TrustCo Bank Corp NY

And welcome to the Tresco Bancorp Earnings Comment Podcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star followed by one. To withdraw a question, you may press star followed by two. Before proceeding, we would like to mention that this presentation may contain forward-looking information about Tresco Bancorp 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 risk 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 statement sections of our annual report on Form 10-K and as updated by our quarterly report on Form 10-Q. The forward-looking statement made this call are valid only as of the date hereof, and the company disclaims any obligations to update this 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 Determine it in accordance with U.S. GAAP. The reconciliation or such non-GAAP financial measures to the most comparable GAAP figures are included in our earnings press release, which is available under the investor relations tab or on our website at trustcobank.com. Please also note that today's event is being recorded. A replay of the call will be available for 30 days, and an audio webcast will be available for one year, as described in our earnings press release. At this time, I would like to turn the conference over to Mr. Robert J. McCormick, Chairman, President, CEO. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining the call. I'm Robert McCormick, the President of Trustful Bank. joined today, as I usually am, by Scott Salvador and Mike Ozemek. Scott will provide color on lending and credit quality, and Mike will follow my comments with detail on the numbers. We ended 2023 in good shape. Our loan portfolio surpassed the $5 billion mark, reaching another all-time high. Our team worked together to retain and grow our customer base, allowing us to lag on some of the deposit rates. We improved our efficiencies by consolidating a few branch locations. and we maintained our rock solid credit quality during that year that challenged our industry. 2024 is off to a good start. Positive trend on total loans continued to reach yet another all time high. Income was also positive with net income of $12 million and non-interest income up. Net interest margin was slightly down at 244, but generally held steady throughout the quarter. We saw solid improvement in our return metrics, with return on average assets and return on average equity both up from the previous quarter. Earnings per share increased significantly from the end of 2023, and our book value per share also improved. Efficiency ratio trended favorably down at quarter end. Exceptional credit quality remains a hallmark of Trustco lending. As those who follow us know, we are a portfolio lender, and the quality of loans we originate supports the stability of the company over the life of the loans. Both residential and commercial underwriting standards are rigorous and yield favorable outcomes. Non-performing loans and non-performing assets remain essentially flat and charge us again, resulting in a net recovery. We are pleased to report that our stock repurchase program has been reauthorized. We anticipate taking advantage of strategic purchase opportunities as they present themselves. Now Mike will give us detail on the numbers, Scott will give color on the loan portfolio, and then we will take your questions. Mike.

Thank you, Rob, and good morning, everyone. I will now review Trustco's financial results for the first quarter of 2024. As we noted in the press release, the company saw first quarter net income of $12.1 million, an increase of 23.13% over the prior quarter, which yielded a return on average assets and average equity of 0.80% and 7.54% respectively. Capital remained strong, consolidated equity to assets ratio was 10.51% for the first quarter of 2024, compared to 10.17% the first quarter of 23. Book value per share at March 31st, 24 was $34.12, up 5.6% compared to $32.31 a year earlier. Average loans for the first quarter of 2024 grew 5.2% or 249.4 million to 5 billion from the first quarter of 23, an all time high. Loan growth has continued to increase and occurred in all of our loan categories and leading the charge was the residential real estate portfolio as usual, which increased 146.6 million or 3.5% in the first quarter of 2024 over the same period in 2023. Average commercial loans increased 38.3 million or 16%. Home equity lines of credit increased 61.7 million or 21.2% and its installment loans increased $2.8 million, or 21.1%, over the same period in 2023. For the first quarter of 2024, the provision for credit losses was $600,000. Retaining deposits has been a key focus during 2023 and into 2024. Although core deposits were down compared to the prior quarter, total deposits as of March 31, 2024, increased $4.4 million from the end of 2023 and remain at $5.4 billion. As we move forward, our objective is to continue to offer competitive product offerings of the bank through aggressive marketing and product differentiation. Net interest income was $36.6 million for the first quarter of 2024, a decrease of $10.4 million compared to the same period in 2023. Net interest margin for the first quarter of 2024 was 2.44%, down 77 basis points for the first quarter of 2023. Yield and interest earning assets increased to 3.99%, up 30 basis points from 3.69 percent first quarter of 2023 the cost of interest granted liabilities increased to 1.99 percent first quarter of 24 from 0.63 percent the first quarter of 2023 during the first quarter of 2024 we have been able to lower the rates offered on time deposits while continuing to retain and grow that product it should bring down the cost of time deposits over time the bank has seen the erosion of margin begin to slow when comparing the decrease to prior quarters, and we are optimistic that we are nearing the bottom of this rate cycle. Our Wealth Management Division continues to be a significant recurring source of non-interest income. They had approximately $1 billion of assets under management as of March 31, 2024. Now on to non-interest expense. Total non-interest expense net of ORE expense came in at $24.8 million, down $4 million from the prior quarter. As mentioned in the earnings release, the decrease is primarily a result of lower salaries an employee benefit cost in the current quarter, and a litigation settlement in the prior quarter. ORE expense net came in at $74,000 for the first quarter, as compared to $12,000 in the prior quarter. Given the continued low level of ORE expenses, we're going to continue to hold anticipated level of expenses not to exceed $250,000 per quarter. All of the other categories of non-interest expense were aligned with our expectations for the quarter. We would expect 2024's total recurring non-interest expense net of already expense to be in the range of $26.9 to $27.4 million per point. Now, Scott will review the loan portfolio and non-performing loans.