GlobeNewswire Inc | Jul 21, 2021 04:00PM EDT

July 21, 2021

GLENVILLE, N.Y., July 21, 2021 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced second quarter 2021 net income of $14.4 million or $0.748 diluted earnings per share, compared to net income of $11.3 million or $0.584 diluted earnings per share for the second quarter 2020; and net income of $28.5 million or $1.478 diluted earnings per share for the six months ended June 30, 2021, compared to net income of $24.6 million or $1.272 diluted earnings per share for the six months ended June 30, 2020. For all periods presented, share and per share information has been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

SummaryRobert J. McCormick, Chairman, President and Chief Executive Officer noted, The people who make up the team at Trustco Bank are second to none. We have a deep and diverse talent pool that enables us to focus on short, medium, and long-term objectives all at the same time. The financial results announced today demonstrate the success of these multifaceted efforts. Working our way through and out of the COVID-19 pandemic, we were true to our Home Town Bank motto and helped many people in the communities we serve, while simultaneously achieving meaningful shareholder value and return.

We not only continued without interruption our long history of paying a meaningful dividend, we also won shareholder approval of a reverse stock split that we believe will improve the companys position in the market by making our stock attractive to a wider audience. At the same time, we also supported food banks, renewed our commitments to distressed neighborhoods, invested in affordable housing programs, aided educational programs, and encouraged savings initiatives. We also continued to assist consumer and commercial customers as they worked their way out of the hardships of the past year and are happy to report that virtually all Trustco Bank borrowers who received pandemic relief are making payments as agreed.

Our team is never one to rest on its successes. Our entire management team, from those leading our branches to the heads of our internal departments, are focused on generating new business by reaching an ever-expanding consumer audience with our industry-leading residential mortgage products and developing new relationships with commercial customers who share our forward-looking and success-oriented vision. As always, we pursue these objectives with our trademark efficiency.

Details

Average loans were up $158.6 million or 3.8% in the second quarter 2021 over the same period in 2020. Average residential loans, our primary lending focus, were up $193.9 million, or 5.3%, in the second quarter 2021 over the same period in 2020. As of June 30, 2021, loans in deferral were not material. Additionally, the Bank had funded 663 Paycheck Protection Program (PPP) loans totaling $46 million in 2020, and an additional 343 loans totaling $23 million in the first half of 2021. As of June 30, 2021, 526 PPP loans totaling $32 million remain outstanding. Average deposits were up $507.8 million or 10.8% for the second quarter 2021 over the same period a year earlier. The increase in deposits was the result of a $701.8 million or 21.2% increase in total average core deposit accounts, which consist of interest bearing and non-interest bearing checking, savings and money market deposits, offset by a decrease in average time deposits of $194.1 million or 13.9%, for the second quarter 2021 over the same period in 2020. Within the core deposits, checking balances were up $399.5 million or 26.6% (including interest bearing and non-interest bearing checking balances), money market balances were up $87.5 million or 13.6%, and savings balances were up $214.8 million or 18.4%. We believe the increase in core deposits continues to reflect the desire of customers to have additional funds in the safety and security offered by TrustCos long history of conservative banking. As we move forward, the objective is to encourage customers to retain these additional funds in the expanded product offerings of the Bank through aggressive marketing and product differentiation.

The cost of interest bearing liabilities decreased to 0.17% in the second quarter 2021 from 0.64% in the second quarter 2020. A significant portion of our CD portfolio (time deposits) repriced during the last year, which resulted in lower rates as a result of the ongoing market conditions. The net interest margin for the second quarter 2021 was 2.70%, down 11 basis points from 2.81% in the second quarter of 2020. This was primarily due to the decrease in market rates resulting in less interest earned on our short-term funds, residential and variable rate loans.

