TRUSTCO BANK CORP N Y - FORM 8-K - EX-99.A - EXHIBIT 99(A)

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8-K - TRUSTCO BANK CORP NY 8-K 7-23-2012 - TRUSTCO BANK CORP N Y	form8k.htm

Exhibit 99(a)

			News Release

5 Sarnowski Drive, Glenville, New York, 12302
(518) 377-3311 Fax: (518) 381-3668

Subsidiary: Trustco Bank

NASDAQ -- TRST

Contact:	Kevin T. Timmons
	Vice President/Treasurer
	(518) 381-3607

FOR IMMEDIATE RELEASE:

TrustCo Announces Second Quarter Pretax Earnings Up 20%;

Net Income Up 17%

Glenville, New York –July 23, 2012

TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced net income for the second quarter of 2012 of $9.1 million, up 16.7% over the prior-year period and equal to diluted earnings per share of $0.097, compared to net income of $7.8 million and diluted earnings per share of $0.100 for the second quarter of 2011. Second quarter 2012 per share results include the full quarter effect of the common stock offering completed on July 6, 2011.

On a pre-tax basis, earnings were up 19.5% from $12.0 million in the second quarter of 2011 to $14.4 million in the second quarter of 2012. The second quarter of 2012 saw continued core balance sheet growth. Robert J. McCormick, President and Chief Executive Officer noted, “We are pleased that the second quarter resulted in solid earnings and continued core loan and deposit growth. We look forward to the second half of 2012 with optimism, though we note that our industry continues to face challenges as the economy remains fragile and interest rates remain at unprecedented levels.” Return on average equity and return on average assets were 10.49% and 0.83%, respectively, for the second quarter of 2012, compared to 11.76% and 0.77% for the second quarter of 2011. Increased capital from the common stock offering led to a lower return on average equity for the second quarter of 2012. The efficiency ratio was 52.24% for the second quarter of 2012, compared to 51.33% for the second quarter of 2011. Both years ratios are industry leaders.

Mr. McCormick also noted “We continue to see some signs of economic improvement in the markets in which we operate, although high levels of unemployment and other persistent issues continue to constrain any significant growth. We believe our long-term focus on traditional lending criteria and conservative balance sheet management has enabled us to maintain a strong balance sheet with continued profitability. As a result, we have been able to focus on conducting business, which has put us in a position to take advantage of the significant upheaval that customers of other banks have seen. We are particularly encouraged by the continued growth of our core loan and deposit portfolios.”

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TrustCo continued to report solid growth in loans and deposits on a year-over-year basis. For the quarter ended June 30, 2012, average loans were up $151.9 million or 6.3% compared to the same period in 2011, while average deposits increased $248.8 million or 6.9% over the same period. Mr. McCormick noted that, “In addition to growth throughout the franchise, we are especially pleased with the progress that we have made in growing loans and deposits through our recently completed branch expansion program. We remain mindful that fully achieving our goals for our newer branches will take time and continued hard work. We believe our success in growing customer relationships provides the basic building blocks that will help drive profit growth over the coming years. It is important to note, however, that we will not pursue balance sheet expansion that does not contribute to the bottom line. As interest rates continue to drift downward we will take advantage of opportunities to enhance our net interest margin even if that leads to a short period of flat or even declining deposits.”

For the first six months of 2012 net income was $18.0 million and resulted in diluted earnings per share of $0.192, as compared to the first six months of 2011 net income of $15.1 million and diluted earnings per share of $0.196. Net income was up 18.7% from the first six months of 2012 to the first six months of 2011. Return on average equity and return on average assets were 10.47% and 0.84%, respectively, for the first six months of 2012 and 11.69% and 0.76% for the comparable period in 2011.

