Exhibit 99(a)
 |
News Release |
5 Sarnowski Drive, Glenville, New York, 12302
(518) 377-3311 Fax: (518) 381-3668
|
Subsidiary:
|
TrustCo Bank
|
NASDAQ -- TRST
|
|
Contact:
|
Robert Leonard
|
|
Executive Vice President and
|
|
|
Chief Risk Officer
|
|
|
(518) 381-3693
|
TrustCo Announces Third Quarter 2018 Net Income of $15.2 Million
Executive Snapshot:
| · |
Continued solid financial results:
|
| o |
Key metrics for third quarter 2018:
|
| § |
Net income of $15.2 million, up 20.7% compared to $12.6 million in the third quarter of 2017
|
| § |
Return on average assets (ROAA) of 1.24% compared to 1.02% in the third quarter of 2017
|
| § |
Return on average equity (ROAE) of 12.84% compared to 11.06% in the third quarter of 2017
|
| § |
Efficiency ratio of 53.39% compared to 52.79% in the third quarter of 2017 (Non-GAAP measure; see P. 14 for definition)
|
| · |
Asset quality continues to be strong:
|
| o |
Nonperforming assets (NPAs) fell by $1.4 million compared to September 30, 2017
|
| o |
NPAs to total assets improved to 0.53%, compared to 0.56% at September 30, 2017
|
| o |
Quarterly net chargeoffs were equal to 0.01% of average loans on an annualized basis, compared to 0.07% for the third quarter of 2017
|
| · |
Seeking depth and expansion of customer base:
|
| o |
Looking to gain depth in customer base within branch network
|
| o |
Core (non-maturity) deposits averaged $28.4 million per branch at September 30, 2018
|
| o |
Average core deposits were down $31.0 million in the third quarter 2018 compared to the third quarter 2017, however that was driven by a decrease in relatively high cost
money market deposits
|
| § |
Excluding money market deposits, core deposits were up $32.4 million or 1.3%
|
| § |
With the exception of money market balances, the cost of core deposits continues to decline
|
| · |
Loan portfolio reaches all-time high:
|
| o |
Average loans were up $242 million for the third quarter 2018 compared to third quarter of 2017
|
| o |
At $3.8 billion as of September 30, 2018, loans continue to set new all-time highs
|
Page | 1
FOR IMMEDIATE RELEASE:
TrustCo Announces Third Quarter 2018 Net Income of $15.2 Million
Glenville, New York – October 22, 2018
TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced third quarter 2018 net income of $15.2 million compared to $12.6 million for the third quarter 2017, an increase of 20.7%. Third quarter 2018 results include the
impact of a lower tax rate resulting from the Tax Cuts and Jobs Act.
Summary
Robert J. McCormick, President and Chief Executive Officer noted, “We are pleased to report continued strong third quarter performance, with an increase of
20.7% in net income as compared to the third quarter of 2017. Our focus on traditional lending criteria and conservative balance sheet management has enabled us to produce consistent earnings, maintain strong liquidity and capital and allowed us
to continue to grow our business and take advantage of changes in market and competitive conditions. In terms of our core business, we continue to add customer relationships, which ultimately drive future growth. We will continue to take
advantage of opportunities as they are presented during the balance of this year and beyond.”
TrustCo continues to see solid loan growth in the third quarter 2018 compared to the prior year, led by an increase in residential mortgages. Loan
portfolio expansion was funded by a combination of utilizing a portion of our strong cash balances and cash flow from security investments, as well as expansion of shareholders’ equity through increased retained net income. The continued shift
toward loans helped sustain the margin despite higher CD rates. We note that current mortgage rates exceed the yield on our existing portfolio of mortgages, which, if sustained, will be a positive going forward. The Federal Reserve decision to
raise the target Federal Funds rate has contributed to our results as our cash position immediately repriced upward. We are starting to see the full impact of the 25 basis point increase from last quarter, of which an additional 25 basis point
increase was announced on September 26th, 2018.
Total average deposits were up $47.3 million in the third quarter 2018 versus the prior year. Average core deposits were down over that time frame, due in
part to a decline of money market balances, our highest costing core deposit type. Other average core deposits were up $32.4 in the third quarter 2018 over the same period in
2017, driven by interest bearing checking accounts and demand deposits. The overall cost of funds increased 16 basis points to 0.52% from the third quarter
2017 to the third quarter 2018. The shift towards loans in the asset mix, coupled with a 100 basis point increase in the yield on Federal Funds and securities more than offset the higher cost of funds, resulting in a 9 basis point gain in net
interest margin to 3.35%. TrustCo’s strong liquidity position continues to allow us to take advantage of opportunities as they arise.
Page | 2
Details
Average loans were up $242 million or 6.8% in the third quarter 2018 over the same period in 2017. Average residential loans, our primary lending focus,
were up $254 million or 8.4% in the third quarter 2018, over the same period in 2017. Total loan growth was offset by an $18.3 million decline in average outstandings on home equity lines of credit.
Average deposits were up $47.3 million or 1.1% for the third quarter 2018 over the same period a year earlier. The growth in deposits was the result of a
$51.8 million increase in average interest bearing checking balances, $16.0 million in average demand balances and $78.3 million in time deposits, partly offset by decreases of $63.4 million in money market balances and $35.4 million in savings
balances. Core deposits typically represent longer term customer relationships and are generally lower cost than time deposits. The cost of total deposits increased to 0.52% in the third quarter 2018 from 0.36% in the third quarter 2017. Mr.
McCormick noted that, “The year-over-year growth of our loans and our focus to strengthen the core deposit base reflect the long term strategic focus of the Company.”
For the third quarter 2018, return on average assets and return on average equity were 1.24% and 12.84%, respectively, compared to 1.02% and 11.06% for the
third quarter 2017. Diluted earnings per share were $0.157 for the third quarter 2018, compared to $0.131 for the third quarter 2017. Total operating expenses increased by $1.0 million in the third quarter 2018 as compared to the third quarter
2017, with the most significant increase coming in salaries and benefits. The increase in expenses was matched with a $945 thousand increase in revenue (net interest income plus non-interest income). The effective tax rate was 24.5% in the third
quarter of 2018, compared to 36.9% in the year ago period, reflecting the Tax Cuts and Jobs Act.
For the three quarters of 2018, return on average assets and return on average equity were 1.24% and 13.00%, respectively, compared to 0.98% and 10.77% for
three quarters of 2017. Diluted earnings per share were $0.470 through September of 2018, compared to $0.372 for the same time period in 2017.
“While some banks have backed away from branches, a customer-friendly branch franchise continues to be the key to our long term plans. We continue to make
good progress expanding loans and deposits throughout our entire branch network. We expect that trend to continue as the newer branches continue to mature.”
