TrustCo Reports Historic Performance – Past and Present; Net Income of $17.9 Million up 24% over the Prior Year Quarter

Rhea-AI Summary

TrustCo Bank Corp NY (NASDAQ: TRST) announced a net income of $17.9 million or $0.933 diluted earnings per share for Q2 2022, up from $14.4 million or $0.748 per share in Q2 2021. For the first half of 2022, net income reached $35.0 million or $1.822 per share, compared to $28.5 million or $1.478 per share in 2021. Average loans rose by 4.6%, and deposits increased by 2.9%. The net interest margin improved to 2.83%. The bank also reported an increase in return on average assets to 1.15% and return on average equity to 12.08%.

Positive

• Net income increased to $17.9 million in Q2 2022, up 24.5% YoY.
• Diluted earnings per share rose to $0.933, a 24.7% increase from Q2 2021.
• Average loans increased by $196.2 million or 4.6% YoY.
• Net interest margin improved to 2.83%, up 13 basis points from the previous year.
• Return on average assets and equity improved to 1.15% and 12.08%, respectively.

Negative

• Salaries and benefits expense increased by approximately $2.2 million quarter-over-quarter.
• A net decrease of $3.5 million in retained earnings due to the adoption of new accounting standards.

GLENVILLE, N.Y., July 21, 2022 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced second quarter 2022 net income of $17.9 million or $0.933 diluted earnings per share, compared to net income of $14.4 million or $0.748 diluted earnings per share for the second quarter 2021; and net income of $35.0 million or $1.822 diluted earnings per share for the six months ended June 30, 2022, compared to net income of $28.5 million or $1.478 diluted earnings per share for the six months ended June 30, 2021.  

Overview

Noting that Trustco Bank marked its 120^th year serving the community this June by ringing Nasdaq’s opening bell on June 13, 2022, Robert J. McCormick, Chairman, President and Chief Executive Officer said “The long-sustained success and strong financial performance of TrustCo Bank Corp NY truly is something to be celebrated. With events from Times Square in New York City to our historic main office in Schenectady, New York, this quarter we have honored the leaders that came before us building not just a strong bank, but enduring community bonds, and touted our strategic plan for weathering a low interest rate environment. We are very pleased to report today that these efforts have culminated in another quarter of record earnings and very positive loan growth.”

Details

Average loans were up $196.2 million or 4.6% in the second quarter 2022 over the same period in 2021. Average residential loans, our primary lending focus, were up $202.0 million, or 5.3%, in the second quarter 2022 over the same period in 2021. Average deposits were up $153.1 million or 2.9% for the second quarter 2022 over the same period a year earlier. The increase in deposits was the result of a $382.6 million or 9.5% 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 $229.5 million or 19.2%, for the second quarter 2022 over the same period in 2021. Within the core deposits, checking balances were up $152.0 million or 8.0% (including interest bearing and non-interest bearing checking balances), money market balances were up $48.7 million or 6.7%, and savings balances were up $181.9 million or 13.2%. 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 continue 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 0.10% in the second quarter 2022 from 0.17% in the second quarter 2021. A significant portion of our CD portfolio (time deposits) repriced during the last year while interest rates remained low; however, the Bank is monitoring the recent Federal Funds target rate increases, and the effects it is having on deposit rates as we move forward. Continued increases in rates by the Federal Reserve Board will more than likely cause an increase in rates of interest bearing liabilities. The net interest margin for the second quarter 2022 was 2.83%, up 13 basis points from 2.70% in the second quarter of 2021. This was primarily also due to the recent increase in the Federal Funds target rate, resulting in more interest earned on our short-term funds.   

The Bank continued to demonstrate its ability to grow shareholders’ equity as average equity was up $17.7 million or 3.1% in the second quarter of 2022 compared to the same period in 2021. Return on average assets and return on average equity for the second quarter 2022 were 1.15% and 12.08%, respectively, an increase as compared to 0.95% and 10.05% for the second quarter 2021. Improving efficiencies to reduce costs continues to remain a key area of focus. Salaries and benefits expense increased approximately $2.2 million over the prior quarter due to a true-up to the incentive compensation accrual in the prior quarter. Salaries and benefits expense has returned to historical levels in the second quarter of 2022. The efficiency ratio was 51.97 for the second quarter 2022, a decrease as compared to 56.91 for the second quarter 2021. The Bank also purchased 75 thousand shares of stock under the previously announced Stock Repurchase Plan.
  
