Market Overview

TrustCo Announces Second Quarter 2016 Earnings

Share:

Executive Snapshot:

  • Continued solid financial results:
    • Key metrics for second quarter of 2016 results:
      • Net income of $10.5 million in the second quarter of 2016 compared to $10.4 million in the first quarter of 2016 and $10.7 million in the second quarter of 2015
      • Operating expenses increased $1.8 million in the second quarter of 2016 compared to the second quarter of 2015
      • Return on average assets (ROA) of 0.88%
      • Return on average equity (ROE) of 9.88%
      • Efficiency ratio of 57.70%
         
  • Asset quality remains solid:
    • Asset quality measures improved compared to the second quarter of 2015
    • Nonperforming assets (NPAs) fell by $5.7 million compared to June 30, 2015
    • NPAs to total assets improved from 0.81% to 0.68% compared to June 30, 2015
    • Quarterly net chargeoffs decreased to 0.14% of average loans on an annualized basis, compared to 0.15% for the second quarter of 2015
       
  • Continued expansion of customer base:
    • Focus on capitalizing on opportunities presented by expanded branch network
    • Average deposits per branch grew $493 thousand from June 30, 2015 to June 30, 2016 on a same store basis
    • Average deposits per branch were $28.8 million at June 30, 2016
    • Average core deposits were $47 million higher in the second quarter of 2016 compared to the second quarter of 2015
       
  • Loan portfolio reaches all-time high:
    • Average loans were up $100 million for the second quarter of 2016 compared to second quarter of 2015
    • At $3.34 billion as of June 30, 2016, loans reached an all-time high


TrustCo Announces Second Quarter 2016 Earnings

GLENVILLE, N.Y., July 21, 2016 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo) (Nasdaq: TRST) today announced second quarter of 2016 net income of $10.5 million compared to $10.4 million for the first quarter of 2016 and $10.7 million for the second quarter of 2015. 

Robert J. McCormick, President and Chief Executive Officer noted, "We are pleased to be able to report stable earnings despite added operating costs related to regulatory issues and a difficult operating environment.  Our continued focus on traditional lending criteria and conservative balance sheet management has enabled us to produce stable earnings, maintain strong liquidity and capital and allowed us to continue to grow our business and take advantage of changes in market and competitive conditions."

Mr. McCormick also noted, "We consider our second quarter 2016 results to be solid and are encouraged by the increase in pre-tax earnings from the first quarter of 2016.  In terms of our core business, we continue to make progress by adding the customer relationships which ultimately drive future growth.  Our highly liquid balance sheet continues to allow us to fund our loan growth without having to overpay for deposits.  We will continue taking advantage of opportunities as they are presented during the balance of 2016.  Recent merger activity between our competitors may provide us with additional opportunities to add customers."

TrustCo saw continued solid loan growth in the second quarter of 2016 compared to the prior year.  Loan portfolio expansion was funded by deposit growth and capital expansion.  The continued shift toward loans helped offset the margin impact from continued comparatively low yields on cash and investments.  The growth in average deposits in the second quarter of 2016 versus the prior year was led by lower cost core deposits.  TrustCo's strong liquidity position continues to allow the Company to take advantage of opportunities when interest rate conditions change.

For the second quarter of 2016, return on average assets and return on average equity were 0.88% and 9.88%, respectively, compared to 0.91% and 10.66% for the second quarter of 2015.  Diluted earnings per share were $0.109 for the second quarter of 2016, compared to $0.113 for the second quarter of 2015.  As discussed in recent quarters, increased operating costs in response to regulatory concerns have hampered earnings.  Higher expenses were anticipated in order to fulfill operating and regulatory requirements.  We took aggressive action to meet these requirements during 2015 and costs related to those actions have continued into 2016.  While some of these costs will be recurring, others will diminish over time.

For the first six months of 2016, diluted net income per share was $0.219, compared to $0.225 for the first six months of 2015.  Return on average assets and equity were 0.88% and 9.93% for the first six months of 2016, compared to 0.92% and 10.78% for the first six months of 2015. 

Average loans were up $100.2 million or 3.1% in the second quarter of 2016, over the same period in 2015.  Loan growth was constrained by an $11.5 million decline in commercial loans, which have become less attractive on a risk adjusted basis.  Average residential loans, our primary lending focus, were up $110.7 million or 4.2% in the second quarter of 2016, over the same period in 2015.  Average deposits were up $33.9 million or 0.8% for the second quarter of 2016 over the same period a year earlier.  The increase in deposits came from core deposit accounts, which consist of checking, savings and money market deposits.  Average core deposits increased $47.0 million from the second quarter of 2015 to the second quarter of 2016, while average time deposit balances declined $13.2 million.  Core deposits typically represent longer term customer relationships and are generally lower cost than time deposits.  Mr. McCormick noted that, "The year-over-year growth of our loans and core deposit base reflect the long term strategic focus of the Company."

