TRUSTCO BANK CORP N Y - FORM 8-K - EX-99.(A) - EXHIBIT 99(A)

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8-K - TRUSTCO BANK CORP NY 8-K 10-21-2013 - TRUSTCO BANK CORP N Y	form8k.htm

Exhibit 99(a)

News Release

5 Sarnowski Drive, Glenville, New York, 12302

(518) 377-3311 Fax: (518) 381-3668

Subsidiary: Trustco Bank

NASDAQ -- TRST

Contact:

Kevin T. Timmons

Vice President/Treasurer

(518) 381-3607

FOR IMMEDIATE RELEASE:

TrustCo Announces Third Quarter Earnings

Glenville, New York –October 21, 2013

TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced that net income rose to $10.3 million in the quarter ended September 30, 2013, up 5.1% from $9.8 million for the quarter ended September 30, 2012. Third quarter net income is up 11.1% over the same period two years ago and 29.6% over the same period four years ago.

TrustCo saw continued strong loan growth in the third quarter of 2013 along with an increase in the average yield on loans for the first time since the third quarter of 2008. Loan growth was funded by continued growth of low cost retail deposits along with a shift from lower yielding investment securities, helping to boost the average yield on earning assets. Robert J. McCormick, President and Chief Executive Officer noted, “Our results for the third quarter of 2013 continued the progress we made in the first half of the year in terms of bottom line growth and in positioning our business for the balance of the year and beyond. In addition to the gain in net income, we continue to add profitable customer relationships on both the loan and deposit sides of the Bank. Our highly liquid balance sheet allowed us to fund much of our loan growth without having to overpay for deposits. In fact, our cost of interest-bearing deposits continued to decline in the third quarter relative to the second quarter. We look forward to the final quarter of 2013 and to 2014 with optimism, though we note that our industry continues to face challenges as the economy remains fragile and interest rate environment remains mixed. We will continue to take advantage of opportunities as they are presented.”

Mr. McCormick also noted “We continue to see signs of economic improvement in the markets in which we operate, particularly Florida, although unemployment and other persistent issues continue to constrain any significant economic growth. We believe our long-term focus on traditional lending criteria and conservative balance sheet management has enabled us to maintain a strong balance sheet and continued profitability. As a result, we have been able to focus on conducting business, which has significantly enhanced our reputation and put us in a position to take advantage of changes in market and competitive conditions.”

Page | 4

Return on average assets and return on average equity were 0.91% and 11.64%, respectively for the third quarter of 2013, compared to 0.89% and 10.97% for the third quarter of 2012. Earnings per share were $0.109 for the third quarter of 2013, up 4.8% from $0.104 for the third quarter of 2012. For the first nine months of 2013, TrustCo earned $29.2 million or $0.310 per share, compared to $27.7 million or $0.296 per share in the first nine months of 2012.

On a year-over-year basis, average loans were up $213.7 million or 8.3% in the third quarter of 2013, over the same period in 2012. Average deposits were up $48.2 million over the same period. Management took action to incent customers to move some funds into certificates with slightly longer maturities, which will be helpful as rates rise without having a material impact on the current cost of funds. Core deposits typically represent longer term customer relationships and are generally lower cost than time deposits. 71.2% of average third quarter deposits were core. Mr. McCormick noted that, “The year-over-year growth of our loans and the shift in our deposit base reflects the long term strategic focus of the Company.

While some banks have backed away from branches, a customer friendly branch franchise continues to be the key to our long term plans. We opened one office, in Ormond Beach, Florida, during the third quarter. We recently celebrated the ten year anniversary of our expansion program, and have made significant progress expanding loans and deposits through our branches. We expect that trend to continue as the new branches continue to grow. We also note we have always designed our branches to be smaller and more cost effective than those built by many of our competitors. We have utilized open floor plans that help maximize the value of our branches. We remain mindful that fully achieving our goals for our newer branches will take time and continued hard work. We believe our success in growing customer relationships provides the basic building blocks that will help drive profit growth over the coming years.”

