TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced full year 2020 net income of $52.5 million or $0.543 diluted earnings per share, and net income of $13.8 million or $0.143 diluted earnings per share for the fourth quarter of 2020. Average residential loan growth increased 5.9% or $209.1 million to a record $3.8 billion for the fourth quarter 2020.

SummaryRobert J. McCormick, Chairman, President and Chief Executive Officer noted, “As a bank built upon Home Town values, we continue to prioritize strengthening our communities and adapting our offerings to address the changing needs of our customers during the COVID-19 pandemic. TrustCo’s commitment to supporting its communities and front line workers remains steadfast. In an effort to ensure families had a safe place to celebrate the holidays, Trustco Bank launched the “Home for the Holidays” program, donating $40,000 to local housing agencies and community loan funds across New York, New Jersey and Florida. This is just one example of ways we have prioritized giving back. In addition, TrustCo partnered with local communities to offer custom merchant loan programs to help small businesses stay afloat during the pandemic. Lastly, TrustCo donated over 2,000 turkeys to food banks in New York and Florida to help ensure families who experienced economic challenges had a warm meal for Thanksgiving.”

We also continue to closely monitor the impact of the pandemic on our business and results of operations. As of December 31, 2020, we had 8 residential loans in deferral totaling $2 million, and no installment or commercial loans in deferral. This represents 0.04% of total outstanding loans. As of September 30, 2020, we had 24 residential and installment loans in deferral totaling $5 million, and 6 commercial loans in deferral totaling $2 million. This represented 0.2% of total outstanding loans. As of June 30, 2020, we had 668 residential and installment loans in deferral totaling $145 million, and 84 commercial loans in deferral totaling $45 million. This represented 4.5% of total outstanding loans. We have been encouraged to see that most of our residential and commercial borrowers who had payment deferral arrangements with us have returned to making regular loan payments. Additionally, the Bank had funded 663 Paycheck Protection Program (“PPP”) loans totaling $46 million, as of December 31, 2020, 514 PPP loans totaling $29 million remain outstanding.

The fourth quarter of 2020 saw continued loan and deposit growth. Our focus on traditional lending criteria and conservative balance sheet management has produced consistent earnings while maintaining strong liquidity and growing capital. This approach allowed us to continue to expand our business and take advantage of changes in market and competitive conditions. As mentioned in prior quarters, the pandemic has created an uncertain future, and we believe we continue to be well-positioned to help our customers through this economic disruption and turmoil. We also continue to hire across our locations for all levels of staff. As we enter the new year, management views the Bank as well-positioned to deploy its existing liquidity into our residential loan portfolio, and we will continue to closely monitor how the current market conditions change.

Details

Average loans were up $214.9 million or 5.3% in the fourth quarter 2020 over the same period in 2019. Average residential loans, our primary lending focus, were up $209.1 million, or 5.9%, in the fourth quarter 2020 over the same period in 2019. Average deposits were up $494.1 million or 11.1% for the fourth quarter 2020 over the same period a year earlier. The increase in deposits was the result of a $632.1 million or 21.0% increase 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 $138.0 million or 9.7%, for the fourth quarter 2020 over the same period in 2019. Within the core deposits, checking balances were up $357.6 million or 27.1% (including interest bearing and non-interest bearing checking balances), money market balances were up $127.1 million or 21.8%, and savings balances were up $147.4 million or 13.3%. 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 0.35% in the fourth quarter 2020 from 0.90% in the fourth quarter 2019. A significant portion of our CD portfolio (time deposits) repriced during 2020, which resulted in a decrease in average rates to 0.95% in the fourth quarter of 2020 from 2.10% in the fourth quarter of 2019, as a result of the ongoing market conditions. The net interest margin for the fourth quarter 2020 was 2.79%, down 23 basis points from 3.02% in the fourth quarter of 2019. This was primarily due to the decrease in market rates over the same period resulting in less interest earned on our short-term funds, residential and variable rate loans.

The Bank continued to demonstrate its ability to grow shareholders’ equity as average equity was up $33.5 million or 6.3% in the fourth quarter of 2020 compared to the same period in 2019. Return on average assets and return on average equity for the fourth quarter 2020 were 0.95% and 9.75%, respectively, compared to 1.06% and 10.41% for the fourth quarter 2019. Improving efficiencies to reduce costs continues to remain a key area of focus.

