TrustBank NY(US:TRST)2019-04-23 16:11Financial Data and Key Metrics Changes - The company reported net income of $14.6 million for Q1 2019, which is essentially flat compared to Q1 2018, resulting in a return on assets of 1.17% and return on equity of 11.93% [4][8] - The efficiency ratio for the quarter was 66.1%, an increase from 55.06% in the previous quarter, primarily due to new hires [28] - The net interest margin decreased to 3.24% from 3.29% year-over-year, attributed to increased funding costs [20] Business Line Data and Key Metrics Changes - Average loans grew by 6% year-over-year, reaching $3.9 billion, with significant growth in the residential real estate portfolio, which increased by 7.2% [9][10] - Non-interest income was reported at $4.6 million, slightly up from the previous quarter, with the Financial Services division being the main contributor [24] Market Data and Key Metrics Changes - Total average deposits increased by $156.6 million or 3.8% year-over-year, driven by a 25.2% increase in average signed deposits [15][16] - The cost of interest-bearing deposits rose to 76 basis points from 41 basis points, while the average cost of time deposits increased to 1.79% from 1.07% year-over-year [16][18] Company Strategy and Development Direction - The company continues to focus on traditional lending and conservative balance sheet management, aiming for consistent high-quality recurring earnings [12] - The strategy of offering competitive shorter-term rates has allowed the company to gain market share and retain existing time deposits [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in loan growth for the upcoming quarters, citing increased application volume and a solid backlog [45][47] - The company expects margins to stabilize in the latter part of 2019 as shorter-term deposits reprice [19] Other Important Information - The company adopted a new lease accounting standard, resulting in additional net lease assets and liabilities of approximately $51.6 million and $56.7 million, respectively, without materially impacting consolidated net earnings [29][30] - The capital ratios improved, with the consolidated equity to assets ratio at 9.73%, up from 9.36% year-over-year [32] Q&A Session Summary Question: Confidence in Loan Growth - Management indicated that seasonal demand and increased application volume give them confidence in loan growth, positioning themselves for a more aggressive approach moving forward [45] Question: Margin Stability - The expectation for margin stability is due to the backlog building and the strategy of keeping deposits short-term to allow for repricing opportunities later in the year [46][47] Question: Expense Guidance - The increase in expense guidance is attributed to inflation, cybersecurity, and technology expenses, with management maintaining a focus on efficiency [51][53]