[TEXT]
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended Commission File Number 0-10592
March 31, 1994
TrustCo Bank Corp NY
(Exact name of registrant as specified in its charter)
New York 14-1630287
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
320 State Street, Schenectady, New York 12305
(Address of principal executive offices)
Registrant's telephone number, including area code: (518) 377-3311
----------------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange on
Title of each class which registered
------------------- -----------------
None None
Securities registered pursuant to Section 12(g) of the Act:
(Title of Class)
Common
----------------------------------------------------------
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 the number of shares outstanding of each of the issuer's classes
of common stock:
Number of Shares Outstanding
Class of Common Stock as of November 10, 1993
--------------------- -----------------------------
$1 Par Value 13,221,478
TRUSTCO BANK CORP NY
INDEX
Part I. FINANCIAL INFORMATION
PAGE NO.
Item 1. Interim Financial Statements (Unaudited):
Consolidated Statements of Income for the Three
Months Ended March 31, 1994 and 1993
Consolidated Statements of Financial Condition as
of March 31, 1994 and December 31, 1993
Consolidated Statements of Cash Flow for the
Three Months Ended March 31, 1994 and 1993
Notes to Consolidated Interim Financial Statements
Independent Auditors' Report
Item 2. Management's Discussion and Analysis
Part II. OTHER INFORMATION
Item 1. Legal Proceedings - NONE
Item 2. Changes in Securities - NONE
Item 3. Defaults Upon Senior Securities - NONE
Item 4. Submission of Matters to Vote of Security Holders - Annual Proxy
Item 5. Other Information - NONE
Item 6. (a) Exhibits - NONE ~
(b) Reports on Form 8-K - NONE
TRUSTCO BANK CORP NY
Consolidated Statements of Income (Unaudited)
(Dollars in Thousands)
3 Months Ended
March 31
1994 1993
------- -------
Interest Income:
Interest and Fees on Loans.........................$ 21,876 22,191
Interest on U. S. Government (incl.
Agencies and Corporations)......................... 6,508 7,593
Interest on States and Political
Subdivisions....................................... 224 451
Interest on Mortgage-Backed Securities.............. 2,122 2,215
Interest on Other Bonds, Notes and
Debentures......................................... 707 772
Interest on Federal Funds Sold...................... 1,247 988
--------- ---------
Total Interest Income............................ 32,684 34,210
Interest Expense: ------- -------
Interest on Deposits:
Regular Savings and NOW Accounts................... 6,274 7,530
Money Market Deposit Accounts...................... 644 805
Certificates of Deposit of $100,000 or more........ 480 393
Other Time......................................... 7,124 7,132
Interest on Short-Term Borrowings................... 103 85
Interest on Long-Term Debt.......................... 41 118
------- -------
Total Interest Expense............................ 14,666 16,063
------- -------
Net Interest Income............................... 18,018 18,147
Provision for Possible Loan Losses................... 1,827 1,000
------- -------
Net Interest Income after Provision
for Possible Loan Losses......................... 16,191 17,147
Other Income: ------- -------
Trust Department Income............................. 1,169 1,027
Fees for Other Services to Customers................ 2,039 1,305
Unrealized Gain on Trading Securities............... --- 33
Net Gain (Loss) on Securities Available for Sale.... (577) 2,116
Other............................................... 683 500
------- -------
Total Other Income................................. 3,314 4,981
Other Expenses: ------- -------
Salaries and Employee Benefits...................... 4,660 4,278
Net Occupancy Expense............................... 1,091 940
Equipment Expense................................... 817 915
FDIC Insurance Expense.............................. 1,007 988
Professional Services............................... 558 570
Other Real Estate Expenses.......................... 272 578
Other............................................... 3,004 1,015
------- -------
Total Other Expenses............................... 11,409 9,284
------- -------
Income Before Income Taxes and Cumulative Effect
of a Change in Accounting Principle.............. 8,096 12,844
Applicable Income Taxes.............................. 2,800 4,809
------- -------
Income Before Cumulative Effect of a Change in
Accounting Principle............................ 5,296 8,035
------- -------
Cumulative effect at January 1, 1993 of a Change in
Accounting Principle................................. --- (3,284)
------- -------
Net Income......................................$ 5,296 4,751
======== ========
Earnings Per Common Share:
Income Before Cumulative Effect of a Change in
Accounting Principle...........................$ 0.39 0.60 *
Earnings Per Common Share:
Cumulative effect at January 1, 1993 of a Change in
Accounting Principle................................. --- (0.24)*
------- -------
Net Income......................................$ 0.39 0.36 *
======== ========
Average Equivalent Shares Outstanding (000s omitted). 13,534 13,424
======== ========
*Per share data for 1993 adjusted for 2 for 1 stock split paid November 1993.
