TrustCo is Pleased to Report Fourth Quarter and Full Year 2020 Results
01/21/2021 - 04:00 PM
GLENVILLE, N.Y., Jan. 21, 2021 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced full year 2020 net income of $52.5 million or $0.543 diluted earnings per share, and net income of $13.8 million or $0.143 diluted earnings per share for the fourth quarter of 2020. Average residential loan growth increased 5.9% or $209.1 million to a record $3.8 billion for the fourth quarter 2020.
Summary Robert J. McCormick, Chairman, President and Chief Executive Officer noted, “As a bank built upon Home Town values, we continue to prioritize strengthening our communities and adapting our offerings to address the changing needs of our customers during the COVID-19 pandemic. TrustCo’s commitment to supporting its communities and front line workers remains steadfast. In an effort to ensure families had a safe place to celebrate the holidays, Trustco Bank launched the “Home for the Holidays” program, donating $40,000 t o local housing agencies and community loan funds across New York, New Jersey and Florida. This is just one example of ways we have prioritized giving back. In addition, TrustCo partnered with local communities to offer custom merchant loan programs to help small businesses stay afloat during the pandemic. Lastly, TrustCo donated over 2,000 turkeys to food banks in New York and Florida to help ensure families who experienced economic challenges had a warm meal for Thanksgiving.”
We also continue to closely monitor the impact of the pandemic on our business and results of operations. As of December 31, 2020, we had 8 residential loans in deferral totaling $2 million , and no installment or commercial loans in deferral. This represents 0.04% of total outstanding loans. As of September 30, 2020, we had 24 residential and installment loans in deferral totaling $5 million , and 6 commercial loans in deferral totaling $2 million . This represented 0.2% of total outstanding loans. As of June 30, 2020, we had 668 residential and installment loans in deferral totaling $145 million , and 84 commercial loans in deferral totaling $45 million . This represented 4.5% of total outstanding loans. We have been encouraged to see that most of our residential and commercial borrowers who had payment deferral arrangements with us have returned to making regular loan payments. Additionally, the Bank had funded 663 Paycheck Protection Program (“PPP”) loans totaling $46 million , as of December 31, 2020, 514 PPP loans totaling $29 million remain outstanding.
The fourth quarter of 2020 saw continued loan and deposit growth. Our focus on traditional lending criteria and conservative balance sheet management has produced consistent earnings while maintaining strong liquidity and growing capital. This approach allowed us to continue to expand our business and take advantage of changes in market and competitive conditions. As mentioned in prior quarters, the pandemic has created an uncertain future, and we believe we continue to be well-positioned to help our customers through this economic disruption and turmoil. We also continue to hire across our locations for all levels of staff. As we enter the new year, management views the Bank as well-positioned to deploy its existing liquidity into our residential loan portfolio, and we will continue to closely monitor how the current market conditions change.
Details
Average loans were up $214.9 million or 5.3% in the fourth quarter 2020 over the same period in 2019. Average residential loans, our primary lending focus, were up $209.1 million , or 5.9% , in the fourth quarter 2020 over the same period in 2019. Average deposits were up $494.1 million or 11.1% for the fourth quarter 2020 over the same period a year earlier. The increase in deposits was the result of a $632.1 million or 21.0% increase total average core deposit accounts, which consist of interest bearing and non-interest bearing checking, savings and money market deposits, offset by a decrease in average time deposits of $138.0 million or 9.7% , for the fourth quarter 2020 over the same period in 2019. Within the core deposits, checking balances were up $357.6 million or 27.1% (including interest bearing and non-interest bearing checking balances), money market balances were up $127.1 million or 21.8% , and savings balances were up $147.4 million or 13.3% . We believe the increase in core deposits continues to reflect the desire of customers to have additional funds in the safety and security offered by TrustCo’s long history of conservative banking. As we move forward, the objective is to encourage customers to retain these additional funds in the expanded product offerings of the Bank through aggressive marketing and product differentiation.
