TrustCo’s Total Loans Surpass $5 Billion – Reach All-Time High; Nonperforming Assets to Total Assets at 0.29%, Lowest in 17 Years

Executive Snapshot:

• Loan portfolio reaches all-time high:
  • At $5.0 billion as of December 31, 2023, loans continued to set new all-time highs
  • On average, total loans were up $309.9 million or 6.6% for the fourth quarter 2023 compared to fourth quarter 2022
• Continued solid financial results:
  • Key metrics for 2023:
    • Net income of $58.6 million
    • Net interest income of $171.8 million
    • Return on average assets (ROAA) of 0.97%
    • Return on average equity (ROAE) of 9.46%
    • Book value per share at period end was $33.92, up from $31.54 compared to December 31, 2022
• Superior asset quality:
  • Nonperforming loans (NPLs) were $17.7 million as of December 31, 2023, up slightly from December 31, 2022, and continue to remain at low levels
  • NPLs to total loans improved to 0.35% compared to 0.37% at December 31, 2022
  • Nonperforming assets (NPAs) to total assets improved to 0.29% compared to 0.33% at December 31, 2022

• Capital continues to grow:
  • Consolidated equity to assets increased to 10.46% at December 31, 2023 from 10.00% at December 31, 2022

GLENVILLE, N.Y., Jan. 22, 2024 (GLOBE NEWSWIRE) —

TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced full year 2023 net income of $58.6 million or $3.08 diluted earnings per share, compared to net income of $75.2 million or $3.93 diluted earnings per share for the full year 2022; and net income of $9.8 million or $0.52 diluted earnings per share for the three months ended December 31, 2023, compared to net income of $20.9 million or $1.10 diluted earnings per share for the three months ended December 31, 2022. Total loan growth increased on average by $309.9 million, or 6.6% for the fourth quarter 2023 over the same period in 2022.

Overview

Chairman, President, and CEO, Robert J. McCormick, said, “The economic environment in 2023 presented challenges not previously seen. In trademark fashion, however, the TrustCo team navigated the adverse circumstances and delivered solid results. Total loans exceeded $5 billion for the first time in our history while credit quality remained exceptional – nonperforming assets to total assets ended the year at 0.29%, the best in 17 years. We are proud to say that this loan growth was funded without brokered deposits or borrowings. Likewise, we sustained our century-long commitment to the payment of a meaningful dividend to our shareholders. The point from which this good work springs is our strong capital position, developed over time and grown through the application of sound strategy. The interest-rate environment in 2024 could unfold in a number of different ways, but no matter how it plays out, we are positioned to capitalize upon the opportunities presented.”

TrustCo saw deposit balances rebound from the end of the prior year with net deposit inflows during the year. Loan growth continued across all categories year over year, 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 from March 2022 through July 2023 has contributed to our results in the fourth quarter and full year 2023. Our cash position has allowed the Bank to be judicious in deposit pricing and created a buffer for the need to seek high cost funding alternatives, while other variable rate products have continued to reprice upward. Similarly, deposit costs continue to increase while we are also experiencing a shift in deposits to Time Accounts. Furthermore, we continue to deploy aggressive marketing efforts to retain and grow 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 expanded net interest margin going forward. We believe that TrustCo’s strong liquidity position continues to allow us to take advantage of opportunities as they arise.

Details

Average loans were up $309.9 million or 6.6% in the fourth quarter 2023 over the same period in 2022. Average residential loans, our primary lending focus, were up $192.2 million, or 4.6%, in the fourth quarter 2023 over the same period in 2022. Average commercial loans and home equity lines of credit also increased $50.5 million, or 22.6%, and $61.8 million, or 22.2%, respectively, in the fourth quarter 2023 over the same period in 2022.

