Executive Snapshot:

• Continued solid financial results:
  -Key metrics for fourth quarter of 2016 results:
      -Net income of $10.8 million in the fourth quarter of 2016 compared to $10.2 million in the fourth quarter of 2015
      -Return on average assets (ROA) of 0.89% compared to 0.86% in Q4/2015
      -Return on average equity (ROE) of 9.87% compared to 9.75% in Q4/2015
      -Efficiency ratio of 54.65% compared to 55.37% in Q4/2015 (Non-GAAP measure; see Non-GAAP Financial Measures Reconciliation for definition)

• Asset quality remains solid:
  -Asset quality measures improved compared to the fourth quarter of 2015
  -Nonperforming assets (NPAs) fell by $5.4 million compared to December 31, 2015
  -NPAs to total assets improved to 0.60%, compared to 0.73% at December 31, 2015
  -Quarterly net chargeoffs decreased to 0.08% of average loans on an annualized basis, compared to 0.21% for the fourth quarter of 2015, the lowest level since 2008
  

• Continued expansion of customer base:
  -Focus on capitalizing on opportunities presented by expanded branch network
  -Average deposits per branch grew $661 thousand from December 31, 2015 to December 31, 2016 on a same store basis
  -Average deposits per branch were $28.9 million at December 31, 2016
  -Average core deposits were $41 million higher in the fourth quarter of 2016 compared to the fourth quarter of 2015
  

• Loan portfolio reaches all-time high:
  -Average loans were up $123 million for the fourth quarter of 2016 compared to fourth quarter of 2015
  -At $3.43 billion as of December 31, 2016, loans reached an all-time high

GLENVILLE, N.Y., Jan. 23, 2017 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo) (Nasdaq:TRST) today announced fourth quarter of 2016 net income of $10.8 million compared to $10.2 million for the fourth quarter of 2015, an increase of 6.1%.

Robert J. McCormick, President and Chief Executive Officer noted, “We are pleased to be able to report an increase in earnings in the fourth quarter of 2016 as compared to the fourth quarter of 2015.  Continued revenue growth coupled with moderating expense increases provided an encouraging end to the year.  Our focus on traditional lending criteria and conservative balance sheet management has enabled us to produce consistent earnings, maintain strong liquidity and capital and allowed us to continue to grow our business and take advantage of changes in market and competitive conditions.  In terms of our core business, we continue to add customer relationships which ultimately drive future growth.  We will continue to take advantage of opportunities as they are presented during 2017 and beyond.  Recent merger activity between our competitors, primarily the Key – First Niagara merger, provided us additional opportunities to add customers.”

TrustCo saw continued solid loan growth in the fourth quarter of 2016 compared to the prior year, led by an increase in residential mortgages.  Loan portfolio expansion was funded primarily by growth of our deposit base.  The continued shift toward loans helped offset the margin impact from continued comparatively low yields on cash and investments, although the recent move by the Federal Reserve to raise rates late in the fourth quarter will provide a benefit in the first quarter of 2017.  The growth in average deposits in the fourth quarter of 2016 versus the prior year was led by lower cost checking and savings deposits.  TrustCo’s strong liquidity position continues to allow the Company to take advantage of opportunities when interest rate conditions change.

For the fourth quarter of 2016, return on average assets and return on average equity were 0.89% and 9.87%, respectively, compared to 0.86% and 9.75% for the fourth quarter of 2015.  Diluted earnings per share were $0.113 for the fourth quarter of 2016, compared to $0.107 for the fourth quarter of 2015.  As discussed in recent quarters, increased operating costs in response to regulatory concerns have pushed overall expense levels higher.  However costs actually declined modestly in the second half of 2016 as compared to the first half and we anticipate being able to control expense growth effectively in 2017.  Some of the costs associated with regulatory issues will be recurring, but others will diminish over time.

For the full year 2016, diluted net income per share was $0.445, compared to $0.444 for the full year 2015.  Return on average assets and equity were 0.89% and 9.94% for 2016, compared to 0.89% and 10.41% for 2015.  The decline in return on equity was attributable to the 4.7% increase in shareholders’ equity from December 31, 2015 to December 31, 2016.

