Exhibit 99(a)
 | News Release |
5 Sarnowski Drive, Glenville, New York, 12302 (518) 377-3311 Fax: (518) 381-3668 | |
Subsidiary: Trustco Bank | NASDAQ -- TRST |
| Contact: | Robert Leonard Executive Vice President and Chief Risk Officer (518) 381-3693 |
FOR IMMEDIATE RELEASE:
TrustCo is Pleased to Report Second Quarter 2021 Results;
Net Income up 28% over the Prior Year Quarter and 5.3% Average Residential Loan Growth Year over Year
Glenville, New York –June 21, 2021
TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced second quarter 2021 net income of $14.4 million or $0.748 diluted earnings per share, compared to net income of $11.3 million or $0.584 diluted earnings per share for the second quarter 2020; and net income of $28.5 million or $1.478 diluted earnings per share for the six months ended June 30, 2021, compared to net income of $24.6 million or $1.272 diluted earnings per share for the six months ended June 30, 2020. For all periods presented, share and per share information has been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.
Summary
Robert J. McCormick, Chairman, President and Chief Executive Officer noted, “The people who make up the team at Trustco Bank are second to none. We have a deep and diverse talent pool that enables us to focus on short, medium, and long-term objectives all at the same time. The financial results announced today demonstrate the success of these multifaceted efforts. Working our way through and out of the COVID-19 pandemic, we were true to our “Home Town Bank” motto and helped many people in the communities we serve, while simultaneously achieving meaningful shareholder value and return.”
We not only continued without interruption our long history of paying a meaningful dividend, we also won shareholder approval of a reverse stock split that we believe will improve the company’s position in the market by making our stock attractive to a wider audience. At the same time, we also supported food banks, renewed our commitments to distressed neighborhoods, invested in affordable housing programs, aided educational programs, and encouraged savings initiatives. We also continued to assist consumer and commercial customers as they worked their way out of the hardships of the past year and are happy to report that virtually all Trustco Bank borrowers who received pandemic relief are making payments as agreed.
Our team is never one to rest on its successes. Our entire management team, from those leading our branches to the heads of our internal departments, are focused on generating new business by reaching an ever-expanding consumer audience with our industry-leading residential mortgage products and developing new relationships with commercial customers who share our forward-looking and success-oriented vision. As always, we pursue these objectives with our trademark efficiency.
Details
Average loans were up $158.6 million or 3.8% in the second quarter 2021 over the same period in 2020. Average residential loans, our primary lending focus, were up $193.9 million, or 5.3%, in the second quarter 2021 over the same period in 2020. As of June 30, 2021, loans in deferral were not material. Additionally, the Bank had funded 663 Paycheck Protection Program (“PPP”) loans totaling $46 million in 2020, and an additional 343 loans totaling $23 million in the first half of 2021. As of June 30, 2021, 526 PPP loans totaling $32 million remain outstanding. Average deposits were up $507.8 million or 10.8% for the second quarter 2021 over the same period a year earlier. The increase in deposits was the result of a $701.8 million or 21.2% increase in total average core deposit accounts, which consist of interest bearing and non-interest bearing checking, savings and money market deposits, offset by a decrease in average time deposits of $194.1 million or 13.9%, for the second quarter 2021 over the same period in 2020. Within the core deposits, checking balances were up $399.5 million or 26.6% (including interest bearing and non-interest bearing checking balances), money market balances were up $87.5 million or 13.6%, and savings balances were up $214.8 million or 18.4%. 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 0.17% in the second quarter 2021 from 0.64% in the second quarter 2020. A significant portion of our CD portfolio (time deposits) repriced during the last year, which resulted in lower rates as a result of the ongoing market conditions. The net interest margin for the second quarter 2021 was 2.70%, down 11 basis points from 2.81% in the second quarter of 2020. This was primarily due to the decrease in market rates 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 $24.3 million or 4.4% in the second quarter of 2021 compared to the same period in 2020. Return on average assets and return on average equity for the second quarter 2021 were 0.95% and 10.05%, respectively, compared to 0.82% and 8.21% for the second quarter 2020. Improving efficiencies to reduce costs continues to remain a key area of focus. As a result, full time equivalent employees decreased from the prior year and quarter partially due to a strategic realignment and the impact of COVID-19 on the labor market. The Bank also purchased 20 thousand shares of stock under the announced Repurchase Plan. Additionally, as previously announced, the reverse split of the Company’s Common Stock at a ratio of 1 for 5 was implemented on the Nasdaq Global Select Market on May 28, 2021. All prior period share and per share information, and common stock and surplus amounts have been split adjusted. The board of directors believes that the Reverse Stock Split will likely result in a higher per share trading price, which is intended to generate greater investor interest in TrustCo and improve the marketability of the shares to a broader range of investors. The board of directors also believes that the Reverse Stock Split will result in a number of our shares of outstanding common stock that is similar to the number of outstanding shares of common stock of comparable financial institutions.
Asset quality and loan loss reserve measures have stayed consistent. Nonperforming loans (NPLs) were $20.8 million at June 30, 2021, compared to $21.9 million at June 30, 2020. NPLs were 0.48% and 0.52% of total loans at June 30, 2021 and 2020, respectively. The coverage ratio, or allowance for loan losses to NPLs, was 240.9% at June 30, 2021, compared to 219.5% at June 30, 2020. Nonperforming assets (NPAs) were $21.1 million at June 30, 2021, compared to $22.8 million at June 30, 2020. The ratio of allowance for loan losses to total loans was 1.15% as of both June 30, 2021 and 2020. The allowance for loan losses was $50.2 million at June 30, 2021, compared to $48.1 million at June 30, 2020. There was no provision for loan losses for the second quarter 2021 consistent with improved asset quality trends and economic conditions. Provision for loan losses for the second quarter of 2020 was $2 million driven by the beginning of the uncertainty in the economic environment resulting from the COVID-19 pandemic. 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 legislation, which became law in December 2020, and therefore the Company intends to adopt CECL on January 1, 2022.
