UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Fee Required) For the Fiscal Year Ended December 31, 2002 Or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the transition period from ____________________ to ____________________ Commission file number 0-10592 TRUSTCO BANK CORP NY (Exact name of registrant as specified in its charter) NEW YORK 14-1630287 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 5 SARNOWSKI DRIVE, GLENVILLE, NEW YORK 12302 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (518) 377-3311 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of exchange on which registered ------------------- ------------------------------------ None None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $1.00 Par Value (Title of class) -------------- 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 registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K.[ X ] Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).Yes(x) No.( ) Indicate the number of shares outstanding of each of the registrant's classes of common stock: Number of Shares Outstanding Class of Common Stock as of March 17, 2003 $1 Par Value 74,267,205 The aggregate market value of registrant's common stock (based upon the closing price on March 17, 2003) held by non-affiliates was approximately $761,238,851. Documents Incorporated by Reference:(1) Portions of registrant's Annual Report to Shareholders for the fiscal year ended December 31, 2002(Part I and Part II). (2) Portions of registrant's Proxy Statement filed for its Annual Meeting of Shareholders to be held May 19, 2003 (Part III). 1
INDEX Description Page PART I Item 1 Business 1 Item 2 Properties 8 Item 3 Legal Proceedings 8 Item 4 Submission of Matters to a Vote of Security 8 Holders PART II Item 5 Market for the Registrant's Common Equity and 10 Related Stockholder Matters Item 6 Selected Financial Data 10 Item 7 Management's Discussion and Analysis of 10 Financial Condition and Results of Operations Item 7A Quantitative and Qualitative Disclosures about 11 Market Risk Item 8 Financial Statements and Supplementary Data 11 Item 9 Changes in and Disagreements with Accountants 11 On Accounting and Financial Disclosure PART III Item 10 Directors and Executive Officers of Registrant 11 Item 11 Executive Compensation 11 Item 12 Security Ownership of Certain Beneficial Owners 11 and Management Item 13 Certain Relationships and Related Transactions 11 Item 14 Controls and Procedures 12 PART IV Item 15 Exhibits, Financial Statement Schedules, and 12 Reports on Form 8-K Signatures 17 EXHIBITS INDEX 21 2
PART I Item 1. Business General TrustCo Bank Corp NY ("TrustCo" or the "Company") is a savings and loan holding company having its principal place of business at 5 Sarnowski Drive, Glenville, New York 12302. TrustCo was incorporated under the laws of New York in 1981 to acquire all of the outstanding stock of Trustco Bank, National Association, formerly known as Trustco Bank New York, and prior to that The Schenectady Trust Company. On July 28, 2000 TrustCo acquired Landmark Financial Corp. (now known as Trustco Financial Corp.) and its subsidiary Landmark Community Bank, Canajoharie, New York, a federal savings bank with assets of approximately $26 million. Landmark Community Bank was subsequently renamed Trustco Savings Bank, and, on November 15, 2002, Trustco Savings Bank and Trustco Bank, National Association merged under the charter of Trustco Savings Bank. In that merger, the resulting bank changed its name to Trustco Bank (sometimes referred to in this report as the "Bank"). Through policy and practice, TrustCo continues to emphasize that it is an equal opportunity employer. There were 488 full-time equivalent employees of TrustCo at year-end 2002. TrustCo had 13,621 shareholders of record as of December 31, 2002 and the closing price of the TrustCo common stock at that date was $10.78. Subsidiaries Trustco Bank Trustco Bank is a federal savings bank engaged in providing general banking services to individuals, partnerships, and corporations. The Bank operates 56 automatic teller machines and 62 banking offices in Albany, Columbia, Dutchess, Greene, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Warren, Washington and Westchester counties of New York State and Bennington County in Vermont. The largest part of such business consists of accepting deposits and making loans and investments. The Bank provides a wide range of both personal and business banking services. The Bank is supervised and regulated by the federal Office of Thrift Supervision ("OTS") and is a member of the Federal Reserve System. Its deposits are insured by the Federal Deposit Insurance Corporation ("FDIC") to the extent permitted by law. An operating subsidiary of the Bank, Trustco Realty Corp., holds certain mortgage assets which are serviced by the Bank. The Bank accounted for substantially all of TrustCo's 2002 consolidated net income and average assets. The trust department of the Bank serves as executor of estates and trustee of personal trusts, provides estate planning and related advice, provides custodial services, and acts as trustee for various types of employee benefit plans and corporate pension and profit sharing trusts. The aggregate market value of the assets under trust, custody, or management of the trust department of the Bank was approximately $897 million as of December 31, 2002. 3