Average loans were up $122.8 million or 3.7% in the fourth quarter of 2016, over the same period in 2015.  Average residential loans, our primary lending focus, were up $155.7 million or 5.7% in the fourth quarter of 2016, over the same period in 2015.  Overall loan growth was constrained by a $13.8 million decline in commercial loans, which have become less attractive on a risk adjusted basis, and an $18.4 million decline in outstandings on home equity lines of credit, as well as a small decline in installment loans.  Average deposits were up $71.1 million or 1.7% for the fourth quarter of 2016 over the same period a year earlier.  The increase in deposits came from core deposit accounts, which consist of checking, savings and money market deposits, although checking and savings were entirely responsible for the growth within core deposits.  Average core deposits increased $40.7 million from the fourth quarter of 2015 to the fourth quarter of 2016, while average time deposit balances contributed $30.4 million of growth.  Within core, money market balances were actually down $50.5 million, while checking was up $73.7 million (including interest bearing and non-interest bearing balances) and savings were up $17.4 million.  Core deposits typically represent longer term customer relationships and are generally lower cost than time deposits.  The shift out of money market balances was also beneficial, as that category is the most expensive type of core deposit.  Mr. McCormick noted that, “The year-over-year growth of our loans and core deposit base reflect the long term strategic focus of the Company.”

“While some banks have backed away from branches, a customer friendly branch franchise continues to be the key to our long term plans.  We continue to make good progress expanding loans and deposits throughout our entire branch network.  We expect that trend to continue as the newer branches continue to mature.”

“At December 31, 2016, our average deposits per branch were $28.9 million, compared to $28.1 million a year earlier.  We have always designed our branches to be smaller and more cost effective than those built by many of our competitors.  We use open floor plans that help maximize the value of our branches.  We remain mindful that fully achieving our goals for newer branches will take time and continued work.  We believe success in growing customer relationships provides basic building blocks that will help drive profit growth for the coming years.”

Asset quality and loan loss reserve measures improved versus December 31, 2015.  Nonperforming loans (NPLs) were $25.1 million at December 31, 2016, compared to $28.3 million at December 31, 2015.  NPLs were equal to 0.73% of total loans at December 31, 2016, compared to 0.86% at December 31, 2015.  The coverage ratio, or allowance for loan losses to NPLs, was 175.1% at December 31, 2016, compared to 158.4% at December 31, 2015.  Nonperforming assets (NPAs) were $29.3 million at December 31, 2016 compared to $34.7 million at December 31, 2015.  The ratio of loan loss allowance to total loans was 1.28% as of December 31, 2016, compared to 1.36% at December 31, 2015 and reflects both the improvement in asset quality and economic conditions in our lending areas.  The allowance for loan losses was $43.9 million at December 31, 2016 compared to $44.8 million at December 31, 2015.  Net chargeoffs for the fourth quarter of 2016 decreased versus the fourth quarter of 2015, falling to $660 thousand from $1.7 million in the year earlier period.  The annualized net chargeoff ratio was 0.08% for the fourth quarter of 2016, compared to 0.21% in the fourth quarter of 2015 and was at the lowest level since the first quarter of 2008.  The provision for loan losses was $600 thousand, compared to $1.3 million in the fourth quarter of 2015.

The net interest margin for the fourth quarter of 2016 was 3.13%, up four basis points from the third quarter of 2016 and down a basis point versus the fourth quarter of 2015. 

At December 31, 2016 the equity to asset ratio was 8.89%, compared to 8.73% at December 31, 2015.  The tangible equity ratio was 8.88% compared to 8.72% at December 31, 2015.  GAAP book value per share at December 31, 2016 was $4.52 compared to $4.34 a year earlier and tangible book value per share was $4.51 and $4.33, respectively.  Tangible equity ratio and tangible book value per share are non-GAAP measures and are discussed in the Non-GAAP Financial Measures Reconciliation.

TrustCo Bank Corp NY is a $4.9 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 145 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at December 31, 2016.

