Overview
Chairman, President, and CEO,
TrustCo saw continued loan growth in the fourth quarter of 2022 compared to the prior year, led by an increase in residential mortgages. Loan portfolio expansion was funded by a combination of utilizing a portion of our strong cash balances and by cash flow from investments, as well as growth in funding from expansion of earnings. The
Details
Average loans were up
Net interest income and Net interest income on a tax equivalent basis, were both
For the fourth quarter of 2022, return on average assets and return on average equity were 1.38% and 13.91%, respectively, compared to 1.05% and 10.92% for the fourth quarter of 2021. As previously discussed, improving efficiencies to reduce costs continues to remain a key area of focus. The efficiency ratio was 48.75% for the fourth quarter of 2022, a decrease compared to 58.50% for the fourth quarter of 2021. Total operating expenses increased by
Asset quality remains strong and loan loss reserve measures are consistent over the past twelve months. The Company recorded a provision for credit losses of
At
TrustCo Bank Corp NY is a
In addition, the Bank’s
A conference call to discuss fourth quarter 2022 results will be held at
Forward-Looking Statements
All statements in this news release that are not historical are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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 development, results or periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2023, including our expectations regarding the effects of the economic environment on our financial results, our ability to retain customers and the amount of customers’ business, including deposit balances, with us, the impact of the Federal Reserve’s actions regarding interest rates, the growth of loans and deposits throughout our branch network, the increase in residential mortgage rates, and our ability to capitalize on economic changes in the areas in which we operate. Forward-looking statements are based on management’s current expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Such forward-looking statements are subject to factors and uncertainties that could cause actual results to differ materially for TrustCo from the views, beliefs and projections expressed in such statements, 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 and macroeconomic or geopolitical concerns related to inflation, rising interest rates and the war in
TRUSTCO BANK CORP NY | |||||||
FINANCIAL HIGHLIGHTS | |||||||
(dollars in thousands, except per share data) | |||||||
(Unaudited) | |||||||
Three months ended | |||||||
Summary of operations | |||||||
Net interest income (TE) (1) | $ | 49,187 | 47,793 | 40,292 | |||
Provision (Credit) for credit losses | 50 | 300 | (3,000 | ) | |||
Noninterest income | 4,775 | 4,386 | 4,526 | ||||
Noninterest expense | 26,405 | 26,144 | 26,190 | ||||
Net income | 20,910 | 19,364 | 16,241 | ||||
Per share | |||||||
Net income per share: | |||||||
- Basic | $ | 1.10 | 1.01 | 0.85 | |||
- Diluted | 1.10 | 1.01 | 0.85 | ||||
Cash dividends | 0.360 | 0.350 | 0.350 | ||||
Book value at period end | 31.54 | 30.89 | 31.28 | ||||
Market price at period end | 37.59 | 31.42 | 33.31 | ||||
At period end | |||||||
Full time equivalent employees | 750 | 753 | 759 | ||||
Full service banking offices | 143 | 144 | 147 | ||||
Performance ratios | |||||||
Return on average assets | 1.38% | 1.24 | 1.05 | ||||
Return on average equity | 13.91 | 12.78 | 10.92 | ||||
Efficiency ratio (2) | 48.75 | 49.87 | 58.50 | ||||
Net interest spread (TE) | 3.28 | 3.13 | 2.67 | ||||
Net interest margin (TE) | 3.34 | 3.16 | 2.69 | ||||
Dividend payout ratio | 32.81 | 34.57 | 41.42 | ||||
Capital ratios at period end | |||||||
Consolidated tangible equity to tangible assets (3) | 9.99% | 9.68 | 9.69 | ||||
Consolidated equity to assets | 10.00% | 9.69 | 9.70 | ||||
Asset quality analysis at period end | |||||||
Nonperforming loans to total loans | 0.37 | 0.40 | 0.42 | ||||
Nonperforming assets to total assets | 0.33 | 0.32 | 0.31 | ||||
