Trustco Bank Corp. TRST

GLENVILLE, N.Y., Jan. 21, 2021 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced full year 2020 net income of $52.5 million or $0.543 diluted earnings per share, and net income of $13.8 million or $0.143 diluted earnings per share for the fourth quarter of 2020. Average residential loan growth increased 5.9% or $209.1 million to a record $3.8 billion for the fourth quarter 2020.

Summary
Robert J. McCormick, Chairman, President and Chief Executive Officer noted, “As a bank built upon Home Town values, we continue to prioritize strengthening our communities and adapting our offerings to address the changing needs of our customers during the COVID-19 pandemic. TrustCo’s commitment to supporting its communities and front line workers remains steadfast. In an effort to ensure families had a safe place to celebrate the holidays, Trustco Bank launched the “Home for the Holidays” program, donating $40,000 to local housing agencies and community loan funds across New York, New Jersey and Florida. This is just one example of ways we have prioritized giving back. In addition, TrustCo partnered with local communities to offer custom merchant loan programs to help small businesses stay afloat during the pandemic. Lastly, TrustCo donated over 2,000 turkeys to food banks in New York and Florida to help ensure families who experienced economic challenges had a warm meal for Thanksgiving.”

We also continue to closely monitor the impact of the pandemic on our business and results of operations. As of December 31, 2020, we had 8 residential loans in deferral totaling $2 million, and no installment or commercial loans in deferral. This represents 0.04% of total outstanding loans. As of September 30, 2020, we had 24 residential and installment loans in deferral totaling $5 million, and 6 commercial loans in deferral totaling $2 million. This represented 0.2% of total outstanding loans. As of June 30, 2020, we had 668 residential and installment loans in deferral totaling $145 million, and 84 commercial loans in deferral totaling $45 million. This represented 4.5% of total outstanding loans. We have been encouraged to see that most of our residential and commercial borrowers who had payment deferral arrangements with us have returned to making regular loan payments. Additionally, the Bank had funded 663 Paycheck Protection Program (“PPP”) loans totaling $46 million, as of December 31, 2020, 514 PPP loans totaling $29 million remain outstanding.

The fourth quarter of 2020 saw continued loan and deposit growth. Our focus on traditional lending criteria and conservative balance sheet management has produced consistent earnings while maintaining strong liquidity and growing capital. This approach allowed us to continue to expand our business and take advantage of changes in market and competitive conditions. As mentioned in prior quarters, the pandemic has created an uncertain future, and we believe we continue to be well-positioned to help our customers through this economic disruption and turmoil. We also continue to hire across our locations for all levels of staff. As we enter the new year, management views the Bank as well-positioned to deploy its existing liquidity into our residential loan portfolio, and we will continue to closely monitor how the current market conditions change.

Details

Average loans were up $214.9 million or 5.3% in the fourth quarter 2020 over the same period in 2019. Average residential loans, our primary lending focus, were up $209.1 million, or 5.9%, in the fourth quarter 2020 over the same period in 2019. Average deposits were up $494.1 million or 11.1% for the fourth quarter 2020 over the same period a year earlier. The increase in deposits was the result of a $632.1 million or 21.0% increase 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 $138.0 million or 9.7%, for the fourth quarter 2020 over the same period in 2019. Within the core deposits, checking balances were up $357.6 million or 27.1% (including interest bearing and non-interest bearing checking balances), money market balances were up $127.1 million or 21.8%, and savings balances were up $147.4 million or 13.3%. We believe the increase in core deposits continues to reflect the desire of customers to have additional funds in the safety and security offered by TrustCo’s long history of conservative banking. As we move forward, the objective is to encourage customers to retain these additional funds in the expanded product offerings of the Bank through aggressive marketing and product differentiation.  