Asset quality and loan loss reserve measures have stayed consistent. Nonperforming loans (NPLs) were $21.1 million at December 31, 2020, compared to $20.9 million at December 31, 2019. NPLs were 0.50% of total loans at December 31, 2020, compared to 0.51% at December 31, 2019. The coverage ratio, or allowance for loan losses to NPLs, was 235.2% at December 31, 2020, compared to 212.4% at December 31, 2019. Nonperforming assets (NPAs) were $21.6 million at December 31, 2020, compared to $22.4 million at December 31, 2019. The ratio of allowance for loan losses to total loans was 1.17% as of December 31, 2020, compared to 1.09% at December 31, 2019. The allowance for loan losses was $49.6 million at December 31, 2020, compared to $44.3 million at December 31, 2019. The provision for loan losses increased to $600 thousand for the fourth quarter 2020 compared to $200 thousand in the same period in the prior year, primarily driven by the continued uncertainty in the current economic environment resulting from COVID-19. 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 Bill, which became law in December 2020, and therefore the Company now intends to adopt CECL on January 1, 2022.

Net chargeoffs for the fourth quarter 2020 were $128 thousand versus net chargeoffs in the fourth quarter 2019 of $212 thousand. The annualized net chargeoffs ratio was 0.01% and 0.02% for the fourth quarter 2020 and 2019, respectively.

At December 31, 2020 the tangible equity to tangible asset ratio was 9.62%, compared to 10.30% at December 31, 2019. Book value per share at December 31, 2020 was $5.89, up 6.1% compared to $5.55 a year earlier.

TrustCo Bank Corp NY is a $5.9 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 148 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at December 31, 2020.

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.

A conference call to discuss fourth quarter 2020 results will be held at 9:00 a.m. Eastern Time on January 22, 2021. Those wishing to participate in the call may dial toll-free 1-888-339-0764. International callers must dial 1-412-902-4195. Please ask to be joined into the TrustCo Bank Corp NY / TRST call. A replay of the call will be available for thirty days by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10151410. The call will also be audio webcast at: https://services.choruscall.com/links/trst210122.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 2020, 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 expectations with respect to our online and mobile banking product offerings, our expectations for the repricing of our CD portfolio, 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; 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; 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; unanticipated effects from the Tax Cut and Jobs Act that may limit its benefits or adversely impact our business; 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; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; 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
    12/31/2020   9/30/2020   12/31/2019
Summary of operations        
   Net interest income (TE) $ 39,182   38,166   38,243
   Provision for loan losses   600   1,000   200
   Noninterest income, excluding net gain on securities transactions   4,069   4,341   4,115
   Noninterest expense   24,830   22,674   23,891
   Net income 13,814   14,071   13,907
             
Per common share        
   Net income per share:        
       - Basic $ 0.143   0.146   0.143
       - Diluted 0.143   0.146   0.143
   Cash dividends 0.068   0.068   0.068
   Book value at period end   5.89   5.81   5.55
   Market price at period end   6.67   5.22   8.67
             
At period end          
   Full time equivalent employees   778   771   814
   Full service banking offices   148   148   148
             
Performance ratios        
   Return on average assets   0.95 % 0.98   1.06
   Return on average equity   9.75   10.04   10.41
   Efficiency (1) 57.31   53.61   57.31
   Net interest spread (TE)   2.72   2.63   2.86
   Net interest margin (TE)   2.79   2.73   3.02
   Dividend payout ratio   47.55   46.68   47.48
             
Capital ratios at period end        
   Consolidated tangible equity to tangible assets (2)   9.62 % 9.76   10.30
   Consolidated equity to assets   9.63 % 9.77   10.31
             
Asset quality analysis at period end      
   Nonperforming loans to total loans   0.50   0.52   0.51
   Nonperforming assets to total assets   0.37   0.39   0.43
   Allowance for loan losses to total loans   1.17   1.17   1.09
   Coverage ratio (3)   2.4x   2.3x   2.1x
             
(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 loan losses divided by total nonperforming loans.
 
