Q3 2026 TrustCo Bank Corp NY Earnings Call
Operator 2: Good day, and welcome to the Trustco Bancorp Earnings Call and Webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0 on your keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then 1. To withdraw your question, you may press star 1 again. Before proceeding, we would like to mention that this presentation may contain forward-looking information about Trustco Bancorp, 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. Actual results, performance, or achievements could differ materially from those expressed in or implied by such statements due to various risks, uncertainties, and other factors.
Operator: Good day, and welcome to the Trustco Bancorp Earnings Call and Webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0 on your keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then 1. To withdraw your question, you may press star 1 again. Before proceeding, we would like to mention that this presentation may contain forward-looking information about Trustco Bancorp, 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. Actual results, performance, or achievements could differ materially from those expressed in or implied by such statements due to various risks, uncertainties, and other factors.
Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then 1. To withdraw your question, you may press star 1 again.
Speaker #1: Before proceeding, we would like to mention that this presentation may contain forward-looking information about TRUSTCO BANK CORP NY 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: Actual results performance or achievements could differ materially from those expressed in or implied by such statements due to various risks, uncertainties, and other factors.
Operator 2: 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 Statements section of our annual report on Form 10-K and as updated by our quarterly reports on Form 10-Q. The forward-looking statements made on this call are valid only as of the date hereof, and the company disclaims 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. During today's call, we will discuss certain financial measures derived from our financial statements that are not determined in accordance with US GAAP. The reconciliations of such non-GAAP financial measures to the most comparable GAAP figures are included in our earnings press release, which is available under the Investor Relations tab of our website at trustcobank.com.
Operator: 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 Statements section of our annual report on Form 10-K and as updated by our quarterly reports on Form 10-Q. The forward-looking statements made on this call are valid only as of the date hereof, and the company disclaims 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. During today's call, we will discuss certain financial measures derived from our financial statements that are not determined in accordance with US GAAP. The reconciliations of such non-GAAP financial measures to the most comparable GAAP figures are included in our earnings press release, which is available under the Investor Relations tab of our website at trustcobank.com.
Speaker #1: 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 Statements section of our annual report on Form 10-K, and as updated by our quarterly reports on Form 10-Q.
Speaker #1: The Forward Looking Statements made on this call are valid only as of the date here, and the company disclaims 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.
Speaker #1: 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 GAAP figures are included in our earnings press release, which is available under the Investor Relations tab of our website at trustcobank.com.
Operator 2: Please also note that today's event is being recorded. A replay of the call will be available for 30 days, and an audio webcast will be available for one year as described in our earnings press release. At this time, I would like to turn the conference over to Mr. Robert J. McCormick, Chairman, President, and CEO. Please go ahead.
Operator: Please also note that today's event is being recorded. A replay of the call will be available for 30 days, and an audio webcast will be available for one year as described in our earnings press release. At this time, I would like to turn the conference over to Mr. Robert J. McCormick, Chairman, President, and CEO. Please go ahead.
Speaker #1: Please also note that today's event is being recorded. A replay of the call will be available for 30 days and an 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 over to Mr. Robert J. McCormick, Chairman, President, and CEO. Please go ahead.
Robert J. McCormick: Good morning, everyone, and thank you for joining the call. As Chase said, I'm Rob McCormick, President of Trustco Bank. I'm joined today, as usual, by Mike Ozimek, our CFO, who will go through the numbers, and Kevin Curley, our Chief Banking Officer, will talk about lending. We think it's best to describe the results this quarter as a result of positive financial momentum. Looking at year-over-year results, deposits have grown each quarter, average loans have grown each quarter, and net income has grown each quarter. For the same period, return on average assets has improved each quarter, return on average equity has improved each quarter, and net interest margin has improved each quarter. This is not happening by accident. Our team has worked diligently in all areas to solidify customer relationships. We have reached out to customers with deposits and no loans to encourage equity borrowing and refinancing.
Robert J. McCormick: Good morning, everyone, and thank you for joining the call. As Chase said, I'm Rob McCormick, President of Trustco Bank. I'm joined today, as usual, by Mike Ozimek, our CFO, who will go through the numbers, and Kevin Curley, our Chief Banking Officer, will talk about lending. We think it's best to describe the results this quarter as a result of positive financial momentum. Looking at year-over-year results, deposits have grown each quarter, average loans have grown each quarter, and net income has grown each quarter. For the same period, return on average assets has improved each quarter, return on average equity has improved each quarter, and net interest margin has improved each quarter. This is not happening by accident. Our team has worked diligently in all areas to solidify customer relationships. We have reached out to customers with deposits and no loans to encourage equity borrowing and refinancing.
