GLENVILLE, N.Y., Oct. 24, 2022 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY ((TrustCo, NASDAQ:TRST) today announced third quarter 2022 net income of $19.4 million or $1.013 diluted earnings per share, compared to net income of $16.8 million or $0.871 diluted earnings per share for the third quarter 2021. On a year-to-date basis, net income of $54.3 million or $2.835 diluted earnings per share for the nine months ended September 30, 2022 was an increase of 20.0%, compared to net income of $45.3 million or $2.349 diluted earnings per share for the nine months ended September 30, 2021.

Overview

Chairman, President, and CEO, Robert J. McCormick said "First and foremost, we are very pleased to advise our shareholders that all of our people in Florida are safe following Hurricane Ian and that Trustco Bank has suffered only minor property damage. All Florida operations resumed in due course following the storm." Mr. McCormick also said: "As to our performance this period, we are very pleased to report yet another record quarter for net income. Our record earnings, sustained now over several quarters, are the product of our effectively executed strategic vision for the company. We expect a strong finish in 2022 and are optimistic about our prospects for 2023."

TrustCo saw continued loan growth in the third quarter of 2022 compared to the prior year, led by an increase in residential mortgages. Loan portfolio expansion was funded by a combination of utilizing a portion of our strong cash balances and by cash flow from investments, as well as growth in funding from customers and expansion of earnings. The continued shift toward loans helped sustain margin expansion while the cost of funds actually decreased 4 basis points from the third quarter of 2021 to the third quarter 2022. In addition, total average deposits grew $105.1 million over the same period. The Federal Reserve decision to begin to raise the target Federal Funds rate has contributed to our results during 2022, as our cash position and other variable rate products repriced upward, and is likely to continue to do so during the remainder of 2022 to the extent there are additional rate increases. We also note that current mortgage rates significantly exceed the yield on our existing portfolio of mortgages, which, if sustained, should be a positive going forward. TrustCo's strong liquidity position continues to allow us to take advantage of opportunities as they arise.

In response to Hurricane Ian, the Bank continues to assess the impact to the counties in Florida that we do business in. We are currently monitoring all customer contact in the affected counties and to date have not identified circumstances that would have a material adverse impact on the performance of our loan portfolio.

Details

Average loans were up $213.5 million or 4.9% in the third quarter 2022 over the same period in 2021. Average residential loans, our primary lending focus, were up $185.0 million, or 4.7%, in the third quarter 2022 over the same period in 2021. As mentioned above, average deposits were up $105.1 million or 2.0% for the third quarter 2022 over the same period a year earlier. The increase in deposits was the result of a $275.7 million or 6.7% 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 $170.6 million or 14.8% for the third quarter 2022 over the same period in 2021. Within the core deposits, checking balances were up $120.5 million or 6.2% (including interest bearing and non-interest bearing checking balances), money market balances were up $6.2 million or 0.8%, and savings balances were up $149.0 million or 10.4%. 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, our objective is to continue 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, on a tax equivalent basis, was $47.8 million for the third quarter of 2022, an increase of $7.9 million or 19.8% compared to the same period in 2021, driven by solid liquidity, low cost core deposit base, and the recent increases in the Federal Funds target rate. The net interest margin for the third quarter 2022 was 3.16%, up 51 basis points from 2.65% in the third quarter of 2021. The cost of interest bearing liabilities decreased to 0.11% in the third quarter 2022 from 0.15% in the third quarter 2021. A significant portion of our CD portfolio (time deposits) repriced during the last year while interest rates remained low; however, the Bank continues to monitor the recent Federal Funds target rate increases and the effects it is having on deposit rates as we move forward. Continued increases in rates by the Federal Reserve Board will more than likely cause an increase in rates on interest bearing liabilities.

For the third quarter of 2022, return on average assets and return on average equity were 1.24% and 12.78%, respectively, compared to 1.08% and 11.40% for the third quarter of 2021. As previously discussed, improving efficiencies to reduce costs continues to remain a key area of focus as we are proud of our efficiency ratio. The efficiency ratio was 49.87% for the third quarter of 2022, a decrease compared to 55.82% for the third quarter of 2021. Total operating expenses increased by $1.4 million in the third quarter of 2022 as compared to the third quarter of 2021, with increases in salary and employee benefits, occupancy, outsourced services and the other expense categories, partly offset by declines in the equipment and the professional services categories. The modest increase in expenses was more than offset by an $8 million increase in revenue (net interest income plus non-interest income) and resulted in a notable improvement in the bottom line.



Asset quality remains strong and loan loss reserve measures are consistent over the past twelve months. The Company recorded a provision for credit losses of $300 thousand in the third quarter of 2022, which includes a provision for credit losses on loans of $100 thousand and a provision for credit losses on unfunded commitments of $200 thousand as a result of a corresponding increase in unfunded loan commitments. The ratio of allowance for credit losses on loans to total loans was 0.98% and 1.08% as of September 30, 2022 and 2021, respectively. The allowance for credit losses on loans was $45.5 million at September 30, 2022, compared to $47.4 million at September 30, 2021.   Nonperforming loans (NPLs) were $18.7 million at September 30, 2022, compared to $20.2 million at September 30, 2021. NPLs were 0.40% and 0.46% of total loans at September 30, 2022 and 2021, respectively. The coverage ratio, or allowance for credit losses on loans to NPLs, was 243.6% at September 30, 2022, compared to 234.7% at September 30, 2021. Nonperforming assets (NPAs) were $19.4 million at September 30, 2022, compared to $20.7 million at September 30, 2021. As mentioned in the prior quarters, the Company adopted Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL") effective January 1, 2022. TrustCo recorded a net decrease to retained earnings of $3.5 million upon adoption of the new accounting standard. The transition adjustment at January 1, 2022 included a $2.4 million increase in the allowance for credit losses on loans, a $2.3 million increase in the allowance for estimated credit losses on unfunded off-balance sheet credit exposures, and a corresponding increase in deferred tax assets of $1.2 million.

At September 30, 2022 our equity to asset ratio was 9.69%, compared to 9.56% at September 30, 2021. Book value per share at September 30, 2022 was $30.89, up 1.3% compared to $30.50 a year earlier.

TrustCo Bank Corp NY is a $6.1 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 144 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at September 30, 2022.

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

A conference call to discuss third quarter 2022 results will be held at 9:00 a.m. Eastern Time on October 25, 2022. Those wishing to participate in the call may dial toll-free for the United States at 1-833-927-1758, for Canada at 1-833-950-0062, and all other locations at 1-929-526-1599, Access code 903558. A replay of the call will be available for thirty days by dialing toll-free for the United States at 1-866-813-9403, for Canada at 1-226-828-7578, and all other locations at +44-204-525-0658, Access code 380809. The call will also be audio webcast at https://events.q4inc.com/attendee/510776782, and will be available at that web address for one year.

Safe Harbor Statement

All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2022, 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 Federal Reserve decision to raise Federal funds target rate, as well as other actions regarding interest rates and the growth of loans and deposits throughout our branch network, the increase in residential mortgage rates 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 and macroeconomic or geopolitical concerns related to inflation, rising interest rates and the war in Ukraine. 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 effects of inflation and inflationary pressures and changes in monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; the impact of the actions taken by governmental authorities to contain the COVID-19 pandemic or address the impact of the pandemic 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; changes in and uncertainty related to benchmark interest rates used to price loans and deposits; future business strategies related to the implementation of CECL; credit risks and risks from concentrations (by geographic area and by loan product) within our loan portfolio; changes in local market areas and general business and economic trends, as well as changes in consumer spending and savings habits; and our ability to assess and react effectively to such changes; 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; 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; 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; 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)
		Three months ended
		9/30/2022		6/30/2022		9/30/2021
Summary of operations
Net interest income (TE)	$	47,793		43,060		39,888
Provision (Credit) for credit losses		300		(491	)	(2,800	)
Noninterest income		4,386		4,916		4,295
Noninterest expense		26,144		25,005		24,697
Net income		19,364		17,871		16,762

Per share
Net income per share:
- Basic	$	1.013		0.933		0.871
- Diluted		1.013		0.933		0.871
Cash dividends		0.350		0.350		0.341
Book value at period end		30.89		31.06		30.50
Market price at period end		31.42		30.84		31.97

At period end
Full time equivalent employees		753		793		743
Full service banking offices		144		144		147

Performance ratios
Return on average assets		1.24	%	1.15		1.08
Return on average equity		12.78		12.08		11.40
Efficiency ratio (1)		49.87		51.97		55.82
Net interest spread (TE)		3.13		2.80		2.62
Net interest margin (TE)		3.16		2.83		2.65
Dividend payout ratio		34.57		37.46		39.13

Capital ratios at period end
Consolidated tangible equity to tangible assets (2)		9.68	%	9.54		9.55
Consolidated equity to assets		9.69	%	9.55		9.56

Asset quality analysis at period end
Nonperforming loans to total loans		0.40		0.41		0.46
Nonperforming assets to total assets		0.32		0.31		0.34
Allowance for credit losses on loans to total loans		0.98		1.00		1.08
Coverage ratio (3)		2.4x		2.4x		2.3x

(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation.
(2) Non-GAAP measure; calculated as total 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)
		Nine months ended
		09/30/22			09/30/21
Summary of operations
Net interest income (TE)	$	130,949			120,117
(Credit) Provision for credit losses		(391	)		(2,450	)
Noninterest income		14,485			13,411
Noninterest expense		73,914			75,472
Net income		54,324			45,278

Per share
Net income per share:
- Basic	$	2.835			2.349
- Diluted		2.835			2.349
Cash dividends		1.050			1.022
Book value at period end		30.89			30.50
Market price at period end		31.42			31.97

Performance ratios
Return on average assets		1.17		%	1.00
Return on average equity		12.16			10.50
Efficiency ratio (1)		50.77			56.36
Net interest spread (TE)		2.86			2.67
Net interest margin (TE)		2.88			2.71
Dividend payout ratio		37.03			43.50

(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation.


TE = Taxable equivalent.

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		9/30/2022	6/30/2022		3/31/2022		12/31/2021		9/30/2021
Interest and dividend income:
Interest and fees on loans	$	40,896	39,604		39,003		39,655		39,488
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		479	147		86		76		91
State and political subdivisions		1	-		1		-		1
Mortgage-backed securities and collateralized mortgage
obligations - residential		1,617	1,367		1,087		1,073		1,038
Corporate bonds		526	522		233		206		220
Small Business Administration - guaranteed
participation securities		133	140		154		165		181
Other securities		3	2		2		4		5
Total interest and dividends on securities available for sale		2,759	2,178		1,563		1,524		1,536

Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations - residential		85	87		90		97		104
Total interest on held to maturity securities		85	87		90		97		104

Federal Home Loan Bank stock		80	65		62		62		64

Interest on federal funds sold and other short-term investments		5,221	2,253		572		432		470
Total interest income		49,041	44,187		41,290		41,770		41,662

Interest expense:
Interest on deposits:
Interest-bearing checking		43	42		44		42		38
Savings		200	163		156		149		154
Money market deposit accounts		237	210		214		201		202
Time deposits		646	536		546		865		1,149
Interest on short-term borrowings		122	176		234		221		232
Total interest expense		1,248	1,127		1,194		1,478		1,775

Net interest income		47,793	43,060		40,096		40,292		39,887

Less: Provision (Credit) for credit losses		300	(491	)	(200	)	(3,000	)	(2,800	)
Net interest income after provision for loan losses		47,493	43,551		40,296		43,292		42,687

