TrustCo Bank Corp NY (NASDAQ:TRST) Q1 2021 Earnings Conference Call April 22, 2021 9:00 AM ET Company Participants Robert J. McCormick – Chairman, President and Chief Executive Officer Michael Ozimek – Chief Financial Officer Scot Salvador – Chief Lending Officer Conference Call Participants Alex Twerdahl – Piper Sandler Operator Good day, and welcome to the TrustCo Bank Corp Earnings Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2020 Or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 5 SARNOWSKI DRIVE, GLENVILLE, NEW YORK 12302 (Address of principal executive offices) (Zip Code) Registra ...

TrustCo Bank Corp NY (NASDAQ:TRST) Q4 2020 Earnings Conference Call January 22, 2021 9:00 AM ET Company Participants Robert McCormick - President, Chief Executive Officer Michael Ozimek - Executive Vice President, Chief Financial Officer Scot Salvador - Executive Vice President, Chief Lending Officer Conference Call Participants Alex Twerdahl - Piper Sandler Operator Good morning everyone and welcome to the TrustCo Bank Corp earnings call and webcast. All participants will be in a listen-only mode. Should y ...

```markdown Part I. FINANCIAL INFORMATION [Item 1. Consolidated Interim Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Consolidated%20Interim%20Financial%20Statements%20(Unaudited)) The unaudited consolidated interim financial statements for TrustCo Bank Corp NY as of September 30, 2020, show a year-over-year decrease in net income and comprehensive income for both the third quarter and the first nine months. Total assets, loans, and deposits grew compared to year-end 2019, while the allowance for loan losses was increased, reflecting the economic environment. The company's capital ratios remain strong and well above regulatory requirements [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) For the third quarter of 2020, net income was $14.1 million, a decrease from $14.7 million in the same period of 2019. For the nine-month period, net income fell to $38.6 million from $43.9 million year-over-year. The decline was primarily driven by a decrease in net interest income and a $5.0 million provision for loan losses in 2020, compared to a credit for loan losses in 2019 | Metric (in thousands, except per share) | Q3 2020 | Q3 2019 | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $38,165 | $38,643 | $114,399 | $117,566 | | Provision for Loan Losses | $1,000 | $- | $5,000 | $(41) | | **Net Income** | **$14,071** | **$14,708** | **$38,638** | **$43,933** | | Diluted EPS | $0.146 | $0.152 | $0.400 | $0.453 | [Consolidated Statements of Financial Condition](index=5&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) As of September 30, 2020, total assets increased to $5.74 billion from $5.22 billion at the end of 2019. This growth was primarily fueled by a significant rise in cash and cash equivalents (from $457 million to $956 million) and an increase in net loans. Total deposits also saw substantial growth, rising to $4.90 billion from $4.45 billion over the same period | Metric (in thousands) | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Total Cash and Cash Equivalents | $956,319 | $456,846 | | Net Loans | $4,165,432 | $4,017,879 | | **Total Assets** | **$5,735,929** | **$5,221,322** | | Total Deposits | $4,899,050 | $4,450,016 | | Total Shareholders' Equity | $560,528 | $538,257 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2020, the company experienced a net increase in cash and cash equivalents of $499.5 million, a significant reversal from the $53.0 million decrease in the prior-year period. This was driven by strong cash inflows from financing activities, primarily a $449.0 million net increase in deposits, which far outpaced the net cash used in investing activities | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $47,906 | $49,771 | | Net Cash used in Investing Activities | $(19,013) | $(261,063) | | Net Cash from Financing Activities | $470,580 | $158,260 | | **Net Increase (Decrease) in Cash** | **$499,473** | **$(53,032)** | [Notes to Consolidated Interim Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Interim%20Financial%20Statements) The notes provide detailed information on the company's financial position and performance. Key areas include the composition of the loan portfolio, which grew to $4.21 billion, and the related allowance for loan losses, which increased to $49.1 million due to a $5.0 million provision. The company provided significant COVID-19 related loan deferrals, which decreased from $190 million at June 30 to $7 million