Attached files
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| 8-K - TRUSTCO BANK CORP NY 8-K 10-3-2013 - TRUSTCO BANK CORP N Y | form8k.htm |
Exhibit 99(a)
Robert J. McCormick, President and Chief Executive Officer
Robert T. Cushing, Executive Vice President and Chief Financial Officer
Scot R. Salvador, Executive Vice President and Chief Banking Officer
October 3, 2013
Forward Looking Statements
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Note: Data in this presentation was obtained from SNL Financial and from the Company’s SEC filings.
This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”).
Forward-looking statements can be identified by words such as “believes,” “anticipates,” “expects,” “should,” “may,” “plans,” “estimates,” and
similar references; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements
include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii)
statements of plans, objectives, and expectations of TrustCo or its management or Board of Directors; (iii) statements of future economic
performance; and (iv) statements of underlying assumptions. Forward-looking statements are based on TrustCo’s current expectations and
assumptions regarding its business, the economy, and other future conditions. Because forward- looking statements relate to the future, they are
subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. TrustCo’s actual results may differ materially from
those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future
performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
(1) local, regional, national, and international economic conditions and the impact they may have on us and our customers; (2) volatility and
disruption in national and international financial markets; (3) government intervention in the U.S. financial system; (4) changes in the level of non-
performing assets and charge-offs; (5) changes in estimates of future reserve requirements; (6) adverse conditions in the securities markets that lead
to impairment in the value of securities in our investment portfolio; (7) inflation, interest rate, securities market, and monetary fluctuations; (8) the
timely development and acceptance of new products and services; (9) changes in consumer spending, borrowings, and savings habits; (10)
technological changes; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks
and other financial service providers; (13) the effect of changes in laws and regulations with which we and our subsidiaries must comply, including
those under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III update to the Basel Accords that is under
development; (14) the effect of changes in accounting policies and practices, as may be adopted by regulatory agencies, as well as the Public
Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of
legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of
regulatory examinations or reviews; and (16) our success at managing the risks involved in the foregoing items; and (17) the other factors that are
described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading “Risk Factors.” Any forward-looking
statement made by the Company speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual results to
differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly
update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by
law.
Forward-looking statements can be identified by words such as “believes,” “anticipates,” “expects,” “should,” “may,” “plans,” “estimates,” and
similar references; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements
include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii)
statements of plans, objectives, and expectations of TrustCo or its management or Board of Directors; (iii) statements of future economic
performance; and (iv) statements of underlying assumptions. Forward-looking statements are based on TrustCo’s current expectations and
assumptions regarding its business, the economy, and other future conditions. Because forward- looking statements relate to the future, they are
subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. TrustCo’s actual results may differ materially from
those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future
performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
(1) local, regional, national, and international economic conditions and the impact they may have on us and our customers; (2) volatility and
disruption in national and international financial markets; (3) government intervention in the U.S. financial system; (4) changes in the level of non-
performing assets and charge-offs; (5) changes in estimates of future reserve requirements; (6) adverse conditions in the securities markets that lead
to impairment in the value of securities in our investment portfolio; (7) inflation, interest rate, securities market, and monetary fluctuations; (8) the
timely development and acceptance of new products and services; (9) changes in consumer spending, borrowings, and savings habits; (10)
technological changes; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks
and other financial service providers; (13) the effect of changes in laws and regulations with which we and our subsidiaries must comply, including
those under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III update to the Basel Accords that is under
development; (14) the effect of changes in accounting policies and practices, as may be adopted by regulatory agencies, as well as the Public
Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of
legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of
regulatory examinations or reviews; and (16) our success at managing the risks involved in the foregoing items; and (17) the other factors that are
described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading “Risk Factors.” Any forward-looking
statement made by the Company speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual results to
differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly
update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by
law.