Nonperforming loans were $51.5 million as of June 30, 2012, compared to $51.2 million at March 31, 2012 and $49.5 million at June 30, 2011. Nonperforming assets were $55.3 million at June 30, 2012, compared to $54.9 million at March 31, 2012 and $54.4 million at June 30, 2011. At June 30, 2012, nonperforming loans were equal to 2.01% of total loans, compared to 2.03% at March 31, 2012 and 2.04% at June 30, 2011. Nonperforming assets to total assets were 1.25% at June 30, 2012, compared to 1.25% at March 31, 2012 and 1.34% at June 30, 2011. The allowance for loan losses as a percentage of gross loans and as a multiple of net charge-offs remains strong. The allowance to total loans was 1.88% at both June 30, 2012 and June 30, 2011, and covered annualized second quarter net charge-offs by 3.4 times, compared to an annualized 3.8 times for the second quarter of 2011. The coverage ratio, or allowance for loan losses to nonperforming loans was 93.3% at June 30, 2012, compared to 94.9% at March 31, 2012 and 92.0% at June 30, 2011.

Net interest margin for the second quarter of 2012 was 3.16%, down from 3.23% in the first quarter of 2012 and from 3.47% in the second quarter of 2011. The decline in the margin reflects the continued effect of the low rate environment on both the loan and investment portfolios, partly offset by lower deposit pricing as well as management’s decision to maintain a higher level of short term liquidity.

On July 6, 2011 the Company completed an offering of 15.6 million common shares, raising net proceeds of $67.6 million. The additional capital significantly improved the Company’s capital position. At June 30, 2012 the tangible equity ratio was 7.90% compared to 6.59% at June 30, 2011. Tangible book value per share also increased, from $3.47 per share to $3.73 per share over that period.

Page | 2

TrustCo Bank Corp NY is a $4.4 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 137 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 2012.

In addition, the Bank’s Financial Services Department offers a full range of investment services, retirement planning and trust and estate administration services. The common shares of TrustCo are traded on the NASDAQ Global Select Market under the symbol TRST.

A conference call to discuss second quarter 2012 results will held at 9:00 a.m. Eastern Time on July 24, 2012. Those wishing to participate in the call may dial toll-free 1-877-317-6789. International callers must dial + 1-412-317-6789. A replay of the call will be available until October 25, 2012 by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10016120. The call will also be audio webcast at: http://services.choruscall.com/links/trst120724.html, and will be available until July 24, 2013.

Safe Harbor Statement

All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. The “forward-looking statements” may include statements regarding future events or performance and statements regarding TrustCo’s ability to offer and sell securities under its shelf registration statement. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect our actual results and could cause our actual financial performance to differ materially from that expressed in any forward-looking statement: credit risk, the effects of and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rates, market and monetary fluctuations, competition, the effect of changes in financial services laws and regulations (including laws concerning taxation, banking and securities), real estate and collateral values, changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board (“FASB”) or the Public Company Accounting Oversight Board; changes in local market areas and general business and economic trends and the matters described under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2011, as amended, and in our subsequent securities filings.

Page | 3

TRUSTCO BANK CORP NY

GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	06/30/12			03/31/12		06/30/11
Summary of operations
Net interest income (TE)	$	33,993			33,637		34,183
Provision for loan losses		3,000			3,100		4,850
Net securities transactions		55			677		851
Noninterest income		3,971			3,841		3,720
Noninterest expense		20,498			20,644		21,552
Net income		9,066			8,909		7,766

Per common share
Net income per share:
- Basic	$	0.097			0.095		0.100
- Diluted		0.097			0.095		0.100
Cash dividends		0.066			0.066		0.066
Tangible Book value at period end		3.73			3.68		3.47
Market price at period end		5.46			5.71		4.90

At period end
Full time equivalent employees		742			734		729
Full service banking offices		137			137		135

Performance ratios
Return on average assets		0.83	%		0.84		0.77
Return on average equity		10.49			10.45		11.76
Efficiency (1)		52.24			52.51		51.33
Net interest spread (TE)		3.09			3.14		3.38
Net interest margin (TE)		3.16			3.23		3.47
Dividend payout ratio		67.80			68.91		65.37

Capital ratio at period end
Consolidated tangible equity to tangible assets (2)		7.90			7.87		6.59

Asset quality analysis at period end
Nonperforming loans to total loans		2.01			2.03		2.04
Nonperforming assets to total assets		1.25			1.25		1.34
Allowance for loan losses to total loans		1.88			1.92		1.88
Coverage ratio (3)		0.9	X		0.9		0.9

(1)	Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalentnet interest income plus noninterest income (excluding net securities transactions).

(2)	The tangible equity ratio excludes $553,000 of intangibles from both equity and assets.

(3)	Calculated as allowance for loan losses divided by total nonperforming loans.

TE = Taxable equivalent.

Page | 4

FINANCIAL HIGHLIGHTS, Continued

(dollars in thousands, except per share data)

(Unaudited)

	Six Months Ended
	06/30/12			06/30/11
Summary of operations
Net interest income (TE)	$	67,630			67,107
Provision for loan losses		6,100			9,450
Net securities transactions		732			1,138
Noninterest income		7,812			7,704
Noninterest expense		41,142			42,398
Net income		17,975			15,148

Per common share
Net income per share:
- Basic	$	0.192			0.196
- Diluted		0.192			0.196
Cash dividends		0.131			0.131
Tangible Book value at period end		3.73			3.47
Market price at period end		5.46			4.90

Performance ratios
Return on average assets		0.84	%		0.76
Return on average equity		10.47			11.69
Efficiency (1)		52.37			51.75
Net interest spread (TE)		3.11			3.35
Net interest margin (TE)		3.19			3.43
Dividend payout ratio		68.35			66.98

(1)	Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions).

TE = Taxable equivalent.

Page | 5

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	6/30/2012		3/31/2012		12/31/2011		9/30/2011		6/30/2011
Interest and dividend income:
Interest and fees on loans	$	32,277		32,425		32,711		32,640		32,184
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		2,606		2,304		2,661		3,347		3,791
State and political subdivisions		368		410		490		557		640
Mortgage-backed securities and collateralized mortgage obligations-residential		1,364		1,093		1,083		778		622
Corporate bonds		648		822		886		953		1,081
Other securities		154		95		85		89		89
Total interest and dividends on securities available for sale		5,140		4,724		5,205		5,724		6,223

Interest on held to maturity securities:
U. S. government sponsored enterprises		-		25		97		164		-
Mortgage-backed securities and collateralized mortgage obligations-residential		1,198		1,290		1,151		1,186		1,240
Corporate bonds		387		509		590		565		595
Total interest on held to maturity securities		1,585		1,824		1,838		1,915		1,835

Interest on federal funds sold and other short-term investments		299		320		284		318		254
Total interest income		39,301		39,293		40,038		40,597		40,496

Interest expense:
Interest on deposits:
Interest-bearing checking		78		78		76		74		70
Savings		979		1,102		1,018		952		885
Money market deposit accounts		770		923		1,030		1,158		1,184
Time deposits		3,230		3,418		3,552		3,904		4,099
Interest on short-term borrowings		378		388		401		384		382
Total interest expense		5,435		5,909		6,077		6,472		6,620

Net interest income		33,866		33,384		33,961		34,125		33,876

Provision for loan losses		3,000		3,100		4,200		5,100		4,850
Net interest income after provision for loan losses		30,866		30,284		29,761		29,025		29,026

Noninterest income:
Trust department income		1,407		1,394		1,086		1,242		1,186
Fees for services to customers		2,388		2,240		2,305		2,189		2,325
Net gain on securities transactions		55		677		132		158		851
Other		176		207		213		214		209
Total noninterest income		4,026		4,518		3,736		3,803		4,571

Noninterest expenses:
Salaries and employee benefits		7,519		7,743		7,638		7,087		7,000
Net occupancy expense		3,817		3,795		3,664		3,614		3,672
Equipment expense		1,600		1,520		1,200		1,639		1,481
Professional services		1,489		1,436		1,411		1,152		1,681
Outsourced services		1,347		1,250		1,050		1,350		1,350
Advertising expense		1,060		809		607		763		708
FDIC and other insurance		953		880		577		835		1,392
Other real estate expense, net		665		966		1,254		754		2,095
Other		2,048		2,245		1,508		1,249		2,173
Total noninterest expenses		20,498		20,644		18,909		18,443		21,552

Income before taxes		14,394		14,158		14,588		14,385		12,045
Income taxes		5,328		5,249		5,874		5,160		4,279

Net income	$	9,066		8,909		8,714		9,225		7,766
Net income per Common Share:
- Basic	$	0.097		0.095		0.093		0.100		0.100

- Diluted		0.097		0.095		0.093		0.100		0.100

Average basic shares (thousands)		93,561		93,546		93,308		92,124		77,363
Average diluted shares (thousands)		93,562		93,546		93,308		92,124		77,363

Note: Taxable equivalent net interest income	$	33,993		33,637		34,220		34,390		34,183

Page | 6

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Six Months Ended
	6/30/2012		6/30/2011

Interest and dividend income:
Interest and fees on loans	$	64,702		63,861
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		4,910		6,990
State and political subdivisions		778		1,424
Mortgage-backed securities and collateralized mortgage obligations-residential		2,457		1,230
Corporate bonds		1,470		2,220
Other securities		249		150
Total interest and dividends on securities available for sale		9,864		12,014

Interest on held to maturity securities:
U. S. government sponsored enterprises		25		-
Mortgage-backed securities-residential		2,488		2,428
Corporate bonds		896		1,310
Total interest on held to maturity securities		3,409		3,738

Interest on federal funds sold and other short-term investments		619		500
Total interest income		78,594		80,113

Interest expense:
Interest on deposits:
Interest-bearing checking		156		135
Savings		2,081		1,818
Money market deposit accounts		1,693		2,411
Time deposits		6,648		8,542
Interest on short-term borrowings		766		789
Total interest expense		11,344		13,695

Net interest income		67,250		66,418

Provision for loan losses		6,100		9,450
Net interest income after provision for loan losses		61,150		56,968

Noninterest income:
Trust department income		2,801		2,760
Fees for services to customers		4,628		4,419
Net gain on securities transactions		732		1,138
Other		383		525
Total noninterest income		8,544		8,842

Noninterest expenses:
Salaries and employee benefits		15,262		14,026
Net occupancy expense		7,612		7,409
Equipment expense		3,120		2,813
Professional services		2,925		3,166
Outsourced services		2,597		2,700
Advertising expense		1,869		1,414
FDIC and other insurance		1,833		3,243
Other real estate expense, net		1,631		3,685
Other		4,293		3,942
Total noninterest expenses		41,142		42,398

Income before taxes		28,552		23,412
Income taxes		10,577		8,264

Net income	$	17,975		15,148

Net income per Common Share:
- Basic	$	0.192		0.196

- Diluted		0.192		0.196

Average basic shares (thousands)		93,503		77,302
Average diluted shares (thousands)		93,504		77,302

Note: Taxable equivalent net interest income	$	67,630		67,107

Page | 7

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

	6/30/2012			3/31/2012			12/31/2011			9/30/2011			6/30/2011
ASSETS:

Cash and due from banks	$	36,589			39,426			44,395			40,875			41,229
Federal funds sold and other short term investments		486,049			486,055			488,548			434,950			479,647
Total cash and cash equivalents		522,638			525,481			532,943			475,825			520,876