The daily operations of the Bank remain the responsibility of its Board of Directors and officers, subject to the overall supervision by TrustCo. TrustCo derives most of its income from dividends paid to it by the Bank. The accounts of the Bank are included in TrustCo's consolidated financial statements. Trustco Financial Corp. Trustco Financial Corp. is a wholly owned subsidiary of the Company and is the immediate parent company of Trustco Bank. The accounts of Trustco Financial Corp. are included in TrustCo's consolidated financial statements. ORE Subsidiary During 1993, TrustCo created ORE Subsidiary Corp., a New York corporation, to hold and manage certain foreclosed properties acquired by the Bank. The accounts of this subsidiary are included in TrustCo's consolidated financial statements. Competition TrustCo faces strong competition in its market areas, both in attracting deposits and making loans. The Company's most direct competition for deposits, historically, has come from commercial banks, savings associations, and credit unions that are located or have branches in those areas. The Company also faces competition for deposits from national brokerage houses, short-term money market funds, and other corporate and government securities funds. Factors affecting the acquisition of deposits include pricing, office locations and hours of operation, the variety of deposit accounts offered, and the quality of customer service provided. Competition for loans has been especially keen during the last five years. Commercial banks, local thrift institutions, traditional mortgage brokers affiliated with local offices, and nationally franchised real estate brokers are all active and aggressive competitors. The Company competes in this environment by providing a full range of financial services based on a tradition of financial strength and integrity dating from its inception. The Company competes for loans, principally through the interest rates and loan fees it charges, and the efficiency and quality of services it provides to borrowers. TrustCo operates in a number of communities where the competition ranges from other locally based commercial and savings banks to branches of the largest financial institutions in the United States. In the Capital District area of New York State, TrustCo's principal competitors are local operations of super regional banks, branch offices of money center banks, and locally based commercial and savings banks. The Bank is the largest depository institution headquartered in the Capital District area. Supervision and Regulation Banking is a highly regulated industry, with numerous federal and state laws and regulations governing the organization and operation of banks and their affiliates. As a registered savings and loan holding company under the Home Owners' Loan Act (the "Act"), TrustCo is regulated and examined by the OTS. The Act requires TrustCo to obtain prior OTS approval for acquisitions and restricts the business operations permitted to TrustCo. Because the FDIC provides deposit insurance to the Bank, the Bank is also subject to its supervision and regulation even though the FDIC is not its primary federal regulator. Most of TrustCo's revenues consist of cash dividends paid to TrustCo by the Bank, payment of which is subject to various regulatory limitations. (Note 1 to the consolidated financial statements contained in TrustCo's Annual Report to Shareholders for the year ended December 31, 2002, which appears on pages 32 and 33 thereof and contains information concerning restrictions on TrustCo's ability to pay dividends, is hereby incorporated by reference.) Compliance with the standards set forth in the OTS rules regarding capital distribution by savings associations and savings banks could also limit the amount of dividends that TrustCo may pay to its shareholders. The banking industry is also affected by the monetary and fiscal policies of the federal government, including the Reserve Board, which exerts considerable influence over the cost and availability of funds obtained for lending and investing. 4
See Note 15 to the consolidated financial statements contained in TrustCo's Annual Report to Shareholders for the year ended December 31, 2002, which appears on page 42 thereof and contains information concerning regulatory capital requirements. The following summary of laws and regulations applicable to the Company and the Bank is not intended to be a complete description of those laws and regulations or their effects on the Company and the Bank, and it is qualified in its entirety by reference to the particular statutory and regulatory provisions described. Holding Company Activities The activities of savings and loan holding companies are governed by the Act. Since TrustCo became a savings and loan holding company in 2002, its activities are limited to those permissible for "multiple" savings and loan holding companies (that is, savings and loan holding companies owning more than one savings association subsidiary) as of March 5, 1987, activities permitted for bank holding companies as of November 12, 1999 and activities permissible for "financial holding companies" (which are described below). "Savings associations" include federal savings banks such as the Bank. TrustCo must obtain approval from the appropriate bank regulatory agencies before acquiring control of any insured depository institution. Regulatory Capital Requirements OTS capital regulations require thrifts to satisfy three capital ratio requirements: tangible capital, Tier 1 core (leverage) capital, and risk-based capital. In general, an association's tangible capital, which must be at least 1.5% of adjusted total assets, is the sum of common shareholders' equity adjusted for the effects of other comprehensive income ("OCI"), less goodwill and other disallowed assets. An association's ratio of Tier 1 core capital to adjusted total assets (the "core capital" or "leverage" ratio) must be at least 3% for the most highly rated associations and 4% for others. Higher capital ratios may be required if warranted by the particular circumstances or risk profile of a given association. Under the risk-based capital requirement, a savings association must have total capital (core capital plus supplementary capital) equal to at least 8% of risk-weighted assets. Tier 1 capital must represent at least 50% of total capital and consists of core capital elements, which include common shareholders' equity, qualifying noncumulative nonredeemable perpetual preferred stock, and minority interests in the equity accounts of consolidated subsidiaries, but exclude goodwill and certain other intangible assets. Supplementary capital mainly consists of qualifying subordinated debt and portions of allowance for loan losses. 5
