Safe and Sound

Wilmington Savings Fund Society, FSB

Wilmington, DE
4
Star Rating
Wilmington Savings Fund Society, FSB is an FDIC-insured bank started in 1832 and currently headquartered in Wilmington, DE. Regulatory filings show the bank having equity of $799.9 million on assets of $6.95 billion, as of December 31, 2017.

U.S. bank customers have $5.29 billion on deposit at 64 offices in multiple states run by 1,130 full-time employees. With that footprint, the bank holds loans and leases worth $4.81 billion, $3.78 billion of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, Wilmington Savings Fund Society, FSB exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank fared on the three major criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of an institution's financial strength. It acts as a buffer against losses and affords protection for depositors when a bank is struggling financially. When looking at safety and soundness, more capital is better.

Wilmington Savings Fund Society, FSB came in below the national average of 13.13 on our test to measure capital adequacy, scoring 10 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Wilmington Savings Fund Society, FSB's Tier 1 capital ratio was 11.36 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic headwinds.

Overall, Wilmington Savings Fund Society, FSB held equity amounting to 11.51 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by problem assets, such as unpaid loans.

Having lots of these types of assets means a bank may have to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, resulting in reduced earnings and potentially more risk of a future failure.

Wilmington Savings Fund Society, FSB scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 0.87 percent of Wilmington Savings Fund Society, FSB'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 known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Wilmington Savings Fund Society, FSB's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

Wilmington Savings Fund Society, FSB scored 14 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. Wilmington Savings Fund Society, FSB's most recent annualized quarterly return on equity was 6.43 percent, below the national average of 8.10 percent.

The bank recorded net income of $51.2 million on total equity of $799.9 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.75 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.