Trust Updates Archive
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(May 17, 2022 --Chicago, IL) -- Gross revenues for the industry grew by a weighted average of 14 percent and a nonweighted average of 11 percent--the largest growth in over 12 years, according Trust Performance Report 2022. TPR annually surveys and reports on the activity of the top 1200 trust institutions, including nearly 170 independent trust companies and nearly 30 national trust companies. The report will be released next week (week of May 23). Assets grew by 11 percent, both as a weighted and nonweighted average. With revenues growing at rates higher than those of assets, it would suggest trust institutions are raising fees. This is supported by responses to Trust Performance Report's annual survey, which was conducted in March and April 2022. In TPR's 2021's survey, the smallest percentage in a decade, just 12 percent, reported having plans to raise fees. However, by year-end, 15 percent of trust institutions had raised fees in 2021. In 2022's survey, nearly 20 percent of survey respondent indicated that they planned to raise one or more fee. Trust executives , who have been "cautiously optimistic" about raising fees for the past few years seem to no longer be hesitant to do so. Top 50 Still Lagging in Revenue Growth The top 50 trust institutions held 98.1 percent of all trust assets in 2021, down marginally from 98.2 percent in the prior year. They also continue to be less efficient producers of revenues and assets than smaller institutions. These giants required more assets to generate $1 of revenues and their revenue and asset growth rates have been some of the industry's lowest. The top 50 narrowed the growth gap in 2021 between their performance and that of the bottom 450 institutions when it comes to assets. When it came to revenues, the gap continued to remain wide, though there is indication it may be narrowing. Profit Margins and Inconsistent Expense Averages Profit margins improved for all peer groups as revenue growth exceeded expense growth by a wide margin: 14 percent weighted average revenue growth compared to 3 percent weighted average expense growth. However, median expense growth, which was unusually high in 2021, suggests that increases in expenses were far from uniform. Executive Prioritie--The Pandemic Isn't Over In contrast to other institutions, executives at all large institutions increased the ranking of concern regarding issues related to the COVID-19 pandemic to number three in 2022, up from number six in the prior year. However, more executives at independent trust companies than at banks reported concern with the COVID-19 pandemic's impact on business. Controlling expenses was the number one concern of executives at large trust institutions in TPR's 2021 survey, which sheds light on why these institutions reported a lower median increases in expenses. Midsized trust institutions ranked issues related to the pandemic as number six in 2022, down from number five in the previous year. The top concerns in 2022 of executives at independent trust companies did not mirror those of executives at banks, as they did in the prior year. Trust Performance Report/A.M. Publishing's annually surveys bank trust divisions and independent trust companies. The survey was conducted in March and April 2022. For sample pages of Trust Performance Report 2021, go to trustupdates.com/TPR2021_sample.pdf … for information on ordering, see below. ************************************ DATA BOOKS Trust Performance Report -- annual data book, published in May, provides both industry and peer group performance data by assets, gross revenue, net income, and account category. Subscribers receive semiannual 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 http://trustupdates.com/Subscribe/Data_Files/ … Discounts apply for subscribers to Trust Performance Report. For more information on discounts, please email: dataorders@trustupdates.com ******************** No statement in this issue is offered as or should be construed as legal opinion or advice or as an indicator of future performance. 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