TrustCo Bank Corp. NY :TRST-US: Earnings Analysis: Q3, 2016 By the Numbers : October 26, 2016

TrustCo Bank Corp. NY reports financial results for the quarter ended September 30, 2016.

We analyze the earnings along side the following peers of TrustCo Bank Corp. NY – Elmira Savings Bank, Greene County Bancorp, Inc. and People’s United Financial, Inc. (ESBK-US, GCBC-US and PBCT-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 41.40 million, Net Earnings of USD 10.93 million.
  • Net interest income margins narrowed from 89.20% to 88.58% compared to the same period last year.
  • Net loan assets changed 3.30% compared to same period last year and 1.35% from previous period, total deposits changed 1.74% compared to same period last year and -0.30% from previous period.
  • Earnings growth from operating margin improvements as well as from one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2015-09-30 2015-12-31 2016-03-31 2016-06-30 2016-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 40.42 40.69 40.75 41.5 41.4
Revenue Growth (%YOY) -5.88 0.67 2.43 3.42 2.43
Earnings (mil) 10.62 10.18 10.41 10.46 10.93
Earnings Growth (%YOY) -0.8 -4.46 -2.86 -2.45 2.96
Net Margin (%) 26.27 25.02 25.54 25.22 26.4
EPS 0.11 0.11 0.11 0.11 0.11
Return on Equity (%) 10.42 9.86 9.96 9.81 10.1
Return on Assets (%) 0.9 0.86 0.88 0.87 0.91

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Market Share Versus Profits

Revenues History
Earnings History

TRST-US‘s change in revenue this period compared to the same period last year of 2.43% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that TRST-US is holding onto its market share. Also, for comparison purposes, revenues changed by -0.25% and earnings by 4.45% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

TRST-US‘s earnings rose year-on-year. But this growth has not come as a result of improvement in net interest income margins or any loan loss improvement activities in its operations. Net interest income margins were 88.58% compared to 87.47% in the immediate last period. Net interest income after provisions margins were 86.76% this period compared to 85.54% in the previous period. In addition, loan loss provisions as a percentage of net interest income were 2.05% this period and 2.22% a year ago.

Net Interest Income Margin Versus Loan Loss Provisions Margin

Quadrant label definitions. Hover to know more

High Risk; High Reward Loans, Risky Loan Portfolio, Conservative Loan Portfolio, Safer Loan Portfolio
Net Interest Income Margin History
Loan Loss Provisions Margin History

Net Loans and Total Deposits

A financial institution’s core operations represented by Net Interest Income and Net Interest Income after Provisions are dependent on both the growth and quality of its deposits as well as the growth and quality of its loans. A firm could boost its interest income in the short-term by just increasing its loan assets with less concern about their quality – but this would eventually lead to greater loan loss provisions. Similarly a drive to increase deposits could result in higher interest expenses and eventually effect the firm’s equity. It is thus important to understand net interest income performance in context to loan loss provisions, loan assets and deposits.

Loan Assets Growth Rate History (Qtr YOY)
Total Deposits Growth Rate History (Qtr YOY)

The firm’s decline in net interest income margins was influenced by both the relative drops in the levels of net loan assets and the level of total deposits as a percentage of equity. On an absolute basis, net loan assets changed 3.30% compared to the same period last year and 1.35% from the previous period. Total deposits changed 1.74% compared to the same period last year and -0.30% from the previous period.


The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating margins from 39.96% to 42.51% and (2) one-time items. The company’s pretax margins are now 42.51%, compared to 39.96% for the same period last year.

EBIT Margin History
PreTax Margin History
EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables

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Company Profile

TrustCo Bank Corp. NY operates as a holding company for TrustCo Bank, which engages in the provision of banking and financial services to individuals, partnerships, and corporations. The company offers checking accounts, savings accounts, retirement accounts, time deposits, money market accounts, and credit cards. It also provides asset and wealth management services; estate planning and related advice; credit cards; trust and investment services; custodial services, and online banking services. The company was founded in 1981 and is headquartered in Glenville, NY.

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