TrustCo Announces Record Earnings for Third Quarter 2021; Net Income of $16.8 million up 19.1% over the prior year quarter, Expands Lending Areas in Key Markets, Adds New Director
GLENVILLE, N.Y., Oct. 21, 2021 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (*TrustCo, NASDAQ: TRST*) today announced third quarter 2021 net income of $16.8 million or $0.871 diluted earnings per share, compared to net income of $14.1 million or $0.730 diluted earnings per share for the third quarter 2020; and net income of $45.3 million or $2.349 diluted earnings per share for the nine months ended September 30, 2021, compared to net income of $38.6 million or $2.001 diluted earnings per share for the nine months ended September 30, 2020. For all periods presented, share and per share information has been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.
*Overview*
Robert J. McCormick, Chairman, President and Chief Executive Officer noted, “Our continued strong financial results announced today are the foundation upon which we continue to build. With an always-sharp focus on new business opportunities, we have identified increasing demand for our hallmark mortgage products and have expanded our lending areas in Northern New Jersey and on both coasts of Florida. As part of these initiatives, we deployed a new mortgage loan originator in New Jersey, opened a new full-service branch location in Palm Coast, Florida, and are launching a new channel for the delivery of our core lending products by opening a loan origination office in Naples, Florida.”
In September, the Company announced the addition of Curtis N. Powell to the boards of directors of TrustCo and its subsidiary, Trustco Bank. Mr. Powell is Vice President for Human Resources and Environmental Health, Safety, and Risk Management at Rensselaer Polytechnic Institute in Troy, New York. Mr. Powell adds depth to our board talent pool in the areas of human capital and risk management. Chairman McCormick said “Our success-oriented approach extends from our business lines to our boardroom. Curtis Powell shares our commitment to excellence, and we have every confidence that he will be a tremendous asset as the Company navigates the highly dynamic labor market that we now see across our entire business footprint.”
Mr. McCormick also congratulated the employees of Trustco Bank on receiving well-deserved recognition. He said “Our management team knows that our people are the best in the business, but recently Trustco Bank has been rated ‘Best Of’ in several categories by local media outlets. Our team members can be justifiably proud of this recognition.” Trustco Bank also celebrated 65 years of success at its Mayfair Branch in Glenville, New York and, for the 15^th straight year, turned out a formidable team for the Workforce Team Challenge with 75 entrants in the annual 3.5 mile race, held this year in Altamont, New York.
*Details*
Average loans were up $176.4 million or 4.2% in the third quarter 2021 over the same period in 2020. Average residential loans, our primary lending focus, were up $218.2 million, or 5.9%, in the third quarter 2021 over the same period in 2020. As of September 30, 2021, loans in deferral were not material. Additionally, the Bank had funded 663 Paycheck Protection Program (“PPP”) loans totaling $46 million in 2020, and an additional 344 loans totaling $23 million in 2021. As of September 30, 2021, 349 PPP loans totaling $21 million remain outstanding. Average deposits were up $348.2 million or 7.1% for the third quarter 2021 over the same period a year earlier. The increase in deposits was the result of a $551.2 million or 15.5% increase in 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 $202.9 million or 15.0%, for the third quarter 2021 over the same period in 2020. Within the core deposits, checking balances were up $287.2 million or 17.4% (including interest bearing and non-interest bearing checking balances), money market balances were up $56.3 million or 8.3%, and savings balances were up $207.6 million or 17.0%. 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 0.15% in the third quarter 2021 from 0.52% in the third quarter 2020. A significant portion of our CD portfolio (time deposits) repriced during the last year, which resulted in lower rates as a result of the ongoing market conditions. The net interest margin for the third quarter 2021 was 2.65%, down 8 basis points from 2.73% in the third quarter of 2020. Net interest income (TE) increased by 4.5% or $1.7 million over the same period last year.
