Form 8-K TRUSTCO BANK CORP N Y For: Apr 21

Exhibit 99 (a)

News Release

Subsidiary:

Trustco Bank

NASDAQ -- TRST

Contact:	Robert Leonard
	Executive Vice President and
	Chief Risk Officer
	(518) 381-3693

TrustCo is Pleased to Report First Quarter 2021 Results;

Net Income of $14.1 Million and 5.2% Average Residential Loan Growth Year over Year

Glenville, New York –April 21, 2021

 

TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced first quarter 2021 net income of $14.1 million or $0.146 diluted earnings per share.  Average residential loan growth increased 5.2% or $187.5 million for the first quarter 2021 compared to the first quarter 2020.

Summary

Overall we are very pleased to share that TrustCo now has assets in excess of $6 billion. Our Northeast region has steadfastly maintained our core franchise in an area that we have served for decades. Additionally, our Florida region passed two major milestones, reaching over $1 billion in deposits and $1 billion in loans. Our Financial Services Department also has over $1 billion in assets under management. As we enter a traditionally busy season for residential lending, the Bank is ready to deploy its existing liquidity into our residential loan portfolio and we will be paying close attention to how the market changes.

We also continue to closely monitor the impact of the pandemic on our business and results of operations.  We have been encouraged to see that most of our residential and commercial borrowers who had payment deferral arrangements with us have returned to making regular loan payments.  As of March 31, 2021, loans in deferral were not material.  Additionally, the Bank had funded 663 Paycheck Protection Program (“PPP”) loans totaling $46 million in 2020, and an additional $17 million in the first quarter of 2021.  As of March 31, 2021, 531 PPP loans totaling $37 million remain outstanding.

Details

Average loans were up $173.3 million or 4.3% in the first quarter 2021 over the same period in 2020.  Average residential loans, our primary lending focus, were up $187.5 million, or 5.2%, in the first quarter 2021 over the same period in 2020.  Average deposits were up $630.3 million or 14.2% for the first quarter 2021 over the same period a year earlier.  The increase in deposits was the result of a $738.2 million or 24.1% increase in total average core deposit accounts, which consist of interest bearing and non-interest bearing checking, savings and money market deposits, offset by a decrease in average time deposits of $108.0 million or 7.9%, for the first quarter 2021 over the same period in 2020.  Within the core deposits, checking balances were up $428.4 million or 32.2% (including interest bearing and non-interest bearing checking balances), money market balances were up $111.4 million or 18.1%, and savings balances were up $198.5 million or 17.8%.  We believe the increase in core deposits continues to reflect the desire of customers to have additional funds in the safety and security offered by TrustCo’s long history of conservative banking.  As we move forward, the objective is to encourage customers to retain these additional funds in the expanded product offerings of the Bank through aggressive marketing and product differentiation.

The cost of interest bearing liabilities decreased to 0.21% in the first quarter 2021 from 0.79% in the first quarter 2020.  A significant portion of our CD portfolio (time deposits) repriced during the last year, which resulted in a decrease in average rates to 0.54% in the first quarter of 2021 from 1.88% in the first quarter of 2020, as a result of the ongoing market conditions. The net interest margin for the first quarter 2021 was 2.78%, down 27 basis points from 3.05% in the first quarter of 2020.  This was primarily due to the decrease in market rates throughout 2020 resulting in less interest earned on our short-term funds, residential and variable rate loans.

The Bank continued to demonstrate its ability to grow shareholders’ equity as average equity was up $28.6 million or 5.3% in the first quarter of 2021 compared to the same period in 2020.  Return on average assets and return on average equity for the first quarter 2021 were 0.96% and 10.01%, respectively, compared to 1.03% and 9.87% for the first quarter 2020.  Improving efficiencies to reduce costs continues to remain a key area of focus.

Asset quality and loan loss reserve measures have stayed consistent.  Nonperforming loans (NPLs) were $21.6 million at March 31, 2021, compared to $20.7 million at March 31, 2020.  NPLs were 0.51% of total loans at March 31, 2021 and 2020, respectively.  The coverage ratio, or allowance for loan losses to NPLs, was 231.1% at March 31, 2021, compared to 222.5% at March 31, 2020.  Nonperforming assets (NPAs) were $22.1 million at March 31, 2021, compared to $22.0 million at March 31, 2020.  The ratio of allowance for loan losses to total loans was 1.17% as of March 31, 2021, compared to 1.13% at March 31, 2020.  The allowance for loan losses was $50.0 million at March 31, 2021, compared to $46.2 million at March 31, 2020.  The provision for loan losses decreased to $350 thousand for the first quarter 2021 compared to $2 million in the same period in the prior year, primarily driven by the beginning of the uncertainty in the economic environment resulting from the COVID-19 pandemic in the same period in the prior year.  The Company had previously elected to delay its adoption of Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”), as provided by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) until the date on which the National Emergency concerning COVID-19 was terminated or December 31, 2020, whichever occurred first.  The December 31, 2020 adoption date under the CARES Act was extended to January 1, 2022 as a part of the COVID-19 relief legislation, which became law in December 2020, and therefore the Company intends to adopt CECL on January 1, 2022.

 Net recoveries for the first quarter 2021 were $46 thousand versus net chargeoffs in the first quarter 2020 of $162 thousand.  The annualized net chargeoffs ratio was 0.00% and 0.02% for the first quarter 2021 and 2020, respectively.

At March 31, 2021 the tangible equity to tangible asset ratio was 9.44%, compared to 10.42% at March 31, 2020.  Book value per share at March 31, 2021 was $5.92, up 4.2% compared to $5.68 a year earlier.

TrustCo Bank Corp NY is a $6.0 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 March 31, 2021.

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

 

 

Safe Harbor Statement

All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended.  Forward-looking statements can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2020, including our expectations regarding the effects of COVID-19 on our financial results and our ability to assist our customers in addressing the effects of COVID-19, our expectations with respect to the effect of our proposed reverse stock split of our common stock, including the impact of such split on the trading price of our common stock, our expectations with respect to our online and mobile banking product offerings, our expectations for the repricing of our CD portfolio, the impact of Federal Reserve actions regarding interest rates and the growth of loans and deposits throughout our branch network and our ability to capitalize on economic changes in the areas in which we operate.  Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed, and many of the risks and uncertainties are heightened by or may, in the future, be heightened by the effects of the COVID-19 pandemic. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement:  the effect of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations; the impact of the actions taken by governmental authorities to contain COVID-19 or address the impact of COVID-19 on the economy, and the effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; future business strategies related to the implementation of CECL; our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at reasonable levels relative to income; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; restrictions or conditions imposed by our regulators on our operations that may make it more difficult for us to achieve our goals; the future earnings and capital levels of us and Trustco Bank and the continued receipt of approvals from our primary federal banking regulators under regulatory rules to distribute capital to TrustCo, which could affect our ability to pay dividends; results of supervisory monitoring or examinations of Trustco Bank and TrustCo by our respective regulators; adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; unanticipated effects from the Tax Cut and Jobs Act that may limit its benefits or adversely impact our business;  the perceived overall value of our products and services by users, including in comparison to competitors’ products and services and the willingness of current and prospective customers to substitute competitors’ products and services for our products and services; changes in consumer spending, borrowing and saving habits; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; changes in management personnel; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; technological changes and electronic, cyber and physical security breaches; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading “Risk Factors” in our most recent annual report on Form 10-K and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.

TRUSTCO BANK CORP NY

GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

(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

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

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

(1)	At period-end

(2)	For the period ended

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY -

INTEREST RATES AND INTEREST DIFFERENTIAL