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Globe Newswire 22-Jul-2024 4:00 PM
Executive Snapshot:
GLENVILLE, N.Y., July 22, 2024 (GLOBE NEWSWIRE) --
TrustCo Bank Corp NY ((TrustCo, NASDAQ:TRST) today announced second quarter 2024 net income of $12.6 million or $0.66 diluted earnings per share, compared to net income of $16.4 million or $0.86 diluted earnings per share for the second quarter 2023; and net income of $24.7 million or $1.30 diluted earnings per share for the six months ended June 30, 2024, compared to net income of $34.1 million or $1.79 diluted earnings per share for the six months ended June 30, 2023. Average loan growth increased $182.2 million or 3.8% for the second quarter 2024 over the same period in 2023. Overview Chairman, President, and CEO, Robert J. McCormick said "Our success this quarter arises directly from our commitment to the core principles of Trustco Bank: competitive pricing and exceptional customer service. This clear mission focus enabled us to reach yet another milestone in our loan portfolio, as our residential, home equity, and commercial offerings all grew significantly over this time last year, reaching an all-time high for total loans. With all revenue streams producing, we realized a 4% increase in net income. By employing a sharp focus on loan pricing and resisting upward pressure on deposit rates, we realized a 3.7% increase in net interest margin. All this was accomplished as we not only maintained, but grew capital. In true Trustco fashion, credit quality remains stellar. We believe that this momentum positions us well for the remainder of the year." Details Average loans were up $182.2 million or 3.8% in the second quarter 2024 over the same period in 2023. Average residential loans and home equity lines of credit, our primary lending focus, were up $89.9 million, or 2.1%, and $61.1 million, or 20.1%, respectively, in the second quarter 2024 over the same period in 2023. Average commercial loans also increased $31.5 million, or 12.7%, in the second quarter 2024 over the same period in 2023. Average deposits were up $77.4 million, or 1.5% for the second quarter 2024 over the same period in 2023. We believe the increase in time deposits compared to the prior year 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 $37.8 million for the second quarter 2024, an increase of $1.2 million, or 3.3%, compared to the prior quarter, driven by loan growth at higher interest rates, an increase in interest on federal funds sold and other short-term investments, and lower cost of deposits, partially offset by lower investment earnings. The net interest margin for the second quarter 2024 was 2.53%, up 9 basis points from 2.44% in the first quarter of 2024. The yield on interest earnings assets increased to 4.06%, up 7 basis points from 3.99% in the first quarter of 2024. The cost of interest bearing liabilities decreased to 1.97% in the second quarter 2024 from 1.99% in the first quarter 2024. The Bank has seen success in managing deposits by lowering the rates on time deposits and retaining deposit balances, while still being competitive in the markets we serve. The Federal Reserve's decision regarding whether to cut or hold rates in the upcoming meetings will have an effect on our ability to continue to decrease deposit costs which should help margin in future quarters, and consequently, should bring down the cost of deposits over time. Non-interest expense increased $1.6 million over the prior quarter primarily as a result of higher salaries and employee benefits costs. Asset quality remains strong and has been consistent over the past twelve months. The Company recorded a provision for credit losses of $500 thousand in the second quarter of 2024, which is the result of a provision for credit losses on loans of $500 thousand, and there was no change in unfunded commitments. The ratio of allowance for credit losses on loans to total loans was 0.99% and 0.96% as of June 30, 2024 and 2023, respectively. The allowance for credit losses on loans was $49.8 million at June 30, 2024, compared to $46.9 million at June 30, 2023. NPLs were $19.2 million at June 30, 2024, compared to $19.4 million at June 30, 2023. NPLs were 0.38% and 0.40% of total loans at June 30, 2024 and 2023, respectively. The coverage ratio, or allowance for credit losses on loans to NPLs, was 259.4% at June 30, 2024, compared to 241.6% at June 30, 2023. NPAs were $21.5 million at June 30, 2024, compared to $20.8 million at June 30, 2023. At June 30, 2024, our equity to asset ratio was 10.73%, compared to 10.23% at June 30, 2023. Book value per share at June 30, 2024 was $34.46, up 5.5% compared to $32.66 a year earlier. A conference call to discuss second quarter 2024 results will be held at 9:00 a.m. Eastern Time on July 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 332275. 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 270896. The call will also be audio webcast at https://events.q4inc.com/attendee/723112639, and will be available for one year. About TrustCo Bank Corp NY TrustCo Bank Corp NY is a $6.1 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 138 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 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. 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. Subsidiary: Trustco Bank 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, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, excluding unrealized gains recognized on equity securities. 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.