Net recoveries for the second quarter 2021 were $164 thousand versus net chargeoffs in the second quarter 2020 of $11 thousand. The annualized net (recoveries) chargeoffs ratio was (0.02)% and 0.00% for the second quarter 2021 and 2020, respectively.
At June 30, 2021 the equity to asset ratio was 9.45%, compared to 9.75% at June 30, 2020. Book value per share at June 30, 2021 was $30.00, up 4.6% compared to $28.67 a year earlier.
TrustCo Bank Corp NY is a $6.1 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 147 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 2021.
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 2021 results will be held at 9:00 a.m. Eastern Time on July 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 10158543. The call will also be audio webcast at: https://services.choruscall.com/links/trst210722.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 2021, 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 the effect of our proposed reverse stock split of our common stock, including the impact of such split on the trading price of our common stock, our ability to retain customer products, 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 | ||||||||||||
| 6/30/2021 | 3/31/2021 | 6/30/2020 | ||||||||||
| Summary of operations | ||||||||||||
| Net interest income (TE) | $ | 40,122 | 40,107 | 37,681 | ||||||||
| Provision for loan losses | - | 350 | 2,000 | |||||||||
| Noninterest income | 4,688 | 4,428 | 3,426 | |||||||||
| Noninterest expense | 25,440 | 25,335 | 23,932 | |||||||||
| Net income | 14,433 | 14,083 | 11,254 | |||||||||
| Per share (4) | ||||||||||||
| Net income per share: | ||||||||||||
| - Basic | $ | 0.749 | 0.730 | 0.584 | ||||||||
| - Diluted | 0.748 | 0.730 | 0.584 | |||||||||
| Cash dividends | 0.341 | 0.341 | 0.341 | |||||||||
| Book value at period end | 30.00 | 29.60 | 28.67 | |||||||||
| Market price at period end | 34.38 | 36.85 | 31.65 | |||||||||
| At period end | ||||||||||||
| Full time equivalent employees | 769 | 820 | 806 | |||||||||
| Full service banking offices | 147 | 148 | 148 | |||||||||
| Performance ratios | ||||||||||||
| Return on average assets | 0.95 | % | 0.96 | 0.82 | ||||||||
| Return on average equity | 10.05 | 10.01 | 8.21 | |||||||||
| Efficiency (1) | 56.91 | 56.35 | 58.30 | |||||||||
| Net interest spread (TE) | 2.66 | 2.74 | 2.69 | |||||||||
| Net interest margin (TE) | 2.70 | 2.78 | 2.81 | |||||||||
| Dividend payout ratio | 45.51 | 46.65 | 58.37 | |||||||||
| Capital ratios at period end | ||||||||||||
| Consolidated tangible equity to tangible assets (2) | 9.44 | % | 9.44 | 9.74 | ||||||||
| Consolidated equity to assets | 9.45 | % | 9.44 | 9.75 | ||||||||
| Asset quality analysis at period end | ||||||||||||
| Nonperforming loans to total loans | 0.48 | 0.51 | 0.52 | |||||||||
| Nonperforming assets to total assets | 0.34 | 0.36 | 0.40 | |||||||||
| Allowance for loan losses to total loans | 1.15 | 1.17 | 1.15 | |||||||||
| Coverage ratio (3) | 2.4 | x | 2.3 | x | 2.2 | x | ||||||
| (1) | Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation. |
| (2) | Non-GAAP measure; calculated as total equity less $553 of intangible assets divided by total assets less $553 of intangible assets. See Non-GAAP Financial Measures Reconciliation. |
| (3) | Calculated as allowance for loan losses divided by total nonperforming loans. |
| (4) | All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021. |
TE = Taxable equivalent
FINANCIAL HIGHLIGHTS, Continued
(dollars in thousands, except per share data)
(Unaudited)
| Six months ended | ||||||||
| 06/30/21 | 06/30/20 | |||||||
| Summary of operations | ||||||||
| Net interest income (TE) | $ | 80,229 | 76,235 | |||||
| Provision for loan losses | 350 | 4,000 | ||||||
| Net gain on securities transactions | - | 1,155 | ||||||
| Noninterest income, excluding net gain on securities transactions | 9,116 | 7,605 | ||||||
| Noninterest expense | 50,775 | 48,200 | ||||||
| Net income | 28,516 | 24,567 | ||||||
| Per share (2) | ||||||||
| Net income per share: | ||||||||
| - Basic | $ | 1.479 | 1.272 | |||||
| - Diluted | 1.478 | 1.272 | ||||||
| Cash dividends | 0.681 | 0.681 | ||||||
| Book value at period end | 30.00 | 28.67 | ||||||
| Market price at period end | 34.38 | 31.65 | ||||||
| Performance ratios | ||||||||
| Return on average assets | 0.96 | 0.92 | ||||||
| Return on average equity | 10.03 | 9.04 | ||||||
| Efficiency (1) | 56.63 | 57.30 | ||||||
