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As Of Filer Filing For·On·As Docs:Size 2/25/20 JPMorgan Chase & Co 10-K 12/31/19 226:85M |
Document/Exhibit Description Pages Size 1: 10-K Annual Report HTML 11.61M 2: EX-4.6 Instrument Defining the Rights of Security Holders HTML 242K 3: EX-10.18 Material Contract HTML 408K 4: EX-21 Subsidiaries List HTML 65K 5: EX-23 Consent of Experts or Counsel HTML 61K 6: EX-31.1 Certification -- §302 - SOA'02 HTML 66K 7: EX-31.2 Certification -- §302 - SOA'02 HTML 66K 8: EX-32 Certification -- §906 - SOA'02 HTML 65K 216: R1 Document and Entity Information HTML 151K 70: R2 Consolidated Statements of Income HTML 152K 45: R3 Consolidated Statements of Comprehensive Income HTML 97K 126: R4 Consolidated Balance Sheets HTML 181K 212: R5 Consolidated Balance Sheets (Parenthetical) HTML 118K 65: R6 Consolidated Statements of Changes in HTML 113K Stockholders' Equity 41: R7 Consolidated Statements of Changes in HTML 61K Stockholders' Equity (Parenthetical) 132: R8 Consolidated Statements of Cash Flows HTML 188K 207: R9 Basis of Presentation HTML 125K 217: R10 Fair Value Measurement HTML 1.51M 138: R11 Fair Value Option HTML 267K 60: R12 Credit Risk Concentrations HTML 207K 89: R13 Derivative Instruments HTML 804K 218: R14 Interest Income and Interest Expense HTML 105K 139: R15 Noninterest Revenue and Noninterest Expense HTML 181K 62: R16 Pension and Other Postretirement Employee Benefit HTML 460K Plans 92: R17 Employee Share-Based Incentives HTML 119K 220: R18 Investment Securities HTML 520K 136: R19 Securities Financing Activities HTML 173K 17: R20 Loans HTML 1.22M 93: R21 Allowance for Credit Losses HTML 428K 177: R22 Variable Interest Entities HTML 355K 149: R23 Goodwill and Mortgage Servicing Rights HTML 211K 18: R24 Premises and Equipment HTML 62K 94: R25 Deposits HTML 112K 179: R26 Leases HTML 160K 151: R27 Accounts Payable and Other Liabilities HTML 71K 15: R28 Long-term Debt HTML 198K 96: R29 Preferred Stock HTML 183K 86: R30 Common Stock HTML 94K 56: R31 Earnings Per Share HTML 92K 145: R32 Accumulated Other Comprehensive Income/(Loss) HTML 288K 224: R33 Income Taxes HTML 212K 85: R34 Restricted Cash, Other Restricted Assets and HTML 81K Intercompany Funds Transfers 55: R35 Regulatory Capital HTML 163K 143: R36 Off-balance Sheet Lending-related Financial HTML 271K Instruments, Guarantees, and Other Commitments 222: R37 Pledged Assets and Collateral HTML 90K 82: R38 Litigation HTML 86K 58: R39 International Operations HTML 149K 116: R40 Business Segments HTML 246K 32: R41 Parent Company HTML 223K 164: R42 Basis of Presentation (Policies) HTML 305K 185: R43 Basis of Presentation Basis of Presentation HTML 101K (Tables) 113: R44 Fair Value Measurement (Tables) HTML 1.46M 29: R45 Fair Value Option (Tables) HTML 258K 159: R46 Credit Risk Concentrations (Tables) HTML 201K 180: R47 Derivative Instruments (Tables) HTML 799K 110: R48 Interest Income and Interest Expense (Tables) HTML 103K 36: R49 Noninterest Revenue and Noninterest Expense HTML 172K (Tables) 53: R50 Pension and Other Postretirement Employee Benefit HTML 455K Plans (Tables) 74: R51 Employee Share-Based Incentives (Tables) HTML 109K 202: R52 Investment Securities (Tables) HTML 510K 117: R53 Securities Financing Activities (Tables) HTML 167K 54: R54 Loans (Tables) HTML 1.16M 75: R55 Allowance for Credit Losses (Tables) HTML 409K 205: R56 Variable Interest Entities (Tables) HTML 317K 120: R57 Goodwill and Mortgage Servicing Rights (Tables) HTML 204K 50: R58 Deposits (Tables) HTML 113K 78: R59 Leases (Tables) HTML 109K 190: R60 Accounts Payable and Other Liabilities (Tables) HTML 70K 169: R61 Long-term Debt (Tables) HTML 331K 22: R62 Preferred Stock (Tables) HTML 199K 103: R63 Common Stock (Tables) HTML 213K 193: R64 Earnings Per Share (Tables) HTML 91K 172: R65 Accumulated Other Comprehensive Income/(Loss) HTML 291K (Tables) 26: R66 Income Taxes (Tables) HTML 201K 107: R67 Restricted Cash, Other Restricted Assets and HTML 71K Intercompany Funds Transfers (Tables) 195: R68 Regulatory Capital (Tables) HTML 158K 166: R69 Off-balance Sheet Lending-related Financial HTML 228K Instruments, Guarantees, and Other Commitments (Tables) 129: R70 Pledged Assets and Collateral (Tables) HTML 90K 215: R71 International Operations (Tables) HTML 150K 71: R72 Business Segments (Tables) HTML 239K 47: R73 Parent Company (Tables) HTML 222K 125: R74 Basis of Presentation - 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Schedule of HTML 61K transfers not qualifying for sale accounting (Details) 98: R129 Loans - Narrative and Balances By Portfolio HTML 98K Segment (Details) 88: R130 Loans - By Portfolio Segment (Details) HTML 79K 64: R131 Loans - Purchased, Sold and Reclassified to HTML 79K Held-for-Sale (Details) 137: R132 Loans - Gains and Losses on Sales of Loans HTML 62K (Details) 221: R133 Loans - Consumer, Excluding Credit Card Loan HTML 87K Portfolio (Details) 87: R134 Loans - Consumer, Excluding Credit Card Loans, HTML 211K Residential Real Estate, Excluding PCI Loans (Details) 63: R135 Loans - Consumer, Excluding Credit Card Loans, HTML 89K Delinquency Statistics Junior Lien Home Equity Loans (Details) 135: R136 Loans - Consumer, Excluding Credit Card Loans, HTML 107K Impaired Loans (Details) 219: R137 Loans - Consumer, Excluding Credit Card Loans, HTML 69K Loan Modifications, New TDRs (Details) 91: R138 Loans - Consumer, Excluding Credit Card Loans, HTML 104K Loan Modifications, Nature and Extent of Modifications (Details) 61: R139 Loans - Consumer, Excluding Credit Card Loans, HTML 115K Financial Effects of Modifications and Redefaults (Details) 102: R140 Loans - Consumer, Excluding Credit Card Loans, HTML 164K Other Consumer Loans (Details) 28: R141 Loans - Consumer, Excluding Credit Card Loans, HTML 83K Other Consumer Impaired Loans and Loan Modifications (Details) 167: R142 Loans - Consumer, Excluding Credit Card Loans, PCI HTML 318K Loans (Details) 196: R143 Loans - Consumer, Excluding Credit Card Loans, PCI HTML 90K Delinquency Statistics (Details) 101: R144 Loans - Consumer, Excluding Credit Card Loans, PCI HTML 87K Accretable Yield Activity (Details) 27: R145 Loans - Credit Card Loan Portfolio (Details) HTML 109K 165: R146 Loans - Credit Card Portfolio - Impaired Loans HTML 71K (Details) 194: R147 Loans - Credit Card Portfolio - Loan Modifications HTML 79K (Details) 104: R148 Loans - Wholesale Loan Portfolio - By Class of HTML 176K Receivable (Details) 23: R149 Loans - Wholesale Loan Portfolio - Real Estate HTML 91K Class of Loans (Details) 39: R150 Loans - 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Document |
For
the fiscal year ended | Commission file | |||
number | i 1-5805 |
i Delaware | i 13-2624428 | ||
(State
or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) | ||
i 383 Madison Avenue, | |||
i New
York, | i New York | i 10179 | |
(Address of principal
executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
i Common stock | i JPM | i The
New York Stock Exchange |
i Depositary Shares, each representing a one-four hundredth interest in a share of 6.125% Non-Cumulative Preferred Stock, Series Y | i JPM
PR F | i The New York Stock Exchange |
i Depositary
Shares, each representing a one-four hundredth interest in a share of 6.10% Non-Cumulative Preferred Stock, Series AA | i JPM PR G | i The
New York Stock Exchange |
i Depositary Shares, each representing a one-four hundredth interest in a share of 6.15% Non-Cumulative Preferred Stock, Series BB | i JPM
PR H | i The New York Stock Exchange |
i Depositary
Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative Preferred Stock, Series DD | i JPM PR D | i The
New York Stock Exchange |
i Depositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative Preferred Stock, Series EE | i JPM
PR C | i The New York Stock Exchange |
i Depositary
Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative Preferred Stock, Series GG | i JPM PR J | i The
New York Stock Exchange |
i Alerian MLP Index ETNs due May 24, 2024 | i AMJ | i NYSE
Arca, Inc. |
i Guarantee of Callable Step-Up Fixed Rate Notes due April 26, 2028 of JPMorgan Chase Financial Company LLC | i JPM/28 | i The
New York Stock Exchange |
☒ | i Large
accelerated filer | ☐ | Accelerated filer | ☐ | Non-accelerated filer | i ☐ | Smaller reporting company | i ☐ | Emerging
growth company |
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34-37 |
1 |
2 |
3 |
4 |
5 |
• | limit
the products and services that it offers |
• | reduce the liquidity that it can provide through its market-making activities |
• | stop or discourage it from engaging in business opportunities that it might otherwise pursue |
• | recognize losses in the value of assets that it holds |
• | pay
higher taxes, assessments, levies or other governmental charges, including in connection with the resolution of tax examinations |
• | dispose of certain assets, and do so at times or prices that are disadvantageous |
• | impose restrictions on certain business activities, or |
• | increase the prices
that it charges for products and services, which could reduce the demand for them. |
• | larger firms are often subject to more stringent supervision and regulation |
• | financial
technology companies and other non-traditional competitors may not be subject to banking regulation, or may be supervised by a national or state regulatory agency that does not have the same resources or regulatory priorities as the regulatory agencies which supervise more diversified financial services firms, or |
• | the financial services regulatory framework in a particular jurisdiction may favor financial institutions that are based in that jurisdiction. |
6 |
• | the resolution of financial institutions |
• | the
establishment of locally-based intermediate holding companies or operating subsidiaries |
• | requirements to maintain minimum amounts of capital or liquidity in locally-based subsidiaries |
• | the separation (or “ring fencing”) of core banking products and services from markets activities |
• | requirements
for executing or settling transactions on exchanges or through central counterparties (“CCPs”) |
• | position limits and reporting rules for derivatives |
• | governance and accountability regimes |
• | conduct of business requirements, and |
• | restrictions
on compensation. |
• | divest assets or restructure its operations |
• | absorb increased operational, capital and liquidity costs |
• | change
the prices that it charges for its products and services |
• | curtail the products and services that it offers to its customers and clients, or |
• | incur higher costs for complying with different legal and regulatory frameworks. |
• | greater exposure in civil litigation |
• | damage to reputation |
• | disqualification
from doing business with certain clients or customers, or in specific jurisdictions, or |
• | other direct and indirect adverse effects. |
• | loss
of clients, customers and business |
• | restrictions on offering certain products or services, and |
• | losing permission to operate certain businesses, either temporarily or permanently. |
7 |
• | enter into further resolutions of investigations or enforcement actions |
• | pay additional regulatory fines, penalties or judgments, or |
• | accept material regulatory restrictions on, or changes in the management of, its businesses. |
• | the absence of a statutory or regulatory basis or guidance
for engaging in specific types of business or transactions |
• | conflicting or ambiguous laws and regulations, or the inconsistent application or interpretation of existing laws and regulations |
• | uncertainty concerning the enforceability of contractual, intellectual property or other obligations |
• | difficulty
in competing in economies in which the government controls or protects all or a portion of the local economy or specific businesses, or where graft or corruption may be pervasive, and |
• | the threat of arbitrary regulatory investigations, civil litigations or criminal prosecutions, the termination of licenses required to operate in the local market or the |
• | in
a bankruptcy proceeding under Chapter 11 of the U.S. Bankruptcy Code, or |
• | in a receivership administered by the FDIC under Title II of the Dodd-Frank Act (“Title II”). |
8 |
• | impede the ability of U.K.-based financial services firms to conduct business in the EU |
• | fail to address significant unresolved issues relating to the cross-border conduct of financial services activities, or |
• | apply
only temporarily. |
• | the possibility that financial institutions, their clients and counterparties, and other market participants may not be positioned to continue to do business through EU-based legal entities |
• | reduction
or fragmentation of market liquidity that may be caused if significant market participants (including trading venues and CCPs) that are currently based in the U.K. have not completed arrangements to conduct operations from the EU either in the near term or, if authorized to continue to operate from the U.K. on a transitional basis, after any transitional or temporary relief has expired |
• | uncertainties concerning the application and interpretation of laws and regulations relating to cross-border financial services activities |
• | inability
to engage in certain financial services activities through EU-based legal entities to the extent that licenses or temporary permission to engage in such activities have not been granted timely by local regulators |
9 |
• | unexpected
or unfavorable changes in laws and regulations, governmental policies or public sentiment, and |
• | losses due to process errors or incorrect judgments concerning economic, political or regulatory developments. |
• | monetary and fiscal policies and actions taken by the Federal Reserve and other central banks or governmental authorities, including any suspension or reversal of large-scale asset purchases |
• | inability to reach political consensus to keep the
U.S. government open |
• | isolationist foreign policies |
• | the implementation of tariffs and other protectionist trade policies |
• | political pressure on monetary policy decisions of central banks, or |
• | the
possible withdrawal or reduction of government support for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (together, the “U.S. GSEs”). |
• | erode investor confidence in the U.S. economy and financial markets, which could potentially undermine the status of the U.S. dollar as a safe haven currency |
• | provoke retaliatory
countermeasures by other countries and otherwise heighten tensions in diplomatic relations |
• | increase concerns about whether the U.S. government will be funded, and its outstanding debt serviced, at any particular time, and |
• | result in periodic shutdowns of the U.S. government or governments in other countries. |
• | slower
growth rates, rising inflation or recession |
• | greater market volatility |
• | a contraction of available credit and the widening of credit spreads |
• | diminished investor and consumer confidence |
• | lower
investment growth |
• | large-scale sales of government debt and other debt and equity securities in the U.S. and other countries |
• | reduced commercial activity among trading partners |
• | the potential for a currency redenomination by a particular country |
• | the
possible departure of a country from, or the dissolution of, a political or economic alliance or treaty |
• | potential expropriation or nationalization of assets |
• | other market dislocations, including the spread of unfavorable economic conditions from a particular country or region to other countries or regions. |
• | investor, consumer and business sentiment |
• | events
that reduce confidence in the financial markets |
• | inflation or deflation |
• | high unemployment or, conversely, a tightening labor market |
• | the availability and cost of capital, liquidity and credit |
• | levels
and volatility of interest rates (including overnight repo rates), credit spreads and market prices for currencies, equities and commodities, and the duration of any changes in levels or volatility |
• | the economic effects of outbreaks of hostilities, terrorism or other geopolitical instabilities, cyberattacks, climate change, natural disasters, severe weather conditions, health emergencies, the spread of infectious diseases or pandemics, and |
• | the health of the U.S. and global economies. |
10 |
• | severe
declines in asset values |
• | unexpected credit events |
• | unforeseen events or conditions that may cause previously uncorrelated factors to become correlated (and vice versa) |
• | the inability to effectively hedge market and other risks related to market-making position, or |
• | other
market risks that may not have been appropriately taken into account in the development, structuring or pricing of a financial instrument. |
• | interest rates |
• | the
rates of inflation and unemployment |
• | housing prices |
• | the level of consumer and small business confidence |
• | changes in consumer spending or in the level of consumer debt, and |
• | the
number of personal bankruptcies. |
• | policies and initiatives relating to medical insurance, education, immigration and employment status |
• | the inability to reach political consensus to keep the U.S. government open and funded, and |
• | policies
aimed at the economy more broadly, such as infrastructure spending and global trade, which could result in higher inflation or reductions in consumer disposable income. |
• | earn less fee revenue due to lower transaction volumes, including when clients are unwilling or unable to refinance their outstanding debt obligations in unfavorable market conditions,
or |
• | dispose of portions of credit commitments at a loss, or hold larger residual positions in credit commitments that cannot be sold at favorable prices. |
11 |
• | fewer originations of commercial and residential real estate loans |
• | losses on underwriting exposures |
• | the loss of deposits, including in the event that JPMorgan Chase makes incorrect
assumptions about depositor behavior |
• | lower net interest income if central banks introduce interest rate increases more quickly than anticipated and this results in a misalignment in the pricing of short-term and long-term borrowings |
• | less liquidity in the financial markets, and |
• | higher
funding costs. |
• | net
interest margins to be compressed, which could reduce the amounts that JPMorgan Chase earns on its investment portfolio to the extent that it is unable to reinvest contemporaneously in higher-yielding instruments |
• | unanticipated or adverse changes in depositor behavior, which could negatively affect JPMorgan Chase’s broader asset and liability management strategy, and |
• | a reduction in the value of JPMorgan Chase’s mortgage servicing rights (“MSRs”) asset, thereby decreasing revenues. |
12 |
• | engage in similar or related businesses, or in businesses in related industries |
• | do business in the same geographic region, or |
• | have
business profiles, models or strategies that could cause their ability to meet their obligations to be similarly affected by changes in economic conditions. |
13 |
• | market-wide
illiquidity or disruption |
• | unforeseen liquidity or capital requirements, including as a result of changes in laws, rules and regulations |
• | inability to sell assets, or to sell assets at favorable times or prices |
• | default by a CCP or other significant market participant |
• | unanticipated
outflows of cash or collateral |
• | unexpected loss of consumer deposits caused by changes in consumer behavior, and |
• | lack of market or customer confidence in JPMorgan Chase or financial institutions in general. |
• | satisfy applicable liquidity coverage ratio and net stable funding ratio requirements |
• | address
obligations under its resolution plan, or |
• | satisfy regulatory requirements in jurisdictions outside the U.S. relating to the pre-positioning of liquidity in subsidiaries that are material legal entities. |
• | pay interest on its debt securities |
• | pay dividends on its equity securities |
• | redeem or repurchase outstanding
securities, and |
14 |
• | fulfill its other payment obligations. |
• | expected future profitability |
• | risk
management practices |
• | legal expenses |
• | ratings differentials between bank holding companies and their bank and non-bank subsidiaries |
• | regulatory developments |
• | assumptions
about government support, and |
• | economic and geopolitical trends. |
• | reducing its access to capital markets |
• | materially increasing its cost of issuing and servicing securities |
• | triggering additional collateral or funding requirements, and |
• | decreasing
the number of investors and counterparties that are willing or permitted to do business with or lend to JPMorgan Chase. |
• | affect hedge accounting
relationships between financial instruments linked to a particular benchmark and any related derivatives, which could adversely affect JPMorgan Chase’s results of operations, or |
• | increase JPMorgan Chase’s operational costs with respect to the determination of whether the transition |
15 |
• | the FCA will no longer persuade or compel banks to submit rates for the calculation of the LIBOR benchmark after 2021, and |
• | once
a significant number of banks are no longer submitting such rates, the FCA may make a determination under applicable regulations that the LIBOR benchmark may not meet the standards required under those regulations for use as a benchmark. |
• | treated clients, customers, counterparties or investors unfairly, or caused them to experience losses, higher financing costs or lower returns on investments |
• | failed
to appropriately communicate the effects of the transition from benchmark rates on the products that JPMorgan Chase has sold to its clients and customers, or failed to disclose purported conflicts of interest |
• | made inappropriate product recommendations to or investments on behalf of its clients, or sold products that did not serve their intended purpose, in connection with the transition from benchmark rates |
• | engaged in anti-competitive behavior, or in the manipulation of markets or specific benchmarks, in connection
with the discontinuation of or transition from benchmark rates, or |
• | disadvantaged clients, customers, counterparties or investors when interpreting or making determinations under the terms of agreements or financial instruments. |
• | constraining the amount
of dividends that may be paid on common stock |
• | reducing the amount of common stock that JPMorgan Chase is permitted to repurchase |
• | requiring the issuance of, or prohibiting the redemption of, capital instruments in a manner inconsistent with JPMorgan Chase’s capital management strategy |
• | curtailing
JPMorgan Chase’s business activities or operations, or |
• | damaging JPMorgan Chase’s reputation. |
16 |
• | the quality of the information contained in those systems, as inaccurate, outdated or corrupted data can significantly compromise the functionality or reliability
of a particular system and other systems to which it transmits or from which it receives information, and |
• | JPMorgan Chase’s ability to appropriately maintain and upgrade its systems on a regular basis, and to ensure that any changes introduced to its systems are managed carefully to ensure security and operational continuity and adhere to all applicable legal and regulatory requirements. |
