TriCo Bancshares Debt

TCBK Stock  USD 48.55  0.71  1.48%   
TriCo Bancshares holds a debt-to-equity ratio of 0.15. At this time, TriCo Bancshares' Short and Long Term Debt is quite stable compared to the past year. Net Debt To EBITDA is expected to rise to 1.80 this year, although the value of Total Debt To Capitalization will most likely fall to 0.26. . TriCo Bancshares' financial risk is the risk to TriCo Bancshares stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

TriCo Bancshares' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. TriCo Bancshares' cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps TriCo Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect TriCo Bancshares' stakeholders.
For most companies, including TriCo Bancshares, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for TriCo Bancshares, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, TriCo Bancshares' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
1.2744
Book Value
37.545
Operating Margin
0.3985
Profit Margin
0.289
Return On Assets
0.0114
Total Current Liabilities is expected to rise to about 5.4 B this year. Liabilities And Stockholders Equity is expected to rise to about 10.4 B this year
  
Check out the analysis of TriCo Bancshares Fundamentals Over Time.
For more information on how to buy TriCo Stock please use our How to buy in TriCo Stock guide.

TriCo Bancshares Bond Ratings

TriCo Bancshares financial ratings play a critical role in determining how much TriCo Bancshares have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for TriCo Bancshares' borrowing costs.
Piotroski F Score
5
HealthyView
Beneish M Score
(3.00)
Unlikely ManipulatorView

TriCo Bancshares Debt to Cash Allocation

TriCo Bancshares currently holds 761.94 M in liabilities with Debt to Equity (D/E) ratio of 0.15, which may suggest the company is not taking enough advantage from borrowing. Note, when we think about TriCo Bancshares' use of debt, we should always consider it together with its cash and equity.

TriCo Bancshares Total Assets Over Time

TriCo Bancshares Assets Financed by Debt

The debt-to-assets ratio shows the degree to which TriCo Bancshares uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.

TriCo Bancshares Debt Ratio

    
  7.83   
It seems most of the TriCo Bancshares' assets are financed through equity. Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the TriCo Bancshares' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of TriCo Bancshares, which in turn will lower the firm's financial flexibility.

TriCo Bancshares Corporate Bonds Issued

TriCo Short Long Term Debt Total

Short Long Term Debt Total

800.04 Million

At this time, TriCo Bancshares' Short and Long Term Debt Total is quite stable compared to the past year.

Understaning TriCo Bancshares Use of Financial Leverage

Leverage ratios show TriCo Bancshares' total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of TriCo Bancshares' financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
Last ReportedProjected for Next Year
Short and Long Term Debt Total761.9 M800 M
Net Debt663.2 M696.4 M
Long Term Debt701.1 M736.2 M
Short Term Debt638.3 M670.3 M
Long Term Debt Total420.5 M441.5 M
Short and Long Term Debt32.6 M48.7 M
Net Debt To EBITDA 1.72  1.80 
Debt To Equity 0.64  0.40 
Interest Debt Per Share 24.62  25.85 
Debt To Assets 0.07  0.08 
Long Term Debt To Capitalization 0.08  0.08 
Total Debt To Capitalization 0.39  0.26 
Debt Equity Ratio 0.64  0.40 
Debt Ratio 0.07  0.08 
Cash Flow To Debt Ratio 0.19  0.18 
Please read more on our technical analysis page.

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When determining whether TriCo Bancshares is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if TriCo Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Trico Bancshares Stock. Highlighted below are key reports to facilitate an investment decision about Trico Bancshares Stock:
Check out the analysis of TriCo Bancshares Fundamentals Over Time.
For more information on how to buy TriCo Stock please use our How to buy in TriCo Stock guide.
You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Is Regional Banks space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of TriCo Bancshares. If investors know TriCo will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about TriCo Bancshares listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.04)
Dividend Share
1.29
Earnings Share
3.36
Revenue Per Share
11.678
Quarterly Revenue Growth
(0.01)
The market value of TriCo Bancshares is measured differently than its book value, which is the value of TriCo that is recorded on the company's balance sheet. Investors also form their own opinion of TriCo Bancshares' value that differs from its market value or its book value, called intrinsic value, which is TriCo Bancshares' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because TriCo Bancshares' market value can be influenced by many factors that don't directly affect TriCo Bancshares' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between TriCo Bancshares' value and its price as these two are different measures arrived at by different means. Investors typically determine if TriCo Bancshares is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, TriCo Bancshares' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

What is Financial Leverage?

Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.

Leverage and Capital Costs

The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.

Benefits of Financial Leverage

Leverage provides the following benefits for companies:
  • Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
  • It provides a variety of financing sources by which the firm can achieve its target earnings.
  • Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.