We have been proactive in retaining deposits through pricing and aggressive marketing, which has resulted in increased balances since December 31, 2022. Total deposits as of December 31, 2023 increased $158.0 million to $5.35 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 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 $38.6 million for the fourth quarter 2023, a decrease of $10.6 million, or 21.5%, 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 at higher interest rates. The net interest margin for the fourth quarter 2023 was 2.60%, down 74 basis points from 3.34% in the fourth quarter of 2022. The yield on interest earnings assets increased to 3.93%, up 39 basis points from 3.54% in the fourth quarter of 2022. The cost of interest bearing liabilities increased to 1.72% in the fourth quarter 2023 from 0.26% in the fourth quarter 2022. Non-interest expense increased $2.4 million over the prior year period primarily as a result of a legal settlement and the closure of several branch locations. Other non-interest expense are expected to return to more normalized levels next quarter. The Bank does expect branch related savings in the future quarters due to the decreased number of branch locations.

Asset quality remains strong and has been consistent over the past twelve months. The Company recorded a provision for credit losses of $1.4 million in the fourth quarter of 2023, which is the result of a provision for credit losses on loans of $1.6 million, offset by a benefit for credit losses on unfunded commitments of $250 thousand as a result of a corresponding decrease in unfunded loan commitments. The ratio of allowance for credit losses on loans to total loans was 0.97% as of December 31, 2023 and 2022. The allowance for credit losses on loans was $48.6 million at December 31, 2023, compared to $46.0 million at December 31, 2022. NPLs were $17.7 million at December 31, 2023, compared to $17.5 million at December 31, 2022. NPLs were 0.35% and 0.37% of total loans at December 31, 2023 and 2022, respectively. The coverage ratio, or allowance for credit losses on loans to NPLs, was 275.0% at December 31, 2023, compared to 263.1% at December 31, 2022. NPAs were $17.9 million at December 31, 2023, compared to $19.6 million at December 31, 2022. Additionally, we had minimal charge-offs and were in a net recovery position for the year.

At December 31, 2023, our equity to asset ratio was 10.46%, compared to 10.00% at December 31, 2022. Book value per share at December 31, 2023 was $33.92, up 7.5% compared to $31.54 a year earlier.

A conference call to discuss fourth quarter 2023results will be held at 9:00 a.m. Eastern Time on January 23, 2024. 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 813290. A replay of the call will be available for thirty days by dialing toll-free for the United States at 1-866-813-9403, Access code 303906. The call will also be audio webcast at https://events.q4inc.com/attendee/827223195, and will be available for one year.

About TrustCo Bank Corp NY

TrustCo Bank Corp NY is a $6.2 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 140 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at December 31, 2023.

