3 Factors That Make TCBK a Risky Choice and One Alternative Stock Worth Considering

TriCo Bancshares: Recent Performance and Investment Outlook

Over the past half-year, TriCo Bancshares has shown minimal movement, with its share price largely unchanged at $47.43 and a modest 4% return.

Is TriCo Bancshares a smart addition to your portfolio, or could it pose unnecessary risk?

Reasons We’re Not Enthusiastic About TriCo Bancshares

At this time, we’re choosing to pass on TriCo Bancshares. Below are three key factors that lead us to believe there are more attractive investment opportunities elsewhere.

1. Net Interest Income Growth Lags Behind Peers

Investors typically value steady net interest income more highly than unpredictable, one-off fees. However, TriCo Bancshares has only managed a 6.4% annualized increase in net interest income over the past five years—a pace that trails the broader banking sector and mirrors its overall revenue growth.

Trailing 12-Month Net Interest Income for TriCo Bancshares

2. EPS Growth Fails to Impress

While long-term earnings trends are important, short-term EPS changes can reveal shifts in business momentum. Over the last two years, TriCo Bancshares posted a compounded annual EPS growth rate of just 2.4%. Although this outpaced its stagnant revenue, it mainly reflects management’s efforts to control costs amid tepid demand.

Trailing 12-Month EPS (Non-GAAP) for TriCo Bancshares

3. Modest Tangible Book Value Per Share (TBVPS) Outlook

For banks, sustained TBVPS growth depends on generating returns that exceed both funding costs and credit losses. Consensus forecasts suggest TriCo Bancshares’s TBVPS will rise by only 9.1% to $34.40 over the next year—a rather lackluster projection.

Quarterly Tangible Book Value per Share for TriCo Bancshares

Our Verdict

While TriCo Bancshares is not a poor-quality company, it doesn’t stand out as a top pick for us. The stock is currently valued at 1.1 times forward price-to-book (about $47.43 per share), which is reasonable, but we don’t see significant upside at this time. We believe there are more promising investment options available. For example, you might consider one of Charlie Munger’s favorite companies.

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