Safe and Sound

The Bank of New York Mellon Trust Company, National Association

Los Angeles, CA
5
Star Rating
The Bank of New York Mellon Trust Company, National Association is a Los Angeles, CA-based, FDIC-insured bank dating back to 1981. Regulatory filings show the bank having equity of $1.87 billion on assets of $2.09 billion, as of December 31, 2017.

With 1,378 full-time employees in 21 offices in multiple states, the bank currently holds loans and leases worth $0, including real estate loans of $0. U.S. bank customers currently have $602,000 in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Bank of New York Mellon Trust Company, National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three major criteria Bankrate used to evaluate U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for depositors when a bank is experiencing financial instability. Therefore, a bank's level of capital is a valuable measurement of an institution's financial strength. From a safety and soundness perspective, the more capital, the better.

The Bank of New York Mellon Trust Company, National Association did better than the national average of 13.13 points on our test to measure capital adequacy, receiving a score of 30 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. The Bank of New York Mellon Trust Company, National Association's Tier 1 capital ratio was 1,001.20 percent, higher than the 6 percent level considered adequate by regulators, and higher than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to financial challenges.

Overall, The Bank of New York Mellon Trust Company, National Association held equity amounting to 89.35 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as past-due loans, on the bank's capitalization and allocated loan loss reserves.

A bank with a large number of these types of assets may eventually have to use capital to absorb losses, reducing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, diminishing earnings and increasing the risk of a future failure.

On Bankrate's test of asset quality, The Bank of New York Mellon Trust Company, National Association scored 40 out of a possible 40 points, above the national average of 37.49 points.

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

Banks maintain 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 problematic 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 The Bank of New York Mellon Trust Company, National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.

The Bank of New York Mellon Trust Company, National Association exceeded the national average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. The Bank of New York Mellon Trust Company, National Association's most recent annualized quarterly return on equity was 9.99 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $182.0 million on total equity of $1.87 billion. The bank experienced an annualized return on average assets, or ROA, of 8.60 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.