The cost of interest bearing liabilities decreased to 0.35% in the fourth quarter 2020 from 0.90% in the fourth quarter 2019. A significant portion of our CD portfolio (time deposits) repriced during 2020, which resulted in a decrease in average rates to 0.95% in the fourth quarter of 2020 from 2.10% in the fourth quarter of 2019, as a result of the ongoing market conditions. The net interest margin for the fourth quarter 2020 was 2.79%, down 23 basis points from 3.02% in the fourth quarter of 2019. This was primarily due to the decrease in market rates over the same period resulting in less interest earned on our short-term funds, residential and variable rate loans.

The Bank continued to demonstrate its ability to grow shareholders’ equity as average equity was up $33.5 million or 6.3% in the fourth quarter of 2020 compared to the same period in 2019. Return on average assets and return on average equity for the fourth quarter 2020 were 0.95% and 9.75%, respectively, compared to 1.06% and 10.41% for the fourth quarter 2019. Improving efficiencies to reduce costs continues to remain a key area of focus.

Asset quality and loan loss reserve measures have stayed consistent. Nonperforming loans (NPLs) were $21.1 million at December 31, 2020, compared to $20.9 million at December 31, 2019. NPLs were 0.50% of total loans at December 31, 2020, compared to 0.51% at December 31, 2019. The coverage ratio, or allowance for loan losses to NPLs, was 235.2% at December 31, 2020, compared to 212.4% at December 31, 2019. Nonperforming assets (NPAs) were $21.6 million at December 31, 2020, compared to $22.4 million at December 31, 2019. The ratio of allowance for loan losses to total loans was 1.17% as of December 31, 2020, compared to 1.09% at December 31, 2019. The allowance for loan losses was $49.6 million at December 31, 2020, compared to $44.3 million at December 31, 2019. The provision for loan losses increased to $600 thousand for the fourth quarter 2020 compared to $200 thousand in the same period in the prior year, primarily driven by the continued uncertainty in the current economic environment resulting from COVID-19. The Company had previously elected to delay its adoption of Accounting Standards Update 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”), as provided by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) until the date on which the National Emergency concerning COVID-19 was terminated or December 31, 2020, whichever occurred first.  The December 31, 2020 adoption date under the CARES Act was extended to January 1, 2022 as a part of the COVID-19 Relief Bill, which became law in December 2020, and therefore the Company now intends to adopt CECL on January 1, 2022.

Net chargeoffs for the fourth quarter 2020 were $128 thousand versus net chargeoffs in the fourth quarter 2019 of $212 thousand. The annualized net chargeoffs ratio was 0.01% and 0.02% for the fourth quarter 2020 and 2019, respectively.

At December 31, 2020 the tangible equity to tangible asset ratio was 9.62%, compared to 10.30% at December 31, 2019. Book value per share at December 31, 2020 was $5.89, up 6.1% compared to $5.55 a year earlier.

TrustCo Bank Corp NY is a $5.9 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 148 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at December 31, 2020.

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 fourth quarter 2020 results will be held at 9:00 a.m. Eastern Time on January 22, 2021. Those wishing to participate in the call may dial toll-free 1-888-339-0764. International callers must dial 1-412-902-4195. Please ask to be joined into the TrustCo Bank Corp NY / TRST call. A replay of the call will be available for thirty days by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10151410. The call will also be audio webcast at: https://services.choruscall.com/links/trst210122.html, and will be available for one year.

Safe Harbor Statement
All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2020, including our expectations regarding the effects of COVID-19 on our financial results and our ability to assist our customers in addressing the effects of COVID-19, our expectations with respect to our online and mobile banking product offerings, our expectations for the repricing of our CD portfolio, the impact of Federal Reserve actions regarding interest rates and the growth of loans and deposits throughout our branch network and our ability to capitalize on economic changes in the areas in which we operate. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed, and many of the risks and uncertainties are heightened by or may, in the future, be heightened by the effects of the COVID-19 pandemic. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement: the effect of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations; the impact of the actions taken by governmental authorities to contain COVID-19 or address the impact of COVID-19 on the economy, and the effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; future business strategies related to the implementation of CECL; our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at reasonable levels relative to income; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; restrictions or conditions imposed by our regulators on our operations that may make it more difficult for us to achieve our goals; the future earnings and capital levels of us and Trustco Bank and the continued receipt of approvals from our primary federal banking regulators under regulatory rules to distribute capital to TrustCo, which could affect our ability to pay dividends; results of supervisory monitoring or examinations of Trustco Bank and TrustCo by our respective regulators; adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; unanticipated effects from the Tax Cut and Jobs Act that may limit its benefits or adversely impact our business; the perceived overall value of our products and services by users, including in comparison to competitors’ products and services and the willingness of current and prospective customers to substitute competitors’ products and services for our products and services; changes in consumer spending, borrowing and saving habits; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; changes in management personnel; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; technological changes and electronic, cyber and physical security breaches; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading “Risk Factors” in our most recent annual report on Form 10-K and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.

