TrustCo Bank Corp NY

TrustCo reported second-quarter 2026 net income of $17 million, up 12.8% from the prior-year quarter. Return on average assets was 1.04% and return on average equity was 10.22%. Net interest income was $45.6 million, up $3.8 million, or 9.2%, year over year, and net interest margin was 2.87%, up 16 basis points sequentially. Book value per share was $38.53, up 4.8% from $36.75 a year ago. Average loans were $5.3 billion, up $197.5 million, or 3.8%, year over year, and deposits ended at $5.7 billion, up $191 million year over year. Non-performing loans were $21.8 million, up from $17.9 million a year ago, and the provision for credit losses was $650,000. Non-interest expense, net of ORE expense, was $28.2 million, up $1.3 million from the prior quarter. Management said Q2 expense pressure was driven by salary/benefits and professional fees, but expects recurring non-interest expense, net of ORE expense, to run at $27.3 million-$27.8 million per quarter for 2026.

Rob McCormick framed the quarter as another example of TrustCo’s “well-oiled” model working in a favorable rate environment: lower-yielding assets rolled off, new loans and better-yielding investments repriced higher, and lower-cost deposits funded growth. He emphasized that this was achieved without sacrificing credit quality and highlighted continued share repurchases as proof of a commitment to sustainable shareholder value. He also pointed to the new regional headquarters in Florida as a sign of confidence in that market and the bank’s growth prospects there.

Mike Ozimek said the second quarter showed strong growth across net income, net interest income, loans, and deposits, with net income of $17 million, NII of $45.6 million, and NIM of 2.87%. He noted capital remained strong, with a consolidated equity-to-assets ratio of 10.5% and book value per share of $38.53, and said the company had repurchased 10.5% of outstanding common stock under the 2025 and 2026 programs. On expenses, he explained the $28.2 million of non-interest expense was lifted by salary/benefits and professional fees, with some of the salary increase recurring and some tied to stock-based incentive revaluation, while 2026 recurring non-interest expense is expected at $27.3 million-$27.8 million per quarter.

The main analyst focus was expenses and interest-rate sensitivity. On expenses, management said roughly half of the quarter’s increase in salary/benefits was recurring wage pressure and roughly half was incentive-compensation revaluation tied to the stock price; professional fees were described as non-recurring consulting, legal, and accounting costs. On rate positioning, management said it is lengthening CDs somewhat, pushing loan growth in mortgages and home equity, and keeping investment maturities relatively short to help manage the impact of potential higher short-term rates.