SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number 1-12709
TOMPKINS COUNTY TRUSTCO, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 16-1482357
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
THE COMMONS, P.O. BOX 460, ITHACA, NEW YORK 14851
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (607) 273-3210
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Title of Class: COMMON STOCK ($.10 PAR VALUE)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the registrant's voting stock held by
non-affiliates was approximately $138,173,866 on March 16, 1998, based on the
closing sales price of the registrant's common stock, $.10 par value (the
"Common Stock"), as reported on the American Stock Exchange, Inc. as of such
date.
The number of shares of the registrant's Common Stock outstanding as of March
16, 1998 was 4,843,190 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Stockholders for the fiscal year ended December 31, 1997 (the
"Annual Report") filed with the Securities and Exchange Commission on March 27,
1998 is incorporated herein by reference (Parts I and II).
Proxy Statement (the "Proxy Statement") filed with the Securities and Exchange
Commission on March 27, 1998 in connection with the 1998 Annual Meeting of
Stockholders is incorporated herein by reference (in Part III).
PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Tompkins County Trustco, Inc. (the "Company") was incorporated under the
laws of the State of New York on March 6, 1995, and is a bank holding company
registered with the Federal Reserve Board ("FRB") under the Bank Holding Company
Act of 1976, as amended. The principal offices of the Company and its
wholly-owned operating subsidiary, Tompkins County Trust Company ("the Bank"),
are located at The Commons, P.O. Box 460, Ithaca, New York 14851, and its
telephone number is 607-273-3210. The Bank is a commercial bank chartered in New
York State, which has operated in the community of Ithaca, New York and environs
since 1836.
On January 1, 1996, the Company consummated a corporate reorganization (the
"Reorganization") pursuant to which, the Company became the sole shareholder of,
and holding company for, the Bank. All outstanding shares of common stock of the
Bank were converted, on a one-for-one basis, into all of the outstanding shares
of common stock of the Company. As a result of the Reorganization, the Company's
primary asset is the common stock of its wholly-owned subsidiary, the Bank.
The Company engages in no substantial business activities other than
activities related to its ownership of the Bank. Unless the context otherwise
requires, all references herein to the "Company" include its wholly-owned
operating subsidiary, the Bank.
STOCK REPURCHASE TRANSACTIONS
In October 1996, the Company repurchased 244,371 shares of its own common
stock in a privately negotiated sale from an unrelated third party. The stock
was purchased at a price of $27.50 per share, for a total purchase price of $6.7
million. The shares have been returned to the status of authorized and unissued
shares. In May 1997, the Company repurchased 80,000 shares in a privately
negotiated transaction. The shares, which have been returned to the status of
authorized but unissued, were purchased at $33.38 per share for a total purchase
price of $2.67 million.
In November 1996, the board of directors approved a stock repurchase
program, which authorizes the repurchase of up to $3 million in common stock in
open market transactions. No open market transactions have been completed under
this program.
BRANCH ACQUISITION
In November 1996, the Bank acquired all deposits and selected assets of the
Odessa branch office of the First National Bank of Rochester. The acquisition of
the Odessa office, with approximately $10 million in deposits, represents the
Bank's first banking office outside of Tompkins County. Odessa, New York is in
Schuyler County, which is adjacent to Tompkins County.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company's primary revenue source is interest income derived from loans
and securities. The Company offers a broad range of short to medium-term
business and personal loans and consumer leases. Commercial loans include both
collateralized and uncollateralized loans for working capital (including
inventory and receivables), business expansion (including real estate
acquisitions and improvements), and purchases of equipment and machinery.
Consumer loans include collateralized and uncollateralized loans for financing
automobiles, boats, home improvements, and personal investments. A detailed
analysis of the Company's financial condition and results of operations is
included in the Management Discussion & Analysis section of the Company's 1997
Annual Report to Shareholders (Annual Report), incorporated by reference under
Item 8, herein.
2
NARRATIVE DESCRIPTION OF BUSINESS
The Company conducts commercial and consumer banking business, which
primarily consists of attracting deposits from the areas served by its banking
offices and using those deposits to originate a variety of commercial, consumer,
and real estate loans (including commercial loans collateralized by real
estate). The Company's principal expenses are interest paid on deposits,
interest on borrowings, and operating and general administrative expenses.
Funding sources, other than deposits include: borrowing, securities sold under
agreements to repurchase, and cash flow from operations, lending, and investing
activities.
The Company conducts trust and investment management services through its
Trust and Investment Services Division. The Trust and Investment Services
Division provides a full range of money management services, including
investment management accounts, custody accounts, living trusts, life insurance
trusts, standby trusts, retirement plans and rollovers, will trusts, estate
settlement, and financial planning.
As is the case with banking institutions generally, the Company's
operations are materially and significantly influenced by general local and
national economic conditions and related monetary and fiscal policies of the
Federal government. Operations may also be significantly influenced by
regulatory policies of various Federal and State agencies, which regulate
various aspects of the Company's business. Deposit flows and cost of funds are
influenced by returns on competing investments and general market rates of
interest. Lending activities are affected by the demand for financing of real
estate and other types of loans, competing interest rates, and other factors
affecting local demand and availability of funds. The Company faces strong
competition in the attraction of deposits (its primary source of lendable funds)
and in the origination of loans. See "-COMPETITION."
The Company's primary source of income is interest earned from its loan and
securities portfolios, which is discussed more fully in the Management
Discussion and Analysis section of the Annual Report.
LENDING ACTIVITIES
A discussion of the Company's lending activities is included in the
Management Discussion and Analysis section of the Annual Report. As of December
31, 1997, management is not aware of any potential problem loans, or loans
classified for regulatory purposes as Substandard, Doubtful, or Loss, which have
not been disclosed as nonperforming assets in the Annual Report.
REAL ESTATE MORTGAGE LOANS
The Company originates mortgage loans to businesses to finance the
acquisition and holding of commercial real estate, and to individuals for
residential real estate purchases and financing. The Company requires mortgage
title insurance, flood insurance, and hazard insurance in amounts deemed
appropriate by management or required by law. Escrow accounts for the payment of
real estate taxes and insurance may also be required. The Company's real estate
mortgage loans primarily are underwritten in the Company's primary market area
on the basis of the value of the underlying real property. The Company carefully
manages environmental risks in its real estate loan portfolio. Primary risks
associated with real estate lending include the borrower's inability to repay
the debt and a reduction in collateral value.
COMMERCIAL LENDING
The Company offers a variety of commercial loan services including term
loans, demand loans, lines of credit, purchased accounts receivables, leasing,
and equipment financing. A broad range of short-to-medium term commercial loans,
both collateralized and uncollateralized, are made available to businesses for
working capital (including inventory and receivables), business expansion
(including acquisitions of real estate and improvements), and the purchase of
equipment and machinery. The purpose of a particular loan generally determines
its structure. Commercial loans include loans that support local not-for-profit
corporations.
3
Commercial loans typically are underwritten on the basis of the borrower's
repayment capacity from cash flow and are generally collateralized by business
assets such as accounts receivable, equipment, real estate, and inventory. As a
result, the availability of funds for the repayment of commercial loans may be
substantially dependent on the success of the business itself. Further, the
collateral underlying the loans may depreciate over time, cannot be appraised
with as much precision as real estate, and may fluctuate in value based on the
success of the business. Working capital loans are primarily collateralized by
short-term assets, while term loans are primarily collateralized by long-term or
fixed assets. The Company normally requires personal guarantees for commercial
loans and has approximately $8 million of commercial loans which are fully or
partially guaranteed by the Small Business Administration.
CONSUMER LOANS
Consumer loans made by the Company include loans for automobiles,
recreation vehicles, education, boats, mobile homes, appliances, home
improvements and overdraft protection. These loans have been extended through
second mortgages, personal (collateralized and uncollateralized) loans, credit
cards, and deposit account collateralized loans.
