GLENVILLE, N.Y., Oct. 22, 2012 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo) (Nasdaq:TRST) today announced that pre-tax earnings were up 10.1% from $14.4 million in the third quarter of 2011 to $15.8 million in the third quarter of 2012. Net income for the third quarter of 2012 was $9.8 million, up 5.7% over the prior-year period and equal to diluted earnings per share of $0.104, compared to net income of $9.2 million and diluted earnings per share of $0.100 for the third quarter of 2011.
The third quarter of 2012 saw continued balance sheet growth compared to the third quarter of 2011, but a modest decline compared to the second quarter of 2012. Robert J. McCormick, President and Chief Executive Officer noted, "We are pleased that the third quarter resulted in continued solid earnings growth. As noted in our second quarter release, the current interest rate environment has created a unique opportunity for our Company to realign the deposit mix which should support future objectives. As we had discussed we allowed an average of $124.0 million of higher cost time deposits to run off during the third quarter while at the same time growing our core deposits by an average of $96.9 million. Previous strong quarterly growth in deposits allowed us the flexibility to take advantage of this opportunity to shift our deposit mix, which helped improve our margin. Balance sheet expansion remains an important part of our future plans, but we will also continue to take advantage of future opportunities like those in the third quarter that strengthen our deposit mix and have a positive impact on our margin. We continue to add solid and profitable customers on both the deposit and loan side, and will remain conservative as to how we price our products. Our highly liquid balance sheet allows us to fund loan growth without having to overpay for deposits. We look forward to the balance of 2012 and 2013 with optimism, though we note that our industry continues to face challenges as the economy remains fragile and interest rates remain at unprecedented levels. We will continue to take advantage of opportunities that are presented." Return on average equity and return on average assets were 10.97% and 0.89%, respectively, for the third quarter of 2012, compared to 10.91% and 0.88% for the third quarter of 2011. The efficiency ratio was 49.18% for the third quarter of 2012, compared to 46.51% for the third quarter of 2011. Both years ratios rank among industry leaders.
Mr. McCormick also noted "We continue to see some signs of economic improvement in the markets in which we operate, although high levels of unemployment and other persistent issues continue to constrain any significant growth. We believe our long-term focus on traditional lending criteria and conservative balance sheet management has enabled us to maintain a strong balance sheet with continued profitability. As a result, we have been able to focus on conducting business, which has put us in a position to take advantage of the significant upheaval that customers of other banks have experienced."
TrustCo continued to report solid growth in loans and deposits on a year-over-year basis. For the quarter ended September 30, 2012, average loans were up $134.7 million or 5.5% compared to the same period in 2011, while average deposits increased $166.1 million or 4.5% over the same period. Compared to the second quarter of 2012, average deposits were down $27.0 million or 2.8% (annualized) and average loans were up $42.3 million or 6.7% (annualized). Mr. McCormick noted that, "The year-over-year growth of our loans and deposits reflects the long term strategic focus of the Bank, while the decline in average deposits relative to the second quarter reflects our near term tactical decision to intensify our focus on enhancing our mix of deposits and growing our core customer base. Our efforts in this regard resulted in certificate of deposit balances falling from 33.9% of deposits at June 30, 2012 to 29.4% at September 30, 2012. Because certificates are our most costly deposits, this decline contributed to our overall cost of deposits falling to 0.44% in the third quarter compared to 0.52% in the second quarter.
Our branch franchise continues to be the key to our long term plans. We have made significant progress in expanding our loans and deposits through our branches, and expect that to continue as the new branches grow towards their capacity. We remain mindful that fully achieving our goals for our newer branches will take time and continued hard work. We believe our success in growing customer relationships provides the basic building blocks that will help drive profit growth over the coming years. As we have noted, however, we will not pursue balance sheet expansion that does not contribute to the long term health of the Company."
For the first nine months of 2012 net income was $27.7 million and resulted in diluted earnings per share of $0.296, as compared to the first nine months of 2011 net income of $24.4 million and diluted earnings per share of $0.296. Net income was up 13.8% from the first nine months of 2011 to the first nine months of 2012. Return on average equity and return on average assets were 10.64% and 0.85%, respectively, for the first nine months of 2012 and 11.38% and 0.80% for the comparable period in 2011.
Reported credit results for the quarter were affected by the implementation in the third quarter of new OCC guidance which affected consumer loans where the borrower's obligation to TrustCo has been discharged in bankruptcy and the borrower has not reaffirmed the debt. Implementation of this new OCC guidance affected nonperforming loans and net charge offs as follows:
- Net $4.0 million of performing consumer loans were reclassified to nonaccrual status, and
- $804 thousand increase in net charge offs, which was covered by the reserve.
Nonperforming loans were $49.9 million as of September 30, 2012, compared to $51.5 million at June 30, 2012 and $47.0 million at September 30, 2011. Nonperforming assets were $58.6 million at September 30, 2012, compared to $55.3 million at June 30, 2012 and $53.1 million at September 30, 2011. At September 30, 2012, nonperforming loans were equal to 1.92% of total loans, compared to 2.01% at June 30, 2012 and 1.89% at September 30, 2011. Nonperforming assets to total assets were 1.36% at September 30, 2012, compared to 1.25% at June 30, 2012 and 1.27% at September 30, 2011. The allowance for loan losses as a percentage of gross loans and as a multiple of net charge-offs remains strong. Excluding the affect of implementing the new OCC guidance TrustCo would have had nonperforming loans of $45.9 million or 1.76% of total loans, and nonperforming assets of $54.6 million or 1.26% of total assets as of September 30, 2012. The allowance to total loans was 1.82% at September 30, 2012 and 1.88% at June 30, 2012, and covered annualized third quarter net charge-offs by 3.3 times, compared to an annualized 4.1 times for the third quarter of 2011. The coverage ratio, or allowance for loan losses to nonperforming loans was 94.9% at September 30, 2012, compared to 93.3% at June 30, 2012 and 101.7% at September 30, 2011. Excluding the affect of implementing the new OCC guidance TrustCo's allowance for loan losses at September 30, 2012 as a percentage of gross loans would have been 1.85%, which would have covered annualized third quarter net charge offs by 4.4 times. Likewise the coverage ratio of the allowance for loan losses to nonperforming loans would have been 104.9% at September 30 , 2012.
