TrustCo Enters Its 120?? Year; Posts Record Earnings; Net Income of $61.5 million up 17.3% over the prior year

GLENVILLE, New York, Jan. 24, 2022 (GLOBE NEWSWIRE) — TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced full year 2021 net income of $61.5 million or $3.194 diluted earnings per share, compared to net income of $52.5 million or $2.717 diluted earnings per share for the full year 2020; and net income of $16.2 million or $0.845 diluted earnings per share for the three months ended December 31, 2021, compared to net income of $13.8 million or $0.716 diluted earnings per share for the three months ended December 31, 2020. For all periods presented, share and per share information has been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

Overview
Robert J. McCormick, Chairman, President and Chief Executive Officer noted, �All of the members of the Trustco Bank family are justifiably proud of our history as we enter our 120?? year. We are very pleased to embark on that celebration with the momentum of a great year in 2021, which was marked by record earnings and rock-solid capital and liquidity. Also fueling our momentum is the increase in the amount of our dividend announced last quarter and our further recognition as an award-winning bank by local and national media outlets, consumer surveys, and the bank rating firm Bauer, which continues to award Trustco Bank its highest five-star rating.”

The Company traces its roots back to the first branch of the Schenectady Trust Company, which was located on State Street in downtown Schenectady, New York in 1902. The institution was founded by prominent local business people and executives of General Electric Company, which also has deep roots in the “Electric City.” The second and third branches of the bank were on Crane Street, in Schenectady’s Mont Pleasant neighborhood, and at the corner of State Street and Brandywine Avenue in the city. Both of these locations are still Trustco Bank branches today. Since then, the franchise has grown to a presence in five states, nearly 150 branch locations, and $6.2 billion in total assets. Record earnings of $61.5 million in 2021 is a testament to the vitality of the current enterprise.

Details
Average loans were up $185.3 million or 4.4% in the fourth quarter 2021 over the same period in 2020. Average residential loans, our primary lending focus, were up $223.3 million, or 5.9%, in the fourth quarter 2021 over the same period in 2020. As of December 31, 2021, there were no loans in deferral. Additionally, the Bank had funded 663 Paycheck Protection Program (“PPP”) loans totaling $46 million in 2020, and an additional 344 loans totaling $23 million in 2021. As of December 31, 2021, 190 PPP loans totaling $10 million remain outstanding. Average deposits were up $297.5 million or 6.0% for the fourth quarter 2021 over the same period a year earlier. The increase in deposits during the 2021 fourth quarter was the result of a $525.8 million or 14.4% 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 $228.3 million or 17.8%, for the fourth quarter 2021 over the same period in 2020. Within the core deposits, checking balances were up $270.0 million or 16.1% (including interest bearing and non-interest bearing checking balances), money market balances were up $52.9 million or 7.5%, and savings balances were up $202.9 million or 16.1%. 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.

The cost of interest bearing liabilities decreased to 0.13% in the fourth quarter 2021 from 0.35% in the fourth quarter 2020. 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 fourth quarter 2021 was 2.69%, down 10 basis points from 2.79% in the fourth quarter of 2020. Net interest income (TE) increased by 2.8% or $1.1 million over the same period last year.

