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 7-22-2013 - 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 Earnings

Glenville, New York –July 22, 2013

TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced that net income rose to $9.8 million in the quarter ended June 30, 2013, up 7.7% from $9.1 million for the quarter ended June 30, 2012. Second quarter net income is up 25.7% over the same period two years ago and 81.5% over the same period four years ago.

TrustCo saw continued strong loan growth in the second quarter of 2013 along with an encouraging shift toward core deposits. Robert J. McCormick, President and Chief Executive Officer noted, “Our results for the first half of 2013 were solid both in terms of bottom line growth and in positioning our business for the balance of the year and beyond. In addition to the gain in net income, we continue to add profitable customer relationships on both the loan and deposit sides of the Bank. As we have noted, our highly liquid balance sheet allows us to fund loan growth without having to overpay for deposits. This enables us to manage our deposit mix during the last year; this should be a benefit going forward. We look forward to the second half of 2013 with optimism, though we note that our industry continues to face challenges as the economy remains fragile and interest rate environment remains mixed. We will continue to take advantage of opportunities as they are presented.”

Mr. McCormick also noted “We continue to see signs of economic improvement in the markets in which we operate, particularly Florida, although unemployment and other persistent issues continue to constrain any significant economic 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 and continued profitability. As a result, we have been able to focus on conducting business, which has significantly enhanced our reputation and put us in a position to take advantage of changes in market and competitive conditions.”

Page | 4

Return on average assets and return on average equity were 0.88% and 10.83%, respectively for the second quarter of 2013, compared to 0.83% and 10.49% for the second quarter of 2012. Earnings per share were $0.104 for the second quarter of 2013, up 7.1% from $0.097 for the second quarter of 2012. For the first half of 2013, TrustCo earned $18.9 million or $0.201 per share, compared to $18.0 million or $0.192 per share in the first half of 2012.

On a year-over-year basis, average loans were up $186.1 million in the second quarter of 2013, over the same period in 2012. Average deposits were actually down a nominal $3.4 million over the same period, but the deposit mix changed in a favorable way. Average core deposits were up $217.9 million, offset by a $221.3 million decline in time deposits. Core deposits typically represent longer term customer relationships and are generally lower cost than time deposits. Mr. McCormick noted that, “The year-over-year growth of our loans and the shift in our deposit base reflects the long term strategic focus of the Company.

While some banks have backed away from branches, a customer friendly branch franchise continues to be the key to our long term plans. We recently celebrated the ten year anniversary of our expansion program, and have made significant progress expanding loans and deposits through our branches. We expect that trend to continue as the new branches continue to grow. We also note we have always designed our branches to be smaller, more cost effective than those built by many of our competitors, we have utilized open floor plans that help maximize the value of our branches. 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.”

Asset quality, reserve coverage of nonperforming loans (NPLs) and reserve coverage of net charge-offs all improved from December 31, 2012 to June 30, 2013. NPLs declined to $43.4 million at June 30, 2013, compared to $52.7 million at December 31, 2012 and nonperforming assets (NPAs) declined to $53.8 million from $61.4 million over the same period. NPLs were equal to 1.57% of total loans at quarter-end, compared to 1.96% at year-end. For the second quarter of 2013 the allowance covered annualized second quarter net charge-offs by 5.8 times, compared to an annualized 3.4 times for the second quarter of 2012. The coverage ratio, or allowance for loan losses to NPLs, was 109.5% at June 30, 2013, compared to 91.0% at December 31, 2012. Overall, every asset quality indicator improved during the second quarter of 2013. Contributing to these improvements was the sale of 17 nonperforming residential loans with total net principal balances of $855 thousand for a gain of $50 thousand.

The net interest margin for the second quarter of 2013 was 3.10%, compared to 3.16% in the second quarter of 2012.

At June 30, 2013 the tangible equity ratio was 7.83% compared to 7.90% at June 30, 2012 and 8.17% at March 31, 2013. Tangible book value per share ended the second quarter at $3.69 compared to $3.73 in the year-ago period.

Page | 5

TrustCo Bank Corp NY is a $4.4 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 138 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 2013.