During the second quarter of 2024, Visa Inc. accepted the Company's tender of its 6,528 shares of Visa Class B-1 common stock in exchange for a combination of Visa Class B-2 common stock and Visa Class C common stock. As a result of the exchange, the Company marked its Visa Class C common stock to fair value and recorded a gain of $1.4 million based on the conversion privilege of the Visa Class C common stock and the closing price of Visa Class A common stock on June 28, 2024 of $262.47 per share. The Company's Visa Class C shares are expected to continue to be marked to fair value on a recurring basis using the Visa Class A shares as evidence of orderly transactions between market participants for similar securities issued by Visa. The Company originally obtained the shares in 2008. The strategic decision to retain those shares and not sell them sooner, allowed the Company to avoid commissions and other expenses thus recognizing the full market value. Further, it is anticipated that there could be future opportunities to exchange Class B-2 shares.Contact: Robert Leonard
Executive Vice President
(518) 381-3693 TRUSTCO BANK CORP NY GLENVILLE, NY FINANCIAL HIGHLIGHTS (dollars in thousands, except per share data) (Unaudited) Three months ended 6/30/2024 3/31/2024 6/30/2023 Summary of operations Net interest income $ 37,788 $ 36,578 $ 44,052 Provision (Credit) for credit losses 500 600 (500 ) Unrealized gains recognized on equity securities 1,360 - - Noninterest income, excluding unrealized gains recognized on equity securities 4,291 4,843 4,598 Noninterest expense 26,459 24,903 27,327 Net income 12,551 12,126 16,372 Per share Net income per share: - Basic $ 0.66 $ 0.64 $ 0.86 - Diluted 0.66 0.64 0.86 Cash dividends 0.36 0.36 0.36 Book value at period end 34.46 34.12 32.66 Market price at period end 28.77 28.16 28.61 At period end Full time equivalent employees 753 761 791 Full service banking offices 138 139 143 Performance ratios Return on average assets 0.82 % 0.80 % 1.09 % Return on average equity 7.76 7.54 10.61 Efficiency ratio (1) 62.84 59.94 55.87 Net interest spread 2.09 2.00 2.74 Net interest margin 2.53 2.44 2.98 Dividend payout ratio 54.57 56.48 41.83 Capital ratios at period end Consolidated equity to assets 10.73 % 10.51 % 10.23 % Consolidated tangible equity to tangible assets (2) 10.72 % 10.50 % 10.22 % Asset quality analysis at period end Nonperforming loans to total loans 0.38 % 0.37 % 0.40 Nonperforming assets to total assets 0.35 0.33 0.34 Allowance for credit losses on loans to total loans 0.99 0.98 0.96 Coverage ratio (3) 2.6x 2.7x 2.4x (1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding unrealized gains recognized on equity securities). 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. FINANCIAL HIGHLIGHTS, Continued (dollars in thousands, except per share data) (Unaudited) Six Months Ended 06/30/24 06/30/23 Summary of operations Net interest income $ 74,366 91,017 Provision (Credit) for credit losses 1,100 (200 ) Unrealized gains recognized on equity securities 1,360 - Noninterest income, excluding unrealized gains recognized on equity securities 9,134 9,267 Noninterest expense 51,362 55,006 Net income 24,677 34,118 Per share Net income per share: - Basic $ 1.30 1.79 - Diluted 1.30 1.79 Cash dividends 0.72 0.72 Book value at period end 34.46 32.66 Market price at period end 28.77 28.61 Performance ratios Return on average assets 0.81 % 1.14 Return on average equity 7.65 11.22 Efficiency ratio (1) 61.40 54.48 Net interest spread 2.05 2.90 Net interest margin 2.48 3.10 Dividend payout ratio 55.51 40.15 (1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding unrealized gains recognized on equity securities). See Non-GAAP Financial Measures