TrustCo Reports Historic First Quarter 2022 Earnings; Net Income of $17.1 Million up 21.3% over the prior year quarter

GLENVILLE, N.Y., April 21, 2022 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced historic earnings which sets the tone for 2022. First quarter net income was $17.1 million or $0.890 diluted earnings per share, compared to net income of $14.1 million or $0.730 diluted earnings per share for the first quarter 2021.   Average residential loans, our primary lending focus, were up $218.6 million, or 5.8%, and average deposits were up $223.4 million or 4.4% for the first quarter 2022 over the same period a year earlier.

Overview

Robert J. McCormick, Chairman, President and Chief Executive Officer said, “The most meaningful success is that which is sustained over the long-term. TrustCo’s tried and true approach to banking and the resulting strongly-liquid balance sheet has us well positioned as rates increase. TrustCo today announces, as it has many times before, that loan growth is up, deposits are up, credit quality remains solid, and expenses are down. In other words, we are sustaining financial performance that makes us ever stronger and more efficient. The Company continues to grow shareholder equity and stands proudly atop its 120-year history as part of the foundation upon which the communities we serve are built. This performance is the result of sound strategy, consistently applied against our ever-present commitment to paying a dependable and meaningful dividend to our owners.”

Details
Average loans were up $195.2 million or 4.6% in the first quarter 2022 over the same period in 2021. Average residential loans, our primary lending focus, were up $218.6 million, or 5.8%, in the first quarter 2022 over the same period in 2021. Average deposits were up $223.4 million or 4.4% for the first quarter 2022 over the same period a year earlier. The increase in deposits during the first quarter of 2022 was the result of a $521.2 million or 13.7% increase in total average core deposit accounts, which consist of interest bearing and non-interest bearing checking, savings and money market deposits, offset by a decrease in average time deposits of $297.8 million or 23.6%, for the first quarter 2022 over the same period in 2021. Within average core deposits, checking balances were up $242.2 million or 13.8% (including interest bearing and non-interest bearing checking balances), money market balances were up $66.1 million or 9.1%, and savings balances were up $212.9 million or 16.2%. We believe the increase in core deposits continues to reflect the desire of customers to have additional funds in the safety and security offered by TrustCo’s long history of conservative banking. As we move forward, the objective is to encourage customers to retain these additional funds in the expanded product offerings of the Bank through aggressive marketing and product differentiation. As of March 31, 2022, there were no pandemic related loans in deferral and 87 Paycheck Protection Program (“PPP”) loans totaling approximately $3 million remain outstanding.     

The cost of interest bearing liabilities decreased to 0.10% in the first quarter 2022 from 0.21% in the first quarter 2021. A significant portion of our CD portfolio (time deposits) repriced during the last year, which resulted in lower rates due to ongoing market conditions. The net interest margin for the first quarter 2022 was 2.66%, down 3 basis points from 2.69% in the fourth quarter of 2021, and down 12 basis points from 2.78% in the first quarter of 2021. Net interest income (TE) was relatively flat over the same period as last year.   

TrustCo continued to demonstrate its ability to grow shareholders’ equity as average equity was up $26.8 million or 4.7% in the first quarter of 2022 compared to the same period in 2021. Return on average assets and return on average equity for the first quarter 2022 were 1.12% and 11.60%, respectively, compared to 0.96% and 10.01% for the first quarter 2021. Improving efficiencies to reduce costs continues to remain a key area of focus. Salaries and benefits expense decreased $3.2 million over the same period in the prior year as a result of a true-up to the incentive compensation accrual upon payout in the first quarter of 2022, as well as decreases in various other employee benefit plan expenses. We do expect salaries and benefits expense to return to historical levels in future quarters. The Bank also purchased 18 thousand shares of stock in the first quarter of 2022 under the previously announced stock repurchase plan. As discussed in prior quarters, on May 28, 2021, a Reverse Stock Split of the Company’s Common Stock at a ratio of 1 for 5 was implemented.   For all periods presented share and per share information, and common stock and surplus amounts have been split adjusted. The Board of Directors believes that the higher per share trading price that resulted from the Reverse Stock Split will generate greater investor interest in TrustCo and improve the marketability of the shares to a broader range of investors. The Board of Directors also believes that the Reverse Stock Split has resulted in the number of our shares of outstanding common stock that is similar to the number of outstanding shares of common stock of comparable financial institutions.     