Noninterest income:
Trustco Financial Services income		1,435	1,996		1,833		1,766		1,558
Fees for services to customers		2,705	2,658		2,801		2,578		2,531
Other		246	262		549		182		206
Total noninterest income		4,386	4,916		5,183		4,526		4,295

Noninterest expenses:
Salaries and employee benefits		12,134	11,464		9,239		11,984		11,909
Net occupancy expense		4,483	4,254		4,529		4,569		4,259
Equipment expense		1,532	1,667		1,588		1,758		1,628
Professional services		1,375	1,484		1,467		1,579		1,483
Outsourced services		2,328	2,500		2,280		1,950		2,015
Advertising expense		508	389		617		762		310
FDIC and other insurance		773	804		812		780		746
Other real estate expense (income), net		124	74		11		(28	)	32
Other		2,887	2,369		2,222		2,836		2,315
Total noninterest expenses		26,144	25,005		22,765		26,190		24,697

Income before taxes		25,735	23,462		22,714		21,628		22,285
Income taxes		6,371	5,591		5,625		5,387		5,523

Net income	$	19,364	17,871		17,089		16,241		16,762

Net income per common share:
- Basic	$	1.013	0.933		0.890		0.845		0.871

- Diluted		1.013	0.933		0.890		0.845		0.871

Average basic shares (in thousands)		19,111	19,153		19,209		19,216		19,249
Average diluted shares (in thousands)		19,112	19,153		19,210		19,218		19,252

Note: Taxable equivalent net interest income	$	47,793	43,060		40,096		40,292		39,888

CONSOLIDATED STATEMENTS OF INCOME, Continued

(dollars in thousands, except per share data)
(Unaudited)
		Nine months ended
		09/30/22		09/30/21
Interest and dividend income:
Interest and fees on loans	$	119,503		119,513
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		712		238
State and political subdivisions		2		2
Mortgage-backed securities and collateralized mortgage
obligations - residential		4,071		3,442
Corporate bonds		1,281		859
Small Business Administration - guaranteed
participation securities		427		580
Other securities		7		16
Total interest and dividends on securities available for sale		6,500		5,137

Interest on held to maturity securities:
Mortgage-backed securities-residential		262		338
Total interest on held to maturity securities		262		338

Federal Home Loan Bank stock		207		198

Interest on federal funds sold and other short-term investments		8,046		1,026
Total interest income		134,518		126,212

Interest expense:
Interest on deposits:
Interest-bearing checking		129		136
Savings		519		475
Money market deposit accounts		661		721
Time deposits		1,728		4,076
Interest on short-term borrowings		532		688
Total interest expense		3,569		6,096

Net interest income		130,949		120,116

Less: (Credit) Provision for credit losses		(391	)	(2,450	)
Net interest income after provision for loan losses		131,340		122,566

Noninterest income:
Trustco Financial Services income		5,264		5,592
Fees for services to customers		8,164		7,221
Other		1,057		598
Total noninterest income		14,485		13,411

Noninterest expenses:
Salaries and employee benefits		32,837		36,737
Net occupancy expense		13,266		13,173
Equipment expense		4,787		4,859
Professional services		4,326		4,529
Outsourced services		7,108		6,434
Advertising expense		1,514		1,213
FDIC and other insurance		2,389		2,230
Other real estate expense, net		209		211
Other		7,478		6,086
Total noninterest expenses		73,914		75,472

Income before taxes		71,911		60,505
Income taxes		17,587		15,227

Net income	$	54,324		45,278

Net income per common share:
- Basic	$	2.835		2.349

- Diluted		2.835		2.349

Average basic shares (in thousands)		19,160		19,272
Average diluted shares (in thousands)		19,160		19,278

