Q3 2023 TrustCo Bank Corp NY Earnings Call

Yeah.

Good day, and welcome to the Trustco Bancorp earnings call and webcast.

Speaker 1: Good day and welcome to the Trustco Bancorp earnings call and webcast. All participants will be notified.

All participants will be in a listen only mode.

Should you need any assistance. Please signal a conference specialist by pressing star key followed by zero on your telephone keypad.

Speaker 1: Should you need any assistance, please signal a conference specialist by pressing star key followed by zero on your telephone keypad.

Speaker 1: After today presentation there will be an opportunity to ask questions. To ask a question you may press star then one. To withdraw your question you may press star then two.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one to withdraw your question you May Press Star then two.

Before proceeding we would like to mention that this presentation may contain forward looking information about Trustco Bank Corp. New York that is intended to be covered by the safe Harbor for forward looking statements provided by the private Securities Litigation Reform Act of 1995.

Speaker 1: Before proceeding, we would like to mention that this presentation may contain forward-looking information about Trusco Bank Corp. New York that is intended to be covered by the Safe Harbor for forward-looking statements provided by the Private Security Litigation Reform Act of 1995.

Actual results performance or achievements could differ materially from those expressed in or implied by such achievements statements various risks uncertainties and other factors.

Speaker 1: Actual results, performance or achievements could differ materially from those expressed in or implied by such achievements. Statements, various risks and uncertainties and other factors.

More detailed information about these and other risk factors can be found in our press release that preceded this call and in the risk factors and forward looking statement section of our annual report on Form 10-K.

Speaker 1: More detail information about these and other risk factors can be found in our press release that preceded this call and in the risk factors and for looking statement section of our annual report on Form 10K and as updated by our quarterly reports on Form 10- Q4 t Looking Statements

And as updated by our quarterly reports on Form 10-Q.

Forward looking statements.

Speaker 1: made on this call are valid only as of the date eros and the company describes any obligation to update this information to reflect events or developments after the date of this call except as may be required by applicable law.

Made on this call are valid only as of the date, Iraq and the company disclaims any obligation to update this information to reflect events or developments. After the date of this call.

As may be required by applicable law.

Speaker 1: During today's call we will discuss certain financial measures derived from our financial statements that are not determined in accordance with US GAAP.

During today's call, we will discuss certain financial measures derived from our financial statements that are not determined in accordance with U S. GAAP.

The reconciliations of such non-GAAP financial measures to the most comparable comparable GAAP figures are included in our earnings press release, which is available under the Investor Relations tab of our website Trustco Bank Dot com.

Speaker 1: The reconsiderations of such non-gab financial measures to the most comparable cat figures are included in our earnings press release, which is available under the investors' relation step of our website, trustcobank.com.

Please also note that todays event is being recorded.

Speaker 1: Please also note that today's event is being recorded. A replay of the call will be available for 30 days.

Play off the call will be available for 30 days.

And the audio webcast will be available for one year and described in our earnings press release.

Speaker 1: and the audio webcast will be available for one year as described in our earnings press release.

Speaker 1: At this time, I would like to turn the conference call over to Mr. Robert J. McCormick, Chairman, President, CEO . Please go ahead.

At this time I would like to turn the conference call over to Mr. Robert J Mccormick Chairman President CEO . Please go ahead.

Good morning, everyone and thank you for joining the call.

Speaker 2: morning everyone and thank you for joining the call as the host said I'm Rob McCormick, the president of Trust Call Bank. With me as usual, I'm Michael Zemeck and Scott Souther to work.

Oh said I'm, Rob Mccormick President of Trustco Bank with me as usual are Michael as American Scot Salvador.

Speaker 2: I will follow a regular format to the call. I will provide highlights. Mike, our CFO will provide a detailed review of the numbers. And Scott will cover the long portfolio, leaving time for questions at the end.

We'll follow our regular format for the call I'll provide highlights Mike our CFO will provide a detailed review of the numbers and Scot will cover the loan portfolio, leaving time for questions at the end.

