TrustCo Bank (NASDAQ:TRST) Corp New York reported robust Q3 results during their recent earnings call, emphasizing a strong balance sheet, unwavering business model, and a milestone of $5 billion in their loan portfolio. The company's CEO, Robert J. McCormick (NYSE:MKC), highlighted the firm's commitment to maintaining their lending practices and careful balance sheet management, leading to organic loan growth and a low non-performing loans ratio.
Key takeaways from the call:
- TrustCo Bank Corp 's loan portfolio reached a record high, surpassing $5 billion.
- Non-performing loans to total loans were reported at a low 0.36%, the best in at least 15 years.
- The bank launched a new loan product, 'split-the-difference', aimed at repricing lower-interest-rate loans and retaining customer relationships.
- The firm reported a third-quarter net income of $14.7 million, yielding a return on average assets and average equity of 0.96% and 9.32%, respectively.
- The consolidated equity to assets ratio was 10.31% for Q3 2023, up from 9.65% in Q3 2022.
CEO McCormick noted that TrustCo Bank's second-quarter results were strong and differentiated the bank from others due to its business model. He stated, "We have not wavered from our business model, maintaining our tried and true lending practices and careful balance sheet management." He also emphasized that the bank's planning has allowed it to remain well-capitalized and debt-free, supporting organic loan growth.
TrustCo Bank's new 'split-the-difference' loan product was also highlighted. The product is designed to reprice lower-interest-rate loans while retaining critical customer relationships. McCormick noted that the product has received positive feedback and is expected to contribute to the upward trend of the bank's loan portfolio yield.
Michael Ozimek, CFO of TrustCo Bank, provided a detailed review of the financial results for Q3 2023. He reported a third-quarter net income of $14.7 million, which yielded a return on average assets and average equity of 0.96% and 9.32%, respectively. He also noted that the bank's capital remains strong, with a consolidated equity to assets ratio of 10.31% for the third quarter of 2023, up from 9.65% in the third quarter of 2022.
Scot Salvador, covering the loan portfolio, reported that total loans increased by $73 million, or 1.5%, year-over-year. He also mentioned that the bank's non-performing loans stand at $17.9 million as of September, down from $19.4 million in June and also down year-over-year.
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