Safe and Sound

The Delaware National Bank of Delhi

Delhi, NY
4
Star Rating
Founded in 1839, The Delaware National Bank of Delhi is an FDIC-insured bank based in Delhi, NY. As of December 31, 2017, the bank had equity of $27.4 million on $314.7 million in assets.

U.S. bank customers have $281.0 million on deposit at 4 offices in NY run by 50 full-time employees. With that footprint, the bank currently holds loans and leases worth $169.8 million, $134.5 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, The Delaware National Bank of Delhi exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three major criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for depositors when a bank is experiencing financial instability. Therefore, when it comes to measuring an an institution's financial strength, capital is important. When looking at safety and soundness, more capital is preferred.

On our test to measure the adequacy of a bank's capital, The Delaware National Bank of Delhi received a score of 8 out of a possible 30 points, below the national average of 13.13.

A bank's Tier 1 capital ratio is an important measure of this buffer. The Delaware National Bank of Delhi's Tier 1 capital ratio was 26.22 percent, exceeding the 6 percent level considered adequate by regulators, and above the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, The Delaware National Bank of Delhi held equity amounting to 8.70 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid mortgages.

A bank with lots of these types of assets may eventually be required to use capital to cover losses, decreasing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, decreasing earnings and increasing the chances of a failure in the future.

On Bankrate's asset quality test, The Delaware National Bank of Delhi scored 36 out of a possible 40 points, less than the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 0.96 percent of The Delaware National Bank of Delhi'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 known as an "allowance for loan and lease losses" to deal with problem assets . That reserve's size can be a useful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on The Delaware National Bank of Delhi's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money are less able to do those things.

The Delaware National Bank of Delhi underperformed the average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for The Delaware National Bank of Delhi was 5.97 percent, below the national average of 8.10 percent.

The bank earned net income of $1.6 million on total equity of $27.4 million for the twelve months ended December 31, 2017. The bank experienced 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.