| Net interest spread (TE) | 2.70 | 2.80 | ||||||
| Net interest margin (TE) | 2.74 | 2.93 | ||||||
| Dividend payout ratio | 46.07 | 53.52 | ||||||
| (1) | Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation. |
| (2) | All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021. |
TE = Taxable equivalent.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
| Three months ended | ||||||||||||||||||||
| 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | ||||||||||||||||
| Interest and dividend income: | ||||||||||||||||||||
| Interest and fees on loans | $ | 39,808 | 40,217 | 40,906 | 41,330 | 41,665 | ||||||||||||||
| Interest and dividends on securities available for sale: | ||||||||||||||||||||
| U. S. government sponsored enterprises | 97 | 50 | 27 | 14 | 106 | |||||||||||||||
| State and political subdivisions | - | 1 | 2 | 1 | 2 | |||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations - residential | 1,167 | 1,237 | 1,172 | 1,319 | 1,527 | |||||||||||||||
| Corporate bonds | 323 | 316 | 349 | 646 | 488 | |||||||||||||||
Small Business Administration - guaranteed participation securities | 193 | 206 | 212 | 216 | 229 | |||||||||||||||
| Other securities | 5 | 6 | 7 | 5 | 5 | |||||||||||||||
| Total interest and dividends on securities available for sale | 1,785 | 1,816 | 1,769 | 2,201 | 2,357 | |||||||||||||||
| Interest on held to maturity securities: | ||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations - residential | 111 | 123 | 129 | 138 | 162 | |||||||||||||||
| Total interest on held to maturity securities | 111 | 123 | 129 | 138 | 162 | |||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 65 | 69 | 70 | 77 | 192 | |||||||||||||||
| Interest on federal funds sold and other short-term investments | 286 | 270 | 246 | 242 | 193 | |||||||||||||||
| Total interest income | 42,055 | 42,495 | 43,120 | 43,988 | 44,569 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Interest on deposits: | ||||||||||||||||||||
| Interest-bearing checking | 46 | 52 | 51 | 55 | 26 | |||||||||||||||
| Savings | 162 | 159 | 156 | 161 | 166 | |||||||||||||||
| Money market deposit accounts | 236 | 283 | 447 | 637 | 862 | |||||||||||||||
| Time deposits | 1,261 | 1,666 | 3,053 | 4,749 | 5,599 | |||||||||||||||
| Interest on short-term borrowings | 228 | 228 | 232 | 221 | 235 | |||||||||||||||
| Total interest expense | 1,933 | 2,388 | 3,939 | 5,823 | 6,888 | |||||||||||||||
| Net interest income | 40,122 | 40,107 | 39,181 | 38,165 | 37,681 | |||||||||||||||
| Less: Provision for loan losses | - | 350 | 600 | 1,000 | 2,000 | |||||||||||||||
| Net interest income after provision for loan losses | 40,122 | 39,757 | 38,581 | 37,165 | 35,681 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Trustco Financial Services income | 1,999 | 2,035 | 1,527 | 1,784 | 1,368 | |||||||||||||||
| Fees for services to customers | 2,486 | 2,204 | 2,365 | 2,292 | 1,807 | |||||||||||||||
| Other | 203 | 189 | 177 | 265 | 251 | |||||||||||||||
| Total noninterest income | 4,688 | 4,428 | 4,069 | 4,341 | 3,426 | |||||||||||||||
| Noninterest expenses: | ||||||||||||||||||||
| Salaries and employee benefits | 12,403 | 12,425 | 11,727 | 10,899 | 11,648 | |||||||||||||||
| Net occupancy expense | 4,328 | 4,586 | 4,551 | 4,277 | 4,385 | |||||||||||||||
| Equipment expense | 1,600 | 1,631 | 1,621 | 1,607 | 1,606 | |||||||||||||||
| Professional services | 1,614 | 1,432 | 1,644 | 1,311 | 1,182 | |||||||||||||||
| Outsourced services | 2,169 | 2,250 | 1,925 | 1,875 | 1,875 | |||||||||||||||
| Advertising expense | 549 | 354 | 527 | 305 | 601 | |||||||||||||||
| FDIC and other insurance | 777 | 707 | 657 | 660 | 609 | |||||||||||||||
| Other real estate (income) expense, net | (60 | ) | 239 | 45 | (115 | ) | (32 | ) | ||||||||||||
| Other | 2,060 | 1,711 | 2,133 | 1,855 | 2,058 | |||||||||||||||
| Total noninterest expenses | 25,440 | 25,335 | 24,830 | 22,674 | 23,932 | |||||||||||||||
| Income before taxes | 19,370 | 18,850 | 17,820 | 18,832 | 15,175 | |||||||||||||||
| Income taxes | 4,937 | 4,767 | 4,006 | 4,761 | 3,921 | |||||||||||||||
| Net income | $ | 14,433 | 14,083 | 13,814 | 14,071 | 11,254 | ||||||||||||||
| Net income per common share (1): | ||||||||||||||||||||
| - Basic | $ | 0.749 | 0.730 | 0.716 | 0.730 | 0.584 | ||||||||||||||
| - Diluted | 0.748 | 0.730 | 0.716 | 0.730 | 0.584 | |||||||||||||||
| Average basic shares (in thousands) (1) | 19,281 | 19,287 | 19,287 | 19,287 | 19,287 | |||||||||||||||
| Average diluted shares (in thousands) (1) | 19,290 | 19,293 | 19,288 | 19,288 | 19,287 | |||||||||||||||
| Note: Taxable equivalent net interest income | $ | 40,122 | 40,107 | 39,182 | 38,166 | 37,681 | ||||||||||||||
| (1) | All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021. |
CONSOLIDATED STATEMENTS OF INCOME, Continued
(dollars in thousands, except per share data)
(Unaudited)
| Six months ended | ||||||||
| 06/30/21 | 06/30/20 | |||||||
| Interest and dividend income: | ||||||||
| Interest and fees on loans | $ | 80,025 | 83,728 | |||||
| Interest and dividends on securities available for sale: | ||||||||
| U. S. government sponsored enterprises | 147 | 527 | ||||||
| State and political subdivisions | 1 | 3 | ||||||
| Mortgage-backed securities and collateralized mortgage obligations - residential | 2,404 | 3,640 | ||||||
| Corporate bonds | 639 | 726 | ||||||
| Small Business Administration - guaranteed participation securities | 399 | 474 | ||||||
| Other securities | 11 | 11 | ||||||
| Total interest and dividends on securities available for sale | 3,601 | 5,381 | ||||||
| Interest on held to maturity securities: | ||||||||
| Mortgage-backed securities-residential | 234 | 337 | ||||||
| Total interest on held to maturity securities | 234 | 337 | ||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 134 | 274 | ||||||
| Interest on federal funds sold and other short-term investments | 556 | 1,460 | ||||||
| Total interest income | 84,550 | 91,180 | ||||||
| Interest expense: | ||||||||
| Interest on deposits: | ||||||||
| Interest-bearing checking | 98 | 42 | ||||||
| Savings | 321 | 399 | ||||||
| Money market deposit accounts | 519 | 1,958 | ||||||
| Time deposits | 2,927 | 11,990 | ||||||
| Interest on short-term borrowings | 456 | 557 | ||||||
| Total interest expense | 4,321 | 14,946 | ||||||
| Net interest income | 80,229 | 76,234 | ||||||
| Less: Provision for loan losses | 350 | 4,000 | ||||||
| Net interest income after provision for loan losses | 79,879 | 72,234 | ||||||
| Noninterest income: | ||||||||
| Trustco Financial Services income | 4,034 | 2,968 | ||||||
| Fees for services to customers | 4,690 | 4,122 | ||||||
| Net gain on securities transactions | - | 1,155 | ||||||
| Other | 392 | 515 | ||||||
| Total noninterest income | 9,116 | 8,760 | ||||||
| Noninterest expenses: | ||||||||
| Salaries and employee benefits | 24,828 | 23,021 | ||||||
| Net occupancy expense | 8,914 | 8,691 | ||||||
| Equipment expense | 3,231 | 3,408 | ||||||
| Professional services | 3,046 | 2,663 | ||||||
| Outsourced services | 4,419 | 3,950 | ||||||
| Advertising expense | 903 | 1,089 | ||||||
| FDIC and other insurance | 1,484 | 903 | ||||||
| Other real estate expense, net | 179 | 162 | ||||||
| Other | 3,771 | 4,313 | ||||||
| Total noninterest expenses | 50,775 | 48,200 | ||||||
| Income before taxes | 38,220 | 32,794 | ||||||
| Income taxes | 9,704 | 8,227 | ||||||
| Net income | $ | 28,516 | 24,567 | |||||
| Net income per common share (1): | ||||||||
| - Basic | $ | 1.479 | 1.272 | |||||
| - Diluted | 1.478 | 1.272 | ||||||
| Average basic shares (in thousands) (1) | 19,284 | 19,316 | ||||||
| Average diluted shares (in thousands) (1) | 19,292 | 19,319 | ||||||
| Note: Taxable equivalent net interest income | $ | 80,229 | 76,235 | |||||
| (1) | All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021. |
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
| 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | ||||||||||||||||
| ASSETS: | ||||||||||||||||||||
| Cash and due from banks | $ | 47,766 | 45,493 | 47,196 | 47,703 | 44,726 | ||||||||||||||
| Federal funds sold and other short term investments | 1,134,622 | 1,094,880 | 1,059,903 | 908,616 | 908,110 | |||||||||||||||
| Total cash and cash equivalents | 1,182,388 | 1,140,373 | 1,107,099 | 956,319 | 952,836 | |||||||||||||||
| Securities available for sale: | ||||||||||||||||||||
| U. S. government sponsored enterprises | 74,579 | 74,465 | 19,968 | 29,996 | - | |||||||||||||||
| States and political subdivisions | 48 | 48 | 103 | 111 | 111 | |||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations - residential | 315,656 | 348,317 | 316,158 | 309,768 | 331,469 | |||||||||||||||
| Small Business Administration - guaranteed participation securities | 37,199 | 39,232 | 42,217 | 44,070 | 45,998 | |||||||||||||||
| Corporate bonds | 54,647 | 64,839 | 59,939 | 70,113 | 54,439 | |||||||||||||||