The Bank continued to demonstrate its ability to grow shareholders’ equity as average equity was up $25.8 million or 4.6% in the third quarter of 2021 compared to the same period in 2020. Return on average assets and return on average equity for the third quarter 2021 were 1.08% and 11.40%, respectively, compared to 0.98% and 10.04% for the third quarter 2020. Improving efficiencies to reduce costs continues to remain a key area of focus. As a result, full time equivalent employees decreased from the prior year and quarter partially due to a strategic realignment and the impact of COVID-19 on the labor market. The Bank also purchased 50 thousand shares of stock in the third quarter of 2021 under the previously announced stock repurchase plan. Additionally, on May 28, 2021, the reverse split of the Company’s Common Stock at a ratio of 1 for 5 was implemented on the Nasdaq Global Select Market. All prior period share and per share information, and common stock and surplus amounts have been split adjusted. The board of directors believes that the Reverse Stock Split will likely result in a higher per share trading price, which is intended to generate greater investor interest in TrustCo and improve the marketability of the shares to a broader range of investors. The board of directors also believes that the Reverse Stock Split will result in a number of our shares of outstanding common stock that is similar to the number of outstanding shares of common stock of comparable financial institutions.
Asset quality and loan loss reserve measures have continued to improve as a result of low levels of nonperforming assets and chargeoffs. Nonperforming loans (NPLs) were $20.2 million at September 30, 2021, compared to $21.8 million at September 30, 2020. NPLs were 0.46% and 0.52% of total loans at September 30, 2021 and 2020, respectively. The coverage ratio, or allowance for loan losses to NPLs, was 234.7% at September 30, 2021, compared to 225.4% at September 30, 2020. Nonperforming assets (NPAs) were $20.7 million at September 30, 2021, compared to $22.2 million at September 30, 2020. The ratio of allowance for loan losses to total loans was 1.08% as of September 30, 2021 compared to 1.17% as of September 30, 2020. The allowance for loan losses was $47.4 million at September 30, 2021, compared to $49.1 million at September 30, 2020. During 2020, management increased certain allowance qualitative factors based on its assessment of the impact of the current pandemic on local, national, and global economic conditions as well as the perceived risks inherent in specific industries and credit characteristics. Based on this approach, the Company adjusted the pandemic specific provision for the third quarter of 2021. Provision for loan losses for the third quarter of 2021 was a credit of $2.8 million compared to a provision for loan losses for the third quarter of 2020 of $1.0 million. The decrease from the prior year is due to the sustained improvement in asset quality trends and economic conditions during the third quarter. 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 legislation, which became law in December 2020, and therefore the Company intends to adopt CECL on January 1, 2022.
Net chargeoffs for the third quarter 2021 were $5 thousand versus net chargeoffs in the third quarter 2020 of $21 thousand. The annualized net chargeoffs ratio was 0.00% for the third quarter 2021 and 2020.
At September 30, 2021 the equity to asset ratio was 9.56%, compared to 9.77% at September 30, 2020. Book value per share at September 30, 2021 was $30.50, up 5.1% compared to $29.03 a year earlier.
TrustCo Bank Corp NY is a $6.1 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 147 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at September 30, 2021.
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*.
Those wishing to participate in the call may dial toll-free for the United States at 1-844-200-6205, for Canada at 1-833-950-0062, and all other locations at 1-929-526-1599, Access code 817092. A replay of the call will be available for thirty days by dialing toll-free for the United States at 1-866-813-9403, for Canada at 1-226-828-7578, and all other locations at +44-204-525-0658, Access code 539783. The call will also be audio webcast at https://services.choruscall.com/links/trst211022.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 2021, 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 expansion initiatives in New Jersey and Florida, our ability to retain customers, 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.
