TRST
TrustCo Bank Corp NY
$55.73
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 10.4% above fair value
You pay
$55.73
Bear
$27.56
Fair
$50.46
Bull
$64.20
Bear
$27.56
-50.6%
ROTCE 6.7% → 0.68x TBV
Fair
$50.46
-9.5%
ROTCE 8.9% → 1.25x TBV
Bull
$64.20
+15.2%
ROTCE 10.2% → 1.59x TBV
Adjust Assumptions
8.9%
7.9%
Key Value Driver
ROTCE (8.9%) vs. cost of equity (7.9%)
Implied Market Multiple
1.38x
Summary
With ROTCE of 8.9% vs. 7.9% cost of equity, fair P/TBV is 1.25x on $40.32 tangible book, implying $50.46 per share. DDM cross-check: $26.18.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $26.18 (48% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly