TrustCo Bank Corp NY 8K Results of Operations and Financial Condition | TRST 21 Apr 15

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

TrustCo Announces First Quarter 2015 Earnings;

Core Net Income Up 7%

Executive Snapshot:

Continued strong financial results:

Core net income for first quarter 2015 compared to the same period in 2014:

Core net income up 6.7%;

Core diluted EPS up 6.1%;

GAAP earnings for the first quarter of 2015 compared to the same period in 2014:

Net income down 2.7%

Diluted EPS down 2.6%

Return on average assets (ROA) of 0.93%

Return on average equity (ROE) of 10.91%

Efficiency ratio of 54.18%

Asset quality improvement:

Asset quality measures continued to improve or remain stable as compared to both the first quarter of 2014 and for the fourth quarter of 2014

Nonperforming assets (NPAs) fell by $13.5 million versus the prior year

NPAs to total assets improved from 1.18% to 0.85% over last year

Quarterly net chargeoffs at lowest level since the fourth quarter of 2008

Continued expansion of customer base:

Focus on capitalizing on opportunities presented by expanded branch network

Average deposits per branch grew $868 thousand from March 31, 2014 to March 31, 2015 on a same store basis

Average core deposits grew $80 million for the first quarter of 2015 compared to the first quarter of 2014

Loan portfolio reaches all-time high:

Average loans were up $250 million for the first quarter of 2015 compared to first quarter of 2014

At $3.19 billion at March 31, 2015, loans reached an all-time historic high

Note: See non-GAAP financial measures reconciliation on pages 10-11 for information on core income and earnings per share

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FOR IMMEDIATE RELEASE:

TrustCo Announces First Quarter 2015 Earnings;

Core Net Income Up 7%

Glenville, New York – April 21, 2015

TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced that first quarter of 2015 core net income rose 7% to $10.7 million compared to $10.0 million for the first quarter of 2014. First quarter 2014 results included the sale of a property that added $965 thousand to reported after-tax earnings. Including this sale, first quarter 2014 reported net income was $11.0 million compared to $10.7 million in 2015.

Robert J. McCormick, President and Chief Executive Officer noted, “Our core results for the first quarter of 2015 represent a solid start to the new year. In addition to core net income growth, we continued to add customer relationships which ultimately positions our business well for the future. Our highly liquid balance sheet continues to allow us to fund our loan growth without having to overpay for deposits. We look forward to the balance of 2015 with optimism. We will continue taking advantage of opportunities as they are presented.”

TrustCo saw continued strong loan growth in the first quarter of 2015. The gains continue to be primarily funded by expansion of retail deposits as well as proceeds from cash flow from the lower yielding investment securities portfolios. The shift toward loans helped offset part of the margin impact from continued comparatively low yields on cash and investments. TrustCo’s strong liquidity position continues to allow the Company to take advantage of opportunities when interest rate conditions change.

Mr. McCormick also noted, “We are encouraged by the continued economic improvements in our market areas. We are pleased with the continued improvement in our asset quality during both the first quarter and over the last year. Our long-term focus on traditional lending criteria and conservative balance sheet management has enabled us to maintain strong liquidity and capital and report continued profit improvements. As a result, we have been able to focus on conducting business, which has significantly enhanced our reputation and put us in a position to take advantage of changes in market and competitive conditions.”

For the first quarter of 2015, return on average assets and return on average equity were 0.93% and 10.91%, respectively, compared to 0.99% and 12.09% for the first quarter of 2014, all on a reported GAAP basis. Higher levels of shareholders equity as well as the one-time gain of $965 thousand noted earlier contributed to the decline in return on average equity. Core diluted net income per share were $0.113 for the first quarter of 2015, up 6.1% from $0.106 for the first quarter of 2014. Reported GAAP earnings per share were $0.113 for the first quarter of 2015, compared to $0.116 for the first quarter of 2014.

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Average loans were up $249.6 million or 8.5% in the first quarter of 2015, over the same period in 2014. Average deposits were up $120.6 million or 3.1% for the first quarter of 2015 over the same period a year earlier. Most of the gain in deposits came from core deposit accounts. Average core deposits increased $80.0 million from the first quarter of 2014 to the first quarter of 2015. Core deposits typically represent longer term customer relationships and are generally lower cost than time deposits. Mr. McCormick noted that, “The year-over-year growth of our loans and core deposit base reflect the long term strategic focus of the Company.