“At September 30, 2018, our average deposits per branch were $28.4 million, compared to $29.0 million at September 30, 2017. For branches open one year
or more, the average deposits per branch is up $240 thousand year over year. While total deposit growth is important, TrustCo strives to maximize customer relationships through attracting and increasing core deposit balances. We have always
designed our branches to be smaller and more cost effective than those built by many of our competitors. We use open floor plans that help maximize the value of our branches. We remain mindful that fully achieving our goals for newer branches
will take time and continued work. We believe success in growing customer relationships provides basic building blocks that will help drive profit growth for the coming years.”
Page | 3
Asset quality and loan loss reserve measures continued to improve. Nonperforming loans (NPLs) were $23.8 million at September 30, 2018, compared to $24.6
million at September 30, 2017. NPLs were equal to 0.62% of total loans at September 30, 2018, compared to 0.69% at September 30, 2017. The coverage ratio, or allowance for loan losses to NPLs, was 188.0% at September 30, 2018, compared to 179.3%
at September 30, 2017. Nonperforming assets (NPAs) were $26.1 million at September 30, 2018 compared to $27.5 million at September 30, 2017. The ratio of loan loss allowance to total loans was 1.17% as of September 30, 2018, compared to 1.23% at
September 30, 2017 and reflects both the continued improvement in asset quality and the economic conditions in our lending areas. The allowance for loan losses was $44.7 million at September 30, 2018 compared to $44.1 million at September 30,
2017. The provision for loan losses was $300 thousand for the third quarter 2018, compared to $550 thousand in the third quarter 2017. Net chargeoffs for the third quarter 2018 decreased versus the third quarter 2017, falling to $67 thousand from
$630 thousand in the year earlier period. The annualized net chargeoff ratio was 0.01% for the third quarter 2018, compared to 0.07% in the third quarter 2017.
The net interest margin for the third quarter 2018 was 3.35%, up 9 basis points versus the third quarter 2017, as increases in short term interest rates
led to significantly higher earnings on Federal Funds, while slightly better returns were also achieved in the investment portfolio. Loan yields declined slightly, but higher volumes increased interest income. During the same period, the cost of
interest bearing liabilities increased 16 basis points.
At September 30, 2018 the equity to asset ratio was 9.77%, compared to 9.34% at September 30, 2017. Book value per share at September 30, 2018 was $4.93
compared to $4.73 a year earlier.
TrustCo Bank Corp NY is a $4.9 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 September 30, 2018.
In addition, the Bank’s Financial Services Department offers a full range of investment services, retirement planning and trust and estate administration
services. The common shares of TrustCo are traded on the NASDAQ Global Select Market under the symbol TRST.
A conference call to discuss third quarter 2018 results will be held at 9:00 a.m. Eastern Time on October 23, 2018. Those
wishing to participate in the call may dial toll-free 1-888-339-0764. International callers must dial 1-412-902-4195. Please ask to be joined into the TrustCo Bank Corp NY / TRST call. A replay of the call will be available for thirty days by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10124519. The call will also be
audio webcast at: https://services.choruscall.com/links/trst181023.html, and
will be available for one year.
Page | 4
Safe Harbor Statement
All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as
amended. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to
future periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2018, the impact of Federal Reserve actions regarding interest rates and the growth of loans and
deposits throughout our branch network, our ability to capitalize on economic changes in the areas in which we operate and the extent to which higher expenses to fulfill operating and regulatory requirements recur or diminish over time. Such
forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which
speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that
expressed in any forward-looking statement: our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at
reasonable levels relative to income; our ability to comply with the supervisory agreement entered into with Trustco Bank’s regulator and potential regulatory actions if we fail to comply; restrictions or conditions imposed by our regulators on our
operations that may make it more difficult for us to achieve our goals; the future earnings and capital levels of Trustco Bank and the continued ability of Trustco Bank under regulatory rules and the supervisory agreement to distribute capital to
TrustCo, which could affect our ability to pay dividends; results of supervisory monitoring or examinations of Trustco Bank and TrustCo by our respective regulators; our ability to make accurate assumptions and judgments regarding the credit risks
associated with lending and investing activities; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; the effects of, and changes in, trade,
monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; adverse conditions on the securities markets that lead to impairment in the value of
securities in our investment portfolio; changes in law and policy accompanying the new presidential administration and uncertainty or speculation pending the enactment of such changes; the perceived overall value of our products and services by
users, including in comparison to competitors’ products and services and the willingness of current and prospective customers to substitute competitors’ products and services for our products and services; changes in consumer spending, borrowing
and saving habits; technological changes and electronic, cyber, and physical security breaches; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB;
changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and
uncertainties under the heading “Risk Factors” in our most recent annual report on Form 10-K and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.
Page | 5
TRUSTCO BANK CORP NY
GLENVILLE, NY
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
|
Three months ended
|
||||||||||||
|
9/30/2018
|
6/30/2018
|
9/30/2017
|
||||||||||
|
Summary of operations
|
||||||||||||
|
Net interest income (TE)
|
$
|
40,526
|
40,119
|
39,190
|
||||||||
|
Provision for loan losses
|
300
|
300
|
550
|
|||||||||
|
Noninterest income
|
4,455
|
4,495
|
4,854
|
|||||||||
|
Noninterest expense
|
24,544
|
24,095
|
23,526
|
|||||||||
|
Net income
|
15,199
|
15,405
|
12,596
|
|||||||||
|
Per common share
|
||||||||||||
|
Net income per share:
|
||||||||||||
|
- Basic
|
$
|
0.157
|
0.160
|
0.131
|
||||||||
|
- Diluted
|
0.157
|
0.160
|
0.131
|
|||||||||
|
Cash dividends
|
0.068
|
0.066
|
0.066
|
|||||||||
|
Book value at period end
|
4.93
|
4.87
|
4.73
|
|||||||||
|
Market price at period end
|
8.50
|
8.90
|
8.90
|
|||||||||
|
At period end
|
||||||||||||
|
Full time equivalent employees
|
807
|
829
|
815
|
|||||||||
|
Full service banking offices
|
148
|
148
|
144
|
|||||||||
|
Performance ratios
|
||||||||||||
|
Return on average assets
|
1.24
|
%
|
1.26
|
1.02
|
||||||||
|
Return on average equity
|
12.84
|
13.26
|
11.06
|
|||||||||
|
Efficiency (1)
|
53.39
|
53.35
|
52.79
|
|||||||||
|
Net interest spread (TE)
|
3.26
|
3.24
|
3.21
|
|||||||||
|
Net interest margin (TE)
|
3.35
|
3.32
|
3.26
|
|||||||||
|
Dividend payout ratio
|
43.29
|
41.08
|
50.07
|
|||||||||
|
Capital ratios at period end
|
||||||||||||
|
Consolidated tangible equity to tangible assets (2)
|
9.76
|
%
|
9.52
|
9.33
|
||||||||
|
Consolidated equity to assets
|
9.77
|
%
|
9.53
|
9.34
|
||||||||
|
Asset quality analysis at period end
|
||||||||||||
|
Nonperforming loans to total loans
|
0.62
|
0.65
|
0.69
|
|||||||||
|
Nonperforming assets to total assets
|
0.53
|
0.54
|
0.56
|
|||||||||
|
Allowance for loan losses to total loans
|
1.17
|
1.19
|
1.23
|
|||||||||
|
Coverage ratio (3)
|
1.9
|
x
|
1.8
|
x
|
1.8
|
x
|
||||||
| (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
Page | 6
FINANCIAL HIGHLIGHTS, Continued
(dollars in thousands, except per share data)
(Unaudited)
|
Nine months ended
|
||||||||
|
9/30/2018
|
9/30/2017
|
|||||||
|
Summary of operations
|
||||||||
|
Net interest income (TE)
|
$
|
119,957
|
115,152
|
|||||
|
Provision for loan losses
|
900
|
1,700
|
||||||
|
Noninterest income
|
13,629
|
14,085
|
||||||
|
Noninterest expense
|
72,794
|
70,458
|
||||||
|
Net income
|
45,412
|
35,783
|
||||||
|
Per common share
|
||||||||
|
Net income per share:
|
||||||||
|
- Basic
|
$
|
0.471
|
0.373
|
|||||
|
- Diluted
|
0.470
|
0.372
|
||||||
|
Cash dividends
|
0.199
|
0.197
|
||||||
|
Tangible Book value at period end
|
4.93
|
4.73
|
||||||
|
Market price at period end
|
8.50
|
8.90
|
||||||
|
Performance ratios
|
||||||||
|
Return on average assets
|
1.24
|
%
|
0.98
|
|||||
|
Return on average equity
|
13.00
|
10.77
|
||||||
|
Efficiency (1)
|
53.60
|
53.96
|
||||||
|
Net interest spread (TE)
|
3.24
|
3.14
|
||||||
|
Net interest margin (TE)
|
3.32
|
3.20
|
||||||
|
Dividend payout ratio
|
42.35
|
52.82
|
||||||
| (1) |
Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities
transactions and gain on sale of building and nonperforming loans).
|
TE = Taxable equivalent.
Page | 7
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
|
Three months ended
|
||||||||||||||||||||
|
9/30/2018
|
6/30/2018
|
3/31/2018
|
12/31/2017
|
9/30/2017
|
||||||||||||||||
|
Interest and dividend income:
|
||||||||||||||||||||
|
Interest and fees on loans
|
$
|
40,073
|
38,956
|
38,091
|
37,914
|
37,513
|
||||||||||||||
|
Interest and dividends on securities available for sale:
|
||||||||||||||||||||
|
U. S. government sponsored enterprises
|
787
|
787
|
750
|
614
|
465
|
|||||||||||||||
|
State and political subdivisions
|
7
|
6
|
7
|
10
|
6
|
|||||||||||||||
|
Mortgage-backed securities and collateralized mortgage obligations - residential
|
1,601
|
1,675
|
1,763
|
1,730
|
1,815
|
|||||||||||||||
|
Corporate bonds
|
202
|
150
|
133
|
148
|
153
|
|||||||||||||||
|
Small Business Administration - guaranteed participation securities
|
325
|
333
|
352
|
358
|
380
|
|||||||||||||||
|
Mortgage-backed securities and collateralized mortgage obligations - commercial
|
-
|
(5
|
)
|
42
|
43
|
22
|
||||||||||||||
|
Other securities
|
4
|
4
|
5
|
4
|
4
|
|||||||||||||||
|
