UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended Commission File Number 0-10592
June 30, 1998
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:
(Title of class)
Common
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes.(x) No.( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Number of Shares Outstanding
Class of Common Stock as of July 27, 1998
--------------------------- ----------------------
$1 Par Value 23,295,166
<PAGE>
TrustCo Bank Corp NY
INDEX
Part I. FINANCIAL INFORMATION PAGE NO.
Item 1. Interim Financial Statements (Unaudited): Consolidated 1
Statements of Income for the Three Months and Six Months Ended
June 30, 1998 and 1997
Consolidated Statements of Financial Condition as of June 30, 2
1998 and December 31, 1997
Consolidated Statements of Cash Flows for the Six Months Ended 3 - 4
June 30, 1998 and 1997
Notes to Consolidated Interim Financial Statements 5 - 8
Independent Auditors' Report 9
Item 2. Management's Discussion and Analysis 10 - 19
Item 3.
Quantitative and Qualitative Disclosures About Market Risk 20
Part II. OTHER INFORMATION
Item 1. Legal Proceedings -- None
Item 2. Changes in Securities -- None
Item 3. Defaults Upon Senior Securities --None
Item 4. Submissions of Matters to Vote of Security Holders -- Annual 23
Meeting
Item 5. Other Information 24
<PAGE>
Item 6.Exhibits and Reports on Form 8-K
(a) Exhibits
Reg S-K (Item 601)
Exhibit No. Description Page No.
- ------------ ------------------------------------------------ -------------
22 Submission of Matters to Vote of Security 23
Holders -- Annual Meeting
(b) Reports on Form 8-K
Filing of Form 8-K on May 19, 1998, regarding May 19, 1998, letter to
shareholders which contained discussion of May 18, 1998, annual meeting of
shareholders, and a press release dated May 19, 1998, declaring a cash dividend
of $0.275 payable on July 1, 1998, to shareholders of record June 12, 1998,
incorporated herein by reference.
Filing of Form 8-K on July 21, 1998, regarding two press releases dated July 21,
1998, detailing second quarter financial results, incorporated herein by
reference.
<PAGE>
<TABLE>
TRUSTCO BANK CORP NY
Consolidated Statements of Income (Unaudited)
(dollars in thousands, except per share data)
<CAPTION>
3 Months Ended 6 Months Ended
June 30 June 30
1998 1997 1998 1997
Interest income:
<S> <C> <C> <C> <C>
Interest and fees on loans $ 27,805 27,088 55,687 53,900
Interest on U. S. Treasuries and agencies 3,824 7,579 8,902 15,025
Interest on states and political
subdivisions 1,538 1,324 3,059 2,614
Interest on mortgage-backed securities 2,963 2,189 5,872 3,778
Other 1,388 428 2,279 864
Interest on federal funds sold 6,296 4,255 11,418 8,577
Total interest income 43,814 42,863 87,217 84,758
Interest expense:
Interest on deposits:
Interest-bearing checking 937 899 1,845 1,784
Savings 5,228 5,664 10,343 11,251
Money market deposit accounts 415 435 832 877
Certificates of deposit of $100,000 or more 1,780 1,415 3,472 2,737
Other time 12,194 11,591 24,250 22,926
Interest on short-term borrowings 1,904 1,373 3,471 2,690
Total interest expense 22,458 21,377 44,213 42,265
Net interest income 21,356 21,486 43,004 42,493
Provision for loan losses 1,558 1,185 2,930 2,395
Net interest income after provision
for loan losses 19,798 20,301 40,074 40,098
Noninterest income:
Trust department income 2,024 1,698 3,699 3,270
Fees for other services to customers 2,150 1,878 4,206 3,682
Net gain/(loss) on securities available for sale 104 (295) 136 (790)
Other 1,069 528 1,860 1,183
Total noninterest income 5,347 3,809 9,901 7,345
Noninterest expenses:
Salaries and employee benefits 5,662 5,782 11,459 11,497
Net occupancy expense 1,135 1,217 2,400 2,302
Equipment expense 1,346 1,294 2,594 2,051
FDIC insurance expense 61 62 123 123
Professional services 792 950 1,379 2,068
Other real estate expenses 36 106 362 295
Other 2,267 2,176 4,511 4,455
Total noninterest expenses 11,299 11,587 22,828 22,791
Income before taxes 13,846 12,523 27,147 24,652
Applicable income taxes 5,180 4,670 10,103 9,206
Net income $ 8,666 7,853 17,044 15,446
Net income per Common Share:
- Basic $ 0.37 0.33 0.73 0.66
- Diluted $ 0.36 0.33 0.70 0.64
Per share data has been adjusted for the 15% stock split declared August, 1997.
See accompanying notes to consolidated interim financial statements.
-1-
</TABLE>
<PAGE>
<TABLE>
TRUSTCO BANK CORP NY
Consolidated Statements of Financial Condition
(dollars in thousands, except share data)
<CAPTION>
06/30/98 12/31/97
ASSETS: (unaudited)
<S> <C> <C>
Cash and due from banks $ 35,185 42,740
Federal funds sold 445,000 395,000
Total cash and cash equivalents 480,185 437,740
Securities available for sale:
U. S. Treasuries and agencies 187,847 278,823
States and political subdivisions 115,145 113,787
Mortgage-backed securities 170,725 155,080
Other 131,698 54,209
Total securities available for sale 605,415 601,899
Loans:
Commercial 192,864 190,651
Residential mortgage loans 935,153 906,404
Home equity line of credit 158,438 172,448
Installment loans 27,096 29,989
Total loans 1,313,551 1,299,492
Less:
Allowance for loan losses 54,667 53,455
Unearned income 1,117 1,216
Net loans 1,257,767 1,244,821
Bank premises and equipment 17,547 18,609
Real estate owned 7,490 9,309
Other assets 65,791 59,887
Total assets $ 2,434,195 2,372,265
LIABILITIES:
Deposits:
Demand $ 140,672 130,345
Interest-bearing checking 238,403 240,699
Savings accounts 663,962 650,601
Money market deposit accounts 57,356 57,021
Certificates of deposit (in denominations of
$100,000 or more) 128,481 112,599
Other time 843,160 830,598
Total deposits 2,072,034 2,021,863
Short-term borrowings 129,478 127,850
Accrued expenses and other liabilities 49,054 43,727
Total liabilities 2,250,566 2,193,440
SHAREHOLDERS' EQUITY:
Capital stock par value $1; 50,000,000 shares authorized,
and 24,276,428 and 24,257,382 shares issued June 30, 1998
and December 31, 1997, respectively 24,276 24,257
Surplus 113,301 112,702
Undivided profits 36,342 32,119
Accumulated other comprehensive income:
Net unrealized gain on securities available for sale 20,251 15,851
Treasury stock at cost - 1,004,268 and 855,850 shares at
June 30, 1998 and December 31, 1997, respectively (10,541) (6,104)
Total shareholders' equity 183,629 178,825
Total liabilities and shareholders' equity $ 2,434,195 2,372,265
See accompanying notes to consolidated interim financial statements.
- 2 -
</TABLE>
<PAGE>
<TABLE>
TRUSTCO BANK CORP NY
Consolidated Statements of Cash Flows (Unaudited)
(dollars in thousands)
<CAPTION>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
SIX MONTHS ENDED June 30, 1998 1997
-------- --------
Cash flows from operating activities:
<S> <C> <C>
Net income............................................... $ 17,044 15,446
-------- --------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 1,062 1,545
Gain on sales of fixed assets.......................... (587) ---
Provision for loan losses.............................. 2,930 2,395
Loss on sale of securities available for sale.......... 2 858
Gain on sale of securities available for sale.......... (138) (68)
Provision for deferred tax benefit..................... (2,076) (2,511)
(Increase)/decrease in taxes receivable................. (3,135) 1,168
Decrease in interest receivable........................ 593 230
Increase/(decrease) in interest payable................ 51 (59)
(Increase)/decrease in other assets..................... (2,941) 3,992
Increase in accrued expenses........................... 5,313 3,375
-------- --------
Total adjustments.................................... 1,074 10,925
-------- --------
Net cash provided by operating activities................ 18,118 26,371
-------- --------
Cash flows from investing activities:
Proceeds from sales of securities available for sale... 29,522 72,686
Purchase of securities available for sale.............. (181,723) 204,379)
Proceeds from maturities and calls
of securities available for sale...................... 156,261 83,367
Net increase in loans.................................. (18,095) (22,308)
Proceeds from dispositions of real estate owned........ 2,653 2,379
Proceeds from sales of fixed assets.................... 1,474 ---
Capital expenditures................................... (887) (1,159)
-------- --------
Net cash used in investing activities................ (10,795) (69,414)
-------- --------
Cash flows from financing activities:
Net increase in deposits............................... 50,171 26,712
Increase in short-term borrowing....................... 1,628 3,583
Proceeds from exercise of stock options................ 170 468
Proceeds from sale of treasury stock................... 3,065 890
Purchase of treasury stock............................. (7,054) (1,851)
Dividends paid......................................... (12,858) (11,209)
-------- --------
Net cash provided by financing activities............ 35,122 18,593
-------- --------
Net increase/(decrease) in cash and cash equivalents..... 42,445 (24,450)
Cash and cash equivalents at beginning of period......... 437,740 355,779
-------- --------
Cash and cash equivalents at end of period............... 480,185 331,329
======== ========
See accompanying notes to consolidated interim financial statements. (Continued)
-3-
</TABLE>
<PAGE>
<TABLE>
TRUSTCO BANK CORP NY
Consolidated Statements of Cash Flows Continued (Unaudited)
(dollars in thousands)
<CAPTION>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
SIX MONTHS ENDED June 30, 1998 1997
-------- --------
<S> <C> <C>
Interest paid......................................... $ 44,162 42,324
Income taxes paid..................................... 12,370 10,549
Transfer of loans to real estate owned................ 2,219 6,576
Increase/(decrease) in dividends payable.............. (37) 13
Change in unrealized gain on securities
available for sale-gross of deferred taxes........... (7,440) (4,603)
Change in deferred tax effect on unrealized gain
on securities available for sale..................... 3,040 1,841
See accompanying notes to consolidated interim financial statements.
</TABLE>
-4-
<PAGE>
TrustCo Bank Corp NY
Notes to Consolidated Interim Financial Statements
(Unaudited)
1. Financial Statement Presentation
In the opinion of the management of TrustCo Bank Corp NY (the Company), the
accompanying unaudited Consolidated Interim Financial Statements contain all
adjustments necessary to present fairly the financial position as of June 30,
1998, the results of operations for the three months and six months ended June
30, 1998 and 1997, and the cash flows for the six months ended June 30, 1998 and
1997. The accompanying Consolidated Interim Financial Statements should be read
in conjunction with the TrustCo Bank Corp NY year-end Consolidated Financial
Statements, including notes thereto, which are included in TrustCo Bank Corp
NY's 1997 Annual Report to Shareholders on Form 10-K.
<TABLE>
2.ab Earnings Per Share
A reconciliation of the component parts of earnings per share for the three
month and six month periods ended June 30, 1998 and 1997 follows:
<CAPTION>
Weighted
(In thousands, Net Average Shares Per Share
except per share data) Income Outstanding Amounts
--------------------------------------------
For the quarter ended June 30, 1998:
Basic EPS:
Net income available to
<S> <C> <C> <C>
common shareholders.............. $8,666 23,308 $0.37
Effect of Dilutive Securities:
Stock options...................... ------ 970 -------
--------------------------------------------
Diluted EPS $8,666 24,278 $0.36
============================================
For six months ended June 30, 1998:
Basic EPS:
Net income available to
common shareholders.............. $17,044 23,341 $0.73
Effect of Dilutive Securities:
Stock options...................... ------- 958 -------
--------------------------------------------
Diluted EPS $17,044 24,299 $0.70
============================================
-5-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Weighted Average
(In thousands, Net Shares Per Share
except per share data) Income Outstanding Amounts
--------------------------------------------
For the quarter ended June 30, 1997:
Basic EPS:
Net income available to
<S> <C> <C> <C>
common shareholders.............. $7,853 23,473 $0.33
Effect of Dilutive Securities:
Stock options...................... ------- 608 -------
--------------------------------------------
Diluted EPS $7,853 24,081 $0.33
============================================
For the six months ended June 30, 1997:
Basic EPS:
Net income available to
common shareholders.............. $15,446 23,459 $0.66
Effect of Dilutive Securities:
Stock options..................... ------- 649 -------
--------------------------------------------
Diluted EPS $15,446 24,108 $0.64
============================================
</TABLE>
3.ab Comprehensive Income
On January 1, 1998, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," (Statement 130).
This Statement establishes standards for reporting and display of comprehensive
income and its components. Comprehensive income includes the reported net income
of a company adjusted for items that are currently accounted for as direct
entries to equity, such as the mark to market adjustment on securities available
for sale, foreign currency items and minimum pension liability adjustments. At
the Company, comprehensive income represents net income plus other comprehensive
income, which consists of the net change in unrealized gains or losses on
securities available for sale for the period. Accumulated other comprehensive
income represents the net unrealized gains or losses on securities available for
sale as of the balance sheet dates.
Comprehensive income for the three month period ended June 30, 1998 and 1997 was
$14,504,000 and $13,263,000 respectively, and $21,444,000 and $18,208,000 for
the six month period ended June 30, 1998 and 1997, respectively. The following
summarizes the components of other comprehensive income:
-6-
<PAGE>
<TABLE>
Other Comprehensive Income (dollars in thousands)
Three months ended June 30
Unrealized gains on securities: 1998 1997
-----------------------------
<CAPTION>
Unrealized holding gains arising during period, net of tax (pre-tax amount
of $9,975 for 1998 and $8,852 for 1997)
<S> <C> <C>
$5,899 5,231
Reclassification adjustment for net gain/(loss) realized in net income
during period, net of tax (pre-tax gain of $104 for 1998 and pre-tax loss of
$295 for 1997)
61 (179)
-----------------------------
Other comprehensive income $5,838 5,410
=============================
Six months ended June 30
Unrealized gains on securities: 1998 1997
-----------------------------
Unrealized holding gains arising during period, net of tax (pre-tax amount
of $7,576 for 1998 and $3,813 for 1997)
$4,480 2,295
Reclassification adjustment for net gain/(loss) realized in net income
during period, net of tax (pre-tax gain of $136 for 1998 and pre-tax loss of
$790 for 1997)
80 (467)
-----------------------------
Other comprehensive income $4,400 2,762
=============================
</TABLE>
4. Recent Accounting Pronouncements
In February 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits," (Statement 132), which amends
the disclosure requirements of Statement of Financial Accounting Standards No.
87, "Employers' Accounting for Pensions," (Statement 87), Statement of Financial
Accounting Standards No. 88, "Employers' Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for Termination Benefits,"
(Statement 88), and Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions,"
(Statement 106). Statement 132 standardizes the disclosure requirements of
Statement 87 and Statement 106 to the extent practicable and recommends a
parallel format for presenting information about pensions and other
postretirement benefits. This Statement is applicable to all entities and
addresses
<PAGE>
disclosure only. The Statement does not change any of the measurement
or recognition provisions provided for in Statements 87, 88, or 106. The
Statement is effective for fiscal years beginning after December 15, 1997.
Management anticipates providing the required disclosures in the December 31,
1998 consolidated financial statements.
In June, 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities," (Statement
133), which establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. This Statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. Management is
currently evaluating the impact of this Statement on the Company's consolidated
financial statements.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
TrustCo Bank Corp NY:
We have reviewed the consolidated statement of financial condition of TrustCo
Bank Corp NY and subsidiaries (the Company) as of June 30, 1998, and the related
consolidated statements of income for the three month and six month periods
ended June 30, 1998 and 1997, and the consolidated statements of cash flows for
the six month periods ended June 30, 1998 and 1997. These consolidated financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the consolidated financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated statement of financial condition of TrustCo Bank
Corp NY and subsidiaries as of December 31, 1997 and the related consolidated
statements of income, changes in shareholders' equity, and cash flows for the
year then ended (not presented herein); and in our report dated January 23,
1998, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
consolidated statement of financial condition as of December 31, 1997, is fairly
stated, in all material respects, in relation to the consolidated statement of
financial condition from which it has been derived.
/s/KPMG Peat Marwick LLP
- ------------------------------
KPMG Peat Marwick LLP
Albany, New York
July 10, 1998
<PAGE>
TrustCo Bank Corp NY
Management's Discussion and Analysis
June 30, 1998
The review that follows focuses on the factors affecting the financial
condition and results of operations of TrustCo Bank Corp NY ("TrustCo" or "
Company") during the three month and six month periods ended June 30, 1998,
with comparisons to 1997 as applicable. Net interest income and net interest
margin are presented on a fully taxable equivalent basis in this discussion.
The consolidated interim financial statements and related notes, as well as
the 1997 Annual Report to Shareholders, should be read in conjunction with
this review. Amounts in prior period consolidated interim financial statements
are reclassified whenever necessary to conform to the current period's
presentation. Per share results have all been adjusted for the 15% stock split
effective August 1997.
Statements included in this review and in future filings by TrustCo with the
Securities and Exchange Commission, in TrustCo's press releases, and in oral
statements made with the approval of an authorized executive officer, which
are not historical or current facts, are "forward-looking statements" made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, and are subject to certain risks and uncertainties that
could cause actual results to differ materially from historical earnings and
those presently anticipated or projected. TrustCo wishes to caution readers
not to place undue reliance on any such forward-looking statements, which
speak only as of the date made. The following important factors, among others,
in some cases have affected and in the future could affect TrustCo's actual
results, and could cause TrustCo's actual financial performance to differ
materially from that expressed in any forward-looking statement: (1) credit
risk, (2) interest rate risk, (3) competition, (4) certain vendors of critical
systems or services failing to comply with Year 2000 programming issues, (5)
changes in the regulatory environment, and (6) changes in general business and
economic trends. The foregoing list should not be construed as exhaustive, and
the Company disclaims any obligation subsequently to revise any
forward-looking statements to reflect events or circumstances after the date
of such statements, or to reflect the occurrence of anticipated or
unanticipated events.
Following this discussion is the table "Distribution of Assets, Liabilities
and Shareholders' Equity: Interest Rates and Interest Differential" which
gives a detailed breakdown of TrustCo's average interest earning assets and
interest bearing liabilities for the three months and six months ended June
30, 1998 and 1997.
Overview
TrustCo recorded net income of $8.7 million, or $0.36 diluted earnings per
share for the three month period ended June 30, 1998, as compared to net
income of $7.9 million and diluted earnings per share of $0.33 for the same
time period in 1997. For the six months ended June 30, 1998, TrustCo recorded
net income of $17.0 million or $0.70 diluted earnings per share compared to
$15.4 million and $0.64 diluted earnings per share in the comparable period in
1997.
<PAGE>
The primary factors accounting for the year to date increase in net income are:
` A 6% increase in the average earning assets to $2.3 billion, and
` An increase in noninterest income (excluding the effect of net
gains/losses on securities transactions) of $1.6 million to $9.8
million.
These increases to net income were partially offset by:
` Reduction in the net interest margin to 3.85% for 1998 compared
to 4.04% for 1997.
Asset/Liability Management
The Company strives to generate superior earnings capabilities through a mix of
core deposits, funding a prudent mix of earning assets. This is, in its most
fundamental form, the essence of asset/liability management. Additionally,
TrustCo attempts to maintain adequate liquidity and reduce the sensitivity of
net interest income to changes in interest rates to an acceptable level while
enhancing profitability both on a short term and long term basis.
Earning Assets
The average balance of interest earning assets increased by $157.4 million to
$2.3 billion during the second quarter of 1998 compared to 1997. The average
yield on earning assets was 7.63% in 1998's second quarter compared to 7.99% in
1997.
For the six month period ended June 30, 1998, average interest earning assets
increased by $138.3 million to $2.3 billion. The average yield on earning assets
was 7.71% in 1998 compared to 7.96% in 1997.
Included in the tables "Distribution of Assets, Liabilities and Shareholders'
Equity: Interest Rates and Interest Differential" is a detailed breakdown of
TrustCo's average earning assets and interest bearing liabilities for the three
month and six month periods ended June 30, 1998 and 1997.
Loans
During the second quarter of 1998, the loan portfolio grew by $61.3 million to
$1.3 billion from the $1.2 billion for the comparable period in 1997. The
average yield on the portfolio decreased 19 basis points to 8.54% for the second
quarter of 1998 compared to 8.73% for 1997. This resulted in total interest
income of $27.9 million for 1998 and $27.2 million for 1997. During the quarter,
the residential mortgage loan balances increased $97.7 million to $927.0 million
compared to $829.2 million for the second quarter of 1997. The other categories
of loans all experienced decreases during the quarter as a result of increased
<PAGE>
competition and run off. The residential real estate loan is the principal
product in the TrustCo lending area. Through aggressive pricing and low closing
costs the Company has been able to attract new borrowers. All loans are held in
the portfolio and are not sold into the secondary markets. Residential real
estate loans are originated by TrustCo employees through the network of branch
facilities, primarily in the upstate New York territory.
For the six month period ended June 30, 1998, the average balance in the loan
portfolio was $1.3 billion compared to $1.2 billion for the comparable period in
1997. The average yield decreased 13 basis points to 8.59% for the 1998 period
compared to 8.72 for the comparable period in 1997. The increase in the average
balances more than offset the reduction in rates thereby causing an increase in
loan interest income to $55.9 million for the six months of 1998.
Securities Available for Sale
During the second quarter of 1998, the average balance of securities available
for sale were $579.7 million with a yield of 7.23%, compared to $632.4 million
for the second quarter of 1997 with a yield of 7.71%. The combination of the
decrease in average balance and the reduction in the yields combined to cause a
decrease in interest income on securities available for sale of $1.7 million
between the second quarter of 1998 and 1997.
The six month results reflect the same principal trends as was noted for the
second quarter. The total average balance of securities available for sale
during the six months of 1998 was $592.7 million with an average yield of 7.30%
compared to an average balance for 1997 of $613.3 million with a yield of 7.71%.
Reflected in both the second quarter and six month results are reductions in the
average balances invested in securities issued by the U.S. Government or its
agencies that are "callable" by the agency. As interest rates in the market have
decreased, these securities were called by the agency and consequently resulted
in TrustCo having additional funds in overnight investments. Through the second
quarter there has also been an increase in the amount invested in
mortgage-backed securities. These are pass through securities and are secured by
the underlying mortgage loans and government guarantees. With the types of
mortgage-backed securities that TrustCo purchases, there is little credit risk
in the portfolio. Rather the risk with respect to these securities rests with
the issue of interest rates. As interest rates in the mortgage markets decrease,
the underlying loans will prepay early or refinance in their entirety.
Generally, mortgage-backed securities provide cash flows over a longer time
period to final maturity, than do callable securities.
<PAGE>
Federal Funds
During the second quarter of 1998 the average balance of federal funds sold was
$455.3 million with a yield of 5.55%, compared to the average balance for the
three month period ended June 30, 1997 of $306.5 million with an average yield
of 5.57%. The $148.8 million increase in the average balance, offset by the 2
basis points decrease in the average yield, resulted in total interest income on
federal funds sold of $6.3 million for 1998 compared to $4.3 million for 1997.
During the six month period ended June 30, 1998 the average balance of federal
funds was $414.4 million with a yield of 5.56% compared to an average balance of
$316.5 million in 1997 with an average yield of 5.46%.
