Trico Bancshares /: Form 10-Q for the period ended Jun 30, 2026

FORWARD-LOOKING STATEMENTS

Cautionary Statements Regarding Forward-Looking Information

The statements contained herein that are not historical facts are forward-looking statements based on current expectations and beliefs of the Company ("TriCo") and First Hawaiian, Inc. and its subsidiaries (including First Hawaiian Bank) ("FHI") concerning future developments and their potential effects on TriCo and FHI. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of TriCo and FHI. TriCo and FHI caution readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: changes in general economic, political, or industry conditions, and in conditions impacting the banking industry specifically; uncertainty in U.S. fiscal, monetary and trade policy, including the interest rate policies of the Federal Reserve Board or the effects of any declines in housing and commercial real estate prices, high or increasing unemployment rates, continued or renewed inflation, the impact of proposed or imposed tariffs by the U.S. government or retaliatory tariffs proposed or imposed by U.S. trading partners that could have an adverse impact on customers or any recession or slowdown in economic growth particularly in the markets in which TriCo and FHI conduct business, including California, Hawaii, Guam and Saipan; volatility and disruptions in global capital and credit markets; the impact of bank failures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources, including impacts on prepayment speeds; competitive pressures among financial institutions and nontraditional providers of financial services, including on product pricing and services; concentrations within TriCo's or FHI’s loan portfolio (including commercial real estate loans) or other asset classes, and the parties’ ability to attract and retain customer deposits, large loans to certain borrowers, access liquidity and capital, and manage deposit costs and funding sources; the success, impact, and timing of TriCo's and FHI’s respective business strategies, including market acceptance of any new products or services and TriCo's and FHI’s ability to successfully implement strategic, operational, technology and integration initiatives; the failure to properly use and protect customer and employee information and data; cybersecurity risks (such as TriCo's 2023 cyber security ransomware incident), including the occurrence of fraudulent activity or a material breach of, or disruption to, the security of FHI’s, TriCo’s or their vendors’ systems; risks related to the development, implementation, use and management of artificial intelligence and other emerging technologies; the effects of failures or interruptions of information, communications or third-party service-provider systems; the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations; changes in laws or regulations; adverse weather conditions, natural disasters and other catastrophic events such as wildfires; the challenges of attracting, integrating and retaining key employees, especially while the merger of TriCo with FHI (the "Transaction") is pending; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement to which TriCo and FHI are parties; the outcome of any legal proceedings that may be instituted against TriCo or FHI, including potential litigation relating to the Transaction; delays in completing the Transaction; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transaction); the failure to obtain stockholder or shareholder approvals, as applicable, or to satisfy any of the other conditions to the closing of the Transaction on a timely basis or at all; changes in TriCo's or FHI’s share price before closing, including as a result of the financial performance of the other party prior to closing, or more generally due to broader stock market movements, and the performance of financial companies and peer group companies; the possibility that the anticipated benefits of the Transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where TriCo and FHI do business; certain restrictions during the pendency of the proposed Transaction that may impact the parties’ ability to pursue certain business opportunities or strategic transactions; the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Transaction; the ability to complete the Transaction and integration of TriCo and FHI promptly and successfully; the dilution caused by FHI’s issuance of additional shares of its capital stock in connection with the Transaction; potential judgments, orders, settlements, penalties, fines and reputational damage resulting from pending or future litigation and regulatory investigations, proceedings and enforcement actions; each company's ability to manage the risks involved in the foregoing; and other factors that may affect the future results of TriCo and FHI. The foregoing factors should not be considered an exhaustive list and should be read together with the other cautionary statements set forth in TriCo’s Annual Report on Form 10-K for the year ended December 31, 2025 and its latest Quarterly Report on Form 10-Q, which are on file with the Securities and Exchange Commission (the "SEC") and available on TriCo’s website, in the “Investor Relations” section of TriCo's website, www.tcbk.com (http://www.tcbk.com), under the “About” tab and the “Investor Relations” link and then under the heading “SEC Filings” and in other documents TriCo files with the SEC, and in FHI’s Annual Report on Form 10-K for the year ended December 31, 2025 and its latest Quarterly Report on Form 10-Q, which are on file with the SEC and available on FHI’s investor relations website, https://ir.fhb.com, under the heading “SEC Filings,” and in other documents FHI files with the SEC. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Annualized, pro forma, projections and estimates are not forecasts and may not reflect actual results. Neither TriCo nor FHI undertakes any obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law.

General

As TriCo Bancshares (referred to in this report as “we”, “our” or the “Company”) has not commenced any business operations independent of Tri Counties Bank (the “Bank”), the following discussion pertains primarily to the Bank. Average balances, including such balances used in calculating certain financial ratios, are generally comprised of average daily balances for the Company. Within Management’s Discussion and Analysis of Financial Condition and Results of Operations, interest income, net interest income, and net interest yield are generally presented on a FTE basis. The Company believes the use of these non-generally accepted accounting principles (non-GAAP) measures provides additional clarity in assessing its results, and the presentation of these measures on a FTE basis is a common practice within the banking industry. Interest income and net interest income are shown on a non-FTE basis in the Part I - Financial Information section of this Form 10-Q, and a reconciliation of the FTE and non-FTE presentations is provided below in the discussion of net interest income.

