TriCo Bancshares (TCBK, Financial) announced its Q3 2023 earnings on October 25, 2023. The company reported a net income of $30.6 million, a significant increase from $24.9 million in the trailing quarter. However, when compared to the same quarter of the prior year, the net income was lower than the $37.3 million reported.
Financial Performance
The company's return on average assets for the current quarter was 1.23%, an improvement from 1.01% in the trailing quarter. The loan balances increased by $187.9 million or 2.9%, while deposit balances declined by $85.7 million or 1.1% from the trailing quarter. The average cost of total deposits was 0.86% for the quarter, compared to 0.58% in the trailing quarter.
TriCo Bancshares (TCBK, Financial) reported that the average yield on earning assets was 4.94%, an increase of 16 basis points over the 4.78% in the trailing quarter. The net interest margin was 3.88% in the recent quarter, narrowing only 8 basis points from 3.96% in the trailing quarter.
Company Commentary
Led by both margin and non-interest expenses, operating results for the quarter were improved over both the immediately preceding quarter and general market expectations," explained Rick Smith, President and Chief Executive Officer. Peter Wiese, EVP and Chief Financial Officer added, "We continue to be mindful about the unique economic circumstances in which we are operating and the need for long-term strategic perseverance consistent with the characteristic strengths for which we are known including consistency in shareholder returns, a conservative credit culture, expense control and depth and strength of our TriCo Team."
Financial Highlights
For the quarter ended September 30, 2023, the company's return on average assets was 1.23%, while the return on average equity was 10.91%. The loan to deposit ratio increased to 83.8% as of September 30, 2023, as compared to 80.6% as of the trailing quarter. The efficiency ratio was 54.8% and 53.4% for the nine months ended September 30, 2023 and 2022, respectively.
The provision for credit losses was approximately $4.2 million during the quarter ended September 30, 2023, as compared to a provision for credit losses of $9.7 million during the trailing quarter ended June 30, 2023, and a provision for credit losses of $3.8 million for the three-month period ended September 30, 2022.
Balance Sheet and Liquidity
Total loans outstanding grew to $6.7 billion as of September 30, 2023, an organic based increase of 6.2% over the prior twelve months. Investments decreased to $2.33 billion as of September 30, 2023, an annualized decrease of 12.6% over the prior year quarter end. The Company's primary sources of liquidity represented 52.5% of total deposits and 175% of estimated total uninsured deposits, respectively.
Despite the complexity of the financial landscape, TriCo Bancshares (TCBK, Financial) has demonstrated resilience and strategic growth in its Q3 2023 earnings report. The company's focus on maintaining a conservative credit culture and controlling expenses has contributed to its improved operating results.
Explore the complete 8-K earnings release (here) from TriCo Bancshares for further details.
