TRST - Earnings call transcript Q1 2020

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Operator

Good day, and welcome to the TrustCo Bank Corp First Quarter Earnings Call and Webcast. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions].

by like about that York the TrustCo intended be would contain presentation that Private we and to information Harbor Act forward-looking Bank covered Securities proceeding, Litigation to provided of this mention may is forward-looking Reform Before statements Safe XXXX. by the Corp New statements and risks, uncertainties, various trends from Actual to differ results those set other factors. due materially could forth in such and that these about Statements in and other this can the factors in found release Annual section Report Forward-Looking information risk our on and be Risk press quarterly our Form Form detailed by reports preceded our and XX-Q. and call XX-K More Factors updated of as of any obligation update except are required applicable may information, valid by to be as as statements date only disclaims hereof, law. the this The company of and the

contains to measures note our in is is Today's recorded. tab Investor of measures. are this being today's earnings Relations most financial available press presentation reconciliations included trustcobank.com. GAAP Please release, site which at figures the our The such event non-GAAP under Web comparable of

like I over ahead, At CEO. go to Chairman, President, to J. would turn and Please the this sir. Mr. time, Robert conference McCormick,

Robert McCormick

the on Good Scot Also Chief in Thank for Eric. call the department today. me Lending room keep the Ozimek Accounting with our you to line. Thanks, Officer Mike the call Andrea Chief Financial joining everyone. morning. Salvador, us this us and from McGuire morning, our Officer; in are is on

active of industry. our have had most an We quarter first unlike not certainly

and counties. with only them, exception we by only stability close sanitize Those have clean lobbies in We and tried our Westchester some are Rockland XXX when We the service. have and being reopen; drive-thru We to to. maintain appointment branches.

this have after requests provided been the in shifts in installed running especially were PPP a barriers day unable to of contact been in. gloves, supplies. all their program. even to have all distancing process very were locations areas. masks active We SBA get We appropriate, customer cleaning social Where and All three applications

for the when backlog We and have reopens. program if a

active We been front deferral dealing from very have payment also on with customers. requests many the

stages Bank Operations We split will next been number expect are different up the the limited so. throughout home. month and into of which working in we have or develop are a this process various from over locations

video in Like any people are everyone, the we of using to services one conference location. number limit

established with to also have charitable and funds We organizations to assist employee assistance. donations

dollar some well. amount We out also loan in as short-term to small instances now have help a personal

quarter. In spite of decent recent a events, had we actually

was net million. just over Our income $XX.X

income net of allowance interest by caused Our our did for drop loan provision bringing to up was net a We losses in total loans. have X.XX% mostly $X quarter-over-quarter interest a expense. million

flat Non-performing ratio and to X.XX% XXX%. and coverage loans to was at total our loans assets assets X.XX% our down total to is non-performing was

was our ROA growth Our posted ratio the for and X.XX X.XX% our quarter. to XXX and in capital was We to XX.XX%. increased ROE margins our

Loans post X.XX continue topping nice million. to growth

occurred category. $XX over the the million All grew in growth deposits loan the Our residential quarter. during

great. side, but deposit posted down the accounts which is On others time all were group,

a for give more have loans. we’ll Scot Then, questions. detail will lot time now will and Mike Mike? talk

Michael Ozimek

Rob, of you, quarter XXXX. TrustCo’s first will for results Thank the everyone. review good I and financial now morning,

X.XX%, and income of press which return average noted respectively. saw assets we As the in release, company on of a equity the net average yield $XX.X and million X.XX%

by of billion X.X million of quarter or X.X% Average first for to the XXX first XXXX loans the grew for XXXX. quarter

period first over residential portfolio. quarter real or the same growth of to the real concentrated primary X.X% As in be increased residential focus; average in our expected, XXXX estate portfolio lending million That estate by the XXXX. continues within XXX.X the

for period in loan loan an loss compared in of allowance increase losses million, to XXXX. as XX, loans the The the the $X XXX,XXX total was of for for to was same X.XX% Provision ratio quarter March first XXXX.

uncertainty and provision in loans for The in current driven in loan around losses growth resulting We of provision the continue portfolio the as the by and loan the was increase economic the expect to conditions reflect in incrementally level COVID-XX. environment would the the becomes footprint. growth overall geographic of regarding loan clarity to portfolio more our XXXX our our increase from in and available economic trends could

includes will in support deferments residential such as our to hardships, the Bank Program. loans press economic This release, the Financial request. by launch As commercial on our and Program experiencing borrowers loan Relief COVID-XX mentioned modifications

three Currently, the to loans Bank residential ranging months. processed has XX.X from XXX million loan one on deferments in

have and sent being In or loans XXX addition, XX.X for deferment are borrowers. to been approved million deferment agreements

We million reviewing is for XX.X a process in XXX also of the deferment. Bank the or potential have loans

an Lastly, defer for application loan. has have of of Bank have XX.X or an million allocation the deferment. how that requested apply their XXX that may requested additional does customers actually an customers estimate many Bank an The to these not

in deferral commercial last side, is commercial process both that noting we worth deferral the million five The of a it’s the XX customers from to monitoring the and actively and requests decrease $XX level or over days. in has processed the deferring residential Bank of the is loans requests have On borrowers. the approximately seen dramatic of Bank the

quarter. adopt The first CECL during the not Bank did

an are We change. environment of in regulatory

landscape understand to how changes and was our would engage in the implementing CECL delay to current current shape new regulatory decision before Our that the standard.

reducing CECL remain earlier National will losses adopt likely institution termination required the equity. current under Emergency the expects a the or calculations. Act will the The XX. This of have well-capitalized December to as of financial for effect increasing regulatory at Bank The loan the the and by shareholders’ company COVID-XX of concerning allowance CARES

balance us continues high-quality sheet our be on focus As has to conservative consistent management prior discussed lending, traditional to earnings. recurring on produce calls, enable which continued to

liquidity is has for portfolio and loan always balance fund Our the a been flexibility of and growth provide investment source to sheet.

same the in first overnight and XXXX of of quarter a compared XX.X of increase to or during an to we compared X.X% decrease result, investments XX.X to of continue million average a fourth quarter XXX.X of As XXXX. hold an XXXX, million period the of million

increased HTM million over year. include portfolios, Total same AFS average X.X% investment last XX.X securities, period which and or the the

During million the opportunity XX of also Bank of a million. in gain XXXX, the of $X.X securities resulting took the first to quarter approximately sell

securities the matured million also $XX XX and purchased Portfolios called million of approximately XX.X securities end Bank to also or The securities has added of down. QX. million pooled in paid very

XX.X balance X.X% over sheet, period was average money market side these the time the and a in deposits, or in deposits result of and On of XX.X increased million the year XXXX the offset savings by XX.X total the funding deposits of The quarter million partially average million for and of first increase interest-bearing of million increase earlier. decrease checking the an million. interest-bearing and X.X in deposits XX.X same

X.XX% period, quarter Over in deposits from of X.XX% XXXX increased fourth the XXXX. to to same the quarter $XX also million demand increased of first XX.X%. the margin or interest compared Net

Our quarter increase taxable XXX,XXX for XXXX. XXXX, the QX of compared increased an million first of equivalent net interest to income to of also XX.X

respect from show XX deposits points For We non-maturity quarter, compared the basis fourth our first the first deposits X.XX% quarter XXXX continues X.XX% decreased XX to of pricing XXXX. basis of CDs to of interest-bearing deposits. this the to quarter our reflect decreased cost QX. and to points for from average Time to discipline total points with basis cost XX

of second to into QX higher market The opportunity the XX X.XX%. move As the lower CDs cost million reprice rate Bank approximately of for rates. quarter XXXX, an will XXX average exists of CDs at in additional has that current to we mature

average the during and addition, at an of approximately third CDs In of XXX XXXX, fourth of rate million X.XX%. will mature quarter

in X.X in first XXXX, sales Non-interest million The of the gains X.X quarter the came of income to for securities. included million quarter. at the last up increase of share lion of compared

division had assets of income. services financial to XX, Our the under management significant March be of of recurring XXXX. most approximately as division XXX continues This non-interest source million

Now from to million, on $XXX,XXX up non-interest quarter quarter, came Total in our XXX,XXX to fourth XXXX. fourth below down came compared expense of XX.X the XXXX. expense the for ORE non-interest quarter in expense net the of range expense. at estimated at ORE of slightly

continued other the quarter. expenses $XXX,XXX anticipated line ORE our the expense in and were Given hold going exceed level to the non-interest to first quarters per are quarter. expectations for level of of prior expenses, low categories with All we not

expect the range the We in per quarter. recurring the total $XX.X of first of came stay quarter fourth XXXX’s non-interest XX.XX% net of to in income to expense ORE quarter XXXX million compared XXXX. in million ratio to efficiency $XX.X in at XX.XX% of expense The

