What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-11 · 163 added, 156 removed, 643 unchanged (33% of the section changed)

70 unchanged sentences

Financial Highlights

Performance highlights and other developments for the Company as of or for the three and six months ended June 30, 2025, included the following:

• 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

Performance highlights and other developments for the Company as of or for the three and nine months ended September 30, 2025, included the following:

• 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

• Net interest income (FTE) was $89.8 million, an increase of $3.0 million or 3.51% over the trailing quarter;

1 unchanged sentence

• 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

• 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

• 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

• 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 5.76%, an increase of 5 basis points over the 5.71% 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

• Non-interest bearing deposits averaged 30.5% of total deposits during the quarter

• 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

• 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%

• 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

• The loan to deposit ratio was 83.08% as of June 30, 2025, as compared to 83.13% for the trailing quarter end

• The efficiency ratio was 59.00% for the quarter ended June 30, 2025, as compared to 60.42% for the trailing quarter

• 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

• 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

• 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

• 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%

• 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

• 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

• The efficiency ratio was 56.18% for the quarter ended September 30, 2025, as compared to 59.00% for the trailing quarter

• 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

• 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

TRICO BANCSHARES

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

38 unchanged sentences

Three months ended

(in thousands) June 30,

2025 March 31,

(in thousands) September 30,

2025 June 30,

2025 Change % Change

9 unchanged sentences

3.88 % 3.82 % 0.06 %

Three months ended June 30,

Three months ended September 30,

(in thousands) 2025 2024 Change % Change

9 unchanged sentences

3.88 % 3.66 % 0.22 %

Six months ended June 30,

Nine months ended September 30,

(in thousands) 2025 2024 Change % Change

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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.

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.

Summary of Average Balances, Yields/Rates and Interest Differential

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Yields on securities and certain loans have been adjusted upward to reflect the effect of income thereon exempt from federal income taxation at the current statutory tax rate (dollars in thousands).

Three months ended June 30,

Three months ended September 30,

Balance Interest

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(3) Net interest margin is computed by calculating the difference between interest income and interest expense, divided by the average balance of i nterest-earning assets, then annualized based on the number of days in the given period .

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.

Six months ended June 30,

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.

Nine months ended September 30,

Balance Interest

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$ 259,407 3.84 % $ 248,163 3.69 %

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.

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 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.

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.

Summary of Changes in Interest Income and Expense due to Changes in Average Asset and Liability Balances and Yields Earned and Rates Paid

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Changes not solely attributable to volume or rates have been allocated in proportion to the respective volume and rate components.

Three months ended June 30, 2025

compared with three months ended June 30, 2024

The following commentary regarding net interest income, interest income and interest expense may be best understood while referencing the Summary of Average Balances, Yields/Rates and Interest Differential and the Summary of Changes in Interest Income and Expense due to Changes in Average Asset and Liability Balances and Yields Earned and Rates Paid shown above.

Three months ended September 30, 2025

compared with three months ended September 30, 2024

(in thousands) Volume Rate Total

13 unchanged sentences

Increase in net interest income $ 4,675 $ 2,262 $ 6,937

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.

Six months ended June 30, 2025

compared with six months ended June 30, 2024

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.

Nine months ended September 30, 2025

compared with nine months ended September 30, 2024

(in thousands) Volume Rate Total

13 unchanged sentences

Increase in net interest income $ 10,238 $ 1,006 $ 11,244

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.

Asset Quality and Credit Loss Provisioning

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.

Three months ended Six months ended

(dollars in thousands) June 30,

2025 March 31,

2025 June 30,

2024 June 30,

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.

Three months ended Nine months ended

(dollars in thousands) September 30,

2025 June 30,

2025 September 30,

2024 September 30,

2025 September 30,

Addition to allowance for credit losses $ 730 $ 4,525 $ 320 $ 7,918 $ 4,670

Addition to reserve for unfunded loan commitments

Reversal (addition to) reserve for unfunded loan commitments

(60) 140 (100) 1,145 260

Total provision for credit losses $ 670 $ 4,665 $ 220 $ 9,063 $ 4,930

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.

Three months ended June 30, Six months ended June 30,

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.

Three months ended September 30, Nine months ended September 30,

(dollars in thousands) 2025 2024 2025 2024

4 unchanged sentences

Balance, end of period $ 124,571 $ 123,760 $ 124,571 $ 123,760

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.

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.

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 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.

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.

(dollars in thousands) As of June 30, 2025 % of Loans Outstanding As of March 31, 2025 % of Loans Outstanding As of June 30, 2024 % of Loans Outstanding

(dollars in thousands) As of September 30, 2025 % of Loans Outstanding As of June 30, 2025 % of Loans Outstanding As of September 30, 2024 % of Loans Outstanding

Pass $ 6,785,679 96.84 % $ 6,751,005 97.01 % $ 6,461,451 96.67 %

5 unchanged sentences

ACL to non-performing loans 189.76 % 192.11 % 297.24 %

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.

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 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.

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.

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.

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.

Management continues to proactively assess the repayment capacity of borrowers that will be subject to rate resets in the near term.

