TrustCo Bank Corp NY Q2 2025 Earnings Report

TrustCo Bank Corp NY EPS Results

• Actual EPS: $0.79
• Consensus EPS: $0.69
• Beat/Miss: Beat by +$0.10
• One Year Ago EPS: N/A

TrustCo Bank Corp NY Revenue Results

• Actual Revenue: $46.60 million
• Expected Revenue: $46.16 million
• Beat/Miss: Beat by +$438.00 thousand
• YoY Revenue Growth: N/A

TrustCo Bank Corp NY Announcement Details

• Quarter: Q2 2025
• Date: 7/21/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, July 22, 2025
• Conference Call Time: 9:00AM ET

TrustCo Bank Corp NY (NASDAQ:TRST) operates as the holding company for Trustco Bank, a federal savings bank that provides personal and business banking services to individuals and businesses. The company accepts deposits; and offers loans and investments. It also operates as a real estate investment trust that acquires, holds, and manages real estate mortgage assets, including residential mortgage loans and mortgage-backed securities. In addition, the company serves as the executor of estates and trustee of personal trusts; provides asset and wealth management, estate planning and related advice, and custodial services; and acts as trustee for various types of employee benefit plans, and corporate pension and profit-sharing trusts. It operates through banking offices in Albany, Columbia, Dutchess, Greene, Montgomery, Orange, Putnam, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Ulster, Warren, Washington, and Westchester counties of New York; Brevard, Charlotte, Flagler, Hillsborough, Indian River, Lake, Manatee, Martin, Orange, Osceola, Palm Beach, Polk, Sarasota, Seminole, and Volusia counties in Florida; Bennington County in Vermont; Berkshire County in Massachusetts; and Bergen County in New Jersey, as well as automatic teller machines. The company was founded in 1902 and is headquartered in Glenville, New York.

TrustCo Bank Corp NY Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Net income reached $15 million in Q2 (up 19.8% YoY) and nearly $30 million YTD, lifting ROA to 0.96% and ROE to 8.73%.
• Positive Sentiment: Net interest income grew 10.5% to $41.7 million while net interest margin expanded 18 bps to 2.71%, driven by higher yields and lower funding costs.
• Positive Sentiment: Average loans rose 2.3% YoY to $5.1 billion, led by an 17.8% increase in home equity lines and 9.2% growth in commercial loans.
• Positive Sentiment: Asset quality remained strong with a second consecutive net recovery, nonperforming loans down to 0.35%, and an allowance coverage ratio of 286%.
• Positive Sentiment: The bank repurchased 169,000 shares in Q2 under its buyback program, underscoring confidence in capital strength and commitment to shareholder returns.

Presentation

[Operator]

Good day, and welcome to the TrustCo Bank Corp earnings call and webcast. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Before proceeding, we would like to mention that this presentation may contain forward looking information about TrustCoBank Corp. New York that's intended to be covered by the safe harbor for forward looking statements provided by the Private Securities Litigation Reform Act of 1995.

[Operator]

Actual results, performance or achievements could differ materially from those expressed in or implied by such statements due to various risks, uncertainties and other factors. More detailed information about these and other risk factors can be found in our press release that preceded this call and in the Risk Factors and Forward Looking Statements section of our annual report on Form 10 ks and as uploaded by our quarterly reports on Form 10 Q. The forward looking statements made on this call are valid only as of the date hereof, and the company disclaims any obligation to update this information and reflects any events or developments after the date of this call, except as may be required by applicable law. During today's call, we will discuss certain financial measures derived from our financial statements that are not determined in accordance with U. S.

[Operator]

GAAP. The reconciliations of such non GAAP financial measures to the most comparable GAAP figures are included in our earnings press release, which is available under the Investor Relations tab on our website at trustcobank.com. Please also note that today's event is being recorded. A replay of the call will be available for thirty days and an audio webcast will be available for one year as described in our earnings press release. At this time, I would like to turn the conference over to Mr. Robert J. McCormick, Chairman, President and CEO to begin. Please go ahead, Robert.

