TRST
TrustCo Bank Corp NY
$54.46
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 7.0% above fair value
You pay
$54.46
Bear
$27.79
Fair
$50.88
Bull
$64.74
Bear
$27.79
-49.0%
ROTCE 6.7% → 0.71x TBV
Fair
$50.88
-6.6%
ROTCE 8.9% → 1.30x TBV
Bull
$64.74
+18.9%
ROTCE 10.2% → 1.65x TBV
Key Value Driver
ROTCE (8.9%) vs. cost of equity (7.8%)
Implied Market Multiple
1.39x
Summary
With ROTCE of 8.9% vs. 7.8% cost of equity, fair P/TBV is 1.30x on $39.29 tangible book, implying $50.88 per share. DDM cross-check: $25.80.
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: $25.80 (49% 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