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TrustCo Demonstrates Strength and Stability; Reports First Quarter Net Income of $17.7 Million and 7.0% Average Loan Growth – Both Up Year Over Year

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TrustCo Bank Corp NY (TRST) reported a net income of $17.7 million for the first quarter of 2023, reflecting a 3.8% increase from $17.1 million in Q1 2022. The company achieved a net interest income of $47.0 million, up 17.1% year-over-year, alongside a return on average assets of 1.20% and return on average equity of 11.84%. Average loans grew by $312.0 million, reaching an all-time high of $4.8 billion. TrustCo's consolidated equity to assets ratio improved to 10.17% from 9.44% a year prior. Nonperforming loans decreased to 0.40% of total loans. The company emphasized strong liquidity and effective management, benefiting from rising interest rates. A conference call to discuss results is scheduled for April 25, 2023.

Positive
  • Net income increased 3.8% to $17.7 million from Q1 2022.
  • Net interest income rose 17.1% to $47.0 million.
  • Average loans up 7.0%, reaching $4.8 billion.
  • Return on average assets improved to 1.20%.
  • Return on average equity increased to 11.84%.
  • Nonperforming loans improved to 0.40% of total loans.
Negative
  • None.

Executive Snapshot:

  • Continued solid financial results:
    • Key metrics for first quarter 2023:
      • Net income of $17.7 million in the first quarter 2023 up 3.8% compared to $17.1 million in the first quarter 2022
      • Net interest income of $47.0 up 17.1% compared to $40.1 million in the first quarter of 2022
      • Return on average assets (ROAA) of 1.20% compared to 1.12% in the first quarter of 2022
      • Return on average equity (ROAE) of 11.84% compared to 11.60% in the first quarter of 2022
      • Book value at period end was $32.31, up from $30.85 compared to March 31, 2022

  • Superior asset quality:
    • Nonperforming loan (NPLs) fell by $256 thousand compared to March 31, 2022
    • NPLs to total loans improved to 0.40% compared to 0.43% at March 31, 2022
    • Quarterly net recoveries were $53 thousand in the first quarter 2023
  • Loan portfolio reaches all-time high:
    • Average loans were up $312.0 million for the first quarter 2023 compared to first quarter of 2022
    • At $4.8 billion as of March 31, 2023, loans continue to set new all-time highs

  • Quarter over quarter deposit growth:
    • Total deposits as of March 31, 2023 increased $19.6 million to $5.2 billion from December 31, 2022
    • Time deposits increased $251.5 million or 24.5% up from December 31, 2022

  • Capital remains strong
    • Consolidated equity to assets increased to 10.17% at March 31, 2023 from 9.44% at March 31, 2022

GLENVILLE, N.Y., April 24, 2023 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced first quarter 2023 net income of $17.7 million or $0.93 diluted earnings per share, compared to net income of $17.1 million or $0.89 diluted earnings per share for the first quarter 2022. Average loan growth increased 7.0% or $312.0 million for the first quarter 2023 over the same period in 2022.

Overview

Chairman, President, and CEO, Robert J. McCormick said “Our first quarter results, which build upon the Company’s record year in 2022, demonstrate that TrustCo is a pillar of strength and a model of stability. The biggest challenge presented by great performance is maintaining momentum. This quarter, TrustCo did not just equal last year’s results, but improved upon them in the key areas of average loan growth, diluted earnings per share, and net income, among others. That we have been able to improve upon our performance in the present challenging environment is a testament to the skill of our bankers and the soundness of our strategy. Careful expansions of our areas of operation and mortgage product offerings, resting upon a solid foundation devoid of risky gimmicks and dangerous concentrations, position us well for sustained success.”

TrustCo saw deposit balances rebound from the end of the year with net deposit inflows during the first quarter of 2023. Loan growth continued in the first quarter 2023 compared to the prior year first quarter, 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 and the existing loan portfolio. The Federal Reserve decision to raise the target Federal Funds rate multiple times since March 2022 has contributed to our results in the first quarter 2023, as our cash position and other variable rate products continue to reprice upward, and are likely to continue to do so to the extent there are additional rate increases. We also note that current mortgage rates significantly exceed the yield on our existing portfolio of mortgages, which, if sustained, should be positive to net interest margin going forward. TrustCo’s strong liquidity position continues to allow us to take advantage of opportunities as they arise.

