TrustCo Announces Fourth Quarter and Full Year 2018 Results; Net Income Up 42.4% Over Prior Year to $61.4 Million

.166

  0.157   0.077         - Diluted   0.166   0.157   0.076         Cash dividends   0.068   0.068   0.066         Book value at period end   5.06   4.93   4.75         Market price at period end   6.86   8.50   9.20                               At period end                     Full time equivalent employees   854   807   846         Full service banking offices   148   148   145                               Performance ratios                     Return on average assets   1.30 % 1.24   0.60         Return on average equity   13.18   12.84   6.38         Efficiency (1)   55.06   53.39   53.13         Net interest spread (TE)   3.27   3.26   3.22         Net interest margin (TE)   3.38   3.35   3.29         Dividend payout ratio   41.07   43.29   85.81                               Capital ratios at period end                     Consolidated tangible equity to tangible assets (2)   9.87 % 9.76   9.33         Consolidated equity to assets   9.88 % 9.77   9.34                               Asset quality analysis at period end                     Nonperforming loans to total loans   0.64   0.62   0.67         Nonperforming assets to total assets   0.54   0.53   0.56         Allowance for loan losses to total loans   1.16   1.17   1.21         Coverage ratio (3)   1.8x   1.9x   1.8x                                                     (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                                                   FINANCIAL HIGHLIGHTS, Continued                   (dollars in thousands, except per share data)         (Unaudited)             Years ended                 12/31/2018   12/31/2017             Summary of operations                     Net interest income (TE) $ 160,698   154,413             Provision for loan losses   1,400   2,000             Noninterest income   18,081   18,373             Noninterest expense   97,713   93,994             Net income   61,445   43,145                                   Per common share                     Net income per share:                     - Basic $ 0.637   0.449             - Diluted   0.636   0.448             Cash dividends   0.268   0.263             Tangible Book value at period end   5.06   4.75             Market price at period end   6.86   9.20                                   Performance ratios                     Return on average assets   1.25 % 0.88             Return on average equity   13.05   9.64             Efficiency (1)   53.97   53.75             Net interest spread (TE)   3.25   3.16             Net interest margin (TE)   3.33   3.22             Dividend payout ratio   42.02   58.44                                                         (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 building and nonperforming loans).           TE = Taxable equivalent.                               CONSOLIDATED STATEMENTS OF INCOME                       (dollars in thousands, except per share data)                     (Unaudited)                         Three months ended     12/31/2018   9/30/2018   6/30/2018   3/31/2018   12/31/2017 Interest and dividend income:                     Interest and fees on loans $ 41,184   40,073   38,956   38,091     37,914   Interest and dividends on securities available for sale:                     U. S. government sponsored enterprises   788   787   787   750     614   State and political subdivisions   2   7   6   7     10   Mortgage-backed securities and collateralized mortgage                     obligations - residential   1,554   1,601   1,675   1,763     1,730   Corporate bonds   202   202   150   133     148   Small Business Administration - guaranteed                     participation securities   329   325   333   352     358   Mortgage-backed securities and collateralized mortgage                     obligations - commercial   -   -   (5 ) 42     43   Other securities   5   4   4   5     4   Total interest and dividends on securities available for sale   2,880   2,926   2,950   3,052     2,907                         Interest on held to maturity securities:                     Mortgage-backed securities and collateralized mortgage                     obligations - residential   226   232   244   260     261   Total interest on held to maturity securities   226   232   244   260     261                         Federal Reserve Bank and Federal Home Loan Bank stock   207   82   198   77     151                         Interest on federal funds sold and other short-term investments   2,367   2,425   2,467   2,017     1,779   Total interest income   46,864   45,738   44,815   43,497     43,012                         Interest expense:                     Interest on deposits:                     Interest-bearing checking   111   113   112   106     107   Savings   401   417   420   419     429   Money market deposit accounts   618   544   452   439     457   Time deposits   4,643   3,864   3,439   2,860     2,412   Interest on short-term