Market Overview

TrustCo Announces First Quarter 2016 Earnings

Share:

Executive Snapshot:

  • Continued solid financial results:
    • Key metrics for first quarter of 2016 results:
      • Net income of $10.4 million in first quarter of 2016 compared to $10.2 million in fourth quarter of 2015 and $10.7 million in the first quarter of 2015
      • Operating expenses increased $1.6 million in the first quarter of 2016 compared to the first quarter of 2015
      • Return on average assets (ROA) of 0.89%
      • Return on average equity (ROE) of 9.98%
      • Efficiency ratio of 56.22%
         
  • Asset quality remains solid:
    • Asset quality measures improved compared to the first quarter of 2015
    • Nonperforming assets (NPAs) fell by $4.4 million compared to March 31, 2015
    • NPAs to total assets improved from 0.85% to 0.76% compared to March 31, 2015
    • Quarterly net chargeoffs decreased to 0.14% of average loans on an annualized basis, compared to 0.15% for the first quarter of 2015
       
  • Continued expansion of customer base:
    • Focus on capitalizing on opportunities presented by expanded branch network
    • Average deposits per branch were $28.6 million
    • Average core deposits were $86 million higher in the first quarter of 2016 compared to the first quarter of 2015
       
  • Loan portfolio reaches all-time high:
    • Average loans were up $122 million for the first quarter of 2016 compared to first quarter of 2015
    • At $3.30 billion as of March 31, 2016, loans reached an all-time high


GLENVILLE, N.Y., April 21, 2016 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo) (Nasdaq: TRST) today announced first quarter of 2016 net income of $10.4 million compared to $10.2 million  for the fourth quarter of 2015 and $10.7 million for the first quarter of 2015. 

Robert J. McCormick, President and Chief Executive Officer noted, "We are pleased to be able to report relatively stable earnings despite added operating costs in response to recent regulatory concerns and a difficult operating environment.  Our long-term 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 first quarter 2016 results to be solid and are encouraged by the increase in pre-tax earnings from the fourth quarter of 2015.  In terms of our core business, we continue to make solid progress, adding customer relationships which ultimately position our business well for the future.  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."

TrustCo saw continued solid loan growth in the first quarter of 2016 compared to the prior year.  Loan portfolio expansion was funded by deposit growth.  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 first 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 first quarter of 2016, return on average assets and return on average equity were 0.89% and 9.98%, respectively, compared to 0.93% and 10.91% for the first quarter of 2015.  Diluted earnings per share were $0.109 for the first quarter of 2016, compared to $0.113 for the first 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 those efforts continue into 2016.  These efforts resulted in added costs in both 2015 and the first quarter of 2016.  While some of these costs will be recurring, others will diminish over time.

Average loans were up $122.3 million or 3.9% in the first quarter of 2016, over the same period in 2015.  Average deposits were up $39.9 million or 1.0% for the first 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 $85.8 million from the first quarter of 2015 to the first quarter of 2016, more than offsetting a decline in time deposit balances.  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 significant progress expanding loans and deposits throughout our entire branch network.  We expect that trend to continue as the newer branches continue to mature."

"At March 31, 2016, our average branch size was $28.6 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 March 31, 2015, but were mixed as compared to December 31, 2015.  Nonperforming loans (NPLs) were $30.4 million at March 31, 2016, compared to $33.5 million at March 31, 2015 and $28.3 million at December 31, 2015.  The slight increase in NPLs was due to residential real estate nonperforming loans in the New York region.  NPLs were equal to 0.92% of total loans at March 31, 2016, compared to 1.05% a year earlier and 0.86% at December 31, 2015.  The coverage ratio, or allowance for loan losses to NPLs, was 146.3% at March 31, 2016, compared to 137.2% at March 31, 2015 and 158.4% at December 31, 2015.  Nonperforming assets (NPAs) were at $36.0 million at March 31, 2016 compared to $40.4 million at March 31, 2015 and $34.7 million at December 31, 2015.  The ratio of loan loss allowance to total loans was 1.34% as of March 31, 2016, compared to 1.44% at March 31, 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 $44.4 million at March 31, 2016 compared to $45.9 million at March 31, 2015 and $44.8 million at December 31, 2015.  Net chargeoffs for the first quarter of 2016 decreased by $523 thousand or 31% versus the fourth quarter of 2015, which was also reflected in the reduction in the provision for loan losses of $500 thousand from the fourth quarter to the first quarter.

