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Regulatory Matters and Capital Adequacy | 12 Months Ended
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Dec. 31, 2016
Disclosure Text Block Abstract |
Regulatory Matters and Capital Adequacy | NOTE 23 Regulatory Matters and Capital Adequacy The Company is supervised and regulated by the Federal Reserve and is subject to the Federal Reserve’s requirements for risk-based capital and leverage ratios. The Company’s two U.S. bank operating subsidiaries, American Express Centurion Bank (Centurion Bank) and American Express Bank, FSB (American Express Bank) (together, the Banks), are subject to supervision and regulation, including similar regulatory capital requirements by the Federal Deposit Insurance Corporation (FDIC) and the Office of the Co mpt roller of the Currency (OCC), respectively. Under the risk-based capital guidelines of the Federal Reserve, the Company is required to maintain minimum ratios of Common Equity Tier 1 (CET1), Tier 1 a nd Total (Tier 1 plus Tier 2) capital to risk-weighted assets, as well as a minimum leverage ratio (Tier 1 capital to average adjusted on-balance sheet assets). Failure to meet minimum capital requirements can initiate certain mandatory, and possibly addi tional, discretionary actions by regulators, that, if undertaken, could have a direct material effect on the Company’s and the Banks’ operating activities. As of December 31, 2016 and 2015, the Company and the Banks met all capital requirements to w hich each was subject and maintained regulatory capital ratios in excess of those required to qualify as well capitalized. The following table presents the regulatory capital ratios for the Company and the Banks:
(Millions, except percentages) |  |  | CET 1 capital |  |  | Tier 1 capital |  |  | Total capital |  | CET 1 Capital ratio |  |  | Tier 1 capital ratio |  | Total capital ratio |  | Tier 1 leverage ratio |  |
December 31, 2016:(a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| American Express Company |  | $ | 16,134 |  | $ | 17,665 |  | $ | 19,893 |  | 12.3 | % |  | 13.5 | % | 15.2 | % | 11.6 | % |
| American Express Centurion Bank |  |  | 6,134 |  |  | 6,134 |  |  | 6,600 |  | 16.5 |  |  | 16.5 |  | 17.8 |  | 16.2 |  |
| American Express Bank, FSB |  |  | 6,681 |  |  | 6,681 |  |  | 7,194 |  | 16.3 |  |  | 16.3 |  | 17.5 |  | 13.9 |  |
December 31, 2015:(a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| American Express Company |  | $ | 16,747 |  | $ | 18,265 |  | $ | 20,551 |  | 12.4 | % |  | 13.5 | % | 15.2 | % | 11.7 | % |
| American Express Centurion Bank |  |  | 6,013 |  |  | 6,013 |  |  | 6,460 |  | 16.9 |  |  | 16.9 |  | 18.2 |  | 17.7 |  |
| American Express Bank, FSB |  |  | 6,927 |  |  | 6,927 |  |  | 7,601 |  | 13.7 |  |  | 13.7 |  | 15.1 |  | 13.2 |  |
Well-capitalized ratios(b) |  |  |  |  |  |  |  |  |  |  | 6.5 | % |  | 8.0 | % | 10.0 | % | 5.0 | % (c) |
Minimum capital ratios(b) |  |  |  |  |  |  |  |  |  |  | 4.5 | % |  | 6.0 | % | 8.0 | % | 4.0 | % |
A s a Basel III advanced approaches institution in parallel run, capital ratios are reported using Basel III capital definitions, inclusive of transition provisions, and risk-weighted assets using the Basel III standardized approach. As defined by the regulations issued by the Federal Reserve, OCC and FDIC for the year ended December 31, 2016. Represents requirements for banking subsidiaries to be considered “well-capitalized” pursuant to regulations issued under the Federal Deposit Insurance Corpora tion Improvement Act. There is no CET1 capital ratio or Tier 1 leverage ratio requirement for a bank holding company to be considered “well-capitalized.” Restricted Net Assets of Subsidiaries Certain of the Company’s subsidiaries are subject to restrictions on the transfer of net assets under debt agreements and regulatory requirements. These restrictions have not had any effect on the Company’s shareholder dividend policy and management does not anticipate any impact in the future. Procedures exist to transfer net assets between the Company and its subsidiaries, while ensuring compliance with the various contractual and regulatory constraints. As of December 31, 2016, the aggregate amount of net assets of subsidiaries that are restricted to be transferred to the Company was approximately $7.8 billion. Bank Holding Company Dividend Restrictions The Company is limited in its ability to pa y dividends by the Federal Reserve, which could prohibit a dividend that would be considered an unsafe or unsound banking practice. It is the policy of the Federal Reserve that bank holding companies generally should pay dividends on preferred and common s tock only out of net income available to common shareholders generated over the past year, and only if prospective earnings retention is consistent with the organization’s current and expected future capital needs, asset quality and overall financial condi tion. Moreover, bank holding companies are required by statute to be a source of strength to their insured depository institution subsidiaries and should not maintain dividend levels that undermine their ability to do so. On an annual basis, the Company is required to develop and maintain a capital plan, which includes planned dividends over a two-year horizon. We may be limited in our ability to pay dividends if the Federal Reserve objects to our capital plan. In addition, the Capital Rules include a capit al conservation buffer which is being phased in from January 1, 2016 through January 1, 2019. The Capital Rules also include a countercyclical capital buffer, which is currently set at zero but which could be increased by the Federal Reserve in the future. These buffers can be satisfied only with CET1 capital. If our risk-based capital ratios were to fall below the applicable buffer levels, we would face graduated constraints on dividends, stock repurchases and other capital distributions based on the amoun t of the shortfall. Banks’ Dividend Restrictions In the year ended December 31, 2016, Centurion Bank and American Express Bank paid dividends from retained earnings to their parent of $1.6 billion and $3.2 billion, respectively. The Banks are limited in their ability to pay dividends by banking statutes, regulations and supervisory polic y. In general, applicable federal and state banking laws prohibit, without first obtaining regulatory approval, insured depository institutions, s uch as Centurion Bank and American Express Bank from making dividend distributions if such distributions are not paid out of available retained earnings or would cause the institution to fail to meet capital adequacy standards. The Banks must maintain a c apital conservation buffer (and countercyclical buffer if in effect). If the Banks’ risk-based capital ratios do not satisfy minimum requirements plus the combined capital conservation buffer (and the countercyclical capital buffer, if applicable), they wi ll face graduated constraints on dividends and other capital distributions based on the amount of the shortfall. As of December 31, 2016, the Banks’ aggregate retained earnings available for the payment of div idends was $6.0 billion. In determini ng the dividends to pay their parent, the Banks must also consider the effects on applicable risk-based capital and leverage ratio requirements, as well as policy statements of the federal regulatory agencies. In addition, the Banks’ banking regulators hav e authority to limit or prohibit the payment of a dividend by the Banks under a number of circumstances, including if, in the banking regulator’s opinion, payment of a dividend would constitute an unsafe or unsound banking practice in light of the financia l condition of the banking organization.

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- Definition The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1G -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958577-112826 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1C -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958572-112826 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1E -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958574-112826 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1H -URI http://asc.fasb.org/extlink&oid=35709795&loc=d3e65071-112826 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958569-112826 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958570-112826 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1F -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958575-112826 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958568-112826 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1D -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958573-112826 + Details
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