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 4-21-2014 - 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

TrustCo Announces First Quarter Earnings Increase of 20.1% Over Prior Year

Executive Snapshot:

Continued strong financial results:

First quarter 2014 compared to 2013:

Net income up 20.1%

Diluted EPS up 19.6%

Return on average assets (ROA) rose 13 basis points to 0.99%

Return on average equity (ROE) rose 174 basis points to 12.09%

Significant improvement in the efficiency ratio from 54.33% in 2013 to 51.28% in 2014

Continued expansion of customer base:

Focus on capitalizing on the opportunities presented by expanded branch franchise

Deposits per branch grew from $28.0 million at year-end 2013 to $28.7 million at March 31, 2014

Average core deposits grew $90.7 million from Q1 2013 to Q1 2014

Loan portfolio reaches all-time high:

Average loans were up $233.5 million or 8.7% from Q1 2013 to Q1 2014

Residential mortgage loans comprised $219.1 million of the increase

At $2.94 billion, loans have reached an all-time high

Asset quality improvement:

Non-performing assets (NPAs) fell $5.8 million to $53.9 million at March 31, 2014 compared to $59.7 million at March 31, 2013

NPAs to total assets improved from 1.35% to 1.18% over the last year

NCOs to average loans improved from 0.34% in Q1 2013 to 0.30% in Q1 2014

Page 4

FOR IMMEDIATE RELEASE:

TrustCo Announces First Quarter Earnings Increase Of 20.1% Over Prior Year

Glenville, New York –April 21, 2014

TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced that net income rose to $11.0 million in the quarter ended March 31, 2014, up 20.1% from $9.2 million for the quarter ended March 31, 2013.

Robert J. McCormick, President and Chief Executive Officer noted, “Our results for the first quarter of 2014 continued our progress in terms of solid bottom line growth and in positioning our business for the future. In addition to the significant increase in net income, we continued to add profitable customer relationships on both the loan and deposit sides of the Bank. Our highly liquid balance sheet continues to allow us to fund our loan growth without having to overpay for deposits. The first quarter was a strong start for TrustCo and we look forward to the remainder of 2014 with optimism. We continue to take advantage of opportunities as they are presented.”

TrustCo saw continued strong loan growth in the first quarter of 2014. The gains were primarily funded by continued expansion of retail deposits. Lower yielding investment securities declined during the quarter, with most of the proceeds invested in short term instruments as of quarter-end. The shift towards loans helped offset part of the impact from continued low yields on cash and securities, while this liquidity provides for opportunities when interest rate conditions improve.

Mr. McCormick also noted “We are encouraged by the continued economic improvements where we operate, particularly Florida, and believe that we are well positioned to capitalize on these changes. 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.”

Return on average assets and return on average equity were 0.99% and 12.09%, respectively for the first quarter of 2014, compared to 0.86% and 10.35% for the first quarter of 2013. Diluted earnings per share were $0.116 for the first quarter of 2014, up 19.6% from $0.097 for the first quarter of 2013.

On a year-over-year basis, average loans were up $233.5 million or 8.7% in the first quarter of 2014, over the same period in 2013. Average deposits were up $141.6 million for the first quarter of 2014 over the same period a year earlier. Customers continued to move some funds into certificates with slightly longer maturities, which may help TrustCo if rates rise, without having a material impact on the current cost of funds. During this time period core deposits rose $90.7 million. Core deposits typically represent longer term customer relationships and are generally lower cost than time deposits. Mr. McCormick noted that, “The year-over-year growth of our loans and core deposit base reflect the long term strategic focus of the Company.

Page 5

While some banks have backed away from branches, a customer friendly branch franchise continues to be the key to our long term plans. During 2013 we celebrated the ten year anniversary of our expansion into Florida, while at the same time making significant progress expanding loans and deposits throughout our branch network. We expect that trend to continue as the new branches continue to grow. At March 31, 2014, our average branch had $28.7 million of deposits, up $731 thousand compared to the prior year. 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 work. We believe our success in growing customer relationships provides the basic building blocks that will help drive profit growth for the coming years.”

Asset quality, reserve coverage of nonperforming loans (NPLs) and net charge-offs all improved from March 31, 2013 to March 31, 2014. NPLs declined to $44.9 million at March 31, 2014, compared to $49.9 million at March 31, 2013 and nonperforming assets (NPAs) declined to $53.9 million from $59.7 million over the same period. NPLs were equal to 1.53% of total loans at March 31, 2014, compared to 1.84% a year earlier. The coverage ratio, or allowance for loan losses to NPLs, was 104.7% at March 31, 2014, compared to 95.6% at March 31, 2013. Overall, virtually every asset quality indicator improved during the first quarter of 2014 relative to the first quarter of 2013. The ratio of reserves to total loans was 1.60% as of March 31, 2014, compared to 1.76% at March 31, 2013. This decline was due primarily to new loan growth over the last year.

The net interest margin for the first quarter of 2014 was 3.13%, compared to 3.15% in the fourth quarter of 2013. Included in first quarter of 2014 results was a gain of $1.6 million on the previously disclosed sale of the regional operations center in Florida. First quarter results also reflect the impact of New York State tax law changes which required a deferred tax asset write-down of $200 thousand.

At March 31, 2014 the tangible equity ratio was 8.11% compared to 7.99% at December 31, 2013 and 8.17% at March 31, 2013. Tangible book value per share ended the first quarter at $3.93 compared to $3.83 in the year-ago period.

TrustCo Bank Corp NY is a $4.6 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 March 31, 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 first quarter 2014 results will be held at 9:00 a.m. Eastern Time on April 22, 2014. 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 10043698. The call will also be audio webcast at: https://services.choruscall.com/links/trst140422.html, and will be available for one year.

Page 6

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. 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: 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; the future earnings and capital levels of Trustco Bank and the continued ability of Trustco Bank under regulatory rules to distribute capital to TrustCo, which could affect our ability to pay dividends; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; results of examinations of Trustco Bank and TrustCo by our respective regulators; 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; 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; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2013, as amended, and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.

Page 7

TRUSTCO BANK CORP NY

GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	03/31/14			12/31/13		03/31/13
Summary of operations
Net interest income (TE)	$	34,701			34,577		33,707
Provision for loan losses		1,500			1,500		2,000
Net securities transactions		6			188		2
Noninterest income, excluding net securities transactions		5,753			4,660		4,590
Noninterest expense		20,801			20,891		21,557
Net income		11,011			10,629		9,168

Per common share
Net income per share:
- Basic	$	0.116			0.113		0.097
- Diluted		0.116			0.112		0.097
Cash dividends		0.066			0.066		0.066
Tangible Book value at period end		3.93			3.82		3.83
Market price at period end		7.04			7.18		5.58

At period end
Full time equivalent employees		709			708		761
Full service banking offices		139			139		138

Performance ratios
Return on average assets		0.99	%		0.94		0.86
Return on average equity		12.09			11.78		10.35
Efficiency (1)		51.28			52.15		54.33
Net interest spread (TE)		3.08			3.10		3.13
Net interest margin (TE)		3.13			3.15		3.19
Dividend payout ratio		56.36			58.44		67.33

Capital ratio at period end
Consolidated tangible equity to tangible assets (2)		8.11			7.99		8.17

Asset quality analysis at period end
Nonperforming loans to total loans		1.53			1.49		1.84
Nonperforming assets to total assets		1.18			1.15		1.35
Allowance for loan losses to total loans		1.60			1.64		1.76
Coverage ratio (3)		1.0	x		1.1		1.0

(1)	Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions and the net gain on sale of building).

