SCHENECTADY — One of the region’s oldest companies will celebrate a milestone anniversary on Thursday with 70 times more employees than when it started and an 82,000% increase in its assets.
One thing that hasn’t changed is the address. Trustco’s long history began at 320 State St. on June 9, 1902, and as of June 2022, the community bank’s main branch is still operating behind the Royal Facade.
The company will celebrate its 120th anniversary there from 9 a.m. Thursday, with the mayor of Schenectady handing over a key to the city and marking the bank’s longevity.
It was a memorable journey for the bank originally chartered as Schenectady Trust Company.
The city’s population nearly tripled, then contracted sharply; two major pandemics struck a century apart; and two world wars have shaken the economy.
The bank survived the Great Depression, in which 9,000 other banks failed, and it remains independent amid the wave of consolidation that has halved the number of U.S. community banks so far in the 21st century .
The Schenectady Trust Company eventually shortened its name to Trustco and added 150 branches in five states as its assets grew from $762,578 to $6.3 billion in 120 years. The 11-person operation now has 750 employees.
But it retains the same fundamental role in the community – keeping people’s money safe and lending it out to buy homes.
“Trustco is certainly an institution in Schenectady County,” said county historian Bill Buell.
“There were only three banks in Schenectady in 1886 when Thomas Edison brought Edison Electrical Works here, and soon the town of 14,000 grew to 32,000 by the turn of the century and would more than double over the next 20 years “, he added.
“Schenectady Trust Co. was one of those banks formed to help manage the population boom at that time, and when it opened in June 1902, it became Schenectady’s fourth bank.”
Mark Eagan, president and CEO of the Capital Region Chamber, said Trustco is notable not only for its survival, but also for its growth and integration into the fabric of the community.
“At first it was the town of Schenectady, then they spread to other parts of the county, then to other parts of the capital region,” he said. “They have a ton of branches.
“And they have a very strong niche in real estate. There are so many people whose dreams of home ownership have come true. [Trustco] made it happen.
Eagan also appreciates that bank management has encouraged and enabled employees to get involved in the communities where they work.
“They show [support] not just through their words, but through their actions,” he said.
THE BANK TODAY
The entity is now TrustCo Bank Corp of NY, a publicly traded savings and loan holding company based in Glenville. It operates 145 outlets, nearly all in three areas: the Capital Region, the Lower Hudson Valley and Central Florida. There is also a branch in Vermont and Massachusetts, and two in New Jersey.
Chairman, President and CEO Robert J. McCormick has led the company since 2002, following his late father, Robert A. McCormick, who took over as CEO in 1985.
He spoke to The Daily Gazette last week about how and why Trustco has endured and grown over a 120-year period that has seen so many other banks fail or disappear.
“Trustco avoids this fate by remaining strong, independent and invested in the community,” he said.
After graduating from Shenendehowa High School and Siena College, and following a stint at Albany Savings Bank, McCormick went to work for Trustco in 1995 and saw Albany’s banking landscape consolidate, with institutions dating back to the early 1990s. 1800s passing through the history books.
“I think when I worked for Albany Savings Bank, there were 14 banks headquartered in the city of Albany,” he said. Among them was the venerable Albany Savings Bank, which was acquired by Charter One, which was acquired by Citizens Financial Group.
As McCormick tells it, the secret to success is not complicated: providing community members with the financial services they need while remaining visible and accessible through a network of local branches.
“Our core product is the current account and the residential mortgage,” he said, adding that “99.9% of the population has a residential mortgage or a current account. If you can take care of people with these two products, they are rather faithful to you and rather satisfied with you.
McCormick continued, “We try to have lots of locations, which is another trademark of Trustco. You are going to find very few 6 billion dollar banks that have 145 locations. We like that. They become billboards.
The business model is based on these fundamentals.
Trustco does not sell its mortgages, so it can make its profit on the interest over the years rather than the initial mortgage underwriting costs, so it can offer lower closing costs.
It has this network of branches in the communities where its borrowers live, so if they’re having trouble paying off their mortgage, they can come in and talk to a human who might already know them, rather than talking to an employee. from the call center.