In addition, the Bank’s Wealth Management 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, continued elevated 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 credit rating downgrades, or failure to increase the debt ceiling; the impact of elevated interest rates; future changes in interest rates; inflationary pressures and elevated 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 material 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
		12/31/2023				9/30/2023				12/31/2022
Summary of operations
Net interest income		$	38,607			$	42,221			$	49,186
Provision for credit losses			1,350				100				50
Noninterest income			4,474				4,574				4,775
Noninterest expense			28,831				27,460				26,405
Net income			9,848				14,680				20,910
Per share
Net income per share:
– Basic		$	0.52			$	0.77			$	1.10
– Diluted			0.52				0.77				1.10
Cash dividends			0.36				0.36				0.36
Book value at period end			33.92				32.80				31.54
Market price at period end			31.05				27.29				37.59
At period end
Full time equivalent employees			750				764				750
Full service banking offices			140				143				143
Performance ratios
Return on average assets			0.64	%			0.96	%			1.38	%
Return on average equity			6.21				9.32				13.91
Efficiency ratio (1)			60.16				58.33				48.75
Net interest spread			2.21				2.55				3.28
Net interest margin			2.60				2.85				3.34
Dividend payout ratio			69.54				46.65				32.81
Capital ratios at period end
Consolidated equity to assets			10.46	%			10.31	%			10.00	%
Consolidated tangible equity to tangible assets (2)			10.45	%			10.30	%			9.99	%
Asset quality analysis at period end
Nonperforming loans to total loans			0.35	%			0.36	%			0.37	%
Nonperforming assets to total assets			0.29				0.31				0.33
Allowance for credit losses on loans to total loans			0.97				0.95				0.97
Coverage ratio (3)			2.7	x			2.6	x			2.6	x
(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense and non-recurring expenses) divided by taxable equivalent net interest income plus noninterest income (excluding non-recurring loss). 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)
		Year ended
		12/31/23				12/31/22
Summary of operations
Net interest income	$		171,845				180,135
Provision (Credit) for credit losses			1,250				(341	)
Noninterest income			18,315				19,260
Noninterest expense			111,297				100,319
Net income			58,646				75,234
Per share
Net income per share:
– Basic	$		3.08				3.93
– Diluted			3.08				3.93
Cash dividends			1.44				1.41
Book value at period end			33.92				31.54
Market price at period end			31.05				37.59
Performance ratios
Return on average assets			0.97	%			1.22
Return on average equity			9.46				12.60
Efficiency ratio (1)			56.72				50.22
Net interest spread			2.64				2.96
Net interest margin			2.91				2.99
Dividend payout ratio			46.71				35.86
(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense and non-recurring expenses) divided by taxable equivalent net interest income plus noninterest income (excluding non-recurring loss). See Non-GAAP Financial Measures Reconciliation.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
Interest and dividend income:
Interest and fees on loans		$	49,201			$	47,921			$	46,062			$	44,272			$	42,711
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises			750				672				691				692				693
State and political subdivisions			1				–				1				–				–
Mortgage-backed securities and collateralized mortgage obligations – residential			1,533				1,485				1,543				1,585				1,606
Corporate bonds			477				473				516				521				523
Small Business Administration – guaranteed participation securities			102				107				111				117				124
Other securities			3				2				3				2				2
Total interest and dividends on securities available for sale			2,866				2,739				2,865				2,917				2,948
Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations – residential			70				73				75				78				81
Total interest on held to maturity securities			70				73				75				78				81
Federal Home Loan Bank stock			149				131				110				110				98
Interest on federal funds sold and other short-term investments			6,354				6,688				6,970				6,555				6,246
