TrustCo Bank Corp NY Q2 FY2025 earnings call

• The strategy over the past several years was to amass capital for lending when interest rate environment is favorable.
• Second quarter net income was $15 million, up 19.8% over prior year quarter; return on average assets was 0.96% and on average equity was 8.73%.
• Capital remains strong with consolidated equity to assets ratio 10.91% in Q2 2025. Book value per share at June 30, 2025 was $36.75, up 6.6% from a year earlier.
• Repurchased 169,000 shares of common stock under stock repurchase program.
• Average loans grew 2.3% to $5.1 billion in Q2 2025; home equity lines of credit portfolio increased $64.7 million or 17.8%, residential real estate portfolio increased $27.9 million, average commercial loans increased $25.8 million or 9.2%.
• Provision for credit losses was $650,000 in Q2 2025. Total deposits ended the quarter at $5.5 billion, up $213 million from prior year quarter.
• Wealth management division added approximately $1.2 billion of assets under management as of June 30, 2025; noninterest income from wealth management increased 13%.
• Total noninterest expense net of ORE expense was $25.7 million, down $600,000 from prior year quarter; ORE expense net was $522,000 for the quarter.

For the second quarter of 2025, net income was $15 million, an increase of 19.8% over the prior year quarter. Net interest income was $41.7 million for the second quarter, an increase of $4 million or 10.5% compared to the prior year quarter. The net interest margin for the second quarter was 2.71%, up 18 basis points from the prior year quarter. Average loans for the second quarter grew 2.3% or $115.6 million to $5.1 billion from the second quarter of 2024, an all-time high. Home equity lines of credit portfolio increased by $64.7 million or 17.8% in the second quarter of 2025 over the same period in 2024. Total deposits ended the quarter at $5.5 billion and was up $213 million compared to the prior year quarter. Noninterest income attributable to wealth management and financial services fees increased 13% to $1.8 million, representing 37.5% of noninterest income.

• The first half of 2025 established positive momentum that may extend into 2026.
• Committed to returning value to shareholders through a disciplined share repurchase program, reflecting confidence in the long-term strength of the franchise and focus on capital optimization.
• Will continue to maintain competitive deposit offerings while ensuring financial stability and support for communities' banking needs.

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

A: It's across the markets, yes. The better of the 2 categories has been Florida, but we've had very strong demand locally as well.

Q: In terms of the CDs that will be maturing in the next quarter, what is the rate for maturing CDs as opposed to the ones you're currently issuing?

A: What's coming due is about the average rate is 3.91%. The highest is 4%, but that's for 3 months. And as we go forward, in future quarters and what's coming due in Q4, in 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.

Q: In terms of the strong commercial loan growth, what types of borrowers are you lending? And what's the rough mix between secured and unsecured?

A: The vast majority, 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.