Speaker #2: Good morning, everyone, and thank you for joining the call. As Chase said, I'm Rob McCormick, President of the TRUSTCO BANK. I'm joined today, as usual, by Mike Ozimek, our CFO, who will go through the numbers and Kevin Curley, our Chief Banking Officer, will talk about lending.
Speaker #2: We think it's best to describe the results this quarter as a result of positive financial momentum. Looking at year-over-year results, deposits have grown each quarter, average loans have grown each quarter, and net income has grown each quarter.
Speaker #2: For the same period, return on average assets has improved each quarter, return on average equity has improved each quarter, and net interest margin has improved each quarter.
Speaker #2: This has not happened by accident. Our team has worked diligently in all areas to solidify customer relationships. We have reached out to customers with deposits and no loans to encourage equity borrowing and refinancing.
Robert J. McCormick: We have provided incentives to loan customers to utilize our deposit products and become real customers of Trustco Bank. We've taken a fresh look at our loan and deposit offerings and the systems that deliver them. We've made enhancements to improve the customer service experience as well. With all those factors coming together and trending favorably, we are optimistic about the company's ability to maintain positive momentum into 2027. Investors and customers can be on the lookout for exciting announcement about our lending operation in the coming months. We are also very pleased to have two new directors on board. Patty Fusco is likely known to many people in the New York market, provides expertise in human resources, and Bryan L. Guentner is a highly experienced real estate professional from the West Coast of Florida. His addition to the board expands our geographic diversity.
Robert J. McCormick: We have provided incentives to loan customers to utilize our deposit products and become real customers of Trustco Bank. We've taken a fresh look at our loan and deposit offerings and the systems that deliver them. We've made enhancements to improve the customer service experience as well. With all those factors coming together and trending favorably, we are optimistic about the company's ability to maintain positive momentum into 2027. Investors and customers can be on the lookout for exciting announcement about our lending operation in the coming months. We are also very pleased to have two new directors on board. Patty Fusco is likely known to many people in the New York market, provides expertise in human resources, and Bryan L. Guentner is a highly experienced real estate professional from the West Coast of Florida. His addition to the board expands our geographic diversity.
Speaker #2: We have provided incentives to loan customers to utilize our deposit products and become real customers of TRUSTCO BANK. And we've taken a fresh look at our loan and deposit offerings and the systems that deliver them.
Speaker #2: We've made enhancements to improve customer service experience as well. With all those factors coming together and trending favorably, we are optimistic about the company's ability to maintain positive momentum into 2027.
Speaker #2: Investors and customers can be on the lookout for exciting announcements about our lending operations in the coming months. We are also very pleased that two new directors on board, Patty Fusco, is likely known to many people in the New York market, provides expertise in human resources, and Brian Gunther is a highly experienced real estate professional from the West Coast to Florida.
Speaker #2: His addition to the board expands our geographic diversity. Now, Mike's going to talk about the numbers. Kevin will touch on the loan portfolio, and then we can take your questions.
Robert J. McCormick: Now Mike's going to talk about the numbers, Kevin will touch on the loan portfolio, and then we can take questions.
Robert J. McCormick: Now Mike's going to talk about the numbers, Kevin will touch on the loan portfolio, and then we can take questions.
Mike Ozimek: Thank you, Rob, and good morning, everyone. I will now review Trustco's financial results for Q3 2026. As we noted in the press release, the company continued to see strong financial results for Q3 2026, marked by increases in both net income and net interest income during Q3 2026 compared to Q3 2025. This performance is underscored by rising net interest income and sustained loan and deposit growth across core lending and deposit categories. This resulted in the Q3 net income of $17.3 million, an increase of 6.5% over the prior year quarter, which yielded a return on average assets and average equity of 1.05% and 10.57%, respectively. Capital remains strong. Consolidated equity to asset ratio was 9.72% for Q3 2026, compared to 10.9% in Q3 2025.
Mike Ozimek: Thank you, Rob, and good morning, everyone. I will now review Trustco's financial results for Q3 2026. As we noted in the press release, the company continued to see strong financial results for Q3 2026, marked by increases in both net income and net interest income during Q3 2026 compared to Q3 2025. This performance is underscored by rising net interest income and sustained loan and deposit growth across core lending and deposit categories. This resulted in the Q3 net income of $17.3 million, an increase of 6.5% over the prior year quarter, which yielded a return on average assets and average equity of 1.05% and 10.57%, respectively. Capital remains strong. Consolidated equity to asset ratio was 9.72% for Q3 2026, compared to 10.9% in Q3 2025.
