TrustCo Bank Corp NY NASDAQ: TRST reported what management called a strong start to 2026, citing higher net income, expanding margin, continued loan and deposit growth, and an accelerating share repurchase program.
First-quarter profitability and returns improved
Chairman, President and CEO Robert J. McCormick said the company posted “net income of over $16 million,” alongside “improving margin” and “positive return metrics.” CFO Mike Ozimek provided the company’s reported results for the first quarter of 2026, including net income of $16.3 million, up 14.1% from the first quarter of 2025. Ozimek said the quarter produced a return on average assets of 1.02% and a return on average equity of 9.66%.
McCormick highlighted improvements year over year in key performance measures, stating that return on average assets increased 10% to 1.02, return on average equity grew 14% to 9.66, and the efficiency ratio improved to 54%.
Ozimek also discussed capital and book value metrics. He said the consolidated equity-to-assets ratio was 10.31% for the first quarter of 2026, compared with 10.85% in the first quarter of 2025. Book value per share was $38.32 at March 31, 2026, up 6% from $36.16 a year earlier.
Net interest income rose as margin expanded and funding costs declined
Management attributed part of the earnings improvement to funding and pricing actions. McCormick said net income improved in part because of “strategic pricing of our time deposit products,” which reduced the company’s cost of funds. He also emphasized that the loan portfolio is repricing as lower-rate loans are replaced with higher-earning loans, adding that the loan portfolio reached “another all-time high this quarter” and that the impact of repricing is becoming “more pronounced.”
Ozimek said net interest income was $44.7 million in the first quarter of 2026, an increase of $4.3 million, or 10.7%, from the prior-year quarter. He reported net interest margin of 2.84% for the first quarter of 2026, up 20 basis points from the prior-year quarter. Yield on interest-earning assets increased to 4.23%, up 10 basis points year over year, while the cost of interest-earning liabilities fell to 1.79% from 1.92%.
Ozimek said the company believes it is “well positioned to continue delivering strong net interest income performance,” even as the Federal Reserve considers potential rate changes.
Loan growth led by residential and home equity, with competitive mortgage pricing
Chief Banking Officer Kevin Curley said average loans increased $158.9 million, or 3.1%, year over year to $5.3 billion, which Ozimek described as an all-time high. Curley said this marked an improvement from the prior quarter’s year-over-year growth of $126.8 million.
Curley and Ozimek both pointed to residential categories as key drivers. Ozimek said the home equity lines of credit portfolio increased $50.8 million, or 12.3%, while the residential real estate portfolio grew $93.2 million, or 2.1%. Ozimek added that average commercial loans increased $17.1 million, or 5.8%, which he said reflected a strong local economy and increased demand for debt.
On a linked-quarter basis, Curley said actual loans increased $37.7 million compared with the fourth quarter, including $35.3 million of growth in purchased mortgage loans (including refinances and home equity loans) and a $3.3 million increase in commercial loans.
Curley said mortgage origination improved during the quarter and year over year, with refinancing activity picking up early in the quarter when rates were lower and then easing as market rates moved higher. He described a rate environment that began lower, rose closer to 6.75%, and then receded into a 6% to 6.25% range. Curley said the bank continued to offer competitive mortgage rates, including a 30-year fixed rate at 5.99%.
Deposits increased; wealth management boosted fee income
Ozimek said total deposits ended the quarter at $5.7 billion, up $156 million from the prior-year quarter. He attributed deposit stability to relationship banking, competitive product offerings, and digital capabilities.
McCormick also pointed to non-interest income as a contributor to results, saying wealth management income rose 9% quarter over quarter. Ozimek said the wealth management division had approximately $1.26 billion of assets under management as of March 31, 2026, and that wealth management and financial services fees represented 44.1% of non-interest income. He noted that most of this fee income is recurring and tied to long-term advisory relationships.
Credit metrics stable, with higher provision tied to loan growth and outlook assumptions
On credit quality, Ozimek said non-performing loans increased to $21.5 million in the first quarter of 2026 from $18.8 million a year earlier, with non-performing loans to total loans rising to 41 basis points from 37 basis points. Non-performing assets to total assets was 35 basis points, up from 33 basis points a year earlier.
Curley characterized asset quality as “very strong,” saying early-stage delinquencies remained stable. He reported net recoveries of $39,000 during the quarter, following a net recovery of $14,000 in the fourth quarter and total recoveries of $238,000 over the past year. Curley said the allowance for credit losses was $53 million at quarter end, with a coverage ratio of 247%.
The provision for credit losses was $950,000 in the first quarter. During the Q&A session, an analyst asked why the provision increased versus last year despite what he called solid portfolio metrics. Ozimek said the company is still using the baseline Moody’s forecast, and that roughly half of the increase was driven by loan growth and half by the forward-looking component of the forecast, which includes economic factors “looking slightly negative on the go forward.”
On deposit pricing competition, McCormick told investors the environment was “the same old, same old,” pointing to consumers pushing for higher CD rates and competitive pressure from credit unions.
Management also emphasized capital deployment through repurchases. McCormick said the company repurchased one million shares during 2025 and received authorization to repurchase an additional two million shares in 2026, calling buybacks the “centerpiece” of capital deployment. Ozimek said the company repurchased 522,000 shares in the first quarter, representing 2.9% of outstanding common stock, under a program allowing up to two million shares, or 11.1% of common stock, to be repurchased in 2026.
Asked about the Common Equity Tier 1 ratio and how low management would be comfortable letting it move as repurchases continue, McCormick said the company had not yet disclosed the ratio but that it was “trending down the same way that the leverage ratio is trending down,” adding that management would not jeopardize capital or liquidity to repurchase shares.
About TrustCo Bank Corp NY NASDAQ: TRST
TrustCo Bank Corp. NY NASDAQ: TRST is a bank holding company headquartered in Glens Falls, New York, that provides a full suite of community banking and financial services primarily across upstate New York and western Massachusetts. Through its wholly owned subsidiary, Trustco Bank, the company offers deposit products such as checking and savings accounts, as well as consumer, residential mortgage, and commercial lending solutions. Additional services include wealth management, trust administration, and insurance products tailored to the needs of individuals, businesses and nonprofit organizations.
Founded in 1902 as the Glens Falls Trust Company, TrustCo Bank has grown steadily through organic branch expansion and acquisitions of locally based banks.
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