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 2016 results will be held at 9:00 a.m. Eastern Time on January 24, 2017.  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 10099604. The call will also be audio webcast at: http://services.choruscall.com/links/trst170124.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 2017 and for the growth of loans and deposits throughout our branch network, our ability to capitalize on economic changes in the areas in which we operate and the extent to which higher expenses to fulfill operating and regulatory requirements recur or diminish over time.  Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed. 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:  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 comply with the supervisory agreement entered into with Trustco Bank’s regulator and potential regulatory actions if we fail to comply; 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 Trustco Bank and the continued ability of Trustco Bank under regulatory rules and the supervisory agreement to distribute capital to TrustCo, which could affect our ability to pay dividends; results of examinations of Trustco Bank and TrustCo by our respective regulators; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; 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; 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; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; 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 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
		12/31/16		09/30/16		12/31/15
Summary of operations
Net interest income (TE)	$	36,921		36,681		36,278
Provision for loan losses		600		750		1,300
Net gain on securities transactions		-		-		2
Noninterest income, excluding net gain on securities transactions		4,512		4,729		4,428
Noninterest expense		23,365		23,049		23,108
Net income		10,798		10,930		10,180
Per common share
Net income per share:
- Basic	$	0.113		0.114		0.107
- Diluted		0.113		0.114		0.107
Cash dividends		0.066		0.066		0.066
Tangible Book value at period end		4.51		4.55		4.33
Market price at period end		8.75		7.09		6.14
At period end
Full time equivalent employees		808		790		787
Full service banking offices		145		145		146
Performance ratios
Return on average assets		0.89	%	0.90		0.86
Return on average equity		9.87		10.05		9.75
Efficiency (1)		54.65		54.11		55.37
Net interest spread (TE)		3.07		3.03		3.08
Net interest margin (TE)		3.13		3.09		3.14
Dividend payout ratio		58.20		57.40		61.54
Capital ratio at period end
Consolidated tangible equity to tangible assets (2)		8.88		9.04		8.72
Asset quality analysis at period end
Nonperforming loans to total loans		0.73		0.77		0.86
Nonperforming assets to total assets		0.60		0.64		0.73
Allowance for loan losses to total loans		1.28		1.30		1.36
Coverage ratio (3)		1.8x		1.6		1.6
(1)  Calculated as noninterest expense (excluding ORE income/expense) divided by
taxable equivalent net interest income plus noninterest income (excluding
net securities transactions and gain on sale of building and nonperforming loans).
(2)  The tangible equity ratio excludes $553 of intangibles from both equity and 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)
		Years Ended
		12/31/16		12/31/15
Summary of operations
Net interest income (TE)	$	146,109		143,222
Provision for loan losses		2,950		3,700
Net gain on securities transactions		668		251
Noninterest income, excluding net gain on securities transactions		18,344		17,621
Noninterest expense		93,827		90,560
Net income		42,601		42,238
Per common share
Net income per share:
- Basic	$	0.446		0.444
- Diluted		0.445		0.444
Cash dividends		0.263		0.263
Tangible Book value at period end		4.51		4.33
Market price at period end		8.75		6.14
Performance ratios
Return on average assets		0.89	%	0.89
Return on average equity		9.94		10.41
Efficiency (1)		55.67		55.08
Net interest spread (TE)		3.05		3.03
Net interest margin (TE)		3.11		3.09
Dividend payout ratio		58.88		59.13
(1)  Calculated as noninterest expense (excluding ORE income/expense) divided by
taxable equivalent net interest income plus noninterest income (excluding
net securities transactions and gain on sale of building and nonperforming loans).
TE = Taxable equivalent.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
		Three Months Ended
		12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
Interest and dividend income:
Interest and fees on loans	$	36,251		36,171		35,652		35,605		35,930
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		422		408		404		255		256
State and political subdivisions		12		13		13		14		16
Mortgage-backed securities and collateralized mortgage obligations-residential		1,849		1,829		2,169		2,116		2,233
Corporate bonds		149		97		-		-		-
Small Business Administration-guaranteed participation securities		430		445		450		476		482
Mortgage-backed securities and collateralized mortgage obligations-commercial		23		36		38		36		37
Other securities		4		4		4		4		4
Total interest and dividends on securities available for sale		2,889		2,832		3,078		2,901		3,028
Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		331		347		374		402		425
Corporate bonds		153		156		154		154		154
Total interest on held to maturity securities		484		503		528		556		579
Federal Reserve Bank and Federal Home Loan Bank stock		133		131		118		120		120
Interest on federal funds sold and other short-term investments		865		866		832		844		494
Total interest income		40,622		40,503		40,208		40,026		40,151
Interest expense:
Interest on deposits:
Interest-bearing checking		123		120		116		114		115
Savings		436		504		604		604		608
Money market deposit accounts		459		463		467		496		513
Time deposits		2,406		2,468		2,460		2,373		2,375
Interest on short-term borrowings		291		281		262		257		278
Total interest expense		3,715		3,836		3,909		3,844		3,889
Net interest income		36,907		36,667		36,299		36,182		36,262
Provision for loan losses		600		750		800		800		1,300
Net interest income after provision for loan losses		36,307		35,917		35,499		35,382		34,962
Noninterest income:
Trustco Financial Services income		1,422		1,347		1,512		1,605		1,489
Fees for services to customers		2,795		2,664		2,737		2,661		2,704
Net gain on securities transactions		-		-		668		-		2
Other		295		718		282		306		235
Total noninterest income		4,512		4,729		5,199		4,572		4,430
Noninterest expenses:
Salaries and employee benefits		9,576		8,995		8,934		9,003		8,042
Net occupancy expense		4,185		3,887		3,918		4,088		3,884
Equipment expense		1,370		1,596		1,840		1,514		1,530
Professional services		1,997		1,959		2,098		2,146		2,067
Outsourced services		1,775		1,465		1,425		1,551		1,585
Advertising expense		727		489		570		729		592
FDIC and other insurance		901		1,127		1,949		1,990		2,055
Other real estate expense, net		721		895		423		519		570
Other		2,113		2,636		2,817		1,899		2,783
Total noninterest expenses		23,365		23,049		23,974		23,439		23,108
Income before taxes		17,454		17,597		16,724		16,515		16,284
Income taxes		6,656		6,667		6,260		6,106		6,104
Net income	$	10,798		10,930		10,464		10,409		10,180
Net income per common share:
- Basic	$	0.113		0.114		0.110		0.109		0.107
- Diluted		0.113		0.114		0.109		0.109		0.107
Average basic shares (in thousands)		95,732		95,603		95,487		95,365		95,256
Average diluted shares (in thousands)		95,877		95,722		95,580		95,412		95,349
Note:  Taxable equivalent net interest income	$	36,921		36,681		36,311		36,196		36,278
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
		Years Ended
		12/31/2016		12/31/2015
Interest and dividend income:
Interest and fees on loans	$	143,679		141,887
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		1,489		1,418
State and political subdivisions		52		87
Mortgage-backed securities and collateralized mortgage obligations-residential		7,963		9,132
Corporate bonds		246		1
Small Business Administration-guaranteed participation securities		1,801		2,004
Mortgage-backed securities and collateralized mortgage obligations-commercial		133		149
Other securities		16		16
Total interest and dividends on securities available for sale		11,700		12,807
Interest on held to maturity securities:
Mortgage-backed securities-residential		1,454		1,844
Corporate bonds		617		615
Total interest on held to maturity securities		2,071		2,459
Federal Reserve Bank and Federal Home Loan Bank stock		502		467
Interest on federal funds sold and other short-term investments		3,407		1,725
Total interest income		161,359		159,345
Interest expense:
Interest on deposits:
Interest-bearing checking		473		448
Savings		2,148		2,468
Money market deposit accounts		1,885		2,214
Time deposits		9,707		9,853
Interest on short-term borrowings		1,091		1,214
Total interest expense		15,304		16,197