Allowance for credit losses on loans to total loans | 0.97 | 0.98 | 1.00 | ||||
Coverage ratio (4) | 2.6x | 2.4x | 2.4x | ||||
(1) Non-GAAP measure; calculated as net interest income plus a taxable equivalent interest income adjustment. | |||||||
(2) 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. | |||||||
(3) Non-GAAP measure; calculated as total shareholders' equity less | |||||||
(4) Calculated as allowance for credit losses on loans divided by total nonperforming loans. | |||||||
TE = Taxable equivalent |
FINANCIAL HIGHLIGHTS, Continued | ||||||||||||||||||||||||||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
Year ended | ||||||||||||||||||||||||||||||||||||
Summary of operations | ||||||||||||||||||||||||||||||||||||
Net interest income (TE) (1) | $ | 180,136 | 160,409 | |||||||||||||||||||||||||||||||||
(Credit) Provision for credit losses | (341 | ) | (5,450 | ) | ||||||||||||||||||||||||||||||||
Noninterest income | 19,260 | 17,937 | ||||||||||||||||||||||||||||||||||
Noninterest expense | 100,319 | 101,662 | ||||||||||||||||||||||||||||||||||
Net income | 75,234 | 61,519 | ||||||||||||||||||||||||||||||||||
Per share | ||||||||||||||||||||||||||||||||||||
Net income per share: | ||||||||||||||||||||||||||||||||||||
- Basic | $ | 3.93 | 3.19 | |||||||||||||||||||||||||||||||||
- Diluted | 3.93 | 3.19 | ||||||||||||||||||||||||||||||||||
Cash dividends | 1.410 | 1.372 | ||||||||||||||||||||||||||||||||||
Book value at period end | 31.54 | 31.28 | ||||||||||||||||||||||||||||||||||
Market price at period end | 37.59 | 33.31 | ||||||||||||||||||||||||||||||||||
Performance ratios | ||||||||||||||||||||||||||||||||||||
Return on average assets | 1.22 | % | 1.01 | |||||||||||||||||||||||||||||||||
Return on average equity | 12.60 | 10.61 | ||||||||||||||||||||||||||||||||||
Efficiency ratio (2) | 50.22 | 56.90 | ||||||||||||||||||||||||||||||||||
Net interest spread (TE) | 2.96 | 2.67 | ||||||||||||||||||||||||||||||||||
Net interest margin (TE) | 2.99 | 2.71 | ||||||||||||||||||||||||||||||||||
Dividend payout ratio | 35.86 | 42.95 | ||||||||||||||||||||||||||||||||||
(1) Non-GAAP measure; calculated as net interest income plus a taxable equivalent interest income adjustment. | ||||||||||||||||||||||||||||||||||||
(2) 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. | ||||||||||||||||||||||||||||||||||||
TE = Taxable equivalent. | ||||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | |||||||||||||||
Interest and dividend income: | |||||||||||||||
Interest and fees on loans | $ | 42,711 | 40,896 | 39,604 | 39,003 | 39,655 | |||||||||
Interest and dividends on securities available for sale: | |||||||||||||||
U. S. government sponsored enterprises | 693 | 479 | 147 | 86 | 76 | ||||||||||
State and political subdivisions | - | 1 | - | 1 | - | ||||||||||
Mortgage-backed securities and collateralized mortgage | |||||||||||||||
obligations - residential | 1,606 | 1,617 | 1,367 | 1,087 | 1,073 | ||||||||||
Corporate bonds | 523 | 526 | 522 | 233 | 206 | ||||||||||
participation securities | 124 | 133 | 140 | 154 | 165 | ||||||||||
Other securities | 2 | 3 | 2 | 2 | 4 | ||||||||||
Total interest and dividends on securities available for sale | 2,948 | 2,759 | 2,178 | 1,563 | 1,524 | ||||||||||
Interest on held to maturity securities: | |||||||||||||||
Mortgage-backed securities and collateralized mortgage | |||||||||||||||
obligations - residential | 81 | 85 | 87 | 90 | 97 | ||||||||||
Total interest on held to maturity securities | 81 | 85 | 87 | 90 | 97 | ||||||||||
98 | 80 | 65 | 62 | 62 | |||||||||||
Interest on federal funds sold and other short-term investments | 6,246 | 5,221 | 2,253 | 572 | 432 | ||||||||||
Total interest income | 52,084 | 49,041 | 44,187 | 41,290 | 41,770 | ||||||||||
Interest expense: | |||||||||||||||
Interest on deposits: | |||||||||||||||
Interest-bearing checking | 61 | 43 | 42 | 44 | 42 | ||||||||||
Savings | 401 | 200 | 163 | 156 | 149 | ||||||||||
Money market deposit accounts | 389 | 237 | 210 | 214 | 201 | ||||||||||