• | delays or other disruptions in providing information, services and liquidity to clients and customers |
• | the inability to settle transactions or obtain access to funds and other assets, including those for which physical settlement
and delivery is required |
• | failure to timely settle or confirm transactions |
• | the possibility that funds transfers, capital markets trades or other transactions are executed erroneously, illegally or with unintended consequences |
• | financial losses, including due to loss-sharing requirements
of CCPs, payment systems or other market infrastructures, or as possible restitution to clients and customers |
• | higher operational costs associated with replacing services provided by a system that is unavailable |
• | client or customer dissatisfaction with JPMorgan Chase’s products and services |
• | loss
of confidence in the ability of JPMorgan Chase, or financial institutions generally, to protect against and withstand operational disruptions, or |
• | harm to JPMorgan Chase’s reputation. |
• | errors made by JPMorgan
Chase or another market participant, whether inadvertent or malicious, cause widespread system disruption |
• | isolated or seemingly insignificant errors in operational systems compound, or migrate to other systems over time, to become larger issues |
• | failures in synchronization or encryption software, or degraded performance of microprocessors due to design flaws, could cause disruptions in operational systems, or the inability of systems to communicate with each other, and |
• | third
parties may attempt to block the use of key technology solutions by claiming that the use infringes on their intellectual property rights. |
• | potential liability to clients, counterparties and customers |
• | increased operating expenses |
• | higher
litigation costs, including regulatory fines, penalties and other sanctions |
• | damage to JPMorgan Chase’s reputation |
• | impairment of JPMorgan Chase’s liquidity |
17 |
• | regulatory intervention, or |
• | weaker competitive standing. |
• | heightened risk that external parties will be able to execute fraudulent transactions using JPMorgan Chase’s systems |
• | losses from fraudulent transactions, as well as potential liability for losses that exceed thresholds established in consumer protection laws and regulations |
• | increased
operational costs to remediate the consequences of the external party’s security breach, and |
• | harm to reputation arising from the perception that JPMorgan Chase’s systems may not be secure. |
• | the ineffective implementation of business decisions |
• | any
failure to institute controls that appropriately address risks associated with business activities, or to appropriately train employees with respect to those risks and controls |
• | a significant operational breakdown or failure, theft, fraud or other unlawful conduct, or |
• | other negative outcomes caused by human error or misconduct by an employee of JPMorgan Chase or of another party on which JPMorgan Chase’s operations depend. |
• | JPMorgan Chase’s clients and customers, and prospective clients and customers |
• | clients and customers of JPMorgan Chase’s clients and customers |
• | employees
and prospective employees, and |
• | employees of JPMorgan Chase’s vendors, counterparties and other external parties. |
• | increase JPMorgan Chase’s compliance and operating costs |
18 |
• | hinder
the development of new products or services, curtail the offering of existing products or services, or affect how products and services are offered to clients and customers |
• | demand significant oversight by JPMorgan Chase’s management, and |
• | require JPMorgan Chase to structure its businesses, operations and systems in less efficient ways. |
• | erroneously provided to parties who are not permitted to have the information, or |
• | intercepted
or otherwise compromised by third parties. |
• | obtain unauthorized access to confidential information belonging to
JPMorgan Chase or its clients, customers, counterparties or employees |
• | manipulate or destroy data |
• | disrupt, sabotage or degrade service on JPMorgan Chase’s systems, or |
• | steal money. |
• | the
techniques used in cyberattacks change frequently and are increasingly sophisticated, and therefore may not be recognized until launched |
• | cyberattacks can originate from a wide variety of sources, including third parties who are or may be involved in organized crime or linked to terrorist organizations or hostile countries, or whose objective is to disrupt the operations of financial institutions more generally |
• | JPMorgan Chase does not have control over the cybersecurity of the systems of the large number of clients,
customers, counterparties and third-party service providers with which it does business |
• | third parties may seek to gain access to JPMorgan Chase’s systems either directly or using equipment or security passwords belonging to employees, customers, |
19 |
• | it is possible that a third party, after establishing a foothold on an internal network without being detected, might obtain access to other networks and systems. |
• | significant disruption of JPMorgan Chase’s operations and those of its clients, customers and counterparties, including losing access to operational systems |
• | misappropriation of confidential information of JPMorgan Chase or that of its clients, customers, counterparties, employees or regulators |
• | damage
to computers or systems of JPMorgan Chase and those of its clients, customers and counterparties |
• | inability to fully recover and restore data that has been stolen, manipulated or destroyed, or to prevent systems from processing fraudulent transactions |
• | violations by JPMorgan Chase of applicable privacy and other laws |
• | financial
loss to JPMorgan Chase or to its clients, customers, counterparties or employees |
• | loss of confidence in JPMorgan Chase’s cybersecurity measures |
• | dissatisfaction among JPMorgan Chase’s clients, customers or counterparties |
• | significant exposure to litigation and regulatory fines, penalties
or other sanctions, and |
• | harm to JPMorgan Chase’s reputation. |
• | cyberbreaches or breaches of physical premises, including data centers |
• | power, telecommunications or internet outages |
• | failures of, or loss of access to, operational systems, including computer systems, servers, networks and other technology
assets |
• | damage to or loss of property or assets of JPMorgan Chase or third parties, and any consequent injuries, including in connection with any construction projects undertaken by JPMorgan Chase |
• | effects of climate change |
• | natural disasters or severe weather conditions |
• | accidents
such as explosions or structural failures |
• | health emergencies, the spread of infectious diseases or pandemics, or |
• | events arising from local or larger-scale political events, including outbreaks of hostilities or terrorist acts. |
20 |
• | hinder JPMorgan Chase’s ability to provide services to its clients and customers or to transact with its counterparties |
• | require it to expend significant resources to correct the failure or disruption |
• | cause
it to incur losses or liabilities, including from loss of revenue, damage to or loss of property, or injuries |
• | expose it to litigation or regulatory fines, penalties or other sanctions, and |
• | harm its reputation. |
• | require significant resources to remediate |
• | attract heightened regulatory scrutiny |
• | expose
JPMorgan Chase to regulatory investigations or legal proceedings |
• | subject it to litigation or regulatory fines, penalties or other sanctions |
• | harm its reputation, or |
• | otherwise diminish confidence in JPMorgan Chase. |
• | reliance on historical trends that may not accurately predict future events, including assumptions underlying the models and estimations which predict correlation among certain market indicators or asset prices |
• | inherent limitations associated with forecasting uncertain economic and financial outcomes |
• | historical
trend information may be incomplete, or may not anticipate severely negative market conditions such as extreme volatility, dislocation or lack of liquidity |
• | technology that is introduced to run models or estimations may not perform as expected, or may not be well understood by the personnel using the technology |
• | models and estimations may contain erroneous data, valuations, formulas or algorithms, and |
• | review
processes may fail to detect flaws in models and estimations. |
21 |
• | potential liability to clients and customers |
• | regulatory
fines, penalties or other sanctions |
• | lower revenues, and the opportunity cost from lost revenues |
• | increased operational costs, or |
• | harm to JPMorgan Chase’s reputation. |
• | trading assets and liabilities |
• | instruments
in the investment portfolio |
• | certain loans |
• | MSRs |
• | structured notes, and |
• | certain
repurchase and resale agreements. |
• | materially and adversely affect JPMorgan Chase’s business and results of operations or financial condition |
• | restrict its ability to access the capital markets |
• | require
it to expend significant resources to correct the lapses or deficiencies |
• | expose it to litigation or regulatory fines, penalties or other sanctions |
• | harm its reputation, or |
• | otherwise diminish investor confidence in JPMorgan Chase. |
• | greater volatility in JPMorgan Chase’s earnings and capital levels over economic cycles |
22 |
• | potential
reductions in its capital distributions, or |
• | unexpected increases in the allowance for credit losses. |
• | the products and services that JPMorgan Chase offers |
• | the geographies in which it operates |
• | the
types of clients and customers that it serves |
• | the counterparties with which it does business, and |
• | the methods and distribution channels by which it offers products and services. |
• | devise effective business plans and strategies |
• | offer
products and services that meet changing expectations of clients and customers |
• | allocate capital in a manner that promotes long-term stability to enable JPMorgan Chase to build and invest in market-leading businesses, even in a highly stressed environment |
• | allocate capital appropriately due to imprecise modeling or subjective judgments made in connection with those allocations |
• | appropriately
address shareholder concerns |
• | react quickly to changes in market conditions or market structures, or |
• | develop and enhance the operational, technology, risk, financial and managerial resources necessary to grow and manage JPMorgan Chase’s businesses. |
• | other banks and financial institutions |
• | trading,
advisory and investment management firms |
• | finance companies and technology companies, and |
• | other nonbank firms that are engaged in providing similar products and services. |
23 |
• | altered distribution and intensity of rainfall |
• | prolonged
droughts or flooding |
• | increased frequency of wildfires |
• | rising sea levels |
• | rising heat index |
• | improperly selling and marketing JPMorgan Chase’s products or services |
• | engaging in insider trading, market manipulation or unauthorized trading |
• | facilitating
illegal or aggressive tax-motivated transactions, or transactions designed to circumvent economic sanction programs |
• | failing to fulfill fiduciary obligations or other duties owed to clients or customers |
• | violating anti-trust or anti-competition laws by colluding with other market participants to manipulate markets, prices or indices |