Our second quarter results here at the bank are very strong with differentiates us from others is something we are really proud of we have not wavered from our business model, maintaining our tried and true lending practices and careful balance sheet management.

Speaker 2: Our second quarter result here at the Bank are very strong, but different shades of us from others is something we are really proud of. We have not wavered from our business model, maintaining our tried and true lending practices, and careful penalty management.

Speaker 2: Well, those may be feeling pressure to keep up with competitors' rates or be borrowing to fund their growth. We remain focused on our own blueprint.

Although this may be feeling pressure to keep up with competitors rates would be borrowing to fund their growth. We remained focused on our own blueprint.

Speaker 2: We don't plan for just three months, three years ago, and maybe longer. We knew the tide would turn, and we kept our power to dry. That plan he has enabled us to stay well capitalized, get free, and is now supporting organic bond.

We don't plan for just three months three years ago, and maybe longer we knew the type of return and we kept our powder dry.

Planning has enabled us to stay well capitalized debt free.

And is now supporting organic loan growth.

Speaker 2: Our portfolio reached an all time high over the quarter, hitting a milestone of $5 billion.

Our portfolio reached an all time high over the quarter hitting our milestone of 5 billion plus our industry, leading first mortgage product, making up the lion's share.

Operator: Good day, and welcome to the TrustCo Bank Corp Erning Call and Webcast. All participants will be in a listen only mode. Should you need any assistance? Please signal a conference specialist by pressing star key followed by zero on your telephone keypad.

Speaker 2: with our industry leading first mortgage product making up the lion's share.

Speaker 2: We strategically grew all aspects of our long portfolio to a responsible and choice lending. We've not sacrificed.

We strategically grew all aspects of our loan portfolio through responsible and choice lending.

Not sacrifice quality for quantity.

Q3, we saw nonperforming loans to total loans of just three 6%.

Speaker 2: Q3 we saw non-performing odds to total odds of just 0.36%.

Operator: After today presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one. To withdraw your question, you may press star then two.

Speaker 2: the best in at least 15 years as was our seventh consecutive quarter for net recovery.

The best in at least 15 years as well as our seventh consecutive quarter for net recoveries.

We continue to build upon our granular and diversified deposit foundation.

Speaker 2: I'm continuing to build upon our granular and diversified deposit foundation and it's seen all categories of portfolio rebound from the beginning of the year. Our average deposit relationship is $15,000, which is proof of the success of our relationship building folks.

Operator: Before proceeding, we would like to mention that this presentation may contain fort looking information about TrustCo Bank Corp New York that is intended to be covered by the safe harbor for fort looking statements provided by the private security litigation reform act of 1995. Actual results, performance or achievements could differ materially from those expressed in or implied by such achievements, statements, various risks uncertainties and other factors. More detail information about these and other risk factors can be found in our press release that preceded this call and in the risk factors and fort looking statement section of our annual report on form 10K.

I've seen all categories in the portfolio rebound.

From the beginning of the year, our average deposit relationship was $15000, which is proof of the success of our relationship building focus.

Speaker 2: Our customers know that they can rely on our strength and stability through market ups and downs.

Our customers know that they can rely on our strength and stability through market ups and downs.

Speaker 2: Also during the quarter we rolled out a new split the difference loan product which enables us to reprice lower industry loans while retaining those critical customer relations.

Also during the quarter, we rolled out a new split the difference loan product, which enables us to reprice lower interest rate loss, while retaining those critical customer relationships and.

In addition to the benefits of repricing. It works out great for customers, who have felt trapped by their low rate mortgage.

Speaker 2: In addition to the benefits of repricing, it works out great for customers who have felt trapped by their low rate mortgage.

We have received great feedback on the initiative and it is making trustco bank a topic of conversation, where we might not have been before.

Speaker 2: We have received great feedback on the initiative and is making Trusco Bank a top-of-com conversation where we might not have been before.

