EX-99.A 2 ef20027309_ex99-a.htm EXHIBIT 99(A)
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
(518) 381-3693

FOR IMMEDIATE RELEASE:

Loans Reach Another All-Time High, Credit Quality Remains Solid;
TrustCo Reports Net Income of $12.1 Million and Capital Up 3%

Executive Snapshot:


 •
Average Loan portfolio continues to grow:

o
On average, total loans were up $249.4 million or 5.2% for the first quarter 2024 compared to first quarter 2023


•
Continued solid financial results:

o
Key metrics for first quarter 2024:

■
Net income of $12.1 million versus $9.8 million for the fourth quarter 2023

■
Net interest income of $36.6 million

■
Return on average assets (ROAA) of 0.80% versus 0.64% for the fourth quarter 2023

■
Return on average equity (ROAE) of 7.54% versus 6.21% for the fourth quarter 2023

■
Book value per share at period end was $34.12, up from $33.92 compared to December 31, 2023


•
Superior asset quality:

o
Nonperforming loans (NPLs) were $18.3 million as of March 31, 2024, down from $19.2 million March 31, 2023, and continue to remain at low levels

o
NPLs to total loans were 0.37% as of March 31, 2024 compared to 0.40% at March 31, 2023

o
Nonperforming assets (NPAs) to total assets was 0.33% at March 31, 2024 compared to 0.35% at March 31, 2023


•
Capital continues to grow:

o
Consolidated equity to assets increased 3.3% to 10.51% at March 31, 2024 from 10.17% at March 31, 2023

Glenville, New York – April 22, 2024

TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced first quarter 2024 net income of $12.1 million or $0.64 diluted earnings per share, compared to net income of $17.7 million or $0.93 diluted earnings per share for the first quarter 2023. Average loan growth increased 5.2% or $249.4 million for the first quarter 2024 over the same period in 2023.

Page | 1
Overview

Chairman, President, and CEO, Robert J. McCormick said “Trustco Bank is known for its top-tier residential mortgage products and our customers, both existing and new, drove residential loan production up 3% compared to the first quarter of 2023. Commercial loans also grew, besting last year’s first quarter by 13%, for an increase in total loans of 4%.  Non-interest income and capital ratios are both up during the same period, and our team held the line on deposit run-off generating modest growth there as well.  Non-performing loans are steady and charge-offs resulted in a net recovery this quarter, consistent with our commitment to excellent credit quality.  All in all, we believe that we are well positioned for the year ahead.”
 
Details

Average loans were up $249.4 million or 5.2% in the first quarter 2024 over the same period in 2023.  Average residential loans, our primary lending focus, were up $146.6 million, or 3.5%, in the first quarter 2024 over the same period in 2023.  Average commercial loans and home equity lines of credit also increased $38.3 million, or 16.0%, and $61.7 million, or 21.2%, respectively, in the first quarter 2024 over the same period in 2023.  Average deposits were up $141.6 million or 2.74% for the first quarter 2024 over the same period a year earlier. We believe the increase in time 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.

Net interest income was $36.6 million for the first quarter 2024, a decrease of $2.0 million, or 5.3%, compared to the prior quarter, driven by a higher cost of deposits, partially offset by loan growth at higher interest rates.  The net interest margin for the first quarter 2024 was 2.44%, down 16 basis points from 2.60% in the fourth quarter of 2023.  The yield on interest earnings assets increased to 3.99%, up 6 basis points from 3.93% in the fourth quarter of 2023.  The cost of interest bearing liabilities increased to 1.99% in the first quarter 2024 from 1.72% in the fourth quarter 2023.  The Bank has seen the erosion of margin begin to slow when comparing the decrease to prior quarters and we are optimistic that we are nearing the bottom of this rate cycle.  The Federal Reserve’s decision regarding whether to cut or hold rates in the upcoming meetings will have an effect on our ability to decrease deposit costs which should help margin in future quarters.  During the first quarter of 2024 we have been able to lower the rates offered on our time deposits while continuing to retain and grow that product.  This should bring down the cost of time deposits over time.  Non-interest expense decreased $3.9 million over the prior quarter primarily as a result of lower salaries and employee benefits costs in the current quarter and a litigation settlement in the prior quarter.

