American Express 2015 Annual Report Download - page 85

The following table presents our regulatory risk-based capital ratios and leverage ratios and those of our
significant bank subsidiaries, as well as additional ratios widely utilized in the marketplace, as of December 31, 2015.
TABLE 17: REGULATORY RISK-BASED CAPITAL AND LEVERAGE RATIOS
Basel III
Standards
2015 (a)
Ratios as of
December 31,
2015
Risk-Based Capital
Common Equity Tier 1 ............................................................ 4.5%
American Express Company ..................................................... 12.4%
American Express Centurion Bank ................................................ 16.9
American Express Bank, FSB .................................................... 13.7
Tier 1 ........................................................................... 6.0
American Express Company ..................................................... 13.5
American Express Centurion Bank ................................................ 16.9
American Express Bank, FSB .................................................... 13.7
Total ........................................................................... 8.0
American Express Company ..................................................... 15.2
American Express Centurion Bank ................................................ 18.2
American Express Bank, FSB .................................................... 15.1
Tier 1 Leverage ................................................................... 4.0
American Express Company ..................................................... 11.7
American Express Centurion Bank ................................................ 17.7
American Express Bank, FSB .................................................... 13.2
Supplementary Leverage Ratio (b) .................................................. 3.0%
American Express Company ..................................................... 9.8
American Express Centurion Bank ................................................ 14.1
American Express Bank, FSB .................................................... 10.0
Common Equity to Risk-Weighted Assets
American Express Company ..................................................... 14.1
Tangible Common Equity to Risk-Weighted Assets (c)
American Express Company ..................................................... 11.5%
(a) Transitional Basel III minimum and conservation buffer as defined by the Federal Reserve for calendar year 2015 for Advanced Approaches
institutions.
(b) The minimum supplementary leverage ratio (SLR) requirement of 3 percent is effective January 1, 2018.
(c) Tangible Common Equity to Risk-Weighted Assets, a non-GAAP measure, is calculated by dividing shareholders’ equity of $20.7 billion as of
December 31, 2015, less preferred shares of $1.6 billion and goodwill and other intangibles of $3.5 billion, by risk-weighted assets of $135.2
billion. We believe presenting the ratio of Tangible Common Equity to Risk-Weighted Assets is a useful measure of evaluating the strength of our
capital position. Tangible Common Equity to Risk-Weighted Assets ratio is widely used in the marketplace, although it may be calculated
differently by different companies.
TABLE 18: REGULATORY RISK-BASED CAPITAL COMPONENTS AND RISK WEIGHTED ASSETS
($ in Billions) December 31, 2015
Risk-Based Capital
Common Equity Tier 1 ...................................................................... $ 16.7
Tier 1 Capital .............................................................................. 18.3
Tier 2 Capital (a) ............................................................................ 2.3
Total Capital .............................................................................. 20.6
Risk Weighted Assets ....................................................................... 135.2
Average Total Assets to calculate the Tier 1 Leverage Ratio ...................................... 156.4
Total Leverage Exposure to calculate SLR .................................................... $186.6
(a) Tier 2 capital is the sum of the allowance for receivable and loan losses (limited to 1.25 percent of risk-weighted assets), a portion of the
unrealized gains on equity securities, $600 million of subordinated notes issued in the fourth quarter of 2014 and $750 million of subordinated
debentures. The $750 million of subordinated debentures do not meet the requirements of Tier 2 capital under Basel III, and are being
transitioned out of capital (the total amount included in Tier 2 capital as of December 31, 2015, was $187 million). Hence, the total amount of
subordinated debt included in Tier 2 capital as of December 31, 2015, was $787 million. The $750 million of subordinated debentures have been
fully transitioned out of capital as of January 1, 2016.
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