TrustCo Reports Second Quarter Net Income of $16.4 Million

Executive Snapshot:

Continued solid financial results:
- Key metrics for second quarter 2023:
  - Net income of $16.4 million in the second quarter 2023
  - Net interest income of $44.1 million up 2.3% compared to $43.1 million in the second quarter of 2022
  - Return on average assets (ROAA) of 1.09% in the second quarter 2023
  - Return on average equity (ROAE) of 10.61% in the second quarter 2023
  - Book value at period end was $32.66, up from $31.06 compared to June 30, 2022
Loan portfolio reaches all-time high:
- Total loans were up $346.3 million or 7.6% for the second quarter 2023 compared to second quarter of 2022
- At $4.9 billion as of June 30, 2023, loans continue to set new all-time highs
Quarter over quarter deposit growth:
- Total deposits as of June 30, 2023 increased $46.0 million to $5.3 billion from March 31, 2023
- Time deposits increased $162.7 million or 12.7% up from March 31, 2023
Superior asset quality:
- Nonperforming loans (NPLs) were $19.4 million for the second quarter of 2023 and continue to remain at low levels
- NPLs to total loans improved to 0.40% compared to 0.41% at June 30, 2022
- Quarterly net recoveries were $229 thousand in the second quarter 2023, resulting in six consecutive quarters of net recoveries
Capital continues to grow:
- Consolidated equity to assets increased to 10.23% at June 30, 2023 from 9.55% at June 30, 2022

GLENVILLE, N.Y., July 24, 2023 (GLOBE NEWSWIRE) --

TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced second quarter 2023 net income of $16.4 million or $0.86 diluted earnings per share, compared to net income of $17.9 million or $0.93 diluted earnings per share for the second quarter 2022; and net income of $34.1 million or $1.79 diluted earnings per share for the six months ended June 30, 2023, compared to net income of $35.0 million or $1.82 diluted earnings per share for the six months ended June 30, 2022. Total loan growth increased $346.3 million or 7.6% for the second quarter 2023 over the same period in 2022.

Overview

Chairman, President, and CEO, Robert J. McCormick said, “The value of business fundamentals in corporate success cannot be overstated. At Trustco Bank, our fundamental goals are to achieve strength and stability. At the management level, we accomplish this by taking a long view on balance sheet management, avoiding trends and costly quick fixes. Our team then applies the fruit of that effort to deliver industry-leading deposit products that allow us to build customer relationships that endure over time and survive economic ups and downs. The results announced today offer proof of the success of that work. In a time when other banks are experiencing loss of deposits to non-bank investment products, through strong customer relationships we have seen deposit growth since year end. We have taken a careful approach to pricing and moderated downward pressure on net interest margin. Additionally, our industry best loan products continue to retain existing customers and attract new ones. All loan categories have grown each successive quarter since the same period in the prior year and have grown by $346 million year over year. Once again, where others have faltered, Trustco Bank has excelled. This success allows us to satisfy our driving goal – to provide our owners with a long-term, top-tier return on their investment.”

TrustCo continued to see deposit balances rebound from the end of the year with net deposit inflows during both the first and second quarters of 2023. Loan growth continued in the second quarter 2023 compared to the prior year’s second quarter, led by an increase in residential mortgages. Loan portfolio expansion was funded by a combination of utilizing a portion of our strong cash balances and by cash flow from investments, deposit inflows, and the existing loan portfolio. The Federal Reserve’s decision to raise the target Federal Funds rate multiple times since March 2022 has contributed to our results in the second quarter 2023, as our cash position and other variable rate products continue to reprice upward, and are likely to continue to do so to the extent there are additional rate increases. We also note that current mortgage rates significantly exceed the yield on our existing portfolio of mortgages, which, if sustained, should be positive to net interest margin going forward. TrustCo’s strong liquidity position continues to allow us to take advantage of opportunities as they arise.

Details

Average loans were up $336.0 million or 7.5% in the second quarter 2023 over the same period in 2022. Average residential loans, our primary lending focus, were up $220.0 million, or 5.4%, in the second quarter 2023 over the same period in 2022. Average commercial loans and home equity lines of credit also increased $50.1 million or 25.2% and $59.5 million or 24.4%, respectively, in the second quarter 2023 over the same period in 2022.

We are actively retaining deposits, which is evident in the quarter over quarter results. Total deposits as of June 30, 2023 increased $46.0 million to $5.3 billion from March 31, 2023. As we move forward, our objective is to continue to encourage customers to retain these funds in the expanded product offerings of the Bank through aggressive marketing and product differentiation. We understood the big inflows of deposits during the pandemic were temporary and that is why we did not invest that liquidity into securities or loans, but we instead retained that liquidity on the balance sheet for when the depositors would start to absorb the funds. This gave us flexibility to strategically price deposits while retaining core customers.

