JP Morgan Chase 2013 Annual Report Download - page 311

JPMorgan Chase & Co./2013 Annual Report 317
The following table presents the regulatory capital, assets and risk-based capital ratios for JPMorgan Chase and its significant
banking subsidiaries at December 31, 2013 and 2012. These amounts are determined in accordance with regulations issued
by the Federal Reserve and/or OCC. The table reflects the Firm’s and JPMorgan Chase Bank, N.A.’s implementation of rules that
provide for additional capital requirements for trading positions and securitizations (“Basel 2.5”). Basel 2.5 rules became
effective for the Firm and JPMorgan Chase Bank, N.A. on January 1, 2013. The implementation of these rules in the first
quarter of 2013 resulted in an increase of approximately $150 billion and $140 billion, respectively, in the Firm’s and
JPMorgan Chase Bank, N.A.’s risk-weighted assets compared with the Basel I rules at March 31, 2013. The implementation of
these rules also resulted in decreases of the Firm’s Tier 1 capital and Total capital ratios of 140 basis points and 160 basis
points, respectively, at March 31, 2013, and decreases of JPMorgan Chase Bank, N.A.’s Tier 1 capital and Total capital ratios of
130 basis points and 150 basis points, respectively, at March 31, 2013. Implementation of Basel 2.5 in the first quarter of
2013 did not impact Chase Bank USA, N.A.’s RWA or Tier 1 capital and Total capital ratios.
December 31, JPMorgan Chase & Co.(d) JPMorgan Chase Bank, N.A.(d) Chase Bank USA, N.A.(d) Well-
capitalized
ratios(e)
Minimum
capital
ratios(e) (in millions, except ratios) 2013 2012 2013 2012 2013 2012
Regulatory capital
Tier 1(a) $ 165,663 $ 160,002 $ 139,727 $ 111,827 $ 12,956 $ 9,648
Total 199,286 194,036 165,496 146,870 16,389 13,131
Assets
Risk-weighted(b) $1,387,863 $1,270,378 $1,171,574 $1,094,155 $100,990 $103,593
Adjusted average(c) 2,343,713 2,243,242 1,900,770 1,815,816 109,731 103,688
Capital ratios
Tier 1(a) 11.9% 12.6% 11.9% 10.2% 12.8% 9.3% 6.0% 4.0%
Total 14.4 15.3 14.1 13.4 16.2 12.7 10.0 8.0
Tier 1 leverage 7.1 7.1 7.4 6.2 11.8 9.3 5.0 (f) 3.0 (g)
(a) At December 31, 2013, for JPMorgan Chase and JPMorgan Chase Bank, N.A., trust preferred securities were $5.3 billion and $600 million, respectively.
If these securities were excluded from the calculation at December 31, 2013, Tier 1 capital would be $160.4 billion and $139.1 billion, respectively,
and the Tier 1 capital ratio would be 11.6% and 11.9%, respectively. At December 31, 2013, Chase Bank USA, N.A. had no trust preferred securities.
(b) Included off–balance sheet risk-weighted assets at December 31, 2013, of $315.9 billion, $304.0 billion and $14 million, and at December 31, 2012,
of $304.5 billion, $297.1 billion and $16 million, for JPMorgan Chase, JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A., respectively.
(c) Adjusted average assets, for purposes of calculating the leverage ratio, included total quarterly average assets adjusted for unrealized gains/(losses) on
securities, less deductions for disallowed goodwill and other intangible assets, investments in certain subsidiaries, and the total adjusted carrying value
of nonfinancial equity investments that are subject to deductions from Tier 1 capital.
(d) Asset and capital amounts for JPMorgan Chase’s banking subsidiaries reflect intercompany transactions; whereas the respective amounts for JPMorgan
Chase reflect the elimination of intercompany transactions.
(e) As defined by the regulations issued by the Federal Reserve, OCC and FDIC.
(f) Represents requirements for banking subsidiaries pursuant to regulations issued under the FDIC Improvement Act. There is no Tier 1 leverage
component in the definition of a well-capitalized bank holding company.
(g) The minimum Tier 1 leverage ratio for bank holding companies and banks is 3% or 4%, depending on factors specified in regulations issued by the
Federal Reserve and OCC.
Note: Rating agencies allow measures of capital to be adjusted upward for deferred tax liabilities, which have resulted from both nontaxable business
combinations and from tax-deductible goodwill. The Firm had deferred tax liabilities resulting from nontaxable business combinations totaling
$192 million and $291 million at December 31, 2013 and 2012, respectively; and deferred tax liabilities resulting from tax-deductible goodwill of
$2.8 billion and $2.5 billion at December 31, 2013 and 2012, respectively.