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 | ||
| (518) 381-3693 |
FOR IMMEDIATE RELEASE:
TrustCo Demonstrates Strength and Stability; Reports First Quarter
Net Income of $17.7 Million and 7.0% Average Loan Growth – Both Up Year Over Year
Executive Snapshot:
| • | Continued solid financial results: |
| o | Key metrics for first quarter 2023: |
| ◾ | Net income of $17.7 million in the first quarter 2023 up 3.8% compared to $17.1 million in the first quarter 2022 |
| ◾ | Net interest income of $47.0 up 17.1% compared to $40.1 million in the first quarter of 2022 |
| ◾ | Return on average assets (ROAA) of 1.20% compared to 1.12% in the first quarter of 2022 |
| ◾ | Return on average equity (ROAE) of 11.84% compared to 11.60% in the first quarter of 2022 |
| ◾ | Book value at period end was $32.31, up from $30.85 compared to March 31, 2022 |
| • | Superior asset quality: |
| o | Nonperforming loan (NPLs) fell by $256 thousand compared to March 31, 2022 |
| o | NPLs to total loans improved to 0.40% compared to 0.43% at March 31, 2022 |
| o | Quarterly net recoveries were $53 thousand in the first quarter 2023 |
| • | Loan portfolio reaches all-time high: |
| o | Average loans were up $312.0 million for the first quarter 2023 compared to first quarter of 2022 |
| o | At $4.8 billion as of March 31, 2023, loans continue to set new all-time highs |
| • | Quarter over quarter deposit growth: |
| o | Total deposits as of March 31, 2023 increased $19.6 million to $5.2 billion from December 31, 2022 |
| o | Time deposits increased $251.5 million or 24.5% up from December 31, 2022 |
| • | Capital remains strong |
| o | Consolidated equity to assets increased to 10.17% at March 31, 2023 from 9.44% at March 31, 2022 |
Glenville, New York –April 24, 2023
TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced first quarter 2023 net income of $17.7 million or $0.93 diluted earnings per share, compared to net income of $17.1 million or $0.89 diluted earnings per share for the first quarter 2022. Average loan growth increased 7.0% or $312.0 million for the first quarter 2023 over the same period in 2022.
Overview
Chairman, President, and CEO, Robert J. McCormick said “Our first quarter results, which build upon the Company’s record year in 2022, demonstrate that TrustCo is a pillar of strength and a model of stability. The biggest challenge presented by great performance is maintaining momentum. This quarter, TrustCo did not just equal last year’s results, but improved upon them in the key areas of average loan growth, diluted earnings per share, and net income, among others. That we have been able to improve upon our performance in the present challenging environment is a testament to the skill of our bankers and the soundness of our strategy. Careful expansions of our areas of operation and mortgage product offerings, resting upon a solid foundation devoid of risky gimmicks and dangerous concentrations, position us well for sustained success.”
TrustCo saw deposit balances rebound from the end of the year with net deposit inflows during the first quarter of 2023. Loan growth continued in the first quarter 2023 compared to the prior year first quarter, led by an increase in residential mortgages. Loan portfolio expansion was funded by a combination of utilizing a portion of our strong cash balances and by cash flow from investments and the existing loan portfolio. The Federal Reserve decision to raise the target Federal Funds rate multiple times since March 2022 has contributed to our results in the first quarter 2023, as our cash position and other variable rate products continue to reprice upward, and are likely to continue to do so to the extent there are additional rate increases. We also note that current mortgage rates significantly exceed the yield on our existing portfolio of mortgages, which, if sustained, should be positive to net interest margin going forward. TrustCo’s strong liquidity position continues to allow us to take advantage of opportunities as they arise.
Details
As discussed, average loans were up $312.0 million or 7.0% in the first quarter 2023 over the same period in 2022. Average residential loans, our primary lending focus, were up $205.0 million or 5.1%, in the first quarter 2023 over the same period in 2022. Average commercial loans and home equity lines of credit also increased $43.9 million or 22.5% and $58.8 million or 25.3%, respectively, over the same period in 2022.
We are now actively retaining deposits which is evident in the quarter over quarter results. Total deposits as of March 31, 2023 increased $19.6 million to $5.2 billion from December 31, 2022. As we move forward, our objective is to continue to encourage customers to retain these funds in the expanded product offerings of the Bank through aggressive marketing and product differentiation. We understood the big inflows of deposits during the pandemic were temporary and that is why we did not invest that liquidity into securities or loans, but retained that liquidity on the balance sheet for when the depositors would start to absorb the funds. This gave us flexibility to strategically price deposits while retaining core customers.
