- Net Income: $12.6 million, an increase of 3.5% over the prior quarter.
- Return on Average Assets (ROAA): 0.82%.
- Return on Average Equity (ROAE): 7.76%.
- Consolidated Equity to Assets Ratio: 10.73% for Q2 2024, compared to 10.23% in Q2 2023.
- Book Value per Share: $34.46, up 5.5% compared to $32.66 a year earlier.
- Average Loans: Grew 3.8% or $182.2 million to $5 billion in Q2 2024.
- Residential Real Estate Portfolio: Increased by $89.9 million or 2.1% year-over-year.
- Average Commercial Loans: Increased $31.5 million or 12.7% year-over-year.
- Home Equity Lines of Credit: Increased $61.1 million or 20.1% year-over-year.
- Installment Loans: Decreased by $339,000 or 2.2% year-over-year.
- Provision for Credit Losses: $500,000 for Q2 2024.
- Total Deposits: $5.3 billion, up $18.5 million compared to the prior year.
- Net Income for Q2 2024: $37.8 million, an increase of $1.2 million or 3.3% compared to the prior quarter.
- Net Interest Margin: 2.53%, up nine basis points from Q1 2024.
- Yield on Earning Assets: 4.06%, up seven basis points from Q1 2024.
- Cost of Interest-Bearing Liabilities: 1.97% in Q2 2024, down from 1.99% in Q1 2024.
- Assets Under Management: Approximately $1.1 billion as of June 30, 2024.
- Non-Interest Expense: $26.4 million, up $1.4 million from the prior quarter.
- ORE Expense Net: $16,000 for the quarter, compared to $74,000 in the prior quarter.
- Nonperforming Loans: $19.2 million, down from $19.4 million last year.
- Nonperforming Loans Ratio: 0.38% of total loans, down from 0.40% a year ago.
- Nonperforming Assets: $21.5 million as of June 30, 2024, up from $20.8 million a year ago.
- Allowance for Credit Losses: $49.8 million with a coverage ratio of 259.4%, compared to $46.9 million and a coverage ratio of 241.6% in 2023.
Release Date: July 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net income for the second quarter of 2024 increased by 3.5% over the prior quarter, reaching $12.6 million.
- Book value per share increased by 5.5% year-over-year, reaching $34.46 as of June 30, 2024.
- Average loans grew by 3.8% year-over-year, with residential mortgages and commercial loans showing significant increases.
- Net interest margin improved to 2.53%, up nine basis points from the first quarter of 2024.
- The bank maintained strong capital ratios, with a consolidated equity to assets ratio of 10.73% for the second quarter of 2024.
Negative Points
- Non-interest expense increased by $1.4 million from the prior quarter, primarily due to higher employee benefit costs.
- Fees for services to customers were down sequentially and year-over-year, with NSF fees being a notable outlier.
- The cost of interest-bearing liabilities increased slightly to 1.97% in the second quarter of 2024.
- Nonperforming assets increased slightly to $21.5 million as of June 30, 2024, compared to $20.8 million a year ago.
- Installment loans decreased by $339,000 or 2.2% year-over-year.
Q & A Highlights
Q: Great to see the NIM expanding after several quarters of decline. Do you think you can still drive the cost of deposits down this quarter?
A: That's the goal. We're closely monitoring and maintaining a balance to keep our liquidity at an acceptable level while funding our loans and cash requirements.
Q: The fees for services to customers were down sequentially and year-over-year. Is there anything unusual going on?
A: The primary outlier is NSF fees. We were caught in a trap with NSF fees calculation and collection. Other fees, like those from our wealth management, have shown growth, making up for the decline in NSF fees.
Q: What percent of the HELOC portfolio is going to existing customers, and what is the loan-to-value ratio?
A: If you have your first mortgage with TrustCo, you can get up to a 90% loan-to-value. The split is about 60-40 between existing TrustCo customers and new customers.
Q: Are you seeing any increase in payoffs or refinances of your existing residential mortgage book?
A: No, we are seeing stable to slightly down trends in payoffs and refinances.
Q: Can you provide more details on the growth in the HELOC portfolio?
A: The HELOC portfolio grew significantly, with home equity loans increasing by $61 million or 20.1%. This growth is driven by our strong reputation as a home equity lender and the withdrawal of some bigger banks from this market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
