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, 1998
[ ] 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 of (I.R.S. Employer Identification No.)
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 $144,699,918 on March 15, 1999, 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
15, 1999 was 4,857,984 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Stockholders for the fiscal year ended December 31, 1998 (the
"Annual Report") filed with the Securities and Exchange Commission on March 29,
1999 is incorporated herein by reference (Parts I and II).
Proxy Statement (the "Proxy Statement") filed with the Securities and Exchange
Commission on March 29, 1999 in connection with the 1999 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 1956, as amended. The principal offices of the Company and its
wholly-owned operating subsidiary, Tompkins County Trust Company (the "Trust
Company" or 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. Unless the context otherwise requires, all
references herein to the "Company" include its wholly-owned operating
subsidiary, the Bank.
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.
In February 1998, the Trust Company formed a subsidiary corporation,
Tompkins Real Estate Holdings, Inc., which was formed to qualify as a real
estate investment trust. Tompkins Real Estate Holdings, Inc. became an active
subsidiary of the Trust Company on June 1, 1998.
STOCK SPLIT
On March 15, 1998, a three-for-two stock split was paid in the form of
a stock dividend to shareholders of record on March 1, 1998. All share and per
share data included herein has been retroactively adjusted to reflect the stock
split.
STOCK REPURCHASE TRANSACTIONS
In October 1996, the Company repurchased 366,556 shares of its own common
stock in a privately negotiated sale from an unrelated third party. The stock
was purchased at a price of $18.33 per share, for a total purchase price of $6.7
million. In May 1997, the Company repurchased 120,000 shares in a privately
negotiated transaction. The shares were purchased at $22.53 per share for a
total purchase price of $2.67 million. In December 1998, The Company repurchased
12,207 shares in a privately negotiated transaction. The shares were purchased
at $34.00 per share, for a total purchase price of $415,000. All of the shares
from the repurchase transactions described above have been returned to the
status of authorized but unissued.
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. During 1998, 5,038 shares were repurchased under this
program, for a total cost of $169,000. The shares repurchased during 1998 are
the only shares that have been purchased under this program, and all of the
shares repurchased under the program have been returned to the status of
authorized but unissued.
2
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 loans, 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 1998
Annual Report to Shareholders (Annual Report), incorporated by reference under
Item 7, herein.
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 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, 1998, 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.
3
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.
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 $8.2 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.
4
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 and 1998 have resulted in growth in the commercial
leasing portfolio, which is expected to continue in 1999.
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.
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 1998 and 1997 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 1996 is presented in Table 1
below.
TABLE 1 SECURITIES
=========================================================================================================
Available-for-Sale Held-to-Maturity
December 31, 1996 Amortized Cost Fair Value Amortized Cost Fair Value
- ---------------------------------------------------------------------------------------------------------
(In Thousands)
U.S. Treasury Securities & Obligations
of U.S. Government Agencies $142,648 $142,729 $ 0 $ 0
Mortgage-Backed Securities 22,092 22,124
Obligations of State and Political
Subdivisions 0 0 37,753 38,784
Equity Securities 3,050 3,050 0 0
- ---------------------------------------------------------------------------------------------------------
$167,790 $167,903 $37,753 $38,784
=========================================================================================================
5
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 initiated a "Trust Alliance" program, in which the Company began
providing servicing and administrative support to the trust department of
another community bank. As of March 1999, the Company had Trust Alliances with
two community banks in New York State and one in Pennsylvania.
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 81% of
total liabilities on December 31, 1998. Scheduled maturities of time deposits
are detailed in Note 6 of the Annual Report.
MARKET AREA
Tompkins County, New York is the Company's primary market area. The
Company has 13 offices; including, 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 areas 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 2.6% in December 1998, compared to a State average of
5.1%. Job growth in the county for the twelve months ended December 31, 1998,
totaled 0.81%, compared to total job growth for the State of 1.01%.
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 1998, the Trust and Investment Services
Division served customers in more than 42 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.
6
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 focuses primarily 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.
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 1998, the Company invested approximately
$124,000 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.
7
REGULATION
As a registered bank holding company, the Company is subject to
examination and comprehensive regulation by the FRB. 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 special
assessment attributable to the FICO bonds was approximately $56,000 in 1998.
EMPLOYEES
At December 31, 1998, the Company employed 237 employees, approximately
47 of which were 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. Ithaca, NY Triphammer Road Branch Office 3,000 Leased
2 W. Main Street Trumansburg, NY Trumansburg Branch Office 2,720 Owned
701 W. Seneca St. West End Branch Office 2,150 Owned
Ithaca, NY
2230 N. Triphammer Rd. Kendal Branch 204 Leased
Ithaca, NY Part Time Office
100 Main Street Odessa Branch Office 3,115 Owned
Odessa, NY
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 1999 to July 2042.
9
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 57 Chairman of the Board, January 1989
President and Chief
Executive Officer
Donald S. Stewart 54 Executive Vice President December 1984
Richard D. Farr 46 Senior Vice President and December 1988
Chief Financial Officer
Thomas J. Smith 58 Senior Vice President December 1984
Lawrence A. Updike 53 Senior Vice President December 1988
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.
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.
10
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
- --------------------------------------------------------------------------------
1997 1st Quarter $23.17 21.09 .20
2nd Quarter 23.83 21.42 .20
3rd Quarter 25.37 23.25 .21
4th Quarter 28.83 25.42 .21
1998 1st Quarter $34.00 28.50 .21
2nd Quarter 38.75 33.38 .22
3rd Quarter 40.75 32.00 .23
4th Quarter 34.75 30.75 .25
Note 1 - The range of reported high and low transaction prices reflects
inter-dealer prices without retail markup, markdown or commission, and represent
actual transactions as quoted on the Nasdaq National Market or the American
Stock Exchange. The Company's stock was traded on the Nasdaq National Market
during January 1997. Effective February 3, 1997, the Company's stock began
trading on the American Stock Exchange. As of March 15, 1999, there were
approximately 1,071 shareholders of record. Note 2 - On March 15, 1998, a
3-for-2 stock split was paid in the form of a stock dividend to shareholders of
record on March 1, 1998. Per share price and dividend information has been
adjusted for the stock split.
Note 3 - 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 29-40 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, of the "Management Discussion & Analysis of Financial
Condition & Results of Operations" section of the Annual Report, incorporated by
reference herein.
11
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, 1998 and 1997
contained on page 8 of the Annual Report;
Consolidated Statements of Income for the Years Ended December 31,
1998, 1997 and 1996 contained on page 9 of the Annual Report;
Consolidated Statements of Cash Flows for the Years Ended December 31,
1998, 1997 and 1996 contained on page 10 of the Annual Report;
Consolidated Statements of Changes in Shareholders' Equity and
Comprehensive Income for the Years Ended December 31, 1998, 1997 and 1996
contained on page 11 of the Annual Report; and
Notes to Consolidated Financial Statements contained on pages 12-27 of
the Annual Report.
Report of KPMG LLP, Independent Auditors, contained on page 28 of the
Annual Report;
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
12
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.
13
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 AUDITORS' REPORT ARE INCORPORATED BY
REFERENCE HEREIN AS SPECIFIED IN ITEM 8:
CONSOLIDATED STATEMENTS OF CONDITION as of December 31, 1998 and
1997
CONSOLIDATED STATEMENTS OF INCOME for the Years Ended December
31, 1998, 1997 and 1996
CONSOLIDATED STATEMENTS OF CASH FLOWS for the Years Ended
December 31, 1998, 1997 and 1996
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY AND
COMPREHENSIVE INCOME for the Years Ended December 31, 1998, 1997
and 1996
Notes to Consolidated Financial Statements
Report of KPMG 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.
14
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 29, 1999
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, March 29, 1999
- --------------------- President and Chief
James J. Byrnes Executive Officer
/s/ RICHARD D. FARR Senior Vice President and March 29, 1999
- --------------------- Chief Financial Officer
Richard D. Farr
/s/ JOHN ALEXANDER Director March 29, 1999
- ---------------------
John E. Alexander
/s/ REEDER D. GATES Director March 29, 1999
- --------------------
Reeder D. Gates
/s/ WILLIAM W. GRISWOLD Director March 29, 1999
- -----------------------
William W. Griswold
/s/ CARL E. HAYNES Director March 29, 1999
- -----------------------
Carl E. Haynes
/s/ EDWARD C. HOOKS Director March 29, 1999
- -----------------------
Edward C. Hooks
/s/ ROBERT T. HORN, JR. Director March 29, 1999
- -----------------------
Robert T. Horn, Jr.
/s/ BONNIE H. HOWELL Director March 29, 1999
- -----------------------
Bonnie H. Howell
/s/ LUCINDA A. NOBLE Director March 29, 1999
- -----------------------
Lucinda A. Noble
/s/ HUNTER R. RAWLINGS, III Director March 29, 1999
- ---------------------------
Hunter R. Rawlings, III
15
Director
- -----------------------
Thomas R. Salm
/s/ MICHAEL D. SHAY Director March 29, 1999
- ---------------------------
Michael D. Shay
/s/ PEGGY R. WILLIAMS Director March 29, 1999
- ----------------------------
Peggy R. Williams
16
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 (3)
13 Portions of the Annual Report to Stockholders for the
fiscal year ended December 31, 1998.
21 Subsidiaries of Registrant (2)
23 Consent of KPMG LLP
27 Financial Data Schedule
(1) Incorporated by reference herein to the identically numbered exhibits of
the Form 8-A.
(2) Incorporated by reference to the identically numbered exhibits of the Form
10-K.
(3) Required information is incorporated by reference to Note 13 of the
Company's 1998 Annual Report Share Holders. 17