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TrustCo is Pleased to Report Second Quarter 2021 Results; Net Income up 28% over the Prior Year Quarter and 5.3% Average Residential Loan Growth Year over Year

GLENVILLE, N.Y., July 21, 2021 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced second quarter 2021 net income of $14.4 million or $0.748 diluted earnings per share, compared to net income of $11.3 million or $0.584 diluted earnings per share for the second quarter 2020; and net income of $28.5 million or $1.478 diluted earnings per share for the six months ended June 30, 2021, compared to net income of $24.6 million or $1.272 diluted earnings per share for the six months ended June 30, 2020.   For all periods presented, share and per share information has been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021. 

Summary
Robert J. McCormick, Chairman, President and Chief Executive Officer noted, “The people who make up the team at Trustco Bank are second to none. We have a deep and diverse talent pool that enables us to focus on short, medium, and long-term objectives all at the same time. The financial results announced today demonstrate the success of these multifaceted efforts. Working our way through and out of the COVID-19 pandemic, we were true to our “Home Town Bank” motto and helped many people in the communities we serve, while simultaneously achieving meaningful shareholder value and return.”

We not only continued without interruption our long history of paying a meaningful dividend, we also won shareholder approval of a reverse stock split that we believe will improve the company’s position in the market by making our stock attractive to a wider audience. At the same time, we also supported food banks, renewed our commitments to distressed neighborhoods, invested in affordable housing programs, aided educational programs, and encouraged savings initiatives. We also continued to assist consumer and commercial customers as they worked their way out of the hardships of the past year and are happy to report that virtually all Trustco Bank borrowers who received pandemic relief are making payments as agreed.

Our team is never one to rest on its successes. Our entire management team, from those leading our branches to the heads of our internal departments, are focused on generating new business by reaching an ever-expanding consumer audience with our industry-leading residential mortgage products and developing new relationships with commercial customers who share our forward-looking and success-oriented vision. As always, we pursue these objectives with our trademark efficiency.

Details

Average loans were up $158.6 million or 3.8% in the second quarter 2021 over the same period in 2020. Average residential loans, our primary lending focus, were up $193.9 million, or 5.3%, in the second quarter 2021 over the same period in 2020. As of June 30, 2021, loans in deferral were not material. Additionally, the Bank had funded 663 Paycheck Protection Program (“PPP”) loans totaling $46 million in 2020, and an additional 343 loans totaling $23 million in the first half of 2021. As of June 30, 2021, 526 PPP loans totaling $32 million remain outstanding. Average deposits were up $507.8 million or 10.8% for the second quarter 2021 over the same period a year earlier. The increase in deposits was the result of a $701.8 million or 21.2% increase in total average core deposit accounts, which consist of interest bearing and non-interest bearing checking, savings and money market deposits, offset by a decrease in average time deposits of $194.1 million or 13.9%, for the second quarter 2021 over the same period in 2020. Within the core deposits, checking balances were up $399.5 million or 26.6% (including interest bearing and non-interest bearing checking balances), money market balances were up $87.5 million or 13.6%, and savings balances were up $214.8 million or 18.4%. 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 0.17% in the second quarter 2021 from 0.64% in the second quarter 2020. A significant portion of our CD portfolio (time deposits) repriced during the last year, which resulted in lower rates as a result of the ongoing market conditions. The net interest margin for the second quarter 2021 was 2.70%, down 11 basis points from 2.81% in the second quarter of 2020. This was primarily due to the decrease in market rates 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 $24.3 million or 4.4% in the second quarter of 2021 compared to the same period in 2020. Return on average assets and return on average equity for the second quarter 2021 were 0.95% and 10.05%, respectively, compared to 0.82% and 8.21% for the second quarter 2020. Improving efficiencies to reduce costs continues to remain a key area of focus.   As a result, full time equivalent employees decreased from the prior year and quarter partially due to a strategic realignment and the impact of COVID-19 on the labor market. The Bank also purchased 20 thousand shares of stock under the announced Repurchase Plan. Additionally, as previously announced, the reverse split of the Company’s Common Stock at a ratio of 1 for 5 was implemented on the Nasdaq Global Select Market on May 28, 2021. All prior period share and per share information, and common stock and surplus amounts have been split adjusted. The board of directors believes that the Reverse Stock Split will likely result in a higher per share trading price, which is intended to generate greater investor interest in TrustCo and improve the marketability of the shares to a broader range of investors. The board of directors also believes that the Reverse Stock Split will result in a number of our shares of outstanding common stock that is similar to the number of outstanding shares of common stock of comparable financial institutions.     

Asset quality and loan loss reserve measures have stayed consistent. Nonperforming loans (NPLs) were $20.8 million at June 30, 2021, compared to $21.9 million at June 30, 2020. NPLs were 0.48% and 0.52% of total loans at June 30, 2021 and 2020, respectively. The coverage ratio, or allowance for loan losses to NPLs, was 240.9% at June 30, 2021, compared to 219.5% at June 30, 2020. Nonperforming assets (NPAs) were $21.1 million at June 30, 2021, compared to $22.8 million at June 30, 2020. The ratio of allowance for loan losses to total loans was 1.15% as of both June 30, 2021 and 2020. The allowance for loan losses was $50.2 million at June 30, 2021, compared to $48.1 million at June 30, 2020. There was no provision for loan losses for the second quarter 2021 consistent with improved asset quality trends and economic conditions. Provision for loan losses for the second quarter of 2020 was $2 million driven by the beginning of the uncertainty in the economic environment resulting from the COVID-19 pandemic. The Company had previously elected to delay its adoption of Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”), as provided by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) until the date on which the National Emergency concerning COVID-19 was terminated or December 31, 2020, whichever occurred first.  The December 31, 2020 adoption date under the CARES Act was extended to January 1, 2022 as a part of the COVID-19 relief legislation, which became law in December 2020, and therefore the Company intends to adopt CECL on January 1, 2022.

Net recoveries for the second quarter 2021 were $164 thousand versus net chargeoffs in the second quarter 2020 of $11 thousand. The annualized net (recoveries) chargeoffs ratio was (0.02)% and 0.00% for the second quarter 2021 and 2020, respectively.

At June 30, 2021 the equity to asset ratio was 9.45%, compared to 9.75% at June 30, 2020. Book value per share at June 30, 2021 was $30.00, up 4.6% compared to $28.67 a year earlier.

TrustCo Bank Corp NY is a $6.1 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 147 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 2021.

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

A conference call to discuss second quarter 2021 results will be held at 9:00 a.m. Eastern Time on July 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 10158543. The call will also be audio webcast at: https://services.choruscall.com/links/trst210722.html, and will be available for one year.

Safe Harbor Statement
All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2021, including our expectations regarding the effects of COVID-19 on our financial results and our ability to assist our customers in addressing the effects of COVID-19, our expectations with respect to the effect of our proposed reverse stock split of our common stock, including the impact of such split on the trading price of our common stock, our ability to retain customer products, 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.

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


TRUSTCO BANK CORP NY
GLENVILLE, NY
 
FINANCIAL HIGHLIGHTS
 
(dollars in thousands, except per share data)
(Unaudited)
  Three months ended
  6/30/2021 3/31/2021 6/30/2020
Summary of operations      
   Net interest income (TE)$40,122  40,107  37,681 
   Provision for loan losses -  350  2,000 
   Noninterest income 4,688  4,428  3,426 
   Noninterest expense 25,440  25,335  23,932 
   Net income 14,433  14,083  11,254 
       
Per share (4)      
   Net income per share:      
       - Basic$0.749  0.730  0.584 
       - Diluted 0.748  0.730  0.584 
   Cash dividends 0.341  0.341  0.341 
   Book value at period end 30.00  29.60  28.67 
   Market price at period end 34.38  36.85  31.65 
       
At period end      
   Full time equivalent employees 769  820  806 
   Full service banking offices 147  148  148 
       