Asset quality, reserve coverage of nonperforming loans (NPLs) and reserve coverage of net charge-offs all improved from December 31, 2012 to September 30, 2013. NPLs declined to $41.7 million at September 30, 2013, compared to $52.7 million at December 31, 2012 and nonperforming assets (NPAs) declined to $51.6 million from $61.4 million over the same period. NPLs were equal to 1.47% of total loans at quarter-end, compared to 1.96% at year-end. For the third quarter of 2013 the allowance covered annualized third quarter net charge-offs by 8.7 times, compared to an annualized 3.3 times for the third quarter of 2012. The coverage ratio, or allowance for loan losses to NPLs, was 114.4% at September 30, 2013, compared to 91.0% at December 31, 2012. Overall, every asset quality indicator improved during the third quarter of 2013.

The net interest margin for the third quarter of 2013 was 3.12%, compared to 3.21% in the third quarter of 2012 and 3.10% in the second quarter of 2013.

At September 30, 2013 the tangible equity ratio was 7.94% compared to 8.27% at September 30, 2012 and 7.83% at June 30, 2013. Tangible book value per share ended the third quarter at $3.75 compared to $3.81 in the year-ago period.

Page | 5

TrustCo Bank Corp NY is a $4.5 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 139 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at September 30, 2013.

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.

A conference call to discuss third quarter 2013 results will be held at 9:00 a.m. Eastern Time on October 23, 2013. Those wishing to participate in the call may dial toll-free 1-888-317-6016. International callers must dial + 1-412-317-6016. A replay of the call will be available thirty days by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10035171. The call will also be audio webcast at: http://services.choruscall.com/links/trst131022.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. The “forward-looking statements” may include statements regarding future events or performance and statements regarding TrustCo’s ability to offer and sell securities under its shelf registration statement. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed. 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: credit risk, the effects of and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rates, market and monetary fluctuations, competition, the effect of changes in financial services laws and regulations (including laws concerning taxation, banking and securities), real estate and collateral values, changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board (“FASB”) or the Public Company Accounting Oversight Board; changes in local market areas and general business and economic trends and the matters described under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2012, as amended, and in our subsequent securities filings.

Page | 6

TRUSTCO BANK CORP NY

GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	09/30/13			06/30/13			09/30/12
Summary of operations
Net interest income (TE)	$	34,180			33,630			34,321
Provision for loan losses		1,500			2,000			2,900
Net securities transactions		-			1,432			666
Noninterest income		4,414			4,484			4,551
Noninterest expense		20,688			21,869			20,643
Net income		10,252			9,763			9,753

Per common share
Net income per share:
- Basic	$	0.109			0.104			0.104
- Diluted		0.109			0.104			0.104
Cash dividends		0.066			0.066			0.066
Tangible Book value at period end		3.75			3.69			3.81
Market price at period end		5.95			5.44			5.71

At period end
Full time equivalent employees		708			710			760
Full service banking offices		139			138			138

Performance ratios
Return on average assets		0.91	%		0.88			0.89
Return on average equity		11.64			10.83			10.97
Efficiency (1)		51.15			53.51			49.99
Net interest spread (TE)		3.06			3.04			3.15
Net interest margin (TE)		3.12			3.10			3.21
Dividend payout ratio		60.38			63.33			63.13

Capital ratio at period end
Consolidated tangible equity to tangible assets (2)		7.94			7.83			8.27

Asset quality analysis at period end
Nonperforming loans to total loans		1.47			1.57			1.92
Nonperforming assets to total assets		1.16			1.21			1.36
Allowance for loan losses to total loans		1.68			1.72			1.82
Coverage ratio (3)		1.1	x		1.1	x		0.9	X

(1)	Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions).

(2)	The tangible equity ratio excludes $553,000 of intangibles from both equity and assets.

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

TE = Taxable equivalent.