Asset quality and loan loss reserve measures have stayed consistent. Nonperforming loans (NPLs) were $18.7 million at June 30, 2022, compared to $20.8 million at June 30, 2021. NPLs were 0.41% and 0.48% of total loans at June 30, 2022 and 2021, respectively. The coverage ratio, or allowance for credit losses on loans to NPLs, was 242.0% at June 30, 2022, compared to 240.9% at June 30, 2021. Nonperforming assets (NPAs) were $19.4 million at June 30, 2022, compared to $21.1 million at June 30, 2021. As mentioned in the prior quarter, the Company adopted Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”) effective January 1, 2022. TrustCo recorded a net decrease to retained earnings of $3.5 million upon adoption of the new accounting standard. The transition adjustment at January 1, 2022 included a $2.4 million increase in the allowance for credit losses on loans, a $2.3 million increase in the allowance for estimated credit losses on unfunded off-balance sheet credit exposures, and a corresponding increase in deferred tax assets of $1.2 million. The Company recorded a credit to provision for credit losses of $491 thousand, which includes a credit to provision for credit losses on loans of $1.0 million as a result of improving unemployment and housing price forecasts, offset by a provision for credit losses on unfunded commitments of $509 thousand as a result of a corresponding increase in unfunded loan commitments. The ratio of allowance for credit losses on loans to total loans was 1.00% and 1.15% as of June 30, 2022 and 2021, respectively. The allowance for credit losses on loans was $45.3 million at June 30, 2022, compared to $50.2 million at June 30, 2021.

Net recoveries for the second quarter 2022 were $107 thousand versus net recoveries in the second quarter 2021 of $164 thousand. The annualized net recoveries ratio was (0.01)% and (0.02)% for the second quarter 2022 and 2021, respectively.

At June 30, 2022 the equity to asset ratio was 9.55%, compared to 9.45% at June 30, 2021. Book value per share at June 30, 2022 was $31.06, up 3.5% compared to $30.00 a year earlier.

TrustCo Bank Corp NY is a $6.2 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 144 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 2022.

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 2022 results will be held at 9:00 a.m. Eastern Time on July 22, 2022. Those wishing to participate in the call may dial toll-free for the United States at 1-844-200-6205, for Canada at 1-833-950-0062, and all other locations at 1-929-526-1599, Access code 005124. 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 575732. The call will also be audio webcast at https://events.q4inc.com/attendee/221175934, 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 2022, 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 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 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: the effects of inflation and inflationary pressures and changes in monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; the impact of the actions taken by governmental authorities to contain the COVID-19 pandemic or address the impact of the pandemic 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; changes in and uncertainty related to benchmark interest rates used to price loans and deposits; future business strategies related to the implementation of CECL; credit risks and risks from concentrations (by geographic area and by loan product) within our loan portfolio; changes in local market areas and general business and economic trends, as well as changes in consumer spending and savings habits; and our ability to assess and react effectively to such changes; 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; 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; 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; 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
		6/30/2022			3/31/2022			6/30/2021
Summary of operations
Net interest income (TE)	$	43,060			40,096			40,122
(Credit) Provision for credit losses		(491	)		(200	)		-
Noninterest income		4,916			5,183			4,688
Noninterest expense		25,005			22,765			25,440
Net income		17,871			17,089			14,433
Per share
Net income per share:
- Basic	$	0.933			0.890			0.749
- Diluted		0.933			0.890			0.748
Cash dividends		0.350			0.350			0.341
Book value at period end		31.06			30.85			30.00
Market price at period end		30.84			31.93			34.38
At period end
Full time equivalent employees		793			769			769
Full service banking offices		144			144			147
Performance ratios
Return on average assets		1.15		%	1.12			0.95
Return on average equity		12.08			11.60			10.05
Efficiency (1)		51.97			50.55			56.91
Net interest spread (TE)		2.80			2.63			2.66
Net interest margin (TE)		2.83			2.66			2.70
Dividend payout ratio		37.46			39.36			45.51
Capital ratios at period end
Consolidated tangible equity to tangible assets (2)		9.54		%	9.43			9.44
Consolidated equity to assets		9.55		%	9.44			9.45
Asset quality analysis at period end
Nonperforming loans to total loans		0.41			0.43			0.48
Nonperforming assets to total assets		0.31			0.31			0.34
Allowance for credit losses on loans to total loans		1.00			1.03			1.15
Coverage ratio (3)		2.4x			2.4x			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 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.
TE = Taxable equivalent