The net interest margin for the first quarter of 2016 was 3.13% compared to 3.14% in the fourth quarter of 2015 and 3.08% in the first quarter of 2015. 

At March 31, 2016 the tangible equity ratio was 8.87% compared to 8.44% at March 31, 2015 and 8.72% at December 31, 2015.  The equity to asset ratio was 8.88% at March 31, 2016, compared to 8.45% at March 31, 2015 and 8.73% at December 31, 2015.  Tangible book value per share at March 31, 2016 was $4.43 compared to $4.21 a year earlier and GAAP book value per share was $4.44 and $4.22, respectively.  Non-GAAP measures are discussed on page 10.

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 March 31, 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 First Quarter 2016 results will be held at 9:00 a.m. Eastern Time on April 22, 2016.  Those wishing to participate in the call may dial toll-free 1-888-339-0764.  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 10084202. The call will also be audio webcast at: http://services.choruscall.com/links/trst160422.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, 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   
  03/31/1612/31/1503/31/15   
Summary of operations       
  Net interest income (TE)$   36,196    36,278    35,185    
  Provision for loan losses    800    1,300    800    
  Net securities transactions    -     2    249    
  Noninterest income, excluding net securities transactions    4,572    4,428    4,374    
  Noninterest expense    23,439    23,108    21,857    
  Net income    10,409    10,180    10,715    
        
Per common share       
  Net income per share:       
    - Basic$   0.109    0.107    0.113    
    - Diluted    0.109    0.107    0.113    
  Cash dividends    0.066    0.066    0.066    
  Tangible Book value at period end    4.43    4.33    4.21    
  Market price at period end    6.06    6.14    6.88    
        
At period end       
  Full time equivalent employees  784  787  747    
  Full service banking offices  145  146  145    
        
Performance ratios       
  Return on average assets  0.89% 0.86  0.93    
  Return on average equity  9.98  9.75  10.91    
  Efficiency (1)  56.22  55.37  54.18    
  Net interest spread (TE)  3.07  3.08  3.02    
  Net interest margin (TE)  3.13  3.14  3.08    
  Dividend payout ratio  60.13  61.54  58.12    
        
Capital ratio at period end       
  Consolidated tangible equity to tangible assets (2)  8.87  8.72  8.44    
        
Asset quality analysis at period end       
  Nonperforming loans to total loans  0.92  0.86  1.05    
  Nonperforming assets to total assets  0.76  0.73  0.85    
  Allowance for loan losses to total loans  1.34  1.36  1.44    
  Coverage ratio (3) 1.5x     1.6  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).       
(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.       
        
        
        
CONSOLIDATED STATEMENTS OF INCOME       
        
(dollars in thousands, except per share data)       
(Unaudited)       
  Three Months Ended 
  3/31/201612/31/20159/30/20156/30/20153/31/2015 
Interest and dividend income:        
Interest and fees on loans$   35,605    35,930    35,631    35,343    34,983  
Interest and dividends on securities available for sale:        
 U.S. government sponsored enterprises    255    256    584    366    212  
 State and political subdivisions     14    16    23    23    25  
 Mortgage-backed securities and collateralized mortgage obligations-residential    2,116    2,233    2,230    2,276    2,393  
 Corporate bonds    -    -    -    -    1  
 Small Business Administration-guaranteed participation securities    476    482    497    503    522  
 Mortgage-backed securities and collateralized mortgage obligations-commercial    36    37    37    38    37  
 Other securities    4    4    4    4    4  
  Total interest and dividends on securities available for sale    2,901    3,028    3,375    3,210    3,194  
        
Interest on held to maturity securities:        
 Mortgage-backed securities and collateralized mortgage obligations-residential    402    425    461    480    478  
 Corporate bonds    154    154    153    154    154  
  Total interest on held to maturity securities    556    579    614    634    632  
        
 Federal Reserve Bank and Federal Home Loan Bank stock    120    120    113    118    116  
        
Interest on federal funds sold and other short-term investments    844    494    408    423    400  
  Total interest income    40,026    40,151    40,141    39,728    39,325  
        
Interest expense:        
 Interest on deposits:        
 Interest-bearing checking    114    115    117    111    105  
 Savings    604    608    603    599    658  
 Money market deposit accounts    496    513    537    547    617  
 Time deposits    2,373    2,375    2,544    2,500    2,434  
 Interest on short-term borrowings    257    278    290    300    346  
  Total interest expense    3,844    3,889    4,091    4,057    4,160  
        
  Net interest income    36,182    36,262    36,050    35,671    35,165  
        
Provision for loan losses    800    1,300    800    800    800  
Net interest income after provision for loan losses     35,382    34,962    35,250    34,871    34,365  
        
Noninterest income:       
 Trustco Financial Services income    1,605    1,489    1,351    1,478    1,653  
 Fees for services to customers    2,661    2,704    2,770    2,691    2,524  
 Net gain on securities transactions    -    2    -    -    249  
 Other    306    235    244    285    197  
  Total noninterest income    4,572    4,430    4,365    4,454    4,623  
        
Noninterest expenses:        
 Salaries and employee benefits    9,003    8,042    7,834    8,164    8,481  
 Net occupancy expense    4,088    3,884    3,929    3,878    4,108  
 Equipment expense    1,514    1,530    1,596    1,803    1,942  
 Professional services    2,146    2,067    2,238    2,066    1,507  
 Outsourced services    1,551    1,585    1,425    1,425    1,425  
 Advertising expense    729    592    668    733    600  
 FDIC and other insurance    1,990    2,055    2,202    1,017    1,065  
 Other real estate expense, net    519    570    806    201    424  
 Other    1,899    2,783    2,766    2,844    2,305  
  Total noninterest expenses    23,439    23,108    23,464    22,131    21,857  
        
Income before taxes    16,515    16,284    16,151    17,194    17,131  
Income taxes    6,106    6,104    5,535    6,467    6,416  
        
Net income$   10,409    10,180    10,616    10,727    10,715  
Net income per common share:        
  - Basic$ 0.109  0.107  0.112  0.113  0.113  
        
  - Diluted  0.109  0.107  0.111  0.113  0.113  
        
Average basic shares (in thousands)    95,365    95,256    95,149    95,056    94,947  
Average diluted shares (in thousands)    95,412    95,349    95,234    95,190    95,074  
        
Note:  Taxable equivalent net interest income$   36,196    36,278    36,069    35,690    35,185  
        
        
        
        
        
        
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION       
        
(dollars in thousands)       
(Unaudited)       
        
        
  3/31/201612/31/20159/30/20156/30/20153/31/2015 
  ASSETS:       
        
 Cash and due from banks$ 37,373  41,698  42,560  37,574  44,853  
 Federal funds sold and other short term investments    722,805  676,458  655,512  641,011  705,273  
  Total cash and cash equivalents    760,178  718,156  698,072  678,585  750,126  
       
 Securities available for sale:      
  U.S. government sponsored enterprises    66,920  86,737  103,492  152,082  108,248  
  States and political subdivisions    974  1,290  1,963  1,969  1,974  
  Mortgage-backed securities and collateralized mortgage obligations-residential    422,189  411,729  413,878  429,205  445,273  
  Corporate bonds    -     -     -     -   1,500  
  Small Business Administration-guaranteed participation securities  89,053  90,416  94,038  95,323  98,668  
  Mortgage-backed securities and collateralized mortgage obligations-commercial    10,307  10,180  10,491  10,399  10,503  
  Other securities    685  685  685  685  685  
   Total securities available for sale    590,128  601,037  624,547  689,663  666,851  
        