Time deposits | 1,839 | 646 | 536 | 546 | 865 | ||||||||||
Interest on short-term borrowings | 208 | 122 | 176 | 234 | 221 | ||||||||||
Total interest expense | 2,898 | 1,248 | 1,127 | 1,194 | 1,478 | ||||||||||
Net interest income | 49,186 | 47,793 | 43,060 | 40,096 | 40,292 | ||||||||||
Less: Provision (Credit) for credit losses | 50 | 300 | (491 | ) | (200 | ) | (3,000 | ) | |||||||
Net interest income after provision for loan losses | 49,136 | 47,493 | 43,551 | 40,296 | 43,292 | ||||||||||
Noninterest income: | |||||||||||||||
1,773 | 1,435 | 1,996 | 1,833 | 1,766 | |||||||||||
Fees for services to customers | 2,783 | 2,705 | 2,658 | 2,801 | 2,578 | ||||||||||
Other | 219 | 246 | 262 | 549 | 182 | ||||||||||
Total noninterest income | 4,775 | 4,386 | 4,916 | 5,183 | 4,526 | ||||||||||
Noninterest expenses: | |||||||||||||||
Salaries and employee benefits | 13,067 | 12,134 | 11,464 | 9,239 | 11,984 | ||||||||||
Net occupancy expense | 4,261 | 4,483 | 4,254 | 4,529 | 4,569 | ||||||||||
Equipment expense | 1,700 | 1,532 | 1,667 | 1,588 | 1,758 | ||||||||||
Professional services | 1,251 | 1,375 | 1,484 | 1,467 | 1,579 | ||||||||||
Outsourced services | 2,102 | 2,328 | 2,500 | 2,280 | 1,950 | ||||||||||
Advertising expense | 532 | 508 | 389 | 617 | 762 | ||||||||||
770 | 773 | 804 | 812 | 780 | |||||||||||
Other real estate expense (income), net | 101 | 124 | 74 | 11 | (28 | ) | |||||||||
Other | 2,621 | 2,887 | 2,369 | 2,222 | 2,836 | ||||||||||
Total noninterest expenses | 26,405 | 26,144 | 25,005 | 22,765 | 26,190 | ||||||||||
Income before taxes | 27,506 | 25,735 | 23,462 | 22,714 | 21,628 | ||||||||||
Income taxes | 6,596 | 6,371 | 5,591 | 5,625 | 5,387 | ||||||||||
Net income | $ | 20,910 | 19,364 | 17,871 | 17,089 | 16,241 | |||||||||
Net income per common share: | |||||||||||||||
- Basic | $ | 1.10 | 1.01 | 0.93 | 0.89 | 0.85 | |||||||||
- Diluted | 1.10 | 1.01 | 0.93 | 0.89 | 0.85 | ||||||||||
Average basic shares (in thousands) | 19,045 | 19,111 | 19,153 | 19,209 | 19,216 | ||||||||||
Average diluted shares (in thousands) | 19,050 | 19,112 | 19,153 | 19,210 | 19,218 | ||||||||||
Note: Taxable equivalent net interest income | $ | 49,187 | 47,793 | 43,060 | 40,096 | 40,292 | |||||||||
CONSOLIDATED STATEMENTS OF INCOME, Continued | |||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Year ended | |||||||||||||||
Interest and dividend income: | |||||||||||||||
Interest and fees on loans | $ | 162,214 | 159,168 | ||||||||||||
Interest and dividends on securities available for sale: | |||||||||||||||
U. S. government sponsored enterprises | 1,405 | 314 | |||||||||||||
State and political subdivisions | 2 | 2 | |||||||||||||
Mortgage-backed securities and collateralized mortgage | |||||||||||||||
obligations - residential | 5,677 | 4,515 | |||||||||||||
Corporate bonds | 1,804 | 1,065 | |||||||||||||
participation securities | 551 | 745 | |||||||||||||
Other securities | 9 | 20 | |||||||||||||
Total interest and dividends on securities available for sale | 9,448 | 6,661 | |||||||||||||
Interest on held to maturity securities: | |||||||||||||||
Mortgage-backed securities-residential | 343 | 435 | |||||||||||||
Total interest on held to maturity securities | 343 | 435 | |||||||||||||
305 | 260 | ||||||||||||||
Interest on federal funds sold and other short-term investments | 14,292 | 1,458 | |||||||||||||
Total interest income | 186,602 | 167,982 | |||||||||||||
Interest expense: | |||||||||||||||
Interest on deposits: | |||||||||||||||
Interest-bearing checking | 190 | 178 | |||||||||||||
Savings | 920 | 624 | |||||||||||||
Money market deposit accounts | 1,050 | 922 | |||||||||||||
Time deposits | 3,567 | 4,941 | |||||||||||||
Interest on short-term borrowings | 740 | 909 | |||||||||||||
Total interest expense | 6,467 | 7,574 | |||||||||||||
Net interest income | 180,135 | 160,408 | |||||||||||||
Less: (Credit) Provision for credit losses | (341 | ) | (5,450 | ) | |||||||||||
Net interest income after provision for loan losses | 180,476 | 165,858 | |||||||||||||