Details

As discussed, average loans were up $312.0 million or 7.0% in the first quarter 2023 over the same period in 2022. Average residential loans, our primary lending focus, were up $205.0 million or 5.1%, in the first quarter 2023 over the same period in 2022. Average commercial loans and home equity lines of credit also increased $43.9 million or 22.5% and $58.8 million or 25.3%, respectively, over the same period in 2022.

We are now actively retaining deposits which is evident in the quarter over quarter results. Total deposits as of March 31, 2023 increased $19.6 million to $5.2 billion from December 31, 2022. As we move forward, our objective is to continue to encourage customers to retain these funds in the expanded product offerings of the Bank through aggressive marketing and product differentiation. We understood the big inflows of deposits during the pandemic were temporary and that is why we did not invest that liquidity into securities or loans, but retained that liquidity on the balance sheet for when the depositors would start to absorb the funds. This gave us flexibility to strategically price deposits while retaining core customers.

Net interest income was $47.0 million for the first quarter 2023, an increase of $6.9 million or 17.1% compared to the same period in 2022, driven by solid liquidity, loan growth, and the recent increases in the Federal Funds target rate. The net interest margin for the first quarter 2023 was 3.21%, up 55 basis points from 2.66% in the first quarter of 2022. The yield on interest earnings assets increased to 3.69%, up 95 basis points from 2.74% in the first quarter of 2022. At the same time the cost of interest bearing liabilities only increased to 0.63% in the first quarter 2023 from 0.10% in the first quarter 2022. The increase in net interest income of $6.9 million is primarily a result of our ability to maintain a $576.9 million average cash balance at the Federal Reserve Bank during the first quarter of 2023 and being able to retain low cost deposit balances at competitive market rates.

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 $300 thousand in the first quarter of 2023, which includes a provision for credit losses on loans of $600 thousand and a benefit for credit losses on unfunded commitments of $300 thousand as a result of a corresponding decrease in unfunded loan commitments. The ratio of allowance for credit losses on loans to total loans was 0.97% and 1.03% as of March 31, 2023 and 2022, respectively. The allowance for credit losses on loans was $46.7 million at March 31, 2023, compared to $46.2 million at March 31, 2022. Nonperforming loans (NPLs) were $19.2 million at March 31, 2023, compared to $19.4 million at March 31, 2022. NPLs were 0.40% and 0.43% of total loans at March 31, 2023 and 2022, respectively. The coverage ratio, or allowance for credit losses on loans to NPLs, was 243.6% at March 31, 2023, compared to 237.8% at March 31, 2022. Nonperforming assets (NPAs) were $21.0 million at March 31, 2023, compared to $19.7 million at March 31, 2022.

At March 31, 2023 our equity to asset ratio was 10.17%, compared to 9.44% at March 31, 2022. Book value per share at March 31, 2023 was $32.31, up 4.7% compared to $30.85 a year earlier.

A conference call to discuss first quarter 2023 results will be held at 9:00 a.m. Eastern Time on April 25, 2023. Those wishing to participate in the call may dial toll-free for the United States at 1-833-470-1428, and for Canada at 1-833-950-0062, Access code 576267. A replay of the call will be available for thirty days by dialing toll-free for the United States at 1-866-813-9403, for Canada at 1-226-828-7578, and all other locations at +44-204-525-0658, Access code 635945. The call will also be audio webcast at https://events.q4inc.com/attendee/162588284, and will be available for one year.

About TrustCo Bank Corp NY

TrustCo Bank Corp NY is a $6.0 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 143 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at March 31, 2023.

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.

