TrustCo Bank Corp NY — 2019 Form 10-K
Reporting period: Fiscal year ended December 31, 2019; filed February 28, 2020. TrustCo is a savings and loan holding company whose principal subsidiary, Trustco Bank, provides retail and business banking, with operations concentrated in New York and Florida. The filing incorporates the detailed financial statements and management discussion from its 2019 Annual Report to Shareholders, but those materials are not included in the supplied text.
Financial performance and condition
- Revenue, net income, EPS, cash flow, margins, assets, deposits, loans, and debt: The supplied filing text does not provide clear values. These metrics are incorporated by reference from the Annual Report to Shareholders.
- Regulatory capital at year-end: Trustco Bank reported a 9.94% Tier 1 leverage ratio, 18.41% CET1 ratio, 18.41% Tier 1 risk-based capital ratio, and 19.67% total capital ratio. TrustCo reported 10.25%, 18.99%, 18.99%, and 20.24%, respectively. Both met applicable capital requirements in 2019 and 2018; the Bank was described as well-capitalized for prompt corrective action purposes.
- FDIC insurance expense: $624,000 in 2019, versus $1.5 million in 2018 and $2.9 million in 2017. The filing notes that the final FICO assessment was collected in 2019, but does not provide a full bridge of the year-over-year change.
- Other scale indicators: The Bank operated 148 banking offices and 162 ATMs at year-end. Trust department assets under trust, custody, or management were approximately $927.5 million.
Changes, outlook, and notable matters
- The company planned to adopt the CECL credit-loss standard effective January 1, 2020. Management warned that lifetime expected-loss estimates could require a higher allowance and additional data; the supplied text does not quantify the expected transition impact.
- No specific earnings, growth, or financial guidance is provided in the supplied text. Management stated that it expected the Bank to remain well-capitalized.
- No shares were reported as purchased under a publicly announced repurchase plan in the fourth quarter of 2019.
- Management reported effective disclosure controls and no material changes in internal control over financial reporting during the fourth quarter. It reported no pending legal proceedings expected to be material to consolidated equity or financial condition.
- Principal risks include interest-rate and margin pressure, residential real-estate and borrower credit risk, geographic concentration, liquidity and funding access, regulatory and tax changes, cyber and third-party operational risks, competition, and uncertainty in the loan-loss allowance. Approximately 74.4% of the loan portfolio was secured by property in New York markets and 25.6% in Florida.
Key facts for investors to verify
- Consult Exhibit 13 / the Annual Report to confirm 2019 and comparative revenue, net income, EPS, net interest margin, efficiency ratio, balance-sheet totals, cash flows, and dividend data.
- Review loan quality, allowance adequacy, charge-offs, and the quantified effect of CECL adoption.
- Check deposit composition, liquidity sources, borrowings, and interest-rate sensitivity, including the effect of changing rates on net interest income and securities values.
- Assess the New York and Florida real-estate concentrations and whether capital levels remain comfortably above regulatory thresholds.