 Held to maturity securities:       
  Mortgage-backed securities and collateralized mortgage obligations-residential  43,595  46,490  50,027  53,576  57,296  
  Corporate bonds  9,979  9,975  9,971  9,967  9,964  
   Total held to maturity securities  53,574  56,465  59,998  63,543  67,260  
        
 Federal Reserve Bank and Federal Home Loan Bank stock  9,480  9,480  9,480  9,480  9,228  
       
 Loans:      
  Commercial    198,765  203,415  208,794  209,399  212,145  
  Residential mortgage loans    2,737,784  2,721,173  2,707,944  2,669,929  2,620,925  
  Home equity line of credit    356,163  359,325  356,337  354,946  352,552  
  Installment loans    8,667  9,391  8,930  8,674  8,003  
 Loans, net of deferred fees and costs    3,301,379  3,293,304  3,282,005  3,242,948  3,193,625  
 Less:      
  Allowance for loan losses    44,398  44,762  45,149  45,571  45,944  
  Net loans    3,256,981  3,248,542  3,236,856  3,197,377  3,147,681  
        
 Bank premises and equipment, net    37,360  37,643  37,506  38,100  38,812  
 Other assets    55,561  63,669  59,358  64,589  60,698  
       
  Total assets$ 4,763,262  4,734,992  4,725,817  4,741,337  4,740,656  
       
  LIABILITIES:      
 Deposits:      
  Demand$ 359,060  365,081  354,162  355,783  347,315  
  Interest-bearing checking    746,562  754,347  719,071  713,001  696,137  
  Savings accounts    1,272,394  1,262,194  1,237,549  1,250,154  1,237,115  
  Money market deposit accounts    595,585  610,826  617,103  633,239  640,368  
  Time deposits    1,168,887  1,107,930  1,168,908  1,185,264  1,196,233  
  Total deposits    4,142,488  4,100,378  4,096,793  4,137,441  4,117,168  
       
 Short-term borrowings    169,528  191,226  184,405  170,750  194,738  
 Accrued expenses and other liabilities    28,221  30,078  32,327  30,687  28,274  
       
  Total liabilities    4,340,237  4,321,682  4,313,525  4,338,878  4,340,180  
       
  SHAREHOLDERS' EQUITY:      
 Capital stock    98,973  98,973  98,964  98,964  98,964  
 Surplus    171,113  171,443  171,788  171,988  172,237  
 Undivided profits    188,159  184,009  180,093  175,721  171,232  
 Accumulated other comprehensive income (loss), net of tax    73  (4,781) (1,174) (5,927) (2,687) 
 Treasury stock at cost  (35,293) (36,334) (37,379) (38,287) (39,270) 
       
  Total shareholders' equity  423,025  413,310  412,292  402,459  400,476  
        
  Total liabilities and shareholders' equity$ 4,763,262  4,734,992  4,725,817  4,741,337  4,740,656  
        
Outstanding shares (in thousands)    95,369    95,262    95,149    95,056    94,956  
        

 

NONPERFORMING ASSETS       
        
(dollars in thousands)       
(Unaudited)       
        
Nonperforming Assets       
  03/31/1612/31/1509/30/1506/30/1503/31/15 
New York and other states*       
Loans in nonaccrual status:       
  Commercial$   2,762    3,024    3,699    3,263    2,489  
  Real estate mortgage - 1 to 4 family    25,669    23,273    26,059    27,366    28,215  
  Installment    74    90    69    79    77  
Total non-accrual loans    28,505    26,387    29,827    30,708    30,781  
Other nonperforming real estate mortgages - 1 to 4 family    47    48    50    74    75  
Total nonperforming loans    28,552    26,435    29,877    30,782    30,856  
Other real estate owned    5,208    6,120    5,893    5,833    6,288  
Total nonperforming assets$   33,760    32,555    35,770    36,615    37,144  
        
