TrustCo Bank Corp NY (NASDAQ:TRST) executives said the company delivered stronger second-quarter 2026 earnings, supported by higher net interest income, continued loan and deposit growth and ongoing share repurchases.
Chairman, President and CEO Robert J. McCormick described the quarter as another period in which the bank’s business model benefited from a favorable market environment. He said TrustCo’s loan and investment portfolios continued to reprice as lower-yielding assets matured and were replaced by higher-yielding loans and investments, while growth in lower-cost deposits helped support the balance sheet.
Net income rises as margin improves
Chief Financial Officer Michael Ozimek said TrustCo generated second-quarter net income of $17 million, up 12.8% from the prior-year quarter. Return on average assets was 1.04%, while return on average equity was 10.22%.
Net interest income totaled $45.6 million, an increase of $3.8 million, or 9.2%, from the second quarter of 2025. The net interest margin was 2.87%, up 16 basis points from the prior quarter. The yield on interest-earning assets rose to 4.27%, up 8 basis points from the prior quarter, while the cost of interest-bearing liabilities declined to 1.79% from 1.91% a year earlier.
Ozimek said the bank remains well positioned to deliver strong net interest income even as the Federal Reserve considers rate changes. He said TrustCo continues to focus on competitive deposit offerings while maintaining financial stability and supporting community banking needs.
Total deposits ended the quarter at $5.7 billion, up $191 million from the same period a year earlier. Ozimek said the increase reflected customer confidence in the bank’s deposit offerings, along with its emphasis on relationship banking, digital capabilities and a stable funding base.
Loan growth reaches another high
Average loans rose 3.8%, or $197.5 million, to $5.3 billion from the second quarter of 2025, which Ozimek called another all-time high. Chief Banking Officer Kevin Curley said loan growth was concentrated in residential lending, with first mortgages increasing $142 million, or 3.2%, and home equity loans rising $44.8 million, or 10.4%, from a year earlier. Commercial loans increased $13.4 million, or 4.4%.
On a linked-quarter basis, actual loans increased $87.1 million from the first quarter. Purchase mortgage loans, including refinances, grew $62.8 million, home equity loans increased $19.3 million and commercial loans rose $5.7 million.
Curley said mortgage rates were lower at the beginning of the quarter, then increased slightly and recently leveled off in a range of 6.25% to 6.5%. Purchase loan volume remained steady during the quarter, while refinance activity was strongest earlier in the period before moderating as rates moved higher. Home equity demand remained consistent across TrustCo’s markets.
Curley said the bank continues to offer competitive 30-year fixed-rate mortgage products, adjustable-rate mortgage options and home equity products that provide customers with lower-cost alternatives to personal loans and credit cards.
Credit quality remains stable
TrustCo executives said asset quality remained strong. Non-performing loans were $21.8 million at quarter-end, compared with $21.5 million in the prior quarter and $17.9 million a year earlier. Non-performing loans represented 0.40% of total loans, compared with 0.41% in the prior quarter and 0.35% a year ago.
Non-performing assets totaled $23 million at quarter-end, versus $22.8 million in the first quarter and $19 million a year earlier. The allowance for credit losses stood at $54.1 million, with a coverage ratio of 249%. That compared with $53 million and a 240% coverage ratio at the end of the first quarter, and $51.3 million and a 286% coverage ratio a year earlier.
Curley said early-stage delinquencies remained within normal ranges. Charge-offs for the quarter amounted to a net recovery of $88,000, following a net recovery of $39,000 in the first quarter. He said the bank has recorded six straight quarters of net recoveries.
The provision for credit losses was $650,000 in the second quarter. The allowance for loan losses to total loans was 1.01% as of June 2026, compared with 0.99% in June 2025.
Buybacks and expenses draw attention
Capital levels remained strong, with a consolidated equity-to-assets ratio of 10.5% for the second quarter of 2026, compared with 10.91% a year earlier. Book value per share was $38.53 as of June 30, 2026, up 4.8% from $36.75 a year earlier.
McCormick said TrustCo continues to execute its capital deployment strategy, primarily through share repurchases. He said the buyback program began in 2020 and has resulted in the reacquisition of more than 2.3 million shares. If the current phase is completed, he said the company will have repurchased nearly 16% of its outstanding shares during 2025 and 2026.
Ozimek said TrustCo has repurchased 10.5% of its outstanding common stock under the 2025 and 2026 programs, including more than 1 million shares in 2026 after buying 1 million shares in 2025.
Non-interest expense, net of other real estate expense, was $28.2 million, up $1.3 million from the prior quarter. Ozimek attributed the increase mainly to higher employee benefit costs and professional fees, including consulting, legal and accounting fees. He said those categories are expected to return to normalized levels next quarter.
During the question-and-answer portion of the call, Ian Lapey of Gabelli Funds asked about the expense increase and updated guidance. Ozimek said about half of the salary and benefits increase reflected salary increases that will recur, while part of the increase related to incentive compensation programs tied to the company’s stock price. TrustCo now expects recurring non-interest expense, net of other real estate expense, to run between $27.3 million and $27.8 million per quarter in 2026.
TrustCo’s wealth management division had approximately $1.39 billion in assets under management as of June 30, 2026. Ozimek said most of the related fee income is recurring. The company also recorded an $844,000 gain after marking its Visa Class C common stock to fair value based on its conversion privilege.
McCormick also noted that TrustCo has moved into a repurposed building in Longwood, Florida, serving as a new regional headquarters for its operations in the state. He called Florida a key part of the bank’s success and said the new location enhances the company’s visibility there.
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.