The Bank continued to demonstrate its ability to grow shareholders equity as average equity was up $24.3 million or 4.4% in the second quarter of 2021 compared to the same period in 2020. Return on average assets and return on average equity for the second quarter 2021 were 0.95% and 10.05%, respectively, compared to 0.82% and 8.21% for the second quarter 2020. Improving efficiencies to reduce costs continues to remain a key area of focus. As a result, full time equivalent employees decreased from the prior year and quarter partially due to a strategic realignment and the impact of COVID-19 on the labor market. The Bank also purchased 20 thousand shares of stock under the announced Repurchase Plan. Additionally, as previously announced, the reverse split of the Companys Common Stock at a ratio of 1 for 5 was implemented on the Nasdaq Global Select Market on May 28, 2021. All prior period share and per share information, and common stock and surplus amounts have been split adjusted. The board of directors believes that the Reverse Stock Split will likely result in a higher per share trading price, which is intended to generate greater investor interest in TrustCo and improve the marketability of the shares to a broader range of investors. The board of directors also believes that the Reverse Stock Split will result in a number of our shares of outstanding common stock that is similar to the number of outstanding shares of common stock of comparable financial institutions.

Asset quality and loan loss reserve measures have stayed consistent. Nonperforming loans (NPLs) were $20.8 million at June 30, 2021, compared to $21.9 million at June 30, 2020. NPLs were 0.48% and 0.52% of total loans at June 30, 2021 and 2020, respectively. The coverage ratio, or allowance for loan losses to NPLs, was 240.9% at June 30, 2021, compared to 219.5% at June 30, 2020. Nonperforming assets (NPAs) were $21.1 million at June 30, 2021, compared to $22.8 million at June 30, 2020. The ratio of allowance for loan losses to total loans was 1.15% as of both June 30, 2021 and 2020. The allowance for loan losses was $50.2 million at June 30, 2021, compared to $48.1 million at June 30, 2020. There was no provision for loan losses for the second quarter 2021 consistent with improved asset quality trends and economic conditions. Provision for loan losses for the second quarter of 2020 was $2 million driven by the beginning of the uncertainty in the economic environment resulting from the COVID-19 pandemic. The Company had previously elected to delay its adoption of Accounting Standards Update 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (CECL), as provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) until the date on which the National Emergency concerning COVID-19 was terminated or December 31, 2020, whichever occurred first. The December 31, 2020 adoption date under the CARES Act was extended to January 1, 2022 as a part of the COVID-19 relief legislation, which became law in December 2020, and therefore the Company intends to adopt CECL on January 1, 2022.

Net recoveries for the second quarter 2021 were $164 thousand versus net chargeoffs in the second quarter 2020 of $11 thousand. The annualized net (recoveries) chargeoffs ratio was (0.02)% and 0.00% for the second quarter 2021 and 2020, respectively.

At June 30, 2021 the equity to asset ratio was 9.45%, compared to 9.75% at June 30, 2020. Book value per share at June 30, 2021 was $30.00, up 4.6% compared to $28.67 a year earlier.

TrustCo Bank Corp NY is a $6.1 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 147 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 2021.

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 2021results will be held at 9:00 a.m. Eastern Time on July 22, 2021. Those wishing to participate in the call may dial toll-free 1-888-339-0764. International callers must dial 1-412-902-4195. Please ask to be joined into the TrustCo Bank Corp NY / TRST call. A replay of the call will be available for thirty days by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10158543. The call will also be audio webcast at: https://services.choruscall.com/links/trst210722.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 2021, including our expectations regarding the effects of COVID-19 on our financial results and our ability to assist our customers in addressing the effects of COVID-19, our expectations with respect to the effect of our proposed reverse stock split of our common stock, including the impact of such split on the trading price of our common stock, our ability to retain customer products, the impact of Federal Reserve actions regarding interest rates and the growth of loans and deposits throughout our branch network and our ability to capitalize on economic changes in the areas in which we operate. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed, and many of the risks and uncertainties are heightened by or may, in the future, be heightened by the effects of the COVID-19 pandemic. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect 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; future business strategies related to the implementation of CECL; our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at reasonable levels relative to income; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; restrictions or conditions imposed by our regulators on our operations that may make it more difficult for us to achieve our goals; the future earnings and capital levels of us and Trustco Bank and the continued receipt of approvals from our primary federal banking regulators under regulatory rules to distribute capital to TrustCo, which could affect our ability to pay dividends; results of supervisory monitoring or examinations of Trustco Bank and TrustCo by our respective regulators; adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; unanticipated effects from the Tax Cut and Jobs Act that may limit its benefits or adversely impact our business; the perceived overall value of our products and services by users, including in comparison to competitors products and services and the willingness of current and prospective customers to substitute competitors products and services for our products and services; changes in consumer spending, borrowing and saving habits; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; changes in management personnel; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; technological changes and electronic, cyber and physical security breaches; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading Risk Factors in our most recent annual report on Form 10-K and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.

