SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 1-12709
TOMPKINS TRUSTCO, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 16-1482357
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
The Commons, P.O. Box 460, Ithaca, NY 14851
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (607) 273-3210
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 of the Registrant's Common Stock outstanding as of
the latest practicable date:
Class Outstanding as of May 8, 2001
- ---------------------------- -------------------------------
Common Stock, $.10 par value 7,419,161 shares
TOMPKINS TRUSTCO, INC.
FORM 10-Q
INDEX
Page
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Condensed Consolidated Statements of Condition as of
March 31, 2001 and December 31, 2000 3
Condensed Consolidated Statements of Income for
the three months ended March 31, 2001
and 2000 4
Condensed Consolidated Statements of Cash Flows for
the three months ended March 31, 2001 and 2000. 5
Condensed Consolidated Statements of Changes in
Shareholders' Equity for the three months ended
March 31, 2001 and 2000. 6
Notes to Unaudited Condensed Consolidated Financial
Statements 7-10
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-16
Item 3 - Quantitative and Qualitative Disclosures about Market
Risk 17
Average Consolidated Balance Sheet and Net Interest
Analysis 18
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings Not Applicable
Item 2 - Changes in Securities and Use of Proceeds Not Applicable
Item 3 - Defaults on Senior Securities Not Applicable
Item 4 - Submission of Matters to a Vote of Securities Holders Not Applicable
Item 5 - Other Information Not Applicable
Item 6 - Exhibits and Reports on Form 8-K 19
SIGNATURES 20
EXHIBIT INDEX 21
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(In thousands, except share data) (Unaudited)
As of As of
03/31/2001 12/31/2000
ASSETS ----------- -----------
Cash & noninterest bearing balances
due from banks $ 43,158 $ 45,939
Interest bearing balances due from banks 666
Federal funds sold 21,600 19,425
Available-for-sale securities, at fair value 340,996 304,358
Held-to-maturity securities, fair value of $24,817 at
March 31, 2001 and $26,147 at December 31, 2000 24,471 25,863
Loans/leases net of unearned income 819,276 845,758
Less: Reserve for loan/lease losses 10,142 9,824
- -----------------------------------------------------------------------------------------------------------
NET LOANS/LEASES 809,134 835,934
Bank premises and equipment, net 24,233 23,861
Corporate owned life insurance 18,813 18,581
Intangible assets 13,514 9,858
Accrued interest and other assets 21,078 21,075
- -----------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 1,317,663 $ 1,304,894
===========================================================================================================
LIABILITIES, MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARIES AND SHAREHOLDERS' EQUITY
Deposits:
Interest bearing:
Checking, savings and money market 421,767 $ 406,081
Time 432,033 420,255
Noninterest bearing 189,531 208,565
- -----------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS 1,043,331 1,034,901
Securities sold under agreements to repurchase and
Federal funds purchased 58,324 72,231
Other borrowings 76,994 67,257
Other liabilities 16,335 14,020
- -----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 1,194,984 $ 1,188,409
- -----------------------------------------------------------------------------------------------------------
Minority interest in consolidated subsidiaries 1,523 1,490
Shareholders' equity:
Common Stock - par value $.10 per share, authorized 15,000,000 shares
Issued: 7,433,341 at March 31, 2001; and 7,344,813 at December 31, 2000 743 $ 734
Surplus 45,462 44,182
Undivided profits 73,671 70,894
Accumulated other comprehensive income (loss) 2,014 (9)
Treasury stock, at cost - 24,550 shares at March 31, 2001,
and 24,886 shares at December 31, 2000 (466) (473)
Unallocated ISOP/ESOP: 25,903 shares at March 31, 2001,
32,261 shares at December 31, 2000 (268) (333)
- -----------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY $ 121,156 $ 114,995
- -----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES, MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES
AND SHAREHOLDERS' EQUITY $ 1,317,663 $ 1,304,894
===========================================================================================================
See accompanying notes to unaudited condensed consolidated financial statements.
3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data) (Unaudited)
Three months ended
03/31/2001 03/31/2000
---------- ----------
INTEREST AND DIVIDEND INCOME
Loans $18,482 $16,394
Federal funds sold 195 254
Available-for-sale securities 4,841 4,748
Held-to-maturity securities 323 397
- ------------------------------------------------------------------------------------------
TOTAL INTEREST AND DIVIDEND INCOME 23,841 21,793
- ------------------------------------------------------------------------------------------
INTEREST EXPENSE
Deposits:
Time certificates of deposits of $100,000 or more 2,749 1,960
Other deposits 5,601 5,486
Federal funds purchased and securities sold under
agreements to repurchase 907 893
Other borrowings 1,092 626
- ------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 10,349 8,965
- ------------------------------------------------------------------------------------------
NET INTEREST INCOME 13,492 12,828
- ------------------------------------------------------------------------------------------
Less: Provision for loan/lease losses 185 240
- ------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN/LEASE LOSSES 13,307 12,588
- ------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust and investment services income 1,234 1,242
Service charges on deposit accounts 1,094 844
Insurance commissions and fees 961 0
Other service charges 997 1,012
Increase in cash surrender value of corporate owned life insurance 254 185
Other income 288 162
Net realized gain (loss) on available-for-sale securities 6 106
- ------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME 4,834 3,551
- ------------------------------------------------------------------------------------------
NONINTEREST EXPENSES
Salary and wages 4,831 4,249
Pension and other employee benefits 1,216 1,021
Net occupancy expense of bank premises 709 628
Furniture and fixture expense 723 614
Amortization of intangible assets 426 252
Other operating expense 2,978 2,755
- ------------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSES 10,883 9,519
- ------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAX EXPENSE AND MINORITY
INTEREST IN CONSOLIDATED SUBSIDIARIES 7,258 6,620
- ------------------------------------------------------------------------------------------
Minority interest in consolidated subsidiaries 34 156
INCOME TAX EXPENSE 2,431 2,138
- ------------------------------------------------------------------------------------------
NET INCOME $ 4,793 $ 4,326
==========================================================================================
BASIC EARNINGS PER SHARE $ 0.65 $ 0.62
DILUTED EARNINGS PER SHARE $ 0.64 $ 0.61
==========================================================================================
See accompanying notes to unaudited condensed consolidated financial statements.