Asset quality and loan loss reserve measures have continued to improve as a result of low levels of nonperforming assets and chargeoffs. Nonperforming loans (NPLs) were $19.4 million at March 31, 2022, compared to $21.6 million at March 31, 2021. NPLs were 0.43% and 0.51% of total loans at March 31, 2022 and 2021, respectively. The coverage ratio, or allowance for credit losses on loans to NPLs, was 237.8% at March 31, 2022, compared to 231.1% at March 31, 2021. Nonperforming assets (NPAs) were $19.7 million at March 31, 2022, compared to $22.1 million at March 31, 2021. The Company adopted Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”) effective January 1, 2022. TrustCo recorded a net decrease to retained earnings of $3.5 million upon adoption of the new accounting standard. The transition adjustment at January 1, 2022 included a $2.4 million increase in the allowance for credit losses on loans, a $2.3 million increase in the allowance for estimated credit losses on unfunded off-balance sheet credit exposures, and a corresponding increase in deferred tax assets of $1.2 million. The Company recorded a credit to provision for credit losses of $200 thousand, which includes a credit to provision for credit losses on loans of $500 thousand as a result of improving unemployment and housing price forecasts, offset by a provision for credit losses on unfunded commitments of $300 thousand as a result of a corresponding increase in unfunded loans. The allowance for credit losses on loans was $46.2 million at March 31, 2022, compared to $50.0 million at March 31, 2021.   The ratio of allowance for credit losses on loans to total loans was 1.03% as of March 31, 2022 compared to 1.17% as of March 31, 2021.   

Net recoveries for the first quarter 2022 were $58 thousand versus net recoveries in the first quarter 2021 of $46 thousand. The annualized net (recoveries) chargeoffs ratio was (0.01)% for the first quarter 2022 versus 0.00% in the first quarter of 2021.

At both March 31, 2022 and 2021 the equity to asset ratio was 9.44%. Book value per share at March 31, 2022 was $30.85, up 4.2% compared to $29.60 a year earlier.

TrustCo Bank Corp NY is a $6.3 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 144 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at March 31, 2022.

In addition, the Bank’s Financial Services Department offers a full range of investment services, retirement planning and trust and estate administration services. The common shares of TrustCo are traded on the NASDAQ Global Select Market under the symbol TRST.

Those wishing to participate in the call may dial toll-free for the United States at 1-844-200-6205, for Canada at 1-833-950-0062, and all other locations at 1-929-526-1599, Access code 630692. A replay of the call will be available for thirty days by dialing toll-free for the United States at 1-866-813-9403, for Canada at 1-226-828-7578, and all other locations at [phone], Access code 640611. The call will also be audio webcast at https://events.q4inc.com/attendee/372562324, and will be available for one year.

Safe Harbor Statement  
All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2022, including our expectations regarding the effects of the economic environment on our financial results, our ability to retain customers and the amount of customers’ business, including deposit balances, with us, the impact of Federal Reserve actions regarding interest rates and the growth of loans and deposits throughout our branch network and our ability to capitalize on economic changes in the areas in which we operate. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed, and many of the risks and uncertainties are heightened by or may, in the future, be heightened by the effects of the COVID-19 pandemic and macroeconomic or geopolitical concerns related to inflation, rising interest rates and the war in Ukraine. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement: the effects of inflation and inflationary pressures and changes in monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; the impact of the actions taken by governmental authorities to contain the COVID-19 pandemic or address the impact of the pandemic on the economy, and the effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; changes in and uncertainty related to benchmark interest rates used to price loans and deposits; future business strategies related to the implementation of CECL; credit risks and risks from concentrations (by geographic area and by loan product) within our loan portfolio; changes in local market areas and general business and economic trends, as well as changes in consumer spending and savings habits; and our ability to assess and react effectively to such changes; our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at reasonable levels relative to income; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; restrictions or conditions imposed by our regulators on our operations that may make it more difficult for us to achieve our goals; the future earnings and capital levels of us and Trustco Bank and the continued receipt of approvals from our primary federal banking regulators under regulatory rules to distribute capital to TrustCo, which could affect our ability to pay dividends; results of supervisory monitoring or examinations of Trustco Bank and TrustCo by our respective regulators; adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; the perceived overall value of our products and services by users, including in comparison to competitors’ products and services and the willingness of current and prospective customers to substitute competitors’ products and services for our products and services; changes in consumer spending, borrowing and saving habits; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; changes in management personnel; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; technological changes and electronic, cyber and physical security breaches; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading “Risk Factors” in our most recent annual report on Form 10-K and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.

