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, 2000
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 31,2000
-------------------------- ----------------------
$1 Par Value 53,548,191
<PAGE>
TRUSTCO BANK CORP NY
INDEX
Part I. FINANCIAL INFORMATION _____ ____ PAGE NO.
ITEM 1. Interim Financial Statements (Unaudited):
Consolidated Statements of Income for the
Three Months and Six Months Ended 1
June 30, 2000 and 1999
Consolidated Statements of Financial Condition 2
as of June 30, 2000 and December 31, 1999
Consolidated Statements of Cash Flows for the 3 - 4
Six Months Ended June 30, 2000 and 1999
Notes to Consolidated Interim Financial Statements 5 - 8
Independent Auditors' Review Report 9
ITEM 2. Management's Discussion and Analysis 10 - 20
ITEM 3. Quantitative and Qualitative Disclosures 21
About Market Risk
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 24
Holders - Annual Meeting
ITEM 5. Other Information - None
i
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ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
REG S-K (ITEM 601)
EXHIBIT NO. DESCRIPTION PAGE NO.
3 (i) Certificate of Amendment of the Certificate of
Incorporation of TrustCo Bank Corp NY
22 Submission of Matters to Vote of Security 24
Holders - Annual Meeting
(b) REPORTS ON FORM 8-K
Filing of Form 8-K on May 16, 2000, regarding May 15, 2000,
letter to shareholders which contained discussion of May 15, 2000,
annual meeting of shareholders, and a press release dated May 16,
2000, declaring a cash dividend of $0.15 per share payable on July 3,
2000, to shareholders of record June 9, 2000, is incorporated herein
by reference.
Filing of Form 8-K on May 23, 2000 regarding a press release announcing
TrustCo Welcomes Landmark Opposition To Tender Offer is incorporated
herein by reference.
Filing of Form 8-K on June 6, 2000 regarding a press release
announcing today that The Office of Thrift Supervision (OTS) had on
June 2, 2000 approved TrustCo's application to acquire Landmark
Financial Corporation of Canajoharie, New York, and its
wholly-owned subsidiary Landmark Community Bank is incorporated
herein by reference.
Filing of Form 8-K on July 18, 2000, regarding two press releases
dated July 18, 2000, detailing second quarter financial results, is
incorporated herein by reference.
Filing of Form 8-K on July 28, 2000, regarding a press release
announcing today that the acquisition of Landmark Financial Corporation,
a $26 million asset thrift, was completed, is incorporated herein by
reference.
ii
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<TABLE>
<CAPTION>
TRUSTCO BANK CORP NY
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)
3 Months Ended 6 Months Ended
June 30 June 30
2000 1999 2000 1999
---- ---- ---- ---
Interest and dividend income:
<S> <C> <C> <C> <C>
Interest and fees on loans $ 27,779 26,466 | 55,211 53,026
Interest on U. S. Treasuries and agencies 3,947 2,680 | 7,871 5,632
Interest on states and political |
subdivisions 1,966 1,825 | 3,836 3,598
Interest on mortgage-backed securities 3,850 4,244 | 7,603 8,323
Interest and didends on other securities 1,610 2,201 | 3,288 4,287
Interest on federal funds sold 3,880 4,182 | 7,467 8,398
-----------------| -----------------
Total interest income 43,032 41,598 | 85,276 83,264
-----------------| -----------------
Interest expense: |
Interest on deposits: |
Interest-bearing checking 728 701 | 1,443 1,377
Savings 4,268 4,507 | 8,562 8,904
Money market deposit accounts 380 413 | 781 812
Time deposits 10,814 11,511 | 21,459 23,830
Interest on short-term borrowings 2,035 1,481 | 3,781 2,929
-----------------| -----------------
Total interest expense 18,225 18,613 | 36,026 37,852
-----------------| -----------------
Net interest income 24,807 22,985 | 49,250 45,412
Provision for loan losses 800 1,500 | 1,650 3,013
-----------------| -----------------
Net interest income after provision |
for loan losses 24,007 21,485 | 47,600 42,399
-----------------| -----------------
Noninterest income: |
Trust department income 2,184 2,040 | 4,270 3,911
Fees for other services to customers 2,303 2,117 | 4,362 4,249
Net gain/(loss) on securities transactions (2,320) (657)| (3,369) (1,077)
Other 888 750 | 1,594 2,587
-----------------| -----------------
Total noninterest income 3,055 4,250 | 6,857 9,670
-----------------| -----------------
Noninterest expenses: |
Salaries and employee benefits 5,736 6,092 | 12,108 12,316
Net occupancy expense 1,187 1,203 | 2,372 2,444
Equipment expense 1,078 1,310 | 2,293 3,107
FDIC insurance expense 102 61 | 206 124
Professional services 897 654 | 1,562 1,248
Other real estate expenses / (income) (258) (296)| (302) (384)
Other 2,690 2,329 | 5,115 4,700
-----------------| -----------------
Total noninterest expenses 11,432 11,353 | 23,354 23,555
-----------------| -----------------
Income before taxes 15,630 14,382 | 31,103 28,514
Applicable income taxes 5,133 4,890 | 10,336 9,699
-----------------| -----------------
Net income $ 10,497 9,492 | 20,767 18,815
==================| ==================
Net income per Common Share: |
|
- Basic $ 0.196 0.177 | 0.388 0.350
==================| ==================
|
- Diluted $ 0.190 0.170 | 0.376 0.336
==================| ==================
Per share data is adjusted for the effect of the 2 for 1 stock split declared August, 1999.
See accompanying notes to consolidated interim financial statements.
</TABLE>
1
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<TABLE>
<CAPTION>
TRUSTCO BANK CORP NY
Consolidated Statements of Financial Conditi
(dollars in thousands, except share da
06/30/00 12/31/99
ASSETS: -------- --------
<S> <C> <C>
Cash and due from banks $ 36,325 54,542
Federal funds sold 243,000 266,000
Other short-term funds 7,902 9,970
----------- -----------
Total cash and cash equivalents 287,227 330,512
Securities available for sale:
U. S. Treasuries and agencies 211,820 185,978
States and political subdivisions 147,522 132,560
Mortgage-backed securities 196,184 205,558
Other 105,952 116,734
----------- -----------
Total securities available for sale 661,478 640,830
----------- -----------
Loans:
Commercial 193,103 193,960
Residential mortgage loans 1,028,018 995,578
Home equity line of credit 134,064 138,339
Installment loans 20,806 22,891
----------- -----------
Total loans 1,375,991 1,350,768
Less: ----------- -----------
Allowance for loan losses 55,389 55,820
Unearned income 922 959
----------- -----------
Net loans 1,319,680 1,293,989
Bank premises and equipment 16,104 16,209
Real estate owned 1,344 1,771
Other assets 81,274 80,711
----------- -----------
Total assets $ 2,367,107 2,364,022
============ ============
LIABILITIES:
Deposits:
Demand $ 167,425 155,313
Interest-bearing checking 270,710 272,384
Savings accounts 630,278 641,650
Money market deposit accounts 56,180 58,557
Certificates of deposit (in denominations of
$100,000 or more) 119,340 115,636
Time deposits 735,211 751,369
----------- -----------
Total deposits 1,979,144 1,994,909
----------- -----------
Short-term borrowings 162,109 152,782
Accrued expenses and other liabilities 49,722 49,975
----------- -----------
Total liabilities 2,190,975 2,197,666
----------- -----------
SHAREHOLDERS' EQUITY:
Capital stock par value $1; 100,000,000 shares authorize
and 56,597,722 and 56,410,787 shares issued June 30, 2000
and December 31, 1999, respectively 56,598 56,411
Surplus 86,614 85,784
Undivided profits 53,228 48,491
Accumulated other comprehensive income/(loss):
Net unrealized gain/(loss) on securities available for 3,306 (2,452)
Treasury stock at cost - 3,153,457 and 3,002,378 shares
June 30, 2000 and December 31, 1999, respectively (23,614) (21,878)
----------- -----------
Total shareholders' equity 176,132 166,356
----------- -----------
Total liabilities and shareholders' equity $ 2,367,107 2,364,022
============ ============
See accompanying notes to consolidated interim financial statements.
</TABLE>
2
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<TABLE>
<CAPTION>
TRUSTCO BANK CORP NY
Consolidated Statements of Cash Flows (Unaudited)
(dollars in thousands)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
SIX MONTHS ENDED June 30, 2000 1999
-------- --------
Cash flows from operating activities:
<S> <C> <C>
Net income..............................................$ 20,767 18,815
-------- --------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 976 1,385
Gain on sales of fixed assets.......................... (52) (1,246)
Provision for loan losses.............................. 1,650 3,013
Loss on sale of securities available for sale.......... 3,817 2,268
Gain on sale of securities available for sale.......... (361) (1,191)
Provision for deferred tax expense/(benefit)........... 98 (717)
Decrease in taxes receivable........................... 1,218 9,571
(Increase)/decrease in interest receivable.............. (729) 420
Increase/(decrease) in interest payable................ 168 (319)
Increase in other assets............................... (5,521) (21,141)
Increase/(decrease) in accrued expenses................ (407) 1,979
-------- --------
Total adjustments.................................... 857 (5,978)
-------- --------
Net cash provided by operating activities................ 21,624 12,837
-------- --------
Cash flows from investing activities:
Proceeds from sales of securities available for sale... 93,739 115,191
Purchase of securities available for sale.............. (148,643) (241,016)
Proceeds from maturities and calls
of securities available for sale...................... 40,534 110,821
Net increase in loans.................................. (27,821) (6,674)
Proceeds form dispositions of real estate owned........ 1,302 3,830
Proceeds from sales of fixed assets.................... 120 2,081
Capital expenditures................................... (939) (973)
-------- --------
Net cash used in investing activities................ (41,708) (16,740)
-------- --------
Cash flows from financing activities:
Net decrease in deposits............................... (15,765) (62,683)
Increase/(decrease) in short-term borrowing............ 9,327 (5,746)
Proceeds from exercise of stock options................ 1,017 1,322
Proceeds from sale of treasury stock................... 3,045 2,790
Purchase of treasury stock............................. (4,781) (6,706)
Dividends paid......................................... (16,044) (14,773)
-------- --------
Net cash used in financing activities................ (23,201) (85,796)
-------- --------
Net decrease in cash and cash equivalents................ (43,285) (89,699)
Cash and cash equivalents at beginning of period......... 330,512 424,929
-------- --------
Cash and cash equivalents at end of period..............$ 287,227 335,230
======== ========
See accompanying notes to consolidated interim financial statements. (Continued)
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
TRUSTCO BANK CORP NY
Consolidated Statements of Cash Flows Continued (Unaudited)
(dollars in thousands)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
SIX MONTHS ENDED June 30, 2000 1999
-------- --------
<S> <C> <C>
Interest paid.........................................$ 35,858 38,171
Income taxes paid...................................... 9,020 845
Transfer of loans to real estate owned................. 480 2,096
Increase/(decrease) in dividends payable............... (14) 19
Change in unrealized (gain)/loss on securities
available for sale-gross of deferred taxes............ (9,734) 18,163
Change in deferred tax effect on unrealized gain/(loss)
on securities available for sale...................... 3,976 (7,420)
</TABLE>
See accompanying notes to consolidated interim financial statements.
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,
2000, the results of operations for the three months and six months ended June
30, 2000 and 1999, and the cash flows for the six months ended June 30, 2000 and
1999. 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 1999 Annual Report to Shareholders on Form 10-K.
2. EARNINGS PER SHARE
A reconciliation of the component parts of earnings per share for the three
month and six month periods ended June 30, 2000 and 1999 follows:
<TABLE>
<CAPTION>
Weighted Average Shares
(In thousands, Net Outstanding Per Share
except per share data) Income Amounts
----------------- -------------------------- -------------------
For the quarter ended
June 30, 2000:
Basic EPS:
<S> <C> <C> <C>
Net income available to
common shareholders.............. $10,497 53,467 $0.196
Effect of Dilutive Securities:
Stock options............................. ------ 1,679 -------
----------------- -------------------------- -------------------
Diluted EPS $10,497 55,146 $0.190
================= ========================== ===================
For six months ended
June 30, 2000:
Basic EPS:
Net income available to
common shareholders.............. $20,767 53,456 $0.388
Effect of Dilutive Securities:
Stock options............................. ------- 1,712 -------
----------------- -------------------------- -------------------
Diluted EPS $20,767 55,168 $0.376
================= ========================== ===================
There were 2,086,850 stock opstions which were antidilutive as of June 30, 2000 and were therefore excluded from the above
calculations.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Weighted Average Shares
(In thousands, Net Outstanding Per Share
except per share data) Income Amounts
----------------- -------------------------- -------------------
For the quarter ended
June 30, 1999:
Basic EPS:
Net income available to
<S> <C> <C> <C>
common shareholders.............. $9,492 53,776 $0.177
Effect of Dilutive Securities:
Stock options............................. ------ 2,152 -------
----------------- -------------------------- -------------------
Diluted EPS $9,492 55,928 $0.170
================= ========================== ===================
For six months ended
June 30, 1999:
Basic EPS:
Net income available to
common shareholders.............. $18,815 53,761 $0.350
Effect of Dilutive Securities:
Stock options............................. ------- 2,195 -------
----------------- -------------------------- -------------------
Diluted EPS $18,815 55,956 $0.336
================= ========================== ===================
Per share data have been adjusted for the 2 for 1 stock split declared in August 1999.
</TABLE>
3. COMPREHENSIVE INCOME
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.
6
<PAGE>
Comprehensive income for the three month periods ended June 30, 2000 and 1999
was $13,529,000 and $820,000 respectively, and $26,525,000 and $8,072,000 for
the six month periods ended June 30, 2000 and 1999, respectively. The following
summarizes the components of other comprehensive income/(loss):
<TABLE>
<CAPTION>
(dollars in thousands)
Unrealized gains on securities: Three months ended June 30
2000 1999
----------------------------------------
Unrealized holding gains/(losses) arising during period, net of
tax (pre-tax gain of $2,684 for 2000 and pre-tax loss of $15,318
<S> <C> <C>
for 1999) $1,586 (9,061)
Reclassification adjustment for net gain/(loss) realized in net
income during the period, net of tax (pre-tax loss of $2,445 for
2000 and pre-tax loss of $657 for 1999) (1,446) (389)
-------------------------------------
Other comprehensive income/(loss) $3,032 (8,672)
==========================================
(dollars in thousands)
Unrealized gains on securities: Six months ended June 30
2000 1999
Unrealized holding gains/(losses) arising during period, net of
tax (pre-tax gain of $6,278 for 2000 and pre-tax loss of $19,240
for 1999) $3,714 (11,380)
Reclassification adjustment for net gain/(loss) realized in net
income during period, net of tax (pre-tax loss of $3,456 for 2000
and pre-tax loss of $1,077 for 1999) (2,044) (637)
---------------------------------------
Other comprehensive income/(loss) $5,758 ($10,743)
============================================
</TABLE>
7
<PAGE>
4. IMPACT OF CHANGES IN ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board 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. As amended, statement 133
is effective for fiscal years beginning after June 15, 1999 to fiscal
years beginning after June 15, 2000. Management is currently
evaluating the impact, if any, on the Company's consolidated financial
statements.
8
<PAGE>
INDEPENDENT AUDITORS' REVIEW 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, 2000, and the related
consolidated statements of income for the three month and six month periods
ended June 30, 2000 and 1999, and the consolidated statements of cash flows for
the six month periods ended June 30, 2000 and 1999. 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 auditing standards generally accepted in The United States of America, 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 in The United
States of America.
We have previously audited, in accordance with auditing standards generally
accepted in The United States of America, the consolidated statement of
financial condition of TrustCo Bank Corp NY and subsidiaries as of December 31,
1999 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 18, 2000, 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, 1999 is fairly stated, in all material respects, in relation to the
consolidated statement of financial condition from which it has been derived.
/s/KPMG LLP
______________________________
KPMG LLP
Albany, New York
July 6, 2000
9
<PAGE>
TRUSTCO BANK CORP NY
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2000
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, 2000, with
comparisons to 1999 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 1999
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 been adjusted for the 2 for 1 stock split declared in
1999.
FORWARD-LOOKING STATEMENTS
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 to subsequently 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, 2000 and
1999.
OVERVIEW
TrustCo recorded net income of $10.5 million, or $0.190 of diluted earnings per
share for the three months ended June 30, 2000, as compared to net income of
$9.5 million or $0.170 of diluted earnings per share in the same period in 1999.
For the six month period ended June 30, 2000, TrustCo recorded net income of
10
<PAGE>
$20.8 million, or $0.376 of diluted earnings per share, as compared to $18.8
million, or $0.336 of diluted earnings per share for the comparable period in
1999.
The primary factors accounting for the year to date increases are:
o A 49 basis points increase in the net interest margin from 4.01%
in 1999 to 4.50% in 2000,
o A reduction in the provision for loan losses of $1.4 million to
$1.7 million in 2000, and,
o A slight reduction in operating expenses of $201 thousand.
These positive factors affecting net income were partially offset by:
o A decrease in the average balance of interest earning assets of
$77.6 million to $2.28 billion, and
o A decrease in non-interest income of $2.8 million.
o An increase of $700 thousand in applicable income tax.
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
Total average interest earning assets decreased from $2.36 billion for the
second quarter of 1999 to $2.28 billion in 2000 with an average yield of 7.74%
in 2000 and 7.23% in 1999. Income on earning assets increased by $1.5 million
during this same time-period from $42.6 million in 1999 to $44.1 million in
2000. The increase in interest income on earning assets was attributable to the
increases in yield on these assets.
For the six month period ended June 30, 2000, the average balance of interest
earning assets was $2.28 billion, a decrease of $77.6 million or 3% from the
balance for the comparable period in 1999 of $2.36 billion. The average yield on
interest earning assets was 7.24% for 1999, compared to 7.68% in 2000. The
decrease in the average balance of earning assets did not completely offset the
increase in the yield earned on these assets, thereby resulting in an increase
in interest income of $2.2 million to $87.4 million for the six months of 2000,
compared to $85.2 million for the six months of 1999.
11
<PAGE>
LOANS
The average balance of loans for the second quarter was $1.36 billion in 2000
and $1.32 billion in 1999. The yield on loans increased from 8.01% in 1999 to
8.18% in 2000. The combination of the higher average balances and the higher
rates resulted in an increase in the interest income on loans by $1.3 million.
For the six-month period ended June 30, 2000, the average balance in the loan
portfolio was $1.36 billion compared to $1.32 billion for the comparable period
in 1999. The average yield increased from 8.05% in 1999 to 8.15% in 2000. The
increase in the average balance of loans outstanding plus the impact of the
increase in the yield resulted in total interest income of $55.3 million in 2000
compared to $53.1 million in 1999.
The increase in the yield in the loan portfolio was the result of increases in
the rates on loans. Since June 1999, market interest rates on real estate loan
products have increased, and TrustCo offered rates that, when compared to local
competitors, were attractive to customers. This resulted in TrustCo being able
to increase the average balance of loans outstanding even though interest rates
had risen significantly between 1999 and 2000. The principal cause of the
increase in interest rates was the impact of the increases in the federal funds
rate during the second half of 1999 and into 2000 on the prime interest rate.
Consequently, the residential mortgage loan portfolio increased on average by
$39.4 million for the six-month period ended June 30, 2000, compared to June 30,
1999. This growth in the residential mortgage loan portfolio caused the yield to
decrease slightly from 7.82% for the six-month period ended June 30, 1999 to
7.81% for the comparable period in 2000. The home equity loan portfolio and the
commercial real estate portfolio are also significantly affected by the interest
rates in the marketplace. Both products have rates tied to various indexes such
as prime rate. As the index changes, so will the rates earned on these assets.
The commercial loan yield decreased from 8.90% for the six-month period ended
June 30, 1999 to 8.87% for the six-month period ended June 30, 2000. While the
prime rate has a significant effect on the income earned in the commercial loan
portfolio this portfolio is most influenced by the rates offered by competing
lending institutions. The Upstate New York marketplace has many large national
and local regional financial institutions that compete for commercial loan
products. Therefore, in order to maintain the balances at the levels generated
many of the commercial loans have been refinanced from floating rate loans to
fixed rates. Therefore, the changes in the prime rate did not have the same
impact on the commercial loan portfolio yield that they did on the home equity
loan portfolio yield. The home equity loan portfolio experienced a increase in
rates as the average yield increased from 7.72% in 1999 to 8.88% in 2000.
SECURITIES AVAILABLE FOR SALE
During the second quarter of 2000, the average balance of securities available
for sale was $667.6 million with a yield of 7.37%, compared to $682.1 million
for the second quarter of 1999 with a yield of 6.98%. The combination of the
decrease in average balance offset by the increase in the yields caused an
increase in interest income on securities available for sale of approximately
$400 thousand between the second quarter of 2000 and 1999.
12
<PAGE>
The six-month results reflect the same principal trends noted for the second
quarter. The total average balance of securities available for sale during the
six months of 2000 was $667.7 million with an average yield of 7.33% compared to
an average balance for 1999 of $680.2 million with a yield of 6.96%.
FEDERAL FUNDS SOLD
During the second quarter of 2000, the average balance of federal funds sold was
$246.4 million with a yield of 6.33%, compared to the average balance for the
three month period ended June 30, 1999 of $350.4 million with an average yield
of 4.79%. The $103.9 million reduction in the average balance, combined with the
154 basis points increase in the average yield, resulted in total interest
income on federal funds sold of $3.8 million for 2000 compared to $4.2 million
for 1999.
During the six-month period ended June 30, 2000, the average balance of federal
funds was $248.5 million with a yield of 6.04% compared to an average balance of
$354.1 million in 1999 with an average yield of 4.78%.
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. The reduction in the average balance for the three month and six
month periods of 2000 compared to 1999 are the result of increases in the loan
portfolio and the outflow of deposits during those time periods, funded through
the liquidation of federal funds sold.
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.
During the quarter, total interest bearing liabilities were $2.0 billion for
2000 and $2.1 billion for 1999. The rate paid on total interest bearing
liabilities was 3.63% for the second quarter of 1999 and 3.71% for 2000. Total
interest expense for the second quarter decreased approximately $400 thousand to
$18.2 million for 2000 compared to $18.6 million for 1999.
Similar changes in interest bearing liabilities were noted for the six-month
period as was discussed for the quarter. Total interest bearing liabilities were
$2.0 billion for the six-month periods ended June 30, 2000 and $2.1 billion for
1999. The rate paid on these balances decreased from 3.70% for 1999 to 3.66% for
2000.
Demand deposit balances increased $14.3 million during the second quarter of
2000 compared to the second quarter of 1999. Demand deposits averaged $164.3
million in 2000 and $150.0 million in 1999. On a year to date basis, demand
deposits were $162.2 million compared to $149.0 million in 1999.
13
<PAGE>
During 1999 and continuing into 2000, TrustCo has reduced the rate paid on all
funding sources from 3.70% in 1999 to 3.66% in 2000. These reductions in
interest rates were the result of specific actions taken during 1999 to reduce
the Company's dependency on high cost deposit products. TrustCo priced
certificates of deposits so as to remain competitive with local financial
institutions but was not aggressive in pursuing the higher cost funds.
Consequently, the average balance of deposits has been reduced during 2000
compared to 1999. The decision to become more conservative in the pricing of
deposits was made to insure that depositor relationships are based upon a
combination of rate and service rather than just being focused on the highest
rates paid. Beginning in the second quarter of 2000 deposit yields have
increased in response to the changes made by the Federal Reserve Board in the
federal funds rate. TrustCo continues to remain disciplined in the pricing of
deposits however, the overall cost of deposits has begun to increase in response
to competitive pressures.
NET INTEREST INCOME
Taxable equivalent net interest income increased to $25.9 million for the second
quarter of 2000. The net interest spread also increased 43 basis points between
1999 and 2000 and the net interest margin increased by 46 basis points.
Similar increases were noted in taxable equivalent net interest income, net
interest spread and net interest margin for the six-month period ended June 30,
2000, compared to the same period in 1999. Net interest income for the first six
months of 2000 was $51.4 million, an increase of $4.0 million over the $47.4
million for the first six months of 1999. Net interest spread increased 48 basis
points to 4.02% and net interest margin increased 49 basis points to 4.50% for
the six-month period ended June 30, 2000, compared to the six-month period ended
June 30, 1999.
NONPERFORMING ASSETS
Nonperforming assets include nonperforming loans which are those loans in a
nonaccrual status, loans that have been restructured, and loans past due three
payments 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 considered to be those commercial and commercial real estate
loans in a nonaccrual status, and loans restructured since January 1, 1995, when
the accounting standards required the identification, measurement and reporting
of impaired loans. The following will describe the nonperforming assets of
TrustCo as of June 30, 2000.
NONPERFORMING LOANS: Total nonperforming loans were $11.8 million at June 30,
2000, a increase from the $9.9 million of nonperforming loans at December 31,
1999 and up from the $11.5 million at June 30, 1999. Nonaccrual loans were $5.0
million at June 30, 2000 up from the $4.4 million at December 31, 1999 and down
from the $5.4 million at June 30, 1999. Restructured loans were $6.5 million at
June 30, 2000 compared to $5.0 million at December 31, 1999 and $4.1 million at
June 30, 1999.
14
<PAGE>
Of the $11.8 million of nonperforming loans at June 30, 2000, all but
approximately $100 thousand are residential real estate or retail consumer
loans. In prior years the vast majority of nonperforming loans were concentrated
in the commercial and commercial real estate portfolios. There has been a
dramatic shifting of nonperforming loans to the residential real estate and
retail consumer loan portfolio for several factors, including:
o The overall emphasis within TrustCo for residential real estate
originations,
o The relatively weak economic environment in the upstate New York
territory, and
o The reduction in real estate values in TrustCo's market area
that has occurred since the middle of the 1990's, thereby
causing a reduction in the collateral that supports the real
estate loans.
Consumer defaults and bankruptcies have increased dramatically over the last
several years and this has lead to an increase in defaults on loans. TrustCo
strives to identify borrowers that are experiencing financial difficulties and
to work aggressively with them to minimize losses or exposures.
Total impaired loans at June 30, 2000 of $6.1 million, consisted of restructured
retail loans. During the first six months of 2000, there have been $1.2 million
of commercial loan charge offs, $254 thousand of consumer loan charge offs and
$1.6 million of mortgage loan charge offs as compared with $190 thousand of
commercial loan charge offs, $285 thousand of consumer loan charge offs and $4.2
million of mortgage loan charge offs in the first six months of 1999. Recoveries
during the first six-month periods have been $876 thousand in 1999 and $2.9
million in 1999.
REAL ESTATE OWNED: Total real estate owned of $1.3 million at June 30, 2000
decreased by $430 thousand since year-end 1999.
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.
At June 30, 2000, the allowance for loan losses was $55.4 million, which
represents a slight decrease from the $55.8 million in the allowance at December
31, 1999. The allowance represents 4.03% of the loan portfolio as of June 30,
2000 compared to 4.14% at December 31, 1999. The provision charged to expense
was $800 thousand compared to $1.5 million for the second quarter of 2000
compared to 1999. For the six-month periods, the provision charged to expense
was $1.7 million for 2000 and $3.0 million for 1999.
In deciding on the adequacy of the allowance for loan losses, management reviews
the current nonperforming loan portfolio as well as loans that are past due and
not yet categorized as nonperforming for reporting purposes. Also, there are a
15
<PAGE>
number of other factors that are taken into consideration, including:
o The magnitude and nature of the recent loan charge offs and the
movement of charge offs to the residential real estate loan
portfolio,
o The growth in the loan portfolio and the implication that has
in relation to the economic climate in the bank's business
territory,
o Changes in underwriting standards in the competitive environment
in which TrustCo operates,
o Significant growth in the level of losses associated with
bankruptcies and the time period needed to foreclose, secure
and dispose of collateral, and
o The relatively weak economic environment in the upstate New
York territory combined with declining real estate prices.
Consumer bankruptcies and defaults in general have risen significantly during
the 1990's. This trend appears to be continuing as a result of economic strife
and the relative ease of access by consumers to additional credit. Job growth in
the upstate New York area has been modest to declining and there continues to be
a shifting of higher paying jobs in manufacturing and government to lower paying
service jobs.
In light of these trends, management believes the allowance for loan losses is
reasonable in relation to the risk that is present in its current loan
portfolio.
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 policies. 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
contingency plans should such a situation arise.
NONINTEREST INCOME
Total noninterest income for the three months ended June 30, 2000 was $3.1
million, a decrease of $1.2 million from the comparable period in 1999. During
the 2000 period, the Company recorded net securities losses of $2.3 million
compared to $657 thousand of net losses for the comparable period in 1999.
Excluding these securities transactions, noninterest income increased to $5.4
million in the second quarter of 2000 from $4.9 million in 1999.
Similar results were also recognized for the six months of 2000 compared to
1999. Total noninterest income was $6.9 million for 2000 compared to $9.7
million for 1999. Excluding net securities transactions, the balances for 2000
16
<PAGE>
and 1999 would have been $10.2 million and $10.7 million respectively.
NONINTEREST EXPENSES
Total noninterest expense for the second quarter of 2000 and 1999 was $11.4
million. For the six-months ended June 30, 2000 and 1999, total noninterest
expense was $23.4 million and $23.6 million respectively.
INCOME TAXES
In the second quarter of 2000 and 1999, TrustCo recognized income tax expense of
$5.1 million and $4.9 million respectively. This resulted in an effective tax
rate of 32.8% for 2000 and 34.0% for 1999. For the six-months of 2000, total
income tax expense was $10.3 million compared to $9.7 million for 1999.
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, 2000 was $176.1 million, an increase of
$9.8 million from the year-end of 1999 balance of $166.4 million. The change in
the shareholders' equity between year-end 1999 and June 30, 2000 primarily
reflects the net income retained by TrustCo, a $5.8 million increase in the net
unrealized gain on securities available for sale, less $1.7 million increase in
the amount of Treasury stock.
TrustCo declared dividends of $0.300 per share during the first six-months of
2000 compared to $0.275 in 1999. These resulted in a dividend payout ratio of
77.1% in 2000 and 78.62% in 1999. The Company achieved the following capital
ratios as of June 30, 2000 and 1999:
JUNE 30, MINIMUM REGULATORY
2000 1999 GUIDELINES
------------------------------------------
TIER 1 RISK ADJUSTED
CAPITAL 13.86% 13.08 4.00
TOTAL RISK ADJUSTED
CAPITAL 15.15 14.37 8.00
In addition, at June 30, 2000 and 1999, the consolidated equity to total assets
ratio (excluding the mark to market effect of securities available for sale) was
7.3% and 7.02%, respectively.
17
<PAGE>
<TABLE>
<CAPTION>
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
TrustCo (adjusted for tax equivalency) for each of the reported periods. Non-
accrual 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 of $1.2
million, net of tax, in the available for sale portfolio in 2000 and unrealized
depreciation of $15.1 million, net of tax, in 1999. The subtotals contained in
the following table are the arithmetic totals of the items in that category.
Second Quarter Second Quarter
2000 1999
______________________________ ______________________________ ____________________________
Average Average Average Average Change in Variance Variance
(dollars in thousands) Balance Interest Rate Balance Interest Rate Interest Balance Rate
Income/ Change Change
Assets Expense
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial loans.......................$ 192,827 $ 4,283 8.90% $ 187,979 $ 4,144 8.82% 139 105 34
Residential mortgage loans............. 1,013,041 19,784 7.81% 971,082 18,923 7.79% 861 819 42
Home equity lines of credit ........... 135,888 3,104 9.16% 142,432 2,735 7.70% 369 (739) 1,108
Installment loans...................... 20,064 652 13.04% 22,793 714 12.57% (62) (209) 147
---------- -------- ---------- -------- ----- ----- -----
Loans, net of unearned income.......... 1,361,820 27,823 8.18% 1,324,286 26,516 8.01% 1,307 (24) 1,331
Securities available for sale:
U.S. Treasuries and agencies.......... 211,562 3,957 7.48% 148,301 2,690 7.25% 1,267 1,181 86
Mortgage-backed securities............ 214,168 3,850 7.19% 255,894 4,244 6.63% (394) (2,141) 1,747
States and political subdivisions..... 144,755 2,912 8.05% 135,972 2,688 7.91% 224 176 48
Other ................................ 97,080 1,583 6.53% 141,887 2,276 6.42% (693) (952) 259
---------- -------- ---------- -------- ----- ----- -----
Total securities available for sale. 667,565 12,302 7.37% 682,054 11,898 6.98% 404 (1,736) 2,140
Federal funds sold..................... 246,440 3,880 6.33% 350,374 4,182 4.79% (302) (5,331) 5,029
Other short-term investments........... 7,844 119 6.09% ----- ---- ---- 119 119 ---
---------- -------- ---------- -------- ----- ----- -----
Total Interest earning assets........ 2,283,669 44,124 7.74% 2,356,714 42,596 7.23% 1,528 (6,972) 8,500
Allowance for loan losses.............. (56,297) -------- (56,440) -------- ----- ----- -----
Cash and noninterest earning assets.... 129,689 132,870
---------- ----------
Total assets.........................$ 2,357,061 $ 2,433,144
========== ==========
Liabilities and shareholders' equity
Deposits:
Interest bearing checking...........$ 274,703 728 1.07% $ 263,428 701 1.07% 27 27 ---
Money market accounts............... 56,025 380 2.73% 60,754 413 2.72% (33) (36) 3
Savings............................... 635,721 4,268 2.70% 668,767 4,507 2.70% (239) (239) ---
Other time deposits................... 853,244 10,814 5.10% 914,166 11,511 5.05% (697) (1,359) 662
---------- -------- ---------- -------- ----- ----- -----
Total time deposits.................. 1,819,693 16,190 3.58% 1,907,115 17,132 3.60% (942) (1,607) 665
Short-term borrowings.................. 156,691 2,035 5.22% 151,219 1,481 3.93% 554 55 499
---------- -------- ---------- -------- ----- ----- -----
Total interest bearing liabilities... 1,976,384 18,225 3.71% 2,058,334 18,613 3.63% (388) (1,552) 1,164
Demand deposits........................ 164,339 -------- 150,039 -------- ----- ----- -----
Other liabilities...................... 44,265 40,311
Shareholders' equity................... 172,073 184,460
---------- ----------
Total liab. & shareholders' equity...$ 2,357,061 $ 2,433,144
========== ==========
Net interest income.................... 25,899 23,983 1,916 (5,420) 7,336
-------- -------- ----- ----- -----
Net interest spread.................... 4.03% 3.60%
Net interest margin (net interest
income to total interest earning
assets)............................. 4.53% 4.07%
Tax equivalent adjustment 1,092 998
-------- --------
Net interest income per book........ $ 24,807 $ 22,985
======== ========
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
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
TrustCo (adjusted for tax equivalency) for each of the reported periods. Non-
accrual 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 of $3.1
million, net of tax, in the available for sale portfolio in 2000 and unrealized
depreciation of $16.6 million, net of tax, in 1999. The subtotals contained in
the following table are the arithmetic totals of the items in that category.
Six Months Six Months
2000 1999
______________________________ ______________________________ ___________________________
Average Average Average Average Change in Variance Variance
(dollars in thousands) Balance Interest Rate Balance Interest Rate Interest Balance Rate
Income/ Change Change
Assets Expense
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial loans.......................$ 193,122 $ 8,555 8.87% $ 186,556 $ 8,289 8.90% 266 353 (87)
Residential mortgage loans............. 1,006,854 39,319 7.81% 967,417 37,842 7.82% 1,477 1,661 (184)
Home equity lines of credit ........... 136,798 6,057 8.88% 144,111 5,518 7.72% 539 (708) 1,247
Installment loans...................... 20,722 1,370 13.26% 23,578 1,478 12.64% (108) (285) 177
---------- -------- ---------- -------- ----- ----- -----
Loans, net of unearned income.......... 1,357,496 55,301 8.15% 1,321,662 53,127 8.05% 2,174 1,021 1,153
Securities available for sale:
U.S. Treasuries and agencies.......... 212,298 7,891 7.43% 154,131 5,653 7.33% 2,238 2,161 77
Mortgage-backed securities............ 213,354 7,603 7.13% 252,433 8,323 6.59% (720) (2,241) 1,521
States and political subdivisions..... 141,516 5,681 8.03% 133,850 5,299 7.92% 382 307 75
Other ................................ 100,516 3,298 6.57% 139,780 4,401 6.30% (1,103) (1,602) 499
---------- -------- ---------- -------- ----- ----- -----
Total securities available for sale. 667,684 24,473 7.33% 680,194 23,676 6.96% 797 (1,375) 2,172
Federal funds sold..................... 248,549 7,467 6.04% 354,122 8,398 4.78% (931) (5,231) 4,300
Other short-term investments........... 5,435 164 6.05% 828 21 5.16% 143 139 4
---------- -------- ---------- -------- ----- ----- -----
Total Interest earning assets........ 2,279,164 87,405 7.68% 2,356,806 85,222 7.24% 2,183 (5,446) 7,629
Allowance for loan losses.............. (56,388) -------- (56,358) -------- ----- ----- -----
Cash and noninterest earning assets.... 129,358 137,526
---------- ----------
Total assets.........................$ 2,352,134 $ 2,437,974
========== ==========
Liabilities and shareholders' equity
Deposits:
Interest bearing checking...........$ 272,339 1,443 1.07%$ 260,936 1,377 1.06% 66 64 2
Money market accounts............... 57,538 781 2.73% 60,032 812 2.73% (31) (31) ---
Savings............................... 637,295 8,562 2.70% 664,112 8,904 2.70% (342) (342) ---
Other time deposits................... 857,473 21,459 5.03% 929,649 23,830 5.17% (2,371) (1,769) (602)
---------- -------- ---------- -------- ----- ----- -----
Total time deposits.................. 1,824,645 32,245 3.55% 1,914,729 34,923 3.68% (2,678) (2,078) (600)
Short-term borrowings.................. 152,866 3,781 4.97% 149,073 2,929 3.96% 852 77 775
---------- -------- ---------- -------- ----- ----- -----
Total interest bearing liabilities... 1,977,511 36,026 3.66% 2,063,802 37,852 3.70% (1,826) (2,001) 175
Demand deposits........................ 162,195 -------- 149,034 -------- ----- ----- -----
Other liabilities...................... 43,653 39,632
Shareholders' equity................... 168,775 185,506
---------- ----------
Total liab. & shareholders' equity...$ 2,352,134 $ 2,437,974
========== ==========
Net interest income.................... 51,379 47,370 4,009 (3,445) 7,454
-------- -------- ----- ----- -----
Net interest spread.................... 4.02% 3.54%
Net interest margin (net interest
income to total interest earning
assets)............................. 4.50% 4.01%
Tax equivalent adjustment 2,129 1,958
-------- --------
Net interest income per book........ $ 49,250 $ 45,412
======== ========
</TABLE>
19
<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the Company's interest rate risk position
since December 31, 1999. 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.
20
<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 14, 2000 By: /s/Robert A. McCormick
---------------------------
Robert A. McCormick
President and
Chief Executive Officer
Date: August 14, 2000 By: /s/Robert T. Cushing
---------------------------
Robert T. Cushing
Vice President and Chief
Financial Officer
21
<PAGE>
EXHIBITS INDEX
REG S-K
EXHIBIT NO. DESCRIPTION PAGE NO.
--------------------------------------------------------------------------------
22 Submission of Matters to Vote of Security 24
Holders - Annual Meeting
22
<PAGE>
EXHIBIT 22
ITEM 4. Submission of Matters to Vote of Security Holders - Annual Meeting
At the annual meeting held May 15, 2000, 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: Barton A. Andreoli, Joseph A.
Lucarelli, Nancy A. McNamara, James H. Murphy and William J. Purdy.
1. The results of shareholder voting are as follows:
DIRECTOR FOR WITHHELD ABSTAIN
-------- ------- -------- -------
Barton A. Andreoli 46,965,256 1,224,083 -0-
Joseph A. Lucarelli 46,988,849 1,200,490 -0-
Nancy A. McNamara 46,941,049 1,248,290 -0-
James H. Murphy, DDS 46,814,853 1,374,486 -0-
William J. Purdy 46,989,995 1,199,344 -0-
Directors continuing in office are Lionel O. Barthold, M. Norman
Brickman, Anthony J. Marinello, MD, PhD, Robert A. McCormick,
Richard J. Murray, Jr., Kenneth C. Petersen, William D. Powers,
and William F. Terry.
2. Shareholders of the Company were asked to consider a proposal to ratify
the appointment by Trustco's Board of Directors of KPMG LLP as the
independent certified public accountants of TrustCo for the fiscal
year ending December 31, 2000. The results of shareholder voting are as
follows:
FOR WITHHELD ABSTAIN
--- -------- -------
47,626,608 374,118 188,613
23