Note: Taxable equivalent net interest income	$	130,949		120,117

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)
(Unaudited)
		9/30/2022		6/30/2022		3/31/2022		12/31/2021		9/30/2021
ASSETS:

Cash and due from banks	$	46,236		46,611		47,526		48,357		45,486
Federal funds sold and other short term investments		795,028		999,573		1,225,022		1,171,113		1,147,853
Total cash and cash equivalents		841,264		1,046,184		1,272,548		1,219,470		1,193,339

Securities available for sale:
U. S. government sponsored enterprises		102,779		101,100		62,059		59,179		59,749
States and political subdivisions		41		41		41		41		48
Mortgage-backed securities and collateralized mortgage
obligations - residential		261,242		287,450		244,045		270,798		293,585
Small Business Administration - guaranteed
participation securities		22,498		25,428		28,086		31,674		34,569
Corporate bonds		81,002		87,740		74,089		45,337		45,915
Other securities		657		656		671		684		686
Total securities available for sale		468,219		502,415		408,991		407,713		434,552

Held to maturity securities:
Mortgage-backed securities and collateralized mortgage
obligations-residential		8,091		8,544		9,183		9,923		10,701
Total held to maturity securities		8,091		8,544		9,183		9,923		10,701

Federal Home Loan Bank stock		5,797		5,797		5,604		5,604		5,604

Loans:
Commercial		217,120		199,886		192,408		200,200		204,679
Residential mortgage loans		4,132,365		4,076,657		4,026,434		3,998,187		3,951,285
Home equity line of credit		269,341		253,758		236,117		230,976		231,314
Installment loans		10,665		10,258		9,395		9,416		9,451
Loans, net of deferred net costs		4,629,491		4,540,559		4,464,354		4,438,779		4,396,729

Less: Allowance for credit losses on loans		45,517		45,285		46,178		44,267		47,350
Net loans		4,583,974		4,495,274		4,418,176		4,394,512		4,349,379

Bank premises and equipment, net		31,931		32,381		32,644		33,027		33,233
Operating lease right-of-use assets		45,733		47,343		48,569		48,090		45,836
Other assets		94,485		88,853		86,158		78,207		62,191

Total assets	$	6,079,494		6,226,791		6,281,873		6,196,546		6,134,835

LIABILITIES:
Deposits:
Demand	$	859,829		851,573		835,281		794,878		790,663
Interest-bearing checking		1,188,790		1,208,159		1,225,093		1,191,304		1,148,593
Savings accounts		1,562,564		1,577,034		1,553,152		1,504,554		1,433,130
Money market deposit accounts		716,319		760,338		796,275		782,079		744,051
Time deposits		954,352		999,737		940,215		995,314		1,124,581
Total deposits		5,281,854		5,396,841		5,350,016		5,268,129		5,241,018

Short-term borrowings		124,932		147,282		248,371		244,686		230,770
Operating lease liabilities		50,077		51,777		53,094		52,720		50,515
Accrued expenses and other liabilities		33,625		36,259		37,497		29,883		25,849

Total liabilities		5,490,488		5,632,159		5,688,978		5,595,418		5,548,152

SHAREHOLDERS' EQUITY:
Capital stock		20,046		20,046		20,046		20,046		20,042
Surplus		256,661		256,661		256,661		256,661		256,565
Undivided profits		379,769		367,100		355,948		349,056		339,554
Accumulated other comprehensive (loss) income, net of tax		(25,209	)	(9,422	)	(2,369	)	12,147		7,304
Treasury stock at cost		(42,261	)	(39,753	)	(37,391	)	(36,782	)	(36,782	)

Total shareholders' equity		589,006		594,632		592,895		601,128		586,683

Total liabilities and shareholders' equity	$	6,079,494		6,226,791		6,281,873		6,196,546		6,134,835