by September 30, 2020. The company's capital ratios remain well above regulatory minimums, classifying it as 'well capitalized' - Total loans grew to **$4.21 billion** as of September 30, 2020, up from **$4.06 billion** at year-end 2019, with first mortgages on 1-to-4 family properties comprising the largest portion of the portfolio at **$3.65 billion**[45](index=45&type=chunk) - The allowance for loan losses increased to **$49.1 million** at September 30, 2020, from **$44.3 million** at the beginning of the year, primarily due to a **$5.0 million** provision for loan losses[56](index=56&type=chunk) - COVID-19 related loan modifications and payment deferrals totaled approximately **$7 million** as of September 30, 2020, a significant reduction from approximately **$190 million** as of June 30, 2020, as many loans returned to regular payment schedules[75](index=75&type=chunk)[123](index=123&type=chunk) - As of September 30, 2020, the Bank was categorized as '**well capitalized**' under the regulatory framework, with all capital ratios significantly exceeding the minimum requirements[116](index=116&type=chunk)[117](index=117&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the slight decrease in Q3 2020 net income to a compressed net interest margin (2.73% vs. 3.04% in Q3 2019) and a $1.0 million provision for loan losses due to COVID-19 uncertainty. These negative impacts were partially offset by a $1.4 million reduction in noninterest expenses. The balance of COVID-related loan deferrals dropped sharply from $190 million in Q2 to $7 million in Q3. The company maintained strong capital and liquidity, and continued to grow its loan and deposit portfolios [COVID-19 Impact](index=43&type=section&id=COVID-19%20Impact) The company actively managed the impact of COVID-19 by providing loan deferrals, which saw a significant decrease from 752 loans totaling $189.7 million at June 30, 2020, to just 30 loans totaling $7.2 million at September 30, 2020. Additionally, the company participated in the Paycheck Protection Program (PPP), processing 663 loans totaling $45.7 million | COVID-19 Loan Deferrals | June 30, 2020 | September 30, 2020 | | :--- | :--- | :--- | | Number of Loans | 752 | 30 | | Outstanding Balance | $189.7 million | $7.2 million | - As of September 30, 2020, the company had processed **663** Paycheck Protection Program (PPP) loans totaling **$45.7 million**[142](index=142&type=chunk) [Financial Overview and Net Interest Income](index=49&type=section&id=Financial%20Overview%20and%20Net%20Interest%20Income) Q3 2020 net income was $14.1 million, down slightly from $14.7 million in Q3 2019. The key driver of this change was a 31 basis point decline in the net interest margin to 2.73%, caused by a sharp drop in yields on interest-earning assets, particularly Federal Funds, which outpaced the reduction in deposit costs. Average interest-earning assets grew by $501.2 million year-over-year - The taxable equivalent net interest margin for Q3 2020 was **2.73%**, a decrease of **31 basis points** from **3.04%** in Q3 2019[156](index=156&type=chunk)[164](index=164&type=chunk) - The margin compression was primarily due to a **209 basis point** decrease in the average yield on Federal Funds sold and other short-term investments, coupled with a **32 basis point** drop in the average loan portfolio yield[164](index=164&type=chunk) - The average rate paid on interest-bearing liabilities decreased by **42 basis points** to **0.52%** in Q3 2020, partially offsetting the decline in asset yields[164](index=164&type=chunk) [Nonperforming Assets and Allowance for Loan Losses](index=55&type=section&id=Nonperforming%20Assets%20and%20Allowance%20for%20Loan%20Losses) Nonperforming loans (NPLs) remained relatively stable at $21.8 million at September 30, 2020. The allowance for loan losses increased to $49.1 million, or 1.17% of total loans, up from 1.09% at year-end 2019. A provision for loan losses of $1.0 million was recorded in Q3 2020, primarily due to economic uncertainty from COVID-19 | Metric | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Nonperforming Loans | $21.8 million | $20.9 million | | Allowance for Loan Losses | $49.1 million | $44.3 million | | Allowance as % of Loans | 1.17% | 1.09% | - The provision for loan losses was **$1.0 million** for Q3 2020, compared to no provision in Q3 2019, reflecting increased economic uncertainty[197](index=197&type=chunk) [Noninterest Income and Expense](index=59&type=section&id=Noninterest%20Income%20and%20Expense) For Q3 2020, noninterest income