See accompanying notes to consolidated interim financial statements.
TRUSTCO BANK CORP NY
Consolidated Statements of Financial Condition
(Dollars in Thousands)
3/31/94 12/31/93
(Unaudited)
Assets: --------- ---------
Cash and Due from Banks................................$ 48,566 50,977
Trading Securities...................................... --- 2,106
Securities Available for Sale:
U. S. Government (incl. Agencies and Corporations)..... 350,124 230,563
Mortgage-Backed Securities............................. 141,905 ---
Other Bonds, Notes and Debentures...................... 38,844 10,153
--------- ---------
Total Securities Available for Sale................... 530,873 240,716
--------- ---------
Investment Securities:
U. S. Government (incl. Agencies and Corporations)..... --- 228,157
States and Political Subdivisions...................... 22,193 23,017
Mortgage-Backed Securities............................. --- 138,376
Other Bonds, Notes and Debentures...................... 9,373 27,256
--------- ---------
Total Investment Securities........................... 31,566 416,806
--------- ---------
Federal Funds Sold...................................... 250,000 149,000
Loans:
Commercial............................................. 229,079 229,971
Mortgages, closed-end.................................. 637,303 599,805
Revolving Home Equity Credit Line...................... 199,656 202,018
Installment............................................ 28,639 31,212
--------- ---------
Total Loans...........................................1,094,677 1,063,006
Less: --------- ---------
Allowance for Possible Loan Losses..................... 36,217 34,087
Unearned Income........................................ 2,227 2,358
--------- ---------
Net Loans..............................................1,056,233 1,026,561
Bank Premises and Equipment............................. 24,904 24,893
Other Assets............................................ 58,603 60,239
--------- ---------
Total Assets........................................$2,000,745 1,971,298
========= =========
Liabilities:
Deposits:
Demand................................................$ 92,703 96,034
Regular Savings and NOW Accounts....................... 995,765 970,407
Money Market Deposit Accounts.......................... 109,231 110,630
Certificates of Deposit (In Denominations of
$100,000 or More)..................................... 40,026 37,452
Other Time............................................. 580,531 579,709
--------- ---------
Total Deposits........................................1,818,256 1,794,232
Short-Term Borrowings................................... 18,464 18,323
Accrued Expenses and Other Liabilities.................. 28,355 26,113
Long-Term Debt.......................................... 2,750 2,750
--------- ---------
Total Liabilities.....................................1,867,825 1,841,418
--------- ---------
Shareholders' Equity
Capital Stock Par Value $1; 25,000,000 Shares Authorized
13,640,155 and 13,588,044 Shares Issued March 31, 1994
and December 31, 1993, respectively................... 13,640 13,588
Surplus................................................. 92,631 91,955
Undivided Profits....................................... 27,308 25,331
Net Unrealized Gain on Securities Available for Sale....
Treasury Stock at Cost - 364,566 Shares at 335 ---
March 31, 1994 and December 31, 1993 ................. (994) (994)
--------- ---------
Total Shareholders' Equity............................ 132,920 129,880
--------- ---------
Total Liabilities and Shareholders' Equity...........$2,000,745 1,971,298
========= =========
See accompanying notes to consolidated interim financial statements.