Reconciliation. CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data) (Unaudited) Three months ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Interest and dividend income: Interest and fees on loans $ 50,660 $ 49,804 $ 49,201 $ 47,921 $ 46,062 Interest and dividends on securities available for sale: U. S. government sponsored enterprises 909 906 750 672 691 State and political subdivisions 1 - 1 - 1 Mortgage-backed securities and collateralized mortgage obligations - residential 1,451 1,494 1,533 1,485 1,543 Corporate bonds 362 476 477 473 516 Small Business Administration - guaranteed participation securities 94 100 102 107 111 Other securities 2 3 3 2 3 Total interest and dividends on securities available for sale 2,819 2,979 2,866 2,739 2,865 Interest on held to maturity securities: Mortgage-backed securities and collateralized mortgage obligations - residential 65 68 70 73 75 Total interest on held to maturity securities 65 68 70 73 75 Federal Home Loan Bank stock 147 152 149 131 110 Interest on federal funds sold and other short-term investments 6,894 6,750 6,354 6,688 6,970 Total interest income 60,585 59,753 58,640 57,552 56,082 Interest expense: Interest on deposits: Interest-bearing checking 288 240 165 102 49 Savings 675 712 707 639 655 Money market deposit accounts 2,228 2,342 2,500 2,384 1,756 Time deposits 19,400 19,677 16,460 11,962 9,291 Interest on short-term borrowings 206 204 201 244 279 Total interest expense 22,797 23,175 20,033 15,331 12,030 Net interest income 37,788 36,578 38,607 42,221 44,052 Less: Provision (Credit) for credit losses 500 600 1,350 100 (500 ) Net interest income after provision (credit) for credit losses 37,288 35,978 37,257 42,121 44,552 Noninterest income: Trustco Financial Services income 1,609 1,816 1,612 1,627 1,412 Fees for services to customers 2,399 2,745 2,563 2,590 2,847 Unrealized gains recognized on equity securities 1,360 - - - - Other 283 282 299 357 339 Total noninterest income 5,651 4,843 4,474 4,574 4,598 Noninterest expenses: Salaries and employee benefits 12,520 11,427 12,444 12,393 13,122 Net occupancy expense 4,375 4,611 4,209 4,358 4,262 Equipment expense 1,990 1,738 1,852 1,923 1,873 Professional services 1,570 1,460 1,561 1,717 1,360 Outsourced services 2,755 2,501 2,532 2,720 2,491 Advertising expense 466 408 384 586 518 FDIC and other insurance 797 1,094 1,085 1,078 1,085 Other real estate expense (income), net 16 74 (12 ) 163 148 Other 1,970 1,590 4,776 2,522 2,468 Total noninterest expenses 26,459 24,903 28,831 27,460 27,327 Income before taxes 16,480 15,918 12,900 19,235 21,823 Income taxes 3,929 3,792 3,052 4,555 5,451 Net income $ 12,551 $ 12,126 $ 9,848 $ 14,680 $ 16,372 Net income per common share: - Basic $ 0.66 $ 0.64 $ 0.52 $ 0.77 $ 0.86 - Diluted 0.66 0.64 0.52 0.77 0.86 Average basic shares (in thousands) 19,022 19,024 19,024 19,024 19,024 Average diluted shares (in thousands) 19,033 19,032 19,026 19,024 19,024 CONSOLIDATED STATEMENTS OF INCOME, Continued (dollars in thousands, except per share data) (Unaudited) Six Months Ended 06/30/24 06/30/23 Interest and dividend income: Interest and fees on loans $ 100,464 90,334 Interest and dividends on securities available for sale: U. S. government sponsored enterprises 1,815 1,383 State and political subdivisions 1 1 Mortgage-backed securities and collateralized mortgage obligations - residential 2,945 3,128 Corporate bonds 838 1,037 Small Business Administration - guaranteed participation securities 194 228 Other securities 5 5 Total interest and dividends on securities available for sale 5,798 5,782 Interest on held to maturity securities: Mortgage-backed securities-residential 133 153 Total interest on held to maturity securities 133 