While some banks have backed away from branches, a customer friendly branch franchise continues to be the key to our long term plans. We opened one new office during the first quarter, in Orlando, Florida. We continue to make significant progress expanding loans and deposits throughout our entire branch network. We expect that trend to continue as the newer branches continue to mature.

At March 31, 2015, our average branch size was $28.4 million. On a same store basis, our average deposits per branch grew by $868 thousand from March 31, 2014 to March 31, 2015. We have always designed our branches to be smaller and more cost effective than those built by many of our competitors. We use open floor plans that help maximize the value of our branches. We remain mindful that fully achieving our goals for newer branches will take time and continued work. We believe success in growing customer relationships provides basic building blocks that will help drive profit growth for the coming years.”

Asset quality and the allowance for loan losses coverage of nonperforming loans (NPLs) improved from both March 31, 2014 and December 31, 2014 to March 31, 2015. NPLs declined to $33.5 million at March 31, 2015, compared to $44.9 million at March 31, 2014 and to $34.0 million at December 31, 2014. NPLs were equal to 1.05% of total loans at March 31, 2015, compared to 1.53% a year earlier and 1.08% at year-end. The coverage ratio, or allowance for loan losses to NPLs, was 137.2% at March 31, 2015, compared to 136.2% at December 31, 2014 and to 104.7% at March 31, 2014. Nonperforming assets (NPAs) declined to $40.4 million from $40.5 million at December 31, 2014 and from $53.9 million at March 31, 2014. Overall, virtually every asset quality indicator improved during the first quarter of 2015 relative to the fourth quarter of 2014 and to the first quarter of 2014. The ratio of loan loss allowance to total loans was 1.44% as of March 31, 2015, compared to 1.47% at December 31, 2014 and to 1.60% at March 31, 2014 and reflects both the improvement in asset quality and economic conditions. The allowance for loan losses was $45.9 million at March 31, 2015 compared to $46.3 million at the end of 2014 and $47.0 million at March 31, 2014.

The net interest margin for the first quarter of 2015 was 3.08%, compared to 3.13% in the first quarter of 2014.

At March 31, 2015 the tangible equity ratio was 8.44% compared to 8.46% at December 31, 2014. Tangible book value per share at March 31, 2015 was $4.21 compared to $3.93 a year earlier.

TrustCo Bank Corp NY is a $4.7 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 145 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at March 31, 2015.

In addition, the Bank’s Financial Services Department offers a full range of investment services, retirement planning and trust and estate administration services. The common shares of TrustCo are traded on the NASDAQ Global Select Market under the symbol TRST.

A conference call to discuss first quarter 2015 results will be held at 9:00 a.m. Eastern Time on April 22, 2015. Those wishing to participate in the call may dial toll-free 1-888-339-0764. International callers must dial 1-412-902-4195. Please ask to be joined into the TrustCo Bank Corp NY / TRST call. A replay of the call will be available for thirty days by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10063957. The call will also be audio webcast at: http://services.choruscall.com/links/trst150422.html, and will be available for one year.

Note: See non-GAAP financial measures reconciliation on pages 10-11 for information on core income and earnings per share

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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. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2015 and for the growth of loans and deposits throughout our branch network and our ability to capitalize on economic changes in the areas in which we operate. 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 TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement: our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at reasonable levels relative to income; the future earnings and capital levels of Trustco Bank and the continued ability of Trustco Bank under regulatory rules to distribute capital to TrustCo, which could affect our ability to pay dividends; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; results of examinations of Trustco Bank and TrustCo by our respective regulators; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; the perceived overall value of our products and services by users, including in comparison to competitors’ products and services and the willingness of current and prospective customers to substitute competitors’ products and services for our products and services; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2014, as amended, and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.

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TRUSTCO BANK CORP NY

GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	03/31/15			12/31/14		03/31/14
Summary of operations
Net interest income (TE)	$	35,185			35,693		34,701
Provision for loan losses		800			1,000		1,500
Net securities transactions		249			335		6
Noninterest income, excluding net securities transactions		4,374			4,417		5,753
Noninterest expense		21,857			22,240		20,801
Net income		10,715			10,660		11,011

Per common share
Net income per share:
- Basic	$	0.113			0.113		0.116
- Diluted		0.113			0.112		0.116
Cash dividends		0.066			0.066		0.066
Tangible Book value at period end		4.21			4.14		3.93
Market price at period end		6.88			7.26		7.04

At period end
Full time equivalent employees		747			737		709
Full service banking offices		145			144		139

Performance ratios
Return on average assets		0.93	%		0.92		0.99
Return on average equity		10.91			10.70		12.09
Efficiency (1)		54.18			53.35		51.28
Net interest spread (TE)		3.02			3.11		3.08
Net interest margin (TE)		3.08			3.17		3.13
Dividend payout ratio		58.12			58.55		56.36

Capital ratio at period end
Consolidated tangible equity to tangible assets (2)		8.44			8.46		8.11

Asset quality analysis at period end
Nonperforming loans to total loans		1.05			1.08		1.53
Nonperforming assets to total assets		0.85			0.87		1.18
Allowance for loan losses to total loans		1.44			1.47		1.60
Coverage ratio (3)		1.4x			1.4		1.0

(1)	Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions, the net gain on sale of building, and the net sale of nonperforming loans).

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

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

TE = Taxable equivalent.

Page | 5

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	3/31/2015		12/31/2014		9/30/2014		6/30/2014			3/31/2014
Interest and dividend income:
Interest and fees on loans	$	34,983		35,051		34,421		33,614			32,874
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		212		233		297		381			506
State and political subdivisions		25		29		38		44			68
Mortgage-backed securities and collateralized mortgage obligations-residential		2,393		2,733		3,040		3,299			3,078
Corporate bonds		1		2		2		2			59
Small Business Administration-guaranteed participation securities		522		524		535		539			556
Mortgage-backed securities and collateralized mortgage obligations-commercial		37		37		38		38			38
Other securities		4		4		4		4			4
Total interest and dividends on securities available for sale		3,194		3,562		3,954		4,307			4,309

Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		478		512		545		577			625
Corporate bonds		154		154		153		154			154
Total interest on held to maturity securities		632		666		698		731			779

Federal Reserve Bank and Federal Home Loan Bank stock		116		123		127		128			133

Interest on federal funds sold and other short-term investments		400		363		374		376			351
Total interest income		39,325		39,765		39,574		39,156			38,446

Interest expense:
Interest on deposits:
Interest-bearing checking		105		98		94		89			84
Savings		658		663		644		592			763
Money market deposit accounts		617		634		648		618			599
Time deposits		2,434		2,366		2,213		2,035			1,951
Interest on short-term borrowings		346		335		327		342			393
Total interest expense		4,160		4,096		3,926		3,676			3,790

Net interest income		35,165		35,669		35,648		35,480			34,656

Provision for loan losses		800		1,000		1,100		1,500			1,500
Net interest income after provision for loan losses		34,365		34,669		34,548		33,980			33,156

Noninterest income:
Trustco Financial Services income		1,653		1,451		1,471		1,405			1,510
Fees for services to customers		2,524		2,753		2,838		2,732			2,521
Net gain on securities transactions		249		335		376		-			6
Other		197		213		205		368			1,722
Total noninterest income		4,623		4,752		4,890		4,505			5,759

Noninterest expenses:
Salaries and employee benefits		8,481		9,003		8,272		8,012			7,592
Net occupancy expense		4,108		3,869		4,013		4,110			4,259
Equipment expense		1,942		1,919		1,725		1,823			1,752
Professional services		1,507		1,536		1,547		1,438			1,286
Outsourced services		1,425		1,225		1,375		1,425			1,325
Advertising expense		600		602		629		657			599
FDIC and other insurance		1,065		949		1,054		1,000			904
Other real estate expense (income), net		424		841		1,001		(1,688	)		855
Other		2,305		2,296		2,576		2,660			2,229
Total noninterest expenses		21,857		22,240		22,192		19,437			20,801

Income before taxes		17,131		17,181		17,246		19,048			18,114
Income taxes		6,416		6,521		6,532		7,240			7,103

Net income	$	10,715		10,660		10,714		11,808			11,011
Net income per common share:
- Basic	$	0.113		0.113		0.113		0.125			0.116

- Diluted		0.113		0.112		0.113		0.125			0.116

Average basic shares (in thousands)		94,947		94,681		94,628		94,559			94,452
Average diluted shares (in thousands)		95,074		94,813		94,752		94,675			94,581

Note: Taxable equivalent net interest income	$	35,185		35,693		35,676		35,513			34,701

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

	3/31/2015			12/31/2014			9/30/2014			6/30/2014			3/31/2014
ASSETS:

Cash and due from banks	$	44,853			43,505			43,724			48,034			46,127
Federal funds sold and other short term investments		705,273			627,943			586,931			573,514			687,003
Total cash and cash equivalents		750,126			671,448			630,655			621,548			733,130

Securities available for sale:
U. S. government sponsored enterprises		108,248			77,800			83,087			103,340			92,708
States and political subdivisions		1,974			2,271			2,769			3,921			4,968
Mortgage-backed securities and collateralized mortgage obligations-residential		445,273			483,560			523,779			589,517			524,197
Corporate bonds		1,500			1,500			1,401			1,402			6,402
Small Business Administration-guaranteed participation securities		98,668			100,496			100,491			102,367			101,821
Mortgage-backed securities and collateralized mortgage obligations-commercial		10,503			10,447			10,417			10,544			10,543
Other securities		685			685			679			679			653
Total securities available for sale		666,851			676,759			722,623			811,770			741,292

Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		57,296			60,986			64,223			67,974			72,188
Corporate bonds		9,964			9,960			9,956			9,952			9,948
Total held to maturity securities		67,260			70,946			74,179			77,926			82,136

Federal Reserve Bank and Federal Home Loan Bank stock		9,228			9,228			9,228			10,951			10,500

Loans:
Commercial		212,145			223,382			219,825			222,655			220,443
Residential mortgage loans		2,620,925			2,575,222			2,510,151			2,437,500			2,374,874
Home equity line of credit		352,552			352,134			346,496			339,897			339,971
Installment loans		8,003			7,594			6,557			6,098			5,714
Loans, net of deferred fees and costs		3,193,625			3,158,332			3,083,029			3,006,150			2,941,002
Less:
Allowance for loan losses		45,944			46,327			46,512			46,935			47,035
Net loans		3,147,681			3,112,005			3,036,517			2,959,215			2,893,967

Bank premises and equipment, net		38,812			38,565			37,455			36,658			35,267
Other assets		60,698			65,488			71,609			71,061			82,445

Total assets	$	4,740,656			4,644,439			4,582,266			4,589,129			4,578,737

LIABILITIES:
Deposits:
Demand	$	347,315			331,425			327,527			324,277			327,779
Interest-bearing checking		696,137			682,210			646,862			643,473			628,752
Savings accounts		1,237,115			1,216,831			1,215,087			1,233,347			1,236,331
Money market deposit accounts		640,368			638,542			655,646			651,367			648,244
Time deposits		1,196,233			1,163,233			1,139,919			1,142,723			1,146,112
Total deposits		4,117,168			4,032,241			3,985,041			3,995,187			3,987,218

Short-term borrowings		194,738			189,116			179,957			181,516			195,411
Accrued expenses and other liabilities		28,274			29,638			27,781			27,409			24,329

Total liabilities		4,340,180			4,250,995			4,192,779			4,204,112			4,206,958

SHAREHOLDERS' EQUITY:
Capital stock		98,964			98,945			98,942			98,927			98,927
Surplus		172,237			172,353			172,598			172,769			172,964
Undivided profits		171,232			166,745			162,326			157,832			152,237
Accumulated other comprehensive loss, net of tax		(2,687	)		(4,509	)		(3,508	)		(2,611	)		(9,452	)
Treasury stock at cost		(39,270	)		(40,090	)		(40,871	)		(41,900	)		(42,897	)

Total shareholders' equity		400,476			393,444			389,487			385,017			371,779

Total liabilities and shareholders' equity	$	4,740,656			4,644,439			4,582,266			4,589,129			4,578,737

Outstanding shares (in thousands)		94,956			94,857			94,785			94,665			94,564

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NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

Nonperforming Assets
	03/31/15			12/31/14			09/30/14			06/30/14			03/31/14
New York and other states*
Loans in nonaccrual status:
Commercial	$	2,489			3,835			4,226			5,132			4,853
Real estate mortgage - 1 to 4 family		28,215			27,221			29,736			31,433			34,597
Installment		77			77			95			87			103
Total non-accrual loans		30,781			31,133			34,057			36,652			39,553
Other nonperforming real estate mortgages - 1 to 4 family		75			125			155			159			162
Total nonperforming loans		30,856			31,258			34,212			36,811			39,715
Other real estate owned		6,288			5,533			5,238			3,930			4,707
Total nonperforming assets	$	37,144			36,791			39,450			40,741			44,422

Florida
Loans in nonaccrual status:
Commercial	$	-			-			517			517			517
Real estate mortgage - 1 to 4 family		2,608			2,740			2,395			3,578			4,668
Installment		20			13			1			1			7
Total non-accrual loans		2,628			2,753			2,913			4,096			5,192
Other nonperforming real estate mortgages - 1 to 4 family		-			-			-			-			-
Total nonperforming loans		2,628			2,753			2,913			4,096			5,192
Other real estate owned		670			908			1,188			4,365			4,300
Total nonperforming assets	$	3,298			3,661			4,101			8,461			9,492

Total
Loans in nonaccrual status:
Commercial	$	2,489			3,835			4,743			5,649			5,370
Real estate mortgage - 1 to 4 family		30,823			29,961			32,131			35,011			39,265
Installment		97			90			96			88			110
Total non-accrual loans		33,409			33,886			36,970			40,748			44,745
Other nonperforming real estate mortgages - 1 to 4 family		75			125			155			159			162
Total nonperforming loans		33,484			34,011			37,125			40,907			44,907
Other real estate owned		6,958			6,441			6,426			8,295			9,007
Total nonperforming assets	$	40,442			40,452			43,551			49,202			53,914

Quarterly Net Chargeoffs (Recoveries)
	03/31/15			12/31/14			09/30/14			06/30/14			03/31/14
New York and other states*
Commercial	$	34			(16	)		124			13			242
Real estate mortgage - 1 to 4 family		1,004			1,591			1,105			1,496			851
Installment		37			48			57			24			44
Total net chargeoffs	$	1,075			1,623			1,286			1,533			1,137

Florida
Commercial	$	(1	)		(476	)		(1	)		(2	)		612
Real estate mortgage - 1 to 4 family		109			37			242			59			428
Installment		-			1			(4	)		10			2
Total net chargeoffs	$	108			(438	)		237			67			1,042

Total
Commercial	$	33			(492	)		123			11			854
Real estate mortgage - 1 to 4 family		1,113			1,628			1,347			1,555			1,279
Installment		37			49			53			34			46
Total net chargeoffs	$	1,183			1,185			1,523			1,600			2,179

Asset Quality Ratios
	03/31/15			12/31/14			09/30/14			06/30/14			03/31/14

Total nonperforming loans(1)	$	33,484			34,011			37,125			40,907			44,907
Total nonperforming assets(1)		40,442			40,452			43,551			49,202			53,914
Total net chargeoffs(2)		1,183			1,185			2,179			1,600			2,179

Allowance for loan losses(1)		45,944			46,327			46,512			46,935			47,035

Nonperforming loans to total loans		1.05	%		1.08	%		1.20	%		1.36	%		1.53	%
Nonperforming assets to total assets		0.85	%		0.87	%		0.95	%		1.07	%		1.18	%
Allowance for loan losses to total loans		1.44	%		1.47	%		1.51	%		1.56	%		1.60	%
Coverage ratio(1)		137.2	%		136.2	%		125.3	%		114.7	%		104.7	%
Annualized net chargeoffs to average loans(2)		0.15	%		0.15	%		0.29	%		0.22	%		0.30	%
Allowance for loan losses to annualized net chargeoffs(2)		9.6	x		9.8	x		5.3	x		7.3	x		5.4	x

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

(1) At period-end

(2) For the period ended

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DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-

INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands) (Unaudited)	Three months ended March 31, 2015									Three months ended March 31, 2014
	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	77,865			212			1.09	%	$	169,355			506			1.19	%
Mortgage backed securities and collateralized mortgage obligations-residential		478,410			2,393			2.00			545,823			3,078			2.26
State and political subdivisions		2,092			38			7.26			6,133			105			6.85
Corporate bonds		1,499			1			0.13			8,548			59			2.78
Small Business Administration-guaranteed participation securities		101,662			522			2.06			110,098			556			2.02
Mortgage backed securities and collateralized mortgage obligations-commercial		10,669			37			1.40			10,939			38			1.39
Other		685			4			2.34			660			4			2.42

Total securities available for sale		672,882			3,207			1.91			851,556			4,346			2.04

Federal funds sold and other short-term Investments		653,263			400			0.25			575,352			351			0.25

Held to maturity securities:
Corporate bonds		9,962			154			6.17			9,947			154			6.18
Mortgage backed securities and collateralized mortgage obligations-residential		59,351			478			3.22			74,324			625			3.36

Total held to maturity securities		69,313			632			3.65			84,271			779			3.70

Federal Reserve Bank and Federal Home Loan Bank stock		9,228			116			5.03			10,500			133			5.07

Commercial loans		219,050			2,796			5.11			222,332			2,797			5.03
Residential mortgage loans		2,594,216			28,958			4.48			2,355,125			26,982			4.60
Home equity lines of credit		352,258			3,061			3.52			340,681			2,936			3.49
Installment loans		7,794			175			9.11			5,596			167			12.11

Loans, net of unearned income		3,173,318			34,990			4.42			2,923,734			32,882			4.52

Total interest earning assets		4,578,004			39,345			3.45			4,445,413			38,491			3.48

Allowance for loan losses		(46,597	)								(48,219	)
Cash & non-interest earning assets		138,560									130,091

Total assets	$	4,669,967								$	4,527,285

Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	677,963			105			0.06	%	$	605,741			84			0.06	%
Money market accounts		637,858			617			0.39			646,601			599			0.38
Savings		1,229,498			658			0.22			1,225,364			763			0.25
Time deposits		1,180,436			2,434			0.84			1,139,811			1,951			0.69

Total interest bearing deposits		3,725,755			3,814			0.42			3,617,517			3,397			0.38
Short-term borrowings		192,344			346			0.73			202,175			393			0.79

Total interest bearing liabilities		3,918,099			4,160			0.43			3,819,692			3,790			0.40

Demand deposits		328,407									316,009
Other liabilities		25,289									22,311
Shareholders' equity		398,172									369,273

Total liabilities and shareholders' equity	$	4,669,967								$	4,527,285

Net interest income, tax equivalent					35,185									34,701

Net interest spread								3.02	%								3.08	%

Net interest margin (net interest income to total interest earning assets)								3.08	%								3.13	%

Tax equivalent adjustment					(20	)								(45	)

Net interest income					35,165									34,656

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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 in the table below as recurring revenue. We believe that this provides a reasonable measure of recurring expenses relative to recurring revenue.

Core net income (“core earnings”) and core net income (“core earnings”) per share are non-GAAP financial measures derived from GAAP-based amounts. We calculate core earnings by excluding the net after-tax gain on the sale of the proposed Florida operations building during the first quarter of 2014 from net income and from net income per share. We believe that this provides a reasonable measure of core net income (earnings).

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. Our management internally assesses our performance based, in part, on these measures. 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, efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.

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NON-GAAP FINANCIAL MEASURES RECONCILIATION

(dollars in thousands, except per share amounts)

(Unaudited)

	03/31/15				12/31/14			03/31/14
Tangible Book Value Per Share

Equity		$	400,476			393,444			371,779
Less: Intangible assets			553			553			553
Tangible equity			399,923			392,891			371,226

Shares outstanding			94,956			94,857			94,564
Tangible book value per share			4.21			4.14			3.93
Book value per share			4.22			4.15			3.93

Tangible Equity to Tangible Assets
Total Assets			4,740,656			4,644,439			4,578,737
Less: Intangible assets			553			553			553
Tangible assets			4,740,103			4,643,886			4,578,184

Tangible Equity to Tangible Assets			8.44	%		8.46	%		8.11	%
Equity to Assets			8.45	%		8.47	%		8.12	%

	3 Months Ended
Efficiency Ratio	03/31/15				12/31/14			03/31/14

Net interest income (fully taxable equivalent)		$	35,185			35,693			34,701
Non-interest income			4,623			4,752			5,759
Less: Net gain on sale of building			-			-			1,556
Less: Net gain on securities			249			335			6
Recurring revenue			39,559			40,110			38,898

Total noninterest expense			21,857			22,240			20,801
Less: Other real estate expense, net			424			841			855
Recurring expense			21,433			21,399			19,946

Efficiency Ratio			54.18	%		53.35	%		51.28	%

	3 Months Ended
Core Net Income	03/31/15		12/31/14		03/31/14

Net income	$	10,715		10,660		11,011
Less: Gain on sale of building, net of tax		-		-		965
Core net income		10,715		10,660		10,046

Average basic shares outstanding (in thousands)		94,947		94,681		94,452
Average diluted shares outstanding (in thousands)		95,074		94,813		94,581

Net income per common share:
- Basic	$	0.113		0.113		0.116
- Diluted		0.113		0.112		0.116

Core net income per common share:

- Basic	$	0.113		0.113		0.106
- Diluted		0.113		0.112		0.106

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