Speaker #3: Thank you, Rob, and good morning, everyone. We're now reviewing TRUSTCO's financial results for the third quarter of 2026. As we noted in the press release, the company continued to see strong financial results for the third quarter of 2026, marked by increases in both net income and net interest income.
Speaker #3: During the third quarter of 2026, compared to the third quarter of 2025, this performance is underscored by rising net interest income and sustained loan and deposit growth across core lending and deposit categories.
Speaker #3: This resulted in the third quarter net income of $17.3 million and increase of 6.5% over the prior year quarter, which yielded a return on average assets and average equity of 1.05% and 10.57% respectively.
Speaker #3: Capital remained strong. Consolidated equity to asset ratio was 9.72% for the third quarter of 2026, compared to 10.9% in the third quarter of 2025.
Mike Ozimek: Book value per share at 30 September 2026 was $38.20, up 2.4% compared to $37.30 a year earlier. Driving these changes, Trustco repurchased 13.2% of outstanding common stock under the 2025 and 2026 stock repurchase programs through the acquisition of over 1.5 million shares in 2026, following the purchase of 1 million shares in 2025, reinforcing a disciplined long-term capital allocation strategy. We remain committed to returning value to shareholders through a disciplined share repurchase program which reflects our confidence in the long-term strength of our franchise and the focus on capital optimization. Additionally, during the Q3, the bank declared an increased quarterly cash dividend of $0.40 per share, or $1.60 per share on an annualized basis. The declared dividend represents an increase of 5.3% over the prior dividend amount, which continues the bank's commitment in paying dividends for over a century.
Mike Ozimek: Book value per share at 30 September 2026 was $38.20, up 2.4% compared to $37.30 a year earlier. Driving these changes, Trustco repurchased 13.2% of outstanding common stock under the 2025 and 2026 stock repurchase programs through the acquisition of over 1.5 million shares in 2026, following the purchase of 1 million shares in 2025, reinforcing a disciplined long-term capital allocation strategy. We remain committed to returning value to shareholders through a disciplined share repurchase program which reflects our confidence in the long-term strength of our franchise and the focus on capital optimization. Additionally, during the Q3, the bank declared an increased quarterly cash dividend of $0.40 per share, or $1.60 per share on an annualized basis. The declared dividend represents an increase of 5.3% over the prior dividend amount, which continues the bank's commitment in paying dividends for over a century.
Speaker #3: Book value per share at September 30, 2026, was $38.20, up 2.4% compared to $37.30 a year earlier. Driving these changes, TRUSTCO repurchased $13.2% of outstanding common stock under the 2025 and 2026 stock repurchase programs, through the acquisition of over 1.5 million shares in 2026, following the purchase of 1 million shares in 2025.
Speaker #3: We are reinforcing a disciplined, long-term capital allocation strategy. We remain committed to returning value to shareholders through a disciplined share repurchase program, which reflects our confidence in the long-term strength of our franchise and our focus on capital optimization.
Speaker #3: Additionally, during the third quarter, the bank declared an increased quarterly cash dividend of $0.40 per share, or $1.60 per share on an annualized basis.
Speaker #3: The declared dividend represents an increase of 5.3% over the prior dividend amount, which continues the bank's commitment to paying dividends for over a century.
Mike Ozimek: Credit quality continues to be stable as we saw non-performing loans modestly increase to $21.1 million in Q3 2026, from $18.5 million in Q3 2025. Our continued focus on solid underwriting within our loan portfolio and conservative lending standards positions us to manage credit risk effectively in the current environment. Average loans for Q3 2026 grew 4.6%, or $238 million to $5.4 billion from Q3 2025. This loan growth continues to reflect the strength of our local markets and ongoing demand for credit. For Q3 2026, the provision for credit losses was $850,000. The increase in the overall provision expense is being driven by loan growth and changes in economic forecasts rather than the softening in the underlying credit performance.
Mike Ozimek: Credit quality continues to be stable as we saw non-performing loans modestly increase to $21.1 million in Q3 2026, from $18.5 million in Q3 2025. Our continued focus on solid underwriting within our loan portfolio and conservative lending standards positions us to manage credit risk effectively in the current environment. Average loans for Q3 2026 grew 4.6%, or $238 million to $5.4 billion from Q3 2025. This loan growth continues to reflect the strength of our local markets and ongoing demand for credit. For Q3 2026, the provision for credit losses was $850,000. The increase in the overall provision expense is being driven by loan growth and changes in economic forecasts rather than the softening in the underlying credit performance.
Speaker #3: Credit quality continues to be stable, as we saw non-performing loans modestly increase to 21.1 million dollars in the third quarter of '26, from 18.5 million in the third quarter of '25.