Total interest income			58,640				57,552				56,082				53,932				52,084
Interest expense:
Interest on deposits:
Interest-bearing checking			165				102				49				66				61
Savings			707				639				655				530				401
Money market deposit accounts			2,500				2,384				1,756				814				389
Time deposits			16,460				11,962				9,291				5,272				1,839
Interest on short-term borrowings			201				244				279				285				208
Total interest expense			20,033				15,331				12,030				6,967				2,898
Net interest income			38,607				42,221				44,052				46,965				49,186
Less: Provision (Credit) for credit losses			1,350				100				(500	)			300				50
Net interest income after provision (credit) for credit losses			37,257				42,121				44,552				46,665				49,136
Noninterest income:
Trustco Financial Services income			1,612				1,627				1,412				1,774				1,773
Fees for services to customers			2,563				2,590				2,847				2,648				2,783
Other			299				357				339				247				219
Total noninterest income			4,474				4,574				4,598				4,669				4,775
Noninterest expenses:
Salaries and employee benefits			12,444				12,393				13,122				13,283				13,067
Net occupancy expense			4,209				4,358				4,262				4,598				4,261
Equipment expense			1,852				1,923				1,873				1,962				1,700
Professional services			1,561				1,717				1,360				1,607				1,251
Outsourced services			2,532				2,720				2,491				2,296				2,102
Advertising expense			384				586				518				390				532
FDIC and other insurance			1,085				1,078				1,085				1,052				770
Other real estate (income) expense, net			(12	)			163				148				225				101
Other			4,776				2,522				2,468				2,266				2,621
Total noninterest expenses			28,831				27,460				27,327				27,679				26,405
Income before taxes			12,900				19,235				21,823				23,655				27,506
Income taxes			3,052				4,555				5,451				5,909				6,596
Net income		$	9,848			$	14,680			$	16,372			$	17,746			$	20,910
Net income per common share:
– Basic		$	0.52			$	0.77			$	0.86			$	0.93			$	1.10
– Diluted			0.52				0.77				0.86				0.93				1.10
Average basic shares (in thousands)			19,024				19,024				19,024				19,024				19,045
Average diluted shares (in thousands)			19,026				19,024				19,024				19,027				19,050
CONSOLIDATED STATEMENTS OF INCOME, Continued
(dollars in thousands, except per share data)
(Unaudited)
		Year ended
		12/31/23				12/31/22
Interest and dividend income:
Interest and fees on loans	$		187,456				162,214
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises			2,805				1,405
State and political subdivisions			2				2
Mortgage-backed securities and collateralized mortgage obligations – residential			6,146				5,677
Corporate bonds			1,987				1,804
Small Business Administration – guaranteed participation securities			437				551
Other securities			10				9
Total interest and dividends on securities available for sale			11,387				9,448
Interest on held to maturity securities:
Mortgage-backed securities-residential			296				343
Total interest on held to maturity securities			296				343
Federal Home Loan Bank stock			500				305
Interest on federal funds sold and other short-term investments			26,567				14,292
Total interest income			226,206				186,602
Interest expense:
Interest on deposits:
Interest-bearing checking			382				190
Savings			2,531				920
Money market deposit accounts			7,454				1,050
Time deposits			42,985				3,567
Interest on short-term borrowings			1,009				740
Total interest expense			54,361				6,467
Net interest income			171,845				180,135
Less: Provision (Credit) for credit losses			1,250				(341	)
Net interest income after provision (credit) for credit losses			170,595				180,476
Noninterest income:
Trustco Financial Services income			6,425				7,037
Fees for services to customers			10,648				10,947
Other			1,242				1,276
Total noninterest income			18,315				19,260
Noninterest expenses:
Salaries and employee benefits			51,242				45,904
Net occupancy expense			17,427				17,527
Equipment expense			7,610				6,487
Professional services			6,245				5,577
Outsourced services			10,039				9,210
Advertising expense			1,878				2,046