Florida       
Loans in nonaccrual status:       
  Commercial$   -     -     -     -     -   
  Real estate mortgage - 1 to 4 family    1,802    1,817    2,054    1,678    2,608  
  Installment    -     8    9    10    20  
Total non-accrual loans    1,802    1,825    2,063    1,688    2,628  
Other nonperforming real estate mortgages - 1 to 4 family    -     -     -     -    -  
Total nonperforming loans    1,802    1,825    2,063    1,688    2,628  
Other real estate owned    476    335    -     275    670  
Total nonperforming assets$   2,278    2,160    2,063    1,963    3,298  
        
Total       
Loans in nonaccrual status:       
  Commercial$   2,762    3,024    3,699    3,263    2,489  
  Real estate mortgage - 1 to 4 family    27,471    25,090    28,113    29,044    30,823  
  Installment    74    98    78    89    97  
Total non-accrual loans    30,307    28,212    31,890    32,396    33,409  
Other nonperforming real estate mortgages - 1 to 4 family    47    48    50    74    75  
Total nonperforming loans    30,354    28,260    31,940    32,470    33,484  
Other real estate owned    5,684    6,455    5,893    6,108    6,958  
Total nonperforming assets$   36,038    34,715    37,833    38,578    40,442  
        
        
Quarterly Net Chargeoffs (Recoveries)       
  03/31/1612/31/1509/30/1506/30/1503/31/15 
New York and other states*       
Commercial$   224    672    3    50    34  
Real estate mortgage - 1 to 4 family    771    963    1,159    933    1,004  
Installment    70    35    26    24    37  
  Total net chargeoffs$   1,065    1,670    1,188    1,007    1,075  
        
Florida       
Commercial$   -     (2)   (3)   (1)   (1) 
Real estate mortgage - 1 to 4 family    83    6    33    167    109  
Installment    16    13    4    -    -   
  Total net chargeoffs$   99    17    34    166    108  
        
Total       
Commercial$   224    670    -     49    33  
Real estate mortgage - 1 to 4 family    854    969    1,192    1,100    1,113  
Installment    86    48    30    24    37  
  Total net chargeoffs$   1,164    1,687    1,222    1,173    1,183  
        
        
Asset Quality Ratios       
  03/31/1612/31/1509/30/1506/30/1503/31/15 
        
Total nonperforming loans(1)$   30,354    28,260    31,940    32,470    33,484  
Total nonperforming assets(1)    36,038    34,715    37,833    38,578    40,442  
Total net chargeoffs(2)    1,164    1,687    1,222    1,173    1,183  
        
Allowance for loan losses(1)    44,398  44,762  45,149  45,571  45,944  
        
Nonperforming loans to total loans  0.92% 0.86% 0.97% 1.00% 1.05% 
Nonperforming assets to total assets  0.76% 0.73% 0.80% 0.81% 0.85% 
Allowance for loan losses to total loans  1.34% 1.36% 1.38% 1.41% 1.44% 
Coverage ratio(1)  146.3% 158.4% 141.4% 140.3% 137.2% 
Annualized net chargeoffs to average loans(2)  0.14% 0.21% 0.15% 0.15% 0.15% 
Allowance for loan losses to annualized net chargeoffs(2)  9.5x   6.6x  9.3x  9.7x  9.6x   
        
* 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) March 31, 2016  March 31, 2015  
  Average InterestAverage  Average InterestAverage  
  Balance  Rate  Balance  Rate  
              
Assets             
              
Securities available for sale:             
U.S. government sponsored enterprises$ 75,031   255   1.36%$ 77,865   212 1.09% 
Mortgage backed securities and             
  collateralized mortgage obligations-residential  412,499   2,116   2.05   478,410   2,393   2.00  
State and political subdivisions  1,114   22   7.90   2,092   38   7.26  
Corporate bonds    -      -    -    1,499   1 0.13  
Small Business Administration-guaranteed participation securities  90,611   476   2.10   101,662   522   2.06  
Mortgage backed securities and             
  collateralized mortgage obligations-commercial  10,394   36   1.40   10,669   37   1.40  
Other  685   4   2.34   685   4   2.34  
              
  Total securities available for sale  590,334   2,909   1.97   672,882   3,207   1.91  
              
Federal funds sold and other             
 short-term Investments  675,586   844   0.50   653,263   400 0.25  
              