| Other securities | 686 | 686 | 686 | 685 | 685 | |||||||||||||||
| Total securities available for sale | 482,815 | 527,587 | 439,071 | 454,743 | 432,702 | |||||||||||||||
| Held to maturity securities: | ||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 11,665 | 12,729 | 13,824 | 15,094 | 16,633 | |||||||||||||||
| Total held to maturity securities | 11,665 | 12,729 | 13,824 | 15,094 | 16,633 | |||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 5,604 | 5,506 | 5,506 | 5,506 | 5,506 | |||||||||||||||
| Loans: | ||||||||||||||||||||
| Commercial | 214,164 | 217,021 | 212,492 | 231,663 | 231,212 | |||||||||||||||
| Residential mortgage loans | 3,892,351 | 3,807,837 | 3,780,167 | 3,724,746 | 3,681,898 | |||||||||||||||
| Home equity line of credit | 234,214 | 235,644 | 242,194 | 248,320 | 254,445 | |||||||||||||||
| Installment loans | 8,638 | 8,670 | 9,617 | 9,826 | 10,006 | |||||||||||||||
| Loans, net of deferred net costs | 4,349,367 | 4,269,172 | 4,244,470 | 4,214,555 | 4,177,561 | |||||||||||||||
| Less: Allowance for loan losses | 50,155 | 49,991 | 49,595 | 49,123 | 48,144 | |||||||||||||||
| Net loans | 4,299,212 | 4,219,181 | 4,194,875 | 4,165,432 | 4,129,417 | |||||||||||||||
| Bank premises and equipment, net | 33,691 | 34,012 | 34,412 | 34,417 | 34,042 | |||||||||||||||
| Operating lease right-of-use assets | 45,825 | 46,614 | 47,885 | 47,174 | 48,712 | |||||||||||||||
| Other assets | 61,378 | 60,455 | 59,124 | 57,244 | 57,155 | |||||||||||||||
| Total assets | $ | 6,122,578 | 6,046,457 | 5,901,796 | 5,735,929 | 5,677,003 | ||||||||||||||
| LIABILITIES: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Demand | $ | 765,193 | 718,343 | 652,756 | 635,345 | 612,960 | ||||||||||||||
| Interest-bearing checking | 1,152,901 | 1,141,595 | 1,086,558 | 1,024,290 | 1,001,592 | |||||||||||||||
| Savings accounts | 1,409,556 | 1,362,141 | 1,285,501 | 1,235,259 | 1,191,682 | |||||||||||||||
| Money market deposit accounts | 732,963 | 719,580 | 716,005 | 699,132 | 666,304 | |||||||||||||||
| Time deposits | 1,169,907 | 1,231,263 | 1,296,373 | 1,305,024 | 1,392,769 | |||||||||||||||
| Total deposits | 5,230,520 | 5,172,922 | 5,037,193 | 4,899,050 | 4,865,307 | |||||||||||||||
| Short-term borrowings | 237,791 | 229,950 | 214,755 | 193,455 | 177,278 | |||||||||||||||
| Operating lease liabilities | 50,586 | 51,449 | 52,784 | 52,125 | 53,710 | |||||||||||||||
| Accrued expenses and other liabilities | 25,088 | 21,105 | 28,903 | 30,771 | 27,287 | |||||||||||||||
| Total liabilities | 5,543,985 | 5,475,426 | 5,333,635 | 5,175,401 | 5,123,582 | |||||||||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||||||||||||
| Capital stock (1) | 20,041 | 20,044 | 20,041 | 20,041 | 20,041 | |||||||||||||||
| Surplus (1) | 256,536 | 256,674 | 256,606 | 256,605 | 256,601 | |||||||||||||||
| Undivided profits | 329,350 | 321,486 | 313,974 | 306,741 | 299,239 | |||||||||||||||
| Accumulated other comprehensive income, net of tax | 7,840 | 7,268 | 11,936 | 11,537 | 11,936 | |||||||||||||||
| Treasury stock at cost | (35,174 | ) | (34,441 | ) | (34,396 | ) | (34,396 | ) | (34,396 | ) | ||||||||||
| Total shareholders' equity | 578,593 | 571,031 | 568,161 | 560,528 | 553,421 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,122,578 | 6,046,457 | 5,901,796 | 5,735,929 | 5,677,003 | ||||||||||||||
| Outstanding shares (in thousands) (1) | 19,265 | 19,288 | 19,287 | 19,287 | 19,287 | |||||||||||||||
| (1) | All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021. |
NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
| 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | ||||||||||||||||
| Nonperforming Assets | ||||||||||||||||||||
| New York and other states* | ||||||||||||||||||||
| Loans in nonaccrual status: | ||||||||||||||||||||
| Commercial | $ | 150 | 125 | 452 | 491 | 571 | ||||||||||||||
| Real estate mortgage - 1 to 4 family | 18,466 | 19,826 | 19,379 | 19,977 | 20,215 | |||||||||||||||
| Installment | 43 | 32 | 43 | 49 | 6 | |||||||||||||||
| Total non-accrual loans | 18,659 | 19,983 | 19,874 | 20,517 | 20,792 | |||||||||||||||
| Other nonperforming real estate mortgages - 1 to 4 family | 20 | 22 | 23 | 25 | 26 | |||||||||||||||
| Total nonperforming loans | 18,679 | 20,005 | 19,897 | 20,542 | 20,818 | |||||||||||||||
| Other real estate owned | 251 | 420 | 541 | 423 | 830 | |||||||||||||||
| Total nonperforming assets | $ | 18,930 | 20,425 | 20,438 | 20,965 | 21,648 | ||||||||||||||
| Florida | ||||||||||||||||||||