Net interest income was $47.0 million for the first quarter 2023, an increase of $6.9 million or 17.1% compared to the same period in 2022, driven by solid liquidity, loan growth, and the recent increases in the Federal Funds target rate. The net interest margin for the first quarter 2023 was 3.21%, up 55 basis points from 2.66% in the first quarter of 2022. The yield on interest earnings assets increased to 3.69%, up 95 basis points from 2.74% in the first quarter of 2022. At the same time the cost of interest bearing liabilities only increased to 0.63% in the first quarter 2023 from 0.10% in the first quarter 2022. The increase in net interest income of $6.9 million is primarily a result of our ability to maintain a $576.9 million average cash balance at the Federal Reserve Bank during the first quarter of 2023 and being able to retain low cost deposit balances at competitive market rates.
Asset quality remains strong and loan loss reserve measures are consistent over the past twelve months. The Company recorded a provision for credit losses of $300 thousand in the first quarter of 2023, which includes a provision for credit losses on loans of $600 thousand and a benefit for credit losses on unfunded commitments of $300 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% and 1.03% as of March 31, 2023 and 2022, respectively. The allowance for credit losses on loans was $46.7 million at March 31, 2023, compared to $46.2 million at March 31, 2022. Nonperforming loans (NPLs) were $19.2 million at March 31, 2023, compared to $19.4 million at March 31, 2022. NPLs were 0.40% and 0.43% of total loans at March 31, 2023 and 2022, respectively. The coverage ratio, or allowance for credit losses on loans to NPLs, was 243.6% at March 31, 2023, compared to 237.8% at March 31, 2022. Nonperforming assets (NPAs) were $21.0 million at March 31, 2023, compared to $19.7 million at March 31, 2022.
At March 31, 2023 our equity to asset ratio was 10.17%, compared to 9.44% at March 31, 2022. Book value per share at March 31, 2023 was $32.31, up 4.7% compared to $30.85 a year earlier.
A conference call to discuss first quarter 2023 results will be held at 9:00 a.m. Eastern Time on April 25, 2023. Those wishing to participate in the call may dial toll-free for the United States at 1-833-470-1428, and for Canada at 1-833-950-0062, Access code 576267. A replay of the call will be available for thirty days by dialing toll-free for the United States at 1-866-813-9403, for Canada at 1-226-828-7578, and all other locations at +44-204-525-0658, Access code 635945. The call will also be audio webcast at https://events.q4inc.com/attendee/162588284, and will be available for one year.
About TrustCo Bank Corp NY
TrustCo Bank Corp NY is a $6.0 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 143 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at March 31, 2023.
In addition, the Bank’s Financial Services Department offers a full range of investment services, retirement planning and trust and estate administration services. The common shares of TrustCo are traded on the NASDAQ Global Select Market under the symbol TRST.
Forward-Looking Statements
All statements in this news release that are not historical are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future development, results or periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2023, 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 the effects of the COVID-19 pandemic and macroeconomic or geopolitical concerns related to inflation, rising interest rates and the war in Ukraine. 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: changes in interest rates, including recent and possible future increases fueled by inflation; inflationary pressures and rising prices; exposure to credit risk in our lending activities; the sufficiency of our allowance for credit losses on loans to cover actual loan losses; our ability to meet the cash flow requirements of our depositors or borrowers or meet our operating cash needs to fund corporate expansion and other activities; claims and litigation pertaining to fiduciary responsibility and lender liability; our dependency upon the services of the management team; our disclosure controls and procedures’ ability