GLENVILLE, N.Y., Oct. 21, 2020 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) · TrustCo Bank Corp NY today announced third quarter 2020 net income of $14.1 million or $0.146 diluted earnings per share, and $38.6 million or $0.400 diluted earnings per share for the nine months ended September 30, 2020.

Summary

Robert J. McCormick, Chairman, President and Chief Executive Officer noted, “We continue to keep a pulse on the best ways to adapt to the changing needs of our customers in light of the ongoing impact of the pandemic. Our unparalleled dedication to customer service positions us as a stable partner to our customers as they seek updated information, support and advice in a volatile time. In response to these changing needs, we made a significant investment in our online and mobile banking offerings, rolling out a completely updated experience for customers that includes real-time account alerts, secure messaging, enhanced billpay and more. We also recently introduced ClickSwitch, an automated tool that allows new customers to change direct deposits and recurring payments in just a few minutes, creating new business opportunities for the Bank. We expect to see more activity and interest in these offerings and have an exciting plan for ongoing updates and new innovations.”

Trustco’s commitment to supporting its communities and front line workers remains steadfast. In an effort to bolster our students and schools during an unpredictable back to school period, we donated more than 450 backpacks and contributed financially to the elementary school near our newly renovated Mont Pleasant Branch. This is just one example of ways we have prioritized giving back in addition to our designated Coronavirus (“COVID-19”) Fund, donating time and financial support to front line organizations across the communities, and the COVID-19 Financial Relief Program, providing support to our borrowers experiencing economic hardships in various ways.

We also continue to closely monitor the impact of the pandemic on our business and results of operations. As of September 30, 2020, we had 24 residential loans in deferral totaling $5 million, and 6 commercial loans in deferral totaling $2 million. This represents 0.2% of total outstanding loans. As of June 30, 2020, we had 668 residential loans in deferral totaling $145 million, and 90 commercial loans in deferral totaling $45 million. This represented 4.5% of total outstanding loans. We are 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 has funded 663 Paycheck Protection Program (“PPP”) loans totaling $46 million.

The third 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 fourth quarter of 2020 and beyond, 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.

TrustCo saw average loans grow 6.5% in the third quarter of 2020 compared to the third quarter of 2019. Year over year, loan portfolio expansion was funded by a combination of utilizing a portion of our strong cash balances, cash flow from investments, and the growth in funding from customer deposits. Total average deposits are up $442.3 million or 9.9% in the third quarter 2020 compared to the prior year.

Details

Average loans were up $254.6 million or 6.5% in the third quarter 2020 over the same period in 2019. Average residential loans, our primary lending focus, were up $237.6 million, or 6.9%, in the third quarter 2020 over the same period in 2019. Average deposits are up $442.3 million or 9.9% for the third quarter 2020 over the same period a year earlier. The increase in deposits was the result of a $544.6 million or 18.1% increase total average core deposit accounts, which consist of interest bearing and non-interest bearing checking, savings and money market deposits, for the third quarter 2020 compared to the third quarter 2019. Within core, checking balances were up $333.8 million or 25.4% (including interest bearing and non-interest bearing checking balances). The increase in core deposits reflects the desire by 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. Average time deposits decreased $102.3 million or 7.0% for the third quarter 2020 compared to the third quarter 2019.

The cost of interest bearing liabilities decreased to 0.52% in the third quarter 2020 from 0.94% in the third quarter 2019. A significant portion of our CD portfolio repriced during the last half of 2019 and the first nine months of 2020, which resulted in lower rates due to market conditions. The net interest margin for the third quarter 2020 was 2.73%, down 31 basis points from 3.04% in the third quarter of 2019 primarily due to the decrease in market rates over the same period resulting in less interest earned on our short-term funds and variable rate loans. Additionally, because we offered competitive shorter term rates on our time deposits in the past, we expect the cost of interest bearing liabilities to continue to decrease as time deposits reprice at lower rates.