(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 8

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	3/31/2014		12/31/2013		9/30/2013		6/30/2013		3/31/2013
Interest and dividend income:
Interest and fees on loans	$	32,874		32,658		32,166		31,639		31,481
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		506		586		571		627		816
State and political subdivisions		68		96		127		148		191
Mortgage-backed securities and collateralized mortgage obligations-residential		3,078		3,027		2,888		2,701		2,769
Corporate bonds		59		138		223		233		218
Small Business Administration-guaranteed participation securities		556		562		558		564		496
Mortgage-backed securities and collateralized mortgage obligations-commercial		38		38		39		38		29
Other securities		4		4		5		3		5
Total interest and dividends on securities available for sale		4,309		4,451		4,411		4,314		4,524

Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		625		649		686		716		789
Corporate bonds		154		153		154		214		312
Total interest on held to maturity securities		779		802		840		930		1,101

Federal Reserve Bank and Federal Home Loan Bank stock		133		129		121		121		119

Interest on federal funds sold and other short-term investments		351		324		344		327		245
Total interest income		38,446		38,364		37,882		37,331		37,470

Interest expense:
Interest on deposits:
Interest-bearing checking		84		83		84		82		80
Savings		763		790		798		829		916
Money market deposit accounts		599		611		590		630		685
Time deposits		1,951		1,982		1,937		1,883		1,820
Interest on short-term borrowings		393		382		370		367		364
Total interest expense		3,790		3,848		3,779		3,791		3,865

Net interest income		34,656		34,516		34,103		33,540		33,605

Provision for loan losses		1,500		1,500		1,500		2,000		2,000
Net interest income after provision for loan losses		33,156		33,016		32,603		31,540		31,605

Noninterest income:
Trustco Financial Services income		1,510		1,276		1,317		1,287		1,421
Fees for services to customers		2,521		2,917		2,903		2,968		2,887
Net gain on securities transactions		6		188		-		1,432		2
Other		1,722		467		194		229		282
Total noninterest income		5,759		4,848		4,414		5,916		4,592

Noninterest expenses:
Salaries and employee benefits		7,592		8,664		7,935		7,647		8,178
Net occupancy expense		4,259		4,226		3,911		3,910		4,053
Equipment expense		1,752		1,514		1,567		1,582		1,718
Professional services		1,286		1,409		1,255		1,565		1,420
Outsourced services		1,325		1,075		1,350		1,350		1,350
Advertising expense		599		835		548		714		730
FDIC and other insurance		904		952		1,009		1,004		1,010
Other real estate expense, net		855		430		946		1,473		749
Other		2,229		1,786		2,167		2,624		2,349
Total noninterest expenses		20,801		20,891		20,688		21,869		21,557

Income before taxes		18,114		16,973		16,329		15,587		14,640
Income taxes		7,103		6,344		6,077		5,824		5,472

Net income	$	11,011		10,629		10,252		9,763		9,168
Net income per Common Share:
- Basic	$	0.116		0.113		0.109		0.104		0.097

- Diluted		0.116		0.112		0.109		0.104		0.097

Average basic shares (thousands)		94,452		94,347		94,228		94,204		94,068
Average diluted shares (thousands)		94,581		94,472		94,275		94,211		94,073

Note: Taxable equivalent net interest income	$	34,701		34,577		34,180		33,630		33,707

Page 9

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

	3/31/2014			12/31/2013			9/30/2013			6/30/2013			3/31/2013
ASSETS:

Cash and due from banks	$	46,127			46,453			45,088			40,580			39,512
Federal funds sold and other short term investments		687,003			536,591			510,561			588,252			405,262
Total cash and cash equivalents		733,130			583,044			555,649			628,832			444,774

Securities available for sale:
U. S. government sponsored enterprises		92,708			198,829			193,614			188,133			263,165
States and political subdivisions		4,968			7,758			11,199			12,159			15,265
Mortgage-backed securities and collateralized mortgage obligations-residential		524,197			532,449			534,301			504,793			612,555
Corporate bonds		6,402			10,471			53,094			53,053			59,239
Small Business Administration-guaranteed participation securities		101,821			103,029			104,863			108,665			115,464
Mortgage-backed securities and collateralized mortgage obligations-commercial		10,543			10,558			10,715			10,725			11,136
Other securities		653			660			660			660			660
Total securities available for sale		741,292			863,754			908,446			878,188			1,077,484

Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		72,188			76,270			81,337			88,852			98,038
Corporate bonds		9,948			9,945			9,941			9,937			19,935
Total held to maturity securities		82,136			86,215			91,278			98,789			117,973

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

Loans:
Commercial		220,443			223,481			212,833			216,977			212,637
Residential mortgage loans		2,374,874			2,338,944			2,279,064			2,205,334			2,154,188
Home equity line of credit		339,971			340,489			337,178			334,571			332,111
Installment loans		5,714			5,895			5,894			5,544			4,831
Loans, net of deferred fees and costs		2,941,002			2,908,809			2,834,969			2,762,426			2,703,767
Less:
Allowance for loan losses		47,035			47,714			47,722			47,589			47,658
Net loans		2,893,967			2,861,095			2,787,247			2,714,837			2,656,109

Bank premises and equipment, net		35,267			34,414			34,559			38,301			35,787
Other assets		82,445			82,430			71,728			73,757			69,998

Total assets	$	4,578,737			4,521,452			4,459,407			4,443,204			4,411,757

LIABILITIES:
Deposits:
Demand	$	327,779			318,456			314,660			314,985			298,243
Interest-bearing checking		628,752			611,127			591,590			591,844			579,077
Savings accounts		1,236,331			1,218,038			1,221,791			1,228,281			1,213,226
Money market deposit accounts		648,244			648,402			650,688			634,804			656,577
Certificates of deposit (in denominations of $100,000 or more)		432,168			419,301			405,575			397,707			384,559
Other time accounts		713,944			711,747			710,064			725,255			725,998
Total deposits		3,987,218			3,927,071			3,894,368			3,892,876			3,857,680

Short-term borrowings		195,411			204,162			185,226			176,325			171,019
Accrued expenses and other liabilities		24,329			28,406			25,425			25,380			22,169

Total liabilities		4,206,958			4,159,639			4,105,019			4,094,581			4,050,868

SHAREHOLDERS' EQUITY:
Capital stock		98,927			98,927			98,912			98,912			98,912
Surplus		172,964			173,144			173,408			173,897			174,386
Undivided profits		152,237			147,432			143,015			138,953			135,373
Accumulated other comprehensive income (loss), net of tax		(9,452	)		(13,803	)		(15,923	)		(16,831	)		(169	)
Treasury stock at cost		(42,897	)		(43,887	)		(45,024	)		(46,308	)		(47,613	)

Total shareholders' equity		371,779			361,813			354,388			348,623			360,889

Total liabilities and shareholders' equity	$	4,578,737			4,521,452			4,459,407			4,443,204			4,411,757

Outstanding shares (thousands)		94,564			94,463			94,334			94,204			94,071

Page 10

NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

Nonperforming Assets

	03/31/14		12/31/13		09/30/13		06/30/13		03/31/13
New York and other states*
Loans in nonaccrual status:
Commercial	$	4,853		6,952		5,436		5,891		5,978
Real estate mortgage - 1 to 4 family		34,597		31,045		30,643		30,736		34,027
Installment		103		93		71		36		35
Total non-accrual loans		39,553		38,090		36,150		36,663		40,040
Other nonperforming real estate mortgages - 1 to 4 family		162		166		170		174		225
Total nonperforming loans		39,715		38,256		36,320		36,837		40,265
Other real estate owned		4,707		3,348		3,011		3,918		4,461
Total nonperforming assets	$	44,422		41,604		39,331		40,755		44,726

