Safe and Sound

JPMorgan Chase Bank, National Association

Columbus, OH
4
Star Rating
JPMorgan Chase Bank, National Association is a Columbus, OH-based, FDIC-insured bank that opened its doors in 1824. The bank has equity of $211.85 billion on $2.141 trillion in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 191,929 full-time employees in 5,290 offices in multiple states, the bank has amassed loans and leases worth $817.76 billion, including real estate loans of $399.10 billion. The bank currently holds $1.272 trillion in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, JPMorgan Chase Bank, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to score American banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of a bank's financial resilience. It acts as a cushion against losses and affords protection for depositors when a bank is struggling financially. From a safety and soundness perspective, the more capital, the better.

On our test to measure capital adequacy, JPMorgan Chase Bank, National Association received a score of 8 out of a possible 30 points, failing to reach the national average of 13.13.

One essential measure of this buffer is a bank's Tier 1 capital ratio. JPMorgan Chase Bank, National Association's Tier 1 capital ratio was 13.80 percent, higher than the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather economic challenges.

Overall, JPMorgan Chase Bank, National Association held equity amounting to 9.89 percent of its assets, which was lower than the national average of 12.03 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 past-due loans.

Having extensive holdings of these kinds of assets could eventually force a bank to use capital to absorb losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, pushing down earnings and increasing the chances of a future failure.

On Bankrate's test of asset quality, JPMorgan Chase Bank, National Association scored 40 out of a possible 40 points, above the national average of 37.49 points.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 1.52 percent of JPMorgan Chase Bank, National Association's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

Banks maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of problem loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on JPMorgan Chase Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. Conversely, losses reduce a bank's ability to do those things.

JPMorgan Chase Bank, National Association scored 18 out of a possible 30 on Bankrate's earnings test, beating the national average of 15.12.

One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. JPMorgan Chase Bank, National Association's most recent annualized quarterly return on equity was 9.04 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $18.93 billion on total equity of $211.85 billion. The bank experienced an annualized return on average assets, or ROA, of 0.89 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.