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

Attached files

file	filename
8-K - TRUSTCO BANK CORP NY 8-K 10-21-2015 - 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 Solid Third Quarter 2015 Earnings

Executive Snapshot:

Continued solid financial results:

Net income for the third quarter of 2015 compared to the same period in 2014:

Net income of $10.6 million in third quarter of 2015 compared to $10.7 million in third quarter of 2014

Operating expenses increased $1.3 million in the third quarter of 2015 compared to the third quarter of 2014

Return on average assets (ROA) of 0.88%

Return on average equity (ROE) of 10.35%

Efficiency ratio of 56.04%

Asset quality improvement:

Asset quality measures continued to improve compared to both the third quarter of 2014 and the second quarter of 2015

Nonperforming assets (NPAs) fell by $5.7 million when compared to September 30, 2014.

NPAs to total assets improved from 0.95% to 0.80% when compared to September 30, 2014.

Quarterly net chargeoffs declined to 0.15% of average loans on an annualized basis, compared to 0.20% for the third quarter of 2014.

Continued expansion of customer base:

Focus on capitalizing on opportunities presented by expanded branch network

Average deposits per branch grew $751 thousand from September 30, 2014 to September 30, 2015 on a same store basis

Average core deposits were $103 million higher in the third quarter of 2015 compared to the third quarter of 2014

Loan portfolio reaches all-time high:

Average loans were up $218 million for the third quarter of 2015 compared to third quarter of 2014

At $3.28 billion as of September 30, 2015, loans reached an all-time high

Page | 1

FOR IMMEDIATE RELEASE:

TrustCo Announces Solid Third Quarter 2015 Earnings

Glenville, New York – October 21, 2015

TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced that third quarter of 2015 net income was $10.6 million compared to $10.7 million for the third quarter of 2014. Despite added operating costs during the third quarter in response to recent regulatory concerns, net income for the quarter was virtually unchanged.

TrustCo saw continued strong loan growth in the third quarter of 2015. Loan portfolio expansion was funded by utilization of a portion of the cash flow from the Bank’s investment portfolio. The rate of growth in average core deposits exceeded the growth rate of total deposit and cash management accounts, which are significantly more costly than core deposits. The continued shift toward loans helped offset the margin impact from continued comparatively low yields on cash and investments. TrustCo’s strong liquidity position continues to allow the Company to take advantage of opportunities when interest rate conditions change.

Robert J. McCormick, President and Chief Executive Officer noted, “We are pleased with the continued improvement in our asset quality during both the third quarter and over the last year. Our long-term focus on traditional lending criteria and conservative balance sheet management has enabled us to maintain strong liquidity and capital and allowed us to continue to grow our business and take advantage of changes in market and competitive conditions.”

Mr. McCormick also noted, “We consider our third quarter 2015 results to be solid as we were able to report roughly flat net income despite increased operating costs in response to regulatory concerns. As we noted in our second quarter earnings press release and related SEC filings, we anticipated higher expenses to fulfill operating and regulatory requirements. We have taken aggressive action to meet these requirements, resulting in added costs in the third quarter. While some of these costs will be recurring, others will diminish over time. In terms of our core business, we continue to make solid progress, adding customer relationships which ultimately position our business well for the future. Our highly liquid balance sheet continues to allow us to fund our loan growth without having to overpay for deposits. We look forward to the balance of 2015 and 2016 with optimism. We will continue taking advantage of opportunities as they are presented.”

For the third quarter of 2015, return on average assets and return on average equity were 0.88% and 10.35%, respectively, compared to 0.92% and 10.96% for the third quarter of 2014. Reported diluted earnings per share were $0.111 for the third quarter of 2015, compared to $0.113 for the third quarter of 2014.

Page | 2

For the first nine months of 2015, core diluted net income per share was $0.336, compared to $0.326 for the first nine months of 2014. GAAP diluted net income per share was $0.337 for the first nine months of 2015, compared to $0.354 for the first nine months of 2014. Return on average assets and equity were 0.91% and 10.64% for the first nine months of 2015, compared to 0.98% and 11.84% for the first nine months of 2014, all on a GAAP basis. Non-GAAP measures are defined on pages 13 and 14.