4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
Three months ended
3/31/2001 3/31/2000
--------- ---------
OPERATING ACTIVITIES
Net income $ 4,793 $ 4,326
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan/lease losses 185 240
Depreciation and amortization premises, equipment, and software 700 590
Amortization of intangible assets 426 252
Earnings from corporate owned life insurance (232) (185)
Net amortization on securities 32 47
Net realized gain on available-for-sale securities (6) (106)
Net gain on sale of loans (60) (12)
Proceeds from sale of loans 2,475 2,849
Net gain on sales of bank premises and equipment (16) (17)
Issuance of treasury stock 10 0
ISOP/ESOP shares released for allocation 184 0
Decrease in accrued interest receivable 1,293 334
(Decrease) increase in accrued interest payable (352) 83
Other, net (367) 2,360
- ----------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 9,065 10,761
- ----------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Proceeds from maturities of available-for-sale securities 72,236 5,865
Proceeds from sales of available-for-sale securities 437 159
Proceeds from maturities of held-to maturity securities 2,369 4,979
Purchases of available-for-sale securities (73,031) (11,365)
Purchases of held-to-maturity securities (984) (3,457)
Net increase in loans (8,645) (19,340)
Proceeds from sale of bank premises and equipment 21 23
Purchases of bank premises and equipment (845) (1,744)
Purchase of Austin, Hardie, Wise Agency, Inc. and Ernest Townsend & Son, Inc. (719) 0
- ----------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (9,161) (24,880)
- ----------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net increase (decrease) in demand, money market,
and savings deposits (3,348) 1,832
Net increase (decrease) in time deposits 11,778 15,218
Net increase (decrease) in securities sold under agreements
to repurchase and Federal funds purchased (13,907) 6,061
Net increase (decrease) in other borrowings 9,539 824
Cash dividends (2,016) (1,901)
Repurchase of common shares (2,194) (894)
Cash paid in lieu of fractional shares Letchworth common shares 0 (9)
Net proceeds from exercise of stock options and related tax benefit 304 31
- ----------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 156 21,162
- ----------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 60 7,043
Cash and Cash Equivalents at beginning of Period 65,364 54,788
TOTAL CASH & CASH EQUIVALENTS AT END OF PERIOD $ 65,424 $ 61,831
==========================================================================================================
SUPPLEMENTAL INFORMATION:
Cash paid during the year for:
Interest $ 10,701 $ 8,673
Taxes $ 2,585 $ 525
Noncash investing activities:
Fair value of noncash assets acquired in purchase acquisition $ 1,429 0
Fair value of liabilities acquired in purchase acquisition $ 1,449 0
Shares issued for acquisitions $ 3,043 0
Securitization of loans $ 32,845 0
See accompanying notes to unaudited condensed consolidated financial statements.
5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
(In thousands, except share data) (Unaudited)
Accumulated
Other
Compre-
hensive
Common Undivided Income Treasury Unallocated
Stock Surplus Profits (Loss) Stock ISOP/ESOP Total
==============================================================================================================================
Balances at
January 1, 2000 $ 710 $ 40,548 $61,078 ($4,745) ($525) ($ 442) $ 96,624
- ------------------------------------------------------------------------------------------------------------------------------
Comprehensive Income:
Net Income 4,326 4,326
Other Comprehensive loss (644) (644)
---------
TOTAL COMPREHENSIVE INCOME 3,682
=========
Cash dividends ($0.27/Share) (1,901) (1,901)
Cash paid in lieu of fractional Letchworth
common shares (9) (9)
Exercise of stock options, and related
tax benefit (3,197 shares, net) 31 31
Common stock repurchased and
returned to unissued status (33,762) (3) (891) (894)
- ------------------------------------------------------------------------------------------------------------------------------
Balances at
March 31, 2000 $ 707 $ 39,679 $63,503 ($5,389) ($525) ($ 442) $ 97,533
==============================================================================================================================
==============================================================================================================================
Balances at
January 1, 2001 $ 734 $ 44,182 $70,894 ($ 9) ($473) ($ 333) $ 114,995
- ------------------------------------------------------------------------------------------------------------------------------
Comprehensive Income:
Net Income 4,793 4,793
Other Comprehensive Income 2,023 2,023
---------
TOTAL COMPREHENSIVE INCOME 6,816
=========
Cash dividends ($0.27/Share) (2,016) (2,016)
Exercise of stock options and
related tax benefit (16,400 shares, net) 2 302 304
Common stock repurchased and
returned to unissued status (79,657 shares) (8) (2,186) (2,194)
Treasury stock issued (336 shares) 3 7 10
Stock issued for purchase acquisition
(151,719 shares) 15 3,042 3,057
ESOP shares committed to be
released for allocation (6,358 shares) 119 65 184
- ------------------------------------------------------------------------------------------------------------------------------
Balances at
March 31, 2001 $ 743 $ 45,462 $73,671 $ 2,014 ($466) ($ 268) $ 121,156
==============================================================================================================================
See accompanying notes to unaudited condensed consolidated financial statements.
6
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS
Tompkins Trustco, Inc. ("Tompkins" or "the Company") is a financial holding
company, organized under the laws of New York State, and is the parent company
of Tompkins Trust Company (the "Trust Company"), The Bank of Castile, The
Mahopac National Bank, and Tompkins Insurance Agencies, Inc. The consolidated
financial information included herein combines the results of operations, the
assets, liabilities, and shareholders' equity of the Company and its
subsidiaries. All significant intercompany balances and transactions are
eliminated in consolidation.
2. BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America. In preparing the financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclose contingent assets and liabilities, at the date of the
financial statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates. Amounts in
the prior period's consolidated financial statements are reclassified when
necessary to conform with the current period's presentation.
In management's opinion, the unaudited condensed consolidated financial
statements reflect all adjustments of a normal recurring nature. The results of
operations for the interim periods are not necessarily indicative of the results
of operations to be expected for the full year ended December 31, 2001. The
unaudited condensed consolidated financial statements should be read in
conjunction with the Company's 2000 Annual Report on Form 10-K.
3. MERGERS AND ACQUISITIONS
Letchworth Independent Bancshares Corporation
On December 20, 1999, the shareholders of Tompkins Trustco, Inc. and Letchworth
Independent Bancshares Corporation ("Letchworth") approved a merger between the
two companies. Effective December 31, 1999, Letchworth was merged with and into
Tompkins, and each issued and outstanding share of Letchworth common stock was
converted into 0.685 shares of Tompkins common stock, plus cash in lieu of any
fractional shares. This merger resulted in the issuance of approximately 2.3
million additional shares of Tompkins common stock, bringing Tompkins' total
outstanding shares to approximately 7.1 million shares immediately following the
merger. The merger qualified as a tax-free reorganization and was accounted for
as a pooling-of-interests.
Letchworth was the holding company for The Bank of Castile, Castile, New York,
and The Mahopac National Bank, Mahopac, New York. The Bank of Castile will
continue to operate its community banking business as a wholly-owned subsidiary
of Tompkins. The Bank of Castile conducts its operations through its main office
located in Castile, New York, and at its eleven branch offices in towns situated
in and around the areas commonly known as the Letchworth State Park area and the
Genesee Valley region of New York State. In 1999, The Bank of Castile opened its
first branch office in Monroe County. Immediately following the Letchworth
merger, Tompkins owned 70.17 percent of The Mahopac National Bank outstanding
common stock. As noted below, Tompkins subsequently purchased the additional
remaining shares of The Mahopac National Bank, and currently owns all of The
Mahopac National Bank outstanding common stock. The Mahopac National Bank is
located in Putnam County, New York, and operates four bank branches in that
county.
7
The Mahopac National Bank Acquisition
On June 4, 1999, Letchworth acquired 70.17 percent of the outstanding common
stock of The Mahopac National Bank in a cash transaction accounted for as a
purchase. Accordingly, operating results for The Mahopac National Bank are not
included for periods prior to June 4, 1999. Subsequent to June 4, 1999, net
income of The Mahopac National Bank is included in Tompkins' net income based
upon the percentage of Tompkins' ownership of The Mahopac National Bank . This
transaction resulted in a core deposit intangible of $3.5 million, which is
being amortized over a 10 year period, and goodwill of $2.5 million, which is
being amortized over a 20 year period.
Effective September 1, 2000, and early in 2001, Tompkins completed the purchase
of the minority interest in The Mahopac National Bank, primarily in a
stock-for-stock transaction accounted for as a purchase. Prior to September 1,
2000, the approximately 30% interest in The Mahopac National Bank, which was not
owned by Tompkins, was shown as a minority interest in consolidated subsidiaries
on the consolidated statements of condition. Subsequent to September 1, 2000,
effectively all of the net income of The Mahopac National Bank is included in
Tompkins' consolidated net income. The approximately 30 percent acquisition of
The Mahopac National Bank resulted in a core deposit intangible of $1.9 million,
which is being amortized over a 10 year period, and goodwill of $2.5 million,
which is being amortized over a 20 year period.
The table below presents the pro forma combined results of operations of
Tompkins and The Mahopac National Bank, as if Mahopac had been 100 percent owned
for the period presented.
Three months ended
(dollar amounts in thousands, except per share) March 31, 2000
================================================================================
NET INTEREST INCOME:
- --------------------------------------------------------------------------------
As reported $12,828
Pro forma combined 12,828
NET INCOME:
- --------------------------------------------------------------------------------
As reported $ 4,326
Pro forma combined 4,400
BASIC EARNINGS PER SHARE:
- --------------------------------------------------------------------------------
As reported $ 0.62
Pro forma combined 0.59
DILUTED EARNINGS PER SHARE:
- --------------------------------------------------------------------------------
As reported $ 0.61
Pro forma combined 0.59
================================================================================
The pro forma combined financial information does not reflect any potential cost
savings or revenue enhancements that are expected to result from the merger and
acquisitions. Accordingly, the pro forma combined financial information may not
be indicative of operations that would have been achieved had the merger and
acquisitions occurred on the dates indicated, nor do they purport to be
indicative of the results of operations that may be achieved in the future.
Austin, Hardie, Wise Agency, Inc. and Ernest Townsend & Son, Inc. Acquisitions
Effective January 1, 2001, the Company completed the acquisition of 100 percent
of the common stock of Austin, Hardie, Wise Agency, Inc. and Ernest Townsend &
Son, Inc., in a cash and stock transaction accounted for as a purchase. The two
agencies have been merged with and into Tompkins Insurance Agencies, Inc., a
wholly-owned subsidiary of Tompkins. The agencies are expected to continue
operating in their current western New York locations, which include Attica,
Warsaw, Alden, LeRoy, Batavia and Caledonia. The excess of the purchase price
over the fair value of identifiable assets acquired less liabilities assumed of
$3.92 million has been recorded as goodwill and is being amortized on a
straight-line basis over 15 years.
The purchase agreements for the insurance agencies include provisions for
additional consideration to be paid in the form of Company stock if certain
income targets are met by Tompkins Insurance Agencies, Inc. in 2001 and 2002.
The contingent consideration includes 25,093 shares, which are payable if the
income targets are met, and an additional 8,333 shares which are payable if
income targets are exceeded by 5 percent.
8
4. EARNINGS PER SHARE
A computation of Basic Earnings Per Share ("EPS") and Diluted EPS for the three
month periods ending March 31, 2001 and 2000, is presented in the table below.
