TRST - Earnings call transcript Q4 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the TrustCo Bank Corp Earnings Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Before proceeding, we would like to mention that the presentation may contain forward-looking information about TrustCo Bank Corp New York that is intended to be covered by the Safe Harbor and forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to the variation risks, uncertainties, and other factors. forward-looking these press risk call, XX-K, release the factors about found can and and information our Form risk our of XX-Q. by in that and reports as detailed an and on our factors other be in annual update More report section quarterly Form on statements preceded this The disclaimer. and the statements are company’s valid only as of the date hereof, required update this information, by be applicable to may law. obligation Any as except Today’s presentation contains financial non-GAAP measures. figures to Investor measures trustcobank.com. in the tab which are of GAAP which under included earnings comparable available of reconciliation Regulations release, press The at our most [Relations] our is website [sic] Please also note event today’s recorded. being is would At I like this Mr. turn over the time, conference to call to J. Robert President Chairman, CEO. and McCormick, Please go ahead.

Robert McCormick

Thank morning, you. Good everyone.

President joining bit results. you in of the host year the about little very As bank. good us a the little morning at McCormick, for to about hear – had a our more bank said, I We Rob this Thank XXXX. am

$XX.X XX% to $X.X company. is Our just million Loans $XXX million, our net an all-time under also up were for prior income from year billion, an record over was up all-time and high. the which

all ratios to loans and over amounting reserve total loans. prior showed periods, of total of X.XX% a non-performing X.XX%, a assets loans were coverage with loss loan improvement and respectively, ratio performance and Our XXX% to X%

core in less posted billion. growth Mike market to on have $X.X in accounts, on detail continued in nice his about to will Deposits deposits. CECL, dependence Ozimek with are drop now operating also and with the expense time under We that in $XXX growth Interest presentations. keeping about XXXX, million

tremendous investment large a position. have cash to portfolio with continue a We

in environment. done anticipation rate changing of a this have We

with stayed our their dividend ROA executed reverse a services good our under increased showed and both on buyback active $X financial management. Our stock cash improvement year-over-year. in We program. continues billion area ROE, split and performance

equity. our ratios and increased capital shareholders also We

under operating Palm to one approach a service close one take We continue varying full branch COVID and essential while to in Florida. open protocols, Coast,

a business. Florida know, As I our become you all has part large of think

We give Mike Schreck, Salvador After the a Eric introduce leaving for are turn to then numbers; us questions. over details runs for loans some us update. to for and Eric, on will break taking the that he it opportunity Ozimek operation will to brief who down time Scot

way, As optimism. so the we XXXX, by we begin with XXXth-year our do

are pleased but We forward XXXX, XXXX. to with aware Eric? and look of

Eric Schreck

first offices branch within recap are facts time thought area. Thanks, offices around call. the encompasses on Central XX briefly are open Florida Florida would de Rob. Florida. XX the Coast I counties. and locations Sarasota Coast, split network between of South East All were some of XX XX my West remainder Florida TrustCo’s novo. milestones. This is The of the I the and North the

outstanding Florida XX/XX/XX, billion $X the of loans first As for time. exceeded

favorable Department Florida offices of despite to As as Palm money $X Florida rolled advantage XXXX which maturities, of Deposit over call TrustCo to accounts. Operations operations a Florida labor savings earlier. year September. XX/XX/XX, opened and at first Among year, CD up our in to few from located existing is is our XX is into Longwood, Florida in the core more significant York over relocated County Flagler the Volusia Coast which joins East the our years in market offices Coast billion ended our adjacent office Florida. office, in is late which deposits in XXXX. deposits well. for center, Florida New in Deposit County. and in on our headquarters ending newest its Florida followed Taking suit Operations moved market, Total

Finally, in loan Naples, Florida. office a open to signed we recently a lease

Mike discuss is to numbers. Ozimek the Next

Michael Ozimek

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

of XX.XX%, in million the $XX.X of release, in an we the fourth As increase a prior saw X.XX% $XXX.X and billion noted respectively. quarter XXXX. year, loans Average of grew on average XXXX, XXXX X.X% the company and billion of or quarter income net over XX.X% the for assets of equity press fourth to a return the yielded from the which quarter average of $X.X fourth