Total interest and dividends on securities available for sale
|
2,926
|
2,950
|
3,052
|
2,907
|
2,845
|
|||||||||||||||
|
Interest on held to maturity securities:
|
||||||||||||||||||||
|
Mortgage-backed securities and collateralized mortgage obligations - residential
|
232
|
244
|
260
|
261
|
276
|
|||||||||||||||
|
Corporate bonds
|
-
|
-
|
-
|
-
|
102
|
|||||||||||||||
|
Total interest on held to maturity securities
|
232
|
244
|
260
|
261
|
378
|
|||||||||||||||
|
Federal Reserve Bank and Federal Home Loan Bank stock
|
82
|
198
|
77
|
151
|
125
|
|||||||||||||||
|
Interest on federal funds sold and other short-term investments
|
2,425
|
2,467
|
2,017
|
1,779
|
1,927
|
|||||||||||||||
|
Total interest income
|
45,738
|
44,815
|
43,497
|
43,012
|
42,788
|
|||||||||||||||
|
Interest expense:
|
||||||||||||||||||||
|
Interest on deposits:
|
||||||||||||||||||||
|
Interest-bearing checking
|
113
|
112
|
106
|
107
|
113
|
|||||||||||||||
|
Savings
|
417
|
420
|
419
|
429
|
435
|
|||||||||||||||
|
Money market deposit accounts
|
544
|
452
|
439
|
457
|
469
|
|||||||||||||||
|
Time deposits
|
3,864
|
3,439
|
2,860
|
2,412
|
2,247
|
|||||||||||||||
|
Interest on short-term borrowings
|
277
|
283
|
358
|
359
|
345
|
|||||||||||||||
|
Total interest expense
|
5,215
|
4,706
|
4,182
|
3,764
|
3,609
|
|||||||||||||||
|
Net interest income
|
40,523
|
40,109
|
39,315
|
39,248
|
39,179
|
|||||||||||||||
|
Less: Provision for loan losses
|
300
|
300
|
300
|
300
|
550
|
|||||||||||||||
|
Net interest income after provision for loan losses
|
40,223
|
39,809
|
39,015
|
38,948
|
38,629
|
|||||||||||||||
|
Noninterest income:
|
||||||||||||||||||||
|
Trustco Financial Services income
|
1,516
|
1,596
|
1,815
|
1,457
|
1,844
|
|||||||||||||||
|
Fees for services to customers
|
2,693
|
2,677
|
2,645
|
2,597
|
2,767
|
|||||||||||||||
|
Other
|
246
|
222
|
219
|
234
|
243
|
|||||||||||||||
|
Total noninterest income
|
4,455
|
4,495
|
4,679
|
4,288
|
4,854
|
|||||||||||||||
|
Noninterest expenses:
|
||||||||||||||||||||
|
Salaries and employee benefits
|
10,761
|
10,741
|
10,422
|
10,536
|
10,360
|
|||||||||||||||
|
Net occupancy expense
|
3,997
|
4,101
|
4,315
|
4,140
|
4,027
|
|||||||||||||||
|
Equipment expense
|
1,783
|
1,793
|
1,751
|
1,465
|
1,669
|
|||||||||||||||
|
Professional services
|
1,578
|
1,814
|
1,430
|
1,325
|
1,679
|
|||||||||||||||
|
Outsourced services
|
1,875
|
1,825
|
1,925
|
1,760
|
1,650
|
|||||||||||||||
|
Advertising expense
|
844
|
670
|
630
|
559
|
699
|
|||||||||||||||
|
FDIC and other insurance
|
682
|
514
|
1,023
|
1,102
|
1,018
|
|||||||||||||||
|
Other real estate expense, net
|
528
|
294
|
372
|
401
|
275
|
|||||||||||||||
|
Other
|
2,496
|
2,343
|
2,287
|
2,248
|
2,149
|
|||||||||||||||
|
Total noninterest expenses
|
24,544
|
24,095
|
24,155
|
23,536
|
23,526
|
|||||||||||||||
|
Income before taxes
|
20,134
|
20,209
|
19,539
|
19,700
|
19,957
|
|||||||||||||||
|
Income taxes
|
4,935
|
4,804
|
4,731
|
12,338
|
7,361
|
|||||||||||||||
|
Net income
|
$
|
15,199
|
15,405
|
14,808
|
7,362
|
12,596
|
||||||||||||||
|
Net income per common share:
|
||||||||||||||||||||
|
- Basic
|
$
|
0.157
|
0.160
|
0.154
|
0.077
|
0.131
|
||||||||||||||
|
- Diluted
|
0.157
|
0.160
|
0.153
|
0.076
|
0.131
|
|||||||||||||||
|
Average basic shares (in thousands)
|
96,555
|
96,449
|
96,353
|
96,230
|
96,102
|
|||||||||||||||
|
Average diluted shares (in thousands)
|
96,689
|
96,580
|
96,490
|
96,393
|
96,205
|
|||||||||||||||
|
Note: Taxable equivalent net interest income
|
$
|
40,526
|
40,119
|
39,319
|
39,259
|
39,190
|
||||||||||||||
Page | 8
CONSOLIDATED STATEMENTS OF INCOME, Continued
(dollars in thousands, except per share data)
(Unaudited)
|
Nine months ended
|
||||||||
|
9/30/2018
|
9/30/2017
|
|||||||
|
Interest and dividend income:
|
||||||||
|
Interest and fees on loans
|
$
|
117,120
|
110,219
|
|||||
|
Interest and dividends on securities available for sale:
|
||||||||
|
U. S. government sponsored enterprises
|
2,324
|
1,667
|
||||||
|
State and political subdivisions
|
20
|
29
|
||||||
|
Mortgage-backed securities and collateralized mortgage obligations - residential
|
5,039
|
5,717
|
||||||
|
Corporate bonds
|
485
|
458
|
||||||
|
Small Business Administration - guaranteed participation securities
|
1,010
|
1,189
|
||||||
|
Mortgage-backed securities and collateralized mortgage obligations - commercial
|
37
|
66
|
||||||
|
Other securities
|
13
|
12
|
||||||
|
Total interest and dividends on securities available for sale
|
8,928
|
9,138
|
||||||
|
Interest on held to maturity securities:
|
||||||||
|
Mortgage-backed securities-residential
|
736
|
888
|
||||||
|
Corporate bonds
|
-
|
410
|
||||||
|
Total interest on held to maturity securities
|
736
|
1,298
|
||||||
|
Federal Reserve Bank and Federal Home Loan Bank stock
|
357
|
393
|
||||||
|
Interest on federal funds sold and other short-term investments
|
6,909
|
4,900
|
||||||
|
Total interest income
|
134,050
|
125,948
|
||||||
|
Interest expense:
|
||||||||
|
Interest on deposits:
|
||||||||
|
Interest-bearing checking
|
331
|
371
|
||||||
|
Savings
|
1,256
|
1,300
|
||||||
|
Money market deposit accounts
|
1,435
|
1,403
|
||||||
|
Time deposits
|
10,163
|
6,711
|
||||||
|
Interest on short-term borrowings
|
918
|
1,043
|
||||||
|
Total interest expense
|
14,103
|
10,828
|
||||||
|