The Bank continued to demonstrate its ability to grow shareholders’ equity as average equity was up $35.8 million or 6.9% in the third quarter of 2020 compared to the same period in 2019. Return on average assets and return on average equity for the third quarter 2020 were 0.98% and 10.04%, respectively, compared to 1.12% and 11.19% for the third quarter 2019. Improving efficiencies to reduce costs continues to remain a key area of focus. Total operating expenses decreased by $1.4 million or 5.8% in the third quarter 2020 as compared to the third quarter 2019, driven by decreases in almost all expense categories, with the exception of increases in occupancy expense and FDIC and other insurance expense.

Asset quality and loan loss reserve measures have stayed consistent. Nonperforming loans (NPLs) were $21.8 million at September 30, 2020, compared to $21.0 million at September 30, 2019. NPLs were 0.52% of total loans at September 30, 2020, compared to 0.53% at September 30, 2019. The coverage ratio, or allowance for loan losses to NPLs, was 225.4% at September 30, 2020, compared to 210.9% at September 30, 2019. Nonperforming assets (NPAs) were $22.2 million at September 30, 2020, compared to $23.4 million at September 30, 2019. The ratio of allowance for loan losses to total loans was 1.17% as of September 30, 2020, compared to 1.11% at September 30, 2019. The allowance for loan losses was $49.1 million at September 30, 2020, compared to $44.3 million at September 30, 2019. The provision for loan losses increased to $1.0 million for the third quarter 2020 compared to $-0- in the same period in the prior year, primarily driven by the uncertainty in the current economic environment resulting from COVID-19. The Bank did not adopt “FASB Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”) as of January 1, 2020 as allowed by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The Bank will adopt CECL as required by the CARES Act at the earlier of the termination of the National Emergency concerning COVID-19 or December 31, 2020. Net chargeoffs for the third quarter 2020 were $21 thousand versus net chargeoffs in the third quarter 2019 of $36 thousand. The annualized net chargeoffs ratio was 0.00% for the third quarter 2020 and 2019.

At September 30, 2020 the tangible equity to tangible asset ratio was 9.76%, compared to 10.07% at September 30, 2019. Book value per share at September 30, 2020 was $5.81, up 7.2% compared to $5.42 a year earlier.

