TRST - Earnings call transcript Q2 2022

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. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero on your keypad. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one. you star question, two. your withdraw may and press To

is any McCormick, press the about other the Relations measures. conference is event information such call press in by various that due most and like may over factors. as Today’s quarterly at of turn can More and differ Bank release, factors Before statements the President our under Mr. the on information our provided recorded. CEO. valid available covered Chairman, this At are J. contains release Investor by call, our and ahead. applicable and by only that disclaims being is to Reform in included forth set and forward-looking Please also are to would would measures Risk could Securities I GAAP tab to like risks, be detailed on section such of statements Statements Harbor reconciliations earnings comparable website our Form Please mention in reports the annual to date Corp today’s to of this which Forward-looking trustcobank.com. Safe by note this York of go these Robert preceded time, the financial figures TrustCo be non-GAAP to required hereof, The presentation in proceeding, as may report XX-Q. obligation update we trends of The risk law. statements Form about and the those company except other XX-K XXXX. to Actual the updated uncertainties, found presentation and our Factors materially that and and be as from information contain New Litigation Private intended Act forward-looking results this

Robert McCormick

our CFO, very of about Scot quarter Thank Bank. Mike morning it would detail, Rob hear solid our hit CEO talk the joining the Ozimek, then the loan Michelle me call the mortgage her Simmonds our you will you for for to for us Michelle portfolio, join this Michelle portfolio, questions. added McCormick, more provide to cover time on report. thought residential and I’m manages so Salvador we for and second for results. and turn the about mortgages, a be it I Michael direct Scot nice over will highlights to leaving today. will

quarter here the bank solid. second The was at very

million record. might and quarter was same Our over up a year first last net period even the be $XX.X it year; this income of the significantly of

interest net to periods was $X.X over with over Fed year. over for million this, up quarter helped the put work loan to is of last to the which almost our $XXX we in some was quarter money $XX able up portfolio, Our also at income end. the greater reported. have all This but been billion action than Certainly million

As usual, mortgage our most of the in growth portfolio. residential happened

We are activity portfolios. home and by loan equity encouraged our in commercial the

second lending I part business. quarter also grow to not Deposits to large most know the our under of you continued installment in of think billion. just $X.X is a

cost trend being less time of core lower on We continued a dependent growing accounts deposits. and

categories. of part, from accounts million. result grew accounts time the the $XXX in Shareholders under in consolidation a For shift just of growth most was to other the equity

quarter, decent be year. quarter continues department to service very They last comparable same to financial the active. Our had a

of was non-performing to X.X to Our assets loans total was strong. loss times. provide loan a to total ratio X.XX. The reserve and was X% loan Non-performing total coverage sufficient loans, performance X.XX of portfolio was loans assets

was Our ROA X.XX.

than prior all reported. better Our ROE was XX.XX, both periods

XX%. expanded to under Margin X.XX. was ratio efficiency Our

healthy a pay to continue We dividend.

just improving. and Capital strong payout over XX%. Our are was ratio ratios

full operate same to the service offices. continue XXX We

with year and look results of the very our are proud We to rest great of optimism. forward the

questions. turn Now will we He talk it respond O. over mortgages, about loans, to cover Scot then to will Michelle detail the results, I’ll Mike? will will Mike

Michael Ozimek

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

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

over same the the second securities, HCM portfolio XX.X% average $XXX be reached decreased As estate the X.X% over portfolio. ’XX. of include and the in continues to in period $XX.X loan real X.X% our same quarter the XXXX. million million growth residential million the focus, commercial second over in expected, within increased The which first or ’XX. investment or the The the quarter concentrated portfolios, quarter lending XXXX Total period average or $XX.X of change primary of during AFS ’XX

securities. same the two $XX $X $XXX.X bank period, the paid down, of approximately million pooled totaling approximately During purchased in million securities maturities and million, had

the increases offset unemployment is For $XXX,XXX. credit provision X.XX% for total the on the commitments same a was loans forecasts, for of of compared ’XX. as losses period $X to million losses a of credit ratio ’XX, to as result a losses result of by and include the of the X% loan provision credit in This XX, loans. XXXX for was as June and second loans quarter of housing of allowance a unfunded as The on losses provision improving for of of in unfunded a price $XXX,XXX credit credit to

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

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

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

bank cash and level the interest environment, into Given excess continue evaluate to the investing the liquidity rate elevated of market. changing will the