Outstanding shares (in thousands)		19,052		19,127		19,202		19,220		19,216

NONPERFORMING ASSETS

(dollars in thousands)
(Unaudited)
		9/30/2022		6/30/2022		3/31/2022		12/31/2021		9/30/2021
Nonperforming Assets

New York and other states*
Loans in nonaccrual status:
Commercial	$	179		203		187		112		176
Real estate mortgage - 1 to 4 family		16,295		16,259		17,065		16,574		17,878
Installment		29		40		33		37		32
Total non-accrual loans		16,503		16,502		17,285		16,723		18,086
Other nonperforming real estate mortgages - 1 to 4 family		12		14		16		17		19
Total nonperforming loans		16,515		16,516		17,301		16,740		18,105
Other real estate owned		682		644		269		362		511
Total nonperforming assets	$	17,197		17,160		17,570		17,102		18,616

Florida
Loans in nonaccrual status:
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		2,104		2,192		2,109		2,016		2,066
Installment		65		5		8		-		-
Total non-accrual loans		2,169		2,197		2,117		2,016		2,066
Other nonperforming real estate mortgages - 1 to 4 family		-		-		-		-		-
Total nonperforming loans		2,169		2,197		2,117		2,016		2,066
Other real estate owned		-		-		-		-		-
Total nonperforming assets	$	2,169		2,197		2,117		2,016		2,066

Total
Loans in nonaccrual status:
Commercial	$	179		203		187		112		176
Real estate mortgage - 1 to 4 family		18,399		18,451		19,174		18,590		19,944
Installment		94		45		41		37		32
Total non-accrual loans		18,672		18,699		19,402		18,739		20,152
Other nonperforming real estate mortgages - 1 to 4 family		12		14		16		17		19
Total nonperforming loans		18,684		18,713		19,418		18,756		20,171
Other real estate owned		682		644		269		362		511
Total nonperforming assets	$	19,366		19,357		19,687		19,118		20,682


Quarterly Net (Recoveries) Chargeoffs

New York and other states*
Commercial	$	-		-		36		-		30
Real estate mortgage - 1 to 4 family		(164	)	(119	)	(97	)	52		(39	)
Installment		34		12		3		31		14
Total net (recoveries) chargeoffs	$	(130	)	(107	)	(58	)	83		5

Florida
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		-		-		-		-		-
Installment		(2	)	-		-		-		-
Total net (recoveries) chargeoffs	$	(2	)	-		-		-		-

Total
Commercial	$	-		-		36		-		30
Real estate mortgage - 1 to 4 family		(164	)	(119	)	(97	)	52		(39	)
Installment		32		12		3		31		14
Total net (recoveries) chargeoffs	$	(132	)	(107	)	(58	)	83		5


Asset Quality Ratios

Total nonperforming loans (1)	$	18,684		18,713		19,418		18,756		20,171
Total nonperforming assets (1)		19,366		19,357		19,687		19,118		20,682
Total net (recoveries) chargeoffs (2)		(132	)	(107	)	(58	)	83		5

Allowance for credit losses on loans (1)		45,517		45,285		46,178		44,267		47,350

Nonperforming loans to total loans		0.40	%	0.41	%	0.43	%	0.42	%	0.46	%
Nonperforming assets to total assets		0.32	%	0.31	%	0.31	%	0.31	%	0.34	%
Allowance for credit losses on loans to total loans		0.98	%	1.00	%	1.03	%	1.00	%	1.08	%
Coverage ratio (1)		243.6	%	242.0	%	237.8	%	236.0	%	234.7	%
Annualized net (recoveries) chargeoffs to average loans (2)		-0.01	%	-0.01	%	-0.01	%	0.01	%	0.00	%
Allowance for credit losses on loans to annualized net (recoveries) chargeoffs (2)		N/A		N/A		N/A		133.3x		2367.5x

* 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
		September 30, 2022						September 30, 2021
		Average		Interest	Average			Average		Interest		Average
		Balance			Rate			Balance				Rate
Assets

