Executive Snapshot:

  • Continued solid financial results:
    - Key metrics for fourth quarter 2018:
    -- Net income of $16.0 million in the fourth quarter 2018 up 118% compared to $7.4 million in the fourth quarter 2017
    -- Return on average assets (ROAA) of 1.30% compared to 0.60% in the fourth quarter of 2017
    -- Return on average equity (ROAE) of 13.18% compared to 6.38% in the fourth quarter of 2017
    -- Efficiency ratio of 55.06% compared to 53.13% in the fourth quarter of 2017 (Non-GAAP measure)
     
  • Asset quality remains strong:
    - Nonperforming assets (NPAs) fell by $962 thousand compared to December 31, 2017
    - NPAs to total assets improved to 0.54% at December 31, 2018
    - Quarterly net chargeoffs were $470 thousand in the fourth quarter 2018, compared to $212 thousand in the fourth quarter 2017
  • Loan portfolio reaches all-time high:
    - Average loans were up $244 million for the fourth quarter 2018 compared to fourth quarter of 2017
    - At $3.9 billion as of December 31, 2018, loans continue to set new all-time highs
     
  • Year over year deposit growth:
    - Average Deposits balances reached $4.2 billion in fourth quarter 2018 up $77.1 million or 1.9% from fourth quarter 2017
    - Time deposits increased $153.1 million or 14.3% compared to the fourth quarter 2017
    - Average interest bearing checking and demand deposits are up $42.8 million or 3.4% in the fourth quarter 2018 compared to fourth quarter 2017

GLENVILLE, N.Y., Jan. 22, 2019 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced fourth quarter 2018 net income of $16.0 million compared to $7.4 million for the fourth quarter 2017, an increase of 118%.  For the full year 2018, net income rose from $43.1 million to $61.4 million or 42.4% driven by strong performance and the lower tax rate from the Tax Cuts and Jobs Act during 2018.  Income before taxes increased $2.9 million over prior year or 3.8%.

Summary

Robert J. McCormick, Chairman, President and Chief Executive Officer, noted, “We are pleased to be reporting strong 2018 performance, with an increase of over 40% in net income as compared to 2017.  Our focus on traditional lending criteria and conservative balance sheet management has enabled us to produce consistent earnings, maintain solid liquidity and grow capital.  Our strong financial condition is evidenced by our continued recognition as a BauerFinancial, Inc. 5-Star Superior Bank rating.  These strategies have allowed us to continue to grow our business and take advantage of changes in market and competitive conditions.  We continue to achieve new records in residential loan balances through our customer relationships, driving our growth.  Our Board’s decision to increase our quarterly cash dividend by 3.8% to $0.2725 per share reinforces our financial strength.  A meaningful and growing dividend is part of our commitment to provide consistent and favorable long-term shareholder return.  We will continue to take advantage of opportunities as they are presented during the coming year and beyond.”

TrustCo continued to see solid loan growth throughout 2018 compared to the prior year, led by an increase in residential mortgages.  Loan portfolio expansion was funded by a combination of utilizing portions of our strong cash balances and cash flow from our loan and investment portfolios.  The continued shift toward loans helped expand the margin despite higher deposit rates.  We note that current mortgage rates exceed the yield on our existing portfolio of mortgages, which, if sustained, will be a positive factor for net interest margin going forward.  The Federal Reserve decision to raise the target Federal Funds rate throughout the course of the year has contributed to our results as our cash position immediately repriced upward. 

Total average deposits were up $77.1 million in the fourth quarter 2018 versus the fourth quarter 2017.  Interest bearing checking accounts and demand deposits increased $42.8 million in the fourth quarter 2018 versus 2017.  The overall cost of funds increased 23 basis points to 0.61% from the fourth quarter 2017 to the fourth quarter 2018.  The shift towards loans in the asset mix, coupled with a 93 basis-point increase in the yield on Federal Funds more than offset the higher cost of funds, resulting in a 9 basis-point gain in net interest margin to 3.38%.

Details

Average loans were up $244 million or 6.8% in the fourth quarter 2018 over the same period in 2017.  Average residential loans, our primary lending focus, were up $256 million or 8.2% in the fourth quarter 2018, over the same period in 2017.  Total loan growth was offset by a $19.2 million decline in average outstanding home equity lines of credit over the same period.  Mr. McCormick noted, “The growth of our loans and our focus to strengthen the core deposit base reflect the long term strategic focus of our Company.”