Net interest margin for the third quarter of 2012 was 3.21%, up from 3.16% in the second quarter of 2012 and down from 3.38% in the third quarter of 2011. The improvement in the margin is partly due to the decision to restrain overall deposit growth through pricing discipline while improving the deposit mix during the third quarter.
At September 30, 2012 the tangible equity ratio was 8.27% compared to 8.04% at September 30, 2011. Tangible book value per share ended the third quarter at $3.81 compared to $3.62 in the year-ago period.
TrustCo Bank Corp NY is a $4.3 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 138 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at September 30, 2012.
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 third quarter 2012 results will be held at 9:00 a.m. Eastern Time on October 23, 2012. Those wishing to participate in the call may dial toll-free 1-877-317-6789. International callers must dial + 1-412-317-6789. A replay of the call will be available until January 24, 2013 by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10019368. The call will also be audio webcast at: http://services.choruscall.com/links/trst121023.html, and will be available until October 23, 2013.
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. The "forward-looking statements" may include statements regarding future events or performance and statements regarding TrustCo's ability to offer and sell securities under its shelf registration statement. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed. 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 our actual results and could cause our actual financial performance to differ materially from that expressed in any forward-looking statement: credit risk, the effects of and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rates, market and monetary fluctuations, competition, the effect of changes in financial services laws and regulations (including laws concerning taxation, banking and securities), real estate and collateral values, changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board ("FASB") or the Public Company Accounting Oversight Board; changes in local market areas and general business and economic trends and the matters described under the heading "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2011, as amended, and in our subsequent securities filings.
| TRUSTCO BANK CORP NY | |||
| GLENVILLE, NY | |||
| FINANCIAL HIGHLIGHTS | |||
| (dollars in thousands, except per share data) | |||
| (Unaudited) | |||
| Three Months Ended | |||
| 09/30/12 | 06/30/12 | 09/30/11 | |
| Summary of operations | |||
| Net interest income (TE) | $ 34,321 | 33,993 | 34,390 |
| Provision for loan losses | 2,900 | 3,000 | 5,100 |
| Net securities transactions | 666 | 55 | 158 |
| Noninterest income | 3,927 | 3,971 | 3,645 |
| Noninterest expense | 20,019 | 20,498 | 18,443 |
| Net income | 9,753 | 9,066 | 9,225 |
| Per common share | |||
| Net income per share: | |||
| - Basic | $ 0.104 | 0.097 | 0.100 |
| - Diluted | $ 0.104 | 0.097 | 0.100 |
| Cash dividends | 0.066 | 0.066 | 0.066 |
| Tangible Book value at period end | 3.81 | 3.73 | 3.62 |
| Market price at period end | 5.71 | 5.46 | 4.46 |
| At period end | |||
| Full time equivalent employees | 760 | 742 | 720 |
| Full service banking offices | 138 | 137 | 135 |
| Performance ratios | |||
| Return on average assets | 0.89% | 0.83 | 0.88 |
| Return on average equity | 10.97 | 10.49 | 10.91 |
| Efficiency (1) | 49.18 | 52.24 | 46.51 |
| Net interest spread (TE) | 3.15 | 3.09 | 3.29 |
| Net interest margin (TE) | 3.21 | 3.16 | 3.38 |
| Dividend payout ratio | 63.13 | 67.80 | 66.27 |
| Capital ratio at period end | |||
| Consolidated tangible equity to tangible assets (2) | 8.27 | 7.90 | 8.04 |
| Asset quality analysis at period end | |||
| Nonperforming loans to total loans (4) | 1.92 | 2.01 | 1.89 |
| Nonperforming assets to total assets (4) | 1.36 | 1.25 | 1.27 |
| Allowance for loan losses to total loans | 1.82 | 1.88 | 1.93 |
| Coverage ratio (3) | 0.9x | 0.9 | 1.0 |
| (1) Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions). | |||
| (2) The tangible equity ratio excludes $553,000 of intangibles from both equity and assets. | |||
| (3) Calculated as allowance for loan losses divided by total nonperforming loans. | |||
| (4) Included in the September 30, 2012 balance of nonperforming loans is net $4.0 of performing loans that have been reclassified to nonaccrual status as a result of recent OCC guidance. | |||
| TE = Taxable equivalent. | |||
| FINANCIAL HIGHLIGHTS, Continued | ||
