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TrustCo is Pleased to Report Second Quarter 2020 Results; Net Income of $11.3 Million and 7.6% Average Residential Loan Growth Year over Year

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GLENVILLE, N.Y., July 21, 2020 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) · TrustCo Bank Corp NY today announced second quarter 2020 net income of $11.3 million or $0.117 diluted earnings per share, and $24.6 million or $0.254 diluted earnings per share for the six months ended June 30, 2020.

Summary

Robert J. McCormick, Chairman, President and Chief Executive Officer noted, “As we continue to navigate COVID-19 and its effects on our families and neighbors, I’d like to reaffirm Trustco Bank’s commitment to serving our communities through careful financial management and high-quality service. This enduring mission guides us as we respond to this situation by providing you with the information, support, and advice you need to manage your finances in this market and plan for your future. We continue to remain thankful to those on the front lines from medical centers to food banks that are providing the essential services for those affected physically, emotionally, and financially by COVID-19.”

TrustCo’s designated Coronavirus (“COVID-19”) Fund, donating time and financial support to front line organizations across the communities, and the COVID-19 Financial Relief Program, providing support to our borrowers experiencing economic hardships by offering loan deferrals, continues to be an asset for our customers experiencing financial challenges during this time.

TrustCo is taking every precaution possible to keep our employees and customers safe during this time. The bank continues to implement important policies, including minimizing contact between employees and customers by requiring face masks, installing clear barriers, and separating banking departments from one another. As recommended by the CDC, cleaning procedures continue to be augmented and protective sanitation items are always available.

We also continue to closely monitor the impact of the pandemic on our business and results of operations. As of June 30, 2020, we had 668 residential loans in deferral totaling $145 million, and 90 commercial loans in deferral totaling $45 million. This represents 4.5% of total outstanding loans. We are encouraged to see that a number of residential and commercial loans had already re-started making regular loan payments prior to the end of the quarter. Additionally, the bank has funded 663 Paycheck Protection Program (“PPP”) loans totaling $46 million.

The second 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 last quarter, 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 second half of 2020 and beyond, 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.

TrustCo saw average loans grow 7.0% in the second quarter of 2020 compared to the second quarter of 2019. Year over year, loan portfolio expansion was funded by a combination of utilizing a portion of our strong cash balances, cash flow from investments, and the growth in funding from customer deposits. Total average deposits are up $276.2 million or 6.2% in the second quarter 2020 compared to the prior year.

Details

Average loans were up $270.5 million or 7.0% in the second quarter 2020 over the same period in 2019. Average residential loans, our primary lending focus, were up $257.2 million or 7.6% in the second quarter 2020, over the same period in 2019. Average deposits are up $276.2 million or 6.2% for the second quarter 2020 over the same period a year earlier. The increase in deposits was the result of a $321.2 million or 10.7% increase total average core deposit accounts, which consist of interest bearing and non-interest bearing checking, savings and money market deposits, for the second quarter 2020 compared to the second quarter 2019. Within core, checking balances were up $203.5 million or 15.7% (including interest bearing checking and non-interest bearing balances). Average time deposits decreased $45.0 million or 3.1% for the second quarter 2020 compared to the second quarter 2019.

The cost of interest bearing liabilities decreased to 0.64% in the second quarter 2020 from 0.91% in the second quarter 2019. A significant portion of our CD portfolio repriced during the last half of 2019 and the first half of 2020, which resulted in lower rates due to market conditions. The net interest margin for the second quarter 2020 was 2.81%, down 30 basis points from 3.11% in the second quarter of 2019 primarily due to federal interest rate cuts over the same period resulting in less interest earned on our short-term funds and variable rate loans. Additionally, because we offered competitive shorter term rates on our time deposits in the past, we expect cost of interest bearing liabilities to continue to decrease as these reprice at lower rates.

The Bank continued to demonstrate its ability to grow shareholders’ equity as average equity was up $44.1 million or 8.7% in the second quarter of 2020 compared to the same period in 2019. Return on average assets and return on average equity for the second quarter 2020 were .82% and 8.21%, respectively, compared to 1.14% and 11.60% for the second quarter 2019. Improving efficiencies to reduce costs continues to remain a key area of focus. Total operating expenses decreased by $970 thousand or 3.9% in the second quarter 2020 as compared to the second quarter 2019, driven by decreases in almost all expense categories, with the exception of an increase in occupancy expense.