3
TrustCo Bank Corp NY
ü New York community-focused financial services company with additional market
presence in Florida, Massachusetts, New Jersey and Vermont
presence in Florida, Massachusetts, New Jersey and Vermont
ü Provides core banking products and services to local businesses and retail
customers
customers
ü Strategy of building solid deposit franchise with low cost, core deposit base has led
to strong, consistent balance sheet and net income growth
to strong, consistent balance sheet and net income growth
(1) As of September 30 2013
Source: SNL Financial
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Year Founded: 1902
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Branches: 139 (86 in NY; 46 in FL; 4 in MA; 2 in NJ; 1 in VT)
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Headquarters: Glenville, NY
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Market Data (as of 9/30/13)
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Financial Data (as of 6/30/13)
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Closing Price
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$5.95
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Assets:
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$4.4 Billion
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Market Capitalization
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$561M
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Net Loans:
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$2.7 Billion
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Shares Outstanding
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94.2M
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Deposits:
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$3.9 Billion
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Dividend Yield:
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4.41%
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Tangible Common Equity:
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$348 Million
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Institutional Ownership:
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56.2%
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Insider Ownership:
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4.3%
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4
Strategy and Philosophy for Continued Growth
ü Deposit and Loan Portfolio Growth
ü Superior Asset Quality
ü Increasing Market Share in New
Markets
Markets
4 Generated through our expanded branch
network
network
4 Intense customer service focus
4 Simple, low cost products
4 Centralized portfolio lending process
4 Conservative lending criteria
4 History of strong portfolio management
4 One of the fastest growing deposit
franchises and branch networks in central
Florida¹
franchises and branch networks in central
Florida¹
ü Improving Efficiency Ratio
4 Effective cost controls producing world
class results
class results
(1) Florida market consists of the counties of Brevard, Charlotte, Hillsborough, Lake, Manatee, Orange, Osceola, Palm Beach, Polk, Sarasota, Seminole and Volusia
Source: FDIC, SNL Financial
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Branch Franchise Overview
New York - 14 Counties, 86 Branches
Massachusetts - 1 County, 4 Branches
New Jersey - 1 County, 2 Branches
Vermont - 1 County, 1 Branch
Florida - 12 Counties, 46 Branches
As of June 30, 2013
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Branch Growth Strategy
4 Since 2000, the Company has increased its network by 85 branches, bringing the total
to 139
to 139
4 All new branches opened on a de novo basis
4 Expansion included growth in five states, with a focus on Florida and Downstate New
York
York
4 We have built a platform for steady and conservative growth
o Rebuilding deposits per branch
4 TrustCo now has a footprint with economic and geographic diversification
Source: SEC Filings; Company Documents
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Number of Branches & Average Size
Detail of Loan Portfolio
1-4 Family Composition
June 30, 2013
ü The portfolio is comprised of loans
that are fully-documented using
comprehensive underwriting criteria
without sole reliance on credit
scores
that are fully-documented using
comprehensive underwriting criteria
without sole reliance on credit
scores
ü All originations are taken at branch
locations by company employees
locations by company employees
ü Residential portfolio increased 9.5%
year over year
year over year
ü Residential delinquency rate
superior to peers
superior to peers
ü Average loan size is approximately
$95,000
$95,000
ü Company chose not to compete
against exotic offerings that were
commonly offered between 2005 to
2007, e.g. no Alt-A or Subprime
products or programs
against exotic offerings that were
commonly offered between 2005 to
2007, e.g. no Alt-A or Subprime
products or programs
Aggregate: $2.5 Billion
Note: Data as of June 30, 2013
Source: Company Documents, Call Report, SEC Filings
9
Investment Portfolio and Interest Rate Risk
4 Strive to achieve a 60/40 split on loans to investments
4 Investment Securities
o High level of liquidity well in excess of $1 billion (including cash)
o Vast majority of securities are available for sale
o High credit quality portfolio
o No derivatives, trust preferred or exotic instruments
4 Interest Rate Risk
o Loans are funded through core deposits
o No borrowings
o Deposit lives exceed asset lives
o Successfully navigated many interest rate environments
Investment Strategy and Composition
ü 2013 plan consistent with prior years
ü Focus on short-term investments (1-5 average life)
ü Primarily investing in government sponsored agency and mortgage
backed securities
backed securities
ü Continue to evaluate investing in other investment classes
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Investment Composition June 30, 2013
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U. S. government sponsored enterprises
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188,133
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States and political subdivisions
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12,159
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Mortgage-backed securities and collateralized
mortgage obligations-residential |
604,672
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Corporate bonds & other securities
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64,890
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SBA guaranteed participation certificates
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108,665
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Total
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978,519
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Capital Ratios as of June 30, 2013
(1) RBC = Risk Based Capital.
Source: SEC Filings; SNL Financial