Average loans were up $218.1 million or 7.2% in the third quarter of 2015, over the same period in 2014. Average deposits were up $144.7 million or 3.6% for the third quarter of 2015 over the same period a year earlier. Most of the increase in deposits came from core deposit accounts. Average core deposits increased $103.3 million from the third quarter of 2014 to the third quarter of 2015. 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.

“While some banks have backed away from branches, a customer friendly branch franchise continues to be the key to our long term plans. We continue to make significant progress expanding loans and deposits throughout our entire branch network. We expect that trend to continue as the newer branches continue to mature.

At September 30, 2015, our average branch size was $28.1 million. On a same store basis, our average deposits per branch grew by $751 thousand from September 30, 2014 to September 30, 2015. We have always designed our branches to be smaller and more cost effective than those built by many of our competitors. We use open floor plans that help maximize the value of our branches. We remain mindful that fully achieving our goals for newer branches will take time and continued work. We believe success in growing customer relationships provides basic building blocks that will help drive profit growth for the coming years.”

Asset quality and the allowance for loan losses coverage of nonperforming loans (NPLs) improved from both September 30, 2014 and June 30, 2015 to September 30, 2015. NPLs declined to $31.9 million at September 30, 2015, compared to $37.1 million at September 30, 2014 and $32.5 million at June 30, 2015. NPLs were equal to 0.97% of total loans at September 30, 2015, compared to 1.20% a year earlier and 1.00% at June 30, 2015. The coverage ratio, or allowance for loan losses to NPLs, was 141.4% at September 30, 2015, compared to 140.3% at June 30, 2015 and 125.3% at September 30, 2014. Nonperforming assets (NPAs) declined to $37.8 million at September 30, 2015 from $38.6 million at June 30, 2015 and $43.6 million at September 30, 2014. Overall, virtually every asset quality indicator improved during the third quarter of 2015 relative to the second quarter of 2015 and the third quarter of 2014. The ratio of loan loss allowance to total loans was 1.38% as of September 30, 2015, compared to 1.41% at June 30, 2015 and to 1.51% at September 30, 2014 and reflects both the improvement in asset quality and economic conditions in our lending areas. The allowance for loan losses was $45.1 million at September 30, 2015 compared to $45.6 million at June 30, 2015 and $46.5 million at September 30, 2014.

The net interest margin for the third quarter of 2015 was 3.08% compared to 3.07% in the second quarter of 2015 and 3.16% in the third quarter of 2014.

Page | 3

At September 30, 2015 the tangible equity ratio was 8.71% compared to 8.48% at June 30, 2015 and 8.49% at September 30, 2014. The equity to asset ratio was 8.72% at September 30, 2015, compared to 8.49% at June 30, 2015 and 8.50% at September 30, 2014. Tangible book value per share at September 30, 2015 was $4.33 compared to $4.10 a year earlier and GAAP book value per share was $4.33 and $4.11, respectively. Non-GAAP measures are defined on pages 13 and 14.

TrustCo Bank Corp NY is a $4.7 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 146 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at September 30, 2015.

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 2015 results will be held at 9:00 a.m. Eastern Time on October 22, 2015. Those wishing to participate in the call may dial toll-free 1-888-339-0764. International callers must dial 1-412-902-4195. Please ask to be joined into the TrustCo Bank Corp NY / TRST call. A replay of the call will be available for thirty days by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10074396. The call will also be audio webcast at: http://services.choruscall.com/links/trst151022.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. 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 2015 and for the growth of loans and deposits throughout our branch network, our ability to capitalize on economic changes in the areas in which we operate and the extent to which higher expenses to fulfill operating and regulatory requirements recur or diminish over time. 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; our ability to comply with the supervisory agreement entered into with Trustco Bank’s regulator and potential regulatory actions if we fail to comply; 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 Trustco Bank and the continued ability of Trustco Bank under regulatory rules and the supervisory agreement to distribute capital to TrustCo, which could affect our ability to pay dividends; results of examinations of Trustco Bank and TrustCo by our respective regulators; 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; 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, 2014, as amended, and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.

Page | 4

TRUSTCO BANK CORP NY

GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	09/30/15			06/30/15		09/30/14
Summary of operations
Net interest income (TE)	$	36,069			35,690		35,676
Provision for loan losses		800			800		1,100
Net securities transactions		-			-		376
Noninterest income, excluding net securities transactions		4,365			4,454		4,514
Noninterest expense		23,464			22,131		22,192
Net income		10,616			10,727		10,714

Per common share
Net income per share:
- Basic	$	0.112			0.113		0.113
- Diluted		0.111			0.113		0.113
Cash dividends		0.066			0.066		0.066
Tangible Book value at period end		4.33			4.23		4.10
Market price at period end		5.84			7.03		6.44

At period end
Full time equivalent employees		778			760		733
Full service banking offices		146			146		143

Performance ratios
Return on average assets		0.88	%		0.91		0.92
Return on average equity		10.35			10.66		10.96
Efficiency (1)		56.04			54.71		52.73
Net interest spread (TE)		3.02			3.01		3.11
Net interest margin (TE)		3.08			3.07		3.16
Dividend payout ratio		58.82			58.15		58.05

Capital ratio at period end
Consolidated tangible equity to tangible assets (2)		8.71			8.48		8.49

Asset quality analysis at period end
Nonperforming loans to total loans		0.97			1.00		1.20
Nonperforming assets to total assets		0.80			0.81		0.95
Allowance for loan losses to total loans		1.38			1.41		1.51
Coverage ratio (3)		1.4	x		1.4		1.3

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

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

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

TE = Taxable equivalent.

Page | 5

FINANCIAL HIGHLIGHTS, Continued

(dollars in thousands, except per share data)

(Unaudited)

	Nine Months Ended
	09/30/15			09/30/14
Summary of operations
Net interest income (TE)	$	106,944			105,890
Provision for loan losses		2,400			4,100
Net securities transactions		249			382
Noninterest income		13,193			14,772
Noninterest expense		67,452			62,430
Net income		32,058			33,533

Per common share
Net income per share:
- Basic	$	0.337			0.354
- Diluted		0.337			0.354
Cash dividends		0.197			0.197
Tangible Book value at period end		4.33			4.10
Market price at period end		5.84			6.44

Performance ratios
Return on average assets		0.91	%		0.98
Return on average equity		10.64			11.84
Efficiency (1)		54.98			52.35
Net interest spread (TE)		3.01			3.09
Net interest margin (TE)		3.08			3.15
Dividend payout ratio		58.36			55.58

(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 | 6

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	9/30/2015		6/30/2015		3/31/2015		12/31/2014		9/30/2014
Interest and dividend income:
Interest and fees on loans	$	35,631		35,343		34,983		35,051		34,421
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		584		366		212		233		297
State and political subdivisions		23		23		25		29		38
Mortgage-backed securities and collateralized mortgage obligations-residential		2,230		2,276		2,393		2,733		3,040
Corporate bonds		-		-		1		2		2
Small Business Administration-guaranteed participation securities		497		503		522		524		535
Mortgage-backed securities and collateralized mortgage obligations-commercial		37		38		37		37		38
Other securities		4		4		4		4		4
Total interest and dividends on securities available for sale		3,375		3,210		3,194		3,562		3,954

Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		461		480		478		512		545
Corporate bonds		153		154		154		154		153
Total interest on held to maturity securities		614		634		632		666		698

Federal Reserve Bank and Federal Home Loan Bank stock		113		118		116		123		127

Interest on federal funds sold and other short-term investments		408		423		400		363		374
Total interest income		40,141		39,728		39,325		39,765		39,574

Interest expense:
Interest on deposits:
Interest-bearing checking		117		111		105		98		94
Savings		603		599		658		663		644
Money market deposit accounts		537		547		617		634		648
Time deposits		2,544		2,500		2,434		2,366		2,213
Interest on short-term borrowings		290		300		346		335		327
Total interest expense		4,091		4,057		4,160		4,096		3,926

Net interest income		36,050		35,671		35,165		35,669		35,648

Provision for loan losses		800		800		800		1,000		1,100
Net interest income after provision for loan losses		35,250		34,871		34,365		34,669		34,548

