Wells Fargo 2014 Annual Report Download - page 105

2013
171.0
Table 59: Risk-Based Capital Components
Under Basel III
(General Under
Approach) (1) Basel I
Dec 31, Dec 31,
(in billions) 2014
Total equity $ 185.3
Noncontrolling interests (0.9) (0.9)
Total Wells Fargo stockholders' equity 184.4 170.1
Adjustments:
Preferred stock (18.0) (15.2)
Cumulative other comprehensive income (2) (2.6) (1.4)
Goodwill and other intangible assets (2)(3) (26.3) (29.6)
Investment in certain subsidiaries and other (0.4) (0.4)
Common Equity Tier 1 (1)(4) (A) 137.1
Preferred stock 18.0 15.2
Qualifying hybrid securities and noncontrolling interests — 2.0
Other (0.4) —
Total Tier 1 capital 154.7
Long-term debt and other instruments qualifying as Tier 2 25.0 20.5
Qualifying allowance for credit losses 13.2 14.3
Other — 0.7
Total Tier 2 capital 38.2
Total qualifying capital (B) $ 192.9
Basel III Risk-weighted assets (RWAs) (5):
Credit risk $ 1,192.9
Market risk 49.6
Basel I RWAs (5):
Credit risk 1,105.2
Market risk 36.3
Total Basel III / Basel I RWAs (C) $ 1,242.5 1,141.5
Capital Ratios:
Common Equity Tier I to total RWAs (A)/(C) 11.04% 10.82
Total capital to total RWAs (B)/(C) 15.53 15.43
(1) Basel III revises the definition of capital, increases minimum capital ratios, and introduces a minimum Common Equity Tier 1 (CET1) ratio. These changes are being fully
phased in effective January 1, 2014, through the end of 2021 and the capital ratios will be determined using Basel III (General Approach) RWAs during 2014. See Table 62
in this section for a summary of changes in RWAs from December 31, 2013, to December 31, 2014.
(2) Under transition provisions to Basel III, cumulative other comprehensive income (previously deducted under Basel I) is included in CET1 over a specified phase-in period.
In addition, certain intangible assets includable in CET1 are phased out over a specified period.
(3) Goodwill and other intangible assets are net of any associated deferred tax liabilities.
(4) CET1 (formerly Tier 1 common equity under Basel I) is a non-GAAP financial measure that is used by investors, analysts and bank regulatory agencies to assess the capital
position of financial services companies. Management reviews CET1 along with other measures of capital as part of its financial analyses and has included this non-GAAP
financial information, and the corresponding reconciliation to total equity, because of current interest in such information on the part of market participants.
(5) Under the regulatory guidelines for risk-based capital, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to
one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar amount in each risk category
is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total
RWAs.
123.5
140.7
35.5
176.2
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