loan types.
Current wording
Loans outstanding increased by $138.2 million or 8.1% on an annualized basis during the quarter ended June 30, 2025. During the quarter, loan originations/draws totaled approximately $457.7 million while payoffs/repayments of loans totaled $329.3 million, which compares to originations/draws and payoffs/repayments during the trailing quarter ended of $357.5 million and $321.3 million, respectively. Origination volume was elevated relative to recent quarters as interest rates have contracted from the highs experienced in early 2025, and the macro-economic outlook continues to improve for borrowers following the passage of tax and spending legislation that is expected to promote continued economic expansion, in addition to progress toward finalizing tariff policies with our largest trade partners. The activity within loan payoffs/repayments remains spread amongst numerous borrowers, regions and loan types.
Previous wording
Investment security balances decreased $57.5 million or 11.3% on an annualized basis during the quarter as a result of net prepayments/maturities of $71.7 million and sales of $30.0 million, and offset by net increases in the market value of securities of $31.4 million and purchases of $14.4 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.
Current wording
Investment security balances decreased $42.2 million or 8.5% on an annualized basis during the quarter as a result of net prepayments/maturities of $64.5 million, partially offset by net increases in the market value of securities of $12.8 million and purchases of $10.2 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
Deposit balances increased by $117.8 million or 5.8% annualized during the period, primarily due to increases in savings deposit accounts.
Current wording
Deposit balances increased by $170.5 million or 8.3% annualized during the period, primarily due to increases in demand and savings deposit accounts. Other borrowings decreased by $73.9 million or 322.4% during the quarter following the repayment of all short-term FHLB advances.
Previous wording
Investment securities held to maturity decreased $5.0 million to $106.9 million as of March 31, 2025, as compared to December 31, 2024. This decrease is attributable to calls and principal repayments of $4.9 million, and amortization of net purchase premiums of $0.1 million.
Current wording
Investment securities held to maturity decreased $10.2 million to $101.7 million as of June 30, 2025, as compared to December 31, 2024. This decrease is attributable to calls and principal repayments of $10.1 million, and amortization of net purchase premiums of $0.1 million.
Previous wording
Nonperforming assets increased during the three months ended March 31, 2025 by $10.7 million or 22.7% to $57.5 million compared to $46.9 million at December 31, 2024. The increase in nonperforming assets during the first quarter of 2025 was primarily the result of nonperforming loan additions totaling $12.5 million, partially offset by pay-downs and upgrades, which totaled $1.4 million during the quarter, as well as $0.3 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, 2025.
Current wording
Nonperforming assets increased during the three months ended June 30, 2025 by $9.9 million or 17.3% to $67.5 million compared to $57.5 million at March 31, 2025. The increase in nonperforming assets during the second quarter of 2025 was primarily the result of nonperforming loan additions totaling $23.9 million, partially offset by pay-downs and upgrades, which totaled $5.5 million during the quarter, as well as $8.5 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 June 30, 2025.
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. Effective January 1, 2025, the Company revised its methodology for determining the allowance for credit losses. 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. While the effects from this change on total ACL reserves was insignificant, the allocation of reserves between quantitative and qualitative did shift materially, as reflected within the table above. Based on the current conditions of the loan portfolio, management believes that the $128.4 million allowance for loan losses at March 31, 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 $124.5 million allowance for loan losses at June 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.
Previous 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, 2025:
Current wording
The following table details the components and summarize the activity in foreclosed assets, net of allowances for losses, for the six months ended June 30, 2025:
Previous wording
During the three months ended March 31, 2025, the Company’s deposits increased by $117.8 million to $8.2 billion at quarter end. There were no brokered deposits included in the deposit balances as of March 31, 2025 and December 31, 2024. Estimated uninsured deposits totaled $2.6 billion and $2.5 billion as of March 31, 2025 and December 31, 2024, respectively.
Current wording
During the six months ended June 30, 2025, the Company’s deposits increased by $288.2 million to $8.4 billion at quarter end. There were no brokered deposits included in the deposit balances as of June 30, 2025 and December 31, 2024. Estimated uninsured deposits totaled $2.8 billion and $2.5 billion as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
During the three months ended March 31, 2025, the Company repurchased 89,654 and 99,332 shares with market values of $3.7 million and $3.4 million, respectively. In addition, the Company’s Tier 1 common equity and tangible capital ratios increased to 13.3% and 9.9%, respectively as of March 31, 2025, compared to 13.2% and 9.7%, respectively, as of December 31, 2024.
Current wording
During the three and six months ended June 30, 2025, the Company repurchased 379,978 and 469,632 shares with market values of $15.2 million and$18.9 million, respectively. In addition, the Company’s Tier 1 common equity and tangible capital ratios increased to 13.1% and 10.0%, respectively as of June 30, 2025, compared to 13.2% and 9.7%, respectively, as of December 31, 2024.
Previous wording
Total shareholders' equity increased by $34.6 million during the quarter ended March 31, 2025, as net income of $26.4 million and a $22.1 million decrease in accumulated other comprehensive losses were partially offset by $10.9 million in cash dividends on common stock and $4.1 million in share repurchase activity. As a result, the Company’s book value increased to $38.17 per share at March 31, 2025, compared to $37.03 at December 31, 2024. 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 $28.73 per share at March 31, 2025, as compared to $27.60 at December 31, 2024. 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 increased by $11.3 million during the quarter ended June 30, 2025, as net income of $27.5 million and a $9.0 million decrease in accumulated other comprehensive losses were partially offset by $10.8 million in cash dividends on common stock and $15.7 million in share repurchase activity. As a result, the Company’s book value increased to $38.92 per share at June 30, 2025, compared to $38.17 at March 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 $29.40 per share at June 30, 2025, as compared to $28.73 at March 31, 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.15.7%
Previous wording
At March 31, 2025, the Company's primary sources of liquidity represented 50% 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 $101.0 million, including approximately $5.9 million in net unrealized losses.
Current wording
At June 30, 2025, the Company's primary sources of liquidity represented 51% of total deposits and 153% 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 $97.0 million, including approximately $4.7 million in net unrealized losses.
Previous wording
The Company’s profitability during the first three months of 2024 generated cash flows from operations of $24.5 million compared to $25.1 million during the first three months of 2024. Net cash from investing activities was $33.9 million for the three months ended March 31, 2025, compared to net cash from investing activities of $60.0 million during the three months ending 2024. Financing activities provided $104.9 million during the three months ended March 31, 2025, compared to using $100.9 million during the three months ended March 31, 2024.
Current wording
The Company’s profitability during the first six months of 2025 generated cash flows from operations of $53.8 million compared to $56.9 million during the first six months of 2024. Net cash from investing activities was $59.4 million for the six months ended June 30, 2025, compared to net cash from investing activities of $255.0 million during the six months ending 2024. Financing activities provided $174.9 million during the six months ended June 30, 2025, compared to using $204.1 million during the six months ended June 30, 2024.
Previous wording
The changes in contractual obligations of the Company and Bank, to include but 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 similar balances or totals as of December 31, 2024.
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, 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 half of 2025.
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 $10.9 million and $11.0 million of cash during the three months ended March 31, 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 $21.6 million and $21.9 million of cash during the six months ended June 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Loans past due 30 days or more decreased by $1.8 million during the quarter ended June 30, 2025, to $43.0 million, as compared to $44.8 million at March 31, 2025. The majority of loans identified as past due are well-secured by collateral, and approximately $12.4 million are less than 90 days delinquent.