Noninterest income: | |||||||||||||||
7,037 | 7,358 | ||||||||||||||
Fees for services to customers | 10,947 | 9,799 | |||||||||||||
Other | 1,276 | 780 | |||||||||||||
Total noninterest income | 19,260 | 17,937 | |||||||||||||
Noninterest expenses: | |||||||||||||||
Salaries and employee benefits | 45,904 | 48,721 | |||||||||||||
Net occupancy expense | 17,527 | 17,742 | |||||||||||||
Equipment expense | 6,487 | 6,617 | |||||||||||||
Professional services | 5,577 | 6,108 | |||||||||||||
Outsourced services | 9,210 | 8,384 | |||||||||||||
Advertising expense | 2,046 | 1,975 | |||||||||||||
3,159 | 3,010 | ||||||||||||||
Other real estate expense, net | 310 | 183 | |||||||||||||
Other | 10,099 | 8,922 | |||||||||||||
Total noninterest expenses | 100,319 | 101,662 | |||||||||||||
Income before taxes | 99,417 | 82,133 | |||||||||||||
Income taxes | 24,183 | 20,614 | |||||||||||||
Net income | $ | 75,234 | 61,519 | ||||||||||||
Net income per common share: | |||||||||||||||
- Basic | $ | 3.93 | 3.19 | ||||||||||||
- Diluted | 3.93 | 3.19 | |||||||||||||
Average basic shares (in thousands) | 19,131 | 19,259 | |||||||||||||
Average diluted shares (in thousands) | 19,133 | 19,263 | |||||||||||||
Note: Taxable equivalent net interest income | $ | 180,136 | 160,409 | ||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | |||||||||||||||
(dollars in thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
ASSETS: | |||||||||||||||
Cash and due from banks | $ | 43,429 | 46,236 | 46,611 | 47,526 | 48,357 | |||||||||
Federal funds sold and other short term investments | 607,170 | 795,028 | 999,573 | 1,225,022 | 1,171,113 | ||||||||||
Total cash and cash equivalents | 650,599 | 841,264 | 1,046,184 | 1,272,548 | 1,219,470 | ||||||||||
Securities available for sale: | |||||||||||||||
U. S. government sponsored enterprises | 118,187 | 102,779 | 101,100 | 62,059 | 59,179 | ||||||||||
States and political subdivisions | 34 | 41 | 41 | 41 | 41 | ||||||||||
Mortgage-backed securities and collateralized mortgage | |||||||||||||||
obligations - residential | 260,316 | 261,242 | 287,450 | 244,045 | 270,798 | ||||||||||
participation securities | 20,977 | 22,498 | 25,428 | 28,086 | 31,674 | ||||||||||
Corporate bonds | 81,346 | 81,002 | 87,740 | 74,089 | 45,337 | ||||||||||
Other securities | 653 | 657 | 656 | 671 | 684 | ||||||||||
Total securities available for sale | 481,513 | 468,219 | 502,415 | 408,991 | 407,713 | ||||||||||
Held to maturity securities: | |||||||||||||||
Mortgage-backed securities and collateralized mortgage | |||||||||||||||
obligations-residential | 7,707 | 8,091 | 8,544 | 9,183 | 9,923 | ||||||||||
Total held to maturity securities | 7,707 | 8,091 | 8,544 | 9,183 | 9,923 | ||||||||||
5,797 | 5,797 | 5,797 | 5,604 | 5,604 | |||||||||||
Loans: | |||||||||||||||
Commercial | 231,011 | 217,120 | 199,886 | 192,408 | 200,200 | ||||||||||
Residential mortgage loans | 4,203,451 | 4,132,365 | 4,076,657 | 4,026,434 | 3,998,187 | ||||||||||
Home equity line of credit | 286,432 | 269,341 | 253,758 | 236,117 | 230,976 | ||||||||||
Installment loans | 12,307 | 10,665 | 10,258 | 9,395 | 9,416 | ||||||||||
Loans, net of deferred net costs | 4,733,201 | 4,629,491 | 4,540,559 | 4,464,354 | 4,438,779 | ||||||||||
Less: Allowance for credit losses on loans | 46,032 | 45,517 | 45,285 | 46,178 | 44,267 | ||||||||||
Net loans | 4,687,169 | 4,583,974 | 4,495,274 | 4,418,176 | 4,394,512 | ||||||||||
Bank premises and equipment, net | 32,556 | 31,931 | 32,381 | 32,644 | 33,027 | ||||||||||
Operating lease right-of-use assets | 44,727 | 45,733 | 47,343 | 48,569 | 48,090 | ||||||||||
Other assets | 89,984 | 94,485 | 88,853 | 86,158 | 78,207 | ||||||||||
Total assets | $ | 6,000,052 | 6,079,494 | 6,226,791 | 6,281,873 | 6,196,546 | |||||||||
LIABILITIES: | |||||||||||||||
Deposits: | |||||||||||||||
Demand | $ | 838,147 | 859,829 | 851,573 | 835,281 | 794,878 | |||||||||
Interest-bearing checking | 1,183,321 | 1,188,790 | 1,208,159 | 1,225,093 | 1,191,304 | ||||||||||