Speaker #3: Our continued focus on solid underwriting within our loan portfolio and conservative lending standards positions us to manage credit risk effectively in the current environment.
Speaker #3: Average loans for the third quarter of '26 grew 4.6%, or 238 million dollars, to 5.4 billion from the third quarter of '25. This loan growth continues to reflect the strength of our local markets and ongoing demand for credit.
Speaker #3: For the third quarter of '26, the provision for credit losses was $850,000. The increase in the overall provision expense is being driven by loan growth and changes in economic forecasts, rather than the softening in the underlying credit performance.
Mike Ozimek: The ratio for the allowance for loan losses to total loans was 1.01% as of 30 September 2026 and 1% as of September 2025. Our focus continues to be on traditional lending and conservative balance sheet management, which has continued to enable us to produce consistent high-quality recurring earnings. Retaining our growing deposits has been a key focus as we finish up 2026. Total deposits ended the quarter at $5.7 billion, was up $203 million compared to the prior year quarter. We believe the increase in these deposits compared to the same period in 2025 continues to indicate strong customer confidence in the bank's competitive deposit offerings. The bank's continued emphasis on relationship banking, combined with competitive product offerings and digital capabilities, has contributed to a stable deposit base that supports ongoing loan growth and expansion.
Mike Ozimek: The ratio for the allowance for loan losses to total loans was 1.01% as of 30 September 2026 and 1% as of September 2025. Our focus continues to be on traditional lending and conservative balance sheet management, which has continued to enable us to produce consistent high-quality recurring earnings. Retaining our growing deposits has been a key focus as we finish up 2026. Total deposits ended the quarter at $5.7 billion, was up $203 million compared to the prior year quarter. We believe the increase in these deposits compared to the same period in 2025 continues to indicate strong customer confidence in the bank's competitive deposit offerings. The bank's continued emphasis on relationship banking, combined with competitive product offerings and digital capabilities, has contributed to a stable deposit base that supports ongoing loan growth and expansion.
Speaker #3: The ratio for the allowance for loan losses to total loans was 1.01% as of September 30, 2026, and 1% as of September 2025. Our focus continues to be on traditional lending and conservative balance sheet management, which has continued to enable us to produce consistent high-quality recurring earnings.
Speaker #3: Retaining and growing deposits has been a key focus as we finish up 2026. Total deposits ended the quarter at 5.7 billion dollars, was up 203 million compared to the prior quarter.
Speaker #3: We believe the increase in these deposits, compared to the same period in '25, continues to indicate strong customer confidence in the bank's competitive deposit offerings.
Speaker #3: The bank's continued emphasis on relationship banking, combined with competitive product offerings and digital capabilities, has contributed to a stable deposit base that supports ongoing loan growth and expansion.
Mike Ozimek: Net interest income was $47 million for Q3 2026, an increase of $3.9 million or 9.1% compared to the prior year quarter. The net interest margin for Q3 2026 was 2.95%, up 16 basis points from the prior year quarter. Yield and interest earning assets increased to 4.35%, up 10 basis points from the prior year quarter. The cost of interest-bearing liabilities decreased to 1.79% in Q3 2026 from 1.9% in Q3 2025. The bank is well-positioned to continue delivering strong net interest income performance even as the Federal Reserve contemplates further rate changes in the months ahead. The bank remains committed to maintaining competitive deposit offerings while ensuring financial stability and continued support for our community's banking needs. Our wealth management division continues to be a significant recurring source of non-interest income.
Mike Ozimek: Net interest income was $47 million for Q3 2026, an increase of $3.9 million or 9.1% compared to the prior year quarter. The net interest margin for Q3 2026 was 2.95%, up 16 basis points from the prior year quarter. Yield and interest earning assets increased to 4.35%, up 10 basis points from the prior year quarter. The cost of interest-bearing liabilities decreased to 1.79% in Q3 2026 from 1.9% in Q3 2025. The bank is well-positioned to continue delivering strong net interest income performance even as the Federal Reserve contemplates further rate changes in the months ahead. The bank remains committed to maintaining competitive deposit offerings while ensuring financial stability and continued support for our community's banking needs. Our wealth management division continues to be a significant recurring source of non-interest income.
Speaker #3: Net interest income was $47 million for the third quarter of '26, an increase of 3.9 million, or 9.1%, compared to the prior year quarter.
Speaker #3: The net interest margin for the quarter third quarter of '26 was 2.95%, up 16 basis points from the prior year quarter. The yield on interest earning assets increased to 4.35%, up 10 basis points from the prior year quarter.
Speaker #3: The cost of interest-bearing liabilities decreased, to 1.79% in the third quarter of '26, from 1.9% in the third quarter of '25. The bank is well-positioned to continue delivering strong net interest income performance, even as the Federal Reserve contemplates further rate changes in the months ahead.
