TrustCo’s Home Town Approach to Customer Relationships Propels Loans to All Time High

Rhea-AI Summary

TrustCo Bank Corp NY reports third quarter net income of $14.7 million. Loan portfolio reaches all-time high of $5.0 billion. Solid financial results with net interest income of $42.2 million and return on average assets (ROAA) of 0.96%. Nonperforming loans (NPLs) decrease to $17.9 million. Consolidated equity to assets increases to 10.31%.

Positive

• Loan portfolio reaches all-time high of $5.0 billion
• Solid financial results with net interest income of $42.2 million
• Return on average assets (ROAA) of 0.96%
• Nonperforming loans (NPLs) decrease to $17.9 million
• Consolidated equity to assets increases to 10.31%

Negative

• None.

Reports Third Quarter Net Income Of $14.7 million

Executive Snapshot:

• Loan portfolio reaches all-time high:
  • Total loans were up $330.8 million or 7.1% for the third quarter 2023 compared to third quarter 2022
  • At $5.0 billion as of September 30, 2023, loans continue to set new all-time highs
    
    
• Continued solid financial results:
  
  
  • Key metrics for third quarter 2023:
    • Net income of $14.7 million
    • Net interest income of $42.2 million
    • Return on average assets (ROAA) of 0.96%
    • Return on average equity (ROAE) of 9.32%
    • Book value at period end was $32.80, up from $30.89 compared to September 30, 2022
      
      
• Superior asset quality:
  
  
  • Nonperforming loans (NPLs) were $17.9 million as of September 30, 2023, down from the same period in the prior year, and continue to remain at low levels
  • NPLs to total loans improved to 0.36% compared to 0.40% at September 30, 2022
  • Quarterly net recoveries were $12 thousand in the third quarter 2023, resulting in seven consecutive quarters of net recoveries

• Capital continues to grow:
  • Consolidated equity to assets increased to 10.31% at September 30, 2023 from 9.69% at September 30, 2022

GLENVILLE, N.Y., Oct. 23, 2023 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced third quarter 2023 net income of $14.7 million, or $0.77 diluted earnings per share, compared to net income of $16.4 million, or $0.86 diluted earnings per share, for the second quarter 2023; and compared to net income of $19.4 million, or $1.01 diluted earnings per share, for the third quarter 2022; and net income of $48.8 million, or $2.57 diluted earnings per share, for the nine months ended September 30, 2023, compared to net income of $54.3 million, or $2.84 diluted earnings per share, for the nine months ended September 30, 2022. Total loan growth increased $330.8 million, or 7.1% for the third quarter 2023 over the same period in 2022.

Overview

Chairman, President, and CEO, Robert J. McCormick said “Our strength, in large measure, is characterized by our credit quality. Solid underwriting and the avoidance of irresponsible lending have long been part of the fabric of our company, and we recently have had seven consecutive quarters of net loan recoveries. We have leveraged strong customer relationships to foster organic loan portfolio growth and retain deposits despite competitive pressure on pricing. We are realizing the benefits of our long-term capital preservation strategy, avoiding the pitfalls of low return investments that have plagued others. Liquidity management continues to be an acute focus, and our capital ratio results this quarter exemplify those efforts. Other TrustCo hallmarks continue to serve us well – we are debt free and extremely well-capitalized. While we can’t predict the future, no matter what the rate environment, we stand ready to capitalize on opportunities.”

TrustCo saw deposit balances rebound from the end of the prior year with net deposit inflows during the first nine months of 2023. Loan growth continued across all categories in the third quarter 2023 compared to the prior year’s third 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, deposit inflows, and cash flow from the existing loan portfolio. The Federal Reserve’s decision to raise the target Federal Funds rate multiple times since March 2022 has contributed to our results in the third quarter 2023, as our cash position and other variable rate products continue to reprice upward, and they are likely to continue to do so to the extent there are additional rate increases. Accordingly, deposit costs continue to increase while we are also experiencing a shift in deposits to Time Deposits. We continue to deploy strong marketing efforts to retain our deposit balances. We also note that current mortgage rates significantly exceed the yield on our existing portfolio of mortgages, which, if sustained, should result in 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

Average loans were up $337.6 million or 7.4% in the third quarter 2023 over the same period in 2022. Average residential loans, our primary lending focus, were up $219.4 million, or 5.3%, in the third quarter 2023 over the same period in 2022. Average commercial loans and home equity lines of credit also increased $53.6 million, or 25.8%, and $58.9 million, or 22.5%, respectively, in the third quarter 2023 over the same period in 2022.

