Good day, and welcome to the TrustCo Bank Corp Earnings Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [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 and 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 Statement 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 law. Today’s presentation contains non-GAAP financial measures. The reconciliation 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 today’s event is being recorded. At this time, I would like to turn the conference over to Mr. Robert J. McCormick, Chairman, President and CEO. Please go ahead.

Thank you. Good morning, everyone. As the host said, I’m Rob McCormick, President of the Bank. Joined today by Michael Ozimek, our CFO; and Scot Salvador, our Chief Lending Officer. As we usually do, I will start with a brief summary hitting the highlights. Then Mike will detail the numbers. Scot will talk about loans. Then we can wrap up with any questions you may have. There’ve been several positive events that have occurred at our company recently. We’ve crossed over the $6 billion total asset mark. Our Florida deposits now exceed $1 billion. Our Florida loan portfolio now exceeds $1 billion. And our financial services area now has more than $1 billion under management. These are all positive events for our company and contributed to a very solid first quarter 2021. Our net income was over $14 million greater than year end 2020 and the first quarter of 2020. Our net interest income was $40.1 million for the first quarter of 2021, also greater than year end and first quarter 2020. Our net interest margin for the first quarter of 2021 was 2.78%, essentially flat since year end 2020 and down from first quarter 2020. Our total deposits were almost $5.2 billion. This is up significantly over the same quarter of 2020 when they were roughly $4.5 billion. This growth has been in all core categories. Higher cost time deposits are actually down about $130 million year-over-year. We’ve certainly received deposits from stimulus payments. These deposits seem stickier than most including us originally thought they would be. We could see this reverse and draw down as our country reopens. Our loan portfolio has grown to almost $4.3 billion, another all-time high. Vast majority of this growth is in residential mortgage loans. We also had some activity in the commercial…

Thank you, Rob, and good morning, everyone. I’ll now review TrustCo’s financial results for the first quarter of 2021. As we noted in the press release, the company saw net income of $14.1 million in the first quarter of 2021, which yielded a return on average assets and average equity of 0.96% and 10.01% respectively. Average loans for the first quarter of 2021 grew 4.3% or $173.3 million to $4.2 billion from the first quarter of 2020. As expected the growth continues to be concentrated within our primary lending focus. The residential real estate portfolio, which increased by $187.5 million or 5.2% in the first quarter of 2021 over the same period in 2020. Average commercial loan portfolio increased $14.7 million or 7.4% over the same period in 2020. It’s included $17.1 million of new PPP loans originated in the first quarter. The bank currently has approximately $37 million remaining of SBA PPP loans. Total average investment securities, which include the AFS and HDM portfolios increased $35.1 million or 7.6% during the first quarter. In the same period, the bank purchased approximately $132 million of securities and approximately $37.9 million of pooled securities paid down. There are no securities called in the first quarter of 2021. Provision for loan loss for the first quarter was $350,000, a decrease compared to the $2 million in the same period in 2020. The ratio for allowance for loan losses to total loans was 1.17% as of March 31, 2021, compared to 1.13% as of the same period in 2020. In the first quarter of 2021, the decrease level of provision was driven by improving economic indicators and the outlook resulting from the COVID-19 pandemic. We would expect a level of provision for loan losses in 2021 will continue to reflect the overall growth…

Okay, Mike, thank you. Good morning. In first quarter total loans grew by $25 million in actual numbers or 0.6%. Year-over-year loans have increased by 4.1% or $170 million. Loan growth on the quarter consisted of $21 million of residential growth and $4.5 million on the commercial side. Commercial loan figures include the bank’s ongoing activity with regards to SBA PPP lending programs. Our first mortgage product increased by $32 million on the quarter [indiscernible] decrease in our home equity loans netting to the $21 million residential growth number. The first quarter is typically the bank slowest with regard to loan growth. Activity levels have increased steadily and are currently strong in all of our lending regions. Purchase money lending has been particularly active in all areas. Refinances remain elevated, although below the peak periods of last year. Properties are selling quickly in most all areas and a lack of inventory in the more modest price ranges is a common occurrence. Interest rates have continued to hover in the lower 3% range over recent weeks. Currently our 30-year rate stands at 2.99%. Our loan backlog at quarter end was strong. It reflects both the active purchase money market and the overall level of mortgage activity. It is well above the totals for both year-end and the same point last year. We’re optimistic regarding increased net loan growth for this quarter, given both the ongoing strong activity levels and our current backlog. This potential growth however will continue to be impacted to some degree by the elevated refinance levels at least in the short-term. Overall asset quality measurements remained strong. Non-performing loans totaled $21.6 million on the quarter. This compared to $21.1 million in December and $20.7 million a year ago. Such choppiness is to be expected as we continue with these very low levels. Non-Performing assets totaled $22.1 million compared to $22 million in March of 2020. Charge offs actually netted to a $46,000 recovery on the quarter. The allowance for loan losses is down 1.17% of total loans with the coverage ratio or the allowance to non-performing loans standing at 231%. Rob?

