TrustCo Bank Corp NY (NASDAQ:TRST) executives highlighted higher profitability, margin expansion, and continued loan and deposit growth during the company’s fourth-quarter 2025 earnings call, while reiterating a conservative approach to underwriting and balance sheet management.
Profitability rose on higher net interest income and a wider margin
Chief Financial Officer Mike Ozimek said TrustCo posted fourth-quarter 2025 net income of $15.6 million, a 38% increase from the prior-year quarter. The company reported a return on average assets of 0.97% and return on average equity of 8.99% for the quarter.
The yield on interest-earning assets increased to 4.24%, up 12 basis points from the prior-year quarter, while the cost of interest-earning liabilities declined to 1.84% from 1.97%. Ozimek said the bank is “well-positioned” to continue delivering net interest income even as the Federal Reserve considers rate changes.
Loan growth led by home equity and residential mortgages
Average loans in the fourth quarter of 2025 increased 2.5%, or $126.8 million, to $5.2 billion, which management described as an all-time high. Growth was concentrated in residential-related categories:
- Home equity lines of credit: up $54.1 million, or 13.5% year over year
- Residential real estate: up $50.6 million, or 1.2%
- Commercial loans: up $24.5 million, or 8.6%
- Installment loans: down $2.4 million, or 17.3%
Chief Banking Officer Kevin Curley added that actual loans increased $60.7 million from the third quarter, led by a $42.4 million increase in purchase mortgage loans (including refinances) and a $17 million increase in home equity loans. Curley said residential activity improved during the quarter and that TrustCo, as a portfolio lender, is able to manage pricing and offer promotions to increase lending value.
Curley also discussed demand for home equity products, which he said remained consistent as customers used home equity for home improvements or to pay off higher-rate debt such as credit cards. He noted that rates in the bank’s markets have been moving within an approximately 25-basis-point range and cited a 5.875% base rate for a 30-year fixed-rate loan, along with a 5/1 ARM and competitive home equity credit line products.
Deposits increased; wealth management remained a meaningful fee contributor
Ozimek said total deposits ended the quarter at $5.6 billion, up $166 million from a year earlier. Management characterized deposit retention as a key focus throughout 2025 and said the year-over-year increase reflected customer confidence in TrustCo’s deposit offerings. The bank also pointed to relationship banking, competitive products, and digital capabilities as supporting a stable deposit base that can fund loan growth.
On non-interest income, Ozimek said the wealth management division remained a “significant recurring source” of fees. TrustCo reported approximately $1.27 billion of assets under management as of Dec. 31, with wealth management and financial services fees representing 44% of non-interest income. Ozimek said most of that fee income is recurring and supported by long-term advisory relationships and a growing base of managed assets.
Credit quality stayed strong, with modest increases in non-performing loans
Management emphasized conservative underwriting and stable credit performance. Ozimek said non-performing loans increased modestly to $20.7 million in the fourth quarter of 2025 from $18.8 million a year earlier. Non-performing loans to total loans rose to 0.39% from 0.37%, while non-performing assets to total assets remained 0.34% in both periods.
Curley described the company as a portfolio lender that originates residential loans in-house with the intent to hold them for the full term, adding that TrustCo has no foreign or subprime residential loans. He said the commercial loan portfolio is about 6% of total loans and is focused on relationship-based lending secured mostly by real estate in primary markets, with avoidance of concentration risk and a requirement for personal guarantees.
Curley reported net charge-offs for the quarter amounted to a net recovery of $14,000, following net recoveries in prior periods. He also said non-performing assets were $22.1 million at quarter end, compared with $19.7 million last quarter and $21 million a year ago. The allowance for credit losses was $52.2 million with a 253% coverage ratio, compared with $51.9 million and a 281% coverage ratio in the third quarter and $50.2 million with a 267% coverage ratio a year earlier.
During the Q&A session, management said an increase in New York commercial non-performing loans was tied to two relationships involving multi-family properties—one in Schenectady and one in Albany—and reiterated that the bank requires personal guarantees on its loans.
Capital return, expenses, and branch outlook
Chairman, President, and CEO Robert McCormick said the quarter’s results reflected a long-term strategy focused on relationship banking and avoiding “risky lending concentrations” and reliance on wholesale borrowing. He also pointed to the company’s dividend, share repurchases, and practice of lending deposits back into its communities.
Ozimek said capital levels remained strong, with a consolidated equity-to-assets ratio of 10.66% versus 10.84% a year earlier. Book value per share was $38.08 at Dec. 31, 2025, up 7.1% from $35.56 a year earlier.
TrustCo repurchased 533,000 shares in the fourth quarter and 1 million shares year to date, representing 5.3% of common stock—the maximum under the prior program. Ozimek said the company renewed its repurchase authorization to allow up to 2 million additional shares, or 11.1%, during 2026.
Non-interest expense (net of other real estate, or ORE, expense) was $26.5 million, down $1.5 million from the prior-year quarter. ORE expense net was $161,000 versus $476,000 a year earlier, and management said it expects to keep ORE expense at no more than $250,000 per quarter. Looking to 2026, Ozimek guided to recurring non-interest expense (net of ORE) of $27.7 million to $28.2 million per quarter, while noting the range provides “breathing room.” During Q&A, he also mentioned a roughly $500,000 funding to the TrustCo Foundation in the fourth quarter for tax purposes.
On branches, McCormick said the bank remains interested in establishing a presence in Pasco County, Florida, but is focused on finding the “right price” and “doing it the right way,” citing difficulty locating a suitable site.
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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