Safe and Sound

Prudential Bank & Trust, FSB

Hartford, CT
5
Star Rating
Started in 1989, Prudential Bank & Trust, FSB is an FDIC-insured bank headquartered in Hartford, CT. The bank has equity of $18.1 million on $20.6 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 6 full-time employees, the bank has amassed loans and leases worth $0, including $0 worth of real estate loans. U.S. bank customers currently have $522,000 in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Prudential Bank & Trust, FSB exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank fared on the three major criteria Bankrate used to grade American 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 a bank's financial resilience, capital is crucial. It acts as a cushion against losses and as protection for depositors during periods of economic trouble for the bank. When looking at safety and soundness, more capital is preferred.

Prudential Bank & Trust, FSB exceeded the national average of 13.13 points on our test to measure the adequacy of a bank's capital, receiving a score of 30 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Prudential Bank & Trust, FSB's Tier 1 capital ratio was 358.80 percent, higher than the 6 percent level considered adequate by regulators, and above the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather financial downturns.

Overall, Prudential Bank & Trust, FSB held equity amounting to 87.72 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

A bank with large numbers of these types of assets may eventually have to use capital to absorb losses, shrinking its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

Prudential Bank & Trust, FSB scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 37.49.

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

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

Earnings score

How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.

Prudential Bank & Trust, FSB scored 30 out of a possible 30 on Bankrate's earnings test, beating the national average of 15.12.

One widely used way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Prudential Bank & Trust, FSB's most recent annualized quarterly return on equity was 22.16 percent, above the national average of 8.10 percent.

The bank recorded net income of $4.1 million on total equity of $18.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 19.20 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.