Trustco Reports Third Quarter 2024 Net Income of $12.9 Million; Skillful Application of Strong Fundamentals Produce Solid Results


Executive Snapshot:

  • Average Loan portfolio continues to grow:
    • On average, total loans were up $127.0 million or 2.6% for the third quarter 2024 compared to the third quarter 2023
  • Continued solid financial results:
    • Key metrics for third quarter 2024:
      • Net income of $12.9 million versus $12.6 million for the second quarter 2024
      • Net interest income of $38.7 million, up from $37.8 million compared to the second quarter of 2024
      • Return on average equity (ROAE) of 7.74% versus 7.76% for the second quarter 2024
  • Capital continues to grow:
    • Consolidated equity to assets increased 6.2% to 10.95% as of September 30, 2024 from 10.31% as of September 30, 2023
    • Book value per share as of September 30, 2024 was $35.19, up from $34.46 compared to June 30, 2024

GLENVILLE, N.Y., Oct. 21, 2024 (GLOBE NEWSWIRE) --

TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced third quarter 2024 net income of $12.9 million or $0.68 diluted earnings per share, compared to net income of $14.7 million or $0.77 diluted earnings per share for the third quarter 2023; and net income of $37.6 million or $1.97 diluted earnings per share for the nine months ended September 30, 2024, compared to net income of $48.9 million or $2.57 diluted earnings per share for the nine months ended September 30, 2023. Average loans increased $127.0 million or 2.6% for the third quarter 2024 over the same period in 2023.   TrustCo was able to increase the balances of home equity lines of credit (HECLs) outstanding through an aggressive campaign to encourage existing customers to utilize their HECLs in place of the higher rates on other products.  The objective was to meet customer needs and encourage increased utilization through existing HECLs.

Overview

Chairman, President, and CEO, Robert J. McCormick said “Hard, consistent work on the fundamentals of banking once again have served the Trustco Bank team well and enabled us to post strong results under challenging circumstances. Our bankers posted one modest success after another – which accumulated into solid performance. We continued to hold the line on demand accounts and capitalized on strong customer relationships which enabled us to direct the flow into competitively-priced CDs, rather than to non-bank investment products. Not having to purchase expensive deposits or pay excessive rates, helped keep interest expense down, contributing to increased net interest income. We have continued to sell home equity products at favorable rates where origination of purchase mortgages lagged due to lack of sales volume. We booked these new loans at higher interest rates, also boosting net interest margin. Once again, loans reached a new all-time high. All of these efforts by our team resulted in net income of $12.9 million for the quarter.”

Details

Average loans were up $127.0 million or 2.6% in the third quarter 2024 over the same period in 2023. Average residential loans and home equity lines of credit, our primary lending focus, were up $50.4 million, or 1.2%, and $60.0 million, or 18.7%, respectively, in the third quarter 2024 over the same period in 2023. Average commercial loans also increased $18.1 million, or 6.9%, in the third quarter 2024 over the same period in 2023. Average deposits were up $15.3 million, or 0.3% for the third quarter 2024 over the same period in 2023. We believe the increase in time deposits compared to the prior year continues to reflect the desire of customers to have additional funds in the safety and security offered by TrustCo’s long history of conservative banking, while earning a competitive interest rate. As we move forward, the objective is to encourage customers to retain these additional funds in the expanded product offerings of Trustco Bank (the “Bank”) through aggressive marketing and product differentiation.

Net interest income was $38.7 million for the third quarter 2024, an increase of $883 thousand, or 2.3%, compared to the prior quarter, driven by loan growth at higher interest rates and lower cost of deposits, partially offset by lower investment earnings and a decrease in interest on federal funds sold and other short-term investments. The net interest margin for the third quarter 2024 was 2.61%, up 8 basis points from 2.53% in the second quarter of 2024. The yield on interest earnings assets increased to 4.11%, up 5 basis points from 4.06% in the second quarter of 2024. The cost of interest bearing liabilities decreased to 1.94% in the third quarter 2024 from 1.97% in the second quarter 2024. The Bank has seen success in retaining deposits while lowering the rates on time deposits, and still being competitive in the markets it serves. The Federal Reserve’s decision regarding whether to cut or hold rates in upcoming meetings will have an effect on the Bank’s ability to continue to manage deposit costs. Further reductions should help margin expansion in future quarters. Non-interest expense decreased $259 thousand over the prior quarter as a result of the Bank’s ongoing efforts to control expenses.

Asset quality remains strong and has been consistent over the past twelve months. The Company recorded a provision for credit losses of $500 thousand in the third quarter of 2024, which is the result of a provision for credit losses on loans of $400 thousand, and provision for credit losses on unfunded commitments of $100 thousand. The ratio of allowance for credit losses on loans to total loans was 0.99% and 0.95% as of September 30, 2024 and 2023, respectively. The allowance for credit losses on loans was $50.0 million at September 30, 2024, compared to $47.2 million at September 30, 2023. Nonperforming loans (NPLs) were $19.4 million at September 30, 2024, compared to $17.9 million at September 30, 2023. NPLs were 0.38% and 0.36% of total loans at September 30, 2024 and 2023, respectively. The coverage ratio, or allowance for credit losses on loans to NPLs, was 256.9% at September 30, 2024, compared to 264.2% at September 30, 2023. Nonperforming assets (NPAs) were $21.9 million at September 30, 2024, compared to $19.1 million at September 30, 2023.  

At September 30, 2024, our equity to asset ratio was 10.95%, compared to 10.31% at September 30, 2023. Book value per share at September 30, 2024 was $35.19, up 7.3% compared to $32.80 a year earlier.

A conference call to discuss third quarter 2024 results will be held at 9:00 a.m. Eastern Time on October 22, 2024. Those wishing to participate in the call may dial toll-free for the United States at 1-833-470-1428, and for Canada at 1-833-950-0062, Access code 034120. A replay of the call will be available for thirty days by dialing toll-free for the United States at 1-866-813-9403, Access code 285814.   The call will also be audio webcast at https://events.q4inc.com/attendee/854762065, and will be available for one year.

About TrustCo Bank Corp NY

TrustCo Bank Corp NY is a $6.1 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, 2024.

In addition, the Bank’s Wealth Management Department offers a full range of investment services, retirement planning and trust and estate administration services. The common shares of TrustCo are traded on the NASDAQ Global Select Market under the symbol TRST.

Forward-Looking Statements

All statements in this news release that are not historical are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future development, results or periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our future performance, including our expectations regarding the effects of the economic environment on our financial results, our ability to retain customers and the amount of customers’ business, including deposit balances, with us, the impact of the Federal Reserve’s actions regarding interest rates, and the growth of loans and deposits throughout our branch network. Forward-looking statements are based on management’s current expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Such forward-looking statements are subject to factors and uncertainties that could cause actual results to differ materially for TrustCo from the views, beliefs and projections expressed in such statements, and many of the risks and uncertainties are heightened by or may, in the future, be heightened by volatility in financial markets and macroeconomic or geopolitical concerns related to inflation, continued elevated interest rates and ongoing armed conflicts (including the Russia/Ukraine conflict and the conflict in Israel and surrounding areas). TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement: future changes in interest rates; ongoing inflationary pressures and continued elevated prices; exposure to credit risk in our lending activities; our increasing commercial loan portfolio; 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 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; increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices; 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 soundness of other financial institutions; U.S. government shutdowns, credit rating downgrades, or failure to increase the debt ceiling; 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, including changes in cybersecurity or privacy regulations; restrictions on data collection and use; our compliance with the USA PATRIOT Act, Bank Secrecy Act, and other laws and regulations that could result in material fines or sanctions; changes in tax laws; limitations on our ability to pay dividends; TrustCo Realty Corp.’s ability to qualify as a real estate investment trust; changes in accounting standards; competition within our market areas; consumers and businesses’ use of non-banks to complete financial transactions; our reliance on third-party service providers; the impact of data breaches and cyber-attacks; the impact of a failure in or breach of our operational or security systems or infrastructure, or those of third parties; the impact of an unauthorized disclosure of sensitive or confidential client or customer information; the impact of interruptions in the effective operation of our computer systems; the impact of anti-takeover provisions in our organizational documents; the impact of the manner in which we allocate capital; 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    
  9/30/2024 6/30/2024 9/30/2023    
Summary of operations          
Net interest income $38,671  $37,788  $42,221       
Provision for credit losses  500   500   100     
Net gains on equity securities  23   1,360   -     
Noninterest income, excluding net gains on equity securities  4,908   4,291   4,574     
Noninterest expense  26,200   26,459   27,460     
Net income  12,875   12,551   14,680     
           
Per share          
Net income per share:          
- Basic $0.68  $0.66  $0.77     
- Diluted  0.68   0.66   0.77     
Cash dividends  0.36   0.36   0.36     
Book value at period end  35.19   34.46   32.80       
Market price at period end  33.07   28.77   27.29     
           
At period end          
Full time equivalent employees  735   753   764     
Full service banking offices  138   138   143     
           
Performance ratios          
Return on average assets  0.84 % 0.82 % 0.96 %   
Return on average equity  7.74   7.76   9.32     
Efficiency ratio (1)  59.65   62.84   58.33     
Net interest spread  2.17   2.09   2.55     
Net interest margin  2.61   2.53   2.85     
Dividend payout ratio  53.16   54.57   46.65       
             
Capital ratios at period end            
Consolidated equity to assets  10.95 % 10.73 % 10.31 %     
Consolidated tangible equity to tangible assets (2)  10.94 % 10.72 % 10.30 %   
           
Asset quality analysis at period end          
Nonperforming loans to total loans  0.38 % 0.38 % 0.36 %   
Nonperforming assets to total assets  0.36   0.35   0.31     
Allowance for credit losses on loans to total loans  0.99   0.99   0.95     
Coverage ratio (3) 2.6x 2.6x 2.6x    
           
           
(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE expense) divided by taxable equivalent net interest income plus noninterest income (excluding net gains on equity securities).
See Non-GAAP Financial Measures Reconciliation.
(2) Non-GAAP measure; calculated as total shareholders' equity less $553 of intangible assets divided by total assets less $553 of intangible assets. See Non-GAAP Financial Measures Reconciliation.
(3) Calculated as allowance for credit losses on loans divided by total nonperforming loans.
           
           
FINANCIAL HIGHLIGHTS, Continued
      
(dollars in thousands, except per share data)
(Unaudited)
  Nine Months Ended      
  09/30/24 09/30/23      
Summary of operations          
Net interest income$ 113,037   133,238       
Provision (Credit) for credit losses  1,600   (100)      
Net gains on equity securities  1,383   -       
Noninterest income, excluding net gains on equity securities  14,042   13,841       
Noninterest expense  77,562   82,466       
Net income  37,552   48,798       
           
Per share          
Net income per share:          
- Basic$ 1.97   2.57       
- Diluted  1.97   2.57       
Cash dividends  1.08   1.08       
Book value at period end  35.19   32.80       
Market price at period end  33.07   27.29       
           
Performance ratios          
Return on average assets  0.82 % 1.08       
Return on average equity  7.68   10.57         
Efficiency ratio (1)  60.80   55.70         
Net interest spread  2.08   2.78         
Net interest margin  2.52   3.01      
Dividend payout ratio  54.70   42.11         
             
(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE expense) divided by taxable equivalent net interest income plus noninterest income (excluding net gains on equity securities).
See Non-GAAP Financial Measures Reconciliation.
           
           
CONSOLIDATED STATEMENTS OF INCOME
           
(dollars in thousands, except per share data)
(Unaudited)
  Three months ended
  9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Interest and dividend income:          
Interest and fees on loans $52,112  $50,660  $49,804  $49,201  $47,921 
Interest and dividends on securities available for sale:          
U. S. government sponsored enterprises  718   909   906   750   672 
State and political subdivisions  -   1   -   1   - 
Mortgage-backed securities and collateralized mortgage          
obligations - residential  1,397   1,451   1,494   1,533   1,485 
Corporate bonds  361   362   476   477   473 
Small Business Administration - guaranteed          
participation securities  90   94   100   102   107 
Other securities  2   2   3   3   2 
Total interest and dividends on securities available for sale  2,568   2,819   2,979   2,866   2,739 
           
Interest on held to maturity securities:          
Mortgage-backed securities and collateralized mortgage          
obligations - residential  62   65   68   70   73 
Total interest on held to maturity securities  62   65   68   70   73 
           
Federal Home Loan Bank stock  153   147   152   149   131 
           
Interest on federal funds sold and other short-term investments  6,174   6,894   6,750   6,354   6,688 
Total interest income  61,069   60,585   59,753   58,640   57,552 
           
Interest expense:          
Interest on deposits:          
Interest-bearing checking  311   288   240   165   102 
Savings  770   675   712   707   639 
Money market deposit accounts  2,154   2,228   2,342   2,500   2,384 
Time deposits  18,969   19,400   19,677   16,460   11,962 
Interest on short-term borrowings  194   206   204   201   244 
Total interest expense  22,398   22,797   23,175   20,033   15,331 
           
Net interest income  38,671   37,788   36,578   38,607   42,221 
           
Less: Provision for credit losses  500   500   600   1,350   100 
Net interest income after provision for credit losses  38,171   37,288   35,978   37,257   42,121 
           
Noninterest income:          
Trustco Financial Services income  2,044   1,609   1,816   1,612   1,627 
Fees for services to customers  2,482   2,399   2,745   2,563   2,590 
Net gains on equity securities  23   1,360   -   -   - 
Other  382   283   282   299   357 
Total noninterest income  4,931   5,651   4,843   4,474   4,574 
           