Asset quality remains strong and has been consistent over the past twelve months.  The Company recorded a provision for credit losses of $600 thousand in the first quarter of 2024, which is the result of a provision for credit losses on loans of $600 thousand, and there was no change in unfunded commitments.  The ratio of allowance for credit losses on loans to total loans was 0.98% and 0.97% as of March 31, 2024 and 2023, respectively.  The allowance for credit losses on loans was $49.2 million at March 31, 2024, compared to $46.7 million at March 31, 2023.  NPLs were $18.3 million at March 31, 2024, compared to $19.2 million at March 31, 2023.  NPLs were 0.37% and 0.40% of total loans at March 31, 2024 and 2023, respectively.  The coverage ratio, or allowance for credit losses on loans to NPLs, was 269.3% at March 31, 2024, compared to 243.6% at March 31, 2023.  NPAs were $20.6 million at March 31, 2024, compared to $21.0 million at March 31, 2023.

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At March 31, 2024, our equity to asset ratio was 10.51%, compared to 10.17% at March 31, 2023.  Book value per share at March 31, 2024 was $34.12, up 5.6% compared to $32.31 a year earlier.
 
A conference call to discuss first quarter 2024 results will be held at 9:00 a.m. Eastern Time on April 23, 2024.  Those wishing to participate in the call may dial toll-free for the United States at 1-833-470-1428, and for Canada at 1-833-950-0062, Access code 897430.  A replay of the call will be available for thirty days by dialing toll-free for the United States at 1-866-813-9403, Access code 734817.  The call will also be audio webcast at https://events.q4inc.com/attendee/180461992, and will be available for one year.
 
About TrustCo Bank Corp NY

TrustCo Bank Corp NY is a $6.2 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 140 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at March 31, 2024.

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

Page | 3
Forward-Looking Statements

All statements in this news release that are not historical are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future development, results or periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our future performance, including our expectations regarding the effects of the economic environment on our financial results, our ability to retain customers and the amount of customers’ business, including deposit balances, with us, the impact of the Federal Reserve’s actions regarding interest rates, 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.  Forward-looking statements are based on management’s current expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Such forward-looking statements are subject to factors and uncertainties that could cause actual results to differ materially for TrustCo from the views, beliefs and projections expressed in such statements, and many of the risks and uncertainties are heightened by or may, in the future, be heightened by volatility in financial markets and macroeconomic or geopolitical concerns related to inflation, continued elevated interest rates and ongoing armed conflicts (including the Russia/Ukraine conflict and the conflict in Israel and surrounding areas). TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement:  future changes in interest rates; ongoing inflationary pressures and continued elevated prices; exposure to credit risk in our lending activities; our increasing commercial loan portfolio; the sufficiency of our allowance for credit losses on loans to cover actual loan losses; our ability to meet the cash flow requirements of our depositors or borrowers or meet our operating cash needs to fund corporate expansion and other activities; claims and litigation pertaining to fiduciary responsibility and lender liability; our dependency upon the services of the management team; our disclosure controls and procedures’ ability to prevent or detect errors or acts of fraud; the adequacy of our business continuity and disaster recovery plans; the effectiveness of our risk management framework; the impact of any expansion by us into new lines of business or new products and services; the impact of severe weather events and climate change on us and the communities we serve, including societal responses to climate change; increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices; the chance of a prolonged economic downturn, especially one affecting our geographic market area; instability in global economic conditions and geopolitical matters, as well as volatility in financial markets; the soundness of other financial institutions; U.S. government shutdowns, credit rating downgrades, or failure to increase the debt ceiling; fluctuations in the trust wealth management fees we receive as a result of investment performance; the impact of regulatory capital rules on our growth; changes in laws and regulations, including changes in cybersecurity or privacy regulations; restrictions on data collection and use; our compliance with the USA PATRIOT Act, Bank Secrecy Act, and other laws and regulations that could result in material fines or sanctions; changes in tax laws; limitations on our ability to pay dividends; TrustCo Realty Corp.’s ability to qualify as a real estate investment trust; changes in accounting standards; competition within our market areas; consumers and businesses’ use of non-banks to complete financial transactions; our reliance on third-party service providers; the impact of data breaches and cyber-attacks; the impact of a failure in or breach of our operational or security systems or infrastructure, or those of third parties; the impact of an unauthorized disclosure of sensitive or confidential client or customer information; the impact of interruptions in the effective operation of our computer systems; the impact of anti-takeover provisions in our organizational documents; the impact of the manner in which we allocate capital; and other risks and uncertainties under the heading “Risk Factors” in our most recent annual report on Form 10-K and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings. The forward-looking statements contained in this news release represent TrustCo management’s judgment as of the date of this news release. TrustCo disclaims, however, any intent or obligation to update forward-looking statements, either as a result of future developments, new information or otherwise, except as may be required by law.

