Good morning, and welcome to the TrustCo Bank Corp Fourth Quarter 2018 Earnings Call and Webcast. [Operator Instructions] 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. Actual results and trends could differ materially from those set forth in such statements due to various risks, 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 Statements sections of our Annual Report on Form 10-K and as updated by our quarterly reports on Form 10-Q. The statements are valid only as of the date hereof, and the company disclaims any obligation to update this information, except as may be required by applicable la6w. Today’s presentation contains non-GAAP financial measures. The reconciliations of such 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. Please also note this event is being recorded. I would now like to turn the conference over to Mr. Robert J. McCormick, Chairman, President and CEO. Please go ahead.

Thanks, Shawn, and thank you for taking time out of your day to hear more about our Company and our 2018 results. I'm Rob McCormick, President of the Bank. Joining me on the call today are Mike Ozimek, our Chief Financial Officer and Scot Salvador our Chief Lending Officer. Also in the room with us is Andrea McGuire from the Accounting Department to keep us in line. As we've done in the past, I will start out with a summary, hitting high points; then Mike will detail the numbers; Scot will talk about loans; then we can respond to any questions you may have. 2018 was a very solid year here at the Bank. We hit a record high net income of $61.4 million. This was up over 42% from 2017, driven by strong performance and benefits from the Jobs and Tax Act. Our loan growth hit another all-time - our loan portfolio hit another all-time high of almost $3.9 billion, driven mostly by growth in our residential mortgage portfolio. We should note, all loan categories experienced some growth in 2018. Our deposits also grew in 2018, as previously reported. We are trying to be cautious with regards to deposit pricing. Performance ratios at the end of 2018 were all very sound. Non-performing loans-to-total loans dropped to 0.64%; non-performing assets-to-total assets dropped to 0.54%. Our allowance to total loans was 1.16% with the coverage ratio of just under 180%. Total allowance also grew year-over-year. We continue to see margin expands to 3.38%. We are paying more for deposits, but our earning assets were able to outpace the cost. Our return on assets improved to 1.3% and our return on equity was 13.18%. Our dividend payout ratio is just over 41% even after our increase in the cash dividend. How could you not be happy with our 2018 results? We do realize that every year cannot be record breaking, but we remain optimistic about 2019. Now Mike will detail the numbers, Scot will give some detail on operations; then we'll respond to questions. Mike?

Thank you, Rob, and good morning everyone. I will now review TrustCo's financial results for the fourth quarter of 2018. As we noted in their press release, the Company saw an increase in net income to $16 million, up 118% compared to $7.4 million for the fourth quarter of 2017. Net income yielded a return on average assets and average equity of 1.30% and 13.18% compared to 0.60% and 6.38% in the fourth quarter of 2017. On December 22, 2017, the Tax Cuts and Jobs Act was signed into law, which included a reduction of the federal statutory corporate tax rate from 35% to 21%, effective January 1, 2018. The lower tax rate continues to have a significant beneficial impact on the results going forward. The effective tax rate was 18.9% in the fourth quarter of 2018 compared to 62.6% in the same period a year ago. The decrease in effective rate for the fourth quarter of 2018 was partially driven by the implementation of a tax planning strategy that reduced taxes on a one-time basis by $880,000. Now, onto the changes in the balance sheet; strong loan growth continued during the fourth quarter of 2018. Average loans were up $244 million or 6.8% for the fourth quarter of 2018 compared to the same period in 2017. As expected, the growth continues to be concentrated within our primary lending focus, the residential real estate portfolio. That portfolio increased by $256 million or 8.2% in the fourth quarter, over the same period in 2017. This continues the positive shift in the balance sheet from lower yielding overnight investments to higher yielding core loan relationships. The loan portfolio expansion was funded by a combination of utilizing a portion of our cash balances and cash flow from our investment portfolios. Total average investment…