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

decrease time During the total from from deposits points points. deposits interest-bearing last XX basis basis points same driven over cost to in XX year. period, basis primarily our points the period of basis decreased was XX by a same This X

the of and we beyond. on mature million move $XXX of XXXX, points. the at increase XXXX, of Fed rate fourth has through In In as impact in in mature will bank basis the funds approximately XXXX, average $XXX approximately average CD XX CDs in an average an of will the basis at CDs $XXX into have XX half we target will an second mature quarter quarter of points. that the CDs basis XX third pricing total points. XXXX of million move will of million an the As The rate approximately rate during of rest rate at

financial services of source had XXXX. non-interest They $XXX.X division XX, assets to under of a as continues recurring million Our be June income. significant of approximately management

quarter came The quarter of of the $XX,XXX at and expense is expense non-interest of first expense to onto the $XX.X ORE just XXXX. million. to true-up a of $X.X non-interest a compensation due to result XXXX net million our in of up quarter. upon in range from low the incentive million, $XX.X net to salaries an employee of the a of quarter prior primarily accrual ORE as to expense. expense for the payout decrease first Total prior the expense compared compared expense end in $XX.X Now benefit $XX,XXX estimated in in at at increase and came of million quarter

of Given the were that range expectations other categories quarter the to line XXXX’s The to efficiency in in quarter expense total We of non-interest of quarter. million at for recurring XXXX. expect to All of quarter. per the per ORE quarter. be continued level going $XX.X $XXX,XXX low expense we expense second net exceed the million our level ORE XXXX second expenses, in of non-interest expense XX.X% hold XX% of would the the in anticipated in to second compared of to came with $XX.X continue to are not ratio

bank XXXX June in ability shareholder was at continues consolidated XX, - X.X% the to compared Finally, of for year these $XX second proud times. of X.XX% XXXX. be quarter value during The Book assets of to up to equity challenging capital share second compared $XX.XX, per ratio to a was ratios economic earlier. to maintain value XXXX its X.XX% quarter

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

Scot Salvador

Mike, Thanks morning. and good

actual to increased or X.X%. [Indiscernible] second loans our million million or $XX in by the numbers, total For continued risen portfolio. quarter, $XXX growth loans X.X%. have in residential by be The centered

$XX by residential X.X%. million loans quarter, the On or grew

just Home with our after due rates. was Florida to the line on continuing business loans activity of PPP money For $X.X on downs. also especially fixed credit by year-over-year and quarter residential million X% the grew Purchase results. up million. picked active loans $XX by equity primarily year, under the with million quarter market term $XXX or long remained SBA increase strong rise the its has pay Commercial decreasing the

Interest base activity on the provide be increasing the in an current business inch move results is quarter, details continued levels in forward, While purchase to rates rate her overall conditions Michelle solid. have and undoubtedly effect and marketplace continued our and will on to economic to interest XX-year rates securing additional efforts. as general in date higher at presentation will our X.XX%. loan we

last up end and changing was market majority mortgages equity Our smaller with and made It the the very are at reflects loan is low at Refis levels a purchase strong of in both point the backlog quarter backlog. money the up from products. of same amount first home quarter is vast year. The dynamics.

and posted of to stage Michelle the remain from from loan allowance $XX.X quarter. now last loans to loan the million quarter. to year million ratio charge-offs additional for information down now quarter. a Non-performing decreased The recovery $XX.X dropped million the This also versus low assets from XXX% XXX% at for measurements non-performing year-over-year. net quality stands portfolio. in decreased turn $XXX,XXX on will $XX.X our of over coverage positive, on again it As delinquencies losses is and I non-performing on $XX.X Early $XX.X million remain loans ago. have a million

Michelle Simmonds

decreased is has considerably thank Thank the months, you pending the to All but bank’s to are Scot, construction the and the past you backlog the several lending over new opportunity greatest in for for market on loan contributing discuss growth The operation. loans our loans for are Florida. residential but rise. closing, regions refinance

Another there in an area where is products. our home equity is uptick

With in always of through are we the that increased well surprisingly, as also fresh option rate interest variable products new loans new continue with competitive, for footprint. are lines. in of our to all our operational to and of existing ideas utilization looking we we existing portfolio for adjustable Not ones. fixed enhancements see for products seeing To remain rate, or expand as increased

product mortgage serve. recently the have ways Overall, variety well unique very of have a we communities products is competitive the appreciation positions offering the for the with firefighters. seen for closing rates insurance, portfolio with we mortgage of vitally segment that active charging of much example, a being market. in it. Hero It police to show low officers do and Hometown lender attractive important incentives, veteran private duty offers members and we costs in we us of one For every no military, and This all program implemented our interest

Now it back turn I’ll Rob. to

Robert McCormick

you be Thank any to have. you Michelle. We’ll answer happy questions

Operator

open. your Sandler. instructions] Our is first now [Operator Alex, question from Piper Twerdahl from line for Alex comes today

Alex Twerdahl

morning. good Hey,

Robert McCormick

Hi Alex.