Consumer loans are beneficial for the Company because the portfolio risk is
more predictable over time and such loans carry higher interest rates than those
charged on other types of loans. Consumer loans, however, pose additional risks
of collectability when compared to other types of loans, such as residential
mortgage loans. In many instances, the Company must rely on the borrower's
ability to repay, since the collateral normally is of reduced value at the time
of any liquidation. Accordingly, the initial determination of the borrower's
ability to repay is of primary importance in the underwriting of consumer loans.
Home equity lines of credit are extended to individuals and secured by a
mortgage covering residential real estate. The Company requires flood insurance
and hazard insurance in amounts deemed appropriate by management.
LEASE FINANCING
The Company's lease portfolio is comprised primarily of leases on vehicles
and equipment for small businesses and individuals. The terms of these loans and
leases typically range from 12 to 180 months and vary based upon the type of
collateral and amount of the lease. The current lease portfolio is comprised
substantially of direct lease financing of new and used automobiles. Marketing
efforts in 1997 have resulted in growth in the commercial leasing portfolio,
which is expected to continue in 1998.
INVESTMENT ACTIVITIES
The Company maintains a portfolio of securities such as U.S. government and
agency securities, obligations of states and political subdivisions thereof,
equity securities, and interest-bearing deposits. It is the intention of
management to maintain short to intermediate maturities in the Company's
securities portfolio in order to better match the interest rate sensitivities of
its assets and liabilities.
Investment decisions are made within policy guidelines established by the
Company's Board of Directors. The investment policy established by the Board of
Directors is based on the asset/liability management goals of the Company. The
intent of the policy is to establish a portfolio of high quality diversified
securities, which optimize net interest income within acceptable limits of
safety and liquidity.
4
Purchases of securities, other than obligations of states and political
subdivisions thereof, are classified as available-for-sale, though it is
generally management's intent to hold all securities to maturity. Securities
available-for-sale may be used to enhance total return, provide additional
liquidity, or reduce interest rate risk. Securities classified as
held-to-maturity are comprised of obligations of states and political
subdivisions thereof. The Company's current policy is to invest in instruments
with maturities between one and fifteen years. A desired maturity curve is
determined by the asset\liability management committee consistent with the
desired interest rate sensitivity. The accounting treatment of the Company's
securities is addressed in Note 1 of the Notes to the Consolidated Financial
Statements of the Annual Report.
Information regarding the amortized cost and fair value of the securities
portfolio for the years ended 1997 and 1996 is presented in Note 2 of the Notes
to Financial Statements of the Annual Report. The amortized cost and fair value
of the securities portfolio for the year ended 1995 is presented in Table 1
below.
TABLE 1 SECURITIES
===================================================================================================================
Available-for-Sale Held-to-Maturity
December 31, 1995 Amortized Cost Fair Value Amortized Cost Fair Value
- -------------------------------------------------------------------------------------------------------------------
(In Thousands)
U.S. Treasury Securities & Obligations
of U.S. Government Agencies $127,013 $128,381 $ 0 $ 0
Mortgage-Backed Securities 13,451 13,633
Obligations of State and Political
Subdivisions 0 0 38,908 40,219
U.S. Corporate Debt Securities 2,999 3,016 0 0
Equity Securities 1,596 1,596 0 0
- -------------------------------------------------------------------------------------------------------------------
$145,059 $146,626 $38,908 $40,219
===================================================================================================================
TRUST AND INVESTMENT MANAGEMENT SERVICES
The Company, through its Trust and Investment Services Division, provides
trust and investment management services to residents of its primary market
area, and to those who have relocated outside of Tompkins County and retained
their trust relationships with the Company. Additionally, the Company provides
financial planning and alternative investments through its relationships with
the INVEST Financial Corporation and Fidelity Investments Incorporated. The
Company also provides pension and 401(k) benefits administration to small
businesses.