We are actively retaining deposits, which is evident since they have increased since December 31, 2022. Total deposits as of September 30, 2023 increased $41.6 million to $5.23 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 we instead retained that liquidity on the balance sheet for when depositors would start to absorb the funds. This gave us flexibility to strategically price deposits while retaining core customers.

Net interest income was $42.2 million for the third quarter 2023, a decrease of $5.6 million, or 11.7%, compared to the same period in 2022, driven by a higher cost of deposits, partially offset by the increased yield on the cash balance at the Federal Reserve Bank due to the increases in the Federal Funds target rate over the past year, and loan growth. The net interest margin for the third quarter 2023 was 2.85%, down 31 basis points from 3.16% in the third quarter of 2022. The yield on interest earnings assets increased to 3.88%, up 64 basis points from 3.24 % in the third quarter of 2022. The cost of interest bearing liabilities increased to 1.33% in the third quarter 2023 from 0.11% in the third quarter 2022.

Asset quality remains strong and has been consistent over the past twelve months. The Company recorded a provision for credit losses of $100 thousand in the third quarter of 2023, which is the result of a provision for credit losses on loans of $300 thousand, offset by a benefit for credit losses on unfunded commitments of $200 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 0.95% and 0.98% as of September 30, 2023 and 2022, respectively. The allowance for credit losses on loans was $47.2 million at September 30, 2023, compared to $45.5 million at September 30, 2022. NPLs were $17.9 million at September 30, 2023, compared to $18.7 million at September 30, 2022. NPLs were 0.36% and 0.40% of total loans at September 30, 2023 and 2022, respectively. The coverage ratio, or allowance for credit losses on loans to NPLs, was 264.2% at September 30, 2023, compared to 243.6% at September 30, 2022. Nonperforming assets (NPAs) were $19.1 million at September 30, 2023, compared to $19.4 million at September 30, 2022.   Additionally, we have also had minimal charge-offs and have been in a net recovery position for the past seven quarters.  

At September 30, 2023, our equity to asset ratio was 10.31%, compared to 9.69% at September 30, 2022. Book value per share at September 30, 2023 was $32.80, up 6.2% compared to $30.89 a year earlier.

A conference call to discuss third quarter 2023 results will be held at 9:00 a.m. Eastern Time on October 24, 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 040076.   A replay of the call will be available for thirty days by dialing toll-free for the United States and Canada at 1-866-813-9403, Access code 265872. The call will also be audio webcast at https://events.q4inc.com/attendee/175259326 , and will be available for one year.

About TrustCo Bank Corp NY

TrustCo Bank Corp NY is a $6.1 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 September 30, 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 future performance, 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 volatility in financial markets and macroeconomic or geopolitical concerns related to inflation, rising interest rates and ongoing armed conflicts (including the Russia/Ukraine conflict and the conflict in Israel and surrounding areas). 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 soundness of other financial institutions; U.S. government shutdowns or failure to increase the debt ceiling; 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; 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 impact of data breaches and cyber-attacks; the impact of a failure in or breach of our operational or security systems or infrastructure, or those of third parties; the impact of an unauthorized disclosure of sensitive or confidential client or customer information; the impact of interruptions in the effective operation of our computer systems; the impact of any expansion by us into new lines of business or new products and services; the impact of anti-takeover provisions in our organizational documents; the impact of the manner in which we allocate capital; 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
		9/30/2023			6/30/2023				9/30/2022
Summary of operations
Net interest income		$	42,221		$	44,052			$	47,793
Provision (Credit) for credit losses			100			(500	)			300
Noninterest income			4,574			4,598				4,386
Noninterest expense			27,460			27,327				26,144
Net income			14,680			16,372				19,364
Per share
Net income per share:
- Basic		$	0.77		$	0.86			$	1.01
- Diluted			0.77			0.86				1.01
Cash dividends			0.36			0.36				0.35
Book value at period end			32.80			32.66				30.89
Market price at period end			27.29			28.61				31.42
At period end
Full time equivalent employees			764			791				753
Full service banking offices			143			143				144
Performance ratios
Return on average assets			0.96	%		1.09		%		1.24	%
Return on average equity			9.32			10.61				12.78
Efficiency ratio (1)			58.33			55.87				49.87
Net interest spread			2.55			2.74				3.13
Net interest margin			2.85			2.98				3.16
Dividend payout ratio			46.65			41.83				34.57
Capital ratios at period end
Consolidated equity to assets			10.31	%		10.23		%		9.69	%
Consolidated tangible equity to tangible assets (2)			10.30	%		10.22		%		9.68	%
Asset quality analysis at period end
Nonperforming loans to total loans			0.36	%		0.40		%		0.40	%
Nonperforming assets to total assets			0.31			0.34				0.32
Allowance for credit losses on loans to total loans			0.95			0.96				0.98
Coverage ratio (3)		2.6x			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 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.

