5 Sarnowski Drive, Glenville, New York, 12302

News Release

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Subsidiary:        Trustco Bank

Nasdaq -- TRST

Executive Vice President

(518) 381-3693

Lauren A. McCormick

Vice President, Treasurer, and

Assistant Corporate Secretary

(518) 381-3673

FOR IMMEDIATE RELEASE:

TrustCo Reports First Quarter 2026 Net Income of $16.3 Million;

Notes Loan Portfolio Repricing

Executive Snapshot:

Glenville, New York – April 21, 2026

TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced strong financial results for the first quarter of 2026 highlighted by a substantial increase in net interest income, continued margin expansion, and sustained loan and deposit growth across core lending and deposit categories.  For the three months ended March 31, 2026, net interest income increased 10.7% year over year to $44.7 million, supported by the ongoing asset repricing across our loan portfolio at higher yields and effective execution of deposit pricing strategies, which together more than offset competitive pressures on deposit pricing.  For the three months ended March 31, 2026, net interest margin expanded to 2.84% from 2.64% in the prior year period, driven by enhanced asset yields and disciplined deposit pricing strategies.  This resulted in first quarter 2026 net income of $16.3 million, or $0.91 diluted earnings per share, compared to net income of $14.3 million, or $0.75 diluted earnings per share, for the first quarter 2025.  Loan balances expanded throughout the quarter, with total average loans increasing $158.9 million for the first quarter 2026 over the same period in 2025.  Following this period of sustained growth, TrustCo remains confident in the quality of its loan portfolio amid broader market concerns.  We believe that our continued focus on solid underwriting within our loan portfolio and conservative lending standards positions us to manage credit risk effectively in the current environment.

Overview

Chairman, President, and CEO, Robert J. McCormick said “Our shareholders can be proud of the net income of $16.3 million we posted for the quarter, a 14% increase year-over-year.  As expected, this performance is due in significant part to repricing in our loan portfolio, which now exceeds $5.29 billion.  Our trademark discipline with respect to deposit pricing resulted in a 4% year-over-year improvement in interest expense.  Together, these successes contributed to margin expansion of 7.6% over the year.  Nonperforming loans remain immaterial as we continue to prioritize high-quality credit and maintain a clean asset profile, while reaching another all-time high in our loan portfolio.  Over the latest one-year period, our share price is up $13 and while we realize that market valuation is always a moving target, delivering a 49% total return with dividends reinvested represents substantial value creation for our owners and is a testament to the effectiveness our team’s strategy.”

Details

We have continued to see meaningful net interest income improvement, and management expects net interest income improvement to remain sustainable.  The Bank’s loan and investment portfolios continue to reprice upward as lower yielding assets mature and are replaced with higher rate loan originations and investment purchases, driving steady improvement in overall asset yields.  We believe that this ongoing repricing reflects disciplined loan production aligned with current market conditions. Complementing this, the Bank maintains a strong liquidity position, providing flexibility to support future growth as funding conditions continue to evolve.  We believe that, together, these factors position the Bank to continue net interest income growth in the coming quarters and deliver long-term value to shareholders.  Net interest income was $44.7 million for the first quarter of 2026, an increase of $4.3 million, or 10.7%, compared to the first quarter of 2025, driven by loan growth at higher interest rates, and a decrease in interest expense.  The net interest margin for the first quarter of 2026 was 2.84%, up 20 basis points from 2.64% in the first quarter of 2025.  The yield on interest earnings assets increased to 4.23% in the first quarter of 2026, up 10 basis points from 4.13% in the first quarter of 2025.  The cost of interest bearing liabilities decreased to 1.79% in the first quarter of 2026, down from 1.92% in the first quarter of 2025.