The above capital requirements are viewed as minimum standards by the OTS. The OTS regulations also specify minimum requirements for a savings association to be considered a "well-capitalized institution" as defined in the "prompt corrective action" regulation described below. A "well-capitalized" savings association must have a total risk-based capital ratio of 10% or greater, and a leverage ratio of 5% or greater. Additionally, to qualify as a "well-capitalized institution," a savings association's Tier 1 risk-based capital, defined as core capital plus supplementary capital less portions of the association's allowance for loan losses, must be equal to at least 6% of risk-weighted assets. Trustco Bank currently meets all of the requirements of a "well-capitalized institution." The OTS regulations contain prompt corrective action provisions that require certain mandatory remedial actions and authorize certain other discretionary actions to be taken by the OTS against a savings association that falls within specified categories of capital deficiency. The relevant regulations establish five categories of capital classification for this purpose, ranging from "well-capitalized" or "adequately capitalized" through "undercapitalized," "significantly undercapitalized" and "critically undercapitalized." In general, the prompt corrective action regulations prohibit an OTS-regulated institution from declaring any dividends, making any other capital distributions, or paying a management fee to a controlling person, such as its parent holding company, if, following the distribution or payment, the institution would be within any of the three undercapitalized categories. Community Reinvestment Act The Community Reinvestment Act ("CRA") requires each savings institution, as well as commercial banks and certain other lenders, to identify the communities served by the institution's offices and to identify the types of credit the institution is prepared to extend within those communities. The CRA also requires the OTS to assess an institution's performance in meeting the credit needs of its identified communities as part of its examination of the institution, and to take such assessments into consideration in reviewing applications with respect to branches, mergers and other business combinations, including acquisitions by savings and loan holding companies. An unsatisfactory CRA rating may be the basis for denying such an application and community groups have successfully protested applications on CRA grounds. In connection with its assessment of CRA performance, the OTS assigns CRA ratings of "outstanding," "satisfactory," "needs to improve" or "substantial noncompliance." The Bank was rated "satisfactory" in its last CRA examination. Institutions are evaluated based on: (i) performance in lending in their assessment areas; (ii) the provision of deposit and other community services in their assessment areas; and (iii) the investment in housing-related and other qualified community investments. An institution that is found to be deficient in its performance in meeting its community's credit needs may be subject to enforcement actions, including cease and desist orders and civil money penalties. 6
Qualified Thrift Lender Test Like all OTS-regulated institutions, the Bank is required to meet a qualified thrift lender ("QTL") test to avoid certain restrictions on its operations, including restrictions on its ability to branch interstate and the Company's mandatory registration as a bank holding company under the Bank Holding Company Act of 1956. A savings association satisfies the QTL test if: (i) on a monthly average basis in at least nine months out of each twelve month period, at least 65% of a specified asset base of the savings association consists of loans to small businesses, credit card loans, educational loans, or certain assets related to domestic residential real estate, including residential mortgage loans and mortgage securities; or (ii) at least 60% of the savings association's total assets consist of cash, U.S. government or government agency debt or equity securities, fixed assets, or loans secured by deposits, real property used for residential, educational, church, welfare, or health purposes, or real property in certain urban renewal areas. The Bank is currently and expects to remain in compliance with QTL standards. Federal Reserve System Federal Reserve Board regulations require savings institutions to maintain non-interest bearing reserves against their transaction accounts. The reserve for transaction accounts as of December 31, 2002 was 0% of the first $5.5 million of such accounts, 3% of the next $35.6 million of such accounts and 10% (subject to adjustment by the Federal Reserve Board between 8% and 14%) of the balance of such accounts. The Bank is in compliance with these requirements as of December 31, 2002. Recent Legislation On November 12, 1999, the Gramm-Leach-Bliley Act of 1999 (the"GLB Act") was signed into law. The GLB Act made significant changes to the operations of financial services companies. It repealed key provisions of the "Glass-Steagall Act" by repealing prohibitions on