• | engaging
in discriminatory behavior or harassment |
• | making risk decisions in ways that subordinate JPMorgan Chase’s risk appetite to employee compensation objectives, and |
• | misappropriating property, confidential or proprietary information, or technology assets belonging to JPMorgan Chase, its clients and customers or third parties. |
• | financial losses |
• | increased operational and compliance costs |
24 |
• | greater
scrutiny by regulators and other parties |
• | regulatory actions that require JPMorgan Chase to restructure, curtail or cease certain of its activities |
• | the need for significant oversight by JPMorgan Chase’s management |
• | loss of clients or customers, and |
• | harm
to JPMorgan Chase’s reputation. |
• | employee misconduct, including discriminatory behavior or harassment |
• | security
breaches, including cyberattacks |
• | failure to safeguard client, customer or employee information |
• | failure to manage environmental, social and sustainability risk issues associated with its business activities or those of its clients |
• | compliance or operational failures |
• | litigation
or regulatory fines, penalties or other sanctions |
• | regulatory investigations or enforcement actions, or resolutions of these matters, and |
• | failure or perceived failure of clients, customers, counterparties or other parties to comply with laws or regulations, including companies in which JPMorgan Chase has made principal investments, parties to joint ventures with JPMorgan Chase, and vendors with which JPMorgan Chase does business. |
• | cause certain clients
and customers to cease doing business with JPMorgan Chase |
• | impair JPMorgan Chase’s ability to attract new clients and customers, or to expand its relationships with existing clients and customers |
• | diminish JPMorgan Chase’s ability to hire or retain employees, or |
• | prompt JPMorgan Chase
to cease doing business with certain clients or customers. |
• | adequately address or appropriately disclose conflicts of interest, including potential conflicts of interest that may arise in connection with providing multiple products and services in the same transaction |
• | deliver
appropriate standards of service and quality |
• | treat clients and customers with the appropriate standard of care |
25 |
• | use
client and customer data responsibly and in a manner that meets legal requirements and regulatory expectations |
• | provide fiduciary products or services in accordance with the applicable legal and regulatory standards, or |
• | handle or use confidential information of customers or clients appropriately or in compliance with applicable data protection and privacy laws and regulations. |
• | worldwide economic disruption |
• | heightened volatility in financial markets |
• | severe declines in asset values, accompanied by widespread sell-offs of investments |
• | substantial
depreciation of local currencies, potentially leading to defaults by borrowers and counterparties in the affected region |
• | disruption of global trade, and |
• | diminished consumer, business and investor confidence. |
• | defaulting on or restructuring their obligations |
• | claiming that actions taken by government officials were beyond the legal authority of those officials, or |
• | repudiating transactions authorized by a previous incumbent government. |
• | extreme
currency fluctuations |
• | high inflation |
• | low or negative growth, and |
• | defaults or potential defaults on sovereign debt. |
• | price, capital or exchange controls, including imposition of punitive transfer and convertibility restrictions |
• | expropriation or nationalization of assets or confiscation of property, including intellectual property, and |
• | changes
in laws and regulations. |
26 |
• | social
unrest |
• | general strikes and demonstrations |
• | crime and corruption |
• | security and personal safety issues |
• | outbreaks
of hostilities |
• | overthrow of incumbent governments |
• | terrorist attacks, and |
• | other forms of internal discord. |
27 |
28 |
(in millions) | Approximate square footage | |
United
States(a) | ||
New York City, New York | ||
383 Madison Avenue, New York, New York | 1.1 | |
All other New York City locations | 8.3 | |
Total New York City, New York | 9.4 | |
Other
U.S. locations | ||
Columbus/Westerville, Ohio | 3.7 | |
Chicago, Illinois | 2.8 | |
Phoenix/Tempe, Arizona | 2.5 | |
Wilmington/Newark, Delaware | 2.2 | |
Houston,
Texas | 1.9 | |
Jersey City, New Jersey | 1.7 | |
Dallas/Plano, Texas | 1.6 | |
All other U.S. locations | 34.5 | |
Total United States | 60.3 | |
Europe,
the Middle East and Africa (“EMEA”) | ||
25 Bank Street, London, U.K. | 1.4 | |
All other U.K. locations | 2.9 | |
All other EMEA locations | 1.4 | |
Total EMEA | 5.7 | |
Asia-Pacific,
Latin America and Canada | ||
India | 3.8 | |
All other locations | 4.0 | |
Total Asia-Pacific, Latin America and Canada | 7.8 | |
Total | 73.8 |
(a) | At
December 31, 2019, the Firm owned or leased 4,976 retail branches in 38 states and Washington D.C. |
29 |
Year
ended December 31, 2019 | Total number of shares of common stock repurchased | Average price paid per share of common stock(a) | Aggregate purchase price of common stock repurchases (in millions)(a) | Dollar value of remaining authorized repurchase (in
millions)(a) | ||||||||||||
First quarter | 49,534,646 | $ | 102.78 | $ | 5,091 | $ | 5,290 | |||||||||
Second
quarter | 47,434,255 | 109.83 | 5,210 | 80 | (b) | |||||||||||
Third
quarter | 62,011,400 | 112.07 | 6,949 | 22,451 | ||||||||||||
October | 19,728,145 | 118.30 | 2,334 | 20,116 | ||||||||||||
November | 17,489,713 | 129.27 | 2,261 | 17,856 | ||||||||||||
December | 16,777,026 | 135.65 | 2,276 | 15,580 | (c) | |||||||||||
Fourth
quarter | 53,994,884 | 127.24 | 6,871 | 15,580 | (c) | |||||||||||
Year-to-date | 212,975,185 | $ | 113.26 | $ | 24,121 | $ | 15,580 | (c) |
(a) | Excludes
commissions cost. |
(b) | The $80 million unused portion under the prior Board authorization was canceled when the $29.4 billion repurchase program was authorized by the Board of Directors on June 27, 2019. |
(c) | Represents the amount remaining under the $29.4 billion repurchase program. |
30 |
31 |
Age | ||
Name | (at
December 31, 2019) | Positions and offices |
63 | Chairman of the Board and Chief Executive Officer; he had been President from July 2004 until January 2018. | |
Ashley Bacon | 50 | Chief Risk Officer since June 2013. |
Lori A. Beer | 52 | Chief
Information Officer since September 2017, prior to which she had been Chief Information Officer of the Corporate & Investment Bank since June 2016. She was Global Head of Banking Technology from January 2014 until May 2016. Prior to joining JPMorgan Chase in 2014, she was Executive Vice President of Specialty Businesses and Information Technology for Anthem, Inc. |
Mary Callahan Erdoes | 52 | Chief Executive Officer of Asset & Wealth Management since September 2009. |
Stacey Friedman | 51 | General Counsel since January 2016, prior to which she was Deputy General Counsel since
July 2015 and General Counsel for the Corporate & Investment Bank since August 2012. |
Marianne Lake | 50 | Chief Executive Officer of Consumer Lending and Card Services since May 2019, prior to which she had been Chief Financial Officer since January 2013. |
Robin Leopold | 55 | Head of Human Resources since January 2018, prior to which she had been Head of Human Resources for the Corporate & Investment Bank since August 2012. |
Douglas B. Petno | 54 | Chief
Executive Officer of Commercial Banking since January 2012. |
49 | Chief Financial Officer since May 2019, prior to which she had been the Chief Executive Officer for Card Services since 2017. She was Chief Executive Officer of Business Banking from 2015 to 2017. | |
Daniel E. Pinto | 57 | Co-President and Co-Chief Operating Officer since January 2018, Chief Executive Officer of the Corporate & Investment Bank since March 2014, and Chief Executive Officer of Europe, the Middle East and
Africa since June 2011. He had been Co-Chief Executive Officer of the Corporate & Investment Bank from July 2012 until March 2014. |
Peter Scher | 58 | Head of Corporate Responsibility since 2011 and Chairman of the Mid-Atlantic Region since 2015. |
Gordon A. Smith | 61 | Co-President and Co-Chief Operating Officer since January 2018, and Chief Executive Officer of Consumer & Community Banking since December 2012. |
32 |
Number of shares to be issued upon exercise of outstanding options/stock appreciation rights | Weighted-average exercise price of outstanding options/stock appreciation rights | Number of shares remaining available for future issuance under stock incentive plans | ||||||||||
Plan category | ||||||||||||
Employee
share-based incentive plans approved by shareholders | 5,527,331 | (a) | $ | 41.36 | 74,945,900 | (b) | ||||||
Total | 5,527,331 | $ | 41.36 | 74,945,900 |
(a) | Does
not include restricted stock units or performance stock units granted under the shareholder-approved Long-Term Incentive Plan (“LTIP”), as amended and restated effective May 15, 2018. Refer to Note 9 for further discussion. |
(b) | Represents shares available for future issuance under the shareholder-approved LTIP. |
33 |
1 | Financial statements | |
The
Consolidated Financial Statements, the Notes thereto and the report of the Independent Registered Public Accounting Firm thereon listed in Item 8 are set forth commencing on page 143. | ||
2 | Financial statement schedules | |
3 | Exhibits | |
3.1 | ||
3.2 | ||
3.3 | ||
3.4 | ||
3.5 | ||
3.6 | ||
3.7 | ||
3.8 | ||
3.9 | ||
3.10 | ||
3.11 | ||
3.12 | ||
3.13 | ||
3.14 | ||
3.15 | ||
3.16 | ||
3.17 |
34 |
3.18 | ||
3.19 | ||
3.20 | ||
4.1(a) | ||
4.1(b) | ||
4.2(a) | ||
4.2(b) | ||
4.3(a) | ||
4.3(b) | ||
4.4 | ||
4.5 | ||
4.6 | ||
Other
instruments defining the rights of holders of long-term debt securities of JPMorgan Chase & Co. and its subsidiaries are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. JPMorgan Chase & Co. agrees to furnish copies of these instruments to the SEC upon request. | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
35 |
10.5 | ||
10.6 | ||
10.7 | ||
10.8 | ||
10.9 | ||
10.10 | ||
10.11 | ||
10.12 | ||
10.13 | ||
10.14 | ||
10.15 | ||
10.16 | ||
10.17 | ||
10.18 | ||
10.19 | ||
10.20 | ||
10.21 | ||
36 |
21 | ||
22 | Annual Report on Form 11-K of The JPMorgan Chase 401(k) Savings Plan for the year ended December 31, 2019 (to be filed pursuant to Rule 15d-21 under the Securities Exchange Act of 1934). | |
23 | ||
31.1 | ||
31.2 | ||
32 | ||
101.INS | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.(d) | |
101.SCH | XBRL
Taxonomy Extension Schema Document.(b) | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document.(b) | |
101.DEF | XBRL
Taxonomy Extension Definition Linkbase Document.(b) | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document.(b) | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document.(b) | |
104 | Cover
Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101). |
(a) | This exhibit is a management contract or compensatory plan or arrangement. |
(b) |
(c) | Furnished
herewith. This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. |
(d) | Pursuant to Rule 405 of Regulation S-T, includes the following financial information included in the Firm’s Form 10-K for the year ended December 31, 2019, formatted in XBRL (eXtensible Business Reporting Language) interactive data files: (i) the Consolidated statements of income for the years ended December 31,
2019, 2018 and 2017, (ii) the Consolidated statements of comprehensive income for the years ended December 31, 2019, 2018 and 2017, (iii) the Consolidated balance sheets as of December 31, 2019 and 2018, (iv) the Consolidated statements of changes in stockholders’ equity for the years ended December 31, 2019, 2018 and 2017,