Net interest income was $44.1 million for the second quarter 2023, an increase of $991 thousand or 2.3% compared to the same period in 2022, driven by a strong cash balance at the Federal Reserve Bank, loan growth, investment income, and the increases in the Federal Funds target rate over the past year. The net interest margin for the second quarter 2023 was 2.98%, up 15 basis points from 2.83% in the second quarter of 2022. The yield on interest earnings assets increased to 3.80%, up 90 basis points from 2.90% in the second quarter of 2022. The cost of interest bearing liabilities increased to 1.06% in the second quarter 2023 from 0.10% in the second quarter 2022. The increase in net interest income is primarily a result of our ability to maintain a $551.1 million average cash balance at the Federal Reserve Bank during the second quarter of 2023, continued strong loan volume, and being able to retain deposit balances at competitive market rates.

Asset quality remains strong and has been consistent over the past twelve months. The Company recorded a benefit for credit losses of $500 thousand in the second quarter of 2023, which is the result of a benefit for credit losses on unfunded commitments of $500 thousand as a result of a corresponding decrease in unfunded loan commitments. There was no provision for credit losses on loans during the second quarter of 2023. The ratio of allowance for credit losses on loans to total loans was 0.96% and 1.00% as of June 30, 2023 and 2022, respectively. The allowance for credit losses on loans was $46.9 million at June 30, 2023, compared to $45.3 million at June 30, 2022. Nonperforming loans (NPLs) were $19.4 million at June 30, 2023, compared to $18.7 million at June 30, 2022. NPLs were 0.40% and 0.41% of total loans at June 30, 2023 and 2022, respectively. The coverage ratio, or allowance for credit losses on loans to NPLs, was 241.6% at June 30, 2023, compared to 242.0% at June 30, 2022. Nonperforming assets (NPAs) were $20.8 million at June 30, 2023, compared to $19.4 million at June 30, 2022. Additionally, we have also had minimal charge-offs, and have been in a net recovery position for the past six quarters.

At June 30, 2023 our equity to asset ratio was 10.23%, compared to 9.55% at June 30, 2022. Book value per share at June 30, 2023 was $32.66, up 5.2% compared to $31.06 a year earlier.

A conference call to discuss second quarter 2023 results will be held at 9:00 a.m. Eastern Time on July 25, 2023. Those wishing to participate in the call may dial toll-free for the United States at 1-833-470-1428, and for Canada at 1-833-950-0062, Access code 775800. A replay of the call will be available for thirty days by dialing toll-free for the United States and Canada at 1-866-813-9403, Access code 419365. The call will also be audio webcast at https://events.q4inc.com/attendee/812116418, and will be available for one year.

About TrustCo Bank Corp NY

TrustCo Bank Corp NY is a $6.1 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 143 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 2023.

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.

Forward-Looking Statements

All statements in this news release that are not historical are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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 development, results or periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2023, including our expectations regarding the effects of the economic environment on our financial results, our ability to retain customers and the amount of customers’ business, including deposit balances, with us, the impact of the Federal Reserve’s actions regarding interest rates, the growth of loans and deposits throughout our branch network, the increase in residential mortgage rates, and our ability to capitalize on economic changes in the areas in which we operate. Forward-looking statements are based on management’s current expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Such forward-looking statements are subject to factors and uncertainties that could cause actual results to differ materially for TrustCo from the views, beliefs and projections expressed in such statements, and many of the risks and uncertainties are heightened by or may, in the future, be heightened by volatility in financial markets and macroeconomic or geopolitical concerns related to inflation, rising interest rates and the war in Ukraine. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement: changes in interest rates, including recent and possible future increases fueled by inflation; inflationary pressures and rising prices; exposure to credit risk in our lending activities; the sufficiency of our allowance for credit losses on loans to cover actual loan losses; our ability to meet the cash flow requirements of our depositors or borrowers or meet our operating cash needs to fund corporate expansion and other activities; claims and litigation pertaining to fiduciary responsibility and lender liability; our dependency upon the services of the management team; our disclosure controls and procedures’ ability to prevent or detect errors or acts of fraud; the adequacy of our business continuity and disaster recovery plans; the effectiveness of our risk management framework; the chance of a prolonged economic downturn, especially one affecting our geographic market area; instability in global economic conditions and geopolitical matters, as well as volatility in financial markets; the COVID-19 pandemic; the soundness of other financial institutions; fluctuations in the trust wealth management fees we receive as a result of investment performance; the impact of regulatory capital rules on our growth; changes in laws and regulations; our compliance with the USA PATRIOT Act, Bank Secrecy Act, and other laws and regulations that could result in fines or sanctions; changes in tax laws; limitations on our ability to pay dividends; TrustCo Realty Corp.’s ability to qualify as a real estate investment trust; changes in accounting standards; competition within our market areas; consumers and businesses’ use of non-banks to complete financial transactions; our reliance on third-party service providers; the risk of data breaches and cyber-attacks; the risk of an unauthorized disclosure of sensitive or confidential client or customer information; the impact of any expansion by us into new lines of business or new products and services; the impact of severe weather events and climate change on us and the communities we serve, including societal responses to climate change; 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. The forward-looking statements contained in this news release represent TrustCo management’s judgment as of the date of this news release. TrustCo disclaims, however, any intent or obligation to update forward-looking statements, either as a result of future developments, new information or otherwise, except as may be required by law.


TRUSTCO BANK CORP NY
GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		6/30/2023				3/31/2023				6/30/2022
Summary of operations
Net interest income		$	44,052			$	46,965			$	43,060
(Credit) Provision for credit losses			(500	)			300				(491	)
Noninterest income			4,598				4,669				4,916
Noninterest expense			27,327				27,679				25,005
Net income			16,372				17,746				17,871

Per share
Net income per share:
- Basic		$	0.86			$	0.93			$	0.93
- Diluted			0.86				0.93				0.93
Cash dividends			0.36				0.36				0.35
Book value at period end			32.66				32.31				31.06
Market price at period end			28.61				31.94				30.84

At period end
Full time equivalent employees			791				776				793
Full service banking offices			143				143				144

Performance ratios
Return on average assets			1.09		%		1.20		%		1.15		%
Return on average equity			10.61				11.84				12.08
Efficiency ratio (1)			55.87				53.17				51.97
Net interest spread			2.74				3.06				2.80
Net interest margin			2.98				3.21				2.83
Dividend payout ratio			41.83				38.59				37.46

Capital ratios at period end
Consolidated equity to assets			10.23		%		10.17		%		9.55		%
Consolidated tangible equity to tangible assets (2)			10.22		%		10.16		%		9.54		%

Asset quality analysis at period end
Nonperforming loans to total loans			0.40		%		0.40		%		0.41		%
Nonperforming assets to total assets			0.34				0.35				0.31
Allowance for credit losses on loans to total loans			0.96				0.97				1.00
Coverage ratio (3)		2.4x				2.4x				2.4x

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



FINANCIAL HIGHLIGHTS, Continued

(dollars in thousands, except per share data)
(Unaudited)
		Six months ended
		06/30/23				06/30/22
Summary of operations
Net interest income	$		91,017				83,156
(Credit) Provision for credit losses			(200	)			(691	)
Noninterest income			9,267				10,099
Noninterest expense			55,006				47,770
Net income			34,118				34,960

Per share
Net income per share:
- Basic	$		1.79				1.82
- Diluted			1.79				1.82
Cash dividends			0.72				0.70
Book value at period end			32.66				31.06
Market price at period end			28.61				30.84

Performance ratios
Return on average assets			1.14		%		1.13
Return on average equity			11.22				11.84
Efficiency ratio (1)			54.48				51.28
Net interest spread			2.90				2.72
Net interest margin			3.10				2.74
Dividend payout ratio			40.15				38.39

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



CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		6/30/2023				3/31/2023				12/31/2022				9/30/2022			6/30/2022
Interest and dividend income:
Interest and fees on loans		$	46,062			$	44,272			$	42,711			$	40,896		$	39,604
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises			691				692				693				479			147
State and political subdivisions			1				-				-				1			-
Mortgage-backed securities and collateralized mortgage
obligations - residential			1,543				1,585				1,606				1,617			1,367
Corporate bonds			516				521				523				526			522
Small Business Administration - guaranteed participation securities			111				117				124				133			140
Other securities			3				2				2				3			2
Total interest and dividends on securities available for sale			2,865				2,917				2,948				2,759			2,178

Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations - residential			75				78				81				85			87
Total interest on held to maturity securities			75				78				81				85			87

Federal Home Loan Bank stock			110				110				98				80			65

Interest on federal funds sold and other short-term investments			6,970				6,555				6,246				5,221			2,253
Total interest income			56,082				53,932				52,084				49,041			44,187

Interest expense:
Interest on deposits:
Interest-bearing checking			49				66				61				43			42
Savings			655				530				401				200			163
Money market deposit accounts			1,756				814				389				237			210
Time deposits			9,291				5,272				1,839				646			536
Interest on short-term borrowings			279				285				208				122			176
Total interest expense			12,030				6,967				2,898				1,248			1,127

Net interest income			44,052				46,965				49,186				47,793			43,060

Less: (Credit) Provision for credit losses			(500	)			300				50				300			(491	)
Net interest income after (credit) provision for loan losses			44,552				46,665				49,136				47,493			43,551

Noninterest income:
Trustco Financial Services income			1,412				1,774				1,773				1,435			1,996
Fees for services to customers			2,847				2,648				2,783				2,705			2,658
Other			339				247				219				246			262
Total noninterest income			4,598				4,669				4,775				4,386			4,916

Noninterest expenses:
Salaries and employee benefits			13,122				13,283				13,067				12,134			11,464
Net occupancy expense			4,262				4,598				4,261				4,483			4,254
Equipment expense			1,873				1,962				1,700				1,532			1,667
Professional services			1,360				1,607				1,251				1,375			1,484
Outsourced services			2,491				2,296				2,102				2,328			2,500
Advertising expense			518				390				532				508			389
FDIC and other insurance			1,085				1,052				770				773			804
Other real estate expense, net			148				225				101				124			74
Other			2,468				2,266				2,621				2,887			2,369
Total noninterest expenses			27,327				27,679				26,405				26,144			25,005

Income before taxes			21,823				23,655				27,506				25,735			23,462
Income taxes			5,451				5,909				6,596				6,371			5,591

Net income		$	16,372			$	17,746			$	20,910			$	19,364		$	17,871

Net income per common share:
- Basic		$	0.86			$	0.93			$	1.10			$	1.01		$	0.93

- Diluted			0.86				0.93				1.10				1.01			0.93

Average basic shares (in thousands)			19,024				19,024				19,045				19,111			19,153
Average diluted shares (in thousands)			19,024				19,028				19,050				19,112			19,153



CONSOLIDATED STATEMENTS OF INCOME, Continued

(dollars in thousands, except per share data)
(Unaudited)
		Six months ended
		06/30/23				06/30/22
Interest and dividend income:
Interest and fees on loans	$		90,334				78,607
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises			1,383				233
State and political subdivisions			1				1
Mortgage-backed securities and collateralized mortgage obligations - residential			3,128				2,454
Corporate bonds			1,037				755
Small Business Administration - guaranteed
participation securities			228				294
Other securities			5				4
Total interest and dividends on securities available for sale			5,782				3,741

Interest on held to maturity securities:
Mortgage-backed securities-residential			153				177
Total interest on held to maturity securities			153				177

Federal Home Loan Bank stock			220				127

Interest on federal funds sold and other short-term investments			13,525				2,825
Total interest income			110,014				85,477

Interest expense:
Interest on deposits:
Interest-bearing checking			115				86
Savings			1,185				319
Money market deposit accounts			2,570				424
Time deposits			14,563				1,082
Interest on short-term borrowings			564				410
Total interest expense			18,997				2,321

Net interest income			91,017				83,156

Less: (Credit) Provision for credit losses			(200	)			(691	)
Net interest income after provision for loan losses			91,217				83,847

Noninterest income:
Trustco Financial Services income			3,186				3,829
Fees for services to customers			5,495				5,459
Other			586				811
Total noninterest income			9,267				10,099

Noninterest expenses:
Salaries and employee benefits			26,405				20,703
Net occupancy expense			8,860				8,783
Equipment expense			3,835				3,255
Professional services			2,967				2,951
Outsourced services			4,787				4,780
Advertising expense			908				1,006
FDIC and other insurance			2,137				1,616
Other real estate expense, net			373				85
Other			4,734				4,591
Total noninterest expenses			55,006				47,770

Income before taxes			45,478				46,176
Income taxes			11,360				11,216

Net income	$		34,118				34,960

Net income per common share:
- Basic	$		1.79				1.82

- Diluted			1.79				1.82

Average basic shares (in thousands)			19,024				19,184
Average diluted shares (in thousands)			19,025				19,185




CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)
(Unaudited)
		6/30/2023				3/31/2023				12/31/2022				9/30/2022			6/30/2022
ASSETS:

Cash and due from banks		$	55,662			$	47,595			$	43,429			$	46,236		$	46,611
Federal funds sold and other short term investments			547,695				589,389				607,170				795,028			999,573
Total cash and cash equivalents			603,357				636,984				650,599				841,264			1,046,184