affiliations among banks, securities firms and insurance companies. It authorizes a broad range of financial services to be conducted by these types of companies within a new structure known as a "financial holding company." A financial holding company may engage in a number of activities deemed to be new activities, such as securities underwriting and dealing activities, insurance underwriting and sales activities, merchant banking and equity investment activities, and "incidental" and "complementary" non-financial activities. While the GLB Act specifies so-called "functional regulation," various federal and state regulators have continued authority over certain activities of financial holding companies and other regulated financial institutions. The GLB Act establishes a federal right to the confidential treatment of nonpublic personal information about consumers. These provisions of the GLB Act require disclosure of privacy policies to consumers and, in some circumstances, will allow consumers to prevent disclosure of certain personal information to a nonaffiliated third party. Compliance with the rules was mandatory starting on July 1, 2001. These rules affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors. Because the Company does not sell customer information or give customer information to outside third parties or its affiliates except under very limited circumstances (e.g., providing customer information to the Company's data processing provider or to third party providers of financial services under narrow joint marketing arrangements), the rules have not had a significant impact on the Company's results of operations or financial condition. 7
On October 26, 2001, President Bush signed into law the USA PATRIOT Act ("Patriot Act"). The Patriot Act includes numerous provisions designed to fight international money laundering and to block terrorist access to the U.S. financial system. Implementation of regulations to implement the Act have been postponed by the Department of the Treasury, which has required additional time to study certain industries for implementation of anti-money laundering regulations. However, it is not anticipated that adoption of the regulations as presently proposed will have a significant adverse impact on the Bank's operations. On July 30, 2002, the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") was signed into law. Sarbanes-Oxley implemented legislative reforms intended to address corporate and accounting fraud and contains reforms of various business practices and numerous aspects of corporate governance. For example, this new legislation addresses accounting oversight and corporate governance matters, including: the creation of a five-member oversight board appointed by the Securities and Exchange Commission that will set and enforce auditing, quality control and independence standards for accountants and have investigative and disciplinary powers; increased responsibilities and codified requirements relating to audit committees of public companies and how they interact with a company's public accounting firm; the prohibition of accounting firms from providing various types of consulting services to public clients and requiring accounting firms to rotate partners among public client assignments every five years; expanded disclosure of corporate operations and internal controls and certification by chief executive officers and chief financial officers to the accuracy of periodic reports filed with the SEC; and prohibitions on public company insiders from trading during retirement plan "blackout" periods, restrictions on loans to company executives and enhanced controls on and reporting of insider trading. Although the Company anticipates that it will incur additional expense in complying with the provisions of Sarbanes-Oxley and the resulting regulations, management does not expect that such compliance will have a material impact on the Company's financial condition or results of operations. Foreign Operations Neither TrustCo nor the Bank engage in any material operations in foreign countries or have any outstanding loans to foreign debtors. Statistical Information Analysis The "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 6 through 25 of TrustCo's Annual Report to Shareholders for the year ended December 31, 2002, which contains a presentation and discussion of statistical data relating to TrustCo, is hereby incorporated by reference. This information should not be construed to imply any conclusion on the part of the management of TrustCo that the results, causes, or trends indicated therein will continue in the future. The nature and effects of governmental monetary policy, supervision and regulation, future legislation, inflation and other economic conditions and many other factors which affect interest rates, investments, loans, deposits, and other aspects of TrustCo's operations are extremely complex and could make historical operations, earnings, assets, and liabilities not indicative of what may occur in the future. 8
Critical Accounting Policies Pursuant to recent SEC guidance, management of the Company is encouraged to evaluate and disclose those accounting policies that are judged to be critical policies, or those most important to the portrayal of the Company's financial condition and results of operations, and that require management's most difficult subjective or complex judgments. Management considers the accounting policy relating to the allowance for loan losses to be a critical accounting policy given the inherent subjectivity and uncertainty in estimating the levels of the allowance required to cover credit losses in the portfolio and the material effect that such judgments can have on the results of operations. Included in Note 1 to the consolidated financial statements contained in TrustCo's Annual Report to Shareholders is a description of this critical policy and the other significant accounting policies that are utilized by the Company in the preparation of the Consolidated Financial Statements. Availability of Reports This annual report on Form 10-K and subsequently filed quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports will be available free of charge from our Internet site, www.trustcobank.com. Forward-Looking Statements Statements included in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" of TrustCo's Annual Report to Shareholders for the year ended December 31, 2002 and in future filings by TrustCo with the Securities and Exchange Commission, in TrustCo's press releases, and in oral statements made with the approval of an authorized executive officer which are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. 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: (i) credit risk; (ii) interest rate risk; (iii) competition; (iv) changes in the regulatory environment; and (v) changes in general business and economic trends. The foregoing list should not be construed as exhaustive and the Company disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 9
Item 2. Properties TrustCo's executive offices are located at 5 Sarnowski Drive, Glenville, New York, 12302. The Company operates 62 offices, of which 23 are owned and 39 are leased from others. The asset value of these properties, when considered in the aggregate, is not material to the operation of TrustCo. In the opinion of management, the physical properties of TrustCo and the Bank are suitable and adequate and are being fully utilized. Item 3. Legal Proceedings The nature of TrustCo's business generates a certain amount of litigation against TrustCo and its subsidiaries involving matters arising in the ordinary course of business. In the opinion of management of TrustCo, there are no proceedings pending to which TrustCo or any of its subsidiaries is a party, or of which its property is the subject which, if determined adversely to TrustCo or such subsidiaries, would be material in relation to TrustCo's consolidated shareholders' equity and financial condition. Item 4. Submission of Matters to a Vote of Security Holders None. 10
<TABLE> <CAPTION> Executive Officers of TrustCo The following is a list of the names and ages of the executive officers of TrustCo and their business history for the past five years: Year First Name, Age and Principal Occupations Became Position Or Employment Since Executive With TrustCo January 1, 1998 of TrustCo - ------------------------------------ ---------------------------------------------------------------------- <S> <C> <C> Robert T. Cushing, 47, President, Chief Executive Officer, and Chief Financial 1994 President and Officer, TrustCo Bank Corp NY since 2002. Vice Chief Executive Officer President and Chief Financial Officer, TrustCo Bank Corp NY, 1994 to 2002. Senior Vice President and Chief Financial Officer, Trustco Bank since 1994. Director of TrustCo Bank Corp NY and Trustco Bank, 2001 and 2002. Robert J. McCormick, 39, Vice President, TrustCo Bank Corp NY since 2000. 2000 Vice President President and Chief Executive Officer, Trustco Bank since 2002. Senior Vice President, Trustco Bank, 2001 and 2002. Administrative Vice President of Trustco Bank, 1997 to 2001. Vice President of Trustco Bank, 1995 to 1997. Robert J. McCormick is the son of Robert A. McCormick, Chairman of TrustCo and Trustco Bank. Nancy A. McNamara, 53, Vice President, TrustCo Bank Corp NY since 1992. 1991 Vice President Senior Vice President, Trustco Bank since 1988. Director of TrustCo Bank Corp NY and Trustco Bank, 1991 to 2002. Henry C. Collins, 48, Secretary, TrustCo Bank Corp NY since February 2001. 1999 Secretary Assistant Secretary, TrustCo Bank Corp NY, 1999 to 2001. Administrative Vice President and General Counsel, Trustco Bank since 1995. </TABLE> Each executive officer is elected by the Board of Directors to serve until election of his or her successor. 11
PART II Item 5 Market for the Registrant's Common Equity and Related Stockholder Matters Page 1 and page 47 of TrustCo's Annual Report to Shareholders for the year ended December 31, 2002, are incorporated herein by reference. TrustCo had 13,670 shareholders of record as of March 17, 2003, and the closing price of TrustCo's common stock on that date was $10.25. The following table provides information regarding securities authorized for issuance under TrustCo's equity compensation plans. <TABLE> <CAPTION> - --------------------------------- ---------------------------- ---------------------------- ----------------------------- Number of securities Number of remaining securities to be available for future issued upon Weighted-average issuance under exercise of exercise price of equity compensation outstanding outstanding plans (excluding options, warrants options, warrants and securities reflected and rights rights in column (a)) (c) Plan category (a) (b) - --------------------------------- ---------------------------- ---------------------------- ----------------------------- - --------------------------------- ---------------------------- ---------------------------- ----------------------------- Equity compensation plans <S> <C> <C> <C> approved by 6,645,820 $8.11 312,905 security holders - --------------------------------- ---------------------------- ---------------------------- ----------------------------- - --------------------------------- ---------------------------- ---------------------------- ----------------------------- Equity compensation plans not approved by None None None security holders - --------------------------------- ---------------------------- ---------------------------- ----------------------------- - --------------------------------- ---------------------------- ---------------------------- ----------------------------- Total 6,645,820 $8.11 312,905 - --------------------------------- ---------------------------- ---------------------------- ----------------------------- </TABLE> Item 6. Selected Financial Data Page 25 of TrustCo's Annual Report to Shareholders for the year ended December 31, 2002, is incorporated herein by reference. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Pages 6 through 27 of TrustCo's Annual Report to Shareholders for the year ended December 31, 2002, are incorporated herein by reference. 12
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Pages 18 through 20 of TrustCo's Annual Report to Shareholders for the year ended December 31, 2002, are incorporated herein by reference. Item 8. Financial Statements and Supplementary Data The consolidated financial statements, together with the report thereon of KPMG LLP on pages 28 through 44 of TrustCo's Annual Report to Shareholders for the year ended December 31, 2002, are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. PART III Item 10. Directors and Executive Officers of Registrant The information under the captions "Information on TrustCo Directors and Nominees" and "Information on TrustCo Executive Officers Not Listed Above" on pages 3 through 5, and Section 16(a) "Beneficial Ownership Reporting Compliance" on pages 22 and 23, of TrustCo's Proxy Statement filed for its Annual Meeting of Shareholders to be held May 19, 2003, is incorporated herein by reference. The required information regarding TrustCo's executive officers is contained in PART I in the item captioned "Executive Officers of TrustCo." Item 11. Executive Compensation The information under the captions "TrustCo and Trustco Bank Executive Officer Compensation" and "TrustCo Retirement Plans" on pages 7 through 12 of TrustCo's Proxy Statement filed for its Annual Meeting of Shareholders to be held May 19, 2003, is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management The information under the captions "Information on TrustCo Directors and Nominees," and "Information on TrustCo Executive Officers Not Listed Above," on pages 3 through 6 and "Ownership Of TrustCo Common Stock By Certain Beneficial Owners" on page 22 of TrustCo's Proxy Statement filed for its Annual Meeting of Shareholders to be held May 19, 2003, is incorporated herein by reference. Additional information concerning the Company's equity compensation plan is set forth in Item 5 hereof. Item 13. Certain Relationships and Related Transactions The information under the caption "Transactions with TrustCo and Trustco Bank Directors, Executive Officers and Associates" on page 22 of TrustCo's Proxy Statement filed for its Annual Meeting of Shareholders to be held May 19, 2003 is incorporated herein by reference. 13
Item 14. Controls and Procedures Within the 90-day period prior to the filing of this Annual Report on Form 10-K, an evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures. Disclosure controls and procedures are procedures that are designed with the objective of ensuring that information required to be disclosed in the Company's reports filed under the Securities Exchange Act of 1934, such as this Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer has concluded that the Company's disclosure controls and procedures are effective to satisfy the objectives for which they are intended. Subsequent to the date of Management's evaluation, there were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls, including any corrective actions with regard to significant deficiencies and material weaknesses. PART IV Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K The following financial statements of TrustCo and its consolidated subsidiaries, and the accountants' report thereon are incorporated herein by reference in item 8. Consolidated Statements of Condition -- December 31, 2002 and 2001. Consolidated Statements of Income -- Years Ended December 31, 2002, 2001, and 2000. Consolidated Statements of Changes in Shareholders' Equity -- Years Ended December 31, 2002, 2001, and 2000. Consolidated Statements of Cash Flows -- Years Ended December 31, 2002, 2001, and 2000. Notes to Consolidated Financial Statements. Financial Statement Schedules Not Applicable. All required schedules for TrustCo and its subsidiaries have been included in the consolidated financial statements or related notes thereto. 14
The following exhibits are incorporated herein by reference:* Reg S-K Exhibit No. Description - ------------------------------------------------------------------------------- 3(i)a Amended and Restated Certificate of Incorporation of TrustCo Bank Corp NY, dated July 27, 1993. 3(i)b Certificate of Amendment of the Certificate of Incorporation of TrustCo Bank Corp NY, dated May 28, 1996. 3(i)c Certificate of Amendment of the Certificate of Incorporation of TrustCo Bank Corp NY, dated May 19, 1997. 3(i)d Certificate of Amendment of the Certificate of Incorporation of TrustCo Bank Corp NY, dated May 18, 1999. 3(ii)a Amended and Restated ByLaws of TrustCo Bank Corp NY, dated September 17, 2002. 10(a) Restated 1985 TrustCo Bank Corp NY Stock Option Plan. 10(b) Amended and Restated Trust For Deferred Benefits Provided under Employment Agreements of Trustco Bank, National Association and TrustCo Bank Corp NY, dated September 18, 2001. 10(c) Amended and Restated Trust Under Non-Qualified Deferred Compensation Plans of Trustco Bank, National Association and TrustCo Bank Corp NY, dated September 18, 2001. 10(d) Amended and Restated Trustco Bank, National Association and TrustCo Bank Corp NY Supplemental Retirement Plan, dated September 18, 2001. 10(e) Amended and Restated TrustCo Bank Corp NY Performance Bonus Plan, dated September 18, 2001. 10(f) Amended and Restated Trustco Bank, National Association Executive Officer Incentive Plan, dated September 18, 2001. 10(g) Amended and Restated Employment Agreements Between Trustco Bank, National Association, TrustCo Bank Corp NY and each of Robert T. Cushing, Robert J. McCormick, and Nancy A. McNamara, dated September 18, 2001. 10(h) Amended and Restated TrustCo Bank Corp NY 1995 Stock Option Plan, dated September 18, 2001. 15