"While some banks have backed away from branches, a customer friendly branch franchise continues to be the key to our long term plans.  We continue to make good progress expanding loans and deposits throughout our entire branch network.  We expect that trend to continue as the newer branches continue to mature."

"At June 30, 2016, our average branch size was $28.8 million.  We have always designed our branches to be smaller and more cost effective than those built by many of our competitors.  We use open floor plans that help maximize the value of our branches.  We remain mindful that fully achieving our goals for newer branches will take time and continued work.  We believe success in growing customer relationships provides basic building blocks that will help drive profit growth for the coming years."

Asset quality and loan loss reserve measures mostly improved versus both June 30, 2015 and as compared to December 31, 2015.  Nonperforming loans (NPLs) were $28.2 million at June 30, 2016, compared to $32.5 million at June 30, 2015 and $28.3 million at December 31, 2015.  During the quarter, $1.2 million of nonperforming loans were sold.  NPLs were equal to 0.84% of total loans at June 30, 2016, compared to 1.00% a year earlier and 0.86% at December 31, 2015.  The coverage ratio, or allowance for loan losses to NPLs, was 156.0% at June 30, 2016, compared to 140.3% at June 30, 2015 and 158.4% at December 31, 2015.  Nonperforming assets (NPAs) were at $32.8 million at June 30, 2016 compared to $38.6 million at June 30, 2015 and $34.7 million at December 31, 2015.  The ratio of loan loss allowance to total loans was 1.32% as of June 30, 2016, compared to 1.41% at June 30, 2015 and to 1.36% at December 31, 2015 and reflects both the improvement in asset quality and economic conditions in our lending areas.  The allowance for loan losses was $44.1 million at June 30, 2016 compared to $45.6 million at June 30, 2015 and $44.8 million at December 31, 2015.  Net chargeoffs for the second quarter of 2016 decreased nominally versus both the second quarter of 2015 and the first quarter of 2016, to $1.1 million.  The net chargeoff ratio was 0.14% for the second quarter of 2016.  The provision for loan losses was flat versus both the second quarter of 2015 and the first quarter of 2016.

The net interest margin for the second quarter of 2016 was 3.09% compared to 3.13% in the first quarter of 2016 and 3.07% in the second quarter of 2015. 

At June 30, 2016 the equity to asset ratio was 8.91%, compared to 8.49% at June 30, 2015 and 8.73% at December 31, 2015.  The tangible equity ratio was 8.90% compared to 8.48% at June 30, 2015 and 8.72% at December 31, 2015.  GAAP book value per share at June 30, 2016 was $4.51 compared to $4.23 a year earlier and tangible book value per share was $4.50 and $4.23, respectively.  Non-GAAP measures are discussed on page 13.

TrustCo Bank Corp NY is a $4.8 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 145 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 2016.

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 Second Quarter 2016 results will be held at 9:00 a.m. Eastern Time on July 22, 2016.  Those wishing to participate in the call may dial toll-free 1-888-3339-0764.  International callers must dial 1-412-902-4195.  Please ask to be joined into the TrustCo Bank Corp NY / TRST call.  A replay of the call will be available for thirty days by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10089498. The call will also be audio webcast at: http://services.choruscall.com/links/trst160722.html, and will be available 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 2016 and for the growth of loans and deposits throughout our branch network, our ability to capitalize on economic changes in the areas in which we operate and the extent to which higher expenses to fulfill operating and regulatory requirements recur or diminish over time.  Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo's actual results and could cause TrustCo's actual financial performance to differ materially from that expressed in any forward-looking statement:  our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at reasonable levels relative to income; our ability to comply with the supervisory agreement entered into with Trustco Bank's regulator and potential regulatory actions if we fail to comply; restrictions or conditions imposed by our regulators on our operations that may make it more difficult for us to achieve our goals; the future earnings and capital levels of Trustco Bank and the continued ability of Trustco Bank under regulatory rules and the supervisory agreement to distribute capital to TrustCo, which could affect our ability to pay dividends; results of examinations of Trustco Bank and TrustCo by our respective regulators; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; 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; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading "Risk Factors" in our most recent annual report on Form 10-K and 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    
  06/30/1603/31/1606/30/15   
Summary of operations       
Net interest income (TE)$ 36,311  36,196  35,690    
Provision for loan losses  800  800  800    
Net gain on securities transactions  668  -  -    
Noninterest income, excluding net gain on securities transactions  4,531  4,572  4,454    
Noninterest expense  23,974  23,439  22,131    
Net income  10,464  10,409  10,727    
        