(v) the Consolidated statements of cash flows for the years ended December 31, 2019, 2018 and 2017, and (vi) the Notes to Consolidated Financial Statements. |
37 |
38 |
Financial: | ||||||
40 | Audited financial statements: | |||||
41 | 142 | |||||
Management’s
discussion and analysis: | 143 | |||||
42 | 146 | |||||
43 | 151 | |||||
48 | ||||||
52 | ||||||
55 | ||||||
57 | Supplementary information: | |||||
60 | 287 | |||||
79 | 288–292 | |||||
84 | 293 | |||||
85 | ||||||
93 | ||||||
100 | ||||||
119 | ||||||
127 | ||||||
129 | ||||||
136 | ||||||
139 | ||||||
141 | ||||||
JPMorgan
Chase & Co./2019 Form 10-K | 39 |
As
of or for the year ended December 31, (in millions, except per share, ratio, headcount data and where otherwise noted) | |||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||
Selected
income statement data | |||||||||||||||||
Total net revenue | $ | 115,627 | $ | 109,029 | $ | 100,705 | $ | 96,569 | $ | 94,440 | |||||||
Total
noninterest expense | 65,497 | 63,394 | 59,515 | 56,672 | 59,911 | ||||||||||||
Pre-provision
profit | 50,130 | 45,635 | 41,190 | 39,897 | 34,529 | ||||||||||||
Provision for
credit losses | 5,585 | 4,871 | 5,290 | 5,361 | 3,827 | ||||||||||||
Income before
income tax expense | 44,545 | 40,764 | 35,900 | 34,536 | 30,702 | ||||||||||||
Income
tax expense | 8,114 | 8,290 | 11,459 | 9,803 | 6,260 | ||||||||||||
Net income | $ | 36,431 | $ | 32,474 | $ | 24,441 | (f) | $ | 24,733 | $ | 24,442 | ||||||
Earnings
per share data | |||||||||||||||||
Net income: Basic | $ | 10.75 | $ | 9.04 | $ | 6.35 | $ | 6.24 | $ | 6.05 | |||||||
Diluted | 10.72 | 9.00 | 6.31 | 6.19 | 6.00 | ||||||||||||
Average
shares: Basic | 3,221.5 | 3,396.4 | 3,551.6 | 3,658.8 | 3,741.2 | ||||||||||||
Diluted | 3,230.4 | 3,414.0 | 3,576.8 | 3,690.0 | 3,773.6 | ||||||||||||
Market
and per common share data | |||||||||||||||||
Market capitalization | $ | 429,913 | $ | 319,780 | $ | 366,301 | $ | 307,295 | $ | 241,899 | |||||||
Common
shares at period-end | 3,084.0 | 3,275.8 | 3,425.3 | 3,561.2 | 3,663.5 | ||||||||||||
Book
value per share | 75.98 | 70.35 | 67.04 | 64.06 | 60.46 | ||||||||||||
Tangible book
value per share (“TBVPS”)(a) | 60.98 | 56.33 | 53.56 | 51.44 | 48.13 | ||||||||||||
Cash
dividends declared per share | 3.40 | 2.72 | 2.12 | 1.88 | 1.72 | ||||||||||||
Selected
ratios and metrics | |||||||||||||||||
Return on common equity (“ROE”) | 15 | % | 13 | % | 10 | % | 10 | % | 11 | % | |||||||
Return
on tangible common equity (“ROTCE”)(a) | 19 | 17 | 12 | 13 | 13 | ||||||||||||
Return
on assets (“ROA”) | 1.33 | 1.24 | 0.96 | 1.00 | 0.99 | ||||||||||||
Overhead
ratio | 57 | 58 | 59 | 59 | 63 | ||||||||||||
Loans-to-deposits ratio | 61 | 67 | 64 | 65 | 65 | ||||||||||||
Liquidity
coverage ratio (“LCR”) (average)(b) | 116 | 113 | 119 | N/A | N/A | ||||||||||||
Common
equity tier 1 (“CET1”) capital ratio(c) | 12.4 | 12.0 | 12.2 | 12.3 | 11.8 | ||||||||||||
Tier
1 capital ratio(c) | 14.1 | 13.7 | 13.9 | 14.0 | 13.5 | ||||||||||||
Total
capital ratio(c) | 16.0 | 15.5 | 15.9 | 15.5 | 15.1 | ||||||||||||
Tier
1 leverage ratio(c) | 7.9 | 8.1 | 8.3 | 8.4 | 8.5 | ||||||||||||
Supplementary
leverage ratio (“SLR”)(d) | 6.3 | % | 6.4 | % | 6.5 | % | 6.5 | % | 6.5 | % | |||||||
Selected
balance sheet data (period-end) | |||||||||||||||||
Trading assets | $ | 411,103 | $ | 413,714 | $ | 381,844 | $ | 372,130 | $ | 343,839 | |||||||
Investment
securities | 398,239 | 261,828 | 249,958 | 289,059 | 290,827 | ||||||||||||
Loans | 959,769 | 984,554 | 930,697 | 894,765 | 837,299 | ||||||||||||
Core
Loans | 916,144 | 931,856 | 863,683 | 806,152 | 732,093 | ||||||||||||
Average core
loans | 906,606 | 885,221 | 829,558 | 769,385 | 670,757 | ||||||||||||
Total assets | 2,687,379 | 2,622,532 | 2,533,600 | 2,490,972 | 2,351,698 | ||||||||||||
Deposits | 1,562,431 | 1,470,666 | 1,443,982 | 1,375,179 | 1,279,715 | ||||||||||||
Long-term
debt | 291,498 | 282,031 | 284,080 | 295,245 | 288,651 | ||||||||||||
Common stockholders’
equity | 234,337 | 230,447 | 229,625 | 228,122 | 221,505 | ||||||||||||
Total stockholders’
equity | 261,330 | 256,515 | 255,693 | 254,190 | 247,573 | ||||||||||||
Headcount | 256,981 | 256,105 | 252,539 | 243,355 | 234,598 | ||||||||||||
Credit
quality metrics | |||||||||||||||||
Allowance for credit losses | $ | 14,314 | $ | 14,500 | $ | 14,672 | $ | 14,854 | $ | 14,341 | |||||||
Allowance
for loan losses to total retained loans | 1.39 | % | 1.39 | % | 1.47 | % | 1.55 | % | 1.63 | % | |||||||
Allowance
for loan losses to retained loans excluding purchased credit-impaired loans(e) | 1.31 | 1.23 | 1.27 | 1.34 | 1.37 | ||||||||||||
Nonperforming
assets | $ | 4,497 | $ | 5,190 | $ | 6,426 | $ | 7,535 | $ | 7,034 | |||||||
Net
charge-offs | 5,629 | 4,856 | 5,387 | 4,692 | 4,086 | ||||||||||||
Net charge-off
rate | 0.60 | % | 0.52 | % | 0.60 | % | (g) | 0.54 | % | 0.52 | % |
(a) | TBVPS
and ROTCE are each non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 57–59 for a further discussion of these measures. |
(b) | For the years ended December 31, 2019, 2018 and 2017, the percentage represents the Firm’s reported average LCR for the three months ended December 31, 2019, 2018 and 2017, which
became effective April 1, 2017. Refer to Liquidity Risk Management on pages 93–98 for additional information on the Firm’s LCR. |
(c) | The Basel III capital rules became fully phased-in effective January 1, 2019. Prior to this date, the required capital measures were subject to the transitional rules which, as of December 31, 2018, were the same on a fully phased-in and transitional basis. Refer to Capital Risk Management on pages 85–92 for additional information on these measures. |
(d) | The
Basel III rule for the SLR became fully phased-in effective January 1, 2018. Prior to this date, the SLR was calculated under the transitional rules. Refer to Capital Risk Management on pages 85–92 for additional information on these measures. |
(e) | This ratio is a non-GAAP financial measure as it excludes the impact of residential real estate purchased credit-impaired (“PCI”) loans. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 57–59, and the Allowance for credit losses on pages 116–117
for further discussion of this measure. |
(f) | In December 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into law. The Firm’s results for the year ended December 31, 2017 included a $2.4 billion decrease to net income as a result of the enactment of the TCJA. Refer to Note 25 for additional information related to the impact of the TCJA. |
(g) | Excluding net charge-offs of $467 million related to the student loan
portfolio sale, the net charge-off rate for the year ended December 31, 2017 would have been 0.55%. |
40 | JPMorgan Chase & Co./2019 Form 10-K |
December 31, (in dollars) | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||
JPMorgan
Chase | $ | 100.00 | $ | 108.37 | $ | 145.82 | $ | 184.81 | $ | 172.52 | $ | 254.07 | |||||||||||
KBW
Bank Index | 100.00 | 100.48 | 129.13 | 153.14 | 126.02 | 171.54 | |||||||||||||||||
S&P
Financials Index | 100.00 | 98.44 | 120.38 | 147.58 | 128.33 | 169.52 | |||||||||||||||||
S&P
500 Index | 100.00 | 101.37 | 113.49 | 138.26 | 132.19 | 173.80 |
JPMorgan Chase & Co./2019 Form 10-K | 41 |
INTRODUCTION
|
42 | JPMorgan Chase & Co./2019 Form 10-K |
EXECUTIVE
OVERVIEW |
Financial performance of JPMorgan Chase | |||||||||
Year
ended December 31, (in millions, except per share data and ratios) | |||||||||
2019 | 2018 | Change | |||||||
Selected income statement data | |||||||||
Total
net revenue | $ | 115,627 | $ | 109,029 | 6 | % | |||
Total noninterest expense | 65,497 | 63,394 | 3 | ||||||
Pre-provision
profit | 50,130 | 45,635 | 10 | ||||||
Provision for credit losses | 5,585 | 4,871 | 15 | ||||||
Net
income | 36,431 | 32,474 | 12 | ||||||
Diluted earnings per share | 10.72 | 9.00 | 19 | ||||||
Selected
ratios and metrics | |||||||||
Return on common equity | 15 | % | 13 | % | |||||
Return on tangible common equity | 19 | 17 | |||||||
Book
value per share | $ | 75.98 | $ | 70.35 | 8 | ||||
Tangible book value per share | 60.98 | 56.33 | 8 | ||||||
Capital
ratios(a) | |||||||||
CET1 | 12.4 | % | 12.0 | % | |||||
Tier 1 capital | 14.1 | 13.7 | |||||||
Total
capital | 16.0 | 15.5 |
(a) | The Basel III capital rules became fully phased-in effective January 1, 2019. Prior to this date, the required capital measures were subject to the transitional rules which, as of December 31,
2018, were the same on a fully phased-in and transitional basis. Refer to Capital Risk Management on pages 85–92 for additional information on these measures. |
• | Net
income was $36.4 billion, up 12%. |
• | Total net revenue increased 6%. Net interest income was $57.2 billion, up 4%, driven by continued balance sheet growth and mix as well as higher average short-term rates, partially offset by higher deposit pay rates. Noninterest revenue was $58.4 billion, up 8%, driven by growth across CCB as well as higher Markets revenue in CIB. Noninterest revenue included approximately $500 million of gains on the sales of certain mortgage loans in Home Lending. |
• | Noninterest
expense was $65.5 billion, up 3%, driven by continued investments across the businesses including employees, technology, real estate, and marketing, as well as higher volume- and revenue-related expenses, including depreciation expense on auto lease assets, partially offset by lower FDIC charges. |
• | Income tax expense included $1.1 billion of tax benefits related to the resolution of certain tax audits. |
• | The provision for credit losses was $5.6 billion, up $714 million, reflecting increases in both wholesale and
consumer. The increase in the wholesale provision reflects additions to the allowance for credit losses in the current year on select client downgrades. The prior year reflected a benefit related to a single name in the Oil & Gas portfolio and higher recoveries. The increase in the consumer provision reflects higher net charge-offs and additions to the allowance for loan losses in Card, predominantly offset by a higher reduction in the allowance for loan losses in Home Lending. The prior year also benefited from larger recoveries in Home Lending on loan sales. |
• | The total allowance for credit losses was $14.3 billion at December 31, 2019, and
the Firm had a loan loss coverage ratio of 1.39%, flat compared with the prior year; excluding the PCI portfolio, the equivalent ratio was 1.31% compared with 1.23% in the prior year. The Firm’s nonperforming assets totaled $4.5 billion at December 31, 2019, a decrease from $5.2 billion in the prior year, primarily reflecting paydowns in the wholesale portfolio and improved credit performance in the consumer portfolio. |
• | Firmwide average total loans of $955 billion were up 1%, or up 3% excluding the impact of certain loan sales in Home Lending. |
• | The
Firm’s CET1 capital was $188 billion, and the Standardized and Advanced CET1 ratios were 12.4% and 13.4%, respectively. |
• | The Firm’s SLR was 6.3%. |
• | The Firm continued to grow tangible book value per share (“TBVPS”), ending 2019 at $60.98, up 8%. |
JPMorgan Chase & Co./2019 Form 10-K | 43 |
CCB ROE 31% | • Record revenue of $55.9 billion, up 7%; record net income of $16.6 billion, up 12% • Average loans down 3%; Home Lending loans down 9% impacted by loan sales; Card loans up 7% • Client investment assets up 27%; average deposits up 3%• Credit
card sales volume up 10% and merchant processing volume up 11% | |