Net interest income		146,055		143,148
Provision for loan losses		2,950		3,700
Net interest income after provision for loan losses		143,105		139,448
Noninterest income:
Trust department income		5,886		5,971
Fees for services to customers		10,857		10,689
Net gain on securities transactions		668		251
Other		1,601		961
Total noninterest income		19,012		17,872
Noninterest expenses:
Salaries and employee benefits		36,508		32,521
Net occupancy expense		16,078		15,799
Equipment expense		6,320		6,871
Professional services		8,200		7,878
Outsourced services		6,216		5,860
Advertising expense		2,515		2,593
FDIC and other insurance		5,967		6,339
Other real estate (income) expense, net		2,558		2,001
Other		9,465		10,698
Total noninterest expenses		93,827		90,560
Income before taxes		68,290		66,760
Income taxes		25,689		24,522
Net income	$	42,601		42,238
Net income per Common Share:
- Basic	$	0.446		0.444
- Diluted		0.445		0.444
Average basic shares (thousands)		95,548		95,103
Average diluted shares (thousands)		95,648		95,213
Note:  Taxable equivalent net interest income	$	146,109		143,222
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
		12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
ASSETS:
Cash and due from banks	$	48,719		42,296		39,787		37,373		41,698
Federal funds sold and other short term investments		658,555		622,132		718,609		722,805		676,458
Total cash and cash equivalents		707,274		664,428		758,396		760,178		718,156
Securities available for sale:
U. S. government sponsored enterprises		117,266		116,327		116,595		66,920		86,737
States and political subdivisions		886		970		974		974		1,290
Mortgage-backed securities and collateralized mortgage obligations-residential		372,308		400,575		404,138		422,189		411,729
Small Business Administration-guaranteed participation securities		78,499		84,687		87,740		89,053		90,416
Mortgage-backed securities and collateralized mortgage obligations-commercial		10,011		10,233		10,374		10,307		10,180
Corporate bonds		40,705		41,025		-		-		-
Other securities		685		685		685		685		685
Total securities available for sale		620,360		654,502		620,506		590,128		601,037
Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		35,500		38,044		40,702		43,595		46,490
Corporate bonds		9,990		9,986		9,982		9,979		9,975
Total held to maturity securities		45,490		48,030		50,684		53,574		56,465
Federal Reserve Bank and Federal Home Loan Bank stock		9,579		9,579		9,579		9,480		9,480
Loans:
Commercial		191,194		189,795		195,698		198,765		203,415
Residential mortgage loans		2,895,733		2,845,876		2,786,951		2,737,784		2,721,173
Home equity line of credit		334,841		343,445		352,069		356,163		359,325
Installment loans		8,818		8,515		8,476		8,667		9,391
Loans, net of deferred fees and costs		3,430,586		3,387,631		3,343,194		3,301,379		3,293,304
Less:
Allowance for loan losses		43,890		43,950		44,064		44,398		44,762
Net loans		3,386,696		3,343,681		3,299,130		3,256,981		3,248,542
Bank premises and equipment, net		35,466		36,110		36,793		37,360		37,643
Other assets		63,941		56,519		55,825		55,561		63,669
Total assets	$	4,868,806		4,812,849		4,830,913		4,763,262		4,734,992
LIABILITIES:
Deposits:
Demand	$	377,755		380,090		376,669		359,060		365,081
Interest-bearing checking		815,534		785,118		766,322		746,562		754,347
Savings accounts		1,271,449		1,277,734		1,282,006		1,272,394		1,262,194
Money market deposit accounts		571,962		566,097		577,063		595,585		610,826
Time deposits		1,159,463		1,159,199		1,178,567		1,168,887		1,107,930
Total deposits		4,196,163		4,168,238		4,180,627		4,142,488		4,100,378
Short-term borrowings		209,406		179,204		190,542		169,528		191,226
Accrued expenses and other liabilities		30,551		29,799		29,479		28,221		30,078
Total liabilities		4,436,120		4,377,241		4,400,648		4,340,237		4,321,682
SHAREHOLDERS' EQUITY:
Capital stock		99,214		99,121		99,071		98,973		98,973
Surplus		171,425		171,093		171,174		171,113		171,443
Undivided profits		201,517		197,013		192,356		188,159		184,009
Accumulated other comprehensive income (loss), net of tax		(6,251	)	2,328		2,395		73		(4,781	)
Treasury stock at cost		(33,219	)	(33,947	)	(34,731	)	(35,293	)	(36,334	)
Total shareholders' equity		432,686		435,608		430,265		423,025		413,310
Total liabilities and shareholders' equity	$	4,868,806		4,812,849		4,830,913		4,763,262		4,734,992
Outstanding shares (in thousands)		95,780		95,614		95,493		95,369		95,262