*Subsidiary:* *Trustco Bank*
Contact: Robert Leonard
Executive Vice President and
Chief Risk Officer
(518) 381-3693
*TRUSTCO BANK CORP NY*
*GLENVILLE, NY*
*FINANCIAL HIGHLIGHTS*
*(dollars in thousands, except per share data)*
*(Unaudited)* *Three months ended* *9/30/2021* *6/30/2021* *9/30/2020*
Summary of operations
Net interest income (TE) $ 39,888 40,122 38,166
(Credit) Provision for loan losses (2,800 ) - 1,000
Noninterest income 4,295 4,688 4,341
Noninterest expense 24,697 25,440 22,674
Net income 16,762 14,433 14,071
Per share (4)
Net income per share:
- Basic $ 0.871 0.749 0.730
- Diluted 0.871 0.748 0.730
Cash dividends 0.341 0.341 0.341
Book value at period end 30.50 30.00 29.03
Market price at period end 31.97 34.38 26.10
At period end
Full time equivalent employees 743 769 771
Full service banking offices 147 147 148
Performance ratios
Return on average assets 1.08 % 0.95 0.98
Return on average equity 11.40 10.05 10.04
Efficiency (1) 55.82 56.91 53.61
Net interest spread (TE) 2.62 2.66 2.63
Net interest margin (TE) 2.65 2.70 2.73
Dividend payout ratio 39.13 45.51 46.68
Capital ratios at period end
Consolidated tangible equity to tangible assets (2) 9.55 % 9.44 9.76
Consolidated equity to assets 9.56 % 9.45 9.77
Asset quality analysis at period end
Nonperforming loans to total loans 0.46 0.48 0.52
Nonperforming assets to total assets 0.34 0.34 0.39
Allowance for loan losses to total loans 1.08 1.15 1.17
Coverage ratio (3) 2.3x 2.4x 2.3x
(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation.
(2) Non-GAAP measure; calculated as total 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 loan losses divided by total nonperforming loans.
(4) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.
TE = Taxable equivalent
*FINANCIAL HIGHLIGHTS, Continued*
*(dollars in thousands, except per share data)*
*(Unaudited)* *Nine months ended* *09/30/21* *09/30/20*
Summary of operations
Net interest income (TE) $ 120,117 114,401
(Credit) Provision for loan losses (2,450 ) 5,000
Net gain on securities transactions - 1,155
Noninterest income, excluding net gain on securities transactions 13,411 11,946
Noninterest expense 75,472 70,874
Net income 45,278 38,638
Per share (2)
Net income per share:
- Basic $ 2.349 2.002
- Diluted 2.349 2.001
Cash dividends 1.022 1.022
Book value at period end 30.50 29.03
Market price at period end 31.97 26.10
Performance ratios
Return on average assets 1.00 0.94
Return on average equity 10.50 9.38
Efficiency (1) 56.36 56.06
Net interest spread (TE) 2.67 2.74
Net interest margin (TE) 2.71 2.86
Dividend payout ratio 43.50 51.03
(1) Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation.
(2) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.
TE = Taxable equivalent.