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

Thanks, Sami. Good morning, everyone, and thank you for joining the call. I'm Rob McCormick, the President of the Bank. I'm joined today as usual by Mike Ozemich, our CFO, will go through the numbers and Kevin Curley, our Chief Banking Officer, will talk about lending. We are very pleased to announce the outstanding year to date and year over year performance results.

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

Mike will provide the details, but the net income of $15,000,000 for the quarter and nearly $30,000,000 year to date is nothing short of stellar. This is and the numbers supported are time to shine. The strategy we developed and deployed over the past several years has been to amass capital for the purpose at least in part of having low cost funds available to lend out exactly at this moment. When the interest rate environment is favorable, loan demand is up, and our competition is scraping to borrow funds to lend out, it is a fundamental principle of TrustCo Bank that we take in deposits and lend those funds right back out into the communities where we are where they were gathered. Average deposits are up over the year and meaningful margin expansion is contributing to our success.

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

Compared to this time last year, margin increased by a solid 7%. Our increased income is of course affected by increased loan volume over the period. On the residential side, home equity products led the way because of the flexibility offered customers looking to preserve favorable first lien rates and increased by 18% year over year. In fact, our team got so good at originating equity loans that we were able to offer a product that promises and delivers a closing within seven days of application. We also successfully executed strategy of growth in our commercial loan portfolio.

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

That program grew by 11% over the past year. And in trademark Trusco fashion, all of this was accomplished while preserving credit quality. We saw net recoveries for the second quarter second consecutive quarter in 2025. These successes have served our own as well. All return metrics are up significantly, return on assets, return on equity, earnings per share and efficiency ratio, also a double digit improvement from this time last year.

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

The beauty of our deployed capital strategy is that we can support the lending in the way we have while preserving our ability to execute on authorized share buyback program, which we have done and likely will continue. I will conclude where I started. Performance has been stellar. The results in the 2025 establish positive momentum that we believe may extend into 2026. Now Mike will go into the details. Mike?

[Michael Ozimek, EVP & CFO at TrustCo Bank NY]

Thank you, Rob, and good morning, everyone. I will now review TrustCo's financial results for the second quarter of twenty twenty five.

[Michael Ozimek, EVP & CFO at TrustCo Bank NY]

As we noted in the press release, the company saw standout results for the 2025 marked by increases in both net income and net interest income of TrustCo Bank during the 2025 compared to the second quarter of twenty twenty four. This performance is underscored by rising net interest income, continued margin expansion and operated loan growth across key portfolios. This results in the second quarter net income of $15,000,000 an increase of 19.8% over the prior year quarter which yielded a return on average assets and average equity of 0.968.73% respectively. Capital remains strong. Consolidated equity to assets ratio was 10.91% for the 2025 compared to 10.73% in the second quarter of twenty twenty four.

[Michael Ozimek, EVP & CFO at TrustCo Bank NY]

Book value per share at 06/30/2025 was $36.75 up 6.6% compared to $34.46 a year earlier. During the second quarter of twenty twenty five, TrustCo repurchased 169,000 shares of common stock under the previously announced stock repurchase program. And as always, we remain committed to returning value to shareholders through a disciplined share repurchase program, which reflects our confidence in the long term strength of the franchise and our focus on capital optimization. Average loans for the 2025 grew 2.3% or $115,600,000 to $5,100,000,000 from the second quarter of twenty twenty four, an all time high. Consequently, overall loan growth has continued to increase and leading the charge was home equity lines of credit portfolio, which increased by $64,700,000 or 17.8% in the 2025 over the same period in 2024.

[Michael Ozimek, EVP & CFO at TrustCo Bank NY]

The residential real estate portfolio increased 27,900,000 or 0.6%. The average commercial loans increased $25,800,000 or 9.2% and installment loans decreased $2,900,000 over the same period in 2024. This uptick continues to reflect a strong local economy and increased demand for credit. For the second quarter of twenty twenty five, the provision for credit losses was 6,100 and dollars Retaining deposits has been a key focus as we navigate through 2025. Total deposits ended the quarter at $5,500,000,000 and was up $213,000,000 compared to the prior year quarter.