Net interest income
|
119,947
|
115,120
|
||||||
|
Less: Provision for loan losses
|
900
|
1,700
|
||||||
|
Net interest income after provision for loan losses
|
119,047
|
113,420
|
||||||
|
Noninterest income:
|
||||||||
|
Trustco Financial Services income
|
4,927
|
5,127
|
||||||
|
Fees for services to customers
|
8,015
|
8,201
|
||||||
|
Other
|
687
|
757
|
||||||
|
Total noninterest income
|
13,629
|
14,085
|
||||||
|
Noninterest expenses:
|
||||||||
|
Salaries and employee benefits
|
31,924
|
30,129
|
||||||
|
Net occupancy expense
|
12,413
|
12,403
|
||||||
|
Equipment expense
|
5,327
|
4,653
|
||||||
|
Professional services
|
4,822
|
5,570
|
||||||
|
Outsourced services
|
5,625
|
4,650
|
||||||
|
Advertising expense
|
2,144
|
2,019
|
||||||
|
FDIC and other insurance
|
2,219
|
3,077
|
||||||
|
Other real estate expense, net
|
1,194
|
770
|
||||||
|
Other
|
7,126
|
7,187
|
||||||
|
Total noninterest expenses
|
72,794
|
70,458
|
||||||
|
Income before taxes
|
59,882
|
57,047
|
||||||
|
Income taxes
|
14,470
|
21,264
|
||||||
|
Net income
|
$
|
45,412
|
35,783
|
|||||
|
Net income per common share:
|
||||||||
|
- Basic
|
$
|
0.471
|
0.373
|
|||||
|
- Diluted
|
0.470
|
0.372
|
||||||
|
Average basic shares (in thousands)
|
96,453
|
95,997
|
||||||
|
Average diluted shares (in thousands)
|
96,587
|
96,091
|
||||||
|
Note: Taxable equivalent net interest income
|
$
|
119,957
|
115,152
|
|||||
Page | 9
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
|
9/30/2018
|
6/30/2018
|
3/31/2018
|
12/31/2017
|
9/30/2017
|
||||||||||||||||
|
ASSETS:
|
||||||||||||||||||||
|
Cash and due from banks
|
$
|
42,195
|
40,567
|
39,373
|
44,125
|
41,598
|
||||||||||||||
|
Federal funds sold and other short term investments
|
423,254
|
546,049
|
577,797
|
568,615
|
582,599
|
|||||||||||||||
|
Total cash and cash equivalents
|
465,449
|
586,616
|
617,170
|
612,740
|
624,197
|
|||||||||||||||
|
Securities available for sale:
|
||||||||||||||||||||
|
U. S. government sponsored enterprises
|
150,053
|
150,704
|
151,327
|
137,994
|
123,658
|
|||||||||||||||
|
States and political subdivisions
|
180
|
524
|
525
|
525
|
534
|
|||||||||||||||
|
Mortgage-backed securities and collateralized mortgage obligations - residential
|
269,093
|
283,252
|
297,633
|
315,840
|
335,530
|
|||||||||||||||
|
Small Business Administration - guaranteed participation securities
|
57,894
|
61,876
|
64,113
|
67,059
|
69,818
|
|||||||||||||||
|
Mortgage-backed securities and collateralized mortgage obligations - commercial
|
-
|
-
|
9,573
|
9,700
|
9,824
|
|||||||||||||||
|
Corporate bonds
|
29,977
|
29,977
|
35,227
|
40,162
|
40,381
|
|||||||||||||||
|
Other securities
|
685
|
685
|
685
|
685
|
685
|
|||||||||||||||
|
Total securities available for sale
|
507,882
|
527,018
|
559,083
|
571,965
|
580,430
|
|||||||||||||||
|
Held to maturity securities:
|
||||||||||||||||||||
|
Mortgage-backed securities and collateralized mortgage obligations-residential
|
23,462
|
24,730
|
26,174
|
27,551
|
29,268
|
|||||||||||||||
|
Total held to maturity securities
|
23,462
|
24,730
|
26,174
|
27,551
|
29,268
|
|||||||||||||||
|
Federal Reserve Bank and Federal Home Loan Bank stock
|
8,953
|
8,953
|
8,779
|
8,779
|
8,779
|
|||||||||||||||
|
Loans:
|
||||||||||||||||||||
|
Commercial
|
190,987
|
190,904
|
185,129
|
186,207
|
187,281
|
|||||||||||||||
|
Residential mortgage loans
|
3,331,212
|
3,245,151
|
3,171,548
|
3,132,521
|
3,070,970
|
|||||||||||||||
|
Home equity line of credit
|
293,750
|
295,791
|
301,885
|
308,916
|
311,753
|
|||||||||||||||
|
Installment loans
|
9,967
|
9,309
|
8,413
|
8,763
|
8,278
|
|||||||||||||||
|
Loans, net of deferred net costs
|
3,825,916
|
3,741,155
|
3,666,975
|
3,636,407
|
3,578,282
|
|||||||||||||||
|
Less: Allowance for loan losses
|
44,736
|
44,503
|
44,379
|
44,170
|
44,082
|
|||||||||||||||
|
Net loans
|
3,781,180
|
3,696,652
|
3,622,596
|
3,592,237
|
3,534,200
|
|||||||||||||||
|
Bank premises and equipment, net
|
35,214
|
35,521
|
35,240
|
35,157
|
35,028
|
|||||||||||||||
|
Other assets
|
63,211
|
61,069
|
62,522
|
59,579
|
58,373
|
|||||||||||||||
|
Total assets
|
$
|
4,885,351
|
4,940,559
|
4,931,564
|
4,908,008
|
4,870,275
|
||||||||||||||
|
LIABILITIES:
|
||||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||
|
Demand
|
$
|
403,047
|
404,564
|
403,782
|
398,399
|
397,623
|
||||||||||||||
|
Interest-bearing checking
|
918,486
|
925,295
|
915,163
|
891,052
|
862,067
|
|||||||||||||||
|
Savings accounts
|
1,221,127
|
1,257,744
|
1,266,852
|
1,260,447
|
1,265,229
|
|||||||||||||||
|
Money market deposit accounts
|
501,270
|
512,453
|
539,839
|
556,462
|
564,557
|
|||||||||||||||
|
Time deposits
|
1,155,994
|
1,155,214
|
1,109,444
|
1,066,966
|
1,075,886
|
|||||||||||||||
|
Total deposits
|
4,199,924
|
4,255,270
|
4,235,080
|
4,173,326
|
4,165,362
|
|||||||||||||||
|
Short-term borrowings
|
176,377
|
182,705
|
203,910
|
242,991
|
216,508
|
|||||||||||||||
|
Accrued expenses and other liabilities
|
31,932
|
31,769
|
30,477
|
33,383
|
33,477
|
|||||||||||||||
|
Total liabilities
|
4,408,233
|
4,469,744
|
4,469,467
|
4,449,700
|
4,415,347
|
|||||||||||||||
|
SHAREHOLDERS' EQUITY:
|
||||||||||||||||||||
|
Capital stock
|
100,175
|
100,093
|
100,002
|
99,998
|
99,562
|
|||||||||||||||
|
Surplus
|
176,764
|
176,243
|
175,674
|
175,651
|
172,712
|
|||||||||||||||
|