TrustCo continued to demonstrate its ability to grow shareholders’ equity as average equity was up $26.4 million or 4.7% in the fourth quarter of 2021 compared to the same period in 2020. Return on average assets and return on average equity for the fourth quarter 2021 were 1.05% and 10.92%, respectively, compared to 0.95% and 9.75% for the fourth quarter 2020. Improving efficiencies to reduce costs continues to remain a key area of focus. As a result, full time equivalent employees decreased from the prior year partially due to a strategic realignment and the impact of COVID-19 on the labor market. Additionally, on May 28, 2021, the reverse split of the Company’s Common Stock at a ratio of 1 for 5 was implemented on the Nasdaq Global Select Market. All prior period 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 a 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 $18.8 million at December 31, 2021, compared to $21.1 million at December 31, 2020. NPLs were 0.42% and 0.50% of total loans at December 31, 2021 and 2020, respectively. The coverage ratio, or allowance for loan losses to NPLs, was 236.0% at December 31, 2021, compared to 235.2% at December 31, 2020. Nonperforming assets (NPAs) were $19.1 million at December 31, 2021, compared to $21.6 million at December 31, 2020. The ratio of allowance for loan losses to total loans was 1.00% as of December 31, 2021 compared to 1.17% as of December 31, 2020. The allowance for loan losses was $44.3 million at December 31, 2021, compared to $49.6 million at December 31, 2020. During 2020, management increased certain allowance qualitative factors based on its assessment of the impact of the pandemic on local, national, and global economic conditions as well as the perceived risks inherent in specific industries and credit characteristics. In light of an improving economic environment in 2021 and based on the approach utilized in the prior year the company adjusted the pandemic specific provision during the second half of 2021. Provision for loan losses for the fourth quarter of 2021 was a credit of $3.0 million compared to a provision for loan losses for the fourth quarter of 2020 of $600 thousand. The decrease from the prior year is due to the sustained improvement in asset quality trends and economic conditions during the fourth quarter. The Company had previously elected to delay its adoption of Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”), as provided by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) until the date on which the National Emergency concerning COVID-19 was terminated or December 31, 2020, whichever occurred first. The December 31, 2020 adoption date under the CARES Act was extended to January 1, 2022 as a part of the COVID-19 relief legislation, which became law in December 2020, and therefore the Company adopted CECL on January 1, 2022.

Net chargeoffs for the fourth quarter 2021 were $83 thousand versus net chargeoffs in the fourth quarter 2020 of $128 thousand. The annualized net chargeoffs ratio was 0.01% for both the fourth quarter 2021 and 2020.

At December 31, 2021 the equity to asset ratio was 9.70%, compared to 9.63% at December 31, 2020. Book value per share at September 30, 2021 was $31.28, up 6.2% compared to $29.46 a year earlier.

TrustCo Bank Corp NY is a $6.2 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 147 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at December 31, 2021.

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 097207. 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 +44-204-525-0658, Access code 124698. The call will also be audio webcast at https://services.choruscall.com/links/trst220125.html, 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 2021, including our expectations regarding the effects of COVID-19 on our financial results and our ability to assist our customers in addressing the effects of COVID-19, our ability to retain customers, 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. 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 effect of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations; the impact of the actions taken by governmental authorities to contain COVID-19 or address the impact of COVID-19 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; 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; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; changes in and uncertainty related to benchmark interest rates used to price loans and deposits; 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.

TRUSTCO BANK CORP NY
GLENVILLE, NY
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		12/31/2021		9/30/2021		12/31/2020
Summary of operations
Net interest income (TE)	$	40,292		39,888		39,182
(Credit) Provision for loan losses		(3,000	)	(2,800	)	600
Noninterest income		4,526		4,295		4,069
Noninterest expense		26,190		24,697		24,830
Net income		16,241		16,762		13,814
Per share (4)
Net income per share:
– Basic	$	0.845		0.871		0.716
– Diluted		0.845		0.871		0.716
Cash dividends		0.350		0.341		0.341
Book value at period end		31.28		30.53		29.46
Market price at period end		33.31		31.97		33.35
At period end
Full time equivalent employees		759		743		778
Full service banking offices		147		147		148
Performance ratios
Return on average assets		1.05	%	1.08		0.95
Return on average equity		10.92		11.40		9.75
Efficiency (1)		58.50		55.82		57.31
Net interest spread (TE)		2.67		2.62		2.72
Net interest margin (TE)		2.69		2.65		2.79
Dividend payout ratio		41.42		39.13		47.55
Capital ratios at period end
Consolidated tangible equity to tangible assets (2)		9.69	%	9.55		9.62
Consolidated equity to assets		9.70	%	9.56		9.63
Asset quality analysis at period end
Nonperforming loans to total loans		0.42		0.46		0.50
Nonperforming assets to total assets		0.31		0.34		0.37
Allowance for loan losses to total loans		1.00		1.08		1.17
Coverage ratio (3)		2.4x		2.3x		2.4x
(1)  Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable
equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation.
(2)  Non-GAAP measure; calculated as total equity less $553 of intangible assets divided by total assets less
$553 of intangible assets.  See Non-GAAP Financial Measures Reconciliation.
(3)  Calculated as allowance for loan losses 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

 

FINANCIAL HIGHLIGHTS, Continued
(dollars in thousands, except per share data)
(Unaudited)
		Year ended
		12/31/21		12/31/20
Summary of operations
Net interest income (TE)	$	160,409		153,583
(Credit) Provision for loan losses		(5,450	)	5,600
Net gain on securities transactions		–		1,155
Noninterest income, excluding net gain on securities transactions		17,937		16,015
Noninterest expense		101,662		95,704
Net income		61,519		52,452
Per share (2)
Net income per share:
– Basic	$	3.194		2.718
– Diluted		3.194		2.717
Cash dividends		1.372		1.363
Book value at period end		31.28		29.46
Market price at period end		33.31		33.35
Performance ratios
Return on average assets		1.01		0.94
Return on average equity		10.61		9.47
Efficiency (1)		56.90		56.38
Net interest spread (TE)		2.67		2.73
Net interest margin (TE)		2.71		2.84
Dividend payout ratio		42.95		50.12
(1)  Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net
interest income plus noninterest income.  See Non-GAAP Financial Measures Reconciliation.
(2)  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
		12/31/2021			9/30/2021			6/30/2021		3/31/2021		12/31/2020
Interest and dividend income:
Interest and fees on loans	$	39,655			39,488			39,808		40,217		40,906
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		76			91			97		50		27
State and political subdivisions		–			1			–		1		2
Mortgage-backed securities and collateralized mortgage
obligations – residential		1,073			1,038			1,167		1,237		1,172
Corporate bonds		206			220			323		316		349
Small Business Administration – guaranteed
participation securities		165			181			193		206		212
Other securities		4			5			5		6		7
Total interest and dividends on securities available for sale		1,524			1,536			1,785		1,816		1,769
Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations – residential		97			104			111		123		129
Total interest on held to maturity securities		97			104			111		123		129
Federal Home Loan Bank stock		62			64			65		69		70
Interest on federal funds sold and other short-term investments		432			470			286		270		246
Total interest income		41,770			41,662			42,055		42,495		43,120
Interest expense:
Interest on deposits:
Interest-bearing checking		42			38			46		52		51
Savings		149			154			162		159		156
Money market deposit accounts		201			202			236		283		447
Time deposits		865			1,149			1,261		1,666		3,053
Interest on short-term borrowings		221			232			228		228		232
Total interest expense		1,478			1,775			1,933		2,388		3,939
Net interest income		40,292			39,887			40,122		40,107		39,181
Less: (Credit) Provision for loan losses		(3,000	)		(2,800	)		–		350		600
Net interest income after provision for loan losses		43,292			42,687			40,122		39,757		38,581
Noninterest income:
Trustco Financial Services income		1,766			1,558			1,999		2,035		1,527
Fees for services to customers		2,578			2,531			2,486		2,204		2,365
Other		182			206			203		189		177
Total noninterest income		4,526			4,295			4,688		4,428		4,069
Noninterest expenses:
Salaries and employee benefits		11,984			11,909			12,403		12,425		11,727
Net occupancy expense		4,569			4,259			4,328		4,586		4,551
Equipment expense		1,758			1,628			1,600		1,631		1,621
Professional services		1,579			1,483			1,614		1,432		1,644
Outsourced services		1,950			2,015			2,169		2,250		1,925
Advertising expense		762			310			549		354		527
FDIC and other insurance		780			746			777		707		657
Other real estate (income) expense, net		(28	)		32			(60	)	239		45
Other		2,836			2,315			2,060		1,711		2,133
Total noninterest expenses		26,190			24,697			25,440		25,335		24,830
Income before taxes		21,628			22,285			19,370		18,850		17,820
Income taxes		5,387			5,523			4,937		4,767		4,006
Net income	$	16,241			16,762			14,433		14,083		13,814
Net income per common share (1):
– Basic	$	0.845			0.871			0.749		0.730		0.716
– Diluted		0.845			0.871			0.748		0.730		0.716
Average basic shares (in thousands) (1)		19,216			19,249			19,281		19,287		19,287
Average diluted shares (in thousands) (1)		19,218			19,252			19,290		19,293		19,288
Note:  Taxable equivalent net interest income	$	40,292			39,888			40,122		40,107		39,182
(1)  All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

 