to prevent or detect errors or acts of fraud; the adequacy of our business continuity and disaster recovery plans; the effectiveness of our risk management framework; the chance of a prolonged economic downturn, especially one affecting our geographic market area; instability in global economic conditions and geopolitical matters, as well as volatility in financial markets; the COVID-19 pandemic; the soundness of other financial institutions; fluctuations in the trust wealth management fees we receive as a result of investment performance; the impact of regulatory capital rules on our growth; changes in laws and regulations; our compliance with the USA PATRIOT Act, Bank Secrecy Act, and other laws and regulations that could result in fines or sanctions; changes in tax laws; limitations on our ability to pay dividends; TrustCo Realty Corp.’s ability to qualify as a real estate investment trust; changes in accounting standards; competition within our market areas; consumers and businesses’ use of non-banks to complete financial transactions; our reliance on third-party service providers; the risk of data breaches and cyber-attacks; the risk of an unauthorized disclosure of sensitive or confidential client or customer information; the impact of any expansion by us into new lines of business or new products and services; 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 | ||||||||||||
| 3/31/2023 | 12/31/2022 | 3/31/2022 | ||||||||||
| Summary of operations | ||||||||||||
| Net interest income | $ | 46,965 | $ | 49,186 | $ | 40,096 | ||||||
| Provision (Credit) for credit losses | 300 | 50 | (200 | ) | ||||||||
| Noninterest income | 4,669 | 4,775 | 5,183 | |||||||||
| Noninterest expense | 27,679 | 26,405 | 22,765 | |||||||||
| Net income | 17,746 | 20,910 | 17,089 | |||||||||
| Per share | ||||||||||||
| Net income per share: | ||||||||||||
| - Basic | $ | 0.93 | $ | 1.10 | $ | 0.89 | ||||||
| - Diluted | 0.93 | 1.10 | 0.89 | |||||||||
| Cash dividends | 0.360 | 0.360 | 0.350 | |||||||||
| Book value at period end | 32.31 | 31.54 | 30.85 | |||||||||
| Market price at period end | 31.94 | 37.59 | 31.93 | |||||||||
| At period end | ||||||||||||
| Full time equivalent employees | 776 | 750 | 769 | |||||||||
| Full service banking offices | 143 | 143 | 144 | |||||||||
| Performance ratios | ||||||||||||
| Return on average assets | 1.20 | % | 1.38 | % | 1.12 | % | ||||||
| Return on average equity | 11.84 | 13.91 | 11.60 | |||||||||
| Efficiency ratio (1) | 53.17 | 48.75 | 50.55 | |||||||||
| Net interest spread | 3.06 | 3.28 | 2.63 | |||||||||
| Net interest margin | 3.21 | 3.34 | 2.66 | |||||||||
| Dividend payout ratio | 38.59 | 32.81 | 39.36 | |||||||||
| Capital ratios at period end | ||||||||||||
| Consolidated equity to assets | 10.17 | % | 10.00 | % | 9.44 | % | ||||||
| Consolidated tangible equity to tangible assets (2) | 10.16 | % | 9.99 | % | 9.43 | % | ||||||
| Asset quality analysis at period end | ||||||||||||
| Nonperforming loans to total loans | 0.40 | % | 0.37 | % | 0.43 | % | ||||||
| Nonperforming assets to total assets | 0.35 | 0.33 | 0.31 | |||||||||
| Allowance for credit losses on loans to total loans | 0.97 | 0.97 | 1.03 | |||||||||
| Coverage ratio (3) | 2.4 | x | 2.6 | x | 2.4 | 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 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. |
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
| Three months ended | ||||||||||||||||||||
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||||||||
| Interest and dividend income: | ||||||||||||||||||||
| Interest and fees on loans | $ | 44,272 | $ | 42,711 | $ | 40,896 | $ | 39,604 | $ | 39,003 | ||||||||||
| Interest and dividends on securities available for sale: | ||||||||||||||||||||
| U. S. government sponsored enterprises | 692 | 693 | 479 | 147 | 86 | |||||||||||||||
| State and political subdivisions | - | - | 1 | - | 1 | |||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations - residential | 1,585 | 1,606 | 1,617 | 1,367 | 1,087 | |||||||||||||||
| Corporate bonds | 521 | 523 | 526 | 522 | 233 | |||||||||||||||
Small Business Administration - guaranteed participation securities | 117 | 124 | 133 | 140 | 154 | |||||||||||||||