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 2013 results will be held at 9:00 a.m. Eastern Time on July 23, 2013. Those wishing to participate in the call may dial toll-free 1-888-317-6016. International callers must dial + 1-412-317-6016. A replay of the call will be available until October 23, 2013 by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10031252. The call will also be audio webcast at: http://services.choruscall.com/links/trst130723.html, and will be available until July 23, 2014.

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 TrustCo’s actual results and could cause TrustCo’s 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, 2012, as amended, and in our subsequent securities filings.

Page | 6

TRUSTCO BANK CORP NY

GLENVILLE, NY

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	06/30/13			03/31/13			06/30/12
Summary of operations
Net interest income (TE)	$	33,630			33,707			33,993
Provision for loan losses		2,000			2,000			3,000
Net securities transactions		1,432			2			55
Noninterest income		4,484			4,590			4,522
Noninterest expense		21,869			21,557			21,049
Net income		9,763			9,168			9,066

Per common share
Net income per share:
- Basic	$	0.104			0.097			0.097
- Diluted	$	0.104			0.097			0.097
Cash dividends		0.066			0.066			0.066
Tangible Book value at period end		3.69			3.83			3.73
Market price at period end		5.44			5.58			5.46

At period end
Full time equivalent employees		710			761			742
Full service banking offices		138			138			137

Performance ratios
Return on average assets		0.88	%		0.86			0.83
Return on average equity		10.83			10.35			10.49
Efficiency (1)		53.51			54.33			52.92
Net interest spread (TE)		3.04			3.13			3.09
Net interest margin (TE)		3.10			3.19			3.16
Dividend payout ratio		63.33			67.33			67.80

Capital ratio at period end
Consolidated tangible equity to tangible assets (2)		7.83			8.17			7.90

Asset quality analysis at period end
Nonperforming loans to total loans		1.57			1.84			2.01
Nonperforming assets to total assets		1.21			1.35			1.25
Allowance for loan losses to total loans		1.72			1.76			1.88
Coverage ratio (3)		1.1	x		1.0	x		0.9	X

(1)	Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net 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 | 7

FINANCIAL HIGHLIGHTS, Continued

(dollars in thousands, except per share data)

(Unaudited)

	Six Months Ended
	06/30/13			06/30/12
Summary of operations
Net interest income (TE)	$	67,337			67,630
Provision for loan losses		4,000			6,100
Net securities transactions		1,434			732
Noninterest income		9,074			8,854
Noninterest expense		43,426			42,184
Net income		18,931			17,975

Per common share
Net income per share:
- Basic	$	0.201			0.192
- Diluted		0.201			0.192
Cash dividends		0.131			0.131
Tangible Book value at period end		3.69			3.73
Market price at period end		5.44			5.58

Performance ratios
Return on average assets		0.87	%		0.84
Return on average equity		10.60			10.47
Efficiency (1)		53.92			53.02
Net interest spread (TE)		3.09			3.11
Net interest margin (TE)		3.15			3.19
Dividend payout ratio		65.27			68.35

(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 | 8

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	6/30/2013		3/31/2013		12/31/2012		9/30/2012		6/30/2012
Interest and dividend income:
Interest and fees on loans	$	31,639		31,481		31,776		32,103		32,277
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		627		816		1,191		1,996		2,606
State and political subdivisions		148		191		295		340		368
Mortgage-backed securities and collateralized mortgage obligations-residential		2,701		2,769		2,237		2,003		1,364
Corporate bonds		233		218		232		529		648
Small Business Administration-guaranteed participation securities		564		496		276		43		-
Mortgage-backed securities and collateralized mortgage obligations-commercial		38		29		-		-		-
Other securities		3		5		5		4		5
Total interest and dividends on securities available for sale		4,314		4,524		4,236		4,915		4,991

Interest on held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		716		789		823		976		1,198
Corporate bonds		214		312		385		385		387
Total interest on held to maturity securities		930		1,101		1,208		1,361		1,585

Federal Reserve Bank and Federal Home Loan Bank stock		121		119		127		120		149

Interest on federal funds sold and other short-term investments		327		245		265		258		299
Total interest income		37,331		37,470		37,612		38,757		39,301

Interest expense:
Interest on deposits:
Interest-bearing checking		82		80		80		79		78
Savings		829		916		921		870		979
Money market deposit accounts		630		685		703		673		770
Time deposits		1,883		1,820		1,967		2,629		3,230
Interest on short-term borrowings		367		364		361		348		378
Total interest expense		3,791		3,865		4,032		4,599		5,435