TE = Taxable equivalent
             
FINANCIAL HIGHLIGHTS, Continued
 
(dollars in thousands, except per share data)
(Unaudited)
    Year ended
    12/31/2020   12/31/2019
Summary of operations    
   Net interest income (TE) $ 153,583   155,812
   Provision for loan losses   5,600   159
   Net gain on securities transactions   1,155   -
   Noninterest income, excluding net gain on securities transactions   16,015   18,591
   Noninterest expense   95,704   97,730
   Net income 52,452   57,840
         
Per common share    
   Net income per share:    
       - Basic $ 0.544   0.597
       - Diluted 0.543   0.597
   Cash dividends 0.273   0.273
   Book value at period end   5.89   5.55
   Market price at period end   6.67   8.67
         
Performance ratios    
   Return on average assets   0.94   1.12
   Return on average equity   9.47   11.26
   Efficiency (1) 56.38   56.13
   Net interest spread (TE)   2.73   2.94
   Net interest margin (TE)   2.84   3.10
   Dividend payout ratio   50.12   45.60
         
(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net gain on securities transactions).
         
TE = Taxable equivalent.
         
CONSOLIDATED STATEMENTS OF INCOME
                     
(dollars in thousands, except per share data)            
(Unaudited)                  
    Three months ended
    12/31/2020   9/30/2020   6/30/2020   3/31/2020   12/31/2019
Interest and dividend income:          
   Interest and fees on loans $ 40,906   41,330     41,665     42,063   42,002  
   Interest and dividends on securities available for sale:      
       U. S. government sponsored enterprises   27   14     106     421   609  
       State and political subdivisions   2   1     2     1   2  
       Mortgage-backed securities and collateralized mortgage        
          obligations - residential   1,172   1,319     1,527     2,113   2,334  
       Corporate bonds   349   646     488     238   295  
       Small Business Administration - guaranteed            
          participation securities   212   216     229     245   253  
       Other securities   7   5     5     6   6  
   Total interest and dividends on securities available for sale   1,769   2,201     2,357     3,024   3,499  
                     
Interest on held to maturity securities:            
       Mortgage-backed securities and collateralized mortgage        
          obligations - residential   129   138     162     175   184  
   Total interest on held to maturity securities   129   138     162     175   184  
                     
Federal Reserve Bank and Federal Home Loan Bank stock   70   77     192     82   203  
                     
Interest on federal funds sold and other short-term investments   246   242     193     1,267   1,635  
   Total interest income   43,120   43,988     44,569     46,611   47,523  
                     
Interest expense:            
   Interest on deposits:            
       Interest-bearing checking   51   55     26     16   21  
       Savings 156   161     166     233   271  
       Money market deposit accounts   447   637     862     1,096   1,175  
       Time deposits 3,053   4,749     5,599     6,391   7,468  
   Interest on short-term borrowings   232   221     235     322   347  
   Total interest expense   3,939   5,823     6,888     8,058   9,282  
                     
   Net interest income   39,181   38,165     37,681     38,553   38,241  
                     
   Less: Provision for loan losses   600   1,000     2,000     2,000   200  
   Net interest income after provision for loan losses   38,581   37,165     35,681     36,553   38,041  
                     
Noninterest income:                
   Trustco Financial Services income   1,527   1,784     1,368     1,600   1,454  
   Fees for services to customers   2,365   2,292     1,807     2,315   2,377  
   Net gain on securities transactions   -   -     -     1,155   -  
   Other   177   265     251     264   284  
      Total noninterest income   4,069   4,341     3,426     5,334   4,115  
                     
Noninterest expenses:                
   Salaries and employee benefits   11,727   10,899     11,648     11,373   11,743  
   Net occupancy expense   4,551   4,277     4,385     4,306   4,399  
   Equipment expense   1,621   1,607     1,606     1,802   1,768  
   Professional services   1,644   1,311     1,182     1,481   1,449  
   Outsourced services   1,925   1,875     1,875     2,075   1,925  
   Advertising expense   527   305     601     488   464  
   FDIC and other insurance   657   660     609     294   259  
   Other real estate expense (income) , net   45   (115 )   (32 )   194   (385 )
   Other   2,133   1,855     2,058     2,255   2,269  
      Total noninterest expenses   24,830   22,674     23,932     24,268   23,891  
                     