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 Ukraine. 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: changes in interest rates, including recent and possible future increases fueled by inflation; inflationary pressures and rising prices; exposure to credit risk in our lending activities; the sufficiency of our allowance for credit losses on loans to cover actual loan losses; our ability to meet the cash flow requirements of our depositors or borrowers or meet our operating cash needs to fund corporate expansion and other activities; claims and litigation pertaining to fiduciary responsibility and lender liability; our dependency upon the services of the management team; our disclosure controls and procedures’ ability to prevent or detect errors or acts of fraud; the adequacy of our business continuity and disaster recovery plans; the effectiveness of our risk management framework; the chance of a prolonged economic downturn, especially one affecting our geographic market area; instability in global economic conditions and geopolitical matters, as well as volatility in financial markets; the COVID-19 pandemic; the soundness of other financial institutions; fluctuations in the trust wealth management fees we receive as a result of investment performance; the impact of regulatory capital rules on our growth; changes in laws and regulations; our compliance with the USA PATRIOT Act, Bank Secrecy Act, and other laws and regulations that could result in fines or sanctions; changes in tax laws; limitations on our ability to pay dividends; TrustCo Realty Corp.’s ability to qualify as a real estate investment trust; changes in accounting standards; competition within our market areas; consumers and businesses’ use of non-banks to complete financial transactions; our reliance on third-party service providers; the risk of data breaches and cyber-attacks; the risk of an unauthorized disclosure of sensitive or confidential client or customer information; the impact of any expansion by us into new lines of business or new products and services; the impact of severe weather events and climate change on us and the communities we serve, including societal responses to climate change; 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. The forward-looking statements contained in this news release represent TrustCo management’s judgment as of the date of this news release. TrustCo disclaims, however, any intent or obligation to update forward-looking statements, either as a result of future developments, new information or otherwise, except as may be required by law.

TRUSTCO BANK CORP NY
GLENVILLE, NY
 
FINANCIAL HIGHLIGHTS
 
(dollars in thousands, except per share data)
(Unaudited)
 Three months ended
 3/31/2023  12/31/2022   3/31/2022 
Summary of operations       
Net interest income$46,965  $49,186  $40,096 
Provision (Credit) for credit losses 300   50   (200)
Noninterest income 4,669   4,775   5,183 
Noninterest expense 27,679   26,405   22,765 
Net income 17,746   20,910   17,089 
        
Per share       
Net income per share:       
- Basic$0.93  $1.10  $0.89 
- Diluted 0.93   1.10   0.89 
Cash dividends 0.360   0.360   0.350 
Book value at period end 32.31   31.54   30.85 
Market price at period end 31.94   37.59   31.93 
        
At period end       
Full time equivalent employees 776   750   769 
Full service banking offices 143   143   144 
        
Performance ratios       
Return on average assets 1.20%  1.38%  1.12%
Return on average equity 11.84   13.91   11.60 
Efficiency ratio (1) 53.17   48.75   50.55 
Net interest spread 3.06   3.28   2.63 
Net interest margin 3.21   3.34   2.66 
Dividend payout ratio 38.59   32.81   39.36 
        
Capital ratios at period end       
Consolidated equity to assets 10.17%  10.00%  9.44%
Consolidated tangible equity to tangible assets (2) 10.16%  9.99%  9.43%
        
Asset quality analysis at period end       
Nonperforming loans to total loans 0.40%  0.37%  0.43%
Nonperforming assets to total assets 0.35   0.33   0.31 
Allowance for credit losses on loans to total loans 0.97   0.97   1.03 
Coverage ratio (3)2.4x  2.6x   2.4x 
        

(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 shareholders' 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 credit losses on loans divided by total nonperforming loans.

CONSOLIDATED STATEMENTS OF INCOME
          
(dollars in thousands, except per share data)         
(Unaudited)         
 Three months ended
  3/31/2023   12/31/2022   9/30/2022   6/30/2022   3/31/2022 
Interest and dividend income:         
Interest and fees on loans$44,272  $42,711  $40,896  $39,604  $39,003 
Interest and dividends on securities available for sale:         
U. S. government sponsored enterprises 692   693   479   147   86 
State and political subdivisions -   -   1   -   1 
Mortgage-backed securities and collateralized mortgage obligations - residential 1,585   1,606   1,617   1,367   1,087 
Corporate bonds 521   523   526   522   233 
Small Business Administration - guaranteed participation securities 117   124   133   140   154 
Other securities 2   2   3   2   2 
Total interest and dividends on securities available for sale 2,917   2,948   2,759   2,178   1,563 
          