TrustCo Bank Corp NY is a $5.7 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 September 30, 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 third quarter 2020 results will be held at 9:00 a.m. Eastern Time on October 22, 2020. 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 10149050. The call will also be audio webcast at: https://services.choruscall.com/links/trst201022.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; 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
		9/30/2020			6/30/2020			9/30/2019
Summary of operations
Net interest income (TE)	$	38,166			37,681			38,644
Provision for loan losses		1,000			2,000			-
Noninterest income, excluding net gain on securities transactions		4,341			3,426			4,925
Noninterest expense		22,674			23,932			24,070
Net income		14,071			11,254			14,708
Per common share
Net income per share:
- Basic	$	0.146			0.117			0.152
- Diluted		0.146			0.117			0.152
Cash dividends		0.068			0.068			0.068
Book value at period end		5.81			5.73			5.42
Market price at period end		5.22			6.33			8.15
At period end
Full time equivalent employees		771			806			823
Full service banking offices		148			148			148
Performance ratios
Return on average assets		0.98		%	0.82			1.12
Return on average equity		10.04			8.21			11.19
Efficiency (1)		53.61			58.30			55.17
Net interest spread (TE)		2.63			2.69			2.88
Net interest margin (TE)		2.73			2.81			3.04
Dividend payout ratio		46.68			58.37			44.85
Capital ratios at period end
Consolidated tangible equity to tangible assets (2)		9.76		%	9.74			10.07
Consolidated equity to assets		9.77		%	9.75			10.07
Asset quality analysis at period end
Nonperforming loans to total loans		0.52			0.52			0.53
Nonperforming assets to total assets		0.39			0.40			0.45
Allowance for loan losses to total loans		1.17			1.15			1.11
Coverage ratio (3)		2.3x			2.2x			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)
		Nine months ended
		9/30/2020			9/30/2019
Summary of operations
Net interest income (TE)	$	114,401			117,569
Provision (Credit) for loan losses		5,000			(41	)
Net gain on securities transactions		1,155			-
Noninterest income, excluding net gain on securities transactions		11,946			14,476
Noninterest expense		70,874			73,839
Net income		38,638			43,933
Per common share
Net income per share:
- Basic	$	0.400			0.454
- Diluted		0.400			0.453
Cash dividends		0.204			0.204
Book value at period end		5.81			5.42
Market price at period end		5.22			8.15
Performance ratios
Return on average assets		0.94			1.14
Return on average equity		9.38			11.56
Efficiency (1)		56.06			55.75
Net interest spread (TE)		2.74			2.98
Net interest margin (TE)		2.86			3.13
Dividend payout ratio		51.03			45.00
(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
		9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019
Interest and dividend income:
Interest and fees on loans	$	41,330			41,665			42,063			42,002			41,923
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		14			106			421			609			996
State and political subdivisions		1			2			1			2			2
Mortgage-backed securities and collateralized mortgage
obligations - residential		1,319			1,527			2,113			2,334			2,178
Corporate bonds		646			488			238			295			321
Small Business Administration - guaranteed
participation securities		216			229			245			253			282
Other securities		5			5			6			6			6
Total interest and dividends on securities available for sale		2,201			2,357			3,024			3,499			3,785
Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations - residential		138			162			175			184			187
Total interest on held to maturity securities		138			162			175			184			187
Federal Reserve Bank and Federal Home Loan Bank stock		77			192			82			203			81
Interest on federal funds sold and other short-term investments		242			193			1,267			1,635			2,552
Total interest income		43,988			44,569			46,611			47,523			48,528
Interest expense:
Interest on deposits:
Interest-bearing checking		55			26			16			21			52
Savings		161			166			233			271			323
Money market deposit accounts		637			862			1,096			1,175			1,177
Time deposits		4,749			5,599			6,391			7,468			7,974
Interest on short-term borrowings		221			235			322			347			359
Total interest expense		5,823			6,888			8,058			9,282			9,885
Net interest income		38,165			37,681			38,553			38,241			38,643
Less: Provision for loan losses		1,000			2,000			2,000			200			-
Net interest income after provision for loan losses		37,165			35,681			36,553			38,041			38,643
Noninterest income:
Trustco Financial Services income		1,784			1,368			1,600			1,454			1,517
Fees for services to customers		2,292			1,807			2,315			2,377			2,602
Net gain on securities transactions		-			-			1,155			-			-
Other		265			251			264			284			806
Total noninterest income		4,341			3,426			5,334			4,115			4,925
Noninterest expenses:
Salaries and employee benefits		10,899			11,648			11,373			11,743			11,725
Net occupancy expense		4,277			4,385			4,306			4,399			4,094
Equipment expense		1,607			1,606			1,802			1,768			1,689
Professional services		1,311			1,182			1,481			1,449			1,507
Outsourced services		1,875			1,875			2,075			1,925			1,875
Advertising expense		305			601			488			464			494
FDIC and other insurance		660			609			294			259			282
Other real estate (income) expense, net		(115	)		(32	)		194			(385	)		33
Other		1,855			2,058			2,255			2,269			2,371
Total noninterest expenses		22,674			23,932			24,268			23,891			24,070
Income before taxes		18,832			15,175			17,619			18,265			19,498
Income taxes		4,761			3,921			4,306			4,358			4,790
Net income	$	14,071			11,254			13,313			13,907			14,708
Net income per common share:
- Basic	$	0.146			0.117			0.138			0.143			0.152
- Diluted		0.146			0.117			0.138			0.143			0.152
Average basic shares (in thousands)		96,433			96,433			96,727			96,919			96,907
Average diluted shares (in thousands)		96,440			96,437			96,750			97,015			96,977