To date this analysis as well as management's observations of loans that have experienced a rate reset, have resulted in an insignificant need to provide concessions to borrowers.

As of 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.

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.

Non-interest Income

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Three months ended

September 30,

(in thousands) 2025 2024 $ Change % Change

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Total non-interest income $ 18,007 $ 16,495 $ 1,512 9.2 %

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.

Six months ended

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.

Nine months ended

September 30,

(in thousands) 2025 2024 $ Change % Change

15 unchanged sentences

Total non-interest income $ 51,170 $ 48,132 $ 3,038 6.3 %

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.

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.

Non-interest Expense

1 unchanged sentence

Three months ended

September 30,

(in thousands) 2025 2024 $ Change % Change

15 unchanged sentences

Courier service 577 542 35 6.5 %

(Gain) loss on sale or acquisition of foreclosed assets — 26 (26) (100.0) %

Loss (gain) on disposal of fixed assets 21 6 15 250.0 %

3 unchanged sentences

Average full time equivalent staff 1,154 1,161 (7) (0.6) %

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 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 $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.

Six months ended

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.

Nine months ended

September 30,

(in thousands) 2025 2024 $ Change % Change

21 unchanged sentences

Average full time equivalent staff 1,173 1,170 3 0.3 %

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.

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 increases, led by elevated business travel, donations, and non-recurring contract termination costs.

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.

Other non-interest expense line items evidenced broad based but incremental decreases, resulting in a net decrease of $0.8 million.

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.

2 unchanged sentences

The following is a comparison of the quarterly change in certain assets and liabilities:

Ending balances June 30,

2025 March 31,

Ending balances September 30,

2025 June 30,

2025 Annualized

5 unchanged sentences

Total other borrowings 17,039 17,788 (749) (16.8)

Loans outstanding increased by $138.2 million or 8.1% on an annualized basis during the quarter ended June 30, 2025.

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 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.

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.

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.

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.

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.

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.

Deposit balances decreased by $41.3 million or 2.0% annualized during the period due to declines in primarily savings deposit account balances.

The following is a comparison of the year over year change in certain assets and liabilities:

Ending balances As of June 30, % Change

Ending balances As of September 30, % Change

(dollars in thousands) 2025 2024 $ Change

5 unchanged sentences

Investment Securities

The following table presents the available for sale debt securities portfolio by major type as of June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

The following table presents the available for sale debt securities portfolio by major type as of September 30, 2025 and December 31, 2024:

September 30, 2025 December 31, 2024

(in thousands) Fair Value % Fair Value %

7 unchanged sentences

Total debt securities available for sale $ 1,740,756 100.0 % $ 1,904,885 100.0 %

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(in thousands) Amortized

5 unchanged sentences

Total debt securities held to maturity $ 95,446 100.0 % $ 111,866 100.0 %

Investment securities held to maturity decreased $10.2 million to $101.7 million as of June 30, 2025, as compared to December 31, 2024.

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.

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The majority of the Company’s loans are direct loans made to individuals, and local or regional businesses which service a variety of industries.

The Company relies substantially on local promotional activity and personal contacts by bank officers, directors and employees to compete with other financial institutions.

The Company relies substantially on local promotional activity and personal contacts by bank officers, directors and employees to

compete with other financial institutions.

The Company makes loans to borrowers whose applications include a sound purpose, a viable repayment source and a plan of repayment established at inception and generally backed by a secondary source of repayment.

The following table shows the Company’s loan balances, net of deferred loan costs and discounts, as of the dates indicated:

(in thousands) June 30, 2025 December 31, 2024

(in thousands) September 30, 2025 December 31, 2024

Commercial real estate $ 4,793,394 68.4 % $ 4,577,632 67.6 %

8 unchanged sentences

“Performing nonaccrual loans” are loans that may be current for both principal and interest payments, or are less than 90 days past due, but for which payment in full of both principal and interest is not expected, and are not well secured and in the process of collection:

(in thousands) June 30,

(in thousands) September 30,

2025 December 31,

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Allowance for credit losses to nonperforming loans 190 % 284 %

Changes in nonperforming assets during the three months ended June 30, 2025

(in thousands) Balance at March 31, 2025 New NPA /

Changes in nonperforming assets during the three and nine months ended September 30, 2025

(in thousands) Balance at June 30, 2025 New NPA /

Adjustments Pay-downs

/Upgrades Charge-offs/ (1)

Assets Balance at June 30, 2025

Assets Balance at September 30, 2025

Commercial real estate:

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(1) The table above does not include deposit overdraft charge-offs.

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.

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.

(in thousands) Balance at December 31, 2024 New NPA /

1 unchanged sentence

/Upgrades Charge-offs/ (1)

Assets Balance at June 30, 2025

Assets Balance at September 30, 2025

Commercial real estate:

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Total nonperforming assets $ 46,882 46,238 (12,685) (9,358) — $ 71,077

(1) The table above does not include deposit overdraft charge-offs.

Loan charge-offs during the three months ended June 30, 2025

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.

