Eric Schreck, Florida Regional President, Trustco Bank
Eric Schreck, Florida regional president of Trustco Bank, sat down with Invest: to discuss the niche the institution is catering to as a community bank servicing retail, what makes Central Florida a great place to do business, priorities looking ahead, and more.
What have been the overall contributions or impact of Trustco Bank in the Greater Orlando region in the past year?
It is a continuation of our ongoing mission. When we first opened branches in Central Florida in 2003, we saw a need for a community bank. There were plenty of banks, of course, but there was not a bank headquartered in Central Florida servicing the region. Community banks in Central Florida tended to start up and sell ofxf a few years later. It left a void of community banks servicing primarily retail needs. Trustco fit into that very well, and our products were very retail banking-oriented. It has been a great fit ever since. This year was no different than any other year. We are here to provide the marketplace with retail banking products, whether that is simple no-cost checking accounts or inexpensive mortgages – we are a nice niche.
What makes Greater Orlando an ideal location for business expansion?
Florida tends to be business-friendly overall and not just for banking. Secondly, Central Florida has a wonderful and diverse supply of labor. We are headquartered in Upstate New York, and New York is stable, but it does not have an influx of people moving in from other parts of the country and world. Central Florida has all of that. It has a stable economy with people moving in from all over the world. For any business, one of the most important, if not the most important, factors is to have access to a strong labor supply. That is one of the most attractive things about Central Florida.
What gives Trustco a competitive edge in the region?
We are retail-oriented with a great commercial loan department and great commercial product, but it is a relatively small component of our business. We focus on the consumer and provide inexpensive banking products. Despite today’s recent trend in banking to add fees and service charges, we still offer a free checking account without the requirement to perform any extra functions to avoid fees. It is a very straightforward, fee-free, zero-balance-required checking account.
Trustco also offers traditional banking products. We still offer passbook savings accounts in a time when cybercrime is on the rise. It is evolving quicker than fintech can battle it. We offer this to mitigate risk and allow for off-the-grid banking. Trustco also offers holiday and vacation club accounts. It’s old-fashioned, but people like it. It helps with consumers’ budgeting as opposed to charging vacations and holidays on a credit card.
We are known as a portfolio lender. We do not sell our mortgages. Almost every bank and mortgage company in the world has you apply for a mortgage and immediately sell it off. It then goes to another entity that will pay your mortgage and property taxes. We keep them out of the way like they used to be. You apply with us and close with us, so the loan stays with us. It tends to cost less because we aren’t selling it on the open market. The big one people like to point to is the lack of private mortgage insurance, which is a huge saving.
What products and services are the main drivers of growth in the region?
The retail mortgage business is our bread and butter business. Mortgages, whether it is the first mortgage for a first home purchase or a second mortgage, home equity line, or loan, are our key drivers at the bank. They account for 91% of the loans we do. Because we don’t sell them, we are very attractive. For someone who is building a home on a piece of land they own, we offer a one-closing building loan. We supply a loan that is pretty unique in the industry. The fact that we don’t sell our loans means the expenses of closing are lower.
What is the outlook for Trustco in the near term, and how does this inform the top priorities?
Like all banks, the past few years with rising interest rates have been challenging in attracting deposits. Trustco has set itself up to weather those challenges well, such as our money market premium, which is currently set at 3.75%. On the loan side, with rates rising, things have curtailed the number of people who are financing a home. Trustco continues to set itself up in a way that ensures that we can set up the utmost number of products at the lowest cost to people who do want to buy a home and fulfill that American Dream of homeownership. For everyone else who wants to tap some equity into home improvement or consolidation, we offer great home equity credit lines and inexpensive, low maintenance, and low-rate feeds so they do not have to refinance their mortgages. We are well-positioned to service the region’s needs. We have been meeting and exceeding challenges since 1902. I don’t think this year will be any different.
