Safe and Sound

Brunswick Bank and Trust Company

New Brunswick, NJ
3
Star Rating
New Brunswick, NJ-based Brunswick Bank and Trust Company is an FDIC-insured bank founded in 1970. The bank has equity of $26.2 million on $176.4 million in assets, according to December 31, 2017, regulatory filings.

With 46 full-time employees in 7 offices in NJ, the bank holds loans and leases worth $131.9 million, including real estate loans of $129.6 million. U.S. bank customers currently have $149.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Brunswick Bank and Trust Company exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three important criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial strength, capital is crucial. It works as a bulwark against losses and as protection for accountholders when a bank is experiencing economic trouble. When looking at safety and soundness, more capital is preferred.

Brunswick Bank and Trust Company racked up 20 out of a possible 30 points on our test to measure the adequacy of a bank's capital, above the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Brunswick Bank and Trust Company's Tier 1 capital ratio was 18.61 percent, exceeding the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic downturns.

Overall, Brunswick Bank and Trust Company held equity amounting to 14.87 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with large numbers of these types of assets may eventually be forced to use capital to cover losses, cutting down on its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in depressed earnings and potentially more risk of a failure in the future.

Brunswick Bank and Trust Company scored 24 out of a possible 40 points on Bankrate's asset quality test, falling short of the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 2.01 percent of Brunswick Bank and Trust Company's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

Banks keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Brunswick Bank and Trust Company's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the bank better prepared to withstand financial trouble. However, banks that are losing money are less able to do those things.

Brunswick Bank and Trust Company scored 6 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.

One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Brunswick Bank and Trust Company's most recent annualized quarterly return on equity was 2.11 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $542,000 on total equity of $26.2 million. The bank experienced an annualized return on average assets, or ROA, of 0.30 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.