Page | 7

FINANCIAL HIGHLIGHTS, Continued

(dollars in thousands, except per share data)

(Unaudited)

	Nine Months Ended
	09/30/13			09/30/12
Summary of operations
Net interest income (TE)	$	101,517			101,951
Provision for loan losses		5,500			9,000
Net securities transactions		1,434			1,398
Noninterest income		13,488			13,405
Noninterest expense		64,114			62,827
Net income		29,183			27,728

Per common share
Net income per share:
- Basic	$	0.310			0.296
- Diluted		0.310			0.296
Cash dividends		0.197			0.197
Tangible Book value at period end		3.75			3.81
Market price at period end		5.95			5.71

Performance ratios
Return on average assets		0.89	%		0.85
Return on average equity		10.94			10.64
Efficiency (1)		52.99			52.00
Net interest spread (TE)		3.08			3.12
Net interest margin (TE)		3.14			3.20
Dividend payout ratio		63.55			66.51

(1)	Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions).

TE = Taxable equivalent.

Page | 8

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	9/30/2013		6/30/2013		3/31/2013		12/31/2012		9/30/2012
Interest and dividend income:
Interest and fees on loans	$	32,166		31,639		31,481		31,776		32,103
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		571		627		816		1,191		1,996
State and political subdivisions		127		148		191		295		340
Mortgage-backed securities and collateralized mortgage obligations-residential		2,888		2,701		2,769		2,237		2,003
Corporate bonds		223		233		218		232		529
Small Business Administration-guaranteed participation securities		558		564		496		276		43
Mortgage-backed securities and collateralized mortgage obligations-commercial		39		38		29		-		-
Other securities		5		3		5		5		4
Total interest and dividends on securities available for sale		4,411		4,314		4,524		4,236		4,915

Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		686		716		789		823		976
Corporate bonds		154		214		312		385		385
Total interest on held to maturity securities		840		930		1,101		1,208		1,361

Federal Reserve Bank and Federal Home Loan Bank stock		121		121		119		127		120

Interest on federal funds sold and other short-term investments		344		327		245		265		258
Total interest income		37,882		37,331		37,470		37,612		38,757

Interest expense:
Interest on deposits:
Interest-bearing checking		84		82		80		80		79
Savings		798		829		916		921		870
Money market deposit accounts		590		630		685		703		673
Time deposits		1,937		1,883		1,820		1,967		2,629
Interest on short-term borrowings		370		367		364		361		348
Total interest expense		3,779		3,791		3,865		4,032		4,599

Net interest income		34,103		33,540		33,605		33,580		34,158

Provision for loan losses		1,500		2,000		2,000		3,000		2,900
Net interest income after provision for loan losses		32,603		31,540		31,605		30,580		31,258

Noninterest income:
Trustco Financial Services income		1,317		1,287		1,421		1,815		1,145
Fees for services to customers		2,903		2,968		2,887		3,386		3,234
Net gain on securities transactions		-		1,432		2		763		666
Other		194		229		282		197		172
Total noninterest income		4,414		5,916		4,592		6,161		5,217

Noninterest expenses:
Salaries and employee benefits		7,935		7,647		8,178		8,427		7,587
Net occupancy expense		3,911		3,910		4,053		3,889		3,756
Equipment expense		1,567		1,582		1,718		1,637		1,316
Professional services		1,255		1,565		1,420		1,458		1,657
Outsourced services		1,350		1,350		1,350		1,175		1,350
Advertising expense		548		714		730		1,037		935
FDIC and other insurance		1,009		1,004		1,010		1,007		983
Other real estate expense, net		946		1,473		749		375		1,210
Other		2,167		2,624		2,349		2,145		1,849
Total noninterest expenses		20,688		21,869		21,557		21,150		20,643

Income before taxes		16,329		15,587		14,640		15,591		15,832
Income taxes		6,077		5,824		5,472		5,785		6,079

Net income	$	10,252		9,763		9,168		9,806		9,753
Net income per Common Share:
- Basic	$	0.109		0.104		0.097		0.104		0.104