The cost of interest bearing liabilities decreased to 0.35% in the fourth quarter 2020 from 0.90% in the fourth quarter 2019. A significant portion of our CD portfolio (time deposits) repriced during 2020, which resulted in a decrease in average rates to 0.95% in the fourth quarter of 2020 from 2.10% in the fourth quarter of 2019, as a result of the ongoing market conditions. The net interest margin for the fourth quarter 2020 was 2.79% , down 23 basis points from 3.02% in the fourth quarter of 2019. This was primarily due to the decrease in market rates over the same period resulting in less interest earned on our short-term funds, residential and variable rate loans.
The Bank continued to demonstrate its ability to grow shareholders’ equity as average equity was up $33.5 million or 6.3% in the fourth quarter of 2020 compared to the same period in 2019. Return on average assets and return on average equity for the fourth quarter 2020 were 0.95% and 9.75% , respectively, compared to 1.06% and 10.41% for the fourth quarter 2019. Improving efficiencies to reduce costs continues to remain a key area of focus.
Asset quality and loan loss reserve measures have stayed consistent. Nonperforming loans (NPLs) were $21.1 million at December 31, 2020, compared to $20.9 million at December 31, 2019. NPLs were 0.50% of total loans at December 31, 2020, compared to 0.51% at December 31, 2019. The coverage ratio, or allowance for loan losses to NPLs, was 235.2% at December 31, 2020, compared to 212.4% at December 31, 2019. Nonperforming assets (NPAs) were $21.6 million at December 31, 2020, compared to $22.4 million at December 31, 2019. The ratio of allowance for loan losses to total loans was 1.17% as of December 31, 2020, compared to 1.09% at December 31, 2019. The allowance for loan losses was $49.6 million at December 31, 2020, compared to $44.3 million at December 31, 2019. The provision for loan losses increased to $600 thousand for the fourth quarter 2020 compared to $200 thousand in the same period in the prior year, primarily driven by the continued uncertainty in the current economic environment resulting from COVID-19. The Company had previously elected to delay its adoption of Accounting Standards Update 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”), as provided by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) until the date on which the National Emergency concerning COVID-19 was terminated or December 31, 2020, whichever occurred first. The December 31, 2020 adoption date under the CARES Act was extended to January 1, 2022 as a part of the COVID-19 Relief Bill, which became law in December 2020, and therefore the Company now intends to adopt CECL on January 1, 2022.
Net chargeoffs for the fourth quarter 2020 were $128 thousand versus net chargeoffs in the fourth quarter 2019 of $212 thousand . The annualized net chargeoffs ratio was 0.01% and 0.02% for the fourth quarter 2020 and 2019, respectively.
At December 31, 2020 the tangible equity to tangible asset ratio was 9.62% , compared to 10.30% at December 31, 2019. Book value per share at December 31, 2020 was $5.89, up 6.1% compared to $5.55 a year earlier.
TrustCo Bank Corp NY is a $5.9 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, 2020.
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 2020 results will be held at 9:00 a.m. Eastern Time on January 22, 2021. Those wishing to participate in the call may dial toll-free 1-888-3 39-0764. 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 10151410. The call will also be audio webcast at: https://services.choruscall.com/links/trst210122.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 2020, including our expectations regarding the effects of COVID-19 on our financial results and our ability to assist our customers in addressing the effects of COVID-19, our expectations with respect to our online and mobile banking product offerings, our expectations for the repricing of our CD portfolio, the impact of Federal Reserve actions regarding interest rates and the growth of loans and deposits throughout our branch network and our ability to capitalize on economic changes in the areas in which we operate. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed, and many of the risks and uncertainties are heightened by or may, in the future, be heightened by the effects of the COVID-19 pandemic. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement: the effect of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations; the impact of the actions taken by governmental authorities to contain COVID-19 or address the impact of COVID-19 on the economy, and the effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; future business strategies related to the implementation of CECL; our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at reasonable levels relative to income; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; restrictions or conditions imposed by our regulators on our operations that may make it more difficult for us to achieve our goals; the future earnings and capital levels of us and Trustco Bank and the continued receipt of approvals from our primary federal banking regulators under regulatory rules to distribute capital to TrustCo, which could affect our ability to pay dividends; results of supervisory monitoring or examinations of Trustco Bank and TrustCo by our respective regulators; adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; unanticipated effects from the Tax Cut and Jobs Act that may limit its benefits or adversely impact our business; the perceived overall value of our products and services by users, including in comparison to competitors’ products and services and the willingness of current and prospective customers to substitute competitors’ products and services for our products and services; changes in consumer spending, borrowing and saving habits; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; changes in management personnel; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; technological changes and electronic, cyber and physical security breaches; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading “Risk Factors” in our most recent annual report on Form 10-K and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.