| Other securities | 2 | 2 | 3 | 2 | 2 | |||||||||||||||
| Total interest and dividends on securities available for sale | 2,917 | 2,948 | 2,759 | 2,178 | 1,563 | |||||||||||||||
| Interest on held to maturity securities: | ||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations - residential | 78 | 81 | 85 | 87 | 90 | |||||||||||||||
| Total interest on held to maturity securities | 78 | 81 | 85 | 87 | 90 | |||||||||||||||
| Federal Home Loan Bank stock | 110 | 98 | 80 | 65 | 62 | |||||||||||||||
| Interest on federal funds sold and other short-term investments | 6,555 | 6,246 | 5,221 | 2,253 | 572 | |||||||||||||||
| Total interest income | 53,932 | 52,084 | 49,041 | 44,187 | 41,290 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Interest on deposits: | ||||||||||||||||||||
| Interest-bearing checking | 66 | 61 | 43 | 42 | 44 | |||||||||||||||
| Savings | 530 | 401 | 200 | 163 | 156 | |||||||||||||||
| Money market deposit accounts | 814 | 389 | 237 | 210 | 214 | |||||||||||||||
| Time deposits | 5,272 | 1,839 | 646 | 536 | 546 | |||||||||||||||
| Interest on short-term borrowings | 285 | 208 | 122 | 176 | 234 | |||||||||||||||
| Total interest expense | 6,967 | 2,898 | 1,248 | 1,127 | 1,194 | |||||||||||||||
| Net interest income | 46,965 | 49,186 | 47,793 | 43,060 | 40,096 | |||||||||||||||
| Less: Provision (Credit) for credit losses | 300 | 50 | 300 | (491 | ) | (200 | ) | |||||||||||||
| Net interest income after provision for loan losses | 46,665 | 49,136 | 47,493 | 43,551 | 40,296 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Trustco Financial Services income | 1,774 | 1,773 | 1,435 | 1,996 | 1,833 | |||||||||||||||
| Fees for services to customers | 2,648 | 2,783 | 2,705 | 2,658 | 2,801 | |||||||||||||||
| Other | 247 | 219 | 246 | 262 | 549 | |||||||||||||||
| Total noninterest income | 4,669 | 4,775 | 4,386 | 4,916 | 5,183 | |||||||||||||||
| Noninterest expenses: | ||||||||||||||||||||
| Salaries and employee benefits | 13,283 | 13,067 | 12,134 | 11,464 | 9,239 | |||||||||||||||
| Net occupancy expense | 4,598 | 4,261 | 4,483 | 4,254 | 4,529 | |||||||||||||||
| Equipment expense | 1,962 | 1,700 | 1,532 | 1,667 | 1,588 | |||||||||||||||
| Professional services | 1,607 | 1,251 | 1,375 | 1,484 | 1,467 | |||||||||||||||
| Outsourced services | 2,296 | 2,102 | 2,328 | 2,500 | 2,280 | |||||||||||||||
| Advertising expense | 390 | 532 | 508 | 389 | 617 | |||||||||||||||
| FDIC and other insurance | 1,052 | 770 | 773 | 804 | 812 | |||||||||||||||
| Other real estate expense, net | 225 | 101 | 124 | 74 | 11 | |||||||||||||||
| Other | 2,266 | 2,621 | 2,887 | 2,369 | 2,222 | |||||||||||||||
| Total noninterest expenses | 27,679 | 26,405 | 26,144 | 25,005 | 22,765 | |||||||||||||||
| Income before taxes | 23,655 | 27,506 | 25,735 | 23,462 | 22,714 | |||||||||||||||
| Income taxes | 5,909 | 6,596 | 6,371 | 5,591 | 5,625 | |||||||||||||||
| Net income | $ | 17,746 | $ | 20,910 | $ | 19,364 | $ | 17,871 | $ | 17,089 | ||||||||||
| Net income per common share: | ||||||||||||||||||||
| - Basic | $ | 0.93 | $ | 1.10 | $ | 1.01 | $ | 0.93 | $ | 0.89 | ||||||||||
| - Diluted | 0.93 | 1.10 | 1.01 | 0.93 | 0.89 | |||||||||||||||
| Average basic shares (in thousands) | 19,024 | 19,045 | 19,111 | 19,153 | 19,209 | |||||||||||||||
| Average diluted shares (in thousands) | 19,028 | 19,050 | 19,112 | 19,153 | 19,210 | |||||||||||||||
(dollars in thousands)
(Unaudited)
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||||||||
| ASSETS: | ||||||||||||||||||||
| Cash and due from banks | $ | 47,595 | $ | 43,429 | $ | 46,236 | $ | 46,611 | $ | 47,526 | ||||||||||
| Federal funds sold and other short term investments | 589,389 | 607,170 | 795,028 | 999,573 | 1,225,022 | |||||||||||||||
| Total cash and cash equivalents | 636,984 | 650,599 | 841,264 | 1,046,184 | 1,272,548 | |||||||||||||||
| Securities available for sale: | ||||||||||||||||||||
| U. S. government sponsored enterprises | 119,132 | 118,187 | 102,779 | 101,100 | �� | 62,059 | ||||||||||||||
| States and political subdivisions | 34 | 34 | 41 | 41 | 41 | |||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations - residential | 255,556 | 260,316 | 261,242 | 287,450 | 244,045 | |||||||||||||||
