TriCo Bancshares: A Dividend Powerhouse in a High-Growth Regional Bank

For income-focused investors, the search for companies that balance growth with reliable dividend payouts is a perpetual challenge. TriCo Bancshares (NASDAQ: TCBK) has long stood out as a regional banking stalwart, offering a compelling blend of earnings momentum and disciplined capital returns. But with recent market volatility and conflicting data points about its 2025 dividend, it's time to dissect whether this bank's dividend strategy remains sustainable—and why it could still be a cornerstone for long-term income portfolios.

A Decade of Dividend Growth: The Foundation of Trust

TriCo Bancshares has rewarded shareholders with 144 consecutive quarterly dividends, a streak dating back to 2010. Over the past 15 years, its quarterly payout has grown from $0.09 to $0.36—a fourfold increase. This consistency is no accident. The bank's management has prioritized a 10.20% average annual dividend growth rate over the past five years, supported by a conservative payout ratio of 38.48% as of Q1 2025. This ratio—well below the industry median of 35%—leaves ample room for reinvestment and future increases.

The recent August 2025 dividend hike to $0.36 per share (a 9.1% increase from the prior quarter) resolves earlier confusion about a supposed 50% drop. The earlier data likely conflated adjusted historical figures with real-time 2025 payments. In reality, TriCo's 2025 dividend trajectory is uninterrupted and accelerating, with the annualized yield now at $1.32 per share.

Earnings Momentum: The Engine Behind the Dividend

TriCo's ability to sustain and grow its dividend hinges on its robust earnings performance. In Q2 2025, the bank reported $0.84 in diluted EPS, exceeding analyst expectations and marking the second consecutive quarter of outperformance. Total assets now stand at $9.9 billion, with a net interest margin (NIM) of 3.7%, reflecting strong lending margins and disciplined cost management.

The bank's balance sheet is a model of prudence. With a loan-to-deposit ratio of 82% and a 234% allowance for credit losses relative to non-performing loans, TriCo has built a fortress-like capital structure. Its $130.1 million in cash and short-term investments further insulate it from liquidity risks. These metrics suggest that even in a downturn, the bank has the firepower to maintain its dividend.

Addressing the 2025 "Dividend Cut" Myth

Earlier reports of a 50% dividend drop in 2025 were based on adjusted historical data that conflated pre-split figures with real-time 2025 payments. The reality is far more positive: TriCo's 2025 dividend has increased every quarter, with the August 2025 raise marking the 144th consecutive payout. The bank's 3.09% dividend yield as of August 2025 is a 35% premium to its 10-year average, making it an attractive proposition for income seekers.

Why This Matters for Long-Term Investors

For investors seeking predictable income, TriCo's track record is hard to ignore. Its 139 consecutive quarterly dividend increases since 2010 demonstrate a culture of shareholder-centricity. The bank's 3.36% yield (as of Q1 2025) outpaces the 1.42% average for the financial sector, while its price-to-book ratio of 5.6x suggests it's undervalued relative to its fundamentals.

However, sustainability requires more than past performance. TriCo's $6.8 billion in loans and $8.4 billion in deposits are growing at a 3–5% annualized rate, providing a tailwind for future earnings. Management's recent $27.5 million Q2 net income and confidence in "historically high credit quality" further reinforce the case for continued dividend growth.

Risks and Considerations

No investment is without risk. A sharp rise in interest rates or a credit downturn could pressure net interest margins and loan quality. However, TriCo's conservative leverage (7.8x asset-to-equity ratio) and strong deposit base mitigate these risks. Additionally, its community-focused model—with a 2022 merger with Valley Republic Bancorp expanding its footprint—positions it to weather macroeconomic shifts better than peers.

Final Verdict: A Buy for Income Portfolios

TriCo Bancshares exemplifies the ideal high-growth regional bank: earnings-driven, capital-efficient, and shareholder-friendly. Its recent dividend increase, supported by a 38.48% payout ratio and $0.84 in Q2 EPS, confirms that its dividend is both sustainable and scalable. For long-term income investors, TCBK offers a rare combination of predictable cash flows, attractive yield, and growth potential.

In a market where many dividend payers are overvalued or vulnerable to economic cycles, TriCo stands out as a blue-chip regional bank with a dividend legacy. For those willing to hold for the long term, it's a compelling addition to a diversified income portfolio.