TRST - Earnings call transcript Q1 2024

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Operator

Good day, and welcome to the TrustCo Bank Corp Earnings Call and Webcast. [Operator Instructions].

Before proceeding, we would like to mention that this presentation may contain forward-looking information about TrustCo Bank Corp New York that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Actual results, performance or achievements could differ materially from those expressed in or implied by such statements due to various risks, uncertainties and other factors.

More detailed information about these and other risk factors can be found in our press release that preceded this call and in the Risk Factors and forward-looking Statements section of our annual report on Form 10-K and as updated by our quarterly reports on Form 10-Q. reflect on hereof, are any call, and update information made of only obligation except statements after this date developments required the the to law. as forward-looking may this of by valid call as to the be The date or applicable this events company disclaims

to U.S. financial are our not measures determined During today's certain most discuss non-GAAP that will the reconciliations financial measures such accordance available trustcobank.com. tab figures statements in with GAAP. the GAAP call, we derived The of of from release, Investor Relations at are our earnings our comparable in under which financial website included is press

available be is earnings audio note today's event for recorded. available also days be that being webcast year, release. and our for the in replay as described of X will A Please XX press the will call

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

Robert McCormick

Thank Mike I you. as ended I'm will on shape. comments XXXX TrustCo credit today, thank joined Ozimek. joining Good and Scot Bank. detail I'm Mike numbers. my and President lending for and McCormick, the Salvador, color the Rob quality We Scot morning, am, of will by everyone, usually follow provide the call. with and you on good in

reaching high. all-time billion another Our mark, loan $X surpassed portfolio the

on to that branch challenged our by together maintained worked of efficiencies year locations, quality lag us team to deposit Our industry. some credit during we allowing rates. our retain rock-solid and grow few our improved that base, the and a consolidating our -- We customer

on positive reach a net another income the up to Income quarter. saw also at all-time yet continue total significantly slightly We quality with ]. Net generally million average off loans quarter. on down value on average down credit improvement has steady of return end. a X.XX, increased a both the XXXX with non-interest trend solid metrics up the XXXX positive improved. share per assets and ratio was TrustCo held book return Efficiency and margin from interest of equity in good return Exceptional quarter our at but throughout share $XX previous remains high. was trended start. favorably from hallmark of [ income end per lending. also and The Earnings is our to

As are we rigorous the favorable underwriting commercial those standards a of supports lender, non-performing and outcomes. and yield us of in resulted assets residential who loans know, company the essentially recovery. the the the a and again loans of charge-offs we of and Non-performing portfolio both quality over life net originate follow stability flat, loans, remain and

repurchase We as themselves. purchase are to present has been of reauthorized. our program they report pleased advantage opportunities taking strategic that anticipate We stock

Now numbers. Mike your the us take color give will will we portfolio, on Scot will questions. detail give loan then the on and Mike?

Michael Ozimek

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

the net first press prior equity of and of average assets million, and quarter, $XX.X As increase in release, over the noted yielded the respectively. on an quarter XX.XX% X.XX% saw you return X.XX%, which a company of income average

$XX.XX, in XX.X% XXXX. at increased March all-time for for $XX.X $XX.X same to in increased and growth same with strong. the share continued quarter as 'XX high. per up quarter $X lines usual, period or XX.XX% XXXX, million equity Capital value million portfolio ratio commercial X.X% the Book grew of earlier. credit the leading installment to to compared first the in was our the 'XX. which X.X% million Loan of $XXX.X first or Consolidated all of of in remains of the XX.XX% first or quarter of to Home residential increase XXXX $XX.XX 'XX, quarter a X.X% loan XX, Average over an has assets million was compared loans from increased $XXX.X occurred the loans first to billion estate of the loans XX.X%, categories $X.X equity and real or charge to or the first million over XX%. increased quarter period Average and year 'XX.

