UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
(Fee Required) For the Fiscal Year Ended December 31, 2002
Or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
(No Fee Required)
For the transition period from ____________________ to ____________________
Commission file number 0-10592
TRUSTCO BANK CORP NY
(Exact name of registrant as specified in its charter)
NEW YORK 14-1630287
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5 SARNOWSKI DRIVE, GLENVILLE, NEW YORK 12302
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (518) 377-3311
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which registered
------------------- ------------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 Par Value
(Title of class)
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes.(x) No.( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K.[ X ]
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).Yes(x) No.( )
Indicate the number of shares outstanding of each of the
registrant's classes of common stock:
Number of Shares Outstanding
Class of Common Stock as of March 17, 2003
$1 Par Value 74,267,205
The aggregate market value of registrant's common stock (based upon the closing
price on March 17, 2003) held by non-affiliates was approximately $761,238,851.
Documents Incorporated by Reference:(1) Portions of registrant's Annual Report
to Shareholders for the fiscal year ended December 31, 2002(Part I and Part II).
(2) Portions of registrant's Proxy
Statement filed for its Annual
Meeting of Shareholders to be
held May 19, 2003 (Part III).
1
INDEX
Description Page
PART I
Item 1 Business 1
Item 2 Properties 8
Item 3 Legal Proceedings 8
Item 4 Submission of Matters to a Vote of Security 8
Holders
PART II
Item 5 Market for the Registrant's Common Equity and 10
Related Stockholder Matters
Item 6 Selected Financial Data 10
Item 7 Management's Discussion and Analysis of 10
Financial Condition and Results of Operations
Item 7A Quantitative and Qualitative Disclosures about 11
Market Risk
Item 8 Financial Statements and Supplementary Data 11
Item 9 Changes in and Disagreements with Accountants 11
On Accounting and Financial Disclosure
PART III
Item 10 Directors and Executive Officers of Registrant 11
Item 11 Executive Compensation 11
Item 12 Security Ownership of Certain Beneficial Owners 11
and Management
Item 13 Certain Relationships and Related Transactions 11
Item 14 Controls and Procedures 12
PART IV
Item 15 Exhibits, Financial Statement Schedules, and 12
Reports on Form 8-K
Signatures 17
EXHIBITS INDEX 21
2
PART I
Item 1. Business
General
TrustCo Bank Corp NY ("TrustCo" or the "Company") is a savings and loan holding
company having its principal place of business at 5 Sarnowski Drive, Glenville,
New York 12302. TrustCo was incorporated under the laws of New York in 1981 to
acquire all of the outstanding stock of Trustco Bank, National Association,
formerly known as Trustco Bank New York, and prior to that The Schenectady Trust
Company. On July 28, 2000 TrustCo acquired Landmark Financial Corp. (now known
as Trustco Financial Corp.) and its subsidiary Landmark Community Bank,
Canajoharie, New York, a federal savings bank with assets of approximately $26
million. Landmark Community Bank was subsequently renamed Trustco Savings Bank,
and, on November 15, 2002, Trustco Savings Bank and Trustco Bank, National
Association merged under the charter of Trustco Savings Bank. In that merger,
the resulting bank changed its name to Trustco Bank (sometimes referred to in
this report as the "Bank").
Through policy and practice, TrustCo continues to emphasize that it is an equal
opportunity employer. There were 488 full-time equivalent employees of TrustCo
at year-end 2002. TrustCo had 13,621 shareholders of record as of December 31,
2002 and the closing price of the TrustCo common stock at that date was $10.78.
Subsidiaries
Trustco Bank
Trustco Bank is a federal savings bank engaged in providing general banking
services to individuals, partnerships, and corporations. The Bank operates 56
automatic teller machines and 62 banking offices in Albany, Columbia, Dutchess,
Greene, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Warren,
Washington and Westchester counties of New York State and Bennington County in
Vermont. The largest part of such business consists of accepting deposits and
making loans and investments. The Bank provides a wide range of both personal
and business banking services. The Bank is supervised and regulated by the
federal Office of Thrift Supervision ("OTS") and is a member of the Federal
Reserve System. Its deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC") to the extent permitted by law. An operating subsidiary of
the Bank, Trustco Realty Corp., holds certain mortgage assets which are serviced
by the Bank. The Bank accounted for substantially all of TrustCo's 2002
consolidated net income and average assets.
The trust department of the Bank serves as executor of estates and trustee of
personal trusts, provides estate planning and related advice, provides custodial
services, and acts as trustee for various types of employee benefit plans and
corporate pension and profit sharing trusts. The aggregate market value of the
assets under trust, custody, or management of the trust department of the Bank
was approximately $897 million as of December 31, 2002.
3
The daily operations of the Bank remain the responsibility of its Board of
Directors and officers, subject to the overall supervision by TrustCo. TrustCo
derives most of its income from dividends paid to it by the Bank. The accounts
of the Bank are included in TrustCo's consolidated financial statements.
Trustco Financial Corp.
Trustco Financial Corp. is a wholly owned subsidiary of the Company and is the
immediate parent company of Trustco Bank. The accounts of Trustco Financial
Corp. are included in TrustCo's consolidated financial statements.
ORE Subsidiary
During 1993, TrustCo created ORE Subsidiary Corp., a New York corporation, to
hold and manage certain foreclosed properties acquired by the Bank. The accounts
of this subsidiary are included in TrustCo's consolidated financial statements.
Competition
TrustCo faces strong competition in its market areas, both in attracting
deposits and making loans. The Company's most direct competition for deposits,
historically, has come from commercial banks, savings associations, and credit
unions that are located or have branches in those areas. The Company also faces
competition for deposits from national brokerage houses, short-term money market
funds, and other corporate and government securities funds. Factors affecting
the acquisition of deposits include pricing, office locations and hours of
operation, the variety of deposit accounts offered, and the quality of customer
service provided. Competition for loans has been especially keen during the last
five years. Commercial banks, local thrift institutions, traditional mortgage
brokers affiliated with local offices, and nationally franchised real estate
brokers are all active and aggressive competitors. The Company competes in this
environment by providing a full range of financial services based on a tradition
of financial strength and integrity dating from its inception. The Company
competes for loans, principally through the interest rates and loan fees it
charges, and the efficiency and quality of services it provides to borrowers.
TrustCo operates in a number of communities where the competition ranges from
other locally based commercial and savings banks to branches of the largest
financial institutions in the United States. In the Capital District area of New
York State, TrustCo's principal competitors are local operations of super
regional banks, branch offices of money center banks, and locally based
commercial and savings banks. The Bank is the largest depository institution
headquartered in the Capital District area.
Supervision and Regulation
Banking is a highly regulated industry, with numerous federal and state laws and
regulations governing the organization and operation of banks and their
affiliates. As a registered savings and loan holding company under the Home
Owners' Loan Act (the "Act"), TrustCo is regulated and examined by the OTS. The
Act requires TrustCo to obtain prior OTS approval for acquisitions and restricts
the business operations permitted to TrustCo. Because the FDIC provides deposit
insurance to the Bank, the Bank is also subject to its supervision and
regulation even though the FDIC is not its primary federal regulator. Most of
TrustCo's revenues consist of cash dividends paid to TrustCo by the Bank,
payment of which is subject to various regulatory limitations. (Note 1 to the
consolidated financial statements contained in TrustCo's Annual Report to
Shareholders for the year ended December 31, 2002, which appears on pages 32 and
33 thereof and contains information concerning restrictions on TrustCo's ability
to pay dividends, is hereby incorporated by reference.) Compliance with the
standards set forth in the OTS rules regarding capital distribution by savings
associations and savings banks could also limit the amount of dividends that
TrustCo may pay to its shareholders. The banking industry is also affected by
the monetary and fiscal policies of the federal government, including the
Reserve Board, which exerts considerable influence over the cost and
availability of funds obtained for lending and investing.
4
See Note 15 to the consolidated financial statements contained in TrustCo's
Annual Report to Shareholders for the year ended December 31, 2002, which
appears on page 42 thereof and contains information concerning regulatory
capital requirements.
The following summary of laws and regulations applicable to the Company and the
Bank is not intended to be a complete description of those laws and regulations
or their effects on the Company and the Bank, and it is qualified in its
entirety by reference to the particular statutory and regulatory provisions
described.
Holding Company Activities
The activities of savings and loan holding companies are governed by the Act.
Since TrustCo became a savings and loan holding company in 2002, its activities
are limited to those permissible for "multiple" savings and loan holding
companies (that is, savings and loan holding companies owning more than one
savings association subsidiary) as of March 5, 1987, activities permitted for
bank holding companies as of November 12, 1999 and activities permissible for
"financial holding companies" (which are described below). "Savings
associations" include federal savings banks such as the Bank. TrustCo must
obtain approval from the appropriate bank regulatory agencies before acquiring
control of any insured depository institution.
Regulatory Capital Requirements
OTS capital regulations require thrifts to satisfy three capital ratio
requirements: tangible capital, Tier 1 core (leverage) capital, and risk-based
capital. In general, an association's tangible capital, which must be at least
1.5% of adjusted total assets, is the sum of common shareholders' equity
adjusted for the effects of other comprehensive income ("OCI"), less goodwill
and other disallowed assets. An association's ratio of Tier 1 core capital to
adjusted total assets (the "core capital" or "leverage" ratio) must be at least
3% for the most highly rated associations and 4% for others. Higher capital
ratios may be required if warranted by the particular circumstances or risk
profile of a given association. Under the risk-based capital requirement, a
savings association must have total capital (core capital plus supplementary
capital) equal to at least 8% of risk-weighted assets. Tier 1 capital must
represent at least 50% of total capital and consists of core capital elements,
which include common shareholders' equity, qualifying noncumulative
nonredeemable perpetual preferred stock, and minority interests in the equity
accounts of consolidated subsidiaries, but exclude goodwill and certain other
intangible assets. Supplementary capital mainly consists of qualifying
subordinated debt and portions of allowance for loan losses.
5
The above capital requirements are viewed as minimum standards by the OTS. The
OTS regulations also specify minimum requirements for a savings association to
be considered a "well-capitalized institution" as defined in the "prompt
corrective action" regulation described below. A "well-capitalized" savings
association must have a total risk-based capital ratio of 10% or greater, and a
leverage ratio of 5% or greater. Additionally, to qualify as a "well-capitalized
institution," a savings association's Tier 1 risk-based capital, defined as core
capital plus supplementary capital less portions of the association's allowance
for loan losses, must be equal to at least 6% of risk-weighted assets. Trustco
Bank currently meets all of the requirements of a "well-capitalized
institution."
The OTS regulations contain prompt corrective action provisions that require
certain mandatory remedial actions and authorize certain other discretionary
actions to be taken by the OTS against a savings association that falls within
specified categories of capital deficiency. The relevant regulations establish
five categories of capital classification for this purpose, ranging from
"well-capitalized" or "adequately capitalized" through "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized." In general,
the prompt corrective action regulations prohibit an OTS-regulated institution
from declaring any dividends, making any other capital distributions, or paying
a management fee to a controlling person, such as its parent holding company,
if, following the distribution or payment, the institution would be within any
of the three undercapitalized categories.
Community Reinvestment Act
The Community Reinvestment Act ("CRA") requires each savings institution, as
well as commercial banks and certain other lenders, to identify the communities
served by the institution's offices and to identify the types of credit the
institution is prepared to extend within those communities. The CRA also
requires the OTS to assess an institution's performance in meeting the credit
needs of its identified communities as part of its examination of the
institution, and to take such assessments into consideration in reviewing
applications with respect to branches, mergers and other business combinations,
including acquisitions by savings and loan holding companies. An unsatisfactory
CRA rating may be the basis for denying such an application and community groups
have successfully protested applications on CRA grounds. In connection with its
assessment of CRA performance, the OTS assigns CRA ratings of "outstanding,"
"satisfactory," "needs to improve" or "substantial noncompliance." The Bank was
rated "satisfactory" in its last CRA examination. Institutions are evaluated
based on: (i) performance in lending in their assessment areas; (ii) the
provision of deposit and other community services in their assessment areas; and
(iii) the investment in housing-related and other qualified community
investments. An institution that is found to be deficient in its performance in
meeting its community's credit needs may be subject to enforcement actions,
including cease and desist orders and civil money penalties.
6
Qualified Thrift Lender Test
Like all OTS-regulated institutions, the Bank is required to meet a qualified
thrift lender ("QTL") test to avoid certain restrictions on its operations,
including restrictions on its ability to branch interstate and the Company's
mandatory registration as a bank holding company under the Bank Holding Company
Act of 1956. A savings association satisfies the QTL test if: (i) on a monthly
average basis in at least nine months out of each twelve month period, at least
65% of a specified asset base of the savings association consists of loans to
small businesses, credit card loans, educational loans, or certain assets
related to domestic residential real estate, including residential mortgage
loans and mortgage securities; or (ii) at least 60% of the savings association's
total assets consist of cash, U.S. government or government agency debt or
equity securities, fixed assets, or loans secured by deposits, real property
used for residential, educational, church, welfare, or health purposes, or real
property in certain urban renewal areas. The Bank is currently and expects to
remain in compliance with QTL standards.
Federal Reserve System
Federal Reserve Board regulations require savings institutions to maintain
non-interest bearing reserves against their transaction accounts. The reserve
for transaction accounts as of December 31, 2002 was 0% of the first $5.5
million of such accounts, 3% of the next $35.6 million of such accounts and 10%
(subject to adjustment by the Federal Reserve Board between 8% and 14%) of the
balance of such accounts. The Bank is in compliance with these requirements as
of December 31, 2002.
Recent Legislation
On November 12, 1999, the Gramm-Leach-Bliley Act of 1999 (the"GLB Act") was
signed into law. The GLB Act made significant changes to the operations of
financial services companies. It repealed key provisions of the "Glass-Steagall
Act" by repealing prohibitions on affiliations among banks, securities firms and
insurance companies. It authorizes a broad range of financial services to be
conducted by these types of companies within a new structure known as a
"financial holding company." A financial holding company may engage in a number
of activities deemed to be new activities, such as securities underwriting and
dealing activities, insurance underwriting and sales activities, merchant
banking and equity investment activities, and "incidental" and "complementary"
non-financial activities. While the GLB Act specifies so-called "functional
regulation," various federal and state regulators have continued authority over
certain activities of financial holding companies and other regulated financial
institutions.
The GLB Act establishes a federal right to the confidential treatment of
nonpublic personal information about consumers. These provisions of the GLB Act
require disclosure of privacy policies to consumers and, in some circumstances,
will allow consumers to prevent disclosure of certain personal information to a
nonaffiliated third party. Compliance with the rules was mandatory starting on
July 1, 2001. These rules affect how consumer information is transmitted through
diversified financial companies and conveyed to outside vendors. Because the
Company does not sell customer information or give customer information to
outside third parties or its affiliates except under very limited circumstances
(e.g., providing customer information to the Company's data processing provider
or to third party providers of financial services under narrow joint marketing
arrangements), the rules have not had a significant impact on the Company's
results of operations or financial condition.
7
On October 26, 2001, President Bush signed into law the USA PATRIOT Act
("Patriot Act"). The Patriot Act includes numerous provisions designed to fight
international money laundering and to block terrorist access to the U.S.
financial system. Implementation of regulations to implement the Act have been
postponed by the Department of the Treasury, which has required additional time
to study certain industries for implementation of anti-money laundering
regulations. However, it is not anticipated that adoption of the regulations as
presently proposed will have a significant adverse impact on the Bank's
operations.
On July 30, 2002, the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") was signed
into law. Sarbanes-Oxley implemented legislative reforms intended to address
corporate and accounting fraud and contains reforms of various business
practices and numerous aspects of corporate governance. For example, this new
legislation addresses accounting oversight and corporate governance matters,
including: the creation of a five-member oversight board appointed by the
Securities and Exchange Commission that will set and enforce auditing, quality
control and independence standards for accountants and have investigative and
disciplinary powers; increased responsibilities and codified requirements
relating to audit committees of public companies and how they interact with a
company's public accounting firm; the prohibition of accounting firms from
providing various types of consulting services to public clients and requiring
accounting firms to rotate partners among public client assignments every five
years; expanded disclosure of corporate operations and internal controls and
certification by chief executive officers and chief financial officers to the
accuracy of periodic reports filed with the SEC; and prohibitions on public
company insiders from trading during retirement plan "blackout" periods,
restrictions on loans to company executives and enhanced controls on and
reporting of insider trading.
Although the Company anticipates that it will incur additional expense in
complying with the provisions of Sarbanes-Oxley and the resulting regulations,
management does not expect that such compliance will have a material impact on
the Company's financial condition or results of operations.
Foreign Operations
Neither TrustCo nor the Bank engage in any material operations in foreign
countries or have any outstanding loans to foreign debtors.
Statistical Information Analysis
The "Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 6 through 25 of TrustCo's Annual Report to Shareholders for
the year ended December 31, 2002, which contains a presentation and discussion
of statistical data relating to TrustCo, is hereby incorporated by reference.
This information should not be construed to imply any conclusion on the part of
the management of TrustCo that the results, causes, or trends indicated therein
will continue in the future. The nature and effects of governmental monetary
policy, supervision and regulation, future legislation, inflation and other
economic conditions and many other factors which affect interest rates,
investments, loans, deposits, and other aspects of TrustCo's operations are
extremely complex and could make historical operations, earnings, assets, and
liabilities not indicative of what may occur in the future.
8
Critical Accounting Policies
Pursuant to recent SEC guidance, management of the Company is encouraged to
evaluate and disclose those accounting policies that are judged to be critical
policies, or those most important to the portrayal of the Company's financial
condition and results of operations, and that require management's most
difficult subjective or complex judgments. Management considers the accounting
policy relating to the allowance for loan losses to be a critical accounting
policy given the inherent subjectivity and uncertainty in estimating the levels
of the allowance required to cover credit losses in the portfolio and the
material effect that such judgments can have on the results of operations.
Included in Note 1 to the consolidated financial statements contained in
TrustCo's Annual Report to Shareholders is a description of this critical policy
and the other significant accounting policies that are utilized by the Company
in the preparation of the Consolidated Financial Statements.
Availability of Reports
This annual report on Form 10-K and subsequently filed quarterly reports on Form
10-Q, current reports on Form 8-K and all amendments to those reports will be
available free of charge from our Internet site, www.trustcobank.com.
Forward-Looking Statements
Statements included in the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" of TrustCo's Annual Report to Shareholders
for the year ended December 31, 2002 and in future filings by TrustCo with the
Securities and Exchange Commission, in TrustCo's press releases, and in oral
statements made with the approval of an authorized executive officer which are
not historical or current facts are "forward-looking statements" made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 and are subject to certain risks and uncertainties that could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. 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: (i) credit risk; (ii) interest rate risk;
(iii) competition; (iv) changes in the regulatory environment; and (v) changes
in 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.
9
Item 2. Properties
TrustCo's executive offices are located at 5 Sarnowski Drive, Glenville, New
York, 12302. The Company operates 62 offices, of which 23 are owned and 39 are
leased from others. The asset value of these properties, when considered in the
aggregate, is not material to the operation of TrustCo.
In the opinion of management, the physical properties of TrustCo and the Bank
are suitable and adequate and are being fully utilized.
Item 3. Legal Proceedings
The nature of TrustCo's business generates a certain amount of litigation
against TrustCo and its subsidiaries involving matters arising in the ordinary
course of business. In the opinion of management of TrustCo, there are no
proceedings pending to which TrustCo or any of its subsidiaries is a party, or
of which its property is the subject which, if determined adversely to TrustCo
or such subsidiaries, would be material in relation to TrustCo's consolidated
shareholders' equity and financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
None.
10
Executive Officers of TrustCo
The following is a list of the names and ages of the executive officers
of TrustCo and their business history for the past five years:
Year First
Name, Age and Principal Occupations Became
Position Or Employment Since Executive
With TrustCo January 1, 1998 of TrustCo
- ------------------------------------ ----------------------------------------------------------------------
Robert T. Cushing, 47, President, Chief Executive Officer, and Chief Financial 1994
President and Officer, TrustCo Bank Corp NY since 2002. Vice
Chief Executive Officer President and Chief Financial Officer, TrustCo Bank
Corp NY, 1994 to 2002. Senior Vice President and Chief
Financial Officer, Trustco Bank since 1994. Director
of TrustCo Bank Corp NY and Trustco Bank, 2001 and 2002.
Robert J. McCormick, 39, Vice President, TrustCo Bank Corp NY since 2000. 2000
Vice President President and Chief Executive Officer, Trustco Bank
since 2002. Senior Vice President, Trustco Bank, 2001
and 2002. Administrative Vice President of Trustco
Bank, 1997 to 2001. Vice President of Trustco Bank,
1995 to 1997. Robert J. McCormick is the son of Robert
A. McCormick, Chairman of TrustCo and Trustco Bank.
Nancy A. McNamara, 53, Vice President, TrustCo Bank Corp NY since 1992. 1991
Vice President Senior Vice President, Trustco Bank since 1988.
Director of TrustCo Bank Corp NY and
Trustco Bank, 1991 to 2002.
Henry C. Collins, 48, Secretary, TrustCo Bank Corp NY since February 2001. 1999
Secretary Assistant Secretary, TrustCo Bank Corp NY, 1999 to 2001.
Administrative Vice President and General Counsel,
Trustco Bank since 1995.
Each executive officer is elected by the Board of Directors to serve until
election of his or her successor.
11
PART II
Item 5 Market for the Registrant's Common Equity and Related Stockholder Matters
Page 1 and page 47 of TrustCo's Annual Report to Shareholders for the year ended
December 31, 2002, are incorporated herein by reference. TrustCo had 13,670
shareholders of record as of March 17, 2003, and the closing price of TrustCo's
common stock on that date was $10.25.
The following table provides information regarding securities authorized for
issuance under TrustCo's equity compensation plans.
- --------------------------------- ---------------------------- ---------------------------- -----------------------------
Number of
securities
Number of remaining
securities to be available for future
issued upon Weighted-average issuance under
exercise of exercise price of equity compensation
outstanding outstanding plans (excluding
options, warrants options, warrants and securities reflected
and rights rights in column (a))
(c)
Plan category (a) (b)
- --------------------------------- ---------------------------- ---------------------------- -----------------------------
- --------------------------------- ---------------------------- ---------------------------- -----------------------------
Equity
compensation plans
approved by 6,645,820 $8.11 312,905
security holders
- --------------------------------- ---------------------------- ---------------------------- -----------------------------
- --------------------------------- ---------------------------- ---------------------------- -----------------------------
Equity
compensation plans
not approved by None None None
security holders
- --------------------------------- ---------------------------- ---------------------------- -----------------------------
- --------------------------------- ---------------------------- ---------------------------- -----------------------------
Total 6,645,820 $8.11 312,905
- --------------------------------- ---------------------------- ---------------------------- -----------------------------
Item 6. Selected Financial Data
Page 25 of TrustCo's Annual Report to Shareholders for the year ended December
31, 2002, is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Pages 6 through 27 of TrustCo's Annual Report to Shareholders for
the year ended December 31, 2002, are incorporated herein by reference.
12
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Pages 18 through 20 of TrustCo's Annual Report to Shareholders for the year
ended December 31, 2002, are incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements, together with the report thereon of KPMG
LLP on pages 28 through 44 of TrustCo's Annual Report to Shareholders for the
year ended December 31, 2002, are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of Registrant
The information under the captions "Information on TrustCo Directors and
Nominees" and "Information on TrustCo Executive Officers Not Listed Above" on
pages 3 through 5, and Section 16(a) "Beneficial Ownership Reporting Compliance"
on pages 22 and 23, of TrustCo's Proxy Statement filed for its Annual Meeting of
Shareholders to be held May 19, 2003, is incorporated herein by reference. The
required information regarding TrustCo's executive officers is contained in PART
I in the item captioned "Executive Officers of TrustCo."
Item 11. Executive Compensation
The information under the captions "TrustCo and Trustco Bank Executive Officer
Compensation" and "TrustCo Retirement Plans" on pages 7 through 12 of TrustCo's
Proxy Statement filed for its Annual Meeting of Shareholders to be held May 19,
2003, is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information under the captions "Information on TrustCo Directors and
Nominees," and "Information on TrustCo Executive Officers Not Listed Above," on
pages 3 through 6 and "Ownership Of TrustCo Common Stock By Certain Beneficial
Owners" on page 22 of TrustCo's Proxy Statement filed for its Annual Meeting of
Shareholders to be held May 19, 2003, is incorporated herein by reference.
Additional information concerning the Company's equity compensation plan is set
forth in Item 5 hereof.
Item 13. Certain Relationships and Related Transactions
The information under the caption "Transactions with TrustCo and Trustco Bank
Directors, Executive Officers and Associates" on page 22 of TrustCo's Proxy
Statement filed for its Annual Meeting of Shareholders to be held May 19, 2003
is incorporated herein by reference.
13
Item 14. Controls and Procedures
Within the 90-day period prior to the filing of this Annual Report on Form 10-K,
an evaluation was carried out under the supervision and with the participation
of the Company's management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the Company's disclosure controls and
procedures. Disclosure controls and procedures are procedures that are designed
with the objective of ensuring that information required to be disclosed in the
Company's reports filed under the Securities Exchange Act of 1934, such as this
Form 10-K, is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
Based on that evaluation, the Chief Executive Officer and Chief Financial
Officer has concluded that the Company's disclosure controls and procedures are
effective to satisfy the objectives for which they are intended. Subsequent to
the date of Management's evaluation, there were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K The
following financial statements of TrustCo and its consolidated subsidiaries, and
the accountants' report thereon are incorporated herein by reference in item 8.
Consolidated Statements of Condition -- December 31, 2002 and 2001.
Consolidated Statements of Income -- Years Ended December 31, 2002,
2001, and 2000.
Consolidated Statements of Changes in Shareholders' Equity -- Years
Ended December 31, 2002, 2001, and 2000.
Consolidated Statements of Cash Flows -- Years Ended December 31, 2002,
2001, and 2000.
Notes to Consolidated Financial Statements.
Financial Statement Schedules
Not Applicable. All required schedules for TrustCo and its
subsidiaries have been included in the consolidated financial
statements or related notes thereto.
14
The following exhibits are incorporated herein by reference:*
Reg S-K Exhibit No. Description
- -------------------------------------------------------------------------------
3(i)a Amended and Restated Certificate of Incorporation of TrustCo Bank Corp NY,
dated July 27, 1993.
3(i)b Certificate of Amendment of the Certificate of Incorporation of TrustCo
Bank Corp NY, dated May 28, 1996.
3(i)c Certificate of Amendment of the Certificate of Incorporation of TrustCo
Bank Corp NY, dated May 19, 1997.
3(i)d Certificate of Amendment of the Certificate of Incorporation of TrustCo
Bank Corp NY, dated May 18, 1999.
3(ii)a Amended and Restated ByLaws of TrustCo Bank Corp NY, dated September 17,
2002.
10(a) Restated 1985 TrustCo Bank Corp NY Stock Option Plan.
10(b) Amended and Restated Trust For Deferred Benefits Provided under Employment
Agreements of Trustco Bank, National Association and TrustCo Bank Corp NY, dated
September 18, 2001.
10(c) Amended and Restated Trust Under Non-Qualified Deferred Compensation Plans
of Trustco Bank, National Association and TrustCo Bank Corp NY, dated September
18, 2001.
10(d) Amended and Restated Trustco Bank, National Association and TrustCo Bank
Corp NY Supplemental Retirement Plan, dated September 18, 2001.
10(e) Amended and Restated TrustCo Bank Corp NY Performance Bonus Plan, dated
September 18, 2001.
10(f) Amended and Restated Trustco Bank, National Association Executive Officer
Incentive Plan, dated September 18, 2001.
10(g) Amended and Restated Employment Agreements Between Trustco Bank, National
Association, TrustCo Bank Corp NY and each of Robert T. Cushing, Robert J.
McCormick, and Nancy A. McNamara, dated September 18, 2001.
10(h) Amended and Restated TrustCo Bank Corp NY 1995 Stock Option Plan, dated
September 18, 2001.
15
10(i) Amended and Restated TrustCo Bank Corp NY Directors Stock Option Plan,
dated September 18, 2001.
10(j) Amended and Restated TrustCo Bank Corp NY Directors Performance Bonus
Plan, dated September 18, 2001.
10(k) Amended and Restated Trustco Bank, National Association Deferred
Compensation Plan for Directors, dated September 18, 2001.
10(l) Consulting Agreement Between TrustCo Bank Corp NY and Robert A. McCormick
11 Computation of Net Income Per Common Share.
- ----------------
*The exhibits included under Exhibit 10 constitute all management contracts,
compensatory plans and arrangements required to be filed as an exhibit to this
form pursuant to Item 15(c) of this report.
16
The following exhibits are filed herewith:
Reg S-K
Exhibit No. Description
13 Portions of Annual Report to Security Holders of TrustCo for the year ended
December 31, 2002.
21 List of Subsidiaries of TrustCo.
23 Consent of Independent Certified Public Accountants.
24 Power of Attorney.
99.1 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 Of The Sarbanes-Oxley Act of 2002
17
Reports on Form 8-K:
On November 19, 2002, TrustCo filed a Current Report on Form 8-K reporting the
declaration of a cash dividend.
On January 21, 2003, TrustCo filed a Current Report on Form 8-K reporting the
fourth quarter and year-end December 31, 2002 results.
On February 18, 2003, TrustCo filed a Current Report on Form 8-K reporting the
declaration of a cash dividend.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
TrustCo Bank Corp NY
By: /s/ Robert T. Cushing
-----------------------
Robert T. Cushing
Chief Executive Officer and
Chief Financial Officer
Date: March 26, 2003
19
Certification Pursuant To Section 302
of The Sarbanes-Oxley Act of 2002
I, Robert T. Cushing, the principal executive officer and principal financial
officer of TrustCo Bank Corp NY, certify that:
1. I have reviewed this annual report on Form 10-K of TrustCo Bank Corp NY;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
20
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 26, 2003
/s/ Robert T. Cushing
------------------
Robert T. Cushing
Chief Executive Officer and
Chief Financial Officer
21
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
Signature Title Date
* Director March 26, 2003
- --------------------------------------
Barton A. Andreoli
* Director March 26, 2003
- --------------------------------------
Joseph Lucarelli
* Director March 26, 2003
- --------------------------------------
Dr. Anthony J. Marinello
* Director March 26, 2003
- --------------------------------------
Robert A. McCormick
* Director March 26, 2003
- --------------------------------------
Dr. James H. Murphy
* Director March 26, 2003
- ---------------------------------------
William D. Powers
* Director March 26, 2003
- ----------------------------------------
William J. Purdy
By: /s/ Henry C. Collins
---------------------------
*Henry C. Collins, as Agent
Pursuant to Power of Attorney
22
Reg S-K Exhibits Index
Item 601
Exhibit No. Page No.
Exhibits Index
3(i)a Amended and Restated Certificate of Incorporation of TrustCo Bank Corp NY,
dated July 27, 1993, filed as Exhibit 3(i)a to TrustCo Bank Corp NY's Quarterly
Report on Form 10Q, for the quarter ended June 30, 1997, is incorporated herein
by reference.
3(i)b Certificate of Amendment of the Certificate of Incorporation of TrustCo
Bank Corp NY, dated May 28, 1996, filed as Exhibit 3(i)b to TrustCo Bank Corp
NY's Quarterly Report on Form 10Q, for the quarter ended June 30, 1997, is
incorporated herein by reference.
3(i)c Certificate of Amendment of the Certificate of Incorporation of TrustCo
Bank Corp NY, dated May 19, 1997, filed as Exhibit 3(i)c to TrustCo Bank Corp
NY's Quarterly Report on Form 10Q, for the quarter ended June 30, 1997, is
incorporated herein by reference.
3(i)d Certificate of Amendment of the Certificate of Incorporation of TrustCo
Bank Corp NY, dated May 18, 1999, filed on Exhibit 3(i)a to TrustCo Bank Corp
NY's Amendment No. 2 to Form S-4, Registration No. 333-41168, on October 3,
2000, is incorporated herein by reference.
3(ii)a Amended and Restated ByLaws of TrustCo Bank Corp NY, dated September 17,
2002, filed as Exhibit 3(ii)a to TrustCo Bank Corp NY's Quarterly Report on Form
10Q, for the quarter ended September 30, 2002, is incorporated herein by
reference.
10(a) Restated 1985 TrustCo Bank Corp NY Stock Option Plan as amended effective
July 1, 1994, filed as Exhibit 10(h) to TrustCo Bank Corp NY's Annual Report on
Form 10K, for the year ended December 31, 1994, is incorporated herein by
reference.
10(b) Amended and Restated Trust For Deferred Benefits Provided under Employment
Agreements of Trustco Bank, National Association and TrustCo Bank Corp NY, dated
September 18, 2001 filed as Exhibit 10(b) to TrustCo Bank Corp NY's Annual
Report on Form 10K, for the year ended December 31, 2001, is incorporated herein
by reference.
23
10(c) Amended and Restated Trust Under Non-Qualified Deferred Compensation Plans
of Trustco Bank, National Association and TrustCo Bank Corp NY, dated September
18, 2001, filed as Exhibit 10(c) to TrustCo Bank Corp NY's Annual Report on Form
10K, for the year ended December 31, 2001, is incorporated herein by reference.
10(d) Amended and Restated Trustco Bank, National Association and TrustCo Bank
Corp NY Supplemental Retirement Plan, dated September 18, 2001, filed as Exhibit
10(f) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended
December 31, 2001 is incorporated herein by reference.
10(e) Amended and Restated TrustCo Bank Corp NY Performance Bonus Plan, dated
September 18, 2001, filed as Exhibit 10(g) to TrustCo Bank Corp NY's Annual
Report on Form 10K, for the year ended December 31, 2001 is incorporated herein
by reference.
10(f) Amended and Restated Trustco Bank, National Association Executive Officer
Incentive Plan, dated September 18, 2001, filed as Exhibit 10(h) to TrustCo Bank
Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001 is
incorporated herein by reference.
10(g) Amended and Restated Employment Agreements Between Trustco Bank, National
Association, TrustCo Bank Corp NY and each of Robert T. Cushing, Robert J.
McCormick, and Nancy A. McNamara, dated September 18, 2001, filed as Exhibit
10(i) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended
December 31, 2001 are incorporated herein by reference.
10(h) Amended and Restated TrustCo Bank Corp NY 1995 Stock Option Plan, dated
September 18, 2001, filed as Exhibit 10(k) to TrustCo Bank Corp NY's Annual
Report on Form 10K, for the year ended December 31, 2001 is incorporated herein
by reference.
10(i) Amended and Restated TrustCo Bank Corp NY Directors Stock Option Plan,
dated September 18, 2001, filed as Exhibit 10(l) to TrustCo Bank Corp NY's
Annual Report on Form 10K, for the year ended December 31, 2001 is incorporated
herein by reference.
24
10(j) Amended and Restated TrustCo Bank Corp NY Directors Performance Bonus
Plan, dated September 18, 2001, filed as Exhibit 10(m) to TrustCo Bank Corp NY's
Annual Report on Form 10K, for the year ended December 31, 2001 is incorporated
herein by reference.
10(k) Amended and Restated Trustco Bank Deferred Compensation Plan for
Directors, dated September 18, 2001, , filed as Exhibit 10(n) to TrustCo Bank
Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001 is
incorporated herein by reference.
10(l) Consulting Agreement Between TrustCo Bank Corp NY and Robert A. McCormick,
dated October 11, 2002, filed as Exhibit 10(a) to TrustCo Bank Corp NY's
Quarterly Report on Form 10Q, for the quarter ended September 30, 2002 is
incorporated herein by reference.
25
11 Computation of Net Income Per Common Share. Note 12 on page 41 of TrustCo's
Annual Report to Shareholders for the year ended December 31, 2002 is
incorporated herein by reference.
13 Portions of Annual Report to Security Holders of TrustCo for the year ended
December 31, 2002 are filed herewith.
99.1 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 Of The Sarbanes-Oxley Act of 2002 is filed herewith.
GRAPHICS APPENDIX
Cross
Reference
To Page
Of Annual
Omitted Charts Report
1 Return on Equity 6
2 Taxable Equivalent Net Interest
Income 8
3 Dividends Per Share 15
4 Allowance for Loan Losses 17
5 Allowance to Loans
Outstanding 17
6 Efficiency Ratio 21
The charts listed above were omitted from the EDGAR version
of Exhibit 13; however, the information depicted in the
charts was adequately discussed and/or displayed in the
tabular information within Management's Discussion and
Analysis section of the Annual Report.
21 List of Subsidiaries of TrustCo, filed herewith
23 Independent Auditors' Consent, filed herewith.
24 Power of Attorney, filed herewith.
26
Exhibit 21
LIST OF SUBSIDIARIES OF TRUSTCO
Trustco Bank Federally chartered
savings bank
ORE Subsidiary Corp. New York corporation
Trustco Realty Corp. New York corporation
(Subsidiary of Trustco Bank)
Trustco Financial Corp Delaware corporation
Each subsidiary does business under its own name. The activities of each are
described in Part I, Item 1 of Form 10-K.
27
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
TrustCo Bank Corp NY:
We consent to incorporation by reference in the registration statements, Form
S-8 (No. 33-43153), Form S-8 (No. 33-67176), Form S-8 (No. 333-78811), and Form
S-3 (No. 333-75035) of TrustCo Bank Corp NY and subsidiaries of our report dated
January 17, 2003, with respect to the consolidated statements of condition of
TrustCo Bank Corp NY and subsidiaries as of December 31, 2002 and 2001, and the
related consolidated statements of income, changes in shareholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
2002, which report appears in the December 31, 2002 Annual Report on Form 10-K
of TrustCo Bank Corp NY.
/s/ KPMG LLP
Albany, New York
March 26, 2003
28
Exhibit 24
POWER OF ATTORNEY
The undersigned persons do hereby appoint Henry C. Collins or Robert T. Cushing
as a true and lawful Attorney In Fact for the sole purpose of affixing their
signatures to the 2001 Annual Report (Form 10-K) of TrustCo Bank Corp NY to the
Securities and Exchange Commission.
/s/Barton A. Andreoli /s/ Joseph Lucarelli
- -------------------------- ---------------------
Barton A. Andreoli Joseph Lucarelli
/s/ Anthony J. Marinello /s/ Robert A McCormick
- --------------------------- ---------------------
Dr. Anthony J. Marinello Robert A. McCormick
/s/ James H. Murphy /s/ Richard J. Murray, Jr.
- -------------------------- ---------------------
Dr. James H. Murphy Richard J. Murray, Jr
/s/ William D. Powers /s/ William J. Purdy
- -------------------------- --------------------------
William D. Powers. William J. Purdy
Sworn to before me this 18th day of February 2003.
/s/Joan Clark
- -------------------------
Notary Public
Joan Clark
Notary Public, State of New York
Qualified in Albany County
No. 01CL4822282
Commission Expires Nov. 30, 2006
29
Exhibit 99.1
Certification
Pursuant To 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 Of The Sarbanes-Oxley Act of 2002
In connection with the Annual Report of TrustCo Bank Corp NY (the
"Company") on Form 10-K for the period ending December 31, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned hereby certifies pursuant to 18 U.S. C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
1. The Report fully complies with the requirements of section 13(a) of the
Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
By:/s/ Robert T. Cushing
---------------------------
Robert T. Cushing
Chief Executive Officer and
Chief Financial Officer
March 26, 2003
30