| Loans in nonaccrual status: | ||||||||||||||||||||
| Commercial | $ | - | - | - | - | - | ||||||||||||||
| Real estate mortgage - 1 to 4 family | 2,142 | 1,626 | 1,187 | 1,254 | 1,111 | |||||||||||||||
| Installment | - | - | - | - | - | |||||||||||||||
| Total non-accrual loans | 2,142 | 1,626 | 1,187 | 1,254 | 1,111 | |||||||||||||||
| Other nonperforming real estate mortgages - 1 to 4 family | - | - | - | - | - | |||||||||||||||
| Total nonperforming loans | 2,142 | 1,626 | 1,187 | 1,254 | 1,111 | |||||||||||||||
| Other real estate owned | - | - | - | - | - | |||||||||||||||
| Total nonperforming assets | $ | 2,142 | 1,626 | 1,187 | 1,254 | 1,111 | ||||||||||||||
| Total | ||||||||||||||||||||
| Loans in nonaccrual status: | ||||||||||||||||||||
| Commercial | $ | 150 | 125 | 452 | 491 | 571 | ||||||||||||||
| Real estate mortgage - 1 to 4 family | 20,608 | 21,452 | 20,566 | 21,231 | 21,326 | |||||||||||||||
| Installment | 43 | 32 | 43 | 49 | 6 | |||||||||||||||
| Total non-accrual loans | 20,801 | 21,609 | 21,061 | 21,771 | 21,903 | |||||||||||||||
| Other nonperforming real estate mortgages - 1 to 4 family | 20 | 22 | 23 | 25 | 26 | |||||||||||||||
| Total nonperforming loans | 20,821 | 21,631 | 21,084 | 21,796 | 21,929 | |||||||||||||||
| Other real estate owned | 251 | 420 | 541 | 423 | 830 | |||||||||||||||
| Total nonperforming assets | $ | 21,072 | 22,051 | 21,625 | 22,219 | 22,759 | ||||||||||||||
| Quarterly Net (Recoveries) Chargeoffs | ||||||||||||||||||||
| New York and other states* | ||||||||||||||||||||
| Commercial | $ | - | (32 | ) | 32 | (1 | ) | (6 | ) | |||||||||||
| Real estate mortgage - 1 to 4 family | (136 | ) | (2 | ) | (27 | ) | 4 | (27 | ) | |||||||||||
| Installment | (27 | ) | (14 | ) | 109 | 18 | 44 | |||||||||||||
| Total net (recoveries) chargeoffs | $ | (163 | ) | (48 | ) | 114 | 21 | 11 | ||||||||||||
| Florida | ||||||||||||||||||||
| Commercial | $ | - | - | - | - | - | ||||||||||||||
| Real estate mortgage - 1 to 4 family | (1 | ) | - | (1 | ) | - | - | |||||||||||||
| Installment | - | 2 | 15 | - | - | |||||||||||||||
| Total net (recoveries) chargeoffs | $ | (1 | ) | 2 | 14 | - | - | |||||||||||||
| Total | ||||||||||||||||||||
| Commercial | $ | - | (32 | ) | 32 | (1 | ) | (6 | ) | |||||||||||
| Real estate mortgage - 1 to 4 family | (137 | ) | (2 | ) | (28 | ) | 4 | (27 | ) | |||||||||||
| Installment | (27 | ) | (12 | ) | 124 | 18 | 44 | |||||||||||||
| Total net (recoveries) chargeoffs | $ | (164 | ) | (46 | ) | 128 | 21 | 11 | ||||||||||||
| Asset Quality Ratios | ||||||||||||||||||||
| Total nonperforming loans (1) | $ | 20,821 | 21,631 | 21,084 | 21,796 | 21,929 | ||||||||||||||
| Total nonperforming assets (1) | 21,072 | 22,051 | 21,625 | 22,219 | 22,759 | |||||||||||||||
| Total net (recoveries) chargeoffs (2) | (164 | ) | (46 | ) | 128 | 21 | 11 | |||||||||||||
| Allowance for loan losses (1) | 50,155 | 49,991 | 49,595 | 49,123 | 48,144 | |||||||||||||||
| Nonperforming loans to total loans | 0.48 | % | 0.51 | % | 0.50 | % | 0.52 | % | 0.52 | % | ||||||||||
| Nonperforming assets to total assets | 0.34 | % | 0.36 | % | 0.37 | % | 0.39 | % | 0.40 | % | ||||||||||
| Allowance for loan losses to total loans | 1.15 | % | 1.17 | % | 1.17 | % | 1.17 | % | 1.15 | % | ||||||||||
| Coverage ratio (1) | 240.9 | % | 231.1 | % | 235.2 | % | 225.4 | % | 219.5 | % | ||||||||||
| Annualized net (recoveries) chargeoffs to average loans (2) | -0.02 | % | 0.00 | % | 0.01 | % | 0.00 | % | 0.00 | % | ||||||||||
| Allowance for loan losses to annualized net (recoveries) chargeoffs (2) | N/A | N/A | 96.9 | x | 584.8 | x | 1094.2 | 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 | ||||||||||||||||||||||
| June 30, 2021 | June 30, 2020 | |||||||||||||||||||||||
Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Securities available for sale: | ||||||||||||||||||||||||
| U. S. government sponsored enterprises | $ | 74,971 | 97 | 0.52 | % | $ | 23,291 | 106 | 1.83 | % | ||||||||||||||
| Mortgage backed securities and collateralized mortgage | ||||||||||||||||||||||||
| obligations - residential | 327,332 | 1,167 | 1.43 | 333,122 | 1,527 | 1.83 | ||||||||||||||||||
| State and political subdivisions | 48 | - | - | 110 | 2 | 7.90 | ||||||||||||||||||
| Corporate bonds | 57,021 | 323 | 2.27 | 51,494 | 488 | 3.79 | ||||||||||||||||||
Small Business Administration - guaranteed participation securities | 36,839 | 193 | 2.09 | 45,260 | 229 | 2.03 | ||||||||||||||||||