Recent Developments

On July 12, 2026, TriCo entered into an Agreement and Plan of Reorganization and Merger (the “merger agreement”) with First Hawaiian, Inc., a Delaware corporation (“First Hawaiian”) and Horizon Merger Sub, Inc., a California corporation and wholly owned subsidiary of First Hawaiian (“Merger Sub”). The merger agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into TriCo (the “merger”), with TriCo surviving the merger (the “Surviving Corporation”), and immediately following the merger, the Surviving Corporation will merge with and into First Hawaiian (the “second step merger,” and together with the merger, the “mergers”), with First Hawaiian continuing as the surviving entity in the second step merger. Promptly following the second step merger, Tri Counties Bank will merge with and into First Hawaiian’s wholly owned bank subsidiary, First Hawaiian Bank (the “bank merger”), with First Hawaiian Bank surviving the bank merger. The merger agreement was unanimously approved and adopted by the board of directors of each of TriCo, FHI and Merger Sub.

Subject to the terms and conditions of the merger agreement, at the effective time of the merger (the “effective time”), each share of TriCo common stock outstanding immediately prior to the effective time, other than shares owned, directly or indirectly, by TriCo, First Hawaiian or any of their respective subsidiaries, will be converted into the right to receive 2.095 shares of common stock, par value $0.01 per share, of First Hawaiian. Holders of TriCo’s common stock will receive cash in lieu of fractional shares. Upon closing of the transaction, First Hawaiian and TriCo shareholders are expected to own approximately 65% and 35%, respectively, of the combined company.

The transaction is expected to close by the end of 2026, subject to the receipt of required regulatory approvals, approval by First Hawaiian and TriCo shareholders and the satisfaction of customary closing conditions. A summary of the terms of the merger agreement and other related agreements are summarized in, and the merger agreement has been filed as an exhibit to, the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on July 15, 2026.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those that materially affect the financial statements and are related to the adequacy of the allowance for credit losses, investments, mortgage servicing rights, fair value measurements, retirement plans and intangible assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. A detailed discussion related to the Company’s accounting policies including those related to estimates on the allowance for credit losses related to loans and investment securities, and impairment of intangible assets, can be found in Note 1 of the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2025.

Geographical Descriptions

For the purpose of describing the geographical location of the Company’s operations, the Company has defined northern California as that area of California north of, and including, Stockton to the east and San Jose to the west; central California as that area of the state south of Stockton and San Jose, to and including, Bakersfield to the east and San Luis Obispo to the west; and southern California as that area of the state south of Bakersfield and San Luis Obispo.

Financial Highlights

Performance highlights and other developments for the Company as of or for the three and six months ended June 30, 2026, included the following:

• Net income was $34.2 million or $1.06 per diluted share as compared to $33.7 million or $1.04 per diluted share in the trailing quarter, and an increase of $6.6 million or 24.1% from the second quarter of 2025
• Net interest income (FTE) was $93.9 million, an increase of $2.4 million or 2.6% over the trailing quarter; net interest margin (FTE) was 4.11%, an increase of 4 basis points over 4.07% in the trailing quarter
• Loan balances increased $242.9 million or 13.7% (annualized) from the trailing quarter and increased $352.1 million or 5.1% from the same quarter of the prior year
• Deposit balances decreased $34.8 million or 1.7% (annualized) from the trailing quarter and $7.0 million or 0.1% from the same quarter of the prior year. One-way sell deposit balances totaled $68.8 million at quarter end, as compared to zero for both the trailing quarter and same quarter of the prior period
• Average non-interest bearing deposits grew by 2.5% year over year and were 30.7% of total deposits at quarter end
• Yield on average earning assets was 5.31%, an increase of 5 basis points over the 5.26% in the trailing quarter; yield on average loans was 5.85%, an increase of 7 basis points over the 5.78% in the trailing quarter
• The average cost of total deposits was 1.27%, an increase of 1 basis point as compared to 1.26% in the trailing quarter, and a decrease of 10 basis points from 1.37% in the same quarter of the prior year
• For the quarter ended June 30, 2026, the Company’s return on average assets was 1.37%, while the return on average equity was 10.15%; for the trailing quarter ended March 31, 2026, the Company’s return on average assets was 1.38%, while the return on average equity was 10.08%
• Diluted earnings per share were $1.06 for the second quarter of 2026, compared to $1.04 for the trailing quarter and $0.84 during the second quarter of 2025
• The loan to deposit ratio was 87.36% as of June 30, 2026, as compared to 84.11% for the trailing quarter end
• The efficiency ratio was 56.25% for the quarter ended June 30, 2026, as compared to 54.55% for the trailing quarter, inclusive of $0.9 million in merger related expenses during the current quarter, versus none in the trailing quarter
• The provision for credit losses was $2.7 million during the quarter ended June 30, 2026, as compared to $3.3 million during the trailing quarter
• The allowance for credit losses (ACL) to total loans was 1.78% as of June 30, 2026, compared to 1.81% as of the trailing quarter end, and 1.79% as of June 30, 2025. Non-performing assets to total assets were 0.76% on June 30, 2026, as compared to 0.77% as of March 31, 2026, and 0.68% on June 30, 2025

