TriCo Bancshares surges on earnings beat, $97M buyback program
Net interest margin expansion and improved efficiency drive quarterly performance as California regional bank authorizes share repurchases
TriCo Bancshares shares advanced after the California-based regional bank reported fourth-quarter earnings that exceeded analyst expectations and announced a substantial share repurchase program, highlighting the lender's resilience in a challenging interest rate environment.
The Chico-based company reported quarterly earnings per share of $1.03, beating the consensus estimate of $0.91 by 13.4%. Revenue reached $109.4 million, surpassing projections of $107.1 million by 2.2%. The stock jumped 4.2% on more than double the average trading volume following the announcement.
Net interest margin, a critical profitability metric for banks, expanded by 10 basis points to 4.02%, demonstrating TriCo's ability to maintain earning power despite the Federal Reserve's rate cuts throughout 2025. The efficiency ratio improved to 54.68%, indicating better operational performance as the bank managed expenses relative to revenue.
Perhaps more significant for investors, TriCo's board authorized a new share repurchase program worth $97.1 million, covering approximately 2 million shares. This represents about 6.2% of the company's outstanding shares, a substantial commitment to returning capital to shareholders.
"The authorization of this share repurchase program reflects our confidence in TriCo's financial strength and our commitment to delivering long-term shareholder value," the company stated in its regulatory filing.
TriCo Bancshares, which operates through Tri Counties Bank across Northern and Central California, has demonstrated steady growth in a regional banking sector still recovering from last year's liquidity concerns. The bank's market capitalization stands at approximately $1.65 billion, with shares trading at $51.49, just below the 52-week high of $52.05 reached earlier this month.
Analysts remain cautiously optimistic on the stock, with a consensus target price of $51.17, according to market data. Of six analysts covering the company, two rate it a strong buy, one recommends buy, and three advise hold. The stock trades at 14.26 times trailing earnings and 12.12 times forward earnings, suggesting reasonable valuation compared to regional banking peers.
The quarterly performance stands out against broader banking sector trends, where many lenders have struggled with compressed net interest margins following the Federal Reserve's pivot to rate cuts. TriCo's ability to expand its margin while improving operational efficiency points to strong deposit franchises and prudent asset-liability management.
The bank's shares have rallied 36% from their 52-week low of $34.38, reflecting growing investor confidence in regional banks with solid fundamentals. TriCo's dividend yield of 2.78% provides additional income appeal for income-focused investors.
Looking ahead, investors will be watching whether TriCo can maintain its net interest margin expansion in a potentially lower-rate environment and how quickly it deploys the newly authorized share repurchase program. The buyback represents roughly 6% of market capitalization, providing meaningful support for the stock if executed over the coming quarters.
Regional banks with strong deposit franchises and efficient operations have increasingly attracted investor attention as the sector stabilizes. TriCo's combination of earnings growth, margin expansion, and capital return initiatives positions it among the more attractive names in the mid-cap banking space.