 

NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
Nonperforming Assets
		12/31/16		09/30/16		06/30/16		03/31/16		12/31/15
New York and other states*
Loans in nonaccrual status:
Commercial	$	1,843		2,366		2,690		2,762		3,024
Real estate mortgage - 1 to 4 family		21,198		21,678		23,559		25,669		23,273
Installment		48		70		49		74		90
Total non-accrual loans		23,089		24,114		26,298		28,505		26,387
Other nonperforming real estate mortgages - 1 to 4 family		42		44		45		47		48
Total nonperforming loans		23,131		24,158		26,343		28,552		26,435
Other real estate owned		4,268		4,768		4,602		5,208		6,120
Total nonperforming assets	$	27,399		28,926		30,945		33,760		32,555
Florida
Loans in nonaccrual status:
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		1,929		1,844		1,900		1,802		1,817
Installment		-		-		-		-		8
Total non-accrual loans		1,929		1,844		1,900		1,802		1,825
Other nonperforming real estate mortgages - 1 to 4 family		-		-		-		-		-
Total nonperforming loans		1,929		1,844		1,900		1,802		1,825
Other real estate owned		-		-		-		476		335
Total nonperforming assets	$	1,929		1,844		1,900		2,278		2,160
Total
Loans in nonaccrual status:
Commercial	$	1,843		2,366		2,690		2,762		3,024
Real estate mortgage - 1 to 4 family		23,127		23,522		25,459		27,471		25,090
Installment		48		70		49		74		98
Total non-accrual loans		25,018		25,958		28,198		30,307		28,212
Other nonperforming real estate mortgages - 1 to 4 family		42		44		45		47		48
Total nonperforming loans		25,060		26,002		28,243		30,354		28,260
Other real estate owned		4,268		4,768		4,602		5,684		6,455
Total nonperforming assets	$	29,328		30,770		32,845		36,038		34,715
Quarterly Net Chargeoffs (Recoveries)
		12/31/16		09/30/16		06/30/16		03/31/16		12/31/15
New York and other states*
Commercial	$	(56	)	353		67		224		672
Real estate mortgage - 1 to 4 family		619		471		973		771		963
Installment		55		37		77		70		35
Total net chargeoffs	$	618		861		1,117		1,065		1,670
Florida
Commercial	$	-		-		-		-		(2	)
Real estate mortgage - 1 to 4 family		23		-		16		83		6
Installment		19		3		1		16		13
Total net chargeoffs	$	42		3		17		99		17
Total
Commercial	$	(56	)	353		67		224		670
Real estate mortgage - 1 to 4 family		642		471		989		854		969
Installment		74		40		78		86		48
Total net chargeoffs	$	660		864		1,134		1,164		1,687
Asset Quality Ratios
		12/31/16		09/30/16		06/30/16		03/31/16		12/31/15
Total nonperforming loans(1)	$	25,060		26,002		28,243		30,354		28,260
Total nonperforming assets(1)		29,328		30,770		32,845		36,038		34,715
Total net chargeoffs(2)		660		864		1,134		1,164		1,687
Allowance for loan losses(1)		43,890		43,950		44,064		44,398		44,762
Nonperforming loans to total loans		0.73	%	0.77	%	0.84	%	0.92	%	0.86	%
Nonperforming assets to total assets		0.60	%	0.64	%	0.68	%	0.76	%	0.73	%
Allowance for loan losses to total loans		1.28	%	1.30	%	1.32	%	1.34	%	1.36	%
Coverage ratio(1)		175.1	%	169.0	%	156.0	%	146.3	%	158.4	%
Annualized net chargeoffs to average loans(2)		0.08	%	0.10	%	0.14	%	0.14	%	0.21	%
Allowance for loan losses to annualized net chargeoffs(2)		16.6x		12.7x		9.7x		9.5x		6.6x
* 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)		Three months ended									Three months ended
(Unaudited)		December 31, 2016									December 31, 2015
		Average			Interest		Average				Average			Interest		Average
		Balance					Rate				Balance					Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	113,158			422		1.49	%		$	80,605			256		1.27	%
Mortgage backed securities and
collateralized mortgage obligations-residential		384,973			1,849		1.92				412,193			2,233		2.17
State and political subdivisions		943			19		8.06				1,280			25		7.78
Corporate bonds		41,039			149		1.45				-			-		-
Small Business Administration-guaranteed participation securities		81,922			430		2.10				93,329			482		2.07
Mortgage backed securities and
collateralized mortgage obligations-commercial		10,173			23		0.90				10,464			37		1.41
Other		685			4		2.34				685			4		2.34
Total securities available for sale		632,893			2,896		1.83				598,556			3,037		2.03
Federal funds sold and other
short-term Investments		622,578			865		0.50				669,545			494		0.29
Held to maturity securities:
Corporate bonds		9,988			153		6.13				9,973			154		6.17
Mortgage backed securities and
collateralized mortgage obligations-residential		36,723			331		3.61				48,275			425		3.52
Total held to maturity securities		46,711			484		4.14				58,248			579		3.97
Federal Reserve Bank and Federal Home Loan Bank stock		9,579			133		5.55				9,480			120		5.06
Commercial loans		189,058			2,557		5.41				202,854			2,667		5.26
Residential mortgage loans		2,869,757			30,294		4.22				2,714,016			29,874		4.40
