Safe and Sound

Chase Bank USA, National Association

Wilmington, DE
5
Star Rating
Chase Bank USA, National Association is a Wilmington, DE-based, FDIC-insured bank founded in 1982. Regulatory filings show the bank having equity of $34.47 billion on $143.80 billion in assets, as of December 31, 2017.

Thanks to the efforts of 9,408 full-time employees in 3 offices in DE, the bank has amassed loans and leases worth $105.01 billion, including $0 worth of real estate loans. The bank currently holds $52.72 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Chase 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 important criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for account holders during periods of economic trouble for the bank. Therefore, a bank's level of capital is a useful measurement of a bank's financial strength. When it comes to safety and soundness, the more capital, the better.

Chase Bank USA, National Association did better than the national average of 13.13 points on our test to measure the adequacy of a bank's capital, scoring 24 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Chase Bank USA, National Association's Tier 1 capital ratio was 11.34 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather financial difficulties.

Overall, Chase Bank USA, National Association held equity amounting to 23.97 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with a large number of these types of assets may eventually be forced to use capital to cover losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, pushing down earnings and increasing the risk of a failure in the future.

Chase Bank USA, National Association exceeded the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.88 percent of Chase 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 below the national average of 1.01 percent.

Banks keep a reserve to handle problem assets known as an "allowance for loan and lease losses." Comparing how large that reserve is to the total amount of at-risk loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Chase Bank USA, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.

Chase Bank USA, National Association underperformed the average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Chase Bank USA, National Association was 2.23 percent, below the national average of 8.10 percent.

The bank recorded net income of $710.3 million on total equity of $34.47 billion for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.52 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.