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

October 21, 2021

GLENVILLE, N.Y., Oct. 21, 2021 (GLOBE NEWSWIRE) -- TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced third quarter 2021 net income of $16.8 million or $0.871 diluted earnings per share, compared to net income of $14.1 million or $0.730 diluted earnings per share for the third quarter 2020; and net income of $45.3 million or $2.349 diluted earnings per share for the nine months ended September 30, 2021, compared to net income of $38.6 million or $2.001 diluted earnings per share for the nine months ended September 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.

Overview

Robert J. McCormick, Chairman, President and Chief Executive Officer noted, Our continued strong financial results announced today are the foundation upon which we continue to build. With an always-sharp focus on new business opportunities, we have identified increasing demand for our hallmark mortgage products and have expanded our lending areas in Northern New Jersey and on both coasts of Florida. As part of these initiatives, we deployed a new mortgage loan originator in New Jersey, opened a new full-service branch location in Palm Coast, Florida, and are launching a new channel for the delivery of our core lending products by opening a loan origination office in Naples, Florida.

In September, the Company announced the addition of Curtis N. Powell to the boards of directors of TrustCo and its subsidiary, Trustco Bank. Mr. Powell is Vice President for Human Resources and Environmental Health, Safety, and Risk Management at Rensselaer Polytechnic Institute in Troy, New York. Mr. Powell adds depth to our board talent pool in the areas of human capital and risk management. Chairman McCormick said Our success-oriented approach extends from our business lines to our boardroom. Curtis Powell shares our commitment to excellence, and we have every confidence that he will be a tremendous asset as the Company navigates the highly dynamic labor market that we now see across our entire business footprint.

Mr. McCormick also congratulated the employees of Trustco Bank on receiving well-deserved recognition. He said Our management team knows that our people are the best in the business, but recently Trustco Bank has been rated Best Of in several categories by local media outlets. Our team members can be justifiably proud of this recognition. Trustco Bank also celebrated 65 years of success at its Mayfair Branch in Glenville, New York and, for the 15th straight year, turned out a formidable team for the Workforce Team Challenge with 75 entrants in the annual 3.5 mile race, held this year in Altamont, New York.

Details

Average loans were up $176.4 million or 4.2% in the third quarter 2021 over the same period in 2020. Average residential loans, our primary lending focus, were up $218.2 million, or 5.9%, in the third quarter 2021 over the same period in 2020. As of September 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 344 loans totaling $23 million in 2021. As of September 30, 2021, 349 PPP loans totaling $21 million remain outstanding. Average deposits were up $348.2 million or 7.1% for the third quarter 2021 over the same period a year earlier. The increase in deposits was the result of a $551.2 million or 15.5% 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 $202.9 million or 15.0%, for the third quarter 2021 over the same period in 2020. Within the core deposits, checking balances were up $287.2 million or 17.4% (including interest bearing and non-interest bearing checking balances), money market balances were up $56.3 million or 8.3%, and savings balances were up $207.6 million or 17.0%. 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 0.15% in the third quarter 2021 from 0.52% in the third 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 third quarter 2021 was 2.65%, down 8 basis points from 2.73% in the third quarter of 2020. Net interest income (TE) increased by 4.5% or $1.7 million over the same period last year.

The Bank continued to demonstrate its ability to grow shareholders equity as average equity was up $25.8 million or 4.6% in the third quarter of 2021 compared to the same period in 2020. Return on average assets and return on average equity for the third quarter 2021 were 1.08% and 11.40%, respectively, compared to 0.98% and 10.04% for the third 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 50 thousand shares of stock in the third quarter of 2021 under the previously announced stock repurchase plan. Additionally, on May 28, 2021, the reverse split of the Companys Common Stock at a ratio of 1 for 5 was implemented on the Nasdaq Global Select Market. 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 continued to improve as a result of low levels of nonperforming assets and chargeoffs. Nonperforming loans (NPLs) were $20.2 million at September 30, 2021, compared to $21.8 million at September 30, 2020. NPLs were 0.46% and 0.52% of total loans at September 30, 2021 and 2020, respectively. The coverage ratio, or allowance for loan losses to NPLs, was 234.7% at September 30, 2021, compared to 225.4% at September 30, 2020. Nonperforming assets (NPAs) were $20.7 million at September 30, 2021, compared to $22.2 million at September 30, 2020. The ratio of allowance for loan losses to total loans was 1.08% as of September 30, 2021 compared to 1.17% as of September 30, 2020. The allowance for loan losses was $47.4 million at September 30, 2021, compared to $49.1 million at September 30, 2020. During 2020, management increased certain allowance qualitative factors based on its assessment of the impact of the current pandemic on local, national, and global economic conditions as well as the perceived risks inherent in specific industries and credit characteristics. Based on this approach, the Company adjusted the pandemic specific provision for the third quarter of 2021. Provision for loan losses for the third quarter of 2021 was a credit of $2.8 million compared to a provision for loan losses for the third quarter of 2020 of $1.0 million. The decrease from the prior year is due to the sustained improvement in asset quality trends and economic conditions during the third quarter. 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 chargeoffs for the third quarter 2021 were $5 thousand versus net chargeoffs in the third quarter 2020 of $21 thousand. The annualized net chargeoffs ratio was 0.00% for the third quarter 2021 and 2020.