Securities available for sale:
U. S. government sponsored enterprises	$	104,633		479	1.83	%	$	68,505		91		0.53	%
Mortgage backed securities and collateralized mortgage
obligations - residential		302,886		1,617	2.13			300,765		1,038		1.38
State and political subdivisions		41		1	8.12			48		2		6.66
Corporate bonds		86,965		526	2.42			48,543		220		1.81
Small Business Administration - guaranteed
participation securities		25,533		133	2.08			34,578		181		2.09
Other		686		3	1.75			686		5		2.92

Total securities available for sale		520,744		2,759	2.12			453,125		1,537		1.36

Federal funds sold and other short-term Investments		918,909		5,221	2.25			1,166,679		470		0.16

Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential		8,306		85	4.08			11,168		104		3.72

Total held to maturity securities		8,306		85	4.08			11,168		104		3.72

Federal Home Loan Bank stock		5,797		80	5.52			5,604		64		4.57

Commercial loans		207,477		2,484	4.79			210,825		2,649		5.03
Residential mortgage loans		4,105,859		35,342	3.44			3,920,903		34,532		3.52
Home equity lines of credit		261,575		2,896	4.39			231,269		2,152		3.69
Installment loans		10,213		174	6.75			8,669		155		7.10

Loans, net of unearned income		4,585,124		40,896	3.57			4,371,666		39,488		3.61

Total interest earning assets		6,038,880		49,041	3.24			6,008,242		41,663		2.77

Allowance for credit losses on loans		(45,519	)					(50,160	)
Cash & non-interest earning assets		188,672						195,902


Total assets	$	6,182,033					$	6,153,984


Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	1,195,370		43	0.01	%	$	1,153,812		38		0.01	%
Money market accounts		744,868		237	0.13			738,662		202		0.11
Savings		1,579,513		200	0.05			1,430,558		154		0.04
Time deposits		981,704		646	0.26			1,152,298		1,149		0.40

Total interest bearing deposits		4,501,455		1,126	0.10			4,475,330		1,543		0.14
Short-term borrowings		138,105		122	0.35			240,183		232		0.38

Total interest bearing liabilities		4,639,560		1,248	0.11			4,715,513		1,775		0.15

Demand deposits		859,122						780,163
Other liabilities		82,290						75,116
Shareholders' equity		601,061						583,192

Total liabilities and shareholders' equity	$	6,182,033					$	6,153,984

Net interest income, tax equivalent				47,793						39,888

Net interest spread					3.13	%						2.62	%


Net interest margin (net interest income to
total interest earning assets)					3.16	%						2.65	%

Tax equivalent adjustment				-						(1	)


Net interest income				47,793						39,887





DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -
INTEREST RATES AND INTEREST DIFFERENTIAL, Continued

(dollars in thousands)
(Unaudited)		Nine months ended						Nine months ended
		September 30, 2022						September 30, 2021
		Average		Interest	Average			Average		Interest		Average
		Balance			Rate			Balance				Rate
Assets

Securities available for sale:
U. S. government sponsored enterprises	$	79,423		712	1.19	%	$	65,103		238		0.49	%
Mortgage backed securities and collateralized mortgage
obligations - residential		282,423		4,071	1.92			318,472		3,442		1.44
State and political subdivisions		41		2	6.73			49		3		8.16
Corporate bonds		75,957		1,281	2.25			56,245		859		2.04
Small Business Administration - guaranteed
participation securities		27,623		427	2.06			36,981		580		2.09
Other		686		7	2.04			686		16		3.11

Total securities available for sale		466,153		6,500	2.79			477,536		5,138		1.43

Federal funds sold and other short-term Investments		1,068,217		8,046	1.01			1,108,018		1,026		0.12

Held to maturity securities:
Mortgage backed securities and collateralized mortgage
obligations - residential		8,897		262	3.93			12,199		338		3.70