| Other | 686 | 5 | 2.92 | 685 | 5 | 2.92 | ||||||||||||||||||
| Total securities available for sale | 496,897 | 1,785 | 1.44 | 453,962 | 2,357 | 2.08 | ||||||||||||||||||
| Federal funds sold and other short-term Investments | 1,126,298 | 286 | 0.10 | 727,006 | 193 | 0.11 | ||||||||||||||||||
| Held to maturity securities: | ||||||||||||||||||||||||
Mortgage backed securities and collateralized mortgage obligations - residential | 12,179 | 111 | 3.67 | 17,199 | 162 | 3.75 | ||||||||||||||||||
| Total held to maturity securities | 12,179 | 111 | 3.67 | 17,199 | 162 | 3.75 | ||||||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 5,598 | 65 | 4.64 | 9,332 | 192 | 8.23 | ||||||||||||||||||
| Commercial loans | 214,912 | 2,608 | 4.85 | 223,002 | 2,610 | 4.68 | ||||||||||||||||||
| Residential mortgage loans | 3,847,274 | 34,836 | 3.62 | 3,653,342 | 36,365 | 3.98 | ||||||||||||||||||
| Home equity lines of credit | 234,476 | 2,211 | 3.78 | 260,029 | 2,515 | 3.89 | ||||||||||||||||||
| Installment loans | 8,349 | 153 | 7.34 | 10,044 | 175 | 7.02 | ||||||||||||||||||
| Loans, net of unearned income | 4,305,011 | 39,808 | 3.70 | 4,146,417 | 41,665 | 4.02 | ||||||||||||||||||
| Total interest earning assets | 5,945,983 | 42,055 | 2.83 | 5,353,916 | 44,569 | 3.33 | ||||||||||||||||||
| Allowance for loan losses | (50,196 | ) | (46,832 | ) | ||||||||||||||||||||
| Cash & non-interest earning assets | 197,561 | 195,815 | ||||||||||||||||||||||
| Total assets | $ | 6,093,348 | $ | 5,502,899 | ||||||||||||||||||||
| Liabilities and shareholders' equity | ||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||
| Interest bearing checking accounts | $ | 1,149,296 | 46 | 0.02 | % | $ | 953,299 | 26 | 0.01 | % | ||||||||||||||
| Money market accounts | 729,136 | 236 | 0.13 | 641,593 | 862 | 0.54 | ||||||||||||||||||
| Savings | 1,382,604 | 162 | 0.05 | 1,167,844 | 166 | 0.06 | ||||||||||||||||||
| Time deposits | 1,198,064 | 1,261 | 0.42 | 1,392,136 | 5,599 | 1.62 | ||||||||||||||||||
| Total interest bearing deposits | 4,459,100 | 1,705 | 0.15 | 4,154,872 | 6,653 | 0.64 | ||||||||||||||||||
| Short-term borrowings | 233,426 | 228 | 0.39 | 172,834 | 235 | 0.55 | ||||||||||||||||||
| Total interest bearing liabilities | 4,692,526 | 1,933 | 0.17 | 4,327,706 | 6,888 | 0.64 | ||||||||||||||||||
| Demand deposits | 751,719 | 548,178 | ||||||||||||||||||||||
| Other liabilities | 73,368 | 75,603 | ||||||||||||||||||||||
| Shareholders' equity | 575,735 | 551,412 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,093,348 | $ | 5,502,899 | ||||||||||||||||||||
| Net interest income, tax equivalent | 40,122 | 37,681 | ||||||||||||||||||||||
| Net interest spread | 2.66 | % | 2.69 | % | ||||||||||||||||||||
| Net interest margin (net interest income to total interest earning assets) | 2.70 | % | 2.81 | % | ||||||||||||||||||||
| Tax equivalent adjustment | - | - | ||||||||||||||||||||||
| Net interest income | 40,122 | 37,681 | ||||||||||||||||||||||
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, 2021 | June 30, 2020 | |||||||||||||||||||||||
Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Securities available for sale: | ||||||||||||||||||||||||
| U. S. government sponsored enterprises | $ | 63,374 | 147 | 0.46 | % | $ | 57,830 | 527 | 1.82 | % | ||||||||||||||
| Mortgage backed securities and collateralized mortgage obligations - residential | 327,472 | 2,404 | 1.47 | 352,445 | 3,640 | 2.07 | ||||||||||||||||||
| State and political subdivisions | 49 | 1 | 6.60 | 112 | 4 | 7.74 | ||||||||||||||||||
| Corporate bonds | 60,160 | 639 | 2.12 | 39,913 | 726 | 3.64 | ||||||||||||||||||
| Small Business Administration - guaranteed participation securities | 38,203 | 399 | 2.09 | 46,339 | 474 | 2.05 | ||||||||||||||||||
| Other | 687 | 11 | 3.20 | 685 | 11 | 3.21 | ||||||||||||||||||
| Total securities available for sale | 489,945 | 3,601 | 1.47 | 497,324 | 5,382 | 2.16 | ||||||||||||||||||
| Federal funds sold and other short-term Investments | 1,078,201 | 556 | 0.10 | 569,541 | 1,460 | 0.52 | ||||||||||||||||||
| Held to maturity securities: | ||||||||||||||||||||||||
| Mortgage backed securities and collateralized mortgage obligations - residential | 12,723 | 234 | 3.68 | 17,671 | 337 | 3.81 | ||||||||||||||||||
| Total held to maturity securities | 12,723 | 234 | 3.68 | 17,671 | 337 | 3.81 | ||||||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 5,552 | 134 | 4.83 | 9,258 | 274 | 5.92 | ||||||||||||||||||