Per common share       
Net income per share:       
- Basic$ 0.110  0.109  0.113    
- Diluted  0.109  0.109  0.113    
Cash dividends  0.066  0.066  0.066    
Tangible Book value at period end  4.50  4.43  4.23    
Market price at period end  6.41  6.06  7.03    
        
At period end       
Full time equivalent employees  801  784  760    
Full service banking offices  145  145  146    
        
Performance ratios       
Return on average assets  0.88% 0.89  0.91    
Return on average equity  9.88  9.98  10.66    
Efficiency (1)  57.70  56.22  54.71    
Net interest spread (TE)  3.03  3.07  3.01    
Net interest margin (TE)  3.09  3.13  3.07    
Dividend payout ratio  59.89  60.13  58.15    
        
Capital ratio at period end       
Consolidated tangible equity to tangible assets (2)  8.90  8.87  8.48    
        
Asset quality analysis at period end       
Nonperforming loans to total loans  0.84  0.92  1.00    
Nonperforming assets to total assets  0.68  0.76  0.81    
Allowance for loan losses to total loans  1.32  1.34  1.41    
Coverage ratio (3)  1.6x  1.5  1.4    
        
        
(1)  Calculated as noninterest expense (excluding ORE income/expense) divided by       
taxable equivalent net interest income plus noninterest income (excluding       
net securities transactions and gain on sale of nonperforming loans).       
(2)  The tangible equity ratio excludes $553 of intangibles from both equity and assets.       
(3)  Calculated as allowance for loan losses divided by total nonperforming loans.       
        
        
TE = Taxable equivalent.       
        
        
FINANCIAL HIGHLIGHTS, Continued       
        
(dollars in thousands, except per share data)       
(Unaudited)       
  Six Months Ended    
   06/30/16  06/30/15     
Summary of operations       
Net interest income (TE)$ 72,508  70,875     
Provision for loan losses  1,600  1,600     
Net gain on securities transactions  668  249     
Noninterest income, excluding net gain on securities transactions  9,103  8,828     
Noninterest expense  47,412  43,988     
Net income  20,875  21,442     
        
Per common share       
Net income per share:       
- Basic$ 0.219  0.226     
- Diluted  0.219  0.225     
Cash dividends  0.131  0.131     
Tangible Book value at period end  4.50  4.23     
Market price at period end  6.41  7.03     
        
Performance ratios       
Return on average assets  0.88% 0.92     
Return on average equity  9.93  10.78     
Efficiency (1)  56.96  54.45     
Net interest spread (TE)  3.05  3.02     
Net interest margin (TE)  3.11  3.08     
Dividend payout ratio  60.00  58.14     
        
        
(1)  Calculated as noninterest expense (excluding ORE income/expense) divided by       
taxable equivalent net interest income plus noninterest income (excluding       
net securities transactions and gain on sale of nonperforming loans).       
TE = Taxable equivalent.       
        
        
CONSOLIDATED STATEMENTS OF INCOME       
        
(dollars in thousands, except per share data)       
(Unaudited)       
  Three Months Ended

 
  6/30/20163/31/201612/31/20159/30/20156/30/2015 
Interest and dividend income:       
Interest and fees on loans$ 35,652  35,605  35,930  35,631  35,343  
Interest and dividends on securities available for sale:       
U. S. government sponsored enterprises  404  255  256  584  366  
State and political subdivisions  13  14  16  23  23  
Mortgage-backed securities and collateralized mortgage obligations-residential  2,169  2,116  2,233  2,230  2,276  
Corporate bonds  -  -  -  -  -  
Small Business Administration-guaranteed participation securities  450  476  482  497  503  
Mortgage-backed securities and collateralized mortgage obligations-commercial  38  36  37  37  38  
Other securities  4  4  4  4  4  
Total interest and dividends on securities available for sale  3,078  2,901  3,028  3,375  3,210  
        
Interest on held to maturity securities:       
Mortgage-backed securities and collateralized mortgage obligations-residential  374  402  425  461  480  
Corporate bonds  154  154  154  153  154  
Total interest on held to maturity securities  528  556  579  614  634  
        