XXXX. of new same $XX AFS approximately As remaining in quarter the the to loans. over primary in the XXXX. average estate The the period which securities, decreased in concentrated commercial loan fourth includes PPP within over million and HTM in portfolio expected, or quarter continues period which $XX.X focus, SBA same the has period million growth in This XXXX. X.X% approximately of $XX.X increased PPP originated investment currently during Total our X.X% fourth XXXX. or loans same million Bank the million portfolios, XX.X% included real the XXXX of portfolio, be lending of $XX million $XXX.X average increased XXXX residential the or over in

the securities approximately bank million period, that of same the paid pooled had down. During $XX.X

of For period, also provision loan $X the approximately fourth in of a compared decrease provision million, loan for $X securities. the of loss for a million loss quarter The $XXX,XXX purchased credit to the the same same was XXXX. for bank the $X.X million period –

to was the XXXX. and for compared quarter, a based improvement December the X.XX% provisions well XX, same mentioned quality economic in during of as of total result certain XXXX, factors loan ratio was impact the pandemic its in The As period as bank’s industries risks and as to The of allowance-related as last the trends asset quarter of the current on they qualitative increased to of in the the as economic conditions. X% specific perceived to fourth conditions portfolio. relate of inherent XXXX decrease management loans losses sustained of allowance assessment during XXXX,

bank XXXX. financial expects institution December by remain current CECL prior As Act. Cares company signed bank the adopted And a provided in January did part COVID-XX originally regulatory well-capitalized XXXX, CECL adopt X, under really the calculations. as bill mentioned to of quarters, Relief as on not the in The

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

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

of overnight As compared an same the a the quarter average increase investments during to million billion result, in of we of XXXX. fourth $XXX $X.X held XXXX, an of period

market. level evaluate of Given to we the the into XXXX, bank continue elevated cash excess head into as investing the liquidity will

the the was checking of average XX.X% or in offset earlier. On by for X.X% the same or the increase The deposits million over decrease increase side account sheet, $XX.X XX.X% and savings time million or a year. period or XX.X% million in deposits increase average XXXX, XX.X% $XXX.X a interest averages, result increase average a balance X% increase non-interest of average in market total in deposits, bearing $XXX the quarter of increased of funding same year are average over in bearing checking deposits a money $XXX or in $XXX or million deposits, the balances. partially XXX last These million, period fourth

over to points This XX XX basis last period, a deposits deposits in from from by our to increased total time over XX points the XX For from of same the market interest year. basis primarily decrease XX points is driven period XX deposits points. money cost basis basis bearing points points basis basis same

of additional reprice into points lower bank approximately as XXXX, mature XXXX. move As that said, rates. market at to quarter $XXX CDs, continued With has opportunities to the of that first CDs an average in basis exist million rate the will we XX

And of quarter approximately basis mature at second basis of points. CDs mature XXXX, XXXX, rate The average at half of will ones. $XXX the an rate million approximately CDs $XXX in an second of average of XX million XX will

to they services of had as XX, recurring significant non-interest $X.X XXXX. a December be division approximately of and continues assets source of under financial Our billion management income,

$XX.X came primarily net expenses. seasonal net ORE expense million above an million expense. expense of the XXXX up is prior $XX,XXX $X.X to non-interest increased at compared increases onto in quarter third as The result prior the advertising expenses million, at $XX,XXX quarter of Now a the $XX.X million. an occupancy of range quarter expense Total net in increase for of estimated income in came and quarter. to and $XX.X of of in expense to slightly compared ORE our from non-interest

of exceed $XXX,XXX expenses, to Given expenses we’re the line the per to with the low going level continued do level categories quarter. not of ORE in our for All fourth other were decrease anticipated in the quarter. expectations expense non-interest