As we've stated opportunities the the control can within continue by make what processes working on we to the Bank past, efficient. identify we'll to more to focus in

we and continue of at to expense control Bank We through are proud expect XXXX. this TrustCo

basis quarter, of the equity to also X.X% Consolidated to proud of value ratios Book finally, $X.XX, XXXX to is compared was March $X.XX per XX.XX% up grow from points XX, continued at Bank the year very its to X.XX% first ratio And a improve. shareholder XX The compared end in period the at XXXX. ability earlier. share value. to capital assets was up same

review portfolio loans. Now loan Scot the will non-performing and

Scot Salvador

able everyone. in significant actual in Good Mike. were XX million Year-over-year, or a by events to in morning, numbers. Thanks, the quarter. Despite growth climbed transpired loan post loans combined X.X%. first the grew the Loans million XXX marketplace, we or have still X.XX% which

and loans. These ability quarter, decrease before closings conference. including pleased via first We the year’s adaptations successfully net the a with them. placed results taken of a loan employees’ challenges and last for video variety proud COVID of reminder, with the our conduct a deal As we to ability saw to have adapt forms, quarter’s were in

respectively. and The lines X.X loans first regions, our centered the XX although growth with mortgage credit and operations million a million, Loan million exhibited particularly quarter occurred home around growth Florida by product X.X decreasing this strong commercial all of loan quarter. residential in was equity

Refinance rates. weeks the the risen over in with drop last several activity has significantly interest

we money represent to increased Our These the which attracting X.XX%. refinances although non-TrustCo to have Bank. quite in been payoff the rate is current activity XX-year refinances portfolio, will in new lead some successful fixed

have slowed and eased. place. level be however, that we begin and a Despite accompanied recent expect reduced volume with the will to have this, events put continue volumes once in purchase restrictions on and the of activity realtors Purchase restrictions builders quickly increase does been the

is ongoing and backlog Drawing difficult, comparisons the totals. of Our marketplace. March strong. year-end at the however, loan to was It any disruptions due end the year’s above in both last was

demand filled near-term uncertainty. of lot with is Forecasting a

quarter. good and continued we Our us the however, growth throughout about are strong hold optimistic backlog, stead should in

Mike in touched on the presentation. the deferments loan early

of As the stated, payment current we the the borrowers vast are will situation that have dramatically. established long-standing amount normal hopeful borrowers of once new commercial majority status Many involved are slowed has of return the such all customers requests and to passed.

on slightly assets Delinquency and remains to quarter. of X/XX. XX measures as Year-over-year, and million to from strong decreased assets decreased non-performing and quality million million XX.X XX.X non-performing XX non-performing both the Non-performing loans national from loans million. dropped

charge-offs in loans Early allowance were – loss on low the delinquencies Rob? to and XXX% to net at end. ratio the quarter coverage stage for quarter very and non-performing loan loan both losses increased

Robert McCormick

to Thanks, questions. respond Scot. any We're happy to

Operator

begin [Operator now the will session. We question-and-answer Instructions].

Alex go Our today will Sandler. first with questions. question from Twerdahl ahead Please of your Piper come

Alex Twerdahl

guys. Good Hi. morning,

Robert McCormick

Hi, you? Alex. are How

Michael Ozimek

Alex. morning, Good

Alex Twerdahl

okay. Doing Thanks.

requested through mind Mike, have categories deferrals. Can all going at go again that it off, would through you went of First you just time? it. lot missed one you running different a just – I the a of loans the number payment through

Michael Ozimek

Absolutely.

three XX.X months. deferred so a in have been So we of residential to from million range deferments far have one that

loans borrowers. an million that an last have additional for And the we’ve have asked million is agreements to additional for additional of process have million $XX.X any application, are reviewing back. in We the piece of worth deferment. we not we’re an being anything XX.X $XX.X gotten Then potential that sent

Alex Twerdahl

going size, us average Thank of I Okay. the loan maybe And average et been terms for portfolio just the characteristics? it’s you you through just before, of I then characteristics cetera? LTV, can those but us some of some know again. you’ve in reminding that of think remind it through the worth

Scot Salvador

this Alex, is Scot. Yes.

than average. that’s so across look that on it’s million approval, approval. on higher side, wide, to for when the real bank, below value, XXX the but loan the it’s are portfolio million average. in loans as around in of point significantly XXX of at the now far when As approvals the It’s are you seasoned terms And add-on XX% estate loans, averaging

throughout it’s in you I whole an seasoned and which it’s family as when portfolio, region. value far of is approvals. look But XX% four on loans – concerned. primarily at spread else, mid-XX% geographic think And all loan to owner properties it’s course our one the individual everything to occupied excess the as