Financial Summary

(In thousands, except per share amounts; unaudited)

(1) Fully Taxable Equivalent (FTE)

Results of Operations

The following discussion and analysis is designed to provide a better understanding of the significant changes and trends related to the Company and the Bank’s financial condition, operating results, asset and liability management, liquidity and capital resources and should be read in conjunction with the unaudited Condensed Consolidated Financial Statements of the Company and the Notes thereto located at Item 1 of this report.

Net Interest Income

The Company’s primary source of revenue is net interest income, or the difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities. Following is a summary of the components of FTE net income for the periods indicated.

(in thousands)

(in thousands)

(in thousands)

(1) Certain information included herein is presented on a FTE basis and/or to present additional financial details which may be desired by users of this financial information. The Company believes the use of this non-generally accepted accounting principles (non-GAAP) measure provides additional clarity in assessing its results, and the presentation of these measures is a common practice within the banking industry.

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, 2026, March 31, 2026 and June 30, 2025, the purchased loan discount accretion was $1.0 million, $1.4 million and $1.2 million, respectively.

Summary of Average Balances, Yields/Rates and Interest Differential

The following table presents, for the three month periods indicated, information regarding the Company’s consolidated average assets, liabilities and shareholders’ equity, the amounts of interest income from average interest-earning assets and resulting yields, and the amount of interest expense paid on interest-bearing liabilities. Average loan balances include nonperforming loans. Interest income includes proceeds from loans on nonaccrual loans only to the extent cash payments have been received and applied to interest income. 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).

(1) Fully taxable equivalent (FTE). All yields and rates are calculated using specific day counts for the period and year as applicable.

(2) Net interest spread represents the average yield earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.

(3) Net interest margin is computed by calculating the difference between interest income and interest expense, divided by the average balance of interest-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, 2026, increased $7.1 million or 8.2% to $93.9 million compared to $86.8 million during the three months ended June 30, 2025. Net interest margin totaled 4.11% for the three months ended June 30, 2026, an increase of 23 basis points from the same quarter in 2025. The primary drivers behind the change in net interest margin is related to an increase in average loan balances, improving interest income by $4.3 million, coupled with a decline in yields paid on interest-bearing deposits improving net interest income by $1.3 million, with yields paid declining by 14 basis points between the quarter ended June 30, 2026, and the same quarter of the prior year. The accretion of discounts from acquired loans added 6 basis points and 8 basis points to loan yields during the quarters ended June 30, 2026 and June 30, 2025, respectively. Finally, the average balance of noninterest-bearing deposits increased by $63.0 million from the three-month average as of June 30, 2026.

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

The following table sets forth, for the period identified, a summary of the changes in interest income and interest expense from changes in average asset and liability balances (volume) and changes in average interest rates for the periods indicated. Changes not solely attributable to volume or rates have been allocated in proportion to the respective volume and rate components.

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.

(in thousands)

Net interest income (FTE) during the three months ended June 30, 2026 increased $7.1 million to $93.9 million compared to $86.8 million during the three months ended June 30, 2025. As noted above, the increase in net interest income (FTE) was due largely to: higher average loan balances, lower rates paid for interest-bearing deposits, and lower average balances for borrowings, all of which have a beneficial impact on net interest income.

(in thousands)

Asset Quality and Credit Loss Provisioning

During the three months ended June 30, 2026, the Company recorded a provision for credit losses of $2.7 million, as compared to $3.3 million during the trailing quarter, and $4.7 million during the second quarter of 2025.

(dollars in thousands)

The ACL was $130.2 million or 1.78% of total loans as of June 30, 2026. The provision for credit losses on loans of $2.6 million recorded allocated approximately $2.3 million toward collectively evaluated loans and $0.3 million to replenish quarterly net charge-offs.

(dollars in thousands)

The net charge-offs incurred during the quarter were spread amongst numerous borrowers and loan types.

The $2.2 million increase in allowance for credit losses was primarily attributed to net loan growth during the quarter, which totaled $242.9 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 were consistent with, if not slightly improved from the period ended March 31, 2026, which is aligned with the Company's direct experiences with borrowers. Management's proactive portfolio management policies and ongoing dialogue with borrowers suggest caution continues to be warranted, with emphasis on the consumer portfolio. Actions by the Federal Reserve during 2026 or stimulative policies by the Federal government may impact this outlook overall, but the uncertainty associated with the extent and timing of these potential reductions has inhibited a material change to monetary policy assumptions. Furthermore, political policy risks both domestic and international remain unresolved, which could quickly lead to further negative effects on domestic economic outcomes. The lingering uncertainties related to the extent and duration of escalation within the Middle East, and potential domestic economic impact from volatility in oil prices and the impact on inflation risks, continue to present challenges in correlating potential improvement of credit risks within the Company's loan portfolio. Therefore, management continues to believe that certain credit weaknesses are present in the overall economy and that it is appropriate to maintain a reserve level that incorporates such risk factors.

