TrustBank NY(TRST) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - TrustCo Bank reported a net income of $15.6 million for Q4 2025, representing a 38% increase compared to Q4 2024, with a return on average assets of 0.97% and return on average equity of 8.99% [6][5] - The consolidated equity to assets ratio was 10.66% for Q4 2025, down from 10.84% in Q4 2024 [6] - Book value per share increased by 7.1% to $38.08 from $35.56 a year earlier [7] - Net interest income for Q4 2025 was $43.7 million, an increase of 12.4% compared to the prior year quarter [10] Business Line Data and Key Metrics Changes - Average loans grew by 2.5%, or $126.8 million, reaching $5.2 billion in Q4 2025 [8][13] - Home equity lines of credit increased by $54.1 million, or 13.5%, while residential real estate portfolio increased by $50.6 million, or 1.2% [8] - Average commercial loans increased by $24.5 million, or 8.6%, while installment loans decreased by $2.4 million, or 17.3% [8] Market Data and Key Metrics Changes - Total deposits reached $5.6 billion, up $166 million compared to the prior year quarter, indicating strong customer confidence [9] - The bank's net interest margin improved to 2.82%, up 22 basis points from the prior year quarter [10] Company Strategy and Development Direction - The company focuses on building solid customer relationships and maintaining low cost of funds through quality loan and deposit products [4] - TrustCo Bank continues to emphasize relationship banking and competitive product offerings to support ongoing loan growth and expansion [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's long-term strength and commitment to returning value to shareholders through a disciplined share repurchase program [7] - The bank is well-positioned to continue delivering strong net interest income performance despite potential Federal Reserve rate changes [10] Other Important Information - Non-performing loans increased to $20.7 million in Q4 2025 from $18.8 million in Q4 2024, with non-performing loans to total loans at 0.39% [8][17] - Total non-interest expense was $26.5 million, down $1.5 million from the prior year quarter [11] Q&A Session Summary Question: Increase in New York commercial NPLs - Management indicated that the increase was due to two relationships in multi-family properties located in Schenectady and Albany [22][23] Question: Other expenses increase - Management explained that the increase was due to year-end benefit plans and a $500,000 funding to the TrustCo Foundation for tax benefits [27] Question: Guidance for 2026 expenses - Management provided guidance for total recurring non-interest expense in the range of $27.7-$28.2 million per quarter, indicating it is across the board without notable drivers [28][29] Question: Branch growth outlook - Management is actively looking for a location in Pasco County, Florida, but emphasized the importance of finding the right site [33]