Florida
Loans in nonaccrual status:
Commercial	$	517		-		-		583		2,595
Real estate mortgage - 1 to 4 family		4,668		5,137		5,406		6,022		7,013
Installment		7		-		-		-		1
Total non-accrual loans		5,192		5,137		5,406		6,605		9,609
Other nonperforming real estate mortgages - 1 to 4 family		-		-		-		-		-
Total nonperforming loans		5,192		5,137		5,406		6,605		9,609
Other real estate owned		4,300		5,381		6,816		6,427		5,406
Total nonperforming assets	$	9,492		10,518		12,222		13,032		15,015

Total
Loans in nonaccrual status:
Commercial	$	5,370		6,952		5,436		6,474		8,573
Real estate mortgage - 1 to 4 family		39,265		36,182		36,049		36,758		41,040
Installment		110		93		71		36		36
Total non-accrual loans		44,745		43,227		41,556		43,268		49,649
Other nonperforming real estate mortgages - 1 to 4 family		162		166		170		174		225
Total nonperforming loans		44,907		43,393		41,726		43,442		49,874
Other real estate owned		9,007		8,729		9,827		10,345		9,867
Total nonperforming assets	$	53,914		52,122		51,553		53,787		59,741

Quarterly Net Chargeoffs

	03/31/14		12/31/13			09/30/13			06/30/13			03/31/13
New York and other states*
Commercial	$	242		176			585			49			248
Real estate mortgage - 1 to 4 family		851		1,194			1,215			1,885			1,563
Installment		44		(2	)		25			13			15
Total net chargeoffs	$	1,137		1,368			1,825			1,947			1,826

Florida
Commercial	$	612		(1	)		(502	)		(1	)		99
Real estate mortgage - 1 to 4 family		428		138			41			123			344
Installment		2		3			3			-			-
Total net chargeoffs	$	1,042		140			(458	)		122			443

Total
Commercial	$	854		175			83			48			347
Real estate mortgage - 1 to 4 family		1,279		1,332			1,256			2,008			1,907
Installment		46		1			28			13			15
Total net chargeoffs	$	2,179		1,508			1,367			2,069			2,269

Asset Quality Ratios

	03/31/14			12/31/13			09/30/13			06/30/13			03/31/13

Total nonperforming loans(1)	$	44,907			43,393			41,726			43,442			49,874
Total nonperforming assets(1)		53,914			52,122			51,553			53,787			59,741
Total net chargeoffs(2)		2,179			1,508			1,367			2,069			2,269

Allowance for loan losses(1)		47,035			47,714			47,722			47,589			47,658

Nonperforming loans to total loans		1.53	%		1.49	%		1.47	%		1.57	%		1.84	%
Nonperforming assets to total assets		1.18	%		1.15	%		1.16	%		1.21	%		1.35	%
Allowance for loan losses to total loans		1.60	%		1.64	%		1.68	%		1.72	%		1.76	%
Coverage ratio(1)		104.7	%		110.0	%		114.4	%		109.5	%		95.6	%
Annualized net chargeoffs to average loans(2)		0.30	%		0.21	%		0.20	%		0.29	%		0.34	%
Allowance for loan losses to annualized net chargeoffs(2)		5.4	x		7.9	x		8.7	x		6.0	x		5.3	x

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

(1)	At period-end

(2)	For the period ended

Page 11

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-

INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands)	Three months ended									Three months ended
(Unaudited)	March 31, 2014									March 31, 2013
	Average			Interest			Average			Average			Interest			Average
	Balance						Rate			Balance						Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	169,355			506			1.19	%	$	270,953			816			1.20	%
Mortgage backed securities and collateralized mortgage obligations-residential		545,823			3,078			2.26			557,408			2,769			1.99
State and political subdivisions		6,133			105			6.85			18,556			285			6.15
Corporate bonds		8,548			59			2.78			47,358			218			1.84
Small Business Administration-guaranteed participation securities		110,098			556			2.02			99,683			496			1.99
Mortgage backed securities and collateralized mortgage obligations-commercial		10,939			38			1.39			8,378			29			1.38
Other		660			4			2.42			660			5			3.03