FINANCIAL HIGHLIGHTS, Continued
(dollars in thousands, except per share data)
(Unaudited)
	Six months ended
		06/30/22			06/30/21
Summary of operations
Net interest income (TE)	$	83,156			80,229
(Credit) Provision for credit losses		(691	)		350
Noninterest income		10,099			9,116
Noninterest expense		47,770			50,775
Net income		34,960			28,516
Per share
Net income per share:
- Basic	$	1.822			1.479
- Diluted		1.822			1.478
Cash dividends		0.700			0.681
Book value at period end		31.06			30.00
Market price at period end		30.84			34.38
Performance ratios
Return on average assets		1.13			0.96
Return on average equity		11.84			10.03
Efficiency (1)		51.28			56.63
Net interest spread (TE)		2.72			2.70
Net interest margin (TE)		2.74			2.74
Dividend payout ratio		38.39			46.07
(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.
TE = Taxable equivalent.

CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		6/30/2022			3/31/2022			12/31/2021			9/30/2021			6/30/2021
Interest and dividend income:
Interest and fees on loans	$	39,604			39,003			39,655			39,488			39,808
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		147			86			76			91			97
State and political subdivisions		-			1			-			1			-
Mortgage-backed securities and collateralized mortgage
obligations - residential		1,367			1,087			1,073			1,038			1,167
Corporate bonds		522			233			206			220			323
Small Business Administration - guaranteed
participation securities		140			154			165			181			193
Other securities		2			2			4			5			5
Total interest and dividends on securities available for sale		2,178			1,563			1,524			1,536			1,785
Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations - residential		87			90			97			104			111
Total interest on held to maturity securities		87			90			97			104			111
Federal Reserve Bank and Federal Home Loan Bank stock		65			62			62			64			65
Interest on federal funds sold and other short-term investments		2,253			572			432			470			286
Total interest income		44,187			41,290			41,770			41,662			42,055
Interest expense:
Interest on deposits:
Interest-bearing checking		42			44			42			38			46
Savings		163			156			149			154			162
Money market deposit accounts		210			214			201			202			236
Time deposits		536			546			865			1,149			1,261
Interest on short-term borrowings		176			234			221			232			228
Total interest expense		1,127			1,194			1,478			1,775			1,933
Net interest income		43,060			40,096			40,292			39,887			40,122
Less: (Credit) Provision for credit losses		(491	)		(200	)		(3,000	)		(2,800	)		-
Net interest income after provision for loan losses		43,551			40,296			43,292			42,687			40,122
Noninterest income:
Trustco Financial Services income		1,996			1,833			1,766			1,558			1,999
Fees for services to customers		2,658			2,801			2,578			2,531			2,486
Other		262			549			182			206			203
Total noninterest income		4,916			5,183			4,526			4,295			4,688
Noninterest expenses:
Salaries and employee benefits		11,464			9,239			11,984			11,909			12,403
Net occupancy expense		4,254			4,529			4,569			4,259			4,328
Equipment expense		1,667			1,588			1,758			1,628			1,600
Professional services		1,484			1,467			1,579			1,483			1,614
Outsourced services		2,500			2,280			1,950			2,015			2,169
Advertising expense		389			617			762			310			549
FDIC and other insurance		804			812			780			746			777
Other real estate expense (income), net		74			11			(28	)		32			(60	)
Other		2,369			2,222			2,836			2,315			2,060
Total noninterest expenses		25,005			22,765			26,190			24,697			25,440
Income before taxes		23,462			22,714			21,628			22,285			19,370
Income taxes		5,591			5,625			5,387			5,523			4,937
Net income	$	17,871			17,089			16,241			16,762			14,433
Net income per common share:
- Basic	$	0.933			0.890			0.845			0.871			0.749
- Diluted		0.933			0.890			0.845			0.871			0.748
Average basic shares (in thousands)		19,152			19,209			19,216			19,249			19,281
Average diluted shares (in thousands)		19,153			19,210			19,218			19,252			19,290
Note:  Taxable equivalent net interest income	$	43,060			40,096			40,292			39,888			40,122

 

