TRST - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to TrustCo Bancorp Earnings Call and Webcast. [Operator Instructions] Before proceeding, we'd 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 forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Actual results, performance or achievements could differ materially from those expressed or implied by such statements due to various risks, uncertainties and other factors. More detailed information about these risks and other factors can be found in our press release that proceeds this call and in the Risk Factors and forward-looking Statements section of our annual report Form 10-K and as updated by our quarterly report Form 10-Q.

The forward-looking statements made on this call are only valid as of the date hereof, and the company disclaims any obligation to update the information to reflect events or developments after the date of this call, except as may be required by applicable law.

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

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

Please Chairman, go the hand At this President over Robert and J. like CEO. time, call McCormick, ahead. to to I'd

Robert McCormick

were everyone, joined morning, for Curley, report today the together income of usual, preservation value. The efforts and almost Good will million. contributing equity lending thank and joining organization's who of by during into net our strength of These to reflect produce Kevin CFO, about X.X%, of XX.X%, all go call. you numbers. President on $XX.X results McCormick, XXXX, detail and average of that TrustCo to I'm our elements of an the Mike creation who by today, and which we efficiency, Rob will talk achievement Bank. ratio capital shareholder a Ozimek, of the I'm of as came on return characterized the XX.XX% efficiency

mortgage is peers. base homes, lending, customer equity improve for third communities their within funds our little. that to our customer deep volume opportunity, the By strengthens our year. of and XXXX, create elected better and and capitalized cost our and exceeded existing were to loans volume quarter the one. efficient, we both team of our generated equity the new more both in very enhanced a home customers This XXXX, sizable new presented and are by loan than Through In footprint. they earnings Home broad volume dug overall network purchase tailoring branch bonds leveraged and lines the existing otherwise are and who greatest offerings our to where them extensive

liquid, performance, or ready position loan lend. and continue further we best-in-class intended XXXX looking And brokered well-capitalized and products technology, efficiency borrowings we improve enter resort in enhance the this and Also invest customer experience deposits. our Like we to ahead, to to our to all are to without the business adaptable. across Thus, come lines.

an be to because the Additionally, extraordinary X.XX% dovetails credit average the industry quality testament the success. our services that venture X.XX% cannabis highlight have with remiss well year-over-year. we last TrustCo Likewise, year particularly outlets. our net to compared of and undertaken are as retail branch Nonperforming extensive make we is commitment exciting products and our business the if our fail to network loans underwriting loans is would we cash-intensive offering in total the flat We new portfolio essentially to industry. to customers this suited by to to this charge-offs of supports year. a This our to a remained needs loans lender.

dive will Now the Mike into numbers.

the update take Mike? Kevin loan will we portfolio, then your an can on and questions. provide

Michael Ozimek

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

XX.XX% Book a credit of for remains compared and leading increase equity $XXX.X in the another XXXX. XXXX. the noted in of lines growth year of saw XXXX Capital the $XX fourth fourth to fourth $X.X X.XX%, in or XX, for the to period to XXXX of earlier. all-time net fourth quarter in grew fourth company an Consolidated $XX.XX XXXX, million per Loan XXXX, was respectively. year to share or XX.XX% strong. and of XX.X% was over of million, X.XX%, X.X% the billion has of equity $XX.XX, average equity press over up the a we quarter at the As which of assets X.X% to of value the income loans million ratio increased release, our high. December $XX.X fourth compared for quarter same quarter, quarter quarter charge quarter increase yielded home assets on the prior average 'XX, portfolio, continued which the XX.X% return was Average

portfolio million. over estate in real the loans residential XXXX. The period $XX.X Average some increased $X.X X.X% increased commercial loans or same million ] [ in and $XX.X million decreased

recorded quarter quarter indications of the long of provision ago. XXXX, matched With $XXX,XXX. loan for the credit provision decreasing credit fourth fourth was for losses For The no the quality.

has to Our and which conservative sheet consistent focus us continued on recurring balance measure, to high-quality enable residential produce lending continues to traditional be earnings.

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

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

excess levels into liquidity in current interest cash to the continue of will environment, market. Given the the the current rate investing evaluate bank

focus quarter. been quarter and key ended XXXX. growing throughout to deposits billion $XXX prior and a the the up deposits $X.X compared Retaining has million at was Total

our point basis assets of X.XX% cost bank the quarter. and Yield Net to quarter interest-earning X.XX% quarter XXXX. fourth to Net interest X differentiation. interest-bearing interest liability prior X.XX%, in on product of to to aggressive offerings from the offer the income quarter quarter. was through down basis XXXX of increased was from quarter. XXXX, The margin in an the the for from increased point prior 'XX forward, X.XX%, third increase continue up of $XXX,XXX prior the the compared of of X product we quarter million fourth marketing As objective move fourth $XX.X competitive is to of for the

have bring significant been XXXX. deposits, time margins growing time half portion which has retaining in the the able that erosion The lower continue of to offer on while flat to we and to deposits. quarter-over-quarter, latter a down XXXX, of rates cost Throughout product of the seen begin bank of the to

of same period balance increased the earlier. X.X% the year of average side XXXX sheet, total fourth the or million funding $XX.X the over On a deposits quarter for

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

outdoor compared expense, an Now on services advertising equipment net of prior $XX.X of $XXX,XXX the ORE net occupancy to in million, at prior and for The expense from the a net quarter. $XXX,XXX expense. [ of ORE noninterest higher expense up expense Total as in in cost at and increase came result ] the expense noninterest quarter. quarter $X.X came is expense million to expense.

the the hold noninterest line expense charge-offs to quarter. onetime with expectations -- not for XXXX range anticipated categories levels were level the we fourth continue total million expense the going XX.X% are quarter. this ORE be XXXX. over net million noninterest X% We not as other expenses $XX would our increase and per experienced to $XX.X of Given in a This the to or we expense $XXX,XXX per of recurring represents in quarter. to than All expect of less the of quarter, are exceed in

loss. review Kevin portfolio and nonreporting the Now will loan

Kevin Curley

Thanks, morning to everyone. good Mike, and

our average loans $XX $XX centered last fourth mortgages, Our million loans million $XXX by increased equity or grew by growth quarter or year by over million X.X% increased residential on XX.X%. home which our also year-over-year,

by grew $XX.X In commercial our loans million last addition, year. over

both actual also increased in million, the increases. $X.X credit third as first $XX.X quarter and to loans loans quarter, were by the higher over lines Residential equity by million. the million. by mortgages decreased Commercial For fourth loans with in compared home quarter increasing $XX

We activity activity capitalize remained residential market Overall, positioned quarters. market as those and to in to discussed in develops. trends similar recent remain the well seek

to flexibility our increase the in utilize ability we have to increased fixed pricing loans. current recent lender, As market weeks, volume. a for application and our rate portfolio XX-year Rates the and control various on X.XXX% base offer the of promotions have our rate in to

have In equate to rates with addition, mortgages the very competitive we the and fixed in range. rate ] X.XX% adjustable [

they results steady remain purchases. driving low continue may we use products loan borrowers they to their large positive for XXXX. mortgages equity or equity attractive growth that quarter see remain various stronger rate are home about the have and projects to to on in Overall, focused many our Our want as in or own demand

asset quality. to Moving

quarter Asset quality at compared Nonperforming year ago. $XXX,XXX. Nonperforming X.XX% ago. as of $XX.X continue just also assets, X.XX% stand and million last a delinquencies strong. million to year million a $XX the quarter quarter were remains amounted Early-stage quarter quarter $XX the under end, charge-offs and Nonperforming million is $XX.X loans $XXX,XXX, a consistently third million last ago. at steady. loans million for to versus now Net XX loans down X.XX% year at the from total of bank quarter last be $XX.X $XX.X December and to

of first XXXX. as year-to-date total we posted net net second only are recoveries and $XXX,XXX quarters charge-offs in the Our

coverage and a coverage credit At losses at of quarter ratio at compared the a with solid ratio $XX XXX% XXXX. XXX% $XX.X a of with for million to year-end allowance coverage and September remained of end, at Rob? $XX.X million XXX% of end million ratio our

Robert McCormick

That's our you We're happy answer story. questions may have. any to

Operator

comes Instructions] Our Ian of Lapey question Funds. first [Operator Gambelli from

John Lapey

Yes.

and mortgage So How you provided just fix said you the show best that of being equity Or mentioned, more the the at are opportunity back in maybe you home with for X.XXX% trade-off numbers 'XX to 'XX the that just so the sort the start, about talk 'XX, there? thinking in rate growth that. is tipping about attractive?