Noninterest income:
Trustco Financial Services income		1,351		1,478		1,653		1,451		1,471
Fees for services to customers		2,770		2,691		2,524		2,753		2,838
Net gain on securities transactions		-		-		249		335		376
Other		244		285		197		213		205
Total noninterest income		4,365		4,454		4,623		4,752		4,890

Noninterest expenses:
Salaries and employee benefits		7,834		8,164		8,481		9,003		8,272
Net occupancy expense		3,929		3,878		4,108		3,869		4,013
Equipment expense		1,596		1,803		1,942		1,919		1,725
Professional services		2,238		2,066		1,507		1,536		1,547
Outsourced services		1,425		1,425		1,425		1,225		1,375
Advertising expense		668		733		600		602		629
FDIC and other insurance		2,202		1,017		1,065		949		1,054
Other real estate expense, net		806		201		424		841		1,001
Other		2,766		2,844		2,305		2,296		2,576
Total noninterest expenses		23,464		22,131		21,857		22,240		22,192

Income before taxes		16,151		17,194		17,131		17,181		17,246
Income taxes		5,535		6,467		6,416		6,521		6,532

Net income	$	10,616		10,727		10,715		10,660		10,714
Net income per common share:
- Basic	$	0.112		0.113		0.113		0.113		0.113

- Diluted		0.111		0.113		0.113		0.112		0.113

Average basic shares (in thousands)		95,149		95,056		94,947		94,681		94,628
Average diluted shares (in thousands)		95,234		95,190		95,074		94,813		94,752

Note: Taxable equivalent net interest income	$	36,069		35,690		35,185		35,693		35,676

Page | 7

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Nine Months Ended
	9/30/2015		9/30/2014

Interest and dividend income:
Interest and fees on loans	$	105,957		100,909
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		1,162		1,184
State and political subdivisions		71		150
Mortgage-backed securities and collateralized mortgage obligations-residential		6,899		9,417
Corporate bonds		1		63
Small Business Administration-guaranteed participation securities		1,522		1,630
Mortgage-backed securities and collateralized mortgage obligations-commercial		112		114
Other securities		12		12
Total interest and dividends on securities available for sale		9,779		12,570

Interest on held to maturity securities:
Mortgage-backed securities-residential		1,419		1,747
Corporate bonds		461		461
Total interest on held to maturity securities		1,880		2,208

Federal Reserve Bank and Federal Home Loan Bank stock		347		388

Interest on federal funds sold and other short-term investments		1,231		1,101
Total interest income		119,194		117,176

Interest expense:
Interest on deposits:
Interest-bearing checking		333		267
Savings		1,860		1,999
Money market deposit accounts		1,701		1,865
Time deposits		7,478		6,199
Interest on short-term borrowings		936		1,062
Total interest expense		12,308		11,392

Net interest income		106,886		105,784

Provision for loan losses		2,400		4,100
Net interest income after provision for loan losses		104,486		101,684

Noninterest income:
Trust department income		4,482		4,386
Fees for services to customers		7,985		8,091
Net gain on securities transactions		249		382
Other		726		2,295
Total noninterest income		13,442		15,154

Noninterest expenses:
Salaries and employee benefits		24,479		23,876
Net occupancy expense		11,915		12,382
Equipment expense		5,341		5,300
Professional services		5,811		4,271
Outsourced services		4,275		4,125
Advertising expense		2,001		1,885
FDIC and other insurance		4,284		2,958
Other real estate expense, net		1,431		168
Other		7,915		7,465
Total noninterest expenses		67,452		62,430

Income before taxes		50,476		54,408
Income taxes		18,418		20,875

Net income	$	32,058		33,533

Net income per Common Share:
- Basic	$	0.337		0.354

- Diluted		0.337		0.354

Average basic shares (thousands)		95,051		94,562
Average diluted shares (thousands)		95,167		94,685

Note: Taxable equivalent net interest income	$	106,944		105,890

Page | 8

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

	9/30/2015			6/30/2015			3/31/2015			12/31/2014			9/30/2014
ASSETS:

Cash and due from banks	$	42,560			37,574			44,853			43,505			43,724
Federal funds sold and other short term investments		655,512			641,011			705,273			627,943			586,931
Total cash and cash equivalents		698,072			678,585			750,126			671,448			630,655