(dollars in thousands)

The ratio of classified loans to total loans of 1.93% as of June 30, 2026, was a decrease of 7 basis points from March 31, 2026, and 1 basis point from the comparative quarter ended 2025. The change in classified loans outstanding as compared to the trailing quarter represented a decrease of approximately $0.5 million.

Loans past due 30 days or more increased by $0.7 million during the quarter ended June 30, 2026, to $49.6 million, as compared to $48.9 million at March 31, 2026. The majority of loans identified as past due are well-secured by collateral, and approximately $27.5 million are less than 90 days delinquent.

Non-performing loans decreased by $0.6 million during the quarter ended June 30, 2026, to $68.8 million as compared to $69.5 million at March 31, 2026. The credit and collateral profiles of non-performing loans remain generally consistent with the trailing quarter. As noted previously, management continues to proactively work with these borrowers to identify actionable and appropriate resolution strategies which are customary for the industries. Management anticipates that these proactive strategies, specifically within agricultural real estate secured and agricultural commercial loans, will further benefit from the continued improvement in agricultural commodity prices, stable water supply, and growing crop demand. Of the $68.8 million loans designated as non-performing as of June 30, 2026, approximately $43.9 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, 2026, other real estate owned consisted of 14 properties with a carrying value of approximately $6.8 million, as compared to 14 properties with a carrying value of $7.0 million at March 31, 2026. Non-performing assets of $75.6 million at June 30, 2026, represented 0.76% of total assets, a change from $76.4 million or 0.77% and $67.5 million or 0.68% as of March 31, 2026 and June 30, 2025, respectively.

Non-interest Income

The following table summarizes the Company’s non-interest income for the periods indicated (in thousands):

(in thousands)

Non-interest income increased $1.2 million or 6.8% to $18.2 million during the three months ended June 30, 2026, compared to $17.1 million during the comparative quarter ended June 30, 2025. Changes in non-interest income line items were modest but generally improved during the quarter. Other income during the three months ended June 30, 2026 increased by $0.7 million, largely attributed to approximately $0.6 million in proceeds from various insurance matters.

(in thousands)

Non-interest income increased $2.1 million or 6.4% to $35.3 million during the six months ended June 30, 2026, compared to $33.2 million during the comparative period ended June 30, 2025. As noted above, service charges and customer fees in the 2026 period drove an increase of $0.8 million. Further, elevated activity and volume of assets under management resulted in an increase of $0.7 million or 22.0% in related income. Other income for the six months ended June 30, 2026 and 2025 included excess insurance related proceeds of $560,000 and $1,207,000, respectively.

Non-interest Expense

The following table summarizes the Company’s non-interest expense for the periods indicated:

(in thousands)

Total non-interest expense increased $1.8 million or 2.9% to $62.9 million during the three months ended June 30, 2026, as compared to $61.1 million for the quarter ended June 30, 2025. Total salaries and benefits expense increased by $0.7 million or 1.8% on a net basis, led by incentive compensation attributed to the loan and deposit production activity in the quarter as well as the Company's overall financial performance. Merger and acquisitions costs during the quarter totaled $0.9 million and were related to the proposed merger with First Hawaiian, Inc. announced on July 13, 2026. The remaining changes in other non-interest expense line items were mixed during the quarter ended June 30, 2026, but essentially flat and due to timing differences rather than unique changes in operations.

(in thousands)

Non-interest expense increased $1.3 million or 1.0% to $122.0 million during the six months ended June 30, 2026, as compared to $120.7 million for the trailing six months ended. Excluding the aforementioned merger expenses, changes in other non-interest expense line items were mixed during the six months period ended June 30, 2026, but essentially flat and due to timing differences rather than unique changes in operations. As noted above, increases in incentive compensation were attributed to the loan and deposit production activity as well as the Company's overall financial performance.

Income Taxes

The Company’s effective tax rate was 26.2% for the quarter ended June 30, 2026, as compared to 26.6% for the quarter ended March 31, 2026, and 27.2% for the quarter ended June 30, 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.

Financial Condition

For financial reporting purposes, the Company does not separately track the changes in assets and liabilities based on branch location or regional geography. The following is a comparison of the quarterly change in certain assets and liabilities:

(dollars in thousands)

Loans outstanding increased by $242.9 million or 13.7% on an annualized basis during the quarter ended June 30, 2026. During the quarter, gross loan originations/draws totaled approximately $632.9 million while gross payoffs/repayments of loans totaled $412.8 million, which compares to gross originations/draws and gross payoffs/repayments during the trailing quarter ended of $388.7 million and $442.2 million, respectively. Origination volume was elevated relative to historical norms, while repayments were in line with recent periods. Domestically, the macro-economic outlook remains optimistic for borrowers following the passage of tax and spending legislation that is expected to promote continued economic expansion through the remainder of 2026.