Savings accounts | 1,521,473 | 1,562,564 | 1,577,034 | 1,553,152 | 1,504,554 | ||||||||||
Money market deposit accounts | 621,106 | 716,319 | 760,338 | 796,275 | 782,079 | ||||||||||
Time deposits | 1,028,763 | 954,352 | 999,737 | 940,215 | 995,314 | ||||||||||
Total deposits | 5,192,810 | 5,281,854 | 5,396,841 | 5,350,016 | 5,268,129 | ||||||||||
Short-term borrowings | 122,700 | 124,932 | 147,282 | 248,371 | 244,686 | ||||||||||
Operating lease liabilities | 48,980 | 50,077 | 51,777 | 53,094 | 52,720 | ||||||||||
Accrued expenses and other liabilities | 35,575 | 33,625 | 36,259 | 37,497 | 29,883 | ||||||||||
Total liabilities | 5,400,065 | 5,490,488 | 5,632,159 | 5,688,978 | 5,595,418 | ||||||||||
SHAREHOLDERS' EQUITY: | |||||||||||||||
Capital stock | 20,058 | 20,046 | 20,046 | 20,046 | 20,046 | ||||||||||
Surplus | 257,078 | 256,661 | 256,661 | 256,661 | 256,661 | ||||||||||
Undivided profits | 393,831 | 379,769 | 367,100 | 355,948 | 349,056 | ||||||||||
Accumulated other comprehensive (loss) income, net of tax | (27,194 | ) | (25,209 | ) | (9,422 | ) | (2,369 | ) | 12,147 | ||||||
(43,786 | ) | (42,261 | ) | (39,753 | ) | (37,391 | ) | (36,782 | ) | ||||||
Total shareholders' equity | 599,987 | 589,006 | 594,632 | 592,895 | 601,128 | ||||||||||
Total liabilities and shareholders' equity | $ | 6,000,052 | 6,079,494 | 6,226,791 | 6,281,873 | 6,196,546 | |||||||||
Outstanding shares (in thousands) | 19,024 | 19,052 | 19,127 | 19,202 | 19,220 | ||||||||||
NONPERFORMING ASSETS | |||||||||||
(dollars in thousands) | |||||||||||
(Unaudited) | |||||||||||
Nonperforming Assets | |||||||||||
Loans in nonaccrual status: | |||||||||||
Commercial | $ | 219 | 179 | 203 | 187 | 112 | |||||
Real estate mortgage - 1 to 4 family | 14,949 | 16,295 | 16,259 | 17,065 | 16,574 | ||||||
Installment | 23 | 29 | 40 | 33 | 37 | ||||||
Total non-accrual loans | 15,191 | 16,503 | 16,502 | 17,285 | 16,723 | ||||||
Other nonperforming real estate mortgages - 1 to 4 family | 10 | 12 | 14 | 16 | 17 | ||||||
Total nonperforming loans | 15,201 | 16,515 | 16,516 | 17,301 | 16,740 | ||||||
Other real estate owned | 2,061 | 682 | 644 | 269 | 362 | ||||||
Total nonperforming assets | $ | 17,262 | 17,197 | 17,160 | 17,570 | 17,102 | |||||
Loans in nonaccrual status: | |||||||||||
Commercial | $ | 314 | - | - | - | - | |||||
Real estate mortgage - 1 to 4 family | 1,895 | 2,104 | 2,192 | 2,109 | 2,016 | ||||||
Installment | 83 | 65 | 5 | 8 | - | ||||||
Total non-accrual loans | 2,292 | 2,169 | 2,197 | 2,117 | 2,016 | ||||||
Other nonperforming real estate mortgages - 1 to 4 family | - | - | - | - | - | ||||||
Total nonperforming loans | 2,292 | 2,169 | 2,197 | 2,117 | 2,016 | ||||||
Other real estate owned | - | - | - | - | - | ||||||
Total nonperforming assets | $ | 2,292 | 2,169 | 2,197 | 2,117 | 2,016 | |||||
Total | |||||||||||
Loans in nonaccrual status: | |||||||||||
Commercial | $ | 533 | 179 | 203 | 187 | 112 | |||||
Real estate mortgage - 1 to 4 family | 16,844 | 18,399 | 18,451 | 19,174 | 18,590 | ||||||
Installment | 106 | 94 | 45 | 41 | 37 | ||||||
Total non-accrual loans | 17,483 | 18,672 | 18,699 | 19,402 | 18,739 | ||||||
Other nonperforming real estate mortgages - 1 to 4 family | 10 | 12 | 14 | 16 | 17 | ||||||
Total nonperforming loans | 17,493 | 18,684 | 18,713 | 19,418 | 18,756 | ||||||
Other real estate owned | 2,061 | 682 | 644 | 269 | 362 | ||||||
Total nonperforming assets | $ | 19,554 | 19,366 | 19,357 | 19,687 | 19,118 | |||||
Quarterly Net (Recoveries) Chargeoffs | |||||||||||
Commercial | $ | - | - | - | 36 | - | |||||
Real estate mortgage - 1 to 4 family | (46 | ) | (164 | ) | (119 | ) | (97 | ) | 52 | ||
Installment | 31 | 34 | 12 | 3 | 31 | ||||||
Total net (recoveries) chargeoffs | $ | (15 | ) | (130 | ) | (107 | ) | (58 | ) | 83 | |
Commercial | $ | - | - | - | - | - | |||||
Real estate mortgage - 1 to 4 family | - | - | - | - | - | ||||||
Installment | - | (2 | ) | - | - | - | |||||
Total net (recoveries) chargeoffs | $ | - | (2 | ) | - | - | - | ||||
Total | |||||||||||
Commercial | $ | - | - | - | 36 | - | |||||
