TrustCo Bank NY (TRST) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $12.6 million ($0.66 per diluted share), up 3.5% sequentially but down from $16.4 million ($0.86 per share) in Q2 2023; six-month net income was $24.7 million ($1.30 per share), down from $34.1 million ($1.79 per share) year-over-year.

• Average loans reached an all-time high of $5.02 billion, driven by residential real estate and commercial loan growth.

• Asset quality remains strong, with non-performing loans at 0.38% of total loans and net recoveries for the quarter.

• Results reflect lower net interest income due to higher interest expense, partially offset by a $1.4 million gain from a Visa stock exchange.

• No debt on the balance sheet, and all funding needs met without brokered deposits or borrowings.

Financial highlights

• Net interest income for Q2 2024 was $37.8 million, up from $36.6 million in Q1 2024 but down from $44.1 million in Q2 2023; six-month net interest income was $74.4 million, down 18.3% year-over-year.

• Book value per share at June 30, 2024 was $34.46, up from $34.12 at March 31, 2024 and $32.66 a year earlier.

• Return on average assets was 0.82% and return on average equity was 7.76% for Q2 2024.

• Net interest margin for Q2 2024 was 2.53%, up from 2.44% in Q1 2024 but down from 2.98% in Q2 2023.

• Total deposits ended the quarter at $5.3 billion, up $18.5 million year-over-year.

Outlook and guidance

• Management expects continued margin compression in the near term as time deposits reprice and the Federal Reserve delays anticipated rate cuts.

• The company believes it is nearing the bottom of the current rate cycle and expects deposit costs to decrease as time deposit rates are lowered.

• Focus remains on maintaining competitive loan and deposit pricing to support margin improvement and expand product offerings.

• Goal to further reduce cost of deposits while maintaining liquidity.

• TrustCo maintains a strong liquidity position and expects to sustain its strategy of growing customer relationships and balance sheet.