Securities available for sale:
U. S. government sponsored enterprises		103,492			152,082			108,248			77,800			83,087
States and political subdivisions		1,963			1,969			1,974			2,271			2,769
Mortgage-backed securities and collateralized mortgage obligations-residential		413,878			429,205			445,273			483,560			523,779
Corporate bonds		-			-			1,500			1,500			1,401
Small Business Administration-guaranteed participation securities		94,038			95,323			98,668			100,496			100,491
Mortgage-backed securities and collateralized mortgage obligations-commercial		10,491			10,399			10,503			10,447			10,417
Other securities		685			685			685			685			679
Total securities available for sale		624,547			689,663			666,851			676,759			722,623

Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		50,027			53,576			57,296			60,986			64,223
Corporate bonds		9,971			9,967			9,964			9,960			9,956
Total held to maturity securities		59,998			63,543			67,260			70,946			74,179

Federal Reserve Bank and Federal Home Loan Bank stock		9,480			9,480			9,228			9,228			9,228

Loans:
Commercial		208,794			209,399			212,145			223,382			219,825
Residential mortgage loans		2,707,944			2,669,929			2,620,925			2,575,222			2,510,151
Home equity line of credit		356,337			354,946			352,552			352,134			346,496
Installment loans		8,930			8,674			8,003			7,594			6,557
Loans, net of deferred fees and costs		3,282,005			3,242,948			3,193,625			3,158,332			3,083,029
Less:
Allowance for loan losses		45,149			45,571			45,944			46,327			46,512
Net loans		3,236,856			3,197,377			3,147,681			3,112,005			3,036,517

Bank premises and equipment, net		37,506			38,100			38,812			38,565			37,455
Other assets		59,358			64,589			60,698			65,488			71,609

Total assets	$	4,725,817			4,741,337			4,740,656			4,644,439			4,582,266

LIABILITIES:
Deposits:
Demand	$	354,162			355,783			347,315			331,425			327,527
Interest-bearing checking		719,071			713,001			696,137			682,210			646,862
Savings accounts		1,237,549			1,250,154			1,237,115			1,216,831			1,215,087
Money market deposit accounts		617,103			633,239			640,368			638,542			655,646
Time deposits		1,168,908			1,185,264			1,196,233			1,163,233			1,139,919
Total deposits		4,096,793			4,137,441			4,117,168			4,032,241			3,985,041

Short-term borrowings		184,405			170,750			194,738			189,116			179,957
Accrued expenses and other liabilities		32,327			30,687			28,274			29,638			27,781

Total liabilities		4,313,525			4,338,878			4,340,180			4,250,995			4,192,779

SHAREHOLDERS' EQUITY:
Capital stock		98,964			98,964			98,964			98,945			98,942
Surplus		171,788			171,988			172,237			172,353			172,598
Undivided profits		180,093			175,721			171,232			166,745			162,326
Accumulated other comprehensive loss, net of tax		(1,174	)		(5,927	)		(2,687	)		(4,509	)		(3,508	)
Treasury stock at cost		(37,379	)		(38,287	)		(39,270	)		(40,090	)		(40,871	)

Total shareholders' equity		412,292			402,459			400,476			393,444			389,487

Total liabilities and shareholders' equity	$	4,725,817			4,741,337			4,740,656			4,644,439			4,582,266

Outstanding shares (in thousands)		95,149			95,056			94,956			94,857			94,785

Page | 9

NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

Nonperforming Assets

	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14
New York and other states*
Loans in nonaccrual status:
Commercial	$	3,699			3,263			2,489			3,835			4,226
Real estate mortgage - 1 to 4 family		26,059			27,366			28,215			27,221			29,736
Installment		69			79			77			77			95
Total non-accrual loans		29,827			30,708			30,781			31,133			34,057
Other nonperforming real estate mortgages - 1 to 4 family		50			74			75			125			155
Total nonperforming loans		29,877			30,782			30,856			31,258			34,212
Other real estate owned		5,893			5,833			6,288			5,533			5,238
Total nonperforming assets	$	35,770			36,615			37,144			36,791			39,450

