TRST
TrustCo Bank Corp NY
$50.26
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 4.5% below fair value
You pay
$50.26
Bear
$28.75
Fair
$52.64
Bull
$66.98
Bear
$28.75
-42.8%
ROTCE 6.7% → 0.73x TBV
Fair
$52.64
+4.7%
ROTCE 8.9% → 1.34x TBV
Bull
$66.98
+33.3%
ROTCE 10.2% → 1.70x TBV
Key Value Driver
ROTCE (8.9%) vs. cost of equity (7.7%)
Implied Market Multiple
1.28x
Summary
With ROTCE of 8.9% vs. 7.7% cost of equity, fair P/TBV is 1.34x on $39.29 tangible book, implying $52.64 per share. DDM cross-check: $26.35.
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: $26.35 (50% 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