10(i) Amended and Restated TrustCo Bank Corp NY Directors Stock Option Plan, dated September 18, 2001. 10(j) Amended and Restated TrustCo Bank Corp NY Directors Performance Bonus Plan, dated September 18, 2001. 10(k) Amended and Restated Trustco Bank, National Association Deferred Compensation Plan for Directors, dated September 18, 2001. 10(l) Consulting Agreement Between TrustCo Bank Corp NY and Robert A. McCormick 11 Computation of Net Income Per Common Share. - ---------------- *The exhibits included under Exhibit 10 constitute all management contracts, compensatory plans and arrangements required to be filed as an exhibit to this form pursuant to Item 15(c) of this report. 16
The following exhibits are filed herewith: Reg S-K Exhibit No. Description 13 Portions of Annual Report to Security Holders of TrustCo for the year ended December 31, 2002. 21 List of Subsidiaries of TrustCo. 23 Consent of Independent Certified Public Accountants. 24 Power of Attorney. 99.1 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 Of The Sarbanes-Oxley Act of 2002 17
Reports on Form 8-K: On November 19, 2002, TrustCo filed a Current Report on Form 8-K reporting the declaration of a cash dividend. On January 21, 2003, TrustCo filed a Current Report on Form 8-K reporting the fourth quarter and year-end December 31, 2002 results. On February 18, 2003, TrustCo filed a Current Report on Form 8-K reporting the declaration of a cash dividend. 18
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TrustCo Bank Corp NY By: /s/ Robert T. Cushing ----------------------- Robert T. Cushing Chief Executive Officer and Chief Financial Officer Date: March 26, 2003 19
Certification Pursuant To Section 302 of The Sarbanes-Oxley Act of 2002 I, Robert T. Cushing, the principal executive officer and principal financial officer of TrustCo Bank Corp NY, certify that: 1. I have reviewed this annual report on Form 10-K of TrustCo Bank Corp NY; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and 20
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: March 26, 2003 /s/ Robert T. Cushing ------------------ Robert T. Cushing Chief Executive Officer and Chief Financial Officer 21
Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated. Signature Title Date * Director March 26, 2003 - -------------------------------------- Barton A. Andreoli * Director March 26, 2003 - -------------------------------------- Joseph Lucarelli * Director March 26, 2003 - -------------------------------------- Dr. Anthony J. Marinello * Director March 26, 2003 - -------------------------------------- Robert A. McCormick * Director March 26, 2003 - -------------------------------------- Dr. James H. Murphy * Director March 26, 2003 - --------------------------------------- William D. Powers * Director March 26, 2003 - ---------------------------------------- William J. Purdy By: /s/ Henry C. Collins --------------------------- *Henry C. Collins, as Agent Pursuant to Power of Attorney 22
Reg S-K Exhibits Index Item 601 Exhibit No. Page No. Exhibits Index 3(i)a Amended and Restated Certificate of Incorporation of TrustCo Bank Corp NY, dated July 27, 1993, filed as Exhibit 3(i)a to TrustCo Bank Corp NY's Quarterly Report on Form 10Q, for the quarter ended June 30, 1997, is incorporated herein by reference. 3(i)b Certificate of Amendment of the Certificate of Incorporation of TrustCo Bank Corp NY, dated May 28, 1996, filed as Exhibit 3(i)b to TrustCo Bank Corp NY's Quarterly Report on Form 10Q, for the quarter ended June 30, 1997, is incorporated herein by reference. 3(i)c Certificate of Amendment of the Certificate of Incorporation of TrustCo Bank Corp NY, dated May 19, 1997, filed as Exhibit 3(i)c to TrustCo Bank Corp NY's Quarterly Report on Form 10Q, for the quarter ended June 30, 1997, is incorporated herein by reference. 3(i)d Certificate of Amendment of the Certificate of Incorporation of TrustCo Bank Corp NY, dated May 18, 1999, filed on Exhibit 3(i)a to TrustCo Bank Corp NY's Amendment No. 2 to Form S-4, Registration No. 333-41168, on October 3, 2000, is incorporated herein by reference. 3(ii)a Amended and Restated ByLaws of TrustCo Bank Corp NY, dated September 17, 2002, filed as Exhibit 3(ii)a to TrustCo Bank Corp NY's Quarterly Report on Form 10Q, for the quarter ended September 30, 2002, is incorporated herein by reference. 10(a) Restated 1985 TrustCo Bank Corp NY Stock Option Plan as amended effective July 1, 1994, filed as Exhibit 10(h) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 1994, is incorporated herein by reference. 10(b) Amended and Restated Trust For Deferred Benefits Provided under Employment Agreements of Trustco Bank, National Association and TrustCo Bank Corp NY, dated September 18, 2001 filed as Exhibit 10(b) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001, is incorporated herein by reference. 23