TRUSTCO BANK CORP NY
GLENVILLE, NY
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		12/31/2020		9/30/2020		12/31/2019
Summary of operations
Net interest income (TE)	$	39,182		38,166		38,243
Provision for loan losses		600		1,000		200
Noninterest income, excluding net gain on securities transactions		4,069		4,341		4,115
Noninterest expense		24,830		22,674		23,891
Net income		13,814		14,071		13,907
Per common share
Net income per share:
- Basic	$	0.143		0.146		0.143
- Diluted		0.143		0.146		0.143
Cash dividends		0.068		0.068		0.068
Book value at period end		5.89		5.81		5.55
Market price at period end		6.67		5.22		8.67
At period end
Full time equivalent employees		778		771		814
Full service banking offices		148		148		148
Performance ratios
Return on average assets		0.95	%	0.98		1.06
Return on average equity		9.75		10.04		10.41
Efficiency (1)		57.31		53.61		57.31
Net interest spread (TE)		2.72		2.63		2.86
Net interest margin (TE)		2.79		2.73		3.02
Dividend payout ratio		47.55		46.68		47.48
Capital ratios at period end
Consolidated tangible equity to tangible assets (2)		9.62	%	9.76		10.30
Consolidated equity to assets		9.63	%	9.77		10.31
Asset quality analysis at period end
Nonperforming loans to total loans		0.50		0.52		0.51
Nonperforming assets to total assets		0.37		0.39		0.43
Allowance for loan losses to total loans		1.17		1.17		1.09
Coverage ratio (3)		2.4x		2.3x		2.1x
(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income.
(2) Non-GAAP measure; calculated as total equity less $553 of intangible assets divided by total assets less $553 of intangible assets.
(3) Calculated as allowance for loan losses divided by total nonperforming loans.
TE = Taxable equivalent

FINANCIAL HIGHLIGHTS, Continued
(dollars in thousands, except per share data)
(Unaudited)
		Year ended
		12/31/2020		12/31/2019
Summary of operations
Net interest income (TE)	$	153,583		155,812
Provision for loan losses		5,600		159
Net gain on securities transactions		1,155		-
Noninterest income, excluding net gain on securities transactions		16,015		18,591
Noninterest expense		95,704		97,730
Net income		52,452		57,840
Per common share
Net income per share:
- Basic	$	0.544		0.597
- Diluted		0.543		0.597
Cash dividends		0.273		0.273
Book value at period end		5.89		5.55
Market price at period end		6.67		8.67
Performance ratios
Return on average assets		0.94		1.12
Return on average equity		9.47		11.26
Efficiency (1)		56.38		56.13
Net interest spread (TE)		2.73		2.94
Net interest margin (TE)		2.84		3.10
Dividend payout ratio		50.12		45.60
(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net gain on securities transactions).
TE = Taxable equivalent.

CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		12/31/2020		9/30/2020			6/30/2020			3/31/2020		12/31/2019
Interest and dividend income:
Interest and fees on loans	$	40,906		41,330			41,665			42,063		42,002
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		27		14			106			421		609
State and political subdivisions		2		1			2			1		2
Mortgage-backed securities and collateralized mortgage
obligations - residential		1,172		1,319			1,527			2,113		2,334
Corporate bonds		349		646			488			238		295
Small Business Administration - guaranteed
participation securities		212		216			229			245		253
Other securities		7		5			5			6		6
Total interest and dividends on securities available for sale		1,769		2,201			2,357			3,024		3,499
Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations - residential		129		138			162			175		184
Total interest on held to maturity securities		129		138			162			175		184
Federal Reserve Bank and Federal Home Loan Bank stock		70		77			192			82		203
Interest on federal funds sold and other short-term investments		246		242			193			1,267		1,635
Total interest income		43,120		43,988			44,569			46,611		47,523
Interest expense:
Interest on deposits:
Interest-bearing checking		51		55			26			16		21
Savings		156		161			166			233		271
Money market deposit accounts		447		637			862			1,096		1,175
Time deposits		3,053		4,749			5,599			6,391		7,468
Interest on short-term borrowings		232		221			235			322		347
Total interest expense		3,939		5,823			6,888			8,058		9,282
Net interest income		39,181		38,165			37,681			38,553		38,241
Less: Provision for loan losses		600		1,000			2,000			2,000		200
Net interest income after provision for loan losses		38,581		37,165			35,681			36,553		38,041
Noninterest income:
Trustco Financial Services income		1,527		1,784			1,368			1,600		1,454
Fees for services to customers		2,365		2,292			1,807			2,315		2,377
Net gain on securities transactions		-		-			-			1,155		-
Other		177		265			251			264		284
Total noninterest income		4,069		4,341			3,426			5,334		4,115
Noninterest expenses:
Salaries and employee benefits		11,727		10,899			11,648			11,373		11,743
Net occupancy expense		4,551		4,277			4,385			4,306		4,399
Equipment expense		1,621		1,607			1,606			1,802		1,768
Professional services		1,644		1,311			1,182			1,481		1,449
Outsourced services		1,925		1,875			1,875			2,075		1,925
Advertising expense		527		305			601			488		464
FDIC and other insurance		657		660			609			294		259
Other real estate expense (income) , net		45		(115	)		(32	)		194		(385	)
Other		2,133		1,855			2,058			2,255		2,269
Total noninterest expenses		24,830		22,674			23,932			24,268		23,891
Income before taxes		17,820		18,832			15,175			17,619		18,265
Income taxes		4,006		4,761			3,921			4,306		4,358
Net income	$	13,814		14,071			11,254			13,313		13,907
Net income per common share:
- Basic	$	0.143		0.146			0.117			0.138		0.143
- Diluted		0.143		0.146			0.117			0.138		0.143
Average basic shares (in thousands)		96,433		96,433			96,433			96,727		96,919
Average diluted shares (in thousands)		96,442		96,440			96,437			96,750		97,015
Note: Taxable equivalent net interest income	$	39,182		38,166			37,681			38,554		38,243

CONSOLIDATED STATEMENTS OF INCOME, Continued
(dollars in thousands, except per share data)
(Unaudited)
		Year ended
		12/31/2020		12/31/2019
Interest and dividend income:
Interest and fees on loans	$	165,964		166,610
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		568		3,209
State and political subdivisions		6		8
Mortgage-backed securities and collateralized mortgage
obligations - residential		6,131		8,219
Corporate bonds		1,721		1,096
Small Business Administration - guaranteed
participation securities		902		1,121
Other securities		23		22
Total interest and dividends on securities available for sale		9,351		13,675
Interest on held to maturity securities:
Mortgage-backed securities-residential		604		797
Total interest on held to maturity securities		604		797
Federal Reserve Bank and Federal Home Loan Bank stock		421		568
Interest on federal funds sold and other short-term investments		1,948		10,478
Total interest income		178,288		192,128
Interest expense:
Interest on deposits:
Interest-bearing checking		148		288
Savings		716		1,338
Money market deposit accounts		3,042		4,297
Time deposits		19,792		28,930
Interest on short-term borrowings		1,010		1,468
Total interest expense		24,708		36,321
Net interest income		153,580		155,807
Less: Provision for loan losses		5,600		159
Net interest income after provision for loan losses		147,980		155,648
Noninterest income:
Trustco Financial Services income		6,279		6,387
Fees for services to customers		8,779		10,110
Net gain on securities transactions		1,155		-
Other		957		2,094
Total noninterest income		17,170		18,591
Noninterest expenses:
Salaries and employee benefits		45,647		46,630
Net occupancy expense		17,519		16,666
Equipment expense		6,636		7,068
Professional services		5,618		6,174
Outsourced services		7,750		7,600
Advertising expense		1,921		2,521
FDIC and other insurance		2,220		1,787
Other real estate expense (income), net		92		(166	)
Other		8,301		9,450
Total noninterest expenses		95,704		97,730
Income before taxes		69,446		76,509
Income taxes		16,994		18,669
Net income	$	52,452		57,840
Net income per common share:
- Basic	$	0.544		0.597
- Diluted		0.543		0.597
Average basic shares (in thousands)		96,506		96,849
Average diluted shares (in thousands)		96,517		96,927
Note: Taxable equivalent net interest income	$	153,583		155,812