TRUSTCO BANK CORP NY GLENVILLE, NY FINANCIAL HIGHLIGHTS (dollars in thousands, except per share data) (Unaudited) Three months ended 12/31/2020 9/30/2020 12/31/2019 Summary of operations Net interest income (TE) $ 39,182 38,166 38,243 Provision for loan losses 600 1,000 200 Noninterest income, excluding net gain on securities transactions 4,069 4,341 4,115 Noninterest expense 24,830 22,674 23,891 Net income 13,814 14,071 13,907 Per common share Net income per share: - Basic $ 0.143 0.146 0.143 - Diluted 0.143 0.146 0.143 Cash dividends 0.068 0.068 0.068 Book value at period end 5.89 5.81 5.55 Market price at period end 6.67 5.22 8.67 At period end Full time equivalent employees 778 771 814 Full service banking offices 148 148 148 Performance ratios Return on average assets 0.95 % 0.98 1.06 Return on average equity 9.75 10.04 10.41 Efficiency (1) 57.31 53.61 57.31 Net interest spread (TE) 2.72 2.63 2.86 Net interest margin (TE) 2.79 2.73 3.02 Dividend payout ratio 47.55 46.68 47.48 Capital ratios at period end Consolidated tangible equity to tangible assets (2) 9.62 % 9.76 10.30 Consolidated equity to assets 9.63 % 9.77 10.31 Asset quality analysis at period end Nonperforming loans to total loans 0.50 0.52 0.51 Nonperforming assets to total assets 0.37 0.39 0.43 Allowance for loan losses to total loans 1.17 1.17 1.09 Coverage ratio (3) 2.4x 2.3x 2.1x (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) Year ended 12/31/2020 12/31/2019 Summary of operations Net interest income (TE) $ 153,583 155,812 Provision for loan losses 5,600 159 Net gain on securities transactions 1,155 - Noninterest income, excluding net gain on securities transactions 16,015 18,591 Noninterest expense 95,704 97,730 Net income 52,452 57,840 Per common share Net income per share: - Basic $ 0.544 0.597 - Diluted 0.543 0.597 Cash dividends 0.273 0.273 Book value at period end 5.89 5.55 Market price at period end 6.67 8.67 Performance ratios Return on average assets 0.94 1.12 Return on average equity 9.47 11.26 Efficiency (1) 56.38 56.13 Net interest spread (TE) 2.73 2.94 Net interest margin (TE) 2.84 3.10 Dividend payout ratio 50.12 45.60 (1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net gain on securities transactions). TE = Taxable equivalent.
CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data) (Unaudited) Three months ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Interest and dividend income: Interest and fees on loans $ 40,906 41,330 41,665 42,063 42,002 Interest and dividends on securities available for sale: U. S. government sponsored enterprises 27 14 106 421 609 State and political subdivisions 2 1 2 1 2 Mortgage-backed securities and collateralized mortgage obligations - residential 1,172 1,319 1,527 2,113 2,334 Corporate bonds 349 646 488 238 295 Small Business Administration - guaranteed participation securities 212 216 229 245 253 Other securities 7 5 5 6 6 Total interest and dividends on securities available for sale 1,769 2,201 2,357 3,024 3,499 Interest on held to maturity securities: Mortgage-backed securities and collateralized mortgage obligations - residential 129 138 162 175 184 Total interest on held to maturity securities 129 138 162 175 184 Federal Reserve Bank and Federal Home Loan Bank stock 70 77 192 82 203 Interest on federal funds sold and other short-term investments 246 242 193 1,267 1,635 Total interest income 43,120 43,988 44,569 46,611 47,523 Interest expense: Interest on deposits: Interest-bearing checking 51 55 26 16 21 Savings 156 161 166 233 271 Money market deposit accounts 447 637 862 1,096 1,175 Time deposits 3,053 4,749 5,599 6,391 7,468 Interest on short-term borrowings 232 221 235 322 347 Total interest expense 3,939 5,823 6,888 8,058 9,282 Net interest income 39,181 38,165 37,681 38,553 38,241 Less: Provision for loan losses 600 1,000 2,000 2,000 200 Net interest income after provision for loan losses 38,581 37,165 35,681 36,553 38,041 Noninterest income: Trustco Financial Services income 1,527 1,784 1,368 1,600 1,454 Fees for services to customers 2,365 2,292 1,807 2,315 2,377 Net gain on securities transactions - - - 1,155 - Other 177 265 251 264 284 Total noninterest income 4,069 4,341 3,426 5,334 4,115 Noninterest expenses: Salaries and employee benefits 11,727 10,899 11,648 11,373 11,743 Net occupancy expense 4,551 4,277 4,385 4,306 4,399 Equipment expense 1,621 1,607 1,606 1,802 1,768 Professional services 1,644 1,311 1,182 1,481 1,449 Outsourced services 1,925 1,875 1,875 2,075 1,925 Advertising expense 527 305 601 488 464 FDIC and other insurance 657 660 609 294 259 Other real estate expense (income) , net 45 (115 ) (32 ) 194 (385 ) Other 2,133 1,855 2,058 2,255 2,269 Total noninterest expenses 24,830 22,674 23,932 24,268 23,891 Income before taxes 17,820 18,832 15,175 17,619 18,265 Income taxes 4,006 4,761 3,921 4,306 4,358 Net income $ 13,814 14,071 11,254 13,313 13,907 Net income per common share: - Basic $ 0.143 0.146 0.117 0.138 0.143 - Diluted 0.143 0.146 0.117 0.138 0.143 Average basic shares (in thousands) 96,433 96,433 96,433 96,727 96,919 Average diluted shares (in thousands) 96,442 96,440 96,437 96,750 97,015 Note: Taxable equivalent net interest income $ 39,182 38,166 37,681 38,554 38,243
CONSOLIDATED STATEMENTS OF INCOME, Continued (dollars in thousands, except per share data) (Unaudited) Year ended 12/31/2020 12/31/2019 Interest and dividend income: Interest and fees on loans $ 165,964 166,610 Interest and dividends on securities available for sale: U. S. government sponsored enterprises 568 3,209 State and political subdivisions 6 8 Mortgage-backed securities and collateralized mortgage obligations - residential 6,131 8,219 Corporate bonds 1,721 1,096 Small Business Administration - guaranteed participation securities 902 1,121 Other securities 23 22 Total interest and dividends on securities available for sale 9,351 13,675 Interest on held to maturity securities: Mortgage-backed securities-residential 604 797 Total interest