Performance ratios      
   Return on average assets 0.95 0.96  0.82 
   Return on average equity 10.05  10.01  8.21 
   Efficiency (1) 56.91  56.35  58.30 
   Net interest spread (TE) 2.66  2.74  2.69 
   Net interest margin (TE) 2.70  2.78  2.81 
   Dividend payout ratio 45.51  46.65  58.37 
       
Capital ratios at period end      
   Consolidated tangible equity to tangible assets (2) 9.44 % 9.44  9.74 
   Consolidated equity to assets 9.45 9.44  9.75 
       
Asset quality analysis at period end      
   Nonperforming loans to total loans 0.48  0.51  0.52 
   Nonperforming assets to total assets 0.34  0.36  0.40 
   Allowance for loan losses to total loans 1.15  1.17  1.15 
   Coverage ratio (3) 2.4x  2.3x  2.2x 
       
(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation.
(2) Non-GAAP measure; calculated as total equity less $553 of intangible assets divided by total assets less $553 of intangible assets. See Non-GAAP Financial Measures Reconciliation.
(3) Calculated as allowance for loan losses divided by total nonperforming loans.
(4) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.  
 
TE = Taxable equivalent


FINANCIAL HIGHLIGHTS, Continued
 
(dollars in thousands, except per share data)
(Unaudited)
  Six months ended
  06/30/21 06/30/20
Summary of operations    
   Net interest income (TE)$80,229  76,235 
   Provision for loan losses 350  4,000 
   Net gain on securities transactions -  1,155 
   Noninterest income, excluding net gain on securities transactions 9,116  7,605 
   Noninterest expense 50,775  48,200 
   Net income 28,516  24,567 
     
Per share (2)    
   Net income per share:    
       - Basic$1.479  1.272 
       - Diluted 1.478  1.272 
   Cash dividends 0.681  0.681 
   Book value at period end 30.00  28.67 
   Market price at period end 34.38  31.65 
     
Performance ratios    
   Return on average assets 0.96  0.92 
   Return on average equity 10.03  9.04 
   Efficiency (1) 56.63  57.30 
   Net interest spread (TE) 2.70  2.80 
   Net interest margin (TE) 2.74  2.93 
   Dividend payout ratio 46.07  53.52 
     
(1) Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation.
(2) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.
     
TE = Taxable equivalent.


CONSOLIDATED STATEMENTS OF INCOME
           
(dollars in thousands, except per share data)          
(Unaudited)          
  Three months ended
  6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020
Interest and dividend income:          
   Interest and fees on loans$39,808  40,217  40,906  41,330  41,665 
   Interest and dividends on securities available for sale:          
       U. S. government sponsored enterprises 97  50  27  14  106 
       State and political subdivisions -  1  2  1  2 
       Mortgage-backed securities and collateralized mortgage          
          obligations - residential 1,167  1,237  1,172  1,319  1,527 
       Corporate bonds 323  316  349  646  488 
       Small Business Administration - guaranteed          
          participation securities 193  206  212  216  229 
       Other securities 5  6  7  5  5 
   Total interest and dividends on securities available for sale 1,785  1,816  1,769  2,201  2,357 
           
Interest on held to maturity securities:          
       Mortgage-backed securities and collateralized mortgage          
          obligations - residential 111  123  129  138  162 
   Total interest on held to maturity securities 111  123  129  138  162 
           
Federal Reserve Bank and Federal Home Loan Bank stock 65  69  70  77  192 
           
Interest on federal funds sold and other short-term investments 286  270  246  242  193 
   Total interest income 42,055  42,495  43,120  43,988  44,569 
           
Interest expense:          
   Interest on deposits:          
       Interest-bearing checking 46  52  51  55  26 
       Savings 162  159  156  161  166 
       Money market deposit accounts 236  283  447  637  862 
       Time deposits 1,261  1,666  3,053  4,749  5,599 
   Interest on short-term borrowings 228  228  232  221  235 
   Total interest expense 1,933  2,388  3,939  5,823  6,888 
           
   Net interest income 40,122  40,107  39,181  38,165  37,681 
           
   Less: Provision for loan losses -  350  600  1,000  2,000 
   Net interest income after provision for loan losses 40,122  39,757  38,581  37,165  35,681 
           