borrowings   352   277   283   358     359   Total interest expense   6,125   5,215   4,706   4,182     3,764                         Net interest income   40,739   40,523   40,109   39,315     39,248                         Less: Provision for loan losses   500   300   300   300     300   Net interest income after provision for loan losses   40,239   40,223   39,809   39,015     38,948                         Noninterest income:                     Trustco Financial Services income   1,356   1,516   1,596   1,815     1,457   Fees for services to customers   2,897   2,693   2,677   2,645     2,597   Other   199   246   222   219     234   Total noninterest income   4,452   4,455   4,495   4,679     4,288                         Noninterest expenses:                     Salaries and employee benefits   10,183   10,761   10,741   10,422     10,536   Net occupancy expense   4,800   3,997   4,101   4,315     4,140   Equipment expense   1,741   1,783   1,793   1,751     1,465   Professional services   1,733   1,578   1,814   1,430     1,325   Outsourced services   1,875   1,875   1,825   1,925     1,760   Advertising expense   876   844   670   630     559   FDIC and other insurance   522   682   514   1,023     1,102   Other real estate expense, net   37   528   294   372     401   Other   3,152   2,496   2,343   2,287     2,248   Total noninterest expenses   24,919   24,544   24,095   24,155     23,536                         Income before taxes   19,772   20,134   20,209   19,539     19,700   Income taxes   3,739   4,935   4,804   4,731     12,338                         Net income $ 16,033   15,199   15,405   14,808     7,362                         Net income per common share:                     - Basic $ 0.166   0.157   0.160   0.154     0.077                         - Diluted   0.166   0.157   0.160   0.153     0.076                         Average basic shares (in thousands)   96,555   96,555   96,449   96,353     96,230   Average diluted shares (in thousands)   96,689   96,689   96,580   96,490     96,393                         Note: Taxable equivalent net interest income  $  40,740   40,526   40,119   39,319     39,259                         CONSOLIDATED STATEMENTS OF INCOME, Continued                       (dollars in thousands, except per share data)           (Unaudited)               Years ended                 12/31/2018   12/31/2017             Interest and dividend income:                     Interest and fees on loans $ 158,304   148,133             Interest and dividends on securities available for sale:                     U. S. government sponsored enterprises   3,112   2,281             State and political subdivisions   22   39             Mortgage-backed securities and collateralized mortgage                     obligations - residential   6,593   7,447             Corporate bonds   687   606             Small Business Administration - guaranteed                     participation securities   1,339   1,547             Mortgage-backed securities and collateralized mortgage                     obligations - commercial   37   109             Other securities   18   16             Total interest and dividends on securities available for sale   11,808   12,045                                   Interest on held to maturity securities:                     Mortgage-backed securities-residential   962   1,149             Corporate bonds   -   410             Total interest on held to maturity securities   962   1,559                                   Federal Reserve Bank and Federal Home Loan Bank stock   564   544                                   Interest on federal funds sold and other short-term investments   9,276   6,679             Total interest income   180,914   168,960                                   Interest expense:                     Interest on deposits:                     Interest-bearing checking   442   478             Savings   1,657   1,729             Money market deposit accounts   2,053   1,860             Time deposits   14,806   9,123             Interest on short-term borrowings   1,270   1,402             Total interest expense   20,228   14,592                                   Net interest income   160,686   154,368                                   Less: Provision for loan losses   1,400   2,000             Net interest income after provision for loan losses   159,286   152,368                                   Noninterest income:                     Trustco Financial Services income   6,283   6,584             Fees for services to customers   10,912   10,798             Other   886   991             Total noninterest income   18,081   18,373                                   Noninterest expenses:                     Salaries and employee benefits   42,107   40,665             Net occupancy expense   17,213   16,543             Equipment expense   7,068   6,118             Professional services   6,555   6,895             Outsourced services   7,500   6,410             Advertising expense   3,020   2,578             FDIC and other