Alex Twerdahl

a up First with family, historically to the I and four what’s on mostly put rates, which and here. to the guys uncertainty this given HELOC rates guess quarter, off, makes the economy sense bit going and picked you also around one from happen

of going still or it one quarters? is equal to more product growth four of product equity shift to going you next be a an or it’s think much family, mix with growth, future the making of component predominantly that HELOC terms up home be to the over do bigger In couple

Robert McCormick

as favor product, out equity we of a of area home but home the product. leader for many, be in went of to used Well, years many that kind ago, period equity a time a Alex, the

eclipsing We are the seeing some of XX% so way, we’re based underwrite to which them underwrite a it pick don’t source, to residential we we loan residential value, first up. second about happy our to right nice product, a never the product, happy in but mortgages. really it, see new them interest a we are it’s supplement, - it it see first we We ever nice though. prime taking It’s over

Alex Twerdahl

what’s the--I liens. a What’s rate equity the first you current now? X.XX loan and on on Okay, home think said right the

Scot Salvador

Well, for prime rate year even. for it Alex, to a fully teaser first a and at the one then indexed X.XX, goes

Alex Twerdahl

Okay, got it.

Scot Salvador

get loan with off rate dollars--if to money X-amount costs. like three they closing recapture, $X,XXX, Tried take a three-year and the the the they closing with the pay one-year six we lower teaser, of a take people go for if years, but if within months, so the the we costs back with pay they

Alex Twerdahl

assuming Can betas of between in terms betas, and guys your you’re markets? this half going about just meaningfully were pressures I if there’s curious deposits it, picking the rates see; any but year. are I’m Florida talk awesome think, deposits the that to little the Got a investors any up which differences just with New in seeing going any okay. and analysts is second many you what I to markets. Certainly higher, and more negative of York on you bit of think start what seeing are deposit the in are quarter,

Robert McCormick

modest the we’ve amount probably a the same to deposits. of say I had Yes, have amount slight a I on mean, or pressure hearing we’re things.

are of ratios right very, very still As all our strong. retainage now,

now, it to We’re customers. that that I rate but our increase on comfortable well, next heard to that the know, for higher looking heard going we’re be--you retainage at, same we’ll be with take Fed certainly I’ve the seeing the the some pretty based is customers we’re opportunities. right for I’ve guess as quarter going thing, where and second as is comes.

Alex Twerdahl

Got it.

press in marketing you the think I about aggressive something differentiation. product mentioned release, and

little differentiation product I talked Hometown the with of a think you some program. the bit about Heroes

aggressive quarters? to coming In going in obvious see expense that something the the in be--that going terms line of is to is more marketing, we’re that

Robert McCormick

point much advertising. in pretty don’t in That’s down, I patted spike you’ll this I think, the time. big a at see think

direct ways so our and Alex, Print also a you expensive, some less internet, marketing, to advertising it’s and the television see less big cheap, But we’re in so we’re We do because more expensive are advantage and I I taking can’t don’t free to quality say regard of the more to more even marketing more that’s - advertising, different with trying with are know a do of or spike alternatives advertising, issue. expensive, it. find more very line. going more right, contact customers, to think we’re medias or at trying alternate of on in expensive sources and and the you’re looking outrageously and social media to

Alex Twerdahl

Then question just for just follow-up it. on the-- me, a Got

Robert McCormick

- we’re side too, big of also and where pretty customers out note, just interesting some our to from, on hang they a surveying so. find came results those Oh, on are

Alex Twerdahl

What play Final are how this to go question just we’re that provisioning. not the different a as weightings you components on think based obviously in that and in that economists that reserve of better later more Yes. of We’ve us A recession the--I maybe well or for too, sense to would the current loss it metrics HCL? Is four a me but your factor or already calculating can lot provisioning. it mean, quarters year, is around help are cause the now get on one. unemployment based GDP, for projecting of credit more the HCL a had if negative histories as factors higher? about on

Michael Ozimek

Florida at also at at high markets the a Yes, taking of things the loan - so we we’ll started hit it CECL and I layering unemployment a and is in it is in the and quarters, in market, a turn components, so York that around. we of to overall serve, and and guess, at know, in balances so. bifurcated, when hit take when that you in loan what the the those over numbers look it, Alex. start is of part could you are the look one next areas, our calculate then you GDP just our and that the big we some growth major to as you, look Those reserve. a we the growth also that there, but area, when numbers where separate just then look it upstate in unemployment and go the then area, Unemployment big It area. as loan markets the in we so points of kind those New much a We see too and few take those in factor, follow is

Alex Twerdahl

for taking my thanks questions. Great,

Robert McCormick

Thank you Alex.