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

shareholder These stock earlier. second from bank adjusted slightly which XXXX to value the increased fourth per amounts these XXXX. the ratio are third challenging the X.X% a year December up $XX.XX, of times. ratios. from X.XX% quarter, Consolidated at split, in basis to during XX asset XX, continues proud value to equity was share the at ability Finally, X.X% of quarter points end to Book compared XXXX. its economic increase The the quarter $XX.XX of capital for reverse up the occurred of be was

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

Scot Salvador

X.X%. loans loan thank fourth the This presented. increased X.XX%. over in and have million another growth, which challenges, has pandemic unabated In assorted $XXX been last actual loans of and numbers steady increased the morning, $XX million Year-over-year, Good the quarter, total you, despite or of quarter of marks Mike. years by which couple continued

portfolio efforts grew the The which holiday the was both Commercial in Florida $X.X $XXX York Activity typical. for mid-winter the fairly includes million growth the in quarter. during a estate We’re markets between very Residential million. employees $XX loans in these ongoing X.X%. slowdown New in areas on PPP combined grateful is quarter, and to by the million remains the our good, quarter, residential results. their increase though real in evenly was or our achieving decreased periods Year-over-year, forgiveness. and spread

interest pent-up Our due should rates mid-winter expectations good and relatively we levels we to see remaining of exit as the low, are that period. demand activity

solid. at backlog from time is It is remained the which down year. loan year-end normal given of September, Our

a the have from the prior Non-performing we bit drop. active in at stands edged or Interest non-performing our the three allowance is base year. from regions and million reflected the totaled $XX.X Improvements up quarter. three categories. delinquency to with we of both to Purchase $XX.X $XX.X backlog. where our percent. million. be – remained stand. continued and are current This December, have pleased charge-offs However, $XX.X numbers $XX,XXX and continued up were Net rate rates of in XX-year money dropped fixed loans and all recently in refinances as to from in eights has makeup non-performing current million year-over-year ratio at in XXX% Rob? assets million loans coverage also showing decreased to non-performing to The quarter, while is slightly our

Robert McCormick

you, Thank Scot.

questions might We’re happy answer have. any to you

Operator

I’m here. you question-and-answer? ready Are for

Robert McCormick

is. else Whenever everyone

Operator

Wonderful.

We Twerdahl, begin the question line session. Instructions] will Piper ahead. is now go unmuted. Our Alex [Operator Please your Sandler. Alex, from question-and-answer comes first

Alex Twerdahl

morning, Hey, guys. good

Robert McCormick

Alex. morning, Good

Eric Schreck

Alex. morning, Good

Michael Ozimek

morning, Alex. Good

Alex Twerdahl

Yes.

First question for me.

stay to of in about think that And you quarter, just talk during about loan I of, overall see residential sort little is yield a as at sort a possible bit portfolio of book kind the I’m of only rates and now compression is X.XX guess is new what’s, below yield I just is bulk more yield X.XX-ish? Just like, range your what below distribution on if in book? sort residential the is Can of the little much of the hovering rate bit loan the if how book getting the steady that. the X.XX-ish

Robert McCormick

ahead. go Yes,

Michael Ozimek

Sure.

I’m There little a So higher refinanced. have that going at have the – portfolio to Alex, a you down not been give like on are is are let’s definitely we said, refinanced bit you at have I we book that yield. background rates loans that start, mean, there traditionally the of, would in rates so

what in we’ve basis of seen. points we basis some eight the, What quarter-to-quarter X robust market to that a guess, three also a to So of north yields that that in seen the in and also on the put If increasing range. because I seen X month. housing X cup a we’ve guess we’ve to compress mortgages that through quarter we’re that’s continue kind I start about of, book is are per on three X, of talking range, Xs in

of able which We I’ve time, off. have that and period some been loans, a off, to And so non-accrual in seen paid period that right? in recapture of and non-accrual been some for interest in they’ve we’ve pay the record

that all month would stay helped if you I of yield. kind rates you’ll also out per see that’s couple But to basis say. net-net, points a and of kind out, continue of take loan So compression, debt if down,