| (dollars in thousands, except per share data) | ||
| (Unaudited) | ||
| Nine Months Ended | ||
| 09/30/12 | 09/30/11 | |
| Summary of operations | ||
| Net interest income (TE) | $ 101,951 | 101,497 |
| Provision for loan losses | 9,000 | 14,550 |
| Net securities transactions | 1,398 | 1,296 |
| Noninterest income | 11,739 | 11,349 |
| Noninterest expense | 61,161 | 60,841 |
| Net income | 27,728 | 24,373 |
| Per common share | ||
| Net income per share: | ||
| - Basic | $ 0.296 | 0.296 |
| - Diluted | 0.296 | 0.296 |
| Cash dividends | 0.197 | 0.197 |
| Tangible Book value at period end | 3.81 | 3.62 |
| Market price at period end | 5.71 | 4.46 |
| Performance ratios | ||
| Return on average assets | 0.85% | 0.80 |
| Return on average equity | 10.64 | 11.38 |
| Efficiency (1) | 51.30 | 49.98 |
| Net interest spread (TE) | 3.12 | 3.33 |
| Net interest margin (TE) | 3.20 | 3.42 |
| Dividend payout ratio | 66.51 | 66.71 |
| (1) Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions). | ||
| TE = Taxable equivalent. | ||
| CONSOLIDATED STATEMENTS OF INCOME | |||||
| (dollars in thousands, except per share data) | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| 9/30/2012 | 6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | |
| Interest and dividend income: | |||||
| Interest and fees on loans | $ 32,103 | 32,277 | 32,425 | 32,711 | 32,640 |
| Interest and dividends on securities available for sale: | |||||
| U. S. government sponsored enterprises | 1,996 | 2,606 | 2,304 | 2,661 | 3,347 |
| State and political subdivisions | 340 | 368 | 410 | 490 | 557 |
| Mortgage-backed securities and collateralized mortgage obligations-residential | 2,003 | 1,364 | 1,093 | 1,083 | 778 |
| Corporate bonds | 529 | 648 | 822 | 886 | 953 |
| Small Business Administration-guaranteed participation securities | 43 | -- | -- | -- | -- |
| Other securities | 4 | 5 | 5 | 5 | 5 |
| Total interest and dividends on securities available for sale | 4,915 | 4,991 | 4,634 | 5,125 | 5,640 |
| Interest on held to maturity securities: | |||||
| U. S. government sponsored enterprises | -- | -- | 25 | 97 | 164 |
| Mortgage-backed securities and collateralized mortgage obligations-residential | 976 | 1,198 | 1,290 | 1,151 | 1,186 |
| Corporate bonds | 385 | 387 | 509 | 590 | 565 |
| Total interest on held to maturity securities | 1,361 | 1,585 | 1,824 | 1,838 | 1,915 |
| Federal Reserve Bank and Federal Home Loan Bank stock | 120 | 149 | 90 | 80 | 84 |
| Interest on federal funds sold and other short-term investments | 258 | 299 | 320 | 284 | 318 |
| Total interest income | 38,757 | 39,301 | 39,293 | 40,038 | 40,597 |
| Interest expense: | |||||
| Interest on deposits: | |||||
| Interest-bearing checking | 79 | 78 | 78 | 76 | 74 |
| Savings | 870 | 979 | 1,102 | 1,018 | 952 |
| Money market deposit accounts | 673 | 770 | 923 | 1,030 | 1,158 |
| Time deposits | 2,629 | 3,230 | 3,418 | 3,552 | 3,904 |
| Interest on short-term borrowings | 348 | 378 | 388 | 401 | 384 |
| Total interest expense | 4,599 | 5,435 | 5,909 | 6,077 | 6,472 |
| Net interest income | 34,158 | 33,866 | 33,384 | 33,961 | 34,125 |
| Provision for loan losses | 2,900 | 3,000 | 3,100 | 4,200 | 5,100 |
| Net interest income after provision for loan losses | 31,258 | 30,866 | 30,284 | 29,761 | 29,025 |
| Noninterest income: | |||||
| Trust department income | 1,145 | 1,407 | 1,394 | 1,086 | 1,242 |
| Fees for services to customers | 2,610 | 2,388 | 2,240 | 2,305 | 2,189 |
| Net gain on securities transactions | 666 | 55 | 677 | 132 | 158 |
| Other | 172 | 176 | 207 | 213 | 214 |
| Total noninterest income | 4,593 | 4,026 | 4,518 | 3,736 | 3,803 |
| Noninterest expenses: | |||||
| Salaries and employee benefits | 7,587 | 7,519 | 7,743 | 7,638 | 7,087 |
| Net occupancy expense | 3,756 | 3,817 | 3,795 | 3,664 | 3,614 |
| Equipment expense | 1,316 | 1,600 | 1,520 | 1,200 | 1,639 |
| Professional services | 1,657 | 1,489 | 1,436 | 1,411 | 1,152 |
| Outsourced services | 1,350 | 1,347 | 1,250 | 1,050 | 1,350 |
| Advertising expense | 935 | 1,060 | 809 | 607 | 763 |
| FDIC and other insurance | 983 | 953 | 880 | 577 | 835 |
| Other real estate expense, net | 1,210 | 665 | 966 | 1,254 | 754 |
| Other | 1,225 | 2,048 | 2,245 | 1,508 | 1,249 |
| Total noninterest expenses | 20,019 | 20,498 | 20,644 | 18,909 | 18,443 |
| Income before taxes | 15,832 | 14,394 | 14,158 | 14,588 | 14,385 |
| Income taxes | 6,079 | 5,328 | 5,249 | 5,874 | 5,160 |
| Net income | $ 9,753 | 9,066 | 8,909 | 8,714 | 9,225 |
| Net income per Common Share: | |||||
| - Basic | $ 0.104 | 0.097 | 0.095 | 0.093 | 0.100 |
