Safe and Sound

Barclays Bank Delaware

Wilmington, DE
5
Star Rating
Founded in 2001, Barclays Bank Delaware is an FDIC-insured bank headquartered in Wilmington, DE. As of June 30, 2017, the bank had equity of $4.36 billion on assets of $30.81 billion.

With 3,387 full-time employees, the bank holds loans and leases worth $24.37 billion, including real estate loans of $18.9 million. U.S. bank customers currently have $21.37 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Barclays Bank Delaware exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three key criteria Bankrate used to evaluate U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for depositors during periods of financial trouble for the bank. Therefore, a bank's level of capital is a key measurement of a bank's financial fortitude. When looking at safety and soundness, the higher the capital, the better.
Barclays Bank Delaware did better than the national average of 13.38 points on our test to measure the adequacy of a bank's capital, achieving a score of 14 out of a possible 30 points.

One important measure of this buffer is a bank's Tier 1 capital ratio. Barclays Bank Delaware's Tier 1 capital ratio was 11.55 percent, above the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to economic difficulties.

Overall, Barclays Bank Delaware held equity amounting to 14.14 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with extensive holdings of these types of assets may eventually be forced to use capital to cover losses, diminishing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, reducing earnings and increasing the chances of a future failure.

On Bankrate's test of asset quality, Barclays Bank Delaware scored 40 out of a possible 40 points, above the national average of 37.62 points.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 1.10 percent of Barclays Bank Delaware'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 1.04 percent.

Banks keep 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 problem loans. Unfortunately, the FDIC did not provide information on Barclays Bank Delaware's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Banks that are losing money, however, are less able to do those things.

Barclays Bank Delaware scored 26 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 16.52.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Barclays Bank Delaware was 16.55 percent, above the national average of 9.28 percent.

The bank recorded net income of $350.0 million on total equity of $4.36 billion for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 2.22 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.