decreased to $4.3 million from $4.9 million in the prior year. Noninterest expenses showed improvement, declining by $1.4 million to $22.7 million, primarily due to an $826 thousand decrease in salaries and employee benefits, reflecting successful cost control measures - Total noninterest income for Q3 2020 was **$4.3 million**, a decrease from **$4.9 million** in Q3 2019[205](index=205&type=chunk) - Total noninterest expenses decreased by **$1.4 million** year-over-year to **$22.7 million** in Q3 2020, largely driven by lower salaries and benefits expense[207](index=207&type=chunk) [Capital Resources](index=60&type=section&id=Capital%20Resources) The company maintained a strong capital position, with total shareholders' equity rising to $560.5 million. All capital ratios for both the Bank and the consolidated company significantly exceeded the levels required to be considered 'well-capitalized'. The company declared a quarterly dividend of $0.068125 per share, resulting in a dividend payout ratio of 46.68% - Both TrustCo and Trustco Bank's capital levels exceeded the minimum standards to be considered '**well-capitalized**' as of September 30, 2020[212](index=212&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) - A dividend of **$0.068125 per share** was declared in Q3 2020, representing a payout ratio of **46.68%** of net income[211](index=211&type=chunk) - The company's share repurchase program was suspended in **April 2020** and expired in **June 2020**. No shares were repurchased during the third quarter[217](index=217&type=chunk)[239](index=239&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's principal market risk is identified as interest rate risk. Management actively responds to changes in interest rates to meet earnings goals while positioning for future rate shifts. The COVID-19 pandemic is noted as a factor that may adversely affect the company's sensitivity to market interest rates - The company's primary market risk is **interest rate risk**, which it manages through its asset/liability strategies[231](index=231&type=chunk) - Market disruptions from the COVID-19 pandemic could increase funding costs or intensify pricing competition for loans, potentially impacting earnings[232](index=232&type=chunk) [Item 4. Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation conducted by management, including the CEO and CFO, the company's disclosure controls and procedures were concluded to be effective as of September 30, 2020. There were no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[234](index=234&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[236](index=236&type=chunk) Part II. OTHER INFORMATION [Item 1. Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings for the period - None[237](index=237&type=chunk) [Item 1A. Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) There were no material changes to the risk factors previously disclosed in the company's 2019 Annual Report on Form 10-K or its Q1 2020 Form 10-Q - No material changes to previously disclosed risk factors were reported[238](index=238&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's stock repurchase program, approved in June 2019, was suspended in April 2020 and subsequently expired on June 6, 2020. No shares were repurchased during the third quarter of 2020 - The company's stock repurchase program was suspended in **April 2020** and expired in **June 2020**[239](index=239&type=chunk) ```

TrustCo Bank Corp NY (NASDAQ:TRST) Q3 2020 Earnings Conference Call October 22, 2020 9:00 AM ET Company Participants Robert McCormick - Chairman, President and CEO Michael Ozimek - EVP and CFO Scot Salvador - EVP and Chief Lending Officer Conference Call Participants Alex Twerdahl - Piper Sandler Operator Good day, and welcome to the TrustCo Bank Corp Earnings Call and Webcast. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to _________ Commission File Number 0-10592 TRUSTCO BANK CORP NY (Exact name of registrant as specified in its charter) Indicate by check mark whether the regi ...

Start Time: 09:00 January 1, 0000 9:24 AM ET TrustCo Bank Corp NY (NASDAQ:TRST) Q2 2020 Earnings Conference Call July 22, 2020, 09:00 AM ET Company Participants Robert McCormick - Chairman, President and CEO Michael Ozimek - EVP and CFO Scot Salvador - EVP and Chief Lending Officer Conference Call Participants Alex Twerdahl - Piper Sandler Operator Good day, and welcome to TrustCo Bank Corp Earnings Call and Webcast. All participants will be in listen-only mode. [Operator Instructions]. After today's presen ...