on held to maturity securities 604 797 Federal Reserve Bank and Federal Home Loan Bank stock 421 568 Interest on federal funds sold and other short-term investments 1,948 10,478 Total interest income 178,288 192,128 Interest expense: Interest on deposits: Interest-bearing checking 148 288 Savings 716 1,338 Money market deposit accounts 3,042 4,297 Time deposits 19,792 28,930 Interest on short-term borrowings 1,010 1,468 Total interest expense 24,708 36,321 Net interest income 153,580 155,807 Less: Provision for loan losses 5,600 159 Net interest income after provision for loan losses 147,980 155,648 Noninterest income: Trustco Financial Services income 6,279 6,387 Fees for services to customers 8,779 10,110 Net gain on securities transactions 1,155 - Other 957 2,094 Total noninterest income 17,170 18,591 Noninterest expenses: Salaries and employee benefits 45,647 46,630 Net occupancy expense 17,519 16,666 Equipment expense 6,636 7,068 Professional services 5,618 6,174 Outsourced services 7,750 7,600 Advertising expense 1,921 2,521 FDIC and other insurance 2,220 1,787 Other real estate expense (income), net 92 (166 ) Other 8,301 9,450 Total noninterest expenses 95,704 97,730 Income before taxes 69,446 76,509 Income taxes 16,994 18,669 Net income $ 52,452 57,840 Net income per common share: - Basic $ 0.544 0.597 - Diluted 0.543 0.597 Average basic shares (in thousands) 96,506 96,849 Average diluted shares (in thousands) 96,517 96,927 Note: Taxable equivalent net interest income $ 153,583 155,812
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (dollars in thousands) (Unaudited) 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 ASSETS: Cash and due from banks $ 47,196 47,703 44,726 43,362 48,198 Federal funds sold and other short term investments 1,059,903 908,616 908,110 492,691 408,648 Total cash and cash equivalents 1,107,099 956,319 952,836 536,053 456,846 Securities available for sale: U. S. government sponsored enterprises 19,968 29,996 - 54,970 104,512 States and political subdivisions 103 111 111 112 162 Mortgage-backed securities and collateralized mortgage obligations - residential 316,158 309,768 331,469 352,067 389,517 Small Business Administration - guaranteed participation securities 42,217 44,070 45,998 46,768 48,511 Corporate bonds 59,939 70,113 54,439 48,564 30,436 Other securities 686 685 685 685 685 Total securities available for sale 439,071 454,743 432,702 503,166 573,823 Held to maturity securities: Mortgage-backed securities and collateralized mortgage obligations-residential 13,824 15,094 16,633 17,720 18,618 Total held to maturity securities 13,824 15,094 16,633 17,720 18,618 Federal Reserve Bank and Federal Home Loan Bank stock 5,506 5,506 5,506 9,183 9,183 Loans: Commercial 212,492 231,663 231,212 195,805 199,499 Residential mortgage loans 3,780,167 3,724,746 3,681,898 3,627,121 3,583,774 Home equity line of credit 242,194 248,320 254,445 265,753 267,922 Installment loans 9,617 9,826 10,006 10,713 11,001 Loans, net of deferred net costs 4,244,470 4,214,555 4,177,561 4,099,392 4,062,196 Less: Allowance for loan losses 49,595 49,123 48,144 46,155 44,317 Net loans 4,194,875 4,165,432 4,129,417 4,053,237 4,017,879 Bank premises and equipment, net 34,412 34,417 34,042 34,428 34,622 Operating lease right-of-use assets 47,885 47,174 48,712 49,955 51,475 Other assets 59,124 57,244 57,155 52,905 58,876 Total assets $ 5,901,796 5,735,929 5,677,003 5,256,647 5,221,322 LIABILITIES: Deposits: Demand $ 652,756 635,345 612,960 480,255 463,858 Interest-bearing checking 1,086,558 1,024,290 1,001,592 895,254 875,672 Savings accounts 1,285,501 1,235,259 1,191,682 1,122,116 1,113,146 Money market deposit accounts 716,005 699,132 666,304 617,198 