Net interest income		33,540		33,605		33,580		34,158		33,866

Provision for loan losses		2,000		2,000		3,000		2,900		3,000
Net interest income after provision for loan losses		31,540		31,605		30,580		31,258		30,866

Noninterest income:
Trustco Financial Services income		1,287		1,421		1,815		1,145		1,407
Fees for services to customers		2,968		2,887		3,386		3,234		2,939
Net gain on securities transactions		1,432		2		763		666		55
Other		229		282		197		172		176
Total noninterest income		5,916		4,592		6,161		5,217		4,577

Noninterest expenses:
Salaries and employee benefits		7,647		8,178		8,427		7,587		7,519
Net occupancy expense		3,910		4,053		3,889		3,756		3,817
Equipment expense		1,582		1,718		1,637		1,316		1,600
Professional services		1,565		1,420		1,458		1,657		1,489
Outsourced services		1,350		1,350		1,175		1,350		1,347
Advertising expense		714		730		1,037		935		1,060
FDIC and other insurance		1,004		1,010		1,007		983		953
Other real estate expense, net		1,473		749		375		1,210		665
Other		2,624		2,349		2,145		1,849		2,599
Total noninterest expenses		21,869		21,557		21,150		20,643		21,049

Income before taxes		15,587		14,640		15,591		15,832		14,394
Income taxes		5,824		5,472		5,785		6,079		5,328

Net income	$	9,763		9,168		9,806		9,753		9,066
Net income per Common Share:
- Basic	$	0.104		0.097		0.104		0.104		0.097

- Diluted		0.104		0.097		0.104		0.104		0.097

Average basic shares (thousands)		94,204		94,068		93,824		93,692		93,561
Average diluted shares (thousands)		94,211		94,073		93,828		93,700		93,562

Note: Taxable equivalent net interest income	$	33,630		33,707		33,718		34,321		33,993

Page | 9

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Six Months Ended
	6/30/2013		6/30/2012

Interest and dividend income:
Interest and fees on loans	$	63,120		64,702
Interest and dividends on securities available for sale:
U. S. government sponsored enterprises		1,443		4,910
State and political subdivisions		339		778
Mortgage-backed securities and collateralized mortgage obligations-residential		5,470		2,457
Corporate bonds		451		1,470
Small Business Administration-guaranteed participation securities		1,060		-
Mortgage-backed securities and collateralized mortgage obligations-commercial		67		-
Other securities		8		10
Total interest and dividends on securities available for sale		8,838		9,625

Interest on held to maturity securities:
U. S. government sponsored enterprises		-		25
Mortgage-backed securities-residential		1,505		2,488
Corporate bonds		526		896
Total interest on held to maturity securities		2,031		3,409

Federal Reserve Bank and Federal Home Loan Bank stock		240		239

Interest on federal funds sold and other short-term investments		572		619
Total interest income		74,801		78,594

Interest expense:
Interest on deposits:
Interest-bearing checking		162		156
Savings		1,745		2,081
Money market deposit accounts		1,315		1,693
Time deposits		3,703		6,648
Interest on short-term borrowings		731		766
Total interest expense		7,656		11,344

Net interest income		67,145		67,250

Provision for loan losses		4,000		6,100
Net interest income after provision for loan losses		63,145		61,150

Noninterest income:
Trust department income		2,708		2,801
Fees for services to customers		5,855		5,670
Net gain on securities transactions		1,434		732
Other		511		383
Total noninterest income		10,508		9,586

Noninterest expenses:
Salaries and employee benefits		15,825		15,262
Net occupancy expense		7,963		7,612
Equipment expense		3,300		3,120
Professional services		2,985		2,925
Outsourced services		2,700		2,597
Advertising expense		1,444		1,869
FDIC and other insurance		2,014		1,833
Other real estate expense, net		2,222		1,631
Other		4,973		5,335
Total noninterest expenses		43,426		42,184

Income before taxes		30,227		28,552
Income taxes		11,296		10,577

Net income	$	18,931		17,975

Net income per Common Share:
- Basic	$	0.201		0.192

- Diluted		0.201		0.192

Average basic shares (thousands)		94,134		93,503
Average diluted shares (thousands)		94,141		93,504