Subsidiary: Trustco Bank Contact: Robert Leonard Executive Vice President and Chief Risk Officer (518) 381-3693

TRUSTCO BANK CORP NYGLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)(Unaudited) Three months ended 6/30/2021 3/31/2021 6/30/2020Summary of operations Net interest income (TE) $ 40,122 40,107 37,681 Provision for loan losses - 350 2,000 Noninterest income 4,688 4,428 3,426 Noninterest expense 25,440 25,335 23,932 Net income 14,433 14,083 11,254 Per share (4) Net income per share: - Basic $ 0.749 0.730 0.584 - Diluted 0.748 0.730 0.584 Cash dividends 0.341 0.341 0.341 Book value at period end 30.00 29.60 28.67 Market price at period end 34.38 36.85 31.65 At period end Full time equivalent employees 769 820 806 Full service banking offices 147 148 148 Performance ratios Return on average assets 0.95 % 0.96 0.82 Return on average equity 10.05 10.01 8.21 Efficiency (1) 56.91 56.35 58.30 Net interest spread (TE) 2.66 2.74 2.69 Net interest margin (TE) 2.70 2.78 2.81 Dividend payout ratio 45.51 46.65 58.37 Capital ratios at period end Consolidated tangible equity to 9.44 % 9.44 9.74 tangible assets (2)Consolidated equity to assets 9.45 % 9.44 9.75 Asset quality analysis at period end Nonperforming loans to total 0.48 0.51 0.52 loansNonperforming assets to total 0.34 0.36 0.40 assetsAllowance for loan losses to 1.15 1.17 1.15 total loansCoverage ratio (3) 2.4x 2.3x 2.2x ^(1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxableequivalent net interest income plus noninterestincome. See Non-GAAP Financial Measures Reconciliation.^(2) Non-GAAP measure; calculated as total equity less $553 of intangibleassets divided by total assets less$553 of intangible assets. See Non-GAAPFinancial Measures Reconciliation.^(3) Calculated as allowance for loan losses divided by total nonperformingloans.^(4) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

TE = Taxable equivalent

FINANCIAL HIGHLIGHTS, Continued

(dollars in thousands, except per share data)(Unaudited) Six months ended 06/30/21 06/30/20Summary of operations Net interest income (TE) $ 80,229 76,235 Provision for loan losses 350 4,000 Net gain on securities transactions - 1,155 Noninterest income, excluding net gain on 9,116 7,605 securities transactionsNoninterest expense 50,775 48,200 Net income 28,516 24,567 Per share (2) Net income per share: - Basic $ 1.479 1.272 - Diluted 1.478 1.272 Cash dividends 0.681 0.681 Book value at period end 30.00 28.67 Market price at period end 34.38 31.65 Performance ratios Return on average assets 0.96 0.92 Return on average equity 10.03 9.04 Efficiency (1) 56.63 57.30 Net interest spread (TE) 2.70 2.80 Net interest margin (TE) 2.74 2.93 Dividend payout ratio 46.07 53.52 ^(1) Calculated as noninterest expense (excluding ORE income/expense) dividedby taxable equivalent net interest incomeplus noninterest income. SeeNon-GAAP Financial Measures Reconciliation.^(2) All periods presented have been adjusted for the 1 for 5 reverse stocksplit which occurred on May 28, 2021. TE = Taxable equivalent.

CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data)(Unaudited) Three months ended 6/30/2021 3/31/2021 12/31/ 9/30/2020 6/30/2020 2020Interest and dividend income: Interest and fees on loans $ 39,808 40,217 40,906 41,330 41,665 Interest and dividends on securities available for sale:U. S. government 97 50 27 14 106 sponsored enterprisesState and political - 1 2 1 2 subdivisionsMortgage-backedsecurities and collateralized mortgageobligations - 1,167 1,237 1,172 1,319 1,527 residentialCorporate bonds 323 316 349 646 488 Small Business Administration - guaranteedparticipation 193 206 212 216 229 securitiesOther securities 5 6 7 5 5 Total interest anddividends on securities available 1,785 1,816 1,769 2,201 2,357 for sale Interest on held to maturity securities:Mortgage-backedsecurities and collateralized mortgageobligations - 111 123 129 138 162 residentialTotal interest on held to 111 123 129 138 162 maturity securities Federal Reserve Bank and Federal 65 69 70 77 192 Home Loan Bank stock Interest on federal funds sold 286 270 246 242 193 and other short-term investmentsTotal interest income 42,055 42,495 43,120 43,988 44,569 Interest expense: Interest on deposits: Interest-bearing 46 52 51 55 26 checkingSavings 162 159 156 161 166 Money market 236 283 447 637 862 deposit accountsTime deposits 1,261 1,666 3,053 4,749 5,599 Interest on short-term 228 228 232 221 235 borrowingsTotal interest expense 1,933 2,388 3,939 5,823 6,888 Net interest income 40,122 40,107 39,181 38,165 37,681 Less: Provision for loan - 350 600 1,000 2,000 lossesNet interest income after 40,122 39,757 38,581 37,165 35,681 provision for loan losses Noninterest income: Trustco Financial Services income 1,999 2,035 1,527 1,784 1,368 Fees for services to 2,486 2,204 2,365 2,292 1,807 customersOther 203 189 177 265 251 Total noninterest 4,688 4,428 4,069 4,341 3,426 income Noninterest expenses: Salaries and employee 12,403 12,425 11,727 10,899 11,648 benefitsNet occupancy expense 4,328 4,586 4,551 4,277 4,385 Equipment expense 1,600 1,631 1,621 1,607 1,606 Professional services 1,614 1,432 1,644 1,311 1,182 Outsourced services 2,169 2,250 1,925 1,875 1,875 Advertising expense 549 354 527 305 601 FDIC and other insurance 777 707 657 660 609 Other real estate (income) (60 ) 239 45 (115 ) (32 )expense, netOther 2,060 1,711 2,133 1,855 2,058 Total noninterest 25,440 25,335 24,830 22,674 23,932 expenses Income before taxes 19,370 18,850 17,820 18,832 15,175 Income taxes 4,937 4,767 4,006 4,761 3,921 Net income $ 14,433 14,083 13,814 14,071 11,254 Net income per common share (1): - Basic $ 0.749 0.730 0.716 0.730 0.584 - Diluted 0.748 0.730 0.716 0.730 0.584 Average basic shares (in 19,281 19,287 19,287 19,287 19,287 thousands) (1)Average diluted shares (in 19,290 19,293 19,288 19,288 19,287 thousands) (1) Note: Taxable equivalent net $ 40,122 40,107 39,182 38,166 37,681 interest income ^(1) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