CONSOLIDATED STATEMENTS OF INCOME, Continued
(dollars in thousands, except per share data)
(Unaudited)
		Six months ended
		06/30/22			06/30/21
Interest and dividend income:
Interest and fees on loans	$	78,607			80,025
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		233			147
State and political subdivisions		1			1
Mortgage-backed securities and collateralized mortgage
obligations - residential		2,454			2,404
Corporate bonds		755			639
Small Business Administration - guaranteed
participation securities		294			399
Other securities		4			11
Total interest and dividends on securities available for sale		3,741			3,601
Interest on held to maturity securities:
Mortgage-backed securities-residential		177			234
Total interest on held to maturity securities		177			234
Federal Reserve Bank and Federal Home Loan Bank stock		127			134
Interest on federal funds sold and other short-term investments		2,825			556
Total interest income		85,477			84,550
Interest expense:
Interest on deposits:
Interest-bearing checking		86			98
Savings		319			321
Money market deposit accounts		424			519
Time deposits		1,082			2,927
Interest on short-term borrowings		410			456
Total interest expense		2,321			4,321
Net interest income		83,156			80,229
Less: (Credit) Provision for credit losses		(691	)		350
Net interest income after provision for loan losses		83,847			79,879
Noninterest income:
Trustco Financial Services income		3,829			4,034
Fees for services to customers		5,459			4,690
Other		811			392
Total noninterest income		10,099			9,116
Noninterest expenses:
Salaries and employee benefits		20,703			24,828
Net occupancy expense		8,783			8,914
Equipment expense		3,255			3,231
Professional services		2,951			3,046
Outsourced services		4,780			4,419
Advertising expense		1,006			903
FDIC and other insurance		1,616			1,484
Other real estate expense, net		85			179
Other		4,591			3,771
Total noninterest expenses		47,770			50,775
Income before taxes		46,176			38,220
Income taxes		11,216			9,704
Net income	$	34,960			28,516
Net income per common share:
- Basic	$	1.822			1.479
- Diluted		1.822			1.478
Average basic shares (in thousands)		19,184			19,284
Average diluted shares (in thousands)		19,185			19,292
Note: Taxable equivalent net interest income	$	83,156			80,229

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
		6/30/2022			3/31/2022			12/31/2021			9/30/2021			6/30/2021
ASSETS:
Cash and due from banks	$	46,611			47,526			48,357			45,486			47,766
Federal funds sold and other short term investments		999,573			1,225,022			1,171,113			1,147,853			1,134,622
Total cash and cash equivalents		1,046,184			1,272,548			1,219,470			1,193,339			1,182,388
Securities available for sale:
U. S. government sponsored enterprises		101,100			62,059			59,179			59,749			74,579
States and political subdivisions		41			41			41			48			48
Mortgage-backed securities and collateralized mortgage
obligations - residential		287,450			244,045			270,798			293,585			315,656
Small Business Administration - guaranteed
participation securities		25,428			28,086			31,674			34,569			37,199
Corporate bonds		87,740			74,089			45,337			45,915			54,647
Other securities		656			671			684			686			686
Total securities available for sale		502,415			408,991			407,713			434,552			482,815
Held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations-residential		8,544			9,183			9,923			10,701			11,665
Total held to maturity securities		8,544			9,183			9,923			10,701			11,665
Federal Reserve Bank and Federal Home Loan Bank stock		5,797			5,604			5,604			5,604			5,604
Loans:
Commercial		199,886			192,408			200,200			204,679			214,164
Residential mortgage loans		4,076,657			4,026,434			3,998,187			3,951,285			3,892,351
Home equity line of credit		253,758			236,117			230,976			231,314			234,214
Installment loans		10,258			9,395			9,416			9,451			8,638
Loans, net of deferred net costs		4,540,559			4,464,354			4,438,779			4,396,729			4,349,367
Less: Allowance for credit losses on loans		45,285			46,178			44,267			47,350			50,155
Net loans		4,495,274			4,418,176			4,394,512			4,349,379			4,299,212
Bank premises and equipment, net		32,381			32,644			33,027			33,233			33,691
Operating lease right-of-use assets		47,343			48,569			48,090			45,836			45,825
Other assets		88,853			86,158			78,207			62,191			61,378
Total assets	$	6,226,791			6,281,873			6,196,546			6,134,835			6,122,578
LIABILITIES:
Deposits:
Demand	$	851,573			835,281			794,878			790,663			765,193
Interest-bearing checking		1,208,159			1,225,093			1,191,304			1,148,593			1,152,901
Savings accounts		1,577,034			1,553,152			1,504,554			1,433,130			1,409,556
Money market deposit accounts		760,338			796,275			782,079			744,051			732,963
Time deposits		999,737			940,215			995,314			1,124,581			1,169,907
Total deposits		5,396,841			5,350,016			5,268,129			5,241,018			5,230,520
Short-term borrowings		147,282			248,371			244,686			230,770			237,791
Operating lease liabilities		51,777			53,094			52,720			50,515			50,586
Accrued expenses and other liabilities		36,259			37,497			29,883			25,849			25,088
Total liabilities		5,632,159			5,688,978			5,595,418			5,548,152			5,543,985
SHAREHOLDERS' EQUITY:
Capital stock		20,046			20,046			20,046			20,042			20,041
Surplus		256,661			256,661			256,661			256,565			256,536
Undivided profits		367,100			355,948			349,056			339,554			329,350
Accumulated other comprehensive (loss) income, net of tax		(9,422	)		(2,369	)		12,147			7,304			7,840
Treasury stock at cost		(39,753	)		(37,391	)		(36,782	)		(36,782	)		(35,174	)
Total shareholders' equity		594,632			592,895			601,128			586,683			578,593
Total liabilities and shareholders' equity	$	6,226,791			6,281,873			6,196,546			6,134,835			6,122,578
Outstanding shares (in thousands)		19,127			19,202			19,220			19,216			19,265

NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
		6/30/2022		3/31/2022		12/31/2021		9/30/2021		6/30/2021
Nonperforming Assets
New York and other states*
Loans in nonaccrual status:
Commercial	$	203		187		112		176		150
Real estate mortgage - 1 to 4 family		16,259		17,065		16,574		17,878		18,466
Installment		40		33		37		32		43
Total non-accrual loans		16,502		17,285		16,723		18,086		18,659
Other nonperforming real estate mortgages - 1 to 4 family		14		16		17		19		20
Total nonperforming loans		16,516		17,301		16,740		18,105		18,679
Other real estate owned		644		269		362		511		251
Total nonperforming assets	$	17,160		17,570		17,102		18,616		18,930
Florida
Loans in nonaccrual status:
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		2,192		2,109		2,016		2,066		2,142
Installment		5		8		-		-		-
Total non-accrual loans		2,197		2,117		2,016		2,066		2,142
Other nonperforming real estate mortgages - 1 to 4 family		-		-		-		-		-
Total nonperforming loans		2,197		2,117		2,016		2,066		2,142
Other real estate owned		-		-		-		-		-
Total nonperforming assets	$	2,197		2,117		2,016		2,066		2,142
Total
Loans in nonaccrual status:
Commercial	$	203		187		112		176		150
Real estate mortgage - 1 to 4 family		18,451		19,174		18,590		19,944		20,608
Installment		45		41		37		32		43
Total non-accrual loans		18,699		19,402		18,739		20,152		20,801
Other nonperforming real estate mortgages - 1 to 4 family		14		16		17		19		20
Total nonperforming loans		18,713		19,418		18,756		20,171		20,821
Other real estate owned		644		269		362		511		251
Total nonperforming assets	$	19,357		19,687		19,118		20,682		21,072
Quarterly Net (Recoveries) Chargeoffs
New York and other states*
Commercial	$	-		36		-		30		-
Real estate mortgage - 1 to 4 family		(119	)	(97	)	52		(39	)	(136	)
Installment		12		3		31		14		(27	)
Total net (recoveries) chargeoffs	$	(107	)	(58	)	83		5		(163	)
Florida
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		-		-		-		-		(1	)
Installment		-		-		-		-		-
Total net (recoveries) chargeoffs	$	-		-		-		-		(1	)
Total
Commercial	$	-		36		-		30		-
Real estate mortgage - 1 to 4 family		(119	)	(97	)	52		(39	)	(137	)
Installment		12		3		31		14		(27	)
Total net (recoveries) chargeoffs	$	(107	)	(58	)	83		5		(164	)
Asset Quality Ratios
Total nonperforming loans (1)	$	18,713		19,418		18,756		20,171		20,821
Total nonperforming assets (1)		19,357		19,687		19,118		20,682		21,072
Total net (recoveries) chargeoffs (2)		(107	)	(58	)	83		5		(164	)
Allowance for credit losses on loans (1)		45,285		46,178		44,267		47,350		50,155
Nonperforming loans to total loans		0.41	%	0.43	%	0.42	%	0.46	%	0.48	%
Nonperforming assets to total assets		0.31	%	0.31	%	0.31	%	0.34	%	0.34	%
Allowance for credit losses on loans to total loans		1.00	%	1.03	%	1.00	%	1.08	%	1.15	%
Coverage ratio (1)		242.0	%	237.8	%	236.0	%	234.7	%	240.9	%
Annualized net (recoveries) chargeoffs to average loans (2)		-0.01	%	-0.01	%	0.01	%	0.00	%	-0.02	%
Allowance for credit losses on loans to annualized net (recoveries) chargeoffs (2)		N/A		N/A		133.3	x	2367.5	x	N/A
* 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, 2022							June 30, 2021
		Average			Interest	Average			Average			Interest	Average
		Balance				Rate			Balance				Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	71,409			147	0.83	%	$	74,971			97	0.52	%
Mortgage backed securities and collateralized mortgage
obligations - residential		282,800			1,367	1.92			327,332			1,167	1.43
State and political subdivisions		41			-	-			48			0	-
Corporate bonds		87,556			522	2.38			57,021			323	2.27
Small Business Administration - guaranteed
participation securities		27,512			140	2.04			36,839			193	2.09
Other		686			2	1.17			686			5	2.92
Total securities available for sale		470,004			2,178	1.85			496,897			1,785	1.44
Federal funds sold and other short-term Investments		1,101,489			2,253	0.82			1,126,298			286	0.10
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential		8,859			87	3.93			12,179			111	3.67
Total held to maturity securities		8,859			87	3.93			12,179			111	3.67
Federal Reserve Bank and Federal Home Loan Bank stock		5,797			65	4.49			5,598			65	4.64
Commercial loans		198,972			2,402	4.83			214,912			2,608	4.85