Just before we turn to questions, I do want to [indiscernible] and a reader poll. And I tell you this only because on prior calls, I told you how our employees have performed, especially during a pandemic year. So I think that’s a very nice tribute to them, shows how well they performed. So we’re now happy to answer any questions you might have.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Alex Twerdahl from Piper Sandler. Please go ahead.

Hey, good morning guys.

Good morning, Alex.

First off just wanted to start with some of the most recent comments you were making Scot, on the loan pipeline and your optimism, etcetera. If you had to kind of boil it all down to sort of a growth rate for expected loan growth for the residential portfolio for 2021. I mean, would you say that sort of mid-single digits is right, high single digits, lower than that? How – can you maybe just help us frame it a little bit better?

Well, it’s difficult to forecast, Alex. As you know, there is a lot of variables that come into play, not just on the volume side, but when you’re talking about the refinance angle and everything else, there is a lot of variables. So it’s difficult to forecast. But that being said, as I said in my remarks, our first quarter is typically our slowest quarter of the year given coming off the holidays, our backlog is very strong and the activity in the marketplace is strong. So I would hope that we’re going to post good net growth for the next – certainly the next quarter and hopefully remainder of the year, and pick up significantly from where we are now, but I can’t put any specific numbers on it.

Okay. And you mentioned the advertise rate was 2.99, is that roughly where most of these loans are coming out or are they coming out a little bit higher than that?

They are as of now, Alex. We have been higher that. As of – most recently, we were at 3 in a quarter. So we – in recent weeks, we’ve been more in that range, but just within the last day or so we’ve come down to where we are to 2.99.

Okay. And then Mike, when you’re talking about the cash balances and being a little bit elevated, I think you said you began to invest excess liquidity at current levels. Is that in reference just the – to the $132 million of purchases that you did in the first quarter or have you done additional in the second quarter? And maybe just help us you get a little bit more understanding on how you’re thinking about sort of laddering that cash in over the next couple of quarters.

Yes, sure. I mean, so far, we haven’t done anything in the second quarter. So the initial comments were what we did in the first. You see where we’re at now at a hundred or a little over $1 billion, pushing to billion, $1.1 billion. We’re going to look at that. And it is a metering of how much money is going out into our loan portfolio. So – and there’s another round of stimulus comes in, what happens with our overall deposit balances, there’s been a lot of talk in the market at – we feel our deposits are sticky. They are hanging around, but as this country opens up in – if we start to see some of those funds run out, people actually go out starting to spend a little bit of money on that, that’s all going to come into play. So I guess what I would say is our cash balance is where they are now. I would not expect them to get a lot larger. So that if that kind of helps out a little bit.

Okay. So around $1 billion sort of the – is plenty and if more cash comes in in the second quarter, then the expectation would be the latter that, and it’s not using longer with expectation would be to go out and purchase some securities.

Right.

Okay. And then on the liability side, we pretty much at the bottom in terms of, I know you talked about the CD re-pricings from 40 and 44 basis points later this year. And where a new CDs coming on and how much more room do you think there is to lower cost of deposits?

I think the highest rate we’re offering right now is 15 basis points.

Okay. That’s all.

I think there’s still room for re-pricing, Alex. I agree with you were bouncing along the bottom is that way of saying it or popular way of saying it, but I think there is still a little bit more room, but I don’t know how much.

Understood. And then as you think about capital deployment and how you reauthorize the 2 million shares repurchase activity or repurchase authorization during the quarter. Talk a little bit about how you plan to use that that authorization. Did you do any in the first quarter and sort of what is it based on price? Is it based on – what’s it based on that again through that 2 million?

Yes. We didn’t make a buy in the first quarter on a buyback program, the first quarter is problematic, because you’re preparing the proxy and the annual report. So there are quite a few close window periods during that time. We are certainly looking at buybacks and it’s based on all of the above, the capital position in the company, the price of the stock and what the activity has been in recent times.

Okay. That’s all my questions for now. Thanks for taking my questions.

All right. Thanks, Alex.

Thanks, Alex.

This concludes our question-and-answer session. I would like to turn the conference back over to Robert J. McCormick for any closing remarks.

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

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.