Average deposits were up $77.1 million or 1.9% for the fourth quarter 2018 over the same period a year earlier.  Average Core deposits excluding money market deposit accounts declined by $16 million or 0.6%, in fourth quarter 2018 verses 2017.  Money market deposits, our highest costing core deposit declined $59.7 million.  The cost of total deposits increased to 0.60% in the fourth quarter 2018 from 0.36% in the fourth quarter 2017. 

For the fourth quarter 2018, return on average assets and return on average equity were 1.30% and 13.18%, respectively, compared to 0.60% and 6.38% for the fourth quarter 2017.  Diluted earnings per share were $0.166 for the fourth quarter 2018, compared to $0.076 for the fourth quarter 2017.  Total operating expenses increased by $1.4 million in the fourth quarter 2018 as compared to the fourth quarter 2017, with the most significant increases coming in infrastructure investment and professional services.  The increase in expenses was offset with a $1.7 million increase in revenue (net interest income plus non-interest income).  The effective tax rate was 18.9% in the fourth quarter of 2018, compared to 62.6% in the same period a year ago.  This was partially driven by implementation of a tax planning strategy that reduced taxes on a one time basis of $880 thousand.

For 2018, return on average assets and return on average equity were 1.25% and 13.05%, respectively, compared to 0.88% and 9.64% for the year ended 2017.  Diluted earnings per share were $0.636 through December of 2018, compared to $0.448 for the same time period in 2017.

“TrustCo strives to maximize customer relationships through attracting and increasing core deposit balances.  We have always designed our branches to be smaller and more cost effective than those built by many of our competitors.  We use open floor plans that help maximize the value of our branches.  We remain mindful that fully achieving our goals for newer branches will take time and continued work.  We believe success in growing customer relationships provides basic building blocks that will help drive profit growth for the coming years.”

Nonperforming loans (NPLs) were $25.0 million at December 31, 2018, compared to $24.4 million at December 31, 2017.  NPLs were equal to 0.64% of total loans at December 31, 2018, compared to 0.67% at December 31, 2017.  The coverage ratio, or allowance for loan losses to NPLs, was 179.2% at December 31, 2018, compared to 181.2% at December 31, 2017.  Nonperforming assets (NPAs) were $26.7 million at December 31, 2018 compared to $27.6 million at December 31, 2017.  The ratio of allowance for loan losses to total loans was 1.16% as of December 31, 2018, compared to 1.21% at December 31, 2017 and reflects both the continued improvement in asset quality and the economic conditions in our primary markets.  The allowance for loan losses was $44.8 million at December 31, 2018 compared to $44.2 million at December 31, 2017.  The provision for loan losses was $1.4 million for 2018, compared to $2.0 million in 2017.  Net chargeoffs decreased to $803 thousand for 2018 from $1.7 million for 2017.  The annualized net chargeoff ratio was 0.05% for 2018, compared to 0.02% in 2017. 

The net interest margin for the fourth quarter 2018 was 3.38%, up 9 basis points versus the fourth quarter 2017, as increases in short term interest rates led to significantly higher earnings on Federal Funds, while slightly better returns were also achieved in the loan and investment portfolios.  Higher loan volumes also increased interest income.  During the same period, the cost of interest bearing liabilities increased 23 basis points.

At December 31, 2018 the equity to asset ratio was 9.88%, compared to 9.34% at December 31, 2017.  Book value per share at December 31, 2018 was $5.06 compared to $4.75 a year earlier.

TrustCo Bank Corp NY is a $5.0 billion savings and loan holding company and through its subsidiary, TrustCo Bank, operated 148 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at December 31, 2018.

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 fourth quarter 2018 results will be held at 9:00 a.m. Eastern Time on January 23, 2019.  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 10127907.  The call will also be audio webcast at https://services.choruscall.com/links/trst190123.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 2018, the impact of Federal Reserve actions regarding interest rates and the growth of loans and deposits throughout our branch network, our ability to capitalize on economic changes in the areas in which we operate and the extent to which higher expenses to fulfill operating and regulatory requirements recur or diminish over time.  Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed. 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:  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 comply with the supervisory agreement entered into with Trustco Bank’s regulator and potential regulatory actions if we fail to comply; 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 Trustco Bank and the continued ability of Trustco Bank under regulatory rules and the supervisory agreement 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; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; 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; adverse conditions on the securities markets that lead to impairment in the value of securities in our investment portfolio; changes in law and policy accompanying the new presidential administration and uncertainty or speculation pending the enactment of such changes; 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; technological changes and electronic, cyber, and physical security breaches; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; 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.