CONSOLIDATED STATEMENTS OF INCOME, Continued

(dollars in thousands, except per share data)(Unaudited) Six months ended 06/30/21 06/30/20Interest and dividend income: Interest and fees on loans $ 80,025 83,728 Interest and dividends on securities available for sale:U. S. government sponsored enterprises 147 527 State and political subdivisions 1 3 Mortgage-backed securities and collateralized mortgageobligations - residential 2,404 3,640 Corporate bonds 639 726 Small Business Administration - guaranteed participation securities 399 474 Other securities 11 11 Total interest and dividends on 3,601 5,381 securities available for sale Interest on held to maturity securities: Mortgage-backed securities-residential 234 337 Total interest on held to maturity securities 234 337 Federal Reserve Bank and Federal Home Loan Bank stock 134 274 Interest on federal funds sold and other short-term 556 1,460 investmentsTotal interest income 84,550 91,180 Interest expense: Interest on deposits: Interest-bearing checking 98 42 Savings 321 399 Money market deposit accounts 519 1,958 Time deposits 2,927 11,990 Interest on short-term borrowings 456 557 Total interest expense 4,321 14,946 Net interest income 80,229 76,234 Less: Provision for loan losses 350 4,000 Net interest income after provision for loan 79,879 72,234 losses Noninterest income: Trustco Financial Services income 4,034 2,968 Fees for services to customers 4,690 4,122 Net gain on securities transactions - 1,155 Other 392 515 Total noninterest income 9,116 8,760 Noninterest expenses: Salaries and employee benefits 24,828 23,021 Net occupancy expense 8,914 8,691 Equipment expense 3,231 3,408 Professional services 3,046 2,663 Outsourced services 4,419 3,950 Advertising expense 903 1,089 FDIC and other insurance 1,484 903 Other real estate expense, net 179 162 Other 3,771 4,313 Total noninterest expenses 50,775 48,200 Income before taxes 38,220 32,794 Income taxes 9,704 8,227 Net income $ 28,516 24,567 Net income per common share (1): - Basic $ 1.479 1.272 - Diluted 1.478 1.272 Average basic shares (in thousands) (1) 19,284 19,316 Average diluted shares (in thousands) (1) 19,292 19,319 Note: Taxable equivalent net interest income $ 80,229 76,235 ^(1) All periods presented have been adjusted for the 1 for 5 reverse stocksplit which occurred on May 28, 2021.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)(Unaudited) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020ASSETS: Cash and due from banks $ 47,766 45,493 47,196 47,703 44,726 Federal funds sold and other short 1,134,622 1,094,880 1,059,903 908,616 908,110 term investmentsTotal cash and cash 1,182,388 1,140,373 1,107,099 956,319 952,836 equivalents Securities available for sale: U. S. government sponsored 74,579 74,465 19,968 29,996 - enterprisesStates and political 48 48 103 111 111 subdivisionsMortgage-backed securities and collateralized mortgageobligations - 315,656 348,317 316,158 309,768 331,469 residentialSmall Business Administration - guaranteedparticipation 37,199 39,232 42,217 44,070 45,998 securitiesCorporate bonds 54,647 64,839 59,939 70,113 54,439 Other securities 686 686 686 685 685 Total securities 482,815 527,587 439,071 454,743 432,702 available for sale Held to maturity securities: Mortgage-backed securities and collateralized mortgageobligations-residential 11,665 12,729 13,824 15,094 16,633 Total held to 11,665 12,729 13,824 15,094 16,633 maturity securities Federal Reserve Bank and Federal 5,604 5,506 5,506 5,506 5,506 Home Loan Bank stock Loans: Commercial 214,164 217,021 212,492 231,663 231,212 Residential mortgage loans 3,892,351 3,807,837 3,780,167 3,724,746 3,681,898 Home equity line of credit 234,214 235,644 242,194 248,320 254,445 Installment loans 8,638 8,670 9,617 9,826 10,006 Loans, net of deferred net costs 4,349,367 4,269,172 4,244,470 4,214,555 4,177,561 Less: Allowance for loan losses 50,155 49,991 49,595 49,123 48,144 Net loans 4,299,212 4,219,181 4,194,875 4,165,432 4,129,417 Bank premises and equipment, net 33,691 34,012 34,412 34,417 34,042 Operating lease right-of-use assets 45,825 46,614 47,885 47,174 48,712 Other assets 61,378 60,455 59,124 57,244 57,155 Total assets $ 6,122,578 6,046,457 5,901,796 5,735,929 5,677,003 LIABILITIES: Deposits: Demand $ 765,193 718,343 652,756 635,345 612,960 Interest-bearing checking 1,152,901 1,141,595 1,086,558 1,024,290 1,001,592 Savings accounts 1,409,556 1,362,141 1,285,501 1,235,259 1,191,682 Money market deposit accounts 732,963 719,580 716,005 699,132 666,304 Time deposits 1,169,907 1,231,263 1,296,373 1,305,024 1,392,769 Total deposits 5,230,520 5,172,922 5,037,193 4,899,050 4,865,307 Short-term borrowings 237,791 229,950 214,755 193,455 177,278 Operating lease liabilities 50,586 51,449 52,784 52,125 53,710 Accrued expenses and other 25,088 21,105 28,903 30,771 27,287 liabilities Total liabilities 5,543,985 5,475,426 5,333,635 5,175,401 5,123,582 SHAREHOLDERS' EQUITY: Capital stock (1) 20,041 20,044 20,041 20,041 20,041 Surplus (1) 256,536 256,674 256,606 256,605 256,601 Undivided profits 329,350 321,486 313,974 306,741 299,239 Accumulated other comprehensive 7,840 7,268 11,936 11,537 11,936 income, net of taxTreasury stock at cost (35,174 ) (34,441 ) (34,396 ) (34,396 ) (34,396 ) Total shareholders' 578,593 571,031 568,161 560,528 553,421 equity Total liabilities $ 6,122,578 6,046,457 5,901,796 5,735,929 5,677,003 and shareholders' equity Outstanding shares (in thousands) 19,265 19,288 19,287 19,287 19,287 (1) ^(1) All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

NONPERFORMING ASSETS (dollars in thousands)(Unaudited) 6/30/2021 3/31/2021 12/31/ 9/30/2020 6/30/2020 2020Nonperforming Assets New York and other states*Loans in nonaccrual status:Commercial $ 150 125 452 491 571 Real estate 18,466 19,826 19,379 19,977 20,215 mortgage - 1 to 4 familyInstallment 43 32 43 49 6 Total non-accrual 18,659 19,983 19,874 20,517 20,792 loansOther nonperformingreal estate mortgages - 1 20 22 23 25 26 to 4 familyTotal nonperforming 18,679 20,005 19,897 20,542 20,818 loansOther real estate 251 420 541 423 830 ownedTotal nonperforming $ 18,930 20,425 20,438 20,965 21,648 assets Florida Loans in nonaccrual status:Commercial $ - - - - - Real estate 2,142 1,626 1,187 1,254 1,111 mortgage - 1 to 4 familyInstallment - - - - - Total non-accrual 2,142 1,626 1,187 1,254 1,111 loansOther nonperformingreal estate mortgages - 1 - - - - - to 4 familyTotal nonperforming 2,142 1,626 1,187 1,254 1,111 loansOther real estate - - - - - ownedTotal nonperforming $ 2,142 1,626 1,187 1,254 1,111 assets Total Loans in nonaccrual status:Commercial $ 150 125 452 491 571 Real estate 20,608 21,452 20,566 21,231 21,326 mortgage - 1 to 4 familyInstallment 43 32 43 49 6 Total non-accrual 20,801 21,609 21,061 21,771 21,903 loansOther nonperformingreal estate mortgages - 1 20 22 23 25 26 to 4 familyTotal nonperforming 20,821 21,631 21,084 21,796 21,929 loansOther real estate 251 420 541 423 830 ownedTotal nonperforming $ 21,072 22,051 21,625 22,219 22,759 assets Quarterly Net (Recoveries) Chargeoffs New York and other states*Commercial $ - (32 ) 32 (1 ) (6 )Real estate (136 ) (2 ) (27 ) 4 (27 )mortgage - 1 to 4 familyInstallment (27 ) (14 ) 109 18 44 Total net $ (163 ) (48 ) 114 21 11 (recoveries) chargeoffs Florida Commercial $ - - - - - Real estate (1 ) - (1 ) - - mortgage - 1 to 4 familyInstallment - 2 15 - - Total net $ (1 ) 2 14 - - (recoveries) chargeoffs Total Commercial $ - (32 ) 32 (1 ) (6 )Real estate (137 ) (2 ) (28 ) 4 (27 )mortgage - 1 to 4 familyInstallment (27 ) (12 ) 124 18 44 Total net $ (164 ) (46 ) 128 21 11 (recoveries) chargeoffs Asset Quality Ratios Total nonperforming loans $ 20,821 21,631 21,084 21,796 21,929 (1)Total nonperforming 21,072 22,051 21,625 22,219 22,759 assets (1)Total net (recoveries) (164 ) (46 ) 128 21 11 chargeoffs (2) Allowance for loan losses 50,155 49,991 49,595 49,123 48,144 (1) Nonperforming loans to 0.48 % 0.51 % 0.50 % 0.52 % 0.52 %total loansNonperforming assets to 0.34 % 0.36 % 0.37 % 0.39 % 0.40 %total assetsAllowance for loan losses 1.15 % 1.17 % 1.17 % 1.17 % 1.15 %to total loansCoverage ratio (1) 240.9 % 231.1 % 235.2 % 225.4 % 219.5 %Annualized net(recoveries) chargeoffs -0.02 % 0.00 % 0.01 % 0.00 % 0.00 %to average loans (2)Allowance for loan lossesto annualized net N/A N/A 96.9x 584.8x 1094.2x (recoveries) 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, 2021 June 30, 2020 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets Securities available for sale:U. S. government $ 74,971 97 0.52 % $ 23,291 106 1.83 %sponsored enterprisesMortgage backedsecurities and collateralized mortgageobligations - 327,332 1,167 1.43 333,122 1,527 1.83 residentialState and political 48 - - 110 2 7.90 subdivisionsCorporate bonds 57,021 323 2.27 51,494 488 3.79 Small BusinessAdministration - guaranteedparticipation 36,839 193 2.09 45,260 229 2.03 securitiesOther 686 5 2.92 685 5 2.92 Totalsecurities available for 496,897 1,785 1.44 453,962 2,357 2.08 sale Federal funds sold andother short-term 1,126,298 286 0.10 727,006 193 0.11 Investments Held to maturity securities:Mortgage backedsecurities and collateralized mortgageobligations - 12,179 111 3.67 17,199 162 3.75 residential Totalheld to maturity 12,179 111 3.67 17,199 162 3.75 securities Federal Reserve Bank andFederal Home Loan Bank 5,598 65 4.64 9,332 192 8.23 stock Commercial loans 214,912 2,608 4.85 223,002 2,610 4.68 Residential mortgage 3,847,274 34,836 3.62 3,653,342 36,365 3.98 loansHome equity lines of 234,476 2,211 3.78 260,029 2,515 3.89 creditInstallment loans 8,349 153 7.34 10,044 175 7.02 Loans, net of unearned 4,305,011 39,808 3.70 4,146,417 41,665 4.02 income Total 5,945,983 42,055 2.83 5,353,916 44,569 3.33 interest earning assets Allowance for loan losses (50,196 ) (46,832 ) Cash & non-interest 197,561 195,815 earning assets Total assets $ 6,093,348 $ 5,502,899 Liabilities and shareholders' equity Deposits: Interest bearing $ 1,149,296 46 0.02 % $ 953,299 26 0.01 %checking accountsMoney market accounts 729,136 236 0.13 641,593 862 0.54 Savings 1,382,604 162 0.05 1,167,844 166 0.06 Time deposits 1,198,064 1,261 0.42 1,392,136 5,599 1.62 Total interest 4,459,100 1,705 0.15 4,154,872 6,653 0.64 bearing depositsShort-term borrowings 233,426 228 0.39 172,834 235 0.55 Total interest 4,692,526 1,933 0.17 4,327,706 6,888 0.64 bearing liabilities Demand deposits 751,719 548,178 Other liabilities 73,368 75,603 Shareholders' equity 575,735 551,412 Total liabilities and $ 6,093,348 $ 5,502,899 shareholders' equity Net interest income, tax 40,122 37,681 equivalent Net interest spread 2.66 % 2.69 % Net interest margin (net interest income tototal interest earning 2.70 % 2.81 %assets) Tax equivalent adjustment - - Net interest income 40,122 37,681

