TRST TrustCo Bank Corporation of NY

New York	0-10592	14-1630287
State or Other Jurisdiction of Incorporation or Organization	Commission File No.	I.R.S. Employer Identification Number

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

	Title of each class		Trading Symbol(s)		Name of each exchange on which registered
	Common Stock, $1.00 par value		TRST		Nasdaq Global Select Market

Item 2.02.

Results of Operations and Financial Condition

Item 9.01.

Financial Statements and Exhibits

(d)

Exhibits

Reg S-K Exhibit No.	Description
99(a)	Press release dated July 22, 2024 for the period ending June 30, 2024, regarding quarterly results.
104	Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document.

Dated: July 22, 2024
	TrustCo Bank Corp NY
	(Registrant)
	By:	/s/ Michael M. Ozimek
		Michael M. Ozimek
		Executive Vice President and
		Chief Financial Officer

5 Sarnowski Drive, Glenville, New York, 12302

FOR IMMEDIATE RELEASE:

TRUSTCO DELIVERS ONCE AGAIN WITH SECOND QUARTER RESULTS

NET INTEREST MARGIN UP 3.7% ON LOAN GROWTH OF 3.8%

Executive Snapshot:

•	Average Loan portfolio continues to grow:

o	On average, total loans were up $182.2 million or 3.8% for the second quarter 2024 compared to the second quarter 2023

•	Continued solid financial results:

o	Key metrics for second quarter 2024:

◾	Net income of $12.6 million versus $12.1 million for the first quarter 2024

◾	Net interest income of $37.8 million, up from $36.6 million compared to the first quarter of 2024

◾	Return on average assets (ROAA) of 0.82% compared to 0.80% to the first quarter of 2024

◾	Return on average equity (ROAE) of 7.76% versus 7.54% for the first quarter 2024

◾	Book value per share as of June 30, 2024 was $34.46, up from $34.12 compared to March 31, 2024

•	Superior asset quality:

o	Nonperforming loans (NPLs) were $19.2 million as of June 30, 2024, down from $19.4 million as of June 30, 2023, and generally continue to remain at low levels

o	NPLs to total loans were 0.38% as of June 30, 2024 compared to 0.40% as of June 30, 2023

o	Nonperforming assets (NPAs) to total assets was 0.35% as of June 30, 2024 compared to 0.34% as of June 30, 2023

•	Capital continues to grow:

o	Consolidated equity to assets increased 4.9% to 10.73% as of June 30, 2024 from 10.23% as of June 30, 2023

Glenville, New York – July 22, 2024

TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced second quarter 2024 net income of $12.6 million or $0.66 diluted earnings per share, compared to net income of $16.4 million or $0.86 diluted earnings per share for the second quarter 2023; and net income of $24.7 million or $1.30 diluted earnings per share for the six months ended June 30, 2024, compared to net income of $34.1 million or $1.79 diluted earnings per share for the six months ended June 30, 2023.  Average loan growth increased $182.2 million or 3.8% for the second quarter 2024 over the same period in 2023.

During the second quarter of 2024, Visa Inc. accepted the Company’s tender of its 6,528 shares of Visa Class B-1 common stock in exchange for a combination of Visa Class B-2 common stock and Visa Class C common stock.  As a result of the exchange, the Company marked its Visa Class C common stock to fair value and recorded a gain of $1.4 million based on the conversion privilege of the Visa Class C common stock and the closing price of Visa Class A common stock on June 28, 2024 of $262.47 per share. The Company’s Visa Class C shares are expected to continue to be marked to fair value on a recurring basis using the Visa Class A shares as evidence of orderly transactions between market participants for similar securities issued by Visa.  The Company originally obtained the shares in 2008. The strategic decision to retain those shares and not sell them sooner, allowed the Company to avoid commissions and other expenses thus recognizing the full market value.  Further, it is anticipated that there could be future opportunities to exchange Class B-2 shares.

Overview

Chairman, President, and CEO, Robert J. McCormick said “Our success this quarter arises directly from our commitment to the core principles of Trustco Bank: competitive pricing and exceptional customer service.  This clear mission focus enabled us to reach yet another milestone in our loan portfolio, as our residential, home equity, and commercial offerings all grew significantly over this time last year, reaching an all-time high for total loans.  With all revenue streams producing, we realized a 4% increase in net income.  By employing a sharp focus on loan pricing and resisting upward pressure on deposit rates, we realized a 3.7% increase in net interest margin.  All this was accomplished as we not only maintained, but grew capital.  In true Trustco fashion, credit quality remains stellar.  We believe that this momentum positions us well for the remainder of the year.”

Details

Average loans were up $182.2 million or 3.8% in the second quarter 2024 over the same period in 2023.  Average residential loans and home equity lines of credit, our primary lending focus, were up $89.9 million, or 2.1%, and $61.1 million, or 20.1%, respectively, in the second quarter 2024 over the same period in 2023.  Average commercial loans also increased $31.5 million, or 12.7%, in the second quarter 2024 over the same period in 2023.  Average deposits were up $77.4 million, or 1.5% for the second quarter 2024 over the same period in 2023. We believe the increase in time deposits compared to the prior year continues to reflect the desire of customers to have additional funds in the safety and security offered by TrustCo’s long history of conservative banking.  As we move forward, the objective is to encourage customers to retain these additional funds in the expanded product offerings of the Bank through aggressive marketing and product differentiation.