Investment security balances decreased $74.8 million or 16.0% on an annualized basis during the quarter as a result of prepayments/maturities of $113.1 million and net decreases in the market value of securities of $3.6 million, partially offset by purchases totaling $42.1 million. Investment security purchases were comprised of fixed rate agency mortgage-backed 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 decreased by $34.8 million or 1.7% annualized during the period, inclusive of $68.8 million in one-way sell activity at June 30, 2026, as a short-term method to reduce the Company's overall balance sheet size. There were no deposits sold in the trailing quarter or the same quarter of the prior year.

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

(dollars in thousands)

Investment Securities

The following table presents the available for sale debt securities portfolio by major type as of June 30, 2026 and December 31, 2025:

(in thousands)

(in thousands)

Investment securities held to maturity decreased $9.8 million to $80.8 million as of June 30, 2026, as compared to December 31, 2025. This decrease is attributable to calls and principal repayments of $9.7 million, and amortization of net purchase premiums of $0.1 million.

Loans

The Company focuses its primary lending activities in six principal areas: commercial real estate loans, consumer loans, commercial and industrial loans, construction loans, agriculture production loans and leases. The interest rates charged for the loans made by the Company vary with the degree of risk, the size and duration of the loans, the borrower’s relationship with the Company and prevailing money market rates indicative of the Company’s cost of funds.

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 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)

Nonperforming Assets

The following tables set forth the amount of the Company’s NPAs as of the dates indicated. “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)

50

Changes in nonperforming assets during the three months ended June 30, 2026

(in thousands)

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

Nonperforming assets decreased during the three months ended June 30, 2026 by $0.8 million or 1.1% to $75.6 million compared to $76.4 million at March 31, 2026. The decrease in nonperforming assets during the second quarter of 2026 was primarily the result of nonperforming loan additions totaling $3.3 million, offset by pay-downs and upgrades, which totaled $3.6 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 June 30, 2026.

Changes in nonperforming assets during the six months ended June 30, 2026

(in thousands)

51

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)

For additional information regarding the allowance for credit 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 $130.2 million allowance for credit losses at June 30, 2026 is adequate to absorb expected losses inherent in the Bank’s loan portfolio. No assurance can be given, however, that adverse economic conditions or other circumstances will not result in increased losses in the portfolio.

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)

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)

52

The following table summarizes the activity in the allowance for credit losses for the periods indicated:

(in thousands)

53

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, 2026:

(in thousands)

Deposits

During the six months ended June 30, 2026, the Company’s deposits increased by $104.9 million to $8.4 billion at quarter end. There were no brokered deposits included in the deposit balances as of June 30, 2026 and December 31, 2025. Estimated uninsured deposits totaled $2.9 billion and $2.9 billion as of June 30, 2026 and December 31, 2025, respectively.

Off-Balance Sheet Arrangements

See Note 9 to the condensed consolidated financial statements at Item 1 of Part I of this report for information about the Company’s commitments and contingencies including off-balance-sheet arrangements.

Capital Resources

The current and projected capital position of the Company and the impact of capital plans and long-term strategies are reviewed regularly by Management.

The Company's Board of Directors has approved the authorization to repurchase up to 2.0 million shares of the Company's common stock (the 2025 Repurchase Plan or the 2025 Program). The Company’s 2025 Share Repurchase Program replaces and supersedes the 2021 Share Repurchase Program which has been terminated as of December 31, 2025. The actual timing of any share repurchases will be determined by the Company's management and therefore the total value of the shares to be purchased under the 2025 Program is subject to change. The 2025 Program has no expiration date but the Board may suspend or discontinue the program at any time.

During the three months ended June 30, 2026, the Company repurchased zero shares. During the six months ended June 30, 2026, the Company repurchased 447,211 shares with a market value totaling $21.6 million under the 2025 Program. There were no shares repurchased in 2025 under the 2025 Program, however, during the three and six months ended June 30, 2025 the Company purchased 379,978 and 469,632 shares with market values of $15.2 million and $18.9 million under the 2021 Share Repurchase Program. As of June 30, 2026, approximately 1,553,000 shares remain authorized for repurchase

Total shareholders' equity increased by $19.6 million during the quarter ended June 30, 2026, as net income of $34.2 million was partially offset by a $2.5 million increase in accumulated other comprehensive losses and $11.5 million in cash dividends on common stock. As a result, the Company’s book value increased to $42.03 per share at June 30, 2026, compared to $41.49 at March 31, 2026. 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 $32.40 per share at June 30, 2026, as compared to $31.82 at March 31, 2026.

The following is a comparison of various capital ratios for the current period with the most recent fiscal year-end and applicable minimum regulatory requirements.

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.

