TrustBank NY(US:TRST)2024-01-23 17:31Financial Data and Key Metrics Changes - The company reported a year-to-date net income of $58.6 million, yielding a return on average assets of 0.97% and average equity of 9.46% [21] - The consolidated equity to assets ratio was 10.46% for Q4 2023, up from 10% in Q4 2022 [21] - Book value per share increased by 7.5% to $33.92 from $31.54 a year earlier [21] Business Line Data and Key Metrics Changes - Average loans for Q4 2023 grew by 6.6% or $309.9 million to $5 billion, marking an all-time high [36] - Residential loans increased by $192.2 million or 4.26% year-over-year, while commercial loans rose by $50.5 million or 22.6% [36] - Home equity lines of credit increased by $61.8 million or 22.2%, and installment loans grew by $5.5 million or 50.3% [36] Market Data and Key Metrics Changes - Total deposits increased by $158 million to $5.35 billion from the end of 2022, marking a significant recovery [22] - Time deposits were up 16% sequentially, indicating a shift from core to time deposits [15] Company Strategy and Development Direction - The company aims to continue offering competitive product offerings through aggressive marketing and product differentiation [22] - The management is optimistic about the future, particularly regarding the repricing of CDs as rates potentially fall [23] - The company has closed three underperforming branches to enhance efficiency and is evaluating further relocations and closures based on profitability [33][68] Management's Comments on Operating Environment and Future Outlook - Management noted that credit quality remains strong, with non-performing assets at 0.29%, the lowest in over 17 years [20] - The company is confident in its capital position and is prepared to capitalize on future opportunities despite economic uncertainties [34] - Management expressed optimism about the loan growth and the potential for increased activity as interest rates decrease [60] Other Important Information - The provision for credit losses was $1.35 million, reflecting the current economic environment rather than existing credit issues [22] - The wealth management division had approximately $967 million in assets under management as of December 31, 2023 [23] Q&A Session Summary Question: What is the expectation for net interest margin (NIM) with potential Fed rate cuts? - Management indicated that they have already started backing CD rates down and are optimistic about repricing deposits to lower rates later in the year [63] Question: What is driving the increase in the allowance for credit losses (ACL)? - The increase in ACL is driven by macroeconomic factors such as unemployment forecasts and housing numbers, rather than a rise in non-performing loans [65] Question: Are there more initiatives underway to trim expenses? - Management confirmed that they are evaluating branch relocations and closures based on profitability and will continue to assess all options as leases come up for maturity [48] Question: Is a buyback program being considered? - Management expressed interest in buybacks, especially given the current book value situation, but did not commit to a specific timeline [2][49]