Residential mortgage loans		4,049,271			34,771	3.43			3,847,274			34,836	3.62
Home equity lines of credit		243,648			2,269	3.74			234,476			2,211	3.78
Installment loans		9,321			162	6.98			8,349			153	7.34
Loans, net of unearned income		4,501,212			39,604	3.52			4,305,011			39,808	3.70
Total interest earning assets		6,087,361			44,187	2.90			5,945,983			42,055	2.83
Allowance for credit losses on loans		(46,411	)						(50,196	)
Cash & non-interest earning assets		193,099							197,561
Total assets	$	6,234,049						$	6,093,348
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	1,210,554			42	0.01	%	$	1,149,296			46	0.02	%
Money market accounts		777,860			210	0.11			729,136			236	0.13
Savings		1,564,454			163	0.04			1,382,604			162	0.05
Time deposits		968,560			536	0.22			1,198,064			1,261	0.42
Total interest bearing deposits		4,521,428			951	0.08			4,459,100			1,705	0.15
Short-term borrowings		197,259			176	0.36			233,426			228	0.39
Total interest bearing liabilities		4,718,687			1,127	0.10			4,692,526			1,933	0.17
Demand deposits		842,487							751,719
Other liabilities		79,431							73,368
Shareholders' equity		593,444							575,735
Total liabilities and shareholders' equity	$	6,234,049						$	6,093,348
Net interest income, tax equivalent					43,060							40,122
Net interest spread						2.80	%						2.66	%
Net interest margin (net interest income to
total interest earning assets)						2.83	%						2.70	%
Tax equivalent adjustment					-							-
Net interest income					43,060							40,122
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, 2022							June 30, 2021
		Average			Interest	Average			Average			Interest	Average
		Balance				Rate			Balance				Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	66,609			233	0.70	%	$	63,374			147	0.46	%
Mortgage backed securities and collateralized mortgage
obligations - residential		272,022			2,454	1.80			327,472			2,404	1.47
State and political subdivisions		41			1	6.73			49			1	6.60
Corporate bonds		70,362			755	2.15			60,160			639	2.12
Small Business Administration - guaranteed
participation securities		28,685			294	2.05			38,203			399	2.09
Other		686			4	1.17			687			11	3.20
Total securities available for sale		438,405			3,741	1.71			489,945			3,601	1.47
Federal funds sold and other short-term Investments		1,144,108			2,825	0.50			1,078,201			556	0.10
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential		9,198			177	3.86			12,723			234	3.68
Total held to maturity securities		9,198			177	3.86			12,723			234	3.68
Federal Reserve Bank and Federal Home Loan Bank stock		5,701			127	4.46			5,552			134	4.83
Commercial loans		196,991			4,928	5.00			213,853			5,554	5.19
Residential mortgage loans		4,028,667			68,968	3.43			3,818,426			69,687	3.65
Home equity lines of credit		238,122			4,393	3.72			236,417			4,471	3.81
Installment loans		9,148			318	7.00			8,573			313	7.37
Loans, net of unearned income		4,472,928			78,607	3.52			4,277,269			80,025	3.75
Total interest earning assets		6,070,340			85,477	2.82			5,863,690			84,550	2.89
Allowance for credit losses on loans		(46,584	)						(50,071	)
Cash & non-interest earning assets		200,193							197,682
Total assets	$	6,223,949						$	6,011,301
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	1,201,078			86	0.01	%	$	1,117,113			98	0.02	%
Money market accounts		784,737			424	0.11			727,363			519	0.14
Savings		1,546,316			319	0.04			1,349,013			321	0.05
Time deposits		966,372			1,082	0.23			1,229,838			2,927	0.48
Total interest bearing deposits		4,498,503			1,911	0.09			4,423,327			3,865	0.18
Short-term borrowings		222,755			410	0.37			228,643			456	0.40
Total interest bearing liabilities		4,721,258			2,321	0.10			4,651,970			4,321	0.19
Demand deposits		825,685							712,790
Other liabilities		81,520							73,276
Shareholders' equity		595,486							573,265
Total liabilities and shareholders' equity	$	6,223,949						$	6,011,301
Net interest income, tax equivalent					83,156							80,229
Net interest spread						2.72	%						2.70	%
Net interest margin (net interest income to
total interest earning assets)						2.74	%						2.74	%
Tax equivalent adjustment					-							-
Net interest income					83,156							80,229

