Safe and Sound

Mizuho Trust & Banking Co. USA

New York, NY
4
Star Rating
Started in 1987, Mizuho Trust & Banking Co. USA is an FDIC-insured bank based in New York, NY. The bank holds equity of $72.0 million on $623,923,000 in assets, according to June 30, 2017, regulatory filings.

With 146 full-time employees, the bank holds loans and leases worth $0, including real estate loans of $0. U.S. bank customers currently have $541.0 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Mizuho Trust & Banking Co. USA exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank faired on the three important criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is essential. It acts as a bulwark against losses and affords protection for depositors when a bank is struggling financially. When looking at safety and soundness, the more capital, the better.
Mizuho Trust & Banking Co. USA did better than the national average of 13.38 points on our test to measure capital adequacy, achieving a score of 14 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Mizuho Trust & Banking Co. USA's Tier 1 capital ratio was 76.04 percent, exceeding the 6 percent level regulators consider adequate, and higher than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial headwinds.

Overall, Mizuho Trust & Banking Co. USA held equity amounting to 11.54 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due mortgages.

Having lots of these types of assets could eventually require a bank to use capital to absorb losses, shrinking its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

Mizuho Trust & Banking Co. USA scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 37.62.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . How large that reserve is can be a widely used indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Mizuho Trust & Banking Co. USA's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Banks that are losing money, however, are less able to do those things.

Mizuho Trust & Banking Co. USA scored 18 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 16.52.

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. Mizuho Trust & Banking Co. USA's most recent annualized quarterly return on equity was 9.35 percent, above the national average of 9.28 percent.

The bank earned net income of $3.3 million on total equity of $72.0 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.06 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 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.