At September 30, 2021 the equity to asset ratio was 9.56%, compared to 9.77% at September 30, 2020. Book value per share at September 30, 2021 was $30.50, up 5.1% compared to $29.03 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 September 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.

Those wishing to participate in the call may dial toll-free for the United States at 1-844-200-6205, for Canada at 1-833-950-0062, and all other locations at 1-929-526-1599, Access code 817092. A replay of the call will be available for thirty days by dialing toll-free for the United States at 1-866-813-9403, for Canada at 1-226-828-7578, and all other locations at +44-204-525-0658, Access code 539783. The call will also be audio webcast at https://services.choruscall.com/links/trst211022.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 our expansion initiatives in New Jersey and Florida, our ability to retain customers, 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 Robert LeonardContact: Executive Vice President and Chief Risk Officer (518) 381-3693

TRUSTCO BANK CORP NY GLENVILLE, NY FINANCIAL HIGHLIGHTS (dollars in thousands, except per share data) (Unaudited) Three months ended 9/30/2021 6/30/2021 9/30/2020 Summary of operations Net interest income (TE) $ 39,888 40,122 38,166 (Credit) Provision for loan (2,800 ) - 1,000 lossesNoninterest income 4,295 4,688 4,341 Noninterest expense 24,697 25,440 22,674 Net income 16,762 14,433 14,071 Per share (4) Net income per share: - Basic $ 0.871 0.749 0.730 - Diluted 0.871 0.748 0.730 Cash dividends 0.341 0.341 0.341 Book value at period end 30.50 30.00 29.03 Market price at period end 31.97 34.38 26.10 At period end Full time equivalent 743 769 771 employeesFull service banking 147 147 148 offices Performance ratios Return on average assets 1.08 % 0.95 0.98 Return on average equity 11.40 10.05 10.04 Efficiency (1) 55.82 56.91 53.61 Net interest spread (TE) 2.62 2.66 2.63 Net interest margin (TE) 2.65 2.70 2.73 Dividend payout ratio 39.13 45.51 46.68 Capital ratios at period endConsolidated tangibleequity to tangible assets 9.55 % 9.44 9.76 (2)Consolidated equity to 9.56 % 9.45 9.77 assets Asset quality analysis at period endNonperforming loans to 0.46 0.48 0.52 total loansNonperforming assets to 0.34 0.34 0.39 total assetsAllowance for loan losses 1.08 1.15 1.17 to total loansCoverage ratio (3) 2.3x 2.4x 2.3x (1) Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterestincome. See Non-GAAP Financial Measures Reconciliation.(2) Non-GAAP measure; calculated as total equity less $553 of intangible assetsdivided by total assets less $553 of intangible assets. See Non-GAAP FinancialMeasures 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 stocksplit which occurred on May 28, 2021. TE = Taxable equivalent FINANCIAL HIGHLIGHTS, Continued (dollars in thousands, except per share data) (Unaudited) Nine months ended 09/30/21 09/30/20 Summary of operations Net interest income (TE) $ 120,117 114,401 (Credit) Provision for loan (2,450 ) 5,000 lossesNet gain on securities - 1,155 transactionsNoninterest income,excluding net gain on 13,411 11,946 securities transactionsNoninterest expense 75,472 70,874 Net income 45,278 38,638 Per share (2) Net income per share: - Basic $ 2.349 2.002 - Diluted 2.349 2.001 Cash dividends 1.022 1.022 Book value at period end 30.50 29.03 Market price at period end 31.97 26.10 Performance ratios Return on average assets 1.00 0.94 Return on average equity 10.50 9.38 Efficiency (1) 56.36 56.06 Net interest spread (TE) 2.67 2.74 Net interest margin (TE) 2.71 2.86 Dividend payout ratio 43.50 51.03 (1) Calculated as noninterest expense (excluding ORE income/expense) divided bytaxable equivalent netinterest income plus noninterest income. See Non-GAAPFinancial 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 9/30/2021 6/30/2021 3/31/2021 12/31/ 9/30/2020 2020Interest and dividend income:Interest and fees on loans $ 39,488 39,808 40,217 40,906 41,330 Interest and dividends onsecurities available for sale:U. S. government sponsored 91 97 50 27 14 enterprisesState and political 1 - 1 2 1 subdivisionsMortgage-backed securitiesand collateralized mortgage 1,038 1,167 1,237 1,172 1,319 obligations - residentialCorporate bonds 220 323 316 349 646 Small BusinessAdministration - 181 193 206 212 216 guaranteedparticipationsecuritiesOther securities 5 5 6 7 5 Total interest anddividends on securities 1,536 1,785 1,816 1,769 2,201 available for sale Interest on held to maturity securities:Mortgage-backed securitiesand collateralized 104 111 123 129 138 mortgageobligations -residentialTotal interest on held to 104 111 123 129 138 maturity securities Federal Reserve Bank andFederal Home Loan Bank 64 65 69 70 77 stock Interest on federal fundssold and other short-term 470 286 270 246 242 investmentsTotal interest income 41,662 42,055 42,495 43,120 43,988 Interest expense: Interest on deposits: Interest-bearing checking 38 46 52 51 55 Savings 154 162 159 156 161 Money market deposit 202 236 283 447 637 accountsTime deposits 1,149 1,261 1,666 3,053 4,749 Interest on short-term 232 228 228 232 221 borrowingsTotal interest expense 1,775 1,933 2,388 3,939 5,823 Net interest income 39,887 40,122 40,107 39,181 38,165 Less: (Credit) Provision (2,800 ) - 350 600 1,000 for loan lossesNet interest income after 42,687 40,122 39,757 38,581 37,165 provision for loan losses Noninterest income: Trustco Financial Services 1,558 1,999 2,035 1,527 1,784 incomeFees for services to 2,531 2,486 2,204 2,365 2,292 customersOther 206 203 189 177 265 Total noninterest income 4,295 4,688 4,428 4,069 4,341 Noninterest expenses: Salaries and employee 11,909 12,403 12,425 11,727 10,899 benefitsNet occupancy expense 4,259 4,328 4,586 4,551 4,277 Equipment expense 1,628 1,600 1,631 1,621 1,607 Professional services 1,483 1,614 1,432 1,644 1,311 Outsourced services 2,015 2,169 2,250 1,925 1,875 Advertising expense 310 549 354 527 305 FDIC and other insurance 746 777 707 657 660 Other real estate (income) 32 (60 ) 239 45 (115 )expense, netOther 2,315 2,060 1,711 2,133 1,855 Total noninterest expenses 24,697 25,440 25,335 24,830 22,674 Income before taxes 22,285 19,370 18,850 17,820 18,832 Income taxes 5,523 4,937 4,767 4,006 4,761 Net income $ 16,762 14,433 14,083 13,814 14,071 Net income per common share (1):- Basic $ 0.871 0.749 0.730 0.716 0.730 - Diluted 0.871 0.748 0.730 0.716 0.730 Average basic shares (in 19,249 19,281 19,287 19,287 19,287 thousands) (1)Average diluted shares (in 19,252 19,290 19,293 19,288 19,288 thousands) (1) Note: Taxable equivalent $ 39,888 40,122 40,107 39,182 38,166 net interest income (1) All periods presented have been adjusted for the 1 for 5 reverse stocksplit which occurred on May 28, 2021. CONSOLIDATED STATEMENTS OF INCOME, Continued (dollars in thousands, except per share data) (Unaudited) Nine months ended 09/30/21 09/30/20 Interest and dividend income:Interest and fees on loans $ 119,513 125,058 Interest and dividends onsecurities available for sale:U. S. government sponsored 238 541 enterprisesState and political 2 4 subdivisionsMortgage-backed securitiesand collateralized mortgage 3,442 4,959 obligations - residentialCorporate bonds 859 1,372 Small BusinessAdministration - guaranteed 580 690 participation securitiesOther securities 16 16 Total interest anddividends on securities 5,137 7,582 available for sale Interest on held to maturity securities:Mortgage-backed 338 475 securities-residentialTotal interest on held to 338 475 maturity securities Federal Reserve Bank andFederal Home Loan Bank 198 351 stock Interest on federal fundssold and other short-term 1,026 1,702 investmentsTotal interest income 126,212 135,168 Interest expense: Interest on deposits: Interest-bearing checking 136 97 Savings 475 560 Money market deposit 721 2,595 accountsTime deposits 4,076 16,739 Interest on short-term 688 778 borrowingsTotal interest expense 6,096 20,769 Net interest income 120,116 114,399 Less: (Credit) Provision (2,450 ) 5,000 for loan lossesNet interest income after 122,566 109,399 provision for loan losses Noninterest income: Trustco Financial Services 5,592 4,752 incomeFees for services to 7,221 6,414 customersNet gain on securities - 1,155 transactionsOther 598 780 Total noninterest income 13,411 13,101 Noninterest expenses: Salaries and employee 36,737 33,920 benefitsNet occupancy expense 13,173 12,968 Equipment expense 4,859 5,015 Professional services 4,529 3,974 Outsourced services 6,434 5,825 Advertising expense 1,213 1,394 FDIC and other insurance 2,230 1,563 Other real estate expense, 211 47 netOther 6,086 6,168 Total noninterest expenses 75,472 70,874 Income before taxes 60,505 51,626 Income taxes 15,227 12,988 Net income $ 45,278 38,638 Net income per common share (1):- Basic $ 2.349 2.002 - Diluted 2.349 2.001 Average basic shares (in 19,272 19,306 thousands) (1)Average diluted shares (in 19,278 19,308 thousands) (1) Note: Taxable equivalent $ 120,117 114,401 net interest income (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) 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 ASSETS: Cash and due from banks $ 45,486 47,766 45,493 47,196 47,703 Federal funds sold andother short term 1,147,853 1,134,622 1,094,880 1,059,903 908,616 investmentsTotal cash and cash 1,193,339 1,182,388 1,140,373 1,107,099 956,319 equivalents Securities available for sale:U. S. government sponsored 59,749 74,579 74,465 19,968 29,996 enterprisesStates and political 48 48 48 103 111 subdivisionsMortgage-backed securitiesand collateralized mortgage 293,585 315,656 348,317 316,158 309,768 obligations - residentialSmall BusinessAdministration - guaranteed 34,569 37,199 39,232 42,217 44,070 participation securitiesCorporate bonds 45,915 54,647 64,839 59,939 70,113 Other securities 686 686 686 686 685 Total securities available 434,552 482,815 527,587 439,071 454,743 for sale Held to maturity securities:Mortgage-backed securitiesand collateralized mortgage 10,701 11,665 12,729 13,824 15,094 obligations-residentialTotal held to maturity 10,701 11,665 12,729 13,824 15,094 securities Federal Reserve Bank andFederal Home Loan Bank 5,604 5,604 5,506 5,506 5,506 stock Loans: Commercial 204,679 214,164 217,021 212,492 231,663 Residential mortgage loans 3,951,285 3,892,351 3,807,837 3,780,167 3,724,746 Home equity line of credit 231,314 234,214 235,644 242,194 248,320 Installment loans 9,451 8,638 8,670 9,617 9,826 Loans, net of deferred net 4,396,729 4,349,367 4,269,172 4,244,470 4,214,555 costs Less: Allowance for loan 47,350 50,155 49,991 49,595 49,123 lossesNet loans 4,349,379 4,299,212 4,219,181 4,194,875 4,165,432 Bank premises and 33,233 33,691 34,012 34,412 34,417 equipment, netOperating lease 45,836 45,825 46,614 47,885 47,174 right-of-use assetsOther assets 62,191 61,378 60,455 59,124 57,244 Total assets $ 6,134,835 6,122,578 6,046,457 5,901,796 5,735,929 LIABILITIES: Deposits: Demand $ 790,663 765,193 718,343 652,756 635,345 Interest-bearing checking 1,148,593 1,152,901 1,141,595 1,086,558 1,024,290 Savings accounts 1,433,130 1,409,556 1,362,141 1,285,501 1,235,259 Money market deposit 744,051 732,963 719,580 716,005 699,132 accountsTime deposits 1,124,581 1,169,907 1,231,263 1,296,373 1,305,024 Total deposits 5,241,018 5,230,520 5,172,922 5,037,193 4,899,050 Short-term borrowings 230,770 237,791 229,950 214,755 193,455 Operating lease liabilities 50,515 50,586 51,449 52,784 52,125 Accrued expenses and other 25,849 25,088 21,105 28,903 30,771 liabilities Total liabilities 5,548,152 5,543,985 5,475,426 5,333,635 5,175,401 SHAREHOLDERS' EQUITY: Capital stock (1) 20,042 20,041 20,044 20,041 20,041 Surplus (1) 256,565 256,536 256,674 256,606 256,605 Undivided profits 339,554 329,350 321,486 313,974 306,741 Accumulated othercomprehensive income, net 7,304 7,840 7,268 11,936 11,537 of taxTreasury stock at cost (36,782 ) (35,174 ) (34,441 ) (34,396 ) (34,396 ) Total shareholders' equity 586,683 578,593 571,031 568,161 560,528 Total liabilities and $ 6,134,835 6,122,578 6,046,457 5,901,796 5,735,929 shareholders' equity Outstanding shares (in 19,216 19,265 19,288 19,287 19,287 thousands) (1) (1) All periods presented have been adjusted for the 1 for 5 reverse stocksplit which occurred on May 28, 2021.

NONPERFORMING ASSETS (dollars in thousands)(Unaudited) 9/30/ 6/30/ 3/31/ 12/31/ 9/30/ 2021 2021 2021 2020 2020Nonperforming Assets New York and other states* Loans in nonaccrual status:Commercial $ 176 150 125 452 491 Real estate mortgage - 1 17,878 18,466 19,826 19,379 19,977 to 4 familyInstallment 32 43 32 43 49 Total non-accrual loans 18,086 18,659 19,983 19,874 20,517 Other nonperforming realestate mortgages - 1 to 4 19 20 22 23 25 familyTotal nonperforming loans 18,105 18,679 20,005 19,897 20,542 Other real estate owned 511 251 420 541 423 Total nonperforming assets $ 18,616 18,930 20,425 20,438 20,965 Florida Loans in nonaccrual status:Commercial $ - - - - - Real estate mortgage - 1 2,066 2,142 1,626 1,187 1,254 to 4 familyInstallment - - - - - Total non-accrual loans 2,066 2,142 1,626 1,187 1,254 Other nonperforming realestate mortgages - 1 to 4 - - - - - familyTotal nonperforming loans 2,066 2,142 1,626 1,187 1,254 Other real estate owned - - - - - Total nonperforming assets $ 2,066 2,142 1,626 1,187 1,254 Total Loans in nonaccrual status:Commercial $ 176 150 125 452 491 Real estate mortgage - 1 19,944 20,608 21,452 20,566 21,231 to 4 familyInstallment 32 43 32 43 49 Total non-accrual loans 20,152 20,801 21,609 21,061 21,771 Other nonperforming realestate mortgages - 1 to 4 19 20 22 23 25 familyTotal nonperforming loans 20,171 20,821 21,631 21,084 21,796 Other real estate owned 511 251 420 541 423 Total nonperforming assets $ 20,682 21,072 22,051 21,625 22,219 Quarterly Net (Recoveries) Chargeoffs New York and other states* Commercial $ 30 - (32 ) 32 (1 )Real estate mortgage - 1 (39 ) (136 ) (2 ) (27 ) 4 to 4 familyInstallment 14 (27 ) (14 ) 109 18 Total net chargeoffs $ 5 (163 ) (48 ) 114 21 (recoveries) Florida Commercial $ - - - - - Real estate mortgage - 1 - (1 ) - (1 ) - to 4 familyInstallment - - 2 15 - Total net chargeoffs $ - (1 ) 2 14 - (recoveries) Total Commercial $ 30 - (32 ) 32 (1 )Real estate mortgage - 1 (39 ) (137 ) (2 ) (28 ) 4 to 4 familyInstallment 14 (27 ) (12 ) 124 18 Total net chargeoffs $ 5 (164 ) (46 ) 128 21 (recoveries) Asset Quality Ratios Total nonperforming loans $ 20,171 20,821 21,631 21,084 21,796 (1)Total nonperforming assets 20,682 21,072 22,051 21,625 22,219 (1)Total net chargeoffs 5 (164 ) (46 ) 128 21 (recoveries) (2) Allowance for loan losses 47,350 50,155 49,991 49,595 49,123 (1) Nonperforming loans to 0.46 % 0.48 % 0.51 % 0.50 % 0.52 %total loansNonperforming assets to 0.34 % 0.34 % 0.36 % 0.37 % 0.39 %total assetsAllowance for loan losses 1.08 % 1.15 % 1.17 % 1.17 % 1.17 %to total loansCoverage ratio (1) 234.7 % 240.9 % 231.1 % 235.2 % 225.4 %Annualized net chargeoffs(recoveries) to average 0.00 % -0.02 % 0.00 % 0.01 % 0.00 %loans (2)Allowance for loan losses toannualized net chargeoffs 2367.5 x N/A N/A 96.9 x 584.8 x(recoveries) (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 September 30, 2021 September 30, 2020 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets Securities available for sale:U. S. government $ 68,505 91 0.53 % $ 12,391 14 0.45 %sponsored enterprisesMortgage backedsecurities andcollateralized 300,765 1,038 1.38 313,296 1,319 1.68 mortgageobligations- residentialState and political 48 2 6.66 110 2 7.90 subdivisionsCorporate bonds 48,543 220 1.81 59,555 646 4.33 Small BusinessAdministration - guaranteedparticipation 34,578 181 2.09 43,282 216 1.99 securitiesOther 686 5 2.92 685 5 2.92 Total securities 453,125 1,537 1.36 429,319 2,202 2.05 available for sale Federal funds soldand other short-term 1,166,679 470 0.16 938,087 242 0.10 Investments Held to maturity securities:Mortgage backedsecurities andcollateralized 11,168 104 3.72 15,759 138 3.52 mortgage obligations- residential Total held to 11,168 104 3.72 15,759 138 3.52 maturity securities Federal Reserve Bankand Federal Home Loan 5,604 64 4.57 5,506 77 5.59 Bank stock Commercial loans 210,825 2,649 5.03 231,517 2,625 4.54 Residential mortgage 