Noninterest income:          
Trustco Financial Services income 1,999  2,035  1,527  1,784  1,368 
   Fees for services to customers 2,486  2,204  2,365  2,292  1,807 
   Other 203  189  177  265  251 
      Total noninterest income 4,688  4,428  4,069  4,341  3,426 
           
Noninterest expenses:          
   Salaries and employee benefits 12,403  12,425  11,727  10,899  11,648 
   Net occupancy expense 4,328  4,586  4,551  4,277  4,385 
   Equipment expense 1,600  1,631  1,621  1,607  1,606 
   Professional services 1,614  1,432  1,644  1,311  1,182 
   Outsourced services 2,169  2,250  1,925  1,875  1,875 
   Advertising expense 549  354  527  305  601 
   FDIC and other insurance 777  707  657  660  609 
   Other real estate (income) expense, net (60) 239  45  (115) (32)
   Other 2,060  1,711  2,133  1,855  2,058 
      Total noninterest expenses 25,440  25,335  24,830  22,674  23,932 
           
Income before taxes 19,370  18,850  17,820  18,832  15,175 
Income taxes 4,937  4,767  4,006  4,761  3,921 
           
Net income$14,433  14,083  13,814  14,071  11,254 
           
Net income per common share (1):          
  - Basic$0.749  0.730  0.716  0.730  0.584 
           
  - Diluted 0.748  0.730  0.716  0.730  0.584 
           
Average basic shares (in thousands) (1) 19,281  19,287  19,287  19,287  19,287 
Average diluted shares (in thousands) (1) 19,290  19,293  19,288  19,288  19,287 
           
Note: Taxable equivalent net interest income$40,122  40,107  39,182  38,166  37,681 
           
(1) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.      


CONSOLIDATED STATEMENTS OF INCOME, Continued
 
(dollars in thousands, except per share data)
(Unaudited)
  Six months ended
  06/30/21 06/30/20
Interest and dividend income:    
  Interest and fees on loans$80,025  83,728 
  Interest and dividends on securities available for sale:    
     U. S. government sponsored enterprises 147  527 
     State and political subdivisions 1  3 
     Mortgage-backed securities and collateralized mortgage    
        obligations - residential 2,404  3,640 
     Corporate bonds 639  726 
     Small Business Administration - guaranteed    
        participation securities 399  474 
     Other securities 11  11 
        Total interest and dividends on securities available for sale 3,601  5,381 
     
Interest on held to maturity securities:    
       Mortgage-backed securities-residential 234  337 
   Total interest on held to maturity securities 234  337 
     
Federal Reserve Bank and Federal Home Loan Bank stock 134  274 
     
Interest on federal funds sold and other short-term investments 556  1,460 
   Total interest income 84,550  91,180 
     
Interest expense:    
   Interest on deposits:    
       Interest-bearing checking 98  42 
       Savings 321  399 
       Money market deposit accounts 519  1,958 
       Time deposits 2,927  11,990 
   Interest on short-term borrowings 456  557 
   Total interest expense 4,321  14,946 
     
   Net interest income 80,229  76,234 
     
   Less: Provision for loan losses 350  4,000 
   Net interest income after provision for loan losses 79,879  72,234 
     
Noninterest income:    
   Trustco Financial Services income 4,034  2,968 
   Fees for services to customers 4,690  4,122 
   Net gain on securities transactions -  1,155 
   Other 392  515 
      Total noninterest income 9,116  8,760 
     
Noninterest expenses:    
   Salaries and employee benefits 24,828  23,021 
   Net occupancy expense 8,914  8,691 
   Equipment expense 3,231  3,408 
   Professional services 3,046  2,663 
   Outsourced services 4,419  3,950 
   Advertising expense 903  1,089 
   FDIC and other insurance 1,484  903 
   Other real estate expense, net 179  162 
   Other 3,771  4,313 
      Total noninterest expenses 50,775  48,200 
     
Income before taxes 38,220  32,794 
Income taxes 9,704  8,227 
     
Net income$28,516  24,567 
     
Net income per common share (1):    
  - Basic$1.479  1.272 
     
  - Diluted 1.478  1.272 
     
Average basic shares (in thousands) (1) 19,284  19,316 
Average diluted shares (in thousands) (1) 19,292  19,319 
     
Note: Taxable equivalent net interest income$80,229  76,235 
     
(1) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.
     


CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
(dollars in thousands)
(Unaudited)
  6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020
ASSETS:          
           
Cash and due from banks$47,766  45,493  47,196  47,703  44,726 
Federal funds sold and other short term investments 1,134,622  1,094,880  1,059,903  908,616  908,110 
        Total cash and cash equivalents 1,182,388  1,140,373  1,107,099  956,319  952,836 
           
Securities available for sale:          
   U. S. government sponsored enterprises 74,579  74,465  19,968  29,996  - 
   States and political subdivisions 48  48  103  111  111 
   Mortgage-backed securities and collateralized mortgage          
      obligations - residential 315,656  348,317  316,158  309,768  331,469 
   Small Business Administration - guaranteed          
      participation securities 37,199  39,232  42,217  44,070  45,998 
   Corporate bonds 54,647  64,839  59,939  70,113  54,439 
   Other securities 686  686  686  685  685 
        Total securities available for sale 482,815  527,587  439,071  454,743  432,702 
           
Held to maturity securities:          
   Mortgage-backed securities and collateralized mortgage          
      obligations-residential 11,665  12,729  13,824  15,094  16,633 
        Total held to maturity securities 11,665  12,729  13,824  15,094  16,633 
           
Federal Reserve Bank and Federal Home Loan Bank stock 5,604  5,506  5,506  5,506  5,506 
           
Loans:          
   Commercial 214,164  217,021  212,492  231,663  231,212 
   Residential mortgage loans 3,892,351  3,807,837  3,780,167  3,724,746  3,681,898 
   Home equity line of credit 234,214  235,644  242,194  248,320  254,445 
   Installment loans 8,638  8,670  9,617  9,826  10,006 
Loans, net of deferred net costs 4,349,367  4,269,172  4,244,470  4,214,555  4,177,561 
           
Less: Allowance for loan losses 50,155  49,991  49,595  49,123  48,144 
   Net loans 4,299,212  4,219,181  4,194,875  4,165,432  4,129,417 
           
Bank premises and equipment, net 33,691  34,012  34,412  34,417  34,042 
Operating lease right-of-use assets 45,825  46,614  47,885  47,174  48,712 
Other assets 61,378  60,455  59,124  57,244  57,155 
           
        Total assets$6,122,578  6,046,457  5,901,796  5,735,929  5,677,003 
           
LIABILITIES:          
Deposits:          
   Demand$765,193  718,343  652,756  635,345  612,960 
   Interest-bearing checking 1,152,901  1,141,595  1,086,558  1,024,290  1,001,592 
   Savings accounts 1,409,556  1,362,141  1,285,501  1,235,259  1,191,682 
   Money market deposit accounts 732,963  719,580  716,005  699,132  666,304 
   Time deposits 1,169,907  1,231,263  1,296,373  1,305,024  1,392,769 
      Total deposits 5,230,520  5,172,922  5,037,193  4,899,050  4,865,307 
           
Short-term borrowings 237,791  229,950  214,755  193,455  177,278 
Operating lease liabilities 50,586  51,449  52,784  52,125  53,710 
Accrued expenses and other liabilities 25,088  21,105  28,903  30,771  27,287 
           
        Total liabilities 5,543,985  5,475,426  5,333,635  5,175,401  5,123,582 
           
SHAREHOLDERS' EQUITY:          
Capital stock (1) 20,041  20,044  20,041  20,041  20,041 
Surplus (1) 256,536  256,674  256,606  256,605  256,601 
Undivided profits 329,350  321,486  313,974  306,741  299,239 
Accumulated other comprehensive income, net of tax 7,840  7,268  11,936  11,537  11,936 
Treasury stock at cost (35,174) (34,441) (34,396) (34,396) (34,396)
           
        Total shareholders' equity 578,593  571,031  568,161  560,528  553,421 
           
        Total liabilities and shareholders' equity$6,122,578  6,046,457  5,901,796  5,735,929  5,677,003 
           
Outstanding shares (in thousands) (1) 19,265  19,288  19,287  19,287  19,287 
           
(1) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.      