Speaker #3: The bank remains committed to maintaining competitive deposit offerings while ensuring financial stability and continued support for our community's banking needs. Our wealth management division continues to be a significant recurring source of non-interest income.
Mike Ozimek: They had approximately $1.37 billion of assets under management as of 30 September 2026. The majority of this fee income is recurring, supported by long-term advisory relationships and a growing base of managed assets. Now on to non-interest expense. Total non-interest expense net of ORE income came in at $28 million, down $300,000 from the prior quarter. ORE income net came in at a credit of $12,000 for the quarter, as compared to an expense of $8,000 in the prior year quarter. We are going to continue to guide the anticipated level of expense not to exceed $200,000 per quarter. All the other categories of non-interest expense were in line with our expectations for Q3. We would expect 2026 total recurring non-interest expense net of ORE expense to be in the range of $27.8 to $28.2 million per quarter. Now Kevin will review the loan portfolio and non-performing loans.
Mike Ozimek: They had approximately $1.37 billion of assets under management as of 30 September 2026. The majority of this fee income is recurring, supported by long-term advisory relationships and a growing base of managed assets. Now on to non-interest expense. Total non-interest expense net of ORE income came in at $28 million, down $300,000 from the prior quarter. ORE income net came in at a credit of $12,000 for the quarter, as compared to an expense of $8,000 in the prior year quarter. We are going to continue to guide the anticipated level of expense not to exceed $200,000 per quarter. All the other categories of non-interest expense were in line with our expectations for Q3. We would expect 2026 total recurring non-interest expense net of ORE expense to be in the range of $27.8 to $28.2 million per quarter. Now Kevin will review the loan portfolio and non-performing loans.
Speaker #3: They had approximately $1.37 billion of assets under management as of September 30, 2026. The majority of this fee income is recurring, supported by long-term advisory relationships and a growing base of managed assets.
Speaker #3: Now onto non-interest expense. Total non-interest expense, net of ordinary income, came in at $28 million, down $300,000 from the prior quarter. Ordinary income net came in at a credit of $12,000 for the quarter, as compared to an expense of $8,000 in the prior year quarter.
Speaker #3: We are going to continue to guide the anticipated level of expense not to exceed $200,000 per quarter, while the other categories of non-interest expense were in line with our expectations for the third quarter.
Speaker #3: We would expect 2026's total recurring non-interest expense net of ordinary expense to be in the range of $27.8 to $28.2 million per quarter. Now, Kevin will review the loan portfolio and non-performing loans.
Kevin Curley: Thanks, Mike, and good morning to everyone. Our average loans grew by $238.1 million or 4.6% year over year. This is an improvement over last quarter's report of year over year growth of $197.5 million. The growth was centered in our residential loan portfolio, with our first mortgage segment growing by $177.3 million or 4%, and our home equity loans growing $50 million or 11.4% over last year. In addition, our commercial loans grew by $13.5 million or 4.3% over last year. For Q3, actual loans increased $77.1 million compared to Q2. Purchase mortgage loans, including refinances, grew by $53.6 million. Home equity loans grew by $13.9 million, and commercial loans were higher by $10 million for the quarter. During Q3, mortgage rates were below 6.5% at the beginning of the quarter and then increased to over 7% by the end of the quarter.
Kevin Curley: Thanks, Mike, and good morning to everyone. Our average loans grew by $238.1 million or 4.6% year over year. This is an improvement over last quarter's report of year over year growth of $197.5 million. The growth was centered in our residential loan portfolio, with our first mortgage segment growing by $177.3 million or 4%, and our home equity loans growing $50 million or 11.4% over last year. In addition, our commercial loans grew by $13.5 million or 4.3% over last year. For Q3, actual loans increased $77.1 million compared to Q2. Purchase mortgage loans, including refinances, grew by $53.6 million. Home equity loans grew by $13.9 million, and commercial loans were higher by $10 million for the quarter. During Q3, mortgage rates were below 6.5% at the beginning of the quarter and then increased to over 7% by the end of the quarter.
Speaker #4: Thanks, Mike, and good morning to everyone. Our average loans grew by 238.1 million, or 4.6%, year over year. This is an improvement over the last quarter's report of year-over-year growth of 197.5 million.
Speaker #4: The growth was centered in our residential loan portfolio, with our first mortgage segment growing by 177.3 million, or 4%, and our home equity loans growing 50 million, or 11.4%, over last year.
Speaker #4: In addition, our commercial loans grew by 13.5 million, or 4.3%, over last year. For the third quarter, actual loans increased 77.1 million, compared to the second quarter.