153 Federal Home Loan Bank stock 299 220 Interest on federal funds sold and other short-term investments 13,644 13,525 Total interest income 120,338 110,014 Interest expense: Interest on deposits: Interest-bearing checking 528 115 Savings 1,387 1,185 Money market deposit accounts 4,570 2,570 Time deposits 39,077 14,563 Interest on short-term borrowings 410 564 Total interest expense 45,972 18,997 Net interest income 74,366 91,017 Less: Provision (Credit) for credit losses 1,100 (200 ) Net interest income after provision (credit) for credit losses 73,266 91,217 Noninterest income: Trustco Financial Services income 3,425 3,186 Fees for services to customers 5,144 5,495 Unrealized gains recognized on equity securities 1,360 - Other 565 586 Total noninterest income 10,494 9,267 Noninterest expenses: Salaries and employee benefits 23,947 26,405 Net occupancy expense 8,986 8,860 Equipment expense 3,728 3,835 Professional services 3,030 2,967 Outsourced services 5,256 4,787 Advertising expense 874 908 FDIC and other insurance 1,891 2,137 Other real estate expense, net 90 373 Other 3,560 4,734 Total noninterest expenses 51,362 55,006 Income before taxes 32,398 45,478 Income taxes 7,721 11,360 Net income $ 24,677 34,118 Net income per common share: - Basic $ 1.30 1.79 - Diluted 1.30 1.79 Average basic shares (in thousands) 19,023 19,024 Average diluted shares (in thousands) 19,033 19,025 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (dollars in thousands) (Unaudited) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 ASSETS: Cash and due from banks $ 42,193 $ 44,868 $ 49,274 $ 45,940 $ 55,662 Federal funds sold and other short term investments 493,920 564,815 528,730 461,321 547,695 Total cash and cash equivalents 536,113 609,683 578,004 507,261 603,357 Securities available for sale: U. S. government sponsored enterprises 106,796 128,854 118,668 121,474 113,570 States and political subdivisions 26 26 26 34 34 Mortgage-backed securities and collateralized mortgage obligations - residential 218,311 227,078 237,677 233,719 243,444 Small Business Administration - guaranteed participation securities 15,592 16,260 17,186 17,316 18,382 Corporate bonds 53,764 53,341 78,052 76,935 76,618 Other securities 688 682 680 657 656 Total securities available for sale 395,177 426,241 452,289 450,135 452,704 Held to maturity securities: Mortgage-backed securities and collateralized mortgage obligations-residential 5,921 6,206 6,458 6,724 7,043 Total held to maturity securities 5,921 6,206 6,458 6,724 7,043 Federal Reserve Bank and Federal Home Loan Bank stock 6,507 6,203 6,203 6,203 6,203 Loans: Commercial 282,441 279,092 273,515 268,642 251,434 Residential mortgage loans 4,370,640 4,354,369 4,365,063 4,343,006 4,310,005 Home equity line of credit 370,063 355,879 347,415 332,028 308,976 Installment loans 15,168 16,166 16,886 16,605 16,396 Loans, net of deferred net costs 5,038,312 5,005,506 5,002,879 4,960,281 4,886,811 Less: Allowance for credit losses on loans 49,772 49,220 48,578 47,226 46,914 Net loans 4,988,540 4,956,286 4,954,301 4,913,055 4,839,897 Bank premises and equipment, net 33,466 33,423 34,007 32,135 32,351 Operating lease right-of-use assets 38,376 39,647 40,542 41,475 43,113 Other assets 102,544 101,881 96,387 97,310 90,957 Total assets $ 6,106,644 $ 6,179,570 $ 6,168,191 $ 6,054,298 $ 6,075,625 LIABILITIES: Deposits: Demand $ 745,227 $ 742,997 $ 754,532 $ 773,293 $ 791,353 Interest-bearing checking 1,029,606 1,020,136 1,015,213 1,033,898 1,082,989 Savings accounts 1,144,427 1,155,517 1,179,241 1,235,658 1,315,893 Money market deposit accounts 517,445 532,611 565,767 610,012 625,253 Time deposits 1,840,262 1,903,908 1,836,024 1,581,504 1,442,959 Total deposits 5,276,967 