[Michael Ozimek, EVP & CFO at TrustCo Bank NY]

We believe the increase in these deposits compared to the same period in 2024 continues to indicate strong customer confidence in the bank's competitive deposit offerings. The bank's continued emphasis on relationship banking combined with competitive product offerings and digital capabilities has continued to be a stable deposit base that continues to support ongoing loan growth and expansion. Net interest income was $41,700,000 for the second quarter of twenty twenty five, an increase of $4,000,000 or 10.5 percent compared to the prior year quarter. The net interest margin for the 2025 was 2.71%, up 18 basis points from the prior year quarter. Yield on interest earning assets increased to 4.19%, up 13 basis points from the prior year quarter.

[Michael Ozimek, EVP & CFO at TrustCo Bank NY]

The cost of interest bearing liabilities decreased to 1.91% in the 2025 from 1.97% in the second quarter of twenty twenty four. The bank is well positioned to continue delivering strong net interest income performance even as the Federal Reserve signals a potential easing cycle in the months ahead. The bank remains committed to maintaining a competitive deposit offerings while ensuring financial stability and continued support for our communities' banking needs. Our wealth management division continues to be a significant recurring source of non interest income. They had approximately $1,200,000,000 of assets under management as of June 3025.

[Michael Ozimek, EVP & CFO at TrustCo Bank NY]

Non interest income attributable to wealth management and financial services fees increased 13% to $1,800,000 driven by strong client demand and higher assets under management. These revenues now represent 37.5% of non interest income. The majority of this fee income is recurring supported by long term advisory relationships and a growing base of managed assets. Now on to non interest expense. Total non interest expense net of ORE expense came in at $25,700,000 down $600,000 from the prior year quarter.

[Michael Ozimek, EVP & CFO at TrustCo Bank NY]

ORE expense net came in at an expense of $522,000 for the quarter as compared to $16,000 in the prior year quarter. We're going to continue to hold the anticipated level of expense not to exceed $250,000 per quarter for ORE expense. All the other categories of non interest expense were in line with expectations for the second quarter. Now Kevin will review the loan portfolio and non performing loans.

[Kevin Curley, EVP & Chief Banking Officer at TrustCo Bank NY]

Thanks Mike and good morning to everyone. Our loans grew by $115,600,000 or 2.3% year over year.

[Kevin Curley, EVP & Chief Banking Officer at TrustCo Bank NY]

The growth was centered on our home equity loans, which increased by $64,700,000 or 17.8 percent over last year, and residential mortgages, increased by $27,900,000 In addition, our commercial loans grew by $25,800,000 or 9.2% over last year. For the second quarter, actual loans increased by $40,600,000 as total residential loans grew by 29,400,000.0 and commercial loans were also higher increasing by $11,500,000 for the quarter. Overall residential activity trends remain similar to those discussed in recent quarters. Our home equity credit lines continue to see consistent demand as customers continue to use their equity in their home for home improvements, education purposes or paying off higher cost loans such as credit cards. For purchase and refinance activity, we are well situated in the market and are ready to capture more growth as these segments pick up.

[Kevin Curley, EVP & Chief Banking Officer at TrustCo Bank NY]

Also, as a portfolio lender, we are uniquely positioned to manage pricing and implement promotions to increase lending volume. In all our markets, rates continue to be moving in approximately 50 basis point range and our current rate is 6.5% for our base thirty year fixed rate loan. In addition, our home equity products remain very attractive option for customers with rates starting below 7%. Commercial loan activity remained strong this quarter and continued to contribute to our portfolio growth. Overall, are encouraged about our loan growth this quarter and are committed to driving stronger results moving forward.

