GlobeNewswire Inc | Jul 21, 2020 04:14PM EDT

July 21, 2020

GLENVILLE, N.Y., July 21, 2020 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) TrustCo Bank Corp NY today announced second quarter 2020 net income of $11.3 million or $0.117 diluted earnings per share, and $24.6 million or $0.254 diluted earnings per share for the six months ended June 30, 2020.

Summary

Robert J. McCormick, Chairman, President and Chief Executive Officer noted, As we continue to navigate COVID-19 and its effects on our families and neighbors, Id like to reaffirm Trustco Banks commitment to serving our communities through careful financial management and high-quality service. This enduring mission guides us as we respond to this situation by providing you with the information, support, and advice you need to manage your finances in this market and plan for your future. We continue to remain thankful to those on the front lines from medical centers to food banks that are providing the essential services for those affected physically, emotionally, and financially by COVID-19.

TrustCos designated Coronavirus (COVID-19) Fund, donating time and financial support to front line organizations across the communities, and the COVID-19 Financial Relief Program, providing support to our borrowers experiencing economic hardships by offering loan deferrals, continues to be an asset for our customers experiencing financial challenges during this time.

TrustCo is taking every precaution possible to keep our employees and customers safe during this time. The bank continues to implement important policies, including minimizing contact between employees and customers by requiring face masks, installing clear barriers, and separating banking departments from one another. As recommended by the CDC, cleaning procedures continue to be augmented and protective sanitation items are always available.

We also continue to closely monitor the impact of the pandemic on our business and results of operations. As of June 30, 2020, we had 668 residential loans in deferral totaling $145 million, and 90 commercial loans in deferral totaling $45 million. This represents 4.5% of total outstanding loans. We are encouraged to see that a number of residential and commercial loans had already re-started making regular loan payments prior to the end of the quarter. Additionally, the bank has funded 663 Paycheck Protection Program (PPP) loans totaling $46 million.

The second quarter of 2020 saw continued loan and deposit growth. Our focus on traditional lending criteria and conservative balance sheet management has produced consistent earnings while maintaining strong liquidity and growing capital. This approach allowed us to continue to expand our business and take advantage of changes in market and competitive conditions. As mentioned last quarter, the pandemic has created an uncertain future, and we believe we continue to be well-positioned to help our customers through this economic disruption and turmoil. We also continue to hire across our locations for all levels of staff. As we enter the second half of 2020 and beyond, management views the Bank as well-positioned to deploy its existing liquidity into our residential loan portfolio and we will continue to closely monitor how the current market conditions change.

TrustCo saw average loans grow 7.0% in the second quarter of 2020 compared to the second quarter of 2019. Year over year, loan portfolio expansion was funded by a combination of utilizing a portion of our strong cash balances, cash flow from investments, and the growth in funding from customer deposits. Total average deposits are up $276.2 million or 6.2% in the second quarter 2020 compared to the prior year.

Details

Average loans were up $270.5 million or 7.0% in the second quarter 2020 over the same period in 2019. Average residential loans, our primary lending focus, were up $257.2 million or 7.6% in the second quarter 2020, over the same period in 2019. Average deposits are up $276.2 million or 6.2% for the second quarter 2020 over the same period a year earlier. The increase in deposits was the result of a $321.2 million or 10.7% increase total average core deposit accounts, which consist of interest bearing and non-interest bearing checking, savings and money market deposits, for the second quarter 2020 compared to the second quarter 2019. Within core, checking balances were up $203.5 million or 15.7% (including interest bearing checking and non-interest bearing balances). Average time deposits decreased $45.0 million or 3.1% for the second quarter 2020 compared to the second quarter 2019.

The cost of interest bearing liabilities decreased to 0.64% in the second quarter 2020 from 0.91% in the second quarter 2019. A significant portion of our CD portfolio repriced during the last half of 2019 and the first half of 2020, which resulted in lower rates due to market conditions. The net interest margin for the second quarter 2020 was 2.81%, down 30 basis points from 3.11% in the second quarter of 2019 primarily due to federal interest rate cuts over the same period resulting in less interest earned on our short-term funds and variable rate loans. Additionally, because we offered competitive shorter term rates on our time deposits in the past, we expect cost of interest bearing liabilities to continue to decrease as these reprice at lower rates.

The Bank continued to demonstrate its ability to grow shareholders equity as average equity was up $44.1 million or 8.7% in the second quarter of 2020 compared to the same period in 2019. Return on average assets and return on average equity for the second quarter 2020 were .82% and 8.21%, respectively, compared to 1.14% and 11.60% for the second quarter 2019. Improving efficiencies to reduce costs continues to remain a key area of focus. Total operating expenses decreased by $970 thousand or 3.9% in the second quarter 2020 as compared to the second quarter 2019, driven by decreases in almost all expense categories, with the exception of an increase in occupancy expense.

Asset quality and loan loss reserve measures continued to improve. Nonperforming loans (NPLs) were $21.9 million at June 30, 2020, compared to $22.1 million at June 30, 2019. NPLs were 0.52% of total loans at June 30, 2020, compared to 0.57% at June 30, 2019. The coverage ratio, or allowance for loan losses to NPLs, was 219.5% at June 30, 2020, compared to 200.4% at June 30, 2019. Nonperforming assets (NPAs) were $22.8 million at June 30, 2020 compared to $24.8 million at June 30, 2019. The ratio of allowance for loan losses to total loans was 1.15% as of June 30, 2020, compared to 1.14% at June 30, 2019. The allowance for loan losses was $48.1 million at June 30, 2020 compared to $44.4 million at June 30, 2019. The provision for loan losses increased to $2.0 million for the second quarter 2020 compared to a credit of $341 thousand in the same period in the prior year, primarily driven by the uncertainty in the current economic environment resulting from COVID-19. Additionally, in the second quarter of 2019 there was a credit to the provision of loan losses of $541 thousand related to the sale of our credit card portfolio. The Bank did not adopt FASB Accounting Standards Update 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (CECL) as of January 1, 2020 as allowed by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Bank will adopt CECL as required by the CARES Act at the earlier of the termination of the National Emergency concerning COVID-19 or December 31, 2020. Net chargeoffs for the second quarter 2020 were $11 thousand versus net recoveries in the second quarter 2019 of $35 thousand. The annualized net chargeoffs ratio was 0.00% for the second quarter 2020 and 2019.

At June 30, 2020 the tangible equity to tangible asset ratio was 9.74%, compared to 9.85% at June 30, 2019. Book value per share at June 30, 2020 was $5.73, up 7.7% compared to $5.32 a year earlier.

TrustCo Bank Corp NY is a $5.7 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 June 30, 2020.

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

A conference call to discuss second quarter 2020results will be held at 9:00 a.m. Eastern Time on July 22, 2020. 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 10146338. The call will also be audio webcast at: https://services.choruscall.com/links/trst200722.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 for the repricing of our CD portfolio and the stabilizing of our net interest margin, the impact of Federal Reserve actions regarding interest rates and 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, 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 TrustCos actual results and could cause TrustCos 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; 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 6/30/ 3/31/ 6/30/ 2020 2020 2019Summary of operations Net interest income (TE) $ 37,681 38,554 39,192 Provision (Credit) for loan losses 2,000 2,000 (341 ) Net gain on securities transactions - 1,155 - Noninterest income, excluding net gain on 3,426 4,179 4,914 securities transactionsNoninterest expense 23,932 24,268 24,902 Net income 11,254 13,313 14,667 Per common share Net income per share: - Basic $ 0.117 0.138 0.152 - Diluted 0.117 0.138 0.151 Cash dividends 0.068 0.068 0.068 Book value at period end 5.73 5.68 5.32 Market price at period end 6.33 5.41 7.92 At period end Full time equivalent employees 806 813 858 Full service banking offices 148 148 148 Performance ratios Return on average assets 0.82 % 1.03 1.14 Return on average equity 8.21 9.87 11.60 Efficiency (1) 58.30 56.34 55.98 Net interest spread (TE) 2.69 2.91 2.95 Net interest margin (TE) 2.81 3.05 3.11 Dividend payout ratio 58.37 49.41 44.94 Capital ratios at period end Consolidated tangible equity to tangible 9.74 % 10.42 9.85 assets (2)Consolidated equity to assets 9.75 % 10.43 9.86 Asset quality analysis at period end Nonperforming loans to total loans 0.52 0.51 0.57 Nonperforming assets to total assets 0.40 0.42 0.47 Allowance for loan losses to total loans 1.15 1.13 1.14 Coverage ratio (3) 2.2x 2.2x 2.0x (1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxableequivalent net interest income plus noninterest income.(2) Non-GAAP measure; calculated as total equity less $553 of intangibleassets divided by total assets less$553 of intangible assets.(3) Calculated as allowance for loan losses divided by total nonperformingloans.

TE = Taxable equivalent

FINANCIAL HIGHLIGHTS, Continued

(dollars in thousands, except per share data)(Unaudited) Six months ended 06/30/ 06/30/ 20 19Summary of operations Net interest income (TE) $ 76,235 78,925 Provision (Credit) for loan losses 4,000 (41 )Net gain on securities transactions 1,155 - Noninterest income, excluding net gain on securities 7,605 9,551 transactionsNoninterest expense 48,200 49,769 Net income 24,567 29,225 Per common share Net income per share: - Basic $ 0.254 0.302 - Diluted 0.254 0.302 Cash dividends 0.136 0.136 Tangible Book value at period end 5.73 5.32 Market price at period end 6.33 7.92 Performance ratios Return on average assets 0.92 1.15 Return on average equity 9.04 11.76 Efficiency (1) 57.30 56.04 Net interest spread (TE) 2.80 3.03 Net interest margin (TE) 2.93 3.17 Dividend payout ratio 53.52 45.08 (1) Calculated as noninterest expense (excluding ORE income/expense) dividedby taxable equivalent net interest incomeplus noninterest income (excluding net securities transactions and gain on saleof building and nonperforming loans). TE = Taxable equivalent.

CONSOLIDATED STATEMENTS OF INCOME (dollars inthousands, except per share data)(Unaudited) Three months ended 6/30/ 3/31/ 12/31/ 9/30/ 6/30/ 2020 2020 2019 2019 2019Interest and dividend income:Interest and fees on $ 41,665 42,063 42,002 41,923 41,432 loansInterest anddividends on securities availablefor sale:U. S. governmentsponsored 106 421 609 996 821 enterprisesState and political 2 1 2 2 3 subdivisionsMortgage-backedsecurities and collateralizedmortgageobligations - 1,527 2,113 2,334 2,178 2,152 residentialCorporate bonds 488 238 295 321 272 Small BusinessAdministration - guaranteedparticipation 229 245 253 282 289 securitiesOther securities 5 6 6 6 5 Total interest anddividends on 2,357 3,024 3,499 3,785 3,542 securities availablefor sale Interest on held to maturity securities:Mortgage-backedsecurities and collateralizedmortgageobligations - 162 175 184 187 209 residentialTotal interest onheld to maturity 162 175 184 187 209 securities Federal Reserve Bankand Federal Home 192 82 203 81 199 Loan Bank stock Interest on federalfunds sold and other 193 1,267 1,635 2,552 3,282 short-terminvestmentsTotal interest 44,569 46,611 47,523 48,528 48,664 income Interest expense: Interest on deposits:Interest-bearing 26 16 21 52 94 checkingSavings 166 233 271 323 367 Money market deposit 862 1,096 1,175 1,177 1,119 accountsTime deposits 5,599 6,391 7,468 7,974 7,512 Interest onshort-term 235 322 347 359 381 borrowingsTotal interest 6,888 8,058 9,282 9,885 9,473 expense Net interest income 37,681 38,553 38,241 38,643 39,191 Less: Provision(Credit) for loan 2,000 2,000 200 - (341 )lossesNet interest incomeafter provision for 35,681 36,553 38,041 38,643 39,532 loan losses Noninterest income: Trustco Financial 1,368 1,600 1,454 1,517 1,683 Services incomeFees for services to 1,807 2,315 2,377 2,602 2,611 customersNet gain onsecurities - 1,155 - - - transactionsOther 251 264 284 806 620 Total noninterest 3,426 5,334 4,115 4,925 4,914 income Noninterest expenses:Salaries and 11,648 11,373 11,743 11,725 11,711 employee benefitsNet occupancy 4,385 4,306 4,399 4,094 4,006 expenseEquipment expense 1,606 1,802 1,768 1,689 1,709 Professional 1,182 1,481 1,449 1,507 1,568 servicesOutsourced services 1,875 2,075 1,925 1,875 1,875 Advertising expense 601 488 464 494 778 FDIC and other 609 294 259 282 598 insuranceOther real estate(income) expense, (32 ) 194 (385 ) 33 210 netOther 2,058 2,255 2,269 2,371 2,447 Total noninterest 23,932 24,268 23,891 24,070 24,902 expenses Income before taxes 15,175 17,619 18,265 19,498 19,544 Income taxes 3,921 4,306 4,358 4,790 4,877 Net income $ 11,254 13,313 13,907 14,708 14,667 Net income per common share:- Basic $ 0.117 0.138 0.143 0.152 0.152 - Diluted 0.117 0.138 0.143 0.152 0.151 Average basic shares 96,433 96,727 96,919 96,907 96,822 (in thousands)Average dilutedshares (in 96,437 96,750 97,015 96,977 96,891 thousands) Note: Taxableequivalent net $ 37,681 38,554 38,243 38,644 39,192 interest income

CONSOLIDATED STATEMENTS OF INCOME, Continued

(dollars in thousands, except per share data)(Unaudited) Six months ended 06/30/ 06/30/ 20 19Interest and dividend income: Interest and fees on loans $ 83,728 82,685 Interest and dividends on securities available for sale:U. S. government sponsored enterprises 527 1,604 State and political subdivisions 3 4 Mortgage-backed securities and collateralized mortgage obligations - residential 3,640 3,707 Corporate bonds 726 480 Small Business Administration - guaranteed participation securities 474 586 Other securities 11 10 Total interest and dividends on securities available 5,381 6,391 for sale Interest on held to maturity securities: Mortgage-backed securities-residential 337 426 Total interest on held to maturity securities 337 426 Federal Reserve Bank and Federal Home Loan Bank stock 274 284 Interest on federal funds sold and other short-term 1,460 6,291 investmentsTotal interest income 91,180 96,077 Interest expense: Interest on deposits: Interest-bearing checking 42 215 Savings 399 744 Money market deposit accounts 1,958 1,945 Time deposits 11,990 13,488 Interest on short-term borrowings 557 762 Total interest expense 14,946 17,154 Net interest income 76,234 78,923 Less: (Credit) Provision for loan losses 4,000 (41 )Net interest income after provision for loan losses 72,234 78,964 Noninterest income: Trustco Financial Services income 2,968 3,416 Fees for services to customers 4,122 5,131 Net gain on securities transactions 1,155 - Other 515 1,004 Total noninterest income 8,760 9,551 Noninterest expenses: Salaries and employee benefits 23,021 23,162 Net occupancy expense 8,691 8,173 Equipment expense 3,408 3,611 Professional services 2,663 3,218 Outsourced services 3,950 3,800 Advertising expense 1,089 1,563 FDIC and other insurance 903 1,246 Other real estate expense, net 162 186 Other 4,313 4,810 Total noninterest expenses 48,200 49,769 Income before taxes 32,794 38,746 Income taxes 8,227 9,521 Net income $ 24,567 29,225 Net income per common share: - Basic $ 0.254 0.302 - Diluted 0.254 0.302 Average basic shares (in thousands) 96,580 96,784 Average diluted shares (in thousands) 96,593 96,857 Note: Taxable equivalent net interest income $ 76,235 78,925

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)(Unaudited) 6/30/2020 3/31/2020 12/31/ 9/30/2019 6/30/2019 2019ASSETS: Cash and due from banks $ 44,726 43,362 48,198 49,526 42,471 Federal funds sold andother short term 908,110 492,691 408,648 401,151 517,684 investmentsTotal cash and cash 952,836 536,053 456,846 450,677 560,155 equivalents Securities available for sale:U. S. government - 54,970 104,512 164,490 184,448 sponsored enterprisesStates and political 111 112 162 169 170 subdivisionsMortgage-backedsecurities and collateralized mortgageobligations - 331,469 352,067 389,517 406,166 354,679 residentialSmall BusinessAdministration - guaranteedparticipation 45,998 46,768 48,511 50,970 53,091 securitiesCorporate bonds 54,439 48,564 30,436 40,281 40,467 Other securities 685 685 685 683 685 Total securities 432,702 503,166 573,823 662,759 633,540 available for sale Held to maturity securities:Mortgage-backedsecurities and collateralized mortgageobligations-residential 16,633 17,720 18,618 19,705 20,667 Total held to maturity 16,633 17,720 18,618 19,705 20,667 securities Federal Reserve Bankand Federal Home Loan 5,506 9,183 9,183 9,183 9,183 Bank stock Loans: Commercial 231,212 195,805 199,499 192,443 190,507 Residential mortgage 3,681,898 3,627,121 3,583,774 3,508,647 3,428,829 loansHome equity line of 254,445 265,753 267,922 273,526 277,559 creditInstallment loans 10,006 10,713 11,001 10,703 9,514 Loans, net of deferred 4,177,561 4,099,392 4,062,196 3,985,319 3,906,409 net costs Less: Allowance for 48,144 46,155 44,317 44,329 44,365 loan lossesNet loans 4,129,417 4,053,237 4,017,879 3,940,990 3,862,044 Bank premises and 34,042 34,428 34,622 34,168 34,058 equipment, netOperating lease 48,712 49,955 51,475 49,618 51,097 right-of-use assetsOther assets 57,155 52,905 58,876 55,369 56,926 Total assets $ 5,677,003 5,256,647 5,221,322 5,222,469 5,227,670 LIABILITIES: Deposits: Demand $ 612,960 480,255 463,858 453,439 432,780 Interest-bearing 1,001,592 895,254 875,672 869,101 888,433 checkingSavings accounts 1,191,682 1,122,116 1,113,146 1,110,947 1,132,308 Money market deposit 666,304 617,198 599,163 570,457 562,318 accountsTime deposits 1,392,769 1,367,005 1,398,177 1,457,223 1,446,428 Total deposits 4,865,307 4,481,828 4,450,016 4,461,167 4,462,267 Short-term borrowings 177,278 148,090 148,666 151,095 166,746 Operating lease 53,710 54,998 56,553 54,731 56,237 liabilitiesAccrued expenses and 27,287 23,546 27,830 29,313 26,790 other liabilities Total liabilities 5,123,582 4,708,462 4,683,065 4,696,306 4,712,040 SHAREHOLDERS' EQUITY: Capital stock 100,205 100,205 100,205 100,200 100,180 Surplus 176,437 176,431 176,427 176,395 176,396 Undivided profits 299,239 294,553 288,067 280,542 272,433 Accumulated othercomprehensive loss, net 11,936 11,392 4,461 (71 ) (1,774 )of taxTreasury stock at cost (34,396 ) (34,396 ) (30,903 ) (30,903 ) (31,605 ) Total shareholders' 553,421 548,185 538,257 526,163 515,630 equity Total liabilities and $ 5,677,003 5,256,647 5,221,322 5,222,469 5,227,670 shareholders' equity Outstanding shares (in 96,433 96,433 96,922 96,917 96,822 thousands)

NONPERFORMING ASSETS (dollars in thousands)(Unaudited) 6/30/ 3/31/ 12/31/ 9/30/ 6/30/ 2020 2020 2019 2019 2019Nonperforming Assets New York and other states*Loans in nonaccrual status:Commercial $ 571 630 816 888 905 Real estate mortgage - 1 20,215 18,570 18,407 18,275 19,633 to 4 familyInstallment 6 24 3 13 1 Total non-accrual loans 20,792 19,224 19,226 19,176 20,539 Other nonperforming realestate mortgages - 1 to 26 27 29 30 31 4 familyTotal nonperforming 20,818 19,251 19,255 19,206 20,570 loansOther real estate owned 830 1,284 1,579 2,409 2,625 Total nonperforming $ 21,648 20,535 20,834 21,615 23,195 assets Florida Loans in nonaccrual status:Commercial $ - - - - - Real estate mortgage - 1 1,111 1,492 1,614 1,809 1,564 to 4 familyInstallment - - - - - Total non-accrual loans 1,111 1,492 1,614 1,809 1,564 Other nonperforming realestate mortgages - 1 to - - - - - 4 familyTotal nonperforming 1,111 1,492 1,614 1,809 1,564 loansOther real estate owned - - - - - Total nonperforming $ 1,111 1,492 1,614 1,809 1,564 assets Total Loans in nonaccrual status:Commercial $ 571 630 816 888 905 Real estate mortgage - 1 21,326 20,062 20,021 20,084 21,197 to 4 familyInstallment 6 24 3 13 1 Total non-accrual loans 21,903 20,716 20,840 20,985 22,103 Other nonperforming realestate mortgages - 1 to 26 27 29 30 31 4 familyTotal nonperforming 21,929 20,743 20,869 21,015 22,134 loansOther real estate owned 830 1,284 1,579 2,409 2,625 Total nonperforming $ 22,759 22,027 22,448 23,424 24,759 assets Quarterly Net (Recoveries) Chargeoffs New York and other states*Commercial $ (6 ) 1 (1 ) (28 ) (1 )Real estate mortgage - 1 (27 ) 140 146 39 (54 )to 4 familyInstallment 44 4 67 9 45 Total net (recoveries) $ 11 145 212 20 (10 )chargeoffs Florida Commercial $ - - - - - Real estate mortgage - 1 - (2 ) (1 ) - (25 )to 4 familyInstallment - 19 1 16 - Total net (recoveries) $ - 17 - 16 (25 )chargeoffs Total Commercial $ (6 ) 1 (1 ) (28 ) (1 )Real estate mortgage - 1 (27 ) 138 145 39 (79 )to 4 familyInstallment 44 23 68 25 45 Total net (recoveries) $ 11 162 212 36 (35 )chargeoffs Asset Quality Ratios Total nonperforming $ 21,929 20,743 20,869 21,015 22,134 loans (1)Total nonperforming 22,759 22,027 22,448 23,424 24,759 assets (1)Total net (recoveries) 11 162 212 36 (35 )chargeoffs (2) Allowance for loan 48,144 46,155 44,317 44,329 44,365 losses (1) Nonperforming loans to 0.52% 0.51% 0.51% 0.53% 0.57% total loansNonperforming assets to 0.40% 0.42% 0.43% 0.45% 0.47% total assetsAllowance for loan 1.15% 1.13% 1.09% 1.11% 1.14% losses to total loansCoverage ratio (1) 219.5% 222.5% 212.4% 210.9% 200.4% Annualized netchargeoffs to average 0.00% 0.02% 0.02% 0.00% 0.00% loans (2)Allowance for loanlosses to annualized net 1094.2x 71.2x 52.3x 307.8x -316.9x chargeoffs (2)

* 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 June 30, 2020 June 30, 2019 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets Securitiesavailable for sale:U. S.government $ 23,291 106 1.83 % $ 160,197 821 2.05 %sponsoredenterprisesMortgagebackedsecurities and collateralizedmortgageobligations - 333,122 1,527 1.83 342,678 2,152 2.51 residentialState andpolitical 110 2 7.90 168 4 9.52 subdivisionsCorporate 51,494 488 3.79 33,793 272 3.22 bondsSmall BusinessAdministration - guaranteedparticipation 45,260 229 2.03 54,254 289 2.13 securitiesOther 685 5 2.92 686 5 2.92 Totalsecurities 453,962 2,357 2.08 591,776 3,543 2.39 available forsale Federal fundssold and other 727,006 193 0.11 545,724 3,282 2.41 short-termInvestments Held tomaturity securities:Mortgagebackedsecurities and collateralizedmortgageobligations - 17,199 162 3.75 21,155 209 3.95 residential Total held tomaturity 17,199 162 3.75 21,155 209 3.95 securities FederalReserve Bankand Federal 9,332 192 8.23 9,173 199 8.68 Home Loan Bankstock Commercial 223,002 2,610 4.68 189,870 2,546 5.36 loansResidential 3,653,342 36,365 3.98 3,396,149 35,179 4.14 mortgage loansHome equitylines of 260,029 2,515 3.89 279,622 3,503 5.01 creditInstallment 10,044 175 7.02 10,310 204 7.91 loans Loans, net ofunearned 4,146,417 41,665 4.02 3,875,951 41,432 4.28 income Total interest 5,353,916 44,569 3.33 5,043,779 48,665 3.86 earning assets Allowance for (46,832 ) (44,841 ) loan lossesCash &non-interest 195,815 177,019 earning assets Total assets $ 5,502,899 $ 5,175,957 Liabilitiesand shareholders'equity Deposits: Interestbearing $ 953,299 26 0.01 % $ 879,732 94 0.04 %checkingaccountsMoney market 641,593 862 0.54 553,708 1,119 0.81 accountsSavings 1,167,844 166 0.06 1,138,107 367 0.13 Time deposits 1,392,136 5,599 1.62 1,437,097 7,512 2.09 Total interestbearing 4,154,872 6,653 0.64 4,008,644 9,092 0.91 depositsShort-term 172,834 235 0.55 162,690 381 0.94 borrowings Total interestbearing 4,327,706 6,888 0.64 4,171,334 9,473 0.91 liabilities Demand 548,178 418,215 depositsOther 75,603 79,056 liabilitiesShareholders' 551,412 507,352 equity Totalliabilitiesand $ 5,502,899 $ 5,175,957 shareholders'equity Net interestincome, tax 37,681 39,192 equivalent Net interest 2.69 % 2.95 %spread Net interestmargin (net interestincome tototal interestearning 2.81 % 3.11 %assets) Tax equivalent - (1 ) adjustment Net interest 37,681 39,191 income

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, 2020 June 30, 2019 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets Securitiesavailable for sale:U. S.government $ 57,830 527 1.82 % $ 157,244 1,604 2.04 %sponsoredenterprisesMortgagebackedsecurities and collateralizedmortgageobligations - 352,445 3,640 2.07 308,034 3,707 2.41 residentialState andpolitical 112 4 7.74 168 6 7.14 subdivisionsCorporate 39,913 726 3.64 30,347 480 3.16 bondsSmall BusinessAdministration - guaranteedparticipation 46,339 474 2.05 55,648 586 2.11 securitiesOther 685 11 3.21 685 10 2.92 Totalsecurities 497,324 5,382 2.16 552,126 6,393 2.32 available forsale Federal fundssold and other 569,541 1,460 0.52 524,468 6,291 2.40 short-termInvestments Held tomaturity securities:Mortgagebackedsecurities and collateralizedmortgageobligations - 17,671 337 3.81 21,594 426 3.95 residential Total held tomaturity 17,671 337 3.81 21,594 426 3.95 securities FederalReserve Bankand Federal 9,258 274 5.92 9,064 284 6.27 Home Loan Bankstock Commercial 210,524 5,152 4.89 191,793 5,129 5.35 loansResidential 3,627,535 72,826 4.02 3,385,628 70,043 4.14 mortgage loansHome equitylines of 262,745 5,383 4.12 282,892 7,040 4.98 creditInstallment 10,380 367 7.11 11,099 473 8.52 loans Loans, net ofunearned 4,111,184 83,728 4.08 3,871,412 82,685 4.27 income Total interest 5,204,978 91,181 3.51 4,978,664 96,079 3.86 earning assets Allowance for (45,676 ) (44,894 ) loan lossesCash &non-interest 194,718 176,518 earning assets Total assets $ 5,354,020 $ 5,110,288 Liabilitiesand shareholders'equity Deposits: Interestbearing $ 912,226 42 0.01 % $ 880,101 215 0.05 %checkingaccountsMoney market 627,897 1,958 0.63 535,950 1,945 0.73 accountsSavings 1,142,201 399 0.07 1,149,064 744 0.13 Time deposits 1,381,025 11,990 1.75 1,395,361 13,488 1.93 Total interestbearing 4,063,349 14,389 0.71 3,960,476 16,392 0.83 depositsShort-term 163,251 557 0.69 160,893 762 0.95 borrowings Total interestbearing 4,226,600 14,946 0.71 4,121,369 17,154 0.83 liabilities Demand 503,327 407,926 depositsOther 77,303 79,814 liabilitiesShareholders' 546,790 501,179 equity Totalliabilitiesand $ 5,354,020 $ 5,110,288 shareholders'equity Net interestincome, tax 76,235 78,925 equivalent Net interest 2.80 % 3.03 %spread Net interestmargin (net interestincome tototal interestearning 2.93 % 3.17 %assets) Tax equivalent (1 ) (2 ) adjustment Net interest 76,234 78,923 income

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 nonperforming loans and 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) 6/30/2020 3/31/2020 6/30/2019 TangibleEquity to TangibleAssetsTotal Assets $ 5,677,003 5,256,647 5,227,670 (GAAP)Less:Intangible 553 553 553 assetsTangibleassets 5,676,450 5,256,094 5,227,117 (Non-GAAP) Equity 553,421 548,185 515,630 (GAAP)Less:Intangible 553 553 553 assetsTangibleequity 552,868 547,632 515,077 (Non-GAAP)TangibleEquity toTangible 9.74% 10.42% 9.85% Assets(Non-GAAP)Equity toAssets 9.75% 10.43% 9.86% (GAAP) Three months ended Six months endedEfficiency 6/30/2020 3/31/2020 6/30/2019 6/30/ 6/30/ Ratio 2020 2019 Net interestincome(fully $ 37,681 38,554 39,192 $ 76,235 78,925 taxableequivalent)(Non-GAAP)Non-interestincome 3,426 5,334 4,914 8,760 9,551 (GAAP)Less: Netgain on - 1,155 - 1,155 - securitiesRevenue usedforefficiency 41,107 42,733 44,106 83,840 88,476 ratio(Non-GAAP) Totalnoninterest 23,932 24,268 24,902 48,200 49,769 expense(GAAP)Less:Other realestate (32 ) 194 210 162 186 expense(income),netExpense usedforefficiency 23,964 24,074 24,692 48,038 49,583 ratio(Non-GAAP) Efficiency 58.30% 56.34% 55.98% 57.30% 56.04% Ratio

Contact:Robert LeonardExecutive Vice President andChief Risk Officer(518) 381-3693