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

Exhibit 99(a)

  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 Up 26%

Glenville, New York –January 23, 2012

TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced net income for the fourth quarter of 2011 of $8.7 million, up 26.2% over the prior-year period and equal to diluted earnings per share of $0.093, compared to net income of $6.9 million and diluted earnings per share of $0.090 for the fourth quarter of 2010.  Fourth quarter 2011 per share results include the full quarter effect of the common stock offering completed on July 6, 2011.

On a pre-tax basis, earnings were up 40.6% from $10.4 million in the fourth quarter of 2010 to $14.6 million in the fourth quarter of 2011.  The fourth quarter of 2011 also saw continued core balance sheet growth.  Robert J. McCormick, President and Chief Executive Officer noted, “We are pleased that the fourth quarter resulted in solid earnings gains and continued core loan and deposit growth.  2011 was an important year for TrustCo, marked by improved profits, continued balance sheet growth, lower non-performing assets and the addition of new capital that proactively addresses capital requirements and positions us for growth in 2012 and beyond.  We look forward to the new year with optimism as our internal trends remain positive.  The banking industry continues to face challenges, but the progress TrustCo has made this year has been significant.”  Return on average equity and return on average assets were 10.15% and 0.83%, respectively, for the fourth quarter of 2011, compared to 10.49% and 0.71% for the fourth quarter of 2010.  Increased capital from the common stock offering led to a lower return on average equity for the fourth quarter of 2011.  The efficiency ratio improved to 46.68% for the fourth quarter of 2011, compared to 53.25% for the fourth quarter of 2010, due to a combination of revenue growth and tight control of core operating expenses.

For the full year 2011 net income was $33.1 million and resulted in diluted earnings per share of $0.389, as compared to the full year 2010 net income of $29.3 million and diluted earnings per share of $0.381.  Net income was up 12.8% from the full year 2010 to the full year 2011, and income before taxes was up 19.3%.  Return on average equity and return on average assets were 11.04% and 0.81%, respectively, for the full year of 2011 and 11.48% and 0.77% for 2010.  Full year results, including per share figures, include the impact of the additional equity only since the offering was completed.

Page 4

Mr. McCormick also noted “We continue to see some signs of economic improvement in the markets in which we operate, although some core problems remain, particularly high levels of unemployment. We believe our long-term focus on traditional lending criteria and conservative balance sheet management has helped us avoid most aspects of the problems that have afflicted many banks in recent years, which has enabled us to maintain a strong balance sheet and continued profitability.  As a result, we have been able to focus on conducting business, which has put us in a position to take advantage of the significant upheaval that customers of other banks have seen.  We are particularly encouraged by the continued growth of our core loan and deposit portfolios.”

TrustCo continued to report solid growth in loans and deposits on a year-over-year basis.  For the quarter ended December 31, 2011, average loans were up $147.3 million or 6.3% compared to the same period in 2010, while average deposits increased $196.0 million or 5.6% over the same period.  One new office was added to the branch network, with 136 offices open at year-end.  Mr. McCormick noted that, “We are pleased with the progress that we have made in growing loans and deposits through our recently completed branch expansion program but are mindful that fully achieving our goals will take time and continued hard work.  We believe our success in growing customer relationships provides the basic building blocks that will help drive profit growth over the coming years.”

Nonperforming loans were $48.8 million as of December 31, 2011, approximately equal to the prior year and below the 2011 peak of $50.4 million at March 31, 2011.  Nonperforming assets declined to $54.0 million at December 31, 2011, compared to $56.2 million at December 31, 2010.  At December 31, 2011, nonperforming loans were equal to 1.93% of total loans, compared to 2.07% at December 31, 2010.  Nonperforming assets to total assets fell to 1.27% at December 31, 2011, compared to 1.42% at December 31, 2010.  The allowance for loan losses as a percentage of gross loans and as a multiple of net charge-offs remains strong.  Reserves to total loans continued to improve, increasing from 1.78% at December 31, 2010 to 1.93% at December 31, 2011, and covered annualized fourth quarter net charge-offs by 3.7 times, compared to an annualized 2.4 times for the fourth quarter of 2010.  The coverage ratio, or allowance for loan losses to nonperforming loans  improved to 99.9% at December 31, 2011, compared to 85.9% at December 31, 2010.

Net interest margin for the fourth quarter of 2011 was 3.35%, down from 3.38% in the third quarter of 2011 and from 3.43% in the fourth quarter of 2010.  The decline in the margin reflects the continued effect of the low rate environment on both the loan and investment portfolios, partly offset by lower deposit pricing.

Two items affected fourth quarter results relative to prior periods.  Fourth quarter 2011 income tax expense was affected by a $450 thousand one-time item that increased the effective tax rate and is not expected to be repeated in 2012.  This item reduced net income in both the three and twelve-month periods of 2011, thus reducing the increase in net income from the 2010 periods to the 2011 periods.  The effective tax rate for the fourth quarter of 2011 was 40.3%, compared to 33.4% in the fourth quarter of 2010 and 35.9% in the third quarter of 2011.  Fourth quarter 2011 results also included a reduction of $745 thousand in securities gains compared to the level recorded in the fourth quarter of 2010.

Page 5

On July 6, 2011 the Company completed an offering of 15.6 million common shares, raising net proceeds of $67.6 million.  The additional capital significantly improved the Company’s capital position.  At December 31, 2011 the tangible equity ratio was 7.97% compared to 6.45% at December 31, 2010.  Tangible book value per share also increased, from $3.31 per share to $3.62 per share over that period.

TrustCo Bank Corp NY is a $4.2 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 136 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at December 31, 2011.

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.

A conference call to discuss fourth quarter 2011 results will held at 9:00 a.m. Eastern Time on January 24, 2012.  Those wishing to participate in the call may dial toll-free 1-877-317-6789.  International callers must dial + 1-412-317-6789.   A replay of the call will be available until April 23, 2012 by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10008723. The call will also be audio webcast at: https://services.choruscall.com/links/trst120124.html, and will be available until January 24, 2013.

Safe Harbor Statement

All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. The “forward-looking statements” may include statements regarding future events or performance and statements regarding TrustCo’s ability to offer and sell securities under its shelf registration statement. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed. 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 our actual results and could cause our actual financial performance to differ materially from that expressed in any forward-looking statement: credit risk, the effects of and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rates, market and monetary fluctuations, competition, the effect of changes in financial services laws and regulations (including laws concerning taxation, banking and securities), real estate and collateral values, changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board (“FASB”) or the Public Company Accounting Oversight Board; changes in local market areas and general business and economic trends and the matters described under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2010, as amended, and in our subsequent securities filings.

Page 6

TRUSTCO BANK CORP NY

GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	12/31/11			09/30/11		12/31/10
Summary of operations
Net interest income (TE)	$	34,220			34,390		32,353
Provision for loan losses		4,200			5,100		5,500
Net securities transactions		132			158		877
Noninterest income		3,604			3,645		3,720
Noninterest expense		18,909			18,443		20,656
Net income		8,714			9,225		6,904
Per common share
Net income per share:
- Basic	$	0.093			0.100		0.090
- Diluted		0.093			0.100		0.090
Cash dividends		0.066			0.066		0.066
Tangible Book value at period end		3.62			3.62		3.31
Market price at period end		5.61			4.46		6.34
At period end
Full time equivalent employees		726			720		738
Full service banking offices		136			135		133
Performance ratios
Return on average assets		0.83	%		0.88		0.71
Return on average equity		10.15			10.91		10.49
Efficiency (1)		46.68			46.51		53.25
Net interest spread (TE)		3.26			3.29		3.33
Net interest margin (TE)		3.35			3.38		3.43
Dividend payout ratio		70.50			66.27		73.33
Capital ratio at period end
Consolidated tangible equity to tangible assets (2)		7.97			8.04		6.45
Asset quality analysis at period end
Nonperforming loans to total loans		1.93			1.89		2.07
Nonperforming assets to total assets		1.27			1.27		1.42
Allowance for loan losses to total loans		1.93			1.93		1.78
Coverage ratio (3)		1.0			1.0		0.9

(1)  Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excludingnet securities transactions).

(2)  The tangible equity ratio excludes $553,000 of intangibles from both equity and assets.

(3)  Calculated as allowance for loan losses divided by total nonperforming loans.

TE = Taxable equivalent.

Page 7

FINANCIAL HIGHLIGHTS, Continued

(dollars in thousands, except per share data)

(Unaudited)

	Years Ended
	12/31/11			12/31/10
Summary of operations
Net interest income (TE)	$	135,717			128,963
Provision for loan losses		18,750			23,200
Net securities transactions		1,428			3,352
Noninterest income		14,953			15,599
Noninterest expense		79,750			78,964
Net income		33,087			29,321
Per common share
Net income per share:
- Basic	$	0.389			0.381
- Diluted		0.389			0.381
Cash dividends		0.263			0.256
Tangible Book value at period end		3.62			3.31
Market price at period end		5.61			6.34
Performance ratios
Return on average assets		0.81	%		0.77
Return on average equity		11.04			11.48
Efficiency (1)		49.15			50.77
Net interest spread (TE)		3.31			3.38
Net interest margin (TE)		3.40			3.50
Dividend payout ratio		67.71			67.25

(1)  Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions).

TE = Taxable equivalent.

Page 8

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	12/31/2011		9/30/2011		6/30/2011		3/31/2011		12/31/2010
Interest and dividend income:
Interest and fees on loans	$	32,711		32,640		32,184		31,677		32,122
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		2,661		3,347		3,791		3,199		2,465
State and political subdivisions		490		557		640		784		841
Mortgage-backed securities and collateralized mortgage obligations-residential		1,083		778		622		608		596
Corporate bonds		886		953		1,081		1,139		1,153
Other securities		85		89		89		61		133
Total interest and dividends on securities available for sale		5,205		5,724		6,223		5,791		5,188
Interest on held to maturity securities:
U. S. government sponsored enterprises		97		164		-		-		-
Mortgage-backed securities and collateralized mortgage obligations-residential		1,151		1,186		1,240		1,188		1,237
Corporate bonds		590		565		595		715		802
Total interest on held to maturity securities		1,838		1,915		1,835		1,903		2,039
Interest on federal funds sold and other short-term investments		284		318		254		246		259
Total interest income		40,038		40,597		40,496		39,617		39,608
Interest expense:
Interest on deposits:
Interest-bearing checking		76		74		70		65		87
Savings		1,018		952		885		933		867
Money market deposit accounts		1,030		1,158		1,184		1,227		1,406
Time deposits		3,552		3,904		4,099		4,443		4,890
Interest on short-term borrowings		401		384		382		407		427
Total interest expense		6,077		6,472		6,620		7,075		7,677
Net interest income		33,961		34,125		33,876		32,542		31,931
Provision for loan losses		4,200		5,100		4,850		4,600		5,500
Net interest income after provision for loan losses		29,761		29,025		29,026		27,942		26,431
Noninterest income:
Trust department income		1,086		1,242		1,186		1,574		1,195
Fees for services to customers		2,305		2,189		2,325		2,094		2,249
Net gain on securities transactions		132		158		851		287		877
Other		213		214		209		316		276
Total noninterest income		3,736		3,803		4,571		4,271		4,597
Noninterest expenses:
Salaries and employee benefits		7,638		7,087		7,000		7,026		7,208
Net occupancy expense		3,664		3,614		3,672		3,737		3,708
Equipment expense		1,200		1,639		1,481		1,332		1,421
Professional services		1,411		1,152		1,681		1,485		1,437
Outsourced services		1,050		1,350		1,350		1,350		1,210
Advertising expense		607		763		708		706		811
FDIC and other insurance		577		835		1,392		1,851		1,779
Other real estate expense, net		1,254		754		2,095		1,590		1,447
Other		1,508		1,249		2,173		1,769		1,635
Total noninterest expenses		18,909		18,443		21,552		20,846		20,656
Income before taxes		14,588		14,385		12,045		11,367		10,372
Income taxes		5,874		5,160		4,279		3,985		3,468
Net income	$	8,714		9,225		7,766		7,382		6,904
Net income per Common Share:
- Basic	$	0.093		0.100		0.100		0.096		0.090
- Diluted		0.093		0.100		0.100		0.096		0.090
Average basic shares (thousands)		93,308		92,124		77,363		77,241		77,113
Average diluted shares (thousands)		93,308		92,124		77,363		77,241		77,113
Note:  Taxable equivalent net interest income		34,220		34,390		34,183		32,924		32,353

Page 9

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Years Ended
	12/31/2011		12/31/2010
Interest and dividend income:
Interest and fees on loans	$	129,212		128,148
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		12,998		12,455
State and political subdivisions		2,471		3,531
Mortgage-backed securities and collateralized mortgage obligations-residential		3,091		3,282
Corporate bonds		4,059		4,488
Other securities		324		411
Total interest and dividends on securities available for sale		22,943		24,167
Interest on held to maturity securities:
U. S. government sponsored enterprises		261		487
Mortgage-backed securities and collateralized mortgage obligations-residential		4,765		5,163
Corporate bonds		2,465		3,249
Total interest on held to maturity securities		7,491		8,899
Interest on federal funds sold and other short-term investments		1,102		909
Total interest income		160,748		162,123
Interest expense:
Interest on deposits:
Interest-bearing checking		285		595
Savings		3,788		3,356
Money market deposit accounts		4,599		5,377
Time deposits		15,998		23,894
Interest on short-term borrowings		1,574		1,776
Total interest expense		26,244		34,998
Net interest income		134,504		127,125
Provision for loan losses		18,750		23,200
Net interest income after provision for loan losses		115,754		103,925
Noninterest income:
Trust department income		5,088		4,993
Fees for services to customers		8,913		9,588
Net gain on securities transactions		1,428		3,352
Other		952		1,018
Total noninterest income		16,381		18,951
Noninterest expenses:
Salaries and employee benefits		28,751		27,065
Net occupancy expense		14,687		14,222
Equipment expense		5,652		5,638
Professional services		5,729		5,599
Outsourced services		5,100		5,458
Advertising expense		2,784		2,716
FDIC and other insurance		4,655		6,446
Other real estate expense, net		5,693		5,565
Other		6,699		6,255
Total noninterest expenses		79,750		78,964
Income before taxes		52,385		43,912
Income taxes		19,298		14,591
Net income	$	33,087		29,321
Net income per Common Share:
- Basic	$	0.389		0.381
- Diluted		0.389		0.381
Average basic shares (thousands)		85,073		76,935
Average diluted shares (thousands)		85,073		76,935
Note:  Taxable equivalent net interest income		135,717		128,963

Page 10

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

	12/31/2011			9/30/2011			6/30/2011			3/31/2011			12/31/2010
ASSETS:
Cash and due from banks	$	44,395			40,875			41,229			37,022			44,067
Federal funds sold and other short term investments		488,548			434,950			479,647			353,566			400,183
Total cash and cash equivalents		532,943			475,825			520,876			390,588			444,250
Securities available for sale:
U. S. government sponsored enterprises		563,460			633,812			676,062			753,546			614,886
States and political subdivisions		43,968			51,289			57,670			70,393			79,764
Mortgage-backed securities and collateralized mortgage obligations-residential		204,022			200,516			66,333			67,334			73,567
Corporate bonds		96,608			97,464			103,194			116,561			115,504
Other securities		9,664			7,521			7,522			7,632			7,880
Total securities available for sale		917,722			990,602			910,781			1,015,466			891,601
Held to maturity securities:
U. S. government sponsored enterprises		15,000			25,000			-			-			-
Mortgage-backed securities-residential		141,857			109,603			105,509			112,315			122,654
Corporate bonds		59,431			59,555			49,019			59,036			69,058
Total held to maturity securities		216,288			194,158			154,528			171,351			191,712
Loans:
Commercial		248,163			244,389			249,124			250,851			258,253
Residential mortgage loans		1,955,951			1,925,144			1,876,699			1,813,611			1,801,042
Home equity line of credit		313,038			305,587			298,314			290,829			291,287
Installment loans		4,151			3,829			3,837			3,838			4,683
Loans, net of deferred fees and costs		2,521,303			2,478,949			2,427,974			2,359,129			2,355,265
Less:
Allowance for loan losses		48,717			47,782			45,561			43,680			41,911
Net loans		2,472,586			2,431,167			2,382,413			2,315,449			2,313,354
Bank premises and equipment, net		37,006			35,946			36,032			36,275			36,632
Other assets		67,099			65,261			65,696			78,761			77,235
Total assets	$	4,243,644			4,192,959			4,070,326			4,007,890			3,954,784
LIABILITIES:
Deposits:
Demand	$	267,776			269,958			259,459			247,803			251,091
Interest-bearing checking		489,227			472,908			461,976			443,133			441,520
Savings accounts		978,819			923,893			891,181			859,799			774,366
Money market deposit accounts		635,434			642,054			638,774			626,669			602,803
Certificates of deposit (in denominations of $100,000 or more)		460,971			461,081			453,303			455,563			456,837
Other time accounts		903,746			910,633			947,838			960,074			1,027,470
Total deposits		3,735,973			3,680,527			3,652,531			3,593,041			3,554,087
Short-term borrowings		147,563			143,081			128,807			137,710			124,615
Due to broker		-			10,000			-			-			-
Accrued expenses and other liabilities		21,592			21,541			20,039			18,667			20,642
Total liabilities		3,905,128			3,855,149			3,801,377			3,749,418			3,699,344
SHAREHOLDERS' EQUITY:
Capital stock		98,912			98,806			83,166			83,166			83,166
Surplus		176,638			177,448			126,196			126,638			126,982
Undivided profits		119,465			116,894			113,782			111,093			108,780
Accumulated other comprehensive income (loss), net of tax		(2,493	)		258			2,846			(4,176	)		(4,119	)
Treasury stock at cost		(54,006	)		(55,596	)		(57,041	)		(58,249	)		(59,369	)
Total shareholders' equity		338,516			337,810			268,949			258,472			255,440
Total liabilities and shareholders' equity	$	4,243,644			4,192,959			4,070,326			4,007,890			3,954,784
Outstanding shares (thousands)		93,315			93,154			77,367			77,244			77,130

Page 11

NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

Nonperforming Assets

	12/31/11		09/30/11		06/30/11		03/31/11		12/31/10
New York and other states*
Loans in nonaccrual status:
Commercial	$	4,981		5,086		5,090		5,697		5,743
Real estate mortgage - 1 to 4 family		27,820		25,932		24,148		22,712		21,036
Installment		3		4		13		13		20
Total non-accrual loans		32,804		31,022		29,251		28,422		26,799
Other nonperforming real estate mortgages - 1 to 4 family		312		317		324		330		336
Total nonperforming loans		33,116		31,339		29,575		28,752		27,135
Other real estate owned		2,382		2,372		725		1,481		1,977
Total nonperforming assets	$	35,498		33,711		30,300		30,233		29,112
Florida
Loans in nonaccrual status:
Commercial	$	5,000		5,400		7,186		7,786		8,281
Real estate mortgage - 1 to 4 family		10,662		10,231		12,770		13,860		13,397
Installment		-		-		-		-		1
Total non-accrual loans		15,662		15,631		19,956		21,646		21,679
Other nonperforming real estate mortgages - 1 to 4 family		-		-		-		-		-
Total nonperforming loans		15,662		15,631		19,956		21,646		21,679
Other real estate owned		2,883		3,739		4,119		5,219		5,439
Total nonperforming assets	$	18,545		19,370		24,075		26,865		27,118
Total
Loans in nonaccrual status:
Commercial	$	9,981		10,486		12,276		13,483		14,024
Real estate mortgage - 1 to 4 family		38,482		36,163		36,918		36,572		34,433
Installment		3		4		13		13		21
Total non-accrual loans		48,466		46,653		49,207		50,068		48,478
Other nonperforming real estate mortgages - 1 to 4 family		312		317		324		330		336
Total nonperforming loans		48,778		46,970		49,531		50,398		48,814
Other real estate owned		5,265		6,111		4,844		6,700		7,416
Total nonperforming assets	$	54,043		53,081		54,375		57,098		56,230

Quarterly Net Chargeoffs
	12/31/11			09/30/11			06/30/11			03/31/11			12/31/10
New York and other states*
Commercial	$	99			(3	)		(32	)		50			24
Real estate mortgage - 1 to 4 family		1,404			858			679			899			1,104
Installment		5			17			8			9			33
Total net chargeoffs	$	1,508			872			655			958			1,161
Florida
Commercial	$	400			-			599			(3	)		(66	)
Real estate mortgage - 1 to 4 family		1,359			2,006			1,715			1,876			3,323
Installment		(2	)		1			-			-			-
Total net chargeoffs	$	1,757			2,007			2,314			1,873			3,257
Total
Commercial	$	499			(3	)		567			47			(42	)
Real estate mortgage - 1 to 4 family		2,763			2,864			2,394			2,775			4,427
Installment		3			18			8			9			33
Total net chargeoffs	$	3,265			2,879			2,969			2,831			4,418

Asset Quality Ratios
	12/31/11			09/30/11			06/30/11			03/31/11			12/31/10
Total nonperforming loans(1)	$	48,778			46,970			49,531			50,398			48,814
Total nonperforming assets(1)		54,043			53,081			54,375			57,098			56,230
Total net chargeoffs(2)		3,265			2,879			2,969			2,831			4,418
Allowance for loan losses(1)		48,717			47,782			45,561			43,680			41,911
Nonperforming loans to total loans(1)		1.93	%		1.89	%		2.04	%		2.14	%		2.07	%
Nonperforming assets to total assets(1)		1.27	%		1.27	%		1.34	%		1.42	%		1.42	%
Allowance for loan losses to total loans(1)		1.93	%		1.93	%		1.88	%		1.85	%		1.78	%
Coverage ratio(1)		99.9	%		101.7	%		92.0	%		86.7	%		85.9	%
Annualized net chargeoffs to average loans(2)		0.52	%		0.47	%		0.50	%		0.48	%		0.75	%
Allowance for loan losses to annualized net chargeoffs(2)		3.7	x		4.1	x		3.8	x		3.9	x		2.4	x

* Includes New York, New Jersey, Vermont and Massachusetts.

(1)  At period-end

(2)  For the period ended

Page 12

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-

INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands)	Three months ended									Three months ended
(Unaudited)	December 31, 2011									December 31, 2010
	Average			Interest			Average			Average			Interest			Average
	Balance						Rate			Balance						Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	592,488			2,661			1.80	%	$	551,097			2,465			1.79	%
Mortgage backed securities and collateralized mortgage obligations-residential		199,155			1,083			2.18			70,040			596			3.41
State and political subdivisions		47,373			712			6.01			77,255			1,257			6.51
Corporate bonds		102,532			886			3.46			115,952			1,153			3.98
Other		7,614			85			4.41			7,833			133			6.72
Total securities available for sale		949,162			5,427			2.29			822,177			5,604			2.73
Federal funds sold and other short-term Investments		444,599			284			0.25			404,848			259			0.25
Held to maturity securities:
U. S. government sponsored enterprises		16,413			97			2.37			-			-			0.00
Corporate bonds		59,491			590			3.96			69,081			802			4.64
Mortgage backed securities and collateralized mortgage obligations-residential		119,739			1,151			3.85			129,637			1,237			3.82
Total held to maturity securities		195,643			1,838			3.64			198,718			2,039			4.10
Commercial loans		239,680			3,401			5.67			255,380			3,750			5.87
Residential mortgage loans		1,945,375			26,331			5.41			1,800,630			25,502			5.67
Home equity lines of credit		310,052			2,870			3.67			291,184			2,716			3.70
Installment loans		3,532			146			16.37			4,184			160			15.14
Loans, net of unearned income		2,498,639			32,748			5.24			2,351,378			32,128			5.46
Total interest earning assets		4,088,043			40,297			3.94			3,777,121			40,030			4.24
Allowance for loan losses		(49,250	)								(42,818	)
Cash & non-interest earning assets		143,121									148,084
Total assets	$	4,181,914								$	3,882,387
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	467,418			76			0.07	%	$	425,303			87			0.08	%
Money market accounts		639,365			1,030			0.64			591,523			1,406			0.94
Savings		951,562			1,018			0.42			754,139			867			0.46
Time deposits		1,360,979			3,552			1.04			1,464,604			4,890			1.32
Total interest bearing deposits		3,419,324			5,676			0.66			3,235,569			7,250			0.89
Short-term borrowings		142,443			401			1.12			120,515			427			1.40
Total interest bearing liabilities		3,561,767			6,077			0.68			3,356,084			7,677			0.91
Demand deposits		258,980									246,724
Other liabilities		20,423									18,359
Shareholders' equity		340,744									261,220
Total liabilities and shareholders' equity	$	4,181,914								$	3,882,387
Net interest income , tax equivalent					34,220									32,353
Net interest spread								3.26	%								3.33	%
Net interest margin (net interest income to total interest earning assets)								3.35	%								3.43	%
Tax equivalent adjustment					(259	)								(422	)
Net interest income					33,961									31,931

Page 13

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-

INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands)	Year ended									Year ended
(Unaudited)	December 31, 2011									December 31, 2010
	Average			Interest			Average			Average			Interest			Average
(dollars in thousands)	Balance						Rate			Balance						Rate
Assets
Securities available for sale:
U. S. government sponsored enterprises	$	667,037			12,998			1.95	%	$	516,806			12,455			2.41	%
Mortgage backed securities and collateralized mortgage obligations-residential		112,504			3,091			2.75			78,618			3,282			4.17
State and political subdivisions		58,725			3,625			6.17			80,468			5,336			6.63
Corporate bonds		108,513			4,059			3.74			103,728			4,488			4.33
Other		7,601			324			4.26			7,694			411			5.34
Total securities available for sale		954,380			24,097			2.52			787,314			25,972			3.30
Federal funds sold and othershort-term Investments		432,631			1,102			0.25			336,572			909			0.27
Held to maturity securities:
U. S. government sponsored enterprises		11,035			261			2.36			20,622			487			2.36
Corporate bonds		56,253			2,465			4.38			70,068			3,249			4.64
Mortgage backed securities-residential		114,296			4,765			4.17			154,501			5,163			3.34
Total held to maturity securities		181,584			7,491			4.13			245,191			8,899			3.63
Commercial loans		247,691			14,285			5.77			262,971			15,536			5.91
Residential mortgage loans		1,873,028			103,281			5.51			1,767,412			101,567			5.75
Home equity lines of credit		298,996			11,117			3.72			285,416			10,445			3.66
Installment loans		3,622			588			16.23			4,211			633			15.03
Loans, net of unearned income		2,423,337			129,271			5.33			2,320,010			128,181			5.52
Total interest earning assets		3,991,932			161,961			4.06			3,689,087			163,961			4.45
Allowance for loan losses		(46,210	)								(40,846	)
Cash & non-interest earning assets		144,068									147,426
Total assets	$	4,089,790								$	3,795,667
Liabilities and shareholders' equity
Deposits:
Interest bearing checking accounts	$	456,397			285			0.06	%	$	415,590			595			0.14	%
Money market accounts		632,786			4,599			0.73			517,669			5,377			1.04
Savings		889,773			3,788			0.43			715,155			3,356			0.47
Time deposits		1,403,312			15,998			1.14			1,506,602			23,894			1.59
Total interest bearing deposits		3,382,268			24,670			0.73			3,155,016			33,222			1.05
Short-term borrowings		133,803			1,574			1.18			119,213			1,776			1.49
Total interest bearing liabilities		3,516,071			26,244			0.75			3,274,229			34,998			1.07
Demand deposits		255,327									248,564
Other liabilities		18,653									17,542
Shareholders' equity		299,739									255,332
Total liabilities and shareholders' equity	$	4,089,790								$	3,795,667
Net interest income , tax equivalent					135,717									128,963
Net interest spread								3.31	%								3.38	%
Net interest margin (net interest income to total interest earning assets)								3.40	%								3.50	%
Tax equivalent adjustment					(1,213	)								(1,838	)
Net interest income					134,504									127,125

Page 14

Non-GAAP Financial Measures Reconciliation

Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders’ equity by common shares outstanding. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.

The efficiency ratio is a non-GAAP measure of expense control relative to recurring revenue.  We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, which we refer to below as recurring expense, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on securities from this calculation, which we refer to below as recurring revenue.  We believe that this provides one reasonable measure of core expenses relative to core revenue.

We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share and efficiency ratio to the underlying GAAP numbers is set forth below.

Non-GAAP Financial Measures Reconciliation

(dollars in thousands, except per share amounts)

(Unaudited)

	12/31/11			09/30/11			06/30/11			03/31/11			12/31/10
Tangible Book Value Per Share
Equity	$	338,516		$	337,810			268,949			258,472			255,440
Less: Intangible assets		553			553			553			553			553
Tangible equity		337,963			337,257			268,396			257,919			254,887
Shares outstanding		93,315			93,154			77,367			77,244			77,130
Tangible book value per share		3.62			3.62			3.47			3.34			3.30
Book value per share		3.63			3.63			3.48			3.35			3.31
Tangible Equity to Tangible Assets
Total Assets		4,243,644			4,192,959			4,070,326			4,007,890			3,954,784
Less: Intangible assets		553			553			553			553			553
Tangible assets		4,243,091			4,192,406			4,069,773			4,007,337			3,954,231
Tangible Equity to Tangible Assets		7.97	%		8.04	%		6.59	%		6.44	%		6.45	%
Equity to Assets		7.98	%		8.06	%		6.61	%		6.45	%		6.46	%

	3 Months Ended															Years Ended
Efficiency Ratio	12/31/11			09/30/11			06/30/11			03/31/11			12/31/10			12/31/11			12/31/10
Net interest income (fully taxable equivalent)	$	34,220			34,390			34,183			32,924			32,353			135,717			128,963
Non-interest income		3,736			3,803			4,571			4,271			4,597			16,381			18,951
Less:  Net gain on securities		132			158			851			287			877			1,428			3,352
Recurring revenue		37,824			38,035			37,903			36,908			36,073			150,670			144,562
Total Noninterest expense		18,909			18,443			21,552			20,846			20,656			79,750			78,964
Less:  Other real estate expense, net		1,254			754			2,095			1,590			1,447			5,693			5,565
Recurring expense		17,655			17,689			19,457			19,256			19,209			74,057			73,399
Efficiency Ratio		46.68	%		46.51	%		51.33	%		52.18	%		53.25	%		49.15	%		50.77	%

Page 15