3,920,903 34,532 3.52 3,702,680 36,020 3.89 loansHome equity lines of 231,269 2,152 3.69 251,459 2,515 3.98 creditInstallment loans 8,669 155 7.10 9,632 170 7.02 Loans, net of 4,371,666 39,488 3.61 4,195,288 41,330 3.94 unearned income Total interest 6,008,242 41,663 2.77 5,583,959 43,989 3.15 earning assets Allowance for loan (50,160 ) (48,483 ) lossesCash & non-interest 195,902 201,018 earning assets Total assets $ 6,153,984 $ 5,736,494 Liabilities and shareholders' equity Deposits: Interest bearing $ 1,153,812 38 0.01 % $ 1,024,455 55 0.02 %checking accountsMoney market accounts 738,662 202 0.11 682,319 637 0.37 Savings 1,430,558 154 0.04 1,222,956 161 0.05 Time deposits 1,152,298 1,149 0.40 1,355,244 4,749 1.39 Total interest 4,475,330 1,543 0.14 4,284,974 5,602 0.52 bearing depositsShort-term borrowings 240,183 232 0.38 193,765 221 0.45 Total interest 4,715,513 1,775 0.15 4,478,739 5,823 0.52 bearing liabilities Demand deposits 780,163 622,313 Other liabilities 75,116 78,093 Shareholders' equity 583,192 557,349 Total liabilities and $ 6,153,984 $ 5,736,494 shareholders' equity Net interest income, 39,888 38,166 tax equivalent Net interest spread 2.62 % 2.63 % Net interest margin(net interest income 2.65 % 2.73 %to total interestearning assets) Tax equivalent (1 ) (1 ) adjustment Net interest income 39,887 38,165 DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -INTEREST RATES AND INTEREST DIFFERENTIAL, Continued (dollars in thousands)(Unaudited) Nine months ended Nine months ended September 30, 2021 September 30, 2020 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets Securities available for sale:U. S. government $ 65,103 238 0.49 % $ 42,573 541 1.69 %sponsored enterprisesMortgage backedsecurities andcollateralized 318,472 3,442 1.44 339,300 4,959 1.95 mortgage obligations- residentialState and political 49 3 8.16 111 6 7.79 subdivisionsCorporate bonds 56,245 859 2.04 46,508 1,372 3.93 Small BusinessAdministration - guaranteedparticipation 36,981 580 2.09 45,313 690 2.03 securitiesOther 686 16 3.11 685 16 3.11 Total securities 477,536 5,138 1.43 474,490 7,584 2.13 available for sale Federal funds soldand other short-term 1,108,018 1,026 0.12 693,286 1,702 0.33 Investments Held to maturity securities:Mortgage backedsecurities andcollateralized 12,199 338 3.70 17,029 475 3.72 mortgage obligations- residential Total held to 12,199 338 3.70 17,029 475 3.72 maturity securities Federal Reserve Bankand Federal Home Loan 5,570 198 4.74 7,998 351 5.85 Bank stock Commercial loans 212,832 8,203 5.14 217,573 7,778 4.77 Residential mortgage 3,852,960 104,219 3.61 3,652,766 108,845 3.97 loansHome equity lines of 234,682 6,622 3.77 258,956 7,898 4.07 creditInstallment loans 8,608 469 7.28 10,129 537 7.08 Loans, net of 4,309,082 119,513 3.70 4,139,424 125,058 4.03 unearned income Total interest 5,912,405 126,213 2.85 5,332,227 135,170 3.38 earning assets Allowance for loan (50,101 ) (46,618 ) lossesCash & non-interest 196,876 196,835 earning assets Total assets $ 6,059,180 $ 5,482,444 Liabilities and shareholders' equity Deposits: Interest bearing $ 1,129,480 136 0.02 % $ 949,909 97 0.01 %checking accountsMoney market accounts 731,171 721 0.13 646,170 2,595 0.54 Savings 1,376,494 475 0.05 1,169,316 560 0.06 Time deposits 1,203,708 4,076 0.45 1,372,369 16,739 1.63 Total interest 4,440,853 5,408 0.16 4,137,764 19,991 0.65 bearing depositsShort-term borrowings 232,532 688 0.40 173,497 778 0.60 Total interest 4,673,385 6,096 0.17 4,311,261 20,769 0.64 bearing liabilities Demand deposits 735,495 543,279 Other liabilities 73,689 77,568 Shareholders' equity 576,611 550,336 Total liabilities and $ 6,059,180 $ 5,482,444 shareholders' equity Net interest income, 120,117 114,401 tax equivalent Net interest spread 2.67 % 2.74 % Net interest margin(net interest income 2.71 % 2.86 %to total interestearning assets) Tax equivalent (1 ) (2 ) adjustment Net interest income 120,116 114,399

