TrustCo Bank Corp NY Q4 FY2025 earnings call

• Results are from strategic long-term planning and nimble near-term execution, resisting risky lending. - Kept cost of funds low, grew loans, leading to margin expansion. - Deployed capital through dividend payout, stock repurchase program. - Fourth-quarter net income up 38%, return on average assets 0.978%. - Capital remains strong with consolidated equity to assets ratio 10.66%. - Book value per share up 7.1% to $38.08. - Renewed stock repurchase program allowing up to 2,000,000 shares in 2026. - Credit quality consistent with solid underwriting, non-performing loans modestly increased. - Loan growth led by home equity lines of credit, residential real estate, and commercial loans. - Deposits increased due to strong customer confidence in competitive offerings. - Non-interest expense net of ORE expense down $1,500,000 yoy, with ORE expense lower. - Wealth management as significant recurring non-interest income source.

In the fourth quarter of 2025, TrustCo Bank Corp NY saw a 38% increase in net income to $15,600,000. Net interest income was $43,700,000, an increase of $4,800,000 or 12.4% compared to the prior year quarter. Net interest margin was 2.82%, up 22 basis points from the prior year quarter. Average loans grew 2.5% to $5,200,000,000. Total deposits ended the quarter at $5,600,000,000, up $166,000,000 compared to the prior year quarter. Wealth management division had approximately $1,270,000,000 of assets under management as of December 31, with non-interest income attributable to wealth management and financial services fees representing 44% of non-interest income.

• 2026 total recurring non-interest expense, net of ORE expense, expected to be in the range of $27.7 to $28,200,000 per quarter. - Renewed stock repurchase program allows repurchase of up to 2,000,000 shares or 11.1% in 2026.

• Forward-looking statements may differ from actual results due to various risks, uncertainties. - Specific to commercial loans, there was an increase in New York commercial NPLs due to a couple of relationships (multi-families in Schenectady and Albany).

Q: Could you expand on the increase in New York commercial NPLs, specifically if it was one relationship or a couple?

A: It's two relationships, multi-families in the city of Schenectady and the city of Albany.

Q: What's driving the slight uptick in other expenses?

A: At the end of the year, there were benefits plans and funding the TrustCo Foundation for tax purposes, resulting in a few larger expenses in the fourth quarter.

Q: Regarding the guidance for 2026 expenses, is it across the board and any particular driver?

A: It's across the board, just giving a little breathing room for next year, and expected to probably be on the lower end of the range.

Q: What's the outlook for branch declines and Pasco County?

A: Still actively looking in Pasco County as there's a lot of mortgage business there due to market changes, but looking for the right location.