     
FINANCIAL HIGHLIGHTS    
     
(dollars in thousands, except per share data)    
(Unaudited)    
  Three months ended    
  12/31/2018 9/30/2018 12/31/2017    
Summary of operations          
Net interest income (TE)$40,740 40,526 39,259    
Provision for loan losses 500 300 300    
Noninterest income 4,452 4,455 4,288    
Noninterest expense 24,919 24,544 23,536    
Net income 16,033 15,199 7,362    
           
Per common share          
Net income per share:          
- Basic$0.166 0.157 0.077    
- Diluted 0.166 0.157 0.076    
Cash dividends 0.068 0.068 0.066    
Book value at period end 5.06 4.93 4.75    
Market price at period end 6.86 8.50 9.20    
           
At period end          
Full time equivalent employees 854 807 846    
Full service banking offices 148 148 145    
           
Performance ratios          
Return on average assets 1.30%1.24 0.60    
Return on average equity 13.18 12.84 6.38    
Efficiency (1) 55.06 53.39 53.13    
Net interest spread (TE) 3.27 3.26 3.22    
Net interest margin (TE) 3.38 3.35 3.29    
Dividend payout ratio 41.07 43.29 85.81    
           
Capital ratios at period end          
Consolidated tangible equity to tangible assets (2) 9.87%9.76 9.33    
Consolidated equity to assets 9.88%9.77 9.34    
           
Asset quality analysis at period end          
Nonperforming loans to total loans 0.64 0.62 0.67    
Nonperforming assets to total assets 0.54 0.53 0.56    
Allowance for loan losses to total loans 1.16 1.17 1.21    
Coverage ratio (3) 1.8x 1.9x 1.8x    
           
           
(1)  Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income.   
(2)  Non-GAAP measure; calculated as total equity less $553 of intangible assets divided by total assets less $553 of intangible assets.   
(3)  Calculated as allowance for loan losses divided by total nonperforming loans.   
    
TE = Taxable equivalent   
           
           
FINANCIAL HIGHLIGHTS, Continued    
     
(dollars in thousands, except per share data)    
(Unaudited)    
  Years ended      
  12/31/2018 12/31/2017      
Summary of operations          
Net interest income (TE)$160,698 154,413      
Provision for loan losses 1,400 2,000      
Noninterest income 18,081 18,373      
Noninterest expense 97,713 93,994      
Net income 61,445 43,145      
           
Per common share          
Net income per share:          
- Basic$0.637 0.449      
- Diluted 0.636 0.448      
Cash dividends 0.268 0.263      
Tangible Book value at period end 5.06 4.75      
Market price at period end 6.86 9.20      
           
Performance ratios          
Return on average assets 1.25%0.88      
Return on average equity 13.05 9.64      
Efficiency (1) 53.97 53.75      
Net interest spread (TE) 3.25 3.16      
Net interest margin (TE) 3.33 3.22      
Dividend payout ratio 42.02 58.44      
           
           
(1)  Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions and gain on sale of building and nonperforming loans).
     
TE = Taxable equivalent.    
           
CONSOLIDATED STATEMENTS OF INCOME
           
(dollars in thousands, except per share data)          
(Unaudited)          
  Three months ended
  12/31/2018 9/30/2018 6/30/2018 3/31/2018 12/31/2017
Interest and dividend income:          
Interest and fees on loans$41,184 40,073 38,956 38,091  37,914 
Interest and dividends on securities available for sale:          
U. S. government sponsored enterprises 788 787 787 750  614 
State and political subdivisions 2 7 6 7  10 
Mortgage-backed securities and collateralized mortgage          
obligations - residential 1,554 1,601 1,675 1,763  1,730 
Corporate bonds 202 202 150 133  148 
Small Business Administration - guaranteed          
participation securities 329 325 333 352  358 
Mortgage-backed securities and collateralized mortgage          
obligations - commercial - - (5)42  43 
Other securities 5 4 4 5  4 
Total interest and dividends on securities available for sale 2,880 2,926 2,950 3,052  2,907 
           
Interest on held to maturity securities:          
Mortgage-backed securities and collateralized mortgage          
obligations - residential 226 232 244 260  261 
Total interest on held to maturity securities 226 232 244 260  261 
           
Federal Reserve Bank and Federal Home Loan Bank stock 207 82 198 77  151 
           
Interest on federal funds sold and other short-term investments 2,367 2,425 2,467 2,017  1,779 
Total interest income 46,864 45,738 44,815 43,497  43,012 
           
Interest expense:          
Interest on deposits:          
Interest-bearing checking 111 113 112 106  107 
Savings 401 417 420 419  429 
Money market deposit accounts 618 544 452 439  457 
Time deposits 4,643 3,864 3,439 2,860  2,412 
Interest on short-term borrowings 352 277 283 358  359 
Total interest expense 6,125 5,215 4,706 4,182  3,764 
           
Net interest income 40,739 40,523 40,109 39,315  39,248 
           
Less: Provision for loan losses 500 300 300 300  300 
Net interest income after provision for loan losses 40,239 40,223 39,809 39,015  38,948 
           
Noninterest income:          
Trustco Financial Services income 1,356 1,516 1,596 1,815  1,457 
Fees for services to customers 2,897 2,693 2,677 2,645  2,597 
Other 199 246 222 219  234 
Total noninterest income 4,452 4,455 4,495 4,679  4,288 
           
Noninterest expenses:          
Salaries and employee benefits 10,183 10,761 10,741 10,422  10,536 
Net occupancy expense 4,800 3,997 4,101 4,315  4,140 
Equipment expense 1,741 1,783 1,793 1,751  1,465 
Professional services 1,733 1,578 1,814 1,430  1,325 
Outsourced services 1,875 1,875 1,825 1,925  1,760 
Advertising expense 876 844 670 630  559 
FDIC and other insurance 522 682 514 1,023  1,102 
Other real estate expense, net 37 528 294 372  401 
Other 3,152 2,496 2,343 2,287  2,248 
Total noninterest expenses 24,919 24,544 24,095 24,155  23,536 
           
Income before taxes 19,772 20,134 20,209 19,539  19,700 
Income taxes 3,739 4,935 4,804 4,731  12,338 
           
Net income$16,033 15,199 15,405 14,808  7,362 
           
Net income per common share:          
- Basic$0.166 0.157 0.160 0.154  0.077 
           
- Diluted 0.166 0.157 0.160 0.153  0.076 
           
Average basic shares (in thousands) 96,555 96,555 96,449 96,353  96,230 
Average diluted shares (in thousands) 96,689 96,689 96,580 96,490  96,393 
           
Note: Taxable equivalent net interest income $ 40,740 40,526 40,119 39,319  39,259 
           
CONSOLIDATED STATEMENTS OF INCOME, Continued     
      
(dollars in thousands, except per share data)     
(Unaudited)     
  Years ended      
  12/31/2018 12/31/2017      
Interest and dividend income:          
Interest and fees on loans$158,304 148,133      
Interest and dividends on securities available for sale:          
U. S. government sponsored enterprises 3,112 2,281      
State and political subdivisions 22 39      
Mortgage-backed securities and collateralized mortgage          
obligations - residential 6,593 7,447      
Corporate bonds 687 606      
Small Business Administration - guaranteed          
participation securities 1,339 1,547      
Mortgage-backed securities and collateralized mortgage          
obligations - commercial 37 109      
Other securities 18 16      
Total interest and dividends on securities available for sale 11,808 12,045      
           
Interest on held to maturity securities:          
Mortgage-backed securities-residential 962 1,149      
Corporate bonds - 410      
Total interest on held to maturity securities 962 1,559      
           
Federal Reserve Bank and Federal Home Loan Bank stock 564 544      
           
Interest on federal funds sold and other short-term investments 9,276 6,679      
Total interest income 180,914 168,960      
           
Interest expense:          
Interest on deposits:          
Interest-bearing checking 442 478      
Savings 1,657 1,729      
Money market deposit accounts 2,053 1,860      
Time deposits 14,806 9,123      
Interest on short-term borrowings 1,270 1,402      
Total interest expense 20,228 14,592      
           
Net interest income 160,686 154,368      
           
Less: Provision for loan losses 1,400 2,000      
Net interest income after provision for loan losses 159,286 152,368      
           
Noninterest income:          
Trustco Financial Services income 6,283 6,584      
Fees for services to customers 10,912 10,798      
Other 886 991      
Total noninterest income 18,081 18,373      
           
