Safe and Sound

BNY Mellon, National Association

Pittsburgh, PA
4
Star Rating
Founded in 1869, BNY Mellon, National Association is an FDIC-insured bank headquartered in Pittsburgh, PA. As of December 31, 2017, the bank held equity of $3.61 billion on $23.95 billion in assets.

Thanks to the work of 1,915 full-time employees in 42 offices in multiple states, the bank currently holds loans and leases worth $16.27 billion, including real estate loans of $9.10 billion. The bank currently holds $17.88 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, BNY Mellon, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three important criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is crucial. It acts as a bulwark against losses and affords protection for accountholders when a bank is experiencing financial instability. From a safety and soundness perspective, more capital is preferred.

On our test to measure the adequacy of a bank's capital, BNY Mellon, National Association received a score of 8 out of a possible 30 points, below the national average of 13.13.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. BNY Mellon, National Association's Tier 1 capital ratio was 10.43 percent, above the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic downturns.

Overall, BNY Mellon, National Association held equity amounting to 15.07 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as unpaid loans, on the bank's loan loss reserves and overall capitalization.

Having extensive holdings of these kinds of assets means a bank may eventually have to use capital to cover losses, diminishing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

BNY Mellon, National Association scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 37.49.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.02 percent of BNY Mellon, National Association's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.01 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . The size of that reserve can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on BNY Mellon, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand economic trouble. However, banks that are losing money are less able to do those things.

BNY Mellon, National Association underperformed the average on Bankrate's earnings test, achieving a score of 14 out of a possible 30.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. BNY Mellon, National Association's most recent annualized quarterly return on equity was 6.94 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $244.4 million on total equity of $3.61 billion. The bank experienced an annualized return on average assets, or ROA, of 1.03 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.