TrustCo is Pleased to Report First Quarter 2021 Results; Net Income of $14.1 Million and 5.2% Average Residential Loan Growth Year over Year

GLENVILLE, N.Y., April 21, 2021 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced first quarter 2021 net income of $14.1 million or $0.146 diluted earnings per share.   Average residential loan growth increased 5.2% or $187.5 million for the first quarter 2021 compared to the first quarter 2020.

Summary
Robert J. McCormick, Chairman, President and Chief Executive Officer noted, “Trustco Bank has remained a “hometown bank” for thousands of our customers and community members during one of our nation’s most challenging years. Over the last year, we prioritized strengthening our communities and adapting our offerings to address the changing needs of our customers during the COVID-19 pandemic. Despite the uncertainty, our reliable and consistent approach has left us well-positioned to help our customers through this economic disruption and turmoil.”

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

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

Details

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

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

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

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

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

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

TrustCo Bank Corp NY is a $6.0 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 148 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at March 31, 2021.

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

A conference call to discuss first quarter 2021 results will be held at 9:00 a.m. Eastern Time on April 22, 2021. 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 10153602. The call will also be audio webcast at: https://services.choruscall.com/links/trst210422.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 2020, including our expectations regarding the effects of COVID-19 on our financial results and our ability to assist our customers in addressing the effects of COVID-19, our expectations with respect to the effect of our proposed reverse stock split of our common stock, including the impact of such split on the trading price of our common stock, our expectations with respect to our online and mobile banking product offerings, our expectations for the repricing of our CD portfolio, the impact of Federal Reserve actions regarding interest rates and the growth of loans and deposits throughout our branch network and our ability to capitalize on economic changes in the areas in which we operate. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed, and many of the risks and uncertainties are heightened by or may, in the future, be heightened by the effects of the COVID-19 pandemic. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement: the effect of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations; the impact of the actions taken by governmental authorities to contain COVID-19 or address the impact of COVID-19 on the economy, and the effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; future business strategies related to the implementation of CECL; our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at reasonable levels relative to income; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; restrictions or conditions imposed by our regulators on our operations that may make it more difficult for us to achieve our goals; the future earnings and capital levels of us and Trustco Bank and the continued receipt of approvals from our primary federal banking regulators under regulatory rules to distribute capital to TrustCo, which could affect our ability to pay dividends; results of supervisory monitoring or examinations of Trustco Bank and TrustCo by our respective regulators; adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; unanticipated effects from the Tax Cut and Jobs Act that may limit its benefits or adversely impact our business; the perceived overall value of our products and services by users, including in comparison to competitors’ products and services and the willingness of current and prospective customers to substitute competitors’ products and services for our products and services; changes in consumer spending, borrowing and saving habits; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; changes in management personnel; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; technological changes and electronic, cyber and physical security breaches; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading “Risk Factors” in our most recent annual report on Form 10-K and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.

TRUSTCO BANK CORP NY
GLENVILLE, NY
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		3/31/2021		12/31/2020		3/31/2020
Summary of operations
Net interest income (TE)	$	40,107		39,182		38,554
Provision for loan losses		350		600		2,000
Noninterest income		4,428		4,069		5,334
Noninterest expense		25,335		24,830		24,268
Net income		14,083		13,814		13,313
Per common share
Net income per share:
- Basic	$	0.146		0.143		0.138
- Diluted		0.146		0.143		0.138
Cash dividends		0.068		0.068		0.068
Book value at period end		5.92		5.89		5.68
Market price at period end		7.37		6.67		5.41
At period end
Full time equivalent employees		820		778		813
Full service banking offices		148		148		148
Performance ratios
Return on average assets		0.96	%	0.95		1.03
Return on average equity		10.01		9.75		9.87
Efficiency (1)		56.35		57.31		56.34
Net interest spread (TE)		2.74		2.72		2.91
Net interest margin (TE)		2.78		2.79		3.05
Dividend payout ratio		46.65		47.55		49.41
Capital ratios at period end
Consolidated tangible equity to tangible assets (2)		9.44	%	9.62		10.42
Consolidated equity to assets		9.44	%	9.63		10.43
Asset quality analysis at period end
Nonperforming loans to total loans		0.51		0.50		0.51
Nonperforming assets to total assets		0.36		0.37		0.42
Allowance for loan losses to total loans		1.17		1.17		1.13
Coverage ratio (3)		2.3x		2.4x		2.2x

(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income.
(2) Non-GAAP measure; calculated as total equity less $553 of intangible assets divided by total assets less $553 of intangible assets.
(3) Calculated as allowance for loan losses divided by total nonperforming loans.

TE = Taxable equivalent

CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		3/31/2021		12/31/2020		9/30/2020			6/30/2020			3/31/2020
Interest and dividend income:
Interest and fees on loans	$	40,217		40,906		41,330			41,665			42,063
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		50		27		14			106			421
State and political subdivisions		1		2		1			2			1
Mortgage-backed securities and collateralized mortgage obligations - residential		1,237		1,172		1,319			1,527			2,113
Corporate bonds		316		349		646			488			238
Small Business Administration - guaranteed participation securities		206		212		216			229			245
Other securities		6		7		5			5			6
Total interest and dividends on securities available for sale		1,816		1,769		2,201			2,357			3,024
Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations - residential		123		129		138			162			175
Total interest on held to maturity securities		123		129		138			162			175
Federal Reserve Bank and Federal Home Loan Bank stock		69		70		77			192			82
Interest on federal funds sold and other short-term investments		270		246		242			193			1,267
Total interest income		42,495		43,120		43,988			44,569			46,611
Interest expense:
Interest on deposits:
Interest-bearing checking		52		51		55			26			16
Savings		159		156		161			166			233
Money market deposit accounts		283		447		637			862			1,096
Time deposits		1,666		3,053		4,749			5,599			6,391
Interest on short-term borrowings		228		232		221			235			322
Total interest expense		2,388		3,939		5,823			6,888			8,058
Net interest income		40,107		39,181		38,165			37,681			38,553
Less: Provision for loan losses		350		600		1,000			2,000			2,000
Net interest income after provision for loan losses		39,757		38,581		37,165			35,681			36,553
Noninterest income:
Trustco Financial Services income		2,035		1,527		1,784			1,368			1,600
Fees for services to customers		2,204		2,365		2,292			1,807			2,315
Net gain on securities transactions		-		-		-			-			1,155
Other		189		177		265			251			264
Total noninterest income		4,428		4,069		4,341			3,426			5,334
Noninterest expenses:
Salaries and employee benefits		12,425		11,727		10,899			11,648			11,373
Net occupancy expense		4,586		4,551		4,277			4,385			4,306
Equipment expense		1,631		1,621		1,607			1,606			1,802
Professional services		1,432		1,644		1,311			1,182			1,481
Outsourced services		2,250		1,925		1,875			1,875			2,075
Advertising expense		354		527		305			601			488
FDIC and other insurance		707		657		660			609			294
Other real estate expense (income), net		239		45		(115	)		(32	)		194
Other		1,711		2,133		1,855			2,058			2,255
Total noninterest expenses		25,335		24,830		22,674			23,932			24,268
Income before taxes		18,850		17,820		18,832			15,175			17,619
Income taxes		4,767		4,006		4,761			3,921			4,306
Net income	$	14,083		13,814		14,071			11,254			13,313
Net income per common share:
- Basic	$	0.146		0.143		0.146			0.117			0.138
- Diluted		0.146		0.143		0.146			0.117			0.138
Average basic shares (in thousands)		96,435		96,433		96,433			96,433			96,727
Average diluted shares (in thousands)		96,465		96,442		96,440			96,437			96,750
Note: Taxable equivalent net interest income	$	40,107		39,182		38,166			37,681			38,554