Page | 4
TRUSTCO BANK CORP NY
GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)
(Unaudited)

   
Three months ended
  
   
3/31/2024
    
12/31/2023
    
3/31/2023
  
Summary of operations
                  
Net interest income
  
$
36,578
    
$
38,607
    
$
46,965
  
Provision for credit losses
    
600
      
1,350
      
300
  
Noninterest income
    
4,843
      
4,474
      
4,669
  
Noninterest expense
    
24,903
      
28,831
      
27,679
  
Net income
    
12,126
      
9,848
      
17,746
  
                         
Per share
                        
Net income per share:
                        
- Basic
  
$
0.64
    
$
0.52
    
$
0.93
  
- Diluted
    
0.64
      
0.52
      
0.93
  
Cash dividends
    
0.36
      
0.36
      
0.36
  
Book value at period end
    
34.12
      
33.92
      
32.31
  
Market price at period end
    
28.16
      
31.05
      
31.94
  
                         
At period end
                        
Full time equivalent employees
    
761
      
750
      
776
  
Full service banking offices
    
140
      
140
      
143
  
                         
Performance ratios
                        
Return on average assets
    
0.80
%
    
0.64
%
    
1.20
%
Return on average equity
    
7.54
      
6.21
      
11.84
  
Efficiency ratio (1)
    
59.94
      
60.16
      
53.17
  
Net interest spread
    
2.00
      
2.21
      
3.06
  
Net interest margin
    
2.44
      
2.60
      
3.21
  
Dividend payout ratio
    
56.48
      
69.54
      
38.59
  
                         
Capital ratios at period end
                        
Consolidated equity to assets
    
10.51
%
    
10.46
%
    
10.17
%
Consolidated tangible equity to tangible assets (2)
    
10.50
%
    
10.45
%
    
10.16
%
                         
Asset quality analysis at period end
                        
Nonperforming loans to total loans
    
0.37
%
    
0.35
%
    
0.40
%
Nonperforming assets to total assets
    
0.33
      
0.29
      
0.35
  
Allowance for credit losses on loans to total loans
    
0.98
      
0.97
      
0.97
  
Coverage ratio (3)
    
2.7
x
    
2.7
x
    
2.4x


(1)
Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense, branch closure expenses, and non-recurring expenses) divided by taxable equivalent net interest income plus noninterest income (excluding non-recurring loss).See Non-GAAP Financial Measures Reconciliation.
(2)
Non-GAAP measure; calculated as total shareholders' equity less $553 of intangible assets divided by total assets less $553 of intangible assets.  See Non-GAAP Financial Measures Reconciliation.
(3)
Calculated as allowance for credit losses on loans divided by total nonperforming loans.

Page | 5
CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)
(Unaudited)

   
Three months ended
  
   
3/31/2024
    
12/31/2023
    
9/30/2023
    
6/30/2023
    
3/31/2023
  
Interest and dividend income:
                              
Interest and fees on loans
  
$
49,804
    
$
49,201
    
$
47,921
    
$
46,062
    
$
44,272
  
Interest and dividends on securities available for sale:
                                        
U. S. government sponsored enterprises
    
906
      
750
      
672
      
691
      
692
  
State and political subdivisions
    
-
      
1
      
-
      
1
      
-
  
Mortgage-backed securities and collateralized mortgage obligations - residential
    
1,494
      
1,533
      
1,485
      
1,543
      
1,585
  
Corporate bonds
    
476
      
477
      
473
      
516
      
521
  
Small Business Administration - guaranteed participation securities
    
100
      
102
      
107
      
111
      
117
  
Other securities
    
3
      
3
      
2
      
3
      
2
  
Total interest and dividends on securities available for sale
    
2,979
      
2,866
      
2,739
      
2,865
      
2,917
  
                                         
Interest on held to maturity securities:
                                        
Mortgage-backed securities and collateralized mortgage
obligations - residential
    
68
      
70
      
73
      
75
      
78
  
Total interest on held to maturity securities
    
68
      
70
      
73
      
75
      
78
  
                                         
Federal Home Loan Bank stock
    
152
      
149
      
131
      
110
      
110
  
                                         
Interest on federal funds sold and other short-term investments
    
6,750
      
6,354
      
6,688
      
6,970
      
6,555
  
Total interest income
    
59,753
      
58,640
      
57,552
      
56,082
      
53,932
  
                                         
Interest expense:
                                        