Average loans were up $158.9 million, or 3.1%, in the first quarter of 2026 over the same period in 2025.  Average residential loans and Home Equity Credit Lines (HECLs), our primary lending focus, were up $93.2 million, or 2.1%, and $50.8 million, or 12.3%, respectively, in the first quarter 2026 over the same period in 2025.  Average commercial loans also increased $17.1 million, or 5.8%, in the first quarter 2026 over the same period in 2025.  Loan growth in the first quarter of 2026 remained steady, driven by continued strength in core relationship lending.  Credit quality metrics were stable, while the Bank increased reserves modestly to reflect a more cautious economic outlook.  Interest rates and selective underwriting standards contributed to the measured pace of originations during the quarter. The consistent growth in the loan portfolio will likely enhance net interest income in the quarters ahead.  Average deposits were up $157.7 million, or 2.9%, for the first quarter of 2026 compared to the first quarter of 2025, primarily as a result of an increase in time deposits, interest bearing checking accounts, and demand deposits. The Bank’s ongoing emphasis on relationship banking, combined with competitive product offerings and digital capabilities, has contributed to a broadening deposit base that supports ongoing loan growth and expansion.

During the first quarter of 2026, the Bank remained focused on capital deployment and allocation, guided by a disciplined framework, with share repurchases continuing to serve as a key tool to enhance shareholder value.  This reflects our confidence in the long-term strength of the franchise and our focus on capital optimization. For the three months ended March 31, 2026, TrustCo repurchased 522 thousand shares, or 2.9%, of TrustCo’s outstanding common stock under its previously announced stock repurchase program that allows the Company to repurchase up to two million shares, or 11.1%, of TrustCo common stock in 2026.  We continue to believe that our approach ensures every dollar of capital is working to generate solid returns, strengthen customer relationships, and enhance shareholder value.  As of March 31, 2026, our equity to asset ratio was 10.31%, compared to 10.85% as of March 31, 2025.  Book value per share as of March 31, 2026 was $38.32, up 6.0% compared to $36.16 as of a year earlier.

Asset quality remains strong and has been consistent over the past twelve months.  TrustCo recorded a provision for credit losses of $950 thousand in the first quarter of 2026, an increase of $650 thousand compared to the same period in 2025.  For the three months ended March 31, 2026, the provision for credit losses was the result of a provision for credit losses on loans of $750 thousand and a provision for credit losses on unfunded commitments of $200 thousand.  The ratio of allowance for credit losses on loans to total loans was 1.00% and 0.99% as of March 31, 2026 and 2025, respectively.  The allowance for credit losses on loans was $53.0 million as of March 31, 2026, compared to $50.6 million as of March 31, 2025.  Nonperforming loans (NPLs) were $21.5 million as of March 31, 2026, compared to $18.8 million as of March 31, 2025.  NPLs were 0.41% and 0.37% of total loans as of March 31, 2026 and 2025, respectively.  The coverage ratio, or allowance for credit losses on loans to NPLs, was 246.9% as of March 31, 2026, compared to 269.8% as of March 31, 2025.  Nonperforming assets (NPAs) were $22.8 million as of March 31, 2026, compared to $20.9 million as of March 31, 2025.  While NPLs increased modestly during the quarter, asset quality metrics remain stable and well covered by reserves, reflecting the Bank’s conservative underwriting standards.

 

A conference call to discuss first quarter 2026 results will be held at 9:00 a.m. Eastern Time on April 22, 2026.  Those wishing to participate in the call may dial toll-free for the United States and Canada at 1-888-672-2415, Conference ID 4207347.  A replay of the call will be available for thirty days by dialing toll-free for the United States and Canada at 1-800-770-2030, Playback ID 4207347.  The call will also be audio webcast at https://events.q4inc.com/attendee/269280990, and will be available for one year.

 

About TrustCo Bank Corp NY

TrustCo Bank Corp NY is a $6.5 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 133 offices in New York, New Jersey, Vermont, Massachusetts, and Florida as of March 31, 2026.

In addition, the Bank’s Wealth Management Department offers a full range of investment services, retirement planning and trust and estate administration services.  The common shares of TrustCo are traded on the NASDAQ Global Select Market under the symbol TRST.