CONSOLIDATED STATEMENTS OF INCOME, Continued
(dollars in thousands, except per share data)
(Unaudited)
		Year ended
		12/31/21		12/31/20
Interest and dividend income:
Interest and fees on loans	$	159,168		165,964
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		314		568
State and political subdivisions		2		6
Mortgage-backed securities and collateralized mortgage
obligations – residential		4,515		6,131
Corporate bonds		1,065		1,721
Small Business Administration – guaranteed
participation securities		745		902
Other securities		20		23
Total interest and dividends on securities available for sale		6,661		9,351
Interest on held to maturity securities:
Mortgage-backed securities-residential		435		604
Total interest on held to maturity securities		435		604
Federal Reserve Bank and Federal Home Loan Bank stock		260		421
Interest on federal funds sold and other short-term investments		1,458		1,948
Total interest income		167,982		178,288
Interest expense:
Interest on deposits:
Interest-bearing checking		178		148
Savings		624		716
Money market deposit accounts		922		3,042
Time deposits		4,941		19,792
Interest on short-term borrowings		909		1,010
Total interest expense		7,574		24,708
Net interest income		160,408		153,580
Less: (Credit) Provision for loan losses		(5,450	)	5,600
Net interest income after provision for loan losses		165,858		147,980
Noninterest income:
Trustco Financial Services income		7,358		6,279
Fees for services to customers		9,799		8,779
Net gain on securities transactions		–		1,155
Other		780		957
Total noninterest income		17,937		17,170
Noninterest expenses:
Salaries and employee benefits		48,721		45,647
Net occupancy expense		17,742		17,519
Equipment expense		6,617		6,636
Professional services		6,108		5,618
Outsourced services		8,384		7,750
Advertising expense		1,975		1,921
FDIC and other insurance		3,010		2,220
Other real estate expense, net		183		92
Other		8,922		8,301
Total noninterest expenses		101,662		95,704
Income before taxes		82,133		69,446
Income taxes		20,614		16,994
Net income	$	61,519		52,452
Net income per common share (1):
– Basic	$	3.194		2.718
– Diluted		3.194		2.717
Average basic shares (in thousands) (1)		19,259		19,301
Average diluted shares (in thousands) (1)		19,263		19,303
Note:  Taxable equivalent net interest income	$	160,409		153,583
(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)
		12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
ASSETS:
Cash and due from banks	$	48,357		45,486		47,766		45,493		47,196
Federal funds sold and other short term investments		1,171,113		1,147,853		1,134,622		1,094,880		1,059,903
Total cash and cash equivalents		1,219,470		1,193,339		1,182,388		1,140,373		1,107,099
Securities available for sale:
U. S. government sponsored enterprises		59,179		59,749		74,579		74,465		19,968
States and political subdivisions		41		48		48		48		103
Mortgage-backed securities and collateralized mortgage
obligations – residential		270,798		293,585		315,656		348,317		316,158
Small Business Administration – guaranteed
participation securities		31,674		34,569		37,199		39,232		42,217
Corporate bonds		45,337		45,915		54,647		64,839		59,939
Other securities		684		686		686		686		686
Total securities available for sale		407,713		434,552		482,815		527,587		439,071
Held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations-residential		9,923		10,701		11,665		12,729		13,824
Total held to maturity securities		9,923		10,701		11,665		12,729		13,824
Federal Home Loan Bank stock		5,604		5,604		5,604		5,506		5,506
Loans:
Commercial		200,200		204,679		214,164		217,021		212,492
Residential mortgage loans		3,998,187		3,951,285		3,892,351		3,807,837		3,780,167
Home equity line of credit		230,976		231,314		234,214		235,644		242,194
Installment loans		9,416		9,451		8,638		8,670		9,617
Loans, net of deferred net costs		4,438,779		4,396,729		4,349,367		4,269,172		4,244,470
Less: Allowance for loan losses		44,267		47,350		50,155		49,991		49,595
Net loans		4,394,512		4,349,379		4,299,212		4,219,181		4,194,875
Bank premises and equipment, net		33,027		33,233		33,691		34,012		34,412
Operating lease right-of-use assets		48,090		45,836		45,825		46,614		47,885
Other assets		78,207		62,191		61,378		60,455		59,124
Total assets	$	6,196,546		6,134,835		6,122,578		6,046,457		5,901,796
LIABILITIES:
Deposits:
Demand	$	794,878		790,663		765,193		718,343		652,756
Interest-bearing checking		1,191,304		1,148,593		1,152,901		1,141,595		1,086,558
Savings accounts		1,504,554		1,433,130		1,409,556		1,362,141		1,285,501
Money market deposit accounts		782,079		744,051		732,963		719,580		716,005
Time deposits		995,314		1,124,581		1,169,907		1,231,263		1,296,373
Total deposits		5,268,129		5,241,018		5,230,520		5,172,922		5,037,193
Short-term borrowings		244,686		230,770		237,791		229,950		214,755
Operating lease liabilities		52,720		50,515		50,586		51,449		52,784
Accrued expenses and other liabilities		29,883		25,849		25,088		21,105		28,903
Total liabilities		5,595,418		5,548,152		5,543,985		5,475,426		5,333,635
SHAREHOLDERS’ EQUITY:
Capital stock (1)		20,046		20,042		20,041		20,044		20,041
Surplus (1)		256,661		256,565		256,536		256,674		256,606
Undivided profits		349,056		339,554		329,350		321,486		313,974
Accumulated other comprehensive income, net of tax		12,147		7,304		7,840		7,268		11,936
Treasury stock at cost		(36,782	)	(36,782	)	(35,174	)	(34,441	)	(34,396	)
Total shareholders’ equity		601,128		586,683		578,593		571,031		568,161
Total liabilities and shareholders’ equity	$	6,196,546		6,134,835		6,122,578		6,046,457		5,901,796
Outstanding shares (in thousands) (1)		19,220		19,216		19,265		19,288		19,287