Subsidiary:  Trustco Bank

Contact:        
Robert Leonard
Executive Vice President and        
Chief Risk Officer
[phone]

TRUSTCO BANK CORP NY
GLENVILLE, NY
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		3/31/2022			12/31/2021			3/31/2021
Summary of operations
Net interest income (TE)	$	40,096			40,292			40,107
(Credit) Provision for credit losses		(200	)		(3,000	)		350
Noninterest income		5,183			4,526			4,428
Noninterest expense		22,765			26,190			25,335
Net income		17,089			16,241			14,083
Per share (4)
Net income per share:
- Basic	$	0.890			0.845			0.730
- Diluted		0.890			0.845			0.730
Cash dividends		0.350			0.350			0.341
Book value at period end		30.85			31.28			29.60
Market price at period end		31.93			33.31			36.85
At period end
Full time equivalent employees		769			759			820
Full service banking offices		144			147			148
Performance ratios
Return on average assets		1.12	%		1.05			0.96
Return on average equity		11.60			10.92			10.01
Efficiency (1)		50.55			58.50			56.35
Net interest spread (TE)		2.63			2.67			2.74
Net interest margin (TE)		2.66			2.69			2.78
Dividend payout ratio		39.36			41.42			46.65
Capital ratios at period end
Consolidated tangible equity to tangible assets (2)		9.43	%		9.69			9.44
Consolidated equity to assets		9.44	%		9.70			9.44
Asset quality analysis at period end
Nonperforming loans to total loans		0.43			0.42			0.51
Nonperforming assets to total assets		0.31			0.31			0.36
Allowance for credit losses on loans to total loans		1.03			1.00			1.17
Coverage ratio (3)		2.4	x		2.4	x		2.3	x
(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income.
(2) Non-GAAP measure; calculated as total equity less $553 of intangible assets divided by total assets less $553 of intangible assets.
(3) Calculated as allowance for credit losses on loans divided by total nonperforming loans.
(4) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.
TE = Taxable equivalent

CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		3/31/2022			12/31/2021			9/30/2021			6/30/2021			3/31/2021
Interest and dividend income:
Interest and fees on loans	$	39,003			39,655			39,488			39,808			40,217
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		86			76			91			97			50
State and political subdivisions		1			-			1			-			1
Mortgage-backed securities and collateralized mortgage
obligations - residential		1,087			1,073			1,038			1,167			1,237
Corporate bonds		233			206			220			323			316
Small Business Administration - guaranteed
participation securities		154			165			181			193			206
Other securities		2			4			5			5			6
Total interest and dividends on securities available for sale		1,563			1,524			1,536			1,785			1,816
Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations - residential		90			97			104			111			123
Total interest on held to maturity securities		90			97			104			111			123
Federal Reserve Bank and Federal Home Loan Bank stock		62			62			64			65			69
Interest on federal funds sold and other short-term investments		572			432			470			286			270
Total interest income		41,290			41,770			41,662			42,055			42,495
Interest expense:
Interest on deposits:
Interest-bearing checking		44			42			38			46			52
Savings		156			149			154			162			159
Money market deposit accounts		214			201			202			236			283
Time deposits		546			865			1,149			1,261			1,666
Interest on short-term borrowings		234			221			232			228			228
Total interest expense		1,194			1,478			1,775			1,933			2,388
Net interest income		40,096			40,292			39,887			40,122			40,107
Less: (Credit) Provision for credit losses		(200	)		(3,000	)		(2,800	)		-			350
Net interest income after provision for loan losses		40,296			43,292			42,687			40,122			39,757
Noninterest income:
Trustco Financial Services income		1,833			1,766			1,558			1,999			2,035
Fees for services to customers		2,801			2,578			2,531			2,486			2,204
Other		549			182			206			203			189
Total noninterest income		5,183			4,526			4,295			4,688			4,428
Noninterest expenses:
Salaries and employee benefits		9,239			11,984			11,909			12,403			12,425
Net occupancy expense		4,529			4,569			4,259			4,328			4,586
Equipment expense		1,588			1,758			1,628			1,600			1,631
Professional services		1,467			1,579			1,483			1,614			1,432
Outsourced services		2,280			1,950			2,015			2,169			2,250
Advertising expense		617			762			310			549			354
FDIC and other insurance		812			780			746			777			707
Other real estate expense (income), net		11			(28	)		32			(60	)		239
Other		2,222			2,836			2,315			2,060			1,711
Total noninterest expenses		22,765			26,190			24,697			25,440			25,335
Income before taxes		22,714			21,628			22,285			19,370			18,850
Income taxes		5,625			5,387			5,523			4,937			4,767
Net income	$	17,089			16,241			16,762			14,433			14,083
Net income per common share (1):
- Basic	$	0.890			0.845			0.871			0.749			0.730
- Diluted		0.890			0.845			0.871			0.748			0.730
Average basic shares (in thousands)		19,209			19,216			19,249			19,281			19,287
Average diluted shares (in thousands)		19,210			19,218			19,252			19,290			19,293
Note: Taxable equivalent net interest income	$	40,096			40,292			39,888			40,122			40,107
(1) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
		3/31/2022			12/31/2021			9/30/2021			6/30/2021			3/31/2021
ASSETS:
Cash and due from banks	$	47,526			48,357			45,486			47,766			45,493
Federal funds sold and other short term investments		1,225,022			1,171,113			1,147,853			1,134,622			1,094,880
Total cash and cash equivalents		1,272,548			1,219,470			1,193,339			1,182,388			1,140,373
Securities available for sale:
U. S. government sponsored enterprises		62,059			59,179			59,749			74,579			74,465
States and political subdivisions		41			41			48			48			48
Mortgage-backed securities and collateralized mortgage
obligations - residential		244,045			270,798			293,585			315,656			348,317
Small Business Administration - guaranteed
participation securities		28,086			31,674			34,569			37,199			39,232
Corporate bonds		74,089			45,337			45,915			54,647			64,839
Other securities		671			684			686			686			686
Total securities available for sale		408,991			407,713			434,552			482,815			527,587
Held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations-residential		9,183			9,923			10,701			11,665			12,729
Total held to maturity securities		9,183			9,923			10,701			11,665			12,729
Federal Reserve Bank and Federal Home Loan Bank stock		5,604			5,604			5,604			5,604			5,506
Loans:
Commercial		192,408			200,200			204,679			214,164			217,021
Residential mortgage loans		4,026,434			3,998,187			3,951,285			3,892,351			3,807,837
Home equity line of credit		236,117			230,976			231,314			234,214			235,644
Installment loans		9,395			9,416			9,451			8,638			8,670
Loans, net of deferred net costs		4,464,354			4,438,779			4,396,729			4,349,367			4,269,172
Less: Allowance for credit losses on loans		46,178			44,267			47,350			50,155			49,991
Net loans		4,418,176			4,394,512			4,349,379			4,299,212			4,219,181
Bank premises and equipment, net		32,644			33,027			33,233			33,691			34,012
Operating lease right-of-use assets		48,569			48,090			45,836			45,825			46,614
Other assets		86,158			78,207			62,191			61,378			60,455
Total assets	$	6,281,873			6,196,546			6,134,835			6,122,578			6,046,457
LIABILITIES:
Deposits:
Demand	$	835,281			794,878			790,663			765,193			718,343
Interest-bearing checking		1,225,093			1,191,304			1,148,593			1,152,901			1,141,595
Savings accounts		1,553,152			1,504,554			1,433,130			1,409,556			1,362,141
Money market deposit accounts		796,275			782,079			744,051			732,963			719,580
Time deposits		940,215			995,314			1,124,581			1,169,907			1,231,263
Total deposits		5,350,016			5,268,129			5,241,018			5,230,520			5,172,922
Short-term borrowings		248,371			244,686			230,770			237,791			229,950
Operating lease liabilities		53,094			52,720			50,515			50,586			51,449
Accrued expenses and other liabilities		37,497			29,883			25,849			25,088			21,105
Total liabilities		5,688,978			5,595,418			5,548,152			5,543,985			5,475,426
SHAREHOLDERS' EQUITY:
Capital stock (1)		20,046			20,046			20,042			20,041			20,044
Surplus (1)		256,661			256,661			256,565			256,536			256,674
Undivided profits		355,948			349,056			339,554			329,350			321,486
Accumulated other comprehensive (loss) income, net of tax		(2,369	)		12,147			7,304			7,840			7,268
Treasury stock at cost		(37,391	)		(36,782	)		(36,782	)		(35,174	)		(34,441	)
Total shareholders' equity		592,895			601,128			586,683			578,593			571,031
Total liabilities and shareholders' equity	$	6,281,873			6,196,546			6,134,835			6,122,578			6,046,457
Outstanding shares (in thousands)		19,202			19,220			19,216			19,265			19,288
(1) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
		3/31/2022		12/31/2021		9/30/2021		6/30/2021		3/31/2021
Nonperforming Assets
New York and other states*
Loans in nonaccrual status:
Commercial	$	187		112		176		150		125
Real estate mortgage - 1 to 4 family		17,065		16,574		17,878		18,466		19,826
Installment		33		37		32		43		32
Total non-accrual loans		17,285		16,723		18,086		18,659		19,983
Other nonperforming real estate mortgages - 1 to 4 family		16		17		19		20		22
Total nonperforming loans		17,301		16,740		18,105		18,679		20,005
Other real estate owned		269		362		511		251		420
Total nonperforming assets	$	17,570		17,102		18,616		18,930		20,425
Florida
Loans in nonaccrual status:
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		2,109		2,016		2,066		2,142		1,626
Installment		8		-		-		-		-
Total non-accrual loans		2,117		2,016		2,066		2,142		1,626
Other nonperforming real estate mortgages - 1 to 4 family		-		-		-		-		-
Total nonperforming loans		2,117		2,016		2,066		2,142		1,626
Other real estate owned		-		-		-		-		-
Total nonperforming assets	$	2,117		2,016		2,066		2,142		1,626
Total
Loans in nonaccrual status:
Commercial	$	187		112		176		150		125
Real estate mortgage - 1 to 4 family		19,174		18,590		19,944		20,608		21,452
Installment		41		37		32		43		32
Total non-accrual loans		19,402		18,739		20,152		20,801		21,609
Other nonperforming real estate mortgages - 1 to 4 family		16		17		19		20		22
Total nonperforming loans		19,418		18,756		20,171		20,821		21,631
Other real estate owned		269		362		511		251		420
Total nonperforming assets	$	19,687		19,118		20,682		21,072		22,051
Quarterly Net (Recoveries) Chargeoffs
New York and other states*
Commercial	$	36		-		30		-		(32	)
Real estate mortgage - 1 to 4 family		(97	)	52		(39	)	(136	)	(2	)
Installment		3		31		14		(27	)	(14	)
Total net (recoveries) chargeoffs	$	(58	)	83		5		(163	)	(48	)
Florida
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		-		-		-		(1	)	-
Installment		-		-		-		-		2
Total net (recoveries) chargeoffs	$	-		-		-		(1	)	2
Total
Commercial	$	36		-		30		-		(32	)
Real estate mortgage - 1 to 4 family		(97	)	52		(39	)	(137	)	(2	)
Installment		3		31		14		(27	)	(12	)
Total net (recoveries) chargeoffs	$	(58	)	83		5		(164	)	(46	)
Asset Quality Ratios
Total nonperforming loans (1)	$	19,418		18,756		20,171		20,821		21,631
Total nonperforming assets (1)		19,687		19,118		20,682		21,072		22,051
Total net (recoveries) chargeoffs (2)		(58	)	83		5		(164	)	(46	)
Allowance for credit losses on loans (1)		46,178		44,267		47,350		50,155		49,991
Nonperforming loans to total loans		0.43	%	0.42	%	0.46	%	0.48	%	0.51	%
Nonperforming assets to total assets		0.31	%	0.31	%	0.34	%	0.34	%	0.36	%
Allowance for credit losses on loans to total loans		1.03	%	1.00	%	1.08	%	1.15	%	1.17	%
Coverage ratio (1)		237.8	%	236.0	%	234.7	%	240.9	%	231.1	%
Annualized net (recoveries) chargeoffs to average loans (2)		-0.01	%	0.01	%	0.00	%	-0.02	%	0.00	%
Allowance for credit losses on loans to annualized net (recoveries) chargeoffs (2)		N/A		133.3x		2367.5	x	N/A		N/A
* Includes New York, New Jersey, Vermont and Massachusetts.
(1) At period-end
(2) For the period ended