Forward-Looking Statements

All statements in this news release and the related earnings call that are not historical are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future development, results or periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our future performance, including our expectations regarding net interest income and shareholder value for future quarters; the impact of the continued repricing of our loan and investment portfolios, as well as our liquidity position, on our future net interest income and overall asset yields; the amount of shares that we expect to repurchase in 2026; and the anticipated effects of our capital management strategy, including our stock repurchase program.  Forward-looking statements are based on management’s current expectations, as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Such forward-looking statements are subject to factors and uncertainties that could cause actual results to differ materially for TrustCo from the views, beliefs and projections expressed in such statements.  TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement:  future changes in interest rates; external economic factors, such as changes in monetary policy, ongoing inflationary pressures and continued elevated prices; exposure to credit risk in our lending activities; the risk of weakness in residential real estate markets; our increasing commercial loan portfolio; the sufficiency of our allowance for credit losses on loans to cover actual loan losses; our ability to meet the cash flow requirements of our depositors or borrowers or meet our operating cash needs to fund corporate expansion and other activities; claims and litigation pertaining to fiduciary responsibility and lender liability; the enforcement of federal cannabis laws and regulations and its impact on our ability to provide services in the cannabis industry; our dependency upon the services of the management team; our disclosure controls and procedures’ ability to prevent or detect errors or acts of fraud; the adequacy of our business continuity and disaster recovery plans; the effectiveness of our risk management framework; the impact of any expansion by us into new lines of business or new products and services; the rising popularity of alternative financial products, including fintech platforms, cryptocurrencies, money market funds, and digital wallets; an increase in the prevalence of fraud and other financial crimes; the impact of severe weather events and climate change on us and the communities we serve, including societal responses to climate change; environmental, social and governance risks and their impact on our reputation and relationships; the chance of a prolonged economic downturn, especially one affecting our geographic market area; instability in global economic conditions and geopolitical matters, including as a result of the conflict between the United States (U.S.) and Iran, as well as volatility in financial markets; the chance of a downgrade in the credit rating of the U.S. government or a default by the U.S. government; the soundness of other financial institutions; U.S. government shutdowns; fluctuations in the trust wealth management fees we receive as a result of investment performance; the impact of regulatory capital rules on our growth; changes in laws and regulations, including changes in cybersecurity or privacy regulations; our compliance with laws designed to protect consumers, including the CRA and fair lending laws; restrictions on data collection and use; our compliance with the USA PATRIOT Act, Bank Secrecy Act, and other laws and regulations that could result in material fines or sanctions; changes in tax laws; limitations on our ability to pay dividends; TrustCo Realty Corp.’s ability to qualify as a real estate investment trust; changes in accounting standards; competition within our market areas; consumers and businesses’ use of non-banks to complete financial transactions; our reliance on third-party service providers; the impact of data breaches and cyber-attacks; the development and use of artificial intelligence; the impact of a failure in or breach of our operational or security systems or infrastructure, or those of third parties; the impact of an unauthorized disclosure of sensitive or confidential client or customer information; the impact of interruptions in the effective operation of our computer systems; the impact of anti-takeover provisions in our organizational documents; the impact of the manner in which we allocate capital; the impact of the actions of activist shareholders; and other risks and uncertainties set forth in our public filings made with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2025, as well as our upcoming quarterly report on Form 10-Q for the first quarter of 2026, and future reports to be filed with the SEC. The forward-looking statements contained in this news release represent TrustCo management’s judgment as of the date of this news release. TrustCo disclaims, however, any intent or obligation to update forward-looking statements, either as a result of future developments, new information or otherwise, except as may be required by law.

(1)  Non-GAAP Financial Measure, see Non-GAAP Financial Measures Reconciliation.

(2)  Calculated as allowance for credit losses on loans divided by total nonperforming loans.

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

* Includes New York, New Jersey, Vermont and Massachusetts.

(1)  At period-end

(2)  For the three-month period ended

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY -

INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands)