 | 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 Third Quarter
Profit Increase of 47%
Glenville, New York – October 20, 2009
TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced net income for the third quarter of 2009 of $7.9 million, equal to diluted earnings per share of $0.103, as compared to net income of $5.4 million and diluted earnings per share of $0.070 for the immediately preceding quarter, an increase of 47%. The quarter was marked by continued margin improvement compared to the second quarter of 2009. Making the earnings announcement was Robert J. McCormick, Chairman, President and Chief Executive Officer. Mr. McCormick noted, “We are pleased that third quarter results continued a 2009 trend of solid earnings and growth. We look forward to the remainder of the year with cautious optimism as our internal trends remain positive.” Return on average equity and return on average assets were 13.09% and 0.87%, respectively, for the third quarter of 2009, compared to 9.10% and 0.61% for the second quarter of 2009.
In the third quarter of 2008, net income was $9.0 million and earnings per share were $0.119. This resulted in return on average equity and return on average assets of 15.41% and 1.05%, respectively, for the third quarter of 2008.
Mr. McCormick also noted “While some aspects of the financial and economic problems that hurt many financial institutions in 2007 and 2008 have eased somewhat in 2009, other core economic issues remain, particularly the ongoing loss of jobs nationally and regionally. TrustCo’s long-term focus on traditional lending criteria and conservative balance sheet management has helped us avoid most aspects of these problems. This has enabled us to maintain an extremely strong balance sheet and continued profitability, and allowed us to focus on conducting business rather than putting out fires. We are particularly encouraged by another quarter of strong expansion of our net interest margin, and by the flattening of our non-performing assets. As a further indication of our success relative to our peers, Trustco Bank was named the eighth best performing bank in the country by the ABA Banking Journal out of all banks with assets of more than $3 billion.”
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For the first nine months of 2009 net income was $19.6 million and resulted in diluted earnings per share of $0.257, as compared to the first nine months of 2008 that resulted in net income of $26.9 million and diluted earnings per share of $0.356. FDIC insurance premiums increased by $5.0 million in the first nine months of 2009 compared to the first nine months of 2008. Return on average equity and return on average assets were 11.04% and 0.75%, respectively, for the first nine months of 2009 and 15.53% and 1.05% for the comparable period in 2008.
TrustCo continued to report strong growth in loans and deposits on a year-over-year basis. For the quarter ended September 30, 2009, average loans were up $160.4 million or 7.8% compared to the same period in 2008, while average deposits rose $180.4 million or 5.9% over the same period. Five new offices were opened during the first nine months of 2009, bringing the total to 129. Seventeen offices were opened during 2008. The branch expansion program will be substantially completed in 2009 with a limited number of 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 goals will take time and continued hard work. Our success in growing loans and deposits provides the basic building blocks that we believe will help drive profit growth over the coming years.”
The Company’s net interest margin was 3.42% for the third quarter of 2009, compared to 3.04% in the third quarter of 2008 and to 3.24% in the second quarter of 2009. The third quarter margin is the highest since the third quarter of 2006. Net income was also impacted by a loan loss provision of $3.2 million for the third quarter of 2009, compared to a provision of $1.0 million in the third quarter of 2008 and a provision of $2.8 million for the second quarter of 2009. As previously discussed, the FDIC’s plan to recapitalize the insurance fund included a special deposit insurance premium in the second quarter that was levied on all banks including TrustCo.
Nonperforming loans were virtually unchanged at $44.1 million as of September 30, 2009, compared to $43.9 million as of June 30, 2009, and remain at manageable levels. The allowance for loan losses as a percentage of gross loans and as a multiple of net charge-offs remains strong. At September 30, 2009, nonperforming loans were equal to 1.97% of total loans, down slightly from 2.01% at the end of the second quarter. The allowance for loan losses was unchanged at 0.8 times nonperforming loans. Reserves to total loans were also unchanged at 1.65%, and covered annualized third quarter net charge-offs by 3.7 times. Gross charge-offs declined from $3.21 million in the second quarter of 2009 to $2.85 million in the third quarter of 2009, while net charge-offs declined from $2.76 million to $2.49 million over that same period.
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TrustCo Bank Corp is a $3.7 billion bank holding company and through its subsidiary, Trustco Bank, operates 129 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 | ||||||||||||
| 09/30/09 | 06/30/09 | 09/30/08 | ||||||||||
| Summary of operations | ||||||||||||
| Net interest income (TE) | $ | 30,070 | 27,790 | 25,292 | ||||||||
| Provision for loan losses | 3,150 | 2,760 | 1,000 | |||||||||
| Net securities transactions | 892 | (41 | ) | 21 | ||||||||
| Net trading gains (losses) | (6 | ) | (36 | ) | 14 | |||||||
| Noninterest income | 4,114 | 3,996 | 4,759 | |||||||||
| Noninterest expense | 18,686 | 20,358 | 14,726 | |||||||||
| Net income | 7,909 | 5,380 | 9,034 | |||||||||
| Per common share | ||||||||||||
| Net income per share: | ||||||||||||
| - Basic | $ | 0.103 | 0.070 | 0.119 | ||||||||
| - Diluted | 0.103 | 0.070 | 0.119 | |||||||||
| Cash dividends | 0.063 | 0.063 | 0.110 | |||||||||
| Tangible Book value at period end | 3.19 | 3.11 | 3.17 | |||||||||
| Market price at period end | 6.25 | 5.89 | 11.71 | |||||||||
| At period end | ||||||||||||
| Full time equivalent employees | 727 | 726 | 696 | |||||||||
| Full service banking offices | 129 | 129 | 118 | |||||||||
| Performance ratios | ||||||||||||
| Return on average assets | 0.87 | % | 0.61 | 1.05 | ||||||||
| Return on average equity (1) | 13.09 | 9.10 | 15.41 | |||||||||
| Efficiency (2) | 52.51 | 56.61 | 48.99 | |||||||||
| Net interest spread (TE) | 3.23 | 3.02 | 2.74 | |||||||||
| Net interest margin (TE) | 3.42 | 3.24 | 3.04 | |||||||||
| Dividend payout ratio | 60.49 | 88.77 | 92.36 | |||||||||
| Capital ratios at period end (3) | ||||||||||||
| Total equity to assets | 6.65 | % | 6.66 | 6.91 | ||||||||
| Tier 1 risk adjusted capital | 12.45 | 12.45 | 12.62 | |||||||||
| Total risk adjusted capital | 13.71 | 13.71 | 13.88 | |||||||||
| Asset quality analysis at period end | ||||||||||||
| Nonperforming loans to total loans | 1.97 | % | 2.01 | 1.11 | ||||||||
| Nonperforming assets to total assets | 1.41 | 1.42 | 0.71 | |||||||||
| Allowance for loan losses to total loans | 1.65 | 1.65 | 1.68 | |||||||||
| Coverage ratio (4) | 0.8 | X | 0.8 | 1.5 | ||||||||
| (1) | Average equity excludes the effect of accumulated other comprehensive loss of $9 thousand for the three months ended 9/30/09 and accumulated other comprehensive income of $526 thousand and $5.0 million for the three months ended 6/30/09 and 9/30/08, respectively. Including these items, return on average equity is 13.09%, 9.08% and 15.08% for the three months ended 9/30/09, 6/30/09, and 9/30/08, respectively. |
| (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)
| Nine Months Ended | ||||||||
| 09/30/09 | 09/30/08 | |||||||
| Summary of operations | ||||||||
| Net interest income (TE) | $ | 82,867 | 74,654 | |||||
| Provision for loan losses | 7,910 | 2,000 | ||||||
| Net securities transactions | 962 | 439 | ||||||
| Net trading (losses) gains | (350 | ) | (229 | ) | ||||
| Noninterest income | 13,652 | 13,062 | ||||||
| Noninterest expense | 57,525 | 43,637 | ||||||
| Net income | 19,638 | 26,930 | ||||||
| Per common share | ||||||||
| Net income per share: | ||||||||
| - Basic | $ | 0.257 | 0.356 | |||||
| - Diluted | 0.257 | 0.356 | ||||||
| Cash dividends | 0.235 | 0.330 | ||||||
| Tangible Book value at period end | 3.19 | 3.17 | ||||||
| Market price at period end | 6.25 | 11.71 | ||||||
| Performance ratios | ||||||||
| Return on average assets | 0.75 | % | 1.05 | |||||
| Return on average equity (1) | 11.04 | 15.53 | ||||||
| Efficiency (2) | 56.77 | 49.65 | ||||||
| Net interest spread (TE) | 2.98 | 2.65 | ||||||
| Net interest margin (TE) | 3.20 | 3.00 | ||||||
| Dividend payout ratio | 91.37 | 92.74 | ||||||
| (1) | Average equity excludes the effect of accumulated other comprehensive income of $94 thousand and $6.9 million for the nine months ended 9/30/09 and 9/30/08, respectively. Including these items, return on average equity is 11.03% and 15.09% for the nine months ended 9/30/09 and 9/30/08, respectively. |
| (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). |
TE = Taxable equivalent.
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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
| 09/30/09 | 12/31/08 | 09/30/08 | ||||||||||
| ASSETS | ||||||||||||
| Loans, net | $ | 2,194,811 | 2,127,189 | 2,051,007 | ||||||||
| Trading securities | 1,040 | 116,326 | 252,879 | |||||||||
| Securities available for sale | 558,222 | 676,002 | 524,480 | |||||||||
| Held to maturity securities | 552,052 | 264,689 | 110,688 | |||||||||
| Federal funds sold and other short-term investments | 223,795 | 207,680 | 340,627 | |||||||||
| Total earning assets | 3,529,920 | 3,391,886 | 3,279,681 | |||||||||
| Cash and due from banks | 40,145 | 41,924 | 61,725 | |||||||||
| Bank premises and equipment | 37,359 | 35,156 | 32,840 | |||||||||
| Other assets | 42,954 | 37,847 | 54,026 | |||||||||
| Total assets | $ | 3,650,378 | 3,506,813 | 3,428,272 | ||||||||
| LIABILITIES | ||||||||||||
| Deposits: | ||||||||||||
| Demand | $ | 258,960 | 249,887 | 258,461 | ||||||||
| Interest-bearing checking | 371,373 | 331,144 | 317,568 | |||||||||
| Savings | 640,983 | 609,444 | 598,349 | |||||||||
| Money market | 354,194 | 285,829 | 287,285 | |||||||||
| Certificates of deposit (in denominations of $100,000 or more) | 503,662 | 455,062 | 415,100 | |||||||||
| Other time deposits | 1,133,917 | 1,204,905 | 1,176,279 | |||||||||
| Total deposits | 3,263,089 | 3,136,271 | 3,053,042 | |||||||||
| Short-term borrowings | 121,894 | 109,592 | 110,221 | |||||||||
| Long-term debt | - | - | 5 | |||||||||
| Other liabilities | 20,727 | 24,926 | 23,886 | |||||||||
| Total liabilities | 3,405,710 | 3,270,789 | 3,187,154 | |||||||||
| SHAREHOLDERS' EQUITY | 244,668 | 236,024 | 241,118 | |||||||||
| Total liabilities and shareholders' equity | $ | 3,650,378 | 3,506,813 | 3,428,272 | ||||||||
| Number of common shares outstanding, in thousands | 76,537 | 76,084 | 75,867 | |||||||||
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CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||||||
| 09/30/09 | 06/30/09 | 09/30/08 | ||||||||||
| Interest income | ||||||||||||
| Loans | $ | 31,184 | 31,094 | 31,066 | ||||||||
| Investments | 9,397 | 8,065 | 8,988 | |||||||||
| Federal funds sold and other short term investments | 565 | 622 | 1,999 | |||||||||
| Total interest income | 41,146 | 39,781 | 42,053 | |||||||||
| Interest expense | ||||||||||||
| Deposits | 11,187 | 12,196 | 16,871 | |||||||||
| Borrowings | 422 | 340 | 483 | |||||||||
| Total interest expense | 11,609 | 12,536 | 17,354 | |||||||||
| Net interest income | 29,537 | 27,245 | 24,699 | |||||||||
| Provision for loan losses | 3,150 | 2,760 | 1,000 | |||||||||
| Net interest income after provision for loan losses | 26,387 | 24,485 | 23,699 | |||||||||
| Net securities transactions | 892 | (41 | ) | 21 | ||||||||
| Trading gains (losses) | (6 | ) | (36 | ) | 14 | |||||||
| Noninterest income | 4,114 | 3,996 | 4,759 | |||||||||
| Noninterest expense | 18,686 | 20,358 | 14,726 | |||||||||
| Income before income taxes | 12,701 | 8,046 | 13,767 | |||||||||
| Income tax expense | 4,792 | 2,666 | 4,733 | |||||||||
| Net income | $ | 7,909 | 5,380 | $ | 9,034 | |||||||
| Net income per share: | ||||||||||||
| - Basic | $ | 0.103 | 0.070 | $ | 0.119 | |||||||
| - Diluted | $ | 0.103 | 0.070 | $ | 0.119 | |||||||
| Avg equivalent shares outstanding, in thousands: | ||||||||||||
| - Basic | 76,526 | 76,421 | 75,833 | |||||||||
| - Diluted | 76,526 | 76,421 | 75,845 | |||||||||
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CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
| Nine Months Ended | ||||||||
| 09/30/09 | 09/30/08 | |||||||
| Interest income | ||||||||
| Loans | $ | 93,469 | 91,880 | |||||
| Investments | 24,819 | 29,532 | ||||||
| Federal funds sold and other short term investments | 1,705 | 8,017 | ||||||
| Total interest income | 119,993 | 129,429 | ||||||
| Interest expense | ||||||||
| Deposits | 37,526 | 55,351 | ||||||
| Borrowings | 1,227 | 1,508 | ||||||
| Total interest expense | 38,753 | 56,859 | ||||||
| Net interest income | 81,240 | 72,570 | ||||||
| Provision for loan losses | 7,910 | 2,000 | ||||||
| Net interest income after provision for loan losses | 73,330 | 70,570 | ||||||
| Net securities transactions | 962 | 439 | ||||||
| Trading (losses) gains | (350 | ) | (229 | ) | ||||
| Noninterest income | 13,652 | 13,062 | ||||||
| Noninterest expense | 57,525 | 43,637 | ||||||
| Income before income taxes | 30,069 | 40,205 | ||||||
| Income tax expense | 10,431 | 13,275 | ||||||
| Net income | $ | 19,638 | 26,930 | |||||
| Net income per share: | ||||||||
| - Basic | $ | 0.257 | 0.356 | |||||
| - Diluted | $ | 0.257 | 0.356 | |||||
| Avg equivalent shares outstanding, in thousands: | ||||||||
| - Basic | 76,329 | 75,672 | ||||||
| - Diluted | 76,329 | 75,680 | ||||||
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