TrustCo Bank Corp NY (TRST) Q3 Earnings call transcript Oct 22, 2024

In a recent earnings call, TrustCo Bancorp reported a solid performance for the third quarter of 2024, highlighting growth in both deposits and loans, as well as a strengthening net interest margin. Rob McCormick, the President of TrustCo Bank, led the call, accompanied by CFO Michael Ozimek and Kevin Curley. The call saw a focus on key themes, including growth, credit quality, and the company's strategic positioning.

Growth and Financial Performance

TrustCo Bancorp reported a 2.6% increase in net income for the third quarter of 2024, reaching $12.9 million. This growth was driven by a combination of factors, including the growth of deposits by $230 million to reach $5.3 billion and the increase in total loans to nearly $5.1 billion. This growth in loans, particularly in the residential real estate sector, contributed to an 18% increase in the home equity portfolio over the year. The company's focus on maintaining a balance between deposits and loans, along with strategic loan origination at better interest rates, has been instrumental in this growth.

Credit Quality and Loan Portfolio

Credit quality remains a key concern for investors, and TrustCo Bancorp's stellar performance in this area is noteworthy. The company's nonperforming loans remained steady at 0.38% of total loans, a testament to its high underwriting standards and effective loan processing operations. This steady performance indicates a strong commitment to maintaining credit quality, which is crucial for long-term success.

Market Positioning and Future Outlook

TrustCo Bancorp's strategic positioning in the market was a significant focus during the call. The company's emphasis on offering competitive product offerings and aggressive marketing strategies has contributed to its success in retaining deposits and growing its loan portfolio. The flexibility to utilize pricing control and offer promotions puts TrustCo Bancorp in a strong position to capitalize on market activity. The company's focus on maintaining competitive rates, particularly in the residential mortgage sector, has been a key driver of its loan growth.

Financial Services and Capital Management

TrustCo Bancorp's Financial Services division has been a significant source of noninterest income, with approximately $1.3 billion in assets under management as of September 30, 2024. The company's proactive approach to fees and the strength of its team in the Trust department have contributed to this growth. As the company looks ahead, it is considering options for capital management, including share buybacks and potential branch expansion, as it navigates the improving net interest margin landscape.

Conclusion

TrustCo Bancorp's third-quarter performance underscores its ability to navigate market challenges and maintain growth. The company's focus on maintaining credit quality, strategic loan origination, and effective financial management have positioned it well for future success. With a strong capital position and a strategic outlook, TrustCo Bancorp is well-positioned to capitalize on market opportunities and continue its growth trajectory.