TrustCo Bank Corp NY

the investor relations tab of our website at trustcobank.com. Please also note that today's event is being recorded. A replay of the call will be available for 30 days and an audio webcast will be available for one year, as described in our earnings press release. At this time, I would like to turn the conference call over to Mr. Robert J. McCormick, Chairman, President and CEO to begin. Please go ahead, Robert.

Good morning, everyone, and thank you for joining the call. I'm Rob McCormick, the chairman of Trustco Bank. I'm joined today, as usual, by Mike Ozemeck, our CFO, who will go through the numbers, and Kevin Curley, our chief banking officer, who will talk about lending. The results announced yesterday are the culmination of years of strategic long-term planning and nimble near-term execution. We resisted risky lending concentrations, borrowing, and other gimmicks in favor of building solid customer relationships through the delivery of top-notch loan and deposit products and services. This enabled us to keep our cost of funds low and grow loans, leading to a healthy margin expansion. We deployed capital through the continuation of our century-long dividend payout, a robust stock repurchase program, and our bedrock practice of lending gathered deposits right back in the communities we serve. All of these factors together contributed to a 38% increase in net income and a return on average assets of almost 33% for the quarter. Total shareholder value returned three times that of our proxy peers year-over-year. Stellar performance by any measure. Now, Mike will go through the details, and Kevin will provide some color on lending.

Thank you, Rob, and good morning, everyone. I will now review TrustWiz financial results for the fourth quarter of 2025. As we noted in the press release, the company continues to see strong financial results for the fourth quarter of 2025. marked by increases in both net income and net interest income of Chesco Bank during the fourth quarter of 25 compared to the fourth quarter of 2024. This performance is underscored by rising net interest income, continued margin expansion, and sustained loan and deposit growth across key portfolios. This resulted in a fourth quarter net income of $15.6 million, an increase of 38% over the prior year quarter, which yielded a return on average assets and average equity of 0.97% and 8.99% respectively. Capital remained strong. Consolidated equity to assets ratio was 10.66% for the fourth quarter of 2025 compared to 10.84% in the fourth quarter of 2024. Book value per share at December 31st, 2025 was $38.08, up 7.1% compared to $35.56 a year earlier. During the fourth quarter of 2025, TrustCo repurchased 533,000 shares of common stock under the previously announced stock repurchase program, resulting in 1 million shares or 5.3% of common stock repurchase year to date, the maximum allowable under the stock repurchase program. And we have also renewed the stock repurchase program, which now allows for the repurchase of up to 2 million shares or another 11.1% during 2026. We remain committed to returning value to shareholders through a disciplined share repurchase program, which reflects our confidence in the long-term strength of the franchise and our focus on capital optimization. Credit quality continues to be consistent as we saw non-performing loans modestly increase to $20.7 million in the fourth quarter of 2025 from $18.8 million in the fourth quarter of 2024. Non-performing loans and total loans increased to 0.39% in the fourth quarter of 2025 from 0.37% in the fourth quarter of 2024. Non-performing assets to total assets was 0.34% for both the fourth quarter of 2025 and 2024. 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. Average loans for the fourth quarter of 2025 grew 2.5%, or $126.8 million to $5.2 billion for the fourth quarter of 2024, an all-time high. Consequently, overall loan growth has continued to increase and leading the charge was home equity lines of credit, which increased by $54.1 million or 13.5% in the fourth quarter of 25 over the same period in 24. The residential real estate portfolio increased $50.6 million or 1.2%. Average commercial loans increased $24.5 million or 8.6%. And installment loans decreased $2.4 million or 17.3% over the same period in 24. This uptick continues to reflect a strong local economy and increased demand for credit. For the fourth quarter of 25, the provision for credit losses was $400,000. Retaining deposits has been a key focus as we navigated through 2025. Toll deposits ended the quarter at $5.6 billion. It was up $166 million compared to the prior year quarter. We believe the increase in these deposits compared to the same period in 24 continues to indicate strong customer confidence in the bank's competitive deposit offerings. The bank's continued emphasis on relationship banking combined with competitive product offerings and digital capabilities has continued to a stable deposit base that supports ongoing loan growth and expansion. Net interest income was $43.7 million from the fourth quarter of 25, an increase of $4.8 million, or 12.4% compared to the prior year quarter. The interest margin for the fourth quarter of 25 was 2.82%, up 22 basis points from the prior year quarter. The yield on interest-earning assets increased to 4.24%, up 12 basis points from the prior year quarter. And the cost of interest-earning liabilities decreased to 1.84% from the fourth quarter of 25, from 1.97%. The bank is well-positioned to continue delivering strong net interest income performance, even as the Federal Reserve contemplates rate changes in the months ahead. The bank remains committed to maintaining competitive deposit offerings while ensuring financial stability and continued support for our community's banking needs. Our wealth management division continues to be a significant recurring source of non-interest income. They had approximately $1.27 billion of assets under management as of December 31. Non-interest income attributable to wealth management and financial services fees represent 44% of non-interest income. The majority of this fee income is recurring, supported by long-term advisory relationships and a growing base of managed assets. Now on to non-interest expense. Total non-interest expense net of ORE expense came in at $26.5 million, down $1.5 million from the prior year quarter. ORE expense net came in at an expense of $161,000 for the quarter, as compared to $476,000 in the prior year quarter. We're going to continue to hold the anticipated level of expense not to exceed $250,000 per quarter. All of the other categories of non-interest expense were in line with our expectations for the fourth quarter. We would expect 2026 total recurring non-interest expense, net of or re-expense to be in the range of 27.7 to $28.2 million per quarter. Now Kevin will review the loan portfolio and non-performing loans.