Noninterest expenses:          
Salaries and employee benefits 42,107 40,665      
Net occupancy expense 17,213 16,543      
Equipment expense 7,068 6,118      
Professional services 6,555 6,895      
Outsourced services 7,500 6,410      
Advertising expense 3,020 2,578      
FDIC and other insurance 2,741 4,179      
Other real estate expense, net 1,231 1,171      
Other 10,278 9,435      
Total noninterest expenses 97,713 93,994      
           
Income before taxes 79,654 76,747      
Income taxes 18,209 33,602      
           
Net income$61,445 43,145      
           
Net income per common share:          
- Basic$0.637 0.449      
           
- Diluted 0.636 0.448      
           
Average basic shares (in thousands) 96,505 96,112      
Average diluted shares (in thousands) 96,646 96,222      
           
Note: Taxable equivalent net interest income$160,698 154,413      
           
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
(dollars in thousands)
(Unaudited)
  12/31/2018 9/30/2018 6/30/2018 3/31/2018 12/31/2017
ASSETS:          
           
Cash and due from banks$49,260 42,195 40,567 39,373  44,125 
Federal funds sold and other short term investments 454,449 423,254 546,049 577,797  568,615 
Total cash and cash equivalents 503,709 465,449 586,616 617,170  612,740 
           
Securities available for sale:          
U. S. government sponsored enterprises 152,160 150,053 150,704 151,327  137,994 
States and political subdivisions 173 180 524 525  525 
Mortgage-backed securities and collateralized mortgage          
obligations - residential 262,032 269,093 283,252 297,633  315,840 
Small Business Administration - guaranteed          
participation securities 56,475 57,894 61,876 64,113  67,059 
Mortgage-backed securities and collateralized mortgage          
obligations - commercial - - - 9,573  9,700 
Corporate bonds 29,938 29,977 29,977 35,227  40,162 
Other securities 685 685 685 685  685 
Total securities available for sale 501,463 507,882 527,018 559,083  571,965 
           
Held to maturity securities:          
Mortgage-backed securities and collateralized mortgage          
obligations - residential 22,501 23,462 24,730 26,174  27,551 
Total held to maturity securities 22,501 23,462 24,730 26,174  27,551 
           
Federal Reserve Bank and Federal Home Loan Bank stock 8,953 8,953 8,953 8,779  8,779 
           
Loans:          
Commercial 196,146 190,987 190,904 185,129  186,207 
Residential mortgage loans 3,376,708 3,331,212 3,245,151 3,171,548  3,132,521 
Home equity line of credit 289,540 293,750 295,791 301,885  308,916 
Installment loans 11,702 9,967 9,309 8,413  8,763 
Loans, net of deferred net costs 3,874,096 3,825,916 3,741,155 3,666,975  3,636,407 
           
Less: Allowance for loan losses 44,766 44,736 44,503 44,379  44,170 
Net loans 3,829,330 3,781,180 3,696,652 3,622,596  3,592,237 
           
Bank premises and equipment, net 34,694 35,214 35,521 35,240  35,157 
Other assets 58,263 63,211 61,069 62,522  59,579 
           
Total assets$4,958,913 4,885,351 4,940,559 4,931,564  4,908,008 
           
LIABILITIES:          
Deposits:          
Demand$405,069 403,047 404,564 403,782  398,399 
Interest-bearing checking 904,678 918,486 925,295 915,163  891,052 
Savings accounts 1,182,683 1,221,127 1,257,744 1,266,852  1,260,447 
Money market deposit accounts 507,311 501,270 512,453 539,839  556,462 
Time deposits 1,274,506 1,155,994 1,155,214 1,109,444  1,066,966 
Total deposits 4,274,247 4,199,924 4,255,270 4,235,080  4,173,326 
           
Short-term borrowings 161,893 176,377 182,705 203,910  242,991 
Accrued expenses and other liabilities 32,902 31,932 31,769 30,477  33,383 
           
Total liabilities 4,469,042 4,408,233 4,469,744 4,469,467  4,449,700 
           
SHAREHOLDERS' EQUITY:          
Capital stock 100,175 100,175 100,093 100,002  99,998 
Surplus 176,710 176,764 176,243 175,674  175,651 
Undivided profits 256,397 246,965 238,342 229,267  219,436 
Accumulated other comprehensive loss, net of tax (10,309(13,000(9,796)(8,490) (1,806)
Treasury stock at cost (33,102(33,786)(34,067)(34,356) (34,971)
           