10(c) Amended and Restated Trust Under Non-Qualified Deferred Compensation Plans of Trustco Bank, National Association and TrustCo Bank Corp NY, dated September 18, 2001, filed as Exhibit 10(c) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001, is incorporated herein by reference. 10(d) Amended and Restated Trustco Bank, National Association and TrustCo Bank Corp NY Supplemental Retirement Plan, dated September 18, 2001, filed as Exhibit 10(f) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001 is incorporated herein by reference. 10(e) Amended and Restated TrustCo Bank Corp NY Performance Bonus Plan, dated September 18, 2001, filed as Exhibit 10(g) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001 is incorporated herein by reference. 10(f) Amended and Restated Trustco Bank, National Association Executive Officer Incentive Plan, dated September 18, 2001, filed as Exhibit 10(h) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001 is incorporated herein by reference. 10(g) Amended and Restated Employment Agreements Between Trustco Bank, National Association, TrustCo Bank Corp NY and each of Robert T. Cushing, Robert J. McCormick, and Nancy A. McNamara, dated September 18, 2001, filed as Exhibit 10(i) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001 are incorporated herein by reference. 10(h) Amended and Restated TrustCo Bank Corp NY 1995 Stock Option Plan, dated September 18, 2001, filed as Exhibit 10(k) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001 is incorporated herein by reference. 10(i) Amended and Restated TrustCo Bank Corp NY Directors Stock Option Plan, dated September 18, 2001, filed as Exhibit 10(l) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001 is incorporated herein by reference. 24
10(j) Amended and Restated TrustCo Bank Corp NY Directors Performance Bonus Plan, dated September 18, 2001, filed as Exhibit 10(m) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001 is incorporated herein by reference. 10(k) Amended and Restated Trustco Bank Deferred Compensation Plan for Directors, dated September 18, 2001, , filed as Exhibit 10(n) to TrustCo Bank Corp NY's Annual Report on Form 10K, for the year ended December 31, 2001 is incorporated herein by reference. 10(l) Consulting Agreement Between TrustCo Bank Corp NY and Robert A. McCormick, dated October 11, 2002, filed as Exhibit 10(a) to TrustCo Bank Corp NY's Quarterly Report on Form 10Q, for the quarter ended September 30, 2002 is incorporated herein by reference. 25
11 Computation of Net Income Per Common Share. Note 12 on page 41 of TrustCo's Annual Report to Shareholders for the year ended December 31, 2002 is incorporated herein by reference. 13 Portions of Annual Report to Security Holders of TrustCo for the year ended December 31, 2002 are filed herewith. 99.1 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 Of The Sarbanes-Oxley Act of 2002 is filed herewith. GRAPHICS APPENDIX Cross Reference To Page Of Annual Omitted Charts Report 1 Return on Equity 6 2 Taxable Equivalent Net Interest Income 8 3 Dividends Per Share 15 4 Allowance for Loan Losses 17 5 Allowance to Loans Outstanding 17 6 Efficiency Ratio 21 The charts listed above were omitted from the EDGAR version of Exhibit 13; however, the information depicted in the charts was adequately discussed and/or displayed in the tabular information within Management's Discussion and Analysis section of the Annual Report. 21 List of Subsidiaries of TrustCo, filed herewith 23 Independent Auditors' Consent, filed herewith. 24 Power of Attorney, filed herewith. 26
Exhibit 21 LIST OF SUBSIDIARIES OF TRUSTCO Trustco Bank Federally chartered savings bank ORE Subsidiary Corp. New York corporation Trustco Realty Corp. New York corporation (Subsidiary of Trustco Bank) Trustco Financial Corp Delaware corporation Each subsidiary does business under its own name. The activities of each are described in Part I, Item 1 of Form 10-K. 27
Exhibit 23 INDEPENDENT AUDITORS' CONSENT The Board of Directors TrustCo Bank Corp NY: We consent to incorporation by reference in the registration statements, Form S-8 (No. 33-43153), Form S-8 (No. 33-67176), Form S-8 (No. 333-78811), and Form S-3 (No. 333-75035) of TrustCo Bank Corp NY and subsidiaries of our report dated January 17, 2003, with respect to the consolidated statements of condition of TrustCo Bank Corp NY and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of income, changes in shareholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2002, which report appears in the December 31, 2002 Annual Report on Form 10-K of TrustCo Bank Corp NY. /s/ KPMG LLP Albany, New York March 26, 2003 28
Exhibit 24 POWER OF ATTORNEY The undersigned persons do hereby appoint Henry C. Collins or Robert T. Cushing as a true and lawful Attorney In Fact for the sole purpose of affixing their signatures to the 2001 Annual Report (Form 10-K) of TrustCo Bank Corp NY to the Securities and Exchange Commission. /s/Barton A. Andreoli /s/ Joseph Lucarelli - -------------------------- --------------------- Barton A. Andreoli Joseph Lucarelli /s/ Anthony J. Marinello /s/ Robert A McCormick - --------------------------- --------------------- Dr. Anthony J. Marinello Robert A. McCormick /s/ James H. Murphy /s/ Richard J. Murray, Jr. - -------------------------- --------------------- Dr. James H. Murphy Richard J. Murray, Jr /s/ William D. Powers /s/ William J. Purdy - -------------------------- -------------------------- William D. Powers. William J. Purdy Sworn to before me this 18th day of February 2003. /s/Joan Clark - ------------------------- Notary Public Joan Clark Notary Public, State of New York Qualified in Albany County No. 01CL4822282 Commission Expires Nov. 30, 2006 29
Exhibit 99.1 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 Of The Sarbanes-Oxley Act of 2002 In connection with the Annual Report of TrustCo Bank Corp NY (the "Company") on Form 10-K for the period ending December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: 1. The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. By:/s/ Robert T. Cushing --------------------------- Robert T. Cushing Chief Executive Officer and Chief Financial Officer March 26, 2003 30