And that’s the heart of it.
Trustco’s financial records show that the vast majority of its revenue comes from interest on loans and also show that 90% of those loans are residential mortgages. Add home equity lines of credit and 95% of its loan portfolio is for individual homes.
Only 4% are commercial loans, which can be much larger than residential loans – a double-edged sword.
“Real estate is a cyclical market. Prices go up and down. The main thing is to do [mortgages] the right way up front,” McCormick said. “You end up with a very diversified portfolio. Instead of having concentrations in one building, you have many consumers who own many single-family homes in many different neighborhoods.
Trustco’s strategy for staying visible in the community follows a similar pattern, with donations of time and money to dozens of local organizations rather than one big, high-profile movement.
Again and again, checks are presented at ceremonies. Again and again, a platoon of employees dons their Trustco t-shirts and takes on a community project.
The next recipients will be Capital District YMCA, The Environmental Clearinghouse and The Schenectady Foundation, which will receive monetary donations at the anniversary ceremony on Thursday.
“We make a lot of contributions every year,” McCormick said. “I don’t know how good it is to have your name out there on the arenas. I think taking care of people is key.
As it avoided being acquired by larger companies, Trustco did not go on a buying spree as it grew steadily over the years.
It acquired several Bank of New York branches in the 1980s and purchased the Home Savings Bank of Albany in 1991, but most of its locations are branches opened by Trustco itself. (The main branch got its first satellite in August 1923, in the Mont Pleasant neighborhood.)
“I’m a big fan of organic growth and I’m a big fan of de novo expansion,” McCormick said. “It’s not as fast and it’s not as smooth and it’s not as sexy. But you open your own branches and you know what you’ve got, and you develop your own line of business. It was very effective for us.
The leap out of the Capital Region in the early 2000s was a big step for Trustco, and not one that many community banks would take.
McCormick said the company reviewed Austin, Texas; Boston; Charlotte; and Phoenix, and rejected each for different reasons before choosing the Orlando area.
There is some winter snowbird overlap between the Capital Region and Central Florida, allowing Trustco to serve customers in both, but that’s not why it chose Orlando, said McCormick. Rather, it is a diverse and prosperous region accessible within hours from the Capital Region.
“We are entering a vibrant and thriving market that is full geographic and economic diversification from our home base,” he said. “That’s what makes it a home run.”
Trustco now has 50 branches in Florida.
“That’s a big part of our success,” McCormick said.
Of all the challenges Trustco has faced in 120 years, COVID was an odd challenge – the impact was human rather than financial or corporate.
“I think COVID has affected our employees more than it’s affected anything else,” McCormick said. “From a financial point of view, we were solid. But we were deemed essential and our employees took it very seriously. The management team too, we didn’t hide in our basements.
The labor shortage that has worsened during the pandemic is also a hindrance as Trustco recruits and hires.
But with Americans’ personal savings at an all-time high after two years of COVID and a still-strong housing market boom, Trustco released historic financial data for the first quarter of 2022. The value of its mortgage portfolio is sharply above pre-pandemic levels, and the benefits followed.
Don’t look for big changes at Trustco in the year 121.
“Obviously we stay on top of other companies’ product offerings and what the competition is doing,” McCormick said. “But generally speaking, this mortgage and this checking account are still a very effective mix.”
The machinery behind the scenes is the biggest component of change these days.
Trustco recently installed a new teller platform and a new loan tracking system. Over the next three years, it will modernize its entire ATM network.
“The biggest issue for us and most companies our size is technology,” McCormick said. “You have to walk the fine line between brick and mortar [for] the classic customer and the more and more technology-demanding customers. So we spend a lot of time, effort and money developing technology and upgrading our systems. »
The old main branch has been expanded and remodeled so many times it would be unrecognizable to the 11 dapper men who opened it in 1902. The technology behind the counter would of course be alien – inconceivable in the age of ledgers and mechanical calculators.
But when the ceremony ends on Thursday, the people inside will do the same thing their ancestors did: keep customers’ money safe and lend them other people’s money to pursue what the American dream looks like for them.
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