As of June 30, 2026, 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. The registration statement does not limit the amount of securities that may be issued thereunder. Our ability to issue securities is subject to market conditions and other factors including, in the case of our debt securities, our credit ratings and compliance with current and prospective covenants in credit agreements.

Liquidity

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

(dollars in thousands)

At June 30, 2026, the Company's primary sources of liquidity represented 47% of total deposits and 139% 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 $76.7 million, including approximately $4.1 million in net unrealized losses.

The Company’s profitability during the first six months of 2026 generated cash flows from operations of $58.8 million compared to $53.8 million during the first six months of 2025. Net cash from investing activities was $167.1 million for the six months ended June 30, 2026, compared to net cash from investing activities of $59.4 million during the six months ending 2025. Financing activities provided $56.5 million during the six months ended June 30, 2026, compared to using $174.9 million during the six months ended June 30, 2025.

The types of contractual obligations of the Company and Bank, include but are not limited to term subordinated debt, operating leases, deferred compensation and supplemental retirement plans as well as off-balance sheet commitments such as unfunded loans and letters of credit, are consistent with those as of December 31, 2025. However, as borrowings have been repaid, the borrowing capacity at correspondent banks has increased. In addition, as the balance of investment securities has declined, so has the balance of unpledged securities. In total, and as illustrated above, the balance of total primary liquidity has increased during the first six months of 2026.

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 $23.0 million of cash during the six months ended June 30, 2026. The Company’s liquidity is dependent on dividends received from the Bank. Dividends from the Bank are subject to certain regulatory restrictions.

TRICO BANCSHARES—NON-GAAP FINANCIAL MEASURES

(Unaudited. Dollars in thousands)

In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this filing contains certain non-GAAP financial measures. Management has presented these non-GAAP financial measures in this filing because it believes that they provide useful and comparative information to assess trends in the Company's core operations reflected in the current quarter's results, and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below:

(dollars in thousands)

(dollars in thousands)

56

(dollars in thousands)

(dollars in thousands)

(dollars in thousands)

57

Based on the changes in interest rates as well as the mix shift of interest earning assets and interest bearing liabilities occurring subsequent to December 31, 2025, the following update of the Company’s assessment of market risk as of June 30, 2026 is being provided. These updates and changes should be read in conjunction with the additional quantitative and qualitative disclosures in our Annual Report on Form 10-K for the year ended December 31, 2025.

As of June 30, 2026, the Company's loan portfolio consisted of approximately $7.3 billion in outstanding principal with a weighted average coupon rate of 5.85%. During the three-month periods ending June 30, 2026, March 31, 2026, and June 30, 2025, the weighted average coupon on loan production in the quarter was 6.50%, 6.33% and 6.87%. Included in the June 30, 2026 total loans balance are adjustable rate loans totaling $5.0 billion, of which $1.0 billion are considered floating based on the Wall Street Prime index. In addition, the Company holds certain investment securities with fair values totaling $259.0 million which are subject to repricing on not less than a quarterly basis.

Management funds the acquisition of nearly all of its earning assets through its core deposit gathering activities. As of June 30, 2026, non-interest bearing deposits represented 31.1% of total deposits. Further, during the quarter ended June 30, 2026, the cost of interest bearing deposits were 1.83% and the cost of total deposits were 1.27%. With the intent of increasing net interest income, management intends to continue to deploy its excess liquidity and/or seek to migrate certain earning assets into higher yielding categories. However, in situations where deposit balances contract, management may rely upon various borrowing facilities or utilize brokered deposits. Thus far during 2026 and the entire 2025 period, management did not utilize any brokered deposits. Management did however utilize term debt borrowing lines from the FHLB during 2025, which was fully repaid in April of 2025. There were no FHLB borrowings outstanding as of or for the quarter ended June 30, 2026.

As of June 30, 2026 the overnight Federal funds effective rate, the rate primarily used in these interest rate shock scenarios, was 3.63%. These scenarios assume that 1) interest rates increase or decrease evenly (in a “ramp” fashion) over a twelve-month period and remain at the new levels beyond twelve months or 2) that interest rates change instantaneously (“shock”). The simulation results shown below assume no changes in the structure of the Company’s balance sheet over the twelve months being measured.

The following table summarizes the estimated effect on net interest income and market value of equity to changing interest rates as measured against a flat rate (no interest rate change) instantaneous parallel shock scenario over a twelve month period utilizing a interest sensitivity (GAP) analysis based on the Company's specific mix of interest earning assets and interest bearing liabilities as of June 30, 2026.

Interest Rate Risk Simulations:

The Company’s management, including its Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2026. Disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are controls and procedures designed to reasonably assure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported on a timely basis. Disclosure controls are also designed to reasonably assure that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026.

During the three months ended June 30, 2026, there were no changes in our internal controls or in other factors that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

In evaluating an investment in the Company's common stock, investors should consider carefully, among other things, the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 2, 2026, and in the information contained in this Quarterly Report on Form 10-Q and our other reports and registration statements.

Risks Related to the Pending Mergers

Regulatory approvals may not be received, may take longer than expected, or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the mergers.