Noninterest expenses:          
Salaries and employee benefits  12,134   12,520   11,427   12,444   12,393 
Net occupancy expense  4,271   4,375   4,611   4,209   4,358 
Equipment expense  1,757   1,990   1,738   1,852   1,923 
Professional services  1,863   1,570   1,460   1,561   1,717 
Outsourced services  2,551   2,755   2,501   2,532   2,720 
Advertising expense  339   466   408   384   586 
FDIC and other insurance  1,112   797   1,094   1,085   1,078 
Other real estate expense (income), net  204   16   74   (12)  163 
Other  1,969   1,970   1,590   4,776   2,522 
Total noninterest expenses  26,200   26,459   24,903   28,831   27,460 
           
Income before taxes  16,902   16,480   15,918   12,900   19,235 
Income taxes  4,027   3,929   3,792   3,052   4,555 
           
Net income $12,875  $12,551  $12,126  $9,848  $14,680 
           
Net income per common share:          
- Basic $0.68  $0.66  $0.64  $0.52  $0.77 
           
- Diluted  0.68   0.66   0.64   0.52   0.77 
           
Average basic shares (in thousands)  19,010   19,022   19,024   19,024   19,024 
Average diluted shares (in thousands)  19,036   19,033   19,032   19,026   19,024 
           
           
           
CONSOLIDATED STATEMENTS OF INCOME, Continued
      
(dollars in thousands, except per share data)
(Unaudited)
  Nine Months Ended      
  09/30/24 09/30/23      
Interest and dividend income:            
Interest and fees on loans$ 152,576   138,255         
Interest and dividends on securities available for sale:            
U. S. government sponsored enterprises  2,533   2,055         
State and political subdivisions  1   1         
Mortgage-backed securities and collateralized mortgage            
obligations - residential  4,342   4,613         
Corporate bonds  1,199   1,510         
Small Business Administration - guaranteed            
participation securities  284   335         
Other securities  7   7         
Total interest and dividends on securities available for sale  8,366   8,521         
           
Interest on held to maturity securities:          
Mortgage-backed securities-residential  195   226         
Total interest on held to maturity securities  195   226         
           
Federal Home Loan Bank stock  452   351         
           
Interest on federal funds sold and other short-term investments  19,818   20,213         
Total interest income  181,407   167,566         
           
Interest expense:          
Interest on deposits:          
Interest-bearing checking  839   217         
Savings  2,157   1,824         
Money market deposit accounts  6,724   4,954         
Time deposits  58,046   26,525         
Interest on short-term borrowings  604   808         
Total interest expense  68,370   34,328         
           
Net interest income  113,037   133,238         
           
Less: Provision (Credit) for credit losses  1,600   (100)        
Net interest income after provision (credit) for credit losses  111,437   133,338         
           
Noninterest income:          
Trustco Financial Services income  5,469   4,813         
Fees for services to customers  7,626   8,085         
Net gains on equity securities  1,383   -         
Other  947   943         
Total noninterest income  15,425   13,841         
           
Noninterest expenses:          
Salaries and employee benefits  36,081   38,798         
Net occupancy expense  13,257   13,218         
Equipment expense  5,485   5,758         
Professional services  4,893   4,684         
Outsourced services  7,807   7,507         
Advertising expense  1,213   1,494         
FDIC and other insurance  3,003   3,215         
Other real estate expense, net  294   536         
Other  5,529   7,256         
Total noninterest expenses  77,562   82,466         
           
Income before taxes  49,300   64,713         
Income taxes  11,748   15,915         
           
Net income$ 37,552   48,798           
             
Net income per common share:          
- Basic$ 1.97   2.57       
           
- Diluted  1.97   2.57       
           
Average basic shares (in thousands)  19,019   19,024       
Average diluted shares (in thousands)  19,034   19,024       
           
           
           
           
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
(dollars in thousands)
(Unaudited)
  9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
ASSETS:          
           
Cash and due from banks $49,659  $42,193  $44,868  $49,274  $45,940 
Federal funds sold and other short term investments  473,306   493,920   564,815   528,730   461,321 
Total cash and cash equivalents  522,965   536,113   609,683   578,004   507,261 
          
Securities available for sale:         
U. S. government sponsored enterprises  90,588   106,796   128,854   118,668   121,474 
States and political subdivisions  26   26   26   26   34 
Mortgage-backed securities and collateralized mortgage         
obligations - residential  222,841   218,311   227,078   237,677   233,719 
Small Business Administration - guaranteed          
participation securities  15,171   15,592   16,260   17,186   17,316 
Corporate bonds  54,327   53,764   53,341   78,052   76,935 
Other securities  701   688   682   680   657 
Total securities available for sale  383,654   395,177   426,241   452,289   450,135 
           
Held to maturity securities:          
Mortgage-backed securities and collateralized mortgage          
obligations-residential  5,636   5,921   6,206   6,458   6,724 
Total held to maturity securities  5,636   5,921   6,206   6,458   6,724 
           
Federal Reserve Bank and Federal Home Loan Bank stock  6,507   6,507   6,203   6,203   6,203 
          
Loans:         
Commercial  280,261   282,441   279,092   273,515   268,642 
Residential mortgage loans  4,382,674   4,370,640   4,354,369   4,365,063   4,343,006 
Home equity line of credit  393,418   370,063   355,879   347,415   332,028 
Installment loans  14,503   15,168   16,166   16,886   16,605 
Loans, net of deferred net costs  5,070,856   5,038,312   5,005,506   5,002,879   4,960,281 
          
Less: Allowance for credit losses on loans  49,950   49,772   49,220   48,578   47,226 
Net loans  5,020,906   4,988,540   4,956,286   4,954,301   4,913,055 
           
Bank premises and equipment, net  33,324   33,466   33,423   34,007   32,135 
Operating lease right-of-use assets  37,958   38,376   39,647   40,542   41,475 
Other assets  98,730   102,544   101,881   96,387   97,310 
          
Total assets $6,109,680  $6,106,644  $6,179,570  $6,168,191  $6,054,298 
          
LIABILITIES:         
Deposits:         
Demand $753,878  $745,227  $742,997  $754,532  $773,293 
Interest-bearing checking  988,527   1,029,606   1,020,136   1,015,213   1,033,898 
Savings accounts  1,092,038   1,144,427   1,155,517   1,179,241   1,235,658 
Money market deposit accounts  477,113   517,445   532,611   565,767   610,012 
Time deposits  1,952,635   1,840,262   1,903,908   1,836,024   1,581,504 
Total deposits  5,264,191   5,276,967   5,355,169   5,350,777   5,234,365 
          
Short-term borrowings  91,450   89,720   94,374   88,990   103,110 
Operating lease liabilities  41,469   42,026   43,438   44,471   45,418 
Accrued expenses and other liabilities  43,549   42,763   37,399   38,668   47,479 
          
Total liabilities  5,440,659   5,451,476   5,530,380   5,522,906   5,430,372 
          
SHAREHOLDERS' EQUITY:         
Capital stock  20,058   20,058   20,058   20,058   20,058 
Surplus  257,644   257,490   257,335   257,181   257,078 
Undivided profits  442,079   436,048   430,346   425,069   422,082 
Accumulated other comprehensive loss, net of tax  (6,600)  (14,268)  (14,763)  (13,237)  (31,506)
Treasury stock at cost  (44,160)  (44,160)  (43,786)  (43,786)  (43,786)
          
Total shareholders' equity  669,021   655,168   649,190   645,285   623,926 
           
Total liabilities and shareholders' equity $6,109,680  $6,106,644  $6,179,570  $6,168,191  $6,054,298 
           
Outstanding shares (in thousands)  19,010   19,010   19,024   19,024   19,024 
           


 
NONPERFORMING ASSETS
       
(dollars in thousands)
(Unaudited)
  9/30/20246/30/20243/31/202412/31/20239/30/2023
Nonperforming Assets      
       
New York and other states*      
Loans in nonaccrual status:      
Commercial $466 $741 $532 $536 $540 
Real estate mortgage - 1 to 4 family  15,320  14,992  14,359  14,375  14,633 
Installment  163  131  149  151  93 
Total non-accrual loans  15,949  15,864  15,040  15,062  15,266 
Other nonperforming real estate mortgages - 1 to 4 family  -  -  -  3  5 
Total nonperforming loans  15,949  15,864  15,040  15,065  15,271 
Other real estate owned  2,503  2,334  2,334  194  1,185 
Total nonperforming assets $18,452 $18,198 $17,374 $15,259 $16,456 
       
Florida      
Loans in nonaccrual status:      
Commercial $314 $314 $314 $314 $314 
Real estate mortgage - 1 to 4 family  3,176  2,985  2,921  2,272  2,228 
Installment  5  22  -  15  65 
Total non-accrual loans  3,495  3,321  3,235  2,601  2,607 
Other nonperforming real estate mortgages - 1 to 4 family  -  -  -  -  - 
Total nonperforming loans  3,495  3,321  3,235  2,601  2,607 
Other real estate owned  -  -  -  -  - 
Total nonperforming assets $3,495 $3,321 $3,235 $2,601 $2,607 
       
Total      
Loans in nonaccrual status:      
Commercial $780 $1,055 $846 $850 $854 
Real estate mortgage - 1 to 4 family  18,496  17,977  17,280  16,647  16,861 
Installment  168  153  149  166  158 
Total non-accrual loans  19,444  19,185  18,275  17,663  17,873 
Other nonperforming real estate mortgages - 1 to 4 family  -  -  -  3  5 
Total nonperforming loans  19,444  19,185  18,275  17,666  17,878 
Other real estate owned  2,503  2,334  2,334  194  1,185 
Total nonperforming assets $21,947 $21,519 $20,609 $17,860 $19,063 
       
       
Quarterly Net (Recoveries) Chargeoffs      
       
New York and other states*      
Commercial $65 $- $- $- $- 
Real estate mortgage - 1 to 4 family  104  (74) (78) 219  (26)
Installment  11  (2) 36  23  14 
Total net (recoveries) chargeoffs $180 $(76)$(42)$242 $(12)
       
Florida      
Commercial $- $- $- $- $- 
Real estate mortgage - 1 to 4 family  -  17  -  -  - 
Installment  42  7  -  6  - 
Total net (recoveries) chargeoffs $42 $24 $- $6 $- 
       
Total      
Commercial $65 $- $- $- $- 
Real estate mortgage - 1 to 4 family  104  (57) (78) 219  (26)
Installment  53  5  36  29  14 
Total net (recoveries) chargeoffs $222 $(52)$(42)$248 $(12)
       
       
Asset Quality Ratios      
       
Total nonperforming loans (1) $19,444 $19,185 $18,275 $17,666 $17,878 
Total nonperforming assets (1)  21,947  21,519  20,609  17,860  19,063 
Total net (recoveries) chargeoffs (2)  222  (52) (42) 248  (12)
       
Allowance for credit losses on loans (1)  49,950  49,772  49,220  48,578  47,226 
       
Nonperforming loans to total loans  0.38% 0.38% 0.37% 0.35% 0.36%
Nonperforming assets to total assets  0.36% 0.35% 0.33% 0.29% 0.31%
Allowance for credit losses on loans to total loans  0.99% 0.99% 0.98% 0.97% 0.95%
Coverage ratio (1)  256.9% 259.4% 269.3% 275.0% 264.2%
Annualized net (recoveries) chargeoffs to average loans (2)  0.02% 0.00% 0.00% 0.02% 0.00%
Allowance for credit losses on loans to annualized net chargeoffs (2) 56.3xN/AN/A49.0xN/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 
  September 30, 2024  September 30, 2023 
  Average InterestAverage  Average InterestAverage 
  Balance  Rate  Balance  Rate 
Assets            
             
Securities available for sale:            
U. S. government sponsored enterprises $95,073  $7183.02% $119,406  $6722.25%
Mortgage backed securities and collateralized mortgage            
obligations - residential  241,792   1,3972.29   269,535   1,4852.19 
State and political subdivisions  26   -6.75   34   -6.74 
Corporate bonds  55,041   3612.63   80,331   4732.36 
Small Business Administration - guaranteed            
participation securities  16,663   902.15   19,801   1072.15 
Other  701   21.14   686   21.17 
             
Total securities available for sale  409,296   2,5682.51   489,793   2,7392.24 
             
Federal funds sold and other short-term Investments  465,922   6,1745.27   494,597   6,6885.37 
             
Held to maturity securities:            
Mortgage backed securities and collateralized mortgage            
obligations - residential  5,779   624.29   6,877   734.22 
             
Total held to maturity securities  5,779   624.29   6,877   734.22 
             
Federal Home Loan Bank stock  6,507   1539.41   6,203   1318.45 
             
Commercial loans  279,199   3,8075.45   261,061   3,3985.21 
Residential mortgage loans  4,375,641   41,8113.82   4,325,219   39,3213.64 
Home equity lines of credit  380,422   6,2456.53   320,446   4,9466.12 
Installment loans  14,443   2496.87   15,959   2566.37 
             
Loans, net of unearned income  5,049,705   52,1124.12   4,922,685   47,9213.89 
             
Total interest earning assets  5,937,209  $61,0694.11   5,920,155  $57,5523.88 
             
Allowance for credit losses on loans  (49,973)      (47,077)    
Cash & non-interest earning assets  187,166       172,523     
             