Small Business Administration - guaranteed participation securities | 19,821 | 20,977 | 22,498 | 25,428 | 28,086 | |||||||||||||||
| Corporate bonds | 81,464 | 81,346 | 81,002 | 87,740 | 74,089 | |||||||||||||||
| Other securities | 652 | 653 | 657 | 656 | 671 | |||||||||||||||
| Total securities available for sale | 476,659 | 481,513 | 468,219 | 502,415 | 408,991 | |||||||||||||||
| Held to maturity securities: | ||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations-residential | 7,382 | 7,707 | 8,091 | 8,544 | 9,183 | |||||||||||||||
| Total held to maturity securities | 7,382 | 7,707 | 8,091 | 8,544 | 9,183 | |||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 5,797 | 5,797 | 5,797 | 5,797 | 5,604 | |||||||||||||||
| Loans: | ||||||||||||||||||||
| Commercial | 246,307 | 231,011 | 217,120 | 199,886 | 192,408 | |||||||||||||||
| Residential mortgage loans | 4,241,459 | 4,203,451 | 4,132,365 | 4,076,657 | 4,026,434 | |||||||||||||||
| Home equity line of credit | 296,490 | 286,432 | 269,341 | 253,758 | 236,117 | |||||||||||||||
| Installment loans | 15,326 | 12,307 | 10,665 | 10,258 | 9,395 | |||||||||||||||
| Loans, net of deferred net costs | 4,799,582 | 4,733,201 | 4,629,491 | 4,540,559 | 4,464,354 | |||||||||||||||
| Less: Allowance for credit losses on loans | 46,685 | 46,032 | 45,517 | 45,285 | 46,178 | |||||||||||||||
| Net loans | 4,752,897 | 4,687,169 | 4,583,974 | 4,495,274 | 4,418,176 | |||||||||||||||
| Bank premises and equipment, net | 32,305 | 32,556 | 31,931 | 32,381 | 32,644 | |||||||||||||||
| Operating lease right-of-use assets | 43,478 | 44,727 | 45,733 | 47,343 | 48,569 | |||||||||||||||
| Other assets | 90,306 | 89,984 | 94,485 | 88,853 | 86,158 | |||||||||||||||
| Total assets | $ | 6,045,808 | $ | 6,000,052 | $ | 6,079,494 | $ | 6,226,791 | $ | 6,281,873 | ||||||||||
| LIABILITIES: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Demand | $ | 806,075 | $ | 838,147 | $ | 859,829 | $ | 851,573 | $ | 835,281 | ||||||||||
| Interest-bearing checking | 1,124,785 | 1,183,321 | 1,188,790 | 1,208,159 | 1,225,093 | |||||||||||||||
| Savings accounts | 1,400,887 | 1,521,473 | 1,562,564 | 1,577,034 | 1,553,152 | |||||||||||||||
| Money market deposit accounts | 600,410 | 621,106 | 716,319 | 760,338 | 796,275 | |||||||||||||||
| Time deposits | 1,280,301 | 1,028,763 | 954,352 | 999,737 | 940,215 | |||||||||||||||
| Total deposits | 5,212,458 | 5,192,810 | 5,281,854 | 5,396,841 | 5,350,016 | |||||||||||||||
| Short-term borrowings | 134,293 | 122,700 | 124,932 | 147,282 | 248,371 | |||||||||||||||
| Operating lease liabilities | 47,643 | 48,980 | 50,077 | 51,777 | 53,094 | |||||||||||||||
| Accrued expenses and other liabilities | 36,711 | 35,575 | 33,625 | 36,259 | 37,497 | |||||||||||||||
| Total liabilities | 5,431,105 | 5,400,065 | 5,490,488 | 5,632,159 | 5,688,978 | |||||||||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||||||||||||
| Capital stock | 20,058 | 20,058 | 20,046 | 20,046 | 20,046 | |||||||||||||||
| Surplus | 257,078 | 257,078 | 256,661 | 256,661 | 256,661 | |||||||||||||||
| Undivided profits | 404,728 | 393,831 | 379,769 | 367,100 | 355,948 | |||||||||||||||
| Accumulated other comprehensive loss, net of tax | (23,375 | ) | (27,194 | ) | (25,209 | ) | (9,422 | ) | (2,369 | ) | ||||||||||
| Treasury stock at cost | (43,786 | ) | (43,786 | ) | (42,261 | ) | (39,753 | ) | (37,391 | ) | ||||||||||
| Total shareholders' equity | 614,703 | 599,987 | 589,006 | 594,632 | 592,895 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,045,808 | $ | 6,000,052 | $ | 6,079,494 | $ | 6,226,791 | $ | 6,281,873 | ||||||||||
| Outstanding shares (in thousands) | 19,024 | 19,024 | 19,052 | 19,127 | 19,202 | |||||||||||||||
(dollars in thousands)
(Unaudited)
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||||||||
| Nonperforming Assets | ||||||||||||||||||||
| New York and other states* | ||||||||||||||||||||
| Loans in nonaccrual status: | ||||||||||||||||||||
| Commercial | $ | 560 | $ | 219 | $ | 179 | $ | 203 | $ | 187 | ||||||||||
| Real estate mortgage - 1 to 4 family | 15,722 | 14,949 | 16,295 | 16,259 | 17,065 | |||||||||||||||
| Installment | 59 | 23 | 29 | 40 | 33 | |||||||||||||||
| Total non-accrual loans | 16,341 | 15,191 | 16,503 | 16,502 | 17,285 | |||||||||||||||
