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TriCo Bancshares Upped to Strong Buy

Zacks Equity Research

On May 2, Zacks Investment Research upgraded TriCo Bancshares (TCBK) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

TriCo Bancshares has been witnessing rising earnings estimates on the back of strong first-quarter 2013 results. Moreover, this well-known commercial banking services provider delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 21.8%. The long-term expected earnings growth rate for this stock is 9%.    

TriCo Bancshares reported its first-quarter results on Apr 29 with earnings per share of 53 cents, substantially beating the Zacks Consensus Estimate of 33 cents by 60.6% and more than doubling from the year-ago earnings of 25 cents. Robust results for the reported quarter were primarily aided by higher non-interest income, reduced non-interest expenses and benefit from loan losses.

Non-interest income jumped 23.6% year over year to $10.2 million. Benefit from loan losses stood at $1.1 million as compared with the provision of $4.0 million in the prior-year quarter. Non-interest expense dipped 5.7% from the year-ago period to $21.6 million.

However, on the downside, net interest income decreased 1.9% to $24.6 million. The fall was primarily due to lower yield on loans and a decline in average balance in investments.

Credit quality continues to exhibit an improvement. Nonperforming originated loans were $54.8 million, waning 22.6% year over year. Net charge-offs for the quarter were $2.8 million compared with $4.9 million in the year-ago quarter.    

Following first-quarter 2013 results for TriCo Bancshares, the Zacks Consensus Estimate for 2013 increased 7.6% to $1.41 per share as 1 of the 4 estimates was revised higher over the last 7 days. For 2014, 1 out of the 4 estimates moved north over the same time frame, lifting the Zacks Consensus Estimate by 3.6% to $1.42 per share.

Other Stocks to Consider

Besides TriCo Bancshares, other stocks in the same sector with a Zacks Rank #1 include CU Bancorp (CUNB), Pacific Continental Corp. (PCBK) and Preferred Bank (PFBC).

Read the Full Research Report on PFBC

Read the Full Research Report on TCBK

Read the Full Research Report on CUNB

Read the Full Research Report on PCBK

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