FINANCIAL HIGHLIGHTS, Continued
(dollars in thousands, except per share data)
(Unaudited)
		Nine months ended
		09/30/23			09/30/22
Summary of operations
Net interest income	$	133,238			130,949
(Credit) Provision for credit losses		(100	)		(391	)
Noninterest income		13,841			14,485
Noninterest expense		82,466			73,914
Net income		48,798			54,324
Per share
Net income per share:
- Basic	$	2.57			2.84
- Diluted		2.57			2.84
Cash dividends		1.08			1.05
Book value at period end		32.80			30.89
Market price at period end		27.29			31.42
Performance ratios
Return on average assets		1.08		%	1.17
Return on average equity		10.57			12.16
Efficiency ratio (1)		55.70			50.77
Net interest spread		2.78			2.86
Net interest margin		3.01			2.88
Dividend payout ratio		42.11			37.03
(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.

CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		9/30/2023			6/30/2023				3/31/2023			12/31/2022			9/30/2022
Interest and dividend income:
Interest and fees on loans		$	47,921		$	46,062			$	44,272		$	42,711		$	40,896
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises			672			691				692			693			479
State and political subdivisions			-			1				-			-			1
Mortgage-backed securities and collateralized mortgage
obligations - residential			1,485			1,543				1,585			1,606			1,617
Corporate bonds			473			516				521			523			526
Small Business Administration - guaranteed
participation securities			107			111				117			124			133
Other securities			2			3				2			2			3
Total interest and dividends on securities available for sale			2,739			2,865				2,917			2,948			2,759
Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations - residential			73			75				78			81			85
Total interest on held to maturity securities			73			75				78			81			85
Federal Home Loan Bank stock			131			110				110			98			80
Interest on federal funds sold and other short-term investments			6,688			6,970				6,555			6,246			5,221
Total interest income			57,552			56,082				53,932			52,084			49,041
Interest expense:
Interest on deposits:
Interest-bearing checking			102			49				66			61			43
Savings			639			655				530			401			200
Money market deposit accounts			2,384			1,756				814			389			237
Time deposits			11,962			9,291				5,272			1,839			646
Interest on short-term borrowings			244			279				285			208			122
Total interest expense			15,331			12,030				6,967			2,898			1,248
Net interest income			42,221			44,052				46,965			49,186			47,793
Less: Provision (Credit) for credit losses			100			(500	)			300			50			300
Net interest income after provision (credit) for credit losses			42,121			44,552				46,665			49,136			47,493
Noninterest income:
Trustco Financial Services income			1,627			1,412				1,774			1,773			1,435
Fees for services to customers			2,590			2,847				2,648			2,783			2,705
Other			357			339				247			219			246
Total noninterest income			4,574			4,598				4,669			4,775			4,386
Noninterest expenses:
Salaries and employee benefits			12,393			13,122				13,283			13,067			12,134
Net occupancy expense			4,358			4,262				4,598			4,261			4,483
Equipment expense			1,923			1,873				1,962			1,700			1,532
Professional services			1,717			1,360				1,607			1,251			1,375
Outsourced services			2,720			2,491				2,296			2,102			2,328
Advertising expense			586			518				390			532			508
FDIC and other insurance			1,078			1,085				1,052			770			773
Other real estate expense, net			163			148				225			101			124
Other			2,522			2,468				2,266			2,621			2,887
Total noninterest expenses			27,460			27,327				27,679			26,405			26,144
Income before taxes			19,235			21,823				23,655			27,506			25,735
Income taxes			4,555			5,451				5,909			6,596			6,371
Net income		$	14,680		$	16,372			$	17,746		$	20,910		$	19,364
Net income per common share:
- Basic		$	0.77		$	0.86			$	0.93		$	1.10		$	1.01
- Diluted			0.77			0.86				0.93			1.10			1.01
Average basic shares (in thousands)			19,024			19,024				19,024			19,045			19,111
Average diluted shares (in thousands)			19,024			19,024				19,028			19,050			19,112

