TRUSTCO BANK CORP N YTRST
TRUSTCO BANK CORP N Y Income Taxes Disclosure
| (8) |
Income Taxes
|
All of the Company’s income tax expense is attributable to domestic operations. Income tax expense from continuing operations was as follows for the years ended:
|
(dollars in thousands)
|
2025
|
2024
|
2023
|
|||||||||
|
|
||||||||||||
|
Current expense
|
||||||||||||
|
Federal
|
$
|
14,197 |
$
|
12,300 |
$
|
15,224 |
||||||
|
State
|
1,346 |
927 |
1,587 |
|||||||||
|
Total current expense
|
15,543 |
13,227 |
16,811 |
|||||||||
|
|
||||||||||||
|
Deferred expense
|
||||||||||||
|
Federal
|
3,412 |
1,598 |
1,700 |
|||||||||
|
State
|
722 |
388 |
456 |
|||||||||
|
Total deferred expense
|
4,134 |
1,986 |
2,156 |
|||||||||
|
|
||||||||||||
|
Total
|
$
|
19,677 |
$
|
15,213 |
$
|
18,967 |
||||||
The effective tax rates differ from the statutory federal income tax rate. The reasons for these differences are as follows:
|
|
2025
|
2024
|
2023
|
|||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Federal income tax at statutory rate
|
$
|
16,971 |
21.0 |
%
|
$
|
13,450 |
21.0 |
%
|
$
|
16,299 |
21.0 |
%
|
||||||||||||
|
Effect of:
|
||||||||||||||||||||||||
|
State income taxes, net of federal benefit*
|
1,634 |
2.0 |
%
|
1,039 |
1.6 |
%
|
1,614 |
2.1 |
%
|
|||||||||||||||
|
Nontaxable or nondeductible items **
|
||||||||||||||||||||||||
|
Nondeductible compensation
|
993 |
1.2 |
%
|
701 |
1.1 |
%
|
1,013 |
1.3 |
%
|
|||||||||||||||
|
Other
|
79 |
0.1 |
%
|
23 |
0.1 |
%
|
41 |
0.0 |
%
|
|||||||||||||||
|
|
||||||||||||||||||||||||
|
Provision for income taxes
|
$
|
19,677 |
24.3 |
%
|
$
|
15,213 |
23.8 |
%
|
$
|
18,967 |
24.4 |
%
|
||||||||||||
* State taxes in made up the majority (greater than 50%) of the tax effect of this category.
** The ‘nontaxable or nondeductible items’ category includes items such as non-taxable interest income, non-deductible meals and entertainment, and other non-deductible expenses. None of those items individually or in the aggregate exceeded the 5% quantitative threshold for separate disaggregation.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024, are as follows:
|
(dollars in thousands)
|
2025
|
2024
|
||||||
|
|
||||||||
|
Deferred tax assets:
|
||||||||
|
Allowance for credit losses on loans
|
$
|
13,810 |
$
|
13,271 |
||||
|
OCI net unrealized losses on securities available for sale
|
4,221 |
7,610 |
||||||
|
Lease Liability
|
9,627 |
10,606 |
||||||
|
Other
|
5,583 |
6,750 |
||||||
|
Total deferred tax assets
|
$
|
33,241 |
$
|
38,237 |
||||
|
|
||||||||
|
Deferred tax liabilities:
|
||||||||
|
Prepaid pension
|
$
|
(9,295 |
)
|
$
|
(8,429 |
)
|
||
|
Prepaid post-retirement
|
(6,358 |
)
|
(5,724 |
)
|
||||
|
OCI pension and post retirement benefit
|
(7,744 |
)
|
(6,260 |
)
|
||||
|
Right of use asset
|
(8,899 |
)
|
(9,673 |
)
|
||||
|
Deferred loan fees
|
(4,671 |
)
|
(3,485 |
)
|
||||
|
Depreciation
|
(3,152 |
)
|
(2,432 |
)
|
||||
|
REIT deferral
|
(2,592 |
)
|
(2,684 |
)
|
||||
|
Other
|
(353 |
)
|
(366 |
)
|
||||
|
Total deferred tax liabilities
|
$
|
(43,064 |
)
|
$
|
(39,053 |
)
|
||
|
|
||||||||
|
Net deferred tax liability
|
$
|
(9,823 |
)
|
$
|
(816 |
)
|
||
Management assesses all available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Based on our evaluation, as of December 31, 2025, management has determined that no valuation allowance is necessary because it is more likely than not that these assets will be realized through future reversals of existing temporary differences and future taxable income.
Income taxes paid, net of refunds, were as follows:
|
|
2025
|
2024
|
2023
|
|||||||||
|
(dollars in thousands)
|
||||||||||||
|
|
||||||||||||
|
Federal
|
$
|
17,600 |
$
|
7,800 |
$
|
17,000 |
||||||
|
State and local:
|
||||||||||||
|
Florida
|
1,250 |
550 |
1,275 |
|||||||||
|
New York
|
104 |
777 |
651 |
|||||||||
|
Other
|
124 |
25 |
138 |
|||||||||
|
|
||||||||||||
|
Total
|
$
|
19,078 |
$
|
9,152 |
$
|
19,064 |
||||||
On a periodic basis, the Company evaluates its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This evaluation takes into consideration the status of taxing authorities’ current examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment in relation to uncertain tax positions. As of December 31, 2025 and 2024, no uncertain tax positions have been recorded.
The Company recognizes interest and/or penalties related to income tax matters in noninterest expense. For the years 2025, 2024, and 2023, these amounts were not material. The Company and its subsidiaries file
income tax returns in the U.S. federal jurisdiction as well as in various states. In the normal course of business, the Company is subject to U.S. federal, state, and local income tax examinations by tax authorities. The Company’s federal
and state income tax returns for the years 2021 through 2025 remain open to examination.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 11, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 3, 2017 | |
| 2015 | Mar 4, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.