Florida
Loans in nonaccrual status:
Commercial	$	-			-			-			-			517
Real estate mortgage - 1 to 4 family		2,054			1,678			2,608			2,740			2,395
Installment		9			10			20			13			1
Total non-accrual loans		2,063			1,688			2,628			2,753			2,913
Other nonperforming real estate mortgages - 1 to 4 family		-			-			-			-			-
Total nonperforming loans		2,063			1,688			2,628			2,753			2,913
Other real estate owned		-			275			670			908			1,188
Total nonperforming assets	$	2,063			1,963			3,298			3,661			4,101

Total
Loans in nonaccrual status:
Commercial	$	3,699			3,263			2,489			3,835			4,743
Real estate mortgage - 1 to 4 family		28,113			29,044			30,823			29,961			32,131
Installment		78			89			97			90			96
Total non-accrual loans		31,890			32,396			33,409			33,886			36,970
Other nonperforming real estate mortgages - 1 to 4 family		50			74			75			125			155
Total nonperforming loans		31,940			32,470			33,484			34,011			37,125
Other real estate owned		5,893			6,108			6,958			6,441			6,426
Total nonperforming assets	$	37,833			38,578			40,442			40,452			43,551

Quarterly Net Chargeoffs (Recoveries)
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14
New York and other states*
Commercial	$	3			50			34			(16	)		124
Real estate mortgage - 1 to 4 family		1,159			933			1,004			1,591			1,105
Installment		26			24			37			48			57
Total net chargeoffs	$	1,188			1,007			1,075			1,623			1,286

Florida
Commercial	$	(3	)		(1	)		(1	)		(476	)		(1	)
Real estate mortgage - 1 to 4 family		33			167			109			37			242
Installment		4			-			-			1			(4	)
Total net chargeoffs	$	34			166			108			(438	)		237

Total
Commercial	$	-			49			33			(492	)		123
Real estate mortgage - 1 to 4 family		1,192			1,100			1,113			1,628			1,347
Installment		30			24			37			49			53
Total net chargeoffs	$	1,222			1,173			1,183			1,185			1,523

Asset Quality Ratios
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14

Total nonperforming loans(1)	$	31,940			32,470			33,484			34,011			37,125
Total nonperforming assets(1)		37,833			38,578			40,442			40,452			43,551
Total net chargeoffs(2)		1,222			1,173			1,183			1,185			1,523

Allowance for loan losses(1)		45,149			45,571			45,944			46,327			46,512

Nonperforming loans to total loans		0.97	%		1.00	%		1.05	%		1.08	%		1.20	%
Nonperforming assets to total assets		0.80	%		0.81	%		0.85	%		0.87	%		0.95	%
Allowance for loan losses to total loans		1.38	%		1.41	%		1.44	%		1.47	%		1.51	%
Coverage ratio(1)		141.4	%		140.3	%		137.2	%		136.2	%		125.3	%
Annualized net chargeoffs to average loans(2)		0.15	%		0.15	%		0.15	%		0.15	%		0.20	%
Allowance for loan losses to annualized net chargeoffs(2)		9.3	x		9.7	x		9.6	x		9.8	x		7.6	x

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

(1)	At period-end

(2)	For the period ended

Page | 10

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands) (Unaudited)	Three months ended September 30, 2015									Three months ended September 30, 2014
	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	157,454			584			1.48	%	$	93,098			297			1.27	%
Mortgage backed securities and collateralized mortgage obligations-residential		425,092			2,230			2.10			569,352			3,040			2.14
State and political subdivisions		1,937			34			7.02			3,307			60			7.26
Corporate bonds		-			-			0.00			1,403			2			0.48
Small Business Administration-guaranteed participation securities		96,109			497			2.07			106,109			535			2.02
Mortgage backed securities and collateralized mortgage obligations-commercial		10,532			37			1.41			10,803			38			1.40
Other		685			4			2.34			685			4			2.34

Total securities available for sale		691,809			3,386			1.96			784,757			3,976			2.03

Federal funds sold and other short-term Investments		652,274			408			0.25			598,318			374			0.25

Held to maturity securities:
Corporate bonds		9,969			153			6.17			9,954			153			6.18
Mortgage backed securities and collateralized mortgage obligations-residential		51,928			461			3.55			66,206			545			3.29