Federal Reserve Bank and Federal Home Loan Bank stock  118  120  120  113  118  
        
Interest on federal funds sold and other short-term investments  832  844  494  408  423  
Total interest income  40,208  40,026  40,151  40,141  39,728  
        
Interest expense:       
Interest on deposits:       
Interest-bearing checking  116  114  115  117  111  
Savings  604  604  608  603  599  
Money market deposit accounts  467  496  513  537  547  
Time deposits  2,460  2,373  2,375  2,544  2,500  
Interest on short-term borrowings  262  257  278  290  300  
Total interest expense  3,909  3,844  3,889  4,091  4,057  
        
Net interest income  36,299  36,182  36,262  36,050  35,671  
        
Provision for loan losses  800  800  1,300  800  800  
Net interest income after provision for loan losses  35,499  35,382  34,962  35,250  34,871  
        
Noninterest income:       
Trustco Financial Services income  1,512  1,605  1,489  1,351  1,478  
Fees for services to customers  2,737  2,661  2,704  2,770  2,691  
Net gain on securities transactions  668  -  2  -  -  
Other  282  306  235  244  285  
Total noninterest income  5,199  4,572  4,430  4,365  4,454  
        
Noninterest expenses:       
Salaries and employee benefits  8,934  9,003  8,042  7,834  8,164  
Net occupancy expense  3,918  4,088  3,884  3,929  3,878  
Equipment expense  1,840  1,514  1,530  1,596  1,803  
Professional services  2,098  2,146  2,067  2,238  2,066  
Outsourced services  1,425  1,551  1,585  1,425  1,425  
Advertising expense  570  729  592  668  733  
FDIC and other insurance  1,949  1,990  2,055  2,202  1,017  
Other real estate expense, net  423  519  570  806  201  
Other  2,817  1,899  2,783  2,766  2,844  
Total noninterest expenses  23,974  23,439  23,108  23,464  22,131  
        
Income before taxes  16,724  16,515  16,284  16,151  17,194  
Income taxes  6,260  6,106  6,104  5,535  6,467  
        
Net income$ 10,464  10,409  10,180  10,616  10,727  
Net income per common share:       
- Basic$ 0.110  0.109  0.107  0.112  0.113  
        
- Diluted  0.109  0.109  0.107  0.111  0.113  
        
Average basic shares (in thousands)  95,487  95,365  95,256  95,149  95,056  
Average diluted shares (in thousands)  95,580  95,412  95,349  95,234  95,190  
        
Note:  Taxable equivalent net interest income$ 36,311  36,196  36,278  36,069  35,690  
        
        
CONSOLIDATED STATEMENTS OF INCOME       
        
(dollars in thousands, except per share data)       
(Unaudited)       
  Six Months Ended    
   6/30/2016  6/30/2015     
        
Interest and dividend income:       
Interest and fees on loans$ 71,257  70,326     
Interest and dividends on securities available for sale:       
U. S. government sponsored enterprises  659  578     
State and political subdivisions  27  48     
Mortgage-backed securities and collateralized mortgage obligations-residential  4,285  4,669     
Corporate bonds  -  1     
Small Business Administration-guaranteed participation securities  926  1,025     
Mortgage-backed securities and collateralized mortgage obligations-commercial  74  75     
Other securities  8  8     
Total interest and dividends on securities available for sale  5,979  6,404     
        
Interest on held to maturity securities:       
Mortgage-backed securities-residential  775  958     
Corporate bonds  308  308     
Total interest on held to maturity securities  1,083  1,266     
        
Federal Reserve Bank and Federal Home Loan Bank stock  238  234     
        
Interest on federal funds sold and other short-term investments  1,677  823     
Total interest income  80,234  79,053     
        
Interest expense:       
Interest on deposits:       
Interest-bearing checking  230  216     
Savings  1,208  1,257     
Money market deposit accounts  962  1,164     
Time deposits  4,833  4,934     
Interest on short-term borrowings  519  646     
Total interest expense  7,752  8,217     
        
Net interest income  72,482  70,836     
        
Provision for loan losses  1,600  1,600     
Net interest income after provision for loan losses  70,882  69,236     
        
Noninterest income:       
Trust department income  3,117  3,131     
Fees for services to customers  5,398  5,215     
Net gain on securities transactions  668  249     
Other  588  482     
Total noninterest income  9,771  9,077     
        
Noninterest expenses:       
Salaries and employee benefits  17,937  16,645     
Net occupancy expense  8,006  7,986     
Equipment expense  3,354  3,745     
Professional services  4,244  3,573     
Outsourced services  2,976  2,850     
Advertising expense  1,299  1,333     
FDIC and other insurance  3,939  2,082     
Other real estate (income) expense, net  942  625     
Other  4,715  5,149     
Total noninterest expenses  47,412  43,988     
        