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
		3/31/2021			12/31/2020			9/30/2020			6/30/2020			3/31/2020
ASSETS:
Cash and due from banks	$	45,493			47,196			47,703			44,726			43,362
Federal funds sold and other short term investments		1,094,880			1,059,903			908,616			908,110			492,691
Total cash and cash equivalents		1,140,373			1,107,099			956,319			952,836			536,053
Securities available for sale:
U. S. government sponsored enterprises		74,465			19,968			29,996			-			54,970
States and political subdivisions		48			103			111			111			112
Mortgage-backed securities and collateralized mortgage obligations - residential		348,317			316,158			309,768			331,469			352,067
Small Business Administration - guaranteed participation securities		39,232			42,217			44,070			45,998			46,768
Corporate bonds		64,839			59,939			70,113			54,439			48,564
Other securities		686			686			685			685			685
Total securities available for sale		527,587			439,071			454,743			432,702			503,166
Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations - residential		12,729			13,824			15,094			16,633			17,720
Total held to maturity securities		12,729			13,824			15,094			16,633			17,720
Federal Reserve Bank and Federal Home Loan Bank stock		5,506			5,506			5,506			5,506			9,183
Loans:
Commercial		217,021			212,492			231,663			231,212			195,805
Residential mortgage loans		3,807,837			3,780,167			3,724,746			3,681,898			3,627,121
Home equity line of credit		235,644			242,194			248,320			254,445			265,753
Installment loans		8,670			9,617			9,826			10,006			10,713
Loans, net of deferred net costs		4,269,172			4,244,470			4,214,555			4,177,561			4,099,392
Less: Allowance for loan losses		49,991			49,595			49,123			48,144			46,155
Net loans		4,219,181			4,194,875			4,165,432			4,129,417			4,053,237
Bank premises and equipment, net		34,012			34,412			34,417			34,042			34,428
Operating lease right-of-use assets		46,614			47,885			47,174			48,712			49,955
Other assets		60,455			59,124			57,244			57,155			52,905
Total assets	$	6,046,457			5,901,796			5,735,929			5,677,003			5,256,647
LIABILITIES:
Deposits:
Demand	$	718,343			652,756			635,345			612,960			480,255
Interest-bearing checking		1,141,595			1,086,558			1,024,290			1,001,592			895,254
Savings accounts		1,362,141			1,285,501			1,235,259			1,191,682			1,122,116
Money market deposit accounts		719,580			716,005			699,132			666,304			617,198
Time deposits		1,231,263			1,296,373			1,305,024			1,392,769			1,367,005
Total deposits		5,172,922			5,037,193			4,899,050			4,865,307			4,481,828
Short-term borrowings		229,950			214,755			193,455			177,278			148,090
Operating lease liabilities		51,449			52,784			52,125			53,710			54,998
Accrued expenses and other liabilities		21,105			28,903			30,771			27,287			23,546
Total liabilities		5,475,426			5,333,635			5,175,401			5,123,582			4,708,462
SHAREHOLDERS' EQUITY:
Capital stock		100,218			100,205			100,205			100,205			100,205
Surplus		176,500			176,442			176,441			176,437			176,431
Undivided profits		321,486			313,974			306,741			299,239			294,553
Accumulated other comprehensive income, net of tax		7,268			11,936			11,537			11,936			11,392
Treasury stock at cost		(34,441	)		(34,396	)		(34,396	)		(34,396	)		(34,396	)
Total shareholders' equity		571,031			568,161			560,528			553,421			548,185
Total liabilities and shareholders' equity	$	6,046,457			5,901,796			5,735,929			5,677,003			5,256,647
Outstanding shares (in thousands)		96,440			96,433			96,433			96,433			96,433

NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
		3/31/2021		12/31/2020		9/30/2020		6/30/2020		3/31/2020
Nonperforming Assets
New York and other states*
Loans in nonaccrual status:
Commercial	$	125		452		491		571		630
Real estate mortgage - 1 to 4 family		19,826		19,379		19,977		20,215		18,570
Installment		32		43		49		6		24
Total non-accrual loans		19,983		19,874		20,517		20,792		19,224
Other nonperforming real estate mortgages - 1 to 4 family		22		23		25		26		27
Total nonperforming loans		20,005		19,897		20,542		20,818		19,251
Other real estate owned		420		541		423		830		1,284
Total nonperforming assets	$	20,425		20,438		20,965		21,648		20,535
Florida
Loans in nonaccrual status:
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		1,626		1,187		1,254		1,111		1,492
Installment		-		-		-		-		-
Total non-accrual loans		1,626		1,187		1,254		1,111		1,492
Other nonperforming real estate mortgages - 1 to 4 family		-		-		-		-		-
Total nonperforming loans		1,626		1,187		1,254		1,111		1,492
Other real estate owned		-		-		-		-		-
Total nonperforming assets	$	1,626		1,187		1,254		1,111		1,492
Total
Loans in nonaccrual status:
Commercial	$	125		452		491		571		630
Real estate mortgage - 1 to 4 family		21,452		20,566		21,231		21,326		20,062
Installment		32		43		49		6		24
Total non-accrual loans		21,609		21,061		21,771		21,903		20,716
Other nonperforming real estate mortgages - 1 to 4 family		22		23		25		26		27
Total nonperforming loans		21,631		21,084		21,796		21,929		20,743
Other real estate owned		420		541		423		830		1,284
Total nonperforming assets	$	22,051		21,625		22,219		22,759		22,027
Quarterly Net (Recoveries) Chargeoffs
New York and other states*
Commercial	$	(32	)	32		(1	)	(6	)	1
Real estate mortgage - 1 to 4 family		(2	)	(27	)	4		(27	)	140
Installment		(14	)	109		18		44		4
Total net (recoveries) chargeoffs	$	(48	)	114		21		11		145
Florida
Commercial	$	-		-		-		-		-
Real estate mortgage - 1 to 4 family		-		(1	)	-		-		(2	)
Installment		2		15		-		-		19
Total net (recoveries) chargeoffs	$	2		14		-		-		17
Total
Commercial	$	(32	)	32		(1	)	(6	)	1
Real estate mortgage - 1 to 4 family		(2	)	(28	)	4		(27	)	138
Installment		(12	)	124		18		44		23
Total net (recoveries) chargeoffs	$	(46	)	128		21		11		162
Asset Quality Ratios
Total nonperforming loans (1)	$	21,631		21,084		21,796		21,929		20,743
Total nonperforming assets (1)		22,051		21,625		22,219		22,759		22,027
Total net (recoveries) chargeoffs (2)		(46	)	128		21		11		162
Allowance for loan losses (1)		49,991		49,595		49,123		48,144		46,155
Nonperforming loans to total loans		0.51	%	0.50	%	0.52	%	0.52	%	0.51	%
Nonperforming assets to total assets		0.36	%	0.37	%	0.39	%	0.40	%	0.42	%
Allowance for loan losses to total loans		1.17	%	1.17	%	1.17	%	1.15	%	1.13	%
Coverage ratio (1)		231.1	%	235.2	%	225.4	%	219.5	%	222.5	%
Annualized net (recoveries) chargeoffs to average loans (2)		0.00	%	0.01	%	0.00	%	0.00	%	0.02	%
Allowance for loan losses to annualized net (recoveries) chargeoffs (2)		N/A		96.9x		584.8x		1094.2x		71.2x