CONSOLIDATED STATEMENTS OF INCOME, Continued
(dollars in thousands, except per share data)
(Unaudited)
		Nine months ended
		09/30/23			09/30/22
Interest and dividend income:
Interest and fees on loans	$	138,255			119,503
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		2,055			712
State and political subdivisions		1			2
Mortgage-backed securities and collateralized mortgage
obligations - residential		4,613			4,071
Corporate bonds		1,510			1,281
Small Business Administration - guaranteed
participation securities		335			427
Other securities		7			7
Total interest and dividends on securities available for sale		8,521			6,500
Interest on held to maturity securities:
Mortgage-backed securities-residential		226			262
Total interest on held to maturity securities		226			262
Federal Home Loan Bank stock		351			207
Interest on federal funds sold and other short-term investments		20,213			8,046
Total interest income		167,566			134,518
Interest expense:
Interest on deposits:
Interest-bearing checking		217			129
Savings		1,824			519
Money market deposit accounts		4,954			661
Time deposits		26,525			1,728
Interest on short-term borrowings		808			532
Total interest expense		34,328			3,569
Net interest income		133,238			130,949
Less: (Credit) Provision for credit losses		(100	)		(391	)
Net interest income after (credit) provision for credit losses		133,338			131,340
Noninterest income:
Trustco Financial Services income		4,813			5,264
Fees for services to customers		8,085			8,164
Other		943			1,057
Total noninterest income		13,841			14,485
Noninterest expenses:
Salaries and employee benefits		38,798			32,837
Net occupancy expense		13,218			13,266
Equipment expense		5,758			4,787
Professional services		4,684			4,326
Outsourced services		7,507			7,108
Advertising expense		1,494			1,514
FDIC and other insurance		3,215			2,389
Other real estate expense, net		536			209
Other		7,256			7,478
Total noninterest expenses		82,466			73,914
Income before taxes		64,713			71,911
Income taxes		15,915			17,587
Net income	$	48,798			54,324
Net income per common share:
- Basic	$	2.57			2.84
- Diluted		2.57			2.84
Average basic shares (in thousands)		19,024			19,160
Average diluted shares (in thousands)		19,024			19,160

 

