TrustCo Bank Corp NY (TRST) 8-K Results of Operations and Financial Condition

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

Contact: Kevin T. Timmons

Vice President/Treasurer

(518) 381-3607

FOR IMMEDIATE RELEASE:

TrustCo Announces Fourth Quarter

Net Income Increase of 19%

Glenville, New York – January 19, 2010

TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced net income for the fourth quarter of 2009 of $8.5 million, equal to diluted earnings per share of $0.111, as compared to net income of $7.1 million and diluted earnings per share of $0.094 for the fourth quarter of 2008.  Net income was up 18.7% from the fourth quarter of 2008 to the fourth quarter of 2009.  Net income was up 7.2% from the third quarter of 2009 to the fourth quarter of 2009, while earnings per share rose to $0.111 from $0.103.  The fourth quarter of 2009 was marked by continued core balance sheet growth as well as improvement of the net interest margin.  Making the earnings announcement was Robert J. McCormick, Chairman, President and Chief Executive Officer.  Mr. McCormick noted, “We are pleased that fourth quarter results continued a 2009 trend of solid earnings and growth and look forward to 2010 with cautious optimism as our internal trends remain positive.  During 2009 we saw significant improvement in the second half of the year, which we think bodes well for 2010.”  Return on average equity and return on average assets were 13.71% and 0.92%, respectively, for the fourth quarter of 2009, compared to 11.87% and 0.82% for the fourth quarter of 2008 and to 13.09% and 0.87%, respectively, for the third quarter of 2009.

Mr. McCormick also noted “For our national economy, 2009 was another tumultuous year, with significant financial and economic problems.  Although some of those problems have eased, other core economic issues remain, particularly the level of unemployment both 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 tomaintain 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 continued growth of our core loan and deposit portfolios.”

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TrustCo continued to report strong growth in loans and deposits on a year-over-year basis.  For the quarter ended December 31, 2009, average loans were up $136.7 million or 6.4% compared to the same period in 2008, while average deposits rose $175.9 million or 5.7% over the same period.  Seven new offices were opened during the full year 2009, bringing the total to 131.  Seventeen offices were opened during 2008.  The branch expansion program is substantially complete, although the Company typically opens or relocates a small number of branches every year as opportunities arise or circumstances dictate.  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 3.51% for the fourth quarter of 2009, compared to 2.96% in the fourth quarter of 2008 and to 3.42% in the third quarter of 2009.  The fourth quarter margin is the highest since the third quarter of 2006.  Net income was also impacted by a loan loss provision of $3.4 million for the fourth quarter of 2009, compared to a provision of $2.2 million in the fourth quarter of 2008 and a provision of $3.2 million for the third quarter of 2009.

Nonperforming loans were up modestly to $46.0 million as of December 31, 2009, compared to $44.3 million as of September 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 December 31, 2009, nonperforming loans were equal to 2.02% of total loans, up slightly from 1.97% at the end of the third 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 fourth quarter net charge-offs by 3.6 times.  Gross charge-offs declined from $2.87 million in the third quarter of 2009 to $2.74 million in the fourth quarter of 2009.

For the full year 2009 net income was $28.1 million and resulted in diluted earnings per share of $0.368, as compared to the full year 2008 net income of $34.1 million and diluted earnings per share of $0.450.  FDIC insurance premiums increased by $6.0 million in the full year 2009 compared to the full year 2008, including the special assessment recorded by all banks in the second quarter of the year.  The loan loss provision for the full year was $11.3 million in 2009 compared to $4.2 million in 2008.  Return on average equity and return on average assets were 11.72% and 0.79%, respectively, for the full year 2009 and 14.28% and 1.00% for the comparable period in 2008.

TrustCo Bank Corp is a $3.7 billion bank holding company and through its subsidiary, Trustco Bank, operates 131 offices in New York, New Jersey, Vermont, Massachusetts, and Florida.

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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
	12/31/09			09/30/09			12/31/08
Summary of operations
Net interest income (TE)	$	31,162		$	30,070			24,886
Provision for loan losses		3,400			3,150			2,200
Net securities transactions		886			892			11
Net trading gains (losses)		-			(6	)		384
Noninterest income		4,114			4,114			4,773
Noninterest expense		19,056			18,686			17,157
Net income		8,482			7,909			7,147
Per common share
Net income per share:
- Basic	$	0.111		$	0.103			0.094
- Diluted		0.111			0.103			0.094
Cash dividends		0.063			0.063			0.110
Tangible Book value at period end		3.20			3.19			3.10
Market price at period end		6.30			6.25			9.51
At period end
Full time equivalent employees		732			727			756
Full service banking offices		131			129			124
Performance ratios
Return on average assets		0.92	%		0.87			0.82
Return on average equity		13.71			13.09			11.87
Efficiency (1)		50.89			52.51			56.45
Net interest spread (TE)		3.35			3.23			2.67
Net interest margin (TE)		3.51			3.42			2.96
Dividend payout ratio		56.64			60.49			117.10
Capital ratios at period end (2)
Total equity to assets		6.71	%		6.65			6.77
Tier 1 risk adjusted capital		12.04			12.45			12.40
Total risk adjusted capital		13.30			13.71			13.66
Asset quality analysis at period end
Nonperforming loans to total loans		2.02	%		1.97			1.57
Nonperforming assets to total assets		1.50			1.41			1.02
Allowance for loan losses to total loans		1.65			1.65			1.67
Coverage ratio (3)		0.8	X		0.8			1.1

(1) 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).

(2) Capital ratios exclude the effect of accumulated other comprehensive income (loss).

(3) 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
	12/31/09			12/31/08
Summary of operations
Net interest income (TE)	$	114,029			99,540
Provision for loan losses		11,310			4,200
Net securities transactions		1,848			450
Net trading (losses) gains		(350	)		155
Noninterest income		17,766			17,835
Noninterest expense		76,581			60,794
Net income		28,120			34,077
Per common share
Net income per share:
- Basic	$	0.368			0.450
- Diluted		0.368			0.450
Cash dividends		0.298			0.440
Tangible Book value at period end		3.20			3.10
Market price at period end		6.30			9.51
Performance ratios
Return on average assets		0.79	%		1.00
Return on average equity		11.72			14.28
Efficiency (1)		55.18			51.37
Net interest spread (TE)		3.06			2.65
Net interest margin (TE)		3.27			2.98
Dividend payout ratio		80.90			97.85

(1) 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)

	12/31/09		12/31/08
ASSETS
Loans, net	$	2,243,945		2,127,189
Trading securities		-		116,326
Securities available for sale		810,365		676,002
Held to maturity securities		374,871		264,689
Federal funds sold and other short-term investments		100,636		207,680
Total earning assets		3,529,817		3,391,886
Cash and due from banks		45,258		41,924
Bank premises and equipment		37,793		35,156
Other assets		67,029		37,847
Total assets	$	3,679,897		3,506,813
LIABILITIES
Deposits:
Demand	$	258,759		249,887
Interest-bearing checking		405,383		331,144
Savings		665,463		609,444
Money market		393,779		285,829
Certificates of deposit (in denominations of $100,000 or more)		486,190		455,062
Other time deposits		1,095,586		1,204,905
Total deposits		3,305,160		3,136,271
Short-term borrowings		107,728		109,592
Other liabilities		21,331		24,926
Total liabilities		3,434,219		3,270,789
SHAREHOLDERS' EQUITY		245,678		236,024
Total liabilities and shareholders' equity	$	3,679,897		3,506,813
Number of common shares outstanding, in thousands		76,651		76,084

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CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	12/31/09		09/30/09			12/31/08
Interest income
Loans	$	31,730		31,184			31,322
Investments		9,154		9,397			9,414
Federal funds sold and other short term investments		483		565			754
Total interest income		41,367		41,146			41,490
Interest expense
Deposits		10,217		11,187			16,733
Borrowings		481		422			464
Total interest expense		10,698		11,609			17,197
Net interest income		30,669		29,537			24,293
Provision for loan losses		3,400		3,150			2,200
Net interest income after provision for loan losses		27,269		26,387			22,093
Net securities transactions		886		892			11
Trading gains (losses)		-		(6	)		384
Noninterest income		4,114		4,114			4,773
Noninterest expense		19,056		18,686			17,157
Income before income taxes		13,213		12,701			10,104
Income tax expense		4,731		4,792			2,957
Net income	$	8,482	$	7,909			7,147
Net income per share:
- Basic	$	0.111	$	0.103			0.094
- Diluted	$	0.111	$	0.103			0.094
Avg equivalent shares outstanding, in thousands:
- Basic		76,696		76,526			76,056
- Diluted		76,696		76,526			76,158

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CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Twelve Months Ended
	12/31/09			12/31/08
Interest income
Loans	$	125,199			123,202
Investments		33,973			38,946
Federal funds sold and other short term investments		2,188			8,771
Total interest income		161,360			170,919
Interest expense
Deposits		47,743			72,084
Borrowings		1,708			1,972
Total interest expense		49,451			74,056
Net interest income		111,909			96,863
Provision for loan losses		11,310			4,200
Net interest income after provision for loan losses		100,599			92,663
Net securities transactions		1,848			450
Trading (losses) gains		(350	)		155
Noninterest income		17,766			17,835
Noninterest expense		76,581			60,794
Income before income taxes		43,282			50,309
Income tax expense		15,162			16,232
Net income	$	28,120			34,077
Net income per share:
- Basic	$	0.368			0.450
- Diluted	$	0.368			0.450
Avg equivalent shares outstanding, in thousands:
- Basic		76,482			75,762
- Diluted		76,482			75,793

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