Okay. Thank you, Mike. Loans continue to grow on a solid pace for the fourth quarter 2018. Overall loans increased by $48 million on the quarter in actual numbers are 1.26%. This included a $41 million net increase in residential mortgages with commercial loans increasing by $5 million. Year-over-year, loans have increased by $238 million or 6.5%. The vast majority of this increase was centered in our 30-year mortgage product, with approximately $10 million of commercial growth included. The pattern of companywide mortgage growth we have experienced in 2018 continued in the fourth quarter with all our regions posting solid increase. Our Downstate New York market continue to do well, and for the year, have posted an increase in overall mortgage activity approaching 30%. While still a smaller piece of our overall operations, we are nonetheless pleased to see this rise in our Downstate activity. Mortgage rates increase then began to ease again later in the fourth quarter. While we have not seen a major effect on overall mortgage activity, the change in rates obviously do play a role and likely have contributed to the declining balances in the home equity credit line portfolio. Our results this quarter included an approximate $4 million decrease in such balances. Our current 30-year fixed mortgage rate stands at 4.99%. Our backlog is down significantly from the third quarter, which is normal, given the seasonal slowdown in the fourth quarter. Year-over-year, the backlog is down just over 10% which includes a lower amount of pending refinances due to changes in interest rate. Looking closer at the year-over-year numbers, the purchase money backlog is down only approximately 6%. Our asset quality measurements remain strong. Early stage delinquencies remain very low, and both non-performing loans and non-performing assets are solid at 0.64% and 0.54% of total loans respectively. We expect these ratios will display some choppiness given their low levels, and for the year both ratios were down, while increasing slightly on the quarter. Net charge offs totaled only $803,000 for the year versus $1.7 million last year. This translates to an annualized charge off ratio of only 0.05%. The coverage ratio or allowance for loan losses to the non-performing loans now stands at 179%. Rob?

Thanks Scot. We'll take any questions you have.

[Operator Instructions] Our first question comes from Alex Twerdahl with Sandler O'Neill. Please go ahead.

First off, just wanted to ask you a question Rob, it's kind of higher level as it relates to capital, you guys have been accreting tangible capital basically as far back as my model go, it almost 10% today. Seems like it should be more than enough given the credit characteristics in your portfolio, the growth that you've had et cetera, how do you think about sort of the level of capital? You've increased the dividend slightly recently, dividend increases the dividend payout ratio, buybacks things like that. Is that something that is going to become more of a focus in 2019?

As I said to you in the last call, Alex, all of that is on the table at this point in time. There are a number of initiatives we're looking at. We would agree with you, we do think a 10% capital level is a benefit from a regulatory perspective. I think 10% banks are going to be looked at differently than other banks and that's just my speculation at this point. But I think all of what you've referenced is on the table.

And then just wanted to drill in a little bit more to kind of what's happening in the margin, and starting with deposits, you guys put on a bunch of time deposits in the fourth quarter. Can you just kind of update us on sort of what the strategy is for deposits and liquidity and sort of managing those balances and sort of what kind of time deposits you're putting on? Is it driven by some promotions you guys are doing or is it more driven by customer demand?

It's a mix bag Alex. So, it's a little bit of everything. What we're trying to do is keep the maturities relatively short on our CDs. We like a nine-month product that distinguishes ourselves from the competition and we've had some success in that area. You also have to remember you have Snowbirds returning to the Florida market. The West Coast of Florida has been very good to us especially, so that there's customer opportunity there and we just thought it was a good time to maybe put some deposits on the books.

And are those, do you think mostly new customers coming in or are they existing customers just kind of increasing their accounts and adding some duration to their portfolios?

Well, the vast majority would be new customers because the quote specials that you offer is at least new money, Alex. They wouldn't necessarily be new customers but new money to the Bank.

And then just kind of, as it relates to the margin you've had some nice margin expansion over the last couple of quarters. A lot of that's being driven by just deploying cash obviously, which is certainly accretive to the margin, but you brought that cash position down from nearly 14% at the beginning of 2017, it's now 8.5% on average. Is there - as you kind of look forward and obviously no one knows what the Fed is going to do next year and what the yield curve is going to look like, but how do you think about managing that cash position, is - how much would you actually kind of deploy over the next couple of quarters?

You've been following us for a long time, and we would say that was execution of a plan, that's been in existence for a long time. When the rates gave us the opportunity, we deployed that cash, as we always told our shareholders we would. And I think we're pretty comfortable with the level we're at. If there is opportunity to grow the cash position, we probably would.

At this time, there are no further questions. This will conclude our answer-and-question session. I would like to turn the conference back over to Robert J. McCormick for any closing remarks.

Thanks for your interest in our Company and have a great day everybody.

The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.