Current Report (Form 8-K)

5 Sarnowski Drive, Glenville, New York, 12302

(518) 377-3311

FOR IMMEDIATE RELEASE:

TrustCo Enters Its 120^th Year; Posts Record Earnings;

Net Income of $61.5 million up 17.3% over the prior year

Glenville, New York - January 24, 2022

TrustCo Bank Corp NY (TrustCo, NASDAQ: TRST) today announced full year 2021 net income of $61.5 million or $3.194 diluted earnings per share, compared to net income of $52.5 million or $2.717 diluted earnings per share for the full year 2020; and net income of $16.2 million or $0.845 diluted earnings per share for the three months ended December 31, 2021, compared to net income of $13.8 million or $0.716 diluted earnings per share for the three months ended December 31, 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, "All of the members of the Trustco Bank family are justifiably proud of our history as we enter our 120^th year. We are very pleased to embark on that celebration with the momentum of a great year in 2021, which was marked by record earnings and rock-solid capital and liquidity. Also fueling our momentum is the increase in the amount of our dividend announced last quarter and our further recognition as an award-winning bank by local and national media outlets, consumer surveys, and the bank rating firm Bauer, which continues to award Trustco Bank its highest five-star rating."

The Company traces its roots back to the first branch of the Schenectady Trust Company, which was located on State Street in downtown Schenectady, New York in 1902. The institution was founded by prominent local business people and executives of General Electric Company, which also has deep roots in the "Electric City." The second and third branches of the bank were on Crane Street, in Schenectady's Mont Pleasant neighborhood, and at the corner of State Street and Brandywine Avenue in the city. Both of these locations are still Trustco Bank branches today. Since then, the franchise has grown to a presence in five states, nearly 150 branch locations, and $6.2 billion in total assets. Record earnings of $61.5 million in 2021 is a testament to the vitality of the current enterprise.

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Details

Average loans were up $185.3 million or 4.4% in the fourth quarter 2021 over the same period in 2020. Average residential loans, our primary lending focus, were up $223.3 million, or 5.9%, in the fourth quarter 2021 over the same period in 2020. As of December 31, 2021, there were no loans in deferral. 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 December 31, 2021, 190 PPP loans totaling $10 million remain outstanding. Average deposits were up $297.5 million or 6.0% for the fourth quarter 2021 over the same period a year earlier. The increase in deposits during the 2021 fourth quarter was the result of a $525.8 million or 14.4% 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 $228.3 million or 17.8%, for the fourth quarter 2021 over the same period in 2020. Within the core deposits, checking balances were up $270.0 million or 16.1% (including interest bearing and non-interest bearing checking balances), money market balances were up $52.9 million or 7.5%, and savings balances were up $202.9 million or 16.1%. 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 TrustCo's 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 0.13% in the fourth quarter 2021 from 0.35% in the fourth quarter 2020. A significant portion of our CD portfolio (time deposits) repriced during the last year, which resulted in lower rates due to ongoing market conditions. The net interest margin for the fourth quarter 2021 was 2.69%, down 10 basis points from 2.79% in the fourth quarter of 2020. Net interest income (TE) increased by 2.8% or $1.1 million over the same period last year.

TrustCo continued to demonstrate its ability to grow shareholders' equity as average equity was up $26.4 million or 4.7% in the fourth quarter of 2021 compared to the same period in 2020. Return on average assets and return on average equity for the fourth quarter 2021 were 1.05% and 10.92%, respectively, compared to 0.95% and 9.75% for the fourth 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 partially due to a strategic realignment and the impact of COVID-19 on the labor market. Additionally, on May 28, 2021, the reverse split of the Company's 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 higher per share trading price that resulted from the Reverse Stock Split will 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 has resulted 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.

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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 $18.8 million at December 31, 2021, compared to $21.1 million at December 31, 2020. NPLs were 0.42% and 0.50% of total loans at December 31, 2021 and 2020, respectively. The coverage ratio, or allowance for loan losses to NPLs, was 236.0% at December 31, 2021, compared to 235.2% at December 31, 2020. Nonperforming assets (NPAs) were $19.1 million at December 31, 2021, compared to $21.6 million at December 31, 2020. The ratio of allowance for loan losses to total loans was 1.00% as of December 31, 2021 compared to 1.17% as of December 31, 2020. The allowance for loan losses was $44.3 million at December 31, 2021, compared to $49.6 million at December 31, 2020. During 2020, management increased certain allowance qualitative factors based on its assessment of the impact of the pandemic on local, national, and global economic conditions as well as the perceived risks inherent in specific industries and credit characteristics. In light of an improving economic environment in 2021 and based on the approach utilized in the prior year the company adjusted the pandemic specific provision during the second half of 2021. Provision for loan losses for the fourth quarter of 2021 was a credit of $3.0 million compared to a provision for loan losses for the fourth quarter of 2020 of $600 thousand. The decrease from the prior year is due to the sustained improvement in asset quality trends and economic conditions during the fourth 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 adopted CECL on January 1, 2022.

Net chargeoffs for the fourth quarter 2021 were $83 thousand versus net chargeoffs in the fourth quarter 2020 of $128 thousand. The annualized net chargeoffs ratio was 0.01% for both the fourth quarter 2021 and 2020.

At December 31, 2021 the equity to asset ratio was 9.70%, compared to 9.63% at December 31, 2020. Book value per share at September 30, 2021 was $31.28, up 6.2% compared to $29.46 a year earlier.

TrustCo Bank Corp NY is a $6.2 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 December 31, 2021.

In addition, the Bank's 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 097207. 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 124698. The call will also be audio webcast at https://services.choruscall.com/links/trst220125.html, and will be available for one year.

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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 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 TrustCo's actual results and could cause TrustCo's 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; credit risks and risks from concentrations (by geographic area and by loan product) within our loan portfolio; changes in local market areas and general business and economic trends, as well as changes in consumer spending and savings habits; and our ability to assess and react effectively to such changes; 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; changes in and uncertainty related to benchmark interest rates used to price loans and deposits; 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; 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; 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.

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TRUSTCO BANK CORP NY

GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

(1)	Non-GAAP measure; calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation.

(2)	Non-GAAP measure; calculated as total equity less $553 of intangible assets divided by total assets less $553 of intangible assets. See Non-GAAP Financial Measures Reconciliation.

(3)	Calculated as allowance for loan losses divided by total nonperforming loans.

(4)	All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

TE = Taxable equivalent

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FINANCIAL HIGHLIGHTS, Continued

(dollars in thousands, except per share data)

(Unaudited)

(1)	Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income. See Non-GAAP Financial Measures Reconciliation.

(2)	All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

TE = Taxable equivalent.

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CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

(1)	All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

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CONSOLIDATED STATEMENTS OF INCOME, Continued

(dollars in thousands, except per share data)

(Unaudited)

(1)	All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

(1)	All periods presented have been adjusted for the 1 for 5 reverse stock split which occurred on May 28, 2021.

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NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

* Includes New York, New Jersey, Vermont and Massachusetts.

(1)	At period-end

(2)	For the period ended

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DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY -

INTEREST RATES AND INTEREST DIFFERENTIAL