Total held to maturity securities		61,897			614			3.97			76,160			698			3.67

Federal Reserve Bank and Federal Home Loan Bank stock		9,480			113			4.77			9,884			127			5.14

Commercial loans		208,492			2,688			5.15			220,347			2,842			5.16
Residential mortgage loans		2,689,072			29,617			4.41			2,473,857			28,315			4.58
Home equity lines of credit		354,552			3,151			3.53			342,456			3,102			3.59
Installment loans		8,678			183			8.33			6,048			168			11.02

Loans, net of unearned income		3,260,794			35,639			4.37			3,042,708			34,427			4.52

Total interest earning assets		4,676,254			40,160			3.43			4,511,827			39,602			3.51

Allowance for loan losses		(45,829	)								(47,115	)
Cash & non-interest earning assets		133,241									134,110

Total assets	$	4,763,666								$	4,598,822

Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	727,693			117			0.06	%	$	650,132			94			0.06	%
Money market accounts		623,381			537			0.34			656,935			648			0.39
Savings		1,251,031			603			0.19			1,229,712			644			0.21
Time deposits		1,189,763			2,544			0.85			1,148,419			2,213			0.76

Total interest bearing deposits		3,791,868			3,801			0.40			3,685,198			3,599			0.39
Short-term borrowings		177,230			290			0.65			180,063			327			0.72

Total interest bearing liabilities		3,969,098			4,091			0.41			3,865,261			3,926			0.40

Demand deposits		360,080									322,083
Other liabilities		27,524									23,783
Shareholders' equity		406,964									387,695

Total liabilities and shareholders' equity	$	4,763,666								$	4,598,822

Net interest income, tax equivalent					36,069									35,676

Net interest spread								3.02	%								3.11	%

Net interest margin (net interest income to total interest earning assets)								3.08	%								3.16	%

Tax equivalent adjustment					(19	)								(28	)

Net interest income					36,050									35,648

Page | 11

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands) (Unaudited)	Nine months ended September 30, 2015									Nine months ended September 30, 2014
	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	116,824			1,162			1.33	%	$	124,133			1,184			1.27	%
Mortgage backed securities and collateralized mortgage obligations-residential		448,223			6,899			2.05			568,257			9,417			2.21
State and political subdivisions		1,989			108			7.32			4,411			235			7.10
Corporate bonds		813			1			0.16			3,758			63			2.23
Small Business Administration-guaranteed participation securities		98,868			1,522			2.05			108,078			1,630			2.01
Mortgage backed securities and collateralized mortgage obligations-commercial		10,600			112			1.41			10,870			114			1.40
Other		685			12			2.34			670			12			2.39

Total securities available for sale		678,002			9,816			1.93			820,177			12,655			2.06

Federal funds sold and other short-term Investments		662,879			1,231			0.25			593,577			1,101			0.25

Held to maturity securities:
Corporate bonds		9,965			461			6.17			9,950			461			6.18
Mortgage backed securities and collateralized mortgage obligations-residential		55,569			1,419			3.41			70,273			1,747			3.31

Total held to maturity securities		65,534			1,880			3.83			80,223			2,208			3.67

Federal Reserve Bank and Federal Home Loan Bank stock		9,392			347			4.93			10,438			388			4.96

Commercial loans		212,617			8,194			5.14			221,492			8,481			5.11
Residential mortgage loans		2,644,216			87,946			4.44			2,410,435			82,845			4.59
Home equity lines of credit		353,630			9,304			3.52			341,014			9,102			3.57
Installment loans		8,236			534			8.66			5,825			502			11.52

Loans, net of unearned income		3,218,699			105,978			4.39			2,978,766			100,930			4.52

Total interest earning assets		4,634,506			119,252			3.43			4,483,181			117,282			3.49

Allowance for loan losses		(46,203	)								(47,570	)
Cash & non-interest earning assets		136,906									133,456

Total assets	$	4,725,209								$	4,569,067


Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	704,323			333			0.06	%	$	629,542			267			0.06	%
Money market accounts		632,143			1,701			0.36			652,886			1,865			0.38
Savings		1,243,544			1,860			0.20			1,231,761			1,999			0.22
Time deposits		1,186,846			7,478			0.84			1,144,164			6,199			0.72

