[TEXT]
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____________________ to ____________________
Commission file number 2-75886
_______________
TRUSTCO BANK CORP NY
(Exact name of registrant as specified in its charter)
NEW YORK 14-1630287
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
320 STATE STREET, SCHENECTADY, NEW YORK 12305
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(518) 377-3311
_______________
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange on
Title of each class which registered
________________ ________________
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 Par Value
(Title of class)
_______________
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 by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K.(X)
Indicate the number of shares outstanding of each of the
registrant's classes of common stock:
Number of Shares Outstanding
Class of Common Stock as of March 10, 1994
__________________ __________________
$1 Par Value 13,275,589
The aggregate market value of registrant's common stock (based upon
the closing price on March 10, 1994) held by non-affiliates was
approximately $285,425,164.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of registrant's Annual Report to Shareholders for the
fiscal year ended December 31, 1993 (Part I, Part II, and Part IV).
(2) Portions of registrant's Proxy Statement filed for its Annual
Meeting of Shareholders to be held May 16, 1994 (Part III).
PART I
Item 1. Business
General
TrustCo Bank Corp NY ("TrustCo") is a one-bank holding company having
its principal place of business at 320 State Street, Schenectady, New
York 12305. TrustCo Bank Corp NYwas organized in 1981 to acquire all
of the outstanding stock of Trustco Bank New York, formerly known as
The Schenectady Trust Company. Following the necessary regulatory
approvals, TrustCo commenced business on July 1, 1982. Through policy
and practice, TrustCo continues to emphasize that it is an equal
opportunity employer. There are 452 full-time equivalent employees at
year-end.
Bank Subsidiary
TrustCo's subsidiary, Trustco Bank New York ("Bank"), is a New York
State chartered trust company, engaged in a general commercial banking
business serving individuals, partnerships, corporations,
municipalities and governments of New York. The largest part of such
business consists of accepting deposits and making loans and
investments. The Bank provides a wide range of both personal and
business banking services. The Bank is a member of the Federal Reserve
system and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law. The Bank accounted for
substantially all of TrustCo's 1993 consolidated net income and
average assets.
The trust department of the Bank acts as executor of estates and
trustee of personal trusts, gives estate planning and related advice,
provides custodial services and acts as trustee of various types of
employee benefit plans and corporate pension and profit sharing
trusts. The aggregate market value of the assets under trust, custody
or management was approximately $671 million as of December 31, 1993.
The daily operations of the Bank remains the responsibility of its
Board of Directors and officers, subject to the overall supervision of
TrustCo. TrustCo, as the parent corporation, derives most of its
income from dividends paid to it by its subsidiary Bank. TrustCo's
Bank subsidiary is included in TrustCo's consolidated financial
statements.
ORE Subsidiary
During 1993, TrustCo created ORE Subsidiary Corp., a New York
corporation, to hold and manage certain foreclosed properties. The
accounts of this new subsidiary are included in TrustCo's consolidated
financial statements.
Competition
TrustCo's subsidiary Bank encounters keen competition from other
commercial banks, including New York City-based holding companies
which are some of the largest and most competitive institutions in the
United States. In addition, savings banks, savings and loan
associations, credit unions and other financial and related
institutions compete for the banking, trust, investment and other
financial services which Bank offers. On a regular basis, TrustCo has
discussions with other financial institutions relative to potential
merger or acquisition opportunities.
Supervision and Regulation
Banking is a highly regulated industry, with numerous federal and
state laws and regulations governing the organization and operation of
banks and their affiliates. As a bank holding company under the Bank
Holding Company Act of 1956, as amended (the "Act"), TrustCo is
regulated and examined by the Board of Governors of the Federal
Reserve System (the "Board"). The Act requires that TrustCo obtain
prior Board approval for bank and non-bank acquisitions and restricts
the business operations permitted to TrustCo. The Bank is subject to
regulation and examination by the New York State Banking Department.
Virtually all aspects of TrustCo's and the Bank's business are subject
to regulation and examination by the Board, the Federal Deposit
Insurance Corporation and the New York State Banking Department.
Most of TrustCo's revenues consist of cash dividends paid to TrustCo
by its subsidiary Bank, payment of which is subject to various state
and federal regulatory limitations. (Reference is made to Note 1(j) of
TrustCo's consolidated financial statements for information concerning
restrictions on TrustCo's ability to pay dividends.) In addition, the
Federal Deposit Insurance Corporation and the Board have established
guidelines with respect to the maintenance of appropriate levels of
capital by a bank holding company under their jurisdictions.
Compliance with the standards set forth in such guidelines could also
limit the amount of dividends which a bank or a bank holding company
may pay.
The banking industry is also affected by the monetary and fiscal
policies of the federal government, including the Board, which exerts
considerable influence over the cost and availability of funds
obtained for lending and investing.
Proposals to change the laws and regulations governing the operations
and taxation of banks, companies which control banks and other
financial institutions are frequently raised in Congress and in the
New York state legislature and before various bank regulatory
authorities. The likelihood of any major changes and the impact such
changes might have on TrustCo are impossible to determine.
Foreign operations
Neither TrustCo nor the Bank engage in material operations in foreign
countries or have any outstanding loans to foreign debtors.
Statistical Information Analysis
The "Financial Review" on pages 26-44 of TrustCo's Annual Report to
Shareholders for the year ended December 31, 1993, which contains a
presentation and discussion of statistical data relating to TrustCo,
are hereby incorporated by reference. The information with respect to
such tables should not be construed to imply any conclusion on the
part of the management of TrustCo that the results, causes or trends
indicated therein will continue in the future. The nature and effects
of governmental monetary policy, supervision and regulation, future
legislation, inflation and other economic conditions and many other
factors which affect interest rates, investments, loans, deposits and
other aspects of TrustCo's operations are extremely complex and could
make historical operations, earnings, assets and liabilities not
indicative of what may occur in the future.
Item 2. Properties
TrustCo's executive offices are located at 320 State Street,
Schenectady, New York, 12305. The Bank operates 43 offices, of which
20 are owned and 23 are leased from others. These properties, when
considered in the aggregate, are not material to the operation of
TrustCo.
Item 3. Legal Proceedings
The nature of TrustCo's business generates a certain amount of
litigation against TrustCo and its subsidiary Bank involving matters
arising in the ordinary course of business. In the opinion of
management of TrustCo, there are no proceedings pending to which
TrustCo or either of its subsidiaries is a party, or of which its
property is the subject which, if determined adversely to TrustCo or
such subsidiary, would be material in relation to TrustCo's
consolidated stockholders' equity and financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of TrustCo
The following is a list of the names and ages of the executive
officers of TrustCo and their business history for the past five
years:
<TABLE>
<CAPTION> Year first became
Name, age and Principal occupations Executive
Position or employment since Officer of
with TrustCo January 1, 1988 TrustCo
<S> <C> <C>
Robert A. McCormick, 57, President and Chief Executive Officer, TrustCo Bank Corp NY. 1982
President and Chief President and Chief Executive Officer, Trustco Bank New York.
Executive Officer
Nancy A. McNamara, 44, Senior Vice President, Trustco Bank New York Since 1988. 1992
Vice President Director of TrustCo Bank Corp NY and Trustco Bank New York
since December 1991. Joined Trustco Bank New York in 1971
William F. Terry, 52, Secretary, TrustCo Bank Corp NY; Senior Vice President 1990
Secretary and Secretary, Trustco Bank New York. 1987: Senior Vice
President Trustco Bank New York.
Peter A. Zakriski, 51, Senior Officer, Trustco Bank New York (Administrative Vice 1982-1988,
Treasurer and President). Treasurer of TrustCo Bank Corp NY from 1982 1992
Assistant Secretary until May 1988. Reassumed the position in February 1992.
</TABLE>
PART II
Item 5. Market for the Corporation's Common Equity and Related
Stockholder Matters
Page 45 of TrustCo's Annual Report to Shareholders for the year ended
December 31, 1993, is incorporated herein by reference. The closing
price for the Corporation's common stock on March 10, 1994, was
$21.50.
Item 6. Selected Financial Data
Page 26 of TrustCo's Annual Report to Shareholders for the year ended
December 31, 1993, is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Pages 26 through 44 of TrustCo's Annual Report to Shareholders for the
year ended December 31, 1993, are incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The financial statements, together with the report thereon of KPMG Peat
Marwick on pages 10 through 25 of TrustCo's Annual Report to
Shareholders for the year ended December 31, 1993, are incorporated
herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
PART III
Item 10. Director and Executive Officers of TrustCo
The information under the captions "Information on TrustCo Directors
and Nominees" and "Information on TrustCo Executive Officers Not
Listed Above" on pages 3 through 5, and "COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934" on page 18, of TrustCo's Proxy
Statement for its Annual Meeting of Shareholders to be held May 16,
1994, is incorporated herein by reference. The required information
regarding TrustCo's executive officers is contained in PART I in the
item captioned "Executive Officers of TrustCo."
Item 11. Executive Compensation
The information under the captions "TrustCo and Trustco Bank Executive
Officer Compensation" and "TrustCo Retirement Plans" on pages 6
through 9 of TrustCo's Proxy Statement for its Annual Meeting of
Shareholders to be held May 16, 1994, is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information under the captions "Information on TrustCo Directors
and Nominees,""Information on TrustCo Executive Officers Not Listed
Above," on pages 6 through 9 and "OWNERSHIP OF TRUSTCO COMMON STOCK BY
CERTAIN BENEFICIAL OWNERS" on page 17 of TrustCo's Proxy Statement for
its Annual Meeting of Shareholders to be held May 16, 1994, is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
The information under the caption "Transactions with TrustCo and
Trustco Bank Directors, Officers and Associates" on page 18 of
TrustCo's Proxy Statement for its Annual Meeting of Shareholders to be
held May 16, 1994, is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K
The following financial statements of TrustCo and its consolidated
subsidiary, and the accountants' report thereon are incorporated
herein by reference.
Consolidated Financial Statements.
Consolidated Statements of Condition--December 31, 1993 and 1992.
Consolidated Statements of Income--Years Ended December 31, 1993, 1992
and 1991.
Consolidated Statements of Changes in Shareholders' Equity--Years
Ended December 31, 1993, 1992 and 1991.
Consolidated Statements of Cash Flows--Years Ended December 31, 1993,
1992 and 1991.
Notes to Consolidated Financial Statements.
Financial Statement Schedules--Not Applicable.
All required schedules for the corporation and its subsidiary have
been included in the consolidated financial statements or related
notes thereto
The following exhibits are incorporated herein by reference:<F1>
<TABLE>
<CAPTION>
Reg S-K Exhibit No. Description
<S> <C>
3(ii) Amended and Restated By-laws of TrustCo Bank Corp NY.
</TABLE>
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Reg S-K Exhibit No. Description
<S> <C>
3(i) TrustCo's Amended and Restated Certificate of Incorporation.
10(a) Employment Agreement dated January 1, 1992 and Amendment dated November 16, 1993,
between TrustCo Bank Corp NY, Trustco Bank New York and Robert A. McCormick.
10(b) Employment Agreement dated January 1, 1992 and Amendment dated November 16, 1993,
between TrustCo Bank Corp NY, Trustco Bank New York and Nancy A. McNamara.
10(c) Employment Agreement dated January 1, 1992 and Amendment dated November 16, 1993,
between TrustCo Bank Corp NY, Trustco Bank New York and William F. Terry.
10(d) Employment Agreement dated January 1, 1992 and Amendment dated November 16, 1993,
between TrustCo Bank Corp NY, Trustco Bank New York and Peter A. Zakriski.
10(e) Employment Agreement dated January 1, 1992 and Amendment dated November 16, 1993,
between TrustCo Bank Corp NY, Trustco Bank New York and Ralph A. Pidgeon.
10(f) TrustCo Bank Corp NY Amended and Restated 1985 Stock Option Plan.
10(g) TrustCo Bank Corp NY Directors Stock Option Plan.
11 Computation of Net Income Per Common Share.
13 Annual Report to Security Holders of Trustco for the year ended December 31, 1993.
21 List of Subsidiaries of TrustCo.
23 Independent Auditors' Consent of KPMG Peat Marwick.
24 Power of Attorney.
99 Independent Auditors' Report of KPMG Peat Marwick.
</TABLE>
Reports on Form 8-K:
On October 18, 1993, TrustCo filed a Current Report on Form 8-K
reporting (1) a 2 for 1 stock split payable on November 18, 1993, to
shareholders of record at the close of business on October 15, 1993,
and (2) second-quarter and six-month earnings.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the TrustCo Bank Corp NY(the "Corporation")
pursuant to the foregoing provisions, or otherwise, the Corporation
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indeminifcation against such liabilities
(other than the payment by the Corporation of expenses incurred or
paid by a director, officer or controlling person of the Corporation
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection
with the securities being registered, the Corporation will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indeminification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
________________
[FN]
<F1> the exhibits included under Exhibit 10 constitute all management
contracts, compensatory plans and arrangements required to be filed as
an exhibit to this form pursuant to Item 14(c) of this report.
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) 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.
TrustCo Bank Corp NY
By/s/Robert A. McCormick
_____________________________
Robert A. McCormick
President
(chief executive officer)
By/s/William F. Terry
_____________________________
William F. Terry
Secretary
(chief financial officer)
By/s/Peter A. Zakriski
_____________________________
Peter A. Zakriski
Treasurer
(chief accounting officer)
Date: March 22, 1993
EXHIBIT INDEX
Reg S-K
Item 601
Exhibit No. Exhibit
________________________________________________________________________
3(i) TrustCo's Amended and Restated Certificate of Incorporation.
3(ii) Amended and Restated By-laws of TrustCo Bank Corp NY, as amended to
August 15, 1989 Exhibit 3(a) to TrustCo Bank Corp NY's S-4
Registration Statement (File No. 33-40379) effective May 8, 1991 is
incorporated by reference.<F1>
10(a) Employment Agreement dated January 1, 1992 and Amendment dated
November 16, 1993, between TrustCo Bank Corp NY, Trustco Bank New
York and Robert A. McCormick.
10(b) Employment Agreement dated January 1, 1992 and Amendment dated
November 16, 1993, between TrustCo Bank Corp NY, Trustco Bank New York
and Nancy A. McNamara.
10(c) Employment Agreement dated January 1, 1992 and Amendment dated
November 16, 1993, between TrustCo Bank Corp NY, Trustco Bank New York
and William F. Terry.
10(d) Employment Agreement dated January 1, 1992 and Amendment dated
November 16, 1993, between TrustCo bank Corp NY, Trustco Bank New York
and Peter A. Zakriski.
10(e) Employment Agreement dated January 1, 1992 and Amendment dated
November 16, 1993, between TrustCo Bank Corp NY, Trustco Bank New York
and Ralph A. Pidgeon.
10(f) TrustCo Bank Corp NY Amended and Restated 1985 Stock Option Plan.
10(g) TrustCo Bank Corp NY Directors Stock Option Plan.
11 Computation of Net Income Per Common Share.
13 Annual Report to Security Holders of Trustco for the year ended
December 31, 1993.
GRAPHICS APPENDIX
Cross References
to Page of
Omitted Charts Annual Report
_________________________________________________________________________
1. Total Average Equity 3
2. Average Earning Assets 3
3. Net Income Per Common Share 3
4. Cash Dividends Per Common Share 3
5. Total Average Assets--10 Year History 7
6. Assets Per Employee--10 Year History 7
7. Net Income--10 Year History 7
8. Return on Equity--10 Year History 7
9. Market Price/Share--10 Year History 7
The above listed charts were omitted from the EDGAR version of
Exhibit 13, however, the information depicted in the charts was
adequately discussed and/or displayed in tabular format in the EDGAR
Version.
21 List of Subsidiaries of TrustCo.
23 Independent Auditors' Consent of KPMG Peat Marwick.
24 Power of Attorney.
99 Independent Auditors' Report of KPMG Peat Marwick.
________________
[FN]
<F1> Incorporated by reference.
[DESCRIPTION] EXHIBIT 3(i) TO FORM 10-K
State of New York
Department of State
ss:
I hereby certify that I have compared the annexed copy with the original
document filed by the Department of State and that the same is a correct
transcript of said original.
Witness my hand and seal of the Department of State on Aug 6 1993
Secretary of State
DOS-200 (12/87)
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF TRUSTCO BANK CORP NY
UNDER SECTION 807 OF THE BUSINESS CORPORATION LAW
Filed By: William F. Terry, Secretary
TrustCo Bank Corp NY
320 State Street/P.O. Box 1082
Schenectady, New York 12301
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF TRUSTCO BANK CORP NY
UNDER SECTION 807 OF THE BUSINESS CORPORATION LAW
We, Robert A. McCormick and William F. Terry, being respectively, the
President and Chief Executive Officer and Senior Vice President and Secretary
of TrustCo Bank Corp NY, certify:
FIRST. (_) The name of the Corporation is TRUSTCO BANK CORP NY.
SECOND. (_) The Certificate of Incorporation was filed by the Department of
State on the twenty-eighth day of October 1981. An Amended and Restated
Certificate of Incorporation was filed by the Department of State on the
fifteenth day of July 1988 and an Amendment to the Amended and Restated
Organization Certificate was filed by the Department of State on the twenty-
ninth day of August 1991.
THIRD. (_) The Certificate of Incorporation of the Corporation is restated as
set forth in its entirety below. The only change to the certificate of
incorporation is increase in the number of authorized shares of common stock
set forth in Section 4.1 of Article IV from 10,000,000 shares to 25,000,000
shares.
FOURTH. (_) The Certificate of Incorporation, as amended and restated, is set
forth below:
Article I
Name
1. (_) The name of the corporation is:
TrustCo Bank Corp NY
(hereinafter called the "Corporation").
Article II
Purposes
2. (_) Subject to any limitation provided in the Business Corporation Law or
any other statute of the State of New York, and except as otherwise
specifically provided in this Certificate, the purposes for which the
Corporation is formed are:
2.1 (_) To the extent that a corporation formed under the Business Corporation
Law of the State of New York may lawfully do so, to acquire, own, control,
hold with power to vote, deal in and with, and dispose of, in any manner,
interests in financial institutions, including, without limitation, banks,
trust companies, savings banks, national banking associations, savings and
loan associations, industrial banks, investment banks, service banks, safe
deposit companies, credit unions, and mutual trust investment companies,
located within or without the State of New York, and to acquire, own,
control, hold with power to vote, deal in and with, and dispose of, in any
manner, interests in any other companies, corporations, partnerships, trusts,
unincorporated associations, joint stock associations, and other entities,
which are engaged in activities related to the business of banking.
2.2 (_) To the extent that a corporation formed under the Business Corporation
Law of the State of New York may lawfully do so, to engage in, carry on,
conduct, and participate in activities, enterprises and businesses permitted
to be engaged in, carried on, conducted and participated in by bank holding
companies under applicable provisions of law and also research,
experimenting, manufacturing, assembling, building, erecting, trading,
buying, selling, collecting, distributing, wholesaling, retailing, importing,
exporting, processing, compounding, producing, refining, synthesizing,
mining, extracting, growing, liquidating, dismantling, demolishing,
servicing, promoting, exhibiting and publishing activities, enterprises and
businesses; and also any activities, enterprises, ventures and businesses
similar or incidental to any of the foregoing.
2.3 (_) To create, acquire, hold, deal in and with, and dispose of, in any
manner, any legal or equitable interest in real property and chattels real,
and, without limiting the generality of the foregoing, to purchase, receive,
take (by grant, gift, devise, bequest or otherwise), own, hold, improve,
employ, use, operate, manage, repair, control, maintain, sell, assign,
transfer, convey, exchange, lease, alter, construct, mortgage or encumber
real property, whether improved or unimproved, and structures and
improvements on real property, or leaseholds, or any other legal or equitable
interests or rights therein.
2.4 (_) To create, acquire, hold, deal in and with, and dispose of, in any
manner, any legal or equitable interest in tangible or intangible personal
property, and, without limiting the generality of the foregoing, to make,
purchase, receive, take (by grant, gift, bequest, lease, exchange or
otherwise), own, hold, improve, employ, use, operate, manage, repair,
control, maintain, process, import, export, sell, assign, transfer, convey,
exchange, lease, or otherwise dispose of, mortgage, ledge or otherwise
encumber or in any manner to exploit, turn to account, trade or deal in or
with, personal property, whether tangible or intangible, or any other legal
or equitable interests or rights therein.
2.5 (_) To make, create, apply for, renew, take (by grant, gift, bequest or
otherwise), purchase, lease or otherwise acquire, to hold, own, register,
use, operate, to sell, assign, license, lease, transfer, exchange or
otherwise dispose of, to mortgage, pledge or otherwise encumber, to acquire
or grant licenses with respect to, or in any manner to exploit, turn to
account, trade or deal in or with, copyrights, trademarks, service marks,
designs, inventions, discoveries, improvements, developments, processes,
formulas, patents, trade names, labels, prints, or any interest or right,
whether legal or equitable, therein.
2.6 (_) To purchase, take (by grant gift, bequest or otherwise), receive,
subscribe for, invest in or otherwise acquire, own, hold, employ, sell, lend,
lease, exchange, transfer, assign, or otherwise dispose of, mortgage, pledge,
use, and otherwise deal in and with, or in respect of shares, stock, bonds,
debentures, warrants, rights, scrip, notes, evidences of indebtedness,
certificates of interest or participation in profit-sharing agreements,
collateral trust certificates, preorganization certificates and
subscriptions, investment contracts, voting trust certificates, certificates
of deposit or other securities or obligations of any kind by whomsoever
issued (whether or not engaged in similar or different businesses,
governmental or other activities); to exercise in respect thereof all powers
and privileges of individual or corporate ownership or interest therein,
including the right to vote thereon (by proxy or otherwise) for any and all
purposes; to consent or otherwise act with respect thereto, without
limitation and to issue in exchange therefor the Corporation's shares, stock,
bonds, debentures, warrants, rights, scrip, notes, evidences of indebtedness,
or other securities or obligations of any kind.
2.7 (_) To make contracts, incur debts and other liabilities, and borrow money
on such terms and at such rate of interest as the Corporation may determine;
and to mortgage, pledge, convey, assign, in trust or otherwise encumber or
dispose of, the property, good will, franchises or other assets of the
Corporation, including contract rights and including after-acquired property.
2.8 (_) To lend money, with or without security; provided that the Corporation
shall not have the power to engage in the business of banking.
2.9 (_) To issue, reissue, sell, assign, exchange, pledge, negotiate or
otherwise dispose of, to purchase, receive, take, own, hold or otherwise
acquire, to deal in or with, or to cancel, shares, stock, bonds, debentures,
warrants, rights, scrip, notes, evidences of indebtedness or other securities
or obligations of the corporation of any kind, whether secured or unsecured,
and whether or not convertible into or subordinated to any other class of
securities.
2.10 (_) In furtherance of its corporate business, to guarantee or assume
liability for the payment of the principal of, or dividends or interest on,
or sinking fund payments in respect of, shares, stock, bonds, debentures,
warrants, rights, scrip, notes, evidences of indebtedness, certificates of
interest or participation in profit-sharing agreements, collateral trust
certificates, preorganization certificates and subscriptions, investment
contracts, voting trust certificates, certificates of deposit, or other
securities or obligations of any kind by whomsoever issued; and to guarantee
or assume liability for the performance of any other contract or obligation,
made or issued by any domestic or foreign corporation, partnership,
association, trustee, group, individual or entity; and, when authorized in
any manner provided by law, to give any guaranty although not in furtherance
of the Corporation's purposes
2.11 (_) In furtherance of its corporate business, to be a promoter, partner,
co-venturer, member, associate or manager of other business enterprises or
ventures, or to be an agent thereof, or to the extent permitted in any
jurisdiction to be an incorporator of other corporations of any kind or type.
2.12 (_) To cause to be formed under the laws of any state or country, to
control or in any manner participate in the management of, to reorganize,
merge, consolidate, and to liquidate or dissolve any corporation, association
or organization of any kind.
2.13 (_) To engage in, carry on, conduct and/or participate in any activity,
enterprise or business which is similar or related to any activity,
enterprise or business herein set forth, or which is capable of being
conveniently carried on incidental to any such activity, enterprise or
business or which may directly or indirectly protect or enhance the value of
any of the rights or property of the Corporation.
2.14 (_) To engage in, carry on, conduct and/or participate in any general or
specific branch or phase of the activities, enterprises or businesses
authorized in this Certificate in the State of New York or in any other state
of the United States and in all foreign countries, and in all territories,
possessions and other places, and in connection with the same, or any
thereof, to he and act either as principal, agent, contractor or otherwise.
2.15 (_) To do everything necessary, suitable, convenient or proper for the
accomplishment, attainment or furtherance of, to do every other act or thing
incidental to, appurtenant to, growing out of or connected with, the purposes
set forth in this Certificate, whether alone or in association with others;
to possess all the rights, powers and privileges now or hereafter conferred
by the law of the State of New York upon a corporation organized under the
Business Corporation Law of the State of New York (as the same may be amended
from time to time) or any statute which may be enacted to supplement or
replace it, and, in general, to carry on any of the activities and to do any
of the things herein set forth to the same extent and as fully as a natural
person or a partnership, association, corporation, or other entity, or any of
them, might or could do; provided that nothing herein set forth shall be
construed as authorizing the Corporation to possess any purpose, object, or
power, or to do any act or thing forbidden by law to a corporation organized
under the Business Corporation Law of the State of New York.
The foregoing provisions of this Article shall be construed as purposes,
objects and powers, and each as an independent purpose, object and power, in
furtherance, and not in limitation, of the purposes, objects and powers
granted to the Corporation by the laws of the State of New York; and except
as otherwise specifically provided in any such provision, no purpose, object
or power herein set forth shall be in any way limited or restricted by
reference to, or inference from, any other provision of this Certificate.
Article III
Office
The office of the corporation is to be located in the City of Schenectady,
County of Schenectady, and State of New York.
Article IV
Number of Shares; Preemptive Rights Denied
4.1 (_) The total number of shares of Common Stock which the Corporation shall
have authority to issue is 25,000,000 shares of the par value of $1 per
share.
The total number of shares of Preferred Stock which the Corporation shall
have authority to issue is 500,000 shares of the par value of $10 per share.
The Board of Directors of the Corporation shall have the authority to provide
for the issuance of the Preferred Stock in one or more series, with such
voting powers, full or limited, but not to exceed one vote per share, or
without voting powers, and with such designations, conversion rights,
redemption prices, dividend rates and similar matters, including preferences
over shares of Common Stock or other series of Preferred Stock as to
dividends or distributions of assets and relative participation, optional or
other special rights, and qualifications, limitations or restrictions
thereof, as shall be set forth in resolutions providing for the issuance
thereof that may be adopted by the Board of Directors.
4.2 (_) No holder of shares of the Corporation shall be entitled as of right
to subscribe for, purchase or receive any new or additional shares of any
class, whether now or hereafter authorized, or any notes, bonds, debentures
or other securities convertible into, or carrying options or warrants to
purchase, shares of any class; but all such new or additional shares of any
class, or notes, bonds, debentures or other securities convertible into, or
carrying options or warrants to purchase, shares of any class may be issued
or disposed of by the Board of Directors to such persons and on such terms as
it, in its absolute discretion, may deem advisable.
Article V
Designation of Secretary of State; Mailing Address
5. (_) The Secretary of State is designated as the agent of the Corporation
upon whom process in any action or proceeding against the Corporation may be
served, and the address to which the Secretary of State shall mail a copy of
process in any action or preceeding against the Corporation which may be
served upon him is:
320 State Street
Schenectady, New York 12301
Attn: Corporate Secretary
Article VI
Directors; Election and Classification
6. (_) The entire Board of Directors, consisting of not less than twelve (12)
members and not more than fifteen (15) members, shall be divided into three
(3) classes of not less than four (4) members each, which classes are hereby
designated as Class A, Class B and Class C. The number of directors of Class
A shall equal one-third (1/3) of the total number of directors as determined
in the manner provided in the By-Laws (with any fractional remainder to count
as one); the number of directors of Class B shall equal one-third (1/3) of
the total number of directors (or the nearest whole number thereto); and the
number of directors of Class C shall equal said total number of directors minus
the aggregate number of directors of Classes A and B. At the election of the
first Board of Directors, the class of each of the members then elected shall
be designated. The term of office of each member then designated as a Class
A director shall expire at the annual meeting of shareholders next ensuing,
that of each member then designated as a Class B director at the annual
meeting of shareholders one year thereafter, and that of each member then
designated as a Class C director at the annual meeting of shareholders two
years thereafter. At each annual meeting of shareholders held after the
election and classification of the first Board of Directors, directors to
succeed those whose terms expire at such annual meeting shall be elected to
hold office for a term expiring at the third succeeding annual meeting of
shareholders and until their respective successors are elected and have
qualified or until their respective earlier displacement from office by
resignation, removal or otherwise.
Article VII
Duration
7. (_) The duration of the Corporation is to be perpetual.
Article VIII
Shareholders<197>Quorum, Voting and Special Meetings
8. (_) The holders of at least a majority of the outstanding Voting Stock of
the Corporation shall be present in person or by proxy at any meeting of
shareholders in order to constitute a quorum for the transaction of any
business, and the affirmative vote of at least a majority of the
Corporation's outstanding Voting Stock shall be needed to approve any matter
on which such shareholders are entitled to vote except that the affirmative
vote or request, as the case may be, of at least two-thirds of the
Corporation's Voting Stock shall be needed to effect a change, modification
or repeal of any provision in the Certificate of Incorporation or By-Laws and
to call a Special Meeting of the shareholders. This provision does not affect
those circumstances under which shareholders may call a Special Meeting for
the election of directors as a matter of law and the right of management to
call shareholder meetings as set forth in the By-Laws.
Article IX
Quorum and Voting Requirements at Directors' Meeting
9. (_) A majority of the Board of Directors shall be present at any meeting
of Directors in order to constitute a quorum for the transaction of any
business. The affirmative vote of a majority of the entire Board of Directors
shall be necessary for the transaction of any business or specified item of
business, except as otherwise provided in this Certificate, and except that,
the affirmative vote of two-thirds of the entire Board of Directors shall be
necessary to change, amend or repeal any provision of the Certificate of
Incorporation or By-Laws.
Article X
Business Combination
10.1 (_) Shareholder Approval of Business Combinations<197>Maximum Vote.
(A) (_) Except as otherwise expressly provided in Section 10.2 of this Article
10, the approval of any Business Combination (as hereinafter defined) shall,
in addition to any affirmative vote required by law or any other provision of
this Certificate of Incorporation or any preferred stock designation of the
Corporation, require the affirmative vote of the holders of not less than
two-thirds of the shares of the Corporation then entitled to vote generally
in the election of directors of the Corporation (hereinafter in this Article
10 referred to as "Voting Stock"), voting together as a single class,
with each share of Voting Stock to have one (1) vote.
(B) (_) The term "Business Combination" as used in this Article 10
shall mean:
(i) (_) any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (a) any Substantial Shareholder (as hereinafter
defined) or (b) any other corporation which, after such merger or
consolidation, would be a Substantial Shareholder, regardless of which entity
survives;
(ii) (_) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Substantial Shareholder of all or any significant part of the assets of the
Corporation or any Subsidiary, or both, with a "significant part of the
assets" to be defined as more than ten percent (10%) of the total assets
of such entity as shown on its audited statement of condition as of the end
of the most recent fiscal year ending prior to the time the particular
transaction is announced;
(iii) (_) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any Substantial
Shareholder; or
(iv) (_) any transaction involving the Corporation or any Subsidiary,
including any issuance, transfer or reclassification of any securities of,
or any recapitalization of, the Corporation or any Subsidiary, or any merger
or consolidation of the Corporation with any Subsidiary (whether or not
involving a Substantial Shareholder), if the transaction would have the
effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is owned directly or indirectly by a
Substantial Shareholder.
10.2 (_) Exception to Maximum Vote Requirement.
The provision of Section 10.1 of this Article 10 shall not be applicable to
any Business Combination, and such Business Combination shall require only
such affirmative shareholder vote as is required by law or otherwise, if, in
the case of a Business Combination which does not involve any cash or other
consideration being received by shareholders of the Corporation (in their
capacities as shareholders), the condition specified in the following
paragraph (i) is met, or, in the case of any Business Combination, either the
condition specified in the following paragraph (i) is met or the condition
specified in the following paragraph (ii) is met:
(i) (_) the Business Combination shall have been approved by two-thirds of the
Disinterested Directors (as hereinafter defined), it being understood that
this condition shall not be capable of satisfaction unless there is at least
one Disinterested Director.
(ii) (_) the consideration to be received per share by holders of Common
Stock of the Corporation and by holders of each other class of Voting Stock
outstanding, if any, shall be Fair Consideration (as hereinafter defined).
10.3 (_) Definitions.
(A) (_) "Fair Consideration" shall mean,
(i) (_) in the case of shares of Common Stock, an amount in cash or readily
available funds at least equal to the highest of the following (whether or
not the Substantial Shareholder has previously acquired such shares):
(a) (_) the highest per share price paid by the Substantial Shareholder for
any such shares acquired by it within the three-year period immediately
preceding the first public announcement of the proposal of the Business
Combination (hereinafter referred to as the "Announcement Date"), plus an
"Interest Adjustment" of such price, as defined hereafter in this
Section 10.3(A);
(b) (_) the highest reported per share price at which such shares were
publicly traded during the three-year period immediately preceding the
Announcement Date, plus an "Interest Adjustment" of such price, as defined
hereafter in this Section 10.3(A);
(c) (_) the per share fair market value of such shares on the Announcement
Date, plus an "Interest Adjustment" of such value, as defined
hereafter in this Section 10.3(A);
(d) (_) the book value per share of Common Stock as of the end of the latest
fiscal quarter preceding the Announcement Date, plus an "Interest
Adjustment" of such value, as defined hereafter in this Section 10.3(A);
(ii) (_) and in the case of shares of any class of Voting Stock of the
Corporation outstanding, an amount in cash or readily available funds at
least equal to the highest of the following (whether or not the Substantial
Shareholder has previously acquired any such shares);
(a) (_) the highest per share price paid by the Substantial Shareholder for
any such shares acquired by it within the three-year period immediately
preceding the Announcement Date, plus an "Interest Adjustment" of such price,
as defined hereafter in this Section 10.3(A);
(b) (_) the highest reported per share price at which such shares were public
traded during the three-year period immediately preceding the Announcement
Date, plus an "Interest Adjustment" of such price, as defined
hereafter in this Section 10.3(A);
(c) (_) the per share fair market value of such shares on the Announcement
Date, plus an "Interest Adjustment" of such value, as defined
hereafter in this Section 10.3(A);
(d) (_) the highest preferential amount per share to which the holders of
such shares are entitled in the event of voluntary or involuntary liquidation
or dissolution of the Corporation.
An "Interest Adjustment" of any price or value per share for a class
of shares under this Section 10.3(A) shall equal an amount of interest on
such price or value compounded annually from the Announcement Date until the
Consummation Date of the Business Combination (the "Consummation
Date"), or, in the case of subdivisions (a) and (b) in each of the
subsections (A)(i) and (A)(ii) in this Section 10.3, from the date the
Substantial Shareholder first became a Substantial Shareholder (the
"Determination Date") until the Consummation Date, at a market prime
rate of interest as may be determined from time to time by a majority of the
Disinterested Directors, less the aggregate amount of any cash dividends per
share paid on such class of shares during such period up to but not in excess
of such amount of interest.
(B) (_) "Substantial Shareholder" shall mean and include any
individual, corporation, partnership or other person or entity (other than
the Corporation or any Subsidiary) which, together with its
"Affiliates" and "Associates" (as such terms were defined as
of December 11, 1984, in Rule 12b-2 under the Securities Exchange Act of
1934) is the "Beneficial Owner" (as defined in accordance with the
criteria set forth as of December 11, 1984, under Rule 13d-3 under the
Securities Exchange Act of 1934) in the aggregate of more than five percent
(5%) of the voting power of the then-outstanding Voting Stock of the
Corporation of any Affiliate or Associate of any such individual,
corporation, partnership or other person or entity.
(C) (_) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Corporation.
(D) (_) "Disinterested Director" shall mean any member of the Board of
Directors of the Corporation (the "Board") who is unaffiliated with
the Substantial Shareholder and who was a member of the Board prior to the
Determination Date or became a member of the Board after the Determination
Date and was recommended or elected by a majority of Disinterested Directors
then on the Board.
10.4 (_) Interpretative Power of Disinterested Directors.
A majority of the Disinterested Directors from time to time shall have the
power and duty to determine, on the basis of facts known to them after
reasonable inquiry, all facts necessary to determine compliance with this
Article 10, including, without limitation, (1) whether a person or entity is
a Substantial Shareholder, (2) whether the price in a proposed Business
Combination is Fair Consideration, (3) the number of shares of Voting Stock
beneficially owned by any person or entity at any given time, and (4) the
fair market value as of any given date of the shares of any class of Voting
Stock.
10.5 (_) Alteration, Amendment and Repeal
Notwithstanding any provision of this Certificate of Incorporation or any
provision of law or any preferred stock designation of the Corporation which
might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of the holders of any particular class or series of the
Voting Stock required by law or this Certificate of Incorporation or any
preferred stock designation of this Corporation, the affirmative vote of the
holders of at least two-thirds of the voting power of the then-outstanding
shares of Voting Stock, voting together as a single class, shall be required
to alter, amend or repeal, or to adopt any provision inconsistent with, this
Article 10 or any provision of this Article 10.
Article XI
11. (_) To the fullest extent that the Business Corporation Law of the State
of New York, as the same exists or may hereafter be amended, permits
elimination or a limitation of the liabilities of directors, no director of
the corporation shall be liable to the corporation, or its shareholders for
any breach of duty in such capacity. Any repeal or modification of this
Article by the shareholder of the corporation shall be prospective only and
shall not adversely affect any elimination or limitation of the personal
liability of a director of the corporation for acts or omissions occurring
prior to the effective date of such repeal or modification.
FIFTH. (_) This Amendment was authorized by a vote of the Board of Directors,
followed by a vote of the holders of a majority of all outstanding shares
entitled to vote thereon at a meeting of Shareholders on the seventeenth day
of May, 1993.
SIXTH. (_) This restatement of the Certificate of Incorporation of the
Corporation was authorized by a majority vote of the Board of Directors
pursuant to section 807 of the Business Corporation Law.
IN WITNESS WHEREOF, THE UNDERSIGNED HAVE SIGNED THIS CERTIFICATE THIS 27th
DAY OF JULY, 1993, AND DO HEREBY AFFIRM THE CONTENTS TO BE TRUE UNDER THE
PENALTIES OF PERJURY.
ROBERT A. McCORMICK
President
WILLIAM F. TERRY
Secretary
STATE OF NEW YORK )
) ss.
COUNTY OF SCHENECTADY )
ROBERT A. McCORMICK, being duly sworn, deposes and says that he is the
President and Chief Executive Officer of TRUSTCO BANK CORP NY, the
Corporation named in the foregoing Certificate, that he has read and signed
said Certificate and knows the contents thereof, and that the statements
contained therein are true.
ROBERT A. McCORMICK
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Sworn to before me this
27th day of July, 1993
Notary Public
RESOLUTION RELATING TO
AMENDMENT AND RESTATEMENT OF ORGANIZATION CERTIFICATE
RESOLVED, That the Certificate of Incorporation of the Corporation be and
hereby is restated to reflect the amendments to the Certificate of
Incorporation adopted since the previous restatement on the eighth day of
July, 1988, including the amendment adopted at the meeting of the
shareholders of the Corporation on the seventeenth day of May, 1993; such
Amended and Restated Certificate of Incorporation, in the form presented to
this meeting, correctly sets forth the corresponding provisions of the
Certificate of Incorporation, as amended, and is hereby adopted on behalf of
the Corporation.
RESOLVED, That the appropriate officers of the Corporation be, and they
hereby are, authorized and directed to execute and deliver and file such
certificates and other documents, including the delivery of an Amended and
Restated Certificate of Incorporation, to the Department of State of the
State of New York, and to take such action and do such other things as may,
in their judgment, be necessary and advisable in order to fully effectuate
the foregoing resolutions.
I hereby certify that the above is a true and correct excerpt from the
minutes of a regular meeting of the Board of Directors of TrustCo Bank Corp
NY held on July 20, 1993, at the Main Office of the Company at 320 State
Street, Schenectady, New York, that a quorum of directors was present and
acting throughout the meeting, and that the resolutions adopted at the
meeting as set forth above are in full force and effect by a majority of the
Board of Directors.
Secretary
Date
[DESCRIPTION] EXHIBIT 10(a) TO FORM 10-K
Executive Employment Agreement for R.A. McCormick
EMPLOYMENT AGREEMENT
between
TRUSTCO BANK NEW YORK
and
TRUSTCO BANK CORP NY
and
ROBERT A. McCORMICK
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of January 1, 1992, (the "Agreement"), by and
between TRUSTCO BANK NEW YORK, a New York banking corporation (the
"Bank") and TRUSTCO BANK CORP NY, a New York business corporation
(the "Company") (hereinafter referred to collectively as the
"Companies"), with principal offices at 320 State Street,
Schenectady, New York 12301 and ROBERT A McCORMICK (the "Executive"),
residing at 16 Greenlea Drive, Clifton Park, New York 12065.
1. Engagement. The Companies agree to engage the Executive and the Executive
agrees to serve the Companies as President and Chief Executive Officer.
2. Term. The term of this Agreement shall commence on January 1, 1992 and
shall continue until December 31, 1994. Beginning on January 1, 1995, and on
January 1 of each and every year thereafter, this Agreement shall renew,
automatically, for the succeeding three year term, unless the Executive is
notified by the method described in Paragraph 10 herein to the contrary
("Nonrenewal Notice"). Nothing contained herein, however, shall be
construed to extend the Executive's right to employment beyond the age of 65
years or the then mandatory retirement age in effect at the Companies,
whichever shall be greater.
3. Services. The Executive shall exert his best efforts and devote
substantially all of his time and attention to the affairs of the Companies.
The Executive shall be the President and Chief Executive Officer of the
Companies, and shall have full authority and responsibility for the operation
of the Companies, subject to the general direction, approval, and control of
the Boards of Directors of the Companies in all respects. His powers shall
include the authority to hire and fire personnel of the Companies, including
employees who are also members of the Boards of Directors, and to retain
consultants when he deems necessary in order to implement the Companies'
policies.
4. Compensation. For purposes of this Agreement, Annual Compensation shall be
deemed to be the Executive's Annual Base Salary plus executive incentive.
During the first twelve months of employment pursuant to this Agreement, the
Executive shall be paid by the Companies the Annual Base Salary provided on
Schedule A attached hereto, which Annual Base Salary shall be paid biweekly,
plus executive incentive. Thereafter, Annual Compensation shall be negotiated
between the parties hereto and shall be deemed a part of this Agreement,
provided, however, that Annual Compensation shall not be less than
Executive's Annual Compensation for the immediately preceding calendar year.
5. Retirement, Pension and Profit Sharing. As further compensation for the
services of the Executive, the Executive shall be allowed to participate
fully in any disability, death benefit, retirement, pension or profit sharing
plans maintained by the Companies, pursuant to the terms of such plans.
6. Termination of Employment. In the event there is a Termination (as
hereinafter defined) of the Executive for any reason other than for good
cause (as hereinafter defined), death, retirement or disability, the
Executive shall receive, upon his Termination of employment with either of
the Companies, the Termination Benefits set forth hereinbelow. The
Executive's Termination for good cause shall be limited to the Executive's
having committed an act of fraud, embezzlement, or theft constituting a
felony, or an act intentionally against either of the Companies which causes
either Company material injury, or a final determination by a court that the
Executive has committed a material breach of his duties and responsibilities
in connection with rendering services to either of the Companies pursuant to
this Agreement.
7. Termination. Termination shall include, but is not limited to, (i) any
reduction in the Executive's Annual Compensation, disability, death,
retirement, pension or profit sharing benefits (unless such reduction shall
have been applied to all Bank employees as part of a validly adopted plan of
cost containment), responsibilities or duties, or (ii) either Company's
relocation or a change in the Executive's base location, or (iii) a
Nonrenewal Notice given pursuant to Paragraph 2 of this Agreement, or (iv)
the unilateral election of the Executive to terminate the Agreement. Such
election shall be communicated to the Companies pursuant to Paragraph 10
hereof.
8. Termination Benefits. The following benefits shall be Termination
Benefits:
(a) The Companies shall pay to the Executive the Executive's full Annual
Compensation through the effective date of his Termination at the rate in
effect at the time notice of termination is given or at time of Termination,
if earlier, and in addition
(b) The Companies shall pay to the Executive, at Executive's option, either:
(i) within ten (10) days of his Termination an additional lump sum amount
equal to three (3) times the Annual Compensation then in effect pursuant to
paragraph 4 above, which sum shall be reduced to present value as determined
by a certified public accountant to be agreed upon between the parties, or
(ii) three equal payments each in an amount equal to the Executive's Annual
Compensation then in effect, the first such payment to be made within ten
(10) days of the Termination and each subsequent payment to be made annually
on the anniversary date of the initial payment, and in addition
(c) The Companies shall pay to the Executive all benefits payable to the
Executive under the Companies' retirement, pension and profit sharing plans,
and in addition
(d) The Companies shall pay the Executive all legal fees and expenses
incurred by the Executive as a result of such Termination, and in addition
(e) The Companies shall provide the Executive, for the greater of one year or
the remaining term of this Agreement following his Termination, health
insurance and group life insurance benefits substantially similar to those
the Executive was receiving immediately prior to his Termination.
9. Indemnity. The Companies shall indemnify the Executive and hold him
harmless for any acts or decisions made by him in good faith while performing
services for either of the Companies and shall use their best efforts to
obtain coverage for him under any insurance policy now in force or
hereinafter obtained during the term of this Agreement covering the other
officers and directors of the Companies against lawsuits. The Companies will
pay all expenses, including attorney's fees, actually and necessarily
incurred by the Executive in connection with any appeal thereon including the
cost of court settlements.
10. Notices. All notices, requests, demands and other communications provided
for by this Agreement shall be in writing and shall be deemed to have been
given at the time when mailed at any general or branch United States Post
Office enclosed in a certified post paid envelope and addressed to the
address of the respective party stated below or to such changed address as
such party may have fixed by notice.
To the Companies: Trustco Bank Corp NY
Trustco Bank New York
320 State Street
Schenectady, NY 12301
To the Executive: Robert A. McCormick
16 Greenlea Drive
Clifton Park, NY 12065
provided, however, that any notice of change of address shall be effective
only upon receipt.
11. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the Companies, their successors and assigns, including,
without limitation, any person or entity which may acquire all or
substantially all of either Company's assets or business or into which either
Company may be consolidated or merged, and the Executive, his heirs,
executors, administrators and legal representatives. The Executive may assign
his right to payment under this Agreement, but not his obligations under this
Agreement.
12. Governing Law. This Agreement shall be governed by the laws of the State
of New York.
13. Modification. This Agreement supersedes all prior understandings and
agreements between the parties, and may not be amended or modified orally,
but only by a writing signed by the parties hereto.
TRUSTCO BANK CORP NY
By:
TRUSTCO BANK NEW YORK
By:
ROBERT A. McCORMICK
C011091BC1
Schedule A to Agreement among Companies and Robert A. McCormick
Calendar Year Annual Salary Approval of Companies
1992 $550,000.00
1993 $650,000.00
1994 $700,000.00
TRUSTCO BANK CORP NY
By:
TRUSTCO BANK NEW YORK
By:
AGREEMENT OF EXECUTIVE
By:
Robert A. McCormick
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT BETWEEN TRUSTCO BANK NEW YORK AND
TRUSTCO BANK CORP NY AND ROBERT A. McCORMICK
WHEREAS, Trustco Bank New York and Trustco Bank Corp NY (herein referred to
as the "Companies") entered into an Employment Agreement dated as of
July 15, 1992, (herein referred to as the "Agreement"); with Robert
A. McCormick (herein referred to as the "Executive"); and
WHEREAS, the Companies and the Executive desire to amend the Agreement,
effective as of November 16, 1993;
NOW, THEREFORE, the Agreement is hereby amended effective June 21, 1993, in
the following respect:
Section 5 of the Agreement is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"5. Retirement, Pension and Profit Sharing. As further compensation for
the services of the Executive:
a. The Executive shall be allowed to participate fully in any
disability, death benefit, retirement, pension or profit sharing plans
maintained by the Companies, pursuant to the terms of such plans; and
b. Upon termination of the Executive's employment due to retirement or
disability (both as defined in the Retirement Plan of Trustco Bank New York),
the Companies shall provide to the Executive and his spouse, for the life of
the Executive, the health insurance benefits provided to retirees by the
Companies under their medical insurance plan. The Companies shall provide to
the Executive for his life the life insurance benefits provided to retirees
by the Companies under their life insurance plan. The obligations of the
Companies pursuant to this subparagraph b. shall survive the termination of
this Agreement."
IN WITNESS WHEREOF, the Companies and the Executive have executed this
Amendment No. 1 this 16 day of November, 1993.
TRUSTCO BANK NEW YORK TRUSTCO BANK CORP NY
By: By:
Robert A. McCormick Robert A. McCormick
[DESCRIPTION] EXHIBIT 10(b) TO FORM 10-K
Executive Employment Agreement for N.A. McNamara
EMPLOYMENT AGREEMENT
between
TRUSTCO BANK NEW YORK
and
TRUSTCO BANK CORP NY
and
NANCY A. MCNAMARA
AGREEMENT
AGREEMENT, dated as of July 15, 1992, (the "Agreement"), by and
between Trustco Bank New York (the "Bank"), a New York banking
corporation and Trustco Bank Corp NY (the "Company"), a New York
business corporation (hereinafter referred to collectively as the
"Companies"), with principal offices at 320 State Street,
Schenectady, New York and Nancy A. McNamara (the "Executive"),
residing at 26 Berkshire Drive West, Clifton Park, New York 12065.
1. Engagement. The Companies agree to engage the Executive and the Executive
agrees to serve the Companies as an Executive.
2. Term. The term of this Agreement shall commence on the date first above
written and shall continue until December 31, 1992. Beginning on January 1,
1993, and on January 1, of each and every year thereafter, this Agreement
shall automatically renew for an additional year on the same terms and
conditions, except to the extent modified in writing, unless the Executive is
notified by the method set forth in Paragraph 11 herein that Executive has
been terminated ("Nonrenewal Notice"). Nothing contained herein,
however, shall be construed to extend the Executive's right to employment
beyond the age of 65 years or the then mandatory retirement age in effect,
whichever shall be greater.
3. Purpose and Effect. The purpose of this Agreement is to provide
Termination Benefits, as defined in Paragraph 9 hereof, in the event of a
Termination, as defined in Paragraph 8 hereof.
4. Service. The Executive shall exert Executive's best efforts and devote
substantially all of Executive's time and attention to the affairs of the
Bank. The Executive shall perform all the services and duties necessary or
appropriate for the management of the Bank's businesses, subject to the
general direction, approval, and control of the Chief Executive Officer and
his designees.
5. Compensation. For purposes of this Agreement, Annual Compensation shall be
deemed to be the Executive's Annual Base Salary. Commencing January 1, 1992,
Executive shall be paid by the Companies, the Annual Base Salary established
on Schedule A attached hereto, (which base salary shall be paid in bi-weekly
installments). Thereafter, Annual Base Salary shall continue at such level or
such other level as may have been agreed to among the parties and evidenced
as provided in this Paragraph, until renegotiated among the parties hereto
and either confirmed in a writing signed by either the Chief Executive
Officer of or a member of the Board of Directors of the Companies, or
endorsed on Schedule A and signed by either the Chief Executive Officer of or
by a member of the Board of Directors of the Companies.
6. Retirement, Pension and Profit Sharing. As further compensation for the
services of the Executive, the Executive shall be eligible to participate
fully in any retirement, executive incentive compensation, pension or profit
sharing plans maintained by the Companies, pursuant to the terms of such
plans. Nothing in this Agreement shall be construed as a waiver of any of the
terms of or conditions precedent to participation in such plans.
7. Termination of Employment. If there shall be a Termination (as hereinafter
defined) of the Executive for any reason other than for good cause, death,
retirement at the mandatory retirement age, or disability, the Executive
shall receive upon his Termination of employment with either of the
Companies, the Termination Benefits set forth herein. The Executive's
Termination for good cause shall be limited to the Executive's having
committed an act of fraud, embezzlement, or theft, constituting a felony or
any act intentionally against either of the Companies which causes either
Company material injury, or a final determination by a court that the
Executive has committed a material breach of his duties and responsibilities
in connection with rendering services to either of the Companies pursuant to
this Agreement.
8. Termination. Termination shall include, but is not limited to, (i) any
reduction in the Executive's Annual Base Salary, retirement other than at the
mandatory retirement age, executive incentive compensation, pension or profit
sharing benefits, (unless such reductions shall have been applied to all bank
employees as apart of a validly adopted plan of cost containment),
responsibilities or duties, or (ii) either Companies' relocation or a change
in the Executive's base location, or (iii) a non-renewal notice given
pursuant to Paragraph 2 of this Agreement, or (iv) the unilateral election of
the Executive to terminate the Agreement. Such election shall be communicated
to the Companies pursuant to Paragraph 11 hereof.
9. Termination Benefits. The following benefits shall be Termination
Benefits:
(a) The Companies shall pay to the Executive the Executive's full
compensation through the effective date of his termination at the rate in
effect at the time notice of termination is given or at time of termination,
if earlier, and in addition
(b) The Companies shall pay to the Executive within ten (10) days of
Termination an additional lump sum amount equal to that Executive's Annual
Base Salary then in effect, and in addition
(c) The Companies shall pay to the Executive all benefits payable to the
Executive under the Companies' retirement, executive incentive compensation,
pension and profit sharing plans, and in addition
(d) The Companies shall pay the Executive all legal fees and expenses
incurred by the Executive as a result of such Termination, and in addition
(e) The Companies shall provide the Executive, for one year following his
Termination, Health Insurance and Group Life Insurance benefits substantially
similar to those the Executive was receiving immediately prior to his
Termination.
10. Indemnity. The Companies shall indemnify the Executive and hold Executive
harmless for any acts or decisions made by Executive in good faith while
performing services for either of the Companies and shall use their best
efforts to obtain coverage for Executive under any insurance policy now in
force or hereinafter obtained during the term of this Agreement covering the
other officers and directors of the Companies against lawsuits. The Companies
will pay all expenses, including attorney's fees, actually and necessarily
incurred by the Executive in connection with any appeal thereon including the
cost of court settlements.
11. Notices. All notices, request, demands and other communications provided
for by this Agreement shall be in writing and shall be deemed to have been
given at the time when personally delivered or mailed at any general or
branch United States Post Office enclosed in a post paid envelope and
addressed to the address of the respective party stated below or to such
changed address as such party may have fixed by notice.
To the Companies: Trustco Bank Corp NY
Trustco Bank New York
320 State Street
Schenectady, NY 12305
To the Executive: Nancy A. McNamara
26 Berkshire Drive West
Clifton Park, NY 12065
Provided, however, that any notice of change of address shall be effective
only upon receipt.
12. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the Companies, their successors and assigns, including,
without limitation, any person or entity which may acquire all or
substantially all of either Company's assets or business or into which either
Company may be consolidated or merged, and the Executive, as well as
Executive's heirs, executors, administrators and legal representatives. The
Executive may assign the right to payment under this Agreement, but not
obligations under this Agreement.
13. Governing Law. This Agreement shall be governed by the laws of the State
of New York.
14. Complete Agreement. This Agreement supersedes all prior understandings
and agreements between the parties, and may not be amended or modified
orally, but only by a writing signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
15th day of July, 1992.
TRUSTCO BANK CORP NY
By:
President and Chief Executive Officer
TRUSTCO BANK NEW YORK
By:
President and Chief Executive Officer
By:
Nancy A. McNamara
Attest:
Secretary
C071092CAM2
Schedule A to Agreement among Companies and Nancy A. McNamara
Calendar Year Annual Salary Approval of Companies
1992 $160,000.00
1993 $200,000.00
1994 $230,000.00
TRUSTCO BANK CORP NY
By:
President and Chief Executive Officer
TRUSTCO BANK NEW YORK
By:
President and Chief Executive Officer
AGREEMENT OF EXECUTIVE
By:
Nancy A. McNamara
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT BETWEEN TRUSTCO BANK NEW YORK AND
TRUSTCO BANK CORP NY AND NANCY A. MCNAMARA
WHEREAS, Trustco Bank New York and Trustco Bank Corp NY (herein referred to
as the "Companies") entered into an Employment Agreement dated as of
July 15, 1992, (herein referred to as the "Agreement"); with Nancy A.
McNamara (herein referred to as the "Executive"); and
WHEREAS, the Companies and the Executive desire to amend the Agreement,
effective as of November 16, 1993;
NOW, THEREFORE, the Agreement is hereby amended effective June 21, 1993, in
the following respect:
Section 6 of the Agreement is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"6. Retirement, Pension and Profit Sharing. As further compensation for
the services of the Executive:
a. The Executive shall be eligible to participate fully in any, retirement,
executive incentive compensation, pension or profit sharing plans maintained
by the Companies, pursuant to the terms of such plans. Nothing in this
agreement shall be construed as a waiver of any of the terms of or conditions
precedent to participation in such plans; and,
b. Upon termination of the Executive's employment due to retirement or
disability (both as defined in the Retirement Plan of Trustco Bank New York),
the Companies shall provide to the Executive and his spouse, for the life of
the Executive, the health insurance benefits provided to retirees by the
Companies under their medical insurance plan. The Companies shall provide to
the Executive for his life the life insurance benefits provided to retirees
by the Companies under their life insurance plan. The obligations of the
Companies pursuant to this subparagraph b. shall survive the termination of
this Agreement."
IN WITNESS WHEREOF, the Companies and the Executive have executed this
Amendment No. 1 this 16 day of November, 1993.
TRUSTCO BANK NEW YORK TRUSTCO BANK CORP NY
By: By:
Nancy A. McNamara Nancy A. McNamera
[DESCRIPTION] EXHIBIT 10(c) TO FORM 10-K
Executive Employment Agreement for W.F. Terry
EMPLOYMENT AGREEMENT
between
TRUSTCO BANK NEW YORK
and
TRUSTCO BANK CORP NY
and
WILLIAM F. TERRY
AGREEMENT
AGREEMENT, dated as of July 15, 1992, (the "Agreement"), by and
between Trustco Bank New York (the "Bank"), a New York banking
corporation and Trustco Bank Corp NY (the "Company"), a New York
business corporation (hereinafter referred to collectively as the
"Companies"), with principal offices at 320 State Street,
Schenectady, New York and William F. Terry (the "Executive"),
residing at 9 Birchwood Court, Loudonville, New York 12211.
1. Engagement. The Companies agree to engage the Executive and the Executive
agrees to serve the Companies as an Executive.
2. Term. The term of this Agreement shall commence on the date first above
written and shall continue until December 31, 1992. Beginning on January 1,
1993, and on January 1, of each and every year thereafter, this Agreement
shall automatically renew for an additional year on the same terms and
conditions, except to the extent modified in writing, unless the Executive is
notified by the method set forth in Paragraph 11 herein that Executive has
been terminated ("Nonrenewal Notice"). Nothing contained herein,
however, shall be construed to extend the Executive's right to employment
beyond the age of 65 years or the then mandatory retirement age in effect,
whichever shall be greater.
3. Purpose and Effect. The purpose of this Agreement is to provide
Termination Benefits, as defined in Paragraph 9 hereof, in the event of a
Termination, as defined in Paragraph 8 hereof.
4. Service. The Executive shall exert Executive's best efforts and devote
substantially all of Executive's time and attention to the affairs of the
Bank. The Executive shall perform all the services and duties necessary or
appropriate for the management of the Bank's businesses, subject to the
general direction, approval, and control of the Chief Executive Officer and
his designees.
5. Compensation. For purposes of this Agreement, Annual Compensation shall be
deemed to be the Executive's Annual Base Salary. Commencing January 1, 1992,
Executive shall be paid by the Companies, the Annual Base Salary established
on Schedule A attached hereto, (which base salary shall be paid in bi-weekly
installments). Thereafter, Annual Base Salary shall continue at such level or
such other level as may have been agreed to among the parties and evidenced
as provided in this Paragraph, until renegotiated among the parties hereto
and either confirmed in a writing signed by either the Chief Executive
Officer of or a member of the Board of Directors of the Companies, or
endorsed on Schedule A and signed by either the Chief Executive Officer of or
by a member of the Board of Directors of the Companies.
6. Retirement, Pension and Profit Sharing. As further compensation for the
services of the Executive, the Executive shall be eligible to participate
fully in any retirement, executive incentive compensation, pension or profit
sharing plans maintained by the Companies, pursuant to the terms of such
plans. Nothing in this Agreement shall be construed as a waiver of any of the
terms of or conditions precedent to participation in such plans.
7. Termination of Employment. If there shall be a Termination (as hereinafter
defined) of the Executive for any reason other than for good cause, death,
retirement at the mandatory retirement age, or disability, the Executive
shall receive upon his Termination of employment with either of the
Companies, the Termination Benefits set forth herein. The Executive's
Termination for good cause shall be limited to the Executive's having
committed an act of fraud, embezzlement, or theft, constituting a felony or
any act intentionally against either of the Companies which causes either
Company material injury, or a final determination by a court that the
Executive has committed a material breach of his duties and responsibilities
in connection with rendering services to either of the Companies pursuant to
this Agreement.
8. Termination. Termination shall include, but is not limited to, (i) any
reduction in the Executive's Annual Base Salary, retirement other than at the
mandatory retirement age, executive incentive compensation, pension or profit
sharing benefits, (unless such reductions shall have been applied to all bank
employees as apart of a validly adopted plan of cost containment),
responsibilities or duties, or (ii) either Companies' relocation or a change
in the Executive's base location, or (iii) a non-renewal notice given
pursuant to Paragraph 2 of this Agreement, or (iv) the unilateral election of
the Executive to terminate the Agreement. Such election shall be communicated
to the Companies pursuant to Paragraph 11 hereof.
9. Termination Benefits. The following benefits shall be Termination
Benefits:
(a) The Companies shall pay to the Executive the Executive's full
compensation through the effective date of his termination at the rate in
effect at the time notice of termination is given or at time of termination,
if earlier, and in addition
(b) The Companies shall pay to the Executive within ten (10) days of
Termination an additional lump sum amount equal to that Executive's Annual
Base Salary then in effect, and in addition
(c) The Companies shall pay to the Executive all benefits payable to the
Executive under the Companies' retirement, executive incentive compensation,
pension and profit sharing plans, and in addition
(d) The Companies shall pay the Executive all legal fees and expenses
incurred by the Executive as a result of such Termination, and in addition
(e) The Companies shall provide the Executive, for one year following his
Termination, Health Insurance and Group Life Insurance benefits substantially
similar to those the Executive was receiving immediately prior to his
Termination.
10. Indemnity. The Companies shall indemnify the Executive and hold Executive
harmless for any acts or decisions made by Executive in good faith while
performing services for either of the Companies and shall use their best
efforts to obtain coverage for Executive under any insurance policy now in
force or hereinafter obtained during the term of this Agreement covering the
other officers and directors of the Companies against lawsuits. The Companies
will pay all expenses, including attorney's fees, actually and necessarily
incurred by the Executive in connection with any appeal thereon including the
cost of court settlements.
11. Notices. All notices, request, demands and other communications provided
for by this Agreement shall be in writing and shall be deemed to have been
given at the time when personally delivered or mailed at any general or
branch United States Post Office enclosed in a post paid envelope and
addressed to the address of the respective party stated below or to such
changed address as such party may have fixed by notice.
To the Companies: Trustco Bank Corp NY
Trustco Bank New York
320 State Street
Schenectady, NY 12305
To the Executive: William F. Terry
9 Birchwood Court
Loudonville, NY 12211
Provided, however, that any notice of change of address shall be effective
only upon receipt.
12. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the Companies, their successors and assigns, including,
without limitation, any person or entity which may acquire all or
substantially all of either Company's assets or business or into which either
Company may be consolidated or merged, and the Executive, as well as
Executive's heirs, executors, administrators and legal representatives. The
Executive may assign the right to payment under this Agreement, but not
obligations under this Agreement.
13. Governing Law. This Agreement shall be governed by the laws of the State
of New York.
14. Complete Agreement. This Agreement supersedes all prior understandings
and agreements between the parties, and may not be amended or modified
orally, but only by a writing signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
15th day of July, 1992.
TRUSTCO BANK CORP NY
By:
President and Chief Executive Officer
TRUSTCO BANK NEW YORK
By:
President and Chief Executive Officer
By:
William F. Terry
Attest:
Secretary
C071092CAM1
Schedule A to Agreement among Companies and William F. Terry
Calendar Year Annual Salary Approval of Companies
1992 $160,000.00
1993 $200,000.00
1994 $230,000.00
TRUSTCO BANK CORP NY
By:
President and Chief Executive Officer
TRUSTCO BANK NEW YORK
By:
President and Chief Executive Officer
AGREEMENT OF EXECUTIVE
By:
William F. Terry
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT BETWEEN
TRUSTCO BANK NEW YORK AND
TRUSTCO BANK CORP NY AND
WILLIAM F. TERRY
WHEREAS, Trustco Bank New York and Trustco Bank Corp NY (herein referred to
as the "Companies") entered into an Employment Agreement dated as of
July 15, 1992, (herein referred to as the "Agreement"); with William
F. Terry (herein referred to as the "Executive"); and
WHEREAS, the Companies and the Executive desire to amend the Agreement,
effective as of November 16, 1993;
NOW, THEREFORE, the Agreement is hereby amended effective June 21, 1993, in
the following respect:
Section 6 of the Agreement is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"6. Retirement, Pension and Profit Sharing. As further compensation for
the services of the Executive:
a. The Executive shall be eligible to participate fully in any, retirement,
executive incentive compensation, pension or profit sharing plans maintained
by the Companies, pursuant to the terms of such plans. Nothing in this
agreement shall be construed as a waiver of any of the terms of or conditions
precedent to participation in such plans; and,
b. Upon termination of the Executive's employment due to retirement or
disability (both as defined in the Retirement Plan of Trustco Bank New York),
the Companies shall provide to the Executive and his spouse, for the life of
the Executive, the health insurance benefits provided to retirees by the
Companies under their medical insurance plan. The Companies shall provide to
the Executive for his life the life insurance benefits provided to retirees
by the Companies under their life insurance plan. The obligations of the
Companies pursuant to this subparagraph b. shall survive the termination of
this Agreement."
IN WITNESS WHEREOF, the Companies and the Executive have executed this
Amendment No. 1 this 16 day of November, 1993.
TRUSTCO BANK NEW YORK TRUSTCO BANK CORP NY
By: By:
William F. Terry William F. Terry
[DESCRIPTION] EXHIBIT 10(d) TO FORM 10-K
Executive Employment Agreement for P.A. Zakriski
EMPLOYMENT AGREEMENT
between
TRUSTCO BANK NEW YORK
and
TRUSTCO BANK CORP NY
and
PETER A. ZAKRISKI
AGREEMENT
AGREEMENT, dated as of July 15, 1992, (the "Agreement"), by and
between Trustco Bank New York (the "Bank"), a New York banking
corporation and Trustco Bank Corp NY (the "Company"), a New York
business corporation (hereinafter referred to collectively as the
"Companies"), with principal offices at 320 State Street,
Schenectady, New York and Peter A. Zakriski (the "Executive"),
residing at 86 St. Stephen's Lane West, Scotia, New York 12302.
1. Engagement. The Companies agree to engage the Executive and the Executive
agrees to serve the Companies as an Executive.
2. Term. The term of this Agreement shall commence on the date first above
written and shall continue until December 31, 1992. Beginning on January 1,
1993, and on January 1, of each and every year thereafter, this Agreement
shall automatically renew for an additional year on the same terms and
conditions, except to the extent modified in writing, unless the Executive is
notified by the method set forth in Paragraph 11 herein that Executive has
been terminated ("Nonrenewal Notice"). Nothing contained herein,
however, shall be construed to extend the Executive's right to employment
beyond the age of 65 years or the then mandatory retirement age in effect,
whichever shall be greater.
3. Purpose and Effect. The purpose of this Agreement is to provide
Termination Benefits, as defined in Paragraph 9 hereof, in the event of a
Termination, as defined in Paragraph 8 hereof.
4. Service. The Executive shall exert Executive's best efforts and devote
substantially all of Executive's time and attention to the affairs of the
Bank. The Executive shall perform all the services and duties necessary or
appropriate for the management of the Bank's businesses, subject to the
general direction, approval, and control of the Chief Executive Officer and
his designees.
5. Compensation. For purposes of this Agreement, Annual Compensation shall be
deemed to be the Executive's Annual Base Salary. Commencing January 1, 1992,
Executive shall be paid by the Companies, the Annual Base Salary established
on Schedule A attached hereto, (which base salary shall be paid in bi-weekly
installments). Thereafter, Annual Base Salary shall continue at such level or
such other level as may have been agreed to among the parties and evidenced
as provided in this Paragraph, until renegotiated among the parties hereto
and either confirmed in a writing signed by either the Chief Executive
Officer of or a member of the Board of Directors of the Companies, or
endorsed on Schedule A and signed by either the Chief Executive Officer of or
by a member of the Board of Directors of the Companies.
6. Retirement, Pension and Profit Sharing. As further compensation for the
services of the Executive, the Executive shall be eligible to participate
fully in any retirement, executive incentive compensation, pension or profit
sharing plans maintained by the Companies, pursuant to the terms of such
plans. Nothing in this Agreement shall be construed as a waiver of any of the
terms of or conditions precedent to participation in such plans.
7. Termination of Employment. If there shall be a Termination (as hereinafter
defined) of the Executive for any reason other than for good cause, death,
retirement at the mandatory retirement age, or disability, the Executive
shall receive upon his Termination of employment with either of the
Companies, the Termination Benefits set forth herein. The Executive's
Termination for good cause shall be limited to the Executive's having
committed an act of fraud, embezzlement, or theft, constituting a felony or
any act intentionally against either of the Companies which causes either
Company material injury, or a final determination by a court that the
Executive has committed a material breach of his duties and responsibilities
in connection with rendering services to either of the Companies pursuant to
this Agreement.
8. Termination. Termination shall include, but is not limited to, (i) any
reduction in the Executive's Annual Base Salary, retirement other than at the
mandatory retirement age, executive incentive compensation, pension or profit
sharing benefits, (unless such reductions shall have been applied to all bank
employees as apart of a validly adopted plan of cost containment),
responsibilities or duties, or (ii) either Companies' relocation or a change
in the Executive's base location, or (iii) a non-renewal notice given
pursuant to Paragraph 2 of this Agreement, or (iv) the unilateral election of
the Executive to terminate the Agreement. Such election shall be communicated
to the Companies pursuant to Paragraph 11 hereof.
9. Termination Benefits. The following benefits shall be Termination
Benefits:
(a) The Companies shall pay to the Executive the Executive's full
compensation through the effective date of his termination at the rate in
effect at the time notice of termination is given or at time of termination,
if earlier, and in addition
(b) The Companies shall pay to the Executive within ten (10) days of
Termination an additional lump sum amount equal to that Executive's Annual
Base Salary then in effect, and in addition
(c) The Companies shall pay to the Executive all benefits payable to the
Executive under the Companies' retirement, executive incentive compensation,
pension and profit sharing plans, and in addition
(d) The Companies shall pay the Executive all legal fees and expenses
incurred by the Executive as a result of such Termination, and in addition
(e) The Companies shall provide the Executive, for one year following his
Termination, Health Insurance and Group Life Insurance benefits substantially
similar to those the Executive was receiving immediately prior to his
Termination.
10. Indemnity. The Companies shall indemnify the Executive and hold Executive
harmless for any acts or decisions made by Executive in good faith while
performing services for either of the Companies and shall use their best
efforts to obtain coverage for Executive under any insurance policy now in
force or hereinafter obtained during the term of this Agreement covering the
other officers and directors of the Companies against lawsuits. The Companies
will pay all expenses, including attorney's fees, actually and necessarily
incurred by the Executive in connection with any appeal thereon including the
cost of court settlements.
11. Notices. All notices, request, demands and other communications provided
for by this Agreement shall be in writing and shall be deemed to have been
given at the time when personally delivered or mailed at any general or
branch United States Post Office enclosed in a post paid envelope and
addressed to the address of the respective party stated below or to such
changed address as such party may have fixed by notice.
To the Companies: Trustco Bank Corp NY
Trustco Bank New York
320 State Street
Schenectady, NY 12305
To the Executive: Peter A. Zakriski
86 St. Stephen's Lane West
Scotia, NY 12302
Provided, however, that any notice of change of address shall be effective
only upon receipt.
12. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the Companies, their successors and assigns, including,
without limitation, any person or entity which may acquire all or
substantially all of either Company's assets or business or into which either
Company may be consolidated or merged, and the Executive, as well as
Executive's heirs, executors, administrators and legal representatives. The
Executive may assign the right to payment under this Agreement, but not
obligations under this Agreement.
13. Governing Law. This Agreement shall be governed by the laws of the State
of New York.
14. Complete Agreement. This Agreement supersedes all prior understandings
and agreements between the parties, and may not be amended or modified
orally, but only by a writing signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
15th day of July, 1992.
TRUSTCO BANK CORP NY
By:
President and Chief Executive Officer
TRUSTCO BANK NEW YORK
By:
President and Chief Executive Officer
By:
Peter A. Zakriski
Attest:
Secretary
C071092CAM4
Schedule A to Agreement among Companies and Peter A. Zakriski
Calendar Year Annual Salary Approval of Companies
1992 $110,000.00
1993 $115,000.00
1994 $120,000.00
TRUSTCO BANK CORP NY
By:
President and Chief Executive Officer
TRUSTCO BANK NEW YORK
By:
President and Chief Executive Officer
AGREEMENT OF EXECUTIVE
By:
Peter A. Zakriski
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT BETWEEN TRUSTCO BANK NEW YORK AND
TRUSTCO BANK CORP NY AND PETER A. ZAKRISKI
WHEREAS, Trustco Bank New York and Trustco Bank Corp NY (herein referred to
as the "Companies") entered into an Employment Agreement dated as of
July 15, 1992, (herein referred to as the "Agreement"); with Peter A.
Zakriski (herein referred to as the "Executive"); and
WHEREAS, the Companies and the Executive desire to amend the Agreement,
effective as of November 16, 1993;
NOW, THEREFORE, the Agreement is hereby amended effective June 21, 1993, in
the following respect:
Section 6 of the Agreement is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"6. Retirement, Pension and Profit Sharing. As further compensation for
the services of the Executive:
a. The Executive shall be eligible to participate fully in any, retirement,
executive incentive compensation, pension or profit sharing plans maintained
by the Companies, pursuant to the terms of such plans. Nothing in this
agreement shall be construed as a waiver of any of the terms of or conditions
precedent to participation in such plans; and,
b. Upon termination of the Executive's employment due to retirement or
disability (both as defined in the Retirement Plan of Trustco Bank New York),
the Companies shall provide to the Executive and his spouse, for the life of
the Executive, the health insurance benefits provided to retirees by the
Companies under their medical insurance plan. The Companies shall provide to
the Executive for his life the life insurance benefits provided to retirees
by the Companies under their life insurance plan. The obligations of the
Companies pursuant to this subparagraph b. shall survive the termination of
this Agreement."
IN WITNESS WHEREOF, the Companies and the Executive have executed this
Amendment No. 1 this 16 day of November, 1993.
TRUSTCO BANK NEW YORK TRUSTCO BANK CORP NY
By: By:
Peter A. Zakriski Peter A. Zakriski
[DESCRIPTION] EXHIBIT 10(e) TO FORM 10-K
Executive Employment Agreement for R.A. Pidgeon
EMPLOYMENT AGREEMENT
between
TRUSTCO BANK NEW YORK
and
TRUSTCO BANK CORP NY
and
RALPH A. PIDGEON
AGREEMENT
AGREEMENT, dated as of July 15, 1992, (the "Agreement"), by and
between Trustco Bank New York (the "Bank"), a New York banking
corporation and Trustco Bank Corp NY (the "Company"), a New York
business corporation (hereinafter referred to collectively as the
"Companies"), with principal offices at 320 State Street,
Schenectady, New York and Ralph A. Pidgeon (the "Executive"), c/o
Trustco Bank New York, 320 State Street, Schenectady, New York 12305.
1. Engagement. The Companies agree to engage the Executive and the Executive
agrees to serve the Companies as an Executive.
2. Term. The term of this Agreement shall commence on the date first above
written and shall continue until December 31, 1992. Beginning on January 1,
1993, and on January 1, of each and every year thereafter, this Agreement
shall automatically renew for an additional year on the same terms and
conditions, except to the extent modified in writing, unless the Executive is
notified by the method set forth in Paragraph 11 herein that Executive has
been terminated ("Nonrenewal Notice"). Nothing contained herein,
however, shall be construed to extend the Executive's right to employment
beyond the age of 65 years or the then mandatory retirement age in effect,
whichever shall be greater.
3. Purpose and Effect. The purpose of this Agreement is to provide
Termination Benefits, as defined in Paragraph 9 hereof, in the event of a
Termination, as defined in Paragraph 8 hereof.
4. Service. The Executive shall exert Executive's best efforts and devote
substantially all of Executive's time and attention to the affairs of the
Bank. The Executive shall perform all the services and duties necessary or
appropriate for the management of the Bank's businesses, subject to the
general direction, approval, and control of the Chief Executive Officer and
his designees.
5. Compensation. For purposes of this Agreement, Annual Compensation shall be
deemed to be the Executive's Annual Base Salary. Commencing January 1, 1992,
Executive shall be paid by the Companies, the Annual Base Salary established
on Schedule A attached hereto, (which base salary shall be paid in bi-weekly
installments). Thereafter, Annual Base Salary shall continue at such level or
such other level as may have been agreed to among the parties and evidenced
as provided in this Paragraph, until renegotiated among the parties hereto
and either confirmed in a writing signed by either the Chief Executive
Officer of or a member of the Board of Directors of the Companies, or
endorsed on Schedule A and signed by either the Chief Executive Officer of or
by a member of the Board of Directors of the Companies.
6. Retirement, Pension and Profit Sharing. As further compensation for the
services of the Executive, the Executive shall be eligible to participate
fully in any retirement, executive incentive compensation, pension or profit
sharing plans maintained by the Companies, pursuant to the terms of such
plans. Nothing in this Agreement shall be construed as a waiver of any of the
terms of or conditions precedent to participation in such plans.
7. Termination of Employment. If there shall be a Termination (as hereinafter
defined) of the Executive for any reason other than for good cause, death,
retirement at the mandatory retirement age, or disability, the Executive
shall receive upon his Termination of employment with either of the
Companies, the Termination Benefits set forth herein. The Executive's
Termination for good cause shall be limited to the Executive's having
committed an act of fraud, embezzlement, or theft, constituting a felony or
any act intentionally against either of the Companies which causes either
Company material injury, or a final determination by a court that the
Executive has committed a material breach of his duties and responsibilities
in connection with rendering services to either of the Companies pursuant to
this Agreement.
8. Termination. Termination shall include, but is not limited to, (i) any
reduction in the Executive's Annual Base Salary, retirement other than at the
mandatory retirement age, executive incentive compensation, pension or profit
sharing benefits, (unless such reductions shall have been applied to all bank
employees as apart of a validly adopted plan of cost containment),
responsibilities or duties, or (ii) either Companies' relocation or a change
in the Executive's base location, or (iii) a non-renewal notice given
pursuant to Paragraph 2 of this Agreement, or (iv) the unilateral election of
the Executive to terminate the Agreement. Such election shall be communicated
to the Companies pursuant to Paragraph 11 hereof.
9. Termination Benefits. The following benefits shall be Termination
Benefits:
(a) The Companies shall pay to the Executive the Executive's full
compensation through the effective date of his termination at the rate in
effect at the time notice of termination is given or at time of termination,
if earlier, and in addition
(b) The Companies shall pay to the Executive within ten (10) days of
Termination an additional lump sum amount equal to that Executive's Annual
Base Salary then in effect, and in addition
(c) The Companies shall pay to the Executive all benefits payable to the
Executive under the Companies' retirement, executive incentive compensation,
pension and profit sharing plans, and in addition
(d) The Companies shall pay the Executive all legal fees and expenses
incurred by the Executive as a result of such Termination, and in addition
(e) The Companies shall provide the Executive, for one year following his
Termination, Health Insurance and Group Life Insurance benefits substantially
similar to those the Executive was receiving immediately prior to his
Termination.
10. Indemnity. The Companies shall indemnify the Executive and hold Executive
harmless for any acts or decisions made by Executive in good faith while
performing services for either of the Companies and shall use their best
efforts to obtain coverage for Executive under any insurance policy now in
force or hereinafter obtained during the term of this Agreement covering the
other officers and directors of the Companies against lawsuits. The Companies
will pay all expenses, including attorney's fees, actually and necessarily
incurred by the Executive in connection with any appeal thereon including the
cost of court settlements.
11. Notices. All notices, request, demands and other communications provided
for by this Agreement shall be in writing and shall be deemed to have been
given at the time when personally delivered or mailed at any general or
branch United States Post Office enclosed in a post paid envelope and
addressed to the address of the respective party stated below or to such
changed address as such party may have fixed by notice.
To the Companies: Trustco Bank Corp NY
Trustco Bank New York
320 State Street
Schenectady, NY 12305
To the Executive: Ralph A. Pidgeon
c/o Trustco Bank New York
320 State Street
Schenectady, NY 12305
Provided, however, that any notice of change of address shall be effective
only upon receipt.
12. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the Companies, their successors and assigns, including,
without limitation, any person or entity which may acquire all or
substantially all of either Company's assets or business or into which either
Company may be consolidated or merged, and the Executive, as well as
Executive's heirs, executors, administrators and legal representatives. The
Executive may assign the right to payment under this Agreement, but not
obligations under this Agreement.
13. Governing Law. This Agreement shall be governed by the laws of the State
of New York.
14. Complete Agreement. This Agreement supersedes all prior understandings
and agreements between the parties, and may not be amended or modified
orally, but only by a writing signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
15th day of July, 1992.
TRUSTCO BANK CORP NY
By:
President and Chief Executive Officer
TRUSTCO BANK NEW YORK
By:
President and Chief Executive Officer
By:
Ralph A. Pidgeon
Attest:
Secretary
C071092CAM3
Schedule A to Agreement among Companies and Ralph A. Pidgeon
Calendar Year Annual Salary Approval of Companies
1992 $160,000.00
1993 $200,000.00
1994 $230,000.00
TRUSTCO BANK CORP NY
By:
President and Chief Executive Officer
TRUSTCO BANK NEW YORK
By:
President and Chief Executive Officer
AGREEMENT OF EXECUTIVE
By:
Ralph A. Pidgeon
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT BETWEEN TRUSTCO BANK NEW YORK AND
TRUSTCO BANK CORP NY AND RALPH A. PIDGEON
WHEREAS, Trustco Bank New York and Trustco Bank Corp NY (herein referred to
as the "Companies") entered into an Employment Agreement dated as of
July 15, 1992, (herein referred to as the "Agreement"); with Ralph A.
Pidgeon (herein referred to as the "Executive"); and
WHEREAS, the Companies and the Executive desire to amend the Agreement,
effective as of November 16, 1993;
NOW, THEREFORE, the Agreement is hereby amended effective June 21, 1993, in
the following respect:
Section 6 of the Agreement is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"6. Retirement, Pension and Profit Sharing. As further compensation for
the services of the Executive:
a. The Executive shall be eligible to participate fully in any, retirement,
executive incentive compensation, pension or profit sharing plans maintained
by the Companies, pursuant to the terms of such plans. Nothing in this
agreement shall be construed as a waiver of any of the terms of or conditions
precedent to participation in such plans; and,
b. Upon termination of the Executive's employment due to retirement or
disability (both as defined in the Retirement Plan of Trustco Bank New York),
the Companies shall provide to the Executive and his spouse, for the life of
the Executive, the health insurance benefits provided to retirees by the
Companies under their medical insurance plan. The Companies shall provide to
the Executive for his life the life insurance benefits provided to retirees
by the Companies under their life insurance plan. The obligations of the
Companies pursuant to this subparagraph b. shall survive the termination of
this Agreement."
IN WITNESS WHEREOF, the Companies and the Executive have executed this
Amendment No. 1 this 16 day of November, 1993.
TRUSTCO BANK NEW YORK TRUSTCO BANK CORP NY
By: By:
Ralph A. Pidgeon Ralph A. Pidgeon
[DESCRIPTION] EXHIBIT 10(f) TO FORM 10-K
1985 TRUSTCO BANK CORP NY
STOCK OPTION PLAN
(as amended through December 31, 1992)
SECTION 1: PURPOSE
This Stock Option Plan (the "Plan") has been established by TrustCo
Bank Corp NY (the "Company") to advance the interests of the Company
and its stockholders by providing to certain key employees an
opportunity to acquire equity ownership in the Company and the
incentive advantages inherent in that equity ownership.
SECTION 2: DEFINITIONS
When capitalized and used in this Plan, each of the following terms or
phrases has the indicated meaning, unless a different meaning is
clearly implied by the context:
"Adoption Date" means the date this plan is duly adopted by the
Board.
"Board" means the Company's Board of Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Committee to be appointed by the Board from
time to time and to consist of three or more members of the Board who
have not been eligible to receive options under the Plan at any time
within a period of one year immediately preceding the date of their
appointment to such Committee.
"Company" means TrustCo Bank Corp NY and its subsidiaries.
"Disability" means a Participant's termination of employment by the
Company or a Participating Subsidiary by reason of his permanent and
total disability, as defined in Code Section 22(e)(3).
"Eligible Employee" means any executive or other key managerial
employee of the Company or any Participating Subsidiary who is a
full-time, salaried employee of the Company or any Participating
Subsidiary, provided he is so employed at the date any Stock Option
is granted to him.
"Fair Market Value" means the current fair market value of any Stock
subject to a Stock Option. During such time as the Stock is not
listed on an established stock exchange, fair market value per share
shall be the mean between the closing dealer "bid" and "ask" prices
for the Stock as quoted by NASDAQ for the day of the grant and if
"bid" and "ask" prices are quoted for the day of the grant, the fair
market value shall be determined by reference to such prices on the
next preceding day on which such prices were quoted. If the Stock is
listed on an established stock exchange or exchanges, the fair market
value shall be deemed to be the highest closing price of the Stock on
such stock exchange or exchanges on the day the option is granted or,
if no sale of Stock has been made on any stock exchange on that day,
the fair market value shall be determined by reference to such
price for the next preceding day on which a sale occurred. In the
event that Stock is not traded on an established stock exchange, and
no closing dealer "bid" and "ask" prices are available, then the
purchase price shall be 100 percent of the fair market value of one
share of Stock on the day the option is granted, as determined by the
Committee in good faith. The purchase price shall be subject to
adjustment only as provided in Section 9 of the Plan.
"Incentive Stock Option" means an option granted to a Participant
under this Plan to purchase the Company's Stock, which is designated
as an Incentive Stock Option and which satisfies the requirements of
Code Section 422, as amended.
"Nonqualified Stock Option" means an option granted to a Participant
under this Plan to purchase the Company's Stock and which is not an
Incentive Stock Option.
"Option Agreement" means the written agreement executed between the
Participant and the Company evidencing the award of Stock Options
under this Plan, as more particularly described in Section 7.
"Participant" means any Eligible Employee who has been awarded any
Stock Option(s) under this Plan and his heirs, legatees, or personal
representatives who may succeed to his interests under any Option
Agreement at his death.
"Participating Subsidiary" means a Subsidiary some or all of whose
employees have been designated as Eligible Employees by the Board.
"Plan" means the TrustCo Bank Corp NY Stock Option Plan as embodied
in this document including all amendments to this document made from
time to time.
"Shareholder-Employee" means any Eligible Employee who at the time an
Incentive Stock Option is to be granted to him under this Plan owns
(within the meaning of Code Section 442(b)(6) and (c)(5)) more than
10 percent of the combined voting power of all classes of the
Company's Stock or of its parent or subsidiary companies (if any).
"Stock" means shares of the Company's common stock.
"Stock Appreciation Right" means a right, granted to a Participant
concurrently with the grant of a Nonqualified Stock Option, to
receive a cash payment from the Company upon the partial or complete
cancellation of that option by a Participant. Each option agreement
may provide that the Participant may from time to time elect to
cancel all or any portion of the option then subject to exercise, in
which event the Company's obligation in respect of such option may be
discharged by payment to the Participant of an amount in cash equal
to the excess, if any, of the fair market value at the time of
cancellation of the shares subject to the option or the portion
thereof so cancelled, over the aggregate purchase price for such
shares as set forth in the option agreement. In the event of such a
cancellation, the number of shares as to which such option was
cancelled shall not become available for use under the Plan.
"Stock Option" or "Option" means a right granted under this Plan to
purchase Company Stock, including a Nonqualified Stock Option or an
Incentive Stock Option.
"Subsidiary" means a corporation of which stock possessing 50% or
more of the total combined voting power of all classes of its stock
entitled to vote generally in the election of directors is owned in
the aggregate by the Company directly or indirectly through one or
more Subsidiaries.
SECTION 3: PLAN ADMINISTRATION
The Plan is to be administered by the Committee except as otherwise
provided in the Plan. Subject to all other Plan provisions, the
Committee is expressly empowered to:
1. select the Eligible Employees who are to receive Stock Options and
Stock Appreciation Rights under this Plan from time to time and grant
those Options and Stock Appreciation Rights;
2. determine the time(s) at which Stock Options and Stock
Appreciation Rights are to be granted;
3. determine the number of shares of Stock to be subject to a Stock
Option granted to any Participant;
4. determine the option price and term of each Stock Option granted
under this Plan (including whether it is to be an Incentive Stock
Option or Nonqualified Stock Option) and all other terms and
conditions to be included in the Option Agreement relating to any
Stock Options under this Plan;
5. determine the duration and purposes of leaves of absence which may
be granted to a Participant without constituting a termination of
employment or service for purposes of the Plan;
6. determine all matters of interpretation of the Plan and any Option
Agreement, and the Committee's decision is to be binding and
conclusive on all persons;
7. determine, in its sole discretion, whether the Company is to
accept Stock previously acquired by a Participant as payment of the
option price for Stock Options granted under this Plan;
8. prescribe, amend and rescind all rules and regulations relating to
the Plan and its operations;
9. in the event of the Company's or a Participating Subsidiary's
merger, consolidation, dissolution or liquidation, accelerate the
exercise date and expiration date for any unexercised Stock Options
then outstanding; and
10. make all other determinations and decisions and take all further
actions deemed necessary or advisable for the Plan's administration.
Notwithstanding any conflicting Plan provision, the Board reserves
the right, by written resolution duly adopted by the Board, to
terminate from time to time any and all powers delegated to the
Committee by the express Plan provisions and, in that event, those
Committee powers so terminated by the Board shall revert to and be
fully exercisable by the Board to the same extent as they were
exercisable by the Committee, provided that no termination of the
Committee's powers shall be retroactively effective. Any termination
of the Committee's powers under this Plan shall not be deemed a Plan
amendment. No Committee or Board member may participate in the
decision to award any Stock Option or Stock Appreciation Right under
this Plan to himself. Neither the Board nor the Committee may,
without the Participant's consent, change the terms and conditions of
any Option Agreement after its execution, except to the extent that
the Agreement may, by its terms, be so amended.
SECTION 4: PLAN EFFECTIVE DATE AND DURATION
This Plan is effective as of the Adoption Date, subject, however, to
the Plan's approval by the Company's shareholders either on or before
the Adoption Date or within the 12-month period following the
Adoption Date. If shareholder approval is not so obtained, all Stock
Options, Stock Appreciation Rights and Option Agreements granted
under this Plan shall automatically be null and void, ab initio. No
Stock Option may be granted under this Plan at any date which is 10
years or more after the Adoption Date.
SECTION 5: AMENDMENTS AND TERMINATIONS
This plan may be amended, suspended, terminated or reinstated, in
whole or in part, at any time by the Board; provided, however, that
without the approval of the Company's stockholders, the Board may
not:
1. except as provided in Section 9, increase the number of shares of
Stock subject to Stock Options issued under this Plan;
2. extend the maximum period during which a Stock Option may be
exercised;
3. extend the maximum period during which Incentive Stock Options may
be granted under this Plan; or
4. change the class of Eligible Employees.
SECTION 6: SHARES SUBJECT TO THE PLAN
The total number of shares available for grants of Stock Options
under this Plan is 60,000, subject to the adjustments under Section
9. If a Stock Option or a portion thereof expires or terminates for
any reason without being exercised in full, the unpurchased shares
covered by the Option are to be available for future Stock Option
grants under this Agreement.
SECTION 7: GRANTS OF OPTIONS
Nonqualified Stock Options may be granted to any Eligible Employee,
at the time(s) and upon such terms and conditions as may be selected
by the Committee. At the time of grant of a Nonqualified Stock
Option, the Committee may, in its discretion, also grant to the
Eligible Employee Stock Appreciation Rights for the total number of
shares subject to that Option. The grant of a Nonqualified Stock
Option and, if appropriate, Stock Appreciation Rights shall be
evidenced by an Option Agreement between the Eligible Employee and
the Company containing any terms and conditions specified by the
Committee, but including the terms described in Section 8.
Incentive Stock Options may be granted to any Eligible Employee, at
the time(s) and upon such terms and condition as may be selected by
the Committee, subject, nevertheless to the following:
1. The aggregate Fair Market Value (as of the date the Incentive
Stock Option is granted) of the Stock subject to Incentive Stock
Options granted to any Eligible Employee during one calendar year
(under this Plan and all other plans of the Company and its
Subsidiaries providing "incentive stock options" within the meaning
of Code Section 422A(b)) shall not exceed the sum of: (i) $100,000;
and (ii) the amount of any "unused limit carryover" which may be
taken into account for that calendar year with respect to that
Eligible Employee under Code Section 422(A)(c)(4).
2. the grant shall be evidenced by an Option Agreement between the
Company and the Eligible Employee containing any terms and conditions
specified by the Committee, except that those terms and conditions
must conform with Section 8 and must be consistent with the
requirements for an "incentive stock option" as described in Code
Section 422A(b).
SECTION 8: TERMS OF OPTIONS AGREEMENT
All Option Agreements for Incentive Stock Options issued under this
Plan must include terms that are consistent with the following:
1. The Participant shall be entitled to purchase the number of shares
subject to the Stock Option, upon his exercise of that Option, at a
price no less than 100% of the Stock's Fair Market Value at the date
of the grant; provided, however, that in the case of an Incentive
Stock Option granted to a Shareholder-Employee, the option price is
to be no less than 110% of that Fair Market Value.
2. At the option's exercise, the option price may be paid in cash or
cash equivalent--that is, by certified check, bank draft or postal or
express money orders made payable to the Company's order in U.S.
dollars. Alternatively, in the Committee's sole discretion, the
option price may be paid, in whole or in part, by the Participant's
exchange of Company Stock previously acquired by him, based on that
Stock's Fair Market Value at the date of exchange. However, no
Company Stock may be accepted in payment of the option price upon
exercise of an Incentive Stock Option, if that Stock was acquired by
the Participant's previous exercise of an Incentive Stock Option
unless that Stock has been held by the Participant for more than 2
years after the date that previous Option was granted and more than 1
year after the date that previous Option was exercised.
3. The option may not be exercisable after the earlier of the
following dates:
(i) If the Participant is not a Shareholder-Employee at the date of
grant or the Option is not an Incentive Stock Option, the date 10
years after the date of grant;
(ii) If the Participant is a Shareholder-Employee at the date of
grant and the Option is an Incentive Stock Option, the date 5 years
after the date of grant;
(iii) If the Participant's employment terminates for reasons other
than his death, disability, or retirement, the date three months
after the date his employment terminates.
Notwithstanding the foregoing, the Committee, in its discretion, may
further limit the period during which all or any portion of a Stock
Option may be exercised and may accelerate the time at which an
Option may be exercised.
4. Acceleration and the immediate right to exercise options in full
will occur if any one or more of the following takes place:
(i) a contract providing for a merger or consolidation of the Company
with or into another entity (except in the case where the Company is
the surviving entity and the merger does not affect the stock
interest of the stockholders of the Company) or a sale of
substantially all the assets of the Company is executed;
(ii) a single entity or individual (including any related parties to
such entity or individual) acquires 20% or more of the outstanding
stock of the Company; or
(iii) a situation occurs in which, during any period of 12
consecutive months, individuals who at the beginning of such period
were members of the Board cease for any reason to constitute at least
a majority of the Board, unless the nomination or election of each
new director was approved by at least two-thirds of the directors
then still in office who were directors at the beginning of such
period.
5. The Stock Option(s) and any related Stock Appreciation Rights may
be exercised only by the Participant during his lifetime and, after
his death, only by his heirs, legatees or personal representatives
who succeed to his interest under the Option Agreement. Neither the
Option Agreement, the Stock Options nor the Stock Appreciation Rights
issued under this Plan shall be transferable by the Participant other
than by will or by the laws of descent and distribution.
6. Notwithstanding anything else to the contrary, no Incentive Stock
Option may be exercised while there is outstanding (within the
meaning of Code Section 422(c)(7)) any "incentive stock option"
(within the meaning of Code Section 422A(b)) to purchase stock of the
Company or any Subsidiary which was granted to the Participant prior
to the grant of the Option sought to be exercised. The provisions of
this Item 6 shall apply only to Incentive Stock Options granted prior
to January 1, 1987.
7. In the case of Nonqualified Stock Options, the Option may be
exercised while there is outstanding another Stock Option to purchase
Stock of the Company or a Subsidiary which was granted to the
Participant prior to the grant of the Option sought to be exercised.
8. The aggregate fair market value (determined at the time the option
is granted) of the stock with respect to which Incentive Stock
Options are exercisable for the first time by such individual during
any calendar year (under all such plans of the individual's employer
corporation and its parent and subsidiary corporation) shall not
exceed $100,000. The provisions of this Item 8 shall apply to
Incentive Stock Options granted after December 31, 1986.
9. The acceleration provisions of Section 8, Item 4 of the Plan shall
override restrictions contained in Section 8, Item 8.
10. As to each Option granted a Participant since November 19, 1985,
if the Participant's employment terminates by his death, disability
or retirement, the exercise of each such Option shall accelerate and
become exercisable in full upon such termination, and shall remain
exercisable throughout the period permitted for exercise.
SECTION 9: RECAPITALIZATION
The number of shares of Stock subject to this Plan, the number of
shares of Stock covered by each outstanding Option (and any
corresponding Stock Appreciation Rights), and the price per share in
each Option, are to be proportionately adjusted for any increase or
decrease in the number of issued shares of Company Stock resulting
from a subdivision or consolidation of shares or the payment of a
stock dividend (but only on the Company's common stock) or any other
increase or decrease in the number of those shares effected without
receipt of consideration by the Company.
Subject to any required action by the Stockholders if the Company
shall be the surviving corporation in any merger or consolidation,
each outstanding Stock Option (and any corresponding Stock
Appreciation Rights) shall pertain to and apply to the securities to
which a holder of the number of shares of stock subject to that
Option would have been entitled. A dissolution or liquidation of the
Company, a proposed sale of substantially all of the assets of the
Company, or a merger or consolidation in which the Company is not the
surviving Corporation, shall cause each outstanding Option (and any
corresponding Stock Appreciation Rights) to terminate as of a date to
be fixed by the Board; provided that no less than 30 days written
notice of the date so fixed shall be given to each Optionee, and each
Optionee shall have the right, during the period of 30 days preceding
such termination, to exercise his option as to all or any part of the
shares covered thereby, including shares as to which such option
would not otherwise be exercisable.
The foregoing adjustments shall be made by the Committee. Fractional
shares resulting from any adjustment in options pursuant to this
Section 9 may be settled as the Committee or the Board (as the case
may be) shall determine.
SECTION 10: GOVERNMENT AND OTHER REGULATIONS
No Option shall be exercisable, no Stock shall be issued, no
certificate for shares of Stock shall be delivered, and no payment
shall be made under this Plan except in compliance with all
applicable federal and state laws and regulations. The Company shall
have the right to rely on the opinion of its counsel as to such
compliance. Any share certificate issued to evidence Stock for which
an Option is exercised may bear such legends and statements as the
Committee may deem advisable to assure compliance with federal and
state laws and regulations. No Option shall be exercisable, no Stock
shall be issued, no certificate for shares shall be delivered, and no
payment shall be made under this Plan until the Company has obtained
such consent or approval as the Committee may deem advisable from
regulatory bodies having jurisdiction over such matters.
SECTION 11: INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification that they may
have as officers or directors, the Committee members shall be
indemnified by the Company against the reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection with
the Plan's administration and the defense of any action, suit, or
proceeding, or in connection with any appeal therein, to which they
or any of them may be a party by reasons of any action taken or
failure to act under or in connection with the Plan or any Option or
Stock Appreciation Right granted thereunder. The Committee members
are also to be indemnified against all amounts paid by them in
settlement thereof (provided that settlement is approved by
independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such Committee member is liable
for gross negligence or willful misconduct in the performance of
his/her duties; provided that within 60 days after institution of any
such action, suit or proceeding a Committee member shall in writing
offer the Company the opportunity, at its own expense, to handle and
defend the same.
SECTION 12: MISCELLANEOUS
The adoption of this Plan, its operation, or any documents describing
or referring to this Plan (or any part thereof) shall not confer
upon any employee any right to continue in the employ of the Company
or in any way affect any right and power of the Company to terminate
the employment of any employee at any time with or without assigning
a reason thereof.
This Plan, insofar as it provides for grants, shall be unfunded, and
the Company shall not be required to segregate any assets that may at
any time be represented by grants under the Plan. Any liability of
the Company to any person with respect to any grant under this Plan
shall be based solely upon any contractual obligations which may be
created pursuant to this Plan. No such obligation of the Company
shall be deemed to be secured by any pledge of, or other encumbrance
on, any property of the Company.
The Plan shall be administered in the State of New York and the
validity, construction, interpretation, administration and effect of
the Plan shall be determined solely in accordance with the laws of
that State.
[DESCRIPTION] EXHIBIT 10(g) TO FORM 10-K
[TEXT]
TRUSTCO BANK CORP NY DIRECTORS STOCK OPTION PLAN
SECTION 1: PURPOSE OF THE PLAN
This Directors Stock Option Plan (the "Plan") has been established by
TrustCo Bank Corp NY (the "Company") to advance the interest of
stockholders and the Company by encouraging Directors to acquire a
larger ownership in the Company. The resulting increased proprietary
interest in the Company increases their incentive to continue active
service as a Director and to oversee the success and growth of the
Company.
SECTION 2: DEFINITIONS
"Adoption Date" means the date this plan is duly adopted by the
Board.
"Board" means the Company's Board of Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation Committee of the Board.
"Company" means TrustCo Bank Corp NY.
"Director" means a member of the Board of Directors of TrustCo Bank
Corp NY.
"Fair Market Value" means the current fair market value of any Stock
subject to a Stock Option. During such time as the Stock is not
listed on an established stock exchange, fair market value per share
shall be the mean between the closing dealer "bid" and "ask" prices
for the Stock as quoted by NASDAQ for the day of the grant, and if
no "bid" and "ask" prices are quoted for the day of the grant, the fair
market value shall be determined by reference to such prices on the
next preceding day on which such prices were quoted. If the Stock is
listed on an established stock exchange or exchanges, the fair market
value shall be deemed to be the highest closing price of the Stock on
such stock exchange or exchanges on the day the option is granted or,
if no sale of Stock has been made on any stock exchange on that day,
the fair market value shall be determined by reference to such
price for the next preceding day on which a sale occurred. In the
event that Stock is not traded on an established stock exchange, and
no closing dealer "bid" and "ask" prices are available, then the
purchase price shall be 100 percent of the fair market value of one
share of Stock on the day the option is granted, as determined by the
Committee in good faith. The purchase price shall be subject to
adjustment only as provided in Section 15 of the Plan.
"Grant Date" as used with respect to a particular Option, means the
date as of which such Option is granted by the Committee pursuant to
the Plan.
"Option" means the right, granted by the Committee pursuant to
Section 7 of the Plan, to purchase shares of Stock.
"Optionee" means the Director to which an Option is granted by the
Committee pursuant to the Plan, except that employees of TrustCo Bank
Corp NY or its subsidiaries, who are also Directors, shall not be
eligible to receive grants under this plan.
"Plan" means this Directors Stock Option Plan as it may be amended
from time to time.
"Stock" means shares of the Company's common stock.
"Total and Permanent Disability" as applied to an Optionee, means
that the Optionee; (i) has established to the satisfaction of the
Committee that the Optionee is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not
less than 12 months (all within the meaning of Section 22(e)(3) of
the Code); and (ii) has satisfied any other requirement imposed by
the Committee.
SECTION 3: PLAN ADMINISTRATION
The Plan shall be administered by a committee composed of three or
more Directors who are appointed by the Board as the Board's
Compensation Committee and who may be members of the committee
appointed to administer the TrustCo Bank Corp NY Stock Option Plan.
The Board may from time to time remove members from, or add members
to, the Committee. Vacancies on the Committee, however caused, shall
be filled by the Board. The Board shall elect one of the Committee's
members as Chairman. The Committee shall hold meetings at such times
and places as it may determine, subject to rules and to procedures
not inconsistent with the provisions of the Plan. A majority of the
authorized number of members of the Committee shall constitute a
quorum for the transaction of business. Acts reduced to or approved
in writing by a majority of the members of the Committee then serving
shall be the valid acts of the Committee. A member of the Committee
shall be eligible to be granted Options under this Plan while a
member of the Committee. The Committee shall be vested with full
authority to make such rules and regulations as it deems necessary or
desirable to administer the Plan and to interpret the provisions of
the Plan. Any determination, decision or action of the Committee in
connection with the construction, interpretation, administration or
application of the Plan shall be final, conclusive and binding upon
all Optionees and any person claiming under or through an Optionee,
unless otherwise determined by the Board.
Any determination, decision or action of the Committee provided for
in the Plan may be made or taken by action of the Board if it so
determines, with the same force and effect as if such determination,
decision or action had been made or taken by the Committee. No member
of the Committee or of the Board shall be liable for any
determination, decision or action made in good faith with respect to
the Plan or any Option granted under the Plan. The fact that a member
of the Board shall at the time be, or shall theretofore have been or
thereafter may be, a person who has received or is eligible to
receive an Option shall not disqualify him or her from taking part in
and voting at any time as a member of the Board in favor of or
against any amendment or repeal of the Plan.
SECTION 4: PLAN EFFECTIVE DATE AND DURATION
This Plan is effective as of the Adoption Date, subject, however, to
the Plan's approval by the Company's shareholders either on or before
the Adoption Date of within the 12 month period following the
Adoption Date. If shareholder approval is not so obtained, all
Options granted under this Plan shall automatically be null and void,
ab initio. No Option may be granted under this Plan at any date which
is 10 years or more after the Adoption Date.
SECTION 5: AMENDMENT OR TERMINATION OF THE PLAN
The Board may at any time terminate, amend, modify or suspend the
Plan, provided that, without the approval of the shareholders of the
Company, no amendment or modification shall be made by the Board
which:
(a) Increases the maximum number of shares as to which Options may be
granted under the Plan;
(b) Alters the method by which the Option price is determined;
(c) Extends any Option for a period longer than 10 years after the
Grant Date;
(d) Materially modifies the requirements as to eligibility for
participation in the Plan;
(e) Amends Paragraphs 9(a) or 9(b) at intervals more frequent than
once every six months except to the extent necessary to comport with
changes in the Code, the Employee Retirement Income Security Act, or
the rules thereunder; or
(f) Alters this Section 5 so as to defeat its purpose.
Further, no amendment, modification, suspension or termination of the
Plan shall in any manner affect any Option theretofore granted under
the Plan without the consent of the Optionee or any person validly
claiming under or through the Optionee.
SECTION 6: STOCK SUBJECT TO THE PLAN
(a) The stock to be issued upon exercise of Options granted under the
Plan shall be TrustCo Bank Corp NY Stock, which shall be made
available, at the discretion of the Board, either from authorized but
unissued Stock or from Stock acquired by the Company, including
shares purchased in the open market. The aggregate number of shares
of Stock which may be issued under or subject to Options granted
under this Plan shall not exceed 50,000 shares. The limitation
established by the preceding sentence shall be subject to adjustment
as provided in Section 15 of the Plan.
(b) In the event that any outstanding Option or portion thereof under
the Plan for any reason expires or is terminated, the shares of Stock
allocable to the unexercised portion of such Option may again be made
subject to Option under the Plan.
SECTION 7: GRANT OF OPTIONS
The Committee may from time to time, subject to the provisions of the
Plan, grant Options to Directors to purchase shares of Stock allotted
in accordance with Section 6. All Options granted under this Plan
shall be "Nonqualified Stock Options" for purposes of the Code.
SECTION 8: OPTION PRICE
The purchase price per share of each share of Stock which is subject
to an Option shall be 100 percent of the Fair Market Value of a share
of Stock on the date of the Grant Date.
SECTION 9: ELIGIBILITY OF OPTIONEES
(a) Options on 1,000 shares of Stock shall be granted annually at a
meeting of the Board of Directors to be held each August, commencing
with August, 1993, to those persons who are then Directors of the
Company, except that if Counsel to the Company determines in his sole
discretion that on such date the Company is in possession of material
non-public information concerning its affairs, such grant shall be
delayed until the third day on which trading occurs following the
public dissemination of such information or the date of an event
which renders such information immaterial.
(b) Subject to the terms of the Plan, and subject to review by the
Board, the Committee shall have exclusive jurisdiction (i) to
determine the dates on which, or the time periods during which, the
Option may be exercised, (ii) to determine the purchase price of the
shares subject to each Option in accordance with Section 8 of the
Plan and (iii) to prescribe the form, which shall be consistent with
the Plan, of the instrument evidencing any Options granted under the
Plan.
(c) Neither anything contained in the Plan or in any document under
the Plan nor the grant of any Option under the Plan shall confer upon
any Optionee any right to continue as a Director of the Company or
limit in any respect the right of the Company shareholders to
terminate the Optionee's directorship at any time and for any reason.
SECTION 10: NON-TRANSFERABILITY OF OPTIONS
No Option granted under the Plan shall be assignable or transferable
by the Optionee other than by will or the laws of descent and
distribution, and during the lifetime of an Optionee the Option shall
be exercisable only by such Optionee.
SECTION 11: TERM AND EXERCISE OF OPTIONS
(a) Each Option granted under the Plan shall terminate on the date
which is 10 years after the Grant Date. The Committee at its
discretion may provide further limitations on the exercisability of
Options granted under the Plan. An Option may be exercised only
during the continuance of the Optionee's service as a Director,
except as provided in Sections 12 and 13 of the Plan.
(b) A person electing to exercise an Option shall give written notice
to the Company of such election and of the number of shares he or she
has elected to purchase, in such forms as the Committee shall have
prescribed or approved, and shall at the time of exercise tender the
full purchase price of the shares he or she has elected to purchase.
The purchase price shall be paid in full in cash upon the exercise of
the Option; provided, however, that in lieu of cash, with the
approval of the Committee at or prior to exercise, an Optionee may
exercise his or her Option by tendering to the Company shares of
Stock owned by him or her and having a fair market value equal to the
cash exercise price applicable to his or her Option, with the then
fair market value of such stock to be determined in the same manner
as provided in Section 8 of the Plan with respect to the
determination of the fair market value of Stock on the date an Option
is granted.
(c) An Optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any shares covered by his or her Option
until the date the stock certificate is issued evidencing ownership
of the shares. No adjustments shall be made for dividends (ordinary
or extraordinary), whether in cash, securities or other property, or
distributions or other rights, for which the record date is prior to
the date such stock certificate is issued, except as provided in
Section 15 hereof.
SECTION 12: TERMINATION OF DIRECTORSHIP
If an Optionee's status as a Director ceases for any reason, any
Option granted to him or her under the Plan shall terminate, and all
rights under the Option shall cease, except:
(a) In the case of a Stock Option held by an Optionee that is not
subject to Total and Permanent Disability, such Stock Option shall
terminate 18 months after the termination of the Optionee's status as
Director.
(b) In the case of a Stock Option held by an Optionee who is subject
to Total and Permanent Disability, such Stock Option shall terminate
upon its expiration date.
(c) In the case of the Optionee's death while serving as a director,
such Stock Option shall terminate eighteen months after the date of
death.
(d) The foregoing notwithstanding, no Option shall be exercisable
after its expiration date.
SECTION 13: DEATH OF AN OPTIONEE
If an Optionee dies after ceasing to serve as a Director but within
the period during which he or she could have exercised the Option
under Section 12 of the Plan, then the Option may be exercised by the
executors or administrators of the Optionee's estate, or by any
person or persons who have acquired the Option directly from the
Optionee by bequest or inheritance, within a period prescribed by the
Committee after the Optionee's death, except that no Option shall be
exercisable after its expiration date.
SECTION 14: MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS
Subject to the terms and conditions and within the limitations of the
Plan, the Committee may modify, extend or renew outstanding Options
granted under the Plan or accept the surrender of outstanding Options
(to the extent not theretofore exercised) and grant new Options in
substitution therefor. Without limiting the generality of the
foregoing, the Committee may grant to an Optionee, if he or she is
otherwise eligible and consents thereto, a new or modified Option in
lieu of an outstanding Option for a number of shares, at an exercise
price and for a term which are greater or lesser than under the
earlier Option, or may do so by cancellation and regrant, amendment,
substitution or otherwise, subject only to the general limitations
and conditions of the Plan. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee,
alter or impair any rights or obligations under any Option
theretofore granted under the Plan.
SECTION 15: CHANGES IN CAPITALIZATION
(a) In the event that the shares of the Company, as presently
constituted, shall be changed into or exchanged for a different
number or kind of shares of stock or other securities of the Company
or of another corporation (whether by reason of merger,
consolidation, recapitalization, reclassification, stock dividend,
stock split, combination of shares or otherwise) or if the number of
such shares of stock shall be increased through the payment of a
stock dividend, then, subject to the provisions of Subsection (c)
below, there shall be substituted for or added to each share of stock
of the Company which was theretofore appropriated, or which
thereafter may become subject to an Option under the Plan, the number
and kind of shares of stock or other securities into which each
outstanding share of the stock of the Company shall be so changed or for
which each such share shall be exchanged or to which each such share
shall be entitled, as the case may be. Outstanding Options shall also
be appropriately amended as to price and other terms, as may be
necessary to reflect the foregoing events.
(b) If there shall be any other change in the number or kind of the
outstanding shares of the stock of the Company, or of any stock or
other securities into which such stock shall have been changed, or
for which it shall have been exchanged, and if the Board or the
Committee (as the case may be), shall in its sole discretion,
determine that such change equitably requires an adjustment in any
Option which was theretofore granted or which may thereafter be
granted under the Plan, then such adjustment shall be made in
accordance with such determination.
(c) A dissolution or liquidation of the Company or a merger or a
consolidation in which the Company is not the surviving corporation,
shall cause each outstanding Option to terminate, except to the extent
that another corporation may and does in the same transaction assume
and continue the Option or substitute its own Options. In either
event, the Board or the Committee (as the case may be) shall have the
right to accelerate the time within which the Option may be
exercised.
(d) Fractional shares resulting from any adjustment in Options
pursuant to this Section 15 may be settled as the Board or the
Committee (as the case may be) shall determine.
(e) To the extent that the foregoing adjustments relate to stock or
securities of the Company such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding
and conclusive. Notice of any adjustment shall be given by the
Company to each holder of an Option which shall have been so
adjusted.
(f) The grant of an Option pursuant to the Plan shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure, to merge, to consolidate, to dissolve, to
liquidate or to sell or transfer all or any part of its business or
assets.
SECTION 16: LISTING AND REGISTRATION OF SHARES
(a) No Option granted pursuant to the Plan shall be exercisable in
whole or in part if at any time the Board or the Committee (as the
case may be) shall determine in its discretion that the listing,
registration or qualification of the shares of Stock subject to such
Option on any securities exchange or under any applicable law, or the
consent or approval of any governmental regulatory body, is necessary
or desirable as a condition of, or in connection with, the granting
of such Option or the issue of shares thereunder, unless such
listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to
the Board.
(b) If a registration statement under the Securities Act of 1933
with respect to the shares issuable upon exercise of any Option
granted under the Plan is not in effect at the time of exercise, as a
condition of the issuance of the shares the person exercising such
Option shall give the Committee a written statement, satisfactory in
form and substance to the Committee, that he or she is acquiring the
shares for his or her own account for investment and not with a view
to their distribution. The Company may place upon any stock
certificate for shares issuable upon exercise of such Option the
following legend or such other legend as the Committee may prescribe
to prevent disposition of the shares in violation of the Securities
Act of 1933 or other applicable law:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO
THEM UNDER THE ACT OR A WRITTEN OPINION OF COUNSEL FOR THE COMPANY
THAT REGISTRATION IS NOT REQUIRED.
SECTION 17: MISCELLANEOUS
The Plan shall be administered in the State of New York and the
validity, construction, interpretation, administration and effect of
the Plan shall be determined solely in accordance with the laws of
that State.
[DESCRIPTION] EXHIBIT 11 TO FORM 10-K
Exhibit 11
TRUSTCO BANK CORP NY
1993 FORM 10-K
Computation of Net Income Per Common Share
Year Ended December 31
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Net Income $20,325,000 $17,503,000 $12,861,000
Weighted Daily average number
of common shares outstanding 13,457,000 13,278,000 10,172,000
Net Income Per Common Share $1.51 $1.32 $1.27
====== ====== ======
</TABLE>
Note: Daily average shares outstanding for all years have been
adjusted to reflect the 2 for 1 stock split in November 1993 and the 5
for 4 stock split in November 1992.
[DESCRIPTION] EXHIBIT 13 TO FORM 10-K
1993 Annual Report
TRUSTCO
Bank Corp NY
Subsidiary Bank:
Trustco Bank New York
Schenectady, New York
Member FDIC
<TABLE>
Financial Highlights
($000 Omitted)
<CAPTION>
Except for Per Share Data
Unadjusted for Tax Equivalency 1993 1992 1991
___________ _______ _______
<S> <C> <C> <C>
Operating Income $ 152,850 158,693 110,652
Operating Expenses and Provision
for Possible Loan Losses $ 116,714 131,865 92,935
Income Taxes $ 12,516 9,325 4,856
Net Income $ 20,325 17,503 12,861
Net Income Per Common Share<F1> $ 1.51 1.32 1.27
Cash Dividend Declared $ 11,560 8,936 5,788
Total Average Deposits $ 1,767,531 1,675,479 1,001,304
Total Average Assets $ 1,946,715 1,852,180 1,149,775
Total Average Loans,
Net of Unearned Income $ 1,021,984 1,005,658 625,031
Total Average Investment
Securities and
Securities Held for Sale $ 649,300 624,541 418,295
Total Average Common
Shareholders' Equity $ 125,648 116,238 74,951
At Year-End:
Book Value Per Share<F1> $ 9.82 9.15 8.50
Shares of Common Stock
Outstanding 13,223,478 6,583,520 5,228,192
Total Equity Accounts $ 129,880 120,429 111,103
Ratio Analysis:
Net Income to Gross Income 13.30% 11.03% 11.62%
Net Income to Average Assets 1.04% .94% 1.12%
Net Income to Average Equity 16.18% 15.06% 17.16%
Allowance for Loan Losses
to Year-end Loans,
Net of Unearned Income 3.21% 2.62% 1.86%
<FN>
<F1> Adjusted for a 2 for 1 stock split in November 1993 and a 5 for 4
stock split in November 1992.
</TABLE>
Total Average Equity
(dollars in millions)
1989 $ 51
1990 $ 57
1991 $ 75
1992 $116
1993 $126
Average Earning Assets
(dollars in millions)
1989 $ 720
1990 $ 821
1991 $1,091
1992 $1,768
1993 $1,835
<TABLE>
Net Income Per Common Share<F1>
<S> <C>
1989 $1.04
1990 $1.16
1991 $1.27
1992 $1.32
1993 $1.51
<FN>
<F1> Adjusted for a 2 for 1 stock split in November 1993, a 5 for 4 stock
split in November 1992, and 10% stock dividends in December 1991 and
December 1990.
</TABLE>
<TABLE>
Cash Dividends Per Common Share<F1>
<S> <C>
1989 $0.35
1990 $0.45
1991 $0.57
1992 $0.68
1993 $0.88
<FN>
<F1> Adjusted for a 2 for 1 stock split in November 1993, a 5 for 4 stock
split in November 1992, and 10% stock dividends in December 1991 and
December 1990.
</TABLE>
President's Message
I am happy to report that 1993 was another record year at TrustCo.
It is nice to be able to report our continuing progress during this
period when apparently the banking industry has attained significant
recovery from the difficulties of the past three or four years.
Throughout this period, TrustCo has managed to avoid the pitfalls many
others have experienced by sticking to the basics of the business and
avoiding the current or in vogue products and precepts. We expect to
continue in this vein, and are grateful for the enthusiasm of our
staff and Boards in making this success a reality.
Shareholder values continue to progress with net income for 1993 at
$20.3 million, up a significant 16.1% over 1992. As planned, TrustCo's
most important ratio, Return on Average Shareholders' Equity, was
16.2% for 1993, up from 15.1% in 1992. It is our commitment to ensure
Return on Average Equity measures up favorably in any peer group, and
we are comfortable that it does. TrustCo's five year average Return on
Equity was 17.1%, and we have plans to methodically increase ROE to
the 18% level for 1995.
Barton Andreoli, President of Towne Paving Inc., joined the Boards
of Trustco Bank New York and TrustCo Bank Corp NY during 1993; and
Bernard King, Chairman of King Road Materials Inc., retired from both
Boards during 1993. We thank Bernie for his many contributions and
wish him well in retirement. I would like to thank all our Board
members for their continued support and guidance through the year.
We note with sorrow the passing of David Hume, Honorary Director,
who served the Boards with distinction for many years.
Senior staff changes included William Milton and James McLoughlin
being promoted to Administrative Vice Presidents; Madeline Busch,
Donald Csaposs, Ann Noble, Matthew Waschull, and George Wickswat were
appointed Vice Presidents in their respective areas of responsibility.
We closed the former Home & City main office on State Street, Albany
and successfully merged the account base into Trustco's State Street
office. We consider the consolidation complete, leaving us with 43
branch offices, with the expectation of at least one new office during
the current year. We continue with our upgrading, targeting each
branch for major renovation on an approximate 7 year cycle.
Our search for appropriately priced acquisitions in our market area
continues, though we are not engaged in any significant acquisition
conversations at this time.
We continue to work with some of the problem loans we acquired and
want to report continuing progress in the legal actions. Though the
litigation is taking longer than originally anticipated, we want
shareholders to know we reserved sufficiently for these loans to
ensure there will be no negative impact on TrustCo's future financial
results as they are brought to conclusion.
We completed a two for one stock split during the fourth quarter,
effectively increasing dividend payments by 29.4% over last year. Our
quarterly cash dividends have increased at a 25.9% compound annual
rate over the last five years, a major accomplishment in the current
banking climate.
Trustco's Affordable Housing Program, designed to assist with
homeownership, was expanded to the other markets that we serve after
our initial success in Schenectady. This program is a model for
community reinvestment and one of the most effective in our state.
It has been suggested by reporters on occasion that TrustCo is a
boring company to follow because the consistently good results don't
make stimulating copy. All in all, 1993 was another "boring" year here
at TrustCo with increases in all important areas and continuing
benefits to the owners, employees, and the community.
Our expectation is that 1994 will also be "boring." Our plans call
for a repeat of 1993 income and growth successes, and newly added
branches are contributing solidly to loan and deposit growth. The
emphasis will continue on the Home Equity Loan and Home Equity Credit
Line products on the lending side and the NOW account on the deposit
side. Our Trust Department currently manages assets in excess of $600
million, and we look forward to increased penetration in the former
Home & City branch territories.
With the difficult economy, community needs have increased and
Trustco has responded accordingly. As mentioned previously, we
continue to expand our Affordable Housing Program. We have been able
to provide increased employee and management participation in
charitable and community organizations, as well as increase our
corporate charitable donations in the Capital District area.
The interesting times of the '90s in banking have been very
challenging at TrustCo. We believe we have met the challenge
successfully and will be able to continue this success into the
future. We have a strong marketplace with the right products and a
team of super employees to bring about the kind of results in the
future that have brought us success in the past. With our focus,
enthusiasm, and commitment, we will be able to compete successfully in
the banking environment of the future.
Sincerely,
Robert A. McCormick,
President and Chief Executive Officer
P.S. December 31, 1993 marked the completion of my first decade as CEO
of the Bank and Holding Company. I thought it appropriate to report
the results of that stewardship. I thank the Company's Board and all
of our employees for making us look so good.
Challenge and Progress
1983-1993
1983-1993--A period characterized by turbulence in the banking
industry. First the go-go times, followed quickly by the savings and
loan debacle which decimated the industry, immediately followed by the
commercial banking fiasco. Taken in total, this period was a very
serious financial blow to taxpayers and to the shareholders of many
banking institutions.
Through it all, TrustCo has served its shareholders well with
exemplary growth in the value of their investments, emerging as a
leader in the financial services marketplace. The past decade has been
a proving ground for our management team to significantly enhance the
bank's profitability and productivity in behalf of shareholders.
TrustCo's success is founded on its accountability and vitality
which are well reflected in the following statistics:
Total Average Assets ($)
12/31/83 $ 324,994,000
12/31/84 459,655,000
12/31/85 506,786,000
12/31/86 587,793,000
12/31/87 640,010,000
12/31/88 714,294,000
12/31/89 762,532,000
12/31/90 868,069,000
12/31/91 1,149,775,000
12/31/92 1,852,180,000
12/31/93 1,946,715,000
Assets per Employee ($)
12/31/83 $ 1,245,188
12/31/84 1,423,080
12/31/85 1,619,125
12/31/86 1,770,461
12/31/87 1,904,792
12/31/88 2,052,569
12/31/89 2,310,703
12/31/90 2,575,872
12/31/91 2,332,201
12/31/92 3,834,741
12/31/93 4,250,469
Net Income ($)
12/31/83 $ 3,362,000
12/31/84 3,828,000
12/31/85 4,851,000
12/31/86 5,650,000
12/31/87 6,671,000
12/31/88 7,826,000
12/31/89 9,446,000
12/31/90 10,575,000
12/31/91 12,861,000
12/31/92 17,503,000
12/31/93 20,325,000
Return on Equity (%)
12/31/83 12.30%
12/31/84 12.93%
12/31/85 14.89%
12/31/86 15.70%
12/31/87 16.68%
12/31/88 17.51%
12/31/89 18.62%
12/31/90 18.49%
12/31/91 17.16%
12/31/92 15.06%
12/31/93 16.20%
Market Price/Share ($)
12/31/83 $ 2.83
12/31/84 3.62
12/31/85 5.81
12/31/86 5.74
12/31/87 6.69
12/31/88 8.56
12/31/89 10.08
12/31/90 9.45
12/31/91 13.50
12/31/92 16.88
12/31/93 22.75
Since 1983, deposits have risen 534 percent. Average assets during
this same period were boosted 499 percent to $1.947 billion. Our 43
branches--an increase of 207 percent--are staffed by 458 employees
working in their own home towns, promoting the Bank's strong
commitment and presence as a respected local employer. Assets per
employee are up by 258 percent to $4.3 million, a tribute to our
diligence in creating efficiency in operations.
The net income of TrustCo was $3.36 million in 1983. It has
increased 505 percent, ending 1993 at $20.33 million. During the past
ten years, Return on Equity rose from 12.3 percent to 18+ percent,
then diminished to 16.2 percent, and is on the way back to a planned
18 percent. This all important measure will stand up favorably against
any index for any period we have been able to find. Last August,
TrustCo increased its common stock dividend to shareholders for the
seventeenth consecutive year. The price per share of TrustCo stock has
climbed 704 percent. To put these achievements into perspective,
consider that 100 shares of common stock purchased at the beginning of
1983 would be worth 1,611 shares of common stock today.
It is important to note that TrustCo's achievements have been
publicly recognized by external resources such as Louis Rukeyser's
Wall Street in 1992 for its remarkable dividend record; selected in
the same year by Financial World as one of the top 200 growth
companies in the United States; cited on the 1993 Honor Roll for
sustained superior performance over 10 years by the respected
investment banking firm of Keefe, Bruyette & Woods, Inc.--one of only
ten banks in the nation to earn this recognition. TrustCo continues to
set and break its own records for financial performance and favorable
trends quarter after quarter, year after year.
The lifeblood of the bank is its capacity to adapt to the changing
economy and the needs of its constituencies: shareholders, customers,
and community. TrustCo has at its core a versatile management team
whose diversity allows it to identify a range of initiatives and
translate them into positive results. Conservative, proactive
planning, consistent pursuit of the Capital Region retail and
commercial customer markets, and exceeding the expectations of our
shareholders are the guiding principles which have contributed to our
success.
Consolidated Statements of Income 10
Consolidated Statements of Condition 11
Consolidated Statements of Changes in Shareholders' Equity 12
Consolidated Statements of Cash Flows 13
Notes to Consolidated Financial Statements 15
Independent Auditors' Report 25
Five-Year Summary 26
Financial Review 27
Distribution of Assets, Liabilities and Shareholders' Equity:
Interest Rates and Interest Differential 44
Price Range of Common Stock and Dividends Per Share 45
<TABLE>
Consolidated Statements of Income
($000 Omitted)
<CAPTION>
For the Year Ended December 31, 1993 1992 1991
________ ______ ______
<S> <C> <C> <C>
Interest Income:
Interest and Fees on Loans $ 86,965 92,935 64,086
Interest and Dividends on:
U.S. Treasury and Agency 28,976 29,125 24,560
State and Municipal Obligations 1,416 2,810 4,274
Mortgage Backed Securities 8,444 12,389 4,467
Other 2,944 2,190 1,067
Interest on Federal Funds Sold 4,912 3,811 2,351
________ _______ _______
Total Interest Income 133,657 143,260 100,805
________ _______ _______
Interest Expense:
Interest on Deposits:
Regular Savings and NOW Accounts 27,530 31,850 16,068
Money Market Deposit Accounts 2,937 4,720 4,575
Certificates of Deposit
(In Denominations of $100,000 or more) 1,819 2,578 1,362
Other Time Accounts 28,596 36,026 33,574
Interest on Short-term Debt 380 757 2,203
Interest on Long-term Debt 357 470 470
________ _______ _______
Total Interest Expense 61,619 76,401 58,252
________ _______ _______
Net Interest Income 72,038 66,859 42,553
Provision for Possible Loan Losses (Note 7) 11,576 12,693 6,490
________ _______ _______
Net Interest Income after
Provision for Possible Loan Losses 60,462 54,166 36,063
________ _______ _______
Other Operating Income:
Trust Department Income 4,347 3,869 3,972
Fees for Other Services to Customers 6,489 6,378 3,862
Credit Card Processing Income 881 1,035 928
Net Gains on Securities Transactions 6,239 2,939 402
Other 1,237 1,212 683
________ _______ _______
Total Other Operating Income 19,193 15,433 9,847
________ _______ _______
Other Operating Expense:
Salaries and Employee Benefits 16,649 15,853 11,686
Net Occupancy Expense of Bank Premises 3,446 3,534 2,483
Equipment Expense 3,650 4,182 2,614
FDIC Insurance Expense 3,985 3,654 2,064
Advertising and Promotional Expense 999 2,168 1,486
Professional Services 2,508 4,295 1,481
Other Real Estate Expenses 4,679 215 1,481
Supplies 1,207 1,286 878
Credit Card Processing Expense 1,000 1,143 819
Amortization of Goodwill -- 880 126
Other 5,396 5,561 3,075
________ _______ _______
Total Other Operating Expense 43,519 42,771 28,193
________ _______ _______
Income Before Income Taxes and Cumulative
Effect of a Change in Accounting Principle 36,136 26,828 17,717
Income Taxes (Note 11) 12,516 9,325 4,856
________ _______ _______
Income Before Cumulative Effect
of a Change in Accounting Principle 23,620 17,503 12,861
Cumulative Effect at January 1, 1993
of a Change in Accounting Principle (3,295) -- --
________ _______ _______
Net Income $ 20,325 17,503 12,861
======== ======== =======
Earnings Per Common Share:
Income Before Cumulative Effect
of a Change in Accounting Principle $ 1.75 1.32 1.27
Cumulative Effect at January 1,
1993 of a Change in Accounting Principle (0.24) -- --
________ _______ _______
Net Income Per Common Share $ 1.51 1.32 1.27
======== ======== =======
Average Equivalent Shares Outstanding 13,457,000 for 1993, 13,278,000
for 1992, and 10,172,000 for 1991. Per share data for 1992 and 1991
adjusted for 2 for 1 stock split in November 1993 and for 5 for 4
stock split in November 1992.
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
Consolidated Statements of Condition
($000 Omitted)
<CAPTION>
December 31, 1993 1992
__________ _________
<S> <C> <C>
ASSETS
Cash and Due from Banks (Note 3) $ 50,977 46,025
Trading Securities 2,106 --
Securities Held for Sale
(Approximate Market Value--$248,059 at
December 31, 1993 and $124,400 at
December 31, 1992) (Note 4) 240,716 120,675
Investment Securities (Approximate Market Value
$431,298 and $565,684 as of 1993
and 1992, respectively) (Note 5):
U.S. Treasury and Agency 228,157 360,622
State and Municipal Obligations 23,017 44,318
Mortgage Backed Securities 138,376 111,455
Other 27,256 31,883
__________ _________
Total Investment Securities 416,806 548,278
Federal Funds Sold 149,000 145,000
Loans and Discounts (Note 6) 1,063,006 1,032,190
Less:
Unearned Income 2,358 3,649
Allowance for Possible Loan Losses (Note 7) 34,087 26,919
__________ _________
Net Loans and Discounts 1,026,561 1,001,622
Bank Premises and Equipment (Note 8) 24,893 22,499
Other Assets 60,239 60,453
__________ _________
Total Assets $1,971,298 1,944,552
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 96,034 99,846
Regular Savings and NOW Accounts 970,407 981,112
Money Market Deposit Accounts 110,630 115,726
Certificates of Deposit
(In Denominations of $100,000 or More) 37,452 31,747
Other Time Accounts 579,709 542,875
__________ _________
Total Deposits 1,794,232 1,771,306
Short-term Debt (Note 9) 18,323 20,849
Accrued Taxes, Expenses and Other Liabilities 26,113 26,968
Long-term Debt (Note 10) 2,750 5,000
__________ _________
Total Liabilities 1,841,418 1,824,123
Commitments and Contingencies
(Notes 12, l3 and 14)
Shareholders' Equity:
Capital Stock; $1 par value.
Shares authorized 25,000,000;
13,588,044 and 6,771,103 shares issued
at December 31, 1993 and 1992, respectively 13,588 6,771
Surplus 91,955 98,115
Undivided Profits 25,331 16,566
Treasury Stock; 364,566 and 187,583 shares, at cost,
at December 31, 1993 and 1992, respectively (994) (1,023)
__________ _________
Total Shareholders' Equity 129,880 120,429
__________ _________
Total Liabilities and Shareholders' Equity $1,971,298 1,944,552
========== =========
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
Consolidated Statements of Changes in Shareholders' Equity
($000 Omitted)
<CAPTION>
Capital Undivided Treasury
For the Three Years Ended December 31, 1993 Stock Surplus Profits Stock
_________ _________ _________ _________
<S> <C> <C> <C> <C>
Beginning Balance, January 1, 1991 $ 3,431 40,082 17,651 (999)
Net Income -- 1991 -- -- 12,861 --
Cash Dividend Declared, $.57 per share -- -- (5,788) --
Issuance of Common Stock, 1,441,050 shares for
acquisition of Home & City Savings Bank 1,441 42,151 -- --
Stock Options Exercised, 17,662 shares 18 279 -- --
Purchase of Treasury Stock, 1,155 shares -- -- -- (24)
10% Stock Dividend (488,301 shares) 488 16,237 (16,725) --
_________ _________ _________ _________
Ending Balance, December 31, 1991 5,378 98,749 7,999 (1,023)
Net Income -- 1992 -- -- 17,503 --
Cash Dividend Declared, $.68 per share -- -- (8,936) --
Stock Options Exercised, 38,621 shares 39 720 -- --
5 for 4 Stock Split (1,354,223 shares) 1,354 (1,354) -- --
_________ _________ _________ _________
Ending Balance, December 31, 1992 6,771 98,115 16,566 (1,023)
Net Income -- 1993 -- -- 20,325 --
Cash Dividend Declared, $.88 per share -- -- (11,560) --
Stock Options Exercised, 23,919 shares 24 444 -- --
Sale of 5,300 Treasury shares to Benefit Plans -- 189 -- 29
2 for 1 Stock Split (6,793,022 shares) 6,793 (6,793) -- --
_________ _________ _________ _________
Ending Balance, December 31, 1993 $13,588 91,955 25,331 (994)
========= ========= ========= =========
Per share data adjusted for 2 for 1 Stock Split in November 1993 and 5
for 4 Stock Split in November 1992.
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
Consolidated Statements of Cash Flows
($000 Omitted)
<CAPTION>
For the Year Ended December 31, 1993 1992 1991
_________ _________ _________
<S> <C> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Cash Flows from Operating Activities:
Net Income before Change in Accounting Principle 23,620 17,503 12,861
Change in Accounting Principle (3,295) -- --
_________ _________ _________
Net Income 20,325 17,503 12,861
_________ _________ _________
Adjustments to Reconcile Net Income to Net Cash
(Used in)/Provided by Operating Activities:
Depreciation and Amortization 2,373 2,245 1,193
Provision for Possible Loan Losses 11,576 12,693 6,490
Amortization of Goodwill -- 880 126
Provision for Deferred Tax Expense (Benefit) 46 (4,364) (894)
Net Gain on Sale of Securities (6,239) (2,939) (402)
Purchase of Trading Securities (1,940) -- --
Proceeds from Sales of Securities Held for Sale 99,475 -- --
Purchase of Securities Held for Sale (153,596) -- --
(Increase) Decrease in Taxes Receivable (1,505) 4,066 (4,532)
Decrease (Increase) in Interest Receivable 3,345 1,939 (2,086)
Decrease in Interest Payable (4,881) (985) (1,052)
(Increase) Decrease in Other Assets (9,066) 6,244 3,036
Increase (Decrease) in Accrued Expenses 3,354 (7,010) (3,360)
_________ _________ _________
Total Adjustments (57,058) 12,769 (1,481)
_________ _________ _________
Net Cash (Used in)/Provided by Operating Activities (36,733) 30,272 11,380
_________ _________ _________
Cash Flows from Investing Activities:
Proceeds from Sales of Investment Securities 1,877 107,639 37,741
Proceeds from Maturities of Investment Securities 229,288 299,559 66,229
Purchase of Investment Securities (159,540) (500,144) (139,758)
Net Decrease (Increase) in Loans (37,769) (19,506) 6,792
Proceeds from Sales of Real Estate Owned 6,091 3,127 __
Cash Received in Payment for Acquisition of
Home & City Savings Bank, Net of Cash Paid -- -- 25,486
Capital Expenditures (2,210) (4,415) (3,242)
_________ _________ _________
Net Cash Provided by/(Used in)
Investing Activities 37,737 (113,740) (6,752)
_________ _________ _________
Cash Flows from Financing Activities:
Net Increase in Deposits 22,926 203,226 27,387
Net Decrease in Short-term Debt (2,526) (18,098) (24,387)
Repayment of Long-term Debt (5,000) -- --
Proceeds from Issuance of Long-term Debt 2,750 -- --
Proceeds from Issuance of Common Stock 468 759 297
Payments to Acquire Treasury Stock -- -- (24)
Proceeds from Sale of Treasury Stock 218 -- --
Dividends Paid (10,888) (8,394) (4,883)
_________ _________ _________
Net Cash Provided by/(Used in)
Financing Activities 7,948 177,493 (1,610)
_________ _________ _________
Net Increase (Decrease) in Cash and Cash Equivalents 8,952 94,025 3,018
Cash and Cash Equivalents at Beginning of Year 191,025 97,000 93,982
_________ _________ _________
Cash and Cash Equivalents at End of Year $199,977 191,025 97,000
========= ========= =========
See Accompanying Notes to Consolidated Financial Statements
.
Consolidated Statements of Cash Flows (continued)
Composition of Cash and Cash Equivalents:
December 31, 1993 1992 1991
_________ _________ _________
Cash and Due from Banks $ 50,977 46,025 62,000
Federal Funds Sold 149,000 145,000 35,000
_________ _________ _________
Total Cash and Cash Equivalents $ 199,977 191,025 97,000
========= ========= =========
Supplemental Disclosure of Cash Flow Information:
December 31, 1993 1992 1991
_________ _________ _________
Interest Paid $ 66,500 77,386 59,304
Income Taxes Paid 8,554 5,873 9,388
Transfer of Investment Securities
to Securities Held for Sale 60,055 120,675 --
Transfer of Loans to Real Estate Owned 1,254 11,563 16,764
Sale of Real Estate Owned to Subsidiary 2,557 -- --
Increase in Dividends Payable 672 542 905
TrustCo purchased 100% of the common stock
of Home & City Savings Bank (see Note 2).
In conjunction with the acquisition,
liabilities were assumed as follows:
Fair Value of Assets Acquired -- -- 844,215
Cash Paid -- -- (28,821)
Market Value of Stock Issued -- -- (43,592)
_________ _________ _________
Liabilities Assumed $ -- -- 771,802
========= ========= =========
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accounting and financial reporting policies of TrustCo Bank Corp
NY (Company) and Trustco Bank New York (Bank) conform to general
practices within the banking industry and are in accordance with
generally accepted accounting principles. A description of the more
significant policies follows.
During 1993, the Company created a new subsidiary to hold and manage
certain foreclosed properties. The enclosed consolidated financial
statements include the accounts of this new subsidiary.
(b) Consolidation
The consolidated financial statements of the Company include the
accounts of the subsidiaries after elimination of all significant
intercompany accounts and transactions.
(c) Investment Securities and Securities Held for Sale
Investment securities are stated at cost, adjusted for amortization
of premiums and accretion of discounts to first call or maturity date.
Securities held for sale are held at the lower of amortized cost or
market. Gains and losses on dispositions of these securities are based
on the adjusted cost of the specific security sold.
Management determines the appropriate classification of securities
at the time of purchase. If management has the intent and the Company
has the ability to hold securities until maturity, they are classified
as investment securities and carried at amortized historical cost.
Securities to be held for indefinite periods of time and not intended
to be held to maturity are classified as held for sale and carried at
the lower of cost or market value. Securities held for indefinite
periods of time include securities that management intends to use as
part of its asset/liability management strategy and that may be sold
in response to changes in interest rates and other factors related to
interest rate and resultant prepayment risk changes. Assets held in
trading accounts are carried at market value.
(d) Loans
Loans are carried at the principal amount outstanding. Related loan
fees are generally amortized into income over the applicable loan or
service period. Interest on discounted loans is accrued based upon
methods which approximate the interest method.
Loan income is recognized on the accrual basis of accounting. When
in the opinion of management the collection of principal or interest
is in doubt, the loan is categorized as non-accrual. Thereafter, no
interest is taken into income until the borrower demonstrates the
ability to make scheduled payments of interest and principal.
(e) Allowance for Possible Loan Losses
An allowance for possible loan losses is maintained at a level
considered adequate by management to provide for potential loan losses
based on analysis of the credit risk of the loan portfolio including a
review of past loan experience, current economic conditions and the
underlying collateral value. The allowance is increased by provisions
charged against income and reduced by net charge-offs.
In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Company's allowance
for losses on loans and real estate owned. Such agencies may require
the Company to recognize additions to the allowances based on their
judgements of information available to them at the time of their
examination.
(f) Bank Premises and Equipment
Bank premises and equipment are stated at cost less accumulated
depreciation computed on either the straight-line or accelerated
methods over the remaining useful lives of the assets. Occupancy
expense comprises all expenses, including maintenance and repair,
related to the operation of Bank premises, net of rental income. Gains
or losses attributed to the retirement or sale of assets are credited
or charged to operations in the year realized.
(g) Real Estate Owned
Included in other assets are assets received from foreclosures and
in-substance foreclosures. A loan is considered an in-substance
foreclosure when little or no equity is present in the underlying
collateral, considering the current fair value of the collateral;
proceeds for repayment of the loan can be expected to come only from
the operation or sale of the collateral; control of the collateral is
effectively abandoned, or because of the current financial condition
it is doubtful that equity will be rebuilt or the loan repaid in the
foreseeable future.
Foreclosed assets, including in-substance foreclosures, held for
sale are recorded on an individual basis at the lower of (1) fair
value minus estimated costs to sell or (2) "cost" (defined as the fair
value at initial foreclosure). When a property is acquired or
identified as in-substance foreclosure, the excess of the loan balance
over fair value is charged to the allowance for loan losses.
Subsequent write downs are included in other noninterest expense. At
December 31, 1993, the value of real estate owned was $19.2 million.
The value of real estate owned at December 31, 1992 was $26.6 million.
(h) Income Taxes
Effective January 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" and has chosen not to restate prior year financial
statements. Under the asset and liability method of Statement 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
(i) Financial Instruments
The Company is a party to certain financial instruments with off-
balance sheet risk such as commitments to extend credit, unused lines
of credit and letters of credit. It is the Company's policy to record
such instruments when funded.
In December 1991, the FASB issued Statement No. 107 which requires
additional disclosure about fair value of financial instruments. The
Company has adopted the provisions of Statement No. 107 and has
provided the required disclosures in Note 15.
(j) Dividend Restrictions
Banking regulations restrict the amount of cash dividends which may
be paid during a year without the written consent of the appropriate
bank regulatory agency. Based on these restrictions, the Company could
pay $32.4 million plus one hundred percent of 1994 net profits.
(k) Amortization of Goodwill
The excess of the fair value of consideration paid over net assets
acquired (goodwill) was fully amortized as of December 31, 1992.
(l) Reclassification of Prior Year Statements
It is the Company's policy to reclassify prior year financial
statements to conform to the current year presentation.
(m) Pension and Other Postretirement Plans
The Company has a defined benefit pension plan covering
substantially all of its employees. The benefits are based on years of
service and the employee's compensation during the five years before
retirement. The cost of this program is being funded currently.
The Company sponsors a defined benefit health care plan for
substantially all retirees and employees. Effective January 1, 1993,
the Company adopted Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other than
Pensions," which establishes a new accounting principle for the cost
of retiree health care and other postretirement benefits (also see
note 12). Prior to 1993, the Company recognized these benefits on the
pay-as-you-go method (i.e., cash basis). The cumulative effect of the
change in method of accounting for postretirement benefits other than
pensions is reported in the 1993 consolidated statement of income.
(2) Acquisition of Home & City Savings Bank
On September 30, 1991, the Company acquired all of the outstanding
common stock of Home & City Savings Bank of Albany, New York in a
purchase business combination. The aggregate purchase price for the
transaction was approximately $72 million consisting of cash and
1,441,050 shares of TrustCo common stock. The excess purchase price
over the fair value of net assets acquired (goodwill) of approximately
$2.5 million has been fully amortized.
The results of operations of Home & City are included in the
Company's consolidated statements of income from the date of
acquisition.
Assuming the acquisition had taken place January 1, 1991 a summary
of the Company's unaudited consolidated results of operations on a pro
forma basis for the twelve months ended December 31, 1991 would have
been as follows:
<TABLE>
<CAPTION>
(Unaudited)
($000 Omitted) 1991
_________
<S> <C>
Interest Income $157,702
Net Interest Income $ 61,955
Net Income $ 8,017
Net Income per Common Share $ 1.53
=========
</TABLE>
The pro forma results are not necessarily representative of the
actual results that would have occurred in the period presented, or
what may be obtained in the future.
(3) Balances at Other Banks
Trustco Bank New York maintains deposit accounts with several other
commercial banks as compensation for services provided to the Bank in
the normal course of business. These balances are not legally
restricted as to withdrawal but result from informal agreements and
are in lieu of fee assessments. As of December 31, 1993, a total of
$79,000 was on deposit at other banks. This balance was $195,000 as of
December 31, 1992. In addition, the Bank maintains a reserve balance
at the Federal Reserve Bank of New York as required by regulation by
the Federal Reserve System. This balance, legally restricted as to
withdrawal, totaled $15,907,000 as of December 31, 1993, and
$13,455,000 as of December 31, 1992. For the years ending December 31,
1993 and 1992 these balances averaged $15,517,000 and $14,961,000,
respectively.
(4) Securities Held for Sale
The book and market values of Securities Held for Sale at December
3l, 1993 and 1992 follows:
<TABLE>
<CAPTION>
1993 1992
________________________ ______________________
Approximate Approximate
Book Market Book Market
($000 Omitted) Value Value Value Value
<S> <C> <C> <C> <C>
________________________ ______________________
U.S. Treasury & Agency $230,563 236,471 $110,507 113,721
Other 10,153 11,588 10,168 10,679
________________________ ______________________
Total Securities
Held for Sale $240,716 248,059 $120,675 124,400
======================== ======================
</TABLE>
The gross unrealized gains and losses in Securities Held for Sale at
December 31, 1993 and 1992 follow:
<TABLE>
<CAPTION>
($000 Omitted) 1993 1992
______ ______
<S> <C> <C>
Gross Unrealized Gains
U.S. Treasury & Agency $7,289 3,298
Other 1,435 511
______ ______
Total Unrealized Gains $8,724 3,809
______ ______
Gross Unrealized Losses
U.S. Treasury & Agency 1,381 84
Other -- --
______ ______
Total Unrealized Losses 1,381 84
______ ______
Net Unrealized Gain $7,343 3,725
====== ======
The anticipated maturity schedule of book and market values of
Securities Held for Sale at December 31, 1993 follows:
</TABLE>
<TABLE>
<CAPTION>
Approximate
Book Market
($000 Omitted) Value Value
_________ _____________
<S> <C> <C>
Due in one year or less $ __ __
Due after one year through five years 148,925 148,204
Due after five years through ten years 81,638 88,267
Due after ten years 10,153 11,588
_________ _____________
$ 240,716 248,059
========= =============
Proceeds from sales of Securities Held for Sale during 1993 were
approximately $99,475,000. During 1992 there were no sales of
Securities Held for Sale.
The gross realized gains on sales of Securities Held for Sale in
1993 were approximately $5,867,000.
Gross realized losses on the sales of Securities Held for Sale in
1993 were $2,000.
The book value of Securities Held for Sale that have been pledged to
secure public deposits and for other purposes required by law amounted
to $41,219,000 and $75,259,000 at December 31, 1993 and 1992,
respectively.
(5) Investment Securities
The book and market values of Investment Securities at December 31,
1993 and 1992 follow:
</TABLE>
<TABLE>
<CAPTION>
1993 1992
______________________ ___________________
<S> <C> <C> <C> <C>
Approximate Approximate
Book Market Book Market
($000 Omitted) Value Value Value Value
______________________ ___________________
U.S. Treasury & Agency $228,157 237,008 $360,622 373,900
State and Municipal 23,017 23,471 44,318 44,787
Mortgage Backed
Securities 138,376 142,119 111,455 114,172
Other 27,256 28,700 31,883 32,825
______________________ ___________________
Total Investment
Securities $416,806 431,298 $548,278 565,684
====================== ===================
</TABLE>
The gross unrealized gains and losses in Investment Securities at
December 31, 1993 and 1992 follow:
<TABLE>
<CAPTION>
($000 Omitted) 1993 1992
________ ________
<S> <C> <C>
Gross Unrealized Gains
U.S. Treasury & Agency $ 8,851 13,280
State and Municipal 458 478
Mortgage-Backed Securities 4,524 3,465
Other 1,465 1,056
________ ________
Total Unrealized Gains 15,298 18,279
________ ________
Gross Unrealized Losses
U.S. Treasury & Agency -- 2
State and Municipal 4 9
Mortgage-Backed Securities 781 748
Other 21 114
________ ________
Total Unrealized Losses 806 873
________ ________
Net Unrealized Gain $ 14,492 17,406
======== ========
</TABLE>
The anticipated maturity schedule of book and market values of
Investment Securities at December 31, 1993 follows:
<TABLE>
<CAPTION>
Approximate
Book Market
($000 Omitted) Value Value
_________ _________
<S> <C> <C>
Due in one year or less $ 108,534 109,193
Due after one year through five years 155,209 164,078
Due after five years through ten years 11,658 12,727
Due after ten years 3,029 3,181
_________ _________
278,430 289,179
Mortgage Backed Securities 138,376 142,119
_________ _________
$ 416,806 431,298
======== ========
</TABLE>
Proceeds from sales of debt instruments included in investment
securities during 1993, 1992, and 1991 were approximately $0,
$107,639,000, and $37,178,000 respectively. All of the 1993 sales of
debt securities were made from those securities designated as Held for
Sale (See note 4). During 1993, the Company realized proceeds of
approximately $1,877,000 from the sale of its portfolio of equity
securities. Proceeds from this portfolio sale were used to acquire a
small portfolio of equity securities. Management has designated these
securities as trading assets and holds them at market value. The
market value of trading securities at December 31, 1993 was
$2,106,000. There were no trading assets as of December 31, 1992.
The gross realized gains on sales of debt instruments in 1993, 1992,
and 1991 were $0, $3,346,000, and $492,000 respectively. Gross
realized gains on sales of equity instruments in 1993 were
approximately $229,000.
Gross realized losses on the sales and calls of debt instruments for
1993, 1992, and 1991 were $0, $407,000, and $26,000 respectively.
Gross realized losses on sales of equity instruments in 1993 were
approximately $21,000.
The book value of securities pledged to secure public deposits and
for other purposes required by law amounted to $85,634,000 and
$121,075,000 at December 31, 1993 and 1992, respectively.
In May 1993, the FASB issued SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The Statement is effective
for financial statements for fiscal years beginning after December 15,
1993. This Statement addresses the accounting for equity securities
that have readily determinable fair values and for all investments in
debt securities. Those investments are to be classified in three
categories and accounted for as follows: debt securities that the
Company has the positive intent and ability to hold to maturity are
classified as "held-to-maturity" and reported at amortized cost. Debt
and equity securities that are bought and held principally for the
purpose of selling them in the near term are classified as "trading
securities" and reported at fair value, with unrealized gains and
losses included in earnings. Debt and equity securities not classified
as either "held-to-maturity" or "trading securities" are classified as
"available-for-sale securities" and reported at fair value, with
unrealized gains and losses excluded from earnings an reported in a
separate component of stockholders' equity. Management believes, at
this time, that the Statement will have no material impact on the
financial statements.
(6) Loans and Discounts
A summary of outstanding Loans and Discounts at December 3l, 1993
and 1992 follows:
<TABLE>
<CAPTION>
($000 Omitted) 1993 1992
__________ _________
<S> <C> <C>
Commercial $ 218,669 240,158
Real Estate Construction 14,172 19,002
Mortgages, closed-end 596,935 533,422
Revolving Home Equity Credit Line 202,018 195,170
Installment 31,212 44,438
__________ _________
Total Loans and Discounts $1,063,006 1,032,190
========== =========
</TABLE>
Real estate construction loans include $2,870,000 in residential loans
and $11,302,000 in commercial loans at December 31, 1993 and
$1,750,000 in residential loans and $17,252,000 in commercial loans at
December 31, 1992.
Information with regard to non-accrual loans follows:
<TABLE>
<CAPTION>
($000 Omitted) 1993 1992 1991
________ ________ ________
<S> <C> <C> <C>
Unpaid Principal at December 31. $ 24 970 1,054
Interest Earnings That Would
Have Been Earned In Accord-
ance With Original Terms 1 79 31
Interest Earnings Actually Realized 1 61 1
Negative, After Tax Earnings
Effect 0 11 18
</TABLE>
Loans contractually past due 90 days or more and still accruing at
year end were $1,853,000, $6,438,000, and $3,340,000 for 1993, 1992
and 1991 respectively. There were no restructured loans at December
31, 1993, 1992 and 1991.
There were no unused commitments on nonaccrual loans at December 31,
1993 or 1992.
The Bank has pledged certain of its GNMA mortgage pools as
collateral for standby letters of credit which have been issued. The
book value of pledged mortgages was $16,611,000 and $25,354,000 at
December 31, 1993, and 1992 respectively.
In the ordinary course of business, the Bank has loan, deposit and
other transactions with executive officers and directors and
organizations with whom such persons are associated. Such transactions
are on the same terms, including interest rates and collateral as to
loans, as those prevailing at the time for comparable transactions
with others. The aggregate amount of loans to executive officers,
directors and their immediate families, and to corporations where
executive officers and directors beneficially own a 10% or greater
equity interest was $11,163,000 and $14,320,000 at December 31, 1993
and 1992, respectively. During 1993, loan advances involving these
individuals amounted to $2,080,000 while repayments totaled
$5,237,000.
On May 31, 1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan," (SFAS No. 114). SFAS No. 114, which
is effective for financial statements issued for fiscal years beginning
after December 15, 1994, prescribes recognition criteria for loan
impairment and measurement methods for certain impaired loans and
loans whose terms are modified in troubled-debt restructurings.
Although the Company has not yet performed a detailed analysis of the
effects of the implementation of SFAS No. 114, the Company does not
expect its adoption to have a material effect on its consolidated
financial statements.
(7) Allowance for Possible Loan Losses
A summary of changes in the allowance for possible loan losses for
the years ending December 31, 1993, 1992 and 1991 follows:
<TABLE>
<CAPTION>
($000 Omitted) 1993 1992 1991
________ ________ ________
<S> <C> <C> <C>
Balance Beginning of Year $ 26,919 $ 19,049 $ 13,446
Provision Charged to
Operating Expenses 11,576 12,693 6,490
Allowance of Acquired Bank __ __ 731
Loans Charged to Allowance (6,741) (5,997) (1,815)
Recoveries 2,333 1,174 197
________ ________ ________
Balance End of Year $ 34,087 $ 26,919 $19,049
======== ======== =======
</TABLE>
(8) Bank Premises and Equipment
A summary of bank premises and equipment at December 31, 1993 and
1992 follows:
<TABLE>
<CAPTION>
($000 Omitted) 1993 1992
________ _________
<S> <C> <C>
Land $ 4,268 $ 4,229
Buildings 21,361 18,026
Furniture, Fixtures and Equipment 14,849 15,555
Leasehold Improvements 2,783 2,753
________ _________
43,261 40,563
Accumulated Depreciation and (18,368) (18,064)
Amortization
________ _________
Total $ 24,893 $ 22,499
======== =========
</TABLE>
Depreciation and amortization approximated $2,373,000 for the year
1993, $2,245,000 for 1992, and $1,193,000 for 1991. Occupancy expense
of Bank premises included rental expense of $1,388,000, $1,430,000,
and $846,000 for the years 1993, 1992 and 1991, respectively.
(9) Short-term Debt
Short-term debt consisting primarily of Securities Sold Under
Agreements to Repurchase with maturities of generally less than ninety
days was as follows for the years ending December 31, 1993 and 1992:
<TABLE>
<CAPTION>
($000 Omitted) 1993 1992
________ ________
<S> <C> <C>
Amount Outstanding at December 31 $ 18,323 20,849
Maximum Amount Outstanding At Any
Month End 20,405 32,689
Average Amount Outstanding 17,447 25,520
Weighted Average Interest Rate:
For the Year 2.18% 2.97%
As of Year-End 2.11% 2.16%
</TABLE>
(10) Long-term Debt
Long-term debt consists of the following:
<TABLE>
<CAPTION>
($000 Omitted) 1993 1992
_______ ________
<S> <C> <C>
Senior Subordinated Note, with interest
at 9.4% due September, 1993 $ -- 5,000
Revolving Loan, at Prime 2,750 --
======= ======
</TABLE>
As of December 31, 1993, the Company's long-term debt was comprised
of $2.75 million borrowed against a $10 million revolving credit
facility, at the prime rate (6.0%). The interest rate increases to one
quarter of one percent above the prime rate for the period July 1,
1995 through June 30, 1998. Beginning October 1, 1995 and on the first
day of each calendar quarter thereafter, one twelfth of the
outstanding principal balance as of June 30, 1995 will be repaid. The
entire unpaid balance of principal and interest will be due July 1, 1998.
(11) Income Taxes
A summary of Income Tax expense (benefit) included in the
consolidated statements of income follows:
<TABLE>
<CAPTION>
($000 Omitted) 1993 1992 1991
________ ________ ________
<S> <C> <C> <C>
Current Tax Expense:
Federal $ 10,372 11,103 4,907
State 2,098 2,586 843
________ ________ ________
Total Current Tax Expense 12,470 13,689 5,750
Total Deferred Expense
(Benefit) 46 (4,364) (894)
======== ======== ========
Total Consolidated Provision
for Income Taxes $ 12,516 9,325 4,856
======== ======== ========
</TABLE>
Prior to 1993, the Company accounted for income taxes under APB 11.
Under APB 11, deferred tax expense (benefit) resulted from timing
differences in the recognition of revenue and expense for tax and
financial statement purposes.
The sources of these differences and the tax effect for each year
follow:
<TABLE>
<CAPTION>
($000 Omitted) 1992 1991
________ _______
<S> <C> <C>
Provision for Loan Losses More Than
Amount Deducted for Tax Purposes $ (3,213) (1,989)
Amortization of Difference Due to
Mandatory Conversion to Accrual Basis
for Tax Reporting Purposes -- --
Depreciation Expense (Greater) Less Than
Amount Deducted for Tax Purposes 2 11
Other Income (Expense) Not Utilized
for Tax Purposes (102) 473
Financial Statement Interest Income Greater
(Less) Than Taxable Interest Income 191 75
Financial Statement Interest Expense (Greater)
Less Than Taxable Interest Expense (186) 5
Bond Accretion and Security Gains/Losses
(Currently) Not Currently
Reportable for Tax Purposes (1,056) 531
_________ _______
Total Deferred Tax Benefit $ (4,364) (894)
========= ========
</TABLE>
Effective January 1, 1993, the Company adopted SFAS No. 109. The
effect of adoption was not material to the financial statements.
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities at December 31, 1993 are presented below.
<TABLE>
<CAPTION>
Deductable Taxable
temporary temporary
($000 Omitted) differences differences
___________ ___________
<S> <C> <C>
Bond Accounting $ __ 126
Pension and deferred remuneration 1,883 --
Deferred loan fees, net 1,992 --
Difference in reporting the provision
for loan losses, net 17,039 --
Other income or expense not utilized
for tax purposes 1,966 --
Other items 838 --
___________ ____________
Total 23,718 126
Valuation reserve (5,938) --
___________ ____________
Total after valuation reserve 17,780 126
___________ ____________
Net deferred tax asset at December 31,1993 17,654
Net deferred tax asset at January 1,1993 17,700
___________
Deferred tax expense for the period
1/1/93 to 12/31/93 $ 46
===========
</TABLE>
The valuation allowance as established by management takes into
consideration the historical level of taxable income in the prior
years as well as the time period that the items giving rise to the
deferred tax assets turn around.
The effective tax rates differ from the statutory federal income tax
rate. The reasons for these differences are as follows:
<TABLE>
<CAPTION>
1993 1992 1991
________ ________ ________
<S> <C> <C> <C>
Statutory Federal Income
Tax Rate 35.0% 34.0% 34.0%
Increase (Decrease) in Taxes
Resulting From:
Tax Exempt Income (2.2) (3.9) (9.1)
State Income Tax, Net of
Federal Tax Benefit 4.0 3.6 2.3
Goodwill Amortization -- 1.1 .2
Effect of Increase in Tax Rate
on Deferred Tax Benefit (1.4) -- --
Other Income (0.8) -- --
________ ________ ________
Effective Income Tax Rate 34.6% 34.8% 27.4%
======== ======== ========
</TABLE>
(12) Employee Benefits
The Company maintains a trusteed non-contributory pension plan
covering substantially all full-time employees. The benefits are based
on the sum of (a) a benefit equal to a prior service benefit plus the
average of the employees' highest five consecutive years compensation
in the ten years preceding retirement multiplied by a percentage of
service after a specified date plus (b) a benefit based upon career
average compensation. The amounts contributed to the plan are
determined annually on the basis of (a) the maximum amount that can be
deducted for federal income tax purposes or (b) the amount certified
by a consulting actuary as necessary to avoid an accumulated funding
deficiency as defined by the Employee Retirement Income Security Act
of 1974. Contributions are intended to provide not only for benefits
attributed to service to date but also for those expected to be earned
in the future. Assets of the funds are primarily invested in common
stock and fixed income common funds administered by the Bank.
The following table sets forth the plans' funded status and amounts
recognized in the Company's consolidated statements of condition at
December 31, 1993 and 1992:
<TABLE>
ACTUARIAL PRESENT VALUE OF BENEFIT OBLIGATIONS:
<CAPTION>
($000 Omitted) 1993 1992
________ ________
<S> <C> <C>
Accumulated Benefit Obligation,
Including Vested Benefits of $12,409 and
$12,325 in 1993 and 1992, respectively $(12,555) (12,514)
_________ _________
Projected Benefit Obligation for
Service Referred to Date (13,570) (13,548)
Plan Assets at Fair Value 19,554 19,531
_________ _________
Plan Assets in Excess of Projected
Benefit Obligations 5,984 5,983
Unrecognized Net Gain from Past Experience
Different from that Assumed and
Effects of Changes in Assumptions (3,420) (3,495)
Unrecognized Prior Service Cost (395) (425)
Unrecognized Net Asset at Transition
Being Recognized Over 15 Years (1,032) (1,179)
_________ __________
Prepaid Pension Expense $ 1,137 884
========= ==========
</TABLE>
<TABLE>
NET PENSION EXPENSE FOR 1993, 1992 AND 1991 INCLUDED THE FOLLOWING
COMPONENTS:
<CAPTION>
($000 Omitted) 1993 1992 1991
________ ________ _________
<S> <C> <C> <C>
Service Cost--Benefits Earned
During the Period $ 501 529 373
Interest Cost on Projected
Benefit Obligation 811 808 582
Actual Return on Plan Assets (1,064) (573) (2,596)
Net Amortization and Deferral (500) (1,221) 1,613
________ ________ _________
Net Periodic Pension Benefit $ (252) (457) (28)
======== ======== =========
</TABLE>
The discount rates used in determining the actuarial present value
of the projected benefit obligation were 6.75 percent in 1993 and 7.5
percent in 1992 and 1991. The rate of increase in future compensation
levels used in the actuarial present value of projected benefit
obligations was 5.0 percent in 1993 and 6.0 percent in 1992 and 1991.
The expected long-term rate of return on assets was 6.5 percent in
1993, 7.0 percent in 1992 and 8.5 percent in 1991.
The Bank also has unfunded supplementary pension plans under which
additional retirement benefits are accrued for eligible senior and
executive officers.
The Bank also provides a profit-sharing plan for substantially all
employees. Contributions to the plan, which are based on management
discretion as defined in the plan, amounted to $1,302,000 in 1993,
$1,294,000 in 1992, and $966,000 in 1991.
An executive incentive plan for executive officers and other
designated senior officers became effective January 1,
1983. Contributions to the plan are based on the Bank's performance and
estimated distributions to participants are accrued during the year
and generally paid in the following year.
Under the terms of the Company's Stock Option Plan, 1,264,230 shares
are reserved for options and stock appreciation rights (SAR's). As of
December 31, 1993, 887,564 options and 17,704 SAR's remain issued and
outstanding. Of these, 406,465 options and 17,704 SAR's are vested
with exercise prices ranging from $5.27 to $20.19. Under the plan,
107,982 shares remain available to grant at December 31, 1993.
During 1993, 21,919 options were exercised and no options cancelled.
Additionally, 280,000 options were granted with an exercise price of
$20.19.
Under the terms of the Directors Stock Option Plan, 100,000 shares
are reserved for options. As of December 31, 1993, 20,000 vested
options remain issued and outstanding, with an exercise price of
$21.38. Under the Plan, 78,000 shares remain available to grant at
December 31, 1993. During 1993, 22,000 options were granted and 2,000
options were exercised.
In December 1990, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions." Statement
106 requires a calculation of the present value of expected benefits
to be paid to employees after their retirement and an allocation of
those benefits to the periods that employees render service to earn
the benefits. The Company permits retirees under age 65 to participate
in the Company's medical plan by paying the same premium as the active
employees. At age 65, Trustco Bank provides a Medicare Supplemental
Program to retirees. The retirees contribute at the same percentage as
active employees. Contributions increase annually or as the premium
increases.
Since these benefits are currently being provided, the Company
adopted SFAS No. 106 effective January 1, 1993, and has reported the
cumulative effect of that change in the December 31, 1993 Consolidated
Statement of Income.
Accumulated postretirement benefit obligation at December 31, 1993:
<TABLE>
<CAPTION>
($000 Omitted)
<S> <C>
Retirees $ 2,987
Fully eligible active plan participants 1,083
Other active plan participants 2,140
_________
$ 6,210
=========
</TABLE>
Expense for 1993 related to the transition obligation was $5.3
million, with an after-tax cost of $3.3 million. Periodic benefit cost
amounts to $467 thousand for the year. The Company funded the plan in
full through the use of a benefit trust during the first quarter of
1993. As a result, periodic benefit costs in future years are expected
to decrease.
The trust holding the plan assets is subject to federal income taxes
at a 35.0 percent tax rate at December 31, 1993. The expected long term
rate of return on plan assets, after estimated income taxes was 3.3
percent for the year ended December 31, 1993.
Net period postretirement benefit cost for 1993 includes the
following components:
<TABLE>
<CAPTION>
($000 Omitted)
<S> <C>
Service cost $ 357
Interest cost 389
Expected return on plan assets (279)
Full Transition obligation 5,260
_________
$ 5,727
=========
</TABLE>
For measurement purposes, a 16 percent annual rate of increase in
the per capita cost of covered benefits (i.e., health care cost trend
rate) was assumed for 1993; the rate was assumed to decrease gradually
to 5.75 percent by the year 2002 and remain at that level thereafter.
The health care cost trend rate assumption has a significant effect
on the amounts reported. To illustrate, increasing the assumed health
care cost trend rates by one percentage point in each year would
increase the accumulated postretirement benefit obligation as of
December 31, 1993, by approximately $1.1 million, and the aggregate of
the service and the interest cost components of net periodic
postretirement benefit cost for the year ended December 31, 1993, by
approximately $236 thousand. The weighted-average discount rate used
in determining the accumulated postretirement benefit obligation was
6.75 percent at December 31, 1993.
(13) Lease Commitments and Contingent Liabilities
(a) Leases
The Bank leases certain banking premises. Accounting for these
leases is under the "operating method," with minimum rental
commitments in the amounts presented below. The majority of these
leases contain options to renew.
<TABLE>
<CAPTION>
($000 Omitted)
<S> <C>
1994 843
1995 782
1996 807
1997 720
1998 653
1999 and after 2,909
_________
$ 6,714
=========
</TABLE>
(b) Litigation
Existing litigation arising in the normal course of business is not
expected to result in any material loss to the Company.
(14) Off-Balance-Sheet Financing and Concentrations of Credit Risk
The Bank is a party to certain financial instruments with off-
balance sheet risk in the normal course of business to meet the
financing needs of its customers. These financial instruments include
commitments to extend credit and standby letters of credit. Those
instruments involve, to varying degrees, elements of credit risk in
excess of the amount recognized on the statements of condition. The
contract amounts of those instruments reflect the extent of involvement
the Bank has in particular classes of financial instruments.
The Bank's exposure to credit loss in the event of nonperformance by
the other party to the commitments to extend credit and standby
letters of credit is represented by the contractual notional amount of
those instruments. The Bank uses the same credit policies in making
commitments as it does for on-balance-sheet instruments.
Contract amounts of financial instruments that represent credit risk
as of December 31, 1993 and 1992 at fixed and variable interest rates
are as follows:
<TABLE>
<CAPTION>
1993
________ ________ _______
Fixed Variable Total
________ ________ _______
<S> <C> <C> <C>
Financial instruments whose contract
amounts represent credit risk:
Conventional mortgage and
home equity $ 29,822 99,162 128,984
Commercial loans 1,652 18,825 20,477
Installment loans 51,416 -- 51,416
________ _______ ________
82,890 117,987 200,877
Standby letters of credit -- 21,439 21,439
________ _______ ________
$ 82,890 139,426 222,316
======== ======= ========
</TABLE>
<TABLE>
<CAPTION>
1992
________ ________ ______
Fixed Variable Total
________ ________ _______
<S> <C> <C> <C>
Financial instruments whose contract
amounts represent credit risk:
Conventional mortgage and
home equity $ 26,150 93,058 119,208
Commercial loans 3,132 24,214 27,346
Installment loans 60,278 -- 60,278
________ ________ _______
89,560 117,272 206,832
Standby letters of credit -- 26,926 26,926
________ ________ _______
$ 89,560 144,198 233,758
======== ======== =======
</TABLE>
Commitments to extend credit are agreements to lend to a customer as
long as there is no violation of any condition established in the
contract. Commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee. Since many of
the commitments are expected to expire without being fully drawn upon,
the total commitment amounts do not necessarily represent future cash
requirements. The Bank evaluates each customer's credit worthiness on
a case-by-case basis. The amount of collateral, if any, required by
the Bank upon the extension of credit is based on management's credit
evaluation of the customer. Mortgage and construction loan commitments
are secured by a first lien on real estate. Collateral on extensions
of credit for commercial loans varies but may include accounts
receivable, inventory, property, plant and equipment, and income
producing commercial property.
Standby letters of credit are conditional commitments issued by the
Bank to guarantee the performance of a customer to a third party.
These guarantees are primarily issued to support borrowing
arrangements. The credit risk involved in issuing standby letters of
credit is essentially the same as that involved in extending loan
facilities to customers.
The Bank grants commercial, installment and residential loans to
customers throughout the Capital District of New York State. Although
the Bank has a diversified loan portfolio, a substantial portion of
its debtors' ability to honor their contracts is dependent upon the
real estate sector as well as the overall strength of the economy.
(15) Fair Value of Financial Instruments
The Financial Accounting Standards Board issued Statement No. 107,
"Disclosures about Fair Value of Financial Instruments" (SFAS 107),
which requires that the Bank disclose estimated fair values for its
financial instruments. SFAS No. 107 defines fair value of financial
instruments as the amount at which the instrument could be exchanged
in a current transaction between willing parties other than in a
forced or liquidation sale. SFAS No. 107 uses the same definition for
a financial instrument as the Financial Accounting Standards Board
Statement No. 105, "Disclosure of Information about Financial
Instruments With Off-Balance Sheet Risk and Financial Instruments With
Concentrations of Credit Risk" (SFAS No. 105). SFAS No. 105 defines a
financial instrument as cash, evidence of ownership interest in an
entity, or a contract that imposes on one entity a contractual
obligation to deliver cash or another financial instrument to a second
entity or to exchange other financial instruments on potentially
unfavorable terms with a second entity and conveys to that second
entity a contractual right to receive cash or another financial
instrument from the first entity or to exchange other financial
instruments on potentially favorable terms with the first entity.
Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial
instrument. These estimates do not reflect any premium or discount
that could result from offering for sale at one time the Bank's entire
holdings of a particular financial instrument. Because no market
exists for a significant portion of the Bank's financial instruments,
fair value estimates are based on judgements regarding future expected
net cash flows, current economic conditions, risk characteristics of
various financial instruments, and other factors. These estimates are
subjective in nature and involve uncertainties and matters of
significant judgement and therefore cannot be determined with
precision. Changes in assumptions could significantly affect the
estimates.
Fair value estimates are based on existing on-and off-balance sheet
financial instruments without attempting to estimate the value of
anticipated future business and the value of assets and liabilities
that are not considered financial instruments. Significant assets and
liabilities that are not considered financial assets or liabilities
include the deferred tax assets and liabilities and property, plant,
and equipment. In addition, the tax ramifications related to the
realization of the unrealized gains and losses can have a significant
effect on fair value estimates and have not been considered in the
estimates of fair value under SFAS No. 107.
In addition there are significant intangible assets that SFAS 107
does not recognize, such as the value of "core deposits," the Bank's
branch network and other items generally referred to as "goodwill."
Investments and Securities Held for Sale
The carrying amounts for short-term investments approximate fair value
because they mature in 90 days or less and do not present
unanticipated credit concerns. The fair value of longer-term
investments, except certain state and municipal securities, is
estimated based on bid prices published in financial newpapers or bid
quotations received from securities dealers. The fair value of certain
state and municipal securities is not readily available through market
sources other than dealer quotations, so fair value estimates are
based on quoted market prices of similar instruments, adjusted for
differences between the quoted instruments and the instruments being
valued. See footnotes 4 and 5 for detail disclosure of investment
securities and securities held for sale.
Loans
Fair values are estimated for portfolios of loans with similar
financial characteristics. Loans are segregated by type such as
commercial, installment and real estate. Each loan category is further
segmented into fixed and adjustable rate interest terms and by
performing and nonperforming categories.
The fair value of performing loans is calculated by discounting
scheduled cash flows through the estimated maturity using estimated
market discount rates that reflect the credit and interest rate risk
inherent in the loan. The estimate of maturity is based on the
contractual term of the loans to maturity.
Fair value for significant nonperforming loans is based on recent
external appraisals and discounting of cash flows. Estimated cash
flows are discounted using a rate commensurate with the risk
associated with the estimated cash flows. Assumptions regarding credit
risk, cash flows, and discount rates are judgmentally determined using
available market information and specific borrower information.
The following table presents information for loans.
<TABLE>
<CAPTION>
At December 31, 1993
__________ __________
Carrying Calculated
Amount Fair value
__________ __________
<S> <C> <C>
Commercial $ 229,971 230,149
Real Estate 801,823 830,561
Installment 28,854 29,187
__________ __________
Loans, net of
unearned income $1,060,648 1,089,897
========== ==========
</TABLE>
<TABLE>
<CAPTION>
At December 31, 1992
__________ __________
Carrying Calculated
Amount Fair value
__________ __________
<S> <C> <C>
Commercial $ 257,410 258,240
Real Estate 730,342 740,618
Installment 40,789 41,216
__________ __________
Loans, net of
unearned income $1,028,541 1,040,074
========== ==========
</TABLE>
The fair value estimate for credit card loans is based on the value of
existing loans at December 31, 1993 and December 31, 1992. This
estimate does not include the value that relates to estimated cash
flows from new loans generated from existing card holders over the
remaining life of the portfolio.
Deposit Liabilities
Under SFAS 107, the fair value of deposits with no stated maturity,
such as non-interest bearing demand deposits, savings, NOW accounts,
money market and checking accounts, is estimated to be the amount
payable on demand as of December 31, 1993. The fair value of
certificates of deposit is based on the discounted value of
contractual cash flows. The discount rate is estimated using the rates
currently offered for deposits of similar remaining maturities.
<TABLE>
<CAPTION>
At December 31, 1993
__________ __________
Carrying Calculated
Amount Fair value
__________ __________
<S> <C> <C>
Non-interest bearing demand $ 96,034 96,034
Savings and NOW 970,407 970,407
Money market deposit accounts 110,630 110,630
Certificates of deposit:
Maturing in six months or less 181,507 182,138
Maturing between six months
and one year 62,592 63,196
Maturing between one and three years 245,657 254,176
Maturing beyond three years 115,586 121,366
Other time deposits 11,819 11,819
__________ __________
Total deposits $1,794,232 1,809,766
========== ==========
</TABLE>
<TABLE>
<CAPTION>
At December 31, 1992
__________ __________
Carrying Calculated
Amount Fair value
__________ __________
<S> <C> <C>
Non-interest bearing demand $ 99,846 99,846
Savings and NOW 981,112 981,112
Money market deposit accounts 115,726 115,726
Certificates of deposit:
Maturing in six months or less 213,270 214,260
Maturing between six months
and one year 89,341 90,564
Maturing between one and three years 162,435 168,325
Maturing beyond three years 95,394 105,279
Other time deposits 14,182 14,182
__________ __________
Total deposits $1,771,306 1,789,294
========== ==========
</TABLE>
The fair value estimates above do not include the benefit that results
from the low-cost funding provided by the deposit liabilities compared
to the cost of borrowing funds in the market.
Long Term Debt
The fair value of the Company's long term debt, which consists of a
revolving credit facility at the prime interest rate, is estimated to
be book value at December 31, 1993 and December 31, 1992.
Other Financial Instruments
The fair value of cash and cash equivalents, accrued interest
receivable, accrued interest payable and short term debt are estimated
to be book value at December 31, 1993 and December 31, 1992.
Commitments to Extend Credit, Standby Letters of Credit, and Financial
Guarantees Written
The fair value of commitments to extend credit is estimated using the
fees currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements and the present
creditworthiness of the counterparties. For fixed rate loan
commitments, fair value also considers the difference between current
levels of interest rates and the committed rates. The fair value of
financial guarantees written and letters of credit is based on fees
currently charged for similar agreements, or on the estimated cost to
terminate them or otherwise settle the obligations with the
counterparties. Fees such as these are not a major part of the Bank's
business. Therefore, based upon the above facts, book value equals
fair value and the amounts are not significant.
(16) Parent Company Only
The following statements pertain to TrustCo Bank Corp NY:
<TABLE>
Statements of Income
<CAPTION>
($000 Omitted)
For the Year Ended December 31, 1993 1992 1991
________ ________ ________
<S> <C> <C> <C>
Income:
Dividends and Interest
from Subsidiaries $ 11,061 11,067 5,086
Gain/Loss on Sale of
Securities 374 -- (64)
Income from Other
Investments 72 43 76
________ ________ ________
Total Income 11,507 11,110 5,098
________ ________ ________
Expense:
Interest on Long-term Debt 343 470 470
Operating Supplies 129 151 32
Professional Services 128 187 46
Miscellaneous Expense 33 14 21
________ ________ ________
Total Expense 633 822 569
________ ________ ________
Income Before Income
Taxes and Undistributed
Net Income of Subsidiaries 10,874 10,288 4,529
Income Tax (Benefit) 52 (153) (29)
________ ________ ________
Income Before Equity in
Undistributed Net
Income of Subsidiaries 10,822 10,441 4,558
Equity in Undistributed Net
Income of Subsidiaries 9,503 7,062 8,303
________ ________ ________
Net Income $ 20,325 17,503 12,861
======== ======== ========
</TABLE>
<TABLE>
Statements of Condition
<CAPTION>
($000 Omitted)
As of December 31, 1993 1992
__________ __________
<S> <C> <C>
Assets:
Cash in Subsidiary Bank $ 6,425 8,764
Trading Securities 2,106 --
Notes and Receivables from Subsidiaries 10 2,563
Investments in Subsidiaries at Equity 124,124 114,621
Other Investments 37 1,698
Accrued Taxes and Other Receivables . 101 154
Bank Premises and Equipment 389 389
__________ __________
Total Assets $ 133,192 $ 128,189
========== ==========
Liabilities and Shareholders' Equity:
Note Payable $ -- 5,000
Accrued Expenses and Other
Liabilities 3,312 2,760
__________ __________
Total Liabilities 3,312 7,760
__________ __________
Shareholders' Equity:
Capital Stock; $1 par value.
Shares authorized 25,000,000:
13,588,044 and 6,771,103 shares
issued at December 31, 1993 and
1992, respectively 13,588 6,771
Surplus 91,955 98,115
Undivided Profits 25,331 16,566
Treasury Stock; 364,566 and 187,583
shares, at cost, at December 31,
1993 and 1992, respectively (994) (1,023)
__________ _________
Total Shareholders' Equity 129,880 120,429
__________ _________
Total Liabilities and
Shareholders' Equity $ 133,192 128,189
========== =========
</TABLE>
<TABLE>
Statements of Cash Flows
<CAPTION>
($000 Omitted)
For the Year Ended December 31, 1993 1992 1991
________ ________ ________
<S> <C> <C> <C>
Increase (Decrease) in Cash
and Cash Equivalents
Net Income $ 20,325 17,503 12,861
________ ________ ________
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Undistributed Income of Subsidiaries (9,503) (7,062) (8,303)
Decrease in Receivable from Subsidiary 54 -- --
(Gain)/Loss on Sales of Securities (374) -- 64
Decrease in Taxes and Other
Receivables 53 437 401
Decrease in Accrued Expenses (120) (136) --
________ ________ ________
Total Adjustments (9,890) (6,761) (7,838)
________ ________ ________
Net Cash Provided by Operating Activities 10,435 10,742 5,023
________ ________ ________
Cash Flows from Investing Activities:
Proceeds from Sales or Maturities
of Investment Securities 1,877 -- 618
Purchase of Trading Securities (1,940) __ __
Purchase of Investment Securities (8) (48) (665)
Net Decrease in Short Term
Loaned Funds to Subsidiary 2,500 -- 5,801
Increase in Investment in Subsidiary (1) -- (550)
________ ________ ________
Net Cash Provided by (Used in)
Investing Activities 2,428 48 5,204
________ ________ ________
Cash Flows from Financing Activities:
Repayment of Long-Term Debt (5,000) -- --
Proceeds from Issuance of Common Stock 468 759 297
Payments to Acquire Treasury Stock -- -- (24)
Dividends Paid (10,888) (8,394) (4,883)
Sales of Treasury Stock 218 -- --
________ ________ ________
Net Cash Used in Financing Activities (15,202) (7,635) (4,610)
________ ________ ________
Net Increase (Decrease) in Cash
and Cash Equivalents (2,339) 3,059 5,617
Cash and Cash Equivalents at Beginning of Year 8,764 5,705 88
________ ________ ________
Cash and Cash Equivalents at End of Year 6,425 8,764 5,705
======== ======== ========
Non Cash Investing and Financing Activities:
Increase in Dividends Payable 672 542 905
Increase in Investment in Subsidiary
due to Accrued Expenses -- -- 136
Increase in Investment in Subsidiary
due to Acquisition of
Home & City Savings Bank $ -- -- 43,592
======== ======== ========
</TABLE>
(17) Unaudited Interim Financial Information
Following is a summary of unaudited consolidated quarterly financial
information for each quarter of 1993 and 1992:
<TABLE>
<CAPTION>
($000 Omitted, except for per share data) 1993 Quarter Ended 1992 Quarter Ended
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
________ ________ ________ _________ ________ ________ ________ _________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Income $ 34,210 33,730 33,216 32,501 $ 35,899 36,568 35,905 34,888
Net Interest Income 18,147 18,261 18,009 17,621 15,874 16,603 16,772 17,610
Provision for Loan Losses 1,000 2,600 5,690 2,286 2,350 2,650 5,500 2,193
Income Before Taxes 12,844 7,737 7,317 8,238 6,169 6,427 6,856 7,376
Change in Accounting Principle (3,284) -- -- (11) -- -- -- --
Net Income 4,751 4,904 5,287 5,383 4,135 4,311 4,410 4,647
Net Income Per Share $ .36 .37 .39 .40 $ .31 .33 .33 .35
Per share data adjusted for 2 for 1 Stock Split in November 1993 and 5 for 4 stock split in November 1992.
</TABLE>
INDEPENDENT AUDITORS' REPORT
KPMG Peat Marwick
Certified Public Accountants
74 North Pearl Street
Albany, New York 12207
The Board of Directors and Shareholders of TrustCo Bank Corp NY:
We have audited the accompanying consolidated statements of
condition of TrustCo Bank Corp NY and subsidiaries as of December
31, 1993 and 1992, and the related consolidated statements of
income, changes in shareholders' equity, and cash flows for each
of the years in the three-year period ended December 31, 1993.
These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of TrustCo Bank Corp NY and subsidiaries as of December
31, 1993 and 1992, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 1993, in conformity with generally accepted
accounting principles.
As discussed in notes 1 and 11 to the consolidated financial
statements, in 1993 the Company adopted the provisions of the
Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" which
changed its method of accounting for income taxes. As discussed in
note 12 to the consolidated financial statements, the Company also
adopted the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other than
Pensions" in 1993 which changed its method of accounting for
postretirement benefits other than pensions.
KPMG Peat Marwick
January 26, 1994
Five-Year Summary
The management of TrustCo has identified return on equity as the
principal measurement index in evaluating its effectiveness in
fulfilling its responsibility to the shareholders. Return on assets,
while an important measure of performance, is regarded as a less
sensitive indicator of true shareholder return. The Company's return
on average shareholders' equity for 1993 was 16.18 percent. This key
performance indicator has exceeded 15 percent in each of the past five
years. Return on average assets performance has remained consistently
positive throughout the period as well, providing further evidence of
steady performance.
Cash dividends per share have increased 2.5 times over the past five
years, for a compound annual increase of 25.9 percent. Management
believes that retained earnings should be maintained at a level that
fully supports, but does not exceed, the Company's needs, with
earnings above such a level returned to the owners in the form of cash
dividends.
This consistently strong performance in all areas indicates the
success enjoyed by the Company in promoting the Bank's image as "YOUR
HOME TOWN BANK" to a broad range of customers. Management intends to
continue to focus its attention on being the best retail banking
company in the Capital District.
<TABLE>
Summarized Statements of Income
<CAPTION>
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
($000 omitted, except per share data) 1993 1992 1991 1990 1989
============================================================================================================
<S> <C> <C> <C> <C> <C>
Interest income, taxable equivalent $ 135,668 145,814 103,870 84,296 75,872
Interest expense 61,619 76,401 58,252 48,445 41,701
____________________________________________________________________________________________________________
Net interest income, taxable equivalent 74,049 69,413 45,618 35,851 34,171
Taxable equivalent interest adjustment 2,011 2,554 3,065 2,776 2,676
____________________________________________________________________________________________________________
Net interest income 72,038 66,859 42,553 33,075 31,495
Provision for possible loan losses 11,576 12,693 6,490 2,700 2,100
____________________________________________________________________________________________________________
60,462 54,166 36,063 30,375 29,395
Other income 19,193 15,433 9,847 5,735 6,503
____________________________________________________________________________________________________________
79,655 69,599 45,910 36,110 35,898
Other expenses 43,519 42,771 28,193 21,877 23,049
____________________________________________________________________________________________________________
Income before income taxes 36,136 26,828 17,717 14,233 12,849
Applicable income taxes 12,516 9,325 4,856 3,658 3,403
____________________________________________________________________________________________________________
Income before Change
in Accounting Principle 23,620 17,503 12,861 10,575 9,446
Change in Accounting Principle (3,295) -- -- -- --
____________________________________________________________________________________________________________
Net income $ 20,325 17,503 12,861 10,575 9,446
============================================================================================================
Average equivalent shares outstanding 13,457,000 13,278,000 10,172,000 9,118,000 9,100,000
Net income per common share $ 1.51 1.32 1.27 1.16 1.04
Return on average assets 1.04% 0.94% 1.12% 1.22% 1.24%
Return on average common shareholders'
equity 16.18% 15.06% 17.16% 18.49% 18.62%
Cash dividend declared per share $ .88 .68 .57 .45 .35
Average Statement of Financial Condition Data
Total assets $1,946,715 1,852,180 1,149,775 868,069 762,532
Total deposits 1,767,531 1,675,479 1,001,304 733,983 645,395
Long-term debt 3,870 5,000 5,000 5,000 5,000
Shareholders' equity 125,648 116,238 74,951 57,208 50,740
Per share data adjusted for a 2 for 1 Stock Split in November 1993, a
5 for 4 Stock Split in November 1992, and 10% stock dividends in
December 1991, and December 1990.
</TABLE>
Financial Review
LIQUIDITY AND INTEREST SENSITIVITY
A sound asset/liability management program must balance the goals of
maintaining sufficient liquidity to meet depositors' requirements,
while at the same time continuing to satisfy credit needs in our
markets. Management has addressed these issues by developing a
maturity mix that maximizes flexibility in responding to both
liquidity needs and interest rate fluctuations, and by consistently
focusing attention on developing and expanding stable funding sources.
The continuing volatility of interest rates during 1993, a year in
which Federal funds rates fluctuated by 275 basis points, serves to
highlight the importance of active management of earning assets and
interest bearing liabilities in enabling the Company to attain its
financial goals.
TrustCo has emphasized the funding of asset growth through the
expansion of its core deposit base. These funds (which represent total
deposits, less certificates of deposit of $100,000 or more) have
historically proven to be the most stable and least costly sources of
funds. Despite ongoing competitive pressures, the level of core
deposits has increased steadily, rising from 91.0 percent of average
total liabilities in 1991 to 93.9 percent in 1992. During 1993, the
level of core deposits continued to expand, reaching an impressive
95.2 percent of average total liabilities at December 31, 1993. This
growth was centered during 1993 in savings accounts, which increased
significantly, while other forms of deposits declined in aggregate.
Core deposit growth for 1993 of 6.3 percent outpaced the 5.2 percent
increase in interest earning assets, providing a further indication of
the stability of funding sources.
Liquidity and interest sensitivity are related in that each is
affected by maturing assets and liabilities. Interest sensitivity
analysis, however, takes the additional step of considering that
certain assets and liabilities are subject to rate adjustment(s) prior
to maturity. The objective of interest sensitivity management is to
establish and maintain satisfactory net interest margins throughout
all phases of a full interest rate cycle.
The measurement of the interest rate sensitivity position at any
specific point in time involves numerous assumptions and estimates.
Within this context, the accompanying interest sensitivity analysis,
divided into future repricing timeframes, helps to illustrate the
potential impact of future interest rate changes on net interest
income. It should be noted that interest sensitivity is only one
indicator of the extent to which changes in interest rates have the
potential to affect net interest income. The components of the earning
asset and interest bearing liability portfolios are also changing
continuously. The Company has not, to date, used financial futures or
interest rate swaps in the management of interest rate risk.
<TABLE>
Interest Sensitivity Analysis
<CAPTION>
Over 3 Over 6
Within 3 Through Through Total 1 to 5 5+
($000 Omitted) Months 6 Months 12 Months 1 Year Years Years Total
_______________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Interest Earning Assets:
Loan financing, net of
unearned income $ 316,391 33,332 150,095 499,818 86,127 474,703 1,060,648
Investment securities 41,085 60,932 5,105 107,122 265,702 43,982 416,806
Trading securities 2,106 -- -- 2,106 -- -- 2,106
Securities held for sale -- -- -- -- 148,926 91,790 240,716
Federal funds sold 149,000 -- -- 149,000 -- -- 149,000
________________________________________________________________________________________________________________________________
Total interest
earning assets $ 508,582 94,264 155,200 758,046 500,755 610,475 1,869,276
________________________________________________________________________________________________________________________________
Interest Bearing Liabilities:
Regular savings,
NOW and money
market accounts 74,968 47,819 95,639 218,426 588,648 273,963 1,081,037
Time accounts 121,129 62,598 66,148 249,875 365,971 1,315 617,161
Short-term debt 18,323 -- -- 18,323 -- -- 18,323
Long-term debt -- -- -- -- 2,750 -- 2,750
________________________________________________________________________________________________________________________________
Total interest
bearing liabilities 214,420 110,417 161,787 486,624 957,369 275,278 1,719,271
________________________________________________________________________________________________________________________________
Interest sensitivity gap $ 294,162 (16,153) (6,587) 271,422 (456,614) 335,197 150,005
================================================================================================================================
Cumulative interest
sensitivity gap $ 294,162 278,009 271,422 -- (185,192) 150,005 --
==========================================================================================================================
</TABLE>
For purposes of this analysis, the maturity and repricing of loans
is based on stated maturity or earliest repricing date. For securities
held for sale and investment securities, the earlier of average life
or stated maturity is used.
The category of regular savings, NOW and money market accounts
includes balances of $110,630,000, $238,871,000, $11,537,000 and
$719,999,000 for Money Market accounts, NOW accounts, Investment
checking accounts and regular savings respectively. Although these
deposits are subject to immediate withdrawal, it is management's
experience that they mature or reprice over a full interest rate
cycle. Time accounts, short term debt and long term debt are based on
stated maturity.
NET INTEREST INCOME
Net interest income represents the difference between interest
related income and expense. Taxable equivalent net interest income for
1993 rose $4.6 million, or 6.7 percent to $74.0 million, after a $23.8
million increase in 1992. Despite ongoing competitive pressure in both
funding sources and investment alternatives, taxable equivalent net
interest income as a percentage of average assets increased 6 basis
points to 4.04 percent in 1993, after declining 22 basis points in
1992.
The following table summarizes the major components of net interest
income.
<TABLE>
Net Interest Income Summary
<CAPTION>
($000 Omitted) (taxable equivalent) 1993 1992 1991 1990 1989
_____________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Interest Income:
Loans $ 87,559 93,532 64,712 50,463 46,985
Investment securities 29,596 44,242 36,807 28,795 24,509
Securities held for sale 13,601 4,229 -- -- --
Interest on deposits with banks -- -- -- -- 73
Federal funds sold 4,912 3,811 2,351 5,038 4,305
_____________________________________________________________________________________
Total 135,668 145,814 103,870 84,296 75,872
_____________________________________________________________________________________
Interest Expense:
Interest bearing deposits:
Regular savings, NOW and
money market accounts 30,467 36,570 20,643 16,079 15,755
Time accounts 30,415 38,604 34,936 28,356 22,198
Short-term debt 380 757 2,203 3,540 3,278
Long-term debt 357 470 470 470 470
_____________________________________________________________________________________
Total 61,619 76,401 58,252 48,445 41,701
_____________________________________________________________________________________
Net interest income $ 74,049 69,413 45,618 35,851 34,171
=====================================================================================
Net interest income to
average earning assets 4.04% 3.98% 4.20% 4.41% 4.82%
=====================================================================================
</TABLE>
Changes in interest income and expense result from variances in the
volume of outstanding interest earning assets and interest bearing
liabilities, from fluctuations in the level of interest rates earned
and paid, or from a combination of these factors. Average interest
earning assets have steadily increased, reaching $1.8 billion in 1993.
Taxable equivalent yields on these assets have fallen with the general
level of interest rates, declining 1.2 percent in 1992, and an
additional 1.0 percent to 7.4 percent in 1993. Interest bearing
liabilities have consistently increased, growing to $1.7 billion in
1993. Interest paid on these funds has declined steadily with overall
rate movements, decreasing 1.3 percent in 1992 and an additional 1.1
percent to 3.6 percent in 1993.
The following table sets forth, for each major category of interest
earning assets and interest bearing liabilities, changes in 1993 and
1992 taxable equivalent interest income and expense, allocating the
changes to variances in either volume or rate.
<TABLE>
Changes in Net Interest Income
<CAPTION>
1993 vs. 1992 1992 vs. 1991
__________________________________________________________________________________________________________
Increase (Decrease) Due Increase (Decrease) Due
to Change in Average (a) to Change in Average (a)
__________________________________________________________________________________________________________
($000 Omitted) (taxable equivalent) Balance Rate Total Balance Rate Total
__________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Interest Income:
Loans $ 570 (6,543) (5,973) 35,094 (6,274) 28,820
Securities held for sale 9,643 (271) 9,372 4,229 -- 4,229
Investment securities (7,838) (6,808) (14,646) 12,553 5,118 7,435
Federal funds sold 1,541 (440) 1,101 2,674 (1,214) 1,460
__________________________________________________________________________________________________________
Total 3,916 (14,062) (10,146) 54,550 (12,606) 41,944
__________________________________________________________________________________________________________
Interest Expense:
Interest bearing deposits:
Regular savings, NOW and
money market accounts 5,413 (11,516) (6,103) 22,029 (6,102) 15,927
Time accounts (3,058) (5,131) (8,189) 9,940 (6,272) 3,668
Short-term debt (205) (172) (337) (710) (736) (1,446)
Long-term debt (104) (9) (113) -- -- --
__________________________________________________________________________________________________________
Total 2,046 (16,828) (14,782) 31,259 (13,110) 18,149
__________________________________________________________________________________________________________
Net interest income $ 1,870 2,766 4,636 23,291 504 23,795
==========================================================================================================
</TABLE>
(a) The dollar amount of changes in interest income and interest
expense attributable to changes in rate/volume (change in rate times
change in volume) has been allocated between rate and volume variances
based on the absolute relationship of such variances to each other.
The following schedule sets forth the classification of consolidated
loans by major category as of year end:
<TABLE>
Loans at December 31
<CAPTION>
($000 Omitted) 1993 1992 1991 1990 1989
_________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Commercial $ 218,669 240,158 264,371 125,183 130,212
Real estate--construction 14,172 19,002 30,341 1,226 1,109
Mortgage, first and second, closed end 596,935 533,422 502,184 178,574 158,068
Revolving home equity credit line 202,018 195,170 168,244 113,762 80,446
Installment 31,212 44,438 66,605 49,340 71,147
_________________________________________________________________________________________________
Total $1,063,006 1,032,190 1,031,745 468,085 440,982
=================================================================================================
</TABLE>
INTEREST AND FEES ON LOANS
Taxable equivalent interest and fees on loans for the last 5 years
are summarized below:
<TABLE>
Loan Income
<CAPTION>
($000 Omitted) (taxable equivalent) 1993 1992 1991 1990 1989
________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Commercial $ 20,419 24,692 17,495 14,922 15,654
Real estate 62,565 61,842 41,042 28,951 23,283
Installment 4,575 6,998 6,175 6,590 8,048
________________________________________________________________________________________________
Total $ 87,559 93,532 64,712 50,463 46,985
================================================================================================
</TABLE>
Increases in taxable equivalent interest and fees on loans allocable
to changes in average volume and rate for the two most recent years
are presented below:
<TABLE>
Changes in Loan Income
<CAPTION>
1993 vs. 1992 1992 vs. 1991
______________________________________________________________________________________________________
Increase (Decrease) Due Increase (Decrease) Due
to Change in Average to Change in Average
______________________________________________________________________________________________________
($000 Omitted) (taxable equivalent) Balance Rate Total Balance Rate Total
______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Commercial $ (2,959) (1,314) (4,273) $ 9,210 (2,013) 7,197
Real estate 5,609 (4,886) 723 25,445 (4,645) 20,800
Installment (2,080) (343) (2,423) 439 384 823
______________________________________________________________________________________________________
Total $ 570 (6,543) (5,973) $ 35,094 (6,274) 28,820
======================================================================================================
</TABLE>
COMMERCIAL LOANS
Both average commercial loan outstandings and taxable equivalent
interest income on commercial loans decreased during 1993. The decline
in volume is attributable in part to generally flat loan demand in the
Bank's market area, and in part to the resolution of a number of
problem credits acquired in connection with the purchase of Home &
City Savings Bank in 1991.
Average commercial loan outstandings decreased 12.5 percent to $237
million in 1993. Taxable equivalent interest income on commercial
loans was reduced 17.3 percent during 1993 as a result of decreasing
average volume, in combination with declining interest rates. The
taxable equivalent interest rate on commercial loans was 8.6 percent
in 1993, compared with 9.1 percent in 1992 and 10.2 percent in 1991.
The Bank's commercial loan portfolio is a component of management's
asset/liability management program. As indicated in the following
table, 52.1 percent of the commercial loan portfolio either matures
within one year or has a floating interest rate.
<TABLE>
Maturities of Commercial Loans at December 31, 1993
<CAPTION>
Within 1 to 5 After
($000 Omitted) 1 Year Years 5 Years Total
__________________________________________________________________________
<S> <C> <C> <C> <C>
Commercial $ 77,216 90,797 50,656 218,669
Real estate - construction<F1> 1,565 8,461 1,276 11,302
__________________________________________________________________________
Total $ 78,781 99,258 51,932 229,971
==========================================================================
Loans maturing after 1 year:
With predetermined interest rate $110,231
With floating interest rate
(dependent upon the prime rate of interest)
40,959
__________________________________________________________________________
Total $151,190
==========================================================================
<FN>
<F1>The above figures do not include $2.9 million residential
construction loans.
</TABLE>
Good corporate citizenship and a resource allocation strategy that
emphasizes diversification have led the Bank to pursue opportunities
in the commercial lending area that allow it to address the needs of
businesses within its marketplace, while at the same time maintaining
the high quality of the loan portfolio. Requests for commercial loans
secured by real estate are evaluated on an individual-case basis.
Collateral standards conform to all applicable regulatory standards.
Although commercial loans are generally granted for a specified
duration, certain loans may be renewed in the ordinary course of
business. Requests for loan renewals are based on internal credit
evaluation standards, and on market conditions in effect at the time
renewal requests are received.
The Bank continues to hold no foreign debt. In addition, the
commercial loan portfolio contains no concentrations of credit with
either individual borrowing interests or with specific industries.
Substantially all loans in the portfolio have been originated locally,
and their diversity is reflective of the heterogeneity of the Capital
Region's economy.
REAL ESTATE LOANS
Real estate-related credit products (primarily first mortgages and
Home Equity Credit Lines) comprised the growth portion of the Bank's
loan portfolio during 1993. Competitive pricing and aggressive
marketing of these products have allowed the Bank to expand portfolio
volume in an increasingly crowded marketplace as it works toward
fulfilling its mission of functioning as the premier retail bank in
the Capital Region.
Home Equity Credit Lines outstanding at December 31, 1993 aggregated
$202.0 million, compared with year-end balances of $195.2 million in
1992 and $168.2 million in 1991. Mortgage balances, with attractive
rate offerings and active promotion, increased $73.3 million at
December 31, 1993.
Average interest rates on real estate loans continued to decline,
reflecting national and local trends. The average interest rate for
1993 was 8.3 percent, compared with 9.0 percent in 1992 and 10.0
percent in 1991. The increase in the size of the Bank's portfolio,
however, contributed to an increase of 1.2 percent in 1993 in interest
income on real estate loans.
Loans secured by one- to four-family residential properties
represented over 99 percent of the Bank's real estate loan portfolio
at December 31, 1993. The vast majority of the loans in portfolio are
collateralized by properties within Trustco's market areas. The Bank's
knowledge of local properties and market conditions enhances the
quality of its real estate loans, all of which are underwritten in
accordance with collateralization standards which conform to
applicable regulatory standards. Loans funded by the Bank in 1993, as
has been the case in prior years, are retained in portfolio rather
than being packaged for secondary market resale.
On May 31, 1993 the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan" (SFAS No. 114). SFAS No. 114,
which is effective for financial statements issued for fiscal years
beginning after December 15, 1994, prescribes recognition criteria for
loan impairment and measurement methods for certain impaired loans and
loans whose terms are modified in troubled debt restructurings.
Although the Company has not yet performed a detailed analysis of the
effects of the implementation of SFAS No. 114, the Company does not
expect its adoption to have a material effect on its consolidated
financial statements.
INSTALLMENT LOANS
Tax law changes have reduced the attractiveness of installment loans
for many customers. Despite this, Trustco continues to offer a full
range of these products as part of its comprehensive commitment to
retail banking in its markets. Average balances, including credit card
outstandings, decreased 31.1 percent in 1993 to $33.1 million. The
volume of applications for all types of installment loans was reduced
during 1993. The average yield on installment loan products, after
increasing from 13.8 percent in 1991 to 14.6 percent in 1992, declined
again to 13.8 percent in 1993, reflecting the general downward trend
in interest rates.
SECURITIES HELD FOR SALE
Securities held for sale represent that portion of the investment
portfolio which the Company does not intend to hold until maturity.
These securities are managed in conjunction with short-term investment
vehicles such as Federal funds sold, and with potentially volatile
funding sources such as short-term debt and large ($100,000 or more)
certificates of deposit in such a way as to maximize management's
flexibility in responding to structural changes in the composition of
borrowed funds and to seasonal and/or cyclical fluctuations in loan
demand.
The portfolio of securities held for sale as of December 31, 1993
consisted of U.S. Treasury Notes with a book value of $230.6 million
and a market value of $236.5 million, and corporate bonds with a book
value of $10.2 million and a market value of $11.6 million. Securities
held for sale having a book value of $41.2 million were pledged to
secure public deposits and for purposes required by law at December
31, 1993. The average taxable equivalent yield on securities held for
sale in 1993 was 6.9 percent, a decline of 52 basis points from 1992
levels.
INVESTMENT SECURITIES
Investment securities represent that portion of the investment
portfolio which the Company has both the capacity and the intent to
hold until maturity. These securities are held to increase yield as
part of management's program for maximizing longer-term overall returns.
The quality of the portfolio, both of investment securities and of
securities held for sale, is evidenced by the fact that over 96
percent of total holdings consist of either U.S. Treasury securities,
or instruments carrying one of the top three investment grades from at
least one leading rating agency. The December 31, 1993 book value of
securities pledged to secure public deposits or for purposes required
by law was $85.6 million. The only obligations (other than U.S.
Treasury and agency issues) that represented more than 10 percent of
equity capital at December 31, 1993 were bonds issued by General Electric
Capital Corporation. These bonds are rated Aaa, and mature in 1994 and
1995.
<TABLE>
Concentration of Investment Securities at Year-end 1993
<CAPTION>
Book Approximate
($000 Omitted) Value Market Value
______________________________________________________________________
<S> <C> <C>
General Electric Capital Corporation bonds $ 15,000 15,496
======================================================================
</TABLE>
The Tax Reform Act of 1986 affected the income potential of the
portfolio by eliminating the deduction for carrying non-qualified
municipal investments. Accordingly, investments are selected with a
view toward safety of principal, as well as the generation of the
highest possible income. Trustco Bank New York continues to serve
Capital Region governmental units by providing capital and operating
funds through active participation in the municipal bond and note
market.
The weighted average maturity of investment securities and
investments held for sale declined in 1993, increasing the rate
sensitivity of the portfolio. The approximate weighted average
portfolio maturity was 3 years, 7 months at December 31, 1993,
compared with 4 years, 3 months at the end of 1992, and 5 years, 9
months at year-end 1991. The following tables detail the maturity
distribution and weighted average yield of the Company's investment
securities and securities held for sale as of December 31, 1993. The
Company's mortgage backed securities are calculated in the maturity
section of the table on the basis of their stated average life of 3
years, 6 months rather than their weighted average maturity of 14
years, 8 months. Weighted average yields are calculated on the basis
of effective yield to the earlier of call or maturity date,
considering applicable premium or discount, but not converting yields
to a taxable equivalent basis.
<TABLE>
Maturities of Investment Securities at Year-end 1993
<CAPTION>
Within 1 Year 1 to 5 Years 5 to l0 Years After l0 Years Total Total
_______________________________________________________________________________________________________________
($000 Omitted) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
_______________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Government
obligations $ 82,792 5.36% $145,365 6.84% $ -- --% $ -- --% $228,157 6.30%
States and political
subdivisions 15,355 3.40% 4,820 5.82% 1,585 6.63% 1,257 6.96% 23,017 4.32%
Mortgage-backed
securities 3,848 9.84% 105,111 6.49% 28,875 6.90% 542 10.59% 138,376 6.68%
Other 10,387 8.48% 5,025 4.57% 10,073 7.36% 1,771 6.00% 27,256 7.19%
_______________________________________________________________________________________________________________
Total $112,382 5.53% $260,321 6.63% $40,533 7.00% $3,570 7.03% $416,806 6.38%
===============================================================================================================
</TABLE>
<TABLE>
Maturities of Securities Held for Sale at Year-end 1993
<CAPTION>
Within 1 Year 1 to 5 Years 5 to l0 Years After l0 Years Total Total
_______________________________________________________________________________________________________________
($000 Omitted) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
_______________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Government
obligations $ -- --% $148,925 4.76% $81,638 6.91% $ -- --% $230,563 5.52%
Other -- --% -- --% -- --% 10,153 7.86% 10,153 7.86%
_______________________________________________________________________________________________________________
Total $ -- --% $148,925 4.76% $81,638 6.91% $10,153 7.86% $240,716 5.62%
_______________________________________________________________________________________________________________
</TABLE>
The following tables set forth the book value and market value by
maturity distribution (based on the earlier of call or maturity date)
of the Company's investment securities and securities held for sale at
December 31, 1993.
<TABLE>
Maturities of Investment Securities at Year-end 1993
<CAPTION>
Within 1 Year 1 to 5 Years 5 to l0 Years After l0 Years Total Total
_____________________________________________________________________________________________________________________
($000 Omitted) Book Market Book Market Book Market Book Market Book Market
_____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Government
obligations $ 82,792 82,992 145,365 154,016 -- -- -- -- 228,157 237,008
States and political
subdivisions 15,355 15,376 4,820 4,999 1,585 1,686 1,257 1,410 23,017 23,471
Mortgage-backed
securities 3,848 4,277 105,111 107,160 28,875 30,072 542 610 138,376 142,119
Other 10,387 10,825 5,025 5,063 10,073 11,041 1,771 1,771 27,256 28,700
_____________________________________________________________________________________________________________________
Total $112,382 113,470 260,321 271,238 40,533 42,799 3,570 3,791 416,806 431,298
=====================================================================================================================
</TABLE>
<TABLE>
Maturities of Securities Held for Sale at Year-end 1993
<CAPTION>
Within 1 Year 1 to 5 Years 5 to l0 Years After l0 Years Total Total
____________________________________________________________________________________________________________________
($000 Omitted) Book Market Book Market Book Market Book Market Book Market
____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Government
obligations $ -- -- 148,925 148,204 81,638 88,267 -- -- 230,563 236,471
Other -- -- -- -- -- -- 10,153 11,588 10,153 11,588
_____________________________________________________________________________________________________________________
Total $ -- -- 148,925 148,204 81,638 88,267 10,153 11,588 240,716 248,059
=====================================================================================================================
</TABLE>
The market value of the investment portfolio at December 31, 1993
was $21.8 million above the book value. Market appreciation aggregated
$21.1 million and $19.2 million at the end of 1992 and 1991,
respectively. The Company realized $6.2 million in gains from the sale
of securities, primarily U.S. Treasury Notes. The proceeds of these
sales were reinvested in securities of similar quality and maturity,
which were designated as Held for Sale.
The following tables detail the classification of the Company's
investment securities and securities held for sale by type, and
provides information on their book value.
<TABLE>
Investment Securities at Year-end
<CAPTION>
($000 Omitted) 1993 1992 1991 1990 1989
____________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
U.S. Government obligations $ 228,157 360,622 341,719 265,746 164,417
States and political subdivisions 23,017 44,318 69,807 62,279 54,663
Mortgage-backed securities 138,376 111,455 145,821 21,286 24,492
Other 27,256 31,883 15,721 13,460 8,627
____________________________________________________________________________________
Total $ 416,806 548,278 573,068 362,771 252,199
====================================================================================
</TABLE>
<TABLE>
Securities Held for Sale at Year-end
<CAPTION>
($000 Omitted) 1993 1992 1991 1990 1989
_____________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
U.S. Government obligations $ 230,563 110,507 -- -- --
Other 10,153 10,168 -- -- --
_____________________________________________________________________________________
Total $ 240,716 120,675 -- -- --
=====================================================================================
</TABLE>
Investment income recorded in each of the last five years is set
forth in the following tables.
<TABLE>
Income from Investment Securities
<CAPTION>
($000 Omitted) (taxable equivalent) 1993 1992 1991 1990 1989
________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
U.S. Government obligations $ 16,913 26,209 25,197 21,034 16,219
States and political subdivisions 2,074 4,005 6,070 5,200 5,476
Mortgage-backed securities 8,444 12,389 4,467 2,065 2,307
Other 2,165 1,639 1,073 496 507
________________________________________________________________________________
Total $ 29,596 44,242 36,807 28,795 24,509
________________________________________________________________________________
</TABLE>
<TABLE>
Income from Securities Held for Sale
<CAPTION>
($000 Omitted) (taxable equivalent) 1993 1992 1991 1990 1989
_________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
U.S. Government obligations $ 12,797 3,671 -- -- --
Other 804 558 -- -- --
_________________________________________________________________________________
Total $ 13,601 4,229 -- -- --
==================================================================================
</TABLE>
The following tables set forth, by category of investment, changes
in taxable equivalent interest income resulting from either changes in
average balances or in average rate for 1993 as compared with 1992,
and for 1992 as compared with 1991.
<TABLE>
Changes in Income from Investment Securities
<CAPTION>
1993 vs. 1992 1992 vs. 1991
________________________________________________________________________________________________
Increase (Decrease) Due Increase (Decrease) Due
to Change in Average to Change in Average
________________________________________________________________________________________________
($000 Omitted) (taxable equivalent) Balance Rate Total Balance Rate Total
________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
U.S. Government obligations $ (4,716) (4,580) (9,296) 5,168 (4,156) 1,012
States and political subdivisions (1,450) (481) (1,931) (1,358) (707) (2,065)
Mortgage-backed securities (2,273) (1,672) (3,945) 8,109 (187) 7,922
Other 601 (75) 526 634 (68) 566
________________________________________________________________________________________________
Total $ (7,838) (6,808) (14,646) 12,553 (5,118) 7,435
================================================================================================
</TABLE>
<TABLE>
Changes in Income from Securities Held for Sale
<CAPTION>
1993 vs. 1992 1992 vs. 1991
_____________________________________________________________________________________________
Increase (Decrease) Due Increase (Decrease) Due
to Change in Average to Change in Average
_____________________________________________________________________________________________
($000 Omitted) (taxable equivalent) Balance Rate Total Balance Rate Total
_____________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
U.S. Government obligations $ 9,397 (271) 9,126 3,671 -- 3,671
Other 246 -- 246 558 -- 558
_____________________________________________________________________________________________
Total $ 9,643 (271) 9,372 4,229 -- 4,229
=============================================================================================
</TABLE>
Taxable equivalent earnings on investment securities declined 33.1
percent to $29.6 million, partially as a result of the
reclassification of certain securities into the Held for Sale
designation, and partly due to a 130 basis point decline to 6.5
percent in average taxable equivalent yield. Earnings on investment
securities in 1992 rose 20.2 percent, as a 36.0 percent increase in
volume more than offset a reduction of 11.6 percent in average taxable
equivalent yield.
U.S. Government and Agency obligations represented 60.1 percent of
the average book value of investment securities in 1993, compared to
60.3 percent in 1992 and 67.2 percent in 1991. Taxable equivalent
interest income on this segment of the portfolio decreased 35.5
percent to $16.9 million in 1993, as a generally declining trend in
interest rates combined with the reduction in book value resulting
from management's designation of a Held for Sale portfolio.
The Company's average investment in the obligations of states and
political subdivisions declined 40.2 percent from 1992 levels to $32.7
million, or 7.2 percent of the book value of the 1993 average
investment portfolio. This decrease is associated with the limited
availability of qualifying designated small issue obligations that
meet the Company's standards for credit rating, maturity and yield.
The average taxable equivalent yield on these securities in 1993 was
6.4 percent, compared to 7.3 percent in 1992 and 8.4 percent in 1991.
Taxable equivalent income on state and municipal obligations fell 48.2
percent to $2.1 million in 1993.
The Company holds a portfolio of mortgage backed securities, in
which management has invested because such instruments offer market
liquidity, relatively high yields, limited credit risk and simplified
payment collection. The primary risk connected with these instruments
is that declining interest rates will accelerate prepayment volume for
the loans supporting the securities, an event which reduces the
effective yield of the investment and exposes the amounts prepaid to
interest rate risk.
Average holdings of mortgage backed securities decreased 20.1
percent from 1992 to 1993. Holdings of mortgage backed securities
backed by U.S. Government agencies or sponsored agencies (GNMA, FNMA,
and FHLMC) increased during 1993, but the Company sold its holdings of
Collateralized Mortgage Obligations (CMOs) late in 1992. There are no
other mortgage derivative products in the Company's portfolio at
December 31, 1993. The average yield on mortgage backed securities was
7.1 percent at December 31, 1993. Income on mortgage backed securities
was $8.4 million for 1993, as compared to $12.4 million in 1992 and
$4.5 million in 1991. Other securities in portfolio at December 31,
1993 consist primarily of investment grade corporate bonds.
In May, 1993 the Financial Accounting Standards Board issued SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." The Statement is effective for fiscal years beginning
after December 15, 1993. This Statement addresses the accounting for
equity issues that have readily determinable fair values, and for all
investments in debt securities. Those investments are to be classified
in three categories and accounted for as follows: debt securities that
the Company has the positive intent and ability to hold to maturity
are classified as "held-to-maturity" and reported at amortized cost.
Debt and equity securities that are bought and held principally for
the purpose of selling them in the near term are classified as
"trading securities" and reported at fair value, with unrealized gains
and losses included in earnings. Debt and equity securities not
classified as either "held-to-maturity" or "trading securities" are
classified as "available-for-sale securities" and reported at fair
value, with unrealized gains and losses excluded from earnings and
reported in a separate component of stockholders' equity. Management
believes at this time that the Statement will have no material impact
on the financial statements.
FEDERAL FUNDS SOLD
The Company has historically allocated a significant portion of its
available resources to Federal funds sold. Factors considered by
management in determining appropriate levels for this form of
investment include: available rates on other short-term products, the
volume of short-term borrowings and large-denomination ($100,000 and
over) certificates of deposit, and overall corporate liquidity goals.
Average Federal funds balances in 1993 were $163.6 million, a 44.2
percent increase over 1992. Interest income from Federal funds sales
rose 28.9 percent in 1993 to $4.9 million. The average interest rate
on this investment continued to decline, decreasing 39.2 percent
between 1991 and 1992, and exhibiting a further 36 basis point
reduction to an average rate of 3.0 percent in 1993.
DEPOSITS
The following tables detail average consolidated deposits and
interest expense for the last five years.
<TABLE>
Average Deposits
<CAPTION>
($000 Omitted) 1993 1992 1991 1990 1989
_______________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Demand (non-interest bearing) $ 92,763 88,667 81,939 78,641 81,625
Regular savings 730,200 577,845 170,620 108,255 104,344
NOW accounts 242,876 234,128 172,864 137,443 126,286
Money market accounts 113,632 133,069 89,753 69,400 72,036
Time certificates $100,000 or more 33,441 44,592 23,415 10,081 14,513
Other time accounts 554,619 597,178 462,713 330,163 246,591
_______________________________________________________________________________________
Total $1,767,531 1,675,479 1,001,304 733,983 645,395
=======================================================================================
</TABLE>
<TABLE>
Interest on Deposits
<CAPTION>
($000 Omitted) 1993 1992 1991 1990 1989
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Regular savings $ 23,306 25,444 8,889 5,767 5,540
NOW accounts 4,224 6,406 7,179 6,538 6,148
Money market accounts 2,937 4,720 4,575 3,774 4,067
Time certificates $100,000 or more 1,819 2,578 1,362 754 1,220
Other time accounts 28,596 36,026 33,574 27,602 20,978
_________________________________________________________________________________________
Total $ 60,882 75,174 55,579 44,435 37,953
=========================================================================================
</TABLE>
The following table sets forth changes in interest expense for each
deposit category. The changes are allocated to variances in either
average balance or in rate for 1993 as compared to 1992, and for 1992
as compared to 1991.
<TABLE>
Changes in Interest Expense
<CAPTION>
1993 vs. 1992 1992 vs. 1991
__________________________________________________________________________________________
Increase (Decrease) Due Increase (Decrease) Due
to Change in Average to Change in Average
__________________________________________________________________________________________
($000 Omitted) Balance Rate Total Balance Rate Total
__________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Regular savings $ 5,806 (7,944) (2,138) 18,131 (1,576) 16,555
NOW accounts 231 (2,413) (2,182) 2,102 (2,875) (773)
Money market accounts (624) (1,159) (1,783) 1,796 (1,651) 145
Time certificates
$100.000 or more (614) (145) (759) 1,224 (8) 1,216
Other time accounts (2,444) (4,986) (7,430) 8,716 (6,264) 2,452
__________________________________________________________________________________________
Total $ 2,355 (16,647) (14,292) 31,969 (12,374) 19,595
==========================================================================================
</TABLE>
Despite an increase of $88.0 million in aggregate interest bearing
deposits, interest expense on deposits decreased $14.3 million in
1993, a reflection of continuing downward movement in interest rates.
The average rate paid on interest bearing time deposits was 3.6
percent, as compared to 4.7 percent in 1992 and 6.0 percent in 1991.
Non-interest bearing demand deposits are a significant funding
resource for the Bank, and play an important role in liability
management, with a direct effect on net income. Average demand
deposits rose 4.6 percent in 1993 to $92.8 million. These funds
represented 5.2 percent of average total deposits in 1993 as compared
to 5.3 percent in 1992 and 8.2 percent in 1991.
The categories of interest bearing deposits which experienced growth
in 1993 were regular savings and NOW accounts. Both of these products
were marketed aggressively during 1993, and the growth in outstandings
represents the attraction of new funds and expansion of Capital Region
market share.
Average regular savings account balances rose 26.4 percent to $730.2
million. Approximately half of the increase represented new customer
accounts, with the balance consisting of internal transfers and
interest credits. Despite the increase in average balances, a decline
of 121 basis points in the average rate paid on these accounts
resulted in a decrease of $2.1 million in interest expense on savings
accounts.
Average NOW account balances grew 3.7 percent to $242.9 million
during 1993. However, interest expense declined 34.1 percent in 1993
due to continuing reductions in average rates, which dropped from 4.2
percent in 1991, to 2.7 percent in 1992, and to 1.7 percent in 1993.
Other types of interest bearing deposits decreased in 1993. The
average volume of money market checking accounts decreased by 14.6
percent to $113.6 million during 1993. Other time accounts, comprised
primarily of certificates of deposit under $100,000 and Individual
Retirement Accounts, fell 7.1 percent in 1993. The average rate paid
on these accounts dropped from 7.3 percent in 1991, to 6.0 percent in
1992, and to 5.2 percent in 1993.
The Bank does not rely to any significant extent on certificates of
deposit in amounts of $100,000 or more. During 1993, the average
volume of these instruments fell to $33.4 million, a drop of 25.0
percent from the 1992 average volume of $44.6 million. The average
rate paid on these certificates declined from 5.78 percent in 1992 to
5.44 percent in 1993. The following table sets forth, by time
remaining until maturity, the aggregate amount of certificates of
deposit of $100,000 or more that were carried on the books of the
Company as of December 31, 1993.
<TABLE>
Maturity Schedule of 1993 Year-end Time Deposits
$100,000 or More
<CAPTION>
____________________________________________________________
($000 Omitted)
____________________________________________________________
<S> <C>
Under 3 months $ 12,093
3 to 6 months $ 2,915
6 to 12 months $ 2,112
Over 12 months $ 20,332
____________________________________________________________
Total $ 37,452
============================================================
</TABLE>
The following table details the classification of the Company's
average consolidated deposits by type of depositor.
<TABLE>
Average Deposits By Type of Depositor
<CAPTION>
($000 Omitted) 1993 1992 1991 1990 1989
____________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Individuals, partnerships and corporations $1,706,530 1,605,191 948,390 690,970 600,456
U.S. Government 540 525 505 620 669
States and political subdivisions 48,145 58,439 45,101 37,162 38,785
Other (certified and official checks, etc.) 12,316 11,324 7,308 5,231 5,485
____________________________________________________________________________________________________
Total $1,767,531 1,675,479 1,001,304 733,983 645,395
====================================================================================================
</TABLE>
There is no concentration of deposits whose loss could have a
material adverse effect on the business operations of TrustCo. Public
funds are secured by the pledge of collateral in accordance with
applicable state and federal regulations. TrustCo's investment
portfolio is managed in a manner which accommodates such requirements.
SHORT-TERM DEBT
Short-term debt consists primarily of securities sold under
agreements to repurchase. These transactions involve contracts under
which the Bank sells a U.S. Treasury security to a customer, while
simultaneously agreeing to repurchase the same security on a specified
future date at a predetermined price. The transactions do not normally
exceed ninety days in duration.
The average volume of the Company's short-term debt declined 31.6
percent to $17.4 million in 1993, following a 40.6 percent decline in
1992. The average rate paid on these transactions in 1993 was 2.2
percent, as compared to 3.0 percent in 1992 and 5.1 percent in 1991.
Interest expense on short-term debt for 1993 was $380 thousand, down
from $757 thousand in 1992 and $2.2 million in 1991.
The following table details consolidated short-term debt over the
past three years.
<TABLE>
Short Term Debt
<CAPTION>
Month-end High Average Outstanding
__________________________________________________________________________________________________
($000 Omitted) 1993 1992 1991 1993 1992 1991
__________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Federal funds purchased and securities
sold under agreements to repurchase $ 20,405 32,689 57,416 $17,447 25,520 42,990
==================================================================================================
</TABLE>
LONG-TERM DEBT
At December 31, 1992, consolidated long-term debt consisted solely
of $5.0 million in 9.4 percent senior notes. These obligations were
paid in full on September 30, 1993.
Consolidated long-term debt at December 31, 1993 consists entirely
of $2.75 million borrowed by ORE Subsidiary Corporation at the prime
rate under a $10 million revolving credit facility. Interest paid on
long term debt declined to $357 thousand in 1993, after aggregating
$470 thousand in both 1992 and 1991.
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses represents a charge to
expense related to potential future loss in the loan portfolio. The
amount charged in each period reflects management's assessment of the
risks inherent in the portfolio at a specific point in time, based on
loan volume, economic conditions, and the Bank's historical loan loss
experience. The 1993 provision for loan losses of $11.6 million was
8.8 percent lower than the amount charged in 1992, while the provision
of $12.7 million in 1992 was 95.6 percent higher than in 1991. The
average allowance for loan losses, as a percentage of average loans
outstanding, was 3.0 percent in 1993, as compared with 2.4 percent in
1992 and 2.6 percent in 1991.
OTHER INCOME
The following table details the major components of other income
over the past five years.
<TABLE>
Other Income
<CAPTION>
($000 Omitted) 1993 1992 1991 1990 1989
___________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Trust department income $ 4,347 3,869 3,972 3,741 3,316
Service charges on deposit accounts and other
charges and fees 6,489 6,378 3,862 2,583 3,641
Credit card processing income 881 1,035 928 985 1,038
Net gains on securities held for sale 5,865 -- -- -- --
Net gains (losses) on securities transactions 208 2,939 402 (1,924) (1,273)
Unrealized gains on trading securities 166 -- -- -- --
Gain on sale of bank premises -- -- -- -- 497
Other 1,237 1,212 683 350 284
___________________________________________________________________________________________
Total $ 19,193 15,433 9,847 5,735 6,503
===========================================================================================
</TABLE>
Total non-interest income of $19.2 million for 1993 was up 24.4
percent from 1992, which in turn increased 56.7 percent from the 1991
level. Service charges on deposit accounts and other fees represented
the largest component of other income in 1993, rising 1.7 percent to
$6.5 million. Net gains on securities designated as "held for sale"
aggregated $5.9 million in 1993, primarily as the result of sales of
U.S. Treasury Notes. Fee income in the Trust Department in 1993 was
$4.3 million, an increase of 12.4 percent over 1992 levels, which had
declined 2.6 percent since 1991.
OTHER EXPENSES
The following table provides a detailed summary of other expenses
over the past five years.
<TABLE>
Other Expenses
<CAPTION>
($000 Omitted) 1993 1992 1991 1990 1989
_______________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Salaries and employee benefits $ 16,649 15,853 11,686 9,928 9,285
Net occupancy expense of bank premises 3,446 3,534 2,483 1,856 1,956
Equipment expense 3,650 4,182 2,614 1,633 1,739
FDIC insurance 3,985 3,654 2,064 835 524
Advertising and promotional expense 999 2,168 1,486 1,129 1,568
Professional services 2,508 4,295 1,481 1,010 976
Other real estate expenses 4,679 215 1,481 -- 2
Operating supplies 1,207 1,286 878 646 939
Credit card processing expense 1,000 1,143 819 808 809
Amortization of goodwill -- 880 126 -- --
Other 5,396 5,561 3,075 4,032 5,251
_______________________________________________________________________________________
Total $ 43,519 42,771 28,193 21,877 23,049
=======================================================================================
</TABLE>
Aggregate non-interest expenses grew 1.7 percent to $43.5 million in
1993. Non-interest expenses for 1992 were 51.7 percent above 1991
levels, primarily due to the acquisition of Home & City Savings Bank.
The largest component of non-interest expense continues to be
salaries and employee benefits. These costs rose 5.0 percent in 1993
after increases of 35.7 percent in 1992 and 17.7 percent in 1991. The
increases were primarily due to routine wage adjustments, increased
payroll taxes, and the growing cost of providing employee benefits.
While compensation costs continue to represent a significant component
of non-interest expense, the effectiveness of management controls in
this area is evidenced by the Bank's consistent placement in the most
efficient quartile of comparable organizations as defined in the
Federal Financial Institutions Examination Council's Uniform Bank
Performance Reports.
Significant items within the category of other expenses for 1993
included a reduction of $1.2 million, or 53.9 percent, in advertising
and promotional expense as a result of management's decision to scale
down all advertising campaigns. Professional expenses decreased $1.8
million, or 41.6 percent in 1993, mainly as the result of eliminating
computer consultant services. These costs, which were associated with
various systems conversions, totalled $1.4 million in 1992. Other real
estate expenses increased $4.5 million in 1993, as several sizable
problem assets acquired in the Home & City purchase moved toward
resolution.
In 1990, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." Statement No. 106
requires a calculation of the present value of expected benefits to be
paid to employees after their retirement and an allocation of those
benefits to the periods in which the employees render service to earn
the benefits. The Company adopted Statement No. 106 on January 1, 1993
at a cost of $5,770,000. The Company funded the resulting liability
during the first quarter of 1993 with investments which will generate
earnings that will reduce period post retirement benefit costs in
future years.
APPLICABLE INCOME TAXES
Applicable income taxes and effective tax rates were $12.5 million
and 34.6 percent for 1993, $9.3 million and 34.8 percent for 1992 and
$4.9 million and 27.4 percent for 1991. Income taxes for financial
reporting purposes differ from the amount computed by applying the
statutory rate to income before taxes. This difference is due
primarily to tax-exempt income from certain loans and investment
securities and non-deductible expenses, primarily goodwill. For
additional information concerning income taxes, refer to Note 11 of
the Notes to Consolidated Financial Statements.
The Company currently accounts for income taxes under FASB Statement
No. 109, which changed the Company's method of accounting for income
taxes from the deferred method required under APB 11 to the asset and
liability method. Under the deferred method, annual income tax expense
is matched with pretax accounting income by providing deferred taxes
at current tax rates for timing differences between the determination
of net income for financial reporting and tax purposes. The objective
of the asset and liability method is to establish deferred tax assets
and liabilities for the temporary differences between the financial
reporting basis and the tax basis of the Company's assets and
liabilities at enacted tax rates expected to be in effect when such
amounts are realized or settled. The tax effects of temporary
differences that give rise to deferred tax assets and deferred tax
liabilities are detailed in Note 11 of the Notes to Consolidated
Financial Statements.
CAPITAL RESOURCES
TrustCo meets all the regulatory requirements for designation as a
well capitalized bank holding company. The Company has established the
regulatory standards for designation as a well capitalized company as
its internal minimum capital requirement.
Designation by the regulatory agencies as a well capitalized bank
holding company requires: a leverage ratio of 5.0 percent or greater;
a Tier I risk-based capital ratio of 6.0 percent or greater; and a
total risk-based capital ratio of 10.0 percent or greater. At December
31, 1993, Trustco had a leverage ratio of 6.67 percent, a Tier I risk-
based capital ratio of 12.06 percent, and a total risk-based capital
ratio of 13.34 percent. The Company's capital ratios were all in
excess of regulatory minimums for designation as well capitalized for
1992 and 1991 as well.
Equity capital stood at $129.9 million at December 31, 1993, an
increase of $9.5 million over the 1992 level, which in turn had grown
$9.3 million from year-end 1991. Substantially all of the increase in
equity capital in this period was the result of earnings retention. At
December 31, 1993, equity capital represented 6.6 percent of total
assets, compared with 6.2 percent at year-end 1992 and 6.3 percent at
the end of 1991. The strength of the equity capital of the Company and
its subsidiary Bank affords protection to the depositors, and also
affords the Company ready access to the debt and equity markets.
The book value of TrustCo stock has increased steadily, growing from
$8.50 per share at year-end 1991, to $9.15 at the end of 1992, and to
$9.82 per share at December 31, 1993. The Company had no commitments
for the future issuance of securities, other than its stock option
plan, in place at December 31, 1993.
Dividends paid on common stock in 1993 totalled $11.6 million, or
56.9 percent of net income. In addition, the Company paid a 2 for 1
stock split in November, 1993, while simultaneously raising the
annualized dividend rate to $1.00 per share. During 1992, cash
dividends represented 51.1 percent of income, and a 5 for 4 stock
split was paid. The 1991 cash dividend payout of 45.0 percent of
income was supplemented with a 10 percent stock dividend.
CREDIT RISK REVIEW
Much of what is discussed in this financial review is based on the
underlying principle of prudent management of the Company's resources.
Management has consistently endeavored to be appropriately responsive
to a variety of changes in the Company's markets, while at all times
preserving its financial strength. The Company has a well-established
tradition of avoiding high-risk resource allocation strategies in
favor of more secure opportunities based on sound financial
relationships. Historical levels of non-performing loans, charge-offs,
and the allowance for loan losses are all indicative of the prudence
of this approach.
However, the extension of credit involves the inherent risk that
funds advanced will not be repaid. Weighing risks against rewards
within the context of the Company's overall business strategy is the
primary task in portfolio management. This effort requires the
thorough review of a prospective borrower's business strategy,
financial statements, credit history and available collateral prior to
the extension of credit. It also requires the regular scrutiny of
existing loans, affording management the opportunity to respond
quickly to deteriorating credits in order to minimize their
consequences. The loan portfolio is subject to ongoing internal
review, as well as to periodic examination by state and federal
supervisory authorities and the Company's independent certified public
accountants.
The Company has historically experienced modest levels of net loan
losses. Net loans charged against the allowance for loan losses during
1993 were $4.4 million, as compared to $4.8 million in 1992 and $1.6
million in 1991. Net charge-offs represented 0.43 percent of average
outstanding loans in 1993, 0.48 percent in 1992, and 0.26 percent in
1991. The increase in net charge-offs after 1991 is associated with
the volume of problem credits acquired in connection with the purchase
of Home & City Savings Bank. Management currently anticipates that
charge-offs will continue in the range of 0.40 percent of average
outstanding loans.
The allowance for loan losses at December 31, 1993 was $34.1
million, or 3.2 percent of net loans outstanding as of that date. At
year-end 1992 and 1991, the allowance for loan losses represented,
respectively, 2.6 and 1.9 percent of outstanding loans. Charge-off
coverage (the ratio of the year-end allowance for loan losses to net
charge-offs for the year) is an indicator of the adequacy of the
allowance. This ratio was 7.7 times for 1993, as compared with 5.6
times for 1992 and 11.8 times for 1991. The most recent examination by
the New York State Banking Department and the Federal Reserve Bank
found that the allowance for loan losses was adequate at the date of
the examination.
The table which follows details the historical relationship among
outstanding loans, the loan loss allowance, additions to the allowance
charged to operating expense, charge-offs and recoveries.
<TABLE>
Loan Loss Analysis
<CAPTION>
($000 Omitted) 1993 1992 1991 1990 1989
_____________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Amount of loans outstanding at end of year
(less unearned income) $1,060,648 1,028,541 1,025,421 462,469 432,155
_____________________________________________________________________________________________________
Average loans outstanding during year
(less average unearned income) $1,021,984 1,005,658 625,031 443,167 406,634
=====================================================================================================
Balance of allowance at beginning of year $ 26,919 19,049 13,446 11,336 9,590
Loans charged off:
Commercial 5,866 4,857 1,129 313 --
Real estate 199 125 70 140 --
Installment including credit card and
related plans 676 1,015 616 395 750
_____________________________________________________________________________________________________
Total 6,741 5,997 1,815 848 750
_____________________________________________________________________________________________________
Recoveries of loans previously charged off:
Commercial 1,810 327 23 21 296
Real estate -- -- -- -- --
Installment including credit card and
related plans 523 847 174 237 100
_____________________________________________________________________________________________________
Total 2,333 1,174 197 258 396
_____________________________________________________________________________________________________
Net loans charged off 4,408 4,823 1,618 590 354
Additions to allowance charged to
operating expense 11,576 12,693 6,490 2,700 2,100
Allowance of acquired bank -- -- 731 -- --
_____________________________________________________________________________________________________
Balance of allowance at end of year $ 34,087 26,919 19,049 13,446 11,336
=====================================================================================================
Net charge-offs as percent
of average loans outstanding
during year (less average unearned income) 0.43% 0.48% 0.26% 0.13% 0.09%
Allowance as percent of loans outstanding
at end of year 3.21% 2.62% 1.86% 2.91% 2.62%
======================================================================================================
</TABLE>
DISCUSSION OF LOAN PORTFOLIO RISK ELEMENTS
Management's assessment of the adequacy of the allowance for loan
losses is influenced by a variety of factors, including: the Company's
standards for granting new loans and evaluating existing credits; the
component elements of the loan portfolio and the growth patterns
exhibited therein; current economic conditions; the loss potential of
loans classified by internal reviewers, supervisory authorities and
independent accountants; the level of past due and non-accrual loans;
and the Company's historical loan loss experience.
The allowance for loan losses over the past five years has averaged
2.61 percent of average loans outstanding, while net loan losses for
the same period have averaged a significantly lower 0.34 percent of
average loans. Additionally, while it is common industry practice for
the total of non-accrual loans, loans in excess of 90 days delinquent
and renegotiated loans to exceed the allowance for loan losses, the
Company's volume of loans so classified of $1.9 million at year-end
1993 and $7.4 million at year-end 1992 was far lower than the year-end
allowance for loan loss levels of $34.1 million in 1993 and $26.9
million in 1992.
The ratio of recoveries on prior period charge-offs to loans charged
off is a test of both the conservatism of charge-off practices and the
forcefulness of collection efforts. Over the past five years, the
Company's recovery ratio has averaged 27.0 percent on a weighted
basis, indicating that charge-offs are taken in a timely manner and
that recovery efforts are effective.
The adequacy of the loan loss allowance is further supported by the
lack of foreign debt in the portfolio, the absence of single-borrower
or single-industry concentrations, and the local composition of the
loan portfolio. Past experience suggests that it is not practical for
management to allocate the allowance for loan losses to specific
categories within the loan portfolio on a statistical or other basis.
NON-PERFORMING LOANS
Loans categorized as "non-performing" include those credits on a non-
accrual basis, credits contractually past due 90 days or more, and
credits whose terms have been renegotiated due to the financial
deterioration of the borrower. Non-performing loans receive
management's close attention.
Loans are placed in non-accrual status when, in the opinion of
management, the collection of additional interest is in doubt.
Thereafter, no interest is taken into income unless received in cash
or until such time as the borrower demonstrates the ability to make
scheduled payments of interest and principal. The following table sets
forth information with regard to non-performing loans:
<TABLE>
Non-performing Loans at Year-end
<CAPTION>
($000 Omitted) 1993 1992 1991 1990 1989
____________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Loans on a non-accrual basis $ 24 970 1,054 107 1,021
Loans contractually past due 90 days or more 1,853 6,438 3,340 1,772 1,229
____________________________________________________________________________________________
Total non-performing loans $ 1,877 7,408 4,394 1,879 2,250
============================================================================================
Total non-performing loans to year-end total net
loans outstanding 0.18% 0.72% 0.44% 0.41% 0.52%
============================================================================================
</TABLE>
Non-performing year-end 1993 commercial loans of $114 thousand were
0.05 percent of outstandings (compared with 1.6 percent and 0.1
percent at year-end 1992 and 1991 respectively). Real estate loans of
$1.5 million were 0.2 percent of outstandings (compared with 0.4
percent at year-end 1992 and 0.6 percent at year-end 1991). There were
$250 thousand in non-performing installment loans, or 0.9 percent of
outstandings, at year-end 1993 compared to 0.9 percent at year-end
1992 and 0.5 percent at year-end 1991. Most of the increase in non-
performing loans was due to loans acquired from Home & City Savings
Bank in 1991. With respect to loans in non-accrual status at December
31, 1993, the gross interest income that would have been recorded
during 1993 had the loans remained current was $1 thousand, and the
amount that was actually recorded amounted to $1 thousand. As of
December 31, 1993, there were no other loans classified for regulatory
purposes that management reasonably expects will materially impact
future operating results, liquidity, or capital resources.
OTHER REAL ESTATE OWNED
Real estate properties acquired in satisfaction of loans are
classified as other assets and recorded on an individual basis at the
lower of fair value minus estimated costs to sell or "cost" (defined
as the fair value at initial foreclosure). The value of real estate
owned was $6.2 million at December 31, 1993 and $5.9 million at
December 31, 1992. In-substance foreclosures were valued at $14.9
million at the end of 1993 and $20.7 million at the end of 1992. Most
of the increase in real estate owned and in-substance foreclosure was
due to assets acquired from Home & City Savings Bank in 1991.
Distribution of Assets, Liabilities and Shareholders' Equity; Interest
Rates and Interest Differential
The following table summarizes the component distribution of average
balance sheet, related interest income and expense and the average
yields on earning assets and rates on interest bearing liabilities of
the Company and the Bank on a tax equivalent basis for each of the
reported periods. Non-accrual loans are included in loans for this
analysis. When a loan is placed in non-accrual status, interest income
is recorded only to the extent actually received in cash.
<TABLE>
<CAPTION>
1993 1992 1991
__________________________________________________________________________________________________________________________
Average Average Average Average Average Average
($000 Omitted) Balance Interest Rate Balance Interest Rate Balance Interest Rate
==========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Loans, net of
unearned income<F1> $1,021,984 87,559 8.57% $1,005,658 93,532 9.30% $ 625,031 64,712 10.35%
__________________________________________________________________________________________________________________________
Securities held for sale:
U.S. Treasury securities<F1> 182,273 12,797 7.02% 48,660 3,671 7.54% -- -- --%
Other 10,160 804 7.91% 7,056 558 7.91% -- -- --%
__________________________________________________________________________________________________________________________
Total securities
held for sale 192,433 13,601 7.07% 55,716 4,229 7.59% -- -- --%
__________________________________________________________________________________________________________________________
Investment securities:
U.S. Treasury securities<F1> 274,398 16,913 6.16% 342,796 26,209 7.65% 280,966 25,197 8.97%
State and municipal
obligations<F1> 32,667 2,074 6.35% 54,652 4,005 7.33% 72,301 6,070 8.40%
Mortgage-backed securities 119,442 8,444 7.07% 149,408 12,389 8.29% 51,697 4,467 8.64%
Other<F1> 30,360 2,165 7.13% 21,969 1,639 7.46% 13,331 1,073 8.05%
__________________________________________________________________________________________________________________________
Total investment securities 456,867 29,596 6.48% 568,825 44,242 7.78% 418,295 36,807 8.80%
Federal funds sold 163,567 4,912 3.00% 113,429 3,811 3.36% 42,542 2,351 5.53%
__________________________________________________________________________________________________________________________
Total interest earning assets 1,834,851 135,668 7.39% 1,743,628 145,814 8.36% 1,085,868 103,870 9.57%
__________________________________________________________________________________________________________________________
Allowance for possible
loan losses (30,214) (23,735) (16,139)
Cash and non-interest
earning assets 142,078 132,287 80,046
__________________________________________________________________________________________________________________________
Total assets 1,946,715 $1,852,180 $1,149,775
==========================================================================================================================
Liabilities and Shareholders' Equity
Time deposits:
Regular savings & Now accounts 973,076 27,530 2.83% 811,973 31,850 3.92% 343,484 16,068 4.68%
Other time deposits 701,692 33,352 4.75% 774,839 43,324 5.59% 575,881 39,511 6.86%
__________________________________________________________________________________________________________________________
Total time deposits 1,674,768 60,882 3.64% 1,586,812 75,174 4.74% 919,365 55,579 6.05%
Short-term borrowed debt 17,447 380 2.18% 25,520 757 2.97% 42,990 2,203 5.12%
Long-term borrowed debt 3,870 357 9.22% 5,000 470 9.40% 5,000 470 9.40%
__________________________________________________________________________________________________________________________
Total interest bearing
liabilities 1,696,085 61,619 3.63% 1,617,332 76,401 4.72% 967,355 58,252 6.02%
__________________________________________________________________________________________________________________________
Demand deposits 92,763 88,667 81,939
Other liabilities 32,219 29,943 25,530
Shareholders' equity 125,648 116,238 74,951
__________________________________________________________________________________________________________________________
Total liabilities
and shareholders' equity $1,946,715 $1,852,180 $1,149,775
==========================================================================================================================
Net interest income 74,049 $69,413 $ 45,618
==========================================================================================================================
Net interest spread 3.76% 3.64% 3.55%
==========================================================================================================================
Net interest margin
(net interest income to total
interest earning assets) 4.04% 3.98% 4.20%
==========================================================================================================================
<FN>
<F1> Certain portions of income earned on certain commercial loans,
U.S. Government obligations, obligations of states and political
subdivisions, and equity securities are exempt from federal and state
taxation. Appropriate adjustments have been made to reflect the
equivalent amount of taxable income that would have been necessary to
generate an equal amount of after tax income. Federal and New York
State tax rates used to calculate income on a tax equivalent basis
were 35.0 percent and 10.35 percent respectively for 1993, and 34.0
percent and 10.35 percent respectively for 1992 and 1991.
</TABLE>
Price Range of Common Stock and Dividends Per Share
The common stock of the Company is traded on the NASDAQ National
Market System. The prices in the table are actual transactions, but
may be purchases and sales of shares between dealers and may not
include mark-ups, mark-downs or commissions.
<TABLE>
Price Range of Common Stock and Dividends Per Share
<CAPTION>
DIVIDENDS
DECLARED
RANGE OF STOCK PRICES PER SHARE
_______________________________________________
1993 1992 1993 1992
_______________ ______________ ________________
HIGH LOW HIGH LOW
_______________ _______________
<S> <C> <C> <C> <C> <C> <C>
1ST QUARTER $20.63 $17.00 $16.20 $13.60 $.200 $.160
2ND QUARTER 20.75 19.38 15.80 14.80 .200 .160
3RD QUARTER 23.25 20.00 15.80 14.20 .225 .160
4TH QUARTER 23.25 21.00 17.25 15.20 .250 .200
</TABLE>
Dividends and stock prices have been adjusted for a 2 for 1 Stock
Split in November 1993 and 5 for 4 stock split paid to shareholders in
November 1992. On December 31, 1993, the last transaction on NASDAQ of
the common stock of the Company was $22.75 a share. The Company had
3,963 shareholders of record at year end.
See Notes to Consolidated Financial Statements (1)(j) regarding
dividend restrictions.
Officers
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Robert A. McCormick
VICE PRESIDENT
Nancy A. McNamara
SECRETARY
William F. Terry
ASSISTANT SECRETARY AND TREASURER
Peter A. Zakriski
Board of Directors
Barton A. Andreoli
President,
Towne Construction and Paving Co.
Lionel O. Barthold
Vice-Chairman, Power Technologies, Inc.
(Consulting Engineers)
M. Norman Brickman
President, D. Brickman, Inc.
(Wholesale Fruit and Produce)
C.W. Carl, Jr.
Retired, Former President, The Carl Company
(Department Store)
Robert A. McCormick
President and Chief Executive Officer
Trustco Bank New York
Nancy A. McNamara
Senior Vice President
Trustco Bank New York
Dr. John S. Morris
President Emeritus, Union College and Former Chancellor, Union University
James H. Murphy, D.D.S.
Orthodontist
Richard J. Murray, Jr.
President, R.J. Murray Co., Inc.
(Air Conditioning Distributors)
Kenneth C. Petersen
President,
Schenectady International, Inc.
William J. Purdy
President,
Welbourne & Purdy Realty, Inc.
Daniel J. Rourke, M.D.
Physician
William F. Terry
Senior Vice President and Secretary
Trustco Bank New York
Philip J. Thompson
Retired, Former Vice President, and Director
New York Telephone
Directors of TrustCo Bank Corp NY are also Directors of Trustco Bank New York
HONORARY DIRECTORS
Donald E. Craig
Dr. Caryl P. Haskins
Bernard J. King
H. Gladstone McKeon
William H. Milton, III
Anthony M. Salerno
Edwin O. Salisbury
Harry E. Whittingham, Jr.
Henry D. Wright
Officers
Trustco Bank
New York
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
Robert A. McCormick
SENIOR VICE PRESIDENT
Nancy A. McNamara
SENIOR VICE PRESIDENT
Ralph A. Pidgeon
SENIOR VICE PRESIDENT AND SECRETARY
William F. Terry
BANK SERVICES, FINANCIAL MANAGEMENT, INFORMATION SERVICES, TRUST
Senior Vice President
William F. Terry
BANK SERVICES
Administrative Vice President
Peter A. Zakriski
FINANCIAL MANAGEMENT
Administrative Vice President
Linda C. Christensen
INFORMATION SERVICES
Administrative Vice President
William H. Milton
Senior Information Services Officer
Danielle M. Eddy
TRUST DEPARTMENT
Administrative Vice President
Joseph A. Gorman, III
Vice President and Senior Trust Officer
James Niland
Vice President and Trust Officer
Matthew G. Waschull
Trust Officers
Christopher J. Fagan
John P. Fulgan
Investment Officer
Robert Scribner
AUDITOR
John C. Fay
BRANCH ADMINISTRATION, MARKETING and COMMUNITY RELATIONS
Senior Vice President
Ralph A. Pidgeon
MARKETING
Vice President
Madeline S. Busch
BRANCH OFFICERS
Richard E. Bailey
Thomas H. Lauster
James H. Tyler
LOAN DIVISION and OPERATIONS
Senior Vice President
Nancy A. McNamara
LOAN DIVISION
COMMERCIAL LOANS
Vice Presidents
Donald J. Csaposs
George W. Wickswat
Senior Commercial Loan Officer
Nancy E. Wurth
INSTALLMENT LOANS
Senior Installment Loan Officer
Thomas H. Poitras
MORTGAGE LOANS
Senior Mortgage Officer
Elinore J. Vine
OPERATIONS
Administrative Vice President
James D. McLoughlin
PERSONNEL
Vice President
Ann M. Noble
Management Information Officer
Lynn D. Hackler
Branch Locations
Trustco Bank
New York
Altamont Ave. Office
1400 Altamont Ave., Rotterdam
Telephone: 356-1317
Altamont Ave. West Office
1900 Altamont Ave., Rotterdam
Telephone: 355-1900
Bay Road Office
292 Bay Road, Queensbury
Telephone: 792-2691
Brandywine Office
State St. at Brandywine Ave.,
Schenectady
Telephone: 346-4295
Central Avenue Office
163 Central Ave., Albany
Telephone: 426-7291
Clifton Park Office
1018 Route 146, Clifton Park
Telephone: 371-8451
Clifton Country Road Office
7 Clifton Country Road
Clifton Park
Telephone: 371-5002
Colonie Office
1892 Central Ave.,
Colonie Plaza, Colonie
Telephone: 456-0041
Delmar Office
167 Delaware Ave., Delmar
Telephone: 439-9941
East Greenbush Office
501 Columbia Turnpike,
Rensselaer
Telephone: 479-7233
Glens Falls Office
3 Warren Street, Glens Falls
Telephone: 798-8131
Greenwich Office
131 Main St., Greenwich
Telephone: 692-2233
Guilderland Office
3900 Carman Road, Schenectady
Telephone: 355-4890
Halfmoon Office
Country Dollar Plaza, Halfmoon
Telephone: 371-0593
Hoosick Falls Office
47 Main St., Hoosick Falls
Telephone: 686-5352
Hudson Office
507 Warren St., Hudson
Telephone: 828-9434
Latham Office
1 Johnson Road, Latham
Telephone: 785-0761
Loudon Plaza Office
372 Northern Blvd., Albany
Telephone: 462-6668
Madison Avenue Office
1084 Madison Ave., Albany
Telephone: 489-4711
Main Office
320 State St., Schenectady
Telephone: 377-3311
Mayfair Office
Saratoga Road at Mayfair,
Glenville
Telephone: 399-9121
Mont Pleasant Office
Crane St. at Main Ave.,
Schenectady
Telephone: 346-1267
New Scotland Office
301 New Scotland Ave., Albany
Telephone: 438-7838
Newton Plaza Office
588 New Loudon Road, Latham
Telephone: 786-3687
Niskayuna-Woodlawn Office
3461 State St., Schenectady
Telephone: 377-2264
Plaza Seven Office
1208 Troy-Schenectady Road,
Latham
Telephone: 785-4744
Queensbury Office
33 Quaker Road, Queensbury
Telephone: 798-7226
Rotterdam Office
Curry Road Shopping Ctr.,
Rotterdam
Telephone: 355-8330
Rotterdam Square Office
2 Campbell Road, Rotterdam
Telephone: 377-2393
Route 9 Office--Latham
754 New Loudon Rd., Latham
Telephone: 786-8816
Sheridan Plaza Office
1350 Gerling St., Schenectady
Telephone: 377-8517
Shoppers' World Office
Old Rte. 146 and Plank Rd.,
Clifton Park
Telephone: 383-6851
State Farm Road Office
Route 20 and 155 South,
Guilderland
Telephone: 452-6913
State Street Office
112 State St., Albany
Telephone: 436-9043
Stuyvesant Plaza Office
Western Ave. at Fuller Road,
Albany
Telephone: 489-2616
Tanners Main Office
345 Main Street, Catskill
Telephone: 943-2500
Tanners West Side Office
238 West Bridge St., Catskill
Telephone: 943-5090
Troy Office
5th Ave., and State St., Troy
Telephone: 274-5420
Union Street East Office
1700 Union St., Schenectady
Telephone: 382-7511
Upper New Scotland Office
583 New Scotland Ave., Albany
Telephone: 438-6611
Upper Union Street Office
1620 Union St., Schenectady
Telephone: 374-4056
Wilton Mall Office
Route 50, Saratoga Springs
Telephone: 583-1716
Wolf Road Office
34 Wolf Road, Albany
Telephone: 458-7761
General Information
ANNUAL MEETING
Monday, May 16, 1994
12:00 Noon
Trust Building
192 Erie Boulevard
Schenectady, New York 12305
CORPORATE HEADQUARTERS
320 State Street
Schenectady, New York 12305
(518-377-3311)
DIVIDEND REINVESTMENT PLAN
A Dividend Reinvestment Plan is available to shareholders of TrustCo
Bank Corp NY. It provides for the reinvestment of cash dividends and
optional cash payments to purchase additional shares of TrustCo stock.
The Plan is free of administrative charges, and provides a convenient
method of acquiring additional shares. Trustco Bank New York, our
wholly owned bank subsidiary, acts as administrator for this service,
and has designated Glens Falls National Bank and Trust Company to act
as agent for shareholders in these transactions. Shareholders who want
additional information may contact the TrustCo Shareholder Services
Department (518-381-3699, ext. 1292).
EQUAL OPPORTUNITY AT TRUSTCO
Trustco Bank New York is an Affirmative Action Equal Opportunity
Employer.
FORM 10-K
TrustCo Bank Corp NY will provide without charge a copy of its Form
10-K upon written request.
Requests and related inquiries should be directed to William F. Terry,
Secretary, TrustCo Bank Corp NY, P.O. Box 1082, Schenectady, New York
12301-1082.
NASDAQ SYMBOL:TRST
The Corporation's common stock is traded on the NASDAQ National Market
System.
SUBSIDIARIES:
Trustco Bank New York
Schenectady, New York
Member FDIC
ORE Subsidiary Corp.
Schenectady, New York
TRANSFER AGENT
Trustco Bank New York
Securities Department
P.O Box 380
Schenectady, New York 12301-380
[DESCRIPTION] EXHIBIT 21 TO FORM 10-K
Exhibit 21
LIST OF SUBSIDIARIES OF TRUSTCO
Trustco Bank New York New York State chartered trust company
ORE Subsidiary Corp. New York corporation
[DESCRIPTION] EXHIBIT 23 TO FORM 10-K
Exhibit 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
TrustCo Bank Corp NY:
We consent to incorporation by reference in the Registration
Statements, Form S-8 (No. 33-43153) filed on October 3, 1991, Form S-8
(No. 33-67176) filed on August 6, 1993 of TrustCo Bank Corp NY and
subsidiaries of our report dated January 26, 1994, relating to the
consolidated statements of condition of TrustCo Bank Corp NY and
subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income, changes in shareholders' equity,
and cash flows for each of the years in the three-year period ended
December 31, 1993, which report appears in the December 31, 1993
Annual Report on Form 10-K of TrustCo Bank Corp NY.
/s/KPMG Peat Marwick
______________________________________
KPMG Peat Marwick
Albany, New York
March 29, 1994
[DESCRIPTION] EXHIBIT 24 TO FORM 10-K
Exhibit 24
POWER OF ATTORNEY
The undersigned persons do hereby appoint William F. Terry or Peter A.
Zakriski as a true and lawful Attorney In Fact for the sole purpose of
affixing their signatures to the 1993 Annual Report (Form 10-K) of
TrustCo Bank Corp NY to the Securities and Exchange Commission.
/s/Barton A. Andreoli /s/Lionel O. Barthold
________________________________ ____________________________
Barton A. Andreoli Lionel O. Barthold
/s/M. Norman Brickman /s/Charles W. Carl,Jr.
________________________________ ____________________________
M. Norman Brickman Charles W. Carl, Jr.
/s/Robert A. McCormick /s/Nancy A. McNamara
________________________________ ____________________________
Robert A. McCormick Nancy A. McNamara
/s/Dr. John S. Morris /s/Dr. James H. Murphy
________________________________ ____________________________
Dr. James S. Morris Dr. James H. Murphy
/s/Richard J. Murray, Jr. /s/Kenneth C. Petersen
________________________________ ____________________________
Richard J. Murray, Jr. Kenneth C. Petersen
/s/William J. Purdy /s/Dr. Daniel J. Rourke
________________________________ ____________________________
William J. Purdy Dr. Daniel J. Rourke
/s/William F. Terry /s/Philip J. Thompson
________________________________ ____________________________
William F. Terry Philip J. Thomspon
Sworn to before me this
15th day of February 1994.
/s/Joan Clark
________________________________
Joan Clark
Notary Public, State of New York
Qualified in Albany County
No. 01CL4822282
Commission Expires Nov. 30, 1994
[DESCRIPTION] EXHIBIT 99 TO FORM 10-K
Exhibit 99
INDEPENDENT AUDITORS' REPORT
KPMG Peat Marwick
Certified Public Accountants
74 North Pearl Street
Albany, New York 12207
The Board of Directors and Shareholders of TrustCo Bank Corp NY:
We have audited the accompanying consolidated statements of condition
of TrustCo Bank Corp NY and subsidiaries as of December 31, 1993 and
1992, and the related consolidated statements of income, changes in
shareholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1993. These consolidated
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of TrustCo Bank Corp NY and subsidiaries as of December 31, 1993 and
1992, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 31, 1993, in
conformity with generally accepted accounting principles.
As discussed in notes 1 and 11 to the consolidated financial
statements, in 1993 the Company adopted the provisions of the
Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" which
changed its method of accounting for income taxes. As discussed in
note 12 to the consolidated financial statements, the Company also
adopted the provisions of the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other than Pensions" in 1993
which changed its method of accounting for postretirement benefits
other than pensions.
/s/KPMG Peat Marwick
______________________________________
KPMG Peat Marwick
January 26, 1994
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) 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.
TrustCo Bank Corp NY
_____________________________
Robert A. McCormick
President
(chief executive officer)
_____________________________
William F. Terry
Secretary
(chief financial officer)
_____________________________
Peter A. Zakriski
Treasurer
(chief accounting officer)
Date: March 22, 1993