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
		12/31/2020			9/30/2020			6/30/2020			3/31/2020			12/31/2019
ASSETS:
Cash and due from banks	$	47,196			47,703			44,726			43,362			48,198
Federal funds sold and other short term investments		1,059,903			908,616			908,110			492,691			408,648
Total cash and cash equivalents		1,107,099			956,319			952,836			536,053			456,846
Securities available for sale:
U. S. government sponsored enterprises		19,968			29,996			-			54,970			104,512
States and political subdivisions		103			111			111			112			162
Mortgage-backed securities and collateralized mortgage
obligations - residential		316,158			309,768			331,469			352,067			389,517
Small Business Administration - guaranteed
participation securities		42,217			44,070			45,998			46,768			48,511
Corporate bonds		59,939			70,113			54,439			48,564			30,436
Other securities		686			685			685			685			685
Total securities available for sale		439,071			454,743			432,702			503,166			573,823
Held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations-residential		13,824			15,094			16,633			17,720			18,618
Total held to maturity securities		13,824			15,094			16,633			17,720			18,618
Federal Reserve Bank and Federal Home Loan Bank stock		5,506			5,506			5,506			9,183			9,183
Loans:
Commercial		212,492			231,663			231,212			195,805			199,499
Residential mortgage loans		3,780,167			3,724,746			3,681,898			3,627,121			3,583,774
Home equity line of credit		242,194			248,320			254,445			265,753			267,922
Installment loans		9,617			9,826			10,006			10,713			11,001
Loans, net of deferred net costs		4,244,470			4,214,555			4,177,561			4,099,392			4,062,196
Less: Allowance for loan losses		49,595			49,123			48,144			46,155			44,317
Net loans		4,194,875			4,165,432			4,129,417			4,053,237			4,017,879
Bank premises and equipment, net		34,412			34,417			34,042			34,428			34,622
Operating lease right-of-use assets		47,885			47,174			48,712			49,955			51,475
Other assets		59,124			57,244			57,155			52,905			58,876
Total assets	$	5,901,796			5,735,929			5,677,003			5,256,647			5,221,322
LIABILITIES:
Deposits:
Demand	$	652,756			635,345			612,960			480,255			463,858
Interest-bearing checking		1,086,558			1,024,290			1,001,592			895,254			875,672
Savings accounts		1,285,501			1,235,259			1,191,682			1,122,116			1,113,146
Money market deposit accounts		716,005			699,132			666,304			617,198			599,163
Time deposits		1,296,373			1,305,024			1,392,769			1,367,005			1,398,177
Total deposits		5,037,193			4,899,050			4,865,307			4,481,828			4,450,016
Short-term borrowings		214,755			193,455			177,278			148,090			148,666
Operating lease liabilities		52,784			52,125			53,710			54,998			56,553
Accrued expenses and other liabilities		28,903			30,771			27,287			23,546			27,830
Total liabilities		5,333,635			5,175,401			5,123,582			4,708,462			4,683,065
SHAREHOLDERS' EQUITY:
Capital stock		100,205			100,205			100,205			100,205			100,205
Surplus		176,442			176,441			176,437			176,431			176,427
Undivided profits		313,974			306,741			299,239			294,553			288,067
Accumulated other comprehensive income, net of tax		11,936			11,537			11,936			11,392			4,461
Treasury stock at cost		(34,396	)		(34,396	)		(34,396	)		(34,396	)		(30,903	)
Total shareholders' equity		568,161			560,528			553,421			548,185			538,257
Total liabilities and shareholders' equity	$	5,901,796			5,735,929			5,677,003			5,256,647			5,221,322
Outstanding shares (in thousands)		96,433			96,433			96,433			96,433			96,922

NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
		12/31/2020		9/30/2020		6/30/2020		3/31/2020		12/31/2019
Nonperforming Assets
New York and other states*
Loans in nonaccrual status:
Commercial	$	452		491		571		630		816
Real estate mortgage - 1 to 4 family		19,379		19,977		20,215		18,570		18,407
Installment		43		49		6		24		3
Total non-accrual loans		19,874		20,517		20,792		19,224		19,226
Other nonperforming real estate mortgages - 1 to 4 family		23		25		26		27		29
Total nonperforming loans		19,897		20,542		20,818		19,251		19,255
Other real estate owned		541		423		830		1,284		1,579
Total nonperforming assets	$	20,438		20,965		21,648		20,535		20,834
Florida
Loans in nonaccrual status:
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		1,187		1,254		1,111		1,492		1,614
Installment		-		-		-		-		-
Total non-accrual loans		1,187		1,254		1,111		1,492		1,614
Other nonperforming real estate mortgages - 1 to 4 family		-		-		-		-		-
Total nonperforming loans		1,187		1,254		1,111		1,492		1,614
Other real estate owned		-		-		-		-		-
Total nonperforming assets	$	1,187		1,254		1,111		1,492		1,614
Total
Loans in nonaccrual status:
Commercial	$	452		491		571		630		816
Real estate mortgage - 1 to 4 family		20,566		21,231		21,326		20,062		20,021
Installment		43		49		6		24		3
Total non-accrual loans		21,061		21,771		21,903		20,716		20,840
Other nonperforming real estate mortgages - 1 to 4 family		23		25		26		27		29
Total nonperforming loans		21,084		21,796		21,929		20,743		20,869
Other real estate owned		541		423		830		1,284		1,579
Total nonperforming assets	$	21,625		22,219		22,759		22,027		22,448
Quarterly Net (Recoveries) Chargeoffs
New York and other states*
Commercial	$	32		(1	)	(6	)	1		(1	)
Real estate mortgage - 1 to 4 family		(27	)	4		(27	)	140		146
Installment		109		18		44		4		67
Total net (recoveries) chargeoffs	$	114		21		11		145		212
Florida
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		(1	)	-		-		(2	)	(1	)
Installment		15		-		-		19		1
Total net (recoveries) chargeoffs	$	14		-		-		17		-
Total
Commercial	$	32		(1	)	(6	)	1		(1	)
Real estate mortgage - 1 to 4 family		(28	)	4		(27	)	138		145
Installment		124		18		44		23		68
Total net (recoveries) chargeoffs	$	128		21		11		162		212
Asset Quality Ratios
Total nonperforming loans (1)	$	21,084		21,796		21,929		20,743		20,869
Total nonperforming assets (1)		21,625		22,219		22,759		22,027		22,448
Total net (recoveries) chargeoffs (2)		128		21		11		162		212
Allowance for loan losses (1)		49,595		49,123		48,144		46,155		44,317
Nonperforming loans to total loans		0.50	%	0.52	%	0.52	%	0.51	%	0.51	%
Nonperforming assets to total assets		0.37	%	0.39	%	0.40	%	0.42	%	0.43	%
Allowance for loan losses to total loans		1.17	%	1.17	%	1.15	%	1.13	%	1.09	%
Coverage ratio (1)		235.2	%	225.4	%	219.5	%	222.5	%	212.4	%
Annualized net chargeoffs to average loans (2)		0.01	%	0.00	%	0.00	%	0.02	%	0.02	%
Allowance for loan losses to annualized net chargeoffs (2)		96.9	x	584.8	x	1094.2	x	71.2	x	52.3	x
* 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
		December 31, 2020								December 31, 2019
		Average			Interest		Average			Average			Interest		Average
		Balance					Rate			Balance					Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	25,761			27		0.42	%	$	127,284			609		1.91	%
Mortgage backed securities and collateralized mortgage
obligations - residential		314,022			1,172		1.49			396,335			2,334		2.36
State and political subdivisions		108			3		7.89			165			4		9.70
Corporate bonds		64,534			349		2.17			37,795			295		3.12
Small Business Administration - guaranteed
participation securities		41,562			212		2.05			49,787			253		2.03
Other		685			7		4.09			685			6		3.50
Total securities available for sale		446,672			1,770		1.59			612,051			3,501		2.29
Federal funds sold and other short-term Investments		916,198			246		0.11			395,311			1,635		1.65
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential		14,406			129		3.58			19,185			184		3.84
Total held to maturity securities		14,406			129		3.58			19,185			184		3.84
Federal Reserve Bank and Federal Home Loan Bank stock		5,506			70		5.09			9,183			203		8.84
Commercial loans		224,838			3,009		5.35			192,427			2,517		5.23
Residential mortgage loans		3,756,304			35,368		3.77			3,547,219			36,179		4.08
