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 4-21-2016 - 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 2016 Earnings

Executive Snapshot:

Continued solid financial results:

Key metrics for first quarter of 2016 results:

Net income of $10.4 million in first quarter of 2016 compared to $10.2 million in fourth quarter of 2015 and $10.7 million in the first quarter of 2015

Operating expenses increased $1.6 million in the first quarter of 2016 compared to the first quarter of 2015

Return on average assets (ROA) of 0.89%

Return on average equity (ROE) of 9.98%

Efficiency ratio of 56.22%

Asset quality remains solid:

Asset quality measures improved compared to the first quarter of 2015

Nonperforming assets (NPAs) fell by $4.4 million compared to March 31, 2015

NPAs to total assets improved from 0.85% to 0.76% compared to March 31, 2015

Quarterly net chargeoffs decreased to 0.14% of average loans on an annualized basis, compared to 0.15% for the first quarter of 2015

Continued expansion of customer base:

Focus on capitalizing on opportunities presented by expanded branch network

Average deposits per branch were $28.6 million

Average core deposits were $86 million higher in the first quarter of 2016 compared to the first quarter of 2015

Loan portfolio reaches all-time high:

Average loans were up $122 million for the first quarter of 2016 compared to first quarter of 2015

At $3.30 billion as of March 31, 2016, loans reached an all-time high

FOR IMMEDIATE RELEASE:

TrustCo Announces First Quarter 2016 Earnings

Glenville, New York – April 21, 2016

TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced first quarter of 2016 net income of $10.4 million compared to $10.2 million for the fourth quarter of 2015 and $10.7 million for the first quarter of 2015.

Robert J. McCormick, President and Chief Executive Officer noted, “We are pleased to be able to report relatively stable earnings despite added operating costs in response to recent regulatory concerns and a difficult operating environment. Our long-term focus on traditional lending criteria and conservative balance sheet management has enabled us to produce stable earnings, 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 first quarter 2016 results to be solid and are encouraged by the increase in pre-tax earnings from the fourth quarter of 2015. 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 will continue taking advantage of opportunities as they are presented during the balance of 2016.”

TrustCo saw continued solid loan growth in the first quarter of 2016 compared to the prior year. Loan portfolio expansion was funded by deposit growth. The continued shift toward loans helped offset the margin impact from continued comparatively low yields on cash and investments. The growth in average deposits in the first quarter of 2016 versus the prior year was led by lower cost core deposits. TrustCo’s strong liquidity position continues to allow the Company to take advantage of opportunities when interest rate conditions change.

For the first quarter of 2016, return on average assets and return on average equity were 0.89% and 9.98%, respectively, compared to 0.93% and 10.91% for the first quarter of 2015. Diluted earnings per share were $0.109 for the first quarter of 2016, compared to $0.113 for the first quarter of 2015. As discussed in recent quarters, increased operating costs in response to regulatory concerns have hampered earnings. Higher expenses were anticipated in order to fulfill operating and regulatory requirements. We took aggressive action to meet these requirements during 2015 and those efforts continue into 2016. These efforts resulted in added costs in both 2015 and the first quarter of 2016. While some of these costs will be recurring, others will diminish over time.

Average loans were up $122.3 million or 3.9% in the first quarter of 2016, over the same period in 2015. Average deposits were up $39.9 million or 1.0% for the first quarter of 2016 over the same period a year earlier. The increase in deposits came from core deposit accounts, which consist of checking, savings and money market deposits. Average core deposits increased $85.8 million from the first quarter of 2015 to the first quarter of 2016, more than offsetting a decline in time deposit balances. 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.”

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“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 March 31, 2016, our average branch size was $28.6 million. 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 loan loss reserve measures mostly improved versus March 31, 2015, but were mixed as compared to December 31, 2015. Nonperforming loans (NPLs) were $30.4 million at March 31, 2016, compared to $33.5 million at March 31, 2015 and $28.3 million at December 31, 2015. The slight increase in NPLs was due to residential real estate nonperforming loans in the New York region. NPLs were equal to 0.92% of total loans at March 31, 2016, compared to 1.05% a year earlier and 0.86% at December 31, 2015. The coverage ratio, or allowance for loan losses to NPLs, was 146.3% at March 31, 2016, compared to 137.2% at March 31, 2015 and 158.4% at December 31, 2015. Nonperforming assets (NPAs) were at $36.0 million at March 31, 2016 compared to $40.4 million at March 31, 2015 and $34.7 million at December 31, 2015. The ratio of loan loss allowance to total loans was 1.34% as of March 31, 2016, compared to 1.44% at March 31, 2015 and to 1.36% at December 31, 2015 and reflects both the improvement in asset quality and economic conditions in our lending areas. The allowance for loan losses was $44.4 million at March 31, 2016 compared to $45.9 million at March 31, 2015 and $44.8 million at December 31, 2015. Net chargeoffs for the first quarter of 2016 decreased by $523 thousand or 31% versus the fourth quarter of 2015, which was also reflected in the reduction in the provision for loan losses of $500 thousand from the fourth quarter to the first quarter.

The net interest margin for the first quarter of 2016 was 3.13% compared to 3.14% in the fourth quarter of 2015 and 3.08% in the first quarter of 2015.

At March 31, 2016 the tangible equity ratio was 8.87% compared to 8.44% at March 31, 2015 and 8.72% at December 31, 2015. The equity to asset ratio was 8.88% at March 31, 2016, compared to 8.45% at March 31, 2015 and 8.73% at December 31, 2015. Tangible book value per share at March 31, 2016 was $4.43 compared to $4.21 a year earlier and GAAP book value per share was $4.44 and $4.22, respectively. Non-GAAP measures are discussed on page 10.

TrustCo Bank Corp NY is a $4.8 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 145 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at March 31, 2016.

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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 2016 results will be held at 9:00 a.m. Eastern Time on April 22, 2016. 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 10084202. The call will also be audio webcast at: http://services.choruscall.com/links/trst160422.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 2016 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 most recent annual report on Form 10-K, and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.

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TRUSTCO BANK CORP NY

GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)
(Unaudited)
	Three Months Ended
	03/31/16			12/31/15		03/31/15
Summary of operations
Net interest income (TE)	$	36,196			36,278		35,185
Provision for loan losses		800			1,300		800
Net securities transactions		-			2		249
Noninterest income, excluding net securities transactions		4,572			4,428		4,374
Noninterest expense		23,439			23,108		21,857
Net income		10,409			10,180		10,715

Per common share
Net income per share:
- Basic	$	0.109			0.107		0.113
- Diluted		0.109			0.107		0.113
Cash dividends		0.066			0.066		0.066
Tangible Book value at period end		4.43			4.33		4.21
Market price at period end		6.06			6.14		6.88

At period end
Full time equivalent employees		784			787		747
Full service banking offices		145			146		145

Performance ratios
Return on average assets		0.89	%		0.86		0.93
Return on average equity		9.98			9.75		10.91
Efficiency (1)		56.22			55.37		54.18
Net interest spread (TE)		3.07			3.08		3.02
Net interest margin (TE)		3.13			3.14		3.08
Dividend payout ratio		60.13			61.54		58.12

Capital ratio at period end
Consolidated tangible equity to tangible assets (2)		8.87			8.72		8.44

Asset quality analysis at period end
Nonperforming loans to total loans		0.92			0.86		1.05
Nonperforming assets to total assets		0.76			0.73		0.85
Allowance for loan losses to total loans		1.34			1.36		1.44
Coverage ratio (3)		1.5	x		1.6		1.4

(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 of intangibles from both equity and assets.

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

TE = Taxable equivalent.

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CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	3/31/2016		12/31/2015		9/30/2015		6/30/2015		3/31/2015
Interest and dividend income:
Interest and fees on loans	$	35,605		35,930		35,631		35,343		34,983
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		255		256		584		366		212
State and political subdivisions		14		16		23		23		25
Mortgage-backed securities and collateralized mortgage obligations-residential		2,116		2,233		2,230		2,276		2,393
Corporate bonds		-		-		-		-		1
Small Business Administration-guaranteed participation securities		476		482		497		503		522
Mortgage-backed securities and collateralized mortgage obligations-commercial		36		37		37		38		37
Other securities		4		4		4		4		4
Total interest and dividends on securities available for sale		2,901		3,028		3,375		3,210		3,194

Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		402		425		461		480		478
Corporate bonds		154		154		153		154		154
Total interest on held to maturity securities		556		579		614		634		632

Federal Reserve Bank and Federal Home Loan Bank stock		120		120		113		118		116

Interest on federal funds sold and other short-term investments		844		494		408		423		400
Total interest income		40,026		40,151		40,141		39,728		39,325

Interest expense:
Interest on deposits:
Interest-bearing checking		114		115		117		111		105
Savings		604		608		603		599		658
Money market deposit accounts		496		513		537		547		617
Time deposits		2,373		2,375		2,544		2,500		2,434
Interest on short-term borrowings		257		278		290		300		346
Total interest expense		3,844		3,889		4,091		4,057		4,160

Net interest income		36,182		36,262		36,050		35,671		35,165

Provision for loan losses		800		1,300		800		800		800
Net interest income after provision for loan losses		35,382		34,962		35,250		34,871		34,365

Noninterest income:
Trustco Financial Services income		1,605		1,489		1,351		1,478		1,653
Fees for services to customers		2,661		2,704		2,770		2,691		2,524
Net gain on securities transactions		-		2		-		-		249
Other		306		235		244		285		197
Total noninterest income		4,572		4,430		4,365		4,454		4,623

Noninterest expenses:
Salaries and employee benefits		9,003		8,042		7,834		8,164		8,481
Net occupancy expense		4,088		3,884		3,929		3,878		4,108
Equipment expense		1,514		1,530		1,596		1,803		1,942
Professional services		2,146		2,067		2,238		2,066		1,507
Outsourced services		1,551		1,585		1,425		1,425		1,425
Advertising expense		729		592		668		733		600
FDIC and other insurance		1,990		2,055		2,202		1,017		1,065
Other real estate expense, net		519		570		806		201		424
Other		1,899		2,783		2,766		2,844		2,305
Total noninterest expenses		23,439		23,108		23,464		22,131		21,857

Income before taxes		16,515		16,284		16,151		17,194		17,131
Income taxes		6,106		6,104		5,535		6,467		6,416

Net income	$	10,409		10,180		10,616		10,727		10,715
Net income per common share:
- Basic	$	0.109		0.107		0.112		0.113		0.113

- Diluted		0.109		0.107		0.111		0.113		0.113

Average basic shares (in thousands)		95,365		95,256		95,149		95,056		94,947
Average diluted shares (in thousands)		95,412		95,349		95,234		95,190		95,074
Note: Taxable equivalent net interest income	$	36,196		36,278		36,069		35,690		35,185

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

	3/31/2016			12/31/2015			9/30/2015			6/30/2015			3/31/2015
ASSETS:

Cash and due from banks	$	37,373			41,698			42,560			37,574			44,853
Federal funds sold and other short term investments		722,805			676,458			655,512			641,011			705,273
Total cash and cash equivalents		760,178			718,156			698,072			678,585			750,126

Securities available for sale:
U. S. government sponsored enterprises		66,920			86,737			103,492			152,082			108,248
States and political subdivisions		974			1,290			1,963			1,969			1,974
Mortgage-backed securities and collateralized mortgage obligations-residential		422,189			411,729			413,878			429,205			445,273
Corporate bonds		-			-			-			-			1,500
Small Business Administration-guaranteed participation securities		89,053			90,416			94,038			95,323			98,668
Mortgage-backed securities and collateralized mortgage obligations-commercial		10,307			10,180			10,491			10,399			10,503
Other securities		685			685			685			685			685
Total securities available for sale		590,128			601,037			624,547			689,663			666,851

Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		43,595			46,490			50,027			53,576			57,296
Corporate bonds		9,979			9,975			9,971			9,967			9,964
Total held to maturity securities		53,574			56,465			59,998			63,543			67,260

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

Loans:
Commercial		198,765			203,415			208,794			209,399			212,145
Residential mortgage loans		2,737,784			2,721,173			2,707,944			2,669,929			2,620,925
Home equity line of credit		356,163			359,325			356,337			354,946			352,552
Installment loans		8,667			9,391			8,930			8,674			8,003
Loans, net of deferred fees and costs		3,301,379			3,293,304			3,282,005			3,242,948			3,193,625
Less:
Allowance for loan losses		44,398			44,762			45,149			45,571			45,944
Net loans		3,256,981			3,248,542			3,236,856			3,197,377			3,147,681

Bank premises and equipment, net		37,360			37,643			37,506			38,100			38,812
Other assets		55,561			63,669			59,358			64,589			60,698

Total assets	$	4,763,262			4,734,992			4,725,817			4,741,337			4,740,656

LIABILITIES:
Deposits:
Demand	$	359,060			365,081			354,162			355,783			347,315
Interest-bearing checking		746,562			754,347			719,071			713,001			696,137
Savings accounts		1,272,394			1,262,194			1,237,549			1,250,154			1,237,115
Money market deposit accounts		595,585			610,826			617,103			633,239			640,368
Time deposits		1,168,887			1,107,930			1,168,908			1,185,264			1,196,233
Total deposits		4,142,488			4,100,378			4,096,793			4,137,441			4,117,168

Short-term borrowings		169,528			191,226			184,405			170,750			194,738
Accrued expenses and other liabilities		28,221			30,078			32,327			30,687			28,274

Total liabilities		4,340,237			4,321,682			4,313,525			4,338,878			4,340,180

SHAREHOLDERS' EQUITY:
Capital stock		98,973			98,973			98,964			98,964			98,964
Surplus		171,113			171,443			171,788			171,988			172,237
Undivided profits		188,159			184,009			180,093			175,721			171,232
Accumulated other comprehensive income (loss), net of tax		73			(4,781	)		(1,174	)		(5,927	)		(2,687	)
Treasury stock at cost		(35,293	)		(36,334	)		(37,379	)		(38,287	)		(39,270	)

Total shareholders' equity		423,025			413,310			412,292			402,459			400,476

Total liabilities and shareholders' equity	$	4,763,262			4,734,992			4,725,817			4,741,337			4,740,656

Outstanding shares (in thousands)		95,369			95,262			95,149			95,056			94,956

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NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

Nonperforming Assets

	03/31/16			12/31/15			09/30/15			06/30/15			03/31/15
New York and other states*
Loans in nonaccrual status:
Commercial	$	2,762			3,024			3,699			3,263			2,489
Real estate mortgage - 1 to 4 family		25,669			23,273			26,059			27,366			28,215
Installment		74			90			69			79			77
Total non-accrual loans		28,505			26,387			29,827			30,708			30,781
Other nonperforming real estate mortgages - 1 to 4 family		47			48			50			74			75
Total nonperforming loans		28,552			26,435			29,877			30,782			30,856
Other real estate owned		5,208			6,120			5,893			5,833			6,288
Total nonperforming assets	$	33,760			32,555			35,770			36,615			37,144