Real estate mortgage - 1 to 4 family | (46 | ) | (164 | ) | (119 | ) | (97 | ) | 52 | ||
Installment | 31 | 32 | 12 | 3 | 31 | ||||||
Total net (recoveries) chargeoffs | $ | (15 | ) | (132 | ) | (107 | ) | (58 | ) | 83 | |
Asset Quality Ratios | |||||||||||
Total nonperforming loans (1) | $ | 17,493 | 18,684 | 18,713 | 19,418 | 18,756 | |||||
Total nonperforming assets (1) | 19,554 | 19,366 | 19,357 | 19,687 | 19,118 | ||||||
Total net (recoveries) chargeoffs (2) | (15 | ) | (132 | ) | (107 | ) | (58 | ) | 83 | ||
Allowance for credit losses on loans (1) | 46,032 | 45,517 | 45,285 | 46,178 | 44,267 | ||||||
Nonperforming loans to total loans | 0.37% | 0.40% | 0.41% | 0.43% | 0.42% | ||||||
Nonperforming assets to total assets | 0.33% | 0.32% | 0.31% | 0.31% | 0.31% | ||||||
Allowance for credit losses on loans to total loans | 0.97% | 0.98% | 1.00% | 1.03% | 1.00% | ||||||
Coverage ratio (1) | 263.1% | 243.6% | 242.0% | 237.8% | 236.0% | ||||||
Annualized net (recoveries) chargeoffs to average loans (2) | 0.00% | -0.01% | -0.01% | -0.01% | 0.01% | ||||||
Allowance for credit losses on loans to annualized net (recoveries) chargeoffs (2) | N/A | N/A | N/A | N/A | 133.3x | ||||||
* Includes New York, | |||||||||||
(1) At period-end | |||||||||||
(2) For the three-month period ended |
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY - | |||||||||||||||||
INTEREST RATES AND INTEREST DIFFERENTIAL | |||||||||||||||||
(dollars in thousands) | |||||||||||||||||
(Unaudited) | Three months ended | Three months ended | |||||||||||||||
Average | Interest | Average | Average | Interest | Average | ||||||||||||
Balance | Rate | Balance | Rate | ||||||||||||||
Assets | |||||||||||||||||
Securities available for sale: | |||||||||||||||||
U. S. government sponsored enterprises | $ | 120,415 | 693 | 2.30 | % | $ | 59,975 | 76 | 0.51 | % | |||||||
Mortgage backed securities and collateralized mortgage | |||||||||||||||||
obligations - residential | 292,845 | 1,606 | 2.18 | 279,472 | 1,073 | 1.54 | |||||||||||
State and political subdivisions | 40 | 1 | 7.81 | 46 | 0 | - | |||||||||||
Corporate bonds | 85,701 | 523 | 2.44 | 45,858 | 206 | 1.79 | |||||||||||
participation securities | 23,805 | 124 | 2.10 | 31,903 | 165 | 2.07 | |||||||||||
Other | 686 | 2 | 1.17 | 680 | 4 | 2.35 | |||||||||||
Total securities available for sale | 523,492 | 2,949 | 2.25 | 417,934 | 1,524 | 1.46 | |||||||||||
Federal funds sold and other short-term Investments | 669,280 | 6,246 | 3.70 | 1,123,276 | 432 | 0.15 | |||||||||||
Held to maturity securities: | |||||||||||||||||
Mortgage backed securities and collateralized mortgage | |||||||||||||||||
obligations - residential | 7,886 | 81 | 4.12 | 10,311 | 97 | 3.76 | |||||||||||
Total held to maturity securities | 7,886 | 81 | 4.12 | 10,311 | 97 | 3.76 | |||||||||||
5,797 | 98 | 6.76 | 5,604 | 62 | 4.43 | ||||||||||||
Commercial loans | 223,164 | 2,756 | 4.94 | 202,092 | 2,704 | 5.35 | |||||||||||
Residential mortgage loans | 4,161,481 | 36,109 | 3.47 | 3,979,645 | 34,602 | 3.48 | |||||||||||
Home equity lines of credit | 278,853 | 3,661 | 5.21 | 230,408 | 2,192 | 3.77 | |||||||||||
Installment loans | 10,886 | 185 | 6.74 | 9,068 | 157 | 6.87 | |||||||||||
Loans, net of unearned income | 4,674,384 | 42,711 | 3.65 | 4,421,213 | 39,655 | 3.59 | |||||||||||
Total interest earning assets | 5,880,839 | 52,085 | 3.54 | 5,978,338 | 41,770 | 2.79 | |||||||||||
Allowance for credit losses on loans | (45,722 | ) | (47,379 | ) | |||||||||||||
Cash & non-interest earning assets | 171,921 | 197,382 | |||||||||||||||
Total assets | $ | 6,007,038 | $ | 6,128,341 | |||||||||||||
Liabilities and shareholders' equity | |||||||||||||||||
Deposits: | |||||||||||||||||
Interest bearing checking accounts | $ | 1,164,178 | 61 | 0.02 | % | $ | 1,151,704 | 42 | 0.01 | % | |||||||
Money market accounts | 668,537 | 389 | 0.23 | 763,053 | 201 | 0.10 | |||||||||||
Savings | 1,540,163 | 401 | 0.10 | 1,461,568 | 149 | 0.04 | |||||||||||
Time deposits | 983,590 | 1,839 | 0.74 | 1,055,792 | 865 | 0.32 | |||||||||||