- Diluted		0.109		0.104		0.097		0.104		0.104

Average basic shares (thousands)		94,228		94,204		94,068		93,824		93,692
Average diluted shares (thousands)		94,275		94,211		94,073		93,828		93,700

Note: Taxable equivalent net interest income	$	34,180		33,630		33,707		33,718		34,321

Page | 9

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Nine Months Ended
	9/30/2013		9/30/2012

Interest and dividend income:
Interest and fees on loans	$	95,286		96,805
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		2,014		6,906
State and political subdivisions		466		1,118
Mortgage-backed securities and collateralized mortgage obligations-residential		8,358		4,460
Corporate bonds		674		1,999
Small Business Administration-guaranteed participation securities		1,618		43
Mortgage-backed securities and collateralized mortgage obligations-commercial		106		-
Other securities		13		14
Total interest and dividends on securities available for sale		13,249		14,540

Interest on held to maturity securities:
U. S. government sponsored enterprises		-		25
Mortgage-backed securities and collateralized mortgage obligations-residential		2,191		3,464
Corporate bonds		680		1,281
Total interest on held to maturity securities		2,871		4,770

Federal Reserve Bank and Federal Home Loan Bank stock		361		359

Interest on federal funds sold and other short-term investments		916		877
Total interest income		112,683		117,351

Interest expense:
Interest on deposits:
Interest-bearing checking		246		235
Savings		2,543		2,951
Money market deposit accounts		1,905		2,366
Time deposits		5,640		9,277
Interest on short-term borrowings		1,101		1,114
Total interest expense		11,435		15,943

Net interest income		101,248		101,408

Provision for loan losses		5,500		9,000
Net interest income after provision for loan losses		95,748		92,408

Noninterest income:
Trust department income		4,025		3,946
Fees for services to customers		8,758		8,904
Net gain on securities transactions		1,434		1,398
Other		705		555
Total noninterest income		14,922		14,803

Noninterest expenses:
Salaries and employee benefits		23,760		22,849
Net occupancy expense		11,874		11,368
Equipment expense		4,867		4,436
Professional services		4,240		4,582
Outsourced services		4,050		3,947
Advertising expense		1,992		2,804
FDIC and other insurance		3,023		2,816
Other real estate expense, net		3,168		2,841
Other		7,140		7,184
Total noninterest expenses		64,114		62,827

Income before taxes		46,556		44,384
Income taxes		17,373		16,656

Net income	$	29,183		27,728

Net income per Common Share:
- Basic	$	0.310		0.296

- Diluted		0.310		0.296

Average basic shares (thousands)		94,096		93,568
Average diluted shares (thousands)		94,115		93,572

Note: Taxable equivalent net interest income	$	101,517		101,951

Page | 10

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

	9/30/2013			6/30/2013			3/31/2013			12/31/2012			9/30/2012
ASSETS:

Cash and due from banks	$	45,088			40,580			39,512			55,789			40,354
Federal funds sold and other short term investments		510,561			588,252			405,262			488,227			402,290
Total cash and cash equivalents		555,649			628,832			444,774			544,016			442,644

Securities available for sale:
U. S. government sponsored enterprises		193,614			188,133			263,165			263,108			427,798
States and political subdivisions		11,199			12,159			15,265			26,457			33,857
Mortgage-backed securities and collateralized mortgage obligations-residential		534,301			504,793			612,555			518,776			515,879
Corporate bonds		53,094			53,053			59,239			26,529			49,296
Small Business Administration-guaranteed participation securities		104,863			108,665			115,464			76,562			25,338
Mortgage-backed securities and collateralized mortgage obligations-commercial		10,715			10,725			11,136			-			-
Other securities		660			660			660			660			660
Total securities available for sale		908,446			878,188			1,077,484			912,092			1,052,828

Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		81,337			88,852			98,038			108,471			120,877
Corporate bonds		9,941			9,937			19,935			34,955			35,074
Total held to maturity securities		91,278			98,789			117,973			143,426			155,951