| Commercial loans | 213,853 | 5,554 | 5.19 | 210,524 | 5,152 | 4.89 | ||||||||||||||||||
| Residential mortgage loans | 3,818,426 | 69,687 | 3.65 | 3,627,535 | 72,826 | 4.02 | ||||||||||||||||||
| Home equity lines of credit | 236,417 | 4,471 | 3.81 | 262,745 | 5,383 | 4.12 | ||||||||||||||||||
| Installment loans | 8,573 | 313 | 7.37 | 10,380 | 367 | 7.11 | ||||||||||||||||||
| Loans, net of unearned income | 4,277,269 | 80,025 | 3.75 | 4,111,184 | 83,728 | 4.08 | ||||||||||||||||||
| Total interest earning assets | 5,863,690 | 84,550 | 2.89 | 5,204,978 | 91,181 | 3.51 | ||||||||||||||||||
| Allowance for loan losses | (50,071 | ) | (45,676 | ) | ||||||||||||||||||||
| Cash & non-interest earning assets | 197,682 | 194,718 | ||||||||||||||||||||||
| Total assets | $ | 6,011,301 | $ | 5,354,020 | ||||||||||||||||||||
| Liabilities and shareholders' equity | ||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||
| Interest bearing checking accounts | $ | 1,117,113 | 98 | 0.02 | % | $ | 912,226 | 42 | 0.01 | % | ||||||||||||||
| Money market accounts | 727,363 | 519 | 0.14 | 627,897 | 1,958 | 0.63 | ||||||||||||||||||
| Savings | 1,349,013 | 321 | 0.05 | 1,142,201 | 399 | 0.07 | ||||||||||||||||||
| Time deposits | 1,229,838 | 2,927 | 0.48 | 1,381,025 | 11,990 | 1.75 | ||||||||||||||||||
| Total interest bearing deposits | 4,423,327 | 3,865 | 0.18 | 4,063,349 | 14,389 | 0.71 | ||||||||||||||||||
| Short-term borrowings | 228,643 | 456 | 0.40 | 163,251 | 557 | 0.69 | ||||||||||||||||||
| Total interest bearing liabilities | 4,651,970 | 4,321 | 0.19 | 4,226,600 | 14,946 | 0.71 | ||||||||||||||||||
| Demand deposits | 712,790 | 503,327 | ||||||||||||||||||||||
| Other liabilities | 73,276 | 77,303 | ||||||||||||||||||||||
| Shareholders' equity | 573,265 | 546,790 | �� | |||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,011,301 | $ | 5,354,020 | ||||||||||||||||||||
| Net interest income, tax equivalent | 80,229 | 76,235 | ||||||||||||||||||||||
| Net interest spread | 2.70 | % | 2.80 | % | ||||||||||||||||||||
| Net interest margin (net interest income to total interest earning assets) | 2.74 | % | 2.93 | % | ||||||||||||||||||||
| Tax equivalent adjustment | - | (1 | ) | |||||||||||||||||||||
| Net interest income | 80,229 | 76,234 | ||||||||||||||||||||||
Non-GAAP Financial Measures Reconciliation
Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.
The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on the sale of securities and other non-routine items from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue.
We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial results. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share, efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.
NON-GAAP FINANCIAL MEASURES RECONCILIATION
(dollars in thousands, except per share amounts)
(Unaudited)
| 6/30/2021 | 3/31/2021 | 6/30/2020 | ||||||||||
| Tangible Equity to Tangible Assets | ||||||||||||
| Total Assets (GAAP) | $ | 6,122,578 | 6,046,457 | 5,677,003 | ||||||||
| Less: Intangible assets | 553 | 553 | 553 | |||||||||
| Tangible assets (Non-GAAP) | 6,122,025 | 6,045,904 | 5,676,450 | |||||||||
| Equity (GAAP) | 578,593 | 571,031 | 553,421 | |||||||||
| Less: Intangible assets | 553 | 553 | 553 | |||||||||
| Tangible equity (Non-GAAP) | 578,040 | 570,478 | 552,868 | |||||||||
| Tangible Equity to Tangible Assets (Non-GAAP) | 9.44 | % | 9.44 | % | 9.74 | % | ||||||
| Equity to Assets (GAAP) | 9.45 | % | 9.44 | % | 9.75 | % | ||||||
| Three months ended | Six months ended | |||||||||||||||||||
| Efficiency Ratio | 6/30/2021 | 3/31/2021 | 6/30/2020 | 6/30/2021 | 6/30/2020 | |||||||||||||||
| Net interest income (fully taxable equivalent) (Non-GAAP) | $ | 40,122 | 40,107 | 37,681 | $ | 80,229 | 76,235 | |||||||||||||
| Non-interest income (GAAP) | 4,688 | 4,428 | 3,426 | 9,116 | 8,760 | |||||||||||||||
| Less: Net gain on securities | - | - | - | - | 1,155 | |||||||||||||||
| Revenue used for efficiency ratio (Non-GAAP) | 44,810 | 44,535 | 41,107 | 89,345 | 83,840 | |||||||||||||||
| Total noninterest expense (GAAP) | 25,440 | 25,335 | 23,932 | 50,775 | 48,200 | |||||||||||||||
| Less: Other real estate (income) expense, net | (60 | ) | 239 | (32 | ) | 179 | 162 | |||||||||||||
| Expense used for efficiency ratio (Non-GAAP) | 25,500 | 25,096 | 23,964 | 50,596 | 48,038 | |||||||||||||||
| Efficiency Ratio | 56.91 | % | 56.35 | % | 58.30 | % | 56.63 | % | 57.30 | % | ||||||||||