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) 9/30/2021 6/30/2021 9/30/2020 TangibleEquity to TangibleAssetsTotal Assets $ 6,134,835 6,122,578 5,735,929 (GAAP)Less:Intangible 553 553 553 assetsTangibleassets 6,134,282 6,122,025 5,735,376 (Non-GAAP) Equity 586,683 578,593 560,528 (GAAP)Less:Intangible 553 553 553 assetsTangibleequity 586,130 578,040 559,975 (Non-GAAP)TangibleEquity toTangible 9.55 % 9.44 % 9.76 % Assets(Non-GAAP)Equity toAssets 9.56 % 9.45 % 9.77 % (GAAP) Three months ended Nine months endedEfficiency 9/30/2021 6/30/2021 9/30/2020 9/30/ 9/30/ Ratio 2021 2020 Net interestincome(fully $ 39,888 40,122 38,166 $ 120,117 114,401 taxableequivalent)(Non-GAAP)Non-interestincome 4,295 4,688 4,341 13,411 13,101 (GAAP)Less: Netgain on - - - - 1,155 securitiesRevenue usedforefficiency 44,183 44,810 42,507 133,528 126,347 ratio(Non-GAAP) Totalnoninterest 24,697 25,440 22,674 75,472 70,874 expense(GAAP)Less: Otherreal estateexpense 32 (60 ) (115 ) 211 47 (income),netExpense usedforefficiency 24,665 25,500 22,789 75,261 70,827 ratio(Non-GAAP) Efficiency 55.82 % 56.91 % 53.61 % 56.36 % 56.06 %Ratio