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
ASSETS:
Cash and due from banks		$	45,940			$	55,662			$	47,595			$	43,429			$	46,236
Federal funds sold and other short term investments			461,321				547,695				589,389				607,170				795,028
Total cash and cash equivalents			507,261				603,357				636,984				650,599				841,264
Securities available for sale:
U. S. government sponsored enterprises			121,474				113,570				119,132				118,187				102,779
States and political subdivisions			34				34				34				34				41
Mortgage-backed securities and collateralized mortgage
obligations - residential			233,719				243,444				255,556				260,316				261,242
Small Business Administration - guaranteed
participation securities			17,316				18,382				19,821				20,977				22,498
Corporate bonds			76,935				76,618				81,464				81,346				81,002
Other securities			657				656				652				653				657
Total securities available for sale			450,135				452,704				476,659				481,513				468,219
Held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations-residential			6,724				7,043				7,382				7,707				8,091
Total held to maturity securities			6,724				7,043				7,382				7,707				8,091
Federal Reserve Bank and Federal Home Loan Bank stock			6,203				6,203				5,797				5,797				5,797
Loans:
Commercial			268,642				251,434				246,307				231,011				217,120
Residential mortgage loans			4,343,006				4,310,005				4,241,459				4,203,451				4,132,365
Home equity line of credit			332,028				308,976				296,490				286,432				269,341
Installment loans			16,605				16,396				15,326				12,307				10,665
Loans, net of deferred net costs			4,960,281				4,886,811				4,799,582				4,733,201				4,629,491
Less: Allowance for credit losses on loans			47,226				46,914				46,685				46,032				45,517
Net loans			4,913,055				4,839,897				4,752,897				4,687,169				4,583,974
Bank premises and equipment, net			32,135				32,351				32,305				32,556				31,931
Operating lease right-of-use assets			41,475				43,113				43,478				44,727				45,733
Other assets			97,310				90,957				90,306				89,984				94,485
Total assets		$	6,054,298			$	6,075,625			$	6,045,808			$	6,000,052			$	6,079,494
LIABILITIES:
Deposits:
Demand		$	773,293			$	791,353			$	806,075			$	838,147			$	859,829
Interest-bearing checking			1,033,898				1,082,989				1,124,785				1,183,321				1,188,790
Savings accounts			1,235,658				1,315,893				1,400,887				1,521,473				1,562,564
Money market deposit accounts			610,012				625,253				600,410				621,106				716,319
Time deposits			1,581,504				1,442,959				1,280,301				1,028,763				954,352
Total deposits			5,234,365				5,258,447				5,212,458				5,192,810				5,281,854
Short-term borrowings			103,110				113,765				134,293				122,700				124,932
Operating lease liabilities			45,418				47,172				47,643				48,980				50,077
Accrued expenses and other liabilities			47,479				34,852				36,711				35,575				33,625
Total liabilities			5,430,372				5,454,236				5,431,105				5,400,065				5,490,488
SHAREHOLDERS' EQUITY:
Capital stock			20,058				20,058				20,058				20,058				20,046
Surplus			257,078				257,078				257,078				257,078				256,661
Undivided profits			422,082				414,251				404,728				393,831				379,769
Accumulated other comprehensive loss, net of tax			(31,506	)			(26,212	)			(23,375	)			(27,194	)			(25,209	)
Treasury stock at cost			(43,786	)			(43,786	)			(43,786	)			(43,786	)			(42,261	)
Total shareholders' equity			623,926				621,389				614,703				599,987				589,006
Total liabilities and shareholders' equity		$	6,054,298			$	6,075,625			$	6,045,808			$	6,000,052			$	6,079,494
Outstanding shares (in thousands)			19,024				19,024				19,024				19,024				19,052

 

NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
		9/30/2023			6/30/2023			3/31/2023			12/31/2022			9/30/2022
Nonperforming Assets
New York and other states*
Loans in nonaccrual status:
Commercial		$	540		$	545		$	560		$	219		$	179
Real estate mortgage - 1 to 4 family			14,633			16,260			15,722			14,949			16,295
Installment			93			124			59			23			29
Total non-accrual loans			15,266			16,929			16,341			15,191			16,503
Other nonperforming real estate mortgages - 1 to 4 family			5			7			8			10			12
Total nonperforming loans			15,271			16,936			16,349			15,201			16,515
Other real estate owned			1,185			1,412			1,869			2,061			682
Total nonperforming assets		$	16,456		$	18,348		$	18,218		$	17,262		$	17,197
Florida
Loans in nonaccrual status:
Commercial		$	314		$	314		$	314		$	314		$	-
Real estate mortgage - 1 to 4 family			2,228			2,170			2,437			1,895			2,104
Installment			65			-			62			83			65
Total non-accrual loans			2,607			2,484			2,813			2,292			2,169
Other nonperforming real estate mortgages - 1 to 4 family			-			-			-			-			-
Total nonperforming loans			2,607			2,484			2,813			2,292			2,169
Other real estate owned			-			-			-			-			-
Total nonperforming assets		$	2,607		$	2,484		$	2,813		$	2,292		$	2,169
Total
Loans in nonaccrual status:
Commercial		$	854		$	859		$	874		$	533		$	179
Real estate mortgage - 1 to 4 family			16,861			18,430			18,159			16,844			18,399
Installment			158			124			121			106			94
Total non-accrual loans			17,873			19,413			19,154			17,483			18,672
Other nonperforming real estate mortgages - 1 to 4 family			5			7			8			10			12
Total nonperforming loans			17,878			19,420			19,162			17,493			18,684
Other real estate owned			1,185			1,412			1,869			2,061			682
Total nonperforming assets		$	19,063		$	20,832		$	21,031		$	19,554		$	19,366
Quarterly Net (Recoveries) Chargeoffs
New York and other states*
Commercial		$	-		$	(129	)	$	-		$	-		$	-
Real estate mortgage - 1 to 4 family			(26	)		(161	)		(53	)		(46	)		(164	)
Installment			14			21			(6	)		31			34
Total net (recoveries) chargeoffs		$	(12	)	$	(269	)	$	(59	)	$	(15	)	$	(130	)
Florida
Commercial		$	-		$	-		$	-		$	-		$	-
Real estate mortgage - 1 to 4 family			-			-			(25	)		-			-
Installment			-			40			31			-			(2	)
Total net (recoveries) chargeoffs		$	-		$	40		$	6		$	-		$	(2	)
Total
Commercial		$	-		$	(129	)	$	-		$	-		$	-
Real estate mortgage - 1 to 4 family			(26	)		(161	)		(78	)		(46	)		(164	)
Installment			14			61			25			31			32
Total net (recoveries) chargeoffs		$	(12	)	$	(229	)	$	(53	)	$	(15	)	$	(132	)
Asset Quality Ratios
Total nonperforming loans (1)		$	17,878		$	19,420		$	19,162		$	17,493		$	18,684
Total nonperforming assets (1)			19,063			20,832			21,031			19,554			19,366
Total net recoveries (2)			(12	)		(229	)		(53	)		(15	)		(132	)
Allowance for credit losses on loans (1)			47,226			46,914			46,685			46,032			45,517
Nonperforming loans to total loans			0.36	%		0.40	%		0.40	%		0.37	%		0.40	%
Nonperforming assets to total assets			0.31	%		0.34	%		0.35	%		0.33	%		0.32	%
Allowance for credit losses on loans to total loans			0.95	%		0.96	%		0.97	%		0.97	%		0.98	%
Coverage ratio (1)			264.2	%		241.6	%		243.6	%		263.1	%		243.6	%
Annualized net (recoveries) chargeoffs to average loans (2)			0.00	%		-0.02	%		0.00	%		0.00	%		-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
		September 30, 2023									September 30, 2022
		Average				Interest		Average			Average				Interest		Average
		Balance						Rate			Balance						Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises		$	119,406			$	672	2.25	%		$	104,633			$	479	1.83	%
Mortgage backed securities and collateralized mortgage
obligations - residential			269,535				1,485	2.19				302,886				1,617	2.13
State and political subdivisions			34				-	6.74				41				1	8.12
Corporate bonds			80,331				473	2.36				86,965				526	2.42
Small Business Administration - guaranteed
participation securities			19,801				107	2.15				25,533				133	2.08
Other			686				2	1.17				686				3	1.75
Total securities available for sale			489,793				2,739	2.24				520,744				2,759	2.12
Federal funds sold and other short-term Investments			494,597				6,688	5.37				918,909				5,221	2.25
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential			6,877				73	4.22				8,306				85	4.08
Total held to maturity securities			6,877				73	4.22				8,306				85	4.08
Federal Home Loan Bank stock			6,203				131	8.45				5,797				80	5.52
Commercial loans			261,061				3,398	5.21				207,477				2,484	4.79
Residential mortgage loans			4,325,219				39,321	3.64				4,105,859				35,342	3.44
Home equity lines of credit			320,446				4,946	6.12				261,575				2,896	4.39
Installment loans			15,959				256	6.37				10,213				174	6.75
Loans, net of unearned income			4,922,685				47,921	3.89				4,585,124				40,896	3.57
Total interest earning assets			5,920,155			$	57,552	3.88				6,038,880			$	49,041	3.24
Allowance for credit losses on loans			(47,077	)								(45,519	)
Cash & non-interest earning assets			172,523									188,672
Total assets		$	6,045,601								$	6,182,033
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts		$	1,050,313			$	102	0.04	%		$	1,195,370			$	43	0.01	%
Money market accounts			625,031				2,384	1.51				744,868				237	0.13
Savings			1,282,641				639	0.20				1,579,513				200	0.05
Time deposits			1,494,402				11,962	3.18				981,704				646	0.26
Total interest bearing deposits			4,452,387				15,087	1.34				4,501,455				1,126	0.10
Short-term borrowings			110,018				244	0.88				138,105				122	0.35
Total interest bearing liabilities			4,562,405			$	15,331	1.33				4,639,560			$	1,248	0.11
Demand deposits			776,885									859,122
Other liabilities			81,411									82,290
Shareholders' equity			624,900									601,061
Total liabilities and shareholders' equity		$	6,045,601								$	6,182,033
Net interest income, GAAP and non-GAAP tax equivalent (1)						$	42,221								$	47,793
Net interest spread, GAAP and non-GAAP tax equivalent (1)								2.55	%								3.13	%
Net interest margin (net interest income to
total interest earning assets), GAAP and non-GAAP tax equivalent (1)								2.85	%								3.16	%
Tax equivalent adjustment (1)							-									-
Net interest income						$	42,221								$	47,793
(1) Tax equivalent adjustment to a measure results in a non-GAAP financial measure. See Non-GAAP Financial Measures Reconciliation.