Total securities available for sale		851,556			4,346			2.04			1,002,996			4,618			1.84

Federal funds sold and other short-term Investments		575,352			351			0.25			405,953			245			0.24

Held to maturity securities:
Corporate bonds		9,947			154			6.18			22,271			312			5.61
Mortgage backed securities and collateralized mortgage obligations-residential		74,324			625			3.36			103,607			789			3.05

Total held to maturity securities		84,271			779			3.70			125,878			1,101			3.50

Federal Reserve Bank and Federal Home Loan Bank stock		10,500			133			5.07			9,632			119			4.94

Commercial loans		222,332			2,797			5.03			216,210			2,847			5.27
Residential mortgage loans		2,355,125			26,982			4.60			2,136,067			25,684			4.83
Home equity lines of credit		340,681			2,936			3.49			333,434			2,800			3.41
Installment loans		5,596			167			12.11			4,528			158			14.20

Loans, net of unearned income		2,923,734			32,882			4.52			2,690,239			31,489			4.70

Total interest earning assets		4,445,413			38,491			3.48			4,234,698			37,572			3.56

Allowance for loan losses		(48,219	)								(48,458	)
Cash & non-interest earning assets		130,091									152,902

Total assets	$	4,527,285								$	4,339,142

Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	605,741			84			0.06	%	$	552,575			80			0.06	%
Money market accounts		646,601			599			0.38			659,172			685			0.42
Savings		1,225,364			763			0.25			1,203,580			916			0.31
Time deposits		1,139,811			1,951			0.69			1,088,877			1,820			0.68

Total interest bearing deposits		3,617,517			3,397			0.38			3,504,204			3,501			0.41
Short-term borrowings		202,175			393			0.79			168,059			364			0.88

Total interest bearing liabilities		3,819,692			3,790			0.40			3,672,263			3,865			0.43

Demand deposits		316,009									287,700
Other liabilities		22,311									20,003
Shareholders' equity		369,273									359,176

Total liabilities and shareholders' equity	$	4,527,285								$	4,339,142

Net interest income , tax equivalent					34,701									33,707

Net interest spread								3.08	%								3.13	%

Net interest margin (net interest income to total interest earning assets)								3.13	%								3.19	%

Tax equivalent adjustment					(45	)								(102	)

Net interest income					34,656									33,605

Page 12

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)

	03/31/14			12/31/13			03/31/13
Tangible Book Value Per Share

Equity	$	371,779			361,813			360,889
Less: Intangible assets		553			553			553
Tangible equity		371,226			361,260			360,336

Shares outstanding		94,564			94,463			94,071
Tangible book value per share		3.93			3.82			3.83
Book value per share		3.93			3.83			3.84

Tangible Equity to Tangible Assets
Total Assets		4,578,737			4,521,452			4,411,757
Less: Intangible assets		553			553			553
Tangible assets		4,578,184			4,520,899			4,411,204

Tangible Equity to Tangible Assets		8.11	%		7.99	%		8.17	%
Equity to Assets		8.12	%		8.00	%		8.18	%

	3 Months Ended
Efficiency Ratio	03/31/14			12/31/13			03/31/13

Net interest income (fully taxable equivalent)	$	34,701			34,577			33,707
Non-interest income		5,759			4,848			4,592
Less: Net gain on sale of building		1,556			-			-
Less: Net gain on securities		6			188			2
Recurring revenue		38,898			39,237			38,297

Total Noninterest expense		20,801			20,891			21,557
Less: Other real estate expense, net		855			430			749
Recurring expense		19,946			20,461			20,808

Efficiency Ratio		51.28	%		52.15	%		54.33	%

Page 13

TRUSTCO BANK CORP N Y - FORM 8-K - EX-99.A - EXHIBIT 99(A) - April 21, 2014

Attached files

TRUSTCO BANK CORP N Y Reports