Income before taxes  33,241  34,325     
Income taxes  12,366  12,883     
        
Net income$ 20,875  21,442     
        
Net income per Common Share:       
- Basic$ 0.219  0.226     
        
- Diluted  0.219  0.225     
        
Average basic shares (thousands)  95,426  95,002     
Average diluted shares (thousands)  95,496  95,132     
        
Note:  Taxable equivalent net interest income$ 72,508  70,875     
        
        
        
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION       
        
(dollars in thousands)       
(Unaudited)       
        
        
  6/30/20163/31/201612/31/20159/30/20156/30/2015 
  ASSETS:       
        
Cash and due from banks$ 39,787  37,373  41,698  42,560  37,574  
Federal funds sold and other short term investments  718,609  722,805  676,458  655,512  641,011  
Total cash and cash equivalents  758,396  760,178  718,156  698,072  678,585  
       
Securities available for sale:      
U. S. government sponsored enterprises  116,595  66,920  86,737  103,492  152,082  
States and political subdivisions  974  974  1,290  1,963  1,969  
Mortgage-backed securities and collateralized mortgage obligations-residential  404,138  422,189  411,729  413,878  429,205  
Small Business Administration-guaranteed participation securities  87,740  89,053  90,416  94,038  95,323  
Mortgage-backed securities and collateralized mortgage obligations-commercial  10,374  10,307  10,180  10,491  10,399  
Other securities  685  685  685  685  685  
Total securities available for sale  620,506  590,128  601,037  624,547  689,663  
        
Held to maturity securities:       
Mortgage-backed securities and collateralized mortgage obligations-residential  40,702  43,595  46,490  50,027  53,576  
Corporate bonds  9,982  9,979  9,975  9,971  9,967  
Total held to maturity securities  50,684  53,574  56,465  59,998  63,543  
        
Federal Reserve Bank and Federal Home Loan Bank stock  9,579  9,480  9,480  9,480  9,480  
       
Loans:      
Commercial  195,698  198,765  203,415  208,794  209,399  
Residential mortgage loans  2,786,951  2,737,784  2,721,173  2,707,944  2,669,929  
Home equity line of credit  352,069  356,163  359,325  356,337  354,946  
Installment loans  8,476  8,667  9,391  8,930  8,674  
Loans, net of deferred fees and costs  3,343,194  3,301,379  3,293,304  3,282,005  3,242,948  
Less:      
Allowance for loan losses  44,064  44,398  44,762  45,149  45,571  
Net loans  3,299,130  3,256,981  3,248,542  3,236,856  3,197,377  
        
Bank premises and equipment, net  36,793  37,360  37,643  37,506  38,100  
Other assets  55,825  55,561  63,669  59,358  64,589  
       
Total assets$ 4,830,913  4,763,262  4,734,992  4,725,817  4,741,337  
       
  LIABILITIES:      
Deposits:      
Demand$ 376,669  359,060  365,081  354,162  355,783  
Interest-bearing checking  766,322  746,562  754,347  719,071  713,001  
Savings accounts  1,282,006  1,272,394  1,262,194  1,237,549  1,250,154  
Money market deposit accounts  577,063  595,585  610,826  617,103  633,239  
Time deposits  1,178,567  1,168,887  1,107,930  1,168,908  1,185,264  
Total deposits  4,180,627  4,142,488  4,100,378  4,096,793  4,137,441  
       
Short-term borrowings  190,542  169,528  191,226  184,405  170,750  
Accrued expenses and other liabilities  29,479  28,221  30,078  32,327  30,687  
       
Total liabilities  4,400,648  4,340,237  4,321,682  4,313,525  4,338,878  
       
  SHAREHOLDERS' EQUITY:      
Capital stock  99,071  98,973  98,973  98,964  98,964  
Surplus  171,174  171,113  171,443  171,788  171,988  
Undivided profits  192,356  188,159  184,009  180,093  175,721  
Accumulated other comprehensive income (loss), net of tax  2,395  73  (4,781) (1,174) (5,927) 
Treasury stock at cost  (34,731) (35,293) (36,334) (37,379) (38,287) 
       
Total shareholders' equity  430,265  423,025  413,310  412,292  402,459  
        
Total liabilities and shareholders' equity$ 4,830,913  4,763,262  4,734,992  4,725,817  4,741,337  
        