Home equity lines of credit		245,401			2,361		3.83			270,766			3,110		4.59
Installment loans		9,416			168		7.09			10,682			196		7.34
Loans, net of unearned income		4,235,959			40,906		3.86			4,021,094			42,002		4.18
Total interest earning assets		5,618,741			43,121		3.07			5,056,824			47,525		3.76
Allowance for loan losses		(49,426	)							(44,320	)
Cash & non-interest earning assets		201,371								188,605
Total assets	$	5,770,686							$	5,201,109
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	1,036,808			51		0.02	%	$	864,774			21		0.01	%
Money market accounts		710,105			447		0.25			583,048			1,175		0.81
Savings		1,258,666			156		0.05			1,111,259			271		0.10
Time deposits		1,284,075			3,053		0.95			1,422,049			7,468		2.10
Total interest bearing deposits		4,289,654			3,707		0.34			3,981,130			8,935		0.90
Short-term borrowings		200,028			232		0.46			154,898			347		0.90
Total interest bearing liabilities		4,489,682			3,939		0.35			4,136,028			9,282		0.90
Demand deposits		640,190								454,585
Other liabilities		77,197								80,386
Shareholders' equity		563,617								530,110
Total liabilities and shareholders' equity	$	5,770,686							$	5,201,109
Net interest income, tax equivalent					39,182								38,243
Net interest spread							2.72	%							2.86	%
Net interest margin (net interest income to
total interest earning assets)							2.79	%							3.02	%
Tax equivalent adjustment					(1	)							(2	)
Net interest income					39,181								38,241
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued
(dollars in thousands)
(Unaudited)		Year ended								Year ended
		December 31, 2020								December 31, 2019
		Average			Interest		Average			Average			Interest		Average
		Balance					Rate			Balance					Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	38,508			568		1.48	%	$	156,292			3,209		2.05	%
Mortgage backed securities and collateralized mortgage
obligations - residential		333,093			6,131		1.84			345,718			8,219		2.38
State and political subdivisions		111			9		7.82			167			13		7.78
Corporate bonds		50,982			1,721		3.38			34,637			1,096		3.16
Small Business Administration - guaranteed
participation securities		44,379			902		2.03			53,269			1,121		2.10
Other		686			23		3.35			685			22		3.21
Total securities available for sale		467,759			9,354		2.00			590,768			13,680		2.32
Federal funds sold and other short-term Investments		748,085			1,948		0.26			477,181			10,478		2.20
Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential		16,376			604		3.69			20,643			797		3.86
Total held to maturity securities		16,376			604		3.69			20,643			797		3.86
Federal Reserve Bank and Federal Home Loan Bank stock		7,381			421		5.70			9,123			568		6.23
Commercial loans		219,328			10,788		4.92			191,636			10,243		5.35
Residential mortgage loans		3,678,536			144,212		3.92			3,445,940			141,964		4.12
Home equity lines of credit		255,583			10,259		4.01			277,905			13,551		4.88
Installment loans		9,952			705		7.08			10,718			852		7.95
Loans, net of unearned income		4,163,399			165,964		3.99			3,926,199			166,610		4.24
Total interest earning assets		5,403,000			178,291		3.30			5,023,914			192,133		3.82
Allowance for loan losses		(47,330	)							(44,639	)
Cash & non-interest earning assets		197,966								182,545
Total assets	$	5,553,636							$	5,161,820
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	971,385			148		0.02	%	$	874,700			288		0.03	%
Money market accounts		662,107			3,042		0.46			555,547			4,297		0.77
Savings		1,191,532			716		0.06			1,134,050			1,338		0.12
Time deposits		1,350,163			19,792		1.47			1,417,487			28,930		2.04
Total interest bearing deposits		4,175,187			23,698		0.57			3,981,784			34,853		0.88
Short-term borrowings		180,065			1,010		0.56			159,220			1,468		0.92
Total interest bearing liabilities		4,355,252			24,708		0.57			4,141,004			36,321		0.88
Demand deposits		567,265								427,276
Other liabilities		77,487								80,051
Shareholders' equity		553,632								513,489
Total liabilities and shareholders' equity	$	5,553,636							$	5,161,820
Net interest income, tax equivalent					153,583								155,812
Net interest spread							2.73	%							2.94	%
Net interest margin (net interest income to
total interest earning assets)							2.84	%							3.10	%
Tax equivalent adjustment					(3	)							(5	)
Net interest income					153,580								155,807