NONPERFORMING ASSETS
       
(dollars in thousands)
(Unaudited)
  6/30/20213/31/202112/31/20209/30/20206/30/2020
Nonperforming Assets      
       
   New York and other states*      
   Loans in nonaccrual status:      
       Commercial$150 125 452 491 571 
       Real estate mortgage - 1 to 4 family 18,466 19,826 19,379 19,977 20,215 
       Installment 43 32 43 49 6 
   Total non-accrual loans 18,659 19,983 19,874 20,517 20,792 
   Other nonperforming real estate mortgages - 1 to 4 family 20 22 23 25 26 
   Total nonperforming loans 18,679 20,005 19,897 20,542 20,818 
   Other real estate owned 251 420 541 423 830 
   Total nonperforming assets$18,930 20,425 20,438 20,965 21,648 
       
   Florida      
   Loans in nonaccrual status:      
       Commercial$- - - - - 
       Real estate mortgage - 1 to 4 family 2,142 1,626 1,187 1,254 1,111 
       Installment - - - - - 
   Total non-accrual loans 2,142 1,626 1,187 1,254 1,111 
   Other nonperforming real estate mortgages - 1 to 4 family - - - - - 
   Total nonperforming loans 2,142 1,626 1,187 1,254 1,111 
   Other real estate owned - - - - - 
   Total nonperforming assets$2,142 1,626 1,187 1,254 1,111 
       
   Total      
   Loans in nonaccrual status:      
       Commercial$150 125 452 491 571 
       Real estate mortgage - 1 to 4 family 20,608 21,452 20,566 21,231 21,326 
       Installment 43 32 43 49 6 
   Total non-accrual loans 20,801 21,609 21,061 21,771 21,903 
   Other nonperforming real estate mortgages - 1 to 4 family 20 22 23 25 26 
   Total nonperforming loans 20,821 21,631 21,084 21,796 21,929 
   Other real estate owned 251 420 541 423 830 
   Total nonperforming assets$21,072 22,051 21,625 22,219 22,759 
       
       
Quarterly Net (Recoveries) Chargeoffs      
       
   New York and other states*      
   Commercial$- (32)32 (1)(6)
   Real estate mortgage - 1 to 4 family (136)(2)(27)4 (27)
   Installment (27)(14)109 18 44 
      Total net (recoveries) chargeoffs$(163)(48)114 21 11 
       
   Florida      
   Commercial$- - - - - 
   Real estate mortgage - 1 to 4 family (1)- (1)- - 
   Installment - 2 15 - - 
      Total net (recoveries) chargeoffs$(1)2 14 - - 
       
   Total      
   Commercial$- (32)32 (1)(6)
   Real estate mortgage - 1 to 4 family (137)(2)(28)4 (27)
   Installment (27)(12)124 18 44 
      Total net (recoveries) chargeoffs$(164)(46)128 21 11 
       
       
Asset Quality Ratios      
       
Total nonperforming loans (1)$20,821 21,631 21,084 21,796 21,929 
Total nonperforming assets (1) 21,072 22,051 21,625 22,219 22,759 
Total net (recoveries) chargeoffs (2) (164)(46)128 21 11 
       
Allowance for loan losses (1) 50,155 49,991 49,595 49,123 48,144 
       
Nonperforming loans to total loans 0.48%0.51%0.50%0.52%0.52%
Nonperforming assets to total assets 0.34%0.36%0.37%0.39%0.40%
Allowance for loan losses to total loans 1.15%1.17%1.17%1.17%1.15%
Coverage ratio (1) 240.9%231.1%235.2%225.4%219.5%
Annualized net (recoveries) chargeoffs to average loans (2) -0.02%0.00%0.01%0.00%0.00%
Allowance for loan losses to annualized net (recoveries) chargeoffs (2) N/A N/A 96.9x 584.8x 1094.2x 
 