| - Diluted | 0.104 | 0.097 | 0.095 | 0.093 | 0.100 |
| Average basic shares (thousands) | 93,692 | 93,561 | 93,546 | 93,308 | 92,124 |
| Average diluted shares (thousands) | 93,700 | 93,562 | 93,546 | 93,308 | 92,124 |
| Note: Taxable equivalent net interest income | $ 34,321 | 33,993 | 33,637 | 34,220 | 34,390 |
| CONSOLIDATED STATEMENTS OF INCOME | ||
| (dollars in thousands, except per share data) | ||
| (Unaudited) | ||
| Nine Months Ended | ||
| 9/30/2012 | 9/30/2011 | |
| Interest and dividend income: | ||
| Interest and fees on loans | $ 96,805 | 96,501 |
| Interest and dividends on securities available for sale: | ||
| U. S. government sponsored enterprises | 6,906 | 10,337 |
| State and political subdivisions | 1,118 | 1,981 |
| Mortgage-backed securities and collateralized mortgage obligations-residential | 4,460 | 2,008 |
| Corporate bonds | 1,999 | 3,173 |
| Small Business Administration-guaranteed participation securities | 43 | -- |
| Other securities | 14 | 14 |
| Total interest and dividends on securities available for sale | 14,540 | 17,513 |
| Interest on held to maturity securities: | ||
| U. S. government sponsored enterprises | 25 | 164 |
| Mortgage-backed securities-residential | 3,464 | 3,614 |
| Corporate bonds | 1,281 | 1,875 |
| Total interest on held to maturity securities | 4,770 | 5,653 |
| Federal Reserve Bank and Federal Home Loan Bank stock | 359 | 225 |
| Interest on federal funds sold and other short-term investments | 877 | 818 |
| Total interest income | 117,351 | 120,710 |
| Interest expense: | ||
| Interest on deposits: | ||
| Interest-bearing checking | 235 | 209 |
| Savings | 2,951 | 2,770 |
| Money market deposit accounts | 2,366 | 3,569 |
| Time deposits | 9,277 | 12,446 |
| Interest on short-term borrowings | 1,114 | 1,173 |
| Total interest expense | 15,943 | 20,167 |
| Net interest income | 101,408 | 100,543 |
| Provision for loan losses | 9,000 | 14,550 |
| Net interest income after provision for loan losses | 92,408 | 85,993 |
| Noninterest income: | ||
| Trust department income | 3,946 | 4,002 |
| Fees for services to customers | 7,238 | 6,608 |
| Net gain on securities transactions | 1,398 | 1,296 |
| Other | 555 | 739 |
| Total noninterest income | 13,137 | 12,645 |
| Noninterest expenses: | ||
| Salaries and employee benefits | 22,849 | 21,113 |
| Net occupancy expense | 11,368 | 11,023 |
| Equipment expense | 4,436 | 4,452 |
| Professional services | 4,582 | 4,318 |
| Outsourced services | 3,947 | 4,050 |
| Advertising expense | 2,804 | 2,177 |
| FDIC and other insurance | 2,816 | 4,078 |
| Other real estate expense, net | 2,841 | 4,439 |
| Other | 5,518 | 5,191 |
| Total noninterest expenses | 61,161 | 60,841 |
| Income before taxes | 44,384 | 37,797 |
| Income taxes | 16,656 | 13,424 |
| Net income | $ 27,728 | 24,373 |
| Net income per Common Share: | ||
| - Basic | $ 0.296 | 0.296 |
| - Diluted | 0.296 | 0.296 |
| Average basic shares (thousands) | 93,568 | 82,297 |
| Average diluted shares (thousands) | 93,572 | 82,297 |
| Note: Taxable equivalent net interest income | $ 101,951 | 101,497 |
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | |||||
| (dollars in thousands) | |||||
| (Unaudited) | |||||
| 9/30/2012 | 6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | |
| ASSETS: | |||||
| Cash and due from banks | $ 40,354 | 36,589 | 39,426 | 44,395 | 40,875 |
| Federal funds sold and other short term investments | 402,290 | 486,049 | 486,055 | 488,548 | 434,950 |
| Total cash and cash equivalents | 442,644 | 522,638 | 525,481 | 532,943 | 475,825 |
| Securities available for sale: | |||||
| U. S. government sponsored enterprises | 427,798 | 643,189 | 744,725 | 563,460 | 633,812 |
| States and political subdivisions | 33,857 | 36,978 | 38,367 | 43,968 | 51,289 |
| Mortgage-backed securities and collateralized mortgage obligations-residential | 515,879 | 354,285 | 219,301 | 204,022 | 200,516 |
| Corporate bonds | 49,296 | 73,311 | 81,654 | 96,608 | 97,464 |
| Small Business Administration-guaranteed participation securities | 25,338 | -- | -- | -- | -- |
| Other securities | 660 | 660 | 660 | 660 | 660 |
| Total securities available for sale | 1,052,828 | 1,108,423 | 1,084,707 | 908,718 | 983,741 |
| Held to maturity securities: | |||||
| U. S. government sponsored enterprises | -- | -- | -- | 15,000 | 25,000 |
| Mortgage-backed securities and collateralized mortgage obligations-residential | 120,877 | 133,562 | 143,629 | 141,857 | 109,603 |
| Corporate bonds | 35,074 | 35,193 | 35,312 | 59,431 | 59,555 |
| Total held to maturity securities | 155,951 | 168,755 | 178,941 | 216,288 | 194,158 |
| Federal Reserve Bank and Federal Home Loan Bank stock | 9,632 | 9,632 | 9,004 | 9,004 | 6,861 |
| Loans: | |||||
| Commercial | 217,431 | 235,347 | 235,513 | 248,163 | 244,389 |
| Residential mortgage loans | 2,056,972 | 2,003,046 | 1,970,278 | 1,955,951 | 1,925,144 |
| Home equity line of credit | 327,083 | 317,157 | 314,668 | 313,038 | 305,587 |
| Installment loans | 4,455 | 4,071 | 3,855 | 4,151 | 3,829 |
| Loans, net of deferred fees and costs | 2,605,941 | 2,559,621 | 2,524,314 | 2,521,303 | 2,478,949 |
| Less: | |||||
| Allowance for loan losses | 47,364 | 48,018 | 48,535 | 48,717 | 47,782 |
| Net loans | 2,558,577 | 2,511,603 | 2,475,779 | 2,472,586 | 2,431,167 |
| Bank premises and equipment, net | 37,251 | 37,868 | 37,099 | 37,006 | 35,946 |
| Other assets | 61,290 | 62,480 | 63,432 | 67,099 | 65,261 |
| Total assets | $ 4,318,173 | 4,421,399 | 4,374,443 | 4,243,644 | 4,192,959 |
| LIABILITIES: | |||||
| Deposits: | |||||
| Demand | $ 292,350 | 283,873 | 281,628 | 267,776 | 269,958 |
| Interest-bearing checking | 536,892 | 528,101 | 507,510 | 489,227 | 472,908 |
| Savings accounts | 1,167,927 | 1,122,208 | 1,068,058 | 978,819 | 923,893 |
| Money market deposit accounts | 668,064 | 644,627 | 631,761 | 635,434 | 642,054 |
| Certificates of deposit (in denominations of $100,000 or more) | 359,246 | 452,043 | 467,447 | 460,971 | 461,081 |
| Other time accounts | 751,974 | 867,798 | 894,946 | 903,746 | 910,633 |
| Total deposits | 3,776,453 | 3,898,650 | 3,851,350 | 3,735,973 | 3,680,527 |
| Short-term borrowings | 161,751 | 150,718 | 159,002 | 147,563 | 143,081 |
| Due to broker | -- | -- | -- | -- | 10,000 |
| Accrued expenses and other liabilities | 22,352 | 22,124 | 19,445 | 21,592 | 21,541 |
| Total liabilities | 3,960,556 | 4,071,492 | 4,029,797 | 3,905,128 | 3,855,149 |
| SHAREHOLDERS' EQUITY: | |||||
| Capital stock | 98,912 | 98,912 | 98,912 | 98,912 | 98,806 |
| Surplus | 175,284 | 175,773 | 176,199 | 176,638 | 177,448 |
| Undivided profits | 128,750 | 125,153 | 122,235 | 119,465 | 116,894 |
| Accumulated other comprehensive income (loss), net of tax | 4,879 | 1,585 | 53 | (2,493) | 258 |
| Treasury stock at cost | (50,208) | (51,516) | (52,753) | (54,006) | (55,596) |
| Total shareholders' equity | 357,617 | 349,907 | 344,646 | 338,516 | 337,810 |
| Total liabilities and shareholders' equity | $ 4,318,173 | 4,421,399 | 4,374,443 | 4,243,644 | 4,192,959 |
| Outstanding shares (thousands) | 93,807 | 93,674 | 93,549 | 93,315 | 93,154 |
| NONPERFORMING ASSETS | |||||
| (dollars in thousands) | |||||
| (Unaudited) | |||||
| Nonperforming Assets | |||||
| 09/30/12 | 06/30/12 | 03/31/12 | 12/31/11 | 09/30/11 | |
| New York and other states* | |||||
| Loans in nonaccrual status: | |||||
| Commercial | $ 5,880 | 5,656 | 5,667 | 4,981 | 5,086 |
| Real estate mortgage - 1 to 4 family | 32,593 | 29,167 | 29,894 | 27,820 | 25,932 |
| Installment | 71 | 1 | 9 | 3 | 4 |
| Total non-accrual loans | 38,544 | 34,824 | 35,570 | 32,804 | 31,022 |
| Other nonperforming real estate mortgages - 1 to 4 family | 238 | 243 | 306 | 312 | 317 |
| Total nonperforming loans | 38,782 | 35,067 | 35,876 | 33,116 | 31,339 |
| Other real estate owned | 2,716 | 2,787 | 2,411 | 2,382 | 2,372 |
| Total nonperforming assets | $ 41,498 | 37,854 | 38,287 | 35,498 | 33,711 |
| Florida | |||||
| Loans in nonaccrual status: | |||||
| Commercial | $ 2,698 | 8,435 | 5,874 | 5,000 | 5,400 |
| Real estate mortgage - 1 to 4 family | 8,438 | 7,954 | 9,404 | 10,662 | 10,231 |
| Installment | 7 | 1 | -- | -- | -- |
| Total non-accrual loans | 11,143 | 16,390 | 15,278 | 15,662 | 15,631 |
| Other nonperforming real estate mortgages - 1 to 4 family | -- | -- | -- | -- | -- |
| Total nonperforming loans | 11,143 | 16,390 | 15,278 | 15,662 | 15,631 |
| Other real estate owned | 5,975 | 1,083 | 1,293 | 2,883 | 3,739 |
| Total nonperforming assets | $ 17,118 | 17,473 | 16,571 | 18,545 | 19,370 |
| Total | |||||
| Loans in nonaccrual status: | |||||
| Commercial | $ 8,578 | 14,091 | 11,541 | 9,981 | 10,486 |
| Real estate mortgage - 1 to 4 family | 41,031 | 37,121 | 39,298 | 38,482 | 36,163 |
| Installment | 78 | 2 | 9 | 3 | 4 |
| Total non-accrual loans | 49,687 | 51,214 | 50,848 | 48,466 | 46,653 |
| Other nonperforming real estate mortgages - 1 to 4 family | 238 | 243 | 306 | 312 | 317 |
| Total nonperforming loans | 49,925 | 51,457 | 51,154 | 48,778 | 46,970 |
| Other real estate owned | 8,691 | 3,870 | 3,704 | 5,265 | 6,111 |
| Total nonperforming assets | $ 58,616 | 55,327 | 54,858 | 54,043 | 53,081 |
| Quarterly Net Chargeoffs | |||||
| 09/30/12 | 06/30/12 | 03/31/12 | 12/31/11 | 09/30/11 | |
| New York and other states* | |||||
| Commercial | $ 9 | 713 | 321 | 99 | (3) |
| Real estate mortgage - 1 to 4 family | 2,157 | 1,844 | 1,136 | 1,404 | 858 |
| Installment | 7 | 7 | (8) | 5 | 17 |
| Total net chargeoffs | $ 2,173 | 2,564 | 1,449 | 1,508 | 872 |
| Florida | |||||
| Commercial | $ 736 | 288 | 160 | 400 | -- |
| Real estate mortgage - 1 to 4 family | 644 | 665 | 1,673 | 1,359 | 2,006 |
| Installment | 1 | -- | -- | (2) | 1 |
| Total net chargeoffs | $ 1,381 | 953 | 1,833 | 1,757 | 2,007 |
| Total | |||||
| Commercial | $ 745 | 1,001 | 481 | 499 | (3) |
| Real estate mortgage - 1 to 4 family | 2,801 | 2,509 | 2,809 | 2,763 | 2,864 |
| Installment | 8 | 7 | (8) | 3 | 18 |
| Total net chargeoffs | $ 3,554 | 3,517 | 3,282 | 3,265 | 2,879 |
| Asset Quality Ratios | |||||
| 09/30/12 | 06/30/12 | 03/31/12 | 12/31/11 | 09/30/11 | |
| Total nonperforming loans(1) | $ 49,925 | 51,457 | 51,154 | 48,778 | 46,970 |
| Total nonperforming assets(1) | 58,616 | 55,327 | 54,858 | 54,043 | 53,081 |
| Total net chargeoffs(2) | 3,554 | 3,517 | 3,282 | 3,265 | 2,879 |
| Allowance for loan losses(1) | 47,364 | 48,018 | 48,535 | 48,717 | 47,782 |
| Nonperforming loans to total loans(1) | 1.92% | 2.01% | 2.03% | 1.93% | 1.89% |
| Nonperforming assets to total assets(1) | 1.36% | 1.25% | 1.25% | 1.27% | 1.27% |
| Allowance for loan losses to total loans(1) | 1.82% | 1.88% | 1.92% | 1.93% | 1.93% |
| Coverage ratio(1) | 94.9% | 93.3% | 94.9% | 99.9% | 101.7% |
| Annualized net chargeoffs to average loans(2) | 0.55% | 0.55% | 0.52% | 0.52% | 0.47% |
| Allowance for loan losses to annualized net chargeoffs(2) | 3.3x | 3.4x | 3.7x | 3.7x | 4.1x |
| * 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 September 30, 2012 |
Three months ended September 30, 2011 |
|||||
|
Average Balance |
Interest |
Average Rate |
Average Balance |
Interest |
Average Rate |
||
| Assets | |||||||
| Securities available for sale: | |||||||
| U. S. government sponsored enterprises | $ 594,814 | 1,996 | 1.34% | $ 666,503 | 3,347 | 2.01% | |
| Mortgage backed securities and | |||||||
| collateralized mortgage obligations-residential | 397,935 | 2,003 | 2.01 | 114,442 | 778 | 2.72 | |
| State and political subdivisions | 34,383 | 495 | 5.76 | 53,540 | 815 | 6.09 | |
| Corporate bonds | 66,940 | 529 | 3.16 | 102,522 | 953 | 3.72 | |
| Small Business Administration-guaranteed participation securities | 8,024 | 43 | 2.14 | -- | -- | 0.00 | |
| Other | 660 | 4 | 2.42 | 660 | 5 | 3.03 | |
| Total securities available for sale | 1,102,756 | 5,070 | 1.84 | 937,667 | 5,898 | 2.52 | |
| Federal funds sold and other | |||||||
| short-term Investments | 416,971 | 258 | 0.25 | 486,749 | 318 | 0.26 | |
| Held to maturity securities: | |||||||
| U. S. government sponsored enterprises | -- | -- | 0.00 | 27,772 | 164 | 2.36 | |
| Corporate bonds | 35,132 | 385 | 4.39 | 50,962 | 565 | 4.44 | |
| Mortgage backed securities and | |||||||
| collateralized mortgage obligations-residential | 128,188 | 976 | 3.04 | 111,037 | 1,186 | 4.27 | |
| Total held to maturity securities | 163,320 | 1,361 | 3.33 | 189,771 | 1,915 | 4.04 | |
| Federal Reserve Bank and Federal Home Loan Bank stock | 9,632 | 120 | 4.98 | 6,861 | 84 | 4.90 | |
| Commercial loans | 228,537 | 3,068 | 5.36 | 247,294 | 3,532 | 5.71 | |
| Residential mortgage loans | 2,031,080 | 25,988 | 5.12 | 1,899,421 | 26,115 | 5.50 | |
| Home equity lines of credit | 322,405 | 2,906 | 3.59 | 301,055 | 2,853 | 3.76 | |
| Installment loans | 4,007 | 149 | 14.82 | 3,559 | 147 | 16.34 | |
| Loans, net of unearned income | 2,586,029 | 32,111 | 4.96 | 2,451,329 | 32,647 | 5.32 | |
| Total interest earning assets | 4,278,708 | 38,920 | 3.64 | 4,072,377 | 40,862 | 4.01 | |
| Allowance for loan losses | (49,039) | (46,731) | |||||
| Cash & non-interest earning assets | 144,099 | 143,928 | |||||
| Total assets | $ 4,373,768 | $ 4,169,574 | |||||
| Liabilities and shareholders' equity | |||||||
| Deposits: | |||||||
| Interest bearing checking accounts | $ 531,216 | 79 | 0.06% | $ 467,152 | 74 | 0.06% | |
| Money market accounts | 660,464 | 673 | 0.40 | 644,452 | 1,158 | 0.71% | |
| Savings | 1,151,910 | 870 | 0.30 | 913,384 | 952 | 0.41% | |
| Time deposits | 1,217,080 | 2,629 | 0.86 | 1,396,941 | 3,904 | 1.11% | |
| Total interest bearing deposits | 3,560,670 | 4,251 | 0.48 | 3,421,929 | 6,088 | 0.71 | |
| Short-term borrowings | 151,535 | 348 | 0.91 | 132,404 | 384 | 1.15 | |
| Total interest bearing liabilities | 3,712,205 | 4,599 | 0.49 | 3,554,333 | 6,472 | 0.72 | |
| Demand deposits | 287,915 | 260,602 | |||||