Note: Taxable equivalent net interest income	$	67,337		67,630

Page | 10

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

(Unaudited)

	6/30/2013			3/31/2013			12/31/2012			9/30/2012			6/30/2012
ASSETS:

Cash and due from banks	$	40,580			39,512			55,789			40,354			36,589
Federal funds sold and other short term investments		588,252			405,262			488,227			402,290			486,049
Total cash and cash equivalents		628,832			444,774			544,016			442,644			522,638

Securities available for sale:
U. S. government sponsored enterprises		188,133			263,165			263,108			427,798			643,189
States and political subdivisions		12,159			15,265			26,457			33,857			36,978
Mortgage-backed securities and collateralized mortgage obligations-residential		504,793			612,555			518,776			515,879			354,285
Corporate bonds		53,053			59,239			26,529			49,296			73,311
Small Business Administration-guaranteed participation securities		108,665			115,464			76,562			25,338			-
Mortgage-backed securities and collateralized mortgage obligations-commercial		10,725			11,136			-			-			-
Other securities		660			660			660			660			660
Total securities available for sale		878,188			1,077,484			912,092			1,052,828			1,108,423

Held to maturity securities:
Mortgage-backed securities and collateralized mortgage obligations-residential		88,852			98,038			108,471			120,877			133,562
Corporate bonds		9,937			19,935			34,955			35,074			35,193
Total held to maturity securities		98,789			117,973			143,426			155,951			168,755

Federal Reserve Bank and Federal Home Loan Bank stock		10,500			9,632			9,632			9,632			9,632

Loans:
Commercial		216,977			212,637			219,577			217,431			235,347
Residential mortgage loans		2,205,334			2,154,188			2,126,668			2,056,972			2,003,046
Home equity line of credit		334,571			332,111			333,909			327,083			317,157
Installment loans		5,544			4,831			4,579			4,455			4,071
Loans, net of deferred fees and costs		2,762,426			2,703,767			2,684,733			2,605,941			2,559,621
Less:
Allowance for loan losses		47,589			47,658			47,927			47,364			48,018
Net loans		2,714,837			2,656,109			2,636,806			2,558,577			2,511,603

Bank premises and equipment, net		38,301			35,787			36,239			37,251			37,868
Other assets		73,757			69,998			64,402			61,290			62,480

Total assets	$	4,443,204			4,411,757			4,346,613			4,318,173			4,421,399

LIABILITIES:
Deposits:
Demand	$	314,985			298,243			300,544			292,350			283,873
Interest-bearing checking		591,844			579,077			560,064			536,892			528,101
Savings accounts		1,228,281			1,213,226			1,198,517			1,167,927			1,122,208
Money market deposit accounts		634,804			656,577			667,589			668,064			644,627
Certificates of deposit (in denominations of $100,000 or more)		397,707			384,559			352,734			359,246			452,043
Other time accounts		725,255			725,998			724,745			751,974			867,798
Total deposits		3,892,876			3,857,680			3,804,193			3,776,453			3,898,650

Short-term borrowings		176,325			171,019			159,846			161,751			150,718
Accrued expenses and other liabilities		25,380			22,169			23,776			22,352			22,124

Total liabilities		4,094,581			4,050,868			3,987,815			3,960,556			4,071,492

SHAREHOLDERS' EQUITY:
Capital stock		98,912			98,912			98,912			98,912			98,912
Surplus		173,897			174,386			174,899			175,284			175,773
Undivided profits		138,953			135,373			132,378			128,750			125,153
Accumulated other comprehensive income (loss), net of tax		(16,831	)		(169	)		1,558			4,879			1,585
Treasury stock at cost		(46,308	)		(47,613	)		(48,949	)		(50,208	)		(51,516	)

Total shareholders' equity		348,623			360,889			358,798			357,617			349,907

Total liabilities and shareholders' equity	$	4,443,204			4,411,757			4,346,613			4,318,173			4,421,399

Outstanding shares (thousands)		94,204			94,071			93,935			93,807			93,674

Page | 11

NONPERFORMING ASSETS

(dollars in thousands)

(Unaudited)

Nonperforming Assets
	06/30/13			03/31/13			12/31/12			09/30/12			06/30/12
New York and other states*
Loans in nonaccrual status:
Commercial	$	5,891			5,978			6,635			5,880			5,656
Real estate mortgage - 1 to 4 family		30,736			34,027			35,286			32,593			29,167
Installment		36			35			6			71			1
Total non-accrual loans		36,663			40,040			41,927			38,544			34,824
Other nonperforming real estate mortgages - 1 to 4 family		174			225			231			238			243
Total nonperforming loans		36,837			40,265			42,158			38,782			35,067
Other real estate owned		3,918			4,461			2,979			2,716			2,787
Total nonperforming assets	$	40,755			44,726			45,137			41,498			37,854

Florida
Loans in nonaccrual status:
Commercial	$	583			2,595			2,698			2,698			8,435
Real estate mortgage - 1 to 4 family		6,022			7,013			7,820			8,438			7,954
Installment		-			1			1			7			1
Total non-accrual loans		6,605			9,609			10,519			11,143			16,390
Other nonperforming real estate mortgages - 1 to 4 family		-			-			-			-			-
Total nonperforming loans		6,605			9,609			10,519			11,143			16,390
Other real estate owned		6,427			5,406			5,726			5,975			1,083
Total nonperforming assets	$	13,032			15,015			16,245			17,118			17,473

Total
Loans in nonaccrual status:
Commercial	$	6,474			8,573			9,333			8,578			14,091
Real estate mortgage - 1 to 4 family		36,758			41,040			43,106			41,031			37,121
Installment		36			36			7			78			2
Total non-accrual loans		43,268			49,649			52,446			49,687			51,214
Other nonperforming real estate mortgages - 1 to 4 family		174			225			231			238			243
Total nonperforming loans		43,442			49,874			52,677			49,925			51,457
Other real estate owned		10,345			9,867			8,705			8,691			3,870
Total nonperforming assets	$	53,787			59,741			61,382			58,616			55,327

Quarterly Net Chargeoffs
	06/30/13			03/31/13			12/31/12			09/30/12			06/30/12
New York and other states*
Commercial	$	49			248			152			9			713
Real estate mortgage - 1 to 4 family		1,885			1,563			1,410			2,157			1,844
Installment		13			15			72			7			7
Total net chargeoffs	$	1,947			1,826			1,634			2,173			2,564

Florida
Commercial	$	(1	)		99			(18	)		736			288
Real estate mortgage - 1 to 4 family		123			344			810			644			665
Installment		-			-			12			1			-
Total net chargeoffs	$	122			443			804			1,381			953

Total
Commercial	$	48			347			134			745			1,001
Real estate mortgage - 1 to 4 family		2,008			1,907			2,220			2,801			2,509
Installment		13			15			84			8			7
Total net chargeoffs	$	2,069			2,269			2,438			3,554			3,517

Asset Quality Ratios
	06/30/13			03/31/13			12/31/12			09/30/12			06/30/12

Total nonperforming loans(1)	$	43,442			49,874			52,677			49,925			51,457
Total nonperforming assets(1)		53,787			59,741			61,382			58,616			55,327
Total net chargeoffs(2)		2,069			2,269			2,438			3,554			3,517

Allowance for loan losses(1)		47,589			47,658			47,927			47,364			48,018

Nonperforming loans to total loans(1)		1.57	%		1.84	%		1.96	%		1.92	%		2.01	%
Nonperforming assets to total assets(1)		1.21	%		1.35	%		1.41	%		1.36	%		1.25	%
Allowance for loan losses to total loans(1)		1.72	%		1.76	%		1.79	%		1.82	%		1.88	%
Coverage ratio(1)		109.5	%		95.6	%		91.0	%		94.9	%		93.3	%
Annualized net chargeoffs to average loans(2)		0.30	%		0.34	%		0.37	%		0.55	%		0.55	%
Allowance for loan losses to annualized net chargeoffs(2)		5.8	x		5.3	x		4.9	x		3.3	x		3.4	x