*CONSOLIDATED STATEMENTS OF INCOME*
*(dollars in thousands, except per share data)*
*(Unaudited)*
*Three months ended* *9/30/2021* *6/30/2021* *3/31/2021* *12/31/2020* *9/30/2020*
Interest and dividend income:
Interest and fees on loans $ 39,488 39,808 40,217 40,906 41,330
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises 91 97 50 27 14
State and political subdivisions 1 - 1 2 1
Mortgage-backed securities and collateralized mortgage obligations - residential 1,038 1,167 1,237 1,172 1,319
Corporate bonds 220 323 316 349 646
Small Business Administration - guaranteed participation securities 181 193 206 212 216
Other securities 5 5 6 7 5
Total interest and dividends on securities available for sale 1,536 1,785 1,816 1,769 2,201
Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations - residential 104 111 123 129 138
Total interest on held to maturity securities 104 111 123 129 138
Federal Reserve Bank and Federal Home Loan Bank stock 64 65 69 70 77
Interest on federal funds sold and other short-term investments 470 286 270 246 242
Total interest income 41,662 42,055 42,495 43,120 43,988
Interest expense:
Interest on deposits:
Interest-bearing checking 38 46 52 51 55
Savings 154 162 159 156 161
Money market deposit accounts 202 236 283 447 637
Time deposits 1,149 1,261 1,666 3,053 4,749
Interest on short-term borrowings 232 228 228 232 221
Total interest expense 1,775 1,933 2,388 3,939 5,823
Net interest income 39,887 40,122 40,107 39,181 38,165
Less: (Credit) Provision for loan losses (2,800 ) - 350 600 1,000
Net interest income after provision for loan losses 42,687 40,122 39,757 38,581 37,165
Noninterest income:
Trustco Financial Services income 1,558 1,999 2,035 1,527 1,784
Fees for services to customers 2,531 2,486 2,204 2,365 2,292
Other 206 203 189 177 265
Total noninterest income 4,295 4,688 4,428 4,069 4,341
Noninterest expenses:
Salaries and employee benefits 11,909 12,403 12,425 11,727 10,899
Net occupancy expense 4,259 4,328 4,586 4,551 4,277
Equipment expense 1,628 1,600 1,631 1,621 1,607
Professional services 1,483 1,614 1,432 1,644 1,311
Outsourced services 2,015 2,169 2,250 1,925 1,875
Advertising expense 310 549 354 527 305
FDIC and other insurance 746 777 707 657 660
Other real estate (income) expense, net 32 (60 ) 239 45 (115 )
Other 2,315 2,060 1,711 2,133 1,855
Total noninterest expenses 24,697 25,440 25,335 24,830 22,674
Income before taxes 22,285 19,370 18,850 17,820 18,832
Income taxes 5,523 4,937 4,767 4,006 4,761
Net income $ 16,762 14,433 14,083 13,814 14,071
Net income per common share (1):
- Basic $ 0.871 0.749 0.730 0.716 0.730
- Diluted 0.871 0.748 0.730 0.716 0.730
Average basic shares (in thousands) (1) 19,249 19,281 19,287 19,287 19,287
Average diluted shares (in thousands) (1) 19,252 19,290 19,293 19,288 19,288
Note: Taxable equivalent net interest income $ 39,888 40,122 40,107 39,182 38,166
(1) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.
*CONSOLIDATED STATEMENTS OF INCOME, Continued*
*(dollars in thousands, except per share data)*
*(Unaudited)* *Nine months ended* *09/30/21* *09/30/20*
Interest and dividend income:
Interest and fees on loans $ 119,513 125,058
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises 238 541
State and political subdivisions 2 4
Mortgage-backed securities and collateralized mortgage obligations - residential 3,442 4,959
Corporate bonds 859 1,372
Small Business Administration - guaranteed participation securities 580 690
Other securities 16 16
Total interest and dividends on securities available for sale 5,137 7,582
Interest on held to maturity securities:
Mortgage-backed securities-residential 338 475
Total interest on held to maturity securities 338 475
Federal Reserve Bank and Federal Home Loan Bank stock 198 351
Interest on federal funds sold and other short-term investments 1,026 1,702
Total interest income 126,212 135,168
Interest expense:
Interest on deposits:
Interest-bearing checking 136 97
Savings 475 560
Money market deposit accounts 721 2,595
Time deposits 4,076 16,739
Interest on short-term borrowings 688 778
Total interest expense 6,096 20,769
Net interest income 120,116 114,399
Less: (Credit) Provision for loan losses (2,450 ) 5,000
Net interest income after provision for loan losses 122,566 109,399
Noninterest income:
Trustco Financial Services income 5,592 4,752
Fees for services to customers 7,221 6,414
Net gain on securities transactions - 1,155
Other 598 780
Total noninterest income 13,411 13,101
Noninterest expenses:
Salaries and employee benefits 36,737 33,920
Net occupancy expense 13,173 12,968
Equipment expense 4,859 5,015
Professional services 4,529 3,974
Outsourced services 6,434 5,825
Advertising expense 1,213 1,394
FDIC and other insurance 2,230 1,563
Other real estate expense, net 211 47
Other 6,086 6,168
Total noninterest expenses 75,472 70,874
Income before taxes 60,505 51,626
Income taxes 15,227 12,988
Net income $ 45,278 38,638
Net income per common share (1):
- Basic $ 2.349 2.002
- Diluted 2.349 2.001
Average basic shares (in thousands) (1) 19,272 19,306
Average diluted shares (in thousands) (1) 19,278 19,308
Note: Taxable equivalent net interest income $ 120,117 114,401
(1) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.
*CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION*
*(dollars in thousands)*
*(Unaudited)* *9/30/21* *6/30/21* *3/31/21* *12/31/20* *9/30/20*
*ASSETS:*
Cash and due from banks $ 45,486 47,766 45,493 47,196 47,703
Federal funds sold and other short term investments 1,147,853 1,134,622 1,094,880 1,059,903 908,616
Total cash and cash equivalents 1,193,339 1,182,388 1,140,373 1,107,099 956,319
Securities available for sale:
U. S. government sponsored enterprises 59,749 74,579 74,465 19,968 29,996
States and political subdivisions 48 48 48 103 111
Mortgage-backed securities and collateralized mortgage obligations - residential 293,585 315,656 348,317 316,158 309,768
Small Business Administration - guaranteed participation securities 34,569 37,199 39,232 42,217 44,070
Corporate bonds 45,915 54,647 64,839 59,939 70,113
Other securities 686 686 686 686 685
Total securities available for sale 434,552 482,815 527,587 439,071 454,743
Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential 10,701 11,665 12,729 13,824 15,094
Total held to maturity securities 10,701 11,665 12,729 13,824 15,094
Federal Reserve Bank and Federal Home Loan Bank stock 5,604 5,604 5,506 5,506 5,506
Loans:
Commercial 204,679 214,164 217,021 212,492 231,663
Residential mortgage loans 3,951,285 3,892,351 3,807,837 3,780,167 3,724,746
Home equity line of credit 231,314 234,214 235,644 242,194 248,320
Installment loans 9,451 8,638 8,670 9,617 9,826
Loans, net of deferred net costs 4,396,729 4,349,367 4,269,172 4,244,470 4,214,555
Less: Allowance for loan losses 47,350 50,155 49,991 49,595 49,123
Net loans 4,349,379 4,299,212 4,219,181 4,194,875 4,165,432
Bank premises and equipment, net 33,233 33,691 34,012 34,412 34,417
Operating lease right-of-use assets 45,836 45,825 46,614 47,885 47,174
Other assets 62,191 61,378 60,455 59,124 57,244
Total assets $ 6,134,835 6,122,578 6,046,457 5,901,796 5,735,929
*LIABILITIES:*
Deposits:
Demand $ 790,663 765,193 718,343 652,756 635,345
Interest-bearing checking 1,148,593 1,152,901 1,141,595 1,086,558 1,024,290
Savings accounts 1,433,130 1,409,556 1,362,141 1,285,501 1,235,259
Money market deposit accounts 744,051 732,963 719,580 716,005 699,132
Time deposits 1,124,581 1,169,907 1,231,263 1,296,373 1,305,024
Total deposits 5,241,018 5,230,520 5,172,922 5,037,193 4,899,050
Short-term borrowings 230,770 237,791 229,950 214,755 193,455
Operating lease liabilities 50,515 50,586 51,449 52,784 52,125
Accrued expenses and other liabilities 25,849 25,088 21,105 28,903 30,771
Total liabilities 5,548,152 5,543,985 5,475,426 5,333,635 5,175,401
*SHAREHOLDERS' EQUITY:*
Capital stock (1) 20,042 20,041 20,044 20,041 20,041
Surplus (1) 256,565 256,536 256,674 256,606 256,605
Undivided profits 339,554 329,350 321,486 313,974 306,741
Accumulated other comprehensive income, net of tax 7,304 7,840 7,268 11,936 11,537
Treasury stock at cost (36,782 ) (35,174 ) (34,441 ) (34,396 ) (34,396 )
Total shareholders' equity 586,683 578,593 571,031 568,161 560,528
Total liabilities and shareholders' equity $ 6,134,835 6,122,578 6,046,457 5,901,796 5,735,929
Outstanding shares (in thousands) (1) 19,216 19,265 19,288 19,287 19,287
(1) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.
