Safe and Sound

Fidelity Federal Savings and Loan Association of Delaware

Delaware, OH
5
Star Rating
Fidelity Federal Savings and Loan Association of Delaware is an FDIC-insured bank started in 1887 and currently headquartered in Delaware, OH. The bank has equity of $22.0 million on $106.6 million in assets, according to December 31, 2017, regulatory filings.

With 23 full-time employees in 2 offices in OH, the bank has amassed loans and leases worth $49.4 million, including real estate loans of $48.8 million. U.S. bank customers currently have $84.3 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Fidelity Federal Savings and Loan Association of Delaware exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to score American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for account holders when a bank is struggling financially. Therefore, a bank's level of capital is a useful measurement of a bank's financial strength. From a safety and soundness perspective, the higher the capital, the better.

Fidelity Federal Savings and Loan Association of Delaware scored above the national average of 13.13 points on our test to measure the adequacy of a bank's capital, scoring 30 out of a possible 30 points.

A bank's Tier 1 capital ratio is an essential measure of this buffer. Fidelity Federal Savings and Loan Association of Delaware's Tier 1 capital ratio was 47.73 percent, exceeding the 6 percent level regulators consider adequate, and exceeding the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic headwinds.

Overall, Fidelity Federal Savings and Loan Association of Delaware held equity amounting to 20.61 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

Having a large number of these types of assets may eventually force a bank to use capital to cover losses, cutting down on its equity buffer. 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, pushing down earnings and increasing the risk of a future failure.

Fidelity Federal Savings and Loan Association of Delaware exceeded the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.35 percent of Fidelity Federal Savings and Loan Association of Delaware'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 keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." How large that reserve is can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Fidelity Federal Savings and Loan Association of Delaware's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand economic trouble. Obviously, banks that are losing money are less able to do those things.

Fidelity Federal Savings and Loan Association of Delaware scored 2 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. Fidelity Federal Savings and Loan Association of Delaware's most recent annualized quarterly return on equity was 0.65 percent, below the national average of 8.10 percent.

The bank earned net income of $143,000 on total equity of $22.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.14 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.