CIB ROE 14% | • Record revenue of $38.3 billion, up 5%; record net income of $11.9 billion, up 1%• Maintained #1 ranking for Global Investment Banking fees with 9.0% wallet share, up 40 basis points (“bps”) • Investment Banking revenue of $7.2 billion, up 3%• Total Markets revenue of $20.9 billion,
up 7% | |
CB ROE 17% | • Record Investment Banking revenue of $2.7 billion, up 10% • Average loans and deposits each up 1%• Strong credit quality with NCOs of 8 bps | |
AWM ROE 26% | • Record
revenue of $14.3 billion, up 2%• Average loans up 8%; average deposits up 2%• Assets under management (“AUM”) of $2.4 trillion, up 19% |
$2.3
trillion | Total credit provided and capital raised | |
$262 billion | Credit for consumers | |
$33 billion | Credit
for U.S. small businesses | |
$860 billion | Credit for corporations | |
$1.0 trillion | Capital raised for corporate clients and non-U.S. government entities | |
$79
billion | Credit and capital raised for nonprofit and U.S. government entities(a) |
(a) | Includes states, municipalities, hospitals and universities. |
44 | JPMorgan
Chase & Co./2019 Form 10-K |
• | Management expects full-year 2020 net interest income, on a managed basis, to be approximately
$57 billion, market dependent, reflecting the impact of lower interest rates offset by balance sheet growth and mix. |
• | The Firm continues to take a disciplined approach to managing expenses, while investing for growth and innovation. As a result, management expects Firmwide adjusted expense for the full-year 2020 to be approximately $67 billion. |
• | The Firm continues to experience charge-off rates at very low levels, reflecting favorable credit trends across the consumer and wholesale portfolios. Management expects
full-year 2020 net charge-offs to be just over $6 billion, an increase from prior year, driven by Card on growth and mix. |
• | Management expects the full-year 2020 effective tax rate, on a reported basis, to be approximately 20%, and approximately 5 to 7 percentage points higher on a managed basis. |
• | Management expects first-quarter 2020 net interest income, on a managed basis, to be approximately $14.2 billion, market dependent. |
• | Firmwide
adjusted expense for the first-quarter 2020 is expected to be approximately $17 billion. |
• | The effective tax rate, on a reported basis, for the first quarter of 2020 is expected to be approximately 17% largely as a result of tax benefits related to the vesting of employee share-based awards. |
• | Markets revenue for the first-quarter of 2020 is expected to be higher when compared with the prior-year quarter by mid-teens percentage points, depending on market conditions. |
JPMorgan
Chase & Co./2019 Form 10-K | 45 |
46 | JPMorgan
Chase & Co./2019 Form 10-K |
• | ongoing implementation of new fallback provisions that provide for the determination of replacement rates for LIBOR-linked syndicated loans, securitizations, floating rate notes and bi-lateral business loans based on the recommendations of the ARRC, and introducing SOFR as a replacement benchmark
rate for certain of these products; |
• | planning to adopt further fallback provisions recommended by the ARRC, including for residential ARMs, in conjunction with the adoption of these provisions by market participants; and |
• | completing its first bilateral SOFR loan in the U.S. and executing its first interest rate swap linked to the Euro short-term rate in Europe. |
JPMorgan
Chase & Co./2019 Form 10-K | 47 |
CONSOLIDATED RESULTS OF OPERATIONS |
Revenue | |||||||||
Year ended December 31, (in millions) | |||||||||
2019 | 2018 | 2017 | |||||||
Investment
banking fees | $ | 7,501 | $ | 7,550 | $ | 7,412 | |||
Principal transactions | 14,018 | 12,059 | 11,347 | ||||||
Lending-
and deposit-related fees | 6,369 | 6,052 | 5,933 | ||||||
Asset management, administration and commissions | 17,165 | 17,118 | 16,287 | ||||||
Investment
securities gains/(losses) | 258 | (395 | ) | (66 | ) | ||||
Mortgage fees and related income | 2,036 | 1,254 | 1,616 | ||||||
Card
income | 5,304 | 4,989 | 4,433 | ||||||
Other income(a) | 5,731 | 5,343 | 3,646 | ||||||
Noninterest
revenue | 58,382 | 53,970 | 50,608 | ||||||
Net interest income | 57,245 | 55,059 | 50,097 | ||||||
Total
net revenue | $ | 115,627 | $ | 109,029 | $ | 100,705 |
(a) | Included operating lease income of $5.5 billion,
$4.5 billion and $3.6 billion for the years ended December 31, 2019, 2018 and 2017, respectively. |
• | higher debt underwriting fees driven by wallet share gains and increased activity in investment-grade and high-yield bonds, |
• | lower advisory fees driven by a decline in industry-wide fees despite wallet share gains. |
• | higher revenue in CIB, which included a gain on the initial public offering (“IPO”) of
Tradeweb in the second quarter of 2019. Excluding this gain, the increase in CIB’s revenue was driven by: |
– | higher revenue in Fixed Income Markets, reflecting an overall strong performance, primarily in agency mortgage trading within Securitized Products; the increase in 2019 also reflected the impact of challenging market conditions in Credit in the fourth quarter of 2018; and |
– | the favorable impact of tighter funding
spreads on derivatives in Credit Adjustments & Other. |
• | lower revenue in AWM related to hedges on certain investments. The impact of these hedges was more than offset by higher valuation gains on the related investments reflected in other income |
48 | JPMorgan Chase & Co./2019 Form 10-K |
• | higher
net mortgage production revenue reflecting approximately $500 million of gains on sales of certain loans, as well as higher mortgage production volumes and margins, |
• | lower net mortgage servicing revenue driven by lower operating revenue reflecting faster prepayment speeds on lower rates and the impact of reclassifying certain loans to held-for-sale. |
• | higher operating lease income from growth in auto operating lease volume in CCB, and |
• | higher
investment valuation gains in AWM, which were largely offset by the impact of the related hedges that were reflected in principal transactions revenue, |
• | lower other income in CIB largely related to increased amortization on a higher level of alternative energy investments. The increased amortization was more than offset by lower income tax expense from the associated tax credits. |
• | $505
million of fair value gains related to the adoption in the first quarter of 2018 of the recognition and measurement accounting guidance for certain equity investments previously held at cost. |
JPMorgan Chase & Co./2019 Form 10-K | 49 |
Provision
for credit losses | |||||||||||
Year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Consumer,
excluding credit card | $ | (383 | ) | $ | (63 | ) | $ | 620 | |||
Credit card | 5,348 | 4,818 | 4,973 | ||||||||
Total
consumer | 4,965 | 4,755 | 5,593 | ||||||||
Wholesale | 620 | 116 | (303 | ) | |||||||
Total
provision for credit losses | $ | 5,585 | $ | 4,871 | $ | 5,290 |
• | an increase in credit card due to |
– | higher
net charge-offs on loan growth, in line with expectations, and |
– | a $500 million addition to the allowance for loan losses reflecting loan growth and higher loss rates, as newer vintages season and become a larger part of the portfolio, compared to a $300 million addition in the prior year |
• | a decrease in consumer, excluding credit card, in CCB due to |
– | a
$650 million reduction in the allowance for loan losses in the purchase credit-impaired (“PCI”) residential real estate portfolio, reflecting continued improvement in home prices and delinquencies, and a $100 million reduction in the allowance for loan losses in the non credit-impaired residential real estate portfolio, compared to a $250 million reduction in the PCI residential real estate portfolio in the prior year, and |
– | a $50 million reduction in the allowance for loan losses in the business banking portfolio |
– | lower
net recoveries in the residential real estate portfolio as the prior year benefited from larger recoveries on loan sales. |
50 | JPMorgan
Chase & Co./2019 Form 10-K |
Noninterest expense | |||||||||
Year ended December 31, | |||||||||
(in
millions) | 2019 | 2018 | 2017 | ||||||
Compensation expense | $ | 34,155 | $ | 33,117 | $ | 31,208 | |||
Noncompensation
expense: | |||||||||
Occupancy | 4,322 | 3,952 | 3,723 | ||||||
Technology, communications and equipment | 9,821 | 8,802 | 7,715 | ||||||
Professional
and outside services | 8,533 | 8,502 | 7,890 | ||||||
Marketing | 3,579 | 3,290 | 2,900 | ||||||
Other(a)(b) | 5,087 | 5,731 | 6,079 | ||||||
Total
noncompensation expense | 31,342 | 30,277 | 28,307 | ||||||
Total noninterest expense | $ | 65,497 | $ | 63,394 | $ | 59,515 |
(a) | Included
Firmwide legal expense/(benefit) of $239 million, $72 million and $(35) million for the years ended December 31, 2019, 2018 and 2017, respectively. |
(b) | Included FDIC-related expense of $457 million, $1.2 billion and $1.5 billion for the years ended December
31, 2019, 2018 and 2017, respectively. |
• | higher investments across the businesses, including technology, real estate and marketing |
• | higher
volume-related expense, including depreciation from growth in auto lease assets in CCB, and brokerage expense in certain businesses in CIB |
• | higher legal expense, and |
• | higher pension costs due to changes to actuarial assumptions and estimates, |
• | lower
FDIC charges as a result of the elimination of the surcharge at the end of the third quarter of 2018 |
• | the impact of efficiencies |
• | lower other regulatory-related assessments in CIB. |
Income
tax expense | |||||||||||
Year ended December 31, (in millions, except rate) | |||||||||||
2019 | 2018 | 2017 | |||||||||
Income
before income tax expense | $ | 44,545 | $ | 40,764 | $ | 35,900 | |||||
Income tax expense | 8,114 | 8,290 | 11,459 | ||||||||
Effective
tax rate | 18.2 | % | 20.3 | % | 31.9 | % |
JPMorgan Chase & Co./2019 Form 10-K | 51 |
CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS |
Selected
Consolidated balance sheets data | |||||||||
December 31, (in millions) | 2019 | 2018 | Change | ||||||
Assets | |||||||||
Cash and due from banks | $ | 21,704 | $ | 22,324 | (3 | )% | |||
Deposits
with banks | 241,927 | 256,469 | (6 | ) | |||||
Federal funds sold and securities purchased under resale agreements | 249,157 | 321,588 | (23 | ) | |||||
Securities
borrowed | 139,758 | 111,995 | 25 | ||||||
Trading assets | 411,103 | 413,714 | (1 | ) | |||||
Investment
securities | 398,239 | 261,828 | 52 | ||||||
Loans | 959,769 | 984,554 | (3 | ) | |||||
Allowance
for loan losses | (13,123 | ) | (13,445 | ) | (2 | ) | |||
Loans, net of allowance for loan losses | 946,646 | 971,109 | (3 | ) | |||||
Accrued
interest and accounts receivable | 72,861 | 73,200 | — | ||||||
Premises and equipment | 25,813 | 14,934 | 73 | ||||||
Goodwill,
MSRs and other intangible assets | 53,341 | 54,349 | (2 | ) | |||||
Other assets | 126,830 | 121,022 | 5 | ||||||
Total
assets | $ | 2,687,379 | $ | 2,622,532 | 2 | % |
• | a reduction in short-term instruments associated with cash deployment activities in Treasury and CIO, |
• | growth in client-driven activities in CIB Markets, primarily debt instruments, and |
• | in
CCB, growth related to originations of mortgage warehouse loans, resulting from the favorable rate environment. |
• | an $800 million reduction in the CCB allowance for loan losses, which included $650 million in the PCI residential real estate portfolio, reflecting continued improvement in home prices and delinquencies; $100 million in the non credit-impaired residential real estate portfolio; and $50 million in the business banking portfolio;
as well as |
• | a $151 million reduction for write-offs of PCI loans, |
• | a $500 million addition to the allowance for loan losses in the credit card portfolio reflecting loan growth and higher loss rates as newer vintages season and become a larger part of the portfolio, and |
• | a
$115 million addition in the wholesale allowance for loan losses driven by select client downgrades. |
52 | JPMorgan Chase &
Co./2019 Form 10-K |
Selected Consolidated balance sheets data | |||||||||
December
31, (in millions) | 2019 | 2018 | Change | ||||||
Liabilities | |||||||||
Deposits | $ | 1,562,431 | $ | 1,470,666 | 6 | ||||
Federal
funds purchased and securities loaned or sold under repurchase agreements | 183,675 | 182,320 | 1 | ||||||
Short-term borrowings | 40,920 | 69,276 | (41 | ) | |||||
Trading
liabilities | 119,277 | 144,773 | (18 | ) | |||||
Accounts payable and other liabilities | 210,407 | 196,710 | 7 | ||||||
Beneficial
interests issued by consolidated variable interest entities (“VIEs”) | 17,841 | 20,241 | (12 | ) | |||||
Long-term debt | 291,498 | 282,031 | 3 | ||||||
Total
liabilities | 2,426,049 | 2,366,017 | 3 | ||||||
Stockholders’ equity | 261,330 | 256,515 | 2 | ||||||
Total
liabilities and stockholders’ equity | $ | 2,687,379 | $ | 2,622,532 | 2 | % |
• | continued
growth driven by new accounts in CCB |
• | growth in operating deposits in CIB driven by client activity, primarily in Treasury Services, and an increase in client-driven net issuances of structured notes in Markets, and |
• | higher deposits in CB and AWM from growth in interest-bearing deposits; for AWM, the growth was partially offset by migration, predominantly into the Firm’s investment-related products. |
• | the
impact of the adoption of the new lease accounting guidance effective January 1, 2019, and |
• | higher client payables related to client-driven activities in CIB. |
• | maturities of credit card
securitizations, |
• | higher levels of Firm-administered multi-seller conduit commercial paper issued to third parties. |
JPMorgan Chase & Co./2019 Form 10-K | 53 |
(in millions) | Year
ended December 31, | |||||||||||
2019 | 2018 | 2017 | ||||||||||
Net cash provided by/(used in) | ||||||||||||
Operating
activities | $ | 6,046 | $ | 14,187 | $ | (10,827 | ) | |||||
Investing activities | (54,013 | ) | (197,993 | ) | 28,249 | |||||||
Financing
activities | 32,987 | 34,158 | 14,642 | |||||||||
Effect of exchange rate changes on cash | (182 | ) | (2,863 | ) | 8,086 | |||||||
Net
increase/(decrease) in cash and due from banks and deposits with banks | $ | (15,162 | ) | $ | (152,511 | ) | $ | 40,150 |
• | In 2019, cash provided primarily reflected net income excluding noncash adjustments and net proceeds of sales, securitizations, and paydowns of loans held-for-sale, partially offset by higher securities borrowed, an
increase in other assets and a decrease in trading liabilities. |
• | In 2018, cash provided primarily reflected net income excluding noncash adjustments, increased trading liabilities and accounts payable and other liabilities, partially offset by an increase in trading assets and net originations of loans held-for-sale. |
• | In
2019, cash used reflected net purchases of investment securities, partially offset by lower securities purchased under resale agreements, and net proceeds from sales and securitizations of loans held-for-investment. |
• | In 2018, cash used reflected an increase in securities purchased under resale agreements, higher net originations of loans and net purchases of investment securities. |
• | In
2019, cash provided reflected higher deposits, partially offset by a decrease in short-term borrowings and net payments of long term borrowings. |
• | In 2018, cash provided reflected higher deposits, short-term borrowings, and securities loaned or sold under repurchase agreements, partially offset by net payments of long term borrowings. |
• | For both periods, cash was used for repurchases of common stock and cash dividends on common and preferred stock. |
54 | JPMorgan Chase & Co./2019 Form 10-K |
OFF-BALANCE
SHEET ARRANGEMENTS AND CONTRACTUAL CASH OBLIGATIONS |
Type of off-balance sheet arrangement | Location of disclosure | Page references |
Special-purpose entities: variable interests and other obligations, including contingent obligations, arising from variable interests in nonconsolidated VIEs | Refer to Note 14 | 242–249 |
Off-balance
sheet lending-related financial instruments, guarantees, and other commitments | Refer to Note 28 | 272–277 |
JPMorgan Chase & Co./2019 Form 10-K | 55 |
Contractual cash obligations | ||||||||||||||||||
By
remaining maturity at December 31, (in millions) | 2019 | 2018 | ||||||||||||||||
2020 | 2021-2022 | 2023-2024 | After 2024 | Total | Total | |||||||||||||
On-balance sheet obligations | ||||||||||||||||||
Deposits(a) | $ | 1,546,142 | $ | 5,840 | $ | 3,550 | $ | 2,508 | $ | 1,558,040 | $ | 1,468,031 | ||||||
Federal
funds purchased and securities loaned or sold under repurchase agreements | 183,304 | — | — | 371 | 183,675 | 182,320 | ||||||||||||
Short-term
borrowings(a) | 35,107 | — | — | — | 35,107 | 62,393 | ||||||||||||
Beneficial
interests issued by consolidated VIEs | 13,628 | 3,950 | — | 296 | 17,874 | 20,258 | ||||||||||||
Long-term
debt(a) | 35,031 | 58,847 | 50,680 | 105,857 | 250,415 | 258,658 | ||||||||||||
Operating
leases(b) | 1,604 | 2,704 | 2,025 | 3,757 | 10,090 | 10,992 | ||||||||||||
Other(c) | 8,695 | 2,046 | 1,851 | 2,976 | 15,568 | 11,794 | ||||||||||||
Total
on-balance sheet obligations | 1,823,511 | 73,387 | 58,106 | 115,765 | 2,070,769 | 2,014,446 | ||||||||||||
Off-balance
sheet obligations | ||||||||||||||||||
Unsettled resale and securities borrowed agreements(d) | 117,203 | 748 | — | — | 117,951 | 102,008 | ||||||||||||
Contractual
interest payments(e) | 7,844 | 10,517 | 7,876 | 28,444 | 54,681 | 58,252 | ||||||||||||
Equity
investment commitments | 539 | — | — | — | 539 | 271 | ||||||||||||
Contractual
purchases and capital expenditures | 1,920 | 766 | 210 | 33 | 2,929 | 3,599 | ||||||||||||
Obligations
under co-brand programs | 351 | 710 | 382 | 105 | 1,548 | 1,937 | ||||||||||||
Total
off-balance sheet obligations | 127,857 | 12,741 | 8,468 | 28,582 | 177,648 | 166,067 | ||||||||||||
Total
contractual cash obligations | $ | 1,951,368 | $ | 86,128 | $ | 66,574 | $ | 144,347 | $ | 2,248,417 | $ | 2,180,513 |
(a) | Excludes
structured notes on which the Firm is not obligated to return a stated amount of principal at the maturity of the notes, but is obligated to return an amount based on the performance of the structured notes. |
(b) | Includes noncancelable operating leases for premises and equipment used primarily for business purposes. Excludes the benefit of noncancelable sublease rentals of $846 million and $825 million at December 31, 2019 and 2018, respectively. Refer to
Note 18 for further information on operating leases. |
(c) | Primarily includes dividends declared on preferred and common stock, deferred annuity contracts, pension and other postretirement employee benefit obligations, insurance liabilities and income taxes payable associated with the deemed repatriation under the TCJA. |
(d) | Refer to unsettled resale and securities borrowed agreements
in Note 28 for further information. |
(e) | Includes accrued interest and future contractual interest obligations. Excludes interest related to structured notes for which the Firm’s payment obligation is based on the performance of certain benchmarks. |
56 | JPMorgan
Chase & Co./2019 Form 10-K |
EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES |
2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||
Year
ended December 31, (in millions, except ratios) | Reported | Fully taxable-equivalent adjustments(a) | Managed basis | Reported | Fully taxable-equivalent adjustments(a) | Managed basis | Reported | Fully
taxable-equivalent adjustments(a) | Managed basis | ||||||||||||||||||||||||||
Other income | $ | 5,731 | $ | 2,534 | $ | 8,265 | $ | 5,343 | $ | 1,877 | (b) | $ | 7,220 | $ | 3,646 | $ | 2,704 | $ | 6,350 | ||||||||||||||||
Total
noninterest revenue | 58,382 | 2,534 | 60,916 | 53,970 | 1,877 | 55,847 | 50,608 | 2,704 | 53,312 | ||||||||||||||||||||||||||
Net
interest income | 57,245 | 531 | 57,776 | 55,059 | 628 | (b) | 55,687 | 50,097 | 1,313 | 51,410 | |||||||||||||||||||||||||
Total
net revenue | 115,627 | 3,065 | 118,692 | 109,029 | 2,505 | 111,534 | 100,705 | 4,017 | 104,722 | ||||||||||||||||||||||||||
Pre-provision
profit | 50,130 | 3,065 | 53,195 | 45,635 | 2,505 | 48,140 | 41,190 | 4,017 | 45,207 | ||||||||||||||||||||||||||
Income
before income tax expense | 44,545 | 3,065 | 47,610 | 40,764 | 2,505 | 43,269 | 35,900 | 4,017 | 39,917 | ||||||||||||||||||||||||||
Income
tax expense | 8,114 | 3,065 | 11,179 | 8,290 | 2,505 | (b) | 10,795 | 11,459 | 4,017 | 15,476 | |||||||||||||||||||||||||
Overhead
ratio | 57 | % | NM | 55 | % | 58 | % | NM | 57 | % | 59 | % | NM | 57 | % |
JPMorgan Chase & Co./2019 Form 10-K | 57 |
Year ended December 31, (in millions, except rates) | 2019 | 2018 | 2017 | ||||||
Net interest income – reported | $ | 57,245 | $ | 55,059 | $ | 50,097 | |||
Fully
taxable-equivalent adjustments | 531 | 628 | 1,313 | ||||||
Net interest income – managed basis(a) | $ | 57,776 | $ | 55,687 | $ | 51,410 | |||
Less:
CIB Markets net interest income(b) | 3,120 | 3,087 | 4,630 | ||||||
Net interest income excluding CIB Markets(a) | $ | 54,656 | $ | 52,600 | $ | 46,780 | |||
Average
interest-earning assets(c) | $ | 2,345,491 | $ | 2,212,908 | $ | 2,170,974 | |||
Less: Average CIB Markets interest-earning assets(b)(c) | 672,629 | 593,355 | 531,217 | ||||||
Average
interest-earning assets excluding CIB Markets | $ | 1,672,862 | $ | 1,619,553 | $ | 1,639,757 | |||
Net yield on average interest-earning assets – managed basis(c) | 2.46 | % | 2.52 | % | 2.37 | % | |||
Net
yield on average CIB Markets interest-earning assets(b)(c) | 0.46 | 0.52 | 0.87 | ||||||
Net yield on average interest-earning assets excluding CIB Markets | 3.27 | % | 3.25 | % | 2.85 | % |
(a) | Interest
includes the effect of related hedges. Taxable-equivalent amounts are used where applicable. |
(b) | Refer to page 69 for further information on CIB’s Markets businesses. |
(c) | In the second quarter of 2019, the Firm reclassified balances related to certain instruments from interest-earning to noninterest-earning assets, as the associated returns are recorded in principal transactions revenue and not in net interest income. These changes were applied retrospectively and, accordingly,
prior period amounts were revised to conform with the current presentation. |
Calculation of certain U.S. GAAP and non-GAAP financial measures | ||||
Certain U.S. GAAP and non-GAAP financial measures are calculated as follows: | ||||
Book value per share (“BVPS”) Common stockholders’ equity at period-end / Common shares at period-end | ||||
Overhead
ratio Total noninterest expense / Total net revenue | ||||
Return on assets (“ROA”) Reported net income / Total average assets | ||||
Return on common equity (“ROE”) Net income* / Average common stockholders’ equity | ||||
Return on tangible common equity (“ROTCE”) Net income* / Average tangible common equity | ||||
Tangible book value per share (“TBVPS”) Tangible common equity at period-end / Common shares at period-end | ||||
*
Represents net income applicable to common equity |
58 | JPMorgan
Chase & Co./2019 Form 10-K |
Period-end | Average | |||||||||||||||
Dec 31,
2019 | Dec 31, 2018 | Year ended December 31, | ||||||||||||||
(in millions, except per share and ratio data) | 2019 | 2018 | 2017 | |||||||||||||
Common stockholders’ equity | $ | 234,337 | $ | 230,447 | $ | 232,907 | $ | 229,222 | $ | 230,350 | ||||||
Less:
Goodwill | 47,823 | 47,471 | 47,620 | 47,491 | 47,317 | |||||||||||
Less: Other intangible assets | 819 | 748 | 789 | 807 | 832 | |||||||||||