Federal Reserve Bank and Federal Home Loan Bank stock		10,500			10,500			9,632			9,632			9,632

Loans:
Commercial		212,833			216,977			212,637			219,577			217,431
Residential mortgage loans		2,279,064			2,205,334			2,154,188			2,126,668			2,056,972
Home equity line of credit		337,178			334,571			332,111			333,909			327,083
Installment loans		5,894			5,544			4,831			4,579			4,455
Loans, net of deferred fees and costs		2,834,969			2,762,426			2,703,767			2,684,733			2,605,941
Less:
Allowance for loan losses		47,722			47,589			47,658			47,927			47,364
Net loans		2,787,247			2,714,837			2,656,109			2,636,806			2,558,577

Bank premises and equipment, net		34,559			38,301			35,787			36,239			37,251
Other assets		71,728			73,757			69,998			64,402			61,290

Total assets	$	4,459,407			4,443,204			4,411,757			4,346,613			4,318,173

LIABILITIES:
Deposits:
Demand	$	314,660			314,985			298,243			300,544			292,350
Interest-bearing checking		591,590			591,844			579,077			560,064			536,892
Savings accounts		1,221,791			1,228,281			1,213,226			1,198,517			1,167,927
Money market deposit accounts		650,688			634,804			656,577			667,589			668,064
Certificates of deposit (in denominations of $100,000 or more)		405,575			397,707			384,559			352,734			359,246
Other time accounts		710,064			725,255			725,998			724,745			751,974
Total deposits		3,894,368			3,892,876			3,857,680			3,804,193			3,776,453

Short-term borrowings		185,226			176,325			171,019			159,846			161,751
Accrued expenses and other liabilities		25,425			25,380			22,169			23,776			22,352

Total liabilities		4,105,019			4,094,581			4,050,868			3,987,815			3,960,556

SHAREHOLDERS' EQUITY:
Capital stock		98,912			98,912			98,912			98,912			98,912
Surplus		173,408			173,897			174,386			174,899			175,284
Undivided profits		143,015			138,953			135,373			132,378			128,750
Accumulated other comprehensive income (loss), net of tax		(15,923	)		(16,831	)		(169	)		1,558			4,879
Treasury stock at cost		(45,024	)		(46,308	)		(47,613	)		(48,949	)		(50,208	)

Total shareholders' equity		354,388			348,623			360,889			358,798			357,617

Total liabilities and shareholders' equity	$	4,459,407			4,443,204			4,411,757			4,346,613			4,318,173

Outstanding shares (thousands)		94,334			94,204			94,071			93,935			93,807

Page | 11

NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

Nonperforming Assets

	09/30/13		06/30/13		03/31/13		12/31/12		09/30/12
New York and other states*
Loans in nonaccrual status:
Commercial	$	5,436		5,891		5,978		6,635		5,880
Real estate mortgage - 1 to 4 family		30,643		30,736		34,027		35,286		32,593
Installment		71		36		35		6		71
Total non-accrual loans		36,150		36,663		40,040		41,927		38,544
Other nonperforming real estate mortgages - 1 to 4 family		170		174		225		231		238
Total nonperforming loans		36,320		36,837		40,265		42,158		38,782
Other real estate owned		3,011		3,918		4,461		2,979		2,716
Total nonperforming assets	$	39,331		40,755		44,726		45,137		41,498

Florida
Loans in nonaccrual status:
Commercial	$	-		583		2,595		2,698		2,698
Real estate mortgage - 1 to 4 family		5,406		6,022		7,013		7,820		8,438
Installment		-		-		1		1		7
Total non-accrual loans		5,406		6,605		9,609		10,519		11,143
Other nonperforming real estate mortgages - 1 to 4 family		-		-		-		-		-
Total nonperforming loans		5,406		6,605		9,609		10,519		11,143
Other real estate owned		6,816		6,427		5,406		5,726		5,975
Total nonperforming assets	$	12,222		13,032		15,015		16,245		17,118