*NONPERFORMING ASSETS*
*(dollars in thousands)*
*(Unaudited)* *9/30/2021* *6/30/2021* *3/31/2021* *12/31/2020* *9/30/2020*
*Nonperforming Assets*
*New York and other states**
Loans in nonaccrual status:
Commercial $ 176 150 125 452 491
Real estate mortgage - 1 to 4 family 17,878 18,466 19,826 19,379 19,977
Installment 32 43 32 43 49
Total non-accrual loans 18,086 18,659 19,983 19,874 20,517
Other nonperforming real estate mortgages - 1 to 4 family 19 20 22 23 25
Total nonperforming loans 18,105 18,679 20,005 19,897 20,542
Other real estate owned 511 251 420 541 423
Total nonperforming assets $ 18,616 18,930 20,425 20,438 20,965
*Florida*
Loans in nonaccrual status:
Commercial $ - - - - -
Real estate mortgage - 1 to 4 family 2,066 2,142 1,626 1,187 1,254
Installment - - - - -
Total non-accrual loans 2,066 2,142 1,626 1,187 1,254
Other nonperforming real estate mortgages - 1 to 4 family - - - - -
Total nonperforming loans 2,066 2,142 1,626 1,187 1,254
Other real estate owned - - - - -
Total nonperforming assets $ 2,066 2,142 1,626 1,187 1,254
*Total*
Loans in nonaccrual status:
Commercial $ 176 150 125 452 491
Real estate mortgage - 1 to 4 family 19,944 20,608 21,452 20,566 21,231
Installment 32 43 32 43 49
Total non-accrual loans 20,152 20,801 21,609 21,061 21,771
Other nonperforming real estate mortgages - 1 to 4 family 19 20 22 23 25
Total nonperforming loans 20,171 20,821 21,631 21,084 21,796
Other real estate owned 511 251 420 541 423
Total nonperforming assets $ 20,682 21,072 22,051 21,625 22,219
*Quarterly Net (Recoveries) Chargeoffs*
*New York and other states**
Commercial $ 30 - (32 ) 32 (1 )
Real estate mortgage - 1 to 4 family (39 ) (136 ) (2 ) (27 ) 4
Installment 14 (27 ) (14 ) 109 18
Total net chargeoffs (recoveries) $ 5 (163 ) (48 ) 114 21
*Florida*
Commercial $ - - - - -
Real estate mortgage - 1 to 4 family - (1 ) - (1 ) -
Installment - - 2 15 -
Total net chargeoffs (recoveries) $ - (1 ) 2 14 -
*Total*
Commercial $ 30 - (32 ) 32 (1 )
Real estate mortgage - 1 to 4 family (39 ) (137 ) (2 ) (28 ) 4
Installment 14 (27 ) (12 ) 124 18
Total net chargeoffs (recoveries) $ 5 (164 ) (46 ) 128 21
*Asset Quality Ratios*
Total nonperforming loans (1) $ 20,171 20,821 21,631 21,084 21,796
Total nonperforming assets (1) 20,682 21,072 22,051 21,625 22,219
Total net chargeoffs (recoveries) (2) 5 (164 ) (46 ) 128 21
Allowance for loan losses (1) 47,350 50,155 49,991 49,595 49,123
Nonperforming loans to total loans 0.46 % 0.48 % 0.51 % 0.50 % 0.52 %
Nonperforming assets to total assets 0.34 % 0.34 % 0.36 % 0.37 % 0.39 %
Allowance for loan losses to total loans 1.08 % 1.15 % 1.17 % 1.17 % 1.17 %
Coverage ratio (1) 234.7 % 240.9 % 231.1 % 235.2 % 225.4 %
Annualized net chargeoffs (recoveries) to average loans (2) 0.00 % -0.02 % 0.00 % 0.01 % 0.00 %
Allowance for loan losses to annualized net chargeoffs (recoveries) (2) 2367.5 x N/A N/A 96.9 x 584.8 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 September 30, 2021 September 30, 2020 Average Interest Average Average Interest Average Balance Rate Balance Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises $ 68,505 91 0.53 % $ 12,391 14 0.45 %