* 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 
  June 30, 2021  June 30, 2020 
  Average InterestAverage  Average InterestAverage 
  Balance  Rate  Balance  Rate 
Assets            
             
Securities available for sale:            
   U. S. government sponsored enterprises$74,971  970.52%$23,291  106 1.83%
   Mortgage backed securities and collateralized mortgage            
      obligations - residential 327,332  1,1671.43  333,122  1,527 1.83 
   State and political subdivisions 48  --  110  2 7.90 
   Corporate bonds 57,021  3232.27  51,494  488 3.79 
   Small Business Administration - guaranteed            
      participation securities 36,839  1932.09  45,260  229 2.03 
   Other 686  52.92  685  5 2.92 
             
          Total securities available for sale 496,897  1,7851.44  453,962  2,357 2.08 
             
Federal funds sold and other short-term Investments 1,126,298  2860.10  727,006  193 0.11 
             
Held to maturity securities:            
   Mortgage backed securities and collateralized mortgage            
      obligations - residential 12,179  1113.67  17,199  162 3.75 
             
          Total held to maturity securities 12,179  1113.67  17,199  162 3.75 
             
Federal Reserve Bank and Federal Home Loan Bank stock 5,598  654.64  9,332  192 8.23 
             
Commercial loans 214,912  2,6084.85  223,002  2,610 4.68 
Residential mortgage loans 3,847,274  34,8363.62  3,653,342  36,365 3.98 
Home equity lines of credit 234,476  2,2113.78  260,029  2,515 3.89 
Installment loans 8,349  1537.34  10,044  175 7.02 
             
Loans, net of unearned income 4,305,011  39,8083.70  4,146,417  41,665 4.02 
             
          Total interest earning assets 5,945,983  42,0552.83  5,353,916  44,569 3.33 
             
Allowance for loan losses (50,196)     (46,832)    
Cash & non-interest earning assets 197,561      195,815     
             
             
Total assets$6,093,348     $5,502,899     
             
             
Liabilities and shareholders' equity            
             
Deposits:            
  Interest bearing checking accounts$1,149,296  460.02%$953,299  26 0.01%
  Money market accounts 729,136  2360.13  641,593  862 0.54 
  Savings 1,382,604  1620.05  1,167,844  166 0.06 
  Time deposits 1,198,064  1,2610.42  1,392,136  5,599 1.62 
             
    Total interest bearing deposits 4,459,100  1,7050.15  4,154,872  6,653 0.64 
Short-term borrowings 233,426  2280.39  172,834  235 0.55 
             
   Total interest bearing liabilities 4,692,526  1,9330.17  4,327,706  6,888 0.64 
             
Demand deposits 751,719      548,178     
Other liabilities 73,368      75,603     
Shareholders' equity 575,735      551,412     
             
Total liabilities and shareholders' equity$6,093,348     $5,502,899     
             
Net interest income, tax equivalent   40,122     37,681   
             
Net interest spread    2.66%    2.69%
             
             
Net interest margin (net interest income to            
total interest earning assets)    2.70%    2.81%
             
Tax equivalent adjustment   -     -   
             
             
Net interest income   40,122     37,681   
             


DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued
             
(dollars in thousands)            
(Unaudited) Six months ended  Six months ended 
  June 30, 2021  June 30, 2020 
  Average InterestAverage  Average InterestAverage 
  Balance  Rate  Balance  Rate 
Assets            
             
Securities available for sale:            
   U. S. government sponsored enterprises$63,374  1470.46%$57,830  527 1.82%
   Mortgage backed securities and collateralized mortgage            
      obligations - residential 327,472  2,4041.47  352,445  3,640 2.07 
   State and political subdivisions 49  16.60  112  4 7.74 
   Corporate bonds 60,160  6392.12  39,913  726 3.64 
   Small Business Administration - guaranteed            
      participation securities 38,203  3992.09  46,339  474 2.05 
   Other 687  113.20  685  11 3.21 
             
