TrustCo Bank Corp NY NASDAQ: TRST reported third-quarter 2026 net income of $17.3 million, up 6.5% from the prior-year period, as higher net interest income, loan growth and deposit growth supported results.
Chairman, President and Chief Executive Officer Robert J. McCormack described the quarter as reflecting “positive financial momentum,” citing sequential year-over-year improvement in deposits, average loans, net income, return on average assets, return on average equity and net interest margin.
McCormack said the bank has sought to deepen customer relationships by encouraging deposit customers without loans to consider home equity borrowing and refinancing, while offering incentives for loan customers to use its deposit products. The company has also reviewed its loan and deposit offerings, delivery systems and customer-service experience, he said.
“With all those factors coming together and trending favorably, we are optimistic about the company’s ability to maintain positive momentum into 2027,” McCormack said. He added that the bank expects to make an announcement concerning its lending operation in the coming months.
Net Interest Income and Margin Increase
Executive Vice President and Chief Financial Officer Mike Ozimek said net interest income totaled $47 million in the third quarter, rising $3.9 million, or 9.1%, from a year earlier. Net interest margin increased 16 basis points year over year to 2.95%.
The yield on interest-earning assets rose 10 basis points to 4.35%, while the cost of interest-bearing liabilities declined to 1.79% from 1.90% in the third quarter of 2025, according to Ozimek.
The company reported return on average assets of 1.05% and return on average equity of 10.57%. Its consolidated equity-to-assets ratio was 9.72%, compared with 10.9% a year earlier. Book value per share was $38.20 at Sept. 30, 2026, up 2.4% from $37.30 a year earlier.
Ozimek said TrustCo repurchased more than 1.5 million shares during 2026 under its 2025 and 2026 repurchase programs, following the purchase of 1 million shares in 2025. Through those programs, the company repurchased 13.2% of outstanding common stock, he said.
The bank also increased its quarterly cash dividend to $0.40 per share, or $1.60 on an annualized basis. The increase was 5.3% above the prior dividend amount.
Loan Growth Led by Residential Lending
Average loans rose $238 million, or 4.6%, from the year-earlier quarter to $5.4 billion. Chief Banking Officer Kevin Curley said growth was led by the residential portfolio.
- First mortgages increased $177.3 million, or 4%, year over year.
- Home equity loans rose $50 million, or 11.4%.
- Commercial loans increased $13.5 million, or 4.3%.
Actual loans increased $77.1 million from the second quarter, Curley said. Purchase mortgage loans, including refinancings, rose $53.6 million; home equity loans increased $13.9 million; and commercial loans rose $10 million.
Curley said mortgage rates began the quarter below 6.5% before rising above 7% at quarter-end. Nevertheless, he said mortgage origination activity and purchase-loan volume remained steady. He also said the bank’s home equity products continued to see consistent demand.
During the question-and-answer session, McCormack said the rise in rates had affected the business in some respects, with some customers opting for longer-term certificates of deposit and some loan volume declining. However, he said TrustCo had not observed a meaningful change in customer behavior in its markets, particularly in upstate New York.
McCormack said the bank has used its liquidity and capital position to allow certain higher-priced funding to run off, while focusing on home equity lending as an area of opportunity.
Deposits, Credit Quality and Expenses
Total deposits ended the quarter at $5.7 billion, up $203 million from the prior quarter. Ozimek said relationship banking, competitive product offerings and digital capabilities supported a stable deposit base and ongoing loan growth.
Credit quality remained stable, though nonperforming loans increased from the year-earlier period. Nonperforming loans were $21.1 million at quarter-end, compared with $21.8 million in the second quarter and $18.5 million a year earlier. The nonperforming-loans-to-total-loans ratio was 0.39%, compared with 0.40% in the preceding quarter and 0.36% a year earlier.
TrustCo recorded a provision for credit losses of $850,000 during the quarter. Ozimek said the provision increase reflected loan growth and changes in economic forecasts rather than deterioration in underlying credit performance.
Curley said net charge-offs were a recovery of $30,000, following a recovery of $88,000 in the second quarter. The bank has posted seven consecutive quarters of net recoveries, he said.
The allowance for credit losses was $55.2 million at quarter-end, representing coverage of 262% of nonperforming loans. The allowance equaled 1.01% of total loans, compared with 1.00% a year earlier.
Non-interest expense, net of other real estate owned income, totaled $28 million, down $300,000 from the prior quarter. Ozimek said TrustCo expects recurring quarterly non-interest expense, net of other real estate owned expense, to range from $27.8 million to $28.2 million through 2026.
TrustCo’s wealth management division held approximately $1.37 billion in assets under management as of Sept. 30, with the majority of related fee income recurring, Ozimek said.
McCormack also announced the addition of two directors: Patty Fusco, who brings human-resources expertise, and Florida real estate professional Brian Gunther, whose appointment expands the board’s geographic diversity.
About TrustCo Bank Corp NY (NASDAQ:TRST)
TrustCo Bank Corp NY is the holding company for Trustco Bank, a community-focused savings bank headquartered in Glenville, New York. Founded in 1902, the company provides banking and financial services to individuals, families, and businesses through a network of branches and digital banking channels.
Trustco Bank's products and services include checking and savings accounts, certificates of deposit, consumer lending, residential mortgages, home equity loans and lines of credit, and commercial real estate financing.
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