Note: Taxable equivalent net interest income	$	38,166			37,681			38,554			38,243			38,644
CONSOLIDATED STATEMENTS OF INCOME, Continued
(dollars in thousands, except per share data)
(Unaudited)
		Nine months ended
		9/30/2020			9/30/2019
Interest and dividend income:
Interest and fees on loans	$	125,058			124,608
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		541			2,600
State and political subdivisions		4			6
Mortgage-backed securities and collateralized mortgage
obligations - residential		4,959			5,885
Corporate bonds		1,372			801
Small Business Administration - guaranteed
participation securities		690			868
Other securities		16			16
Total interest and dividends on securities available for sale		7,582			10,176
Interest on held to maturity securities:
Mortgage-backed securities-residential		475			613
Total interest on held to maturity securities		475			613
Federal Reserve Bank and Federal Home Loan Bank stock		351			365
Interest on federal funds sold and other short-term investments		1,702			8,843
Total interest income		135,168			144,605
Interest expense:
Interest on deposits:
Interest-bearing checking		97			267
Savings		560			1,067
Money market deposit accounts		2,595			3,122
Time deposits		16,739			21,462
Interest on short-term borrowings		778			1,121
Total interest expense		20,769			27,039
Net interest income		114,399			117,566
Less: Provision (Credit) for loan losses		5,000			(41	)
Net interest income after provision for loan losses		109,399			117,607
Noninterest income:
Trustco Financial Services income		4,752			4,933
Fees for services to customers		6,414			7,733
Net gain on securities transactions		1,155			-
Other		780			1,810
Total noninterest income		13,101			14,476
Noninterest expenses:
Salaries and employee benefits		33,920			34,887
Net occupancy expense		12,968			12,267
Equipment expense		5,015			5,300
Professional services		3,974			4,725
Outsourced services		5,825			5,675
Advertising expense		1,394			2,057
FDIC and other insurance		1,563			1,528
Other real estate expense, net		47			219
Other		6,168			7,181
Total noninterest expenses		70,874			73,839
Income before taxes		51,626			58,244
Income taxes		12,988			14,311
Net income	$	38,638			43,933
Net income per common share:
- Basic	$	0.400			0.454
- Diluted		0.400			0.453
Average basic shares (in thousands)		96,531			96,825
Average diluted shares (in thousands)		96,542			96,897
Note: Taxable equivalent net interest income	$	114,401			117,569
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
		9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019
ASSETS:
Cash and due from banks	$	47,703			44,726			43,362			48,198			49,526
Federal funds sold and other short term investments		908,616			908,110			492,691			408,648			401,151
Total cash and cash equivalents		956,319			952,836			536,053			456,846			450,677
Securities available for sale:
U. S. government sponsored enterprises		29,996			-			54,970			104,512			164,490
States and political subdivisions		111			111			112			162			169
Mortgage-backed securities and collateralized mortgage
obligations - residential		309,768			331,469			352,067			389,517			406,166
Small Business Administration - guaranteed
participation securities		44,070			45,998			46,768			48,511			50,970
Corporate bonds		70,113			54,439			48,564			30,436			40,281
Other securities		685			685			685			685			683
Total securities available for sale		454,743			432,702			503,166			573,823			662,759
Held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations-residential		15,094			16,633			17,720			18,618			19,705
Total held to maturity securities		15,094			16,633			17,720			18,618			19,705
Federal Reserve Bank and Federal Home Loan Bank stock		5,506			5,506			9,183			9,183			9,183
Loans:
Commercial		231,663			231,212			195,805			199,499			192,443
Residential mortgage loans		3,724,746			3,681,898			3,627,121			3,583,774			3,508,647
Home equity line of credit		248,320			254,445			265,753			267,922			273,526
Installment loans		9,826			10,006			10,713			11,001			10,703
Loans, net of deferred net costs		4,214,555			4,177,561			4,099,392			4,062,196			3,985,319
Less: Allowance for loan losses		49,123			48,144			46,155			44,317			44,329
Net loans		4,165,432			4,129,417			4,053,237			4,017,879			3,940,990
Bank premises and equipment, net		34,417			34,042			34,428			34,622			34,168
Operating lease right-of-use assets		47,174			48,712			49,955			51,475			49,618
Other assets		57,244			57,155			52,905			58,876			55,369
Total assets	$	5,735,929			5,677,003			5,256,647			5,221,322			5,222,469
LIABILITIES:
Deposits:
Demand	$	635,345			612,960			480,255			463,858			453,439
Interest-bearing checking		1,024,290			1,001,592			895,254			875,672			869,101
Savings accounts		1,235,259			1,191,682			1,122,116			1,113,146			1,110,947
Money market deposit accounts		699,132			666,304			617,198			599,163			570,457
Time deposits		1,305,024			1,392,769			1,367,005			1,398,177			1,457,223
Total deposits		4,899,050			4,865,307			4,481,828			4,450,016			4,461,167
Short-term borrowings		193,455			177,278			148,090			148,666			151,095
Operating lease liabilities		52,125			53,710			54,998			56,553			54,731
Accrued expenses and other liabilities		30,771			27,287			23,546			27,830			29,313
Total liabilities		5,175,401			5,123,582			4,708,462			4,683,065			4,696,306
SHAREHOLDERS’ EQUITY:
Capital stock		100,205			100,205			100,205			100,205			100,200
Surplus		176,441			176,437			176,431			176,427			176,395
Undivided profits		306,741			299,239			294,553			288,067			280,542
Accumulated other comprehensive income (loss), net of tax		11,537			11,936			11,392			4,461			(71	)
Treasury stock at cost		(34,396	)		(34,396	)		(34,396	)		(30,903	)		(30,903	)
Total shareholders’ equity		560,528			553,421			548,185			538,257			526,163
Total liabilities and shareholders’ equity	$	5,735,929			5,677,003			5,256,647			5,221,322			5,222,469
Outstanding shares (in thousands)		96,433			96,433			96,433			96,922			96,917

NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
		9/30/2020		6/30/2020		3/31/2020		12/31/2019		9/30/2019
Nonperforming Assets
New York and other states*
Loans in nonaccrual status:
Commercial	$	491		571		630		816		888
Real estate mortgage - 1 to 4 family		19,977		20,215		18,570		18,407		18,275
Installment		49		6		24		3		13
Total non-accrual loans		20,517		20,792		19,224		19,226		19,176
Other nonperforming real estate mortgages - 1 to 4 family		25		26		27		29		30
Total nonperforming loans		20,542		20,818		19,251		19,255		19,206
Other real estate owned		423		830		1,284		1,579		2,409
Total nonperforming assets	$	20,965		21,648		20,535		20,834		21,615
Florida
Loans in nonaccrual status:
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		1,254		1,111		1,492		1,614		1,809
Installment		-		-		-		-		-
Total non-accrual loans		1,254		1,111		1,492		1,614		1,809
Other nonperforming real estate mortgages - 1 to 4 family		-		-		-		-		-
Total nonperforming loans		1,254		1,111		1,492		1,614		1,809
Other real estate owned		-		-		-		-		-
Total nonperforming assets	$	1,254		1,111		1,492		1,614		1,809
Total
Loans in nonaccrual status:
Commercial	$	491		571		630		816		888
Real estate mortgage - 1 to 4 family		21,231		21,326		20,062		20,021		20,084
Installment		49		6		24		3		13
Total non-accrual loans		21,771		21,903		20,716		20,840		20,985
Other nonperforming real estate mortgages - 1 to 4 family		25		26		27		29		30
Total nonperforming loans		21,796		21,929		20,743		20,869		21,015
Other real estate owned		423		830		1,284		1,579		2,409
Total nonperforming assets	$	22,219		22,759		22,027		22,448		23,424
Quarterly Net (Recoveries) Chargeoffs
New York and other states*
Commercial	$	(1	)	(6	)	1		(1	)	(28	)
Real estate mortgage - 1 to 4 family		4		(27	)	140		146		39
Installment		18		44		4		67		9
Total net (recoveries) chargeoffs	$	21		11		145		212		20
Florida
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		-		-		(2	)	(1	)	-
Installment		-		-		19		1		16
Total net (recoveries) chargeoffs	$	-		-		17		-		16
Total
Commercial	$	(1	)	(6	)	1		(1	)	(28	)
Real estate mortgage - 1 to 4 family		4		(27	)	138		145		39
Installment		18		44		23		68		25
Total net (recoveries) chargeoffs	$	21		11		162		212		36
Asset Quality Ratios
Total nonperforming loans (1)	$	21,796		21,929		20,743		20,869		21,015
Total nonperforming assets (1)		22,219		22,759		22,027		22,448		23,424
Total net (recoveries) chargeoffs (2)		21		11		162		212		36
Allowance for loan losses (1)		49,123		48,144		46,155		44,317		44,329
Nonperforming loans to total loans		0.52	%	0.52	%	0.51	%	0.51	%	0.53	%
Nonperforming assets to total assets		0.39	%	0.40	%	0.42	%	0.43	%	0.45	%
Allowance for loan losses to total loans		1.17	%	1.15	%	1.13	%	1.09	%	1.11	%
Coverage ratio (1)		225.4	%	219.5	%	222.5	%	212.4	%	210.9	%
Annualized net chargeoffs to average loans (2)		0.00	%	0.00	%	0.02	%	0.02	%	0.00	%
Allowance for loan losses to annualized net chargeoffs (2)		584.8x		1094.2x		71.2x		52.3x		307.8x
* 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
		September 30, 2020								September 30, 2019
		Average			Interest		Average			Average			Interest		Average
		Balance					Rate			Balance					Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	12,391			14		0.45	%	$	183,580			996		2.17	%
Mortgage backed securities and collateralized mortgage
obligations - residential		313,296			1,319		1.68			370,808			2,178		2.35
State and political subdivisions		110			2		7.90			166			3		7.23
Corporate bonds		59,555			646		4.33			40,231			321		3.19
Small Business Administration - guaranteed
participation securities		43,282			216		1.99			51,988			282		2.17
Other		685			5		2.92			685			6		3.50
Total securities available for sale		429,319			2,202		2.05			647,458			3,786		2.34
Federal funds sold and other short-term Investments		938,087			242		0.10			465,251			2,552		2.19
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential		15,759			138		3.52			20,197			187		3.70
Total held to maturity securities		15,759			138		3.52			20,197			187		3.70
Federal Reserve Bank and Federal Home Loan Bank stock		5,506			77		5.59			9,183			81		3.53
Commercial loans		231,517			2,625		4.54			190,538			2,596		5.45
Residential mortgage loans		3,702,680			36,020		3.89			3,465,102			35,743		4.13
Home equity lines of credit		251,459			2,515		3.98			275,047			3,401		4.95