Income before taxes   17,820   18,832     15,175     17,619   18,265  
Income taxes 4,006   4,761     3,921     4,306   4,358  
                     
Net income $ 13,814   14,071     11,254     13,313   13,907  
                     
Net income per common share:          
  - Basic $ 0.143   0.146     0.117     0.138   0.143  
                     
  - Diluted 0.143   0.146     0.117     0.138   0.143  
                     
Average basic shares (in thousands)   96,433   96,433     96,433     96,727   96,919  
Average diluted shares (in thousands)   96,442   96,440     96,437     96,750   97,015  
                     
Note: Taxable equivalent net interest income $ 39,182   38,166     37,681     38,554   38,243  
                     
         
CONSOLIDATED STATEMENTS OF INCOME, Continued
 
(dollars in thousands, except per share data)
(Unaudited)
    Year ended
    12/31/2020   12/31/2019
Interest and dividend income:
  Interest and fees on loans $ 165,964   166,610  
  Interest and dividends on securities available for sale:
     U. S. government sponsored enterprises   568   3,209  
     State and political subdivisions   6   8  
     Mortgage-backed securities and collateralized mortgage
        obligations - residential   6,131   8,219  
     Corporate bonds   1,721   1,096  
     Small Business Administration - guaranteed
        participation securities   902   1,121  
     Other securities   23   22  
        Total interest and dividends on securities available for sale   9,351   13,675  
         
Interest on held to maturity securities:
       Mortgage-backed securities-residential   604   797  
   Total interest on held to maturity securities   604   797  
         
Federal Reserve Bank and Federal Home Loan Bank stock   421   568  
         
Interest on federal funds sold and other short-term investments   1,948   10,478  
   Total interest income   178,288   192,128  
         
Interest expense:
   Interest on deposits:
       Interest-bearing checking   148   288  
       Savings 716   1,338  
       Money market deposit accounts   3,042   4,297  
       Time deposits 19,792   28,930  
   Interest on short-term borrowings   1,010   1,468  
   Total interest expense   24,708   36,321  
         
   Net interest income   153,580   155,807  
         
   Less: Provision for loan losses   5,600   159  
   Net interest income after provision for loan losses   147,980   155,648  
         
Noninterest income:    
   Trustco Financial Services income   6,279   6,387  
   Fees for services to customers   8,779   10,110  
   Net gain on securities transactions   1,155   -  
   Other   957   2,094  
      Total noninterest income   17,170   18,591  
         
Noninterest expenses:    
   Salaries and employee benefits   45,647   46,630  
   Net occupancy expense   17,519   16,666  
   Equipment expense   6,636   7,068  
   Professional services   5,618   6,174  
   Outsourced services   7,750   7,600  
   Advertising expense   1,921   2,521  
   FDIC and other insurance   2,220   1,787  
   Other real estate expense (income), net   92   (166 )
   Other   8,301   9,450  
      Total noninterest expenses   95,704   97,730  
         
Income before taxes   69,446   76,509  
Income taxes 16,994   18,669  
         
Net income $ 52,452   57,840  
         
Net income per common share:
  - Basic $ 0.544   0.597  
         
  - Diluted 0.543   0.597  
         
Average basic shares (in thousands)   96,506   96,849  
Average diluted shares (in thousands)   96,517   96,927  
         
Note: Taxable equivalent net interest income $ 153,583   155,812  
         
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
(dollars in thousands)
(Unaudited)
    12/31/2020   9/30/2020   6/30/2020   3/31/2020   12/31/2019
ASSETS:                    
             
Cash and due from banks $ 47,196     47,703     44,726     43,362     48,198  
Federal funds sold and other short term investments   1,059,903     908,616     908,110     492,691     408,648  
        Total cash and cash equivalents   1,107,099     956,319     952,836     536,053     456,846  
                     