[Part I. FINANCIAL INFORMATION](index=4&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Interim Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Interim%20Financial%20Statements%20(Unaudited)) The unaudited Q1 2020 financial statements show decreased net income and initial COVID-19 impacts, including higher loan loss provisions [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q1 2020 decreased to $13.3 million, primarily due to a higher provision for loan losses and lower net interest income Consolidated Statements of Income Highlights (in thousands, except per share data) | Metric | Three months ended March 31, 2020 | Three months ended March 31, 2019 | | :--- | :--- | :--- | | Net Interest Income | $38,553 | $39,732 | | Provision for loan losses | $2,000 | $300 | | Noninterest Income | $5,334 | $4,637 | | Noninterest Expenses | $24,268 | $24,867 | | Net Income | $13,313 | $14,558 | | Diluted EPS | $0.138 | $0.150 | - The provision for loan losses significantly increased to **$2.0 million** in Q1 2020 from **$300 thousand** in Q1 2019, reflecting anticipated economic impacts from the COVID-19 pandemic[7](index=7&type=chunk) - Noninterest income increased, largely due to a **$1.155 million** net gain on securities transactions in Q1 2020, which was absent in the prior-year period[7](index=7&type=chunk) [Consolidated Statements of Financial Condition](index=7&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) As of March 31, 2020, total assets increased to $5.26 billion, primarily driven by a rise in net loans Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Assets | $5,256,647 | $5,221,322 | | Net Loans | $4,053,237 | $4,017,879 | | Securities Available for Sale | $503,166 | $573,823 | | Total Deposits | $4,481,828 | $4,450,016 | | Total Shareholders' Equity | $548,185 | $538,257 | [Notes to Consolidated Interim Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Interim%20Financial%20Statements) The notes detail accounting policies, investment and loan portfolios, and the significant impact of COVID-19, including loan deferrals and CECL adoption delay - The loan portfolio totaled **$4.1 billion**, with the vast majority (**$3.54 billion**) in 1-to-4 family first mortgages[40](index=40&type=chunk) - The allowance for loan losses increased to **$46.2 million** at March 31, 2020, from **$44.3 million** at year-end 2019, with a provision of **$2.0 million** taken during the quarter[48](index=48&type=chunk) - Due to the COVID-19 pandemic, the company has provided loan modifications and payment deferrals totaling approximately **$4.9 million** through March 31, 2020[102](index=102&type=chunk) - The Company elected to delay its adoption of the new credit loss standard (ASU 2016-13 / CECL) as permitted by the CARES Act, until the national emergency concerning COVID-19 is terminated or December 31, 2020, whichever is first[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2020 net income decline to lower net interest margin and increased loan loss provisions due to COVID-19, while maintaining strong capital [COVID-19 Impact](index=45&type=section&id=COVID-19%20Impact) The company responded to COVID-19 by providing loan deferrals and participating in the PPP, while increasing loan loss provisions COVID-19 Loan Deferrals as of April 28, 2020 | Loan Type | Number of Loans | Outstanding Balance (in thousands) | | :--- | :--- | :--- | | Commercial | 70 | $40,489 | | Residential mortgage loans | 494 | $110,430 | | Home equity line of credit | 34 | $2,433 | | Installment loans | 5 | $197 | | **Total** | **603** | **$153,549** | - The company is participating in the Paycheck Protection Program (PPP) and had processed **405 loans** totaling **$33.8 million** as of April 28, 2020[120](index=120&type=chunk) [Financial Overview](index=50&type=section&id=Financial%20Overview) Q1 2020 net income decreased to $13.3 million due to lower net interest income and a higher provision for loan losses Key Performance Metrics | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net Income | $13.3 million | $14.6 million | | Diluted EPS | $0.138 | $0.150 | | Return on Average Assets | 1.03% | 1.17% | | Return on Average Equity | 9.87% | 11.93% | [Nonperforming Assets and Allowance for Loan Losses](index=56&type=section&id=Nonperforming%20Assets%20and%20Allowance%20for%20Loan%20Losses) Nonperforming loans remained stable, while the allowance for loan losses increased significantly due to COVID-19 uncertainty - Total NPLs were **$20.7 million** at March 31, 2020, a slight decrease from **$20.9 million** at December 31, 2019[160](index=160&type=chunk) - The allowance for loan losses was **$46.2 million**, or **1.13%** of total loans, as of March 31, 2020[170](index=170&type=chunk) - The provision for loan losses increased to **$2.0 million** for Q1 2020, primarily driven by uncertainty from the COVID-19 pandemic, compared to **$300 thousand** in Q1 2019[171](index=171&type=chunk) [Capital Resources](index=60&type=section&id=Capital%20Resources) The company maintained strong capital ratios well above regulatory minimums, while