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

(1)	At period-end

(2)	For the period ended

Page | 12

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-

INTEREST RATES AND INTEREST DIFFERENTIAL

(dollars in thousands)	Three months ended									Three months ended
(Unaudited)	June 30, 2013									June 30, 2012
	Average			Interest			Average			Average			Interest			Average
	Balance						Rate			Balance						Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	218,199			627			1.15	%	$	719,590			2,606			1.45	%
Mortgage backed securities and collateralized mortgage obligations-residential		545,989			2,701			1.98			255,039			1,364			2.14
State and political subdivisions		13,098			231			7.05			36,730			489			5.33
Corporate bonds		54,724			233			1.70			77,020			648			3.37
Small Business Administration-guaranteed participation securities		114,760			564			1.97			-			-			0.00
Mortgage backed securities and collateralized mortgage obligations-commercial		11,136			38			1.36			-			-			0.00
Other		660			3			1.82			660			5			3.03

Total securities available for sale		958,566			4,397			1.83			1,089,039			5,112			1.88

Federal funds sold and other short-term Investments		529,672			327			0.25			489,228			299			0.25

Held to maturity securities:
Corporate bonds		13,947			214			6.14			35,251			387			4.39
Mortgage backed securities and collateralized mortgage obligations-residential		93,644			716			3.06			138,419			1,198			3.46

Total held to maturity securities		107,591			930			3.46			173,670			1,585			3.65

Federal Reserve Bank and Federal Home Loan Bank stock		10,434			121			4.64			9,432			149			6.32

Commercial loans		214,158			2,812			5.25			235,651			3,138			5.33
Residential mortgage loans		2,177,171			25,866			4.75			1,988,017			26,124			5.26
Home equity lines of credit		333,510			2,806			3.37			316,289			2,875			3.66
Installment loans		4,930			162			13.16			3,762			146			15.60

Loans, net of unearned income		2,729,769			31,646			4.64			2,543,719			32,283			5.08

Total interest earning assets		4,336,032			37,421			3.45			4,305,088			39,428			3.67

Allowance for loan losses		(48,298	)								(49,386	)
Cash & non-interest earning assets		146,387									138,964

Total assets	$	4,434,121								$	4,394,666

Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	581,785			82			0.06	%	$	514,219			78			0.06	%
Money market accounts		650,927			630			0.39			636,171			770			0.49
Savings		1,218,683			829			0.27			1,104,422			979			0.36
Time deposits		1,119,710			1,883			0.67			1,341,038			3,230			0.97

Total interest bearing deposits		3,571,105			3,424			0.38			3,595,850			5,057			0.57
Short-term borrowings		179,878			367			0.82			153,082			378			0.99

Total interest bearing liabilities		3,750,983			3,791			0.41			3,748,932			5,435			0.58

Demand deposits		301,123									279,761
Other liabilities		20,590									18,435
Shareholders' equity		361,425									347,538

Total liabilities and shareholders' equity	$	4,434,121								$	4,394,666

Net interest income , tax equivalent					33,630									33,993

Net interest spread								3.04	%								3.09	%

Net interest margin (net interest income to total interest earning assets)								3.10	%								3.16	%

Tax equivalent adjustment					(90	)								(127	)

Net interest income					33,540									33,866

Page | 13

(dollars in thousands)	Six months ended									Six months ended
(Unaudited)	June 30, 2013									June 30, 2012
	Average			Interest			Average			Average			Interest			Average
	Balance						Rate			Balance						Rate

Assets

Securities available for sale:
U. S. government sponsored enterprises	$	244,430			1,443			1.18	%	$	655,168			4,910			1.50	%
Mortgage backed securities and collateralized mortgage obligations-residential		551,667			5,470			1.98			229,849			2,457			2.14
State and political subdivisions		15,812			516			6.53			38,371			1,092			5.69
Corporate bonds		51,061			451			1.76			85,094			1,470			3.46
Small Business Administration-guaranteed participation securities		107,263			1,060			1.98			-			-			0.00
Mortgage backed securities and collateralized mortgage obligations-commercial		9,764			67			1.37			-			-			0.00
Other		660			8			2.42			660			10			3.03

Total securities available for sale		980,657			9,015			1.84			1,009,142			9,939			1.97

Federal funds sold and other
short-term Investments		468,154			572			0.25			501,617			619			0.25

Held to maturity securities:
U. S. government sponsored enterprises		-			-			0.00			2,143			25			2.38
Corporate bonds		18,086			526			5.81			44,074			896			4.06
Mortgage backed securities and collateralized mortgage obligations-residential		98,598			1,505			3.05			140,783			2,488			3.53

Total held to maturity securities		116,684			2,031			3.48			187,000			3,409			3.65

Federal Reserve Bank and Federal Home Loan Bank stock		10,035			240			4.78			9,218			239			5.19

Commercial loans		215,178			5,659			5.26			238,460			6,501			5.45
Residential mortgage loans		2,156,733			51,550			4.79			1,975,333			52,236			5.30
Home equity lines of credit		333,472			5,606			3.39			315,644			5,740			3.66
Installment loans		4,730			320			13.65			3,688			291			15.87

Loans, net of unearned income		2,710,113			63,135			4.67			2,533,125			64,768			5.12

Total interest earning assets		4,285,643			74,993			3.51			4,240,102			78,974			3.73

Allowance for loan losses		(48,377	)								(49,613	)
Cash & non-interest earning assets		149,670									140,522

Total assets	$	4,386,936								$	4,331,011

Liabilities and shareholders' equity

Deposits:
Interest bearing checking accounts	$	567,261			162			0.06	%	$	498,290			156			0.06	%
Money market accounts		655,027			1,315			0.40			634,032			1,693			0.54
Savings		1,211,173			1,745			0.29			1,062,010			2,081			0.39
Time deposits		1,104,379			3,703			0.68			1,353,072			6,648			0.99

Total interest bearing deposits		3,537,840			6,925			0.39			3,547,404			10,578			0.60
Short-term borrowings		174,001			731			0.85			149,283			766			1.03

Total interest bearing liabilities		3,711,841			7,656			0.42			3,696,687			11,344			0.62

Demand deposits		294,449									270,706
Other liabilities		20,339									18,333
Shareholders' equity		360,307									345,285

Total liabilities and shareholders' equity	$	4,386,936								$	4,331,011

Net interest income , tax equivalent					67,337									67,630

Net interest spread								3.09	%								3.11	%

Net interest margin (net interest income to total interest earning assets)								3.15	%								3.19	%

Tax equivalent adjustment					(192	)								(380	)


Net interest income					67,145									67,250

Page | 14

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. Our management internally assesses our performance based, in part, on these measures. 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)

	06/30/13			03/31/13			12/31/12			09/30/12			06/30/12
Tangible Book Value Per Share

Equity	$	348,623			360,889			358,798			357,617			349,907
Less: Intangible assets		553			553			553			553			553
Tangible equity		348,070			360,336			358,245			357,064			349,354

Shares outstanding		94,204			94,071			93,935			93,807			93,674
Tangible book value per share		3.69			3.83			3.81			3.81			3.73
Book value per share		3.70			3.84			3.82			3.81			3.74

Tangible Equity to Tangible Assets
Total Assets		4,443,204			4,411,757			4,346,613			4,318,173			4,421,399
Less: Intangible assets		553			553			553			553			553
Tangible assets		4,442,651			4,411,204			4,346,060			4,317,620			4,420,846

Tangible Equity to Tangible Assets		7.83	%		8.17	%		8.24	%		8.27	%		7.90	%
Equity to Assets		7.85	%		8.18	%		8.25	%		8.28	%		7.91	%

	3 Months Ended															6 Months Ended
Efficiency Ratio	06/30/13			03/31/13			12/31/12			09/30/12			06/30/12			06/30/13			06/30/12

Net interest income (fully taxable equivalent)	$	33,630			33,707			33,718			34,321			33,993			67,337			67,630
Non-interest income		5,916			4,592			6,161			5,217			4,577			10,508			9,586
Less: Net gain on securities		1,432			2			763			666			55			1,434			732
Recurring revenue		38,114			38,297			39,116			38,872			38,515			76,411			76,484

Total Noninterest expense		21,869			21,557			21,150			20,643			21,049			43,426			42,184
Less: Other real estate expense, net		1,473			749			375			1,210			665			2,222			1,631
Recurring expense		20,396			20,808			20,775			19,433			20,384			41,204			40,553

Efficiency Ratio		53.51	%		54.33	%		53.11	%		49.99	%		52.92	%		53.92	%		53.02	%

Page | 15

TRUSTCO BANK CORP N Y - FORM 8-K - EX-99.(A) - EXHIBIT 99(A) - July 22, 2013

Attached files

TRUSTCO BANK CORP N Y Reports