Safe and Sound

The MassMutual Trust Company

Enfield, CT
5
Star Rating
The MassMutual Trust Company is an Enfield, CT-based, FDIC-insured bank started in 2000. Regulatory filings show the bank having equity of $22.0 million on assets of $79.6 million, as of December 31, 2017.

Thanks to the efforts of 36 full-time employees, the bank holds loans and leases worth $0, $0 of which are for real estate. U.S. bank customers currently have $50.5 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The MassMutual Trust Company exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three important criteria Bankrate used to score U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of a bank's financial fortitude. It works as a bulwark against losses and as protection for depositors during times of financial trouble for the bank. When looking at safety and soundness, the more capital, the better.

The MassMutual Trust Company racked up 30 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 important measure of this buffer is a bank's Tier 1 capital ratio. The MassMutual Trust Company's Tier 1 capital ratio was 43.89 percent, exceeding the 6 percent level regulators consider adequate, and higher than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic headwinds.

Overall, The MassMutual Trust Company held equity amounting to 27.64 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

A bank with a large number of these types of assets may eventually have to use capital to cover losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, diminishing earnings and increasing the chances of a future failure.

The MassMutual Trust Company exceeded the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

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

Banks maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." That reserve's size can be a handy 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 The MassMutual Trust Company'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 put them to work addressing problematic loans, potentially making the bank better able to withstand financial trouble. Banks that are losing money, however, are less able to do those things.

The MassMutual Trust Company beat the national average on Bankrate's earnings test, achieving a score of 22 out of a possible 30.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for The MassMutual Trust Company was 13.13 percent, above the national average of 8.10 percent.

The bank reported net income of $2.7 million on total equity of $22.0 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 3.50 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.