Interest on held to maturity securities:         
Mortgage-backed securities and collateralized mortgage obligations - residential 78   81   85   87   90 
Total interest on held to maturity securities 78   81   85   87   90 
          
Federal Home Loan Bank stock 110   98   80   65   62 
          
Interest on federal funds sold and other short-term investments 6,555   6,246   5,221   2,253   572 
Total interest income 53,932   52,084   49,041   44,187   41,290 
          
Interest expense:         
Interest on deposits:         
Interest-bearing checking 66   61   43   42   44 
Savings 530   401   200   163   156 
Money market deposit accounts 814   389   237   210   214 
Time deposits 5,272   1,839   646   536   546 
Interest on short-term borrowings 285   208   122   176   234 
Total interest expense 6,967   2,898   1,248   1,127   1,194 
          
Net interest income 46,965   49,186   47,793   43,060   40,096 
          
Less: Provision (Credit) for credit losses 300   50   300   (491)  (200)
Net interest income after provision for loan losses 46,665   49,136   47,493   43,551   40,296 
          
Noninterest income:         
Trustco Financial Services income 1,774   1,773   1,435   1,996   1,833 
Fees for services to customers 2,648   2,783   2,705   2,658   2,801 
Other 247   219   246   262   549 
Total noninterest income 4,669   4,775   4,386   4,916   5,183 
          
Noninterest expenses:         
Salaries and employee benefits 13,283   13,067   12,134   11,464   9,239 
Net occupancy expense 4,598   4,261   4,483   4,254   4,529 
Equipment expense 1,962   1,700   1,532   1,667   1,588 
Professional services 1,607   1,251   1,375   1,484   1,467 
Outsourced services 2,296   2,102   2,328   2,500   2,280 
Advertising expense 390   532   508   389   617 
FDIC and other insurance 1,052   770   773   804   812 
Other real estate expense, net 225   101   124   74   11 
Other 2,266   2,621   2,887   2,369   2,222 
Total noninterest expenses 27,679   26,405   26,144   25,005   22,765 
          
Income before taxes 23,655   27,506   25,735   23,462   22,714 
Income taxes 5,909   6,596   6,371   5,591   5,625 
          
Net income$17,746  $20,910  $19,364  $17,871  $17,089 
          
Net income per common share:         
- Basic$0.93  $1.10  $1.01  $0.93  $0.89 
          
- Diluted 0.93   1.10   1.01   0.93   0.89 
          
Average basic shares (in thousands) 19,024   19,045   19,111   19,153   19,209 
Average diluted shares (in thousands) 19,028   19,050   19,112   19,153   19,210 
                    


CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
(dollars in thousands)
(Unaudited)
  3/31/2023   12/31/2022   9/30/2022   6/30/2022   3/31/2022 
ASSETS:         
          
Cash and due from banks$47,595  $43,429  $46,236  $46,611  $47,526 
Federal funds sold and other short term investments 589,389   607,170   795,028   999,573   1,225,022 
Total cash and cash equivalents 636,984   650,599   841,264   1,046,184   1,272,548 
          
Securities available for sale:         
U. S. government sponsored enterprises 119,132   118,187   102,779   101,100   62,059 
States and political subdivisions 34   34   41   41   41 
Mortgage-backed securities and collateralized mortgage obligations - residential 255,556   260,316   261,242   287,450   244,045 
Small Business Administration - guaranteed participation securities 19,821   20,977   22,498   25,428   28,086 
Corporate bonds 81,464   81,346   81,002   87,740   74,089 
Other securities 652   653   657   656   671 
Total securities available for sale 476,659   481,513   468,219   502,415   408,991 
          
Held to maturity securities:         
Mortgage-backed securities and collateralized mortgage obligations-residential 7,382   7,707   8,091   8,544   9,183 
Total held to maturity securities 7,382   7,707   8,091   8,544   9,183 
          