suspending its share repurchase program Consolidated Capital Ratios (as of March 31, 2020) | Ratio | Actual | Minimum for Capital Adequacy + Buffer | | :--- | :--- | :--- | | Tier 1 leverage ratio | 10.316% | 4.000% | | Common equity tier 1 capital | 18.943% | 7.000% | | Tier 1 risk-based capital | 18.943% | 8.500% | | Total risk-based capital | 20.198% | 10.500% | - The company repurchased **489,000 shares** at an average price of **$7.11 per share** during Q1 2020 but suspended the program on April 16, 2020[189](index=189&type=chunk)[212](index=212&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with sensitivity analysis showing potential impacts on capital fair value from rate fluctuations Interest Rate Sensitivity Analysis (as of March 31, 2020) | Rate Shock Scenario | Estimated Percentage of Fair Value of Capital to Fair Value of Assets | | :--- | :--- | | +400 BP | 19.80% | | +300 BP | 20.20% | | +200 BP | 20.50% | | +100 BP | 20.60% | | Current rates | 20.00% | | -100 BP | 16.30% | [Item 4. Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal controls during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2020[199](index=199&type=chunk) - No material changes to internal control over financial reporting occurred during the first quarter of 2020[201](index=201&type=chunk) [Part II. OTHER INFORMATION](index=67&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight significant uncertainties from COVID-19, including increased loan delinquencies, collateral value declines, and PPP participation risks - The COVID-19 outbreak is identified as a significant risk that could adversely affect business activities, financial condition, and results of operations through increased loan delinquencies, defaults, and declines in collateral value[204](index=204&type=chunk) - Participation in the SBA's Paycheck Protection Program (PPP) introduces new risks, including potential litigation over application processing and the possibility of the SBA denying its guaranty on certain loans[208](index=208&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) - Significant reductions in the federal funds rate and other market interest rates are expected to adversely affect the company's net interest income and margins[206](index=206&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 489,000 shares for $3.5 million in Q1 2020 under an existing program, which was subsequently suspended Share Repurchases for Q1 2020 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | January 2020 | 75,000 | $8.04 | | February 2020 | 225,000 | $7.50 | | March 2020 | 189,000 | $6.28 | | **Total** | **489,000** | **$7.11** |

Start Time: 09:00 January 1, 0000 9:24 AM ET TrustCo Bank Corp NY (NASDAQ:TRST) Q1 2020 Earnings Conference Call April 22, 2020, 09:00 AM ET Company Participants Robert McCormick - Chairman, President and CEO Michael Ozimek - EVP and CFO Scot Salvador - EVP and Chief Lending Officer Conference Call Participants Alex Twerdahl - Piper Sandler Operator Good day, and welcome to the TrustCo Bank Corp First Quarter Earnings Call and Webcast. All participants will be in listen-only mode. [Operator Instructions]. A ...

PART I [Business](index=4&type=section&id=Item%201.%20Business) TrustCo Bank Corp NY, a savings and loan holding company, provides general banking, trust, and wealth management services through its subsidiary Trustco Bank across five states, focusing on residential mortgages [General and Subsidiaries](index=4&type=section&id=General%20and%20Subsidiaries) TrustCo Bank Corp NY, a holding company for Trustco Bank, operates 148 banking offices and manages $927.5 million in trust assets with 814 employees - TrustCo's principal subsidiary is Trustco Bank, a federal savings bank providing general banking services[12](index=12&type=chunk)[14](index=14&type=chunk) - At year-end 2019, the Bank operated **148 banking offices** and **162 ATMs** across New York, Florida, Vermont, Massachusetts, and New Jersey[14](index=14&type=chunk) - The trust department, operating as Trustco Financial Services, had approximately **$927.5 million in assets under management** as of December 31, 2019[16](index=16&type=chunk) - The company had **814 full-time equivalent employees** at the end of 2019[13](index=13&type=chunk) [Competition](index=5&type=section&id=Competition) The company faces intense competition for deposits and loans from diverse financial institutions, competing on pricing, service, and location - The company faces intense competition from commercial banks, savings associations, credit unions, and non-bank entities in its market areas of New York and Central Florida[19](index=19&type=chunk) - Competition for loans and deposits is based on interest rates, fees, service quality, and convenience[20](index=20&type=chunk) [Supervision and Regulation](index=5&type=section&id=Supervision%20and%20Regulation) TrustCo and its bank subsidiary are highly regulated by the Federal Reserve and OCC, subject to capital, dividend, and consumer protection rules - TrustCo, as a savings and loan holding company, is supervised by the Federal Reserve