Trust Updates Archive

Fiduciary Assets Trust Performance Report trust companies executive priorities assets revenue expenses State Street A.M. Publishing peer comparison financial institutions trust banks Bernard Garbo Improved Profit Margins in 2020 Fail to Dampen Concern About Revenue

(June 3, 2021 --Chicago, IL) -- Meeting revenue targets is the number-one concern of trust bankers in 2021, according Trust Performance Report 2021, which annually surveys and reports on the activity of the top 1200 trust institutions, including 170 independent trust companies and nearly 30 national trust companies. The report was released in late May. In addition to meeting revenue targets, other concerns trust executives have varied, often significantly, based on the size of the institution as well as its type.

In 2020's survey, trust executives expressed "cautiously optimistic" about achieving revenue targets. Meeting account and revenue growth targets were their number-two and -three concerns, after the pandemic. By year's end, most trust institutions reported stronger revenue gains in 2020 than in the prior year. Those gains were below standard, however, based on the industry's 10-year average.

2020 Overview

Gross revenues in 2020 grew by a weighted average of 5 percent, which was driven more by the performance among small and midtier institutions, than large ones. In dollars, total industry gross revenues grew by $1.8 billion, two-thirds of which were driven by custody revenue.

Total trust-industry assets in 2020 grew by $18.6 trillion, or at a weighted average of 10 percent. The Dow Jones Industrial Average in 2020 grew by 7.5 percent, while the Standard & Poor 500 Index performed significantly better, at 16.6 percent.

New accounts grew by a weighted average of 3.6 percent. Excluding the spike in new accounts among Peer Group 2 (institutions with assets between $10 billion and $100 billion), the weighted growth rate for new accounts would have been just slightly better than 1 percent. This was Peer Group 2's second consecutive year of a spike in new accounts.

Profit Margin and Productivity

Profit margins at trust institutions generally improved in 2020 as expenses increased at rates at or below those of revenues. Four of the five peer groups reported average revenue growth exceeding average expense growth. Only Peer Group 2 reported no change in its profit margin from the prior year.

As ever fewer trust institutions report plans to raise fees, profit margins seem unlikely to improve in 2021. How stable profit margins will remain then seemingly depends more on how expenses are managed rather than on increased revenues.

Productivity improved for most institutions, according to preliminary analysis of survey data. Most bank trust departments and independent trust companies reported improved productivity. The exceptions were small trust departments of banks and midtier trust companies. For a detailed analysis of productivity, see the upcoming issue of Trust Performance Report's sister publication, Fiduciary Earnings & Expenses.

State Street's Unusual $3.9 Trillion Asset Decline

State Street reported asset increases of some $8.3 trillion, primarily in custody, but also reported declines of $3.9 trillion, chiefly in employee benefit trust and agency (EBT) accounts. Such large swings often occur when a bank reclassifies assets.

State Street declined repeated requests to comment.

It is not a common occurrence, but large institutions periodically reclassify their assets. These adjustments usually turn on confusion regarding regulatory call-report definitions. In 2011, Northern Trust's reclassification of assets resulted in asset declines of 45 percent to 91 percent in various account categories. In 2012, BNY Mellon reported a 91 percent decline in nonmanaged personal assets as part of its "continued efforts to refine reporting of assets."

In 2017, the average defined-benefit account balances reported by Peer Group 1 institutions shifted radically. The shift was driven by State Street, which reported a 5 percent decline in defined-benefit assets but a 62 percent decline in the number of accounts, which seemingly had more to do with the interpretation of regulatory definitions than actual loss of business.

Trust Performance Report/A.M. Publishing's annually surveys bank trust divisions and independent trust companies. The survey was conducted in March and April 2021.

For sample pages of Trust Performance Report 2021, go to … for information on ordering, see below.

Trust Performance Report -- annual data book, published in May (June in 2020), provides both industry and peer group performance data by assets, gross revenue, net income, and account category. Subscribers receive quarterly updates. TPR findings are based on its annual survey of the top 1200 fiduciary institutions. For more best practices and benchmark data see TPR. For information on ordering click here or the link below.

Fiduciary Earnings & Expenses -- annual data book comparing performance among independent trust companies to that of OCC national trust companies and to bank trust divisions. For information on ordering click here or the link below.

For Sample copies of both publications click here and then, on the web page, check "Trust Performance Report."

Data Files -- a spreadsheet version of Trust Performance Report is available. For more information on rates, please visit … Discounts apply for subscribers to Trust Performance Report. For more information on discounts, please email:

No statement in this issue is offered as or should be construed as legal opinion or advice or as an indicator of future performance.
To subscribe to Trust Updates or for a trial subscription go to

To unsubscribe to Trust Updates go to

To subscribe, click on the link below :
•  Trust Performance Report or
• Fiduciary Earnings & Expenses

Subscription request can also be sent to ""
or by calling 800-404-2116.

• 1992-2021 Copyright© A.M. Publishing, Inc., Trust Updates