Securities available for sale:
U. S. government sponsored enterprises			113,570				119,132				118,187				102,779			101,100
States and political subdivisions			34				34				34				41			41
Mortgage-backed securities and collateralized mortgage obligations - residential			243,444				255,556				260,316				261,242			287,450
Small Business Administration - guaranteed
participation securities			18,382				19,821				20,977				22,498			25,428
Corporate bonds			76,618				81,464				81,346				81,002			87,740
Other securities			656				652				653				657			656
Total securities available for sale			452,704				476,659				481,513				468,219			502,415

Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential			7,043				7,382				7,707				8,091			8,544
Total held to maturity securities			7,043				7,382				7,707				8,091			8,544

Federal Reserve Bank and Federal Home Loan Bank stock			6,203				5,797				5,797				5,797			5,797

Loans:
Commercial			251,434				246,307				231,011				217,120			199,886
Residential mortgage loans			4,310,005				4,241,459				4,203,451				4,132,365			4,076,657
Home equity line of credit			308,976				296,490				286,432				269,341			253,758
Installment loans			16,396				15,326				12,307				10,665			10,258
Loans, net of deferred net costs			4,886,811				4,799,582				4,733,201				4,629,491			4,540,559

Less: Allowance for credit losses on loans			46,914				46,685				46,032				45,517			45,285
Net loans			4,839,897				4,752,897				4,687,169				4,583,974			4,495,274

Bank premises and equipment, net			32,351				32,305				32,556				31,931			32,381
Operating lease right-of-use assets			43,113				43,478				44,727				45,733			47,343
Other assets			90,957				90,306				89,984				94,485			88,853

Total assets		$	6,075,625			$	6,045,808			$	6,000,052			$	6,079,494		$	6,226,791

LIABILITIES:
Deposits:
Demand		$	791,353			$	806,075			$	838,147			$	859,829		$	851,573
Interest-bearing checking			1,082,989				1,124,785				1,183,321				1,188,790			1,208,159
Savings accounts			1,315,893				1,400,887				1,521,473				1,562,564			1,577,034
Money market deposit accounts			625,253				600,410				621,106				716,319			760,338
Time deposits			1,442,959				1,280,301				1,028,763				954,352			999,737
Total deposits			5,258,447				5,212,458				5,192,810				5,281,854			5,396,841

Short-term borrowings			113,765				134,293				122,700				124,932			147,282
Operating lease liabilities			47,172				47,643				48,980				50,077			51,777
Accrued expenses and other liabilities			34,852				36,711				35,575				33,625			36,259

Total liabilities			5,454,236				5,431,105				5,400,065				5,490,488			5,632,159

SHAREHOLDERS' EQUITY:
Capital stock			20,058				20,058				20,058				20,046			20,046
Surplus			257,078				257,078				257,078				256,661			256,661
Undivided profits			414,251				404,728				393,831				379,769			367,100
Accumulated other comprehensive loss, net of tax			(26,212	)			(23,375	)			(27,194	)			(25,209	)		(9,422	)
Treasury stock at cost			(43,786	)			(43,786	)			(43,786	)			(42,261	)		(39,753	)

Total shareholders' equity			621,389				614,703				599,987				589,006			594,632

Total liabilities and shareholders' equity		$	6,075,625			$	6,045,808			$	6,000,052			$	6,079,494		$	6,226,791

Outstanding shares (in thousands)			19,024				19,024				19,024				19,052			19,127

NONPERFORMING ASSETS

(dollars in thousands)
(Unaudited)
	6/30/2023			3/31/2023			12/31/2022			9/30/2022			6/30/2022
Nonperforming Assets

New York and other states*
Loans in nonaccrual status:
Commercial	$	545		$	560		$	219		$	179		$	203
Real estate mortgage - 1 to 4 family		16,260			15,722			14,949			16,295			16,259
Installment		124			59			23			29			40
Total non-accrual loans		16,929			16,341			15,191			16,503			16,502
Other nonperforming real estate mortgages - 1 to 4 family		7			8			10			12			14
Total nonperforming loans		16,936			16,349			15,201			16,515			16,516
Other real estate owned		1,412			1,869			2,061			682			644
Total nonperforming assets	$	18,348		$	18,218		$	17,262		$	17,197		$	17,160

Florida
Loans in nonaccrual status:
Commercial	$	314		$	314		$	314		$	-		$	-
Real estate mortgage - 1 to 4 family		2,170			2,437			1,895			2,104			2,192
Installment		-			62			83			65			5
Total non-accrual loans		2,484			2,813			2,292			2,169			2,197
Other nonperforming real estate mortgages - 1 to 4 family		-			-			-			-			-
Total nonperforming loans		2,484			2,813			2,292			2,169			2,197
Other real estate owned		-			-			-			-			-
Total nonperforming assets	$	2,484		$	2,813		$	2,292		$	2,169		$	2,197