The Trust and Investment Services Division continues to add services as
part of the Company's strategy to sharpen competitive performance and expand
markets. In December 1996, the Trust and Investment Services Division began
providing custodial services for the Company's securities portfolio. In 1997,
The Company formed an alliance with another community bank, in which the Company
began providing Trust and Investment Services through the newly formed trust
department of the other bank.
DEPOSITS
Deposit services include time deposits, individual retirement accounts
("IRAs"), checking and other demand deposit accounts, NOW accounts, savings
accounts, and money market accounts. Transaction accounts and time deposits are
tailored to the principal market area at rates competitive to those in the area.
All deposit accounts are insured under the Bank Insurance Fund ("BIF") of the
Federal Deposit Insurance Corporation ("FDIC") up to the maximum limits
permitted by law. The Company solicits deposit accounts from small businesses,
professional firms, households, and educational and governmental institutions
located throughout its primary market area. Total deposits represented 84% of
total liabilities on December 31, 1997. Scheduled maturities of time deposits
are detailed in Note 6 of the Annual Report.
5
MARKET AREA
Tompkins County, New York is the Company's primary market area. The Company
has ten full service branch facilities located in Tompkins County, and one full
service facility located in Schuyler County, New York, which is adjacent to
Tompkins County. The Company's deposit gathering, lending markets and trust and
investment management services are concentrated in the communities surrounding
its offices in Ithaca, New York. Management believes its offices are located in
an area serving small and mid-sized businesses; and serving low, middle and
upper income communities.
Tompkins County has an estimated resident population of approximately
97,000 people, with approximately 34,000 households, and an average household
income of approximately $44,000. Education plays a significant role in the local
economy with Cornell University and Ithaca College being two of the county's
major employers. Unemployment in the county has historically remained well below
the State average, and was 3.1% in December 1997, compared to a State average of
5.7%. Job growth in the county for the twelve months ended December 31, 1997,
totaled 2.98%, compared to total job growth for the State of 1.42%.
MARKET FOR SERVICES
The Company's principal markets are the established and expanding small
businesses; and the low, moderate, and high income households within Tompkins
and surrounding counties. Management believes its focus on professional
personalized service, and the Bank's unique situation as the only commercial
bank headquartered in Ithaca, NY, contribute to the Company's competitiveness as
a leading provider of financial services in Tompkins County.
The Company continues to invest in technologies that allow customers to
access Bank products and services from anywhere in the country. This technology
has allowed the Bank to retain customers who have moved outside of the Bank's
principal market area, and attract customers for certain products from outside
the Bank's principal market area. In 1997, the Trust and Investment Services
Division served customers in more than 40 states. Other products such as credit
cards, debit cards, telephone banking, and PC banking have greatly expanded
access to Trust Company products and services from outside the Bank's primary
market area.
COMPETITION
The Company encounters strong competition in making loans, attracting
deposits, and providing trust and investment services. Competition among
financial institutions is based upon interest rates offered on deposit accounts,
interest rates charged on loans, other credit and service charges, the quality
and scope of the services rendered, and the convenience of banking facilities.
The deregulation of the banking industry, the widespread enactment of state
laws that accommodate interstate multi-bank holding companies, and an increasing
level of interstate banking have created a highly competitive environment for
commercial banking in the Company's primary market area. In one or more aspects
of its business, the Company competes with other commercial banks, savings
institutions, credit unions, mortgage bankers and brokers, finance companies,
mutual funds, insurance companies, brokerage and investment banking companies,
and other financial intermediaries operating in Tompkins County and elsewhere.
Many of these competitors, some of which are affiliated with large bank holding
companies, have substantially greater resources and lending limits; and may
offer certain services the Company does not currently provide. In addition, many
non-bank competitors, such as credit unions, are not subject to the same
extensive Federal regulations that govern bank holding companies and Federally
insured banks.
The Company primarily focuses on providing personalized banking and trust
and investment services to businesses and individuals within the market area
where its banking offices are located. As the only independent community bank
headquartered in Ithaca, NY, management believes the Company's community
commitment and personalized service are factors that contribute to the Company's
competitiveness.