599,163 Time deposits 1,296,373 1,305,024 1,392,769 1,367,005 1,398,177 Total deposits 5,037,193 4,899,050 4,865,307 4,481,828 4,450,016 Short-term borrowings 214,755 193,455 177,278 148,090 148,666 Operating lease liabilities 52,784 52,125 53,710 54,998 56,553 Accrued expenses and other liabilities 28,903 30,771 27,287 23,546 27,830 Total liabilities 5,333,635 5,175,401 5,123,582 4,708,462 4,683,065 SHAREHOLDERS' EQUITY: Capital stock 100,205 100,205 100,205 100,205 100,205 Surplus 176,442 176,441 176,437 176,431 176,427 Undivided profits 313,974 306,741 299,239 294,553 288,067 Accumulated other comprehensive income, net of tax 11,936 11,537 11,936 11,392 4,461 Treasury stock at cost (34,396 ) (34,396 ) (34,396 ) (34,396 ) (30,903 ) Total shareholders' equity 568,161 560,528 553,421 548,185 538,257 Total liabilities and shareholders' equity $ 5,901,796 5,735,929 5,677,003 5,256,647 5,221,322 Outstanding shares (in thousands) 96,433 96,433 96,433 96,433 96,922
NONPERFORMING ASSETS (dollars in thousands) (Unaudited) 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Nonperforming Assets New York and other states* Loans in nonaccrual status: Commercial $ 452 491 571 630 816 Real estate mortgage - 1 to 4 family 19,379 19,977 20,215 18,570 18,407 Installment 43 49 6 24 3 Total non-accrual loans 19,874 20,517 20,792 19,224 19,226 Other nonperforming real estate mortgages - 1 to 4 family 23 25 26 27 29 Total nonperforming loans 19,897 20,542 20,818 19,251 19,255 Other real estate owned 541 423 830 1,284 1,579 Total nonperforming assets $ 20,438 20,965 21,648 20,535 20,834 Florida Loans in nonaccrual status: Commercial $ - - - - - Real estate mortgage - 1 to 4 family 1,187 1,254 1,111 1,492 1,614 Installment - - - - - Total non-accrual loans 1,187 1,254 1,111 1,492 1,614 Other nonperforming real estate mortgages - 1 to 4 family - - - - - Total nonperforming loans 1,187 1,254 1,111 1,492 1,614 Other real estate owned - - - - - Total nonperforming assets $ 1,187 1,254 1,111 1,492 1,614 Total Loans in nonaccrual status: Commercial $ 452 491 571 630 816 Real estate mortgage - 1 to 4 family 20,566 21,231 21,326 20,062 20,021 Installment 43 49 6 24 3 Total non-accrual loans 21,061 21,771 21,903 20,716 20,840 Other nonperforming real estate mortgages - 1 to 4 family 23 25 26 27 29 Total nonperforming loans 21,084 21,796 21,929 20,743 20,869 Other real estate owned 541 423 830 1,284 1,579 Total nonperforming assets $ 21,625 22,219 22,759 22,027 22,448 Quarterly Net (Recoveries) Chargeoffs New York and other states* Commercial $ 32 (1 ) (6 ) 1 (1 ) Real estate mortgage - 1 to 4 family (27 ) 4 (27 ) 140 146 Installment 109 18 44 4 67 Total net (recoveries) chargeoffs $ 114 21 11 145 212 Florida Commercial $ - - - - - Real estate mortgage - 1 to 4 family (1 ) - - (2 ) (1 ) Installment 15 - - 19 1 Total net (recoveries) chargeoffs $ 14 - - 17 - Total Commercial $ 32 (1 ) (6 ) 1 (1 ) Real estate mortgage - 1 to 4 family (28 ) 4 (27 ) 138 145 Installment 124 18 44 23 68 Total net (recoveries) chargeoffs $ 128 21 11 162 212 Asset Quality Ratios Total nonperforming loans (1) $ 21,084 21,796 21,929 20,743 20,869 Total nonperforming assets (1) 21,625 22,219 22,759 22,027 22,448 Total net (recoveries) chargeoffs (2) 128 21 11 162 212 Allowance for loan losses (1) 49,595 49,123 48,144 46,155 44,317 Nonperforming loans to total loans 0.50 % 0.52 % 0.52 % 0.51 % 0.51 % Nonperforming assets to total assets 0.37 % 0.39 % 0.40 % 0.42 % 0.43 % Allowance for loan losses to total loans 1.17 % 1.17 % 1.15 % 1.13 % 1.09 % Coverage ratio (1) 235.2 % 225.4 % 219.5 % 222.5 % 212.4 % Annualized net chargeoffs to average loans (2) 0.01 % 0.00 % 0.00 % 0.02 % 0.02 % Allowance for loan losses to annualized net chargeoffs (2) 96.9 x 584.8 x 1094.2 x 71.2 x 52.3 x * Includes New York, New Jersey, Vermont and Massachusetts. (1) At period-end (2) For the period ended