Total
Loans in nonaccrual status:
Commercial	$	5,436		6,474		8,573		9,333		8,578
Real estate mortgage - 1 to 4 family		36,049		36,758		41,040		43,106		41,031
Installment		71		36		36		7		78
Total non-accrual loans		41,556		43,268		49,649		52,446		49,687
Other nonperforming real estate mortgages - 1 to 4 family		170		174		225		231		238
Total nonperforming loans		41,726		43,442		49,874		52,677		49,925
Other real estate owned		9,827		10,345		9,867		8,705		8,691
Total nonperforming assets	$	51,553		53,787		59,741		61,382		58,616

Quarterly Net Chargeoffs

	09/30/13			06/30/13			03/31/13		12/31/12			09/30/12
New York and other states*
Commercial	$	585			49			248		152			9
Real estate mortgage - 1 to 4 family		1,215			1,885			1,563		1,410			2,157
Installment		25			13			15		72			7
Total net chargeoffs	$	1,825			1,947			1,826		1,634			2,173

Florida
Commercial	$	(502	)		(1	)		99		(18	)		736
Real estate mortgage - 1 to 4 family		41			123			344		810			644
Installment		3			-			-		12			1
Total net chargeoffs	$	(458	)		122			443		804			1,381

Total
Commercial	$	83			48			347		134			745
Real estate mortgage - 1 to 4 family		1,256			2,008			1,907		2,220			2,801
Installment		28			13			15		84			8
Total net chargeoffs	$	1,367			2,069			2,269		2,438			3,554

Asset Quality Ratios

	09/30/13			06/30/13			03/31/13			12/31/12			09/30/12
Total nonperforming loans(1)	$	41,726			43,442			49,874			52,677			49,925
Total nonperforming assets(1)		51,553			53,787			59,741			61,382			58,616
Total net chargeoffs(2)		1,367			2,069			2,269			2,438			3,554

Allowance for loan losses(1)		47,722			47,589			47,658			47,927			47,364

Nonperforming loans to total loans(1)		1.47	%		1.57	%		1.84	%		1.96	%		1.92	%
Nonperforming assets to total assets(1)		1.16	%		1.21	%		1.35	%		1.41	%		1.36	%
Allowance for loan losses to total loans(1)		1.68	%		1.72	%		1.76	%		1.79	%		1.82	%
Coverage ratio(1)		114.4	%		109.5	%		95.6	%		91.0	%		94.9	%
Annualized net chargeoffs to average loans(2)		0.20	%		0.29	%		0.34	%		0.37	%		0.55	%
Allowance for loan losses to annualized net chargeoffs(2)		8.7	x		6.0	x		5.3	x		4.9	x		3.3	x

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

(1)	At period-end

(2)	For the period ended

Page | 12

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-

INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands)	Three months ended									Three months ended
(Unaudited)	September 30, 2013									September 30, 2012
	Average			Interest			Average			Average			Interest			Average
	Balance						Rate			Balance						Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	197,336			571			1.16	%	$	594,814			1,996			1.34	%
Mortgage backed securities and collateralized mortgage obligations-residential		534,773			2,888			2.16			397,935			2,003			2.01
State and political subdivisions		11,272			197			7.01			34,383			495			5.76
Corporate bonds		53,238			223			1.68			66,940			529			3.16
Small Business Administration-guaranteed participation securities		113,298			558			1.97			8,024			43			2.14
Mortgage backed securities and collateralized mortgage obligations-commercial		11,070			39			1.41			-			-			0.00
Other		660			5			3.03			660			4			2.42

Total securities available for sale		921,647			4,481			1.94			1,102,756			5,070			1.84

Federal funds sold and other short-term Investments		551,409			344			0.25			416,971			258			0.25

Held to maturity securities:
Corporate bonds		9,939			154			6.19			35,132			385			4.39
Mortgage backed securities and collateralized mortgage obligations-residential		85,388			686			3.21			128,188			976			3.04