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued
(dollars in thousands)
(Unaudited)		Nine months ended							Nine months ended
		September 30, 2023							September 30, 2022
		Average			Interest	Average			Average			Interest	Average
		Balance				Rate			Balance				Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	120,243			2,055	2.28	%	$	79,423			712	1.19	%
Mortgage backed securities and collateralized mortgage
obligations - residential		278,252			4,613	2.21			282,423			4,071	1.92
State and political subdivisions		34			1	6.74			41			2	6.73
Corporate bonds		83,732			1,510	2.41			75,957			1,281	2.25
Small Business Administration - guaranteed
participation securities		20,876			335	2.14			27,623			427	2.06
Other		686			7	1.02			686			7	2.04
Total securities available for sale		503,823			8,521	1.69			466,153			6,500	2.79
Federal funds sold and other short-term Investments		540,570			20,213	5.00			1,068,217			8,046	1.01
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential		7,205			226	4.18			8,897			262	3.93
Total held to maturity securities		7,205			226	4.18			8,897			262	3.93
Federal Home Loan Bank stock		5,957			351	5.89			5,734			207	7.22
Commercial loans		249,738			9,716	5.19			200,525			7,412	4.93
Residential mortgage loans		4,269,494			114,227	3.57			4,054,657			104,310	3.43
Home equity lines of credit		305,075			13,598	5.96			246,026			7,289	3.96
Installment loans		15,015			714	6.35			9,507			492	6.91
Loans, net of unearned income		4,839,322			138,255	3.81			4,510,715			119,503	3.53
Total interest earning assets		5,896,877			167,566	3.79			6,059,716			134,518	2.96
Allowance for credit losses on loans		(46,812	)						(46,225	)
Cash & non-interest earning assets		173,521							196,333
Total assets	$	6,023,586						$	6,209,824
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	1,088,859			217	0.03	%	$	1,199,154			129	0.01	%
Money market accounts		613,119			4,954	1.08			771,301			661	0.11
Savings		1,363,052			1,824	0.18			1,557,503			519	0.04
Time deposits		1,343,762			26,525	2.64			971,539			1,728	0.24
Total interest bearing deposits		4,408,792			33,520	1.02			4,499,497			3,037	0.09
Short-term borrowings		121,911			808	0.89			194,228			532	0.37
Total interest bearing liabilities		4,530,703			34,328	1.01			4,693,725			3,569	0.10
Demand deposits		793,890							836,953
Other liabilities		81,771							81,780
Shareholders' equity		617,224							597,366
Total liabilities and shareholders' equity	$	6,023,588						$	6,209,824
Net interest income, GAAP and non-GAAP tax equivalent (1)					133,238							130,949
Net interest spread, GAAP and non-GAAP tax equivalent (1)						2.78	%						2.86	%
Net interest margin (net interest income to
total interest earning assets), GAAP and non-GAAP tax equivalent (1)						3.01	%						2.88	%
Tax equivalent adjustment (1)					-							-
Net interest income					133,238							130,949
(1) Tax equivalent adjustment to a measure results in a non-GAAP financial measure. See Non-GAAP Financial Measures Reconciliation.

 

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.