Home equity lines of credit		339,591			3,209		3.78				357,990			3,204		3.55
Installment loans		8,391			198		9.44				9,126			192		8.37
Loans, net of unearned income		3,406,797			36,258		4.26				3,283,986			35,937		4.37
Total interest earning assets		4,718,558			40,636		3.44				4,619,815			40,167		3.47
Allowance for loan losses		(44,368	)								(45,467	)
Cash & non-interest earning assets		137,372									136,209
Total assets	$	4,811,562								$	4,710,557
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	782,979			123		0.06	%		$	721,150			115		0.06	%
Money market accounts		565,335			459		0.32				615,815			513		0.33
Savings		1,267,551			436		0.14				1,250,127			608		0.19
Time deposits		1,163,820			2,406		0.83				1,133,396			2,375		0.83
Total interest bearing deposits		3,779,685			3,424		0.36				3,720,488			3,611		0.39
Short-term borrowings		195,526			291		0.60				186,462			278		0.59
Total interest bearing liabilities		3,975,211			3,715		0.37				3,906,950			3,889		0.39
Demand deposits		372,801									360,916
Other liabilities		28,198									28,570
Shareholders' equity		435,352									414,121
Total liabilities and shareholders' equity	$	4,811,562								$	4,710,557
Net interest income, tax equivalent					36,921									36,278
Net interest spread							3.07	%								3.08	%
Net interest margin (net interest income
to total interest earning assets)							3.13	%								3.14	%
Tax equivalent adjustment					(14	)								(16	)
Net interest income					36,907									36,262
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-
INTEREST RATES AND INTEREST DIFFERENTIAL
(dollars in thousands)		Year ended									Year ended
(Unaudited)		December 31, 2016									December 31, 2015
		Average			Interest		Average				Average			Interest		Average
		Balance					Rate				Balance					Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	101,242			1,489		1.47	%		$	107,436			1,418		1.32	%
Mortgage backed securities and
collateralized mortgage obligations-residential		410,646			7,963		1.94				439,343			9,132		2.08
State and political subdivisions		991			80		8.07				1,812			133		7.40
Corporate bonds		17,088			246		1.44				613			1		0.16
Small Business Administration-guaranteed participation securities		86,407			1,801		2.08				97,496			2,004		2.06
Mortgage backed securities and
collateralized mortgage obligations-commercial		10,284			133		1.29				10,566			149		1.41
Other		683			16		2.34				685			16		2.34
Total securities available for sale		627,341			11,728		1.87				657,951			12,853		1.95
Federal funds sold and other
short-term Investments		662,436			3,407		0.50				664,516			1,725		0.26
Held to maturity securities:
Corporate bonds		10,145			617		6.08				9,967			615		6.17
Mortgage backed securities and
collateralized mortgage obligations-residential		40,830			1,454		3.56				53,763			1,844		3.43
Total held to maturity securities		50,975			2,071		4.06				63,730			2,459		3.86
Federal Reserve Bank and Federal Home Loan Bank stock		9,554			502		5.25				9,414			467		4.96
Commercial loans		196,116			10,331		5.27				210,210			10,861		5.17
Residential mortgage loans		2,793,780			119,817		4.29				2,661,421			117,820		4.43
Home equity lines of credit		350,004			12,779		3.65				354,718			12,508		3.53
Installment loans		8,424			778		9.24				8,457			726		8.59
Loans, net of unearned income		3,348,324			143,705		4.29				3,234,806			141,915		4.39
Total interest earning assets		4,698,630			161,413		3.44				4,630,417			159,419		3.44
Allowance for loan losses		(44,718	)								(46,023	)
Cash & non-interest earning assets		136,789									136,752
Total assets	$	4,790,701								$	4,721,146
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	764,399			473		0.06	%		$	708,331			448		0.06	%
Money market accounts		580,125			1,885		0.32				628,096			2,214		0.35
Savings		1,272,015			2,148		0.17				1,245,100			2,468		0.20
Time deposits		1,162,842			9,707		0.83				1,173,426			9,853		0.84
Total interest bearing deposits		3,779,381			14,213		0.38				3,754,953			14,983		0.40
Short-term borrowings		185,672			1,091		0.59				184,725			1,214		0.66
Total interest bearing liabilities		3,965,053			15,304		0.39				3,939,678			16,197		0.41
Demand deposits		369,820									348,552
Other liabilities		27,439									27,155
Shareholders' equity		428,389									405,761
Total liabilities and shareholders' equity	$	4,790,701								$	4,721,146
Net interest income, tax equivalent					146,109									143,222
Net interest spread							3.05	%								3.03	%
Net interest margin (net interest income
to total interest earning assets)							3.11	%								3.09	%
Tax equivalent adjustment					(54	)								(74	)
Net interest income					146,055									143,148