Securities available for sale:                
   U. S. government sponsored enterprises   19,968     29,996     -     54,970     104,512  
   States and political subdivisions   103     111     111     112     162  
   Mortgage-backed securities and collateralized mortgage          
      obligations - residential   316,158     309,768     331,469     352,067     389,517  
   Small Business Administration - guaranteed            
      participation securities   42,217     44,070     45,998     46,768     48,511  
   Corporate bonds   59,939     70,113     54,439     48,564     30,436  
   Other securities 686     685     685     685     685  
        Total securities available for sale   439,071     454,743     432,702     503,166     573,823  
                     
Held to maturity securities:                
   Mortgage-backed securities and collateralized mortgage          
      obligations-residential   13,824     15,094     16,633     17,720     18,618  
        Total held to maturity securities   13,824     15,094     16,633     17,720     18,618  
                     
Federal Reserve Bank and Federal Home Loan Bank stock   5,506     5,506     5,506     9,183     9,183  
                     
Loans:                    
   Commercial 212,492     231,663     231,212     195,805     199,499  
   Residential mortgage loans   3,780,167     3,724,746     3,681,898     3,627,121     3,583,774  
   Home equity line of credit   242,194     248,320     254,445     265,753     267,922  
   Installment loans   9,617     9,826     10,006     10,713     11,001  
Loans, net of deferred net costs   4,244,470     4,214,555     4,177,561     4,099,392     4,062,196  
                     
Less: Allowance for loan losses   49,595     49,123     48,144     46,155     44,317  
   Net loans 4,194,875     4,165,432     4,129,417     4,053,237     4,017,879  
                     
Bank premises and equipment, net   34,412     34,417     34,042     34,428     34,622  
Operating lease right-of-use assets   47,885     47,174     48,712     49,955     51,475  
Other assets 59,124     57,244     57,155     52,905     58,876  
                     
        Total assets $ 5,901,796     5,735,929     5,677,003     5,256,647     5,221,322  
             
LIABILITIES:                  
Deposits:                  
   Demand $ 652,756     635,345     612,960     480,255     463,858  
   Interest-bearing checking   1,086,558     1,024,290     1,001,592     895,254     875,672  
   Savings accounts   1,285,501     1,235,259     1,191,682     1,122,116     1,113,146  
   Money market deposit accounts   716,005     699,132     666,304     617,198     599,163  
   Time deposits 1,296,373     1,305,024     1,392,769     1,367,005     1,398,177  
      Total deposits 5,037,193     4,899,050     4,865,307     4,481,828     4,450,016  
                     
Short-term borrowings   214,755     193,455     177,278     148,090     148,666  
Operating lease liabilities   52,784     52,125     53,710     54,998     56,553  
Accrued expenses and other liabilities   28,903     30,771     27,287     23,546     27,830  
                     
        Total liabilities   5,333,635     5,175,401     5,123,582     4,708,462     4,683,065  
                     
SHAREHOLDERS' EQUITY:                
Capital stock 100,205     100,205     100,205     100,205     100,205  
Surplus   176,442     176,441     176,437     176,431     176,427  
Undivided profits 313,974     306,741     299,239     294,553     288,067  
Accumulated other comprehensive income, net of tax   11,936     11,537     11,936     11,392     4,461  
Treasury stock at cost   (34,396 )   (34,396 )   (34,396 )   (34,396 )   (30,903 )
                     
        Total shareholders' equity   568,161     560,528     553,421     548,185     538,257  
                     
        Total liabilities and shareholders' equity $ 5,901,796     5,735,929     5,677,003     5,256,647     5,221,322  
                     
Outstanding shares (in thousands)   96,433     96,433     96,433     96,433     96,922  
                     

NONPERFORMING ASSETS
             
(dollars in thousands)
(Unaudited)
    12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019
Nonperforming Assets            
             
   New York and other states*            
   Loans in nonaccrual status:            
       Commercial $ 452   491   571   630   816  
       Real estate mortgage - 1 to 4 family   19,379   19,977   20,215   18,570   18,407  
       Installment   43   49   6   24   3  
   Total non-accrual loans   19,874   20,517   20,792   19,224   19,226  
   Other nonperforming real estate mortgages - 1 to 4 family   23   25   26   27   29  
   Total nonperforming loans   19,897   20,542   20,818   19,251   19,255  
   Other real estate owned   541   423   830   1,284   1,579  
   Total nonperforming assets $ 20,438   20,965   21,648   20,535   20,834  
             