Interest on deposits:
                                        
Interest-bearing checking
    
240
      
165
      
102
      
49
      
66
  
Savings
    
712
      
707
      
639
      
655
      
530
  
Money market deposit accounts
    
2,342
      
2,500
      
2,384
      
1,756
      
814
  
Time deposits
    
19,677
      
16,460
      
11,962
      
9,291
      
5,272
  
Interest on short-term borrowings
    
204
      
201
      
244
      
279
      
285
  
Total interest expense
    
23,175
      
20,033
      
15,331
      
12,030
      
6,967
  
                                         
Net interest income
    
36,578
      
38,607
      
42,221
      
44,052
      
46,965
  
 
                                        
Less: Provision (Credit) for credit losses
    
600
      
1,350
      
100
      
(500
)
    
300
  
Net interest income after provision (credit) for credit losses
    
35,978
      
37,257
      
42,121
      
44,552
      
46,665
  
                                         
Noninterest income:
                                        
Trustco Financial Services income
    
1,816
      
1,612
      
1,627
      
1,412
      
1,774
  
Fees for services to customers
    
2,745
      
2,563
      
2,590
      
2,847
      
2,648
  
Other
    
282
      
299
      
357
      
339
      
247
  
Total noninterest income
    
4,843
      
4,474
      
4,574
      
4,598
      
4,669
  
                                         
Noninterest expenses:
                                        
Salaries and employee benefits
    
11,427
      
12,444
      
12,393
      
13,122
      
13,283
  
Net occupancy expense
    
4,611
      
4,209
      
4,358
      
4,262
      
4,598
  
Equipment expense
    
1,738
      
1,852
      
1,923
      
1,873
      
1,962
  
Professional services
    
1,460
      
1,561
      
1,717
      
1,360
      
1,607
  
Outsourced services
    
2,501
      
2,532
      
2,720
      
2,491
      
2,296
  
Advertising expense
    
408
      
384
      
586
      
518
      
390
  
FDIC and other insurance
    
1,094
      
1,085
      
1,078
      
1,085
      
1,052
  
Other real estate expense (income), net
    
74
      
(12
)
    
163
      
148
      
225
  
Other
    
1,590
      
4,776
      
2,522
      
2,468
      
2,266
  
Total noninterest expenses
    
24,903
      
28,831
      
27,460
      
27,327
      
27,679
  
                                         
Income before taxes
    
15,918
      
12,900
      
19,235
      
21,823
      
23,655
  
Income taxes
    
3,792
      
3,052
      
4,555
      
5,451
      
5,909
  
                                         
Net income
  
$
12,126
    
$
9,848
    
$
14,680
    
$
16,372
    
$
17,746
  
                                         
Net income per common share:
                                        
- Basic
  
$
0.64
    
$
0.52
    
$
0.77
    
$
0.86
    
$
0.93
  
                                         
- Diluted
    
0.64
      
0.52
      
0.77
      
0.86
      
0.93
  
                                         
Average basic shares (in thousands)
    
19,024
      
19,024
      
19,024
      
19,024
      
19,024
  
Average diluted shares (in thousands)
    
19,032
      
19,026
      
19,024
      
19,024
      
19,027
  

Page | 6
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)
(Unaudited)

   
3/31/2024
    
12/31/2023
    
9/30/2023
    
6/30/2023
    
3/31/2023
  
ASSETS:
                              
                               
Cash and due from banks
  
$
44,868
    
$
49,274
    
$
45,940
    
$
55,662
    
$
47,595
  
Federal funds sold and other short term investments
    
564,815
      
528,730
      
461,321
      
547,695
      
589,389
  
Total cash and cash equivalents
    
609,683
      
578,004
      
507,261
      
603,357
      
636,984
  
                                         
Securities available for sale:
                                        
U. S. government sponsored enterprises
    
128,854
      
118,668
      
121,474
      
113,570
      
119,132
  
States and political subdivisions
    
26
      
26
      
34
      
34
      
34
  
Mortgage-backed securities and collateralized mortgage
obligations - residential
    227,078       237,677       233,719       243,444       255,556  
Small Business Administration - guaranteed participation securities
    
16,260
      
17,186
      
17,316
      
18,382
      
19,821
  
Corporate bonds
    
53,341
      
78,052
      
76,935
      
76,618
      
81,464
  
Other securities
    
682
      
680
      
657
      
656
      
652
  
Total securities available for sale
    
426,241
      
452,289
      
450,135
      
452,704
      
476,659
  
                                         
Held to maturity securities:
                                        
Mortgage-backed securities and collateralized mortgage
obligations-residential
    
6,206
      
6,458
      
6,724
      
7,043
      
7,382
  
Total held to maturity securities
    
6,206
      
6,458
      
6,724
      
7,043
      
7,382
  
                                         
Federal Reserve Bank and Federal Home Loan Bank stock
    
6,203
      
6,203
      
6,203
      
6,203
      
5,797
  
                                         
Loans:
                                        
Commercial
    
279,092
      
273,515
      
268,642
      
251,434
      
246,307
  
Residential mortgage loans
    
4,354,369
      
4,365,063
      
4,343,006
      
4,310,005
      
4,241,459
  
Home equity line of credit
    
355,879
      
347,415
      
332,028
      
308,976
      
296,490
  
Installment loans
    
16,166
      
16,886
      
16,605
      
16,396
      
15,326
  
Loans, net of deferred net costs
    
5,005,506
      
5,002,879
      
4,960,281
      
4,886,811
      
4,799,582
  
                                         
Less: Allowance for credit losses on loans
    
49,220
      
48,578
      
47,226
      
46,914
      
46,685
  
Net loans
    
4,956,286
      
4,954,301
      
4,913,055
      
4,839,897
      
4,752,897
  
                                         
Bank premises and equipment, net
    
33,423
      
34,007
      
32,135
      
32,351
      
32,305
  
Operating lease right-of-use assets
    
39,647
      
40,542
      
41,475
      
43,113
      
43,478
  
Other assets
    
101,881
      
96,387
      
97,310
      
90,957
      
90,306
  
                                         
Total assets
  
$
6,179,570
    
$
6,168,191
    
$
6,054,298
    
$
6,075,625
    
$
6,045,808
  
                                         
LIABILITIES:
                                        
Deposits:
                                        
Demand
  
$
742,997
    
$
754,532
    
$
773,293
    
$
791,353
    
$
806,075
  
Interest-bearing checking
    
1,020,136
      
1,015,213
      
1,033,898
      
1,082,989
      
1,124,785
  
Savings accounts
    
1,155,517
      
1,179,241
      
1,235,658
      
1,315,893
      
1,400,887
  
Money market deposit accounts
    
532,611
      
565,767
      
610,012
      
625,253
      
600,410
  
Time deposits
    
1,903,908
      
1,836,024
      
1,581,504
      
1,442,959
      
1,280,301
  
Total deposits
    
5,355,169
      
5,350,777
      
5,234,365
      
5,258,447
      
5,212,458
  
                                         
Short-term borrowings
    
94,374
      
88,990
      
103,110
      
113,765
      
134,293
  
Operating lease liabilities
    
43,438
      
44,471
      
45,418
      
47,172
      
47,643
  
Accrued expenses and other liabilities
    
37,399
      
38,668
      
47,479
      
34,852
      
36,711
  
                                         
Total liabilities
    
5,530,380
      
5,522,906
      
5,430,372
      
5,454,236
      
5,431,105
  
                                         
SHAREHOLDERS' EQUITY:
                                        
Capital stock
    
20,058
      
20,058
      
20,058
      
20,058
      
20,058
  
Surplus
    
257,335
      
257,181
      
257,078
      
257,078
      
257,078
  
Undivided profits
    
430,346
      
425,069
      
422,082
      
414,251
      
404,728
  
Accumulated other comprehensive loss, net of tax
    
(14,763
)
    
(13,237
)
    
(31,506
)
    
(26,212
)
    
(23,375
)
Treasury stock at cost
    
(43,786
)
    
(43,786
)
    
(43,786
)
    
(43,786
)
    
(43,786
)
                                         
Total shareholders' equity
    
649,190
      
645,285
      
623,926
      
621,389
      
614,703
  
                                         
Total liabilities and shareholders' equity
  
$
6,179,570
    
$
6,168,191
    
$
6,054,298
    
$
6,075,625
    
$
6,045,808
  
                                         
Outstanding shares (in thousands)
    
19,024
      
19,024
      
19,024
      
19,024
      
19,024
  

Page | 7
NONPERFORMING ASSETS

(dollars in thousands)
(Unaudited)

   
3/31/2024
    
12/31/2023
    
9/30/2023
    
6/30/2023
    
3/31/2023
  
Nonperforming Assets
                              
                               
New York and other states*
                              
Loans in nonaccrual status:
                              