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL
(dollars in thousands)
(Unaudited)		Three months ended								Three months ended
		March 31, 2022								March 31, 2021
		Average			Interest	Average				Average			Interest	Average
		Balance				Rate				Balance				Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	61,755			86	0.55	%		$	51,649			50	0.38	%
Mortgage backed securities and collateralized mortgage
obligations - residential		261,124			1,087	1.67				327,614			1,237	1.51
State and political subdivisions		41			1	6.73				50			1	6.47
Corporate bonds		52,977			233	1.76				63,334			316	1.99
Small Business Administration - guaranteed
participation securities		29,871			154	2.06				39,582			206	2.09
Other		686			2	1.17				686			6	3.50
Total securities available for sale		406,454			1,563	1.54				482,915			1,816	1.50
Federal funds sold and other short-term Investments		1,187,201			572	0.20				1,029,570			270	0.11
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential		9,541			90	3.79				13,273			123	3.70
Total held to maturity securities		9,541			90	3.79				13,273			123	3.70
Federal Reserve Bank and Federal Home Loan Bank stock		5,604			62	4.43				5,506			69	5.01
Commercial loans		194,989			2,525	5.18				212,781			2,945	5.54
Residential mortgage loans		4,007,886			34,197	3.42				3,789,256			34,852	3.69
Home equity lines of credit		232,535			2,125	3.71				238,379			2,259	3.84
Installment loans		8,974			156	7.03				8,795			161	7.41
Loans, net of unearned income		4,444,384			39,003	3.52				4,249,211			40,217	3.80
Total interest earning assets		6,053,184			41,290	2.74				5,780,475			42,495	2.95
Allowance for credit losses on loans		(46,759	)							(49,945	)
Cash & non-interest earning assets		207,308								199,769
Total assets	$	6,213,733							$	5,930,299
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	1,191,496			44	0.01	%		$	1,084,572			52	0.02	%
Money market accounts		791,689			214	0.11				725,570			283	0.16
Savings		1,527,975			156	0.04				1,315,049			159	0.05
Time deposits		964,158			546	0.23				1,261,963			1,666	0.54
Total interest bearing deposits		4,475,318			960	0.09				4,387,154			2,160	0.20
Short-term borrowings		248,535			234	0.38				223,807			228	0.41
Total interest bearing liabilities		4,723,853			1,194	0.10				4,610,961			2,388	0.21
Demand deposits		808,695								673,428
Other liabilities		83,633								75,143
Shareholders' equity		597,552								570,767
Total liabilities and shareholders' equity	$	6,213,733							$	5,930,299
Net interest income, tax equivalent					40,096								40,107
Net interest spread						2.63	%							2.74	%
Net interest margin (net interest income to
total interest earning assets)						2.66	%							2.78	%
Tax equivalent adjustment					0								0
Net interest income					40,096								40,107