6
Customers are solicited through the personal efforts of the Company's
officers and employees. Management believes a locally-based bank can possess a
clearer understanding of local commerce and the needs of local businesses.
Consequently, management expects to be able to make prudent lending decisions
quickly and more equitably than many of its competitors without compromising
asset quality or the Company's profitability.
The Company recognizes that its employees are the key to providing a high
level of personal service. During 1997, the Company invested approximately
$100,000 in formal education of its employees, and provides ongoing internal
training to ensure employees are knowledgeable of the Company's products and
services.
The Company offers state-of-the-art facilities, convenient office locations
and service hours, an extensive ATM network, telephone banking services, PC
banking services, electronic bill payment services, and a wide variety of
financial products. Management periodically reviews the scope of the Company's
products and services to assess whether additional products or services should
be offered, giving consideration to customer demand, market opportunities, and
available resources.
REGULATION
As a registered bank holding company, the Company is subject to examination
and comprehensive regulation by the FRB, and the Bank is subject to examination
and comprehensive regulation by the FDIC and the New York State Banking
Department ("NYSBD"). Each of these agencies issues regulations and requires the
filing of reports describing the activities and financial condition of the
entities under its jurisdiction. Likewise, such agencies conduct examinations on
a recurring basis to evaluate the safety and soundness of the institution and
test compliance with various regulatory requirements relating to: Consumer
Protection, Fair Lending, the Community Reinvestment Act, sales of non-deposit
investments, electronic data processing, and trust department activities.
Under FRB regulations, the Company may not, without providing prior notice
to the FRB, purchase or redeem its own Common Stock if the gross consideration
for the purchase or redemption, combined with the net consideration paid for all
such purchases or redemptions during the preceding twelve months, is equal to
ten percent or more of the Company's consolidated net worth. Additionally, FRB
policy provides that dividends shall not be paid except out of current earnings
and unless prospective rate of earnings retention by the Company appears
consistent with its capital needs, asset quality, and overall financial
condition.
The FRB and FDIC have promulgated capital adequacy guidelines that are
considered by the agencies in examining and supervising a bank or bank holding
company; and in analyzing any applications a bank or holding company may make to
the appropriate agency. In addition, for supervisory purposes the agencies have
promulgated regulations establishing five categories of capitalization, ranging
from well capitalized to critically undercapitalized, depending upon the level
of capitalization and other factors. Currently, the Company and the Bank
maintain leverage and risk-based capital ratios above the required levels and
are considered well capitalized under the FRB and FDIC regulations. A comparison
of the Company's capital ratios and the various regulatory requirements is
included in Note 15 of the Notes to Consolidated Financial Statements of the
Annual Report.
Bank deposit accounts are insured by the BIF, generally in amounts up to
$100,000 per depositor. The FDIC has the power to terminate a bank's insured
status or to temporarily suspend it under special conditions. Deposit insurance
coverage is maintained by payment of premiums assessed to banks insured by the
BIF.
Based upon the capital strength of the Bank and a favorable FDIC risk
classification, the Bank is not currently subject to BIF insurance assessments.
Beginning in January 1997, the Bank, and all BIF insured banks, are subject to
special assessments to repay Financing Corporation (FICO) bonds, which were used
to repay depositors of failed Savings and Loan Associations after the former
Federal Savings and Loan Insurance Fund became insolvent. The
7
special assessments attributable to the FICO bonds added approximately $50,000
to the Company's operating expenses in 1997, compared to 1996.
EMPLOYEES
At December 31, 1997, the Company employed 235 employees, approximately 45
of which are part-time. No employees are covered by a collective bargaining
agreement and the Company believes its employee relations are excellent.
