Safe and Sound

Wilmington Trust, National Association

Wilmington, DE
5
Star Rating
Wilmington Trust, National Association is a Wilmington, DE-based, FDIC-insured bank founded in 1995. As of June 30, 2017, the bank held equity of $515.4 million on $3,403,075,000 in assets.

Thanks to the efforts of 407 full-time employees in 34 offices in multiple states, the bank currently holds loans and leases worth $252.6 million, including $255.6 million worth of real estate loans. The bank currently holds $2.86 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Wilmington Trust, National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to grade U.S. banks on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of an institution's financial resilience. It works as a buffer against losses and affords protection for accountholders when a bank is experiencing economic trouble. From a safety and soundness perspective, the higher the capital, the better.
Wilmington Trust, National Association racked up 22 out of a possible 30 points on our test to measure the adequacy of a bank's capital, above the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Wilmington Trust, National Association's Tier 1 capital ratio was 64.37 percent, higher than the 6 percent level considered adequate by regulators, and exceeding the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to economic downturns.

Overall, Wilmington Trust, National Association held equity amounting to 15.15 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

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

Having large numbers of these types of assets means a bank could eventually have to use capital to absorb losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, pushing down earnings and increasing the risk of a failure in the future.

Wilmington Trust, National Association scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 37.62.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 2.47 percent of Wilmington Trust, 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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the how large that reserve is to the total amount of problematic loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Wilmington Trust, National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

Wilmington Trust, National Association fell short of the national average on Bankrate's earnings test, achieving a score of 14 out of a possible 30.

One key way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Wilmington Trust, National Association's most recent annualized quarterly return on equity was 6.81 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $17.2 million on total equity of $515.4 million. The bank had an annualized return on average assets, or ROA, of 0.84 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.