Commercial
  
$
532
    
$
536
    
$
540
    
$
545
    
$
560
  
Real estate mortgage - 1 to 4 family
    
14,359
      
14,375
      
14,633
      
16,260
      
15,722
  
Installment
    
149
      
151
      
93
      
124
      
59
  
Total non-accrual loans
    
15,040
      
15,062
      
15,266
      
16,929
      
16,341
  
Other nonperforming real estate mortgages - 1 to 4 family
    
-
      
3
      
5
      
7
      
8
  
Total nonperforming loans
    
15,040
      
15,065
      
15,271
      
16,936
      
16,349
  
Other real estate owned
    
2,334
      
194
      
1,185
      
1,412
      
1,869
  
Total nonperforming assets
  
$
17,374
    
$
15,259
    
$
16,456
    
$
18,348
    
$
18,218
  
                                         
Florida
                                        
Loans in nonaccrual status:
                                        
Commercial
  
$
314
    
$
314
    
$
314
    
$
314
    
$
314
  
Real estate mortgage - 1 to 4 family
    
2,921
      
2,272
      
2,228
      
2,170
      
2,437
  
Installment
    
-
      
15
      
65
      
-
      
62
  
Total non-accrual loans
    
3,235
      
2,601
      
2,607
      
2,484
      
2,813
  
Other nonperforming real estate mortgages - 1 to 4 family
    
-
      
-
      
-
      
-
      
-
  
Total nonperforming loans
    
3,235
      
2,601
      
2,607
      
2,484
      
2,813
  
Other real estate owned
    
-
      
-
      
-
      
-
      
-
  
Total nonperforming assets
  
$
3,235
    
$
2,601
    
$
2,607
    
$
2,484
    
$
2,813
  
                                         
Total
                                        
Loans in nonaccrual status:
                                        
Commercial
  
$
846
    
$
850
    
$
854
    
$
859
    
$
874
  
Real estate mortgage - 1 to 4 family
    
17,280
      
16,647
      
16,861
      
18,430
      
18,159
  
Installment
    
149
      
166
      
158
      
124
      
121
  
Total non-accrual loans
    
18,275
      
17,663
      
17,873
      
19,413
      
19,154
  
Other nonperforming real estate mortgages - 1 to 4 family
    
-
      
3
      
5
      
7
      
8
  
Total nonperforming loans
    
18,275
      
17,666
      
17,878
      
19,420
      
19,162
  
Other real estate owned
    
2,334
      
194
      
1,185
      
1,412
      
1,869
  
Total nonperforming assets
  
$
20,609
    
$
17,860
    
$
19,063
    
$
20,832
    
$
21,031
  
                                         
Quarterly Net (Recoveries) Chargeoffs
                                        
                                         
New York and other states*
                                        
Commercial
  
$
-
    
$
-
    
$
-
    
$
(129
)
  
$
-
  
Real estate mortgage - 1 to 4 family
    
(78
)
    
219
      
(26
)
    
(161
)
    
(53
)
Installment
    
36
      
23
      
14
      
21
      
(6
)
Total net (recoveries) chargeoffs
  
$
(42
)
  
$
242
    
$
(12
)
  
$
(269
)
  
$
(59
)
                                         
Florida
                                        
Commercial
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
Real estate mortgage - 1 to 4 family
    
-
      
-
      
-
      
-
      
(25
)
Installment
    
-
      
6
      
-
      
40
      
31
  
Total net (recoveries) chargeoffs
  
$
-
    
$
6
    
$
-
    
$
40
    
$
6
  
                                         
Total
                                        
Commercial
  
$
-
    
$
-
    
$
-
    
$
(129
)
  
$
-
  
Real estate mortgage - 1 to 4 family
    
(78
)
    
219
      
(26
)
    
(161
)
    
(78
)
Installment
    
36
      
29
      
14
      
61
      
25
  
Total net (recoveries) chargeoffs
  
$
(42
)
  
$
248
    
$
(12
)
  
$
(229
)
  
$
(53
)
                                         
Asset Quality Ratios
                                        
                                         
Total nonperforming loans (1)
  
$
18,275
    
$
17,666
    
$
17,878
    
$
19,420
    
$
19,162
  
Total nonperforming assets (1)
    
20,609
      
17,860
      
19,063
      
20,832
      
21,031
  
Total net (recoveries) chargeoffs  (2)
    
(42
)
    
248
      
(12
)
    
(229
)
    
(53
)
                                         
Allowance for credit losses on loans (1)
    