[Kevin Curley, EVP & Chief Banking Officer at TrustCo Bank NY]

Now moving to asset quality. Asset quality at the bank remains very strong. Our early stage delinquencies for our portfolio continue to be steady. Charge offs for the quarter amounted to a net recovery of $9,000 which follows a net recovery $258,000 in the first quarter. Non performing loans were $17,900,000 at this quarter end, dollars 18,800,000.0 last quarter and $19,200,000 a year ago.

[Kevin Curley, EVP & Chief Banking Officer at TrustCo Bank NY]

Non performing loans to total loans decreased to 0.35% at this quarter end compared to 0.37% last quarter and 0.38% a year ago. And non performing assets also decreased to $19,000,000 at quarter end versus $20,900,000 last quarter and $21,500,000 a year ago. At quarter end, our allowance for credit losses remained very solid at $51,300,000 with a coverage ratio of 286% compared to $50,600,000 with a coverage ratio of 270% in the first quarter and $49,800,000 and a coverage ratio of 259% a year ago. Rob?

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

That's our story. We're happy to answer any questions anyone might have.

[Operator]

We will now begin the question and answer session. Our first question comes from Ian Lapie from Gabelli Funds. Your line is open. Please go ahead.

[Ian Lapey, Portfolio Manager at Gabelli Funds]

Good morning, Congratulations. Great quarter. Just a couple of

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

Thank you, Ian, and good morning, Neil.

[Ian Lapey, Portfolio Manager at Gabelli Funds]

Thanks. Rob, you talked about strong local demand. Is that in Florida as well?

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

I missed the first part of the question, Ian. I'm sorry. There's something you must have came faded in and out.

[Ian Lapey, Portfolio Manager at Gabelli Funds]

The strong local demand that you referred to, is that in Florida as well as in the Northeast?

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

Across the markets. Yeah. The the best demand the the better of the two categories has been Florida, Ian, but we've had very strong demand locally as well.

[Ian Lapey, Portfolio Manager at Gabelli Funds]

Okay, great. And then what is the in terms of the CDs that will be maturing in the next quarter, what is the rate for maturing CDs as opposed to ones you're currently issuing?

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

We're still gaining ground, but not as much ground as we were gaining, Ian. Do you have the the number?

[Michael Ozimek, EVP & CFO at TrustCo Bank NY]

Yeah. Sure. We have what's coming due is about the average rate is $3.91.

[Ian Lapey, Portfolio Manager at Gabelli Funds]

Okay. And what what are you paying now?

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

The highest is 4, but that's for three months.

[Michael Ozimek, EVP & CFO at TrustCo Bank NY]

And then last one Ian, one thing is as we go Ian, I'll just add to that. I mean, that's over the next quarter. But as you look out, we gained some ground in future quarters and what's coming due in Q4 and Q1 of next year are lower. They're in the $3.60 range. So we're going to make some more ground up as we go forward.

[Ian Lapey, Portfolio Manager at Gabelli Funds]

Okay. Great. And last one, in terms of the strong commercial loan growth, what what types of borrowers are you lending? And what's the rough mix between secured and unsecured?

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

The the vast majority, Ian, probably in the 90 over 90% range is real estate related in commercial loans. And, we're doing smaller multifamily projects and, very small office offerings, some owner occupied and some investment. But the vast majority of the commercial loan portfolio is secured by real estate.

[Ian Lapey, Portfolio Manager at Gabelli Funds]

Okay. Great. Thank you very much.

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

Thank you.

[Operator]

We currently have no further questions. So I'd like to turn the conference call back to Robert J. McCormack for any closing remarks.

[Robert McCormick, President, CEO & Chairman at TrustCo Bank NY]

Thank you for your interest in our company, and we appreciate you spending a couple of minutes with us this morning. Have a great day.

[Operator]

The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Participants

Executives

• Robert McCormick, President, CEO & Chairman
• Michael Ozimek, EVP & CFO

Analysts

• Kevin Curley, EVP & Chief Banking Officer at TrustCo Bank NY
• Ian Lapey, Portfolio Manager at Gabelli Funds