Installment loans		9,632			170		7.02			9,967			183		7.34
Loans, net of unearned income		4,195,288			41,330		3.94			3,940,654			41,923		4.26
Total interest earning assets		5,583,959			43,989		3.15			5,082,743			48,529		3.82
Allowance for loan losses		(48,483	)							(44,448	)
Cash & non-interest earning assets		201,018								188,528
Total assets	$	5,736,494							$	5,226,823
Liabilities and shareholders’ equity
Deposits:
Interest bearing checking accounts	$	1,024,455			55		0.02	%	$	874,179			52		0.02	%
Money market accounts		682,319			637		0.37			567,554			1,177		0.83
Savings		1,222,956			161		0.05			1,126,935			323		0.11
Time deposits		1,355,244			4,749		1.39			1,457,510			7,974		2.19
Total interest bearing deposits		4,284,974			5,602		0.52			4,026,178			9,526		0.95
Short-term borrowings		193,765			221		0.45			160,162			359		0.90
Total interest bearing liabilities		4,478,739			5,823		0.52			4,186,340			9,885		0.94
Demand deposits		622,313								438,789
Other liabilities		78,093								80,188
Shareholders’ equity		557,349								521,506
Total liabilities and shareholders’ equity	$	5,736,494							$	5,226,823
Net interest income, tax equivalent					38,166								38,644
Net interest spread							2.63	%							2.88	%
Net interest margin (net interest income to
total interest earning assets)							2.73	%							3.04	%
Tax equivalent adjustment					(1	)							(1	)
Net interest income					38,165								38,643
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued
(dollars in thousands)
(Unaudited)		Nine months ended								Nine months ended
		September 30, 2020								September 30, 2019
		Average			Interest		Average			Average			Interest		Average
		Balance					Rate			Balance					Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	42,573			541		1.69	%	$	166,119			2,600		2.09	%
Mortgage backed securities and collateralized mortgage
obligations - residential		339,300			4,959		1.95			329,188			5,885		2.38
State and political subdivisions		111			6		7.79			167			9		7.19
Corporate bonds		46,508			1,372		3.93			33,678			801		3.17
Small Business Administration - guaranteed
participation securities		45,313			690		2.03			54,414			868		2.13
Other		685			16		3.11			685			16		3.11
Total securities available for sale		474,490			7,584		2.13			584,251			10,179		2.32
Federal funds sold and other short-term Investments		693,286			1,702		0.33			504,512			8,843		2.34
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential		17,029			475		3.72			21,123			613		3.87
Total held to maturity securities		17,029			475		3.72			21,123			613		3.87
Federal Reserve Bank and Federal Home Loan Bank stock		7,998			351		5.85			9,104			365		5.35
Commercial loans		217,573			7,778		4.77			191,370			7,725		5.38
Residential mortgage loans		3,652,766			108,845		3.97			3,412,411			105,786		4.13
Home equity lines of credit		258,956			7,898		4.07			280,248			10,441		4.97
Installment loans		10,129			537		7.08			10,718			656		8.16
Loans, net of unearned income		4,139,424			125,058		4.03			3,894,747			124,608		4.27
Total interest earning assets		5,332,227			135,170		3.38			5,013,737			144,608		3.85
Allowance for loan losses		(46,618	)							(44,744	)
Cash & non-interest earning assets		196,835								180,568
Total assets	$	5,482,444							$	5,149,561
Liabilities and shareholders’ equity
Deposits:
Interest bearing checking accounts	$	949,909			97		0.01	%	$	878,106			267		0.04	%
Money market accounts		646,170			2,595		0.54			546,601			3,122		0.76
Savings		1,169,316			560		0.06			1,141,607			1,067		0.12
Time deposits		1,372,369			16,739		1.63			1,416,306			21,462		2.02
Total interest bearing deposits		4,137,764			19,991		0.65			3,982,620			25,918		0.87
Short-term borrowings		173,497			778		0.60			160,647			1,121		0.93
Total interest bearing liabilities		4,311,261			20,769		0.64			4,143,267			27,039		0.87
Demand deposits		543,279								418,327
Other liabilities		77,568								79,937
Shareholders’ equity		550,336								508,030
Total liabilities and shareholders’ equity	$	5,482,444							$	5,149,561
Net interest income, tax equivalent					114,401								117,569
Net interest spread							2.74	%							2.98	%
Net interest margin (net interest income to
total interest earning assets)							2.86	%							3.13	%
Tax equivalent adjustment					(2	)							(3	)
Net interest income					114,399								117,566