Held to maturity securities:             
Corporate bonds  9,977   154   6.17   9,962   154 6.17  
Mortgage backed securities and             
  collateralized mortgage obligations-residential  45,112   402   3.56   59,351   478 3.22  
              
  Total held to maturity securities  55,089   556   4.03   69,313   632   3.65  
              
Federal Reserve Bank and Federal Home Loan Bank stock  9,480   120   5.06   9,228   116   5.03  
              
Commercial loans  201,367   2,617   5.20   219,050   2,796   5.11  
Residential mortgage loans  2,726,811   29,622   4.35   2,594,216   28,958 4.48  
Home equity lines of credit  358,817   3,179   3.56   352,258   3,061 3.52  
Installment loans  8,659   193   8.94   7,794   175 9.11  
              
Loans, net of unearned income  3,295,654   35,611 4.33   3,173,318   34,990   4.42  
              
  Total interest earning assets  4,626,143   40,040 3.47   4,578,004   39,345   3.45  
              
Allowance for loan losses  (45,271)      (46,597)     
Cash & non-interest earning assets  135,532       138,560      
              
              
Total assets$ 4,716,404     $ 4,669,967      
              
              
Liabilities and shareholders' equity             
              
Deposits:             
Interest bearing checking accounts$ 735,098   114 0.06%$ 677,963   105 0.06% 
Money market accounts  603,774   496 0.33   637,858   617 0.39  
Savings  1,262,467   604 0.19   1,229,498   658 0.22  
Time deposits  1,134,459   2,373 0.84   1,180,436   2,434 0.84  
              
  Total interest bearing deposits  3,735,798   3,587 0.39   3,725,755   3,814 0.42  
Short-term borrowings  176,119   257 0.59   192,344   346 0.73  
              
  Total interest bearing liabilities  3,911,917   3,844 0.40   3,918,099   4,160 0.43  
              
Demand deposits  358,224       328,407      
Other liabilities  26,917       25,289      
Shareholders' equity  419,346       398,172      
              
Total liabilities and shareholders' equity$ 4,716,404     $ 4,669,967      
              
Net interest income, tax equivalent    36,196       35,185    
              
Net interest spread    3.07%    3.02% 
              
Net interest margin (net interest income             
to total interest earning assets)    3.13%    3.08% 
              
Tax equivalent adjustment    (14)      (20)   
              
              
  Net interest income     36,182       35,165    
              


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 a building, 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)     
  03/31/1612/31/1503/31/15 
Tangible Book Value Per Share     
      
Equity$   423,025    413,310    400,476  
Less: Intangible assets    553    553    553  
  Tangible equity    422,472    412,757    399,923  
      
Shares outstanding    95,369    95,262    94,956  
Tangible book value per share    4.43    4.33    4.21  
Book value per share    4.44    4.34    4.22  
      
Tangible Equity to Tangible Assets     
Total Assets  4,763,262  4,734,992  4,740,656  
Less: Intangible assets    553    553    553  
  Tangible assets    4,762,709    4,734,439    4,740,103  
      
Tangible Equity to Tangible Assets  8.87% 8.72% 8.44% 
Equity to Assets  8.88% 8.73% 8.45% 
      
  3 Months Ended 
Efficiency Ratio 03/31/1612/31/1503/31/15 
      
Net interest income$   36,182    36,262    35,165  
Taxable equivalent adjustment    14    16    20  
Net interest income (fully taxable equivalent)    36,196    36,278    35,185  
Non-interest income    4,572    4,430    4,623  
Less:  Net gain on securities    -    2    249  
  Revenue used for efficiency ratio    40,768    40,706    39,559  
      
Total noninterest expense    23,439    23,108    21,857  
Less:  Other real estate expense, net    519    570    424  
  Expense used for efficiency ratio    22,920    22,538    21,433  
      
Efficiency Ratio  56.22% 55.37% 54.18% 
            
Kevin T. Timmons Vice President/Treasurer (518) 381-3607

Primary Logo

View Comments and Join the Discussion!