| Other nonperforming real estate mortgages - 1 to 4 family | 8 | 10 | 12 | 14 | 16 | |||||||||||||||
| Total nonperforming loans | 16,349 | 15,201 | 16,515 | 16,516 | 17,301 | |||||||||||||||
| Other real estate owned | 1,869 | 2,061 | 682 | 644 | 269 | |||||||||||||||
| Total nonperforming assets | $ | 18,218 | $ | 17,262 | $ | 17,197 | $ | 17,160 | $ | 17,570 | ||||||||||
| Florida | ||||||||||||||||||||
| Loans in nonaccrual status: | ||||||||||||||||||||
| Commercial | $ | 314 | $ | 314 | $ | - | $ | - | $ | - | ||||||||||
| Real estate mortgage - 1 to 4 family | 2,437 | 1,895 | 2,104 | 2,192 | 2,109 | |||||||||||||||
| Installment | 62 | 83 | 65 | 5 | 8 | |||||||||||||||
| Total non-accrual loans | 2,813 | 2,292 | 2,169 | 2,197 | 2,117 | |||||||||||||||
| Other nonperforming real estate mortgages - 1 to 4 family | - | - | - | - | - | |||||||||||||||
| Total nonperforming loans | 2,813 | 2,292 | 2,169 | 2,197 | 2,117 | |||||||||||||||
| Other real estate owned | - | - | - | - | - | |||||||||||||||
| Total nonperforming assets | $ | 2,813 | $ | 2,292 | $ | 2,169 | $ | 2,197 | $ | 2,117 | ||||||||||
| Total | ||||||||||||||||||||
| Loans in nonaccrual status: | ||||||||||||||||||||
| Commercial | $ | 874 | $ | 533 | $ | 179 | $ | 203 | $ | 187 | ||||||||||
| Real estate mortgage - 1 to 4 family | 18,159 | 16,844 | 18,399 | 18,451 | 19,174 | |||||||||||||||
| Installment | 121 | 106 | 94 | 45 | 41 | |||||||||||||||
| Total non-accrual loans | 19,154 | 17,483 | 18,672 | 18,699 | 19,402 | |||||||||||||||
| Other nonperforming real estate mortgages - 1 to 4 family | 8 | 10 | 12 | 14 | 16 | |||||||||||||||
| Total nonperforming loans | 19,162 | 17,493 | 18,684 | 18,713 | 19,418 | |||||||||||||||
| Other real estate owned | 1,869 | 2,061 | 682 | 644 | 269 | |||||||||||||||
| Total nonperforming assets | $ | 21,031 | $ | 19,554 | $ | 19,366 | $ | 19,357 | $ | 19,687 | ||||||||||
| Quarterly Net (Recoveries) Chargeoffs | ||||||||||||||||||||
| New York and other states* | ||||||||||||||||||||
| Commercial | $ | - | $ | - | $ | - | $ | - | $ | 36 | ||||||||||
| Real estate mortgage - 1 to 4 family | (53 | ) | (46 | ) | (164 | ) | (119 | ) | (97 | ) | ||||||||||
| Installment | (6 | ) | 31 | 34 | 12 | 3 | ||||||||||||||
| Total net (recoveries) chargeoffs | $ | (59 | ) | $ | (15 | ) | $ | (130 | ) | $ | (107 | ) | $ | (58 | ) | |||||
| Florida | ||||||||||||||||||||
| Commercial | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
| Real estate mortgage - 1 to 4 family | (25 | ) | - | - | - | - | ||||||||||||||
| Installment | 31 | - | (2 | ) | - | - | ||||||||||||||
| Total net (recoveries) chargeoffs | $ | 6 | $ | - | $ | (2 | ) | $ | - | $ | - | |||||||||
| Total | ||||||||||||||||||||
| Commercial | $ | - | $ | - | $ | - | $ | - | $ | 36 | ||||||||||
| Real estate mortgage - 1 to 4 family | (78 | ) | (46 | ) | (164 | ) | (119 | ) | (97 | ) | ||||||||||
| Installment | 25 | 31 | 32 | 12 | 3 | |||||||||||||||
| Total net (recoveries) chargeoffs | $ | (53 | ) | $ | (15 | ) | $ | (132 | ) | $ | (107 | ) | $ | (58 | ) | |||||
| Asset Quality Ratios | ||||||||||||||||||||
| Total nonperforming loans (1) | $ | 19,162 | $ | 17,493 | $ | 18,684 | $ | 18,713 | $ | 19,418 | ||||||||||
| Total nonperforming assets (1) | 21,031 | 19,554 | 19,366 | 19,357 | 19,687 | |||||||||||||||
| Total net (recoveries) chargeoffs (2) | (53 | ) | (15 | ) | (132 | ) | (107 | ) | (58 | ) | ||||||||||
| Allowance for credit losses on loans (1) | 46,685 | 46,032 | 45,517 | 45,285 | 46,178 | |||||||||||||||
| Nonperforming loans to total loans | 0.40 | % | 0.37 | % | 0.40 | % | 0.41 | % | 0.43 | % | ||||||||||
| Nonperforming assets to total assets | 0.35 | % | 0.33 | % | 0.32 | % | 0.31 | % | 0.31 | % | ||||||||||
| Allowance for credit losses on loans to total loans | 0.97 | % | 0.97 | % | 0.98 | % | 1.00 | % | 1.03 | % | ||||||||||
| Coverage ratio (1) | 243.6 | % | 263.1 | % | 243.6 | % | 242.0 | % | 237.8 | % | ||||||||||
| Annualized net (recoveries) chargeoffs to average loans (2) | 0.00 | % | 0.00 | % | -0.01 | % | -0.01 | % | -0.01 | % | ||||||||||
| Allowance for credit losses on loans to annualized net (recoveries) chargeoffs (2) | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
* Includes New York, New Jersey, Vermont and Massachusetts.
