Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: First, Scot, you mentioned the backlog at the end of the quarter was similar to the end of the year. However, it seems that the second quarter is usually the strongest quarter for loan growth. We've seen that in the last couple of years. Obviously, the spring and home buying season is a real thing. I mean, based on what you're seeing in the market, despite the backlog being similar, would you expect the second quarter to again show similar growth trends to what we've seen in the last couple of years?
A: (Scot Salvador - Executive Vice President - Commercial Banking of TrustCo and Trustco Bank) Yes, the second quarter normally builds upon the first quarter, which is typically the slowest for net growth. Recent activity has picked up, which should translate to increased backlog and benefit us as we move forward.
Q: Okay. Great. And then do you have handy just the amount of normal amortization that you would see in the mortgage portfolio in a given quarter?
A: (Scot Salvador - Executive Vice President - Commercial Banking of TrustCo and Trustco Bank) It's roughly $15 million to $20 million, probably around $17 million to $18 million per month.
Q: If we do see loan growth pick up a little bit in the second quarter, a couple of percent, would the expectation be to fund that with deposit promotions? Or would you fund it with cash on hand?
A: (Robert McCormick - Chairman of the Board, President, Chief Executive Officer of TrustCo and Trustco Bank) That would be a good problem to have. We could step up and do more promotions to grow deposits or use the excess cash we have on the balance sheet.
Q: Can you just give us a little more color? You mentioned that you're lowering the rate on time deposits. Would that be time deposits, as they mature, you're able to actually lower the rate on them?
A: (Robert McCormick - Chairman of the Board, President, Chief Executive Officer of TrustCo and Trustco Bank) Yes, we're attempting to price to retain those accounts at maturity, working with our customers to hopefully retain them. Based on the current rate environment, we are probably close to the peak of time deposit rates.
Q: And then can you just give us a little bit more color? Maybe I missed it in the prepared remarks, but salaries and benefits dropped pretty dramatically, caused you to beat that expense guide pretty meaningfully in the first quarter. Can you just talk about how you found that additional savings and what really drove that?
A: (Michael Ozimek - Executive Vice President, Chief Financial Officer of TrustCo and Trustco Bank) About $600,000 of the savings was related to being able to take down some of the incentive comp accruals due to lower production from the prior year. Additionally, some liability-based awards get revalued at the end of every quarter, which also contributed to a downward adjustment.
Q: Okay. So those are things that you would expect not to recur into that 26.9% to 27.4%, that's where you expect to be in the second, third and fourth quarter?
A: (Michael Ozimek - Executive Vice President, Chief Financial Officer of TrustCo and Trustco Bank) Correct. That $1 million will load back into the second quarter, and that's a conservative number. It could be a little high, but correct.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.