   Florida            
   Loans in nonaccrual status:            
       Commercial $ -   -   -   -   -  
       Real estate mortgage - 1 to 4 family   1,187   1,254   1,111   1,492   1,614  
       Installment   -   -   -   -   -  
   Total non-accrual loans   1,187   1,254   1,111   1,492   1,614  
   Other nonperforming real estate mortgages - 1 to 4 family   -   -   -   -   -  
   Total nonperforming loans   1,187   1,254   1,111   1,492   1,614  
   Other real estate owned   -   -   -   -   -  
   Total nonperforming assets $ 1,187   1,254   1,111   1,492   1,614  
             
   Total            
   Loans in nonaccrual status:            
       Commercial $ 452   491   571   630   816  
       Real estate mortgage - 1 to 4 family   20,566   21,231   21,326   20,062   20,021  
       Installment   43   49   6   24   3  
   Total non-accrual loans   21,061   21,771   21,903   20,716   20,840  
   Other nonperforming real estate mortgages - 1 to 4 family   23   25   26   27   29  
   Total nonperforming loans   21,084   21,796   21,929   20,743   20,869  
   Other real estate owned   541   423   830   1,284   1,579  
   Total nonperforming assets $ 21,625   22,219   22,759   22,027   22,448  
             
             
Quarterly Net (Recoveries) Chargeoffs            
             
   New York and other states*            
   Commercial $ 32   (1 ) (6 ) 1   (1 )
   Real estate mortgage - 1 to 4 family   (27 ) 4   (27 ) 140   146  
   Installment   109   18   44   4   67  
      Total net (recoveries) chargeoffs $ 114   21   11   145   212  
             
   Florida            
   Commercial $ -   -   -   -   -  
   Real estate mortgage - 1 to 4 family   (1 ) -   -   (2 ) (1 )
   Installment   15   -   -   19   1  
      Total net (recoveries) chargeoffs $ 14   -   -   17   -  
             
   Total            
   Commercial $ 32   (1 ) (6 ) 1   (1 )
   Real estate mortgage - 1 to 4 family   (28 ) 4   (27 ) 138   145  
   Installment   124   18   44   23   68  
      Total net (recoveries) chargeoffs $ 128   21   11   162   212  
             
             
Asset Quality Ratios            
             
Total nonperforming loans (1) $ 21,084   21,796   21,929   20,743   20,869  
Total nonperforming assets (1)   21,625   22,219   22,759   22,027   22,448  
Total net (recoveries) chargeoffs (2)   128   21   11   162   212  
             
Allowance for loan losses (1)   49,595   49,123   48,144   46,155   44,317  
               
Nonperforming loans to total loans   0.50 % 0.52 % 0.52 % 0.51 % 0.51 %
Nonperforming assets to total assets   0.37 % 0.39 % 0.40 % 0.42 % 0.43 %
Allowance for loan losses to total loans   1.17 % 1.17 % 1.15 % 1.13 % 1.09 %
Coverage ratio (1)   235.2 % 225.4 % 219.5 % 222.5 % 212.4 %
Annualized net chargeoffs to average loans (2)   0.01 % 0.00 % 0.00 % 0.02 % 0.02 %
Allowance for loan losses to annualized net chargeoffs (2)   96.9 x 584.8 x 1094.2 x 71.2 x 52.3 x
 
* 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, 2020     December 31, 2019  
    Average   Interest Average     Average   Interest Average  
    Balance     Rate     Balance     Rate  
Assets                        
                         
Securities available for sale:                        
   U. S. government sponsored enterprises $ 25,761     27   0.42 % $ 127,284     609   1.91 %
   Mortgage backed securities and collateralized mortgage                        
      obligations - residential   314,022     1,172   1.49     396,335     2,334   2.36  
   State and political subdivisions   108     3   7.89     165     4   9.70  
   Corporate bonds   64,534     349   2.17     37,795     295   3.12  
   Small Business Administration - guaranteed                        
      participation securities   41,562     212   2.05     49,787     253   2.03  
   Other   685     7   4.09     685     6   3.50  
                         