The Components of the Allowance for Credit Losses for Loans

The following table sets forth the allowance for credit losses for loans as of the dates indicated:

(in thousands) June 30,

(in thousands) September 30,

2025 December 31,

2024 June 30,

2024 September 30,

Allowance for credit losses:

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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.

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.

The following table summarizes the allocation of the allowance for credit losses between loan types and by percentage of the total allowance for credit losses on loans as of the dates indicated:

(in thousands) June 30, 2025 December 31, 2024 June 30, 2024

(in thousands) September 30, 2025 December 31, 2024 September 30, 2024

Commercial real estate $ 75,017 60.2 % $ 72,849 58.1 % $ 71,339 57.6 %

6 unchanged sentences

The following table summarizes the allocation of the allowance for credit losses as a percentage of the total loans for each loan category as of the dates indicated:

(in thousands) June 30, 2025 December 31, 2024 June 30, 2024

(in thousands) September 30, 2025 December 31, 2024 September 30, 2024

Commercial real estate 1.57 % 1.59 % 1.59 %

7 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in thousands) 2025 2024 2025 2024

1 unchanged sentence

Balance at beginning of period $ 124,455 $ 123,517 $ 125,366 $ 121,522

ACL on PCD loans — — — —

Provision for credit losses 730 320 7,918 4,670

34 unchanged sentences

Foreclosed Assets, Net of Allowance for Losses

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:

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:

(in thousands) Balance at December 31,

1 unchanged sentence

Adjustments Transfers

from Loans Balance at June 30, 2025

from Loans Balance at September 30, 2025

Land & construction $ 204 $ (100) $ — $ 2,747 $ 2,851

2 unchanged sentences

Total foreclosed assets $ 2,786 $ (100) $ (3) $ 2,747 $ 5,430

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.

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.

Off-Balance Sheet Arrangements

6 unchanged sentences

The 2021 Repurchase Plan has no expiration date (in accordance with applicable laws and regulations).

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.

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.

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.

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.

The following is a comparison of various capital ratios for the current period with the trailing quarter and applicable minimum regulatory requirements.

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Ratio Minimum

5 unchanged sentences

See Note 10 and Note 16 to the condensed consolidated financial statements at Item 1 of Part I of this report for additional information about the Company’s capital resources.

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.

As of June 30, 2025, we had an effective shelf registration statement on file with the Securities and Exchange Commission that allows us to issue various types of debt securities, as well as common stock, preferred stock, warrants, depository shares representing fractional interest in shares of preferred stock, purchase contracts and units from time to time in one or more offerings.

As of September 30, 2025, we had an effective shelf registration statement on file with the Securities and Exchange Commission that allows us to issue various types of debt securities, as well as common stock, preferred stock, warrants, depository shares representing fractional interest in shares of preferred stock, purchase contracts and units from time to time in one or more offerings.

Each issuance under the shelf registration statement will require the filing of a prospectus supplement identifying the amount and terms of the securities to be issued.

2 unchanged sentences

The Company's primary sources of liquidity include the following for the periods indicated:

(dollars in thousands) June 30, 2025 December 31, 2024

(dollars in thousands) September 30, 2025 December 31, 2024

Borrowing capacity at correspondent banks and FRB $ 2,994,052 $ 2,882,859

5 unchanged sentences

Total primary liquidity $ 4,201,799 $ 3,993,390

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.

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.

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.

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.

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.

1 unchanged sentence

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.

In total, and as illustrated above, the balance of total primary liquidity has increased during the first nine months of 2025.

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.

2 unchanged sentences

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.

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.

8 unchanged sentences

For a reconciliation of these non-GAAP financial measures, see the tables below:

Three months ended Six months ended

(dollars in thousands) June 30,

2025 June 30,

2024 June 30,

2025 June 30,

Three months ended Nine months ended

(dollars in thousands) September 30,

2025 September 30,

2024 September 30,

2025 September 30,

Net interest margin

5 unchanged sentences

Net interest margin less effect of acquired loan discount accretion (Non-GAAP) 3.88 % 3.66 % 3.78 % 3.64 %

Three months ended Six months ended

(dollars in thousands) June 30,

2025 June 30,

2024 June 30,

2025 June 30,

Three months ended Nine months ended

(dollars in thousands) September 30,

2025 September 30,

2024 September 30,

2025 September 30,

Pre-tax pre-provision return on average assets or equity

9 unchanged sentences

Pre-tax pre-provision return on average equity (Non-GAAP) (annualized) 14.50 % 12.98 % 13.53 % 13.64 %

Three months ended Six months ended

(dollars in thousands) June 30,

2025 June 30,

2024 June 30,

2025 June 30,

Three months ended Nine months ended

(dollars in thousands) September 30,

2025 September 30,

2024 September 30,

2025 September 30,

Return on tangible common equity

8 unchanged sentences

Return on average tangible common equity (Non-GAAP) 13.91 % 13.13 % 12.37 % 13.47 %

(dollars in thousands) June 30,

(dollars in thousands) September 30,

2025 December 31,

8 unchanged sentences

Tangible shareholders' equity to tangible assets (Non-GAAP) 10.40 % 9.72 %

(dollars in thousands) June 30,

(dollars in thousands) September 30,

2025 December 31,

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis