SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 1-12709
TOMPKINS TRUSTCO, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 16-1482357
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
THE COMMONS, P.O. BOX 460, ITHACA, NY 14851
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (607) 273-3210
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes [ X ] No [ ].
Indicate the number of shares of the Registrant's Common Stock outstanding as of
the latest practicable date:
Class Outstanding as of July 25, 1999
---------------------------- -------------------------------
Common Stock, $.10 par value 4,807,774 shares
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TOMPKINS TRUSTCO, INC.
FORM 10-Q
INDEX
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PART I -FINANCIAL INFORMATION
PAGE
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ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION AS OF
JUNE 30, 1999 (UNAUDITED) AND DECEMBER 31, 1998 3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR
THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1999
AND 1998 (UNAUDITED) 4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (UNAUDITED) 5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY AND COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 1998 (UNAUDITED) 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 7-8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 9-15
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 16
AVERAGE CONSOLIDATED BALANCE SHEET AND NET INTEREST ANALYSIS 17
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS NOT APPLICABLE
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS NOT APPLICABLE
ITEM 3 - DEFAULTS ON SENIOR SECURITIES NOT APPLICABLE
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS 18
ITEM 5 - OTHER INFORMATION NOT APPLICABLE
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 18
SIGNATURES 19
EXHIBIT INDEX 20
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(In thousands, except share data)
ASSETS (UNAUDITED)
AS OF AS OF
06/30/1999 12/31/1998
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Cash & noninterest bearing balances
due from banks $22,723 $17,170
Federal funds sold -0- 9,600
Available-for-sale securities, at fair value 182,112 182,740
Held-to-maturity securities, fair value of $31,598
in 1999 and $35,011 in 1998 31,084 34,088
Loans/leases net of unearned income 422,376 405,357
Less: Reserve for loan/lease losses 5,079 5,028
- ------------------------------------------------------------------------------------------------------------------------
NET LOANS/LEASES 417,297 400,329
Bank premises and equipment, net 7,355 7,411
Other assets 26,292 21,704
- ------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $686,863 $673,042
========================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Interest bearing:
Checking, savings and money market $217,656 $208,741
Time 174,530 194,495
Noninterest bearing 95,563 89,556
- ------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS 487,749 492,792
Securities sold under agreements to repurchase and
Federal funds purchased 80,781 60,007
Other borrowings 45,005 45,005
Other liabilities 10,895 11,215
- ------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $624,430 $609,019
- ------------------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
Shareholders' equity:
Common Stock - par value $.10 per share
Authorized 15,000,000 shares; issued 4,844,687 at June 30, 1999
Authorized 7,500,000 shares; issued 4,893,141 at December 31, 1998 $484 $489
Surplus 28,104 29,817
Undivided profits 36,908 33,364
Accumulated other comprehensive income (2,347) 1,077
Treasury stock, at cost - 28,305 shares at June 30, 1999,
28,889 shares at December 31, 1998. (537) (548)
Deferred ISOP benefit expense - 8,917 shares at June 30, 1999,
8,789 shares at December 31, 1998. (179) (176)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY $62,433 $64,023
- ------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $686,863 $673,042
========================================================================================================================
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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3
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data) (Unaudited)
QUARTER TO DATE YEAR TO DATE
06/30/1999 06/30/1998 06/30/1999 06/30/1998
-------------- -------------- -------------- --------------
INTEREST INCOME
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Loans $8,661 $8,545 $17,174 $16,894
Federal funds sold 25 51 70 102
Available-for-sale securities 3,009 3,248 6,006 6,357
Held-to-maturity securities 427 477 869 959
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 12,122 12,321 24,119 24,312
- ---------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Deposits:
Time certificates of deposits of $100,000 or more 1,275 1,417 2,506 2,800
Other deposits 2,485 2,623 4,929 5,182
Federal funds purchased and securities sold under
agreements to repurchase 679 674 1,415 1,389
Other borrowings 561 491 1,120 928
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 5,000 5,205 9,970 10,299
- ---------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 7,122 7,116 14,149 14,013
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Less: Provision for loan/lease losses 102 330 224 481
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NET INTEREST INCOME AFTER PROVISION FOR LOAN/LEASE LOSSES 7,020 6,786 13,925 13,532
- ---------------------------------------------------------------------------------------------------------------------------
OTHER INCOME
Trust and investment services income 1,191 933 2,219 1,893
Service charges on deposit accounts 417 419 831 834
Credit card merchant income 664 556 1,252 1,194
Other service charges 508 475 999 905
Other operating income 221 97 482 287
Gain (loss) on available-for-sale securities -0- -0- -0- (95)
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL OTHER INCOME 3,001 2,480 5,783 5,018
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OTHER EXPENSES
Salary and wages 2,196 2,117 4,372 4,216
Pension and other employee benefits 549 445 1,184 958
Net occupancy expense of bank premises 308 331 613 671
Furniture and fixture expense 280 280 561 526
Credit card operating expense 674 495 1,200 1,064
Other operating expense 1,505 1,382 2,817 2,738
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TOTAL OTHER EXPENSES 5,512 5,050 10,747 10,173
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INCOME BEFORE INCOME TAXES 4,509 4,216 8,961 8,377
- ---------------------------------------------------------------------------------------------------------------------------
Income taxes 1,501 1,497 2,988 2,973
- ---------------------------------------------------------------------------------------------------------------------------
NET INCOME $3,008 $2,719 $5,973 $5,404
===========================================================================================================================
BASIC EARNINGS PER SHARE $0.62 $0.56 $1.23 $1.12
DILUTED EARNINGS PER SHARE $0.61 $0.55 $1.21 $1.10
===========================================================================================================================
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SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
SIX MONTHS ENDED
06/30/1999 06/30/1998
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OPERATING ACTIVITIES
Net income $5,973 $5,404
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan/lease losses 224 481
Depreciation and amortization 625 518
Net amortization on securities 186 142
Net loss on sale of securities 0 95
Net gain on sale of loans (1) (96)
Net gain on sales of bank premises and equipment (20) (2)
ISOP shares released for allocation (5) 8
Increase in other assets (1,707) (397)
Decrease in other liabilities (965) (596)
- ----------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,310 5,557
- ----------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Proceeds from maturities of available-for-sale securities 39,477 41,253
Proceeds from sales of available-for-sale securities 3,000 19,905
Proceeds from maturities of held-to maturity securities 7,101 5,606
Purchases of available-for-sale securities (47,625) (79,929)
Purchases of held-to-maturity securities (4,275) (4,744)
Proceeds from sale of loans 338 6,810
Net increase in loans (17,529) (12,684)
Proceeds from sale of bank premises and equipment 20 8
Purchases of bank premises and equipment (461) (276)
- ----------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (19,954) (24,051)
- ----------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net (decrease) in deposits (5,043) (1,646)
Net increase in securities sold under agreements
to repurchase and Federal funds purchased 20,774 9,714
Net increase in other borrowings 0 11,000
Cash dividends (2,429) (2,106)
Sale of treasury stock 20 20
Common shares repurchased and returned to authorized
and unissued status (1,835) 0
Net proceeds from exercise of stock options,
and related tax benefit 110 49
- ----------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 11,597 17,031
- ----------------------------------------------------------------------------------------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (4,047) (1,463)
Cash and Cash Equivalents at beginning of Period 26,770 25,089
TOTAL CASH & CASH EQUIVALENTS AT END OF PERIOD $22,723 $23,626
========================================================================================
Supplemental Information:
Cash paid during the year for:
Interest 10,447 10,923
Taxes 3,387 2,931
Change in net unrealized holding gain (loss) on
available-for-sale securities (5,769) (153)
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SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
5
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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
(In thousands, except share data) (Unaudited)
ACCUMULATED DEFERRED
OTHER ISOP
COMMON TREASURY UNDIVIDED COMPREHENSIVE BENEFIT
STOCK STOCK SURPLUS PROFITS INCOME EXPENSE TOTAL
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BALANCES AT
JANUARY 1, 1998 $326 ($571) $30,037 $26,769 $1,074 ($392) $57,243
- ----------------------------------------------------------------------------------------------------------------------------
Cash dividends ($0.43/Share) (2,106) (2,106)
Exercise of stock options (4,356 shares) 49 49
Treasury stock sold (528 shares) 12 8 20
ISOP Shares released for
allocation (177 shares) 4 4 8
Effect of 3 for 2 stock split in
the form of a stock dividend 163 (163)
Comprehensive Income:
Change in net unrealized gain (loss)
on available-for-sale securities,
net of tax (89) (89)
Net Income 5,404 5,404
- ----------------------------------------------------------------------------------------------------------------------------
Total Comprehensive Income 5,315
- ----------------------------------------------------------------------------------------------------------------------------
BALANCES AT
JUNE 30, 1998 $489 ($559) $30,098 $29,904 $985 ($388) $60,529
- ----------------------------------------------------------------------------------------------------------------------------
============================================================================================================================
BALANCES AT
JANUARY 1, 1999 $489 ($548) $29,817 $33,364 $1,077 ($176) $64,023
- ----------------------------------------------------------------------------------------------------------------------------
Cash dividends ($0.50/Share) (2,429) (2,429)
Exercise of stock options and
related tax benefit (6,601 shares, net) 1 109 110
Common stock repurchased and
returned to authorized and
unissued status (55,055 shares) (6) (1,829) (1,835)
Treasury stock sold (584 shares) 11 9 20
ISOP shares returned to unallocated
status (128 shares) (2) (3) (5)
Comprehensive Income:
Change in net unrealized gain (loss)
on available-for-sale securities,
net of tax (3,424) (3,424)
Net Income 5,973 5,973
- ----------------------------------------------------------------------------------------------------------------------------
Total Comprehensive Income 2,549
- ----------------------------------------------------------------------------------------------------------------------------
BALANCES AT
JUNE 30, 1999 $484 ($537) $28,104 $36,908 ($2,347) ($179) $62,433
============================================================================================================================
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SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
6
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS
Tompkins Trustco, Inc. ("the Company"), formerly known as Tompkins County
Trustco, Inc., is a registered bank holding company, organized under the laws of
New York State, and is the parent company of the Tompkins County Trust Company
(the "Trust Company" or the "Bank"). The Trust Company provides loan, deposit,
and trust services to its customers primarily in Tompkins County, New York, and
surrounding areas.
The consolidated financial information included herein combines the results of
operations, cash flows, the assets, liabilities, and shareholders' equity of the
Company, the Trust Company, and Tompkins Real Estate Holdings, Inc. for all
periods presented. All significant intercompany balances and transactions are
eliminated in consolidation.
2. BASIS OF PRESENTATION
The condensed consolidated financial statements included herein reflect all
adjustments of a normal recurring nature which are, in the opinion of
management, necessary for a fair presentation of the Company's financial
position at June 30, 1999, and December 31, 1998, and the results of operations
for the three months and six months ended June 30, 1999 and 1998.
Reclassifications are made when necessary to conform prior periods to present
period presentation.
In preparing the condensed consolidated financial statements, management is
required to make estimates and assumptions that effect the reported amounts of
assets and liabilities as of the date of the condensed consolidated statements
of condition, income, cash flows, and changes in shareholders' equity and
comprehensive income. Actual amounts could differ from estimates. The
accompanying condensed consolidated financial statements and related notes
should be read in conjunction with the Company's Form 10-K and related notes for
the year ended December 31, 1998.
3. EARNINGS PER SHARE
A computation of Basic EPS and Diluted EPS for the three and six month periods
ending June 30, 1999 and 1998, is presented in the table below.
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WEIGHTED
AVERAGE PER
THREE MONTHS ENDED JUNE 30, 1999 NET SHARES SHARE
(In thousands except share and per share data) INCOME OUTSTANDING AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
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BASIC EPS
INCOME AVAILABLE TO COMMON SHAREHOLDERS $3,008 4,851,296 $0.62
EFFECT OF DILUTIVE SECURITIES (OPTIONS) 69,815
DILUTED EPS
INCOME AVAILABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS $3,008 4,921,111 $0.61
- -------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE PER
THREE MONTHS ENDED JUNE 30, 1998 NET SHARES SHARE
(In thousands except share and per share data) INCOME OUTSTANDING AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
BASIC EPS
INCOME AVAILABLE TO COMMON SHAREHOLDERS $2,719 4,843,490 $0.56
EFFECT OF DILUTIVE SECURITIES (OPTIONS) 97,846
DILUTED EPS
INCOME AVAILABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS $2,719 4,941,336 $0.55
=========================================================================================================================
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WEIGHTED
AVERAGE PER
SIX MONTHS ENDED JUNE 30, 1999 NET SHARES SHARE
(In thousands except share and per share data) INCOME OUTSTANDING AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
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BASIC EPS
INCOME AVAILABLE TO COMMON SHAREHOLDERS $5,973 4,854,099 $1.23
EFFECT OF DILUTIVE SECURITIES (OPTIONS) 73,040
DILUTED EPS
INCOME AVAILABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS $5,973 4,927,139 $1.21
- -------------------------------------------------------------------------------------------------------------------------
WEIGHTED
SIX MONTHS ENDED JUNE 30, 1998 AVERAGE PER
(In thousands except share and per share data) NET SHARES SHARE
INCOME OUTSTANDING AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
BASIC EPS
INCOME AVAILABLE TO COMMON SHAREHOLDERS $5,404 4,839,721 $1.12
EFFECT OF DILUTIVE SECURITIES (OPTIONS) 88,662
DILUTED EPS
INCOME AVAILABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS $5,404 4,928,383 $1.10
=========================================================================================================================
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8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Tompkins Trustco, Inc. is the parent company of Tompkins County Trust Company.
The Trust Company, which traces its charter back to 1836, is an independent
community bank whose primary service area is Tompkins County, New York, and
surrounding areas. Through the Bank, the Company provides a full range of
financial services including: deposits, trust and investment services,
commercial lending, consumer lending, residential mortgage lending, cash
management, and electronic banking.
The following discussion is intended to provide the reader with a further
understanding of the consolidated financial condition and results of operations
of Tompkins Trustco, Inc. and its operating subsidiaries. It should be read in
conjunction with the Company's 1998 Form 10-K and related notes for the year
ended December 31, 1998, and the condensed consolidated financial statements and
notes included elsewhere in this report.
STOCK REPURCHASE PROGRAM
In November 1996, the board of directors approved a stock repurchase program
(the "Program"), which authorizes the repurchase of up to $3 million of the
Company's common stock in open market transactions. During the first half of
1999, the Company repurchased 14,055 shares under the Program for $471,000, or
$33.51 per share. Since inception, the Company has repurchased 19,093 shares
under the program for a total cost of $640,000.
The Company repurchased 41,000 shares in the second quarter of 1999 in a
privately negotiated transaction. The shares were repurchased at a cost of $1.4
million, or $33.25 per share. In December 1998, the Company repurchased 12,207
shares in a privately negotiated transaction. The shares were purchased at
$34.00 per share, for a total purchase price of $415,000. All of the shares from
the repurchase transactions described above have been returned to the status of
authorized but unissued.
RESULTS OF OPERATIONS
Net income for the second quarter of 1999 was $3.0 million, compared to $2.7
million for the second quarter of 1998. Basic earnings per share in the second
quarter of 1999 increased by 10.7% to $0.62, compared to $0.56 in the second
quarter of 1998. On a diluted basis, earnings per share increased to $0.61 per
share in the second quarter of 1999, compared to $0.55 for the same period in
1998. Net income for the year to date was $6.0 million, up 10.5% over the first
six months of 1998. Diluted earnings per share for the first half of 1999 was
$1.21, reflecting a 10% increase over the same period in 1998.
The Company's return on average assets (ROAA) was 1.77% through the first six
months of 1999, compared to 1.69% for the same period in 1998. Return on average
shareholders' equity (ROAE) for the first six months of 1999 was 18.44%,
compared to 18.66% for the same period in 1998. Improvement in ROAA reflects the
strong earnings growth in the first half of 1999, which exceeded average asset
growth of 5% between June 1999 and June 1998. The modest decline in ROAE is the
result of 12% growth in average equity, which outpaced growth in net income.
NET INTEREST INCOME
As reflected in the attached Average Consolidated Balance Sheet and Net Interest
Analysis, the Company earned tax-equivalent net interest income of $14.7 million
for the six months ended June 30, 1999, compared to $14.6 million for the same
period in 1998. The tax-equivalent net interest margin on earning assets was
4.66% through the first six months of 1999, compared to a 4.80% ratio through
the first six months of 1998. Yield on earning assets declined from 8.19% as of
June 30, 1998, to 7.83% as of June 30, 1999. The decline in asset yields is
reflective of the general downward trending of interest rates over the periods
presented.
The cost of interest bearing liabilities was 3.91% in the first six months of
1999, compared to 4.24% for the same period in 1998. Noninterest bearing
liabilities contributed 75 basis points to the Company's net interest margin in
the first six months of 1999, compared to 85 basis points for the same period in
1998.
9
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Despite a decline in the Company's net interest margin, net interest income
continues to rise due to growth in the Company's earning asset base. Average
earning assets grew by $22.2 million between June 30, 1999 and June 30, 1998.
Growth in average earning assets was centered in residential real estate loans,
which grew by $19.9 million, and commercial real estate loans, which grew by
$7.1 million.
Earning asset growth from June 1998 to June 1999 was supported by an $8.7
million increase in average core deposits (noninterest bearing deposits, savings
and money market deposits, and time deposits of less than $100,000), an $18.6
million increase in average non-core funding (Time deposits of $100,000 and
more, Federal funds purchased, securities sold under agreements to repurchase,
and other borrowings), and $6.9 million growth in average shareholders' equity.
A decline in average securities from June 1998 to June 1999 corresponds with an
increase in other assets over the same period. Growth in other assets is largely
attributable to an $12.3 million investment in corporate owned life insurance.
The corporate owned life insurance was purchased primarily in the third and
fourth quarters of 1998, and covers several senior officers of the Company and
the Trust Company. The insurance provides benefits to both the Company and the
covered employees. Increases in the cash surrender value of the insurance are
reflected as other operating income, and the related mortality expense is
recognized as an other operating expense. Although income associated with the
insurance policies is not included in interest income, increases in the cash
surrender value are expected to produce a tax-adjusted return of approximately
8.6% in 1999. Income from corporate owned life insurance was $350,000 in the
first half of 1999.
PROVISION FOR LOAN/LEASE LOSSES
The provision represents management's estimate of the expense necessary to
maintain the reserve for loan/lease losses at an adequate level. The provision
of $224,000 for the first six months of 1999 represents a 51% decline from the
$481,000 provision in the first six months of 1998. The decline in the year to
date provision is reflective of a lower level of loan/lease losses in the
current period, and management's estimates of the reserves necessary given the
inherent risk of loss in the portfolio.
OTHER INCOME
Other income growth remains a key strategic objective of the Company, as a means
of developing diversified sources of revenue. Total other income for the first
six months of 1999 totaled $5.8 million, an increase of 15% from the prior year.
Other income as a percentage of average assets increased from 1.56% for the six
months ended June 30, 1998, compared to 1.70% for the same period in 1999. Other
income for the quarter ended June 30, 1999, was up 21% over the same period in
1998.
Income from trust and investment services, the largest segment of other income,
increased 17% to $2.2 million, compared to $1.9 million for the first six months
of 1998. Total assets managed by, or in custody of, the Trust and Investment
Services Division exceeded $1 billion for the first time in the Company's
history, with $1,002 million under management as of June 30, 1999. Income growth
from trust and investment services is primarily attributable to growth in assets
managed by, or in custody of the Division, which increased by $60 million from
June 30, 1998. Assets in the custody of the Trust and Investment Services
Division include a portion of the Trust Company's securities portfolio, with a
market value of $132 million on June 30, 1999, and $159 million on June 30,
1998.
10
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The Trust and Investment Services Division is an important component of future
revenue growth of the Company. Although the division primarily provides services
to customers in the Bank's market area of Tompkins County and surrounding areas,
the division currently manages assets for clients in more than 40 states. In
1997, the Company expanded the reach of the Trust and Investment Services
Division by offering trust and investment services through a "Trust Alliance"
program. Through this program, the Company provides servicing and administrative
support to trust departments of other banks. Currently, the Company has formed
Trust Alliances with two community banks, which have assets under management
totaling $30.3 million. The Company will add a third bank to the Trust Alliance
program in the third quarter of 1999. The Dime Bank, a commercial bank
headquartered in Honesdale, Pennsylvania will bring its existing Trust
Department into the program beginning in July 1999.
Electronic banking services and card products continue to expand and provide a
growing source of other income. Credit card merchant income contributed $1.3
million to other income in the first half of 1999, representing an increase of
5% compared to the same period in 1998. Fees related to the Company's debit card
and credit card products rose 25% in the first half of 1999, to $348,000. The
Company continues to expand its banking card services, with the introduction of
a Visa Purchasing Card in the second quarter of 1999. Purchasing Cards can be
used by businesses to improve controls and reduce paperwork associated with
procurement of small dollar purchases. Purchasing Cards can be coded with a wide
variety of spending controls and allow for the delivery of statements in
electronic or paper format. The product will generate additional revenue in the
form of interest income and fee income.
Service charges on deposit accounts of $831,000 for the first six months of 1999
remained relatively unchanged from the $834,000 reported for the same period in
1998. Growth in service charges on deposit accounts has not kept pace with
growth in deposits in recent quarters, as customers are increasingly taking
advantage of lower fee options in deposit products.
Other operating income increased by 68% to $482,000 in the first half of 1999.
The increase from 1998 to 1999 includes $350,000 associated with the Company's
investment in corporate owned life insurance, as previously discussed under "Net
Interest Income". Other operating income in 1998 was aided by a $96,000 gain on
the sale of student loans, which compares to a gain on sale of loans of $1,000
for the first six months of 1999.
OTHER EXPENSE
Total other expenses increased 6% in the first six months of 1999 to $10.7
million, compared to $10.2 million in 1998. Salary and wages remains the largest
segment of other expense, comprising 41% of other expenses for the period ended
June 30, 1999, which is relatively unchanged from the same period in 1998.
Pension and employee benefits expense increased by 24% over the prior year, to
$1.2 million. Pension and employee benefits expense is heavily affected by
actuarial calculations relating to the Company's pension plan, and may fluctuate
based upon those calculations.
Credit card operating expense is a variable expense that varies based upon the
volume of merchant and card holder transactions. The 13% increase in credit card
operating expenses during the first six months of 1999 is primarily due to an
increased volume of merchant customer transactions. Year to date other operating
expenses have increased a modest 3% from $2.7 million in 1998, to $2.8 million
in 1999.
INCOME TAXES
The provision for income taxes provides for Federal and New York State income
taxes. The provision for the first six months of 1999 was $3.0 million. Despite
an increased level of pretax net income, the provision for income taxes was
relatively unchanged from the prior year, as the effective tax rate for the
first six months of 1999 was 33.3%, compared to 35.5% for the same period in
1998.
11
<PAGE>
FINANCIAL CONDITION
The Company's total assets were $686.9 million as of June 30, 1999, representing
a 2% increase over total assets reported as of December 31, 1998. Growth was
primarily in the loan and lease portfolio, which increased by $17.0 million in
the first six months of 1999. Investments, including Federal funds sold,
decreased by $7.5 million (net of market value adjustments on available-for-sale
securities) in the first half of 1999, while noninterest bearing cash balances
increased by $5.6 million. Asset growth was funded through a combination of core
deposit growth and short term borrowings in the form of Federal funds purchased.
CAPITAL
Total shareholders' equity declined by 2% during the first six months of 1999 to
$62.4 million. Contributing to the decline in shareholders' equity were
approximately $1.9 million of common stock repurchased by the Company during the
first half of 1999, and a $3.4 million decline in accumulated other
comprehensive income. The decline in accumulated other comprehensive income,
which represents the change in net unrealized gain or loss in the Company's
available-for-sale securities portfolio, reflects the market depreciation in the
portfolio caused by rising interest rates during the first half of 1999.
Cash dividends paid in the first half of 1999 totaled approximately $2.4
million, representing 40.7% of year to date earnings. Per share cash dividends
of $0.50 for the first six months of 1999, represents a 16% increase over cash
dividends paid in the first six months of 1998.
The Company and the Trust Company are subject to various regulatory capital
requirements administered by Federal banking agencies. Management believes the
Company and the Trust Company meet all capital adequacy requirements to which
they are subject. The table below reflects the Company's capital position at
June 30, 1999, compared to the regulatory capital requirements for "well
capitalized" institutions.
<TABLE>
<CAPTION>
REGULATORY CAPITAL ANALYSIS - June 30, 1999
=========================================================================================================
ACTUAL WELL CAPITALIZED REQUIREMENT
(DOLLAR AMOUNTS IN THOUSANDS) AMOUNT RATIO AMOUNT RATIO
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Capital (to risk weighted assets) $71,015 16.9% $42,034 10.0%
Tier I Capital (to risk weighted assets) $65,936 15.7% $25,221 6.0%
Tier I Capital (to average assets) $65,936 9.7% $34,176 5.0%
=========================================================================================================
</TABLE>
As illustrated above, the Company's capital ratios on June 30, 1999, remain well
above the minimum requirement for well capitalized institutions. The ratios show
continued improvement from the levels reported at December 31, 1998. As of
December 31, 1998, the Company's Total Capital as a percentage of risk weighted
assets was 17.1%; Tier I Capital to risk weighted assets was 15.9%; and Tier I
Capital to average assets was 9.7%.
RESERVE FOR LOAN AND LEASE LOSSES AND NONPERFORMING ASSETS
Management reviews the adequacy of the reserve for loan and lease losses in a
detailed and ongoing basis, giving consideration to various risk elements that
may affect losses in the loan portfolio. Based upon management's review, the
current reserve of $5.1 million is believed to be adequate to absorb inherent
losses in the loan and lease portfolios. Activity in the Company's reserve for
loan and lease losses during the first six months of 1999 and 1998 is
illustrated in the table below.
12
<PAGE>
<TABLE>
<CAPTION>
ANALYSIS OF THE RESERVE FOR LOAN/LEASE LOSSES (In thousands)
====================================================================================================
JUNE 30, 1999 JUNE 30, 1998
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Average Loans and Leases Outstanding Year to Date $411,182 $380,415
- ----------------------------------------------------------------------------------------------------
Beginning Balance 5,028 4,979
- ----------------------------------------------------------------------------------------------------
Provision for loan losses 224 481
Loans charged off (395) (658)
Loan recoveries 222 202
- ----------------------------------------------------------------------------------------------------
Net Charge-offs (173) (456)
- ----------------------------------------------------------------------------------------------------
Ending Balance $5,079 $5,004
====================================================================================================
Annualized net charge-offs through the first six months of 1999 amounted to
0.08% of average loans outstanding during the period. This ratio compares to
0.23% for the six months ended June 30, 1998.
The level of nonperforming assets, as illustrated in the table below, reflects
an improving trend from the prior year. Over 94% of nonperforming loans as of
June 30, 1999 are secured by real estate, with 53% secured by 1-4 family
residential properties.
NONPERFORMING ASSETS (In thousands)
====================================================================================================
JUNE 30, 1999 JUNE 30, 1998
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Nonaccrual loans $815 $1,325
Loans past due 90 days and accruing 67 59
Troubled debt restructuring not included above 0 0
- ----------------------------------------------------------------------------------------------------
Total nonperforming loans 882 1,384
- ----------------------------------------------------------------------------------------------------
Other real estate, net of allowances 92 271
====================================================================================================
Total nonperforming assets $974 $1,655
====================================================================================================
Total nonperforming loans as a percent of total loans 0.21% 0.36%
Total nonperforming assets as a percentage of total assets 0.14% 0.26%
====================================================================================================
</TABLE>
DEPOSITS AND OTHER LIABILITIES
Total deposits were $487.7 million on June 30, 1999, compared to $492.8 million
on December 31, 1998. Core deposits, which include demand deposits, savings and
money market accounts, and time deposits of less than $100,000 represent the
primary funding source for the Company. As of June 30, 1999, core deposits of
$402.3 million represented 64.4% of total liabilities. This compares to core
deposits of $385.9 million, representing 65.5% of total liabilities on December
31, 1998.
The Company uses large time deposits, securities sold under repurchase
agreements, Federal funds purchased, and other borrowings as additional funding
sources. As of June 30, 1999, time deposits of $100,000 and over were $85.5
million, down from $106.9 million at year end. Securities sold under agreements
to repurchase and Federal funds purchased were $80.8 million on June 30, 1999,
representing an increase of approximately $20.8 million from December 31, 1998.
Other borrowings, consisting of term borrowings from the Federal Home Loan Bank,
were unchanged at $45 million.
LIQUIDITY
Liquidity represents the Company's ability to efficiently and economically
accommodate decreases in deposits and other liabilities, and fund increases in
assets. The Company uses a variety of resources to meet its liquidity needs
which include cash and cash equivalents, short term investments, cash flow from
lending and investing activities, deposit growth, securities sold under
repurchase agreements, and borrowings.
Cash and cash equivalents of $22.7 million as of June 30, 1999 reflects a
decline of $4.0 million from December 31, 1998. Short term investments
consisting of debt securities due in one year or less declined from $21.6
million on December 31, 1998, to $19.5 million on June 30, 1999. Securities
pledged to secure certain large deposits and securities sold under repurchase
agreements were 78.4% of total securities as of June 30, 1999, compared to 84.1%
as of December 31, 1998.
Additional liquidity is provided through the Trust Company's Federal Home Loan
Bank (FHLB) membership. As of June 30, 1999, the Trust Company had approximately
$44.8 million in unused borrowing capacity through established lines of credit
with the FHLB. The Trust Company's equity investment in Tompkins Real Estate
Holdings, Inc. of $207 million can be used to secure additional borrowings from
the FHLB.
13
<PAGE>
YEAR 2000 CONSIDERATIONS
The Company has been preparing for Year 2000 since 1997 and is pleased to report
that as of June 30, 1999, all significant systems are Year 2000 certified and
testing has been completed. The Company uses purchased software products for all
of its internal transaction processing applications; therefore, no significant
internal programming was necessary to prepare these systems to handle
transactions in the Year 2000. The majority of the Company's efforts in
preparation for Year 2000 processing related to testing purchased and outsourced
processing systems, as well as updating databases.
Management initiated a Year 2000 program, consistent with guidelines issued by
the Federal Financial Institutions Examination Council (FFIEC), to prepare the
Company's computer systems and software applications for the Year 2000.
The program included the following phases, all of which have been completed as
of June 30, 1999:
o Identification
o Assessment
o Remediation
o Testing
o Contingency Planning
The identification phase involved identifying the types of risk exposures
related to Year 2000. Through this process the Company identified specific risk
exposures related to internal information technologies, information service
providers, other service providers, and customers.
As part of the assessment phase, the Company categorized its information
technology systems as Mission Critical, Mission Important, or Important. The
Company assessed the Year 2000 readiness of each information technology system
and established a plan for remediating any known Year 2000 problems.
The Company's primary application, which handles processing of loans, deposits,
and general ledger, has been designated as Year 2000 compliant by the vendor.
The vendor, which has contracts with approximately 1,000 banks, has also
provided the Company with test results performed by an independent contractor
that has also designated the system as Year 2000 compliant. Due to the
importance of this application to the Company's operations, management conducted
its own tests of this system in the fourth quarter of 1998, with satisfactory
results. All other mission critical and mission important systems have been
remediated, tested, and certified as Year 2000 compliant. Testing continues on
several other systems that are not considered Mission Critical or Mission
Important.
The Company has formulated a contingency plan for business continuation in the
event of Year 2000 system failures. This contingency plan is based on the
Company's existing disaster recovery plan, with modifications for Year 2000
risks.
As part of the process of evaluating and attempting to mitigate third party
risk, the Company has collected and analyzed Year 2000 information from third
parties who have significant business relationships with the Company. These
third parties include borrowers, obligors, and vendors. Through this evaluation
process, the Company is aware of no issues that would significantly affect the
Company's ability to conduct business as usual during and after the century date
change.
The Company believes that its reasonably likely worst case scenario might
include a material increase in credit losses due to Year 2000 problems of
borrowers and a disruption in financial markets causing liquidity stress to the
Company. The magnitude of potential credit losses or a disruption in financial
markets cannot be determined at this time; however, the Year 2000 program
described above is designed to reduce exposure to these risks. In any event, the
strong capital position, earnings strength and liquidity of the Company are
believed to be more than adequate to withstand any reasonably likely worst case
scenario.
14
<PAGE>
The total cost of the Company's Year 2000 project was approximately $200,000,
the majority of which was incurred in 1998. This amount includes the costs of
additional hardware, software, and technology consultants, as well as the cost
of the Company's information technology professionals dedicated to achieving
Year 2000 compliance. Management does not expect to incur any significant
additional expense related to the Company's Year 2000 project in the remainder
of 1999.
FORWARD-LOOKING STATEMENTS
Portions of this document may constitute "forward looking statements" as defined
by federal law. Although the Company believes any such statements are based on
reasonable assumptions, there is no assurance that actual outcomes will not be
materially different. The Company assumes no duty to update forward-looking
statements, and cautions that these statements are subject to numerous
assumptions, risk, and uncertainties, all of which could change over time.
15
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest rate sensitivity is the primary market risk category associated with
the Company's operations. Interest rate risk refers to the volatility of
earnings caused by changes in interest rates. Each month the Asset/Liability
Management Committee estimates the likely impact on earnings resulting from
various changing interest rate scenarios. The findings of the committee are
incorporated into the investment and funding decision of the Company.
The Company's June 30, 1999, one-year cumulative rate sensitivity gap was a
negative 12% of total assets. This suggests earnings would benefit from a
declining interest rate environment, and would be vulnerable to a rising
interest rate environment. Management estimates that a 200 basis point rise in
interest rates over a one year period would result in a 4% decline in net
interest income, assuming no management actions to reposition the balance sheet
in reaction to a changing rate environment. Management believes the current
interest rate risk exposure is not material given the Company's current level of
earnings and capital.
16
<PAGE>
<TABLE>
<CAPTION>
TOMPKINS COUNTY TRUSTCO, INC.
AVERAGE CONSOLIDATED BALANCE SHEET AND NET INTEREST ANALYSIS
- ----------------------------------------------------------------------------------------------------------------------------
YTD YTD
QUARTER PERIOD PERIOD
ENDED ENDED ENDED
JUN-99 JUN-99 JUN-98
- ----------------------------------------------------------------------------------------------------------------------------
Average Average Average Average Average Average
(DOLLAR AMOUNTS IN THOUSANDS) Balance Interest Yield/Rate Balance Interest Yield/Rate Balance Interest Yield/Rate
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Securities (1)
U.S. Government Securities 180,642 2,926 6.50% 178,574 5,797 6.55% 185,113 6,181 6.73%
State and municipal (2) 33,921 658 7.78% 34,382 1,336 7.84% 37,557 1,489 7.99%
Other Securities (2) 5,784 95 6.59% 7,794 233 6.03% 5,827 199 6.89%
-------------------------------------------------------------------------------------
Total securities 220,347 3,679 6.70% 220,750 7,366 6.73% 228,497 7,869 6.94%
Federal Funds Sold 2,040 25 4.92% 3,025 70 4.67% 3,880 102 5.30%
Loans, net of unearned income (3)
Residential real estate 183,295 3,421 7.49% 181,753 6,831 7.58% 161,831 6,450 8.04%
Commercial Real Estate 78,254 1,656 8.49% 76,232 3,222 8.52% 69,098 3,135 9.15%
Commercial Loans (2) 78,433 1,841 9.41% 79,017 3,661 9.34% 77,620 3,711 9.64%
Consumer Loans 59,551 1,452 9.78% 59,122 2,897 9.88% 59,428 3,126 10.61%
Direct Lease Financing 15,774 307 7.81% 15,058 594 7.95% 12,438 500 8.11%
-------------------------------------------------------------------------------------
Total loans, net of
unearned income 415,307 8,677 8.38% 411,182 17,205 8.44% 380,415 16,922 8.97%
-------------------------------------------------------------------------------------
TOTAL INTEREST-EARNING ASSETS 637,693 12,381 7.79% 634,956 24,641 7.83% 612,791 24,893 8.19%
-------------------------------------------------------------------------------------
Other assets 46,419 45,992 31,439
-------- -------- --------
TOTAL ASSETS $684,112 $680,948 $644,230
======== ======== ========
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Deposits
Interest-bearing deposits
Interest checking, savings,
& money market 220,506 1,418 2.58% 218,052 2,790 2.58% 212,631 2,921 2.77%
Time Dep > $100,000 103,830 1,275 4.93% 102,292 2,507 4.94% 101,536 2,800 5.56%
Time Dep < $100,000 88,583 1,066 4.83% 88,336 2,139 4.88% 87,769 2,261 5.19%
-------------------------------------------------------------------------------------
Total interest-bearing deposits 412,919 3,759 3.65% 408,680 7,436 3.67% 401,936 7,982 4.00%
Federal funds purchased & securities
sold under agreements to repurchase 58,079 679 4.69% 60,399 1,415 4.72% 54,180 1,389 5.17%
Other borrowings 45,005 562 5.01% 45,005 1,120 5.02% 33,331 928 5.61%
-------------------------------------------------------------------------------------
TOTAL INTEREST-BEARING LIABILITIES 516,003 5,000 3.89% 514,084 9,971 3.91% 489,447 10,299 4.24%
Noninterest bearing deposits 91,604 90,391 87,638
Accrued expenses and other liabilities 10,750 11,173 8,747
-------- -------- --------
TOTAL LIABILITIES 618,357 615,648 585,832
SHAREHOLDER'S EQUITY 65,755 65,300 58,398
TOTAL LIABILITIES AND -------- -------- --------
SHAREHOLDERS' EQUITY $684,112 $680,948 $644,230
======== ======== ========
Interest rate spread 3.90% 3.91% 3.95%
Impact of noninterest bearing
liabilities 0.74% 0.75% 0.85%
------------------- -------------------- -------------------
Net interest income/margin
on earning assets $7,381 4.64% $14,670 4.66% $14,594 4.80%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Average balances and yields exclude unrealized gains and losses on
available-for-sale securities.
(2) Interest income includes the effects of taxable-equivalent adjustments
using a blended Federal and State income tax rate of 40% to increase tax
exempt interest income to a taxable-equivalent basis.
(3) Nonaccrual loans are included in the average asset totals presented above.
Payments received on nonaccrual loans have been recognized as disclosed in
the notes to the Company's 1998 Form 10-K. .
17
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
The Annual Meeting of stockholders of the Company was held on April 28, 1999
(the "Annual Meeting"). Proxies for the Annual Meeting were solicited pursuant
to Regulation 14 under the Securities and Exchange Act of 1934, as amended.
The election of four directors for three year terms and one director for a one
year term were approved at the Annual Meeting. Directors John Alexander, Edward
C. Hooks, Hunter Rawlings, III, and Michael D. Shay were each elected to terms
of three years which expire in the year 2002. Director Peggy R. Williams was
elected to a one year term expiring in 2000. Directors James J. Byrnes, Reeder
D. Gates, William W. Griswold, Carl E. Haynes, Robert T. Horn, Jr., Bonnie H.
Howell, Lucinda A. Nobel, and Thomas R. Salm will continue as directors.
A proposal to change the Company name from Tompkins County Trustco, Inc. to
Tompkins Trustco, Inc. was approved, with shares voted as follows: 4,023,172 in
favor, 253,574 opposed, 9,901 abstained, and 571,337 did not vote.
A proposal to increase the number of authorized shares of the Company's common
stock from 7,500,000 to 15,000,000 was approved with shares voted as follows:
4,107,901 in favor, 107,350 opposed, 71,396 abstained, and 571,337 did not vote.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: July 29, 1999
TOMPKINS TRUSTCO, INC.
By: /s/ James J. Byrnes
---------------------------------------------------
JAMES J. BYRNES
Chairman of the Board,
President and Chief Executive Officer
By: /s/ Richard D. Farr
---------------------------------------------------
RICHARD D. FARR
Senior Vice President and
Chief Financial Officer
19
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION PAGES
- --------------------------------------------------------------------------------
EXHIBIT 27 FINANCIAL DATA SCHEDULE
20
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JUNE 30,
1999 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0001005817
<NAME> TOMPKINS TRUSTCO, INC.
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 22,723
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 182,112
<INVESTMENTS-CARRYING> 31,084
<INVESTMENTS-MARKET> 31,598
<LOANS> 422,376
<ALLOWANCE> 5,079
<TOTAL-ASSETS> 686,863
<DEPOSITS> 487,749
<SHORT-TERM> 80,781
<LIABILITIES-OTHER> 10,895
<LONG-TERM> 45,005
0
0
<COMMON> 484
<OTHER-SE> 61,949
<TOTAL-LIABILITIES-AND-EQUITY> 686,863
<INTEREST-LOAN> 17,174
<INTEREST-INVEST> 6,875
<INTEREST-OTHER> 70
<INTEREST-TOTAL> 24,119
<INTEREST-DEPOSIT> 7,435
<INTEREST-EXPENSE> 9,970
<INTEREST-INCOME-NET> 14,149
<LOAN-LOSSES> 224
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 10,747
<INCOME-PRETAX> 8,961
<INCOME-PRE-EXTRAORDINARY> 8,961
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,973
<EPS-BASIC> 1.23
<EPS-DILUTED> 1.21
<YIELD-ACTUAL> 3
<LOANS-NON> 815
<LOANS-PAST> 67
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,028
<CHARGE-OFFS> 224
<RECOVERIES> 395
<ALLOWANCE-CLOSE> 5,079
<ALLOWANCE-DOMESTIC> 5,079
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,082
</TABLE>