8
ITEM 2. PROPERTIES
The following table provides information with respect to the Company's
facilities:
LOCATION FACILITY TYPE SQUARE FEET OWNED/LEASED
- -------- ------------- ----------- ------------
The Commons Main Office 23,900 Owned
Ithaca, NY
119 E. Seneca Street Trust and Investment Services 18,550 Owned
Ithaca, NY
121 E. Seneca Street Administration 18,900 Owned
Ithaca, NY
Rothschilds Building Operations 20,500 Leased
The Commons
Ithaca, NY
Campus Store Cornell Campus Branch Office 400 Leased
Central Avenue
Cornell University
905 Hanshaw Road Community Corners 790 Leased
Ithaca, NY Branch Office
139 North Street Extension Dryden Branch 2,250 Owned
Dryden, NY Office
1020 Ellis Hollow Road East Hill Plaza Branch 650 Leased
Ithaca, NY
775 S. Meadow St. Plaza Branch Office 2,280 Owned
Ithaca, NY
Pyramid Mall Pyramid Mall Branch Office 610 Leased
Ithaca, NY
116 E. Seneca St. Seneca Street 775 Owned
Ithaca, NY Drive-In
2251 N. Triphammer Rd. Triphammer Road Branch Office 3,000 Leased
Ithaca, NY
2 W. Main Street Trumansburg Branch Office 2,720 Owned
Trumansburg, NY
701 W. Seneca St. West End Branch Office 2,150 Leased
Ithaca, NY
2230 N. Triphammer Rd. Kendall Branch 204 Leased
Ithaca, NY Part Time Office
100 Main Street Odessa Branch Office 3,115 Owned
Odessa, NY
9
Management believes the Company's facilities are suitable for their present
intended purposes and adequate for the Company's current level of operations.
The lease terminations for the Company's currently leased properties range from
January 1998 to July 2042.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in legal proceedings in the normal course of
business, none of which is expected to have a material adverse impact on the
financial condition or operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matters during the fourth quarter of the
fiscal year covered by this report to a vote of security holders through the
solicitation of proxies or otherwise.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
EXECUTIVE
NAME AGE POSITION OFFICER SINCE
- ---- --- -------- -------------
James J. Byrnes 56 Chairman of the January 1989
Board, President and
Chief Executive Officer
Francis E. Benedict 58 Executive Vice President * December 1984
Richard D. Farr 45 Senior Vice President December 1988
and Chief Financial Officer
Thomas J. Smith 57 Senior Vice President December 1984
Donald S. Stewart 53 Executive Vice President December 1984
Lawrence A. Updike 52 Senior Vice President December 1988
* Effective December 31, 1997, Mr. Benedict retired as an executive officer;
however, he remains with the bank as a contract employee, performing many of the
same duties in an advisory capacity.
10
BUSINESS EXPERIENCE OF THE EXECUTIVE OFFICERS
JAMES J. BYRNES has been Chairman of the Board of the Company since April 1992
and President and Chief Executive Officer of the Company since January 1989.
From 1978 to 1988, Mr. Byrnes was employed at the Bank of Montreal, most
recently as Senior Vice President.
FRANCIS E. BENEDICT has been employed by the Company since 1957 and has served
as Executive Vice President in charge of banking and investments since December
1984.
RICHARD D. FARR has been employed by the Company since 1984 and has served as
Senior Vice President and Chief Financial Officer since December 1988.
THOMAS J. SMITH has been employed by the Company since 1964 and has served as
Senior Vice President in charge of credit services since December 1984.
DONALD S. STEWART has been employed by the Company since 1972, served as Senior
Vice President in charge of trust and investment services since December 1984,
and was promoted to Executive Vice President in 1997.
LAWRENCE A. UPDIKE has been employed by the Company since 1965 and has served as
Senior Vice President in charge of operations and systems since December 1988.
11
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(SEE NOTES 1, 2 & 3 BELOW) MARKET PRICE CASH
HIGH LOW DIVIDENDS PAID
1996 1st Quarter $32.00 27.50 .26
2nd Quarter 31.50 21.50 .27
3rd Quarter 28.00 23.75 .27
4th Quarter 34.25 25.75 .30
1997 1st Quarter $34.75 31.63 .30
2nd Quarter 35.75 32.13 .30
3rd Quarter 38.06 34.88 .32
4th Quarter 43.25 38.13 .32
Note 1: The range of reported high and low transaction prices reflects
inter-dealer prices without retail mark-up, mark-down or commission and
do represent actual transactions as quoted on the Nasdaq National Market
or American Stock Exchange. The Company's stock was traded on the Nasdaq
Market in 1996 and during January of 1997. Effective February 3, 1997,
the Company's stock began trading on the American Stock Exchange. As of
March 16, 1998, there were approximately 992, shareholders of record.
Note 2: On February 10, 1998, the Company announced that its board of directors
had approved a 3-for-2 stock split in the form of a stock dividend (the
"Stock Split"), payable on March 15, 1998, to shareholders of record on
March 1, 1998. The above market prices and cash dividends have not been
adjusted for the effect of the Stock Split.
Note 3: Cash dividends were paid on the 15th day of March, June, September and
December of each year.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" contained on page 7 of the Annual Report is
incorporated by reference herein.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
"Management Discussion & Analysis of Financial Condition & Results of
Operations" contained on pages 28-40 of the Annual Report is incorporated by
reference herein.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and Qualitative Disclosures about market risk are contained on
pages 38-39, of the "Management Discussion & Analysis of Financial Condition &
Results of Operations" section of the Annual Report, incorporated by reference
herein.
12
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference are the following sections of the Annual Report:
Consolidated Statements of Condition as of December 31, 1997 and 1996
contained on page 8 of the Annual Report;
Consolidated Statements of Income for the Years Ended December 31, 1997,
1996 and 1995 contained on page 9 of the Annual Report;
Consolidated Statements of Cash Flows for the Years Ended December 31,
1997, 1996 and 1995 contained on page 10 of the Annual Report;
Consolidated Statements of Changes in Shareholders' Equity for the Years
Ended December 31, 1997, 1996 and 1995 contained on page 11 of the Annual
Report; and
Notes to Consolidated Financial Statements contained on pages 12-26 of the
Annual Report.
Report of KPMG Peat Marwick LLP, Independent Auditors, contained on page 27
of the Annual Report;
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the executive officers of the Company is included
in Item 4A of Part I.
Information relating to the Directors of the Company is incorporated herein
by reference from the "Election of Directors" section of the Proxy Statement
beginning on page 4 thereof.
ITEM 11. EXECUTIVE COMPENSATION
"Executive Compensation" beginning on page 8 of the Proxy Statement is
incorporated by reference herein.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
"Security Ownership of Certain Beneficial Owners and Management" beginning
on page 2 of the Proxy Statement is incorporated by reference herein.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
"Certain Relationships and Related Transactions" contained on page 11 of
the Proxy Statement is incorporated by reference herein.
14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) THE FOLLOWING FINANCIAL STATEMENTS OF THE COMPANY AND
INDEPENDENT AUDITOR'S REPORT ARE INCORPORATED BY REFERENCE
HEREIN AS SPECIFIED IN ITEM 8:
Consolidated Statements of Condition as of December 31, 1997
and 1996
Consolidated Statements of Income for the Years Ended December
31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1997, 1996 and 1995
Consolidated Statements of Changes in Shareholders' Equity for
the Years Ended December 31, 1997, 1996 and 1995
Notes to Consolidated Financial Statements
Report of KPMG Peat Marwick LLP, Independent Auditors
(2) THE FOLLOWING FINANCIAL STATEMENT SCHEDULES ARE FILED WITH THIS
REPORT:
All other schedules for which provision is made in the
applicable accounting regulations of the Commission are not
required under related instructions or are inapplicable and
therefore have been omitted.
(b) Reports on Form 8-K
None.
(c) Exhibits - The response to this portion of Item 14 is submitted as a
separate section of this report. See Exhibit Index on page 18.
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
TOMPKINS COUNTY TRUSTCO, INC.
By: /s/ JAMES J. BYRNES
-----------------------------------------
James J. Byrnes
Chairman of the Board, President and
Chief Executive Officer
Date: March 20, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons in the capacities and on the
dates indicated:
SIGNATURE CAPACITY DATE
- --------- -------- ----
/s/ JAMES J. BYRNES Chairman of the Board, President March 20, 1998
- --------------------------- and Chief Executive Officer
James J. Byrnes
/s/ RICHARD D. FARR Senior Vice President and March 20, 1998
- --------------------------- Chief Financial Officer
Richard D. Farr
Director
- ---------------------------
John E. Alexander
/s/ REEDER D. GATES Director March 24, 1998
- ---------------------------
Reeder D. Gates
/s/ WILLIAM W. GRISWOLD Director March 26, 1998
- ---------------------------
William W. Griswold
/s/ CARL E. HAYNES Director March 26, 1998
- ---------------------------
Carl E. Haynes
/s/ EDWARD C. HOOKS Director March 25, 1998
- ---------------------------
Edward C. Hooks
/s/ RICHARD T. HORN, JR. Director March 25, 1998
- ---------------------------
Robert T. Horn, Jr.
/s/ BONNIE H. HOWELL Director March 25, 1998
- ---------------------------
Bonnie H. Howell
/s/ LUCINDA A. NOBLE Director March 24, 1998
- ---------------------------
Lucinda A. Noble
16
SIGNATURE CAPACITY DATE
- --------- -------- ----
- --------------------------- Director
Frank H. T. Rhodes
/s/ HUNTER R. RAWLINGS, III Director March 25, 1998
- ---------------------------
Hunter R. Rawlings, III
/s/ THOMAS R. SALM Director March 25, 1998
- ---------------------------
Thomas R. Salm
/s/ MICHAEL D. SHAY Director March 24, 1998
- ---------------------------
Michael D. Shay
17
EXHIBIT INDEX
The following designated exhibits are, as indicated below, either filed herewith
or have heretofore been filed with the Commission under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, and are
incorporated herein by reference to such filings. As indicated, various exhibits
are incorporated herein by reference to the identically numbered exhibit
contained in the (I) Registrant's Registration Statement on Form 8-A (No.
0-27514), as filed with the Commission on December 29, 1995 and amended by the
Company's Form 8-A/A filed with the Commission on January 22, 1996 (the "Form
8-A"), and (ii) Form 10-K, as filed with the Commission on March 26, 1996, and
amended by the Company's form 10-K/A filed with the Commission on September 20,
1996 (the "Form 10-K").
Exhibit
Number Title Of Exhibit Page
- ------- ---------------- ----
2. Agreement and Plan of Reorganization, dated as of March 14,
1995, among the Bank, the Company and the Bank Interim Bank (1)
3.1 Certificate of Incorporation of the Company (1)
3.2 Bylaws of the Company (1)
4. Form of Specimen Common Stock Certificate of the Company (1)
10.2 1992 Stock Option Plan (1)
10.3 1996 Stock Retainer Plan for Non-Employee Directors (1)
10.4 Form of Director Deferred Compensation Agreement (1)
10.5 Deferred Compensation Plan for Senior Officers (1)
10.6 Supplemental Executive Retirement Agreement with James J.
Byrnes (1)
10.7 Severance Agreement with James J. Byrnes (1)
10.8 Lease Agreement dated August 20, 1993 between Tompkins County Trust
Company and Comex Plaza Associates, relating to leased property at
the Rothschilds Building, Ithaca, NY (2)
11 Statement of Computation of Earnings Per Share
13 Portions of the Annual Report to Stockholders for the fiscal year
ended December 31, 1997.
21 Subsidiaries of Registrant (2)
23 Consent of KPMG Peat Marwick LLP
27 Financial Data Schedule
- ----------------
(1) Incorporated by reference herein to the identically numbered exhibit of
the Form 8-A.
(2) Incorporated by reference to the identically numbered exhibits of the Form
10-K.
18