          Total securities available for sale   446,672     1,770   1.59     612,051     3,501   2.29  
                         
Federal funds sold and other short-term Investments   916,198     246   0.11     395,311     1,635   1.65  
                         
Held to maturity securities:                        
   Mortgage backed securities and collateralized mortgage                        
      obligations - residential   14,406     129   3.58     19,185     184   3.84  
                         
          Total held to maturity securities   14,406     129   3.58     19,185     184   3.84  
                         
Federal Reserve Bank and Federal Home Loan Bank stock   5,506     70   5.09     9,183     203   8.84  
                         
Commercial loans   224,838     3,009   5.35     192,427     2,517   5.23  
Residential mortgage loans   3,756,304     35,368   3.77     3,547,219     36,179   4.08  
Home equity lines of credit   245,401     2,361   3.83     270,766     3,110   4.59  
Installment loans   9,416     168   7.09     10,682     196   7.34  
                         
Loans, net of unearned income   4,235,959     40,906   3.86     4,021,094     42,002   4.18  
                         
          Total interest earning assets   5,618,741     43,121   3.07     5,056,824     47,525   3.76  
                         
Allowance for loan losses   (49,426 )           (44,320 )        
Cash & non-interest earning assets   201,371             188,605          
                         
                         
Total assets $ 5,770,686           $ 5,201,109          
                         
                         
Liabilities and shareholders' equity                        
                         
Deposits:                        
  Interest bearing checking accounts $ 1,036,808     51   0.02 % $ 864,774     21   0.01 %
  Money market accounts   710,105     447   0.25     583,048     1,175   0.81  
  Savings   1,258,666     156   0.05     1,111,259     271   0.10  
  Time deposits   1,284,075     3,053   0.95     1,422,049     7,468   2.10  
                         
    Total interest bearing deposits   4,289,654     3,707   0.34     3,981,130     8,935   0.90  
Short-term borrowings   200,028     232   0.46     154,898     347   0.90  
                         
   Total interest bearing liabilities   4,489,682     3,939   0.35     4,136,028     9,282   0.90  
                         
Demand deposits   640,190             454,585          
Other liabilities   77,197             80,386          
Shareholders' equity   563,617             530,110          
                         
Total liabilities and shareholders' equity $ 5,770,686           $ 5,201,109          
                         
Net interest income, tax equivalent       39,182             38,243      
                         
Net interest spread         2.72 %         2.86 %
                         
Net interest margin (net interest income to                        
total interest earning assets)         2.79 %         3.02 %
                         
Tax equivalent adjustment       (1 )           (2 )    
                         
Net interest income       39,181             38,241      
                         
                         
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued
                         
(dollars in thousands)                        
(Unaudited)   Year ended     Year ended  
    December 31, 2020     December 31, 2019  
    Average   Interest Average     Average   Interest Average  
    Balance     Rate     Balance     Rate  
Assets                        
                         
Securities available for sale:                        
   U. S. government sponsored enterprises $ 38,508     568   1.48 % $ 156,292     3,209   2.05 %
   Mortgage backed securities and collateralized mortgage                        
      obligations - residential   333,093     6,131   1.84     345,718     8,219   2.38  
   State and political subdivisions   111     9   7.82     167     13   7.78  
   Corporate bonds   50,982     1,721   3.38     34,637     1,096   3.16  
   Small Business Administration - guaranteed                        
      participation securities   44,379     902   2.03     53,269     1,121   2.10  
   Other   686     23   3.35     685     22   3.21  
                         
          Total securities available for sale   467,759     9,354   2.00     590,768     13,680   2.32  
                         
Federal funds sold and other short-term Investments   748,085     1,948   0.26     477,181     10,478   2.20  
                         
Held to maturity securities:                        
   Mortgage backed securities and collateralized mortgage                        
      obligations - residential   16,376     604   3.69     20,643     797   3.86  
                         
          Total held to maturity securities   16,376     604   3.69     20,643     797   3.86  
                         
Federal Reserve Bank and Federal Home Loan Bank stock   7,381     421   5.70     9,123     568   6.23  
                         