Total interest bearing deposits | 4,356,468 | 2,690 | 0.25 | 4,432,117 | 1,257 | 0.11 | |||||||||||
Short-term borrowings | 126,562 | 208 | 0.65 | 233,829 | 221 | 0.38 | |||||||||||
Total interest bearing liabilities | 4,483,030 | 2,898 | 0.26 | 4,665,946 | 1,478 | 0.13 | |||||||||||
Demand deposits | 845,493 | 795,258 | |||||||||||||||
Other liabilities | 82,085 | 77,165 | |||||||||||||||
Shareholders' equity | 596,430 | 589,972 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 6,007,038 | $ | 6,128,341 | |||||||||||||
Net interest income, tax equivalent | 49,187 | 40,292 | |||||||||||||||
Net interest spread | 3.28 | % | 2.67 | % | |||||||||||||
Net interest margin (net interest income to | |||||||||||||||||
total interest earning assets) | 3.34 | % | 2.69 | % | |||||||||||||
Tax equivalent adjustment | (1 | ) | - | ||||||||||||||
Net interest income | 49,186 | 40,292 | |||||||||||||||
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY - | |||||||||||||||||
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued | |||||||||||||||||
(dollars in thousands) | |||||||||||||||||
(Unaudited) | Year ended | Year ended | |||||||||||||||
Average | Interest | Average | Average | Interest | Average | ||||||||||||
Balance | Rate | Balance | Rate | ||||||||||||||
Assets | |||||||||||||||||
Securities available for sale: | |||||||||||||||||
U. S. government sponsored enterprises | $ | 89,557 | 1,405 | 1.57 | % | $ | 63,743 | 314 | 0.49 | % | |||||||
Mortgage backed securities and collateralized mortgage | |||||||||||||||||
obligations - residential | 284,901 | 5,677 | 1.99 | 308,777 | 4,515 | 1.46 | |||||||||||
State and political subdivisions | 41 | 3 | 6.66 | 48 | 3 | 6.56 | |||||||||||
Corporate bonds | 78,266 | 1,804 | 2.31 | 53,699 | 1,065 | 1.98 | |||||||||||
participation securities | 26,679 | 551 | 2.07 | 35,723 | 745 | 2.09 | |||||||||||
Other | 686 | 9 | 1.31 | 685 | 20 | 2.92 | |||||||||||
Total securities available for sale | 480,130 | 9,449 | 1.97 | 462,675 | 6,662 | 1.44 | |||||||||||
Federal funds sold and other short-term Investments | 969,043 | 14,292 | 1.47 | 1,111,257 | 1,458 | 0.13 | |||||||||||
Held to maturity securities: | |||||||||||||||||
Mortgage backed securities and collateralized mortgage | |||||||||||||||||
obligations - residential | 8,647 | 343 | 3.97 | 11,733 | 435 | 3.71 | |||||||||||
Total held to maturity securities | 8,647 | 343 | 3.97 | 11,733 | 435 | 3.71 | |||||||||||
5,749 | 305 | 5.31 | 5,578 | 260 | 4.66 | ||||||||||||
Commercial loans | 206,144 | 10,168 | 4.93 | 210,145 | 10,907 | 5.19 | |||||||||||
Residential mortgage loans | 4,081,120 | 140,420 | 3.44 | 3,884,336 | 138,821 | 3.57 | |||||||||||
Home equity lines of credit | 254,168 | 10,950 | 4.31 | 233,628 | 8,814 | 3.77 | |||||||||||
Installment loans | 9,849 | 676 | 6.87 | 8,725 | 626 | 7.17 | |||||||||||
Loans, net of unearned income | 4,551,281 | 162,214 | 3.56 | 4,336,834 | 159,168 | 3.67 | |||||||||||
Total interest earning assets | 6,014,850 | 186,603 | 3.10 | 5,928,077 | 167,983 | 2.83 | |||||||||||
Allowance for credit losses on loans | (46,124 | ) | (49,421 | ) | |||||||||||||
Cash & non-interest earning assets | 190,278 | 196,825 | |||||||||||||||
Total assets | $ | 6,159,004 | $ | 6,075,481 | |||||||||||||
Liabilities and shareholders' equity | |||||||||||||||||
Deposits: | |||||||||||||||||
Interest bearing checking accounts | $ | 1,190,337 | 190 | 0.02 | % | $ | 1,134,702 | 178 | 0.02 | % | |||||||
Money market accounts | 745,714 | 1,050 | 0.14 | 739,139 | 922 | 0.12 | |||||||||||
Savings | 1,553,016 | 920 | 0.06 | 1,397,432 | 624 | 0.04 | |||||||||||
Time deposits | 974,428 | 3,567 | 0.37 | 1,166,963 | 4,941 | 0.42 | |||||||||||
Total interest bearing deposits | 4,463,495 | 5,727 | 0.13 | 4,438,236 | 6,665 | 0.15 | |||||||||||
Short-term borrowings | 177,599 | 740 | 0.42 | 232,815 | 909 | 0.39 | |||||||||||
Total interest bearing liabilities | 4,641,094 | 6,467 | 0.14 | 4,671,051 | 7,574 | 0.16 | |||||||||||
Demand deposits | 838,944 | 750,111 | |||||||||||||||