5,355,169 5,350,777 5,234,365 5,258,447 Short-term borrowings 89,720 94,374 88,990 103,110 113,765 Operating lease liabilities 42,026 43,438 44,471 45,418 47,172 Accrued expenses and other liabilities 42,763 37,399 38,668 47,479 34,852 Total liabilities 5,451,476 5,530,380 5,522,906 5,430,372 5,454,236 SHAREHOLDERS' EQUITY: Capital stock 20,058 20,058 20,058 20,058 20,058 Surplus 257,490 257,335 257,181 257,078 257,078 Undivided profits 436,048 430,346 425,069 422,082 414,251 Accumulated other comprehensive loss, net of tax (14,268 ) (14,763 ) (13,237 ) (31,506 ) (26,212 ) Treasury stock at cost (44,160 ) (43,786 ) (43,786 ) (43,786 ) (43,786 ) Total shareholders' equity 655,168 649,190 645,285 623,926 621,389 Total liabilities and shareholders' equity $ 6,106,644 $ 6,179,570 $ 6,168,191 $ 6,054,298 $ 6,075,625 Outstanding shares (in thousands) 19,010 19,024 19,024 19,024 19,024 NONPERFORMING ASSETS (dollars in thousands) (Unaudited) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Nonperforming Assets New York and other states* Loans in nonaccrual status: Commercial $ 741 $ 532 $ 536 $ 540 $ 545 Real estate mortgage - 1 to 4 family 14,992 14,359 14,375 14,633 16,260 Installment 131 149 151 93 124 Total non-accrual loans 15,864 15,040 15,062 15,266 16,929 Other nonperforming real estate mortgages - 1 to 4 family - - 3 5 7 Total nonperforming loans 15,864 15,040 15,065 15,271 16,936 Other real estate owned 2,334 2,334 194 1,185 1,412 Total nonperforming assets $ 18,198 $ 17,374 $ 15,259 $ 16,456 $ 18,348 Florida Loans in nonaccrual status: Commercial $ 314 $ 314 $ 314 $ 314 $ 314 Real estate mortgage - 1 to 4 family 2,985 2,921 2,272 2,228 2,170 Installment 22 - 15 65 - Total non-accrual loans 3,321 3,235 2,601 2,607 2,484 Other nonperforming real estate mortgages - 1 to 4 family - - - - - Total nonperforming loans 3,321 3,235 2,601 2,607 2,484 Other real estate owned - - - - - Total nonperforming assets $ 3,321 $ 3,235 $ 2,601 $ 2,607 $ 2,484 Total Loans in nonaccrual status: Commercial $ 1,055 $ 846 $ 850 $ 854 $ 859 Real estate mortgage - 1 to 4 family 17,977 17,280 16,647 16,861 18,430 Installment 153 149 166 158 124 Total non-accrual loans 19,185 18,275 17,663 17,873 19,413 Other nonperforming real estate mortgages - 1 to 4 family - - 3 5 7 Total nonperforming loans 19,185 18,275 17,666 17,878 19,420 Other real estate owned 2,334 2,334 194 1,185 1,412 Total nonperforming assets $ 21,519 $ 20,609 $ 17,860 $ 19,063 $ 20,832 Quarterly Net (Recoveries) Chargeoffs New York and other states* Commercial $ - $ - $ - $ - $ (129 ) Real estate mortgage - 1 to 4 family (74 ) (78 ) 219 (26 ) (161 ) Installment (2 ) 36 23 14 21 Total net (recoveries) chargeoffs $ (76 ) $ (42 ) $ 242 $ (12 ) $ (269 ) Florida Commercial $ - $ - $ - $ - $ - Real estate mortgage - 1 to 4 family 17 - - - - Installment 7 - 6 - 40 Total net (recoveries) chargeoffs $ 24 $ - $ 6 $ - $ 40 Total Commercial $ - $ - $ - $ - $ (129 ) Real estate mortgage - 1 to 4 family (57 ) (78 ) 219 (26 ) (161 ) Installment 5 36 29 14 61 Total net (recoveries) chargeoffs $ (52 ) $ (42 ) $ 248 $ (12 ) $ (229 ) Asset Quality Ratios Total nonperforming loans (1) $ 19,185 $ 18,275 $ 17,666 $ 17,878 $ 19,420 Total nonperforming assets (1) 21,519 20,609 17,860 19,063 20,832 Total net (recoveries) chargeoffs (2) (52 ) (42 ) 248 (12 ) (229 ) Allowance for credit losses on loans (1) 49,772 49,220 48,578 47,226 46,914 Nonperforming loans to total loans 0.38 % 0.37 % 0.35 % 0.36 % 0.40 % Nonperforming assets to total assets 0.35 % 0.33 % 0.29 % 0.31 % 0.34 % Allowance for credit losses on loans to total loans 0.99 % 0.98 % 0.97 % 0.95 % 0.96 % Coverage ratio (1) 259.4 % 269.3 % 275.0 % 264.2 % 241.6 % Annualized net (recoveries) chargeoffs