Safe and Sound

Barclays Bank Delaware

Wilmington, DE
5
Star Rating
Wilmington, DE-based Barclays Bank Delaware is an FDIC-insured bank started in 2001. The bank has equity of $4.36 billion on assets of $30.81 billion, according to June 30, 2017, regulatory filings.

Thanks to the work of 3,387 full-time employees, the bank currently 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 an analysis 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

When it comes to measuring an an institution's financial stability, capital is useful. It works as a cushion against losses and as protection for accountholders when a bank is struggling financially. When it comes to safety and soundness, the higher the capital, the better.

Barclays Bank Delaware racked up 14 out of a possible 30 points on our test to measure the adequacy of a bank's capital, exceeding the national average of 11.67.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Barclays Bank Delaware's Tier 1 capital ratio was 11.55 percent, higher than the 6 percent level regulators consider adequate, but under the national average of 12.50 percent. The higher the capital ratio, the better the bank will be able to weather economic downturns.

Overall, Barclays Bank Delaware held equity amounting to 14.14 percent of its assets, which exceeded the national average of 13.94 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with large numbers of these kinds of assets could eventually have to use capital to absorb 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 interest for the bank, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, Barclays Bank Delaware scored 40 out of a possible 40 points, better than the national average of 38.67 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, 1.10 percent of Barclays Bank Delaware's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.24 percent.

Banks keep a reserve to handle problem 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. Barclays Bank Delaware's loan loss allowance was 324.09 percent of its total noncurrent loans, higher than the national average. All things being equal, a higher ratio of loan loss allowance to noncurrent loans is better.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Conversely, losses take away from a bank's ability to do those things.

Barclays Bank Delaware received above-average marks on Bankrate's test of earnings, achieving a score of 26 out of a possible 30.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Barclays Bank Delaware's most recent annualized quarterly return on equity was 16.55 percent, above the national average of 9.24 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $350.0 million on total equity of $4.36 billion. 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 1.13 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.