Board, while its subsidiary, Trustco Bank, is primarily regulated by the OCC[21](index=21&type=chunk) - The Dodd-Frank Act and the subsequent Regulatory Relief Act have significantly changed the financial regulatory landscape, impacting consumer protection, capital requirements, and mortgage lending[24](index=24&type=chunk)[25](index=25&type=chunk) Regulatory Capital Ratios as of December 31, 2019 | Ratio | Trustco Bank | TrustCo (Company) | Minimum Requirement (Well-Capitalized) | | :--- | :--- | :--- | :--- | | Tier 1 Leverage Ratio | 9.94% | 10.25% | > 5.0% | | CET1 Capital Ratio | 18.41% | 18.99% | > 6.5% | | Tier 1 Capital Ratio | 18.41% | 18.99% | > 8.0% | | Total Capital Ratio | 19.67% | 20.24% | > 10.0% | FDIC Deposit Insurance Expense | Year | Expense (in thousands) | | :--- | :--- | | 2019 | $624 | | 2018 | $1,500 | | 2017 | $2,900 | - The Bank must comply with the Community Reinvestment Act (CRA) and received a "satisfactory" rating in its last examination[58](index=58&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks from interest rate fluctuations, credit defaults, regulatory changes, operational failures, cybersecurity threats, and economic downturns in key markets [Market and Economic Risks](index=15&type=section&id=Market%20and%20Economic%20Risks) Earnings are sensitive to interest rate changes and economic downturns, particularly in New York and Florida, due to concentrated residential real estate lending - Net interest income is subject to risk from changes in market interest rates, which could compress the interest rate spread and negatively affect profitability[86](index=86&type=chunk) - The company has a geographic concentration of loans, with **74.4% secured by property in New York** and **25.6% in Florida**, making it vulnerable to local economic downturns[97](index=97&type=chunk) - Market volatility could adversely affect the company's ability to access capital and impact its overall business and financial condition[114](index=114&type=chunk) [Credit and Lending Risks](index=16&type=section&id=Credit%20and%20Lending%20Risks) Inherent credit risk from lending activities and potential insufficiency of the allowance for loan losses (ALLL) pose a threat, with CECL adoption expected to impact ALLL methodology - The company is exposed to credit risk, as adverse changes in borrowers' ability to repay loans could materially impact earnings and financial condition[89](index=89&type=chunk) - The allowance for loan losses (ALLL) may be insufficient if management's assumptions about the loan portfolio's collectability prove incorrect, potentially requiring material additions to the allowance[90](index=90&type=chunk) - The adoption of the CECL accounting standard in 2020 will change the method for calculating credit loss allowances and may require an increase in the ALLL[91](index=91&type=chunk) [Regulatory, Legal, and Compliance Risks](index=16&type=section&id=Regulatory%2C%20Legal%2C%20and%20Compliance%20Risks) Operating in a highly regulated environment, the company faces risks from changing laws, stringent capital rules, dividend limitations, and potential litigation - Stringent regulatory capital rules could limit growth, require raising additional capital, or result in restrictions on dividends and compensation if not met[92](index=92&type=chunk)[93](index=93&type=chunk) - Changes in banking laws and regulations could have a material impact on operations, compliance costs, and the products and services offered[98](index=98&type=chunk)[103](index=103&type=chunk) - The ability to pay dividends is limited by regulations and the financial condition of the subsidiary bank, Trustco Bank[102](index=102&type=chunk) - The company's subsidiary, Trustco Realty Corp., must maintain its status as a REIT; failure to do so would increase the company's effective tax rate[119](index=119&type=chunk)[123](index=123&type=chunk) [Operational and Technology Risks](index=19&type=section&id=Operational%20and%20Technology%20Risks) Significant operational risks include third-party vendor dependency, cybersecurity threats, data breaches, and system failures, potentially causing financial and reputational harm - The company is dependent on third-party vendors for business infrastructure, creating risk of operational disruption from vendor failure[106](index=106&type=chunk)[133](index=133&type=chunk) - Cyber-attacks and data breaches pose a significant risk, potentially leading to financial loss, litigation, reputational damage, and increased regulatory scrutiny[107](index=107&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) - A failure in operational or security systems, whether internal or from third parties, could disrupt business, impact financial condition, and cause reputational harm[108](index=108&type=chunk) [Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[136](index=136&type=chunk) [Properties](index=24&type=section&id=Item%202.