Operator: And as updated by our quarterly reports on form 10Q. Fort looking statements made on this call are valid only as of the date year off. And the company disclaims any obligation to update this information to effective answer developments after the date of this call, except as maybe required by applicable law.

Speaker 2: Overall, we expected if the product takes off, it will further contribute to the upward trend of our long portfolio.

Overall, we expect that if the product takes off will further contribute to the upward trend of our loan portfolio yield.

Speaker 2: As always, we are very proud of our substantial dividend, which we have paid every quarter since 1904. Our shareholders have been able to count on.

As always we are very proud of our substantial dividend, which we paid every quarter since 19, all for our shareholders have been able to count on.

US through all economic conditions whatever comes next Trustco bank is ready to capitalize on the opportunities presented.

Speaker 2: us through all economic conditions. Whatever comes next, Trustco Bank is ready to capitalize on the opportunities presented.

Operator: During today's call, we will discuss certain financial measures dried from our financial statements that are not determined in accordance with US gap. The reconsiderations of such non-gab financial measures to the most comparable comparable gap figures are included in our earnings press release, which is available under the investor's relations tab of our website trustcobank.com.

Now Mike will give us detail on the numbers Scot will give color on the loan portfolio and then we will take your questions. Thank.

Speaker 2: Now Mike will give us a detail on the numbers, Scott will give color on the own portfolio, and then we'll take your questions. Bye.

Speaker 2: Thank you Rob and good morning everyone. I will now review Trusco's financial results for the third quarter of 2020.

Thank you Rob and good morning, everyone I will now review Trustco financial results for the third quarter of 2023.

As we noted in the press release the company saw third quarter net income of $14 $7 million, which yielded a return on average assets and average equity of nine 6% and $9 three 2% respectively capital remained strong consolidated equity to assets ratio was 10, 31% for the third quarter of 2023 compared to nine.

Speaker 3: As we noted in the press release, the company saw 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.

Operator: Please also note that today's event is being recorded. A replay of the call will be available for 30 days and the audio webcast will be available for one year as described in our earnings press release.

Speaker 3: Capoevo remains strong, consolidated equity to assets ratio, was 10.31% for the third quarter of 2023, compared to 9.69% in the third quarter of 2020.

Robert McCormick: At this time, I would like to turn the conference call over to Mr. Robert, Jay McCormick, Chairman, President CEO. Please go ahead.

Six 5% in the third quarter of 2022.

Speaker 3: book value for share on September 30, 23, $32.80, up 6.2% compared to $30.89 at your early.

Value per share at September 33 was $32 80.

Up six 2% compared to $30 89, a year earlier.

Robert McCormick: With me as usual, I'm Michael Zamek and Scott Salvador. We'll follow a regular format to the call. I'll provide highlights. Mike, our CFL will provide a detailed review of the numbers and Scott will cover the long portfolio, leaving time for questions at the end. Our second quarter result here at the bank are very strong, with differentiates us from others as something we are really proud of. We have not wavered from our business model maintaining our tried and true lending practices and careful balance sheet management.

Speaker 3: average loans for the third quarter grew 7.4 percent or 337.6 million to 4.9 million dollars for the third quarter of 20.

Average loans for the third quarter group second from 4% or $337 6 million to $4 $9 billion for the third quarter of 2002.

Speaker 3: Long growth has continued to increase and occurred in all of our long categories and leading the charge was a residential real estate portfolio. As always, which increased by 219.4 million or 5.3% and a third quarter of 23 over the same period in 20.

Loan growth has continued to increase and occurred in all of our loan categories are leading the charge was a residential real estate portfolio as always which increased by $219 4 million or five 3% in the third quarter of 2003 over the same period in 2022 average commercial loans increased 500.