Robert McCormick

but Ian, past is real I we're think the I months. coming business. doing than know pre-approvals time got the seeing, optimism I XX to I this tell think this probably you, in you're have don't we back year what into more estate

about So I'm old. we're very encouraged XX years --

of during that end a a it But with in you market used think we the know to for I that, period kind estate spring think when and may a call again. time. I we crazy faded spring we've market been real up that but of market,

actively of maybe real home effort shows brokers capture an a So of estate some things a like and mortgage mortgages. that calling we're on lot purchase participating to money in in and lot

purchase We're non-trust again money I optimistic we're also about the guess refinances of optimistic are mortgages. So that there. out some about

and additional eventually, a have pretty want good funds. need that. We for some And program people

John Lapey

Yes.

Okay.

Robert McCormick

[indiscernible]. hope I

John Lapey

yes. Yes,

basis of a little I but spot would NIM, of bit. actually sort the -- be the What now had so we NIM but XXX in since not January? On what September, mean, a points cuts fell would we're as lot, your NIM

Michael Ozimek

other able obviously, But I down. repricing the are Fed bring we're of we will -- the -- if the that's think cutting side, that out. mean, flatting holding I right? bring us -- So helping And CDs on we're asset -- mean, we're we're down, keeps to some that out. I side our

John Lapey

So what rates are CDs? on current your

Michael Ozimek

have We X Kevin and Karl. [indiscernible]

months have and X X%. at and XX X at We X.XX% months

John Lapey

Okay.

Okay. fairly those drove that and increases? expense and jumped there on the then And Is significantly, those the services both year-over-year. lines in sequentially anything outsourced expenses, equipment unusual

Michael Ozimek

just -- third of Yes. cleaned we locations couple had we and year. of up throughout we -- a we the we for A the fourth -- out that kind closed quarter,

branches amortizing that some also rolled into service we fit some left put we those we've We we that off. are Our -- installed new ups ATMs. existing

pushing the that So those and equipment expense that hit quarter. up line expenses are fourth in the some outsourced item just services

those So level. continue we that don't to expect at

John Lapey

good. Credit last maybe one. then quality And Okay. looks

I side? you think steady. what to you you said you earlier look delinquency the as are worried about and 'XX, are quality watching forward on are 'XX What credit

Robert McCormick

credit been our about pretty all, We've regard quality we're pretty our about quality for not We we're to always a comfortable commercial with concerned at at. credit not We're all. modest standards. relatively where with company nervous keep We're again. of And portfolio reasonable a lending at size.

John Lapey

to I'll . you Okay. Thanks, in next Good to talk quarter. hear. and guys,

Robert McCormick

you. Thank

Operator

question next of from Our Instructions] Greg [Operator Funds. comes Adirondack Roeder

Gregory Roeder

line ordering a on challenging very Congrats funding quarter. on

powder, mentioned quality. credit had you not you're nervous dry about You

it You're as back see occupied book. pulling commercial or like non-owner of And or small be are multifamily your real from I'm lenders other to as to very Do kind exposure increase deals your there? you kind commercial loans whether underweight in things the that. of opportunity estate, unique curious

Robert McCormick

$X long see a portfolio, We million we're ever bit a billion I commercial term. slow pushing loan steady. or you'll and think contrarian. Greg, again, $XXX but a number, something mind don't I significant like But certainly Absolutely. with like wouldn't that that $XXX little up million, us

seize us. about we think there over. to that we that -- in I and more opportunity But if get there and we'd and crazy think know 'XX, if 'XX we grab could. are we just be of opportunities, won't to And you like that especially will think

Gregory Roeder

that And State about -- on our question confined my in to works? And very question the York certain hear. of much last New in don't to curious and how know cannabis it states and as my forth. I curious about I'm Good is really opportunity. that. their so Is in I'm Jersey Florida laws or rules Massachusetts, and New terms next

Robert McCormick

We the Florida is medical far, so activity but we've haven't in Massachusetts our New York right. all opened to states most right And still and had entire now market, only. is

Gregory Roeder

you're retail on small bang So side, the essentially the to going operators? deposit

Robert McCormick

sir. Yes, Yes.

Gregory Roeder

Okay.

Robert McCormick

Not yet. Yes.

Operator

We no hand currently any remarks. you much. for questions. the Thank have closing Robert to very to I'd McCormick like back

Robert McCormick

you, hope you a Thank quarter. day. [indiscernible] We have next you company. great See

Operator

today's we'd conclude to everyone like joining. we call, As for thank

now You disconnect may lines. your

TrustCo Bank Corp NY (TRST) 22 Jan 252024 Q4 Earnings call transcript