Federal Reserve Bank and Federal Home Loan Bank stock 5,797   5,797   5,797   5,797   5,604 
          
Loans:         
Commercial 246,307   231,011   217,120   199,886   192,408 
Residential mortgage loans 4,241,459   4,203,451   4,132,365   4,076,657   4,026,434 
Home equity line of credit 296,490   286,432   269,341   253,758   236,117 
Installment loans 15,326   12,307   10,665   10,258   9,395 
Loans, net of deferred net costs 4,799,582   4,733,201   4,629,491   4,540,559   4,464,354 
          
Less: Allowance for credit losses on loans 46,685   46,032   45,517   45,285   46,178 
Net loans 4,752,897   4,687,169   4,583,974   4,495,274   4,418,176 
          
Bank premises and equipment, net 32,305   32,556   31,931   32,381   32,644 
Operating lease right-of-use assets 43,478   44,727   45,733   47,343   48,569 
Other assets 90,306   89,984   94,485   88,853   86,158 
          
Total assets$6,045,808  $6,000,052  $6,079,494  $6,226,791  $6,281,873 
          
LIABILITIES:         
Deposits:         
Demand$806,075  $838,147  $859,829  $851,573  $835,281 
Interest-bearing checking 1,124,785   1,183,321   1,188,790   1,208,159   1,225,093 
Savings accounts 1,400,887   1,521,473   1,562,564   1,577,034   1,553,152 
Money market deposit accounts 600,410   621,106   716,319   760,338   796,275 
Time deposits 1,280,301   1,028,763   954,352   999,737   940,215 
Total deposits 5,212,458   5,192,810   5,281,854   5,396,841   5,350,016 
          
Short-term borrowings 134,293   122,700   124,932   147,282   248,371 
Operating lease liabilities 47,643   48,980   50,077   51,777   53,094 
Accrued expenses and other liabilities 36,711   35,575   33,625   36,259   37,497 
          
Total liabilities 5,431,105   5,400,065   5,490,488   5,632,159   5,688,978 
          
SHAREHOLDERS' EQUITY:         
Capital stock 20,058   20,058   20,046   20,046   20,046 
Surplus 257,078   257,078   256,661   256,661   256,661 
Undivided profits 404,728   393,831   379,769   367,100   355,948 
Accumulated other comprehensive loss, net of tax (23,375)  (27,194)  (25,209)  (9,422)  (2,369)
Treasury stock at cost (43,786)  (43,786)  (42,261)  (39,753)  (37,391)
          
Total shareholders' equity 614,703   599,987   589,006   594,632   592,895 
          
Total liabilities and shareholders' equity$6,045,808  $6,000,052  $6,079,494  $6,226,791  $6,281,873 
          
Outstanding shares (in thousands) 19,024   19,024   19,052   19,127   19,202 
                    


NONPERFORMING ASSETS
      
(dollars in thousands)
(Unaudited)
  3/31/2023  12/31/2022  9/30/2022  6/30/2022  3/31/2022 
Nonperforming Assets     
      
New York and other states*     
Loans in nonaccrual status:     
Commercial$560 $219 $179 $203 $187 
Real estate mortgage - 1 to 4 family 15,722  14,949  16,295  16,259  17,065 
Installment 59  23  29  40  33 
Total non-accrual loans 16,341  15,191  16,503  16,502  17,285 
Other nonperforming real estate mortgages - 1 to 4 family 8  10  12  14  16 
Total nonperforming loans 16,349  15,201  16,515  16,516  17,301 
Other real estate owned 1,869  2,061  682  644  269 
Total nonperforming assets$18,218 $17,262 $17,197 $17,160 $17,570 
      
Florida     
Loans in nonaccrual status:     
Commercial$314 $314 $- $- $- 
Real estate mortgage - 1 to 4 family 2,437  1,895  2,104  2,192  2,109 
Installment 62  83  65  5  8 
Total non-accrual loans 2,813  2,292  2,169  2,197  2,117 
Other nonperforming real estate mortgages - 1 to 4 family -  -  -  -  - 
Total nonperforming loans 2,813  2,292  2,169  2,197  2,117 
Other real estate owned -  -  -  -  - 
Total nonperforming assets$2,813 $2,292 $2,169 $2,197 $2,117 
      