Asset quality and loan loss reserve measures continued to improve. Nonperforming loans (NPLs) were $21.9 million at June 30, 2020, compared to $22.1 million at June 30, 2019. NPLs were 0.52% of total loans at June 30, 2020, compared to 0.57% at June 30, 2019. The coverage ratio, or allowance for loan losses to NPLs, was 219.5% at June 30, 2020, compared to 200.4% at June 30, 2019. Nonperforming assets (NPAs) were $22.8 million at June 30, 2020 compared to $24.8 million at June 30, 2019. The ratio of allowance for loan losses to total loans was 1.15% as of June 30, 2020, compared to 1.14% at June 30, 2019. The allowance for loan losses was $48.1 million at June 30, 2020 compared to $44.4 million at June 30, 2019. The provision for loan losses increased to $2.0 million for the second quarter 2020 compared to a credit of $341 thousand in the same period in the prior year, primarily driven by the uncertainty in the current economic environment resulting from COVID-19. Additionally, in the second quarter of 2019 there was a credit to the provision of loan losses of $541 thousand related to the sale of our credit card portfolio. The Bank did not adopt “FASB Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”) as of January 1, 2020 as allowed by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The Bank will adopt CECL as required by the CARES Act at the earlier of the termination of the National Emergency concerning COVID-19 or December 31, 2020. Net chargeoffs for the second quarter 2020 were $11 thousand versus net recoveries in the second quarter 2019 of $35 thousand. The annualized net chargeoffs ratio was 0.00% for the second quarter 2020 and 2019.

At June 30, 2020 the tangible equity to tangible asset ratio was 9.74%, compared to 9.85% at June 30, 2019. Book value per share at June 30, 2020 was $5.73, up 7.7% compared to $5.32 a year earlier.

TrustCo Bank Corp NY is a $5.7 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 June 30, 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 second quarter 2020 results will be held at 9:00 a.m. Eastern Time on July 22, 2020. 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 10146338. The call will also be audio webcast at: https://services.choruscall.com/links/trst200722.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 for the repricing of our CD portfolio and the stabilizing of our net interest margin, the impact of Federal Reserve actions regarding interest rates and the growth of loans and deposits throughout our branch network, our ability to capitalize on economic changes in the areas in which we operate and the extent to which higher expenses to fulfill operating and regulatory requirements recur or diminish over time. 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; 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

6/30/2020

3/31/2020

6/30/2019

Summary of operations

Net interest income (TE)

$

37,681

38,554

39,192

Provision (Credit) for loan losses

2,000

2,000

(341

)

Net gain on securities transactions

-

1,155

-

Noninterest income, excluding net gain on securities transactions

3,426

4,179

4,914

Noninterest expense

23,932

24,268

24,902

Net income

11,254

13,313

14,667

Per common share

Net income per share:

- Basic

$

0.117

0.138

0.152

- Diluted

0.117

0.138

0.151

Cash dividends

0.068

0.068

0.068

Book value at period end

5.73

5.68

5.32

Market price at period end

6.33

5.41

7.92

At period end

Full time equivalent employees

806

813

858

Full service banking offices

148

148

148

Performance ratios

Return on average assets

0.82

%

1.03

1.14

Return on average equity

8.21

9.87

11.60

Efficiency (1)

58.30

56.34

55.98

Net interest spread (TE)

2.69

2.91

2.95

Net interest margin (TE)

2.81

3.05

3.11

Dividend payout ratio

58.37

49.41

44.94

Capital ratios at period end

Consolidated tangible equity to tangible assets (2)

9.74

%

10.42

9.85

Consolidated equity to assets

9.75

%

10.43

9.86

Asset quality analysis at period end

Nonperforming loans to total loans

0.52

0.51

0.57

Nonperforming assets to total assets

0.40

0.42

0.47

Allowance for loan losses to total loans

1.15

1.13

1.14

Coverage ratio (3)

2.2x

2.2x

2.0x

(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)

Six months ended

06/30/20

06/30/19

Summary of operations

Net interest income (TE)

$

76,235

78,925

Provision (Credit) for loan losses

4,000

(41

)

Net gain on securities transactions

1,155

-

Noninterest income, excluding net gain on securities transactions

7,605

9,551

Noninterest expense

48,200

49,769

Net income

24,567

29,225

Per common share

Net income per share:

- Basic

$

0.254

0.302

- Diluted

0.254

0.302

Cash dividends

0.136

0.136

Tangible Book value at period end

5.73

5.32

Market price at period end

6.33

7.92

Performance ratios

Return on average assets

0.92

1.15

Return on average equity

9.04

11.76

Efficiency (1)

57.30

56.04

Net interest spread (TE)

2.80

3.03

Net interest margin (TE)

2.93

3.17

Dividend payout ratio

53.52

45.08

(1) Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income

plus noninterest income (excluding net securities transactions and gain on sale of building and nonperforming loans).

TE = Taxable equivalent.


CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

Three months ended

6/30/2020

3/31/2020

12/31/2019

9/30/2019

6/30/2019

Interest and dividend income:

Interest and fees on loans

$

41,665

42,063

42,002

41,923

41,432

Interest and dividends on securities available for sale:

U. S. government sponsored enterprises

106

421

609

996

821

State and political subdivisions

2

1

2

2

3

Mortgage-backed securities and collateralized mortgage

obligations - residential

1,527

2,113

2,334

2,178

2,152

Corporate bonds

488

238

295

321

272

Small Business Administration - guaranteed

participation securities

229

245

253

282

289

Other securities

5

6

6

6

5

Total interest and dividends on securities available for sale

2,357

3,024

3,499

3,785

3,542

Interest on held to maturity securities:

Mortgage-backed securities and collateralized mortgage

obligations - residential

162

175

184

187

209

Total interest on held to maturity securities

162

175

184

187

209

Federal Reserve Bank and Federal Home Loan Bank stock

192

82

203

81

199

Interest on federal funds sold and other short-term investments

193

1,267

1,635

2,552

3,282

Total interest income

44,569

46,611

47,523

48,528

48,664

Interest expense:

Interest on deposits:

Interest-bearing checking

26

16

21

52

94

Savings

166

233

271

323

367

Money market deposit accounts

862

1,096

1,175

1,177

1,119

Time deposits

5,599

6,391

7,468

7,974

7,512

Interest on short-term borrowings

235

322

347

359

381

Total interest expense

6,888

8,058

9,282

9,885

9,473

Net interest income

37,681

38,553

38,241

38,643

39,191

Less: Provision (Credit) for loan losses

2,000

2,000

200

-

(341

)

Net interest income after provision for loan losses

35,681

36,553

38,041

38,643

39,532

Noninterest income:

Trustco Financial Services income

1,368

1,600

1,454

1,517

1,683

Fees for services to customers

1,807

2,315

2,377

2,602

2,611

Net gain on securities transactions

-

1,155

-

-

-

Other

251

264

284

806

620

Total noninterest income

3,426

5,334

4,115

4,925

4,914

Noninterest expenses:

Salaries and employee benefits

11,648

11,373

11,743

11,725

11,711

Net occupancy expense

4,385

4,306

4,399

4,094

4,006

Equipment expense

1,606

1,802

1,768

1,689

1,709

Professional services

1,182

1,481

1,449

1,507

1,568

Outsourced services

1,875

2,075

1,925

1,875

1,875

Advertising expense

601

488

464

494

778

FDIC and other insurance

609

294

259

282

598

Other real estate (income) expense, net

(32

)

194

(385

)

33

210

Other

2,058

2,255

2,269

2,371

2,447

Total noninterest expenses

23,932

24,268

23,891

24,070

24,902

Income before taxes

15,175

17,619

18,265

19,498

19,544

Income taxes

3,921

4,306

4,358

4,790

4,877

Net income

$

11,254

13,313

13,907

14,708

14,667

Net income per common share:

- Basic

$

0.117

0.138

0.143

0.152

0.152

- Diluted

0.117

0.138

0.143

0.152

0.151

Average basic shares (in thousands)

96,433

96,727

96,919

96,907

96,822

Average diluted shares (in thousands)

96,437

96,750

97,015

96,977

96,891

Note: Taxable equivalent net interest income

$

37,681

38,554

38,243

38,644

39,192


CONSOLIDATED STATEMENTS OF INCOME, Continued

(dollars in thousands, except per share data)

(Unaudited)

Six months ended

06/30/20

06/30/19

Interest and dividend income:

Interest and fees on loans

$

83,728

82,685

Interest and dividends on securities available for sale:

U. S. government sponsored enterprises

527

1,604

State and political subdivisions

3

4

Mortgage-backed securities and collateralized mortgage

obligations - residential

3,640

3,707

Corporate bonds

726

480

Small Business Administration - guaranteed

participation securities

474

586

Other securities

11

10

Total interest and dividends on securities available for sale

5,381

6,391

Interest on held to maturity securities:

Mortgage-backed securities-residential

337

426

Total interest on held to maturity securities

337

426

Federal Reserve Bank and Federal Home Loan Bank stock

274

284

Interest on federal funds sold and other short-term investments

1,460

6,291

Total interest income

91,180

96,077

Interest expense:

Interest on deposits:

Interest-bearing checking

42

215

Savings

399

744

Money market deposit accounts

1,958

1,945

Time deposits

11,990

13,488

Interest on short-term borrowings

557

762

Total interest expense

14,946

17,154

Net interest income

76,234

78,923

Less: (Credit) Provision for loan losses

4,000

(41

)

Net interest income after provision for loan losses

72,234

78,964

Noninterest income:

Trustco Financial Services income

2,968

3,416

Fees for services to customers

4,122

5,131

Net gain on securities transactions

1,155

-

Other

515

1,004

Total noninterest income

8,760

9,551

Noninterest expenses:

Salaries and employee benefits

23,021

23,162

Net occupancy expense

8,691

8,173

Equipment expense

3,408

3,611

Professional services

2,663

3,218

Outsourced services

3,950

3,800

Advertising expense

1,089

1,563

FDIC and other insurance

903

1,246

Other real estate expense, net

162

186

Other

4,313

4,810

Total noninterest expenses

48,200

49,769

Income before taxes

32,794

38,746

Income taxes

8,227

9,521

Net income

$

24,567

29,225

Net income per common share:

- Basic

$

0.254

0.302

- Diluted

0.254

0.302

Average basic shares (in thousands)

96,580

96,784

Average diluted shares (in thousands)

96,593

96,857

Note: Taxable equivalent net interest income

$

76,235

78,925


CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

6/30/2020

3/31/2020

12/31/2019

9/30/2019

6/30/2019

ASSETS:

Cash and due from banks

$

44,726

43,362

48,198

49,526

42,471

Federal funds sold and other short term investments

908,110

492,691

408,648

401,151

517,684

Total cash and cash equivalents

952,836

536,053

456,846

450,677

560,155

Securities available for sale:

U. S. government sponsored enterprises

-

54,970

104,512

164,490

184,448

States and political subdivisions

111

112

162

169

170

Mortgage-backed securities and collateralized mortgage

obligations - residential

331,469

352,067

389,517

406,166

354,679

Small Business Administration - guaranteed

participation securities

45,998

46,768

48,511

50,970

53,091

Corporate bonds

54,439

48,564

30,436

40,281

40,467

Other securities

685

685

685

683

685

Total securities available for sale

432,702

503,166

573,823

662,759

633,540

Held to maturity securities:

Mortgage-backed securities and collateralized mortgage

obligations-residential

16,633

17,720

18,618

19,705

20,667

Total held to maturity securities

16,633

17,720

18,618

19,705

20,667

Federal Reserve Bank and Federal Home Loan Bank stock

5,506

9,183

9,183

9,183

9,183

Loans:

Commercial

231,212

195,805

199,499

192,443

190,507

Residential mortgage loans

3,681,898

3,627,121

3,583,774

3,508,647

3,428,829

Home equity line of credit

254,445

265,753

267,922

273,526

277,559

Installment loans

10,006

10,713

11,001

10,703

9,514

Loans, net of deferred net costs

4,177,561

4,099,392

4,062,196

3,985,319

3,906,409

Less: Allowance for loan losses

48,144

46,155

44,317

44,329

44,365

Net loans

4,129,417

4,053,237

4,017,879

3,940,990

3,862,044

Bank premises and equipment, net

34,042

34,428

34,622

34,168

34,058

Operating lease right-of-use assets

48,712

49,955

51,475

49,618

51,097

Other assets

57,155

52,905

58,876

55,369

56,926

Total assets

$

5,677,003

5,256,647

5,221,322

5,222,469

5,227,670

LIABILITIES:

Deposits:

Demand

$

612,960

480,255

463,858

453,439

432,780

Interest-bearing checking

1,001,592

895,254

875,672

869,101

888,433

Savings accounts

1,191,682

1,122,116

1,113,146

1,110,947

1,132,308

Money market deposit accounts

666,304

617,198

599,163

570,457

562,318

Time deposits

1,392,769

1,367,005

1,398,177

1,457,223

1,446,428

Total deposits

4,865,307

4,481,828

4,450,016

4,461,167

4,462,267

Short-term borrowings

177,278

148,090

148,666

151,095

166,746

Operating lease liabilities

53,710

54,998

56,553

54,731

56,237

Accrued expenses and other liabilities

27,287

23,546

27,830

29,313

26,790

Total liabilities

5,123,582

4,708,462

4,683,065

4,696,306

4,712,040

SHAREHOLDERS' EQUITY:

Capital stock

100,205

100,205

100,205

100,200

100,180

Surplus

176,437

176,431

176,427

176,395

176,396

Undivided profits

299,239

294,553

288,067

280,542

272,433

Accumulated other comprehensive loss, net of tax

11,936

11,392

4,461

(71

)

(1,774

)

Treasury stock at cost

(34,396

)

(34,396

)

(30,903

)

(30,903

)

(31,605

)

Total shareholders' equity

553,421

548,185

538,257

526,163

515,630

Total liabilities and shareholders' equity

$

5,677,003

5,256,647

5,221,322

5,222,469

5,227,670

Outstanding shares (in thousands)

96,433

96,433

96,922

96,917

96,822


NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

6/30/2020

3/31/2020

12/31/2019

9/30/2019

6/30/2019

Nonperforming Assets

New York and other states*

Loans in nonaccrual status:

Commercial

$

571

630

816

888

905

Real estate mortgage - 1 to 4 family

20,215

18,570

18,407

18,275

19,633

Installment

6

24

3

13

1

Total non-accrual loans

20,792

19,224

19,226

19,176

20,539

Other nonperforming real estate mortgages - 1 to 4 family

26

27

29

30

31

Total nonperforming loans

20,818

19,251

19,255

19,206

20,570

Other real estate owned

830

1,284

1,579

2,409

2,625

Total nonperforming assets

$

21,648

20,535

20,834

21,615

23,195

Florida

Loans in nonaccrual status:

Commercial

$

-

-

-

-

-

Real estate mortgage - 1 to 4 family

1,111

1,492

1,614

1,809

1,564

Installment

-

-

-

-

-

Total non-accrual loans

1,111

1,492

1,614

1,809

1,564

Other nonperforming real estate mortgages - 1 to 4 family

-

-

-

-

-

Total nonperforming loans

1,111

1,492

1,614

1,809

1,564

Other real estate owned

-

-

-

-

-

Total nonperforming assets

$

1,111

1,492

1,614

1,809

1,564

Total

Loans in nonaccrual status:

Commercial

$

571

630

816

888

905

Real estate mortgage - 1 to 4 family

21,326

20,062

20,021

20,084

21,197

Installment

6

24

3

13

1

Total non-accrual loans

21,903

20,716

20,840

20,985

22,103

Other nonperforming real estate mortgages - 1 to 4 family

26

27

29

30

31

Total nonperforming loans

21,929

20,743

20,869

21,015

22,134

Other real estate owned

830

1,284

1,579

2,409

2,625

Total nonperforming assets

$

22,759

22,027

22,448

23,424

24,759

Quarterly Net (Recoveries) Chargeoffs

New York and other states*

Commercial

$

(6

)

1

(1

)

(28

)

(1

)

Real estate mortgage - 1 to 4 family

(27

)

140

146

39

(54

)

Installment

44

4

67

9

45

Total net (recoveries) chargeoffs

$

11

145

212

20

(10

)

Florida

Commercial

$

-

-

-

-

-

Real estate mortgage - 1 to 4 family

-

(2

)

(1

)

-

(25

)

Installment

-

19

1

16

-

Total net (recoveries) chargeoffs

$

-

17

-

16

(25

)

Total

Commercial

$

(6

)

1

(1

)

(28

)

(1

)

Real estate mortgage - 1 to 4 family

(27

)

138

145

39

(79

)