to average loans (2) 0.00 % 0.00 % 0.02 % 0.00 % -0.02 % Allowance for credit losses on loans to annualized net chargeoffs (2) N/A N/A 49.0x N/A N/A * Includes New York, New Jersey, Vermont and Massachusetts. (1) At period-end (2) For the three-month period ended DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY - INTEREST RATES AND INTEREST DIFFERENTIAL (dollars in thousands) (Unaudited) Three months ended Three months ended June 30, 2024 June 30, 2023 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets Securities available for sale: U. S. government sponsored enterprises $ 113,844 $ 909 3.20 % $ 120,646 $ 691 2.29 % Mortgage backed securities and collateralized mortgage obligations - residential 250,517 1,451 2.30 278,367 1,543 2.20 State and political subdivisions 26 1 6.75 34 1 6.74 Corporate bonds 55,065 362 2.63 85,344 516 2.42 Small Business Administration - guaranteed participation securities 17,436 94 2.15 20,724 111 2.15 Other 694 2 1.15 686 3 1.75 Total securities available for sale 437,582 2,819 2.58 505,801 2,865 2.27 Federal funds sold and other short-term Investments 506,493 6,894 5.48 551,087 6,970 5.07 Held to maturity securities: Mortgage backed securities and collateralized mortgage obligations - residential 6,054 65 4.28 7,204 75 4.17 Total held to maturity securities 6,054 65 4.28 7,204 75 4.17 Federal Home Loan Bank stock 6,340 147 9.27 5,868 110 7.50 Commercial loans 280,559 3,765 5.37 249,040 3,295 5.29 Residential mortgage loans 4,359,232 40,819 3.75 4,269,295 37,992 3.56 Home equity lines of credit 364,210 5,814 6.42 303,134 4,533 6.00 Installment loans 15,395 262 6.86 15,734 242 6.16 Loans, net of unearned income 5,019,396 50,660 4.04 4,837,203 46,062 3.81 Total interest earning assets 5,975,865 $ 60,585 4.06 5,907,163 $ 56,082 3.80 Allowance for credit losses on loans (49,454 ) (47,060 ) Cash & non-interest earning assets 181,688 172,821 Total assets $ 6,108,099 $ 6,032,924 Liabilities and shareholders' equity Deposits: Interest bearing checking accounts $ 1,009,048 $ 288 0.11 % $ 1,083,795 $ 49 0.02 % Money market accounts 524,068 2,228 1.71 613,204 1,756 1.15 Savings 1,145,922 675 0.24 1,352,181 655 0.19 Time deposits 1,873,139 19,400 4.17 1,372,248 9,291 2.72 Total interest bearing deposits 4,552,177 22,591 2.00 4,421,428 11,751 1.07 Short-term borrowings 93,703 206 0.89 124,089 279 0.90 Total interest bearing liabilities 4,645,880 $ 22,797 1.97 4,545,517 $ 12,030 1.06 Demand deposits 735,262 788,654 Other liabilities 76,258 79,839 Shareholders' equity 650,699 618,914 Total liabilities and shareholders' equity $ 6,108,099 $ 6,032,924 Net interest income, GAAP and non-GAAP tax equivalent (1) $ 37,788 $ 44,052 Net interest spread, GAAP and non-GAAP tax equivalent (1) 2.09 % 2.74 % Net interest margin (net interest income to total interest earning assets), GAAP and non-GAAP tax equivalent (1) 2.53 % 2.98 % Tax equivalent adjustment (1) - - Net interest income $ 37,788 $ 44,052 (1) Tax equivalent adjustment to a measure results in a non-GAAP financial measure. See Non-GAAP Financial Measures Reconciliation. DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY - INTEREST RATES AND INTEREST DIFFERENTIAL, Continued (dollars in thousands) (Unaudited) Six Months Ended Six Months Ended June 30, 2024 June 30, 2023 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets Securities available for sale: U. S. government sponsored enterprises $ 119,908 $ 1,815 3.03 % $ 120,669 $ 1,383 2.29 % Mortgage backed securities and collateralized mortgage obligations - residential 254,665 2,945 2.31 282,683 3,128 2.21 State and political subdivisions 26 1 6.82 34 1 6.74 Corporate bonds 64,345 838 2.60 85,460 1,037 2.43 Small Business Administration - guaranteed participation securities 17,830 194 2.18 21,423 228 2.13 Other 695 5 1.44 686 5 1.46 Total securities available for sale 457,469 5,798 2.53 510,955 5,782 2.26 Federal funds sold and other short-term Investments 502,072 13,644 5.47 563,938 13,525 4.84 Held to maturity securities: Mortgage backed securities and collateralized mortgage obligations - residential 6,192 133 4.29 7,372 153 4.16 Total held to maturity securities 6,192 133 4.29 7,372 153 4.16 Federal Home Loan Bank stock 6,271 299 9.54 5,833 220 7.54 Commercial loans 278,871 7,425 5.33 243,983 6,319 5.18 Residential mortgage loans 4,359,351 81,236 3.73 4,241,207 74,906 3.54 Home equity lines of credit 358,607 11,277 6.32 297,262 8,652 5.87 Installment loans 15,761 526 6.72 14,535 457 6.35 Loans, net of unearned income 5,012,590 100,464 4.01 4,796,987 90,334 3.77 Total interest earning assets 5,984,594 $ 120,338 4.03 5,885,085 $ 110,014 3.75 Allowance for credit losses on loans (49,139 ) (46,677 ) Cash & non-interest earning assets 188,364 173,990 Total assets $ 6,123,819 $ 6,012,398 Liabilities and shareholders' equity Deposits: Interest bearing checking accounts $ 999,589 528 0.11 % $ 1,108,452 115 0.02 % Money market accounts 534,378 4,570 1.72 607,064 2,570 0.85 Savings 1,152,241 1,387 0.24 1,403,924 1,185 0.17 Time deposits 1,881,535 39,077 4.18 1,267,193 14,563 2.32 Total interest bearing deposits 4,567,743 45,562 2.01 4,386,633 18,433 0.85 Short-term borrowings 93,510 410 0.88 127,957 564 0.89 Total interest bearing liabilities 4,661,253 $ 45,972 1.98 4,514,590 $ 18,997 0.85 Demand deposits 730,781 802,533 Other liabilities 83,105 81,954 Shareholders' equity 648,680 613,321 Total liabilities and shareholders' equity $ 6,123,819 $ 6,012,398 Net interest income, GAAP and non-GAAP tax equivalent (1) $ 74,366 $ 91,017 Net interest spread, GAAP and non-GAAP tax equivalent (1) 2.05 % 2.90 % Net interest margin (net interest income to total interest earning assets), GAAP and non-GAAP tax equivalent (1) 2.48 % 3.10 % Tax equivalent adjustment (1) - - Net interest income $ 74,366 $ 91,017 (1) Tax equivalent adjustment to a measure results in a non-GAAP financial measure. See Non-GAAP Financial Measures Reconciliation. NON-GAAP FINANCIAL MEASURES RECONCILIATION (dollars in thousands) (Unaudited) 6/30/2024 3/31/2024 6/30/2023 Tangible Book Value Per Share Equity (GAAP) $ 655,168 $ 649,190 $ 621,389 Less: Intangible assets 553 553 553 Tangible equity (Non-GAAP) $ 654,615 $ 648,637 $ 620,836 Shares outstanding 19,010 19,024 19,024 Tangible book value per share 34.44 34.10 32.63 Book value per share 34.46 34.12 32.66 Tangible Equity to Tangible Assets Total Assets (GAAP) $ 6,106,644 $ 6,179,570 $ 6,075,625 Less: Intangible assets 553 553 553 Tangible assets (Non-GAAP) $ 6,106,091 $ 6,179,017 $ 6,075,072 Tangible Equity to Tangible Assets (Non-GAAP) 10.72 % 10.50 % 10.22 % Equity to Assets (GAAP) 10.73 % 10.51 % 10.23 % Three months ended Six Months Ended Efficiency Ratio 6/30/2024 3/31/2024 6/30/2023 6/30/2024 6/30/2023 Net interest income (GAAP) $ 37,788 $ 36,578 $ 44,052 $ 74,366 $ 91,017 Taxable equivalent adjustment - - - - - Net interest income (fully taxable equivalent) (Non-GAAP) 37,788 36,578 44,052 74,366 91,017 Non-interest income (GAAP) 5,651 4,843 4,598 10,494 9,267 Less: Unrealized gains recognized on equity securities 1,360 - - 1,360 - Revenue used for efficiency ratio (Non-GAAP) $ 42,079 $ 41,421 $ 48,650 $ 83,500 $ 100,284 Total noninterest expense (GAAP) $ 26,459 $ 24,903 $ 27,327 $ 51,362 $ 55,006 Less: Other real estate expense, net 16 74 148 90 373 Expense used for efficiency ratio (Non-GAAP) $ 26,443 $ 24,829 $ 27,179 $ 51,272 $ 54,633 Efficiency Ratio 62.84 % 59.94 % 55.87 % 61.40 % 54.48 %