Speaker 3: average commercial loans increased five hundred fifty three point six million on the equity lines accredited increased fifty eight point nine million and it's all mulloam's increased five point seven million dollars over the same period in twenty twenty two

Robert McCormick: Although this may be feeling pressure to keep up with competitors rates or be borrowing to fund their growth, we remain focused on our own blueprint. We don't plan for just three months, three years ago, and maybe longer. We knew the tide would turn and we kept our powder dry. That planning has enabled us to stay well capitalized, get free, and is now supporting organic long growth. Our portfolio reached an all-time high over the quarter, hitting a milestone of $5 billion, with our industry leading first mortgage product making up the lion's share.

$53 6 million home equity lines of credit increased $58 9 million and installment loans increased $5 $7 million over the same period in 2022.

Speaker 3: For the third quarter of 2023, the provision for credit losses is $100,000.

For the third quarter of 2023, the provision for credit losses was $100000.

Speaker 3: Retaining deposits has been a key focus in 2023. Although deposits were down compared to prior quarter, total deposits as of September 30th, 2023 increased, $41.6 billion or $5.23 billion from the end of 2020.

Retaining deposits has been a key focus our 2023, although deposits were down compared to prior quarter total deposits as of September 32023 increased $41 $6 billion or 523 billion from the end of 2022.

Robert McCormick: We strategically grew all aspects of our loan portfolio to a responsible and choice lending. We have not sacrificed quality for quantity. In Q3, we saw non-performing loans to total loans of just 0.36%. The best in at least 15 years has was our seventh consecutive quarter for net recoveries. We continue to build upon our granular and diversified deposit foundation, and it's seen all categories of the portfolio rebound from the beginning of the year, our average deposit relationship is $15,000, which is proof of the success of our relationship building focus.

Speaker 3: As we move forward, our objective is to continue to offer competitive product offerings of the bank through aggressive marketing and product differentiation.

As we move forward. Our objective is to continue to offer competitive product offerings of the bank through aggressive marketing and product differentiation.

Speaker 3: That interest income was $42.2 million for the third quarter of 2023, a decrease of $5.6 million or 11.7% compared to the same period in 2022. That interest margin for the third quarter of 2023 was 2.85%, down 31 basis points for the third quarter of 2023.

Net interest income was $42 2 million for the third quarter of 2023, a decrease of $5 6 million or 11, 7% compared to the same period in 2022 net interest margin for the third quarter of 2003 was 285% down 31 basis points for the third quarter of 2002.

Yield on interest bearing <unk>.

Speaker 3: Yield on interest-bearing assets increased to 3.88%, up 64 basis points from 3.24% in the third quarter of 2022.

<unk> increased to 388% up 64 basis points from $3 two 4% in the third quarter of 2022.

Robert McCormick: Our customers know that they can rely on our strength and stability to market ups and downs. Also during the quarter we rolled out a new split to difference loan product, which enables us to reprise lower interest rate loans while retaining those critical customer relationships. In addition to the benefits of repricing, it works out great for customers who have felt trapped by their low rate mortgage. We have received great feedback on the initiative and is making TrustCo Bank a topic of conversation where we might not have been before.

Our financial services Division continues to be a significant recurring source of that interest income at approximately $902 million of assets under management as of September 32023.

Speaker 3: Our financial services division continues to be a significant recurring source of non-interest income. They had approximately 902 million of assets under management as of September 30th, 2020.

Now on to noninterest expense total noninterest expense net of <unk> expense came in at 23, $27 3 million, which is consistent with prior quarters <unk> expense net came in at an expense of $163000 for the quarter as compared to an expense of 148000 in the prior quarter.

Speaker 3: Now on to non-interest expense. Total non-interest expense, net of ORE expense came in at $27.3 million, which is consistent with prior quarters. ORE expense net came in at an expense of $163,000 for the quarter, as compared to an expense of $148,000 in the prior quarter.

Speaker 3: Given the continued low level of ORE expenses, we're going to continue to hold the anticipated level of expenses, not to exceed $250,000 per quarter.