| (1) | At period-end |
| (2) | For the three-month period ended |
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL
| (dollars in thousands) | ||||||||||||||||||||||||
| (Unaudited) | Three months ended | Three months ended | ||||||||||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||||||||||||
| Average | Interest | Average | Average | Interest | Average | |||||||||||||||||||
| Balance | Rate | Balance | Rate | |||||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Securities available for sale: | ||||||||||||||||||||||||
| U. S. government sponsored enterprises | $ | 120,692 | $ | 692 | 2.29 | % | $ | 61,755 | $ | 86 | 0.55 | % | ||||||||||||
Mortgage backed securities and collateralized mortgage obligations - residential | 287,046 | 1,585 | 2.20 | 261,124 | 1,087 | 1.67 | ||||||||||||||||||
| State and political subdivisions | 34 | - | 6.74 | 41 | 1 | 6.73 | ||||||||||||||||||
| Corporate bonds | 85,578 | 521 | 2.43 | 52,977 | 233 | 1.76 | ||||||||||||||||||
Small Business Administration - guaranteed participation securities | 22,129 | 117 | 2.12 | 29,871 | 154 | 2.06 | ||||||||||||||||||
| Other | 686 | 2 | 1.17 | 686 | 2 | 1.17 | ||||||||||||||||||
| Total securities available for sale | 516,165 | 2,917 | 2.26 | 406,454 | 1,563 | 1.54 | ||||||||||||||||||
| Federal funds sold and other short-term Investments | 576,931 | 6,555 | 4.61 | 1,187,201 | 572 | 0.20 | ||||||||||||||||||
| Held to maturity securities: | ||||||||||||||||||||||||
Mortgage backed securities and collateralized mortgage obligations - residential | 7,542 | 78 | 4.14 | 9,541 | 90 | 3.79 | ||||||||||||||||||
| Total held to maturity securities | 7,542 | 78 | 4.14 | 9,541 | 90 | 3.79 | ||||||||||||||||||
| Federal Home Loan Bank stock | 5,797 | 110 | 7.59 | 5,604 | 62 | 4.43 | ||||||||||||||||||
| Commercial loans | 238,870 | 3,024 | 5.06 | 194,989 | 2,525 | 5.18 | ||||||||||||||||||
| Residential mortgage loans | 4,212,878 | 36,913 | 3.50 | 4,007,886 | 34,197 | 3.42 | ||||||||||||||||||
| Home equity lines of credit | 291,326 | 4,119 | 5.73 | 232,535 | 2,125 | 3.71 | ||||||||||||||||||
| Installment loans | 13,323 | 216 | 6.56 | 8,974 | 156 | 7.03 | ||||||||||||||||||
| Loans, net of unearned income | 4,756,397 | 44,272 | 3.73 | 4,444,384 | 39,003 | 3.52 | ||||||||||||||||||
| Total interest earning assets | 5,862,832 | $ | 53,932 | 3.69 | 6,053,184 | $ | 41,290 | 2.74 | ||||||||||||||||
| Allowance for credit losses on loans | (46,290 | ) | (46,759 | ) | ||||||||||||||||||||
| Cash & non-interest earning assets | 175,097 | 207,308 | ||||||||||||||||||||||
| Total assets | $ | 5,991,639 | $ | 6,213,733 | ||||||||||||||||||||
| Liabilities and shareholders' equity | ||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||
| Interest bearing checking accounts | $ | 1,133,383 | $ | 66 | 0.02 | % | $ | 1,191,496 | $ | 44 | 0.01 | % | ||||||||||||
| Money market accounts | 600,855 | 814 | 0.55 | 791,689 | 214 | 0.11 | ||||||||||||||||||
| Savings | 1,456,242 | 530 | 0.15 | 1,527,975 | 156 | 0.04 | ||||||||||||||||||
| Time deposits | 1,160,969 | 5,272 | 1.84 | 964,158 | 546 | 0.23 | ||||||||||||||||||
| Total interest bearing deposits | 4,351,449 | 6,682 | 0.62 | 4,475,318 | 960 | 0.09 | ||||||||||||||||||
| Short-term borrowings | 131,867 | 285 | 0.88 | 248,535 | 234 | 0.38 | ||||||||||||||||||
| Total interest bearing liabilities | 4,483,316 | $ | 6,967 | 0.63 | 4,723,853 | $ | 1,194 | 0.10 | ||||||||||||||||