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)
		6/30/2022		3/31/2022		6/30/2021
Tangible Equity to Tangible Assets
Total Assets (GAAP)	$	6,226,791		6,281,873		6,122,578
Less: Intangible assets		553		553		553
Tangible assets (Non-GAAP)		6,226,238		6,281,320		6,122,025
Equity (GAAP)		594,632		592,895		578,593
Less: Intangible assets		553		553		553
Tangible equity (Non-GAAP)		594,079		592,342		578,040
Tangible Equity to Tangible Assets (Non-GAAP)		9.54	%	9.43	%	9.44	%
Equity to Assets (GAAP)		9.55	%	9.44	%	9.45	%
		Three months ended								Six months ended
Efficiency Ratio		6/30/2022		3/31/2022		6/30/2021				6/30/2022		6/30/2021
Net interest income (fully taxable equivalent) (Non-GAAP)	$	43,060		40,096		40,122			$	83,156		80,229
Non-interest income (GAAP)		4,916		5,183		4,688				10,099		9,116
Less: Net gain on sale of building		-		268		-				268		-
Revenue used for efficiency ratio (Non-GAAP)		47,976		45,011		44,810				92,987		89,345
Total noninterest expense (GAAP)		25,005		22,765		25,440				47,770		50,775
Less: Other real estate (income) expense, net		74		11		(60	)			85		179
Expense used for efficiency ratio (Non-GAAP)		24,931		22,754		25,500				47,685		50,596
Efficiency Ratio		51.97	%	50.55	%	56.91	%			51.28	%	56.63	%

FAQ

What were TrustCo Bank's earnings for the second quarter of 2022?

TrustCo Bank reported net income of $17.9 million or $0.933 diluted earnings per share for Q2 2022.

How did TrustCo Bank's net income for the first half of 2022 compare to last year?

For the first half of 2022, TrustCo Bank's net income was $35.0 million, up from $28.5 million in the same period in 2021.

What was the average loan growth for TrustCo Bank in Q2 2022?

Average loans increased by $196.2 million or 4.6% in Q2 2022 compared to Q2 2021.

What was the net interest margin for TrustCo Bank in Q2 2022?

The net interest margin for Q2 2022 improved to 2.83%.

How did the return on average equity change for TrustCo Bank in Q2 2022?

Return on average equity increased to 12.08% in Q2 2022.