Before the mergers and the bank merger may be completed, various approvals, consents, waivers, and/or non-objections must be obtained from the Federal Reserve Board, the FDIC, the Hawaii DFI, the California DFPI and other regulatory authorities in the United States. These approvals could be delayed or not obtained at all, including due to an adverse development in either party’s regulatory standing or in any other factors considered by regulators when granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment generally.

The approvals that are granted may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the combined company’s business following the mergers or require changes to the terms of the transactions contemplated by the merger agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions and that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the merger agreement, imposing additional material costs on or materially limiting the revenues of the combined company following the mergers or otherwise reducing the anticipated benefits of the mergers if the mergers were consummated successfully within the expected time frame. In addition, there can be no assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the mergers. Additionally, the completion of the mergers is conditioned on the absence of certain orders, injunctions or decrees by any court or governmental entity of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the merger agreement.

In addition, neither TriCo nor First Hawaiian, nor any of their respective subsidiaries, is required or, without the written consent of the other party, permitted, to take any action, commit to take any action or agree to any condition or restriction in connection with obtaining the required permits, consents, approvals and authorizations of governmental entities or regulatory agencies that would reasonably be expected to have, either individually or in the aggregate, a material adverse effect on First Hawaiian as the surviving entity and its subsidiaries, taken as a whole, after giving effect to the mergers and the bank merger (a “materially burdensome regulatory condition”).

If the requisite approvals of TriCo shareholders or First Hawaiian stockholders are not obtained, or other conditions to the closing of the mergers are not met, the merger agreement may be terminated in accordance with its terms and the mergers may not be completed.

The merger agreement is subject to a number of conditions that must be fulfilled in order to complete the mergers. Those conditions include: (i) the approval by TriCo shareholders of the TriCo merger proposal and the approval by First Hawaiian stockholders of the First Hawaiian share issuance proposal; (ii) authorization for listing on Nasdaq of the shares of First Hawaiian common stock to be issued in the merger; (iii) the receipt of requisite regulatory approvals, including approvals, waivers or non-objections, as applicable, from the Federal Reserve Board, the FDIC, the Hawaii DFI and the California DFPI, and the expiration or termination of all statutory waiting periods in respect thereof, without any such requisite regulatory approval having resulted in the imposition of any materially burdensome regulatory condition; (iv) effectiveness of First Hawaiian’s registration statement on Form S-4 relating to the mergers; and (v) the absence of any order, injunction or decree issued by any court or agency of competent jurisdiction or other law preventing or making illegal the completion of the mergers, the bank merger or any of the other transactions contemplated by the merger agreement. Each party’s obligation to complete the mergers is also subject to certain additional customary conditions, including (a) subject to applicable materiality standards, the accuracy of the representations and warranties of the other party, (b) the performance in all material respects by the other party of its obligations under the merger agreement and (c) the receipt by each party of an opinion from its counsel to the effect that the mergers, taken together, will qualify as a reorganization within the meaning of Section 368(a) of the Code. These conditions may not be fulfilled in a timely manner or at all, and, accordingly, the mergers may not be completed. In addition, the parties can mutually decide to terminate the merger agreement at any time, before or after the requisite TriCo shareholder approval or First Hawaiian stockholder approval, or TriCo or First Hawaiian may elect to terminate the merger agreement in certain other circumstances.

Failure to complete the mergers could negatively impact TriCo.

If the mergers are not completed for any reason, including as a result of TriCo shareholders’ failure to approve the TriCo merger proposal or First Hawaiian stockholders’ failure to approve the First Hawaiian share issuance proposal, there may be various adverse consequences and TriCo may experience negative reactions from the financial markets and from its customers and employees. For example, TriCo’s business may be adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the mergers, without realizing any of the anticipated benefits of completing the mergers. Additionally, if the merger agreement is terminated, the market price of TriCo common stock could decline to the extent that current market prices reflect a market assumption that the mergers will be beneficial and will be completed. TriCo also could be subject to litigation related to any failure to complete the mergers or to proceedings commenced against TriCo to perform its obligations under the merger agreement. If the merger agreement is terminated under certain circumstances, either TriCo or First Hawaiian may be required to pay a termination fee of $80 million to the other party.

TriCo and First Hawaiian will be subject to business uncertainties and contractual restrictions while the mergers are pending.

Uncertainty about the effect of the mergers may have an adverse effect on TriCo and First Hawaiian. These uncertainties may impair TriCo’s or First Hawaiian’s ability to attract, retain and motivate key personnel and other employees until the mergers are completed. These uncertainties may also cause customers, suppliers, business partners and others that deal with TriCo or First Hawaiian to seek alternative relationships with third parties, seek to alter their business relationships with TriCo or First Hawaiian or fail to extend existing relationships with TriCo or First Hawaiian. In addition, subject to certain exceptions, TriCo and First Hawaiian have each agreed to operate its business in the ordinary course in all material respects and to refrain from taking certain actions that may adversely affect its ability to consummate the transactions contemplated by the merger agreement on a timely basis without the consent of the other party. These restrictions may prevent TriCo and/or First Hawaiian from pursuing attractive business opportunities that may arise prior to the completion of the mergers.