(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)
		12/31/2021	9/30/2021		6/30/2021		3/31/2021		12/31/2020
Nonperforming Assets
New York and other states*
Loans in nonaccrual status:
Commercial	$	112	176		150		125		452
Real estate mortgage – 1 to 4 family		16,574	17,878		18,466		19,826		19,379
Installment		37	32		43		32		43
Total non-accrual loans		16,723	18,086		18,659		19,983		19,874
Other nonperforming real estate mortgages – 1 to 4 family		17	19		20		22		23
Total nonperforming loans		16,740	18,105		18,679		20,005		19,897
Other real estate owned		362	511		251		420		541
Total nonperforming assets	$	17,102	18,616		18,930		20,425		20,438
Florida
Loans in nonaccrual status:
Commercial	$	–	–		–		–		–
Real estate mortgage – 1 to 4 family		2,016	2,066		2,142		1,626		1,187
Installment		–	–		–		–		–
Total non-accrual loans		2,016	2,066		2,142		1,626		1,187
Other nonperforming real estate mortgages – 1 to 4 family		–	–		–		–		–
Total nonperforming loans		2,016	2,066		2,142		1,626		1,187
Other real estate owned		–	–		–		–		–
Total nonperforming assets	$	2,016	2,066		2,142		1,626		1,187
Total
Loans in nonaccrual status:
Commercial	$	112	176		150		125		452
Real estate mortgage – 1 to 4 family		18,590	19,944		20,608		21,452		20,566
Installment		37	32		43		32		43
Total non-accrual loans		18,739	20,152		20,801		21,609		21,061
Other nonperforming real estate mortgages – 1 to 4 family		17	19		20		22		23
Total nonperforming loans		18,756	20,171		20,821		21,631		21,084
Other real estate owned		362	511		251		420		541
Total nonperforming assets	$	19,118	20,682		21,072		22,051		21,625
Quarterly Net (Recoveries) Chargeoffs
New York and other states*
Commercial	$	–	30		–		(32	)	32
Real estate mortgage – 1 to 4 family		52	(39	)	(136	)	(2	)	(27	)
Installment		31	14		(27	)	(14	)	109
Total net chargeoffs (recoveries)	$	83	5		(163	)	(48	)	114
Florida
Commercial	$	–	–		–		–		–
Real estate mortgage – 1 to 4 family		–	–		(1	)	–		(1	)
Installment		–	–		–		2		15
Total net chargeoffs (recoveries)	$	–	–		(1	)	2		14
Total
Commercial	$	–	30		–		(32	)	32
Real estate mortgage – 1 to 4 family		52	(39	)	(137	)	(2	)	(28	)
Installment		31	14		(27	)	(12	)	124
Total net chargeoffs (recoveries)	$	83	5		(164	)	(46	)	128
Asset Quality Ratios
Total nonperforming loans (1)	$	18,756	20,171		20,821		21,631		21,084
Total nonperforming assets (1)		19,118	20,682		21,072		22,051		21,625
Total net chargeoffs (recoveries) (2)		83	5		(164	)	(46	)	128
Allowance for loan losses (1)		44,267	47,350		50,155		49,991		49,595
Nonperforming loans to total loans		0.42%	0.46%		0.48%		0.51%		0.50%
Nonperforming assets to total assets		0.31%	0.34%		0.34%		0.36%		0.37%
Allowance for loan losses to total loans		1.00%	1.08%		1.15%		1.17%		1.17%
Coverage ratio (1)		236.0%	234.7%		240.9%		231.1%		235.2%
Annualized net chargeoffs (recoveries) to average loans (2)		0.01%	0.00%		-0.02%		0.00%		0.01%
Allowance for loan losses to annualized net chargeoffs (recoveries) (2)		133.3x	2367.5x		N/A		N/A		96.9x
* 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
		December 31, 2021						December 31, 2020
		Average		Interest	Average			Average		Interest	Average
		Balance			Rate			Balance			Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	59,975		76	0.51	%	$	25,761		27	0.42	%
Mortgage backed securities and collateralized mortgage
obligations – residential		279,472		1,073	1.54			314,022		1,172	1.49
State and political subdivisions		46		–	–			108		3	7.89
Corporate bonds		45,858		206	1.79			64,534		349	2.17
Small Business Administration – guaranteed
participation securities		31,903		165	2.07			41,562		212	2.05
Other		680		4	2.35			685		7	4.09
Total securities available for sale		417,934		1,524	1.46			446,672		1,770	1.59
Federal funds sold and other short-term Investments		1,123,276		432	0.15			916,198		246	0.11
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations – residential		10,311		97	3.76			14,406		129	3.58
Total held to maturity securities		10,311		97	3.76			14,406		129	3.58
Federal Reserve Bank and Federal Home Loan Bank stock		5,604		62	4.43			5,506		70	5.09
Commercial loans		202,092		2,704	5.35			224,838		3,009	5.35
Residential mortgage loans		3,979,645		34,602	3.48			3,756,304		35,368	3.77
Home equity lines of credit		230,408		2,192	3.77			245,401		2,361	3.83
Installment loans		9,068		157	6.87			9,416		168	7.09
Loans, net of unearned income		4,421,213		39,655	3.59			4,235,959		40,906	3.86
Total interest earning assets		5,978,338		41,770	2.79			5,618,741		43,121	3.07
Allowance for loan losses		(47,379	)					(49,426	)
Cash & non-interest earning assets		197,382						201,371
Total assets	$	6,128,341					$	5,770,686
Liabilities and shareholders’ equity
Deposits:
Interest bearing checking accounts	$	1,151,704		42	0.01	%	$	1,036,808		51	0.02	%
Money market accounts		763,053		201	0.10			710,105		447	0.25
Savings		1,461,568		149	0.04			1,258,666		156	0.05
Time deposits		1,055,792		865	0.32			1,284,075		3,053	0.95
Total interest bearing deposits		4,432,117		1,257	0.11			4,289,654		3,707	0.34
Short-term borrowings		233,829		221	0.38			200,028		232	0.46
Total interest bearing liabilities		4,665,946		1,478	0.13			4,489,682		3,939	0.35
Demand deposits		795,258						640,190
Other liabilities		77,165						77,197
Shareholders’ equity		589,972						563,617
Total liabilities and shareholders’ equity	$	6,128,341					$	5,770,686
Net interest income, tax equivalent				40,292						39,182
Net interest spread					2.67	%					2.72	%
Net interest margin (net interest income to
total interest earning assets)					2.69	%					2.79	%
Tax equivalent adjustment				–						(1)
Net interest income				40,292						39,181