Total     
Loans in nonaccrual status:     
Commercial$874 $533 $179 $203 $187 
Real estate mortgage - 1 to 4 family 18,159  16,844  18,399  18,451  19,174 
Installment 121  106  94  45  41 
Total non-accrual loans 19,154  17,483  18,672  18,699  19,402 
Other nonperforming real estate mortgages - 1 to 4 family 8  10  12  14  16 
Total nonperforming loans 19,162  17,493  18,684  18,713  19,418 
Other real estate owned 1,869  2,061  682  644  269 
Total nonperforming assets$21,031 $19,554 $19,366 $19,357 $19,687 
      
      
Quarterly Net (Recoveries) Chargeoffs     
      
New York and other states*     
Commercial$- $- $- $- $36 
Real estate mortgage - 1 to 4 family (53) (46) (164) (119) (97)
Installment (6) 31  34  12  3 
Total net (recoveries) chargeoffs$(59)$(15)$(130)$(107)$(58)
      
Florida     
Commercial$- $- $- $- $- 
Real estate mortgage - 1 to 4 family (25) -  -  -  - 
Installment 31  -  (2) -  - 
Total net (recoveries) chargeoffs$6 $- $(2)$- $- 
      
Total     
Commercial$- $- $- $- $36 
Real estate mortgage - 1 to 4 family (78) (46) (164) (119) (97)
Installment 25  31  32  12  3 
Total net (recoveries) chargeoffs$(53)$(15)$(132)$(107)$(58)
      
      
Asset Quality Ratios     
      
Total nonperforming loans (1)$19,162 $17,493 $18,684 $18,713 $19,418 
Total nonperforming assets (1) 21,031  19,554  19,366  19,357  19,687 
Total net (recoveries) chargeoffs (2) (53) (15) (132) (107) (58)
      
Allowance for credit losses on loans (1) 46,685  46,032  45,517  45,285  46,178 
      
Nonperforming loans to total loans 0.40% 0.37% 0.40% 0.41% 0.43%
Nonperforming assets to total assets 0.35% 0.33% 0.32% 0.31% 0.31%
Allowance for credit losses on loans to total loans 0.97% 0.97% 0.98% 1.00% 1.03%
Coverage ratio (1) 243.6% 263.1% 243.6% 242.0% 237.8%
Annualized net (recoveries) chargeoffs to average loans (2) 0.00% 0.00% -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  N/A 
 

* Includes New York, New Jersey, Vermont and Massachusetts.
(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
 March 31, 2023 March 31, 2022
  Average   Interest Average   Average   Interest Average 
  Balance     Rate   Balance     Rate 
Assets           
            
Securities available for sale:           
U. S. government sponsored enterprises$120,692  $692 2.29% $61,755  $86 0.55%
Mortgage backed securities and collateralized mortgage obligations - residential 287,046   1,585 2.20   261,124   1,087 1.67 
State and political subdivisions 34   - 6.74   41   1 6.73 
Corporate bonds 85,578   521 2.43   52,977   233 1.76 
Small Business Administration - guaranteed participation securities 22,129   117 2.12   29,871   154 2.06 
Other 686   2 1.17   686   2 1.17 
            
Total securities available for sale 516,165   2,917 2.26   406,454   1,563 1.54 
            
Federal funds sold and other short-term Investments 576,931   6,555 4.61   1,187,201   572 0.20 
            
Held to maturity securities:           
Mortgage backed securities and collateralized mortgage obligations - residential 7,542   78 4.14   9,541   90 3.79 
            
Total held to maturity securities 7,542   78 4.14   9,541   90 3.79 
            
Federal Home Loan Bank stock 5,797   110 7.59   5,604   62 4.43 
            
Commercial loans 238,870   3,024 5.06   194,989   2,525 5.18 
Residential mortgage loans 4,212,878   36,913 3.50   4,007,886   34,197 3.42 
Home equity lines of credit 291,326   4,119 5.73   232,535   2,125 3.71 
Installment loans 13,323   216 6.56   8,974   156 7.03 
            