Speaker #4: Purchased mortgage loans, including refinances, grew by 53.6 million, home equity loans grew by 13.9 million, and commercial loans were higher by 10 million for the quarter.
Speaker #4: During the third quarter, mortgage rates were below 6.5% at the beginning of the quarter and then increased to over 7% by the end of the quarter.
Kevin Curley: As noted previously, we have the flexibility to strategically manage pricing and introduce targeted promotions to drive lending volume. Our mortgage origination activity, as well as our purchase loan volume, were steady throughout the quarter. In addition, our home equity products continue to produce consistent demand as customers are able to use their equity to meet their borrowing needs. Overall, we are pleased with the loan growth during the quarter and remain committed to delivering strong results moving forward. Moving to asset quality. As a portfolio lender, we originate loans to hold through maturity. This reinforces our disciplined approach to underwriting and risk management. Asset quality at the bank remains very strong. Our early-stage delinquencies in our portfolio continue to remain within their normal range.
Kevin Curley: As noted previously, we have the flexibility to strategically manage pricing and introduce targeted promotions to drive lending volume. Our mortgage origination activity, as well as our purchase loan volume, were steady throughout the quarter. In addition, our home equity products continue to produce consistent demand as customers are able to use their equity to meet their borrowing needs. Overall, we are pleased with the loan growth during the quarter and remain committed to delivering strong results moving forward. Moving to asset quality. As a portfolio lender, we originate loans to hold through maturity. This reinforces our disciplined approach to underwriting and risk management. Asset quality at the bank remains very strong. Our early-stage delinquencies in our portfolio continue to remain within their normal range.
Speaker #4: As noted previously, we have the flexibility to strategically manage pricing and produce targeted promotions to drive lending volume. Our mortgage origination activity, as well as our purchase loan volume, were steady throughout the quarter.
Speaker #4: In addition, our home equity products continue to produce consistent demand, as customers are able to use their equity to meet their borrowing needs. Overall, we are pleased with the loan growth during the quarter and remain committed to delivering strong results moving forward.
Speaker #4: Moving to asset quality. As a portfolio lender, we originate loans through maturity. This reinforces our disciplined approach to underwriting and risk management. Asset quality at the bank remains very strong.
Speaker #4: Our early-stage delinquencies and our portfolio continued to remain with our within their normal range. Charge offs for the quarter, amounted to a net recovery of $30,000, which follows a net recovery of $88,000 in the second quarter, and a total of $171,000 in recoveries over the past year.
Kevin Curley: Charge-offs for the quarter amounted to a net recovery of $30,000, which follows a net recovery of $88,000 in Q2 and a total of $171,000 in recoveries over the past year. Overall, we have had seven straight quarters of net recoveries. Non-performing loans were $21.1 million at this quarter end, $21.8 million last quarter, and $18.5 million a year ago. Non-performing loans to total loans was 0.39% for quarter end, compared to 0.4% last quarter and 0.36% a year ago. Non-performing assets were $22.3 million at quarter end, $23 million last quarter, and $19.7 million a year ago. At quarter end, our allowance for credit losses remained solid at $55.2 million, with a coverage ratio of 262%, compared to $54.1 million with a coverage ratio of 249% at the end of Q2 and $51.9 million and a coverage ratio of 281% a year ago. Rob?
Kevin Curley: Charge-offs for the quarter amounted to a net recovery of $30,000, which follows a net recovery of $88,000 in Q2 and a total of $171,000 in recoveries over the past year. Overall, we have had seven straight quarters of net recoveries. Non-performing loans were $21.1 million at this quarter end, $21.8 million last quarter, and $18.5 million a year ago. Non-performing loans to total loans was 0.39% for quarter end, compared to 0.4% last quarter and 0.36% a year ago. Non-performing assets were $22.3 million at quarter end, $23 million last quarter, and $19.7 million a year ago. At quarter end, our allowance for credit losses remained solid at $55.2 million, with a coverage ratio of 262%, compared to $54.1 million with a coverage ratio of 249% at the end of Q2 and $51.9 million and a coverage ratio of 281% a year ago. Rob?
Speaker #4: Overall, we have had seven straight quarters of net recoveries. Non-performing loans were $21.1 million at this quarter end, $21.8 million last quarter, and $18.5 million a year ago.
Speaker #4: Non-performing loans to total loans was 0.39% at quarter end, compared to 0.40% last quarter and 0.36% a year ago. Non-performing assets were $22.3 million at quarter end, $23 million last quarter, and $19.7 million a year ago.