Total
Loans in nonaccrual status:
Commercial	$	859		$	874		$	533		$	179		$	203
Real estate mortgage - 1 to 4 family		18,430			18,159			16,844			18,399			18,451
Installment		124			121			106			94			45
Total non-accrual loans		19,413			19,154			17,483			18,672			18,699
Other nonperforming real estate mortgages - 1 to 4 family		7			8			10			12			14
Total nonperforming loans		19,420			19,162			17,493			18,684			18,713
Other real estate owned		1,412			1,869			2,061			682			644
Total nonperforming assets	$	20,832		$	21,031		$	19,554		$	19,366		$	19,357


Quarterly Net (Recoveries) Chargeoffs

New York and other states*
Commercial	$	(129	)	$	-		$	-		$	-		$	-
Real estate mortgage - 1 to 4 family		(161	)		(53	)		(46	)		(164	)		(119	)
Installment		21			(6	)		31			34			12
Total net (recoveries) chargeoffs	$	(269	)	$	(59	)	$	(15	)	$	(130	)	$	(107	)

Florida
Commercial	$	-		$	-		$	-		$	-		$	-
Real estate mortgage - 1 to 4 family		-			(25	)		-			-			-
Installment		40			31			-			(2	)		-
Total net (recoveries) chargeoffs	$	40		$	6		$	-		$	(2	)	$	-

Total
Commercial	$	(129	)	$	-		$	-		$	-		$	-
Real estate mortgage - 1 to 4 family		(161	)		(78	)		(46	)		(164	)		(119	)
Installment		61			25			31			32			12
Total net (recoveries) chargeoffs	$	(229	)	$	(53	)	$	(15	)	$	(132	)	$	(107	)


Asset Quality Ratios

Total nonperforming loans (1)	$	19,420		$	19,162		$	17,493		$	18,684		$	18,713
Total nonperforming assets (1)		20,832			21,031			19,554			19,366			19,357
Total net (recoveries) chargeoffs (2)		(229	)		(53	)		(15	)		(132	)		(107	)

Allowance for credit losses on loans (1)		46,914			46,685			46,032			45,517			45,285

Nonperforming loans to total loans		0.40%			0.40%			0.37%			0.40%			0.41%
Nonperforming assets to total assets		0.34%			0.35%			0.33%			0.32%			0.31%
Allowance for credit losses on loans to total loans		0.96%			0.97%			0.97%			0.98%			1.00%
Coverage ratio (1)		241.6%			243.6%			263.1%			243.6%			242.0%
Annualized net (recoveries) chargeoffs to average loans (2)		-0.02%			0.00%			0.00%			-0.01%			-0.01%
Allowance for credit losses on loans to annualized net (recoveries) chargeoffs (2)		N/A			N/A			N/A			N/A			N/A

* Includes New York, New Jersey, Vermont and Massachusetts.
(1) At period-end
(2) For the three-month period ended

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

(dollars in thousands)
(Unaudited)	Three months ended							Three months ended
	June 30, 2023							June 30, 2022
	Average			Interest		Average		Average			Interest		Average
	Balance					Rate		Balance					Rate
Assets

Securities available for sale:
U. S. government sponsored enterprises	$	120,646		$	691	2.29	%	$	71,409		$	147	0.83	%
Mortgage backed securities and collateralized mortgage obligations - residential		278,367			1,543	2.20			282,800			1,367	1.92
State and political subdivisions		34			1	6.74			41			0	-
Corporate bonds		85,344			516	2.42			87,556			522	2.38
Small Business Administration - guaranteed
participation securities		20,724			111	2.15			27,512			140	2.04
Other		686			3	1.75			686			2	1.17

Total securities available for sale		505,801			2,865	2.27			470,004			2,178	1.85

Federal funds sold and other short-term Investments		551,087			6,970	5.07			1,101,489			2,253	0.82

Held to maturity securities:
Mortgage backed securities and collateralized mortgage obligations - residential		7,204			75	4.17			8,859			87	3.93

Total held to maturity securities		7,204			75	4.17			8,859			87	3.93

Federal Home Loan Bank stock		5,868			110	7.50			5,797			65	4.49

Commercial loans		249,040			3,295	5.29			198,972			2,402	4.83
Residential mortgage loans		4,269,295			37,992	3.56			4,049,271			34,771	3.43
Home equity lines of credit		303,134			4,533	6.00			243,648			2,269	3.74
Installment loans		15,734			242	6.16			9,321			162	6.98