49,220
      
48,578
      
47,226
      
46,914
      
46,685
  
                                         
Nonperforming loans to total loans
    
0.37
%
    
0.35
%
    
0.36
%
    
0.40
%
    
0.40
%
Nonperforming assets to total assets
    
0.33
%
    
0.29
%
    
0.31
%
    
0.34
%
    
0.35
%
Allowance for credit losses on loans to total loans
    
0.98
%
    
0.97
%
    
0.95
%
    
0.96
%
    
0.97
%
Coverage ratio (1)
    
269.3
%
    
275.0
%
    
264.2
%
    
241.6
%
    
243.6
%
Annualized net (recoveries) chargeoffs to average loans (2)
    
0.00
%
    
0.02
%
    
0.00
%
    
-0.02
%
    
0.00
%
Allowance for credit losses on loans to annualized net chargeoffs (2)
    
N/A
      
49.0
x
    
N/A
      
N/A
      
N/A
  

* Includes New York, New Jersey, Vermont and Massachusetts.

(1)
At period-end
(2)
For the three-month period ended

Page | 8
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands)
(Unaudited)

     
Three months ended
March 31, 2024
      
Three months ended
March 31, 2023
   
     
Average
Balance
      
Interest
      
Average
Rate
      
Average
Balance
      
Interest
      
Average
Rate
   
Assets
                                    
                                     
Securities available for sale:
                                    
U. S. government sponsored enterprises
  
$
125,973
    
$
906
      
2.88
%
  
$
120,692
    
$
692
      
2.29
%
Mortgage backed securities and collateralized mortgage obligations - residential
    
258,814
      
1,494
      
2.30
      
287,046
      
1,585
      
2.20
  
State and political subdivisions
    
26
      
-
      
6.90
      
34
      
0
      
6.74
  
Corporate bonds
    
73,625
      
476
      
2.59
      
85,578
      
521
      
2.43
  
Small Business Administration - guaranteed
                                                
participation securities
    
18,224
      
100
      
2.20
      
22,129
      
117
      
2.12
  
Other
    
696
      
3
      
1.72
      
686
      
2
      
1.17
  
                                                 
Total securities available for sale
    
477,358
      
2,979
      
2.50
      
516,165
      
2,917
      
2.26
  
                                                 
Federal funds sold and other short-term Investments
    
497,652
      
6,750
      
5.45
      
576,931
      
6,555
      
4.61
  
                                                 
Held to maturity securities:
                                                
Mortgage backed securities and collateralized mortgage
obligations - residential
    
6,329
      
68
      
4.30
      
7,542
      
78
      
4.14
  
                                                 
Total held to maturity securities
    
6,329
      
68
      
4.30
      
7,542
      
78
      
4.14
  
                                                 
Federal Home Loan Bank stock
    
6,203
      
152
      
9.80
      
5,797
      
110
      
7.59
  
                                                 
Commercial loans
    
277,183
      
3,661
      
5.28
      
238,870
      
3,024
      
5.06
  
Residential mortgage loans
    
4,359,476
      
40,415
      
3.71
      
4,212,878
      
36,913
      
3.50
  
Home equity lines of credit
    
353,004
      
5,464
      
6.22
      
291,326
      
4,119
      
5.73
  
Installment loans
    
16,128
      
264
      
6.58
      
13,323
      
216
      
6.56
  
                                                 
Loans, net of unearned income
    
5,005,791
      
49,804
      
3.98
      
4,756,397
      
44,272
      
3.73
  
                                                 
Total interest earning assets
    
5,993,333
    
$
59,753
      
3.99
      
5,862,832
    
$
53,932
      
3.69
  
                                                 
Allowance for credit losses on loans
    
(48,824
)
                    
(46,290
)
                
Cash & non-interest earning assets
    
185,230
                      
175,097
                  
                                                 
                                                 
Total assets
  
$
6,129,739
                    
$
5,991,639
                  
                                                 
                                                 
Liabilities and shareholders' equity
                                                
                                                 
Deposits:
                                                