Given the continued low level of ore expenses, we are going to continue to hold the anticipated level of expenses not to exceed $250000 per quarter.

Robert McCormick: Overall, we expect that if the product takes off, it will further contribute to the upward trend of our loan portfolio yield. As always, we are very proud of our substantial dividend, which we have paid every quarter since 1904. Our shareholders have been able to count on us through all economic conditions. Whatever comes next, TrustCo Bank is ready to capitalize when the opportunities present it.

Speaker 3: Salary expenses down due to a decrease in overall salary expense and a decrease in the liability-based equity worth due to a lower stock price.

Salary expense was down due to a decrease in overall salary expense and a decrease in our liability based equity awards due to a lower stock price.

All the other categories of noninterest expense were in line with our expectations for the third quarter.

Speaker 3: All the other categories and non-interest expense were in line with our expectations for the third quarter, we would expect 2023.

Would expect 2020 Three's total recurring noninterest expense net of <unk> expense to be in the range of $26 nine to $27 $4 million per quarter now.

Robert McCormick: Now Mike will give us detail on the numbers, Scott will give color on the loan portfolio and then we will take your questions.

Speaker 3: total recurring non-interest expense, net of or re-expense, to be in the range of $26.9 to $27.4 million per quarter. Now Scott will review the loan portfolio and non-performing loans.

Michael Ozimek: Mike, thank you Rob and good morning everyone. I will now review TrustCo's financial results for the third quarter of 2023. As we noted in the press release, the company saw 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. Capital remains strong, consolidated equity assets ratio was 10.31% for the third quarter of 2023 compared to 9.69% in the third quarter of 2022.

Now Scot will review the loan portfolio and nonperforming loans.

Good morning, and thanks, Mike.

For the third quarter total loans increased by $73 million in actual numbers or one 5%.

Speaker 4: For the third quarter, total loans increased by $73 million, and actual numbers are 1.5%.

Speaker 4: Year-over-year, the increase was 331 million, or 7.2 percent.

Year over year, the increase was $331 million or seven 2%.

Speaker 4: This quarter marked a continuation of strong loan growth through the bank, coming on the heels of an $87 million increase in the second quarter.

This quarter marked a continuation of strong loan growth for the bank coming on the heels of an $87 million increase in the second quarter.

Speaker 4: The loan increases are spread among all loan categories. Residential loans increased by a combined $56 million, with first mortgages increasing by $33 million, and our home equity products climbing by $23 million. Commercial loans increased by

Alone increases are spread among all loan categories residential loans increased by a combined $56 million with first mortgages, increasing by $33 million and our home equity products climbing by $23 million.

Michael Ozimek: Book value for share at September 30, 23 was $32.80, up 6.2% compared to $30.89 a year earlier. Average loans for the third quarter grew 7.4% or 337.6 million to $4.9 million from the third quarter of 2022. Loan growth has continued to increase and occurred in all of our loan categories and leading the charge was a residential real estate portfolio as always, which increased by $219.4 million or 5.3% of third quarter of 23 over the same period in 2022.

Commercial loans increased by $17 million in the quarter.

As previously stated the combination of increased interest rates and some new personnel in our commercial loan area has allowed us to be a bit more active versus prior years.

Speaker 4: As previously stated, the combination of increased interest rates and some new personnel in our commercial loan area has allowed us to be a bit more active versus prior year.

Overall purchase activity in our residential markets has slowed reflecting nationwide trends.

Speaker 4: Overall purchase activity in our residential markets has slowed reflecting nationwide trends.

Speaker 4: Increased interest rates have obviously played the largest role in this, although other factors such as the time of year also begin to come into play.

Increased interest rates have obviously played the largest role in this although other factors such as the time of year also became begin to come into play.

To help offset this we are putting a lot of focus into capturing a bigger piece of the existing pie and all of our regions.