The federal funds portfolio is utilized to generate additional interest income
and liquidity as funds are waiting to be deployed into the loan and securities
portfolios. As noted in the Securities Available for Sale section there have
been a relatively large amount of unanticipated prepayments due to the low
interest rates in the market during 1998. Due to the relatively low rates in the
market place and the desire to record loans in an orderly fashion compared to a
wholesale loan purchase program, these funds have not been reinvested as of June
30, 1998.
Funding Opportunities
TrustCo utilizes various funding sources to support its earning asset portfolio.
The vast majority of the Company's funding comes from traditional deposit
vehicles such as savings, interest-bearing checking and time deposit accounts.
Also, TrustCo developed a Short-Term Investment Account which was introduced in
1995 exclusively for customers of the Trust Department.
During the quarter, total interest-bearing liabilities increased to $2.1 billion
from $2.0 billion for 1997. The rate paid on total interest-bearing liabilities
was 4.33% for the second quarter of 1998, 3 basis points less than the 4.36%
rate paid for 1997. Total interest expense for the second quarter increased $1.1
million to $22.5 million for 1998 compared to $21.4 million for 1997. The
TrustCo Short Term Investment account and time deposits were the principal
reasons for the increase in interest-bearing liabilities during the quarter.
Similar growth in interest-bearing liabilities was noted for the six month
period as was discussed for the quarter. The overall growth in interest-bearing
liabilities during the six month period ended June 30, 1998 was $97.1 million
compared to the comparable period in 1997. Total interest expense increased by
$1.9 million due to the increase in average balances during the six month
periods offset by a reduction of 1 basis point in the overall rate paid.
<PAGE>
Growth in the interest-bearing liabilities resulted from successful marketing of
the Company's products along with the impact of the new branches opened in 1997.
Net Interest Income
Taxable equivalent net interest income decreased by approximately $50 thousand
during the second quarter of 1998 compared to 1997. On a year to date basis, the
taxable equivalent net interest income was $44.7 million for 1998 compared to
$44.0 million for 1997, an increase of approximately $700 thousand.
Nonperforming Assets
Nonperforming assets include nonperforming loans which are those loans in a
nonaccrual status, loans that have been restructured, and loans past due 90 days
or more and still accruing interest. Also included in the total of nonperforming
assets are foreclosed real estate properties which are categorized as real
estate owned.
Impaired loans are defined as those commercial and commercial real estate loans
in a nonaccrual status, and loans restructured since January 1, 1995, when newly
effective accounting standards required the identification, measurement and
reporting of impaired loans. The following will describe the nonperforming
assets of TrustCo as of June 30, 1998.
Nonperforming loans: Total nonperforming loans were $11.0 million at June 30,
1998, a decrease from the $ 11.7 million of nonperforming loans at March 31,
1998 and down also from the $12.2 million at June 30, 1997. Nonaccrual loans
were $6.4 million at June 30, 1998 down slightly from the $7.3 million at March
31, 1998 and the $7.7 million at June 30, 1997. Restructured loans were $3.8
million at June 30, 1998 compared to $3.3 million at March 31, 1998 and $3.5
million at June 30, 1997.
A noted trend has developed within the subcategories of nonperforming loans.
Whereas at June 30, 1997, $2.4 million of total nonperforming loans were
commercial and commercial real estate loans, by June 30, 1998, there were no
nonperforming commercial and commercial real estate loans. There has been a
shifting of nonperforming loans towards the residential real estate category in
1998. This is a result of several factors, including:
` The overall emphasis within TrustCo for residential real estate
originations,
` The relatively weak economic environment in the upstate
New York territory, and
` The reduction in real estate values in
TrustCo's market area that has occurred since the middle of
the 1990's.
With the portfolio concentrated in the category of residential real estate, the
increase in this type of nonperforming loan is not unusual. Consumer defaults
and bankruptcies have increased dramatically over the last several years and
this has lead to an increase in defaults
<PAGE>
on loans. TrustCo strives to identify borrowers that are experiencing
financial difficulties and to work aggressively with them so as to minimize
losses or exposures.
At June 30, 1998, there were no commercial and commercial real estate impaired
loans. Total impaired loans at June 30, 1998 of $3.0 million, consisted of
restructured retail loans. Of the total $11.0 million of nonperforming loans at
quarter end June 30, 1998, only the restructured retail loans of $3.0 million
are considered by management to be impaired.
During the first six months of 1998, there have been $577 thousand of commercial
loan charge offs, $440 thousand of consumer loan charge offs and $2.4 million of
mortgage loan charge offs. Recoveries during the six month period have been $1.7
million in 1998.
Real estate owned: Total real estate owned of $7.5 million at June 30, 1998
increased by $195 thousand between March 31, 1998 and June 30, 1998.
Allowance for loan losses: The balance of the allowance for loan losses is
maintained at a level that is , in management's judgment, representative of the
amount of the risk inherent in the loan portfolio, given past, present and
expected future conditions.
At June 30, 1998, the allowance for loan losses was $54.7 million, which
represents a slight increase of $1.2 million from the $53.5 million in the
allowance at year end 1997. The allowance represents 4.17% of the loan portfolio
as of June 30, 1998, up slightly from the 4.16% as of June 30, 1997. The year to
date provision charged to expense was $2.9 million compared to $2.4 million for
1997.
In deciding on the adequacy of the allowance for loan losses, management reviews
the current nonperforming loan portfolio as well as loans that are slightly past
due and not yet categorized as nonperforming for reporting purposes. Also, there
are a number of other factors that are taken into consideration, including:
` The magnitude and nature of the recent loan charge offs and
the movement of charge offs to the residential real estate
loan portfolio,
` The growth in the loan portfolio and the implication that has
in relation to the economic climate in the bank's business
territory,
` Changes in underwriting standards in the competitive environment
that TrustCo operates in,
` Significant growth in the level of losses associated with
bankruptcies and the time period needed to foreclose, secure and
dispose of collateral, and
` The relatively weak economic environment in the upstate New York
territory combined with declining real estate prices makes it
more difficult for consumers to refinance their debts.
<PAGE>
Liquidity and Interest Rate Sensitivity
TrustCo seeks to obtain favorable sources of funding and to maintain prudent
levels of liquid assets in order to satisfy varied liquidity demands. TrustCo's
earnings performance and strong capital position enable the Company to raise
funds easily in the marketplace and to secure new sources of funding. The
Company actively manages its liquidity through target ratios established under
its liquidity policy. Continual monitoring of both historical and prospective
ratios allows TrustCo to employ strategies necessary to maintain adequate
liquidity. Management has also defined various degrees of adverse liquidity
situations which could potentially occur, and has prepared appropriate
continuance plans should such a situation arise.
Noninterest Income
Total noninterest income for the three months ended June 30, 1998 was $5.3
million an increase of $1.5 million over the comparable period in 1997. During
the 1998 period the Company recorded net securities gains of $104 thousand
compared to $295 thousand of net losses for the comparable period in 1997.
Excluding these securities transactions, noninterest income increased from $4.1
million in the second quarter of 1997 to $5.2 million in 1998. The increase is
the result of a 19% increase in Trust department income from $ 1.7 million in
the second quarter of 1997 to $ 2.0 million for the second quarter of 1998.
Other noninterest income increased by $540 thousand primarily as a result of a
gain recognized on the sale of bank premises and equipment.
Similar results were also recognized for the six months of 1998 compared to
1997. Total noninterest income was $ 9.9 million for 1998 compared to $7.3
million for 1997. Excluding net securities transactions the balances for 1998
and 1997 would have been $9.8 million and $8.1 million respectively.
Noninterest Expenses
Total noninterest expense for the second quarter of 1998 was $ 11.3 million down
slightly from $11.6 million in the second quarter of 1997. For the six months
ended June 30, 1998 and 1997, total noninterest expense was $ 22.8 million.
Increasing operating cost associated with new branches has been offset by
savings in other areas of the bank. TrustCo has a continuing program to reduce
and control cost at all levels within the organization.
Income Taxes
In the second quarter of 1998 and 1997, TrustCo recognized income tax expense of
$5.2 million and $4.7 million respectively. This resulted in an effective tax
rate of 37.4% for 1998 and 37.3% for 1997. For the six months of 1998, total
income tax expense was $10.1 million compared to $9.2 million for 1997.
<PAGE>
Capital Resources
Consistent with its long term goal of operating a sound and profitable financial
organization, TrustCo strives to maintain strong capital ratios. New issues of
equity securities have not been required since traditionally, most of its
capital requirements are met through the capital retained in the Company (after
the dividends on the common stock).
Total shareholders' equity at June 30, 1998 was $183.6 million an increase of
$4.8 million from the year end 1997 balance of $178.8 million. The change in the
shareholders' equity between year end 1997 and June 30, 1998 reflects the net
income retained by TrustCo and a $4.4 million increase in the net unrealized
gain on securities available for sale, offset by a $4.4 million increase in the
amount of Treasury stock.
<TABLE>
TrustCo declared dividends of $0.55 per share during the first six months of
1998 compared to $0.48 in 1997. These resulted in a dividend payout ratio of
75.22% in 1998 and 72.65% in 1997. The Company achieved the following capital
ratios as of June 30, 1998 and 1997:
<CAPTION>
June 30, Minimum Regulatory
1998 1997 Guidelines
-------------------------------------
Tier 1 risk adjusted
<S> <C> <C> <C>
capital 12.77% 13.37 4.00
Total risk adjusted
capital 14.06 14.66 8.00
</TABLE>
In addition, at June 30, 1998 and 1997, consolidated equity to asset ratio
(excluding the mark to market adjustment on securities available for sale) was
6.77% and 7.01%, respectively.
<PAGE>
<TABLE>
TrustCo Bank Corp NY
Management's Discussion and Analysis
STATISTICAL DISCLOSURE
I. DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
The following table summarizes the component distribution of average balance
heet, related interest income and expense and the average annualized yields on
nterest-earning assets and annualized rates on interest-bearing libilities of the
egistrant and the Bank (adjusted for tax equivalency) for each of the reported periods.
onaccrual loans are included in loans for this analysis. The average balances of sec-
rities available for sale is calculated using amortized costs for these securities.
ncluded in the balance of shareholders' equity is unrealized appreciation, net of tax,
n the available for sale portfolio of $14.7 million in 1998 and $4.7 million in 1997.
he subtotals contained in the following table are the arithmetic totals of the items
ontained in that category.
<CAPTION>
Second Quarter Second Quarter
1998 1997
Average Average Average Average Change in Variance Variance
(dollars in thousands) Balance Interest Rate Balance Interest Rate Interest Balance Rate
Income/ Change Change
Assets Expense
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial loans......................$ 191,178 $ 4,521 9.47% $ 205,983 $ 4,877 9.48% (356) (350) (6)
Residential mortgage loans............ 926,958 18,703 8.07% 829,227 17,112 8.25% 1,591 3,899 (2,308)
Home equity lines of credit .......... 161,854 3,817 9.46% 180,294 4,228 9.41% (411) (575) 164
Installment loans..................... 26,519 840 12.70% 29,685 957 12.93% (117) (101) (16)
-------- ------ -------- ------ ----- ----- -----
Loans, net of unearned income......... 1,306,509 27,881 8.54% 1,245,189 27,174 8.73% 707 2,873 (2,166)
Securities available for sale:
U.S. Treasuries and agencies......... 204,768 3,837 7.50% 388,988 7,599 7.81% (3,762) (3,463) (299)
Mortgage-backed securities........... 174,824 2,963 6.78% 114,412 2,189 7.65% 774 2,282 (1,508)
States and political subdivisions.... 111,260 2,255 8.11% 95,882 1,946 8.12% 309 326 (17)
Other ............................... 88,805 1,424 6.41% 33,092 460 5.57% 964 884 80
-------- ------ --------- ------ ----- ----- -----
Total securities available for sale 579,657 10,479 7.23% 632,374 12,194 7.71% (1,715) 29 (1,744)
Federal funds sold.................... 455,264 6,296 5.55% 306,462 4,255 5.57% 2,041 2,158 (117)
-------- ------ --------- ------ ----- ----- -----
Total Interest earning assets....... 2,341,430 44,656 7.63% 2,184,025 43,623 7.99% 1,033 5,060 (4,027)
Allowance for loan losses............. (55,873) ------ (52,639) ------ ----- ----- -----
Cash and non-interest earning assets.. 153,269 150,623
-------- ---------
Total assets.......................$ 2,438,826 $2,282,009
======== =========
Liabilities and shareholders' equity
Deposits:
Interest-bearing checking.........$ 243,613 937 1.54% $ 233,763 $ 899 1.54% 38 37 1
Money market accounts.............. 56,799 415 2.93% 59,609 435 2.93% (20) (22) 2
Savings.............................. 658,755 5,228 3.18% 661,430 5,664 3.44% (436) (23) (413)
CD's over $100 thousand.............. 124,577 1,780 5.73% 97,761 1,415 5.80% 365 483 (118)
Other time deposits.................. 838,387 12,194 5.83% 798,069 11,591 5.83% 603 587 16
-------- ------ --------- ------ ----- ----- -----
Total time deposits................. 1,922,131 20,554 4.29% 1,850,632 20,004 4.34% 550 1,062 (512)
Short-term borrowings................. 156,401 1,904 4.88% 115,725 1,373 4.76% 531 494 37
-------- ------ --------- ------ ----- ----- -----
Total interest-bearing liabilities.. 2,078,532 22,458 4.33% 1,966,357 21,377 4.36% 1,081 1,556 (475)
Demand deposits....................... 137,537 ------ 116,930 ------ ----- ----- -----
Other liabilities..................... 47,155 35,884
Shareholders' equity.................. 175,602 162,838
-------- ---------
Total liab. & shareholders' equity.$ 2,438,826 $ 2,282,009
======== =========
Net interest income................... 22,198 22,246 (48) 3,504 (3,552)
------ ------ ----- ----- -----
Net interest spread................... 3.30% 3.63%
Net interest margin (net interest
income to total interest earning
assets)............................ 3.79% 4.07%
Tax equivalent adjustment 842 760
------ ------
Net interest income per book....... 21,356 $21,486
====== ======
</TABLE>
<PAGE>
<TABLE>
TrustCo Bank Corp NY
Management's Discussion and Analysis
STATISTICAL DISCLOSURE
I. 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 annualized yields on
interest-earning assets and annualized rates on interest-bearing libilities of the
Registrant and the Bank (adjusted for tax equivalency) for each of the reported periods.
Nonaccrual loans are included in loans for this analysis. The average balances of sec-
urities available for sale is calculated using amortized costs for these securities.
Included in the balance of shareholders' equity is unrealized appreciation, net of tax,
in the available for sale portfolio of $14.9 million in 1998 and $4.8 million in 1997.
The subtotals contained in the following table are the arithmetic totals of the items
contained in that category.
<CAPTION>
Six Months Six Months
1998 1997
Average Average Average Average Change in Variance Variance
(dollars in thousands) Balance Interest Rate Balance Interest Rate Interest Balance Rate
Income/ Change Change
Assets Expense
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial loans.....................$ 190,459 9,067 9.54%$ 211,525 $ 9,918 9.40% (851) (1,266) 415
Residential mortgage loans............. 920,645 37,329 8.11% 819,412 33,846 8.26% 3,483 5,197 (1,714)
Home equity lines of credit ........... 165,808 7,761 9.44% 181,841 8,366 9.28% (605) (995) 390
Installment loans...................... 27,017 1,719 12.83% 30,224 1,950 13.01% (231) (205) (26)
--------- ------ ------- ------- ----- ----- -----
Loans, net of unearned income......... 1,303,929 55,876 8.59% 1,243,002 54,080 8.72% 1,796 2,731 (935)
Securities available for sale:
U.S. Treasuries and agencies......... 235,469 8,928 7.58% 386,067 15,066 7.81% (6,138) (5,722) (416)
Mortgage-backed securities........... 171,824 5,872 6.84% 98,187 3,778 7.70% 2,094 3,293 (1,199)
States and political subdivisions.... 110,377 4,485 8.13% 94,942 3,842 8.09% 643 627 16
Other ............................... 75,039 2,352 6.28% 34,102 940 5.53% 1,412 1,268 144
--------- ------ ------- ------- ----- ----- -----
Total securities available for sale. 592,709 21,637 7.30% 613,298 23,626 7.71% (1,989) (534) (1,455)
Federal funds sold.................... 414,431 11,418 5.56% 316,514 8,577 5.46% 2,841 2,695 146
--------- ------ ------- ------- ----- ----- -----
Total Interest earning assets....... 2,311,069 88,931 7.71% 2,172,814 86,283 7.96% 2,648 4,892 (2,244)
Allowance for loan losses............. (55,214)------ (52,807) ------- ----- ----- -----
Cash and non-interest earning assets... 153,054 151,584
--------- ---------
Total assets.......................$ 2,408,909 $ 2,271,591
========= =========
Liabilities and shareholders' equity
Deposits:
Interest-bearing checking.........$ 241,487 1,845 1.54%$ 233,923 1,784 1.54% 61 58 3
Money market accounts.............. 57,314 832 2.93% 60,375 877 2.93% (45) (44) (1)
Savings.............................. 655,219 10,343 3.18% 660,545 11,251 3.43% (908) (90) (818)
CD's over $100 thousand.............. 122,364 3,472 5.72% 96,032 2,737 5.75% 735 772 (37)
Other time deposits.................. 836,303 24,250 5.85% 793,624 22,926 5.83% 1,324 1,237 87
--------- ------ ------- ------- ----- ----- -----
Total time deposits................. 1,912,687 40,742 4.30% 1,844,499 39,575 4.33% 1,167 1,933 (766)
Short-term borrowings................. 143,686 3,471 4.87% 114,750 2,690 4.73% 781 697 84
--------- ------ ------- ------- ----- ----- -----
Total interest-bearing liabilities.. 2,056,373 44,213 4.34% 1,959,249 42,265 4.35% 1,948 2,630 (682)
Demand deposits....................... 132,836 ------ 115,785 ------- ----- ----- -----
Other liabilities..................... 43,937 34,065
Shareholders' equity.................. 175,763 162,492
--------- ---------
Total liab. & shareholders' equity.$ 2,408,909 2,271,591
========= =========
Net interest income................... 44,718 44,018 700 2,262 (1,562)
------ ------- ----- ----- -----
Net interest spread................... 3.37% 3.61%
Net interest margin (net interest
income to total interest earning
assets)............................ 3.85% 4.04%
Tax equivalent adjustment 1,714 1,525
------ -------
Net interest income per book....... 43,004 42,493
====== =======
</TABLE>
<PAGE>
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes in the Company's interest rate risk
position since December 31, 1997. Other types of market risk, such as foreign
exchange rate risk and commodity price risk, do not arise in the normal course
of the Company's business activities.
<PAGE>
SIGNATURES
Pursuant to the requirements 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
Date: August 5, 1998 By: /s/Robert A. McCormick
------------------------------------
Robert A. McCormick
President and Chief Executive Officer
Date: August 5, 1998 By: /s/Robert T. Cushing
------------------------------------
Robert T. Cushing
Vice President and Chief
Financial Officer
<PAGE>
Exhibits Index
Reg S-K
Exhibit No. Description Page No.
- -------------- ---------------------------------------------------- --------
22 Submission of Matters to Vote of Security 23
Holders -- Annual Meeting
<PAGE>
Exhibit 22
Item 4.Submission of Matters to Vote of Security Holders -- Annual Meeting
1.Election of Directors:
At the annual meeting held May 18, 1998, shareholders of the Company
were asked to consider the Company's nominees for directors and to elect
four (4) directors, to serve for a term of three (3) years. The Company's
nominees for director were: M. Norman Brickman, Anthony J. Marinello, M.D.
, Ph.D, Robert A. McCormick, and Kenneth C. Petersen. The results of
shareholder voting are as follows:
DIRECTOR FOR WITHHELD ABSTAIN NON-VOTE
-------- --- -------- ------- --------
Brickman 21,290,511 474,077 N/A N/A
Marinello 21,187,378 577,210 N/A N/A
McCormick 21,298,259 466,329 N/A N/A
Petersen 21,337,573 427,015 N/A N/A
Directors continuing in office are: Barton A. Andreoli,
Lionel O. Barthold, Nancy A. McNamara, John S. Morris, PhD,
James H. Murphy, DDS, Richard J. Murray, Jr., William D. Powers,
William J. Purdy, and William F. Terry.
2. Shareholders of the Company were asked to consider a proposal to ratify
the selection by TrustCo's Board of Directors of KPMG Peat Marwick LLP as
the independent certified public accountants for the Company for the
fiscal year ending December 31, 1998. The results of shareholder voting
are as follows:
FOR AGAINST ABSTAIN WITHHELD NON-VOTE
21,616,345 65,604 83,265 N/A N/A
<PAGE>
Item 5. Other Information
The Securities and Exchange Commission ("SEC") recently adopted
amendments to its rules under the Securities Exchange Act of 1934 (the
"Exchange Act") regarding the submission by shareholders of proposals
intended to be presented at meetings of shareholders. These amendments,
which became effective on June 29, 1998 ,included provisions authorizing
companies to exercise discretionary voting authority with respect to
shareholder proposals for which a company did not receive notice within a
specified time period prior to a meeting of its shareholders or that
otherwise did not satisfy certain requirements specified in such
admendments.
Pursuant to these amendments, TrustCo shareholders are hereby notified
that any shareholder proposal not included in TrustCo's proxy statement for
its 1999 Annual Meeting of Shareholders will be considered untimely for
purposes of the SEC rules governing the submission of shareholder proposals
for consideration at shareholder meetings if notice of the proposal is not
received by TrustCo on or before February 22, 1999. Management proxies will
be authorized to exercise discretionary voting authority with respect to
any shareholder proposal not included in TrustCo's Proxy Statement for its
1999 Annual Meeting unless (a) TrustCo receives notice of such proposal on
or before February 22,1999, and (b) the additional conditions set forth in
SEC Rule 14a-4(c)(2)(i)-(iii) under the Exchange Act are satisfied.
-24-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 35,149
<INT-BEARING-DEPOSITS> 36
<FED-FUNDS-SOLD> 445,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 605,415
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 1,312,434
<ALLOWANCE> 54,667
<TOTAL-ASSETS> 2,434,195
<DEPOSITS> 2,072,034
<SHORT-TERM> 129,478
<LIABILITIES-OTHER> 49,054
<LONG-TERM> 0
0
0
<COMMON> 24,276
<OTHER-SE> 159,353
<TOTAL-LIABILITIES-AND-EQUITY> 2,434,195
<INTEREST-LOAN> 55,687
<INTEREST-INVEST> 20,112
<INTEREST-OTHER> 11,418
<INTEREST-TOTAL> 87,217
<INTEREST-DEPOSIT> 40,742
<INTEREST-EXPENSE> 44,213
<INTEREST-INCOME-NET> 43,004
<LOAN-LOSSES> 2,930
<SECURITIES-GAINS> 136
<EXPENSE-OTHER> 22,828
<INCOME-PRETAX> 27,147
<INCOME-PRE-EXTRAORDINARY> 27,147
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,044
<EPS-PRIMARY> <F1> 0.73
<EPS-DILUTED> <F2> 0.70
<YIELD-ACTUAL> 3.85
<LOANS-NON> 6,406
<LOANS-PAST> 824
<LOANS-TROUBLED> 3,756
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 53,455
<CHARGE-OFFS> 3,442
<RECOVERIES> 1,724
<ALLOWANCE-CLOSE> 54,667
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 54,667
<FN>
<F1> EPS is reported as "Basic EPS" as prescribed by Statement of Financial
Accounting Standards No. 128.
<F2> EPS is reported as "Diluted EPS" as prescribed by Statement of Financial
Accounting Standards No. 128.
</FN>
</TABLE>
