TrustCo Bank NY (TRST) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $12.9 million ($0.68 per diluted share), up from $12.6 million in Q2 2024 but down from $14.7 million ($0.77 per share) in Q3 2023; nine-month net income was $37.6 million ($1.97 per share), down from $48.8 million ($2.57 per share) year-over-year.

• Return on average assets was 0.84% for Q3 2024 (vs. 0.96% in Q3 2023); return on average equity was 7.74% (vs. 9.32%).

• Loan portfolio reached an all-time high of nearly $5.1 billion, driven by residential and home equity lending.

• Noninterest income increased, aided by higher financial services income and a gain from Visa stock transactions.

• Noninterest expenses declined due to lower salaries, benefits, and other expense categories.

Financial highlights

• Net interest income for Q3 2024 was $38.7 million, up 2.3% from Q2 2024 but down $3.6 million (8.4%) from Q3 2023; net interest margin was 2.61%, up from 2.53% in Q2 2024 but down from 2.85% in Q3 2023.

• Book value per share increased to $35.19 as of September 30, 2024, up from $32.80 a year earlier.

• Total deposits ended the quarter at $5.3 billion; average deposits increased $15.3 million (0.3%) year-over-year.

• Provision for credit losses was $500,000 for the quarter.

• Noninterest expenses for Q3 2024 were $26.2 million (down $1.3 million year-over-year); efficiency ratio was 59.65%.

Outlook and guidance

• Management expects margin compression to ease as deposit costs decrease following recent rate cuts; future Federal Reserve actions will impact margins.

• Recurring noninterest expense (net of ORE) expected to be $26.9–$27.4 million per quarter for 2024.

• Focus on competitive product offerings and aggressive marketing to retain and grow deposits.

• The company maintains a conservative approach to growth and may limit balance sheet expansion if market conditions warrant.

• No significant impact expected from recent hurricanes in Florida; all branches have reopened and damage was negligible.