TRUSTCO BANK CORP NY
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in Thousands)
THREE MONTHS ENDED March 31, 1994 1993
-------- -------
Cash Flows from Operating Activities:
Net Income before Change in Accounting Principle........$ 5,296 8,035
Change in Accounting Principle........................... --- (3,284)
-------- -------
Net Income............................................... 5,296 4,751
-------- -------
Adjustments to Reconcile Net Income to Net Cash Provided
by/(Used in) Operating Activities:
Depreciation and Amortization.......................... 569 581
Provision for Possible Loan Losses..................... 1,827 1,000
Provision for Deferred Tax Expense..................... 214 ---
Loss on Sale of Securities Available for Sale.......... 6,148 2
Gain on Sale of Securities Available for Sale.......... (5,565) (2,118)
Gain on Calls and Sales of Investment Securities....... (6) (33)
Purchase of Trading Securities......................... --- (1,772)
Decrease(Increase) in Taxes Receivable................. 1,071 (647)
(Increase)Decrease in Interest Receivable............... (907) 9
Increase(Decrease) in Interest Payable................. 53 (102)
Increase in Other Assets............................... (2,801) (11,788)
Increase in Accrued Expenses........................... 2,175 7,901
-------- -------
Total Adjustments 2,778 (6,967)
-------- -------
Net Cash Provided by/(Used in) Operating Activities...... 8,074 (2,216)
-------- -------
Cash Flows from Investing Activities:
Proceeds from Sales of Securities Available for Sale... 394,048 39,277
Purchase of Securities Held for Sale................... (330,252) ---
Proceeds from Maturities of Investment Securities ..... 1,385 27,145
Proceeds from Maturities of Securities Avail for Sale.. 32,558 ---
Purchase of Investment Securities...................... (555) (22,359)
Net Increase in Loans.................................. (31,586) (2,429)
Proceeds from sales of Real Estate Owned............... 3,909 2,253
Capital Expenditures................................... (580) (464)
-------- -------
Net Cash Provided by Investing Activities............ 68,927 43,423
-------- -------
Cash Flows from Financing Activities:
Net Increase(Decrease) in Deposits..................... 24,024 (14,985)
Net Increase(Decrease) in Short-Term Debt.............. 141 (5,175)
Proceeds from Issuance of Common Stock................. 728 230
Proceeds from Sale of Treasury Stock................... --- 218
Dividends Paid......................................... (3,305) (2,633)
-------- -------
Net Cash Provided by/(Used In) Financing Activities.. 21,588 (22,345)
-------- -------
Net Increase in Cash and Cash Equivalents................ 98,589 18,862
Cash and Cash Equivalents at Beginning of Period......... 199,977 191,025
-------- -------
Cash and Cash Equivalents at End of Period..............$ 298,566 209,887
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest Paid.........................................$ (14,613) (16,165)
Income Taxes Paid...................................... (1,515) (42)
Transfer of Loans to Real Estate Owned................. 87 9,146
Increase in Dividends Payable.......................... 14 5
Transfer of Trading Securities to Securities
Available for Sale.................................... (2,106) ---
Unrealized gain on Securities Available for Sale-Gross. (572) ---
Deferred tax on Unrealized gain on Securities
Available for Sale.................................... 237 ---
COMPOSITION OF CASH AND CASH EQUIVALENTS:
March 31, 1994 1993
-------- -------
Cash and Due from Banks.................................$ 48,566 44,887
Federal Funds Sold....................................... 250,000 165,000
-------- -------
Total Cash and Cash Equivalents.................$ 298,566 209,887
======== =======
See accompanying notes to consolidated interim financial statements.
TrustCo Bank Corp NY
Notes to Consolidated Interim Financial Statements
(Unaudited)
1. Financial Statement Presentation
In the opinion of the management of TrustCo Bank Corp NY, the
accompanying unaudited Consolidated Interim Financial
Statements contain all adjustments necessary to present
fairly the financial position as of March 31, 1994, and the
results of operations and the cash flows for the three
months ended March 31, 1994 and 1993. The accompanying
Consolidated Interim Financial Statements should be read in
conjunction with TrustCo Bank Corp NY's Consolidated year end
Financial Statements, including notes thereto, which are
included in TrustCo Bank Corp NY's 1993 annual report to
shareholders on Form 10-K.
2. Securities Available for Sale and Investment Securities
On January 1, 1994 the Company adopted Statement of Financial
Accounting Standards No. 115 (SFAS No. 115) "Accounting for
Certain Investments in Debt and Equity Securities."
Management determines the appropriate classification of
securities at the time of purchase. If management has the
positive intent and ability to hold debt securities to
maturity, they are classified as investment securities held
to maturity and are stated at amortized cost. If securities
are purchased for the purpose of selling them in the near
term, they are classified as a trading securities and are
reported at fair value with unrealized holding gains and
losses reflected in current earnings. All other debt and
equity securities are classified as securities available for
sale and are reported at fair value, with net unrealized gains
or losses reported, net of income taxes, as a separate
component of shareholders' equity. Gains and losses on
disposition of all investment securities are based on the
adjusted cost of the specific security sold.
Upon the adoption of SFAS No. 115, the Company transferred the
following securities into the "available for sale" category
from the "held to maturity" category:
(in $ thousands)
US Treasury & Agency $229,406
Mortgage Backed Securities 142,119
Other 26,929
$398,454
At January 1, 1994, the net unrealized gain on securities
available for sale, net of the income tax effect, was
$12,459,000. At March 31, 1994, the net unrealized gain on
securities available for sale, net of the income tax effect
was $335,000, representing a $12,124,000 decrease from January
1, 1994.
Prior to the adoption of SFAS No. 115, securities available
for sale were carried at the lower of amortized cost or fair
value.
The Company also transferred its $2,106,000 portfolio of
equity securities from trading assets to the available for
sale category.
Securities Available for Sale
- - -----------------------------
(in $Thousands) March 31, 1994
_________ __________ _________ __________
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gain Loss Value
_________ __________ _________ __________
U.S. Treasury $349,787 2,708 2,371 350,124
& Agency
Mortgage Backed 142,612 2,302 3,009 141,905
Securities
Other 37,902 1,127 185 38,844
--------- ---------- --------- ---------
Total $530,301 6,137 5,565 530,873
========= ========== ========= =========
The maturity of securities available for sale at March 31, 1994:
Within 1 Year 1 to 5 Years 5 TO 10 Years After 10 Years Total
_________ _________ _________ _________ _________ _________ _________ _________ _________ _________
Approximate Approximate Approximate Approximate Approximate
Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value Cost Value Cost Value
_________ _________ _________ _________ _________ _________ _________ _________ _________ _________
U.S. Treasury $15,050 13,849 216,142 216,498 118,595 119,777 ---- ---- 349,787 350,124
& Agency
Mortgage Backed 12,763 13,452 102,045 101,124 27,804 27,329 ---- ---- 142,612 141,905
Securities
Other 10,000 10,242 5,160 4,975 20,579 21,205 2,163 2,422 37,902 38,844
--------- ---------- --------- --------- --------- --------- --------- --------- --------- ---------
Total $37,813 37,543 323,347 322,597 166,978 168,311 2,163 2,422 530,301 530,873
========= ========== ========= ========= ========= ========= ========= ========= ========= =========
Securities Held to Maturity
- - ----------------------------
(in $Thousands) March 31, 1994
_________ __________ _________ __________
Amortized Gross Gross Approximate
Cost Unrealized Unrealized Fair
Gain Loss Value
_________ __________ _________ __________
State and Municipal $22,193 354 17 22,530
Other 9,373 --- --- 9,373
--------- ---------- --------- ---------
Total $31,566 354 17 31,903
========= ========== ========= =========
The maturity of securities held to maturity at March 31, 1994:
Within 1 Year 1 to 5 Years 5 TO 10 Years After 10 Years Total
_________ _________ _________ _________ _________ _________ _________ _________ _________ _________
Approximate Approximate Approximate Approximate Approximate
Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value Cost Value Cost Value
_________ _________ _________ _________ _________ _________ _________ _________ _________ _________
State and Municipal $14,688 14,701 4,778 4,913 1,470 1,537 1,257 1,379 22,193 22,530
Other ---- ---- ---- ---- ---- ---- 9,373 9,373 9,373 9,373
--------- ---------- --------- --------- --------- --------- --------- --------- --------- ---------
Total $14,688 14,701 4,778 4,913 1,470 1,537 10,630 10,752 31,566 31,903
========= ========== ========= ========= ========= ========= ========= ========= ========= =========
During the three months ended 03/31/94 there were no sales of
Held to Maturity securities.
INDEPENDENT AUDITOR'S REPORT
KPMG Peat Marwick
Certified Public Accountants
74 North Pearl Street
Albany, New York 12207
The Board of Directors and Shareholders TrustCo Bank Corp NY:
We have reviewed the consolidated statement of financial condition
of TrustCo Bank Corp NY and subsidiaries as of March 31, 1994, and
the related consolidated statements of income for the three-month
periods ended March 31, 1994 and 1993 in accordance with standards
established by the American Institute of Certified Public
Accountants.
A review of interim financial information consists principally of
obtaining an understanding of the system for the preparation of
interim financial information, applying analytical review
procedures to financial data, and making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the consolidated financial statements
referred to above for them to be in conformity with generally
accepted accounting principles.
As discussed in note 2 to the consolidated interim financial
statements, effective January 1, 1994, the Company adopted the
provisions of the Financial Accounting Standards Board's Statement
of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" which changed its method
of accounting for certain investments in debt and equity
securities.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated statement of financial
condition of TrustCo Bank Corp NY and subsidiaries as of December
31, 1993, and the related consolidated statements of income,
changes in shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated January 26,
1994, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth
in the accompanying consolidated statement of financial condition
as of December 31, 1993, is fairly presented, in all material
respects, in relation to the consolidated statement of financial
condition from which it has been derived.
/s/ KPMG Peat Marwick
_______________________
KPMG Peat Marwick
May 13, 1994
TrustCo Bank Corp NY
Management's Discussion and Analysis
First quarter 1994 net income was $5.3 million compared to
$4.8 million for the first quarter of 1993 and $5.4 million for the
fourth quarter of 1993. Per share earnings were $.39, $.36 and
$.40, respectively, on average equivalent shares of 13,534,000
outstanding during the first quarter of 1994, 13,424,000 during the
first quarter 1993 and 13,523,000 outstanding during the fourth
quarter of 1993.
Annualized return on average assets was 1.08% for the first
quarter 1994, compared with 1.00% last year. The annualized return
on average equity from operations for 1994's first quarter was
16.3% compared to 16.0% for 1993's first quarter. In January, the
Company adopted the Financial Accounting Standards Board's
Statement No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." Return on equity for the first quarter of
1994, after considering the market value adjustment, was 15.0%.
Interest income was $32.7 million for the first quarter of
1994, a decrease of 4.5% from the first quarter of 1993. This was
the result of a 4.8% increase in average earning assets offset by
a 66 basis point decrease in average interest rate to 6.9%. With
the exception of overnight funds which increased 29 basis points,
the decrease in rates was spread across all product lines. Most
of the increase in earning assets came from growth in the
residential mortgage portfolio. Compared with the fourth quarter
of 1993, interest income increased very slightly as average earning
assets increased 2.3% while average interest rates decreased 9
basis points.
Interest expense was $14.7 million in the first quarter 1994
compared with $14.9 million in the fourth quarter 1993 and $16.1
million for 1993's first quarter. Decreases between the first
quarter 1994 and fourth quarter 1993 were due to a 3 basis point
drop in average rate partially offset by a 1.7% increase in average
interest bearing liabilities. Decreases from the first quarter
1993 were due to a 42 basis point drop in average rate, partially
offset by a 2.5% increase in average interest bearing liabilities.
Net interest income was $18.0 million for the first quarter
of 1994, compared with $17.6 million from the fourth quarter of
1993 and $18.1 million from the first quarter of 1993. The net
interest margins for the respective periods of time were 3.78%,
3.81% and 3.98%.
Average federal funds sold of $155.6 million decreased 13.1%
from the fourth quarter 1993 as the Company sought to move funds
out of federal funds sold into longer term residential mortgages.
Compared with the first quarter of 1993, average federal funds sold
increased 15.0%.
The average balance of securities available for sale was
$636.5 million for the first quarter of 1994, compared with $110.3
million for securities held for sale in the first quarter of 1993.
At the date of adoption of SFAS No. 115, the Company
transferred $398.5 million of securities into the available for
sale category from the held to maturity category. Management
sought to maximize the Company's flexibility in being able to
improve its earnings in the face of rising interest rates and a
looming market correction. As interest rates stabilize over the
coming months, the Company expects to increase its purchase of held
to maturity securities.
The Company also transferred $2.1 million in equity
securities, formerly designated as "trading assets" to the
available for sale category, as the Company does not intend to
activity trade these securities. Additional information about
securities available for sale and securities held to maturity is
contained in Note 2.
Average balances of investment securities was $32.3 million
for the first quarter 1994, compared with $543.5 million a year
ago. The change in average balances reflects the transfer of
securities to the available for sale category upon the adoption
of SFAS No. 115.
Average balances of loans, net of unearned income, increased
5.1% over the first quarter of 1993 and increased 3.9% over the
fourth quarter 1993. Almost all of the loan growth came from
increased first mortgages on residential property. The growth was
partially the result of refinancing activity as first mortgage
rates dropped into the 6% to 7% range locally, and partially the
result of the Company's positioning of its first mortgage product
in the local market.
Residential fixed term second mortgages were affected by
refinancing activity. Average balances of these loans were $104.9
million for the current quarter, down 8.1% from the previous
quarter and down 14.0% from the first quarter 1993. Revolving,
open-ended, variable rate home equity credit lines averaged $201.2
million for the quarter. This compares to an average balance of
$204.1 million from the previous quarter and $197.4 million from
the first quarter 1993.
At the end of the first quarter 1994, non-performing loans are
0.48% of the loan portfolio, compared to 0.34% at March 31, 1993
and 0.18% at the end of the fourth quarter 1993. Real estate
owned, including in-substance foreclosure, amounted to $15.4
million at March 31, 1994, down $3.8 million from $19.2 million
recorded at the end of the fourth quarter 1993. This decrease was
the result of foreclosure actions initiated in earlier periods
being completed, and aggressive efforts to sell foreclosed
properties. Real estate owned was $33.5 million at March 31, 1993.
The average balance of NOW accounts, $245.4 million in the first
quarter 1994, increased 2.8% from the first quarter 1993 and was
down 0.4% from the fourth quarter 1993. Money Market accounts
averaged $109.3 million for the current quarter, unchanged from
the fourth quarter 1993 and down 7.4% from a year ago. Total average
interest bearing checking balances were fairly stable over the
three quarters referenced.
Average savings account balances totaled $735.1 million for
the first quarter 1994, compared with $717.4 million in the
previous quarter and $733.9 million in the prior year.
Average Certificates of Deposit, excluding certificates of
deposit of $100,000 or more increased 1.4% from the fourth quarter
of 1993 and 9.8% from the first quarter 1993. Most of the growth
occurred for the 30 month CD product and was the result of the
Company's position in the local CD market.
Total average deposits showed sustained growth, increasing
1.2% from the fourth quarter 1994 and increasing 2.8% from the
first quarter last year.
Average certificates of deposit over $100,000 of $39.9 million
increased 27.1% from last year's first quarter and increased 10.2%
from the fourth quarter of 1993. The Company does not rely on
brokered deposits. All the growth in jumbo CDs was retail
oriented.
The first quarter's provision for loan losses was $1.8
million, a 20.1% decrease from 1993's fourth quarter and 82.7%
higher than the first quarter of 1993. At the end of the most
recent quarter the allowance for possible loan losses amounted to
$36.2 million or 3.3% of loans (net of unearned income) compared
with $28.2 million or 2.8% at March 31, 1993. In management's
opinion, the allowance for possible loan losses is considered
adequate.
Non interest income was $3.3 million for the first quarter
1994. Excluding losses on sales of securities available for sale,
most of the increase was attributable to closing fees for residential
mortgages. The Company began doing these in-house mid year 1993.
During the current quarter a $577 loss on securities available for
sale was recognized as the result of the Company's selling lower
yielding U.S. Treasury securities and purchasing securities with
higher yields. In the corresponding quarter of 1993, the Company
recognized gains of $2.1 million.
Non interest expense for the first quarter 1994 was $11.4
million, down from $13.0 million in the fourth quarter of 1994 and
up from $9.3 million in the first quarter 1993. Personnel expense
was $4.7 million, $4.0 million and $4.3 million for the same
referenced periods of time. The first quarter 1994 increase was
primarily due to normal wage increases and revamped benefits plans.
Net occupancy expense increased $151 thousand from the first
quarter of 1993, primarily as the result of snow removal and higher
fuel consumption due to the severe weather in the Northeast.
Equipment expense and professional services expense declined
modestly from the prior year. ORE expense was down from the same
quarter a year ago as a result of the lowered number of properties
held.
Federal Deposit Insurance (FDIC) expense was $1 million in the
recent quarter, increased 0.8% from the fourth quarter of 1993, and
increased 1.9% from 1993's first quarter. The increase in FDIC
expense is due entirely to changes in deposit volumes. Because
Trustco Bank is a well capitalized bank, the FDIC insurance rate
has remained unchanged from 1991 levels.
Income taxes on operations for the current quarter were $2.8
million compared with $2.8 million for the fourth quarter 1993 and
$4.8 million for the first quarter 1993.
In May 1993, the Financial Accounting Standards Board adopted
Statement No. 114, "Accounting by Creditors for Impairment of a
Loan" which will be effective for fiscal years beginning after
December 15, 1994. The Company will adopt SFAS No. 114 in 1995.
At March 31, 1994, TrustCo had a Tier I capital to average
assets ratio of 6.7%, equity capital of 6.6% and risk-adjusted
capital to risk-adjusted assets ratio of 13.1%. TrustCo's capital
ratios exceed the regulatory requirements for a well capitalized
bank holding company.
TrustCo Bank Corp NY
Management's Discussion and Analysis
STATISTICAL DISCLOSURE
I. DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
The following table summarizes the component distribution of average balance
sheet, related interest income and expense and the average annualized yields
on earning assets and annualized rates on interest bearing libilities of the
Registrant and the Bank (unadjusted for tax equivalency) for each of the
reported periods. Non-accrual loans are included in loans for this analysis.
First Quarter First Quarter
1994 1993
_____________________________ _____________________________
Average Average Average Average
($000 omitted) Balance Interest Rate Balance Interest Rate
Assets
Loans, Net of Unearned Income....... $1,075,176 $21,876 8.18% $1,023,330 $22,191 8.71%
Trading Assets...................... --- --- --- 994 8 3.22%
Securities Available for Sale
U.S. Treasury and Agency........... 449,791 6,394 5.69% 100,155 1,748 6.98%
Other Taxable Investments........... 186,741 2,802 6.00% 10,165 199 7.83%
--------- --------- --------- ---------
Total Securities Available for Sale 636,532 9,196 5.78% 110,320 1,947 7.06%
Investment Securities:
U.S. Treasury and Agency............ --- --- --- 362,632 5,845 6.45%
Other Taxable Investments........... 9,373 141 6.00% 139,019 2,788 8.02%
Exempt from Federal Income Tax...... 22,892 224 3.92% 41,867 451 4.31%
--------- ------ --------- ------
Total Investment Securities...... 32,265 365 4.53% 543,518 9,084 6.69%
Federal Funds Sold................... 155,583 1,247 3.25% 135,311 988 2.96%
--------- ------ --------- ------
Total Interest Earning Assets..... 1,899,556 32,684 6.91% 1,812,479 34,210 7.57%
Allowance for Possible Loan Losses (35,664) ------ (27,539) ------
Cash and Non-Int. Bearing Assets.... 123,999 139,131
--------- ---------
Total Assets...................... $1,987,891 $1,924,071
========= =========
Liabilities and Shareholders' Equity
Time Deposits:
Regular Savings and NOW Accounts... $980,495 6,274 2.60% $972,681 7,530 3.14%
Other Time Deposits................ 723,965 8,248 4.62% 689,929 8,330 4.90%
--------- ------ --------- ------
Total Time Deposits............... 1,704,460 14,522 3.46% 1,662,610 15,860 3.87%
Short-Term Borrowed Funds........... 18,609 103 2.24% 16,663 85 2.07%
Long-Term Borrowed Funds............ 2,750 41 6.00% 5,000 118 9.40%
--------- ------ --------- ------
Total Int. Bearing Liabilities.... 1,725,819 14,666 3.45% 1,684,273 16,063 3.87%
Demand Deposits..................... 93,344 ------ 86,963 ------
Other Liabilities................... 25,976 32,264
Shareholders' Equity................ 142,752 120,571
--------- ---------
Total Liab. & Shhldrs.' Equity.... $1,987,891 $1,924,071
========= =========
Net Interest Income................. $18,018 $18,147
======= =======
Net Interest Spread................. 3.46% 3.70%
Net Interest Margin (Net Interest
Income to Total Interest Earning
Assets).......................... 3.78% 3.98%
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned duly authorized.
TRUSTCO BANK CORP NY
(Registrant)
/s/ Robert A. McCormick
Date: May 12, 1994 _____________________________________
Robert A. McCormick, President
and Chief Executive Officer
/s/ Peter A. Zakriski
Date: May 12, 1994 _____________________________________
Peter A. Zakriski, Treasurer
and Chief Accounting Officer