Total held to maturity securities		95,327			840			3.52			163,320			1,361			3.33

Federal Reserve Bank and Federal Home Loan Bank stock		10,500			121			4.61			9,632			120			4.98

Commercial loans		213,541			2,785			5.22			228,537			3,068			5.36
Residential mortgage loans		2,245,284			26,325			4.69			2,031,080			25,988			5.12
Home equity lines of credit		335,391			2,892			3.42			322,405			2,906			3.59
Installment loans		5,494			171			12.33			4,007			149			14.82

Loans, net of unearned income		2,799,710			32,173			4.59			2,586,029			32,111			4.96

Total interest earning assets		4,378,593			37,959			3.46			4,278,708			38,920			3.64

Allowance for loan losses		(48,649	)								(49,039	)
Cash & non-interest earning assets		122,130									144,099


Total assets	$	4,452,074								$	4,373,768


Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	592,264			84			0.06	%	$	531,216			79			0.06	%
Money market accounts		641,597			590			0.36			660,464			673			0.40
Savings		1,233,284			798			0.26			1,151,910			870			0.30
Time deposits		1,121,737			1,937			0.69			1,217,080			2,629			0.86

Total interest bearing deposits		3,588,882			3,409			0.38			3,560,670			4,251			0.48
Short-term borrowings		183,414			370			0.80			151,535			348			0.91

Total interest bearing liabilities		3,772,296			3,779			0.40			3,712,205			4,599			0.49

Demand deposits		307,910									287,915
Other liabilities		22,435									20,084
Shareholders' equity		349,433									353,564

Total liabilities and shareholders' equity	$	4,452,074								$	4,373,768

Net interest income , tax equivalent					34,180									34,321

Net interest spread								3.06	%								3.15	%

Net interest margin (net interest income to total interest earning assets)								3.12	%								3.21	%

Tax equivalent adjustment					(77	)								(163	)


Net interest income					34,103									34,158

Page | 13

(dollars in thousands)	Nine months ended									Nine months ended
(Unaudited)	September 30, 2013									September 30, 2012
	Average			Interest			Average			Average			Interest			Average
	Balance						Rate			Balance						Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	228,560			2,014			1.17	%	$	634,903			6,906			1.45	%
Mortgage backed securities and collateralized mortgage obligations-residential		545,974			8,358			2.04			286,287			4,460			2.08
State and political subdivisions		14,282			713			6.66			37,032			1,587			5.71
Corporate bonds		51,795			674			1.74			78,999			1,999			3.38
Small Business Administration-guaranteed participation securities		109,297			1,618			1.97			2,694			43			2.13
Mortgage backed securities and collateralized mortgage obligations-commercial		10,204			106			1.39			-			-			0.00
Other		660			13			2.63			660			14			2.83

Total securities available for sale		960,772			13,496			1.87			1,040,575			15,009			1.92

Federal funds sold and other short-term Investments		496,211			916			0.25			473,196			877			0.25

Held to maturity securities:
U. S. government sponsored enterprises		-			-			0.00			1,423			25			2.38
Corporate bonds		15,340			680			5.91			41,071			1,281			4.16
Mortgage backed securities and collateralized mortgage obligations-residential		94,146			2,191			3.10			136,554			3,464			3.38

Total held to maturity securities		109,486			2,871			3.50			179,048			4,770			3.55

Federal Reserve Bank and Federal Home Loan Bank stock		10,192			361			4.72			9,357			359			5.12

Commercial loans		214,626			8,444			5.25			235,128			9,569			5.43
Residential mortgage loans		2,186,574			77,875			4.75			1,994,051			78,224			5.23
Home equity lines of credit		334,119			8,498			3.40			317,914			8,646			3.63
Installment loans		4,988			491			13.16			3,795			440			15.50

Loans, net of unearned income		2,740,307			95,308			4.64			2,550,888			96,879			5.06

Total interest earning assets		4,316,968			112,952			3.49			4,253,064			117,894			3.70