Non-GAAP Financial Measures Reconciliation

Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures 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 book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders’ equity by common shares outstanding. 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 nonperforming loans and securities 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 position, results and ratios. Our management internally assesses our performance based, in part, on these measures.  However, these non-GAAP financial measures are supplemental and are 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)
		12/31/16		09/30/16		12/31/15
Tangible Book Value Per Share
Equity	$	432,686		435,608		413,310
Less: Intangible assets		553		553		553
Tangible equity		432,133		435,055		412,757
Shares outstanding		95,780		95,614		95,262
Tangible book value per share		4.51		4.55		4.33
Book value per share		4.52		4.56		4.34
Tangible Equity to Tangible Assets
Total Assets		4,868,806		4,812,849		4,734,992
Less: Intangible assets		553		553		553
Tangible assets		4,868,253		4,812,296		4,734,439
Tangible Equity to Tangible Assets		8.88	%	9.04	%	8.72	%
Equity to Assets		8.89	%	9.05	%	8.73	%
		3 Months Ended							Years Ended
Efficiency Ratio		12/31/16		09/30/16		12/31/15			12/31/16		12/31/15
Net interest income	$	36,907		36,667		36,262			146,055		143,148
Taxable equivalent adjustment		14		14		16			54		74
Net interest income (fully taxable equivalent)		36,921		36,681		36,278			146,109		143,222
Non-interest income		4,512		4,729		4,430			19,012		17,872
Less:  Net gain on sale of building		-		469		-			469		-
Less:  Net gain on sale of nonperforming loans		-		-		-			24		60
Less:  Net gain on securities		-		-		2			668		251
Revenue used for efficiency ratio		41,433		40,941		40,706			163,960		160,783
Total noninterest expense		23,365		23,049		23,108			93,827		90,560
Less:  Other real estate expense, net		721		895		570			2,558		2,001
Expense used for efficiency ratio		22,644		22,154		22,538			91,269		88,559
Efficiency Ratio		54.65	%	54.11	%	55.37	%		55.67	%	55.08	%

 

Contact:
Kevin T. Timmons
Vice President/Treasurer
(518) 381-3607

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