TrustCo Earnings Climbed as Margin Expanded and Buybacks Lifted EPS
Net interest margin widened 16 basis points from a year earlier to 2.87%.
Trustco Bank Corp N Y (TRST), the savings-and-loan holding company, reported a 24.1% increase in second-quarter diluted earnings to $0.98 a share as stronger net interest income and a reduced share count lifted results.
The quarter extended TrustCo’s earnings momentum, with net income rising 4.2% sequentially and net interest income advancing 2.0% as asset yields increased and funding costs declined.
Net incomeCLS income rose 12.8% from a year earlier to $17.0 million, compared with $16.3 million in the first quarter. Net interest income increased 9.2% to $45.6 million from $41.7 million a year earlier.
Loan growth supported the increase. Average loans rose $197.5 million, or 3.8%, from a year earlier, led by residential mortgages and home-equity lines. Period-end loans increased $87.1 million sequentially to $5.38 billion, outpacing a $29.2 million rise in deposits to $5.68 billion.
TrustCo also recorded an $844,000 unrealized gain tied to the conversion and fair-value recognition of Visa Class C shares, helping noninterest income rise to $5.9 million from $4.8 million sequentially. Excluding that gain, noninterest income was $5.1 million, while noninterest expense increased 5.0% from the prior quarter to $28.3 million.
Credit costs eased, with the provision for credit losses declining to $650,000 from $950,000 sequentially. Nonperforming loans represented 0.40% of total loans, down one basis point from the first quarter but five basis points above the year-earlier level.
Improvements in net income and net interest income are expected to remain sustainable as lower-yielding loans and investments continue to reprice upward.
TrustCo repurchased one million shares, or 5.6% of its outstanding stock, during the first half and remains on pace to buy back three million shares across 2025 and 2026. The purchases reduced weighted-average diluted shares to 17.4 million from 19.0 million a year earlier, widening the gap between EPS and net-income growth.