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, 2021 June 30, 2020 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets Securities available for sale:U. S. government $ 63,374 147 0.46 % $ 57,830 527 1.82 %sponsored enterprisesMortgage backedsecurities and collateralized mortgageobligations - 327,472 2,404 1.47 352,445 3,640 2.07 residentialState and political 49 1 6.60 112 4 7.74 subdivisionsCorporate bonds 60,160 639 2.12 39,913 726 3.64 Small BusinessAdministration - guaranteedparticipation 38,203 399 2.09 46,339 474 2.05 securitiesOther 687 11 3.20 685 11 3.21 Totalsecurities available for 489,945 3,601 1.47 497,324 5,382 2.16 sale Federal funds sold andother short-term 1,078,201 556 0.10 569,541 1,460 0.52 Investments Held to maturity securities:Mortgage backedsecurities and collateralized mortgageobligations - 12,723 234 3.68 17,671 337 3.81 residential Totalheld to maturity 12,723 234 3.68 17,671 337 3.81 securities Federal Reserve Bank andFederal Home Loan Bank 5,552 134 4.83 9,258 274 5.92 stock Commercial loans 213,853 5,554 5.19 210,524 5,152 4.89 Residential mortgage 3,818,426 69,687 3.65 3,627,535 72,826 4.02 loansHome equity lines of 236,417 4,471 3.81 262,745 5,383 4.12 creditInstallment loans 8,573 313 7.37 10,380 367 7.11 Loans, net of unearned 4,277,269 80,025 3.75 4,111,184 83,728 4.08 income Total 5,863,690 84,550 2.89 5,204,978 91,181 3.51 interest earning assets Allowance for loan losses (50,071 ) (45,676 ) Cash & non-interest 197,682 194,718 earning assets Total assets $ 6,011,301 $ 5,354,020 Liabilities and shareholders' equity Deposits: Interest bearing $ 1,117,113 98 0.02 % $ 912,226 42 0.01 %checking accountsMoney market accounts 727,363 519 0.14 627,897 1,958 0.63 Savings 1,349,013 321 0.05 1,142,201 399 0.07 Time deposits 1,229,838 2,927 0.48 1,381,025 11,990 1.75 Total interest 4,423,327 3,865 0.18 4,063,349 14,389 0.71 bearing depositsShort-term borrowings 228,643 456 0.40 163,251 557 0.69 Total interest 4,651,970 4,321 0.19 4,226,600 14,946 0.71 bearing liabilities Demand deposits 712,790 503,327 Other liabilities 73,276 77,303 Shareholders' equity 573,265 546,790 Total liabilities and $ 6,011,301 $ 5,354,020 shareholders' equity Net interest income, tax 80,229 76,235 equivalent Net interest spread 2.70 % 2.80 % Net interest margin (net interest income tototal interest earning 2.74 % 2.93 %assets) Tax equivalent adjustment - (1 ) Net interest income 80,229 76,234

