| TRUSTCO | | Exhibit 99 (a) |
| Bank Corp NY | | News Release |
| 5 Sarnowski Drive, Glenville, New York, 12302 |
| (518) 377-3311 Fax: (518) 381-3668 |
| |
| Subsidiary: Trustco Bank | NASDAQ -- TRST |
Vice President/Treasurer
(518) 381-3607
FOR IMMEDIATE RELEASE:
TrustCo Announces Second Quarter Profits
Up 4% from Second Quarter of 2007
Glenville, New York – July 15, 2008
TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) is pleased to announce net income for the second quarter of 2008 of $8.5 million, equal to diluted earnings per share of $0.112, as compared to net income of $8.1 million and diluted earnings per share of $0.108 for the second quarter of 2007. Net income and diluted earnings per share for the second quarter of 2008 were up 4% over the prior year. Return on average equity and return on average assets were 14.72% and 0.99%, respectively, for the second quarter of 2008, compared to 14.13% and 0.98% for the second quarter of 2007.
Making the earnings announcement was Robert J. McCormick, President and Chief Executive Officer. Mr. McCormick noted, “A large segment of the banking and financial services industry continues to suffer significant problems, and many banks have once again pre-announced large charges that will substantially reduce or eliminate their earnings in the second quarter of 2008. TrustCo has traditionally focused on maintaining a highly conservative balance sheet, particularly in terms of liquidity and asset quality, and has never been involved in direct subprime lending, which has been the biggest cause of these widely reported industry problems. One measure of liquidity is the loan-to-deposit ratio, where TrustCo’s ratio of 64% compares to about 100% for the peer group. The difference represents a large safety net when times are tough, but also an opportunity that will allow our Company to conduct business in a way that other institutions with less liquidity will not be able to. TrustCo’s long-term focus on traditional lending criteria has helped it maintain strong asset quality. Although maintaining our conservative stance may have slightly reduced profits in good times, our strength today is the result. Our return on equity levels remain among the leaders in our industry.”
For the first half of 2008 net income was $17.9 million and resulted in diluted earnings per share of $0.237, as compared to the first half of 2007 that resulted in net income of $20.4 million and diluted earnings per share of $0.272. Return on average assets and return on average equity was 1.06% and 15.60%, respectively, for the first six months of 2008 and 1.27% and 17.88% for the comparable period in 2007.
Results for the first half of 2007 include net trading gains of $0.6 million, compared to net trading losses of $0.2 million in the first half of 2008. Results for the second quarter of 2008 included net trading losses of $1.0 million, compared to $2.8 million in the second quarter of 2007.
TrustCo continued to report solid growth in both deposits and loans on a year-over-year basis. For the quarter ended June 30, 2008, average deposits were up $136 million, an increase of 4.6% compared to the second quarter of 2007. Average loans showed similar results, rising $160 million or 8.8% compared to the same period in 2007. During the second quarter of 2008, TrustCo’s branch network expanded to 112. Four offices were opened in the first quarter of 2008 and sixteen offices were opened during 2007. Current plans call for the expansion program to continue in 2008 with new branches planned in the markets currently served. Mr. McCormick noted that, “We are pleased with the results of our expansion program but are mindful that achieving our profit goals will take time and continued hard work.”
The Company’s net interest margin was 2.87% for the second quarter of 2008, compared to 3.07% for the second quarter of 2007. Net income was also impacted by a loan loss provision of $0.7 million for the second quarter of 2008, compared to a zero provision in the second quarter of 2007 and a provision of $0.3 million for the first quarter of 2008.
Nonperforming loans continue at low levels and reserve coverage of those loans remains strong. At June 30, 2008, nonperforming loans were equal to 0.99% of total loans, while the allowance for loan losses was 1.8 times nonperforming loans. The allowance was equal to 1.73% of gross loans.
TrustCo Bank Corp is a $3.5 billion bank holding company and through its subsidiary, Trustco Bank, operates 112 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.
TRUSTCO BANK CORP NY
GLENVILLE, NY
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
| | | Three Months Ended | |
| | | 06/30/08 | | | 03/31/08 | | | 06/30/07 | |
| Summary of operations | | | | | | | | | |
| Net interest income (TE) | | $ | 24,212 | | | | 25,149 | | | | 24,752 | |
| Provision for loan losses | | | 700 | | | | 300 | | | | - | |
| Net securities transactions | | | 784 | | | | (366 | ) | | | 3 | |
| Net trading (losses) gains | | | (960 | ) | | | 717 | | | | (2,844 | ) |
| Noninterest income | | | 4,113 | | | | 4,190 | | | | 3,987 | |
| Noninterest expense | | | 14,347 | | | | 14,564 | | | | 13,458 | |
| Net income | | | 8,469 | | | | 9,427 | | | | 8,107 | |
| | | | | | | | | | | | | |
| Per common share | | | | | | | | | | | | |
| Net income per share: | | | | | | | | | | | | |
| - Basic | | $ | 0.112 | | | | 0.125 | | | | 0.108 | |
| - Diluted | | | 0.112 | | | | 0.125 | | | | 0.108 | |
| Cash dividends | | | 0.110 | | | | 0.110 | | | | 0.160 | |
| Tangible Book value at period end | | | 3.16 | | | | 3.21 | | | | 3.06 | |
| Market price at period end | | | 7.42 | | | | 8.89 | | | | 9.88 | |
| | | | | | | | | | | | | |
| At period end | | | | | | | | | | | | |
| Full time equivalent employees | | | 688 | | | | 680 | | | | 610 | |
| Full service banking offices | | | 112 | | | | 111 | | | | 101 | |
| | | | | | | | | | | | | |
| Performance ratios | | | | | | | | | | | | |
| Return on average assets | | | 0.99 | % | | | 1.13 | | | | 0.98 | |
| Return on average equity (1) | | | 14.72 | | | | 16.48 | | | | 14.13 | |
| Efficiency (2) | | | 51.01 | | | | 49.01 | | | | 46.20 | |
| Net interest spread (TE) | | | 2.54 | | | | 2.68 | | | | 2.63 | |
| Net interest margin (TE) | | | 2.87 | | | | 3.07 | | | | 3.07 | |
| Dividend payout ratio | | | 98.29 | | | | 88.13 | | | | 148.02 | |
| | | | | | | | | | | | | |
| Capital ratios at period end (3) | | | | | | | | | | | | |
| Total equity to assets | | | 6.73 | % | | | 6.88 | | | | 6.87 | |
| Tier 1 risk adjusted capital | | | 12.87 | | | | 13.32 | | | | 13.29 | |
| Total risk adjusted capital | | | 14.13 | | | | 14.58 | | | | 14.55 | |
| | | | | | | | | | | | | |
| Asset quality analysis at period end | | | | | | | | | | | | |
| Nonperforming loans to total loans | | | 0.99 | % | | | 0.89 | | | | 0.50 | |
| Nonperforming assets to total assets | | | 0.63 | | | | 0.55 | | | | 0.28 | |
| Allowance for loan losses to total loans | | | 1.73 | | | | 1.77 | | | | 1.90 | |
| Coverage ratio (4) | | | 1.8 | X | | | 2.0 | | | | 3.8 | |
| (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.
TE = Taxable equivalent.