Florida
Loans in nonaccrual status:
Commercial	$	-			-			-			-			-
Real estate mortgage - 1 to 4 family		1,802			1,817			2,054			1,678			2,608
Installment		-			8			9			10			20
Total non-accrual loans		1,802			1,825			2,063			1,688			2,628
Other nonperforming real estate mortgages - 1 to 4 family		-			-			-			-			-
Total nonperforming loans		1,802			1,825			2,063			1,688			2,628
Other real estate owned		476			335			-			275			670
Total nonperforming assets	$	2,278			2,160			2,063			1,963			3,298

Total
Loans in nonaccrual status:
Commercial	$	2,762			3,024			3,699			3,263			2,489
Real estate mortgage - 1 to 4 family		27,471			25,090			28,113			29,044			30,823
Installment		74			98			78			89			97
Total non-accrual loans		30,307			28,212			31,890			32,396			33,409
Other nonperforming real estate mortgages - 1 to 4 family		47			48			50			74			75
Total nonperforming loans		30,354			28,260			31,940			32,470			33,484
Other real estate owned		5,684			6,455			5,893			6,108			6,958
Total nonperforming assets	$	36,038			34,715			37,833			38,578			40,442

Quarterly Net Chargeoffs (Recoveries)
	03/31/16			12/31/15			09/30/15			06/30/15			03/31/15
New York and other states*
Commercial	$	224			672			3			50			34
Real estate mortgage - 1 to 4 family		771			963			1,159			933			1,004
Installment		70			35			26			24			37
Total net chargeoffs	$	1,065			1,670			1,188			1,007			1,075

Florida
Commercial	$	-			(2	)		(3	)		(1	)		(1	)
Real estate mortgage - 1 to 4 family		83			6			33			167			109
Installment		16			13			4			-			-
Total net chargeoffs	$	99			17			34			166			108

Total
Commercial	$	224			670			-			49			33
Real estate mortgage - 1 to 4 family		854			969			1,192			1,100			1,113
Installment		86			48			30			24			37
Total net chargeoffs	$	1,164			1,687			1,222			1,173			1,183

Asset Quality Ratios
	03/31/16			12/31/15			09/30/15			06/30/15			03/31/15
Total nonperforming loans(1)	$	30,354			28,260			31,940			32,470			33,484
Total nonperforming assets(1)		36,038			34,715			37,833			38,578			40,442
Total net chargeoffs(2)		1,164			1,687			1,222			1,173			1,183

Allowance for loan losses(1)		44,398			44,762			45,149			45,571			45,944

Nonperforming loans to total loans		0.92	%		0.86	%		0.97	%		1.00	%		1.05	%
Nonperforming assets to total assets		0.76	%		0.73	%		0.80	%		0.81	%		0.85	%
Allowance for loan losses to total loans		1.34	%		1.36	%		1.38	%		1.41	%		1.44	%
Coverage ratio(1)		146.3	%		158.4	%		141.4	%		140.3	%		137.2	%
Annualized net chargeoffs to average loans(2)		0.14	%		0.21	%		0.15	%		0.15	%		0.15	%
Allowance for loan losses to annualized net chargeoffs(2)		9.5	x		6.6	x		9.3	x		9.7	x		9.6	x

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

(1)	At period-end

(2)	For the period ended

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DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-

INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands) (Unaudited)	Three months ended March 31, 2016									Three months ended March 31, 2015
	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	75,031			255			1.36	%	$	77,865			212			1.09	%
Mortgage backed securities and collateralized mortgage obligations-residential		412,499			2,116			2.05			478,410			2,393			2.00
State and political subdivisions		1,114			22			7.90			2,092			38			7.26
Corporate bonds		-			-			-			1,499			1			0.13
Small Business Administration-guaranteed participation securities		90,611			476			2.10			101,662			522			2.06
Mortgage backed securities and collateralized mortgage obligations-commercial		10,394			36			1.40			10,669			37			1.40
Other		685			4			2.34			685			4			2.34

Total securities available for sale		590,334			2,909			1.97			672,882			3,207			1.91