Speaker #4: At quarter end, our allowance for credit losses remains solid at $55.2 million, with a coverage ratio of 262%, compared to $54.1 million with a coverage ratio of 249% at the end of the second quarter, and $51.9 million and a coverage ratio of 281% a year ago.
Robert J. McCormick: Thanks, Kevin. That's our story. We're happy to answer any questions anybody might have.
Robert J. McCormick: Thanks, Kevin. That's our story. We're happy to answer any questions anybody might have.
Speaker #4: Rob?
Speaker #2: Thanks, Kevin. That's our story. We're happy to answer any questions anybody might have.
Operator 2: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star one again. At this time, we will pause momentarily to assemble our roster. Your first question comes from the line of Ian Lapey from Gabelli Funds. Your line is open. Please go ahead.
Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star one again. At this time, we will pause momentarily to assemble our roster. Your first question comes from the line of Ian Lapey from Gabelli Funds. Your line is open. Please go ahead.
Speaker #1: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker #1: If at any time your question has been addressed and you would like to withdraw your question, please press star 1 again. At this time, we will pause momentarily to assemble our roster.
Speaker #1: Your first question comes from the line of Ian Leppe, from Gabelli Funds. Your line is open. Please go ahead.
Ian Lapey: Good morning, Rob and team. Congratulations on another strong quarter. A few questions.
Ian Lapey: Good morning, Rob and team. Congratulations on another strong quarter. A few questions.
Speaker #5: Good morning, Rob and team. Congratulations on another strong quarter. A few questions.
Robert J. McCormick: Good morning, Ian. Thank you.
Robert J. McCormick: Good morning, Ian. Thank you.
Speaker #6: Morning, Ian. Thank you.
Ian Lapey: Can you just talk about, obviously, during the quarter, there was a sharp increase in interest rates, particularly the 10-year and mortgage rates. Can you just talk about the impact that that had
Ian Lapey: Can you just talk about, obviously, during the quarter, there was a sharp increase in interest rates, particularly the 10-year and mortgage rates. Can you just talk about the impact that that had on both the loan and deposit business?
Speaker #5: Can you just talk about, obviously, during the quarter there was a sharp increase in interest rates, particularly the 10-year and mortgage rates. Can you just talk about the impact that that had.
Robert J. McCormick: The impact that that had
Speaker #6: The impact that that had.
Ian Lapey: on both the loan and deposit business?
Speaker #5: On both the loan and deposit business?
Robert J. McCormick: Certainly the change affected us in some ways, Ian, but we've always maintained a pretty liquid position and stay well capitalized. So we kind of let some of it run off a little bit and work our way to higher priced stuff and work our way back into it. So I think it's been a very effective thing for us. Some people are going a little bit longer on CDs and some of the loan volumes are down. But as I said in my introduction was that we're trying to pick up more home equity loans and do more business that way, and we've been successful at it so far.
Robert J. McCormick: Certainly the change affected us in some ways, Ian, but we've always maintained a pretty liquid position and stay well capitalized. So we kind of let some of it run off a little bit and work our way to higher priced stuff and work our way back into it. So I think it's been a very effective thing for us. Some people are going a little bit longer on CDs and some of the loan volumes are down. But as I said in my introduction was that we're trying to pick up more home equity loans and do more business that way, and we've been successful at it so far.
Speaker #6: Certainly, the change affected us in some ways, Ian, but we've always maintained a pretty liquid position and stayed well-capitalized. So we kind of let some of it run off a little bit and worked our way through the higher-priced stuff and worked our way back into it.
Speaker #6: So I think it's been a very effective thing for us. Some people are going a little bit longer on CDs, and some of the loan volumes are down.
Speaker #6: But as I said in my introduction, we're trying to pick up more equity loans and do more business that way, and we've been successful at it so far.
Ian Lapey: Did you see sort of just a, in terms of customer behavior, just any type of freezing in terms of plans to either refi or purchase a new home?
Ian Lapey: Did you see sort of just a, in terms of customer behavior, just any type of freezing in terms of plans to either refi or purchase a new home?
Speaker #5: Did you see sort of just a in terms of customer behavior, just any type of freezing in terms of plans to either refi or purchase a new home?
Robert J. McCormick: No.
Robert J. McCormick: No. You're talking about encouraging people to refi or-
Speaker #6: No.
Speaker #5: No? Okay.
Robert J. McCormick: You're talking about encouraging people to refi or-
Speaker #6: You're talking about encouraging people to refi, or?
Ian Lapey: No, I'm just talking about-
Ian Lapey: No, I'm just talking about-
Robert J. McCormick: Are you seeing more of it?
Robert J. McCormick: Are you seeing more of it?
Speaker #5: No, I'm just talking about.