Non-GAAP Financial Measures Reconciliation

Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.

The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on the sale of securities and other non-routine items from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue.

We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial results. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share, efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.

NON-GAAP FINANCIAL MEASURES RECONCILIATION
(dollars in thousands, except per share amounts)
(Unaudited)
		3/31/2022		12/31/2021		3/31/2021
Tangible Equity to Tangible Assets
Total Assets (GAAP)	$	6,281,873		6,196,546		6,046,457
Less: Intangible assets		553		553		553
Tangible assets (Non-GAAP)		6,281,320		6,195,993		6,045,904
Equity (GAAP)		592,895		601,128		571,031
Less: Intangible assets		553		553		553
Tangible equity (Non-GAAP)		592,342		600,575		570,478
Tangible Equity to Tangible Assets (Non-GAAP)		9.43	%	9.69	%	9.44	%
Equity to Assets (GAAP)		9.44	%	9.70	%	9.44	%
		Three months ended
Efficiency Ratio		3/31/2022		12/31/2021		3/31/2021
Net interest income (fully taxable equivalent) (Non-GAAP)	$	40,096		40,292		40,107
Non-interest income (GAAP)		5,183		4,526		4,428
Less: Net gain on sale of building		268		-		-
Revenue used for efficiency ratio (Non-GAAP)		45,011		44,818		44,535
Total noninterest expense (GAAP)		22,765		26,190		25,335
Less: Other real estate expense (income), net		11		(28	)	239
Expense used for efficiency ratio (Non-GAAP)		22,754		26,218		25,096
Efficiency Ratio		50.55	%	58.50	%	56.35	%

 

Source: TrustCo Bank Corp NY

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