- ---------------------------------------------------------------------------------------------------------
Weighted Per
Three months ended March 31, 2001 Net Income Average Shares Share
(In thousands except share and per share data) (Numerator) (Denominator) Amount
- ---------------------------------------------------------------------------------------------------------
Basic EPS
Income available to common shareholders $ 4,793 7,405,251 $ 0.65
Effect of dilutive securities (Stock Options) 66,139
Diluted EPS
Income available to common shareholders plus assumed conversions $ 4,793 7,471,390 $ 0.64
=========================================================================================================
The effect of dilutive securities calculation for 2001 excludes weighted average
options of 3,500 because the exercise price of the options was greater than the
average market value during the period.
- ---------------------------------------------------------------------------------------------------------
Weighted Per
Three months ended March 31, 2000 Net Income Average Shares Share
(In thousands except share and per share data) (Numerator) (Denominator) Amount
- ---------------------------------------------------------------------------------------------------------
Basic EPS
Income available to common shareholders $ 4,326 7,018,994 $ 0.62
Effect Of Dilutive Securities (Stock options) 59,343
Diluted EPS
Income available to common shareholders plus assumed conversions $ 4,326 7,078,337 $ 0.61
=========================================================================================================
The effect of dilutive securities calculation for 2000 excludes weighted average
options of 5,750 because the exercise price of the options was greater than the
average market value during the period.
5. COMPREHENSIVE INCOME (LOSS)
Three months ended
(in thousands) 03/31/2001 03/31/2000
- --------------------------------------------------------------------------------
Net Income $ 4,793 $ 4,326
- --------------------------------------------------------------------------------
Net unrealized holding gain (losses) during the period 2,027 (580)
Memo: Pre-tax net unrealized holding gain (loss) 3,378 (967)
Reclassification adjustment for net realized gain on
available-for-sale securities (4) (64)
Memo: Pretax net realized gain (6) (106)
- --------------------------------------------------------------------------------
Other Comprehensive Income (Loss) 2,023 (644)
- --------------------------------------------------------------------------------
Total Comprehensive Income $ 6,816 $ 3,682
================================================================================
9
6. RECENT ACCOUNTING PRONOUNCEMENTS
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIEs: The Company
adopted the provisions of Financial Accounting Standards Board (FASB) SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities," effective
January 1, 2001. This statement establishes accounting and reporting standards
for derivative instruments, including certain derivatives embedded in other
contracts, and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities on the balance sheet and measure
those assets at fair value. Changes in fair value of the derivative financial
instruments are reported as either net income or as a component of comprehensive
income, depending on whether or not it qualifies from hedge accounting.
Consequently, for those entities using derivative financial instruments, there
may be increased volatility in net income and shareholders' equity as a result
of accounting for derivatives in accordance with SFAS No. 133.
Special hedge accounting treatment is permitted only if specific criteria are
met, including a requirement that the hedging relationship be highly effective
both at inception and on an ongoing basis. Results of effective hedges are
recognized in current earnings for fair value hedges, in other comprehensive
income for cash flow hedges. Ineffective portions of hedges are recognized
immediately in earnings and are not deferred. The adoption of SFAS No. 133 by
the Company on January 1, 2001, did not have a material effect on the Company's
consolidated financial statements. The Company does not presently use derivative
financial instruments to manage interest rate risk.
ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS
OF LIABILITIES: In September 2000, The FASB issued SFAS No. 140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities."
SFAS No. 140 replaces identically titled SFAS No. 125, and it carries forward
most of SFAS No. 125's provisions without change. It does revise accounting
standards for securitizations and certain other transfers of financial assets
and collateral. The statement is generally applied prospectively to transactions
and servicing activities occurring after March 31, 2001, although provisions
with respect to collateral and certain disclosure requirements are effective for
fiscal years ending after December 15, 2000. The adoption of this statement did
not have a material impact on the consolidated financial statements of the
Company.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Tompkins Trustco, Inc. ("Tompkins" or "the Company") was organized in 1995, as
the parent company of Tompkins Trust Company (formerly known as Tompkins County
Trust Company), which traces its charter back to 1836. On December 31, 1999, the
Company completed a merger with Letchworth Independent Bancshares Corporation
("Letchworth"), at which time Letchworth was merged with and into Tompkins. Upon
completion of the merger, Letchworth's two subsidiary banks, The Bank of Castile
and The Mahopac National Bank, became subsidiaries of Tompkins.
Effective January 1, 2001, the Company completed the acquisition of 100 percent
of the common stock of Austin, Hardie, Wise Agency, Inc. and Ernest Townsend &
Son, Inc., in a cash and stock transaction accounted for as a purchase. The two
agencies have been merged with and into Tompkins Insurance Agencies, Inc.
(Tompkins Insurance), a wholly-owned subsidiary of Tompkins. The agencies
primarily offer property and casualty insurance to individuals and businesses in
Western New York State. They are expected to continue operating in their current
locations, which include Attica, Warsaw, Alden, LeRoy, Batavia and Caledonia.
Further details pertaining to the mergers and acquisitions are presented in Note
3 to the consolidated financial statements, included herein.
Through its community bank subsidiaries, the Company provides traditional
banking related services, which constitute the Company's only business segment.
Banking services consist primarily of attracting deposits from the areas served
by its banking offices and using those deposits to originate a variety of
commercial loans, consumer loans, real estate loans (including commercial loans
collateralized by real estate), and leases, and providing trust and investment
related services. The Company's principal expenses are interest on deposits,
interest on borrowings, and operating and general administrative expenses, as
well as provisions for loan losses. Funding sources, other than deposits,
include borrowings, securities sold under agreements to repurchase, and cash
flow from lending and investing activities. The Company conducts trust and
investment services through Tompkins Investment Services, a division of Tompkins
Trust Company. Tompkins Investment Services provides a full range of money
management services, including investment management accounts, custody accounts,
trusts, retirement plans and rollovers, estate settlement, and financial
planning. Financial services of Tompkins Insurance Agencies, Inc., primarily
consist of property and casualty insurance for individuals and businesses, which
will complement the services offered through the Company's banking subsidiaries.
The following discussion is intended to provide the reader with a further
understanding of the consolidated financial condition and results of operations
of Tompkins Trustco, Inc. and its operating subsidiaries. It should be read in
conjunction with the Company's Form 10-K and related notes for the year ended
December 31, 2000, and the unaudited condensed consolidated financial statements
and notes included elsewhere in this report.
FORWARD-LOOKING STATEMENTS
This report may include forward-looking statements with respect to revenue
sources, growth, market risk, and corporate objectives. The Company assumes no
duty, and specifically disclaims any obligation, to update forward-looking
statements, and cautions that these statements are subject to numerous
assumptions, risk, and uncertainties, all of which could change over time.
Actual results could differ materially from forward-looking statements.
11
RESULTS OF OPERATIONS
Net income was $4.8 million for the three months ended March 31, 2001, an
increase of 10.8 percent over the same period in 2000. Management believes that
operating earnings, which excludes amortization of intangible assets (net of
applicable tax benefit), is more reflective of the Company's core operating
performance. Operating earnings for the first three months of 2001 was $5.1
million, an increase of 13.3 percent over operating earnings of $4.5 million in
2000. Diluted operating earnings per share was $0.68 for the first three months
of 2001, an increase of 7.9 percent over the same period in 2000. Diluted
earnings per share reported in accordance with Generally Accepted Accounting
Principles (GAAP) was $0.64 for first three months of 2001, compared to $0.61
for the same period in 2000.
The Company's key performance ratios remain strong. Return on average assets
(ROAA) for the first three months of 2001 was 1.49 percent, up slightly from
1.45 percent for the same period in 2000. Operating ROAA was 1.59 percent for
the first three months of 2001, compared to 1.51 percent in 2000. Return on
average shareholders' equity (ROAE) for the first three months of 2001 was 16.52
percent, compared to 17.83 percent for the same period in 2000. Operating ROAE
was 17.53 percent for the three months ended March 31, 2001, compared to 18.47
percent for the same period in 2000.
The modest decline in ROAE is primarily the result of increased average equity
in 2001, which includes approximately $8.2 million related to the September of
2000 acquisition of the approximately 30 percent minority interest in The
Mahopac National Bank, and approximately $3.0 million related to the acquisition
of Austin, Hardie, Wise Agency, Inc. and Ernest Townsend & Son, Inc. The
increased equity resulting from the above acquisition activities was partially
offset by common stock repurchased under the Company's common stock repurchase
plan (the "Plan"), which was approved by the board of directors on August 15,
2000. The Plan authorizes the repurchase of up to 400,000 shares over a two year
period. As of March 31, 2001, 198,616 shares had been repurchased at a total
cost of $5.3 million.
NET INTEREST INCOME
As reflected in the attached Average Consolidated Balance Sheet and Net Interest
Analysis, the Company earned tax-equivalent net interest income of $14.0 million
for the three months ended March 31,, 2001, an increase of 4.6 percent over the
same period in 2000. An increased volume of earning assets helped offset a
decline in net interest margin from 4.82 percent for the first quarter of 2000
to 4.76 percent for the first quarter of 2001. Although the net interest margin
for the quarter is down slightly from the same period in 2000, the declining
interest rate environment has positively affected the margin, which is improved
over the 4.68 percent margin in the fourth quarter of 2000, and the 4.59 percent
margin in the third quarter of 2000.
Growth in average earning assets was centered in the loan portfolio which grew
by 11.1 percent to $848 million. The increase in average loans included a $34.3
million increase in average residential real estate loans, a $19.4 million
increase in average commercial real estate loans, and $29.6 million in average
commercial loans. Asset growth was funded primarily by an increased level of
core deposits (total deposits less time deposits of $100,000 or more), which
increased by $46.6 million over the first quarter of 2000. Average borrowings
grew by $25.6 million, providing an additional funding source to support the
growth in earning assets.
PROVISION FOR LOAN/LEASE LOSSES
The provision for loan/lease losses represents management's estimate of the
expense necessary to maintain the reserve for loan/lease losses at an adequate
level. The provision for loan/lease losses of $185,000 for the first three
months of 2001, is down from $240,000 for the same period in 2000. The decrease
in the provision for loan/lease losses reflects the continued high quality of
the loan and lease portfolio, along with the benefit of a $320,000 recovery in
the first quarter of 2001. Net recoveries were $133,000 for the first three
months of 2001, compared to net charge-offs of $77,000 for the first three
months of 2000. The reserve for loan/lease losses as a percentage of period end
loans was 1.24 percent at March 31, 2001, and 1.16 percent at December 31, 2000.
12
NONINTEREST INCOME
Management continues to emphasize noninterest income as an important component
of the Company's future success. Noninterest income for the three months ended
March 31, 2001, was $4.8 million, an increase of 36 percent over the same period
in 2000. The increase in 2001 included $961,000 of insurance commissions and
fees related to Tompkins Insurance, which became an active subsidiary of the
Company effective January 1, 2001. Excluding the revenue provided by Tompkins
Insurance, noninterest income was up approximately 9%, over the first quarter of
2000. Noninterest income for the first three months of 2001, increased to 25.6
percent of total revenue (tax equivalent net interest income, plus noninterest
income), up from 21.0 percent for the same period in 2000.
Income from trust and investment services remains the largest source of
noninterest income. The Tompkins Investment Services Division of Tompkins Trust
Company generates fee income through managing trust and investment
relationships, managing estates, providing custody services, and managing
employee benefits plans. Trends for new business in trust and investments
services remain positive, although the general downward trend in national stock
markets during the first quarter of 2000 caused earnings to be flat. Trust and
investments services income was $1.2 million in the first quarter of 2001,
relatively unchanged from the same period in 2000. The market value of assets
managed by, or in custody of, Tompkins Investment Services was approximately
$1.1 billion at March 31, 2001, also relatively unchanged from the prior year.
Income from card services, included in other service charges on the consolidated
statements of income, continues to be a an important source of revenue. The
Company continues to expand its product offerings to better serve the needs of
customers. Card services products include traditional credit cards, purchasing
cards, debit cards, and merchant card processing. Core income associated with
card services was $553,000 for the three months ended March 31, 2001, an
increase of approximately 23 percent from the first quarter of 2000.
Other income for the first three months of 2001 includes $254,000 relating to
increases in the cash surrender value of corporate owned life insurance (COLI).
This compares to $185,000 for the same period in 2000. The corporate owned life
insurance relates to life insurance and other benefits provided to certain
senior officers of the Company and its subsidiaries. The Company's average
investment in COLI was $18.7 million for the three month period ended March 31,
2001, compared to $13.3 million for the same period in 2000. Increases in the
cash surrender value of insurance are reflected as noninterest income, and the
related mortality expense is recognized as a noninterest expense.
NONINTEREST EXPENSES
Total noninterest expenses were $10.9 million for the first three months of
2001, compared to $9.5 million for the same period in 2000. The 14.3 percent
increase in 2001, includes $762,000 of expenses related to Tompkins Insurance,
and $125,000 in amortization of intangible assets related to the acquisition of
the minority interest in The Mahopac National Bank in September of 2000. If
these expenses are excluded from 2001 totals for comparison, growth in
noninterest expenses would be 5.0 percent.
Personnel-related expenses comprise the largest segment of other expense,
representing approximately 55.5 percent of operating expense in the first three
months of 2001. Total personnel-related expenses for the first three months of
2001 increased by 14.7 percent over the first three months of 2000. The increase
in personnel related expense-included $494,000 related to Tompkins Insurance.
Expense for premises, furniture, and fixtures increased from $1.2 million for
the period ended March 31, 2000, to $1.4 million for the period ended March 31,
2001. The increase includes $80,000 related to Tompkins Insurance.
Amortization expense increased from $252,000 in the first quarter of 2000, to
$426,000 in the first quarter of 2001. The increase reflects the additional
intangible assets that resulted from the purchase of the approximately 30
percent minority interest of The Mahopac National Bank in September 2000, and
the purchase of the Austin, Hardie, Wise Agency, Inc. and Ernest Townsend & Son,
Inc., in January 2001. The approximately 30 percent acquisition of The Mahopac
National Bank resulted in a core deposit intangible of $1.9 million, which is
being amortized over a 10 year period, and goodwill of $2.5 million, which is
being amortized over a 20 year period. The purchase of the Austin, Hardie, Wise
Agency, Inc. and Ernest Townsend & Son, Inc., resulted in $3.92 million of
goodwill, which is being amortized on a straight-line basis over 15 years.
13
INCOME TAX EXPENSE
The provision for income taxes provides for Federal and New York State income
taxes. The provision for the three months ended March 31, 2001, was $2.4
million, compared to $2.1 million in 2000. The increased provision is primarily
due to increased levels of taxable income. The effective tax rate for the first
three months of 2001 was 33.5 percent, compared to 32.3 percent for the same
period in 2000.
FINANCIAL CONDITION
The Company's total assets were $1.3 billion as of March 31, 2001, representing
an increase of $12.8 million over total assets reported as of December 31, 2000.
Asset growth is primarily the result of an increased volume of loans
originations. Although March 31, 2001, total loans were down 3 percent from the
prior year end, the decline is attributable to $33 million in residential
mortgage loans that were securitized in March 2001, and are now carried as
available-for-sale securities. Asset growth also included an increase in
intangible assets from $9.9 million at December 31, 2000, to $13.5 million at
March 31, 2001. The increase in intangible assets is primarily related to
goodwill associated with the purchase of the Austin, Hardie, Wise Agency, Inc.
and Ernest Townsend & Son, Inc., in January 2001.
CAPITAL
Total shareholders' equity grew by approximately 5.36 percent during the first
three months of 2001 to $121 million. The increase in shareholders' equity
includes an increase of approximately $3.0 million related the purchase of the
Austin, Hardie, Wise Agency, Inc. and Ernest Townsend & Son, Inc., which
included the issuance of 151,156 shares of common stock. The increased equity
resulting from the above acquisition was partially offset by 79,657 shares of
common stock repurchased in the first quarter of 2001 under the Company's common
stock repurchase plan, at a total cost of $2.2 million. Tangible book value per
share increased from $14.36 at December 31, 2000, to $14.53 at March 31, 2001.
Cash dividends paid in the first quarter totaled approximately $2.0 million,
representing 42 percent of year to date earnings. Per share cash dividends of
$0.27 for the first three months of 2001, is unchanged from the first quarter of
2000.
The Company and its banking subsidiaries are subject to various regulatory
capital requirements administered by Federal banking agencies. Management
believes the Company and its subsidiaries meet all capital adequacy requirements
to which they are subject. The table below reflects the Company's capital
position at March 31, 2001, compared to the regulatory capital requirements for
"well capitalized" institutions.
REGULATORY CAPITAL ANALYSIS - MARCH 31, 2001
- --------------------------------------------------------------------------------------
Actual Well Capitalized
Requirement
(Dollar amounts in thousands) Amount Ratio Amount Ratio
- --------------------------------------------------------------------------------------
Total Capital (to risk weighted assets) $117,292 13.0% $ 89,911 10.0%
Tier I Capital (to risk weighted assets) $107,150 11.9% $ 53,947 6.0%
Tier I Capital (to average assets) $107,150 8.3% $ 64,405 5.0%
======================================================================================
As illustrated above, the Company's capital ratios on March 31, 2001 remain well
above the minimum requirement for well capitalized institutions. As of March 31,
2001, the capital ratios for each of the Company's subsidiary banks also
exceeded the minimum levels required to be considered well capitalized.
RESERVE FOR LOAN AND LEASE LOSSES AND NONPERFORMING ASSETS
Management reviews the adequacy of the reserve for loan and lease losses in a
detailed and ongoing basis, giving consideration to various risk elements that
may affect the inherent risk of loss in the current loan/lease portfolio. Based
upon management's review, the current reserve of $10.1 million is believed
adequate based on the inherent risk of loss in the loan and lease portfolios.
Activity in the Company's reserve for loan/lease losses during the first three
months of 2001 and 2000 is illustrated in the table below.
14
ANALYSIS OF THE RESERVE FOR LOAN/LEASE LOSSES (In thousands)
- ----------------------------------------------------------------------------------------
March 31, 2001 March 31, 2000
- ----------------------------------------------------------------------------------------
Average Loans and Leases Outstanding Year to Date $ 848,158 $ 763,206
- ----------------------------------------------------------------------------------------
Beginning Balance 9,824 9,228
- ----------------------------------------------------------------------------------------
Provision for loan losses 185 240
Loans charged off (285) (209)
Loan recoveries 418 132
- ----------------------------------------------------------------------------------------
Net recoveries (charge-offs) 133 (77)
- ----------------------------------------------------------------------------------------
Ending Balance $ 10,142 $ 9,391
========================================================================================
Recoveries of previously charged-off loans, in the amount of $418,000, exceeded
first quarter loan losses resulting in net recoveries of $133,000 for the period
ended March 31, 2001. Recoveries for the period included a recovery on a single
loan in the amount of $320,000. Net charge-offs for first three months of 2000
were $77,000. Reserve coverage of nonperforming loans was 2.1x at March 31,
2001, compared to 2.6x at March 31, 2000.
The level of nonperforming assets at March 31, 2001 and 2000 is illustrated in
the table below. Nonperforming assets of $5.1 million as of March 31, 2001,
reflect an increase of $1.3 million from March 31, 2000. Despite the increase in
the current period, the level of nonperforming assets at March 31, 2001, remains
modest at 0.39 percent of total assets.
NONPERFORMING ASSETS (In thousands)
- ----------------------------------------------------------------------------------------
March 31, 2001 March 31, 2000
- ----------------------------------------------------------------------------------------
Nonaccrual loans $4,520 $3,426
Loans past due 90 days and accruing 406 234
Troubled debt restructuring not included above 0 0
- ----------------------------------------------------------------------------------------
Total nonperforming loans 4,926 3,660
- ----------------------------------------------------------------------------------------
Other real estate, net of allowances 204 214
- ----------------------------------------------------------------------------------------
Total nonperforming assets $5,130 $3,874
========================================================================================
Total nonperforming loans as a percent of total loans 0.60% 0.50%
Total nonperforming assets as a percentage of total assets 0.39% 0.32%
========================================================================================
DEPOSITS AND OTHER LIABILITIES
Total deposits were $1.0 billion on March 31, 2001, up approximately $8 million
from December 31, 2000. Core deposits, which include demand deposits, savings
and money market accounts, and time deposits of less than $100,000 represent the
primary funding source for the Company. As of March 31, 2001, core deposits of
$847 million represented 71 percent of total liabilities. This compares to core
deposits of $851 million, representing 72 percent of total liabilities at
December 31, 2000.
The Company uses large time deposits, securities sold under repurchase
agreements, Federal funds purchased, and other borrowings as additional funding
sources. Time Deposits of $100,000 and over increased from $183 million at
December 31, 2000, to $196 million at March 31, 2001. As of March 31, 2001,
total securities sold under repurchase agreements amounted to $58 million,
compared to $72 million at December 31, 2000. Other borrowings, consisting of
term borrowings from the Federal Home Loan Bank, increased from $67 million at
December 31, 2000, to $77 million at March 31, 2001.
15
LIQUIDITY
Liquidity represents the Company's ability to efficiently and economically
accommodate decreases in deposits and other liabilities, and fund increases in
assets. The Company uses a variety of resources to meet its liquidity needs
which include cash and cash equivalents, short term investments, cash flow from
lending and investing activities, deposit growth, securities sold under
repurchase agreements, and borrowings.
Cash and cash equivalents totaled $65 million as of March 31, 2001, relatively
unchanged from December 31, 2000. Short term investments, consisting of
securities due in one year or less and Federal funds sold, declined from $52.5
million on December 31, 2000, to $47 million on March 31, 2001. Securities
pledged to secure certain large deposits and securities sold under repurchase
agreements were 73 percent of total securities as of March 31, 2001, compared to
79 percent as of December 31, 2000. The lower proportion of pledged securities
compared to total securities in the current period reflects the benefit of $33
million in residential mortgage loans that were securitized in March of 2001,
and are now carried as available-for-sale securities.
Liquidity is enhanced by ready access to national and regional wholesale funding
sources including Federal funds purchased, repurchase agreements, negotiable
certificates of deposit, and FHLB advances. Through its subsidiary banks, the
Company has borrowing relationships with the FHLB and correspondent banks, which
provide secured and unsecured borrowing capacity. At March 31, 2001, the unused
borrowing capacity on established lines with the FHLB was $127 million. As
members of the FHLB, the Company's subsidiary banks can use certain unencumbered
mortgage-related assets to secure additional borrowings from the FHLB. At March
31, 2001, total real estate loans of the Company were $488 million, the majority
of which is available as collateral purposes for FHLB borrowings.
16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest rate risk is the primary market risk category associated with the
Company's operations. Interest rate risk refers to the volatility of earnings
caused by changes in interest rates. Each month the Asset/Liability Management
Committee estimates the likely impact on earnings resulting from various
changing interest rate scenarios. The findings of the committee are incorporated
into the investment and funding decisions of the Company.
The table below is a Condensed Static Gap Report, which illustrates the
anticipated repricing intervals of assets and liabilities as of March 31, 2001.
CONDENSED STATIC GAP - March 31, 2001 Repricing Interval
Cumulative
(dollar amounts in thousands) Total 0-3 months 3-6 months 6-12 months 12 months
- -----------------------------------------------------------------------------------------------------------------------------
Interest-earning assets $ 1,203,652 $ 337,542 $ 88,721 $ 118,659 $ 544,922
Interest-bearing liabilities 989,118 385,274 132,914 98,558 616,746
- -----------------------------------------------------------------------------------------------------------------------------
Net gap position (47,732) (44,193) 20,101 (71,824)
- -----------------------------------------------------------------------------------------------------------------------------
Net gap position as a percentage of total assets (3.62%) (3.35%) 1.53% (5.45%)
=============================================================================================================================
The Company's March 31, 2001, one-year cumulative rate sensitivity gap was a
negative 5.45 percent of total assets, indicating a liability sensitive
position. The analysis suggests earnings would benefit from a declining interest
rate environment, and would be vulnerable to a rising interest rate environment.
Consistent with the above analysis, as interest rates declined during the first
quarter of 2001, the Company's net interest margin improved in comparison to the
last two quarters of 2000.
Management estimates that a 200 basis point rise in interest rates would result
in a 2.4 percent decline in net interest income over a one year period, and a
3.8 percent decline over a two year period, assuming no management actions to
reposition the balance sheet in reaction to a changing rate environment.
Management believes the current interest rate risk exposure is not material
given the Company's current level of earnings and capital.
17
TOMPKINS TRUSTCO, INC.
AVERAGE CONSOLIDATED BALANCE SHEET AND NET INTEREST ANALYSIS
Mar-01 Mar-00
- -----------------------------------------------------------------------------------------------------------------------
Average Average
Balance Average Balance Average
(Dollar amounts in thousands) (YTD) Interest Yield/Rate (YTD) Interest Yield/Rate
- -----------------------------------------------------------------------------------------------------------------------
ASSETS
Interest-earning assets
Certificates of deposit with other banks $ 441 $ 1 0.92% $ 0 $ 0 $ 0
Securities (1)
U.S. Government Securities 242,009 4,012 6.72% 242,615 3,956 6.56%
State and municipal (2) 70,122 1,283 7.42% 81,402 1,453 7.18%
Other Securities (2) 18,443 318 6.99% 12,455 261 8.43%
-------------------------------------------------------------------
Total securities 330,574 5,613 6.89% 336,472 5,670 6.78%
Federal Funds Sold 13,502 195 5.86% 18,021 254 5.67%
Loans, net of unearned income (3)
Real Estate 518,033 10,630 8.32% 464,332 9,374 8.12%
Commercial Loans (2) 202,446 4,797 9.61% 172,866 4,121 9.59%
Consumer Loans 109,678 2,756 10.19% 109,228 2,611 9.61%
Direct Lease Financing 18,001 370 8.34% 16,780 328 7.86%
-------------------------------------------------------------------
Total loans, net of unearned income 848,158 18,553 8.87% 763,206 16,434 8.66%
-------------------------------------------------------------------
TOTAL INTEREST-EARNING ASSETS 1,192,675 24,362 8.28% 1,117,699 22,358 8.05%
-------------------------------------------------------------------
Other assets 109,511 79,706
---------- ----------
TOTAL ASSETS $1,302,186 $1,197,405
========== ==========
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES & SHAREHOLDERS' EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings,
& money market 410,621 2,215 2.19% 414,694 2,498 2.42%
Time Dep > $100,000 188,696 2,749 5.91% 142,092 1,960 5.55%
Time Dep < $100,000 237,027 3,386 5.79% 235,755 2,988 5.10%
-------------------------------------------------------------------
Total interest-bearing deposits 836,344 8,350 4.05% 792,541 7,446 3.78%
Federal funds purchased & securities sold under
agreements to repurchase 67,197 907 5.47% 67,329 893 5.33%
Other borrowings 70,798 1,092 6.26% 45,116 626 5.58%
-------------------------------------------------------------------
TOTAL INTEREST-BEARING LIABILITIES 974,339 10,349 4.31% 904,986 8,965 3.98%
Noninterest bearing deposits 192,959 175,918
Accrued expenses and other liabilities 15,710 12,637
TOTAL LIABILITIES 1,183,008 1,093,541
---------- ----------
Minority Interest 1,505 6,274
SHAREHOLDERS' EQUITY 117,673 97,590
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,302,186 $1,197,405
========== ==========
Interest rate spread 3.97% 4.17%
---------- ------ ---------- ------
Net interest income/margin on earning assets $ 14,013 4.76% $ 13,393 4.82%
- -----------------------------------------------------------------------------------------------------------------------
(1) Average balances and yields exclude unrealized gains and losses on
available-for-sale securities.
(2) Interest income includes the effects of taxable-equivalent adjustments
using a blended Federal and State income tax rate of 40% to increase tax
exempt interest income to a taxable-equivalent basis.
(3) Nonaccrual loans are included in the average loans totals presented above.
Payments received on nonaccrual loans have been recognized as disclosed in
Note 1 to the Company's Annual Report on Form 10-K dated December 31, 2000.
18
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(b) Reports on form 8-K
On January 11, 2001, Tompkins filed a Form 8-K announcing that effective January
1, 2001, the Company completed its previously announced acquisition of Austin,
Hardie, Wise Agency, Inc., with offices in Attica, Warsaw and Alden; and Ernest
Townsend & Son, Inc., with offices in LeRoy, Batavia and Caledonia.
19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: May 14, 2001
TOMPKINS TRUSTCO, INC.
By: /s/ JAMES J. BYRNES
--------------------------
James J. Byrnes
Chairman of the Board,
Chief Executive Officer
By: /s/ FRANCIS M. FETSKO
--------------------------
Francis M. Fetsko
Senior Vice President and
Chief Financial Officer
20
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION PAGES
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