Loans, net of unearned income		4,837,203			46,062	3.81			4,501,212			39,604	3.52

Total interest earning assets		5,907,163		$	56,082	3.80			6,087,361		$	44,187	2.90

Allowance for credit losses on loans		(47,060	)						(46,411	)
Cash & non-interest earning assets		172,821							193,099


Total assets	$	6,032,924						$	6,234,049


Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	1,083,795		$	49	0.02	%	$	1,210,554		$	42	0.01	%
Money market accounts		613,204			1,756	1.15			777,860			210	0.11
Savings		1,352,181			655	0.19			1,564,454			163	0.04
Time deposits		1,372,248			9,291	2.72			968,560			536	0.22

Total interest bearing deposits		4,421,428			11,751	1.07			4,521,428			951	0.08
Short-term borrowings		124,089			279	0.90			197,259			176	0.36

Total interest bearing liabilities		4,545,517		$	12,030	1.06			4,718,687		$	1,127	0.10

Demand deposits		788,654							842,487
Other liabilities		79,839							79,431
Shareholders' equity		618,914							593,444

Total liabilities and shareholders' equity	$	6,032,924						$	6,234,049

Net interest income, GAAP and non-GAAP tax equivalent (1)				$	44,052						$	43,060

Net interest spread, GAAP and non-GAAP tax equivalent (1)						2.74	%						2.80	%


Net interest margin (net interest income to
total interest earning assets), GAAP and non-GAAP tax equivalent (1)						2.98	%						2.83	%

Tax equivalent adjustment (1)					-							-


Net interest income				$	44,052						$	43,060

(1) Tax equivalent adjustment to a measure results in a non-GAAP financial measure. See Non-GAAP Financial Measures Reconciliation.



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

(dollars in thousands)
(Unaudited)	Six months ended							Six months ended
	June 30, 2023							June 30, 2022
	Average			Interest		Average		Average			Interest		Average
	Balance					Rate		Balance					Rate
Assets

Securities available for sale:
U. S. government sponsored enterprises	$	120,669			1,383	2.29	%	$	66,609			233	0.70	%
Mortgage backed securities and collateralized mortgage obligations - residential		282,683			3,128	2.21			272,022			2,454	1.80
State and political subdivisions		34			1	6.74			41			1	6.73
Corporate bonds		85,460			1,037	2.43			70,362			755	2.15
Small Business Administration - guaranteed
participation securities		21,423			228	2.13			28,685			294	2.05
Other		686			5	0.73			686			4	1.17

Total securities available for sale		510,955			5,782	1.13			438,405			3,741	1.71

Federal funds sold and other short-term Investments		563,938			13,525	4.84			1,144,108			2,825	0.50

Held to maturity securities:
Mortgage backed securities and collateralized mortgage obligations - residential		7,372			153	4.16			9,198			177	3.86

Total held to maturity securities		7,372			153	4.16			9,198			177	3.86

Federal Home Loan Bank stock		5,833			220	3.77			5,701			127	4.46

Commercial loans		243,983			6,319	5.18			196,991			4,928	5.00
Residential mortgage loans		4,241,207			74,906	3.54			4,028,667			68,968	3.43
Home equity lines of credit		297,262			8,652	5.87			238,122			4,393	3.72
Installment loans		14,535			457	6.35			9,148			318	7.00

Loans, net of unearned income		4,796,987			90,334	3.77			4,472,928			78,607	3.52

Total interest earning assets		5,885,085			110,014	3.75			6,070,340			85,477	2.82

Allowance for credit losses on loans		(46,677	)						(46,584	)
Cash & non-interest earning assets		173,990							200,193


Total assets	$	6,012,398						$	6,223,949


Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	1,108,452			115	0.02	%	$	1,201,078			86	0.01	%
Money market accounts		607,064			2,570	0.85			784,737			424	0.11
Savings		1,403,924			1,185	0.17			1,546,316			319	0.04
Time deposits		1,267,193			14,563	2.32			966,372			1,082	0.23

Total interest bearing deposits		4,386,633			18,433	0.85			4,498,503			1,911	0.09
Short-term borrowings		127,957			564	0.89			222,755			410	0.37

Total interest bearing liabilities		4,514,590			18,997	0.85			4,721,258			2,321	0.10

Demand deposits		802,533							825,685
Other liabilities		81,954							81,520
Shareholders' equity		613,321							595,486

Total liabilities and shareholders' equity	$	6,012,398						$	6,223,949

Net interest income, GAAP and non-GAAP tax equivalent (1)					91,017							83,156

Net interest spread, GAAP and non-GAAP tax equivalent (1)						2.90	%						2.72	%


Net interest margin (net interest income to total interest earning assets), GAAP and non-GAAP tax equivalent (1)						3.10	%						2.74	%

Tax equivalent adjustment (1)					-							-


Net interest income					91,017							83,156

(1) Tax equivalent adjustment to a measure results in a non-GAAP financial measure. See Non-GAAP Financial Measures Reconciliation.