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)
Tangible Book Value Per Share		12/31/2020		9/30/2020		12/31/2019
Equity (GAAP)	$	568,161		560,528		538,257
Less: Intangible assets		553		553		553
Tangible equity (Non-GAAP)		567,608		559,975		537,704
Shares outstanding		96,433		96,433		96,922
Tangible book value per share (Non-GAAP)		5.89		5.81		5.55
Book value per share (GAAP)		5.89		5.81		5.55
Tangible Equity to Tangible Assets
Total Assets (GAAP)	$	5,901,796		5,735,929		5,221,322
Less: Intangible assets		553		553		553
Tangible assets (Non-GAAP)		5,901,243		5,735,376		5,220,769
Tangible Equity to Tangible Assets (Non-GAAP)		9.62	%	9.76	%	10.30	%
Equity to Assets (GAAP)		9.63	%	9.77	%	10.31	%
		Three months ended								Year ended
Efficiency Ratio		12/31/2020		9/30/2020		12/31/2019				12/31/2020		12/31/2019
Net interest income (GAAP)	$	39,181		38,165		38,241			$	153,580		155,807
Taxable equivalent adjustment		1		1		2				3		5
Net interest income (fully taxable equivalent) (Non-GAAP)		39,182		38,166		38,243				153,583		155,812
Non-interest income (GAAP)		4,069		4,341		4,115				17,170		18,591
Less: Net gain on securities		-		-		-				1,155		-
Revenue used for efficiency ratio (Non-GAAP)		43,251		42,507		42,358				169,598		174,403
Total noninterest expense (GAAP)		24,830		22,674		23,891				95,704		97,730
Less: Other real estate (income) expense, net		45		(115	)	(385	)			92		(166	)
Expense used for efficiency ratio (Non-GAAP)		24,785		22,789		24,276				95,612		97,896
Efficiency Ratio		57.31	%	53.61	%	57.31	%			56.38	%	56.13	%

Subsidiary: Trustco Bank

Contact:

Robert Leonard
Executive Vice President and        
Chief Risk Officer
(518) 381-3693