TrustBank NY(US:TRST)2020-01-22 15:45Financial Data and Key Metrics Changes - TrustCo Bank Corp reported total assets exceeding $5.2 billion, driven by strong loan growth [5] - Net income for 2019 was $57.8 million, down from a record in 2018 due to increased deposit costs [5][7] - The return on assets and equity were 1.06% and 10.41% respectively [6] Business Line Data and Key Metrics Changes - Total loans surpassed $4 billion, with the residential portfolio growing to over $3.5 billion [5] - Average loans for Q4 2019 increased by 4.4% year-over-year, primarily in the residential real estate portfolio [7] - Non-interest income for Q4 2019 was $4.1 million, down from the previous quarter due to prior year legal settlements [13] Market Data and Key Metrics Changes - Interest-bearing deposits reached nearly $4 billion, with significant growth in money market and time deposit categories [6] - Total average deposits increased by 5.2% year-over-year, driven by time deposits and money market deposits [10] - The cost of interest-bearing deposits rose to 90 basis points from 60 basis points [11] Company Strategy and Development Direction - The company continues to focus on traditional lending and conservative balance sheet management to produce consistent earnings [9] - TrustCo is exploring options for acquisitions, emphasizing that any deal must be accretive for shareholders [27] - The bank aims to stem the runoff in home equity lines of credit and is testing new ideas to reverse trends in that area [5][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capital levels and indicated that they are exploring various options for capital management [26] - The bank anticipates continued loan growth in 2020, despite a slower loan cycle in the first quarter [19] - Non-performing loans decreased year-over-year, reflecting improved asset quality and economic conditions [20] Other Important Information - The efficiency ratio for Q4 2019 was 57.31%, up from 55.17% in the previous quarter [15] - The consolidated equity to assets ratio improved to 10.31% at the end of Q4 2019 [16] - The bank's tangible book value per share increased by 9.68% year-over-year to $5.55 [16] Q&A Session Summary Question: Capital management and buyback program - Management acknowledged the strong capital levels and indicated that the buyback program has not been heavily utilized due to share price considerations [25][26] Question: Potential for M&A activity - Management stated that any acquisition would need to be beneficial for shareholders and mentioned interest in a potential deal in Columbia County [27][28] Question: Margin outlook and yield compression - Management discussed the impact of refinancing activity on yield and indicated that the first quarter typically sees slower loan production [29][34] Question: CD repricing and retention strategies - Management confirmed that some CDs have repriced lower, and they have had success retaining a significant portion of the portfolio [39][41]