| Demand deposits | 816,565 | 808,695 | ||||||||||||||||||||||
| Other liabilities | 84,092 | 83,633 | ||||||||||||||||||||||
| Shareholders' equity | 607,666 | 597,552 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 5,991,639 | $ | 6,213,733 | ||||||||||||||||||||
| Net interest income, GAAP and tax equivalent | $ | 46,965 | $ | 40,096 | ||||||||||||||||||||
| Net interest spread, GAAP and tax equivalent | 3.06 | % | 2.63 | % | ||||||||||||||||||||
| Net interest margin (net interest income to | ||||||||||||||||||||||||
| total interest earning assets) GAAP and tax equivalent | 3.21 | % | 2.66 | % | ||||||||||||||||||||
| Tax equivalent adjustment | - | - | ||||||||||||||||||||||
| Net interest income | $ | 46,965 | $ | 40,096 | ||||||||||||||||||||
Non-GAAP Financial Measures Reconciliation
Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from total shareholders’ equity and total assets, respectively. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios. Additionally, we believe that this measure is important to many investors in the marketplace who are interested in relative changes from period to period in equity and total assets, each exclusive of changes in intangible assets.
The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and non-interest fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, excluding non-routine items from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue. Additionally, we believe this measure is important to investors looking for a measure of efficiency in our productivity measured by the amount of revenue generated for each dollar spent.
We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial results. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible equity as a percentage of tangible assets, and efficiency ratio to the most directly comparable GAAP measures is set forth below.
(dollars in thousands)
(Unaudited)
| 3/31/2023 | 12/31/2022 | 3/31/2022 | ||||||||||
| Tangible Equity to Tangible Assets | ||||||||||||
| Total Assets (GAAP) | $ | 6,045,808 | $ | 6,000,052 | $ | 6,281,873 | ||||||
| Less: Intangible assets | 553 | 553 | 553 | |||||||||
| Tangible assets (Non-GAAP) | $ | 6,045,255 | $ | 5,999,499 | $ | 6,281,320 | ||||||
| Equity (GAAP) | $ | 614,703 | $ | 599,987 | $ | 592,895 | ||||||
| Less: Intangible assets | 553 | 553 | 553 | |||||||||
| Tangible equity (Non-GAAP) | $ | 614,150 | $ | 599,434 | $ | 592,342 | ||||||
| Tangible Equity to Tangible Assets (Non-GAAP) | 10.16 | % | 9.99 | % | 9.43 | % | ||||||
| Equity to Assets (GAAP) | 10.17 | % | 10.00 | % | 9.44 | % | ||||||
| Three months ended | ||||||||||||
| Efficiency Ratio | 3/31/2023 | 12/31/2022 | 3/31/2022 | |||||||||
| Net interest income (fully taxable equivalent) (Non-GAAP) | $ | 46,965 | $ | 49,187 | $ | 40,096 | ||||||
| Non-interest income (GAAP) | 4,669 | 4,775 | 5,183 | |||||||||
| Less: Net gain on sale of building | - | - | 268 | |||||||||
| Revenue used for efficiency ratio (Non-GAAP) | $ | 51,634 | $ | 53,962 | $ | 45,011 | ||||||
| Total noninterest expense (GAAP) | $ | 27,679 | $ | 26,405 | $ | 22,765 | ||||||
| Less: Other real estate (income) expense, net | 225 | 101 | 11 | |||||||||
| Expense used for efficiency ratio (Non-GAAP) | $ | 27,454 | $ | 26,304 | $ | 22,754 | ||||||
| Efficiency Ratio | 53.17 | % | 48.75 | % | 50.55 | % | ||||||