Interest bearing checking accounts
  
$
990,130
    
$
240
      
0.10
%
  
$
1,133,383
    
$
66
      
0.02
%
Money market accounts
    
544,687
      
2,342
      
1.73
      
600,855
      
814
      
0.55
  
Savings
    
1,158,558
      
712
      
0.25
      
1,456,242
      
530
      
0.15
  
Time deposits
    
1,889,929
      
19,677
      
4.19
      
1,160,969
      
5,272
      
1.84
  
                                                 
Total interest bearing deposits
    
4,583,304
      
22,971
      
2.02
      
4,351,449
      
6,682
      
0.62
  
Short-term borrowings
    
93,316
      
204
      
0.88
      
131,867
      
285
      
0.88
  
                                                 
Total interest bearing liabilities
    
4,676,620
    
$
23,175
      
1.99
      
4,483,316
    
$
6,967
      
0.63
  
                                                 
Demand deposits
    
726,299
                      
816,565
                  
Other liabilities
    
80,158
                      
84,092
                  
Shareholders' equity
    
646,662
                      
607,666
                  
                                                 
Total liabilities and shareholders' equity
  
$
6,129,739
                    
$
5,991,639
                  
                                                 
Net interest income, GAAP and non-GAAP tax equivalent (1)
          
$
36,578
                    
$
46,965
          
                                                 
Net interest spread, GAAP and non-GAAP tax equivalent (1)
                    
2.00
%
                    
3.06
%
                                                 
Net interest margin (net interest income to total interest earning assets), GAAP and non-GAAP tax equivalent (1)
                    
2.44
%
                    
3.21
%
                                                 
Tax equivalent adjustment (1)
            
-
                      
-
          
                                                 
                                                 
Net interest income
          
$
36,578
                    
$
46,965
          

(1)
Tax equivalent adjustment to a measure results in a non-GAAP financial measure.  See Non-GAAP Financial Measures Reconciliation.

Page | 9
Non-GAAP Financial Measures Reconciliation

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

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

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

The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and non-interest fee income.  We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, excluding other real estate expense, net, strategic branch closing costs, and a non-recurring expense related to the settlement of a class action lawsuit, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, excluding gain/loss on the disposal of assets from strategic branch closures from this calculation.  We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue.  Additionally, we believe this measure is important to investors looking for a measure of efficiency in our productivity measured by the amount of revenue generated for each dollar spent.

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

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NON-GAAP FINANCIAL MEASURES RECONCILIATION

(dollars in thousands)
(Unaudited)

   
3/31/2024
    
12/31/2023
    
3/31/2023
  
Tangible Book Value Per Share
                  
                   
Equity (GAAP)
  
$
649,190
    
$
645,285
    
$
614,703
  
Less: Intangible assets
    
553
      
553
      
553
  
   Tangible equity (Non-GAAP)
  
$
648,637
    
$
644,732
    
$
614,150
  
                         
Shares outstanding
    
19,024
      
19,024
      
19,024
  
Tangible book value per share
    
34.10
      
33.89
      
32.28
  
Book value per share
    
34.12
      
33.92
      
32.31
  
                         
Tangible Equity to Tangible Assets
                        
Total Assets (GAAP)
  
$
6,179,570
    
$
6,168,191
    
$
6,045,808
  
Less: Intangible assets
    
553
      
553
      
553
  
   Tangible assets (Non-GAAP)
  
$
6,179,017
    
$
6,167,638
    
$
6,045,255
  
                         
Tangible Equity to Tangible Assets (Non-GAAP)
    
10.50
%
    
10.45
%
    
10.16
%
Equity to Assets (GAAP)
    
10.51
%
    
10.46
%
    
10.17
%

   
Three months ended
  
Efficiency Ratio
  
3/31/2024
    
12/31/2023
    
3/31/2023
  
                         
Net interest income (GAAP)
  
$
36,578
    
$
38,607
    
$
46,965
  
Taxable equivalent adjustment
    
-
      
-
      
-
  
Net interest income (fully taxable equivalent) (Non-GAAP)
    
36,578
      
38,607
      
46,965
  
Non-interest income (GAAP)
    
4,843
      
4,474
      
4,669
  
Add:  Non-recurring loss
    
-
      
101
      
-
  
Revenue used for efficiency ratio (Non-GAAP)
  
$
41,421
    
$
43,182
    
$
51,634
  
                         
Total noninterest expense (GAAP)
  
$
24,903
    
$
28,831
    
$
27,679
  
Less:  Branch closure expense
    
-
      
114
      
-
  
Less:  Non-recurring expenses
    
-
      
2,750
      
-
  
Less:  Other real estate (income) expense, net
    
74
      
(12
)
    
225
  
Expense used for efficiency ratio (Non-GAAP)
  
$
24,829
    
$
25,979
    
$
27,454
  
                         
Efficiency Ratio
    
59.94
%
    
60.16
%
    
53.17
%


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