Safe and Sound

JPMorgan Chase Bank, Dearborn

Dearborn, MI
5
Star Rating
Founded in 1974, JPMorgan Chase Bank, Dearborn is an FDIC-insured bank based in Dearborn, MI. Regulatory filings show the bank having equity of $56.4 million on assets of $60.5 million, as of June 30, 2017.

The bank has loans and leases worth $233,000, including real estate loans of $0. U.S. bank customers currently have $516,000 in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, JPMorgan Chase Bank, Dearborn exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank faired on the three major criteria Bankrate used to score U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and provides protection for depositors when a bank is struggling financially. It follows then that when it comes to measuring an an institution's financial fortitude, capital is key. When it comes to safety and soundness, the higher the capital, the better.
JPMorgan Chase Bank, Dearborn scored above the national average of 13.38 points on our test to measure capital adequacy, racking up 30 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. JPMorgan Chase Bank, Dearborn's Tier 1 capital ratio was 444.07 percent, above the 6 percent level regulators consider adequate, and exceeding the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial challenges.

Overall, JPMorgan Chase Bank, Dearborn held equity amounting to 93.13 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

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

A bank with a large number of these types of assets could eventually be forced to use capital to absorb losses, cutting down on its cushion of equity. 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 failure in the future.

JPMorgan Chase Bank, Dearborn scored above the national average of 37.62 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of June 30, 2017, none of JPMorgan Chase Bank, Dearborn's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

Banks keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." Comparing the how large that reserve is to the total amount of problematic loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on JPMorgan Chase Bank, Dearborn's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its long-term survivability. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.

JPMorgan Chase Bank, Dearborn fell behind the national average on Bankrate's test of earnings, achieving a score of 2 out of a possible 30.

One important way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for JPMorgan Chase Bank, Dearborn was 0.79 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $223,000 on total equity of $56.4 million. The bank had an annualized return on average assets, or ROA, of 0.74 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 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.