Non-GAAP Financial Measures Reconciliation

Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders equity and total assets, respectively. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.

The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on the sale of securities and other non-routine items from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue.

We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial results. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share, efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(dollars in thousands, except per share amounts)(Unaudited) 6/30/2021 3/31/2021 6/30/2020 TangibleEquity to TangibleAssetsTotal Assets $ 6,122,578 6,046,457 5,677,003 (GAAP)Less:Intangible 553 553 553 assetsTangibleassets 6,122,025 6,045,904 5,676,450 (Non-GAAP) Equity (GAAP) 578,593 571,031 553,421 Less:Intangible 553 553 553 assetsTangibleequity 578,040 570,478 552,868 (Non-GAAP)TangibleEquity toTangible 9.44 % 9.44 % 9.74 % Assets(Non-GAAP)Equity to 9.45 % 9.44 % 9.75 % Assets (GAAP) Three months ended Six months endedEfficiency 6/30/2021 3/31/2021 6/30/2020 6/30/2021 6/30/2020Ratio Net interestincome (fullytaxable $ 40,122 40,107 37,681 $ 80,229 76,235 equivalent)(Non-GAAP)Non-interest 4,688 4,428 3,426 9,116 8,760 income (GAAP)Less: Net gain - - - - 1,155 on securitiesRevenue usedfor efficiency 44,810 44,535 41,107 89,345 83,840 ratio(Non-GAAP) Totalnoninterest 25,440 25,335 23,932 50,775 48,200 expense (GAAP)Less: Otherreal estate (60 ) 239 (32 ) 179 162 (income)expense, netExpense usedfor efficiency 25,500 25,096 23,964 50,596 48,038 ratio(Non-GAAP) Efficiency 56.91 % 56.35 % 58.30 % 56.63 % 57.30 %Ratio