Undivided profits
|
246,965
|
238,342
|
229,267
|
219,436
|
218,401
|
|||||||||||||||
|
Accumulated other comprehensive loss, net of tax
|
(13,000
|
)
|
(9,796
|
)
|
(8,490
|
)
|
(1,806
|
)
|
(3,060
|
)
|
||||||||||
|
Treasury stock at cost
|
(33,786
|
)
|
(34,067
|
)
|
(34,356
|
)
|
(34,971
|
)
|
(32,687
|
)
|
||||||||||
|
Total shareholders' equity
|
477,118
|
470,815
|
462,097
|
458,308
|
454,928
|
|||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
4,885,351
|
4,940,559
|
4,931,564
|
4,908,008
|
4,870,275
|
||||||||||||||
|
Outstanding shares (in thousands)
|
96,586
|
96,475
|
96,359
|
96,289
|
96,108
|
|||||||||||||||
Page | 10
NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
|
9/30/2018
|
6/30/2018
|
3/31/2018
|
12/31/2017
|
9/30/2017
|
||||||||||||||||
|
Nonperforming Assets
|
||||||||||||||||||||
|
New York and other states*
|
||||||||||||||||||||
|
Loans in nonaccrual status:
|
||||||||||||||||||||
|
Commercial
|
$
|
928
|
767
|
1,213
|
1,543
|
1,696
|
||||||||||||||
|
Real estate mortgage - 1 to 4 family
|
20,750
|
21,209
|
21,424
|
20,350
|
20,926
|
|||||||||||||||
|
Installment
|
13
|
6
|
19
|
57
|
30
|
|||||||||||||||
|
Total non-accrual loans
|
21,691
|
21,982
|
22,656
|
21,950
|
22,652
|
|||||||||||||||
|
Other nonperforming real estate mortgages - 1 to 4 family
|
35
|
36
|
38
|
38
|
40
|
|||||||||||||||
|
Total nonperforming loans
|
21,726
|
22,018
|
22,694
|
21,988
|
22,692
|
|||||||||||||||
|
Other real estate owned
|
2,306
|
2,569
|
2,190
|
3,246
|
2,879
|
|||||||||||||||
|
Total nonperforming assets
|
$
|
24,032
|
24,587
|
24,884
|
25,234
|
25,571
|
||||||||||||||
|
Florida
|
||||||||||||||||||||
|
Loans in nonaccrual status:
|
||||||||||||||||||||
|
Commercial
|
$
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||
|
Real estate mortgage - 1 to 4 family
|
2,054
|
2,143
|
2,154
|
2,389
|
1,895
|
|||||||||||||||
|
Installment
|
13
|
-
|
4
|
-
|
-
|
|||||||||||||||
|
Total non-accrual loans
|
2,067
|
2,143
|
2,158
|
2,389
|
1,895
|
|||||||||||||||
|
Other nonperforming real estate mortgages - 1 to 4 family
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
|
Total nonperforming loans
|
2,067
|
2,143
|
2,158
|
2,389
|
1,895
|
|||||||||||||||
|
Other real estate owned
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
|
Total nonperforming assets
|
$
|
2,067
|
2,143
|
2,158
|
2,389
|
1,895
|
||||||||||||||
|
Total
|
||||||||||||||||||||
|
Loans in nonaccrual status:
|
||||||||||||||||||||
|
Commercial
|
$
|
928
|
767
|
1,213
|
1,543
|
1,696
|
||||||||||||||
|
Real estate mortgage - 1 to 4 family
|
22,804
|
23,352
|
23,578
|
22,739
|
22,821
|
|||||||||||||||
|
Installment
|
26
|
6
|
23
|
57
|
30
|
|||||||||||||||
|
Total non-accrual loans
|
23,758
|
24,125
|
24,814
|
24,339
|
24,547
|
|||||||||||||||
|
Other nonperforming real estate mortgages - 1 to 4 family
|
35
|
36
|
38
|
38
|
40
|
|||||||||||||||
|
Total nonperforming loans
|
23,793
|
24,161
|
24,852
|
24,377
|
24,587
|
|||||||||||||||
|
Other real estate owned
|
2,306
|
2,569
|
2,190
|
3,246
|
2,879
|
|||||||||||||||
|
Total nonperforming assets
|
$
|
26,099
|
26,730
|
27,042
|
27,623
|
27,466
|
||||||||||||||
|
Quarterly Net Chargeoffs (Recoveries)
|
||||||||||||||||||||
|
New York and other states*
|
||||||||||||||||||||
|
Commercial
|
$
|
(2
|
)
|
(1
|
)
|
(6
|
)
|
(86
|
)
|
(2
|
)
|
|||||||||
|
Real estate mortgage - 1 to 4 family
|
(3
|
)
|
150
|
28
|
249
|
613
|
||||||||||||||
|
Installment
|
64
|
27
|
66
|
50
|
56
|
|||||||||||||||
|
Total net chargeoffs
|
$
|
59
|
176
|
88
|
213
|
667
|
||||||||||||||
|
Florida
|
||||||||||||||||||||
|
Commercial
|
$
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||
|
Real estate mortgage - 1 to 4 family
|
-
|
-
|
-
|
(1
|
)
|
(41
|
)
|
|||||||||||||
|
Installment
|
8
|
-
|
2
|
-
|
4
|
|||||||||||||||
|
Total net chargeoffs
|
$
|
8
|
-
|
2
|
(1
|
)
|
(37
|
)
|
||||||||||||
|
Total
|
||||||||||||||||||||
|
Commercial
|
$
|
(2
|
)
|
(1
|
)
|
(6
|
)
|
(86
|
)
|
(2
|
)
|
|||||||||
|
Real estate mortgage - 1 to 4 family
|
(3
|
)
|
150
|
28
|
248
|
572
|
||||||||||||||
|
Installment
|
72
|
27
|
68
|
50
|
60
|
|||||||||||||||
|
Total net chargeoffs
|
$
|
67
|
176
|
90
|
212
|
630
|
||||||||||||||
|
Asset Quality Ratios
|
||||||||||||||||||||
|
Total nonperforming loans (1)
|
$
|
23,793
|
24,161
|
24,852
|
24,377
|
24,587
|
||||||||||||||
|
Total nonperforming assets (1)
|
26,099
|
26,730
|
27,042
|
27,623
|
27,466
|
|||||||||||||||
|
Total net chargeoffs (2)
|
67
|
176
|
90
|
212
|
630
|
|||||||||||||||
|
Allowance for loan losses (1)
|
44,736
|
44,503
|
44,379
|
44,170
|
44,082
|
|||||||||||||||
|
Nonperforming loans to total loans
|
0.62
|
%
|
0.65
|
%
|
0.68
|
%
|
0.67
|
%
|
0.69
|
%
|
||||||||||
|
Nonperforming assets to total assets
|
0.53
|
%
|
0.54
|
%
|
0.55
|
%
|
0.56
|
%
|
0.56
|
%
|
||||||||||
|
Allowance for loan losses to total loans
|
1.17
|
%
|
1.19
|
%
|
1.21
|
%
|
1.21
|
%
|
1.23
|
%
|
||||||||||
|
Coverage ratio (1)
|
188.0
|
%
|
184.2
|
%
|
178.6
|
%
|
181.2
|
%
|
179.3
|
%
|
||||||||||
|
Annualized net chargeoffs to average loans (2)
|
0.01
|
%
|
0.02
|
%
|
0.01
|
%
|
0.02
|
%
|
0.07
|
%
|
||||||||||
|
Allowance for loan losses to annualized net chargeoffs (2)
|
166.9
|
x
|
63.2
|
x
|
123.3
|
x
|
52.1
|
x
|
17.5
|
x
|
||||||||||
|
*
|
Includes New York, New Jersey, Vermont and Massachusetts.