FDIC and other insurance			4,300				3,159
Other real estate expense, net			524				310
Other			12,032				10,099
Total noninterest expenses			111,297				100,319
Income before taxes			77,613				99,417
Income taxes			18,967				24,183
Net income	$		58,646				75,234
Net income per common share:
– Basic	$		3.08				3.93
– Diluted			3.08				3.93
Average basic shares (in thousands)			19,024				19,131
Average diluted shares (in thousands)			19,025				19,133
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
ASSETS:
Cash and due from banks		$	49,274			$	45,940			$	55,662			$	47,595			$	43,429
Federal funds sold and other short term investments			528,730				461,321				547,695				589,389				607,170
Total cash and cash equivalents			578,004				507,261				603,357				636,984				650,599
Securities available for sale:
U. S. government sponsored enterprises			118,668				121,474				113,570				119,132				118,187
States and political subdivisions			26				34				34				34				34
Mortgage-backed securities and collateralized mortgage obligations – residential			237,677				233,719				243,444				255,556				260,316
Small Business Administration – guaranteed participation securities			17,186				17,316				18,382				19,821				20,977
Corporate bonds			78,052				76,935				76,618				81,464				81,346
Other securities			680				657				656				652				653
Total securities available for sale			452,289				450,135				452,704				476,659				481,513
Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential			6,458				6,724				7,043				7,382				7,707
Total held to maturity securities			6,458				6,724				7,043				7,382				7,707
Federal Reserve Bank and Federal Home Loan Bank stock			6,203				6,203				6,203				5,797				5,797
Loans:
Commercial			273,515				268,642				251,434				246,307				231,011
Residential mortgage loans			4,365,063				4,343,006				4,310,005				4,241,459				4,203,451
Home equity line of credit			347,415				332,028				308,976				296,490				286,432
Installment loans			16,886				16,605				16,396				15,326				12,307
Loans, net of deferred net costs			5,002,879				4,960,281				4,886,811				4,799,582				4,733,201
Less: Allowance for credit losses on loans			48,578				47,226				46,914				46,685				46,032
Net loans			4,954,301				4,913,055				4,839,897				4,752,897				4,687,169
Bank premises and equipment, net			34,007				32,135				32,351				32,305				32,556
Operating lease right-of-use assets			40,542				41,475				43,113				43,478				44,727
Other assets			96,387				97,310				90,957				90,306				89,984
Total assets		$	6,168,191			$	6,054,298			$	6,075,625			$	6,045,808			$	6,000,052
LIABILITIES:
Deposits:
Demand		$	754,532			$	773,293			$	791,353			$	806,075			$	838,147
Interest-bearing checking			1,015,213				1,033,898				1,082,989				1,124,785				1,183,321
Savings accounts			1,179,241				1,235,658				1,315,893				1,400,887				1,521,473
Money market deposit accounts			565,767				610,012				625,253				600,410				621,106
Time deposits			1,836,024				1,581,504				1,442,959				1,280,301				1,028,763
Total deposits			5,350,777				5,234,365				5,258,447				5,212,458				5,192,810
Short-term borrowings			88,990				103,110				113,765				134,293				122,700
Operating lease liabilities			44,471				45,418				47,172				47,643				48,980
Accrued expenses and other liabilities			38,668				47,479				34,852				36,711				35,575
Total liabilities			5,522,906				5,430,372				5,454,236				5,431,105				5,400,065
SHAREHOLDERS’ EQUITY:
Capital stock			20,058				20,058				20,058				20,058				20,058
Surplus			257,181				257,078				257,078				257,078				257,078
Undivided profits			425,069				422,082				414,251				404,728				393,831
Accumulated other comprehensive loss, net of tax			(13,237	)			(31,506	)			(26,212	)			(23,375	)			(27,194	)
Treasury stock at cost			(43,786	)			(43,786	)			(43,786	)			(43,786	)			(43,786	)
Total shareholders’ equity			645,285				623,926				621,389				614,703				599,987
Total liabilities and shareholders’ equity		$	6,168,191			$	6,054,298			$	6,075,625			$	6,045,808			$	6,000,052
Outstanding shares (in thousands)			19,024				19,024				19,024				19,024				19,024

