TrustCo Bank Corp NY (TRST): A Buy in a Corrective Market
Despite the recent market correction, TrustCo Bank Corp NY (NASDAQ: TRST) remains a compelling investment for income and trading opportunities.
Solid Q1 Earnings with Respectable Loan Activity
TrustCo Bank reported a mixed Q1 earnings report, reflecting the challenging rate environment and concerns over mortgage and commercial loan demand. However, the bank maintained respectable loan activity and achieved solid returns on assets, resulting in revenue growth.
Revenue increased by 19.1% to $61.48 million, exceeding consensus estimates. Return on average assets and return on average equity were both above sequential quarters, at 0.80% and 7.54%, respectively.
Valuation Attractive Below Book Value
At $26.78 per share, TRST is trading below its book value of $34.12. The bank has experienced solid loan growth, particularly in residential loans, commercial loans, and home equity lines of credit.
Deposits also increased, providing ample liquidity for further lending. TrustCo’s asset quality remains high, with non-performing assets at a low 0.33% and allowance for credit losses at a stable 0.98%.
Strong Dividend and Buyback Program
The current dividend yield stands at an attractive 5.5%. The bank is also actively buying back stock, providing additional value to shareholders.
Buy Recommendation and Outlook
Analysts rate TrustCo Bank Corp NY shares a Buy. The bank is well-positioned to navigate the challenging macro environment, with its strong asset quality, loan growth, and income generation capabilities. Investors seeking income and potential capital appreciation should consider adding TRST to their portfolios.