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY - INTEREST RATES AND INTEREST DIFFERENTIAL (dollars in thousands) (Unaudited) Three months ended Three months ended December 31, 2020 December 31, 2019 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets Securities available for sale: U. S. government sponsored enterprises $ 25,761 27 0.42 % $ 127,284 609 1.91 % Mortgage backed securities and collateralized mortgage obligations - residential 314,022 1,172 1.49 396,335 2,334 2.36 State and political subdivisions 108 3 7.89 165 4 9.70 Corporate bonds 64,534 349 2.17 37,795 295 3.12 Small Business Administration - guaranteed participation securities 41,562 212 2.05 49,787 253 2.03 Other 685 7 4.09 685 6 3.50 Total securities available for sale 446,672 1,770 1.59 612,051 3,501 2.29 Federal funds sold and other short-term Investments 916,198 246 0.11 395,311 1,635 1.65 Held to maturity securities: Mortgage backed securities and collateralized mortgage obligations - residential 14,406 129 3.58 19,185 184 3.84 Total held to maturity securities 14,406 129 3.58 19,185 184 3.84 Federal Reserve Bank and Federal Home Loan Bank stock 5,506 70 5.09 9,183 203 8.84 Commercial loans 224,838 3,009 5.35 192,427 2,517 5.23 Residential mortgage loans 3,756,304 35,368 3.77 3,547,219 36,179 4.08 Home equity lines of credit 245,401 2,361 3.83 270,766 3,110 4.59 Installment loans 9,416 168 7.09 10,682 196 7.34 Loans, net of unearned income 4,235,959 40,906 3.86 4,021,094 42,002 4.18 Total interest earning assets 5,618,741 43,121 3.07 5,056,824 47,525 3.76 Allowance for loan losses (49,426 ) (44,320 ) Cash & non-interest earning assets 201,371 188,605 Total assets $ 5,770,686 $ 5,201,109 Liabilities and shareholders' equity Deposits: Interest bearing checking accounts $ 1,036,808 51 0.02 % $ 864,774 21 0.01 % Money market accounts 710,105 447 0.25 583,048 1,175 0.81 Savings 1,258,666 156 0.05 1,111,259 271 0.10 Time deposits 1,284,075 3,053 0.95 1,422,049 7,468 2.10 Total interest bearing deposits 4,289,654 3,707 0.34 3,981,130 8,935 0.90 Short-term borrowings 200,028 232 0.46 154,898 347 0.90 Total interest bearing liabilities 4,489,682 3,939 0.35 4,136,028 9,282 0.90 Demand deposits 640,190 454,585 Other liabilities 77,197 80,386 Shareholders' equity 563,617 530,110 Total liabilities and shareholders' equity $ 5,770,686 $ 5,201,109 Net interest income, tax equivalent 39,182 38,243 Net interest spread 2.72 % 2.86 % Net interest margin (net interest income to total interest earning assets) 2.79 % 3.02 % Tax equivalent adjustment (1 ) (2 ) Net interest income 39,181 38,241 DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY - INTEREST RATES AND INTEREST DIFFERENTIAL, Continued (dollars in thousands) (Unaudited) Year ended Year ended December 31, 2020 December 31, 2019 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets Securities available for sale: U. S. government sponsored enterprises $ 38,508 568 1.48 % $ 156,292 3,209 2.05 % Mortgage backed securities and collateralized mortgage obligations - residential 333,093 6,131 1.84 345,718 8,219 2.38 State and political subdivisions 111 9 7.82 167 13 7.78 Corporate bonds 50,982 1,721 3.38 34,637 1,096 3.16 Small Business Administration - guaranteed participation securities 44,379 902 2.03 53,269 1,121 2.10 Other 686 23 3.35 685 22 3.21 Total securities available for sale 467,759 9,354 2.00 590,768 13,680 2.32 Federal funds sold and other short-term Investments 748,085 1,948 0.26 477,181 10,478 2.20 Held to maturity securities: Mortgage backed securities and collateralized