Robert McCormick

And wave not booked drop for speaking now. that personal the we X% out, I we we them see loans But in to the send that part, think, of slowed. card just has certainly generally And loans you’re we the every the rates most have we past. I’m and have right year. X%, are I the people refinanced slowed. And haven’t ranges probably a people, as now, continue really sure in refinance has high But the those vast right, majority as dramatically have that off, talking if think about by tremendous activity and are

Alex Twerdahl

second me. then for question Got it. And

about to be where depending dropped around XX points you on, I talked a about – were – we which rates XX-year, minute the about rates we’re and your talking guess, ago. basis waiting Just cash on of versus quarter and opportunistic higher position sort the

looking cash rates out, because to wondering, just certainly with ladder How cash certainly in been what I’m So position over work? have it are where time? you to are you for feel higher? moving that to And going do you going order put comfortable

Robert McCormick

mind, have in and bell going a Alex. ring the don’t rate we’re to specific invest, We

with also in the into sheet rates time move balance the maturities as forward. a the fill we do we’re feel managing where the do to going where – in appropriate. We’re we’ll the big And that forward. is right the comfortable fit we plans way fit our is is and Term can and at issue rates feel invest

bell rate at to are there opportunities there’s going of involved things time, And happening what’s a that factors are So we’re but the number the a factors in. at the what number there. time, what and specific are invest of elsewhere ring weigh and all in, are with of there no opportunities the deposits, those that there

Alex Twerdahl

any done you so in far Have Right. purchases security quarter? first the

Robert McCormick

amount. modest a just Yes,

Michael Ozimek

Yep.

Alex Twerdahl

in the CECL where is, as we would today where Okay. today are is then about economy where reserve versus versus the I – where I reserve And kind of think adjustments your are I’m there and expect your to CECL, adopted days of anything change the for which XX to reserve? to was guess I be that missing Is pretty any there is I adjustment real modest. be any sort going there? ago, mean, we

Robert McCormick

the type I as today up adjustment mean, disclosing of adjustment know, we year. as we’re from it. you a the as I haven’t No, Alex. released or expect down material no, not throughout of thing where yet would far But at the end

Alex Twerdahl

that normal month. which inflation for other then banks the wondering in of that to number suggests a reflected I’m And XX.X there’s XX.X some to just if far that flat. guide, expense been this really sort XXXX, pressure that seemed changed be or we’ve of in of wage at guidance? talking about been quarter increases as so per it fully I salary could that expenses has much close XXXX, a I expense possible to think it know hasn’t that

Robert McCormick

is I wages, with industry, just more to retaining Right. an people that’s seen think, more epidemic, nationwide just regard but a people share even and No Alex, to day. and not attracting question. every We’ve that, takes a, our work,

You number? Sorry, ahead. in saw that year-over-year the go

Alex Twerdahl

the No, going open be I today a number as ask was you’re to if to spots progresses? that seeing need year filled of

Robert McCormick

Question.

are there number still open progress by but We of positions. a are bringing down, number the of that encouraged significant

Alex Twerdahl

Final question… Okay.

Robert McCormick

in hire certainly people very has operations time. us to Florida, and Moving a they We long in to good in with helped stay Florida that seem category.

Alex Twerdahl

for down because there just there’s are Or have that money? you qualified the less positions? people do that Is more

Robert McCormick

a from very only economy. not other they’re company. but that employers and service-based and – trained typically we a there’s industries, are draw with And it’s number people very competitors, can of do Probably well there a well our

Alex Twerdahl

stock the then it to the with quarter. just dividend is of me a split? the new maybe that the strategy And and – in from more of dividend final modest regularly? dividend the to the to a question fourth normalize increase Or dividend Okay. on increase increases just Is try capital indicative kind

Robert McCormick

likes you dividend little can’t increase. normalize likes I Well, and that. forward-looking But everybody it on give I dividend everybody a like increases, think I the think certainly statement a dividend,

Alex Twerdahl

you And then questions. taking for – all right. Well, my thank

Robert McCormick

Alex. Thanks,

Michael Ozimek

Alex. Thanks,

Operator

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

Robert McCormick

your you time this Thank great for have day. morning, and a

TrustCo Bank Corp NY (TRST) 25 Jan 222021 Q4 Earnings call transcript