|
| (1) |
At period-end
|
| (2) |
For the period ended
|
Page | 11
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL
|
(dollars in thousands)
(Unaudited)
|
Three months ended
|
Three months ended
|
||||||||||||||||||||||
|
September 30, 2018
|
September 30, 2017
|
|||||||||||||||||||||||
|
Average
Balance
|
Interest
|
Average
Rate |
Average
Balance |
Interest
|
Average
Rate |
|||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||
|
Securities available for sale:
|
||||||||||||||||||||||||
|
U. S. government sponsored enterprises
|
$
|
154,865
|
787
|
2.03
|
%
|
$
|
123,055
|
465
|
1.51
|
%
|
||||||||||||||
|
Mortgage backed securities and collateralized mortgage obligations - residential
|
287,760
|
1,601
|
2.23
|
345,248
|
1,815
|
2.10
|
||||||||||||||||||
|
State and political subdivisions
|
453
|
10
|
8.88
|
522
|
11
|
8.43
|
||||||||||||||||||
|
Corporate bonds
|
30,110
|
202
|
2.68
|
42,528
|
153
|
1.44
|
||||||||||||||||||
|
Small Business Administration - guaranteed participation securities
|
62,368
|
325
|
2.09
|
72,204
|
380
|
2.11
|
||||||||||||||||||
|
Mortgage backed securities and collateralized mortgage obligations - commercial
|
-
|
-
|
-
|
9,918
|
22
|
0.89
|
||||||||||||||||||
|
Other
|
685
|
4
|
2.34
|
685
|
4
|
2.34
|
||||||||||||||||||
|
Total securities available for sale
|
536,241
|
2,929
|
2.18
|
594,160
|
2,850
|
1.92
|
||||||||||||||||||
|
Federal funds sold and other short-term Investments
|
486,552
|
2,425
|
1.98
|
621,878
|
1,927
|
1.24
|
||||||||||||||||||
|
Held to maturity securities:
|
||||||||||||||||||||||||
|
Corporate bonds
|
-
|
-
|
-
|
6,738
|
102
|
6.06
|
||||||||||||||||||
|
Mortgage backed securities and collateralized mortgage obligations - residential
|
24,080
|
232
|
3.86
|
30,161
|
276
|
3.66
|
||||||||||||||||||
|
Total held to maturity securities
|
24,080
|
232
|
3.86
|
36,899
|
378
|
4.10
|
||||||||||||||||||
|
Federal Reserve Bank and Federal Home Loan Bank stock
|
8,953
|
82
|
3.66
|
9,117
|
125
|
5.48
|
||||||||||||||||||
|
Commercial loans
|
188,757
|
2,480
|
5.25
|
183,867
|
2,482
|
5.40
|
||||||||||||||||||
|
Residential mortgage loans
|
3,289,534
|
33,949
|
4.13
|
3,035,745
|
31,600
|
4.16
|
||||||||||||||||||
|
Home equity lines of credit
|
294,518
|
3,418
|
4.60
|
312,812
|
3,237
|
4.14
|
||||||||||||||||||
|
Installment loans
|
9,447
|
226
|
9.51
|
8,096
|
200
|
9.88
|
||||||||||||||||||
|
Loans, net of unearned income
|
3,782,256
|
40,073
|
4.23
|
3,540,520
|
37,519
|
4.24
|
||||||||||||||||||
|
Total interest earning assets
|
4,838,082
|
45,741
|
3.78
|
4,802,574
|
42,799
|
3.56
|
||||||||||||||||||
|
Allowance for loan losses
|
(44,770
|
)
|
(44,284
|
)
|
||||||||||||||||||||
|
Cash & non-interest earning assets
|
120,474
|
127,004
|
||||||||||||||||||||||
|
Total assets
|
$
|
4,913,786
|
$
|
4,885,294
|
||||||||||||||||||||
|
Liabilities and shareholders' equity
|
||||||||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||||||
|
Interest bearing checking accounts
|
$
|
913,150
|
113
|
0.05
|
%
|
$
|
861,387
|
113
|
0.05
|
%
|
||||||||||||||
|
Money market accounts
|
508,795
|
544
|
0.42
|
572,168
|
469
|
0.33
|
||||||||||||||||||
|
Savings
|
1,244,889
|
417
|
0.13
|
1,280,318
|
435
|
0.14
|
||||||||||||||||||
|
Time deposits
|
1,156,422
|
3,864
|
1.33
|
1,078,085
|
2,247
|
0.83
|
||||||||||||||||||
|
Total interest bearing deposits
|
3,823,256
|
4,938
|
0.51
|
3,791,958
|
3,264
|
0.34
|
||||||||||||||||||
|
Short-term borrowings
|
183,796
|
277
|
0.60
|
223,238
|
345
|
0.62
|
||||||||||||||||||
|
Total interest bearing liabilities
|
4,007,052
|
5,215
|
0.52
|
4,015,196
|
3,609
|
0.36
|
||||||||||||||||||
|
Demand deposits
|
405,311
|
389,286
|
||||||||||||||||||||||
|
Other liabilities
|
26,429
|
28,809
|
||||||||||||||||||||||
|
Shareholders' equity
|
474,994
|
452,003
|
||||||||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
4,913,786
|
$
|
4,885,294
|
||||||||||||||||||||
|
Net interest income, tax equivalent
|
40,526
|
39,190
|
||||||||||||||||||||||
|
Net interest spread
|
3.26
|
%
|
3.21
|
%
|
||||||||||||||||||||
|
Net interest margin (net interest income to total interest earning assets)
|
3.35
|
%
|
3.26
|
%
|
||||||||||||||||||||
|
Tax equivalent adjustment
|
(3
|
)
|
(11
|
)
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Net interest income
|
40,523
|
39,179
|
||||||||||||||||||||||
Page | 12
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued
|
(dollars in thousands)
|
||||||||||||||||||||||||
| (Unaudited) |
Nine months ended
September 30, 2018 |
Nine months ended
September 30, 2017 |
||||||||||||||||||||||
|
Average
Balance |
Interest
|
Average
Rate |
Average
Balance |
Interest |
Average
Rate |
|||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||
|
Securities available for sale:
|
||||||||||||||||||||||||
|
U. S. government sponsored enterprises
|
$
|
155,434
|
2,324
|
1.99
|
%
|
$
|
139,629
|
1,667
|
1.59
|
%
|
||||||||||||||
|
Mortgage backed securities and collateralized mortgage obligations - residential
|
300,645
|
5,039
|
2.23
|
357,347
|
5,717
|
2.13
|
||||||||||||||||||
|
State and political subdivisions
|
494
|
30
|
8.14
|
736
|
41
|
7.43
|
||||||||||||||||||
|
Corporate bonds
|
30,384
|
485
|
2.13
|
42,272
|
458
|
1.44
|
||||||||||||||||||
|
Small Business Administration - guaranteed participation securities
|
64,769
|
1,010
|
2.08
|
75,429
|
1,189
|
2.10
|
||||||||||||||||||
|
Mortgage backed securities and collateralized mortgage obligations - commercial
|
3,651
|
37
|
1.34
|
10,003
|
66
|
0.88
|
||||||||||||||||||
|
Other
|
685
|
13
|
2.53
|
685
|
12