For XXXX. of has and credit $XXX,XXX. a provision the focus quarter key was the first during into for 'XX, been deposits 'XX losses Retaining

of increased deposits 'XX and million core to quarter, $X.X the the March at were Although as XXXX, from remain $X.X prior end total down of compared deposits, XX, billion.

the and As to of offer product differentiation. we marketing bank objective competitive offerings forward, aggressive to product continue move through is our

was of 'XX. first Net quarter quarter X.XX%, XX the in the Net of interest first interest $XX.X in XX to rate to period points decrease to of first increased a The million quarter bearing up liabilities quarter X.XX% first on interest for income in X.XX%, for 'XX. was first X.XX% Yield 'XX, points down XXXX. XXXX XXXX first quarter same from of million assets in $XX.X margin basis for the compared basis the of XXXX. interest-earning increased quarter from of the the cost of X.XX%

bring prior beginning has we decrease are that to of During optimistic time rates to the we quarters, lower cycle. slow the the we erosion have the able of been bank offered to on retain cost margin The are continuing grow time. time when of product. over This rate this while the that comparing and first XXXX, and down to nearing deposits to should deposits seen of quarter bottom

XXXX. of a division management Management of March $X recurring income. approximately to XX, Wealth assets under Our continues significant of had They source be noninterest as billion

of $X Now down net the from expense on million, million $XX.X noninterest at prior expense came to quarter. in expense. ORE noninterest Total

$XX,XXX the to of in compared ORE and $XX,XXX for -- in quarter came the decrease lower the is a prior a salaries costs employee quarter in settlement the in net result release, quarter. and benefit earnings first litigation in mentioned primarily in As current expense first quarter. prior the the the as at

to level not expenses level of to $XXX,XXX continued to we're of anticipated per hold the exceed low Given ORE quarter. continue going expenses,

All total to net XXXX's recurring We other were per for in be million ORE quarter. line in of expense, of expense, our categories the expectations $XX.X range the noninterest would noninterest the expect $XX.X in expense with to million quarter. of

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

Scott Salvador

million loans residential with $XXX over Thanks, morning, X.X% in the The million from Mike. or increase increased growth just which Good actual an billion. grew of Total quarter on $X year-over-year everyone. $XXX commercial. numbers, by was ending centered first additional $XX coming million mortgages,

$X.X decreased slightly loans loans quarter, the grew by million. by $X.X as On million approximately increased commercial loans residential and

past what has have to been in by portfolio grown over challenging over environment. pleased a loan the We're the $XXX million year

reflects equity overall continuing home activity with trends to quarter's First recent post products growth.

The years. and nationwide themes purchase restrained as conditions, versus money prior interest market rates volume market continues with other

well increased our looking in we're not market seek However, the from to positioned to we as capitalize the and share on also only increased take market market competitors. remain develops, but it activity

Our advantageous the trade our to us market, portfolio product, own puts promotions do pricing unique ability so. combined in ] [ position versus to varied a with control our

Rates moved XX-year in and have fixed up X.XX% we our market at the back rate. currently for in weeks, stand base recent

the and goal rates have volume keeping we we main stated, enter more market our As sharp driving of selling with the share season. as increasing been

amount quarter. translate recent the end equivalent processing net stages of growth as Our of has backlog and in the This last should picked committed to committed activity of we backlog numbers earlier loan to portfolio move loans More cycle. stands a however, we up, increased roughly the good and forward. have

to versus in year remained million $XX.X X/XX/XX. million million recovery years X $XX [indiscernible] measures Non-performing the a $XX.X ago. charge-offs $XX,XXX were were a quality This of year consecutive at Asset quarter charge-offs good. recovery. to Non-performing assets XXXX net million in Net follows stretching totaled quarter back $XX.X net as amounted when loans end the versus for upon a position.

credit or to at loans The in to as for essentially remained losses loans allowance year XXX% XXX%, Bob? losses at the flat of allowance a Our March, stands ratio from for X.XX%. coverage non-performing up total ago. quarter credit

Robert McCormick

That's take we're questions might and to have. anyone our story, any happy

Operator

[Operator from first Twerdahl Our Alex Sandler. is from question Piper Instructions]

Alexander Roberts Twerdahl

of backlog year. to quarter First, Scot, the of you end mentioned the was similar the the the end at

that seeing in and seems the seen buying is quarter However, seen a loan We've second the Based of kind second of thing. real last again despite similar, usually market, the of to couple in for is quarter what home the that years. season in the spring the couple it the being to strongest would growth. quarter you you're expect we've the trends last what backlog show on years? similar Obviously, growth

Scott Salvador

second the Yes. quarter. normally builds I first mean, just the quarter, said, upon

And delay, the we year translate which have of pick quarter net going growth. start to But move there's in obviously, all and should what's a slowest benefit for but between positive, always hit we our on activity see which relative, up, they normally will have And to up the we recently, overall, the to . activity line. seen come obviously, pick start applications it's some is that of backlog. when seen is when as increased quarter we First and the bottom forward. the

Alexander Roberts Twerdahl

amortization Okay. given Great. see in the of quarter? you you handy normal portfolio the that And just mortgage amount do in would then the have .