 

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY –
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued
(dollars in thousands)
(Unaudited)		Year ended							Year ended
		December 31, 2021							December 31, 2020
		Average		Interest		Average			Average		Interest		Average
		Balance				Rate			Balance				Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	63,743		314		0.49	%	$	38,508		568		1.48	%
Mortgage backed securities and collateralized mortgage
obligations – residential		308,777		4,515		1.46			333,093		6,131		1.84
State and political subdivisions		48		3		6.56			111		9		7.82
Corporate bonds		53,699		1,065		1.98			50,982		1,721		3.38
Small Business Administration – guaranteed
participation securities		35,723		745		2.09			44,379		902		2.03
Other		685		20		2.92			686		23		3.35
Total securities available for sale		462,675		6,662		1.44			467,759		9,354		2.00
Federal funds sold and other short-term Investments		1,111,257		1,458		0.13			748,085		1,948		0.26
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations – residential		11,733		435		3.71			16,376		604		3.69
Total held to maturity securities		11,733		435		3.71			16,376		604		3.69
Federal Reserve Bank and Federal Home Loan Bank stock		5,578		260		4.66			7,381		421		5.70
Commercial loans		210,145		10,907		5.19			219,328		10,788		4.92
Residential mortgage loans		3,884,336		138,821		3.57			3,678,536		144,212		3.92
Home equity lines of credit		233,628		8,814		3.77			255,583		10,259		4.01
Installment loans		8,725		626		7.17			9,952		705		7.08
Loans, net of unearned income		4,336,834		159,168		3.67			4,163,399		165,964		3.99
Total interest earning assets		5,928,077		167,983		2.83			5,403,000		178,291		3.30
Allowance for loan losses		(49,421	)						(47,330	)
Cash & non-interest earning assets		196,825							197,966
Total assets	$	6,075,481						$	5,553,636
Liabilities and shareholders’ equity
Deposits:
Interest bearing checking accounts	$	1,134,702		178		0.02	%	$	971,385		148		0.02	%
Money market accounts		739,139		922		0.12			662,107		3,042		0.46
Savings		1,397,432		624		0.04			1,191,532		716		0.06
Time deposits		1,166,963		4,941		0.42			1,350,163		19,792		1.47
Total interest bearing deposits		4,438,236		6,665		0.15			4,175,187		23,698		0.57
Short-term borrowings		232,815		909		0.39			180,065		1,010		0.56
Total interest bearing liabilities		4,671,051		7,574		0.16			4,355,252		24,708		0.57
Demand deposits		750,111							567,265
Other liabilities		74,396							77,487
Shareholders’ equity		579,923							553,632
Total liabilities and shareholders’ equity	$	6,075,481						$	5,553,636
Net interest income, tax equivalent				160,409							153,583
Net interest spread						2.67	%						2.73	%
Net interest margin (net interest income to
total interest earning assets)						2.71	%						2.84	%
Tax equivalent adjustment				(1	)						(3	)
Net interest income				160,408							153,580

