 | News Release |
5 Sarnowski Drive, Glenville, New York, 12302
(518) 377-3311 Fax: (518) 381-3668
| Subsidiary: Trustco Bank | NASDAQ -- TRST |
Contact: Kevin T. Timmons
Vice President/Treasurer
(518) 381-3607
FOR IMMEDIATE RELEASE:
TrustCo Announces 2007 Results
Glenville, New York – January 15, 2008
TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced net income for 2007 was $39.5 million, equal to diluted earnings per share of $0.525 in 2007, as compared to net income of $45.3 million and diluted earnings per share of $0.603 in 2006. Return on average equity and return on average assets were 17.19% and 1.20%, respectively, for the full year 2007, and 18.71% and 1.52% for 2006. Making the earnings announcement was Robert J. McCormick, President and Chief Executive Officer. Mr. McCormick noted, “2007 was an extremely difficult year for the banking industry with subprime lending issues and loosened credit standards causing significant problems for some banks. TrustCo has never been involved in subprime lending, which has led to the widely reported problems in the banking and financial services industry. I am proud that TrustCo’s long-term focus on traditional lending criteria has helped it avoid any direct impact from these problems and that the Company continues to post strong earnings results. Though down from the prior year, our return on equity will be among the leaders in our industry.”
For the fourth quarter of 2007, net income was $8.4 million compared to $9.4 million for the comparable 2006 quarter. Diluted earnings per share were $0.111 for the fourth quarter of 2007, compared to $0.125 for the same period in 2006. Return on average equity and return on average assets were 14.56% and 1.00%, respectively for the fourth quarter of 2007 compared to 15.39% and 1.21% for the fourth quarter of 2006.
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In light of economic trends in the Bank’s service areas and the broader difficulties affecting the banking industry, TrustCo recorded a provision for loan losses of $2.5 million in the fourth quarter of 2007. These actions result in an allowance for loan losses equal to 1.79% of total loans as of December 31, 2007 as compared to 1.82% as of September 30, 2007.
TrustCo continued to report impressive growth in both deposits and loans. For the quarter ended December 31, 2007, average deposits were up $276.3 million, an increase of 11.2% compared to the fourth quarter of 2006. Average loans showed similar results, rising $189.7 million or 11.0% compared to the same period in 2006. For the full year, average deposits were up 13.0% in 2007 while average loans were up 15.0%. Much of the growth can be attributed to the Company’s branch expansion initiative. During the fourth quarter of 2007, TrustCo opened two offices to bring the total to 107. A total of 16 offices were opened during 2007. Current plans call for the expansion program to continue into 2008 with new branches planned in the markets currently served. Mr. McCormick noted that, “We are pleased with the early results of our expansion program but are mindful that achieving our profit goals will take time and continued hard work.”
The strong growth of deposits and loans during 2007 helped to significantly offset the impact of a decline in the Company’s net interest margin, brought about by the inverted yield curve. The net interest margin was 3.10% in 2007, compared to 3.50% in 2006. Net income was also impacted by the previously noted loan loss provision of $2.5 million for both the fourth quarter and the full year 2007, compared to a zero provision in the fourth quarter of 2006 and a credit to the provision for loan losses of $3.6 million for full year 2006.
Nonperforming loans continue at low levels and reserve coverage of those loans remains strong. At year-end 2007, nonperforming loans were equal to 0.66% of total loans, while the allowance for loan losses was 2.7 times nonperforming loans. These figures compare favorably to current industry levels.
TrustCo Bank Corp is a $3.4 billion bank holding company and through its subsidiary, Trustco Bank, operates 107 offices in New York, New Jersey, Vermont, Massachusetts, and Florida.
In addition, the Bank operates a full service Trust Department. The common shares of TrustCo are traded on The NASDAQ Global Select Market under the symbol TRST.
Except for the historical information contained herein, the matters discussed in this news release and other information contained in TrustCo’s Securities and Exchange Commission filings may express “forward-looking statements.” Those “forward-looking statements” may involve risk and uncertainties, including statements containing future events or performance and assumptions and other statements of historical facts.
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) changes in the regulatory environment, (5) real estate and collateral values, and (6) changes in local market areas and 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.
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TRUSTCO BANK CORP NY
GLENVILLE, NY
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||||||
| 12/31/07 | 09/30/07 | 12/31/06 | ||||||||||
| Summary of operations | ||||||||||||
| Net interest income (TE) | $ | 24,932 | 25,314 | 24,257 | ||||||||
| Provision for loan losses | 2,500 | - | - | |||||||||
| Net securities transactions | (12 | ) | 226 | (332 | ) | |||||||
| Net trading (losses) gains | (15 | ) | 305 | - | ||||||||
| Noninterest income | 4,344 | 4,220 | 4,074 | |||||||||
| Noninterest expense | 13,832 | 13,597 | 13,452 | |||||||||
| Net income | 8,406 | 10,640 | 9,356 | |||||||||
| Per common share | ||||||||||||
| Net income per share: | ||||||||||||
| - Basic | $ | 0.112 | 0.142 | 0.125 | ||||||||
| - Diluted | 0.111 | 0.141 | 0.125 | |||||||||
| Cash dividends | 0.160 | 0.160 | 0.160 | |||||||||
| Tangible Book value at period end | 3.14 | 3.12 | 3.19 | |||||||||
| Market price at period end | 9.92 | 10.93 | 11.12 | |||||||||
| At period end | ||||||||||||
| Full time equivalent employees | 670 | 649 | 554 | |||||||||
| Full service banking offices | 107 | 105 | 91 | |||||||||
| Performance ratios | ||||||||||||
| Return on average assets | 1.00 | 1.26 | 1.21 | |||||||||
| Return on average equity (1) | 14.56 | 18.45 | 15.39 | |||||||||
| Efficiency (2) | 46.14 | 45.99 | 46.93 | |||||||||
| Net interest spread (TE) | 2.63 | 2.66 | 2.84 | |||||||||
| Net interest margin (TE) | 3.07 | 3.10 | 3.28 | |||||||||
| Dividend payout ratio | 143.48 | 113.02 | 128.22 | |||||||||
| Capital ratios at period end (3) | ||||||||||||
| Total equity to assets | 6.82 | 6.93 | 7.67 | |||||||||
| Tier 1 risk adjusted capital | 13.53 | 13.44 | 14.88 | |||||||||
| Total risk adjusted capital | 14.79 | 14.7 | 16.14 | |||||||||
| Asset quality analysis at period end | ||||||||||||
| Nonperforming loans to total loans | 0.66 | 0.46 | 0.40 | |||||||||
| Nonperforming assets to total assets | 0.39 | 0.27 | 0.23 | |||||||||
| Allowance for loan losses to total loans | 1.79 | 1.82 | 2.02 | |||||||||
| Coverage ratio (4) | 2.7 | 3.9 | 5.0 | |||||||||
| (1) | Average equity excludes the effect of accumulated other comprehensive income (loss). |
| (2) | Calculated as noninterest expense (excluding other real estate owned income/expense, specialized consulting and any one-time charges) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions, net trading gains and losses and one-time income items). |
| (3) | Capital ratios exclude the effect of accumulated other comprehensive income (loss). |
| (4) | Calculated as allowance for loan losses divided by total nonperforming loans. |
TE = Taxable equivalent.
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FINANCIAL HIGHLIGHTS, Continued
(dollars in thousands, except per share data)
(Unaudited)
| Twelve Months Ended | ||||||||
| 12/31/07 | 12/31/06 | |||||||
| Summary of operations | ||||||||
| Net interest income (TE) | $ | 99,504 | 101,370 | |||||
| Provision (credit) for loan losses | 2,500 | (3,575 | ) | |||||
| Net securities transactions | 217 | (596 | ) | |||||
| Net trading gains | 891 | - | ||||||
| Noninterest income | 16,654 | 15,455 | ||||||
| Noninterest expense | 53,593 | 49,062 | ||||||
| Net income | 39,467 | 45,325 | ||||||
| Per common share | ||||||||
| Net income per share: | ||||||||
| - Basic | $ | 0.525 | 0.605 | |||||
| - Diluted | 0.525 | 0.603 | ||||||
| Cash dividends | 0.640 | 0.640 | ||||||
| Tangible Book value at period end | 3.14 | 3.19 | ||||||
| Market price at period end | 9.92 | 11.12 | ||||||
| Performance ratios | ||||||||
| Return on average assets | 1.20 | % | 1.52 | |||||
| Return on average equity (1) | 17.19 | 18.71 | ||||||
| Efficiency (2) | 45.45 | 42.03 | ||||||
| Net interest spread (TE) | 2.66 | 3.08 | ||||||
| Net interest margin (TE) | 3.10 | 3.50 | ||||||
| Dividend payout ratio | 121.79 | 105.70 | ||||||
| (1) | Average equity excludes the effect of accumulated other comprehensive income (loss). |
| (2) | Calculated as noninterest expense (excluding other real estate owned income/expense, specialized consulting and any one-time charges) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions, net trading gains and losses and one-time income items). |
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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
| 12/31/07 | 12/31/06 | |||||||
| ASSETS | ||||||||
| Loans, net | $ | 1,900,263 | 1,726,898 | |||||
| Trading securities | 465,151 | - | ||||||
| Securities available for sale | 578,892 | 1,048,270 | ||||||
| Held to maturity securities | 15,000 | - | ||||||
| Federal funds sold and other short-term investments | 286,764 | 243,449 | ||||||
| Total earning assets | 3,246,070 | 3,018,617 | ||||||
| Cash and due from banks | 58,156 | 47,889 | ||||||
| Bank premises and equipment, net | 29,193 | 24,050 | ||||||
| Other assets | 44,132 | 70,631 | ||||||
| Total assets | $ | 3,377,551 | 3,161,187 | |||||
| LIABILITIES | ||||||||
| Deposits: | ||||||||
| Demand | $ | 262,863 | 259,401 | |||||
| Interest-bearing checking | 293,027 | 290,784 | ||||||
| Savings accounts | 609,064 | 662,310 | ||||||
| Money market | 341,790 | 310,719 | ||||||
| Certificates of deposit (in denominations of $100,000 or more) | 390,328 | 299,813 | ||||||
| Other time deposits | 1,123,226 | 976,356 | ||||||
| Total deposits | 3,020,298 | 2,799,383 | ||||||
| Short-term borrowings | 92,220 | 95,507 | ||||||
| Long-term debt | 29 | 59 | ||||||
| Other liabilities | 27,936 | 26,715 | ||||||
| Total liabilities | 3,140,483 | 2,921,664 | ||||||
| SHAREHOLDERS' EQUITY | 237,068 | 239,523 | ||||||
| Total liabilities and shareholders' equity | $ | 3,377,551 | 3,161,187 | |||||
| Number of common shares outstanding, in thousands | 75,326 | 74,873 | ||||||
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CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||||||
| 12/31/07 | 09/30/07 | 12/31/06 | ||||||||||
| Interest income | ||||||||||||
| Loans | $ | 31,225 | 31,039 | 27,883 | ||||||||
| Investments | 12,904 | 12,851 | 13,691 | |||||||||
| Federal funds sold and other short term investments | 3,621 | 4,949 | 2,140 | |||||||||
| Total interest income | 47,750 | 48,839 | 43,714 | |||||||||
| Interest expense | ||||||||||||
| Deposits | 22,776 | 23,342 | 19,264 | |||||||||
| Borrowings | 798 | 942 | 981 | |||||||||
| Total interest expense | 23,574 | 24,284 | 20,245 | |||||||||
| Net interest income | 24,176 | 24,555 | 23,469 | |||||||||
| Provision for loan losses | 2,500 | - | - | |||||||||
| Net interest income after provision for loan losses | 21,676 | 24,555 | 23,469 | |||||||||
| Net securities transactions | (12 | ) | 226 | (332 | ) | |||||||
| Trading (losses) gains | (15 | ) | 305 | - | ||||||||
| Noninterest income | 4,344 | 4,220 | 4,074 | |||||||||
| Noninterest expense | 13,832 | 13,597 | 13,452 | |||||||||
| Income before income taxes | 12,161 | 15,709 | 13,759 | |||||||||
| Income tax expense | 3,755 | 5,069 | 4,403 | |||||||||
| Net income | $ | 8,406 | 10,640 | 9,356 | ||||||||
| Net income per share: | ||||||||||||
| - Basic | $ | 0.112 | 0.142 | 0.125 | ||||||||
| - Diluted | $ | 0.111 | 0.141 | 0.125 | ||||||||
| Avg equivalent shares outstanding, in thousands: | ||||||||||||
| - Basic | 75,326 | 75,166 | 74,941 | |||||||||
| - Diluted | 75,416 | 75,267 | 75,139 | |||||||||
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CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
| Twelve Months Ended | ||||||||
| 12/31/07 | 12/31/06 | |||||||
| Interest income | ||||||||
| Loans | $ | 120,461 | 104,400 | |||||
| Investments | 50,092 | 55,895 | ||||||
| Federal funds sold and other short term investments | 18,865 | 8,912 | ||||||
| Total interest income | 189,418 | 169,207 | ||||||
| Interest expense | ||||||||
| Deposits | 89,261 | 67,228 | ||||||
| Borrowings | 3,723 | 3,712 | ||||||
| Total interest expense | 92,984 | 70,940 | ||||||
| Net interest income | 96,434 | 98,267 | ||||||
| Provision (credit) for loan losses | 2,500 | (3,575 | ) | |||||
| Net interest income after provision (credit) for loan losses | 93,934 | 101,842 | ||||||
| Net securities transactions | 217 | (596 | ) | |||||
| Trading gains | 891 | - | ||||||
| Noninterest income | 16,654 | 15,455 | ||||||
| Noninterest expense | 53,593 | 49,062 | ||||||
| Income before income taxes | 58,103 | 67,639 | ||||||
| Income tax expense | 18,636 | 22,314 | ||||||
| Net income | $ | 39,467 | 45,325 | |||||
| Net income per share: | ||||||||
| - Basic | $ | 0.525 | 0.605 | |||||
| - Diluted | $ | 0.525 | 0.603 | |||||
| Avg equivalent shares outstanding, in thousands: | ||||||||
| - Basic | 75,122 | 74,904 | ||||||
| - Diluted | 75,202 | 75,149 | ||||||
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