mortgage obligations - residential 16,376 604 3.69 20,643 797 3.86 Total held to maturity securities 16,376 604 3.69 20,643 797 3.86 Federal Reserve Bank and Federal Home Loan Bank stock 7,381 421 5.70 9,123 568 6.23 Commercial loans 219,328 10,788 4.92 191,636 10,243 5.35 Residential mortgage loans 3,678,536 144,212 3.92 3,445,940 141,964 4.12 Home equity lines of credit 255,583 10,259 4.01 277,905 13,551 4.88 Installment loans 9,952 705 7.08 10,718 852 7.95 Loans, net of unearned income 4,163,399 165,964 3.99 3,926,199 166,610 4.24 Total interest earning assets 5,403,000 178,291 3.30 5,023,914 192,133 3.82 Allowance for loan losses (47,330 ) (44,639 ) Cash & non-interest earning assets 197,966 182,545 Total assets $ 5,553,636 $ 5,161,820 Liabilities and shareholders' equity Deposits: Interest bearing checking accounts $ 971,385 148 0.02 % $ 874,700 288 0.03 % Money market accounts 662,107 3,042 0.46 555,547 4,297 0.77 Savings 1,191,532 716 0.06 1,134,050 1,338 0.12 Time deposits 1,350,163 19,792 1.47 1,417,487 28,930 2.04 Total interest bearing deposits 4,175,187 23,698 0.57 3,981,784 34,853 0.88 Short-term borrowings 180,065 1,010 0.56 159,220 1,468 0.92 Total interest bearing liabilities 4,355,252 24,708 0.57 4,141,004 36,321 0.88 Demand deposits 567,265 427,276 Other liabilities 77,487 80,051 Shareholders' equity 553,632 513,489 Total liabilities and shareholders' equity $ 5,553,636 $ 5,161,820 Net interest income, tax equivalent 153,583 155,812 Net interest spread 2.73 % 2.94 % Net interest margin (net interest income to total interest earning assets) 2.84 % 3.10 % Tax equivalent adjustment (3 ) (5 ) Net interest income 153,580 155,807
Non-GAAP Financial Measures Reconciliation
Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.
The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on the sale of securities and other non-routine items from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue.
We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial results. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share, efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.
NON-GAAP FINANCIAL MEASURES RECONCILIATION (dollars in thousands, except per share amounts) (Unaudited) Tangible Book Value Per Share 12/31/2020 9/30/2020 12/31/2019 Equity (GAAP) $ 568,161 560,528 538,257 Less: Intangible assets 553 553 553 Tangible equity (Non-GAAP) 567,608 559,975 537,704 Shares outstanding 96,433 96,433 96,922 Tangible book value per share (Non-GAAP) 5.89 5.81 5.55 Book value per share (GAAP) 5.89 5.81 5.55 Tangible Equity to Tangible Assets Total Assets (GAAP) $ 5,901,796 5,735,929 5,221,322 Less: Intangible assets 553 553 553 Tangible assets (Non-GAAP) 5,901,243 5,735,376 5,220,769 Tangible Equity to Tangible Assets (Non-GAAP) 9.62 % 9.76 % 10.30 % Equity to Assets (GAAP) 9.63 % 9.77 % 10.31 % Three months ended Year ended Efficiency Ratio 12/31/2020 9/30/2020 12/31/2019 12/31/2020 12/31/2019 Net interest income (GAAP) $ 39,181 38,165 38,241 $ 153,580 155,807 Taxable equivalent adjustment 1 1 2 3 5 Net interest income (fully taxable equivalent) (Non-GAAP) 39,182 38,166 38,243 153,583 155,812 Non-interest income (GAAP) 4,069 4,341 4,115 17,170 18,591 Less: Net gain on securities - - - 1,155 - Revenue used for efficiency ratio (Non-GAAP) 43,251 42,507 42,358 169,598 174,403 Total noninterest expense (GAAP) 24,830 22,674 23,891 95,704 97,730 Less: Other real estate (income) expense, net 45 (115 ) (385 ) 92 (166 ) Expense used for efficiency ratio (Non-GAAP) 24,785 22,789 24,276 95,612 97,896 Efficiency Ratio 57.31 % 53.61 % 57.31 % 56.38 % 56.13 %
Subsidiary: Trustco Bank
Contact: Robert Leonard Executive Vice President and Chief Risk Officer (518) 381-3693