Other liabilities | 81,880 | 74,396 | |||||||||||||||
Shareholders' equity | 597,086 | 579,923 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 6,159,004 | $ | 6,075,481 | |||||||||||||
Net interest income, tax equivalent | 180,136 | 160,409 | |||||||||||||||
Net interest spread | 2.96 | % | 2.67 | % | |||||||||||||
Net interest margin (net interest income to | |||||||||||||||||
total interest earning assets) | 2.99 | % | 2.71 | % | |||||||||||||
Tax equivalent adjustment | (1 | ) | (1 | ) | |||||||||||||
Net interest income | 180,135 | 160,408 | |||||||||||||||
Non-GAAP Financial Measures Reconciliation
Tangible book value per share is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible book value by excluding the balance of intangible assets from total shareholders’ equity divided by shares outstanding. 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. Additionally, we believe that this measure is important to many investors in the marketplace who are interested in relative changes from period to period in equity exclusive of changes in intangible assets.
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 total 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. Additionally, we believe that this measure is important to many investors in the marketplace who are interested in relative changes from period to period in equity and total assets, each exclusive of changes in intangible assets.
The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and non-interest fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, excluding non-routine items from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue. Additionally, we believe this measure is important to investors looking for a measure of efficiency in our productivity measured by the amount of revenue generated for each dollar spent.
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 book value per share, tangible common equity, and efficiency ratio to the most directly comparable GAAP measures is set forth below.
NON-GAAP FINANCIAL MEASURES RECONCILIATION | |||||||||||||
(dollars in thousands) | |||||||||||||
(Unaudited) | |||||||||||||
Tangible Book Value Per Share | |||||||||||||
Equity (GAAP) | $ | 599,987 | 589,006 | 601,128 | |||||||||
Less: Intangible assets | 553 | 553 | 553 | ||||||||||
Tangible equity (Non-GAAP) | 599,434 | 588,453 | 600,575 | ||||||||||
Shares outstanding | 19,024 | 19,052 | 19,220 | ||||||||||
Tangible book value per share | 31.51 | 30.89 | 31.25 | ||||||||||
Book value per share | 31.54 | 30.92 | 31.28 | ||||||||||
Tangible Equity to Tangible Assets | |||||||||||||
Total Assets (GAAP) | 6,000,052 | 6,079,494 | 6,196,546 | ||||||||||
Less: Intangible assets | 553 | 553 | 553 | ||||||||||
Tangible assets (Non-GAAP) | 5,999,499 | 6,078,941 | 6,195,993 | ||||||||||
Tangible Equity to Tangible Assets (Non-GAAP) | 9.99% | 9.68% | 9.69% | ||||||||||
Equity to Assets (GAAP) | 10.00% | 9.69% | 9.70% | ||||||||||
Three months ended | Year ended | ||||||||||||
Efficiency Ratio | |||||||||||||
Net interest income (GAAP) | $ | 49,186 | 47,793 | 40,292 | $ | 180,135 | 160,408 | ||||||
Taxable equivalent adjustment | 1 | 0 | 0 | 1 | 1 | ||||||||
Net interest income (fully taxable equivalent) (Non-GAAP) | 49,187 | 47,793 | 40,292 | 180,136 | 160,409 | ||||||||
Non-interest income (GAAP) | 4,775 | 4,386 | 4,526 | 19,260 | 17,937 | ||||||||
Less: Net gain on sale of building | - | - | - | 268 | - | ||||||||
Revenue used for efficiency ratio (Non-GAAP) | 53,962 | 52,179 | 44,818 | 199,128 | 178,346 | ||||||||
Total noninterest expense (GAAP) | 26,405 | 26,144 | 26,190 | 100,319 | 101,662 | ||||||||
Less: Other real estate (income) expense, net | 101 | 124 | (28 | ) | 310 | 183 | |||||||
Expense used for efficiency ratio (Non-GAAP) | 26,304 | 26,020 | 26,218 | 100,009 | 101,479 | ||||||||
Efficiency Ratio | 48.75% | 49.87% | 58.50% | 50.22% | 56.90% | ||||||||
Subsidiary: | Trustco Bank |
Contact: | |
Executive Vice President | |
(518) 381-3693 |
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