insurance   2,741   4,179             Other real estate expense, net   1,231   1,171             Other   10,278   9,435             Total noninterest expenses   97,713   93,994                                   Income before taxes   79,654   76,747             Income taxes   18,209   33,602                                   Net income $ 61,445   43,145                                   Net income per common share:                     - Basic $ 0.637   0.449                                   - Diluted   0.636   0.448                                   Average basic shares (in thousands)   96,505   96,112             Average diluted shares (in thousands)   96,646   96,222                                   Note: Taxable equivalent net interest income $ 160,698   154,413                                   CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION   (dollars in thousands) (Unaudited)     12/31/2018   9/30/2018   6/30/2018   3/31/2018   12/31/2017 ASSETS:                                           Cash and due from banks $ 49,260   42,195   40,567   39,373     44,125   Federal funds sold and other short term investments   454,449   423,254   546,049   577,797     568,615   Total cash and cash equivalents   503,709   465,449   586,616   617,170     612,740                         Securities available for sale:                     U. S. government sponsored enterprises   152,160   150,053   150,704   151,327     137,994   States and political subdivisions   173   180   524   525     525   Mortgage-backed securities and collateralized mortgage                     obligations - residential   262,032   269,093   283,252   297,633     315,840   Small Business Administration - guaranteed                     participation securities   56,475   57,894   61,876   64,113     67,059   Mortgage-backed securities and collateralized mortgage                     obligations - commercial   -   -   -   9,573     9,700   Corporate bonds   29,938   29,977   29,977   35,227     40,162   Other securities   685   685   685   685     685   Total securities available for sale   501,463   507,882   527,018   559,083     571,965                         Held to maturity securities:                     Mortgage-backed securities and collateralized mortgage                     obligations - residential   22,501   23,462   24,730   26,174     27,551   Total held to maturity securities   22,501   23,462   24,730   26,174     27,551                         Federal Reserve Bank and Federal Home Loan Bank stock   8,953   8,953   8,953   8,779     8,779                         Loans:                     Commercial   196,146   190,987   190,904   185,129     186,207   Residential mortgage loans   3,376,708   3,331,212   3,245,151   3,171,548     3,132,521   Home equity line of credit   289,540   293,750   295,791   301,885     308,916   Installment loans   11,702   9,967   9,309   8,413     8,763   Loans, net of deferred net costs   3,874,096   3,825,916   3,741,155   3,666,975     3,636,407                         Less: Allowance for loan losses   44,766   44,736   44,503   44,379     44,170   Net loans   3,829,330   3,781,180   3,696,652   3,622,596     3,592,237                         Bank premises and equipment, net   34,694   35,214   35,521   35,240     35,157   Other assets   58,263   63,211   61,069   62,522     59,579                         Total assets $ 4,958,913   4,885,351   4,940,559   4,931,564     4,908,008                         LIABILITIES:                     Deposits:                     Demand $ 405,069   403,047   404,564   403,782     398,399   Interest-bearing checking   904,678   918,486   925,295   915,163     891,052   Savings accounts   1,182,683   1,221,127   1,257,744   1,266,852     1,260,447   Money market deposit accounts   507,311   501,270   512,453   539,839     556,462   Time deposits   1,274,506   1,155,994   1,155,214   1,109,444     1,066,966   Total deposits   4,274,247   4,199,924   4,255,270   4,235,080     4,173,326                         Short-term borrowings   161,893   176,377   182,705   203,910     242,991   Accrued expenses and other liabilities   32,902   31,932   31,769   30,477     33,383                         Total liabilities   4,469,042   4,408,233   4,469,744   4,469,467     4,449,700                         SHAREHOLDERS' EQUITY:                     Capital stock   100,175   100,175   100,093   100,002     99,998   Surplus   176,710   176,764   176,243   175,674     175,651   Undivided profits   256,397   246,965   238,342   229,267     219,436   Accumulated other comprehensive loss, net of tax   (10,309 )  (13,000 )  (9,796 ) (8,490 )   (1,806 ) Treasury stock at cost   (33,102 )  (33,786 ) (34,067 ) (34,356 )   (34,971 )                       Total shareholders' equity   489,871   477,118   470,815   462,097     458,308                         Total liabilities and shareholders' equity $ 4,958,913   4,885,351   4,940,559   4,931,564     4,908,008                         Outstanding shares (in thousands)   96,659   96,586   96,475   96,359     96,289