Scott Salvador

not out Roughly million, number, $XX probably It million a probably to bad to $XX want $XX to that's you number out. depends. a throw if throw million, million, $XX

Alexander Roberts Twerdahl

month, about $XX month. million per Right. about That's per

Scott Salvador

I quarter. sorry, Yes. I'm Yes. said for

Alexander Roberts Twerdahl

month. per million $XX

to. that percent, Obviously, liquidity the we it up Okay. do growth in bit hand? on you That's if lot couple see to to a deploy you a have whenever fund Or cash then would great. decide fund with you guys deposit expectation would promotions? it of loan be pick the little And a quarter, second with of

Robert McCormick

decision cash that That more on up grow . certainly would the excess good to and be or balance we up chop way that and make. a Al, got good could deposits have have a the promotions the we've to problem We now. do sheet step

Alexander Roberts Twerdahl

we're it it's peak is time longer? deposit push higher sort then rates, it on mentioned deposits. you're rate that lowering deposits time -- it deposits? on more on I time of to you us as mature, there them? give Or maintain a for that way time deposit they rate necessary Is color? to that to goes can bit still remain actually the potentially into And more another the saying just the lower a there of rates You a guess that as is little obviously that lower be able as little rate would close is Or up Okay. you're

Robert McCormick

answer those hopefully out we're even them our and longer peak And being with terms, we are the I people deposits. of have say, are to actively but close smart, time customers working because roll working retain environment, rate yes, those retain Not attempting as based to is throwing probably we're would over, to on current the And to Alex. and them. the to and question price accounts Alex, maturity, accounts yes,

Alexander Roberts Twerdahl

Say that X more time?

Robert McCormick

are customers customers to X them for, to and are actually or months X more look looked even X CDs beginning throwing longer even ]. People past out months. are you X, X But a terms now on maybe at about probably, than [ asking longer rates the at if year months, anything

Alexander Roberts Twerdahl

is in get cut. the And that of that is you so stuff? could longer-term past, you've portfolio short highlighted willing have the know that really that the something benefit nature been to potentially being of I rates that something offer kind when

Robert McCormick

appropriately, do a rate priced longer-term Yes, we . offer

Alexander Roberts Twerdahl

found Okay. us Maybe the of beat bit dropped just quarter. but in drove what talk expense first you benefits meaningfully pretty additional . a really you caused color? And then Can sort it can missed that? remarks, you about you to and I give how just pretty in salaries savings dramatically, the guide that and that more prepared little

Michael Ozimek

sure. Yes,

because right? about incentive So the was to and had at of sort quarter, related from also of [indiscernible] pool able the awards every then was $XXX,XXX about of about another it adjustment. of also get had, lower $X the that of of So year. being was prior or And there $XXX,XXX that $XXX,XXX, down production and take the downward revalued we we end some that million the some to liability-based

we stock that's that. So That up, price in million the turn but picked up could around goes there. drove if the first quarter what about $X

Alexander Roberts Twerdahl

Okay.

would in to where in you so that you fourth those to that not kind XX.X% expect are So quarter. that's things second, third to XX.X%, recur expect of and the be

Michael Ozimek

high, little will And conservative mean quarter, be correct. $X back that that's million Right. number. the mean, I correct. second a a I it could load into but

Alexander Roberts Twerdahl

for now. all my That's questions Okay.

Michael Ozimek

wherever Correct. go mean the also performance base you then and Yes, the I [indiscernible]. can right. mentioned awards liability

Operator

would I over currently concludes conference further turn This like J. no to session. We McCormick have to the Robert question-and-answer questions. any for our final now back remarks.

Robert McCormick

interest day. your for and you in Thank a company, our have great

Operator

and presentation, concluded. now attending disconnect. today's The conference Thank call you has you for now may

TrustCo Bank Corp NY (TRST) 23 Apr 242024 Q1 Earnings call transcript