Securities available for sale:
U. S. government sponsored enterprises		643,189			744,725			563,460			633,812			676,062
States and political subdivisions		36,978			38,367			43,968			51,289			57,670
Mortgage-backed securities and collateralized mortgage obligations-residential		354,285			219,301			204,022			200,516			66,333
Corporate bonds		73,311			81,654			96,608			97,464			103,194
Other securities		10,292			9,664			9,664			7,521			7,522
Total securities available for sale		1,118,055			1,093,711			917,722			990,602			910,781

Held to maturity securities:
U. S. government sponsored enterprises		-			-			15,000			25,000			-
Mortgage-backed securities and collateralized mortgage obligations-residential		133,562			143,629			141,857			109,603			105,509
Corporate bonds		35,193			35,312			59,431			59,555			49,019
Total held to maturity securities		168,755			178,941			216,288			194,158			154,528

Loans:
Commercial		235,347			235,513			248,163			244,389			249,124
Residential mortgage loans		2,003,046			1,970,278			1,955,951			1,925,144			1,876,699
Home equity line of credit		317,157			314,668			313,038			305,587			298,314
Installment loans		4,071			3,855			4,151			3,829			3,837
Loans, net of deferred fees and costs		2,559,621			2,524,314			2,521,303			2,478,949			2,427,974
Less:
Allowance for loan losses		48,018			48,535			48,717			47,782			45,561
Net loans		2,511,603			2,475,779			2,472,586			2,431,167			2,382,413

Bank premises and equipment, net		37,868			37,099			37,006			35,946			36,032
Other assets		62,480			63,432			67,099			65,261			65,696

Total assets	$	4,421,399			4,374,443			4,243,644			4,192,959			4,070,326

LIABILITIES:
Deposits:
Demand	$	283,873			281,628			267,776			269,958			259,459
Interest-bearing checking		528,101			507,510			489,227			472,908			461,976
Savings accounts		1,122,208			1,068,058			978,819			923,893			891,181
Money market deposit accounts		644,627			631,761			635,434			642,054			638,774
Certificates of deposit (in denominations of $100,000 or more)		452,043			467,447			460,971			461,081			453,303
Other time accounts		867,798			894,946			903,746			910,633			947,838
Total deposits		3,898,650			3,851,350			3,735,973			3,680,527			3,652,531

Short-term borrowings		150,718			159,002			147,563			143,081			128,807
Due to broker		-			-			-			10,000			-
Accrued expenses and other liabilities		22,124			19,445			21,592			21,541			20,039

Total liabilities		4,071,492			4,029,797			3,905,128			3,855,149			3,801,377

SHAREHOLDERS' EQUITY:
Capital stock		98,912			98,912			98,912			98,806			83,166
Surplus		175,773			176,199			176,638			177,448			126,196
Undivided profits		125,153			122,235			119,465			116,894			113,782
Accumulated other comprehensive income (loss), net of tax		1,585			53			(2,493	)		258			2,846
Treasury stock at cost		(51,516	)		(52,753	)		(54,006	)		(55,596	)		(57,041	)

Total shareholders' equity		349,907			344,646			338,516			337,810			268,949

Total liabilities and shareholders' equity	$	4,421,399			4,374,443			4,243,644			4,192,959			4,070,326

Outstanding shares (thousands)		93,674			93,549			93,315			93,154			77,367

Page | 8

NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

Nonperforming Assets

	06/30/12			03/31/12			12/31/11			09/30/11			06/30/11
New York and other states*
Loans in nonaccrual status:
Commercial	$	5,656			5,667			4,981			5,086			5,090
Real estate mortgage - 1 to 4 family		29,167			29,894			27,820			25,932			24,148
Installment		1			9			3			4			13
Total non-accrual loans		34,824			35,570			32,804			31,022			29,251
Other nonperforming real estate mortgages - 1 to 4 family		243			306			312			317			324
Total nonperforming loans		35,067			35,876			33,116			31,339			29,575
Other real estate owned		2,787			2,411			2,382			2,372			725
Total nonperforming assets	$	37,854			38,287			35,498			33,711			30,300

Florida
Loans in nonaccrual status:
Commercial	$	8,435			5,874			5,000			5,400			7,186
Real estate mortgage - 1 to 4 family		7,954			9,404			10,662			10,231			12,770
Installment		1			-			-			-			-
Total non-accrual loans		16,390			15,278			15,662			15,631			19,956
Other nonperforming real estate mortgages - 1 to 4 family		-			-			-			-			-
Total nonperforming loans		16,390			15,278			15,662			15,631			19,956
Other real estate owned		1,083			1,293			2,883			3,739			4,119
Total nonperforming assets	$	17,473			16,571			18,545			19,370			24,075

Total
Loans in nonaccrual status:
Commercial	$	14,091			11,541			9,981			10,486			12,276
Real estate mortgage - 1 to 4 family		37,121			39,298			38,482			36,163			36,918
Installment		2			9			3			4			13
Total non-accrual loans		51,214			50,848			48,466			46,653			49,207
Other nonperforming real estate mortgages - 1 to 4 family		243			306			312			317			324
Total nonperforming loans		51,457			51,154			48,778			46,970			49,531
Other real estate owned		3,870			3,704			5,265			6,111			4,844
Total nonperforming assets	$	55,327			54,858			54,043			53,081			54,375

Quarterly Net Chargeoffs
	06/30/12			03/31/12			12/31/11			09/30/11			06/30/11
New York and other states*
Commercial	$	713			321			99			(3	)		(32	)
Real estate mortgage - 1 to 4 family		1,844			1,136			1,404			858			679
Installment		7			(8	)		5			17			8
Total net chargeoffs	$	2,564			1,449			1,508			872			655

Florida
Commercial	$	288			160			400			-			599
Real estate mortgage - 1 to 4 family		665			1,673			1,359			2,006			1,715
Installment		-			-			(2	)		1			-
Total net chargeoffs	$	953			1,833			1,757			2,007			2,314

Total
Commercial	$	1,001			481			499			(3	)		567
Real estate mortgage - 1 to 4 family		2,509			2,809			2,763			2,864			2,394
Installment		7			(8	)		3			18			8
Total net chargeoffs	$	3,517			3,282			3,265			2,879			2,969

Asset Quality Ratios
	06/30/12			03/31/12			12/31/11			09/30/11			06/30/11
Total nonperforming loans(1)	$	51,457			51,154			48,778			46,970			49,531
Total nonperforming assets(1)		55,327			54,858			54,043			53,081			54,375
Total net chargeoffs(2)		3,517			3,282			3,265			2,879			2,969

Allowance for loan losses(1)		48,018			48,535			48,717			47,782			45,561

Nonperforming loans to total loans(1)		2.01	%		2.03	%		1.93	%		1.89	%		2.04	%
Nonperforming assets to total assets(1)		1.25	%		1.25	%		1.27	%		1.27	%		1.34	%
Allowance for loan losses to total loans(1)		1.88	%		1.92	%		1.93	%		1.93	%		1.88	%
Coverage ratio(1)		93.3	%		94.9	%		99.9	%		101.7	%		92.0	%
Annualized net chargeoffs to average loans(2)		0.55	%		0.52	%		0.52	%		0.47	%		0.50	%
Allowance for loan losses to annualized net chargeoffs(2)		3.4	x		3.7	x		3.7	x		4.1	x		3.8	x

* Includes New York, New Jersey, Vermont and Massachusetts.

(1)	At period-end

(2)	For the period ended

Page | 9

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY- INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands) (Unaudited)	Three months ended June 30, 2012									Three months ended June 30, 2011
	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	719,590			2,606			1.45	%	$	739,545			3,791			2.05	%
Mortgage backed securities and collateralized mortgage obligations-residential		255,039			1,364			2.14			66,089			622			3.76
State and political subdivisions		36,730			489			5.33			60,668			939			6.19
Corporate bonds		77,020			648			3.37			112,193			1,081			3.85
Other		10,092			154			6.10			7,547			89			4.77

Total securities available for sale		1,098,471			5,261			1.92			986,042			6,522			2.65

Federal funds sold and other short-term Investments		489,228			299			0.25			400,460			254			0.25

Held to maturity securities:
Corporate bonds		35,251			387			4.39			52,269			595			4.56
Mortgage backed securities and collateralized mortgage obligations-residential		138,419			1,198			3.46			108,983			1,240			4.55

Total held to maturity securities		173,670			1,585			3.65			161,252			1,835			4.55

Commercial loans		235,651			3,138			5.33			250,347			3,675			5.87
Residential mortgage loans		1,988,017			26,124			5.26			1,843,831			25,646			5.56
Home equity lines of credit		316,289			2,875			3.66			294,180			2,728			3.72
Installment loans		3,762			146			15.60			3,501			143			16.42

Loans, net of unearned income		2,543,719			32,283			5.08			2,391,859			32,192			5.38

Total interest earning assets		4,305,088			39,428			3.67			3,939,613			40,803			4.14

Allowance for loan losses		(49,386	)								(45,261	)
Cash & non-interest earning assets		138,964									144,866

Total assets	$	4,394,666								$	4,039,218

Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	514,219			78			0.06	%	$	459,678			70			0.06	%
Money market accounts		636,171			770			0.49			630,352			1,184			0.75
Savings		1,104,422			979			0.36			877,503			885			0.40
Time deposits		1,341,038			3,230			0.97			1,402,890			4,099			1.17

Total interest bearing deposits		3,595,850			5,057			0.57			3,370,423			6,238			0.74
Short-term borrowings		153,082			378			0.99			130,275			382			1.18

Total interest bearing liabilities		3,748,932			5,435			0.58			3,500,698			6,620			0.76

Demand deposits		279,761									256,373
Other liabilities		18,435									17,326
Shareholders' equity		347,538									264,821

Total liabilities and shareholders' equity	$	4,394,666								$	4,039,218

Net interest income , tax equivalent					33,993									34,183

Net interest spread								3.09	%								3.38	%

Net interest margin (net interest income to total interest earning assets)								3.16	%								3.47	%

Tax equivalent adjustment					(127	)								(307	)

Net interest income					33,866									33,876

Page | 10

(dollars in thousands) (Unaudited)	Six months ended June 30, 2012									Six months ended June 30, 2011
	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	655,168			4,910			1.50	%	$	704,922			6,990			1.98	%
Mortgage backed securities and collateralized mortgage obligations-residential		229,849			2,457			2.14			67,927			1,230			3.62
State and political subdivisions		38,371			1,092			5.69			66,965			2,098			6.26
Corporate bonds		85,094			1,470			3.46			114,462			2,220			3.88
Other		9,878			249			5.05			7,635			150			3.97

Total securities available for sale		1,018,360			10,178			2.00			961,911			12,688			2.64

Federal funds sold and other short-term Investments		501,617			619			0.25			399,826			500			0.25

Held to maturity securities:
U. S. government sponsored enterprises		2,143			25			2.38			-			-			0.00
Corporate bonds		44,074			896			4.06			57,241			1,310			4.58
Mortgage backed securities and collateralized mortgage obligations-residential		140,783			2,488			3.53			113,202			2,428			4.29

Total held to maturity securities		187,000			3,409			3.65			170,443			3,738			4.39

Commercial loans		238,460			6,501			5.45			251,897			7,352			5.84
Residential mortgage loans		1,975,333			52,236			5.30			1,823,662			50,835			5.57
Home equity lines of credit		315,644			5,740			3.66			292,433			5,394			3.72
Installment loans		3,688			291			15.87			3,697			295			16.12

Loans, net of unearned income		2,533,125			64,768			5.12			2,371,689			63,876			5.39

Total interest earning assets		4,240,102			78,974			3.73			3,903,869			80,802			4.14