Installment

44

23

68

25

45

Total net (recoveries) chargeoffs

$

11

162

212

36

(35

)

Asset Quality Ratios

Total nonperforming loans (1)

$

21,929

20,743

20,869

21,015

22,134

Total nonperforming assets (1)

22,759

22,027

22,448

23,424

24,759

Total net (recoveries) chargeoffs (2)

11

162

212

36

(35

)

Allowance for loan losses (1)

48,144

46,155

44,317

44,329

44,365

Nonperforming loans to total loans

0.52%

0.51%

0.51%

0.53%

0.57%

Nonperforming assets to total assets

0.40%

0.42%

0.43%

0.45%

0.47%

Allowance for loan losses to total loans

1.15%

1.13%

1.09%

1.11%

1.14%

Coverage ratio (1)

219.5%

222.5%

212.4%

210.9%

200.4%

Annualized net chargeoffs to average loans (2)

0.00%

0.02%

0.02%

0.00%

0.00%

Allowance for loan losses to annualized net chargeoffs (2)

1094.2x

71.2x

52.3x

307.8x

-316.9x

* 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, 2020

June 30, 2019

Average

Interest

Average

Average

Interest

Average

Balance

Rate

Balance

Rate

Assets

Securities available for sale:

U. S. government sponsored enterprises

$

23,291

106

1.83

%

$

160,197

821

2.05

%

Mortgage backed securities and collateralized mortgage

obligations - residential

333,122

1,527

1.83

342,678

2,152

2.51

State and political subdivisions

110

2

7.90

168

4

9.52

Corporate bonds

51,494

488

3.79

33,793

272

3.22

Small Business Administration - guaranteed

participation securities

45,260

229

2.03

54,254

289

2.13

Other

685

5

2.92

686

5

2.92

Total securities available for sale

453,962

2,357

2.08

591,776

3,543

2.39

Federal funds sold and other short-term Investments

727,006

193

0.11

545,724

3,282

2.41

Held to maturity securities:

Mortgage backed securities and collateralized mortgage

obligations - residential

17,199

162

3.75

21,155

209

3.95

Total held to maturity securities

17,199

162

3.75

21,155

209

3.95

Federal Reserve Bank and Federal Home Loan Bank stock

9,332

192

8.23

9,173

199

8.68

Commercial loans

223,002

2,610

4.68

189,870

2,546

5.36

Residential mortgage loans

3,653,342

36,365

3.98

3,396,149

35,179

4.14

Home equity lines of credit

260,029

2,515

3.89

279,622

3,503

5.01

Installment loans

10,044

175

7.02

10,310

204

7.91

Loans, net of unearned income

4,146,417

41,665

4.02

3,875,951

41,432

4.28

Total interest earning assets

5,353,916

44,569

3.33

5,043,779

48,665

3.86

Allowance for loan losses

(46,832

)

(44,841

)

Cash & non-interest earning assets

195,815

177,019

Total assets

$

5,502,899

$

5,175,957

Liabilities and shareholders' equity

Deposits:

Interest bearing checking accounts

$

953,299

26

0.01

%

$

879,732

94

0.04

%

Money market accounts

641,593

862

0.54

553,708

1,119

0.81

Savings

1,167,844

166

0.06

1,138,107

367

0.13

Time deposits

1,392,136

5,599

1.62

1,437,097

7,512

2.09

Total interest bearing deposits

4,154,872

6,653

0.64

4,008,644

9,092

0.91

Short-term borrowings

172,834

235

0.55

162,690

381

0.94

Total interest bearing liabilities

4,327,706

6,888

0.64

4,171,334

9,473

0.91

Demand deposits

548,178

418,215

Other liabilities

75,603

79,056

Shareholders' equity

551,412

507,352

Total liabilities and shareholders' equity

$

5,502,899

$

5,175,957

Net interest income, tax equivalent

37,681

39,192

Net interest spread

2.69

%

2.95

%

Net interest margin (net interest income to

total interest earning assets)

2.81

%

3.11

%

Tax equivalent adjustment

-

(1

)

Net interest income

37,681

39,191


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, 2020

June 30, 2019

Average

Interest

Average

Average

Interest

Average

Balance

Rate

Balance

Rate

Assets

Securities available for sale:

U. S. government sponsored enterprises

$

57,830

527

1.82

%

$

157,244

1,604

2.04

%

Mortgage backed securities and collateralized mortgage

obligations - residential

352,445

3,640

2.07

308,034

3,707

2.41

State and political subdivisions

112

4

7.74

168

6

7.14

Corporate bonds

39,913

726

3.64

30,347

480

3.16

Small Business Administration - guaranteed

participation securities

46,339

474

2.05

55,648

586

2.11

Other

685

11

3.21

685

10

2.92

Total securities available for sale

497,324

5,382

2.16

552,126

6,393

2.32

Federal funds sold and other short-term Investments

569,541

1,460

0.52

524,468

6,291

2.40

Held to maturity securities:

Mortgage backed securities and collateralized mortgage

obligations - residential

17,671

337

3.81

21,594

426

3.95

Total held to maturity securities

17,671

337

3.81

21,594

426

3.95

Federal Reserve Bank and Federal Home Loan Bank stock

9,258

274

5.92

9,064

284

6.27

Commercial loans

210,524

5,152

4.89

191,793

5,129

5.35

Residential mortgage loans

3,627,535

72,826

4.02

3,385,628

70,043

4.14

Home equity lines of credit

262,745

5,383

4.12

282,892

7,040

4.98

Installment loans

10,380

367

7.11

11,099

473

8.52

Loans, net of unearned income

4,111,184

83,728

4.08

3,871,412

82,685

4.27

Total interest earning assets

5,204,978

91,181

3.51

4,978,664

96,079

3.86

Allowance for loan losses

(45,676

)

(44,894

)

Cash & non-interest earning assets

194,718

176,518

Total assets

$

5,354,020

$

5,110,288

Liabilities and shareholders' equity

Deposits:

Interest bearing checking accounts

$

912,226

42

0.01

%

$

880,101

215

0.05

%

Money market accounts

627,897

1,958

0.63

535,950

1,945

0.73

Savings

1,142,201

399

0.07

1,149,064

744

0.13

Time deposits

1,381,025

11,990

1.75

1,395,361

13,488

1.93

Total interest bearing deposits

4,063,349

14,389

0.71

3,960,476

16,392

0.83

Short-term borrowings

163,251

557

0.69

160,893

762

0.95

Total interest bearing liabilities

4,226,600

14,946

0.71

4,121,369

17,154

0.83

Demand deposits

503,327

407,926

Other liabilities

77,303

79,814

Shareholders' equity

546,790

501,179

Total liabilities and shareholders' equity

$

5,354,020

$

5,110,288

Net interest income, tax equivalent

76,235

78,925

Net interest spread

2.80

%

3.03

%

Net interest margin (net interest income to

total interest earning assets)

2.93

%

3.17

%

Tax equivalent adjustment

(1

)

(2

)

Net interest income

76,234

78,923

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 nonperforming loans and 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)

6/30/2020

3/31/2020

6/30/2019

Tangible Equity to Tangible Assets

Total Assets (GAAP)

$

5,677,003

5,256,647

5,227,670

Less: Intangible assets

553

553

553

Tangible assets (Non-GAAP)

5,676,450

5,256,094

5,227,117

Equity (GAAP)

553,421

548,185

515,630

Less: Intangible assets

553

553

553

Tangible equity (Non-GAAP)

552,868

547,632

515,077

Tangible Equity to Tangible Assets (Non-GAAP)

9.74%

10.42%

9.85%

Equity to Assets (GAAP)

9.75%

10.43%

9.86%

Three months ended

Six months ended

Efficiency Ratio

6/30/2020

3/31/2020

6/30/2019

6/30/2020

6/30/2019

Net interest income (fully taxable equivalent) (Non-GAAP)

$

37,681

38,554

39,192

$

76,235

78,925

Non-interest income (GAAP)

3,426

5,334

4,914

8,760

9,551

Less: Net gain on securities

-

1,155

-

1,155

-

Revenue used for efficiency ratio (Non-GAAP)

41,107

42,733

44,106

83,840

88,476

Total noninterest expense (GAAP)

23,932

24,268

24,902

48,200

49,769

Less: Other real estate expense (income), net

(32

)

194

210

162

186

Expense used for efficiency ratio (Non-GAAP)

23,964

24,074

24,692

48,038

49,583

Efficiency Ratio

58.30%

56.34%

55.98%

57.30%

56.04%

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