Ian Lapey: Yeah. What you are seeing in terms of customer behavior, given the sharp increase in rates.
Ian Lapey: Yeah. What you are seeing in terms of customer behavior, given the sharp increase in rates.
Speaker #6: Yeah. What you're seeing in terms of customer behavior, given the sharp rate increase in rates. We operate in pretty conservative areas. Especially in upstate New York.
Robert J. McCormick: We operate in pretty conservative areas, especially in upstate New York, so we have not seen a real change in customer behavior.
Robert J. McCormick: We operate in pretty conservative areas, especially in upstate New York, so we have not seen a real change in customer behavior.
Speaker #6: So we have not really seen a real change in customer behavior.
Ian Lapey: Mm-hmm. Okay. Then, next on credit. First, congratulations on another quarter of net recoveries. Very impressive. Just given, and you mentioned the increase in the allowance was driven mostly by sort of a deteriorating economic outlook. Can you just talk about how you are positioning the loan portfolio for a more challenging environment and what you are focused most on in terms of potential risk there?
Ian Lapey: Mm-hmm. Okay. Then, next on credit. First, congratulations on another quarter of net recoveries. Very impressive. Just given, and you mentioned the increase in the allowance was driven mostly by sort of a deteriorating economic outlook. Can you just talk about how you are positioning the loan portfolio for a more challenging environment and what you are focused most on in terms of potential risk there?
Speaker #5: Okay. And then next, on credit, first, congratulations on another quarter of net recoveries. Very impressive. Just given and you mentioned the allowances the increase in the allowance was driven mostly by sort of a deteriorating economic outlook.
Speaker #5: Can you just talk about how you're positioning the loan portfolio for a more challenging environment, and what you are focusing on most in terms of potential risk there?
Robert J. McCormick: Yeah. Our underwriting is always conservative, Ian, so we are staying the course and trying not to get crazy with regard to any of the loans that are being made. We are watching everybody around us kind of change their stripes and kind of do different things. We are trying to stay the course. Part of that allowance increase is driven by loan growth, so that we are back funding that through the CECL model. So between the combination of the Q factors, and Mike can tell you 100 times more than I can tell you about it. But between a combination of the Q factors and the loan growth, that is how we ended up. But our customers have come to know us and come to know what to expect of us, and we are pretty comfortable with where we are at.
Robert J. McCormick: Yeah. Our underwriting is always conservative, Ian, so we are staying the course and trying not to get crazy with regard to any of the loans that are being made. We are watching everybody around us kind of change their stripes and kind of do different things. We are trying to stay the course. Part of that allowance increase is driven by loan growth, so that we are back funding that through the CECL model. So between the combination of the Q factors, and Mike can tell you 100 times more than I can tell you about it. But between a combination of the Q factors and the loan growth, that is how we ended up. But our customers have come to know us and come to know what to expect of us, and we are pretty comfortable with where we are at.
Speaker #6: Yeah. I mean, our underwriting is always conservative, Ian. So we're paying the course and trying not to get crazy with regard to any of the loans that are being made.
Speaker #6: We're watching everybody around us kind of change their stripes and kind of do different things. We're trying to stay the course, and part of that allowance increase is driven by loan growth.
Speaker #6: So, we're back to funding that through the CSO model. So, between a combination of the Q factors—and Mike can tell you 100 times more than I can about it—but between a combination of the Q factors and the loan growth, that's how we ended up.
Speaker #6: But our customers have come to know us and come to know what to expect of us. And we're pretty comfortable with where we're at.
Ian Lapey: Okay, great. That is all for me. Congrats again.
Ian Lapey: Okay, great. That is all for me. Congrats again.
Speaker #5: Okay, great. That's all from me. Congrats again.
Robert J. McCormick: All right. Thanks, Ian.
Robert J. McCormick: All right. Thanks, Ian.
Speaker #6: All right. Thanks, Ian.
Operator 2: This concludes our question and answer session. I would like to turn the conference back over to Robert J. McCormick for any closing remarks.
Operator: This concludes our question and answer session. I would like to turn the conference back over to Robert J. McCormick for any closing remarks.
Speaker #1: This concludes our question-and-answer session. I would like to turn the conference back over to Robert J. McCormick for any closing remarks.
Robert J. McCormick: Thank you for your interest in our company. I hope you have a great day.
Robert J. McCormick: Thank you for your interest in our company. I hope you have a great day.
Speaker #6: Thank you for your interest in our company. I hope you have a great day.
Operator 2: This concludes today's call. Thank you for attending today's presentation. You may now disconnect.
Operator: This concludes today's call. Thank you for attending today's presentation. You may now disconnect.