 

NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
Nonperforming Assets
New York and other states*
Loans in nonaccrual status:
Commercial		$	536			$	540			$	545			$	560			$	219
Real estate mortgage – 1 to 4 family			14,375				14,633				16,260				15,722				14,949
Installment			151				93				124				59				23
Total non-accrual loans			15,062				15,266				16,929				16,341				15,191
Other nonperforming real estate mortgages – 1 to 4 family			3				5				7				8				10
Total nonperforming loans			15,065				15,271				16,936				16,349				15,201
Other real estate owned			194				1,185				1,412				1,869				2,061
Total nonperforming assets		$	15,259			$	16,456			$	18,348			$	18,218			$	17,262
Florida
Loans in nonaccrual status:
Commercial		$	314			$	314			$	314			$	314			$	314
Real estate mortgage – 1 to 4 family			2,272				2,228				2,170				2,437				1,895
Installment			15				65				–				62				83
Total non-accrual loans			2,601				2,607				2,484				2,813				2,292
Other nonperforming real estate mortgages – 1 to 4 family			–				–				–				–				–
Total nonperforming loans			2,601				2,607				2,484				2,813				2,292
Other real estate owned			–				–				–				–				–
Total nonperforming assets		$	2,601			$	2,607			$	2,484			$	2,813			$	2,292
Total
Loans in nonaccrual status:
Commercial		$	850			$	854			$	859			$	874			$	533
Real estate mortgage – 1 to 4 family			16,647				16,861				18,430				18,159				16,844
Installment			166				158				124				121				106
Total non-accrual loans			17,663				17,873				19,413				19,154				17,483
Other nonperforming real estate mortgages – 1 to 4 family			3				5				7				8				10
Total nonperforming loans			17,666				17,878				19,420				19,162				17,493
Other real estate owned			194				1,185				1,412				1,869				2,061
Total nonperforming assets		$	17,860			$	19,063			$	20,832			$	21,031			$	19,554
Quarterly Net (Recoveries) Chargeoffs
New York and other states*
Commercial		$	–			$	–			$	(129	)		$	–			$	–
Real estate mortgage – 1 to 4 family			219				(26	)			(161	)			(53	)			(46	)
Installment			23				14				21				(6	)			31
Total net chargeoffs (recoveries)		$	242			$	(12	)		$	(269	)		$	(59	)		$	(15	)
Florida
Commercial		$	–			$	–			$	–			$	–			$	–
Real estate mortgage – 1 to 4 family			–				–				–				(25	)			–
Installment			6				–				40				31				–
Total net chargeoffs (recoveries)		$	6			$	–			$	40			$	6			$	–
Total
Commercial		$	–			$	–			$	(129	)		$	–			$	–
Real estate mortgage – 1 to 4 family			219				(26	)			(161	)			(78	)			(46	)
Installment			29				14				61				25				31
Total net chargeoffs (recoveries)		$	248			$	(12	)		$	(229	)		$	(53	)		$	(15	)
Asset Quality Ratios
Total nonperforming loans (1)		$	17,666			$	17,878			$	19,420			$	19,162			$	17,493
Total nonperforming assets (1)			17,860				19,063				20,832				21,031				19,554
Total net chargeoffs (recoveries) (2)			248				(12	)			(229	)			(53	)			(15	)
Allowance for credit losses on loans (1)			48,578				47,226				46,914				46,685				46,032
Nonperforming loans to total loans			0.35	%			0.36	%			0.40	%			0.40	%			0.37	%
Nonperforming assets to total assets			0.29	%			0.31	%			0.34	%			0.35	%			0.33	%
Allowance for credit losses on loans to total loans			0.97	%			0.95	%			0.96	%			0.97	%			0.97	%
Coverage ratio (1)			275.0	%			264.2	%			241.6	%			243.6	%			263.1	%
Annualized net chargeoffs (recoveries) to average loans (2)			0.02	%			0.00	%			-0.02	%			0.00	%			0.00	%
Allowance for credit losses on loans to annualized net chargeoffs (recoveries) (2)			49.0	x			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
		December 31, 2023									December 31, 2022
		Average				Interest		Average			Average				Interest			Average
		Balance						Rate			Balance							Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises		$	125,572			$	750	2.39	%		$	120,415			$	693		2.30	%
Mortgage backed securities and collateralized mortgage obligations – residential			267,341				1,533	2.28				292,845				1,606		2.18
State and political subdivisions			32				1	6.62				40				1		7.81
Corporate bonds			80,207				477	2.38				85,701				523		2.44
Small Business Administration – guaranteed participation securities			18,990				102	2.15				23,805				124		2.10
Other			689				3	1.74				686				2		1.17
Total securities available for sale			492,831				2,866	2.33				523,492				2,949		2.25
Federal funds sold and other short-term Investments			461,889				6,354	5.46				669,280				6,246		3.70
Held to maturity securities:
Mortgage backed securities and collateralized mortgage obligations – residential			6,591				70	4.25				7,886				81		4.12
Total held to maturity securities			6,591				70	4.25				7,886				81		4.12
Federal Home Loan Bank stock			6,203				149	9.61				5,797				98		6.76
Commercial loans			273,622				3,589	5.25				223,164				2,756		4.94
Residential mortgage loans			4,353,660				40,009	3.68				4,161,481				36,109		3.47
Home equity lines of credit			340,670				5,338	6.22				278,853				3,661		5.21
Installment loans			16,359				265	6.44				10,886				185		6.74