Federal funds sold and other short-term Investments		675,586			844			0.50			653,263			400			0.25

Held to maturity securities:
Corporate bonds		9,977			154			6.17			9,962			154			6.17
Mortgage backed securities and collateralized mortgage obligations-residential		45,112			402			3.56			59,351			478			3.22

Total held to maturity securities		55,089			556			4.03			69,313			632			3.65

Federal Reserve Bank and Federal Home Loan Bank stock		9,480			120			5.06			9,228			116			5.03

Commercial loans		201,367			2,617			5.20			219,050			2,796			5.11
Residential mortgage loans		2,726,811			29,622			4.35			2,594,216			28,958			4.48
Home equity lines of credit		358,817			3,179			3.56			352,258			3,061			3.52
Installment loans		8,659			193			8.94			7,794			175			9.11

Loans, net of unearned income		3,295,654			35,611			4.33			3,173,318			34,990			4.42

Total interest earning assets		4,626,143			40,040			3.47			4,578,004			39,345			3.45

Allowance for loan losses		(45,271	)								(46,597	)
Cash & non-interest earning assets		135,532									138,560

Total assets	$	4,716,404								$	4,669,967

Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	735,098			114			0.06	%	$	677,963			105			0.06	%
Money market accounts		603,774			496			0.33			637,858			617			0.39
Savings		1,262,467			604			0.19			1,229,498			658			0.22
Time deposits		1,134,459			2,373			0.84			1,180,436			2,434			0.84

Total interest bearing deposits		3,735,798			3,587			0.39			3,725,755			3,814			0.42
Short-term borrowings		176,119			257			0.59			192,344			346			0.73

Total interest bearing liabilities		3,911,917			3,844			0.40			3,918,099			4,160			0.43

Demand deposits		358,224									328,407
Other liabilities		26,917									25,289
Shareholders' equity		419,346									398,172

Total liabilities and shareholders' equity	$	4,716,404								$	4,669,967

Net interest income, tax equivalent					36,196									35,185

Net interest spread								3.07	%								3.02	%


Net interest margin (net interest income to total interest earning assets)								3.13	%								3.08	%

Tax equivalent adjustment					(14	)								(20	)

Net interest income					36,182									35,165

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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.

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.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(dollars in thousands, except per share amounts) (Unaudited)	03/31/16			12/31/15			03/31/15

Tangible Book Value Per Share

Equity	$	423,025			413,310			400,476
Less: Intangible assets		553			553			553
Tangible equity		422,472			412,757			399,923

Shares outstanding		95,369			95,262			94,956
Tangible book value per share		4.43			4.33			4.21
Book value per share		4.44			4.34			4.22

Tangible Equity to Tangible Assets
Total Assets		4,763,262			4,734,992			4,740,656
Less: Intangible assets		553			553			553
Tangible assets		4,762,709			4,734,439			4,740,103

Tangible Equity to Tangible Assets		8.87	%		8.72	%		8.44	%
Equity to Assets		8.88	%		8.73	%		8.45	%

	3 Months Ended
Efficiency Ratio	03/31/16			12/31/15			03/31/15

Net interest income	$	36,182			36,262			35,165
Taxable equivalent adjustment		14			16			20
Net interest income (fully taxable equivalent)		36,196			36,278			35,185
Non-interest income		4,572			4,430			4,623
Less: Net gain on securities		-			2			249
Revenue used for efficiency ratio		40,768			40,706			39,559

Total noninterest expense		23,439			23,108			21,857
Less: Other real estate expense, net		519			570			424
Expense used for efficiency ratio		22,920			22,538			21,433

Efficiency Ratio		56.22	%		55.37	%		54.18	%

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TRUSTCO BANK CORP N Y - FORM 8-K - EX-99.(A) - EXHIBIT 99(A) - April 21, 2016

Attached files

TRUSTCO BANK CORP N Y Reports