Allowance for loan losses		(49,613	)								(44,418	)
Cash & non-interest earning assets		140,522									144,605

Total assets	$	4,331,011								$	4,004,056

Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	498,290			156			0.06	%	$	445,712			135			0.06	%
Money market accounts		634,032			1,693			0.54			623,633			2,411			0.78
Savings		1,062,010			2,081			0.39			847,211			1,818			0.43
Time deposits		1,353,072			6,648			0.99			1,427,605			8,542			1.21

Total interest bearing deposits		3,547,404			10,578			0.60			3,344,161			12,906			0.78
Short-term borrowings		149,283			766			1.03			130,121			789			1.22

Total interest bearing liabilities		3,696,687			11,344			0.62			3,474,282			13,695			0.79

Demand deposits		270,706									250,924
Other liabilities		18,333									17,439
Shareholders' equity		345,285									261,411

Total liabilities and shareholders' equity	$	4,331,011								$	4,004,056

Net interest income , tax equivalent					67,630									67,107

Net interest spread								3.11	%								3.35	%

Net interest margin (net interest income to total interest earning assets)								3.19	%								3.43	%

Tax equivalent adjustment					(380	)								(689	)

Net interest income					67,250									66,418

Page | 11

Non-GAAP Financial Measures Reconciliation

Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders’ equity by common shares outstanding. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.

The efficiency ratio is a non-GAAP measure of expense control relative to recurring revenue. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, which we refer to below as recurring expense, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on securities from this calculation, which we refer to below as recurring revenue. We believe that this provides one reasonable measure of core expenses relative to core revenue.

We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share and efficiency ratio to the underlying GAAP numbers is set forth below.

Non-GAAP Financial Measures Reconciliation

(dollars in thousands, except per share amounts)

(Unaudited)

	06/30/12			03/31/12			12/31/11			09/30/11			06/30/11
Tangible Book Value Per Share

Equity	$	349,907			344,646			338,516			337,810			268,949
Less: Intangible assets		553			553			553			553			553
Tangible equity		349,354			344,093			337,963			337,257			268,396

Shares outstanding		93,674			93,549			93,315			93,154			77,367
Tangible book value per share		3.73			3.68			3.62			3.62			3.47
Book value per share		3.74			3.68			3.63			3.63			3.48

Tangible Equity to Tangible Assets
Total Assets		4,421,399			4,374,443			4,243,644			4,192,959			4,070,326
Less: Intangible assets		553			553			553			553			553
Tangible assets		4,420,846			4,373,890			4,243,091			4,192,406			4,069,773

Tangible Equity to Tangible Assets		7.90	%		7.87	%		7.97	%		8.04	%		6.59	%
Equity to Assets		7.91	%		7.88	%		7.98	%		8.06	%		6.61	%

	3 Months Ended															6 Months Ended
Efficiency Ratio	06/30/12			03/31/12			12/31/11			09/30/11			06/30/11			06/30/12			06/30/11

Net interest income (fully taxable equivalent)	$	33,993			33,637			34,220			34,390			34,183			67,630			67,107
Non-interest income		4,026			4,518			3,736			3,803			4,571			8,544			8,842
Less: Net gain on securities		55			677			132			158			851			732			1,138
Recurring revenue		37,964			37,478			37,824			38,035			37,903			75,442			74,811

Total Noninterest expense		20,498			20,644			18,909			18,443			21,552			41,142			42,398
Less: Other real estate expense, net		665			966			1,254			754			2,095			1,631			3,685
Recurring expense		19,833			19,678			17,655			17,689			19,457			39,511			38,713

Efficiency Ratio		52.24	%		52.51	%		46.68	%		46.51	%		51.33	%		52.37	%		51.75	%

Page | 12

TRUSTCO BANK CORP N Y - FORM 8-K - EX-99.A - EXHIBIT 99(A) - July 23, 2012

Attached files

TRUSTCO BANK CORP N Y Reports