TrustBank NY(TRST) - 2025 Q1 - Quarterly Report

Financial Performance - TrustCo recorded net income of $14.3 million, or $0.75 of diluted earnings per share, for Q1 2025, compared to $12.1 million, or $0.64 per share, in Q1 2024, representing a 18.2% increase in net income [134]. - The return on average assets improved to 0.93% in Q1 2025 from 0.80% in Q1 2024, while return on average equity increased to 8.49% from 7.54% [134]. - Net interest income rose by $3.8 million to $40.4 million in Q1 2025, with the net interest margin up 20 basis points to 2.64% [165]. - Total noninterest income for the first quarter of 2025 was $5.0 million, an increase from $4.8 million in the same period of 2024, driven by a $304 thousand increase in Trustco financial services income [188]. - Total noninterest expenses for the first quarter of 2025 were $26.3 million, a 5.7% increase from $24.9 million in the first quarter of 2024 [190]. - TrustCo declared a dividend of $0.36 per share in the first quarter of 2025, resulting in a dividend payout ratio of 47.97% based on first quarter 2025 earnings of $14.3 million [193]. Asset and Liability Management - Total average interest earning assets rose from $5.99 billion in Q1 2024 to $6.11 billion in Q1 2025, with an average yield of 4.13% [146]. - The average loan portfolio grew by $104.7 million to $5.11 billion, with the average yield on loans increasing by 21 basis points to 4.19% [148]. - The average balance of interest bearing liabilities increased by $57.7 million, while the average rate paid decreased by 7 basis points to 1.92% [147]. - Total average interest-bearing deposits increased by $67.8 million to $4.65 billion in Q1 2025, with the average rate paid decreasing from 2.02% to 1.94% [161]. - The average balance of Federal Funds sold and other short-term investments increased by $116.0 million to $613.6 million in Q1 2025, but the yield decreased to 4.45% [158]. - TrustCo's total liabilities and shareholders' equity reached $6.3 billion in Q1 2025, up from $6.1 billion in Q1 2024, reflecting a growth of approximately 2.0% [205]. Loan and Credit Quality - Nonperforming loans totaled $18.8 million as of March 31, 2025, with a significant portion being residential real estate loans [167]. - The provision for credit losses recorded in Q1 2025 was $300 thousand, driven by loan growth and an increase in unfunded loan commitments [178]. - As of March 31, 2025, the allowance for credit losses on loans was $50.6 million, up from $50.2 million as of December 31, 2024, representing 0.99% of the loan portfolio [180]. - Net recoveries for the three-month period ended March 31, 2025, were $258 thousand, compared to $42 thousand for the prior year period [181]. - The allowance for credit losses on loans was $50.5 million in Q1 2025, slightly up from $48.8 million in Q1 2024, reflecting a cautious approach to credit risk management [205]. Market and Economic Conditions - Economic uncertainty persists with a modest increase in unemployment to 4.2%, and economists are evaluating the possibility of a recession in the second half of 2025 [131]. - The Federal Funds rate remained flat at a range of 5.25% to 5.50% as of March 31, 2025 [139]. Capital and Shareholder Information - As of March 31, 2025, total shareholders' equity was $687.8 million, compared to $676.3 million as of December 31, 2024 [193]. - The capital ratios as of March 31, 2025, included a Tier 1 leverage ratio of 10.533%, a common equity tier 1 capital ratio of 18.660%, and a total risk-based capital ratio of 19.913% [195]. - TrustCo's consolidated equity to total assets ratio was 10.85% as of March 31, 2025, compared to 10.84% at December 31, 2024 [195]. - The Company announced a share repurchase program of up to 1,000,000 shares, approximately 5% of its currently outstanding common stock [199]. Investment and Securities - The average balance of securities available for sale decreased to $369.9 million in Q1 2025 from $477.4 million in Q1 2024, while the average yield increased to 2.62% [153]. - Total securities available for sale decreased to $369.9 million in Q1 2025 from $477.4 million in Q1 2024, a decline of 22.5% [205]. - TrustCo does not engage in derivatives, focusing instead on traditional investment strategies to manage interest rate risk [207].