Total interest bearing deposits		3,766,856			11,372			0.40			3,658,353			10,330			0.38
Short-term borrowings		184,079			936			0.68			190,599			1,062			0.74

Total interest bearing liabilities		3,950,935			12,308			0.42			3,848,952			11,392			0.40

Demand deposits		344,606									318,306
Other liabilities		26,689									23,074
Shareholders' equity		402,979									378,735

Total liabilities and shareholders' equity	$	4,725,209								$	4,569,067

Net interest income, tax equivalent					106,944									105,890

Net interest spread								3.01	%								3.09	%

Net interest margin (net interest income to total interest earning assets)								3.08	%								3.15	%

Tax equivalent adjustment					(58	)								(106	)

Net interest income					106,886									105,784

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 revenue from net interest income and fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on the sale of a building, nonperforming loans and securities from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue.

Core net income (“core earnings”) and core net income (“core earnings”) per share are non-GAAP financial measures derived from GAAP-based amounts. We calculate core earnings by excluding the net after-tax gain on the sale of the proposed Florida operations building, the net after-tax gain on an significant sale of an ORE property and net after-tax gains on the sale of non-performing loans from net income and from net income per share. We believe that this provides a reasonable measure of core net income (earnings).

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, efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.

Page | 13

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(dollars in thousands, except per share amounts)

(Unaudited)

	09/30/15			06/30/15			09/30/14
Tangible Book Value Per Share

Equity	$	412,292			402,459			389,487
Less: Intangible assets		553			553			553
Tangible equity		411,739			401,906			388,934

Shares outstanding		95,149			95,056			94,785
Tangible book value per share		4.33			4.23			4.10
Book value per share		4.33			4.23			4.11

Tangible Equity to Tangible Assets
Total Assets		4,725,817			4,741,337			4,582,266
Less: Intangible assets		553			553			553
Tangible assets		4,725,264			4,740,784			4,581,713

Tangible Equity to Tangible Assets		8.71	%		8.48	%		8.49	%
Equity to Assets		8.72	%		8.49	%		8.50	%

	3 Months Ended									9 Months Ended
Efficiency Ratio	09/30/15			06/30/15			09/30/14			09/30/15			09/30/14

Net interest income	$	36,050			35,671			35,648			106,886			105,784
Taxable equivalent adjustment		19			19			28			58			106
Net interest income (fully taxable equivalent)		36,069			35,690			35,676			106,944			105,890
Non-interest income		4,365			4,454			4,890			13,442			15,154
Less: Net gain on sale of building and nonperforming loans		-			60			-			60			1,719
Less: Net gain on securities		-			-			376			249			382
Revenue used for efficiency ratio		40,434			40,084			40,190			120,077			118,943

Total noninterest expense		23,464			22,131			22,192			67,452			62,430
Less: Other real estate expense, net		806			201			1,001			1,431			168
Expense used for efficiency ratio		22,658			21,930			21,191			66,021			62,262

Efficiency Ratio		56.04	%		54.71	%		52.73	%		54.98	%		52.35	%

	3 Months Ended									9 Months Ended
Core Net Income	09/30/15			06/30/15			09/30/14			09/30/15			09/30/14

Net income	$	10,616			10,727			10,714			32,058			33,533
Less: Gain on sale of building, nonperforming loans, and significant ORE gain, net of tax		-			37			-			37			2,684
Core net income		10,616			10,690			10,714			32,021			30,849

Average basic shares outstanding (in thousands)		95,149			95,056			94,628			95,051			94,562
Average diluted shares outstanding (in thousands)		95,234			95,190			94,752			95,167			94,685

Net income per common share:
- Basic	$	0.112			0.113			0.113			0.337			0.355
- Diluted		0.111			0.113			0.113			0.337			0.354

Core net income per common share:

- Basic	$	0.112			0.112			0.113			0.337			0.326
- Diluted		0.111			0.112			0.113			0.336			0.326

Page | 14

TRUSTCO BANK CORP N Y - FORM 8-K - EX-99.A - EXHIBIT 99(A) - October 21, 2015

Attached files

TRUSTCO BANK CORP N Y Reports