Speaker 4: To help offset this, we are putting a lot of focus into capturing a bigger piece of the existing pie in all our regions. Our status as a portfolio lender is an advantage in this regard. One example, as Rob mentioned, is a current promotion whereby existing TrustCo mortgage customers who sell and purchase a new home can obtain a reduction off of current rates by maintaining their financing with TrustCo.

Michael Ozimek: Average commercial loans increased $53.6 million, home equity lines are credit increased $58.9 million, and its sole loans increased $5.7 million over the same period in 2022. For the third quarter of 2023, the provision for credit losses was $100,000. Retaining deposits has been a key focus on 2023. Although deposits were down compared to prior quarter, total deposits as of September 30, 2023 increased $41.6 million or $5.23 billion from the end of 22.

Our status as a portfolio of lenders and advantage in this regard.

One example, as Rob mentioned is a current promotion whereby existing trustco mortgage customers, who sell and purchase a new home can obtain a reduction off of current rates by maintaining their financing with trustco.

Interest rates continue to rise, where we currently stand at 75% for our 30 year base rate.

Speaker 4: Interest rates continue to rise, and we currently stand at 7 and 5 eighths for our 30-year base rate.

The higher rates have continued to drive growth in our home equity products as people like to stay and improve their existing home rather than purchase a new one or refinance our first mortgage.

Speaker 4: The higher rates have continued to drive growth in our home equity products as people elect to stay and improve their existing home, rather than purchase a new one or refinance their first mortgage.

Michael Ozimek: As we move forward, our objective is to continue to offer competitive product offerings of the bank through aggressive marketing and product differentiation. An interesting income was 42.2 million for the third quarter of 2023. A decrease of 5.6 million are 11.7% credit for the same period in 2022. An interest larger from the third quarter of 2023 was 2.85% down 31 basis points from the third quarter of 2022. A yield on interest bearing assets increased to 3.88% up to 64 basis points from 3.24% in the third quarter of 2022. Our financial services division continues to be a significant recurring source of non-interest income. They add approximately 902 million of assets on management as of September 30, 2023.

The loan backlog has come down somewhat from last quarter and year over year. This reflects both the current marketplace and time of the year.

Speaker 4: The loan backlog has come down somewhat from last quarter and year-over-year. This reflects both the current marketplace and time of year. It does contain a good amount of new money, however, given almost a complete lack of refis, and we expect to post continued growth on the quarter.

It does contain a good amount of new money. However, given almost a complete lack of refis and we expect to post continued growth in the quarter.

The news and asset quality remains good nonperforming loans stand at $17 9 million as of September down from $19 4 million in June and also down year over year nonperforming assets declined to $19 1 million from 28 last quarter a year ago. They stood at $19 4 million.

Speaker 4: The news on asset quality remains good. Non-performing loans stand at $17.9 million as of September , down from $19.4 million in June , and also down year over year. Non-performing assets declined to $19.1 million from $20.8 million last quarter. A year ago, they stood at $19.4 million.

Speaker 4: ChargeOS posted another small net recovery on the quarter, and now total a combined 294,000 net recovery year-to-date. Early stage delinquency...

Charge offs posted another small net recovery on the quarter and now total a combined 294000 net recovery year to date.

Early stage delinquencies remained solid.

Speaker 4: The allowance for credit losses stands at 0.95% of total loans and 264% of non-performing

The allowance for credit losses stands at <unk>, 95% of total total loans and 264% of nonperforming loans. This is up from a coverage ratio of 244% a year ago.

Michael Ozimek: Now it's a non-interest expense. Total non-interest expense, net of ORE expense, came in at 23.7.3 million, which is consistent with prior quarters. ORE expense, net, came in at an expense of $163,000 for the quarter as compared to an expense of $148,000 in the prior quarters. Given the continued low level of ORE expenses, we're going to continue to hold anticipated level of expenses, not to exceed $250,000 per quarter. Salary expenses down due to a decrease in overall salary expense and a decrease in a liability based equity worth due to a lower stock price.

Speaker 3: This is up from a coverage ratio of 244% a year ago, but that's our story. We're happy to answer any.