The merger agreement limits TriCo’s ability to pursue alternatives to the mergers and may discourage other companies from trying to acquire TriCo.

The merger agreement contains “no shop” covenants that restrict each of TriCo’s or First Hawaiian’s ability to, directly or indirectly, among other things, initiate, solicit, knowingly encourage or knowingly facilitate inquiries or proposals with respect to, or, subject to certain exceptions generally related to the exercise of fiduciary duties by each respective board of directors, engage or participate in any negotiations concerning, or provide any confidential or nonpublic information or data relating to, or have or participate in any discussions with any person relating to, any alternative acquisition proposals, subject to certain exceptions. These provisions may discourage a potential third-party acquirer that might have an interest in acquiring all or a significant part of TriCo or First Hawaiian from considering or making that acquisition proposal.

Shareholder or stockholder litigation related to the mergers could prevent or delay the completion of the mergers, result in the payment of damages or otherwise negatively impact the business and operations of TriCo and First Hawaiian.

Shareholders of TriCo and/or stockholders of First Hawaiian may file lawsuits against TriCo, First Hawaiian and/or the directors or officers of either company in connection with the mergers. One of the conditions to the closing is that no order, injunction or decree issued by any court or agency of competent jurisdiction or other law preventing or making illegal the consummation of the mergers, the bank merger or any of the other transactions contemplated by the merger agreement be in effect. If any plaintiff were successful in obtaining an injunction prohibiting TriCo or First Hawaiian defendants from completing the mergers, the bank merger or any of the other transactions contemplated by the merger agreement, then such injunction may delay or prevent the consummation of the mergers and could result in significant costs to TriCo and/or First Hawaiian, including any cost associated with the indemnification of directors and officers of each company. TriCo and First Hawaiian may incur costs in connection with the defense or settlement of any shareholder or stockholder lawsuits filed in connection with the mergers, the bank merger or any other transactions contemplated by the merger agreement. Such litigation could have an adverse effect on the financial condition and results of operations of TriCo and could prevent or delay the completion of the mergers.

TriCo and First Hawaiian have incurred and are expected to incur substantial costs related to the mergers.

TriCo and First Hawaiian have incurred and expect to incur a number of significant non-recurring costs associated with the mergers. These costs include legal, financial advisory, accounting, consulting and other advisory fees, severance/employee benefit-related costs, public company filing fees and other regulatory fees, printing and mailing costs and other related costs. Some of these costs are payable by either TriCo or First Hawaiian regardless of whether or not the mergers are completed.

Combining TriCo and First Hawaiian may be more difficult, costly or time-consuming than expected, and TriCo and First Hawaiian may fail to realize the anticipated strategic benefits of the mergers.

The success of the mergers will depend, in part, on the ability to realize the anticipated strategic and financial benefits from combining the businesses of TriCo and First Hawaiian, including geographic expansion, the enhanced growth opportunities and broader product capabilities of the combined franchise. To realize the anticipated benefits from the mergers, following completion of the mergers, the combined company must successfully integrate the businesses of TriCo and First Hawaiian in a manner that permits those benefits to be realized without adversely affecting current revenues and future growth. If the combined company is not able to successfully achieve these objectives, the anticipated benefits of the mergers may not be realized fully or at all or may take longer to realize than expected. In addition, any cost savings of the mergers could be less than anticipated, and integration may result in additional and unforeseen expenses.

TriCo and First Hawaiian have operated and, until the effective time, must continue to operate, independently. It is possible that the integration process could result in the loss of key employees, diminished competitive position, loan and deposit attrition, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits of the mergers. The conversion and migration of data, applications, systems and third-party interfaces could also be delayed or unsuccessful and could result in service interruptions, processing errors, data loss, cybersecurity or data-protection incidents, customer disruption or additional costs. Integration efforts between the companies may also divert management attention and resources. These integration matters could have an adverse effect on each of TriCo and First Hawaiian while the mergers are pending and on the combined company for an undetermined period following completion of the mergers.

An inability to realize the full extent of the anticipated benefits of the mergers and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results of the combined company following the completion of the mergers.

The combined company may be unable to retain legacy TriCo or First Hawaiian personnel successfully after the completion of the mergers.

The success of the mergers will depend in part on the combined company’s ability to retain the talent and dedication of key employees currently employed by TriCo and First Hawaiian. It is possible that these employees may decide not to remain with the applicable company while the mergers are pending or after the completion of the mergers. If the combined company is unable to retain key employees, including management, who are critical to the successful integration and future operations of the combined company following the mergers, TriCo and First Hawaiian could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, following the completion of the mergers, if key employees terminate their employment, the combined company’s business activities following the mergers may be adversely affected, and management’s attention may be diverted from successfully hiring suitable replacements, all of which may cause the combined company’s business following the mergers to suffer. The combined company also may not be able to locate or retain suitable replacements for key employees.