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)
		9/30/2020		6/30/2020		9/30/2019
Tangible Equity to Tangible Assets
Total Assets (GAAP)	$	5,735,929		5,677,003		5,222,469
Less: Intangible assets		553		553		553
Tangible assets (Non-GAAP)		5,735,376		5,676,450		5,221,916
Equity (GAAP)		560,528		553,421		526,163
Less: Intangible assets		553		553		553
Tangible equity (Non-GAAP)		559,975		552,868		525,610
Tangible Equity to Tangible Assets (Non-GAAP)		9.76	%	9.74	%	10.07	%
Equity to Assets (GAAP)		9.77	%	9.75	%	10.07	%
		Three months ended								Nine months ended
Efficiency Ratio		9/30/2020		6/30/2020		9/30/2019				9/30/2020		9/30/2019
Net interest income (fully taxable equivalent) (Non-GAAP)	$	38,166		37,681		38,644			$	114,401		117,569
Non-interest income (GAAP)		4,341		3,426		4,925				13,101		14,476
Less: Net gain on securities		-		-		-				1,155		-
Revenue used for efficiency ratio (Non-GAAP)		42,507		41,107		43,569				126,347		132,045
Total noninterest expense (GAAP)		22,674		23,932		24,070				70,874		73,839
Less: Other real estate (income) expense, net		(115	)	(32	)	33				47		219
Expense used for efficiency ratio (Non-GAAP)		22,789		23,964		24,037				70,827		73,620
Efficiency Ratio		53.61	%	58.30	%	55.17	%			56.06	%	55.75	%

Subsidiary: TrustCo Bank

Contact:

Robert Leonard
Executive Vice President and
Chief Risk Officer
(518) 381-3693

 

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