Loans, net of unearned income			4,984,311				49,201	3.94				4,674,384				42,711		3.65
Total interest earning assets			5,951,825			$	58,640	3.93				5,880,839			$	52,085		3.54
Allowance for credit losses on loans			(47,458	)								(45,722	)
Cash & non-interest earning assets			169,791									171,921
Total assets		$	6,074,158								$	6,007,038
Liabilities and shareholders’ equity
Deposits:
Interest bearing checking accounts		$	1,004,744			$	165	0.07	%		$	1,164,178			$	61		0.02	%
Money market accounts			586,025				2,500	1.69				668,537				389		0.23
Savings			1,205,388				707	0.23				1,540,163				401		0.10
Time deposits			1,720,871				16,460	3.79				983,590				1,839		0.74
Total interest bearing deposits			4,517,028				19,832	1.74				4,356,468				2,690		0.25
Short-term borrowings			92,529				201	0.86				126,562				208		0.65
Total interest bearing liabilities			4,609,557			$	20,033	1.72				4,483,030			$	2,898		0.26
Demand deposits			754,078									845,493
Other liabilities			81,297									82,085
Shareholders’ equity			629,226									596,430
Total liabilities and shareholders’ equity		$	6,074,158								$	6,007,038
Net interest income, GAAP and non-GAAP tax equivalent (1)						$	38,607								$	49,187
Net interest spread, GAAP and non-GAAP tax equivalent (1)								2.21	%									3.28	%
Net interest margin (net interest income to total interest earning assets), GAAP and non-GAAP tax equivalent (1)								2.60	%									3.34	%
Tax equivalent adjustment (1)							–									(1	)
Net interest income						$	38,607								$	49,186
(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)		Year ended									Year ended
		December 31, 2023									December 31, 2022
		Average				Interest		Average			Average				Interest			Average
		Balance						Rate			Balance							Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$		121,574				2,805	2.31	%	$		89,557				1,405		1.57	%
Mortgage backed securities and collateralized mortgage obligations – residential			275,565				6,146	2.23				284,901				5,677		1.99
State and political subdivisions			33				2	6.71				41				3		6.66
Corporate bonds			82,865				1,987	2.40				78,266				1,804		2.31
Small Business Administration – guaranteed participation securities			20,410				437	2.14				26,679				551		2.07
Other			686				10	1.46				686				9		1.31
Total securities available for sale			501,133				11,387	2.27				480,130				9,449		1.97
Federal funds sold and other short-term Investments			521,021				26,567	5.10				969,043				14,292		1.47
Held to maturity securities:
Mortgage backed securities and collateralized mortgage obligations – residential			7,053				296	4.20				8,647				343		3.97
Total held to maturity securities			7,053				296	4.20				8,647				343		3.97
Federal Home Loan Bank stock			6,018				500	8.31				5,749				305		5.31
Commercial loans			255,666				13,306	5.20				206,144				10,168		4.93
Residential mortgage loans			4,290,241				154,235	3.60				4,081,120				140,420		3.44
Home equity lines of credit			313,914				18,936	6.03				254,168				10,950		4.31
Installment loans			15,345				979	6.38				9,849				676		6.87
Loans, net of unearned income			4,875,166				187,456	3.84				4,551,281				162,214		3.56
Total interest earning assets			5,910,391				226,206	3.83				6,014,850				186,603		3.10
Allowance for credit losses on loans			(46,971	)								(46,124	)
Cash & non-interest earning assets			172,641									190,278
Total assets	$		6,036,061							$		6,159,004
Liabilities and shareholders’ equity
Deposits:
Interest bearing checking accounts	$		1,067,972				382	0.04	%	$		1,190,337				190		0.02	%
Money market accounts			606,230				7,454	1.23				745,714				1,050		0.14
Savings			1,323,995				2,531	0.19				1,553,016				920		0.06
Time deposits			1,437,336				42,985	2.99				974,428				3,567		0.37
Total interest bearing deposits			4,435,533				53,352	1.20				4,463,495				5,727		0.13
Short-term borrowings			114,639				1,009	0.88				177,599				740		0.42
Total interest bearing liabilities			4,550,172				54,361	1.19				4,641,094				6,467		0.14
Demand deposits			784,021									838,944
Other liabilities			81,658									81,880
Shareholders’ equity			620,212									597,086
Total liabilities and shareholders’ equity	$		6,036,063							$		6,159,004
Net interest income, GAAP and non-GAAP tax equivalent (1)							171,845									180,136
Net interest spread, GAAP and non-GAAP tax equivalent (1)								2.64	%									2.96	%
Net interest margin (net interest income to total interest earning assets), GAAP and non-GAAP tax equivalent (1)								2.91	%									2.99	%
Tax equivalent adjustment (1)							–									(1	)
Net interest income							171,845									180,135
(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 book value per share is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible book value by excluding the balance of intangible assets from total shareholders’ equity divided by shares outstanding. 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 exclusive of changes in intangible assets.