| Other liabilities | 20,084 | 19,310 | |||||
| Shareholders' equity | 353,564 | 335,329 | |||||
| Total liabilities and shareholders' equity | $ 4,373,768 | $ 4,169,574 | |||||
| Net interest income , tax equivalent | 34,321 | 34,390 | |||||
| Net interest spread | 3.15% | 3.29% | |||||
| Net interest margin (net interest income | |||||||
| to total interest earning assets) | 3.21% | 3.38% | |||||
| Tax equivalent adjustment | (163) | (265) | |||||
| Net interest income | 34,158 | 34,125 | |||||
|
(dollars in thousands) (Unaudited) |
Nine months ended September 30, 2012 |
Nine months ended September 30, 2011 |
|||||
|
Average Balance |
Interest |
Average Rate |
Average Balance |
Interest |
Average Rate |
||
| Assets | |||||||
| Securities available for sale: | |||||||
| U. S. government sponsored enterprises | $ 634,903 | 6,906 | 1.45% | $ 691,975 | 10,337 | 1.99% | |
| Mortgage backed securities and | |||||||
| collateralized mortgage obligations-residential | 286,287 | 4,460 | 2.08 | 83,603 | 2,008 | 3.20 | |
| State and political subdivisions | 37,032 | 1,587 | 5.71 | 62,440 | 2,913 | 6.22 | |
| Corporate bonds | 78,999 | 1,999 | 3.38 | 110,438 | 3,173 | 3.83 | |
| Small Business Administration-guaranteed participation securities | 2,694 | 43 | 2.13 | -- | -- | 0.00 | |
| Other | 660 | 14 | 2.83 | 717 | 14 | 2.60 | |
| Total securities available for sale | 1,040,575 | 15,009 | 1.92 | 949,173 | 18,445 | 2.59 | |
| Federal funds sold and other | |||||||
| short-term Investments | 473,196 | 877 | 0.25 | 429,115 | 818 | 0.25 | |
| Held to maturity securities: | |||||||
| U. S. government sponsored enterprises | 1,423 | 25 | 2.38 | 9,359 | 164 | 2.33 | |
| Corporate bonds | 41,071 | 1,281 | 4.16 | 55,125 | 1,875 | 4.54 | |
| Mortgage backed securities and | |||||||
| collateralized mortgage obligations-residential | 136,554 | 3,464 | 3.38 | 112,472 | 3,614 | 4.28 | |
| Total held to maturity securities | 179,048 | 4,770 | 3.55 | 176,956 | 5,653 | 4.26 | |
| Federal Reserve Bank and Federal Home Loan Bank stock | 9,357 | 359 | 5.12 | 6,879 | 225 | 4.36 | |
| Commercial loans | 235,128 | 9,569 | 5.43 | 250,346 | 10,884 | 5.80 | |
| Residential mortgage loans | 1,994,051 | 78,224 | 5.23 | 1,849,192 | 76,950 | 5.55 | |
| Home equity lines of credit | 317,914 | 8,646 | 3.63 | 295,338 | 8,247 | 3.73 | |
| Installment loans | 3,795 | 440 | 15.50 | 3,650 | 442 | 16.19 | |
| Loans, net of unearned income | 2,550,888 | 96,879 | 5.06 | 2,398,526 | 96,523 | 5.37 | |
| Total interest earning assets | 4,253,064 | 117,894 | 3.70 | 3,960,649 | 121,664 | 4.10 | |
| Allowance for loan losses | (49,420) | (45,197) | |||||
| Cash & non-interest earning assets | 141,725 | 144,386 | |||||
| Total assets | $ 4,345,369 | $ 4,059,838 | |||||
| Liabilities and shareholders' equity | |||||||
| Deposits: | |||||||
| Interest bearing checking accounts | $ 509,346 | 235 | 0.06% | $ 452,938 | 209 | 0.06% | |
| Money market accounts | 642,907 | 2,366 | 0.49 | 630,649 | 3,569 | 0.76 | |
| Savings | 1,092,195 | 2,951 | 0.36 | 869,511 | 2,770 | 0.43 | |
| Time deposits | 1,307,411 | 9,277 | 0.95 | 1,417,272 | 12,446 | 1.17 | |
| Total interest bearing deposits | 3,551,859 | 14,829 | 0.56 | 3,370,370 | 18,994 | 0.75 | |
| Short-term borrowings | 150,039 | 1,114 | 0.99 | 130,890 | 1,173 | 1.20 | |
| Total interest bearing liabilities | 3,701,898 | 15,943 | 0.58 | 3,501,260 | 20,167 | 0.77 | |
| Demand deposits | 276,484 | 254,187 | |||||
| Other liabilities | 18,922 | 18,070 | |||||
| Shareholders' equity | 348,065 | 286,321 | |||||
| Total liabilities and shareholders' equity | $ 4,345,369 | $ 4,059,838 | |||||
| Net interest income , tax equivalent | 101,951 | 101,497 | |||||
| Net interest spread | 3.12% | 3.33% | |||||
| Net interest margin (net interest income | |||||||
| to total interest earning assets) | 3.20% | 3.42% | |||||
| Tax equivalent adjustment | (543) | (954) | |||||
| Net interest income | 101,408 | 100,543 | |||||
Non-GAAP Financial Measures Reconciliation
Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures 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 book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders' equity by common shares outstanding. 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 recurring revenue. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, which we refer to below as recurring expense, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on securities from this calculation, which we refer to below as recurring revenue. We believe that this provides one reasonable measure of core expenses relative to core revenue.
