TrustCo Bank Corp NY (TRST) Q4 2025 Earnings Call Transcript
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Overview
The earnings call reveals strong financial performance with a 38% increase in net income and rising net interest income. The stock repurchase program and dividend payouts support shareholder value. Despite some concerns over nonperforming assets and increased expenses, optimistic guidance and strong loan growth in key areas like home equity and commercial loans suggest a positive outlook. The Q&A section did not reveal significant negative sentiment, and the management's cautious approach to expenses and branch expansion reflects prudent strategy. Overall, the sentiment is positive, likely leading to a 2% to 8% stock price increase.
Key Financial Performance
Net Income $15.6 million for Q4 2025, an increase of 38% year-over-year. This was driven by rising net interest income, continued margin expansion, and sustained loan and deposit growth.
Return on Average Assets 0.97% for Q4 2025, reflecting strong profitability and operational efficiency.
Return on Average Equity 8.99% for Q4 2025, showcasing improved shareholder returns.
Consolidated Equity to Assets Ratio 10.66% for Q4 2025, slightly down from 10.84% in Q4 2024, indicating stable capital levels.
Book Value Per Share $38.08 as of December 31, 2025, up 7.1% from $35.56 a year earlier, reflecting increased shareholder value.
Nonperforming Loans $20.7 million in Q4 2025, up from $18.8 million in Q4 2024. Nonperforming loans to total loans increased to 0.39% from 0.37%, attributed to modest increases in nonperforming loans.
Average Loans $5.2 billion for Q4 2025, up 2.5% or $126.8 million year-over-year, driven by growth in residential real estate, home equity lines of credit, and commercial loans.
Home Equity Lines of Credit Increased by $54.1 million or 13.5% year-over-year in Q4 2025, reflecting strong demand for home equity products.
Residential Real Estate Portfolio Increased by $50.6 million or 1.2% year-over-year in Q4 2025, driven by improved residential activity.
Commercial Loans Increased by $24.5 million or 8.6% year-over-year in Q4 2025, reflecting a strong local economy and increased demand for credit.
Net Interest Income $43.7 million for Q4 2025, an increase of $4.8 million or 12.4% year-over-year, driven by higher yields on interest-earning assets and lower costs of interest-bearing liabilities.
Net Interest Margin 2.82% for Q4 2025, up 22 basis points year-over-year, supported by increased yields on interest-earning assets.
Total Deposits $5.6 billion for Q4 2025, up $166 million year-over-year, indicating strong customer confidence and competitive deposit offerings.
Noninterest Expense $26.5 million for Q4 2025, down $1.5 million year-over-year, reflecting cost management efforts.
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Operating Highlights
Loan and Deposit Products: Focused on delivering top-notch loan and deposit products and services, leading to low cost of funds and loan growth.
Home Equity Loans: Home equity loans grew by $54.1 million or 13.5% year-over-year, reflecting strong demand.
Residential Real Estate Portfolio: Increased by $50.6 million or 1.2% year-over-year.
Commercial Loans: Grew by $24.5 million or 8.6% year-over-year.
Local Economy: Strong local economy driving increased demand for credit.
Deposit Growth: Total deposits increased by $166 million year-over-year, indicating strong customer confidence.
Net Income: Fourth quarter net income of $15.6 million, a 38% increase year-over-year.
Net Interest Income: Increased by $4.8 million or 12.4% year-over-year.
Stock Repurchase Program: Repurchased 533,000 shares in Q4 2025 and renewed the program for up to 2 million shares in 2026.
Noninterest Expense: Reduced by $1.5 million year-over-year.
Credit Quality: Maintained strong credit quality with prudent underwriting standards and no subprime loans.
Portfolio Lending: Focused on originating loans in-house to be held for the full term, avoiding risky lending practices.
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Risk or Challenges
Nonperforming Loans: Nonperforming loans increased to $20.7 million in Q4 2025 from $18.8 million in Q4 2024, with nonperforming loans to total loans rising to 0.39% from 0.37%. This indicates a slight deterioration in credit quality.
Nonperforming Assets: Nonperforming assets increased to $22.1 million in Q4 2025 from $21 million a year ago, reflecting potential challenges in asset quality.
Credit Risk: The provision for credit losses was $400,000 in Q4 2025, highlighting ongoing credit risk management needs in the current environment.
Loan Portfolio Concentration: Commercial loans, which make up about 6% of total loans, are relationship-based and secured mostly by real estate. While this reduces risk, it also limits diversification.
Economic Environment: The bank's performance is tied to the local economy, which, while currently strong, could pose risks if economic conditions deteriorate.
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Guidance & Outlook
Stock Repurchase Program: The company has renewed its stock repurchase program, allowing for the repurchase of up to 2 million shares or 11.1% during 2026.
Noninterest Expense Guidance: The company expects total recurring noninterest expense, net of ORE expense, to be in the range of $27.7 million to $28.2 million per quarter in 2026.
Loan Growth Outlook: The company remains positive about loan growth, particularly in residential and home equity loans, and expects to capture more growth as market segments pick up.
Net Interest Income Performance: The bank is well-positioned to continue delivering strong net interest income performance even as the Federal Reserve contemplates rate changes in the months ahead.
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Shareholder Return Plan
Dividend Payout: TrustCo Bank has a century-long tradition of dividend payouts, which continues as part of their shareholder return strategy.
Stock Repurchase Program: During the fourth quarter of 2025, TrustCo repurchased 533,000 shares of common stock under the previously announced stock repurchase program. This resulted in 1 million shares or 5.3% of common stock repurchased year-to-date, reaching the maximum allowable under the program. The stock repurchase program has been renewed for 2026, allowing for the repurchase of up to 2 million shares or another 11.1%.
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Key Q&A
Q:What caused the increase in New York commercial NPL by $1.7 million?
A:It was due to two relationships involving multifamily properties, one in Schenectady and one in Albany.
Q:Are the loans in question backed by good collateral and personal guarantees?
A:Yes, all loans in the portfolio are guaranteed, and these particular cases involve retirees who are knowledgeable and have relocated to Florida.
Q:Why did other expenses increase to $2.55 million in Q4 compared to $1.7 million in Q3?
A:The increase was due to end-of-year benefit plan reviews and a $0.5 million funding to the TrustCo Foundation for tax purposes, among other larger expenses.
Q:What is the guidance for 2026 expenses, excluding other real estate?
A:The guidance is $27.7 million to $28.2 million, providing some breathing room for next year, with expectations to be on the lower end of the range.
Q:Why is there a decent uptick in the expense guidance compared to this year's run rate?
A:The increase is across the board with no specific driver, providing flexibility for next year.
Q:What is the outlook for branch growth or declines, particularly in Pasco County, Florida?
A:The company is actively looking for a location in Pasco County due to mortgage business growth and affordability shifts, but they aim to find the right price and location.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on why Pasco County has been difficult for finding a location, only mentioning general challenges and market shifts.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ARM home
Banking Officer
Chairman TrustCo
Chief Banking
Home equity
Purchase mortgage
Reserve rate
York Instructions
activity loan
activity purchase
asset shareholder
bedrock practice
borrowing gimmick
capital continuation
century dividend
change month
color lending
community factor
concentration borrowing
continuation century
credit period
culmination year
date maximum
delivery notch
deposit community
detail color
increase income
loan deposit
loan rate
margin expansion
quality loan
refinances
segment
standard
underwriting
TRST Transcript
TrustCo Bank Corp NY (TRST) Q4 2025 Earnings Call Transcript
Positive1-22
The earnings call reveals strong financial performance with a 38% increase in net income and rising net interest income. The stock repurchase program and dividend payouts support shareholder value. Despite some concerns over nonperforming assets and increased expenses, optimistic guidance and strong loan growth in key areas like home equity and commercial loans suggest a positive outlook. The Q&A section did not reveal significant negative sentiment, and the management's cautious approach to expenses and branch expansion reflects prudent strategy. Overall, the sentiment is positive, likely leading to a 2% to 8% stock price increase.
TrustCo Bank Corp NY (TRST) Q3 2025 Earnings Call Transcript
Positive10-22
The earnings call reveals strong financial performance with increased net income, net interest income, and book value per share. The company is executing a disciplined share repurchase program, indicating confidence in its valuation. Despite economic uncertainties, the bank's strategic initiatives and risk management are effective. The Q&A section did not reveal any major concerns, and management provided clear responses. The positive financial metrics, strategic execution, and shareholder returns suggest a positive stock price movement in the near term.
TrustCo Bank Corp NY (TRST) Q2 2025 Earnings Call Transcript
Positive7-22
The earnings call reveals strong financial performance with a 19.8% increase in net income and a 10.5% rise in net interest income. The bank's strategic initiatives, including deposit growth, robust loan portfolio expansion, and a successful share buyback program, indicate a positive outlook. The Q&A section supports this sentiment, with management providing clear answers and highlighting strong demand across markets. The only risk is the interest rate environment, but overall, the call suggests positive sentiment, likely leading to a 2% to 8% stock price increase over the next two weeks.
TrustCo Bank Corp NY (NASDAQ:TRST) Q1 2025 Earnings Call Transcript
Positive4-23
The earnings call reveals strong financial performance with net income up 17.7% YoY, improved return on assets and equity, and a strong capital position. The share repurchase program of 5% of outstanding shares is a positive shareholder return initiative. Despite some uncertainties in economic conditions and regulatory compliance, the bank's management demonstrated confidence in stable markets and loan growth. The Q&A section did not reveal significant negative sentiment, supporting a positive outlook. The anticipated loan growth and stable net interest margin further contribute to a positive sentiment.
TRST Report
Frequently Asked Questions
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