 

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)
		12/31/2021		9/30/2021	12/31/2020
Tangible Book Value Per Share
Equity (GAAP)		$       601,128		586,683	568,161
Less: Intangible assets		553		553	553
Tangible equity (Non-GAAP)		600,575		586,130	567,608
Shares outstanding (1)		19,220		19,216	19,287
Tangible book value per share (1)		31.25		30.50	29.43
Book value per share (1)		31.28		30.53	29.46
Tangible Equity to Tangible Assets
Total Assets (GAAP)	$	6,196,546		6,134,835	5,901,796
Less: Intangible assets		553		553	553
Tangible assets (Non-GAAP)		6,195,993		6,134,282	5,901,243
Tangible Equity to Tangible Assets (Non-GAAP)		9.69%		9.55%	9.62%
Equity to Assets (GAAP)		9.70%		9.56%	9.63%
		Three months ended						Year ended
Efficiency Ratio		12/31/2021		9/30/2021	12/31/2020			12/31/2021	12/31/2020
Net interest income	$	40,292		39,887	39,181		$	160,408	153,580
Taxable equivalent adjustment		–		1	1			1	3
Net interest income (fully taxable equivalent) (Non-GAAP)		40,292		39,888	39,182			160,409	153,583
Non-interest income (GAAP)		4,526		4,295	4,069			17,937	17,170
Less:  Net gain on securities		–		–	–			–	1,155
Revenue used for efficiency ratio (Non-GAAP)		44,818		44,183	43,251			178,346	169,598
Total noninterest expense (GAAP)		26,190		24,697	24,830			101,662	95,704
Less:  Other real estate (income) expense, net		(28	)	32	45			183	92
Expense used for efficiency ratio (Non-GAAP)		26,218		24,665	24,785			101,479	95,612
Efficiency Ratio		58.50%		55.82%	57.31%			56.90%	56.38%
(1)  All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

 

Subsidiary:	Trustco NASDAQ — TRST
Contact:	Robert Leonard
	Executive Vice President and
	Chief Risk Officer
	(518) 381-3693