Yep.

That's our story and we're happy to answer any questions you might have.

Yeah.

Speaker 1: Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star 1 on the telephone keypad. That's star 1 on the telephone keypad.

Thank you, ladies and gentlemen, if you'd like to ask a question. Please press star one on your telephone keypad.

Thats Star one on your telephone keypad.

To withdraw your question press Star followed by two.

Speaker 1: And please do also remember to unmute the microphone when it's your turn to speak.

And please also remember too underneath the microphone with your turn to speak.

Michael Ozimek: All the other categories and non-interest expense were in line with our expectations for the third quarter. We would expect 2023's total recurring, non-interest expense, net of ORE expense to be in the range of $26.9 to $27.4 million per quarter.

We will now wait a couple of seconds to see if there any questions.

Speaker 1: We'll now wait a couple of seconds to see if we got any questions.

Scott Salvador: Now Scott will review the loan portfolio and not performing loans. Good morning, and thanks Mike. The third quarter total loans increased by 73 million in actual numbers are 1.5%. Year over year the increase was 331 million or 7.2%. This quarter marked a continuation of strong loan growth to the bank coming on the heels of an $87 million increase in the second quarter. The loan increases are spread among all own categories. Residential loans increased by combined 56 million, with first mortgages increasing by 33 million, and our home equity products climbing by 23 million.

Okay, Yeah, no questions registered so I would like to hand back to Mr. Mccormick for closing remarks.

Speaker 1: Okay, we have no questions registered, so I would like to hand back to Mr. McCormick for closing remarks.

Thank you for your interest in our company and joining us today and have a great day.

Speaker 2: Thank you for your interest in our company and joining us today and have a great day.

Yeah.

Ladies and gentlemen. This concludes today's call. Thank you for joining you may now disconnect your lines. Thank you.

Speaker 1: Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines. Thank you.

[music].

Scott Salvador: Commercial loans increased by 17 million on the quarter. As previously stated, the combination of increased interest rates and some new personnel in our commercial loan area has allowed us to be a bit more active versus prior years. Overall, purchase activity in our residential markets has slowed reflecting nationwide trends. Increased interest rates have obviously played the largest role in this, although other factors such as the time of year also begin to come into play.

Scott Salvador: To offset this, we are putting a lot of focus into capturing a bigger piece of the existing pie in all our regions. Our status is a portfolio of lenders and advantage in this regard. One example, as Rob mentioned, is a current promotion whereby existing trust co-mortgage customers who sell and purchase a new home can obtain a reduction off of current rates by maintaining their financing with trust co-mortgage. Interest rates continue to rise and we currently stand at 75-8s for our 30-year base rate.

Scott Salvador: The higher rates have continued to drive growth in our home equity products as people elect to stay and improve their existing home rather than purchase a new one or refinance a first mortgage. The loan backlog has come down somewhat from last quarter and year over year. This reflects both the current marketplace and time of year. It does contain a good amount of new money, however, given almost the complete lack of refines, and we expect to pose continuing growth on the quarter.

Scott Salvador: The loan was $19.1 million from $20.8 million last quarter. A year ago, they stood at $19.4 million. Charger has posted another small net recovery on the quarter and now total a combined $294,000 net recovery year-to-date. Early states and frequencies remain solid. The allowance for credit losses stands at 0.95% of total loans and 264% of non-performing loans. This is up from a coverage ratio of 244% a year ago.

Scott Salvador: But that's our story and we're happy to answer any questions you might have. Thank you.

Operator: Ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad. Let's start one on the telephone keypad. To withdraw your question, press star followed by two and please do also remember to unmute the microphone with your turn to speak. We'll now wait a couple of seconds to see if we got any questions.

Robert McCormick: Okay, we have no questions registered, so I would like to hand it back to Mr McCormick for closing the box. Thank you very much for sending our company and joining us today and have a great day.

Operator: Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines. Thank you.