Mortgage backed securities and collateralized mortgage obligations - residential 300,765 1,038 1.38 313,296 1,319 1.68
State and political subdivisions 48 2 6.66 110 2 7.90
Corporate bonds 48,543 220 1.81 59,555 646 4.33
Small Business Administration - guaranteed
participation securities 34,578 181 2.09 43,282 216 1.99
Other 686 5 2.92 685 5 2.92
Total securities available for sale 453,125 1,537 1.36 429,319 2,202 2.05
Federal funds sold and other short-term Investments 1,166,679 470 0.16 938,087 242 0.10
Held to maturity securities:
Mortgage backed securities and collateralized mortgage obligations - residential 11,168 104 3.72 15,759 138 3.52
Total held to maturity securities 11,168 104 3.72 15,759 138 3.52
Federal Reserve Bank and Federal Home Loan Bank stock 5,604 64 4.57 5,506 77 5.59
Commercial loans 210,825 2,649 5.03 231,517 2,625 4.54
Residential mortgage loans 3,920,903 34,532 3.52 3,702,680 36,020 3.89
Home equity lines of credit 231,269 2,152 3.69 251,459 2,515 3.98
Installment loans 8,669 155 7.10 9,632 170 7.02
Loans, net of unearned income 4,371,666 39,488 3.61 4,195,288 41,330 3.94
Total interest earning assets 6,008,242 41,663 2.77 5,583,959 43,989 3.15
Allowance for loan losses (50,160 ) (48,483 )
Cash & non-interest earning assets 195,902 201,018
Total assets $ 6,153,984 $ 5,736,494
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts $ 1,153,812 38 0.01 % $ 1,024,455 55 0.02 %
Money market accounts 738,662 202 0.11 682,319 637 0.37
Savings 1,430,558 154 0.04 1,222,956 161 0.05
Time deposits 1,152,298 1,149 0.40 1,355,244 4,749 1.39
Total interest bearing deposits 4,475,330 1,543 0.14 4,284,974 5,602 0.52
Short-term borrowings 240,183 232 0.38 193,765 221 0.45
Total interest bearing liabilities 4,715,513 1,775 0.15 4,478,739 5,823 0.52
Demand deposits 780,163 622,313
Other liabilities 75,116 78,093
Shareholders' equity 583,192 557,349
Total liabilities and shareholders' equity $ 6,153,984 $ 5,736,494
Net interest income, tax equivalent 39,888 38,166
Net interest spread 2.62 % 2.63 %
Net interest margin (net interest income to total interest earning assets) 2.65 % 2.73 %
Tax equivalent adjustment (1 ) (1 ) Net interest income 39,887 38,165
*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, 2021 September 30, 2020 Average Interest Average Average Interest Average Balance Rate Balance Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises $ 65,103 238 0.49 % $ 42,573 541 1.69 %
Mortgage backed securities and collateralized mortgage obligations - residential 318,472 3,442 1.44 339,300 4,959 1.95
State and political subdivisions 49 3 8.16 111 6 7.79
Corporate bonds 56,245 859 2.04 46,508 1,372 3.93
Small Business Administration - guaranteed
participation securities 36,981 580 2.09 45,313 690 2.03
Other 686 16 3.11 685 16 3.11
Total securities available for sale 477,536 5,138 1.43 474,490 7,584 2.13