Commercial loans   219,328     10,788   4.92     191,636     10,243   5.35  
Residential mortgage loans   3,678,536     144,212   3.92     3,445,940     141,964   4.12  
Home equity lines of credit   255,583     10,259   4.01     277,905     13,551   4.88  
Installment loans   9,952     705   7.08     10,718     852   7.95  
                         
Loans, net of unearned income   4,163,399     165,964   3.99     3,926,199     166,610   4.24  
                         
          Total interest earning assets   5,403,000     178,291   3.30     5,023,914     192,133   3.82  
                         
Allowance for loan losses   (47,330 )           (44,639 )        
Cash & non-interest earning assets   197,966             182,545          
                         
Total assets $ 5,553,636           $ 5,161,820          
                         
Liabilities and shareholders' equity                        
                         
Deposits:                        
  Interest bearing checking accounts $ 971,385     148   0.02 % $ 874,700     288   0.03 %
  Money market accounts   662,107     3,042   0.46     555,547     4,297   0.77  
  Savings   1,191,532     716   0.06     1,134,050     1,338   0.12  
  Time deposits   1,350,163     19,792   1.47     1,417,487     28,930   2.04  
                         
   Total interest bearing deposits   4,175,187     23,698   0.57     3,981,784     34,853   0.88  
Short-term borrowings   180,065     1,010   0.56     159,220     1,468   0.92  
                         
   Total interest bearing liabilities   4,355,252     24,708   0.57     4,141,004     36,321   0.88  
                         
Demand deposits   567,265             427,276          
Other liabilities   77,487             80,051          
Shareholders' equity   553,632             513,489          
                         
Total liabilities and shareholders' equity $ 5,553,636           $ 5,161,820          
                         
Net interest income, tax equivalent       153,583             155,812      
                         
Net interest spread         2.73 %         2.94 %
                         
Net interest margin (net interest income to                        
total interest earning assets)         2.84 %         3.10 %
                         
Tax equivalent adjustment       (3 )           (5 )    
                         
Net interest income       153,580             155,807      
                         

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)
                 
Tangible Book Value Per Share   12/31/2020 9/30/2020 12/31/2019        
                 
Equity (GAAP) $ 568,161   560,528   538,257          
Less: Intangible assets   553   553   553          
   Tangible equity (Non-GAAP)   567,608   559,975   537,704          
                     
Shares outstanding   96,433   96,433   96,922          
Tangible book value per share (Non-GAAP)   5.89   5.81   5.55          
Book value per share (GAAP)   5.89   5.81   5.55          
                 
Tangible Equity to Tangible Assets                
                 
Total Assets (GAAP) $ 5,901,796   5,735,929   5,221,322          
Less: Intangible assets   553   553   553          
   Tangible assets (Non-GAAP)   5,901,243   5,735,376   5,220,769          
                     
Tangible Equity to Tangible Assets (Non-GAAP)   9.62 % 9.76 % 10.30 %        
Equity to Assets (GAAP)   9.63 % 9.77 % 10.31 %        
                 
    Three months ended     Year ended
Efficiency Ratio   12/31/2020 9/30/2020 12/31/2019     12/31/2020 12/31/2019
                 
Net interest income (GAAP) $ 39,181   38,165   38,241     $ 153,580   155,807  
Taxable equivalent adjustment   1   1   2       3   5  
Net interest income (fully taxable equivalent) (Non-GAAP)   39,182   38,166   38,243       153,583   155,812  
Non-interest income (GAAP)   4,069   4,341   4,115       17,170   18,591  
Less: Net gain on securities   -   -   -       1,155   -  
Revenue used for efficiency ratio (Non-GAAP)   43,251   42,507   42,358       169,598   174,403  
                 
Total noninterest expense (GAAP)   24,830   22,674   23,891       95,704   97,730  
Less: Other real estate (income) expense, net   45   (115 ) (385 )     92   (166 )
Expense used for efficiency ratio (Non-GAAP)   24,785   22,789   24,276       95,612   97,896  
                 
Efficiency Ratio   57.31 % 53.61 % 57.31 %     56.38 % 56.13 %
                           

Subsidiary: Trustco Bank

Contact:Robert LeonardExecutive Vice President and        Chief Risk Officer(518) 381-3693

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