Outstanding shares (in thousands)  95,493  95,369  95,262  95,149  95,056  
        

 

NONPERFORMING ASSETS      
       
(dollars in thousands)      
(Unaudited)      
       
Nonperforming Assets      
  06/30/1603/31/1612/31/1509/30/1506/30/15
New York and other states*      
Loans in nonaccrual status:      
Commercial$ 2,690  2,762  3,024  3,699  3,263 
Real estate mortgage - 1 to 4 family  23,559  25,669  23,273  26,059  27,366 
Installment  49  74  90  69  79 
Total non-accrual loans  26,298  28,505  26,387  29,827  30,708 
Other nonperforming real estate mortgages - 1 to 4 family  45  47  48  50  74 
Total nonperforming loans  26,343  28,552  26,435  29,877  30,782 
Other real estate owned  4,602  5,208  6,120  5,893  5,833 
Total nonperforming assets$ 30,945  33,760  32,555  35,770  36,615 
       
Florida      
Loans in nonaccrual status:      
Commercial$ -  -  -  -  - 
Real estate mortgage - 1 to 4 family  1,900  1,802  1,817  2,054  1,678 
Installment  -  -  8  9  10 
Total non-accrual loans  1,900  1,802  1,825  2,063  1,688 
Other nonperforming real estate mortgages - 1 to 4 family  -  -  -  -  - 
Total nonperforming loans  1,900  1,802  1,825  2,063  1,688 
Other real estate owned  -  476  335  -  275 
Total nonperforming assets$ 1,900  2,278  2,160  2,063  1,963 
       
Total      
Loans in nonaccrual status:      
Commercial$ 2,690  2,762  3,024  3,699  3,263 
Real estate mortgage - 1 to 4 family  25,459  27,471  25,090  28,113  29,044 
Installment  49  74  98  78  89 
Total non-accrual loans  28,198  30,307  28,212  31,890  32,396 
Other nonperforming real estate mortgages - 1 to 4 family  45  47  48  50  74 
Total nonperforming loans  28,243  30,354  28,260  31,940  32,470 
Other real estate owned  4,602  5,684  6,455  5,893  6,108 
Total nonperforming assets$ 32,845  36,038  34,715  37,833  38,578 
       
       
Quarterly Net Chargeoffs (Recoveries)      
  06/30/1603/31/1612/31/1509/30/1506/30/15
New York and other states*      
Commercial$ 67  224  672  3  50 
Real estate mortgage - 1 to 4 family  973  771  963  1,159  933 
Installment  77  70  35  26  24 
Total net chargeoffs$ 1,117  1,065  1,670  1,188  1,007 
       
Florida      
Commercial$ -  -  (2) (3) (1)
Real estate mortgage - 1 to 4 family  16  83  6  33  167 
Installment  1  16  13  4  - 
Total net chargeoffs$ 17  99  17  34  166 
       
Total      
Commercial$ 67  224  670  -  49 
Real estate mortgage - 1 to 4 family  989  854  969  1,192  1,100 
Installment  78  86  48  30  24 
Total net chargeoffs$ 1,134  1,164  1,687  1,222  1,173 
       
       
Asset Quality Ratios      
  06/30/1603/31/1612/31/1509/30/1506/30/15
       
Total nonperforming loans(1)$ 28,243  30,354  28,260  31,940  32,470 
Total nonperforming assets(1)  32,845  36,038  34,715  37,833  38,578 
Total net chargeoffs(2)  1,134  1,164  1,687  1,222  1,173 
       
Allowance for loan losses(1)  44,064  44,398  44,762  45,149  45,571 
       
Nonperforming loans to total loans  0.84% 0.92% 0.86% 0.97% 1.00%
Nonperforming assets to total assets  0.68% 0.76% 0.73% 0.80% 0.81%
Allowance for loan losses to total loans  1.32% 1.34% 1.36% 1.38% 1.41%
Coverage ratio(1)  156.0% 146.3% 158.4% 141.4% 140.3%
Annualized net chargeoffs to average loans(2)  0.14% 0.14% 0.21% 0.15% 0.15%
Allowance for loan losses to annualized net chargeoffs(2)  9.7x  9.5x  6.6x  9.3x  9.7x 
       
* 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 
             
(dollars in thousands) Three months ended  Three months ended 
(Unaudited) June 30, 2016  June 30, 2015 
  Average InterestAverage  Average InterestAverage 
  Balance  Rate  Balance  Rate 
             
Assets            
             
Securities available for sale:            
U. S. government sponsored enterprises$ 107,190   404 1.51%$ 114,279   366 1.28%
Mortgage backed securities and            
collateralized mortgage obligations-residential  445,162   2,169 1.95   441,754   2,276 2.06 
State and political subdivisions  955   19 7.96   1,939   36 7.36 
Corporate bonds  -   - -   956   0 0.00 
Small Business Administration-guaranteed participation securities  87,801   450 2.05   98,894   503 2.03 
Mortgage backed securities and            
collateralized mortgage obligations-commercial  10,321   38 1.47   10,600   38 1.41 
Other  677   4 2.36   685   4 2.34 
             
Total securities available for sale  652,106   3,084 1.89   669,107   3,223 1.93 
             
Federal funds sold and other            
short-term Investments  668,395   832 0.50   683,110   423 0.25 
             
Held to maturity securities:            
Corporate bonds  9,981   154 6.17   9,965   154 6.17 
Mortgage backed securities and            
collateralized mortgage obligations-residential  42,188   374 3.55   55,509   480 3.46 
             
Total held to maturity securities  52,169   528 4.05   65,474   634 3.87 
             
Federal Reserve Bank and Federal Home Loan Bank stock  9,576   118 4.93   9,466   118 4.99 
             
Commercial loans  198,938   2,563 5.15   210,424   2,710 5.15 
Residential mortgage loans  2,759,024   29,725 4.31   2,648,320   29,371 4.44 
Home equity lines of credit  354,897   3,179 3.58   354,053   3,092 3.50 
Installment loans  8,316   191 9.19   8,226   176 8.60 
             
Loans, net of unearned income  3,321,175   35,658 4.29   3,221,023   35,349 4.39 
             
Total interest earning assets  4,703,421   40,220 3.42   4,648,180   39,747 3.42 
             
Allowance for loan losses  (44,754)      (46,190)    
Cash & non-interest earning assets  136,724       137,329     
             
             
Total assets$ 4,795,391     $ 4,739,319     
             
             
Liabilities and shareholders' equity            
             
Deposits:            
Interest bearing checking accounts$ 759,546   116 0.06%$ 706,767   111 0.06%
Money market accounts  580,100   467 0.32   635,347   547 0.35 
Savings  1,273,575   604 0.19   1,249,865   599 0.19 
Time deposits  1,177,084   2,460 0.84   1,190,234   2,500 0.84 
             
Total interest bearing deposits  3,790,305   3,647 0.38   3,782,213   3,757 0.40 
Short-term borrowings  181,247   262 0.58   182,829   300 0.66 
             
Total interest bearing liabilities  3,971,552   3,909 0.39   3,965,042   4,057 0.41 
             
Demand deposits  370,781       344,982     
Other liabilities  27,121       25,591     
Shareholders' equity  425,937       403,704     
             
Total liabilities and shareholders' equity$ 4,795,391     $ 4,739,319     
             
Net interest income, tax equivalent    36,311       35,690   
             
Net interest spread    3.03%    3.01%
             
Net interest margin (net interest income            
to total interest earning assets)    3.09%    3.07%
             
Tax equivalent adjustment    (12)      (19)  
             
             
Net interest income    36,299       35,671   
             
             
             
             
             
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY- 
INTEREST RATES AND INTEREST DIFFERENTIAL 
(dollars in thousands) Six months ended  Six months ended 
(Unaudited) June 30, 2016  June 30, 2015 
  Average InterestAverage  Average InterestAverage 
  Balance  Rate  Balance  Rate 
             
Assets            
             
Securities available for sale:            
U. S. government sponsored enterprises$ 91,111   659 1.45%$ 96,172   578 1.20%
Mortgage backed securities and            
collateralized mortgage obligations-residential  428,831   4,285 2.00   459,980   4,669 2.03 
State and political subdivisions  1,034   41 7.93   2,015   74 7.31 
Corporate bonds  -   - -   1,226   1 0.16 
Small Business Administration-guaranteed participation securities  89,206   926 2.08   100,270   1,025 2.05 
Mortgage backed securities and            
collateralized mortgage obligations-commercial  10,357   74 1.43   10,635   75 1.41 
Other  682   8 2.35   685   8 2.34 
             
Total securities available for sale  621,221   5,993 1.93   670,983   6,430 1.92 
             
Federal funds sold and other            
short-term Investments  671,990   1,677 0.50   668,269   823 0.25 
             
Held to maturity securities:            
Corporate bonds  9,979   308 6.17   9,964   308 6.17 
Mortgage backed securities and            
collateralized mortgage obligations-residential  43,650   775 3.55   57,419   958 3.34 
             