|
2.34
|
||||||||||||||||||
|
Total securities available for sale
|
556,062
|
8,938
|
2.14
|
626,101
|
9,150
|
1.95
|
||||||||||||||||||
|
Federal funds sold and other short-term Investments
|
521,470
|
6,909
|
1.77
|
635,450
|
4,900
|
1.03
|
||||||||||||||||||
|
Held to maturity securities:
|
||||||||||||||||||||||||
|
Corporate bonds
|
-
|
-
|
-
|
8,897
|
410
|
6.14
|
||||||||||||||||||
|
Mortgage backed securities and collateralized mortgage obligations - residential
|
25,410
|
736
|
3.86
|
32,202
|
888
|
3.68
|
||||||||||||||||||
|
Total held to maturity securities
|
25,410
|
736
|
3.86
|
41,099
|
1,298
|
4.21
|
||||||||||||||||||
|
Federal Reserve Bank and Federal Home Loan Bank stock
|
8,893
|
357
|
5.35
|
9,467
|
393
|
5.54
|
||||||||||||||||||
|
Commercial loans
|
187,198
|
7,336
|
5.23
|
184,932
|
7,313
|
5.27
|
||||||||||||||||||
|
Residential mortgage loans
|
3,214,950
|
99,123
|
4.11
|
2,969,363
|
92,910
|
4.17
|
||||||||||||||||||
|
Home equity lines of credit
|
299,723
|
10,018
|
4.47
|
321,276
|
9,453
|
3.92
|
||||||||||||||||||
|
Installment loans
|
8,831
|
644
|
9.75
|
8,117
|
563
|
9.25
|
||||||||||||||||||
|
Loans, net of unearned income
|
3,710,702
|
117,120
|
4.21
|
3,483,688
|
110,239
|
4.22
|
||||||||||||||||||
|
Total interest earning assets
|
4,822,537
|
134,060
|
3.71
|
4,795,805
|
125,980
|
3.50
|
||||||||||||||||||
|
Allowance for loan losses
|
(44,573
|
)
|
(44,317
|
)
|
||||||||||||||||||||
|
Cash & non-interest earning assets
|
123,134
|
129,384
|
||||||||||||||||||||||
|
Total assets
|
$
|
4,901,098
|
$
|
4,880,872
|
||||||||||||||||||||
|
Liabilities and shareholders' equity
|
||||||||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||||||
|
Interest bearing checking accounts
|
$
|
899,319
|
331
|
0.05
|
%
|
$
|
840,322
|
371
|
0.06
|
%
|
||||||||||||||
|
Money market accounts
|
528,310
|
1,435
|
0.36
|
576,518
|
1,403
|
0.32
|
||||||||||||||||||
|
Savings
|
1,255,245
|
1,256
|
0.13
|
1,280,473
|
1,300
|
0.14
|
||||||||||||||||||
|
Time deposits
|
1,124,592
|
10,163
|
1.21
|
1,104,731
|
6,711
|
0.81
|
||||||||||||||||||
|
Total interest bearing deposits
|
3,807,466
|
13,185
|
0.46
|
3,802,044
|
9,785
|
0.34
|
||||||||||||||||||
|
Short-term borrowings
|
202,412
|
918
|
0.61
|
226,447
|
1,043
|
0.61
|
||||||||||||||||||
|
Total interest bearing liabilities
|
4,009,878
|
14,103
|
0.47
|
4,028,491
|
10,828
|
0.36
|
||||||||||||||||||
|
Demand deposits
|
396,288
|
380,216
|
||||||||||||||||||||||
|
Other liabilities
|
28,062
|
27,880
|
||||||||||||||||||||||
|
Shareholders' equity
|
466,870
|
444,285
|
||||||||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
4,901,098
|
4,880,872
|
|||||||||||||||||||||
|
Net interest income, tax equivalent
|
119,957
|
115,152
|
||||||||||||||||||||||
|
Net interest spread
|
3.24
|
%
|
3.14
|
%
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Net interest margin (net interest income to total interest earning assets)
|
3.32
|
%
|
3.20
|
%
|
||||||||||||||||||||
|
Tax equivalent adjustment
|
(10
|
)
|
(32
|
)
|
||||||||||||||||||||
|
Net interest income
|
119,947
|
115,120
|
||||||||||||||||||||||
Page | 13
Non-GAAP Financial Measures Reconciliation
Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible
equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible
assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.
The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. We calculate the efficiency
ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on
the sale of nonperforming loans and securities and other non-routine items from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue.
We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial
results. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and not a substitute for an analysis based on GAAP measures. As other companies may use
different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share,
efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.
NON-GAAP FINANCIAL MEASURES RECONCILIATION
(dollars in thousands, except per share amounts)
(Unaudited)
|
Tangible Equity to Tangible Assets
|
9/30/2018
|
6/30/2018
|
9/30/2017
|
|||||||||
|
Total Assets
|
$
|
4,885,351
|
4,940,559
|
4,870,275
|
||||||||
|
Less: Intangible assets
|
553
|
553
|
553
|
|||||||||
|
Tangible assets
|
4,884,798
|
4,940,006
|
4,869,722
|
|||||||||
|
Equity
|
477,118
|
470,815
|
454,928
|
|||||||||
|
Less: Intangible assets
|
553
|
553
|
553
|
|||||||||
|
Tangible equity
|
476,565
|
470,262
|
454,375
|
|||||||||
|
Tangible Equity to Tangible Assets
|
9.76
|
%
|
9.52
|
%
|
9.33
|
%
|
||||||
|
Equity to Assets
|
9.77
|
%
|
9.53
|
%
|
9.34
|
%
|
||||||
|
Three months ended
|
Nine months ended
|
|||||||||||||||||||
|
Efficiency Ratio
|
9/30/2018
|
6/30/2018
|
9/30/2017
|
9/30/2018
|
9/30/2017
|
|||||||||||||||
|
Net interest income (fully taxable equivalent)
|
$
|
40,526
|
40,119
|
39,190
|
119,957
|
115,152
|
||||||||||||||
|
Non-interest income
|
4,455
|
4,495
|
4,854
|
13,629
|
14,085
|
|||||||||||||||
|
Less: Net gain on sale of nonperforming loans
|
-
|
-
|
-
|
-
|
84
|
|||||||||||||||
|
Revenue used for efficiency ratio
|
44,981
|
44,614
|
44,044
|
133,586
|
129,153
|
|||||||||||||||
|
Total noninterest expense
|
24,544
|
24,095
|
23,526
|
72,794
|
70,458
|
|||||||||||||||
|
Less: Other real estate expense, net
|
528
|
294
|
275
|
1,194
|
770
|
|||||||||||||||
|
Expense used for efficiency ratio
|
24,016
|
23,801
|
23,251
|
71,600
|
69,688
|
|||||||||||||||
|
Efficiency Ratio
|
53.39
|
%
|
53.35
|
%
|
52.79
|
%
|
53.60
|
%
|
53.96
|
%
|
||||||||||
Page | 14