Net interest income is commonly presented on a taxable equivalent basis. That is, to the extent that some component of the institution’s net interest income will be exempt from taxation (e.g., was received by the institution as a result of its holdings of state or municipal obligations), an amount equal to the tax benefit derived from that component is added back to the net interest income total. Management considers this adjustment helpful to investors in comparing one financial institution’s net interest income (pre- tax) to that of another institution, as each will have a different proportion of tax-exempt items in their portfolios. Moreover, net interest income is itself a component of another financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average interest earning assets. Additionally, management and many financial institutions also present net interest spread, which is the average yield on interest earning assets minus the average rate paid on interest bearing liabilities. For purposes of these measures as well, taxable equivalent net interest income is generally used by financial institutions, again to provide investors with a better basis of comparison from institution to institution. We calculate taxable equivalent net interest margin by dividing net interest income, adjusted to include the benefit of non-taxable interest income, by average interest earning assets.   We calculate taxable equivalent net interest spread as the difference between average yield on interest earning assets, adjusted to include the benefit of non-taxable interest income, and the average rate paid on interest bearing liabilities.

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. We have not presented a reconciliation of taxable equivalent net interest income, taxable equivalent net interest margin or taxable equivalent net interest spread to the most directly comparable GAAP measure, as there was no difference between the taxable equivalent measure and comparable GAAP measure for any period presented in this release.

NON-GAAP FINANCIAL MEASURES RECONCILIATION
(dollars in thousands)
(Unaudited)
		9/30/2023			6/30/2023			9/30/2022
Tangible Book Value Per Share
Equity (GAAP)		$	623,926		$	621,389		$	589,006
Less: Intangible assets			553			553			553
Tangible equity (Non-GAAP)		$	623,373		$	620,836		$	588,453
Shares outstanding			19,024			19,024			19,052
Tangible book value per share			32.77			32.63			30.89
Book value per share			32.80			32.66			30.92
Tangible Equity to Tangible Assets
Total Assets (GAAP)		$	6,054,298		$	6,075,625		$	6,079,494
Less: Intangible assets			553			553			553
Tangible assets (Non-GAAP)		$	6,053,745		$	6,075,072		$	6,078,941
Tangible Equity to Tangible Assets (Non-GAAP)			10.30	%		10.22	%		9.68	%
Equity to Assets (GAAP)			10.31	%		10.23	%		9.69	%
		Three months ended											Nine months ended
Efficiency Ratio		9/30/2023			6/30/2023			9/30/2022					9/30/2023			9/30/2022
Net interest income (GAAP)		$	42,221		$	44,052		$	47,793				$	133,238		$	130,949
Taxable equivalent adjustment			-			-			-					-			-
Net interest income (fully taxable equivalent) (Non-GAAP)			42,221			44,052			47,793					133,238			130,949
Non-interest income (GAAP)			4,574			4,598			4,386					13,841			14,485
Less: Net gain on sale of building			-			-			-					-			268
Revenue used for efficiency ratio (Non-GAAP)		$	46,795		$	48,650		$	52,179				$	147,079		$	145,166
Total noninterest expense (GAAP)		$	27,460		$	27,327			26,144				$	82,466			73,914
Less: Other real estate expense, net			163			148			124					536			209
Expense used for efficiency ratio (Non-GAAP)		$	27,297		$	27,179		$	26,020				$	81,930		$	73,705
Efficiency Ratio			58.33	%		55.87	%		49.87	%				55.70	%		50.77	%

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

FAQ

What is TrustCo Bank Corp NY's net income for the third quarter of 2023?

TrustCo Bank Corp NY reported a net income of $14.7 million for the third quarter of 2023.

What is the loan portfolio of TrustCo Bank Corp NY?

TrustCo Bank Corp NY's loan portfolio reached an all-time high of $5.0 billion.

What is the net interest income of TrustCo Bank Corp NY?

TrustCo Bank Corp NY reported a net interest income of $42.2 million.

What is the return on average assets (ROAA) of TrustCo Bank Corp NY?

TrustCo Bank Corp NY's return on average assets (ROAA) is 0.96%.

What is the amount of nonperforming loans (NPLs) for TrustCo Bank Corp NY?

TrustCo Bank Corp NY's nonperforming loans (NPLs) decreased to $17.9 million.

What is the consolidated equity to assets ratio of TrustCo Bank Corp NY?

TrustCo Bank Corp NY's consolidated equity to assets ratio increased to 10.31%.