Safe and Sound

Credit One Bank, National Association

Las Vegas, NV
5
Star Rating
Las Vegas, NV-based Credit One Bank, National Association is an FDIC-insured bank founded in 1984. The bank has equity of $173.6 million on assets of $323.7 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 647 full-time employees, the bank currently holds loans and leases worth $16.2 million, $0 of which are for real estate. U.S. bank customers currently have $21.8 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Credit One Bank, 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 major 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 cushion against losses and as protection for account holders when a bank is experiencing financial instability. It follows then that when it comes to measuring an an institution's financial fortitude, capital is essential. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, Credit One Bank, National Association achieved a score of 30 out of a possible 30 points, above the national average of 13.13.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Credit One Bank, National Association's Tier 1 capital ratio was 111.01 percent, exceeding the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic difficulties.

Overall, Credit One Bank, National Association held equity amounting to 53.62 percent of its assets, which exceeded the national average of 12.03 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 problem assets, such as unpaid mortgages.

A bank with lots of these types of assets could eventually be required to use capital to cover losses, diminishing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

Credit One Bank, National Association did better than the national average of 37.49 on Bankrate's test of asset quality, 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, 0.03 percent of Credit One Bank, National Association's loans were noncurrent, meaning 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 maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . How large that reserve is can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Credit One Bank, National Association's loan loss allowance was 29,560.00 percent of its total noncurrent loans, exceeding the national average. All else being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank better prepared to withstand economic trouble. Losses, on the other hand, take away from a bank's ability to do those things.

Credit One Bank, National Association exceeded the national average on Bankrate's test of earnings, achieving a score of 30 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. Credit One Bank, National Association's most recent annualized quarterly return on equity was 100.91 percent, above the national average of 8.10 percent.

The bank reported net income of $142.8 million on total equity of $173.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 56.38 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.