Federal funds sold and other short-term Investments 1,108,018 1,026 0.12 693,286 1,702 0.33
Held to maturity securities:
Mortgage backed securities and collateralized mortgage obligations - residential 12,199 338 3.70 17,029 475 3.72
Total held to maturity securities 12,199 338 3.70 17,029 475 3.72
Federal Reserve Bank and Federal Home Loan Bank stock 5,570 198 4.74 7,998 351 5.85
Commercial loans 212,832 8,203 5.14 217,573 7,778 4.77
Residential mortgage loans 3,852,960 104,219 3.61 3,652,766 108,845 3.97
Home equity lines of credit 234,682 6,622 3.77 258,956 7,898 4.07
Installment loans 8,608 469 7.28 10,129 537 7.08
Loans, net of unearned income 4,309,082 119,513 3.70 4,139,424 125,058 4.03
Total interest earning assets 5,912,405 126,213 2.85 5,332,227 135,170 3.38
Allowance for loan losses (50,101 ) (46,618 )
Cash & non-interest earning assets 196,876 196,835
Total assets $ 6,059,180 $ 5,482,444
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts $ 1,129,480 136 0.02 % $ 949,909 97 0.01 %
Money market accounts 731,171 721 0.13 646,170 2,595 0.54
Savings 1,376,494 475 0.05 1,169,316 560 0.06
Time deposits 1,203,708 4,076 0.45 1,372,369 16,739 1.63
Total interest bearing deposits 4,440,853 5,408 0.16 4,137,764 19,991 0.65
Short-term borrowings 232,532 688 0.40 173,497 778 0.60
Total interest bearing liabilities 4,673,385 6,096 0.17 4,311,261 20,769 0.64
Demand deposits 735,495 543,279
Other liabilities 73,689 77,568
Shareholders' equity 576,611 550,336
Total liabilities and shareholders' equity $ 6,059,180 $ 5,482,444
Net interest income, tax equivalent 120,117 114,401
Net interest spread 2.67 % 2.74 %
Net interest margin (net interest income to total interest earning assets) 2.71 % 2.86 %
Tax equivalent adjustment (1 ) (2 )
Net interest income 120,116 114,399
*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) *9/30/2021* *6/30/2021* *9/30/2020*
*Tangible Equity to Tangible Assets*
Total Assets (GAAP) $ 6,134,835 6,122,578 5,735,929
Less: Intangible assets 553 553 553
Tangible assets (Non-GAAP) 6,134,282 6,122,025 5,735,376
Equity (GAAP) 586,683 578,593 560,528
Less: Intangible assets 553 553 553
Tangible equity (Non-GAAP) 586,130 578,040 559,975
Tangible Equity to Tangible Assets (Non-GAAP) 9.55 % 9.44 % 9.76 %
Equity to Assets (GAAP) 9.56 % 9.45 % 9.77 % *Three months ended* *Nine months ended*
*Efficiency Ratio* *9/30/2021* *6/30/2021* *9/30/2020* *9/30/2021* *9/30/2020*
Net interest income (fully taxable equivalent) (Non-GAAP) $ 39,888 40,122 38,166 $ 120,117 114,401
Non-interest income (GAAP) 4,295 4,688 4,341 13,411 13,101
Less: Net gain on securities - - - - 1,155
Revenue used for efficiency ratio (Non-GAAP) 44,183 44,810 42,507 133,528 126,347
Total noninterest expense (GAAP) 24,697 25,440 22,674 75,472 70,874
Less: Other real estate expense (income), net 32 (60 ) (115 ) 211 47
Expense used for efficiency ratio (Non-GAAP) 24,665 25,500 22,789 75,261 70,827
Efficiency Ratio 55.82 % 56.91 % 53.61 % 56.36 % 56.06 %