Total held to maturity securities  53,629   1,083 4.04   67,383   1,266 3.76 
             
Federal Reserve Bank and Federal Home Loan Bank stock  9,527   238 5.00   9,348   234 5.01 
             
Commercial loans  200,152   5,180 5.18   214,713   5,506 5.13 
Residential mortgage loans  2,742,918   59,348 4.33   2,621,417   58,329 4.46 
Home equity lines of credit  356,857   6,358 3.56   353,161   6,153 3.51 
Installment loans  8,488   383 9.02   8,011   351 8.84 
             
Loans, net of unearned income  3,308,415   71,269 4.31   3,197,302   70,339 4.41 
             
Total interest earning assets  4,664,782   80,260 3.44   4,613,285   79,092 3.44 
             
Allowance for loan losses  (45,013)      (46,392)    
Cash & non-interest earning assets  136,138       138,319     
             
             
Total assets$ 4,755,907     $ 4,705,212     
             
             
Liabilities and shareholders' equity            
             
Deposits:            
Interest bearing checking accounts$ 747,322   230 0.06%$ 692,445   216 0.06%
Money market accounts  591,937   962 0.33   636,596   1,164 0.37 
Savings  1,268,021   1,208 0.19   1,239,737   1,257 0.20 
Time deposits  1,155,773   4,833 0.84   1,185,363   4,934 0.84 
             
Total interest bearing deposits  3,763,053   7,233 0.38   3,754,141   7,571 0.41 
Short-term borrowings  178,683   519 0.58   187,560   646 0.69 
             
Total interest bearing liabilities  3,941,736   7,752 0.39   3,941,701   8,217 0.42 
             
Demand deposits  364,503       336,741     
Other liabilities  27,019       25,817     
Shareholders' equity  422,649       400,953     
             
Total liabilities and shareholders' equity$ 4,755,907     $ 4,705,212     
             
Net interest income, tax equivalent    72,508       70,875   
             
Net interest spread    3.05%    3.02%
             
Net interest margin (net interest income            
to total interest earning assets)    3.11%    3.08%
             
Tax equivalent adjustment    (26)      (39)  
             
             
Net interest income    72,482       70,836   
             

 

Non-GAAP Financial Measures Reconciliation

Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders' equity and total assets, respectively. We calculate tangible book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders' equity by common shares outstanding. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios. 

The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income.  We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on the sale of nonperforming loans and securities from this calculation.  We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue. 

We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. Our management internally assesses our performance based, in part, on these measures.  However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share, efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.



NON-GAAP FINANCIAL MEASURES RECONCILIATION       
        
(dollars in thousands, except per share amounts)       
(Unaudited)       
  06/30/1603/31/1606/30/15   
Tangible Book Value Per Share       
        
Equity$ 430,265  423,025  402,459    
Less: Intangible assets  553  553  553    
Tangible equity  429,712  422,472  401,906    
        
Shares outstanding  95,493  95,369  95,056    
Tangible book value per share  4.50  4.43  4.23    
Book value per share  4.51  4.44  4.23    
        
Tangible Equity to Tangible Assets       
Total Assets  4,830,913  4,763,262  4,741,337    
Less: Intangible assets  553  553  553    
Tangible assets  4,830,360  4,762,709  4,740,784    
        
Tangible Equity to Tangible Assets  8.90% 8.87% 8.48%   
Equity to Assets  8.91% 8.88% 8.49%   
        
  3 Months Ended 6 Months Ended
Efficiency Ratio 06/30/1603/31/1606/30/15 06/30/1606/30/15
        
Net interest income$ 36,299  36,182  35,671   72,482  70,836 
Taxable equivalent adjustment  12  14  19   26  39 
Net interest income (fully taxable equivalent)  36,311  36,196  35,690   72,508  70,875 
Non-interest income  5,199  4,572  4,454   9,771  9,077 
Less:  Net gain on sale of nonperforming loans  24  -  60   24  60 
Less:  Net gain on securities  668  -  -   668  249 
Revenue used for efficiency ratio  40,818  40,768  40,084   81,587  79,643 
        
Total noninterest expense  23,974  23,439  22,131   47,412  43,988 
Less:  Other real estate expense, net  423  519  201   942  625 
Expense used for efficiency ratio  23,551  22,920  21,930   46,470  43,363 
        
Efficiency Ratio  57.70% 56.22% 54.71%  56.96% 54.45%
        
        

 

Contact: Kevin T. Timmons Vice President/Treasurer (518) 381-3607

Primary Logo

View Comments and Join the Discussion!