Loans, net of unearned income 4,756,397   44,272 3.73   4,444,384   39,003 3.52 
            
Total interest earning assets 5,862,832  $53,932 3.69   6,053,184  $41,290 2.74 
            
Allowance for credit losses on loans (46,290)      (46,759)    
Cash & non-interest earning assets 175,097       207,308     
            
            
Total assets$5,991,639      $6,213,733     
            
Liabilities and shareholders' equity           
            
Deposits:           
Interest bearing checking accounts$1,133,383  $66 0.02% $1,191,496  $44 0.01%
Money market accounts 600,855   814 0.55   791,689   214 0.11 
Savings 1,456,242   530 0.15   1,527,975   156 0.04 
Time deposits 1,160,969   5,272 1.84   964,158   546 0.23 
            
Total interest bearing deposits 4,351,449   6,682 0.62   4,475,318   960 0.09 
Short-term borrowings 131,867   285 0.88   248,535   234 0.38 
            
Total interest bearing liabilities 4,483,316  $6,967 0.63   4,723,853  $1,194 0.10 
            
Demand deposits 816,565       808,695     
Other liabilities 84,092       83,633     
Shareholders' equity 607,666       597,552     
            
Total liabilities and shareholders' equity$5,991,639      $6,213,733     
            
Net interest income, GAAP and tax equivalent  $46,965      $40,096   
            
Net interest spread, GAAP and tax equivalent   3.06%    2.63%
            
Net interest margin (net interest income to total interest earning assets) GAAP and tax equivalent   3.21%    2.66%
            
Tax equivalent adjustment   -       -   
            
Net interest income  $46,965      $40,096   
                

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 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 equity as a percentage of tangible assets, and efficiency ratio to the most directly comparable GAAP measures is set forth below.

NON-GAAP FINANCIAL MEASURES RECONCILIATION   
    
(dollars in thousands)   
(Unaudited)   
  3/31/2023  12/31/2022  3/31/2022 
Tangible Equity to Tangible Assets   
Total Assets (GAAP)$6,045,808 $6,000,052 $6,281,873 
Less: Intangible assets 553  553  553 
Tangible assets (Non-GAAP)$6,045,255 $5,999,499 $6,281,320 
    
Equity (GAAP)$614,703 $599,987 $592,895 
Less: Intangible assets 553  553  553 
Tangible equity (Non-GAAP)$614,150 $599,434 $592,342 
Tangible Equity to Tangible Assets (Non-GAAP) 10.16% 9.99% 9.43%
Equity to Assets (GAAP) 10.17% 10.00% 9.44%
    
 Three months ended
Efficiency Ratio 3/31/2023  12/31/2022  3/31/2022 
    
Net interest income (fully taxable equivalent) (Non-GAAP)$46,965 $49,187 $40,096 
Non-interest income (GAAP) 4,669  4,775  5,183 
Less: Net gain on sale of building -  -  268 
Revenue used for efficiency ratio (Non-GAAP)$51,634 $53,962 $45,011 
    
Total noninterest expense (GAAP)$27,679 $26,405 $22,765 
Less: Other real estate (income) expense, net 225  101  11 
Expense used for efficiency ratio (Non-GAAP)$27,454 $26,304 $22,754 
    
Efficiency Ratio 53.17% 48.75% 50.55%
          


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

FAQ

What were TrustCo's net income figures for Q1 2023?

TrustCo reported a net income of $17.7 million for the first quarter of 2023.

How much did TrustCo's net interest income increase in Q1 2023?

Net interest income rose by 17.1%, totaling $47.0 million.

What is the average loan growth reported by TrustCo for Q1 2023?

Average loans increased by $312.0 million, up 7.0% compared to Q1 2022.

What is the return on average assets for TrustCo in Q1 2023?

The return on average assets was 1.20% for the first quarter of 2023.

When is the conference call to discuss TrustCo's Q1 2023 results?

The conference call is scheduled for April 25, 2023, at 9:00 a.m. Eastern Time.

Trustco Bank Corp NY

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