Michael Ozimek

families. in one Really two

Scot Salvador

some is There families. two duplexes in and one whatnot, smaller Yes, a piece. but that’s

Alex Twerdahl

any of do in it’s be sort a some have piece the your portfolio? cetera? the energy, pie. Great. it of And know transportation, categories to hospitality, you I commercial small then portfolio, at-risk more exposure in overall any whether the But commercial of et exposure restaurants,

Scot Salvador

said has that of Hospitality, especially limited. the highlighted marketplace we on and on little couple I what prior too lending. and we’ve in in years of that Very motels quarters of aggressive last been was we’ve type was based that Rob cautious with going commercial felt think the side hotels, the really

a are real we while. our at have any that that of all. borrowers in really most have portfolio, again seasoned seasoned been steered limited have there. type away We And some stuff. from So some But We in around had do have don’t but of many concentrations that. hospitality not quite we we amount ones what for restaurant,

Alex Twerdahl

terms Mike, or CECL, adjustment January you have you I then, of been would Do adopt know chose have it the you range for adopted of guys any sense it? And in as should not Xst. Okay. what to a have

Michael Ozimek

really how as much adjustment the overall released I’d not But increase increase a have, We far say opening be. as it’s as allowance. a how to that we would the haven’t far as range material much

Alex Twerdahl

think Okay. And about TCEs you’ve as XX.X%. you then just now over got capital,

almost You suspended, you’re a the million thinking quarter why excess when dividend, potentially before you share maybe it during et program. so buyback, as about back relates as cetera, to capital Can reopening to today you much suspending talk X.X you buy relates little that about capital? have did it the bit how shares

Robert McCormick

in idea for preserving reasons. a times, I lot these a think Alex, capital just was good of

buyback. fully committed are We to a

buyback initial start. be Our to plan the increase rollover would to its renew program and or

before, I up you And And in appropriate on buybacks, long to comes an you think everything is buyback time the just expend don’t to dividend, I’ve are but name told a about again, committed term. it’s it just June I table; we capital. think it. fully

this is you capital think keep the if time it. to I need

Alex Twerdahl

switching XXX Okay, talk the correctly. drop or gears XX-K to as I you around the XX% understood. it then And in scenario just margin read that the if NII margin, in the should about suggest disclosure down

the versus following out XXX in contemplated seeing long bit down short the now We’re on you’re a the in that actually you are Can recently? in on little that end, assumptions end. some about of talk rates scenario what differences drops XXX play the the

Robert McCormick

reverse I first. I’ll guess Right. it in answer

starts come when you Obviously, what’s think at out pressure. take I going think that a on see reprice really – playing million the right I our now, now. CDs margin look really really in. really the us I the near-term to some right ability to as That’s help going you’re in near going to like basis Fed Fed down $XXX to under XX points out is bleed within to that to the term.

have in have we is rates that that we And starts rates model, sticky to lower there’s to said side very on assumptions level things always as have come far money that’s we’ve far we down. our deposits. that can we’re of as reprice – deposits, of one As the so the that we short-term on so at just have then asset down. they already And a going core

continue our in we investment loans. spins can to in the you deposit portfolio talked have. that And cash much the away. past obviously that is, that as seeing the our we is We But we flipside, come loan down. that cash portfolio So portfolio about spins off, the see good our flow rates flow right make you’re reprice and our that always off on that part those how can impact

portfolio pipeline estate on still our is solid. Our real

start we’ll I and to we think as loans continue this, of do We’re of to out come more still that. closing

Alex Twerdahl

initial you And guys program mention Great. Do to have in an just size able sort you then did that of thus you participating PPP program. that loans you’re or are far? the fund of

Michael Ozimek

as XX As that total little through million, the under half Alex. Rob as only And a we’re far about able of said, to received, was it get system. applications

still pending. is other The

once million will up. roughly has now program and that back other So is half getting is that that proceed of half XX the – pending geared approved been the

Alex Twerdahl

Great.

questions I for queue. time all in and that’s now. back my for Thanks the the think get I’ll

Robert McCormick

Alex. Thanks,

Michael Ozimek

you. Thank

Scot Salvador

Alex. Thanks,

Operator

This like for J. I conference turn question-and-answer concludes back remarks. any to our session. would over Robert the to closing McCormick

Robert McCormick

day time stay Thank of you for safe your taking and out healthy. and

Operator

The you presentation. conference has now Thank concluded. for today’s very attending much

You may now disconnect.

TrustCo Bank Corp NY (TRST) 22 Apr 202020 Q1 Earnings call transcript