Trustco Bank Corp. N y (TRST) risk factors, FY2025 10-K

Risks Related to Our Lending Activities

1. 01Changes in interest rates may significantly impact our financial condition and results of operations
2. 02External economic factors, such as changes in monetary policy and inflation and deflation, may have an adverse effect on our business, financial condition and results of operations
3. 03We are exposed to credit risk in our lending activities
4. 04Our emphasis on residential mortgage loans exposes us to lending risks, and any weakness in the residential real estate markets could adversely affect our performance31% rewritten
5. 05Our commercial loan portfolio is increasing and the inherently higher risk of loss may lead to additional provisions for credit losses or charge-offs, which would negatively impact earnings and capital
6. 06If our allowance for credit losses on loans (“ACLL”) is not sufficient to cover expected loan losses, our earnings could decrease26% rewritten
7. 07We may not be able to meet the cash flow requirements of our depositors or borrowers or meet our operating cash needs to fund corporate expansion and other activities
8. 08We are subject to claims and litigation pertaining to fiduciary responsibility and lender liability

Risks Related to Our Operations

1. 09We are dependent upon the services of our management team
2. 10Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
3. 11If the business continuity and disaster recovery plans that we have in place are not adequate to continue our operations in the event of a disaster, the business disruption can adversely impact our operations
4. 12The Company’s risk management framework may not be effective in mitigating risk and loss
5. 13New lines of business or new products and services may subject us to additional risks
6. 14Digital banking trends may create deposit volatility, which could adversely affect our operations, profitability and competitive positionNew
7. 15Our business may be adversely affected by the prevalence of fraud and other financial crimesNew
8. 16We are exposed to climate risk
9. 17Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers
10. 18Environmental, social and governance (“ESG”) risks could adversely affect our reputation and shareholder, employee, client and third party relationships and may negatively affect our stock price

Risks Related to Market Conditions

1. 19A prolonged economic downturn, especially one affecting our geographic market area, will adversely affect our operations and financial results
2. 20Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on our results of operations and financial condition
3. 21The soundness of other financial institutions could adversely affect us49% rewritten
4. 22The trust wealth management fees we receive may decrease as a result of poor investment performance, in either relative or absolute terms, which could decrease our revenues and net earnings

Risks Related to Compliance and Regulation

1. 23The regulatory capital rules could slow our growth, cause us to seek to raise additional capital, or both
2. 24Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and our income
3. 25We are subject to numerous laws designed to protect consumers, including the CRA and fair lending laws, and a failure to comply with these laws could lead to a wide variety of sanctions
4. 26Changes in cybersecurity or privacy regulations may increase our compliance costs, limit our ability to gain insight from data and lead to increased scrutiny65% rewritten
5. 27Restrictions on data collection and use may limit opportunities to gain business insights useful to running our business and offering innovative products and servicesNew
6. 28Non-compliance with the Bank Secrecy Act, or other laws and regulations could result in fines or sanctions
7. 29Changes in tax laws may adversely affect us, and the Internal Revenue Service or a court may disagree with our tax positions, which may result in adverse effects on our business, financial condition, and results of operations or cash flows97% rewritten
8. 30There can be no assurance that future changes to the Code, applicable regulations, or administrative interpretations will not increase the rate of the corporate income tax, impose new limitations on deductions, credits, or other tax benefits, or otherwise adversely affect the performance of an investment in our stockNew
9. 31We are subject to regulatory limitations and other limitations that may affect our ability to pay dividends to our stockholders or to repurchase our common stock
10. 32We may be subject to a higher effective tax rate if Trustco Realty Corp. (“Trustco Realty”) fails to qualify as a real estate investment trust (“REIT”)
11. 33Changes in accounting standards could impact reported earnings

Risks Related to Competition

1. 34Strong competition within the Bank’s market areas could hurt profits and slow growth
2. 35Consumers and businesses are increasingly using non-banks to complete their financial transactions, which could adversely affect our business and results of operations

Risks Related to Cybersecurity, Third Parties, and Technology

1. 36Our business could be adversely affected by third-party service providers, data breaches, and cyber-attacks
2. 37The development and use of artificial intelligence (“AI”) presents risks and challenges that may adversely impact our business
3. 38A failure in or breach of our operational or security systems or infrastructure, or those of third parties, could disrupt our businesses, and adversely impact our results of operations, liquidity and financial condition, as well as cause reputational harm
4. 39Unauthorized disclosure of sensitive or confidential client or customer information, whether through a breach of our computer systems or otherwise, could severely harm our business
5. 40We could suffer a material adverse impact from interruptions in the effective operation of, or security breaches affecting, our computer systems

Risk Related to Ownership of Our Securities

1. 41Provisions in our articles of incorporation and bylaws and New York law may discourage or prevent takeover attempts, and these provisions may have the effect of reducing the market price of our stock
2. 42Our business plan calls for us to execute a variety of strategies to allocate and deploy any excess capital including, but not limited to, continued organic balance sheet growth and diversification, implementation of stock repurchase plans and payment of regular cash dividendsNew
3. 43Actions of activist shareholders could negatively affect our business and the value of our common stock and cause us to incur significant expensesNew