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, strategic branch closing costs, and a non-recurring expense related to the settlement of a class action lawsuit, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, excluding gain/loss on the disposal of assets from strategic branch closures 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)
		12/31/2023			9/30/2023			12/31/2022
Tangible Book Value Per Share
Equity (GAAP)		$	645,285		$	623,926		$	599,987
Less: Intangible assets			553			553			553
Tangible equity (Non-GAAP)		$	644,732		$	623,373		$	599,434
Shares outstanding			19,024			19,024			19,024
Tangible book value per share			33.89			32.77			31.51
Book value per share			33.92			32.80			31.54
Tangible Equity to Tangible Assets
Total Assets (GAAP)		$	6,168,191		$	6,054,298		$	6,000,052
Less: Intangible assets			553			553			553
Tangible assets (Non-GAAP)		$	6,167,638		$	6,053,745		$	5,999,499
Tangible Equity to Tangible Assets (Non-GAAP)			10.45	%		10.30	%		9.99	%
Equity to Assets (GAAP)			10.46	%		10.31	%		10.00	%
		Three months ended											Year ended
Efficiency Ratio		12/31/2023			9/30/2023			12/31/2022					12/31/2023			12/31/2022
Net interest income (GAAP)		$	38,607		$	42,221		$	49,186				$	171,845		$	180,135
Taxable equivalent adjustment			–			–			1					–			1
Net interest income (fully taxable equivalent) (Non-GAAP)			38,607			42,221			49,187					171,845			180,136
Non-interest income (GAAP)			4,474			4,574			4,775					18,315			19,260
Add: Non-recurring loss (1)			101			–			–					101			–
Less: Net gain on sale of building			–			–			–					–			268
Revenue used for efficiency ratio (Non-GAAP)		$	43,182		$	46,795		$	53,962				$	190,261		$	199,128
Total noninterest expense (GAAP)		$	28,831		$	27,460		$	26,405				$	111,297		$	100,319
Less: Branch closure expense			114			–			–					114			–
Less: Non-recurring expenses (1)			2,750			–			–					2,750			–
Less: Other real estate (income) expense, net			(12	)		163			101					524			310
Expense used for efficiency ratio (Non-GAAP)		$	25,979		$	27,297		$	26,304				$	107,909		$	100,009
Efficiency Ratio			60.16	%		58.33	%		48.75	%				56.72	%		50.22	%
(1) There were no non-recurring losses or expenses in the prior period.

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

Originally Appeared Here