Allowance for loan losses		(48,469	)								(49,420	)
Cash & non-interest earning assets		140,432									141,725


Total assets	$	4,408,931								$	4,345,369


Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	575,687			246			0.06	%	$	509,346			235			0.06	%
Money market accounts		650,501			1,905			0.39			642,907			2,366			0.49
Savings		1,218,625			2,543			0.28			1,092,195			2,951			0.36
Time deposits		1,110,229			5,640			0.68			1,307,411			9,277			0.95

Total interest bearing deposits		3,555,042			10,334			0.39			3,551,859			14,829			0.56
Short-term borrowings		177,173			1,101			0.83			150,039			1,114			0.99

Total interest bearing liabilities		3,732,215			11,435			0.41			3,701,898			15,943			0.58

Demand deposits		298,986									276,484
Other liabilities		21,087									18,922
Shareholders' equity		356,643									348,065

Total liabilities and shareholders' equity	$	4,408,931								$	4,345,369

Net interest income , tax equivalent					101,517									101,951

Net interest spread								3.08	%								3.12	%

Net interest margin (net interest income
to total interest earning assets)								3.14	%								3.20	%

Tax equivalent adjustment					(269	)								(543	)


Net interest income					101,248									101,408

Page | 14

Non-GAAP Financial Measures Reconciliation

Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures 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 book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders’ equity by common shares outstanding. 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 recurring revenue. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, which we refer to below as recurring expense, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on securities from this calculation, which we refer to below as recurring revenue. We believe that this provides one reasonable measure of core expenses relative to core revenue.

We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and are 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 and efficiency ratio to the underlying GAAP numbers is set forth below.

Non-GAAP Financial Measures Reconciliation

(dollars in thousands, except per share amounts)

(Unaudited)

	09/30/13			06/30/13			03/31/13			12/31/12			09/30/12
Tangible Book Value Per Share

Equity	$	354,388			348,623			360,889			358,798			357,617
Less: Intangible assets		553			553			553			553			553
Tangible equity		353,835			348,070			360,336			358,245			357,064

Shares outstanding		94,334			94,204			94,071			93,935			93,807
Tangible book value per share		3.75			3.69			3.83			3.81			3.81
Book value per share		3.76			3.70			3.84			3.82			3.81

Tangible Equity to Tangible Assets
Total Assets		4,459,407			4,443,204			4,411,757			4,346,613			4,318,173
Less: Intangible assets		553			553			553			553			553
Tangible assets		4,458,854			4,442,651			4,411,204			4,346,060			4,317,620

Tangible Equity to Tangible Assets		7.94	%		7.83	%		8.17	%		8.24	%		8.27	%
Equity to Assets		7.95	%		7.85	%		8.18	%		8.25	%		8.28	%

	3 Months Ended															9 Months Ended
Efficiency Ratio	09/30/13			06/30/13			03/31/13			12/31/12			09/30/12			09/30/13			09/30/12

Net interest income (fully taxable equivalent)	$	34,180			33,630			33,707			33,718			34,321			101,517			101,951
Non-interest income		4,413			5,916			4,592			6,161			5,217			14,921			14,803
Less: Net gain on securities		-			1,432			2			763			666			1,434			1,398
Recurring revenue		38,593			38,114			38,297			39,116			38,872			115,004			115,356

Total Noninterest expense		20,688			21,869			21,557			21,150			20,643			64,114			62,827
Less: Other real estate expense, net		946			1,473			749			375			1,210			3,168			2,841
Recurring expense		19,742			20,396			20,808			20,775			19,433			60,946			59,986

Efficiency Ratio		51.15	%		53.51	%		54.33	%		53.11	%		49.99	%		52.99	%		52.00	%

Page | 15

TRUSTCO BANK CORP N Y - FORM 8-K - EX-99.(A) - EXHIBIT 99(A) - October 21, 2013

Attached files

TRUSTCO BANK CORP N Y Reports