* 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)
(Unaudited)		Three months ended							Three months ended
		March 31, 2021							March 31, 2020
		Average			Interest	Average			Average			Interest		Average
		Balance				Rate			Balance					Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	51,649			50	0.38	%	$	92,369			421		1.82	%
Mortgage backed securities and collateralized mortgage obligations - residential		327,614			1,237	1.51			371,768			2,113		2.27
State and political subdivisions		50			1	6.47			114			2		7.59
Corporate bonds		63,334			316	1.99			28,332			238		3.36
Small Business Administration - guaranteed participation securities		39,582			206	2.09			47,418			245		2.06
Other		686			6	3.50			685			6		3.50
Total securities available for sale		482,915			1,816	1.50			540,686			3,025		2.26
Federal funds sold and other short-term Investments		1,029,570			270	0.11			412,076			1,267		1.24
Held to maturity securities:
Mortgage backed securities and collateralized mortgage obligations - residential		13,273			123	3.70			18,144			175		3.86
Total held to maturity securities		13,273			123	3.70			18,144			175		3.86
Federal Reserve Bank and Federal Home Loan Bank stock		5,506			69	5.01			9,183			82		3.57
Commercial loans		212,781			2,945	5.54			198,047			2,542		5.13
Residential mortgage loans		3,789,256			34,852	3.69			3,601,728			36,461		4.05
Home equity lines of credit		238,379			2,259	3.84			265,461			2,868		4.35
Installment loans		8,795			161	7.41			10,717			192		7.20
Loans, net of unearned income		4,249,211			40,217	3.80			4,075,953			42,063		4.13
Total interest earning assets		5,780,475			42,495	2.95			5,056,042			46,612		3.69
Allowance for loan losses		(49,945	)						(44,520	)
Cash & non-interest earning assets		199,769							193,619
Total assets	$	5,930,299						$	5,205,141
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	1,084,572			52	0.02	%	$	871,153			16		0.01	%
Money market accounts		725,570			283	0.16			614,201			1,096		0.72
Savings		1,315,049			159	0.05			1,116,558			233		0.08
Time deposits		1,261,963			1,666	0.54			1,369,914			6,391		1.88
Total interest bearing deposits		4,387,154			2,160	0.20			3,971,826			7,736		0.78
Short-term borrowings		223,807			228	0.41			153,668			322		0.84
Total interest bearing liabilities		4,610,961			2,388	0.21			4,125,494			8,058		0.79
Demand deposits		673,428							458,476
Other liabilities		75,143							79,003
Shareholders' equity		570,767							542,168
Total liabilities and shareholders' equity	$	5,930,299						$	5,205,141
Net interest income, tax equivalent					40,107							38,554
Net interest spread						2.74	%							2.91	%
Net interest margin (net interest income to total interest earning assets)						2.78	%							3.05	%
Tax equivalent adjustment					-							(1	)
Net interest income					40,107							38,553

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 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.

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 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.

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, 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)
		3/31/2021		12/31/2020		3/31/2020
Tangible Equity to Tangible Assets
Total Assets (GAAP)	$	6,046,457		5,901,796		5,256,647
Less: Intangible assets		553		553		553
Tangible assets (Non-GAAP)		6,045,904		5,901,243		5,256,094
Equity (GAAP)		571,031		568,161		548,185
Less: Intangible assets		553		553		553
Tangible equity (Non-GAAP)		570,478		567,608		547,632
Tangible Equity to Tangible Assets (Non-GAAP)		9.44	%	9.62	%	10.42	%
Equity to Assets (GAAP)		9.44	%	9.63	%	10.43	%
		Three months ended
Efficiency Ratio		3/31/2021		12/31/2020		3/31/2020
Net interest income (fully taxable equivalent) (Non-GAAP)	$	40,107		39,182		38,554
Non-interest income (GAAP)		4,428		4,069		5,334
Less: Net gain on securities		-		-		1,155
Revenue used for efficiency ratio (Non-GAAP)		44,535		43,251		42,733
Total noninterest expense (GAAP)		25,335		24,830		24,268
Less: Other real estate expense (income), net		239		45		194
Expense used for efficiency ratio (Non-GAAP)		25,096		24,785		24,074
Efficiency Ratio		56.35	%	57.31	%	56.34	%

Subsidiary: Trustco Bank

Contact:		Robert Leonard Executive Vice President and Chief Risk Officer [phone]