%20Properties) The company operates 148 banking offices, with 25 owned and 123 leased, and its executive offices are company-owned - The company operates **148 banking offices**, of which **25 are owned** and **123 are leased**[137](index=137&type=chunk) [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course litigation, but management believes no pending proceedings are materially adverse - In the opinion of management, there are no pending legal proceedings that would be material to the Company's financial condition[138](index=138&type=chunk) [Mine Safety Disclosure](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - Not applicable[139](index=139&type=chunk) PART II [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20the%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) TrustCo's common stock trades on NASDAQ under "TRST", with no equity security purchases under public programs in Q4 2019 - The company's common stock is traded on The NASDAQ Stock Market under the symbol "TRST"[143](index=143&type=chunk) - There were no shares purchased as part of publicly announced plans or programs in the fourth quarter of 2019[144](index=144&type=chunk)[145](index=145&type=chunk) [Selected Financial Data](index=26&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected financial data is incorporated by reference from the Annual Report to Shareholders (Exhibit 13) - Information is incorporated by reference from the Annual Report to Shareholders (Exhibit 13)[147](index=147&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's Discussion and Analysis is incorporated by reference from the Annual Report to Shareholders (Exhibit 13) - Information is incorporated by reference from the Annual Report to Shareholders (Exhibit 13)[148](index=148&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=26&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Quantitative and qualitative disclosures about market risk are incorporated by reference from the Annual Report to Shareholders (Exhibit 13) - Information is incorporated by reference from the Annual Report to Shareholders (Exhibit 13)[149](index=149&type=chunk) [Financial Statements and Supplementary Data](index=27&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Consolidated financial statements, auditor's report, and supplementary data are incorporated by reference from the Annual Report to Shareholders (Exhibit 13) - The consolidated financial statements and auditor's report are incorporated by reference from the Annual Report to Shareholders (Exhibit 13)[151](index=151&type=chunk) [Changes in and Disagreements with Accountants On Accounting and Financial Disclosure](index=27&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20On%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[152](index=152&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%209A.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting in Q4 2019 - Management concluded that the Company's disclosure controls and procedures are effective[153](index=153&type=chunk) - No material changes were made to the company's internal control over financial reporting during the fourth quarter of 2019[155](index=155&type=chunk) [Other Information](index=27&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[156](index=156&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=27&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2020 Proxy Statement - Information is incorporated by reference from the Company's Proxy Statement[158](index=158&type=chunk) [Executive Compensation](index=27&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the 2020 Proxy Statement - Information is incorporated by reference from the Company's Proxy Statement[159](index=159&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=28&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference, detailing outstanding options and available securities under equity compensation plans Equity Compensation Plan Information as of December 31, 2019 | Plan Category | Securities to be issued upon exercise (a) | Weighted-average exercise price (b) | Securities remaining available for future issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 519,091 | $6.67 | 1,696,794 | [Certain Relationships and Related Transactions and Director Independence](index=28&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2020 Proxy Statement - Information is incorporated by reference from the Company's Proxy Statement[164](index=164&type=chunk) [Principal Accountant Fees and Services](index=28&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Principal accountant fees and services information is incorporated by reference from the 2020 Proxy Statement - Information is incorporated by reference from the Company's Proxy Statement[165](index=165&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=28&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits, including the Annual Report to Shareholders and officer certifications - The Annual Report to Shareholders for the year ended December 31, 2019 is filed as Exhibit 13[180](index=180&type=chunk) - Certifications by the principal executive officer and principal financial officer under Rule 13a-14(a)/15d-14(a) and Section 1350 are included as exhibits[180](index=180&type=chunk)