Total held to maturity securities		8,897		262	3.93			12,199		338		3.70

Federal Home Loan Bank stock		5,734		207	7.22			5,570		198		4.74

Commercial loans		200,525		7,412	4.93			212,832		8,203		5.14
Residential mortgage loans		4,054,657		104,310	3.43			3,852,960		104,219		3.61
Home equity lines of credit		246,026		7,289	3.96			234,682		6,622		3.77
Installment loans		9,507		492	6.91			8,608		469		7.28

Loans, net of unearned income		4,510,715		119,503	3.53			4,309,082		119,513		3.70

Total interest earning assets		6,059,716		134,518	2.96			5,912,405		126,213		2.85

Allowance for credit losses on loans		(46,225	)					(50,101	)
Cash & non-interest earning assets		196,333						196,876


Total assets	$	6,209,824					$	6,059,180


Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	1,199,154		129	0.01	%	$	1,129,480		136		0.02	%
Money market accounts		771,301		661	0.11			731,171		721		0.13
Savings		1,557,503		519	0.04			1,376,494		475		0.05
Time deposits		971,539		1,728	0.24			1,203,708		4,076		0.45

Total interest bearing deposits		4,499,497		3,037	0.09			4,440,853		5,408		0.16
Short-term borrowings		194,228		532	0.37			232,532		688		0.40

Total interest bearing liabilities		4,693,725		3,569	0.10			4,673,385		6,096		0.17

Demand deposits		836,953						735,495
Other liabilities		81,780						73,689
Shareholders' equity		597,366						576,611

Total liabilities and shareholders' equity	$	6,209,824					$	6,059,180

Net interest income, tax equivalent				130,949						120,117

Net interest spread					2.86	%						2.67	%


Net interest margin (net interest income to
total interest earning assets)					2.88	%						2.71	%

Tax equivalent adjustment				-						(1	)


Net interest income				130,949						120,116

Non-GAAP Financial Measures Reconciliation

Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from 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.

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, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on the sale of securities and other non-routine items from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue. 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 common equity and efficiency ratio to the most directly comparable GAAP measures is set forth below.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(dollars in thousands)
(Unaudited)
		9/30/2022		6/30/2022		9/30/2021

Tangible Equity to Tangible Assets
Total Assets (GAAP)	$	6,079,494		6,226,791		6,134,835
Less: Intangible assets		553		553		553
Tangible assets (Non-GAAP)		6,078,941		6,226,238		6,134,282

Equity (GAAP)		589,006		594,632		586,683
Less: Intangible assets		553		553		553
Tangible equity (Non-GAAP)		588,453		594,079		586,130
Tangible Equity to Tangible Assets (Non-GAAP)		9.68	%	9.54	%	9.55	%
Equity to Assets (GAAP)		9.69	%	9.55	%	9.56	%

		Three months ended							Nine months ended
Efficiency Ratio		9/30/2022		6/30/2022		9/30/2021			9/30/2022		9/30/2021

Net interest income (fully taxable equivalent) (Non-GAAP)	$	47,793		43,060		39,888		$	130,949		120,117
Non-interest income (GAAP)		4,386		4,916		4,295			14,485		13,411
Less: Net gain on sale of building		-		-		-			268		-
Revenue used for efficiency ratio (Non-GAAP)		52,179		47,976		44,183			145,166		133,528

Total noninterest expense (GAAP)		26,144		25,005		24,697			73,914		75,472
Less: Other real estate (income) expense, net		124		74		32			209		211
Expense used for efficiency ratio (Non-GAAP)		26,020		24,931		24,665			73,705		75,261

Efficiency Ratio		49.87	%	51.97	%	55.82	%		50.77	%	56.36	%

Subsidiary:	Trustco Bank

Contact:	Robert Leonard
	Executive Vice President
	(518) 381-3693

TrustCo Reports Another Record Quarter; Net Income of $19.4 Million up 15.5% over the Prior Year Quarter