We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. However, these non-GAAP financial measures are supplemental and are 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 and efficiency ratio to the underlying GAAP numbers is set forth below.
[Table on following page]
| Non-GAAP Financial Measures Reconciliation | |||||||
| (dollars in thousands, except per share amounts) | |||||||
| (Unaudited) | |||||||
| 09/30/12 | 06/30/12 | 03/31/12 | 12/31/11 | 09/30/11 | |||
| Tangible Book Value Per Share | |||||||
| Equity | $ 357,617 | 349,907 | 344,646 | 338,516 | 337,810 | ||
| Less: Intangible assets | 553 | 553 | 553 | 553 | 553 | ||
| Tangible equity | 357,064 | 349,354 | 344,093 | 337,963 | 337,257 | ||
| Shares outstanding | 93,807 | 93,674 | 93,549 | 93,315 | 93,154 | ||
| Tangible book value per share | 3.81 | 3.73 | 3.68 | 3.62 | 3.62 | ||
| Book value per share | 3.81 | 3.74 | 3.68 | 3.63 | 3.63 | ||
| Tangible Equity to Tangible Assets | |||||||
| Total Assets | 4,318,173 | 4,421,399 | 4,374,443 | 4,243,644 | 4,192,959 | ||
| Less: Intangible assets | 553 | 553 | 553 | 553 | 553 | ||
| Tangible assets | 4,317,620 | 4,420,846 | 4,373,890 | 4,243,091 | 4,192,406 | ||
| Tangible Equity to Tangible Assets | 8.27% | 7.90% | 7.87% | 7.97% | 8.04% | ||
| Equity to Assets | 8.28% | 7.91% | 7.88% | 7.98% | 8.06% | ||
| 3 Months Ended | 9 Months Ended | ||||||
| Efficiency Ratio | 09/30/12 | 06/30/12 | 03/31/12 | 12/31/11 | 09/30/11 | 09/30/12 | 09/30/11 |
| Net interest income (fully taxable equivalent) | $ 34,321 | 33,993 | 33,637 | 34,220 | 34,390 | 101,951 | 101,497 |
| Non-interest income | 4,593 | 4,026 | 4,518 | 3,736 | 3,803 | 13,137 | 12,645 |
| Less: Net gain on securities | 666 | 55 | 677 | 132 | 158 | 1,398 | 1,296 |
| Recurring revenue | 38,248 | 37,964 | 37,478 | 37,824 | 38,035 | 113,690 | 112,846 |
| Total Noninterest expense | 20,019 | 20,498 | 20,644 | 18,909 | 18,443 | 61,161 | 60,841 |
| Less: Other real estate expense, net | 1,210 | 665 | 966 | 1,254 | 754 | 2,841 | 4,439 |
| Recurring expense | 18,809 | 19,833 | 19,678 | 17,655 | 17,689 | 58,320 | 56,402 |
| Efficiency Ratio | 49.18% | 52.24% | 52.51% | 46.68% | 46.51% | 51.30% | 49.98% |
| 09/30/12 | |||||||
| Asset Quality Ratios | |||||||
| Total nonperforming loans before OCC guidance | $ 45,910 | ||||||
| Add: Chapter 7 bankruptcies net of chargeoffs | 4,015 | ||||||
| Total nonperforming loans after OCC guidance | 49,925 | ||||||
| Total nonperforming assets before OCC guidance | $ 54,601 | ||||||
| Add: Chapter 7 bankruptcies net of chargeoffs | 4,015 | ||||||
| Total nonperforming assets after OCC guidance | 58,616 | ||||||
| Total loans before OCC guidance | $ 2,606,745 | ||||||
| Less: Chapter 7 bankruptcies chargeoffs | 804 | ||||||
| Total loans after OCC guidance | 2,605,941 | ||||||
| Total allowance for loan losses before OCC guidance | $ 48,168 | ||||||
| Less: Chapter 7 bankruptcies chargeoffs | 804 | ||||||
| Total allowance for loan losses after OCC guidance | 47,364 | ||||||
| Net chargeoffs before OCC guidance | $ 2,750 | ||||||
| Add: Chapter 7 bankruptcies chargeoffs | 804 | ||||||
| Net chargeoffs after OCC guidance | 3,554 | ||||||
| Nonperforming loans to total loans before OCC guidance | 1.76% | ||||||
| Nonperforming loans to total loans after OCC guidance | 1.92% | ||||||
| Nonperforming assets to total assets before OCC guidance | 1.26% | ||||||
| Nonperforming assets to total assets after OCC guidance | 1.36% | ||||||
| Allowance for loan losses to total loans before OCC guidance | 1.85% | ||||||
| Allowance for loan losses to total loans after OCC guidance | 1.82% | ||||||
| Coverage ratio before OCC guidance | 104.9% | ||||||
| Coverage ratio after OCC guidance | 94.9% | ||||||
| Annualized net chargeoffs to average loans before OCC guidance | 0.43% | ||||||
| Annualized net chargeoffs to average loans after OCC guidance | 0.55% | ||||||
| Allowance for loan losses to annualized net chargeoffs before OCC guidance | 4.4x | ||||||
| Allowance for loan losses to annualized net chargeoffs after OCC guidance | 3.3x | ||||||