          Total securities available for sale 489,945  3,6011.47  497,324  5,382 2.16 
             
Federal funds sold and other short-term Investments 1,078,201  5560.10  569,541  1,460 0.52 
             
Held to maturity securities:            
   Mortgage backed securities and collateralized mortgage            
      obligations - residential 12,723  2343.68  17,671  337 3.81 
             
          Total held to maturity securities 12,723  2343.68  17,671  337 3.81 
             
Federal Reserve Bank and Federal Home Loan Bank stock 5,552  1344.83  9,258  274 5.92 
             
Commercial loans 213,853  5,5545.19  210,524  5,152 4.89 
Residential mortgage loans 3,818,426  69,6873.65  3,627,535  72,826 4.02 
Home equity lines of credit 236,417  4,4713.81  262,745  5,383 4.12 
Installment loans 8,573  3137.37  10,380  367 7.11 
             
Loans, net of unearned income 4,277,269  80,0253.75  4,111,184  83,728 4.08 
             
          Total interest earning assets 5,863,690  84,5502.89  5,204,978  91,181 3.51 
             
Allowance for loan losses (50,071)     (45,676)    
Cash & non-interest earning assets 197,682      194,718     
             
             
Total assets$6,011,301     $5,354,020     
             
             
Liabilities and shareholders' equity            
             
Deposits:            
  Interest bearing checking accounts$1,117,113  980.02%$912,226  42 0.01%
  Money market accounts 727,363  5190.14  627,897  1,958 0.63 
  Savings 1,349,013  3210.05  1,142,201  399 0.07 
  Time deposits 1,229,838  2,9270.48  1,381,025  11,990 1.75 
             
   Total interest bearing deposits 4,423,327  3,8650.18  4,063,349  14,389 0.71 
Short-term borrowings 228,643  4560.40  163,251  557 0.69 
             
   Total interest bearing liabilities 4,651,970  4,3210.19  4,226,600  14,946 0.71 
             
Demand deposits 712,790      503,327     
Other liabilities 73,276      77,303     
Shareholders' equity 573,265      546,790     
             
Total liabilities and shareholders' equity$6,011,301     $5,354,020     
             
Net interest income, tax equivalent   80,229     76,235   
             
Net interest spread    2.70%    2.80%
             
             
Net interest margin (net interest income to            
total interest earning assets)    2.74%    2.93%
             
Tax equivalent adjustment   -     (1)  
             
             
Net interest income   80,229     76,234   
             

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)
  6/30/20213/31/20216/30/2020    
         
Tangible Equity to Tangible Assets        
Total Assets (GAAP)$6,122,578 6,046,457 5,677,003     
Less: Intangible assets 553 553 553     
   Tangible assets (Non-GAAP) 6,122,025 6,045,904 5,676,450     
         
Equity (GAAP) 578,593 571,031 553,421     
Less: Intangible assets 553 553 553     
   Tangible equity (Non-GAAP) 578,040 570,478 552,868     
Tangible Equity to Tangible Assets (Non-GAAP) 9.44%9.44%9.74%    
Equity to Assets (GAAP) 9.45%9.44%9.75%    
         
  Three months ended  Six months ended
Efficiency Ratio 6/30/20213/31/20216/30/2020  6/30/20216/30/2020
         
Net interest income (fully taxable equivalent) (Non-GAAP)$40,122 40,107 37,681  $80,229 76,235 
Non-interest income (GAAP) 4,688 4,428 3,426   9,116 8,760 
Less: Net gain on securities - - -   - 1,155 
Revenue used for efficiency ratio (Non-GAAP) 44,810 44,535 41,107   89,345 83,840 
         
Total noninterest expense (GAAP) 25,440 25,335 23,932   50,775 48,200 
Less: Other real estate (income) expense, net (60)239 (32)  179 162 
Expense used for efficiency ratio (Non-GAAP) 25,500 25,096 23,964   50,596 48,038 
         
Efficiency Ratio 56.91%56.35%58.30%  56.63%57.30%

 


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