Operator

you. Thank

Lapey of question Gabelli from open. next Our your is Ian Funds. Ian, now comes line

Ian Lapey

and competitors morning, talk for whether about traditional are, was the I could deposits lenders start good competitive for environment you strong are. fintechs your then and sort a or Hi, and the talk that. you just similarly Maybe branch-based quarter. competition we or congratulations competitors hoping, maybe with of they’re underwriting others, who who could about toughest the like toughest mortgages, on

Robert McCormick

internet the formidable central County, Westchester can’t the are lenders way. but the is area, Truist, this credit Florida very lenders some large discount a Obviously area, of you upstate From a Wells the area. unions some in share internet it has Fargo Orlando then the the especially in market and the presence of Downstate area. and strong same shifts in very Wells to are Florida in Ian, perspective, very competitors even and

compete particular that to full We go, scale. with As but market regard deposit gathering. heavy can especially anybody and far everyone. CD deposits I as sounds against any it’s hot into crazy, come time, know at the

ATMs, large as that the of area attracting focused, more with hopefully core side us We’re a don’t the lot that for not at and personal the of locations, in battle I core doing telling customers. and a right deposits, are regard presentation, bit very well many of we’re I’m time, so doing and but you certainly any along positives, the about seeing very, a that and have do a charges now can in of lot things internet But contact, lot banks anything CDs are so deposit with on the in said some now. the to good crazy out They’re don’t foreign some and our little stuff job you hearing pricing, of in accounts. we’re locations domestic very come market it. There people and a you know go the

Ian Lapey

Okay, thanks.

three next you what if the or is at on both? the it mortgages So years, your Is finding it you growing base, growth? deposit do as look biggest attractive see underwrite, constraint to

Robert McCormick

above, and certainly, hiring all be of of also another members the qualified finding and our labor both big to market, That’s and add the team. be them items and of trained would Ian, issue. Well, long to stay I those people, getting enough productive

Ian Lapey

Trustco-- and then Okay, on the

Robert McCormick

Ian--no, go From a perspective, positive ahead.

go You ahead.

Ian Lapey

then you No, one. I’ll ask next the finish and Why no. don’t

Robert McCormick

if times, strong we’re to feel Well, and good difficulties we’ll at be be a withstand to a position you able do balance some perspective, us. whatever come off positive thrown this, recession built a or during so we’ve the standing prosper in see withstand from and we might is that and be about, sheet built, pretty

Ian Lapey

and Okay, you share Trustco ask me area? that I considering both there, think gaining you was Can like in the $XXX quarter. bond going AUM. and was remind products offering been what--I a you services, agree. in good it looked tough have pretty just markets, million I said just it What Then are to on stock yes. generally financial you

Robert McCormick

very trust a it’s much. Ian, say would I traditional department,

administration, of more but convert perspective, - a investment and diversity much a those lot accounts a custody management accounts, of estate some is to department and a get types traditional of just lot very different that attempting accounts items. it trust We’re from

Ian Lapey

then next over Okay, branch one, is years? what last strategy growth and your the three

Robert McCormick

very in much mode. we’re Well, a greenfield

During one we opened the I that branches in top - our de year novo was year. XX think period,

that. We’re certainly not to going

couple Port between probably over expectations, we’ll there over to I think see branches not areas Florida area a infill the a we to like a like with are next markets, in Lucie renewal that because of close years so at them. several up much the York New lease have be our a we you’ll even It that and close, along treasure would and three performed net will But additional us new probably there three the net opt in other locations. probably a coast, that other the to will years next couple of St. zero probably branches. net--pretty closures are

Ian Lapey

Thank Okay, you. that’s it.

Robert McCormick

Thank you Ian.

Operator

session. like closing Thank over for turn to remarks. you. answer to Mr. McCormick concludes back would This our question I and any the conference

Robert McCormick

the in stay your great you here our Try cool northeast. for company, have day. in Thank interest and a and

Operator

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

disconnect. now may You

Robert McCormick	President, Chief Executive Officer
Michael Ozimek	Executive Vice President, Chief Financial Officer
Scot Salvador	Executive Vice President, Chief Lending Officer
Michelle Simmonds	Administrative Vice President
Alex Twerdahl	Piper Sandler
Ian Lapey	Gabelli Funds

TrustCo Bank Corp NY (TRST) 22 Jul 222022 Q2 Earnings call transcript