Total shareholders' equity 489,871 477,118 470,815 462,097  458,308 
           
Total liabilities and shareholders' equity$4,958,913 4,885,351 4,940,559 4,931,564  4,908,008 
           
Outstanding shares (in thousands) 96,659 96,586 96,475 96,359  96,289 
           
           


 
NONPERFORMING ASSETS
       
(dollars in thousands)
(Unaudited)
  12/31/20189/30/20186/30/20183/31/201812/31/2017
Nonperforming Assets      
       
New York and other states*      
Loans in nonaccrual status:      
Commercial$645 928 767 1,213 1,543 
Real estate mortgage - 1 to 4 family 22,373 20,750 21,209 21,424 20,350 
Installment 4 13 6 19 57 
Total non-accrual loans 23,022 21,691 21,982 22,656 21,950 
Other nonperforming real estate mortgages - 1 to 4 family 34 35 36 38 38 
Total nonperforming loans 23,056 21,726 22,018 22,694 21,988 
Other real estate owned 1,675 2,306 2,569 2,190 3,246 
Total nonperforming assets$24,731 24,032 24,587 24,884 25,234 
       
Florida      
Loans in nonaccrual status:      
Commercial$- - - - - 
Real estate mortgage - 1 to 4 family 1,915 2,054 2,143 2,154 2,389 
Installment 15 13 - 4 - 
Total non-accrual loans 1,930 2,067 2,143 2,158 2,389 
Other nonperforming real estate mortgages - 1 to 4 family - - - - - 
Total nonperforming loans 1,930 2,067 2,143 2,158 2,389 
Other real estate owned - - - - - 
Total nonperforming assets$1,930 2,067 2,143 2,158 2,389 
       
Total      
Loans in nonaccrual status:      
Commercial$645 928 767 1,213 1,543 
Real estate mortgage - 1 to 4 family 24,288 22,804 23,352 23,578 22,739 
Installment 19 26 6 23 57 
Total non-accrual loans 24,952 23,758 24,125 24,814 24,339 
Other nonperforming real estate mortgages - 1 to 4 family 34 35 36 38 38 
Total nonperforming loans 24,986 23,793 24,161 24,852 24,377 
Other real estate owned 1,675 2,306 2,569 2,190 3,246 
Total nonperforming assets$26,661 26,099 26,730 27,042 27,623 
       
       
Quarterly Net Chargeoffs (Recoveries)      
       
New York and other states*      
Commercial$99 (2)(1)(6)(86)
Real estate mortgage - 1 to 4 family 323 (3)150 28 249 
Installment 35 64 27 66 50 
Total net chargeoffs$457 59 176 88 213 
       
Florida      
Commercial$- - - - - 
Real estate mortgage - 1 to 4 family (3)- - - (1)
Installment 16 8 - 2 - 
Total net chargeoffs$13 8 - 2 (1)
       
Total      
Commercial$99 (2)(1)(6)(86)
Real estate mortgage - 1 to 4 family 320 (3)150 28 248 
Installment 51 72 27 68 50 
Total net chargeoffs$470 67 176 90 212 
       
       
Asset Quality Ratios      
       
Total nonperforming loans (1)$24,986 23,793 24,161 24,852 24,377 
Total nonperforming assets (1) 26,661 26,099 26,730 27,042 27,623 
Total net chargeoffs (2) 470 67 176 90 212 
       
Allowance for loan losses (1) 44,766 44,736 44,503 44,379 44,170 
       
Nonperforming loans to total loans 0.64%0.62%0.65%0.68%0.67%
Nonperforming assets to total assets 0.54%0.53%0.54%0.55%0.56%
Allowance for loan losses to total loans 1.16%1.17%1.19%1.21%1.21%
Coverage ratio (1) 179.2%188.0%184.2%178.6%181.2%
Annualized net chargeoffs to average loans (2) 0.05%0.01%0.02%0.01%0.02%
Allowance for loan losses to annualized net chargeoffs (2) 23.8x 166.9x 63.2x 123.3x 52.1x 
 
* 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  Three months ended 
  December 31, 2018  December 31, 2017 
  Average InterestAverage  Average InterestAverage 
  Balance  Rate  Balance  Rate 
Assets            
             
Securities available for sale:            
U. S. government sponsored enterprises$154,867  788 2.03%$139,565  614 1.76%
Mortgage backed securities and collateralized mortgage            
obligations - residential 276,747  1,554 2.25  328,826  1,730 2.10 
State and political subdivisions 172  3 7.82  519  10 7.71 
Corporate bonds 30,068  202 2.68  41,006  148 1.44 
Small Business Administration - guaranteed            
participation securities 59,363  329 2.21  69,643  358 2.06 
Mortgage backed securities and collateralized mortgage            
obligations - commercial -  - -  9,843  43 1.75 
Other 684  5 2.92  685  4 2.34 
             
Total securities available for sale 521,901  2,881 2.21  590,087  2,907 1.97 
             
Federal funds sold and other short-term Investments 416,765  2,367 2.25  539,700  1,779 1.32 
             
Held to maturity securities:            
Corporate bonds -  - -  -  - - 
Mortgage backed securities and collateralized mortgage            
obligations - residential 22,947  226 3.93  28,418  261 3.67 
             
Total held to maturity securities 22,947  226 3.93  28,418  261 3.67 
             
Federal Reserve Bank and Federal Home Loan Bank stock 8,953  207 9.25  8,779  151 6.88 
             
Commercial loans 191,899  2,577 5.37  186,655  2,429 5.21 
Residential mortgage loans 3,359,540  34,808 4.14  3,103,792  32,051 4.13 
Home equity lines of credit 291,411  3,544 4.82  310,626  3,240 4.17 
Installment loans 10,486  255 9.65  8,276  205 9.91 
             
Loans, net of unearned income 3,853,336  41,184 4.27  3,609,349  37,925 4.20 
             
Total interest earning assets 4,823,902  46,865 3.88  4,776,333  43,023 3.60 
             
Allowance for loan losses (44,887)     (44,322)    
Cash & non-interest earning assets 120,646      128,340     
             
             
Total assets$4,899,661     $4,860,351     
             
             
Liabilities and shareholders' equity            
             
Deposits:            
Interest bearing checking accounts$892,241  111 0.05%$856,031  107 0.05%
Money market accounts 499,771  618 0.49  559,463  457 0.33 
Savings 1,200,864  401 0.13  1,259,938  429 0.14 
Time deposits 1,227,034  4,643 1.50  1,073,956  2,412 0.90 
             
Total interest bearing deposits 3,819,910  5,773 0.60  3,749,388  3,405 0.36 
Short-term borrowings 171,247  352 0.82  232,207  359 0.62 
             
Total interest bearing liabilities 3,991,157  6,125 0.61  3,981,595  3,764 0.38 
             
Demand deposits 396,959      390,343     
Other liabilities 28,748      30,392     
Shareholders' equity 482,797      458,021     
             
Total liabilities and shareholders' equity$4,899,661     $4,860,351     
             
Net interest income, tax equivalent   40,740      39,259   
             
Net interest spread    3.27%    3.22%
             
Net interest margin (net interest income to            
total interest earning assets)    3.38%    3.29%
             
Tax equivalent adjustment   (1)     (11)  
             
Net interest income   40,739      39,248   
             
             
             
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued
             
(dollars in thousands)            
(Unaudited) Year ended  Year ended 
  December 31, 2018  December 31, 2017 
  Average InterestAverage  Average InterestAverage 
  Balance  Rate  Balance  Rate 
Assets            
             
Securities available for sale:            
U. S. government sponsored enterprises$155,381  3,112 2.00%$139,652  2,281 1.63%
Mortgage backed securities and collateralized mortgage            
obligations - residential 294,732  6,593 2.24  350,256  7,447 2.13 
State and political subdivisions 414  34 8.11  682  55 8.06 
Corporate bonds 30,310  687 2.27  41,946  606 1.44 
Small Business Administration - guaranteed            
participation securities 63,430  1,339 2.11  73,996  1,547 2.09 
Mortgage backed securities and collateralized mortgage            
obligations - commercial 2,769  37 1.33  9,963  109 1.09 
Other 685  18 3.50  685  16 2.34 
             
Total securities available for sale 547,721  11,820 2.88  617,180  12,061 1.95 
             
Federal funds sold and other short-term Investments 495,066  9,276 1.87  611,586  6,679 1.09 
             
Held to maturity securities:            
Corporate bonds -  - -  6,663  410 6.15 
Mortgage backed securities and collateralized mortgage            
obligations - residential 24,801  962 3.88  31,266  1,149 3.67 
             
Total held to maturity securities 24,801  962 3.88  37,929  1,559 4.11 
             
Federal Reserve Bank and Federal Home Loan Bank stock 8,907  564 8.44  9,295  544 5.85 
             
Commercial loans 188,362  9,913 5.26  185,376  9,741 5.25 
Residential mortgage loans 3,250,800  133,930 4.12  3,002,706  124,961 4.16 
Home equity lines of credit 297,678  13,562 4.56  318,660  12,692 3.98 
Installment loans 9,242  899 9.73  8,158  768 9.41 
             
Loans, net of unearned income 3,746,082  158,304 4.23  3,514,900  148,162 4.22 
             
Total interest earning assets 4,822,577  180,926 3.75  4,790,890  169,005 3.53 
             
Allowance for loan losses (44,651)     (44,319)    
Cash & non-interest earning assets 122,524      129,097     
             
             
Total assets$4,900,450     $4,875,668     
             
             
Liabilities and shareholders' equity            
             
Deposits:            
Interest bearing checking accounts$897,378  442 0.05%$844,010  478 0.06%
Money market accounts 521,233  2,053 0.39  572,270  1,860 0.33 
Savings 1,241,619  1,657 0.13  1,275,268  1,729 0.14 
Time deposits 1,149,980  14,806 1.29  1,097,190  9,123 0.83 
             
Total interest bearing deposits 3,810,210  18,958 0.50  3,788,738  13,190 0.35 
Short-term borrowings 194,810  1,270 0.65  228,086  1,402 0.61 
             
Total interest bearing liabilities 4,005,020  20,228 0.51  4,016,824  14,592 0.36 
             
Demand deposits 396,367      382,658     
Other liabilities 28,249      28,506     
Shareholders' equity 470,814      447,680     
             
Total liabilities and shareholders' equity$4,900,450      4,875,668     
             
Net interest income, tax equivalent   160,698      154,413   
             
Net interest spread    3.25%    3.16%
             
Net interest margin (net interest income to            
total interest earning assets)    3.33%    3.22%
             
Tax equivalent adjustment   (12)     (45)  
             
Net interest income   160,686      154,368   
             

Non-GAAP Financial Measures Reconciliation

Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios. 

The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income.  We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on the sale of nonperforming loans and securities and other non-routine items from this calculation.  We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue. 

We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial results. Our management internally assesses our performance based, in part, on these measures.  However, these non-GAAP financial measures are supplemental and not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share, efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.

  
NON-GAAP FINANCIAL MEASURES RECONCILIATION 
  
(dollars in thousands, except per share amounts) 
(Unaudited) 
          
Tangible Book Value Per Share 12/31/20189/30/201812/31/2017     
          
Equity 489,871 477,118 458,308      
Less: Intangible assets 553 553 553      
Tangible equity 489,318 476,565 457,755      
          
Shares outstanding 96,659 96,586 96,289      
Tangible book value per share 5.06 4.93 4.75      
Book value per share 5.07 4.94 4.76      
          
Tangible Equity to Tangible Assets         
          
Total Assets$4,958,913 4,885,351 4,908,008      
Less: Intangible assets 553 553 553      
Tangible assets 4,958,360 4,884,798 4,907,455      
          
Tangible Equity to Tangible Assets 9.87%9.76%9.33%     
Equity to Assets 9.88%9.77%9.34%     
          
  Three months ended  Years ended 
Efficiency Ratio 12/31/20189/30/201812/31/2017  12/31/201812/31/2017 
          
Net interest income$40,739 40,523 39,248   160,686 154,368  
Taxable equivalent adjustment 1 3 11   12 45  
Net interest income (fully taxable equivalent) 40,740 40,526 39,259   160,698 154,413  
Non-interest income 4,452 4,455 4,288   18,081 18,373  
Less:  Net gain on sale of nonperforming loans - - -   - 84  
Revenue used for efficiency ratio 45,192 44,981 43,547   178,779 172,702  
          
Total noninterest expense 24,919 24,544 23,536   97,713 93,994  
Less:  Other real estate expense, net 37 528 401   1,231 1,171  
Expense used for efficiency ratio 24,882 24,016 23,135   96,482 92,823  
          
Efficiency Ratio 55.06%53.39%53.13%  53.97%53.75%