A. M. Publishing recently released its 2017 Trust Performance Report.  The Trust Performance Report is based on an annual survey of financial institutions which offer trust administration services.

The aggregate data in the 2017 Trust Performance Report and its sister publication, Fiduciary Earnings and Expenses, reveals, in general, two conclusions: (1) the market rewards those trust service providers which have a tightly focused service offering and (2) the independent trust company model is more successful than the bank trust department model.  The following data points back up the conclusion:

  • The survey data demonstrates that the highest profit margin institutions limit operations, typically focusing on three or fewer service offerings.  Of those that specialize, the overwhelming majority focus on a combination of personal trusts, employee benefits, and investment management services.  Bank trust divisions continue to favor a full-service model.  92% of high profit margin independent trust companies specialize; only 57% of high profit margin bank trust departments specialize.
  • The only institutions which are contemplating selling or outsourcing their trust operations were bank trust divisions.  No independent trust company reported that they are contemplating selling its trust operations.
  • Executives at independent trust companies consistently and by a wide margin report lower stress and concern than do bank trust division or national trust company executives, especially when it comes to meeting account, revenue, and net income targets.

Other interesting data points:

  • P. I. E. assets (personal trust, investment management, and employee benefits assets) account for only 14% of industry assets but generate a whopping 50% of industry gross revenue.
  • To generate $1 of revenue requires $753 of P. I. E. assets.
  • Traditional P. I. E. assets grew overall by 7%.
  • 15% of bank trust departments reported one or more fee increases in 2016.
  • Growing new business is more important to bank trust executives than meeting revenue and net income targets (81% of executives surveyed responded that meeting new accounts was an important concern).

A. M. Publishing recently released its quarterly Trust Performance Report, which tracks the trust industry’s asset and revenue data. The following are a few highlights:

  • Asset growth rates are improving.
  • Revenue growth rates are also improving although revenue growth rates lag asset growth.
  • According to the 2016 Fiduciary Earnings and Expenses report, investment in training remains low.
  • Efficiency improved for all peer groups except the smallest institutions.
  • In 2014, 75% of trust institutions that forecasted raising one or more fees, did so.  In 2015, 60% did so.  More institutions report that their focus is on policing their existing fee schedule to ensure full implementation.
  • The top performers, by asset growth rate, include HSBC Bank (167%), Amboy Bank (99%), Advantage Trust (94%), and Iberiabank (90%).

Around The Water Cooler this morning, we’re diving into more statistics.  The IRS recently released its 2015 Data Book.  The following statistics are related to 2015 estate and trust income taxes and 2015 estate taxes.  There are a few tea leaves to read in the statistics; particularly the respective audit rates.

Estate and Trust Income Taxes:

Gross Collections from Estate and Trust Income Taxes:  approximately $33 Billion (a 14% increase over collections in 2014).  Gross collections from estate and trust income taxes represent 1% of total gross collections from all sources (a total of approximately $3 Trillion).

Number of Estate and Trust Income Tax Returns Filed:  3,202,706

Number of Estate and Trust Income Tax Returns Audited:  5,288 (0.17%).  The audit rate of estate and trust income tax returns is the lowest audit rate of all types of tax returns.

Estate Tax:

Gross Collections from Estate Taxes:  approximately $18 Billion.  Gross collections from estate taxes represent 0.5% of total gross collections from all sources.

Number of Estate Tax Returns Filed:  36,343

Number of Estate Tax Returns Audited:  2,770 (7.6%)

A whopping 31.6% of estate tax returns with a gross estate of greater than $10 Million were audited.  The audit rate of these estate tax returns is the second highest audit rate of all types of tax returns behind only income tax returns of corporations with total assets over $5 Billion.


No trust news today….just statistics.  A. M. Publishing recently released its annual Trust Performance Report, which tracks the trust industry’s asset and income data. The following are a few highlights from the 2016 Report which reflects 2015 data:

  • 4 out of every 5 trust institutions reported asset declines.
  • 2 out of every 3 trust institutions posted revenue growth.
  • A large number of trust institutions, 70, left the business in 2015.  84% of the institutions that left the trust business reported less than $500 million in total assets.
  • In 2015, 15% of trust institutions raised fees; slightly more than 20% of trust institutions plan to raise fees in 2016.
  • While trust industry assets overall shrank for the first time in 8 years, TIAA-CREF reported asset growth of 212%.