Non-GAAP Financial Measures Reconciliation

Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from total shareholders’ equity and total assets, respectively. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios. Additionally, we believe that this measure is important to many investors in the marketplace who are interested in relative changes from period to period in equity and total assets, each exclusive of changes in intangible assets.

Net interest income is commonly presented on a taxable equivalent basis. That is, to the extent that some component of the institution’s net interest income will be exempt from taxation (e.g., was received by the institution as a result of its holdings of state or municipal obligations), an amount equal to the tax benefit derived from that component is added back to the net interest income total. Management considers this adjustment helpful to investors in comparing one financial institution’s net interest income (pre- tax) to that of another institution, as each will have a different proportion of tax-exempt items in their portfolios. Moreover, net interest income is itself a component of another financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average interest earning assets. Additionally, management and many financial institutions also present net interest spread, which is the average yield on interest earning assets minus the average rate paid on interest bearing liabilities. For purposes of these measures as well, taxable equivalent net interest income is generally used by financial institutions, again to provide investors with a better basis of comparison from institution to institution. We calculate taxable equivalent net interest margin by dividing net interest income, adjusted to include the benefit of non-taxable interest income, by average interest earning assets. We calculate taxable equivalent net interest spread as the difference between average yield on interest earning assets, adjusted to include the benefit of non-taxable interest income, and the average rate paid on interest bearing liabilities.

The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and non-interest fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, excluding non-routine items from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue. Additionally, we believe this measure is important to investors looking for a measure of efficiency in our productivity measured by the amount of revenue generated for each dollar spent.

We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial results. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible equity as a percentage of tangible assets, and efficiency ratio to the most directly comparable GAAP measures is set forth below. We have not presented a reconciliation of taxable equivalent net interest income, taxable equivalent net interest margin or taxable equivalent net interest spread to the most directly comparable GAAP measure, as there was no difference between the taxable equivalent measure and comparable GAAP measure for any period presented in this release.


NON-GAAP FINANCIAL MEASURES RECONCILIATION

(dollars in thousands)
(Unaudited)
	6/30/2023		3/31/2023		6/30/2022
Tangible Book Value Per Share

Equity (GAAP)	$	621,389	$	614,703	$	594,632
Less: Intangible assets		553		553		553
Tangible equity (Non-GAAP)	$	620,836	$	614,150	$	594,079

Shares outstanding		19,024		19,024		19,127
Tangible book value per share		32.63		32.28		31.06
Book value per share		32.66		32.31		31.06

Tangible Equity to Tangible Assets
Total Assets (GAAP)	$	6,075,625	$	6,045,808	$	6,226,791
Less: Intangible assets		553		553		553
Tangible assets (Non-GAAP)	$	6,075,072	$	6,045,255	$	6,226,238

Tangible Equity to Tangible Assets (Non-GAAP)		10.22%		10.16%		9.54%
Equity to Assets (GAAP)		10.23%		10.17%		9.55%

	Three months ended						Six months ended
Efficiency Ratio	6/30/2023		3/31/2023		6/30/2022		6/30/2023		6/30/2022

Net interest income (GAAP)	$	44,052	$	46,965	$	43,060	$	91,017	$	83,156
Taxable equivalent adjustment		-		-		-		-		-
Net interest income (fully taxable equivalent) (Non-GAAP)		44,052		46,965		43,060		91,017		83,156
Non-interest income (GAAP)		4,598		4,669		4,916		9,267		10,099
Less: Net gain on sale of building		-		-		-		-		268
Revenue used for efficiency ratio (Non-GAAP)	$	48,650	$	51,634	$	47,976	$	100,284	$	92,987

Total noninterest expense (GAAP)	$	27,327	$	27,679	$	25,005	$	55,006	$	47,770
Less: Other real estate expense, net		148		225		74		373		85
Expense used for efficiency ratio (Non-GAAP)	$	27,179	$	27,454	$	24,931	$	54,633	$	47,685

Efficiency Ratio		55.87%		53.17%		51.97%		54.48%		51.28%

Subsidiary:	Trustco Bank

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

TrustCo Reports Second Quarter Net Income of $16.4 Million and $346 Million of Loan Growth; Maintains Strong Liquidity and Demonstrates Deposit Stability