Safe and Sound

Capital One Bank (USA), National Association

Glen Allen, VA
5
Star Rating
Capital One Bank (USA), National Association is a Glen Allen, VA-based, FDIC-insured bank started in 1994. Regulatory filings show the bank having equity of $12.56 billion on $108,099,689,000 in assets, as of June 30, 2017.

Thanks to the work of 22,446 full-time employees, the bank has amassed loans and leases worth $81.35 billion, including real estate loans of $0. The bank currently holds $66.21 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Capital One Bank (USA), National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank did on the three key 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 works as a bulwark against losses and provides protection for depositors during periods of financial instability for the bank. It follows then that when it comes to measuring an a bank's financial fortitude, capital is useful. When looking at safety and soundness, the more capital, the better.
Capital One Bank (USA), National Association achieved a score of 14 out of a possible 30 points on our test to measure the adequacy of a bank's capital, better than the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Capital One Bank (USA), National Association's Tier 1 capital ratio was 13.16 percent, exceeding the 6 percent level considered adequate by regulators, but below the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to financial downturns.

Overall, Capital One Bank (USA), National Association held equity amounting to 11.62 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.

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

Capital One Bank (USA), National Association fell below the national average of 37.62 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 1.65 percent of Capital One Bank (USA), National Association's loans were noncurrent -- in other words, 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 maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." 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 Capital One Bank (USA), 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. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.

On Bankrate's earnings test, Capital One Bank (USA), National Association scored 24 out of a possible 30, beating out the national average of 16.52.

One important way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Capital One Bank (USA), National Association's most recent annualized quarterly return on equity was 14.52 percent, above the national average of 9.28 percent.

The bank reported net income of $887.7 million on total equity of $12.56 billion for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.63 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.