Net interest income was $37.8 million for the second quarter 2024, an increase of $1.2 million, or 3.3%, compared to the prior quarter, driven by loan growth at higher interest rates, an increase in interest on federal funds sold and other short-term investments, and lower cost of deposits, partially offset by lower investment earnings.  The net interest margin for the second quarter 2024 was 2.53%, up 9 basis points from 2.44% in the first quarter of 2024.  The yield on interest earnings assets increased to 4.06%, up 7 basis points from 3.99% in the first quarter of 2024.  The cost of interest bearing liabilities decreased to 1.97% in the second quarter 2024 from 1.99% in the first quarter 2024.  The Bank has seen success in managing deposits by lowering the rates on time deposits and retaining deposit balances, while still being competitive in the markets we serve.  The Federal Reserve’s decision regarding whether to cut or hold rates in the upcoming meetings will have an effect on our ability to continue to decrease deposit costs which should help margin in future quarters, and consequently, should bring down the cost of deposits over time.  Non-interest expense increased $1.6 million over the prior quarter primarily as a result of higher salaries and employee benefits costs.

Asset quality remains strong and has been consistent over the past twelve months.  The Company recorded a provision for credit losses of $500 thousand in the second quarter of 2024, which is the result of a provision for credit losses on loans of $500 thousand, and there was no change in unfunded commitments.  The ratio of allowance for credit losses on loans to total loans was 0.99% and 0.96% as of June 30, 2024 and 2023, respectively.  The allowance for credit losses on loans was $49.8 million at June 30, 2024, compared to $46.9 million at June 30, 2023.  NPLs were $19.2 million at June 30, 2024, compared to $19.4 million at June 30, 2023.  NPLs were 0.38% and 0.40% of total loans at June 30, 2024 and 2023, respectively.  The coverage ratio, or allowance for credit losses on loans to NPLs, was 259.4% at June 30, 2024, compared to 241.6% at June 30, 2023.  NPAs were $21.5 million at June 30, 2024, compared to $20.8 million at June 30, 2023.

At June 30, 2024, our equity to asset ratio was 10.73%, compared to 10.23% at June 30, 2023.  Book value per share at June 30, 2024 was $34.46, up 5.5% compared to $32.66 a year earlier.

 

 

About TrustCo Bank Corp NY

TrustCo Bank Corp NY is a $6.1 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 138 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 2024.

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 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 the effects of the economic environment on our financial results, our ability to retain customers and the amount of customers’ business, including deposit balances, with us, the impact of the Federal Reserve’s actions regarding interest rates, the growth of loans and deposits throughout our branch network, and our ability to capitalize on economic changes in the areas in which we operate.  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, and many of the risks and uncertainties are heightened by or may, in the future, be heightened by volatility in financial markets and macroeconomic or geopolitical concerns related to inflation, continued elevated interest rates and ongoing armed conflicts (including the Russia/Ukraine conflict and the conflict in Israel and surrounding areas). 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; ongoing inflationary pressures and continued elevated prices; exposure to credit risk in our lending activities; 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; 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 impact of severe weather events and climate change on us and the communities we serve, including societal responses to climate change; increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices; the chance of a prolonged economic downturn, especially one affecting our geographic market area; instability in global economic conditions and geopolitical matters, as well as volatility in financial markets; the soundness of other financial institutions; U.S. government shutdowns, credit rating downgrades, or failure to increase the debt ceiling; 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; 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 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; and other risks and uncertainties under the heading “Risk Factors” in our most recent annual report on Form 10-K and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings. 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.

		Three months ended
		6/30/2024				3/31/2024				6/30/2023
Summary of operations
Net interest income		$	37,788			$	36,578			$	44,052
Provision (Credit) for credit losses			500				600				(500	)
Unrealized gains recognized on equity securities			1,360				-				-
Noninterest income, excluding unrealized gains recognized on equity securities			4,291				4,843				4,598
Noninterest expense			26,459				24,903				27,327
Net income			12,551				12,126				16,372
Per share
Net income per share:
- Basic		$	0.66			$	0.64			$	0.86
- Diluted			0.66				0.64				0.86
Cash dividends			0.36				0.36				0.36
Book value at period end			34.46				34.12				32.66
Market price at period end			28.77				28.16				28.61
At period end
Full time equivalent employees			753				761				791
Full service banking offices			138				139				143
Performance ratios
Return on average assets			0.82	%			0.80	%			1.09	%
Return on average equity			7.76				7.54				10.61
Efficiency ratio (1)			62.84				59.94				55.87
Net interest spread			2.09				2.00				2.74
Net interest margin			2.53				2.44				2.98
Dividend payout ratio			54.57				56.48				41.83
Capital ratios at period end
Consolidated equity to assets			10.73	%			10.51	%			10.23	%
Consolidated tangible equity to tangible assets (2)			10.72	%			10.50	%			10.22	%
Asset quality analysis at period end
Nonperforming loans to total loans			0.38	%			0.37	%			0.40	%
Nonperforming assets to total assets			0.35				0.33				0.34
Allowance for credit losses on loans to total loans			0.99				0.98				0.96
Coverage ratio (3)			2.6	x			2.7	x			2.4	x

FINANCIAL HIGHLIGHTS, Continued

(dollars in thousands, except per share data)

(Unaudited)

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

CONSOLIDATED STATEMENTS OF INCOME, Continued

(dollars in thousands, except per share data)

(Unaudited)

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)