JP Morgan Chase 2013 Annual Report Download - page 156

Management’s discussion and analysis
162 JPMorgan Chase & Co./2013 Annual Report
A reconciliation of total stockholders’ equity to Tier 1
common, Tier 1 capital and Total qualifying capital is
presented in the table below.
Risk-based capital components and assets
December 31, (in millions) 2013 2012
Total stockholders’ equity $ 211,178 $ 204,069
Less: Preferred stock 11,158 9,058
Common stockholders’ equity 200,020 195,011
Effect of certain items in accumulated
other comprehensive income/(loss)
excluded from Tier 1 common (1,337) (4,198)
Less: Goodwill(a) 45,320 45,663
Other intangible assets(a) 2,012 2,311
Fair value DVA on structured notes
and derivative liabilities related to
the Firm’s credit quality 1,300 1,577
Investments in certain subsidiaries
and other 1,164 920
Tier 1 common 148,887 140,342
Preferred stock 11,158 9,058
Qualifying hybrid securities and
noncontrolling interests(b) 5,618 10,608
Other —(6)
Total Tier 1 capital 165,663 160,002
Long-term debt and other instruments
qualifying as Tier 2 16,695 18,061
Qualifying allowance for credit losses 16,969 15,995
Other (41) (22)
Total Tier 2 capital 33,623 34,034
Total qualifying capital $ 199,286 $ 194,036
Credit risk RWA $ 1,223,147 $ 1,156,102
Market risk RWA 164,716 114,276
Total RWA $ 1,387,863 $ 1,270,378
Total adjusted average assets $ 2,343,713 $ 2,243,242
(a) Goodwill and other intangible assets are net of any associated
deferred tax liabilities.
(b) Primarily includes trust preferred securities of certain business
trusts. Under the Basel III interim final rule published by U.S. federal
banking agencies in October 2013, trust preferred securities will be
phased out from inclusion as Tier 1 capital, but included as Tier 2
capital, beginning in 2014 through the end of 2015 and phased out
from inclusion as Tier 2 capital beginning in 2016 through the end of
2021.
Capital rollforward
The following table presents the changes in Basel I Tier 1
common, Tier 1 capital and Tier 2 capital for the year ended
December 31, 2013.
Year ended December 31, (in millions) 2013
Tier 1 common at December 31, 2012 $ 140,342
Net income applicable to common equity 17,118
Dividends declared on common stock (5,585)
Net issuance of treasury stock (2,845)
Changes in capital surplus (776)
Effect of certain items in accumulated other comprehensive
income/(loss) excluded from Tier 1 common (40)
Qualifying noncontrolling minority interests in consolidated
subsidiaries (47)
DVA on structured notes and derivative liabilities 277
Goodwill and other nonqualifying intangibles (net of
deferred tax liabilities) 642
Other (199)
Increase in Tier 1 common 8,545
Tier 1 common at December 31, 2013 $ 148,887
Tier 1 capital at December 31, 2012 $ 160,002
Change in Tier 1 common 8,545
Net issuance of noncumulative perpetual preferred stock 2,100
Redemption of qualifying trust preferred securities (4,942)
Other (42)
Increase in Tier 1 capital 5,661
Tier 1 capital at December 31, 2013 $ 165,663
Tier 2 capital at December 31, 2012 $ 34,034
Change in long-term debt and other instruments qualifying
as Tier 2 (1,366)
Change in allowance for credit losses 974
Other (19)
Decrease in Tier 2 capital (411)
Tier 2 capital at December 31, 2013 $ 33,623
Total capital at December 31, 2013 $ 199,286