             
Total assets $6,074,402      $6,045,601     
             
             
Liabilities and shareholders' equity            
             
Deposits:            
Interest bearing checking accounts $1,000,333  $3110.12% $1,050,313  $1020.04%
Money market accounts  499,408   2,1541.72   625,031   2,3841.51 
Savings  1,122,673   7700.27   1,282,641   6390.20 
Time deposits  1,880,021   18,9694.01   1,494,402   11,9623.18 
             
Total interest bearing deposits  4,502,435   22,2041.96   4,452,387   15,0871.34 
Short-term borrowings  87,677   1940.88   110,018   2440.88 
             
Total interest bearing liabilities  4,590,112  $22,3981.94   4,562,405  $15,3311.33 
             
Demand deposits  742,164       776,885     
Other liabilities  80,502       81,411     
Shareholders' equity  661,624       624,900     
             
Total liabilities and shareholders' equity $6,074,402      $6,045,601     
             
Net interest income, GAAP and non-GAAP tax equivalent (1)   $38,671     $42,221  
             
Net interest spread, GAAP and non-GAAP tax equivalent (1)    2.17%    2.55%
             
             
Net interest margin (net interest income to            
total interest earning assets), GAAP and non-GAAP tax equivalent (1)   2.61%    2.85%
             
Tax equivalent adjustment (1)    -      -  
             
             
Net interest income   $38,671     $42,221  
             
(1) Tax equivalent adjustment to a measure results in a non-GAAP financial measure. See Non-GAAP Financial Measures Reconciliation.
             
             
             
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued
             
(dollars in thousands)            
(Unaudited) Nine Months Ended  Nine Months Ended 
  September 30, 2024  September 30, 2023 
  Average InterestAverage  Average InterestAverage 
  Balance  Rate  Balance  Rate 
Assets            
             
Securities available for sale:            
U. S. government sponsored enterprises$ 111,570   2,5333.03%$ 120,243   2,0552.28%
Mortgage backed securities and collateralized mortgage            
obligations - residential  250,343   4,3422.31   278,252   4,6132.21 
State and political subdivisions  26   16.80   34   16.74 
Corporate bonds  61,221   1,1992.61   83,732   1,5102.41 
Small Business Administration - guaranteed            
participation securities  17,438   2842.17   20,876   3352.14 
Other  697   71.34   686   71.02 
             
Total securities available for sale  441,295   8,3662.53   503,823   8,5211.69 
             
Federal funds sold and other short-term Investments  489,934   19,8185.40   540,570   20,2135.00 
             
Held to maturity securities:            
Mortgage backed securities and collateralized mortgage            
obligations - residential  6,053   1954.29   7,205   2264.18 
             
Total held to maturity securities  6,053   1954.29   7,205   2264.18 
             
Federal Home Loan Bank stock  6,350   4529.49   5,957   3515.89 
             
Commercial loans  278,981   11,2325.37   249,738   9,7165.19 
Residential mortgage loans  4,364,821   123,0463.76   4,269,494   114,2273.57 
Home equity lines of credit  365,932   17,5226.40   305,075   13,5985.96 
Installment loans  15,319   7766.76   15,015   7146.35 
             
Loans, net of unearned income  5,025,053   152,5764.05   4,839,322   138,2553.81 
             
Total interest earning assets  5,968,685   181,4074.05   5,896,877   167,5663.79 
             
Allowance for credit losses on loans  (49,419)      (46,812)    
Cash & non-interest earning assets  187,963       173,521     
             
             
Total assets$ 6,107,229     $ 6,023,586     
             
             
Liabilities and shareholders' equity            
             
Deposits:            
Interest bearing checking accounts$ 999,839   8390.11%$ 1,088,859   2170.03%
Money market accounts  522,636   6,7241.72   613,119   4,9541.08 
Savings  1,142,313   2,1570.25   1,363,052   1,8240.18 
Time deposits  1,881,027   58,0464.12   1,343,762   26,5252.64 
             
Total interest bearing deposits  4,545,815   67,7661.99   4,408,792   33,5201.02 
Short-term borrowings  91,551   6040.88   121,911   8080.89 
             
Total interest bearing liabilities  4,637,366   68,3701.97   4,530,703   34,3281.01 
             
Demand deposits  734,604       793,890     
Other liabilities  82,233       81,771     
Shareholders' equity  653,026       617,224     
             
Total liabilities and shareholders' equity$ 6,107,229     $ 6,023,588     
             
Net interest income, GAAP and non-GAAP tax equivalent (1)    113,037      133,238  
             
Net interest spread, GAAP and non-GAAP tax equivalent (1)    2.08%    2.78%
             
             
Net interest margin (net interest income to            
total interest earning assets), GAAP and non-GAAP tax equivalent (1)   2.52%    3.01%
             
Tax equivalent adjustment (1)    -      -  
             
             
Net interest income    113,037      133,238  
             
(1) Tax equivalent adjustment to a measure results in a non-GAAP financial measure. See Non-GAAP Financial Measures Reconciliation.
             

Non-GAAP Financial Measures Reconciliation

Tangible book value per share is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible book value by excluding the balance of intangible assets from total shareholders’ equity divided by shares outstanding. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios. Additionally, we believe that this measure is important to many investors in the marketplace who are interested in relative changes from period to period in equity exclusive of changes in intangible assets.

Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from total shareholders’ equity and total assets, respectively. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios. Additionally, we believe that this measure is important to many investors in the marketplace who are interested in relative changes from period to period in equity and total assets, each exclusive of changes in intangible assets.

Net interest income is commonly presented on a taxable equivalent basis. That is, to the extent that some component of the institution’s net interest income will be exempt from taxation (e.g., was received by the institution as a result of its holdings of state or municipal obligations), an amount equal to the tax benefit derived from that component is added back to the net interest income total. Management considers this adjustment helpful to investors in comparing one financial institution’s net interest income (pre- tax) to that of another institution, as each will have a different proportion of tax-exempt items in their portfolios. Moreover, net interest income is itself a component of another financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average interest earning assets. Additionally, management and many financial institutions also present net interest spread, which is the average yield on interest earning assets minus the average rate paid on interest bearing liabilities. For purposes of these measures as well, taxable equivalent net interest income is generally used by financial institutions, again to provide investors with a better basis of comparison from institution to institution. We calculate taxable equivalent net interest margin by dividing net interest income, adjusted to include the benefit of non-taxable interest income, by average interest earning assets. We calculate taxable equivalent net interest spread as the difference between average yield on interest earning assets, adjusted to include the benefit of non-taxable interest income, and the average rate paid on interest bearing liabilities.

The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and non-interest fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, excluding net gains on equity securities. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue. Additionally, we believe this measure is important to investors looking for a measure of efficiency in our productivity measured by the amount of revenue generated for each dollar spent.

We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial results. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible equity as a percentage of tangible assets, and efficiency ratio to the most directly comparable GAAP measures is set forth below. We have not presented a reconciliation of taxable equivalent net interest income, taxable equivalent net interest margin or taxable equivalent net interest spread to the most directly comparable GAAP measure, as there was no difference between the taxable equivalent measure and comparable GAAP measure for any period presented in this release.

 
NON-GAAP FINANCIAL MEASURES RECONCILIATION
        
(dollars in thousands)       
(Unaudited)       
  9/30/20246/30/20249/30/2023   
Tangible Book Value Per Share       
        
Equity (GAAP) $669,021 $655,168 $623,926    
Less: Intangible assets  553  553  553    
Tangible equity (Non-GAAP) $668,468 $654,615 $623,373    
        
Shares outstanding  19,010  19,010  19,024    
Tangible book value per share  35.16  34.44  32.77    
Book value per share  35.19  34.46  32.80    
        
Tangible Equity to Tangible Assets       
Total Assets (GAAP) $6,109,680 $6,106,644 $6,054,298    
Less: Intangible assets  553  553  553    
Tangible assets (Non-GAAP) $6,109,127 $6,106,091 $6,053,745    
        
Tangible Equity to Tangible Assets (Non-GAAP)  10.94% 10.72% 10.30%   
Equity to Assets (GAAP)  10.95% 10.73% 10.31%   
        
  Three months ended Nine Months Ended
Efficiency Ratio 9/30/20246/30/20249/30/2023 9/30/20249/30/2023
        
Net interest income (GAAP) $38,671 $37,788 $42,221  $113,037 $133,238 
Taxable equivalent adjustment  -  -  -   -  - 
Net interest income (fully taxable equivalent) (Non-GAAP)  38,671  37,788  42,221   113,037  133,238 
Non-interest income (GAAP)  4,931  5,651  4,574   15,425  13,841 
Less: Net gains on equity securities  23  1,360  -   1,383  - 
Revenue used for efficiency ratio (Non-GAAP) $43,579 $42,079 $46,795  $127,079 $147,079 
        
Total noninterest expense (GAAP) $26,200 $26,459 $27,460  $77,562 $82,466 
Less: Other real estate expense, net  204  16  163   294  536 
Expense used for efficiency ratio (Non-GAAP) $25,996 $26,443 $27,297  $77,268 $81,930 
        
Efficiency Ratio  59.65% 62.84% 58.33%  60.80% 55.70%
        


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