Add:
Certain deferred tax liabilities(a) | 2,381 | 2,280 | 2,328 | 2,231 | 3,116 | |||||||||||
Tangible common
equity | $ | 188,076 | $ | 184,508 | $ | 186,826 | $ | 183,155 | $ | 185,317 | ||||||
Return
on tangible common equity | NA | NA | 19 | % | 17 | % | 12 | % | ||||||||
Tangible book value per share | $ | 60.98 | $ | 56.33 | NA | NA | NA |
(a) | Represents
deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating TCE. |
JPMorgan
Chase & Co./2019 Form 10-K | 59 |
BUSINESS SEGMENT RESULTS |
JPMorgan
Chase | |||||||||||||
Consumer Businesses | Wholesale Businesses | ||||||||||||
Consumer & Community Banking | Corporate & Investment Bank | Commercial Banking(a) | Asset
& Wealth Management | ||||||||||
Consumer
& Business Banking | Home Lending | Card, Merchant Services & Auto | Banking | Markets & Securities Services | • Middle Market Banking | • Asset
Management | |||||||
• Consumer Banking/Chase Wealth Management • Business Banking | • Home Lending Production • Home Lending Servicing • Real Estate Portfolios | • Card Services – Credit Card – Merchant Services(a) • Auto | • Investment
Banking • Treasury Services(a) • Lending | • Fixed Income Markets | • Corporate Client Banking | • Wealth Management | |||||||
• Equity Markets • Securities Services • Credit Adjustments & Other | • Commercial Real Estate
Banking | ||||||||||||
(a) | Effective in the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The revenue and expenses of the Merchant Services business will be reported across CCB, CIB and CB based primarily on client relationship. |
60 | JPMorgan
Chase & Co./2019 Form 10-K |
Year
ended December 31, | Consumer & Community Banking | Corporate & Investment Bank | Commercial Banking | ||||||||||||||||||||||||||
(in millions, except ratios) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||||
Total
net revenue | $ | 55,883 | $ | 52,079 | $ | 46,485 | $ | 38,298 | $ | 36,448 | $ | 34,657 | $ | 8,984 | $ | 9,059 | $ | 8,605 | |||||||||||
Total
noninterest expense | 28,896 | 27,835 | 26,062 | 21,519 | 20,918 | 19,407 | 3,500 | 3,386 | 3,327 | ||||||||||||||||||||
Pre-provision
profit/(loss) | 26,987 | 24,244 | 20,423 | 16,779 | 15,530 | 15,250 | 5,484 | 5,673 | 5,278 | ||||||||||||||||||||
Provision
for credit losses | 4,952 | 4,753 | 5,572 | 277 | (60 | ) | (45 | ) | 296 | 129 | (276 | ) | |||||||||||||||||
Net
income/(loss) | 16,641 | 14,852 | 9,395 | 11,922 | 11,773 | 10,813 | 3,924 | 4,237 | 3,539 | ||||||||||||||||||||
Return
on equity (“ROE”) | 31 | % | 28 | % | 17 | % | 14 | % | 16 | % | 14 | % | 17 | % | 20 | % | 17 | % |
Year
ended December 31, | Asset & Wealth Management | Corporate | Total | ||||||||||||||||||||||||||
(in millions, except ratios) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||||
Total
net revenue | $ | 14,316 | $ | 14,076 | $ | 13,835 | $ | 1,211 | $ | (128 | ) | $ | 1,140 | $ | 118,692 | $ | 111,534 | $ | 104,722 | ||||||||||
Total
noninterest expense | 10,515 | 10,353 | 10,218 | 1,067 | 902 | 501 | 65,497 | 63,394 | 59,515 | ||||||||||||||||||||
Pre-provision
profit/(loss) | 3,801 | 3,723 | 3,617 | 144 | (1,030 | ) | 639 | 53,195 | 48,140 | 45,207 | |||||||||||||||||||
Provision
for credit losses | 61 | 53 | 39 | (1 | ) | (4 | ) | — | 5,585 | 4,871 | 5,290 | ||||||||||||||||||
Net
income/(loss) | 2,833 | 2,853 | 2,337 | 1,111 | (1,241 | ) | (1,643 | ) | 36,431 | 32,474 | 24,441 | ||||||||||||||||||
Return
on equity (“ROE”) | 26 | % | 31 | % | 25 | % | NM | NM | NM | 15 | % | 13 | % | 10 | % |
JPMorgan Chase & Co./2019 Form 10-K | 61 |
CONSUMER & COMMUNITY BANKING |
Consumer & Community Banking offers services to consumers and businesses through bank branches, ATMs, digital (including mobile and online) and telephone banking. CCB is organized into Consumer & Business Banking (including Consumer Banking/Chase Wealth Management and Business Banking), Home Lending (including Home Lending Production, Home Lending Servicing and
Real Estate Portfolios) and Card, Merchant Services & Auto. Consumer & Business Banking offers deposit and investment products and services to consumers, and lending, deposit, and cash management and payment solutions to small businesses. Home Lending includes mortgage origination and servicing activities, as well as portfolios consisting of residential mortgages and home equity loans. Card, Merchant Services & Auto issues credit cards to consumers and small businesses, offers payment processing services to merchants, and originates and services auto loans and leases. |
Selected
income statement data | |||||||||||
Year ended December 31, | |||||||||||
(in millions, except ratios) | 2019 | 2018 | 2017 | ||||||||
Revenue | |||||||||||
Lending-
and deposit-related fees | $ | 3,859 | $ | 3,624 | $ | 3,431 | |||||
Asset management, administration and commissions | 2,499 | 2,402 | 2,212 | ||||||||
Mortgage
fees and related income | 2,035 | 1,252 | 1,613 | ||||||||
Card income | 4,847 | 4,554 | 4,024 | ||||||||
All
other income | 5,402 | 4,428 | 3,430 | ||||||||
Noninterest revenue | 18,642 | 16,260 | 14,710 | ||||||||
Net
interest income | 37,241 | 35,819 | 31,775 | ||||||||
Total net revenue | 55,883 | 52,079 | 46,485 | ||||||||
Provision
for credit losses | 4,952 | 4,753 | 5,572 | ||||||||
Noninterest
expense | |||||||||||
Compensation expense | 10,700 | 10,534 | 10,133 | ||||||||
Noncompensation
expense(a) | 18,196 | 17,301 | 15,929 | ||||||||
Total noninterest expense | 28,896 | 27,835 | 26,062 | ||||||||
Income
before income tax expense | 22,035 | 19,491 | 14,851 | ||||||||
Income tax expense | 5,394 | 4,639 | 5,456 | ||||||||
Net
income | $ | 16,641 | $ | 14,852 | $ | 9,395 | |||||
Revenue
by line of business | |||||||||||
Consumer & Business Banking | $ | 26,495 | $ | 24,805 | $ | 21,104 | |||||
Home
Lending | 5,179 | 5,484 | 5,955 | ||||||||
Card, Merchant Services & Auto | 24,209 | 21,790 | 19,426 | ||||||||
Mortgage
fees and related income details: | |||||||||||
Net production revenue | 1,618 | 268 | 636 | ||||||||
Net
mortgage servicing revenue(b) | 417 | 984 | 977 | ||||||||
Mortgage fees and related income | $ | 2,035 | $ | 1,252 | $ | 1,613 | |||||
Financial
ratios | |||||||||||
Return on equity | 31 | % | 28 | % | 17 | % | |||||
Overhead
ratio | 52 | 53 | 56 |
(a) | Included
depreciation expense on leased assets of $4.1 billion, $3.4 billion and $2.7 billion for the years ended December 31, 2019, 2018 and 2017, respectively. |
(b) | Included MSR risk management results of $(165) million, $(111) million and $(242) million for the years ended December 31, 2019,
2018 and 2017, respectively. |
62 | JPMorgan Chase & Co./2019 Form 10-K |
• | higher loan balances and margin expansion in Card, as well as higher deposit margins and growth in deposit balances in CBB, |
• | lower loan balances due to loan sales, as well as loan spread compression in Home Lending. |
• | higher auto lease volume, and |
• | higher net mortgage production revenue reflecting higher production volumes and margins, |
• | lower
net mortgage servicing revenue driven by lower operating revenue reflecting faster prepayment speeds on lower rates and the impact of reclassifying certain loans to held-for-sale. |
• | investments in the business including technology and marketing and higher depreciation on auto lease assets, |
• | expense efficiencies and lower FDIC charges. |
• | an increase in credit card due to |
– | higher
net charge-offs on loan growth, in line with expectations, and |
– | a $500 million addition to the allowance for loan losses reflecting loan growth and higher loss rates, as newer vintages season and become a larger part of the portfolio, compared to a $300 million addition in the prior year |
• | a decrease in consumer, excluding credit card due to |
– | a
$650 million reduction in the allowance for loan losses in the PCI residential real estate portfolio, reflecting continued improvement in home prices and delinquencies, and a $100 million reduction in the allowance for loan losses in the non credit-impaired residential real estate portfolio, compared to a $250 million reduction in the PCI residential real estate portfolio in the prior year, and |
– | a $50 million reduction in the allowance for loan losses in the business banking portfolio |
– | lower
net recoveries in the residential real estate portfolio as the prior year benefited from larger recoveries on loan sales. |
JPMorgan Chase & Co./2019 Form 10-K | 63 |
Selected
metrics | |||||||||||
As of or for the year ended December 31, | |||||||||||
(in millions, except headcount) | 2019 | 2018 | 2017 | ||||||||
Selected
balance sheet data (period-end) | |||||||||||
Total assets | $ | 539,090 | $ | 557,441 | $ | 552,601 | |||||
Loans: | |||||||||||
Consumer
& Business Banking | 27,199 | 26,612 | 25,789 | ||||||||
Home equity | 30,163 | 36,013 | 42,751 | ||||||||
Residential
mortgage | 169,636 | 203,859 | 197,339 | ||||||||
Home Lending | 199,799 | 239,872 | 240,090 | ||||||||
Card | 168,924 | 156,632 | 149,511 | ||||||||
Auto | 61,522 | 63,573 | 66,242 | ||||||||
Total
loans | 457,444 | 486,689 | 481,632 | ||||||||
Core loans | 414,107 | 434,466 | 415,167 | ||||||||
Deposits | 718,416 | 678,854 | 659,885 | ||||||||
Equity | 52,000 | 51,000 | 51,000 | ||||||||
Selected
balance sheet data (average) | |||||||||||
Total assets | $ | 542,191 | $ | 547,368 | $ | 532,756 | |||||
Loans: | |||||||||||
Consumer
& Business Banking | 26,608 | 26,197 | 24,875 | ||||||||
Home equity | 32,975 | 39,133 | 46,398 | ||||||||
Residential
mortgage | 186,557 | 202,624 | 190,242 | ||||||||
Home Lending | 219,532 | 241,757 | 236,640 | ||||||||
Card | 156,325 | 145,652 | 140,024 | ||||||||
Auto | 61,862 | 64,675 | 65,395 | ||||||||
Student | — | — | 2,880 | ||||||||
Total
loans | 464,327 | 478,281 | 469,814 | ||||||||
Core loans | 416,694 | 419,066 | 393,598 | ||||||||
Deposits | 693,550 | 670,388 | 640,219 | ||||||||
Equity | 52,000 | 51,000 | 51,000 | ||||||||
Headcount | 127,137 | 129,518 | 133,721 |
Selected
metrics | |||||||||||
As of or for the year ended December 31, | |||||||||||
(in millions, except ratio data) | 2019 | 2018 | 2017 | ||||||||
Credit
data and quality statistics | |||||||||||
Nonaccrual loans(a)(b) | $ | 3,018 | $ | 3,339 | $ | 4,084 | |||||
Net
charge-offs/(recoveries)(c) | |||||||||||
Consumer & Business Banking | 296 | 236 | 257 | ||||||||
Home
equity | (48 | ) | (7 | ) | 63 | ||||||
Residential mortgage | (50 | ) | (287 | ) | (16 | ) | |||||
Home
Lending | (98 | ) | (294 | ) | 47 | ||||||
Card | 4,848 | 4,518 | 4,123 | ||||||||
Auto
| 206 | 243 | 331 | ||||||||
Student | — | — | 498 | (g) | |||||||
Total
net charge-offs/(recoveries) | $ | 5,252 | $ | 4,703 | $ | 5,256 | (g) | ||||
Net
charge-off/(recovery) rate(c) | |||||||||||
Consumer & Business Banking | 1.11 | % | 0.90 | % | 1.03 | % | |||||
Home
equity(d) | (0.19 | ) | (0.02 | ) | 0.18 | ||||||
Residential mortgage(d) | (0.03 | ) | (0.16 | ) | (0.01 | ) | |||||
Home
Lending(d) | (0.05 | ) | (0.14 | ) | 0.02 | ||||||
Card | 3.10 | 3.10 | 2.95 | ||||||||
Auto | 0.33 | 0.38 | 0.51 | ||||||||
Student | — | — | NM | ||||||||
Total
net charge-offs/(recovery) rate(d) | 1.20 | 1.04 | 1.21 | (g) | |||||||
30+ day delinquency rate | |||||||||||
Home
Lending(e)(f) | 0.76 | % | 0.77 | % | 1.19 | % | |||||
Card | 1.87 | 1.83 | 1.80 | ||||||||
Auto | 0.94 | 0.93 | 0.89 | ||||||||
90+
day delinquency rate - Card | 0.95 | 0.92 | 0.92 | ||||||||
Allowance
for loan losses | |||||||||||
Consumer & Business Banking | $ | 746 | $ | 796 | $ | 796 | |||||
Home
Lending, excluding PCI loans | 903 | 1,003 | 1,003 | ||||||||
Home Lending — PCI loans(c) | 987 | 1,788 | 2,225 | ||||||||
Card | 5,683 | 5,184 | 4,884 | ||||||||
Auto
| 465 | 464 | 464 | ||||||||
Total allowance for loan losses(c) | $ | 8,784 | $ | 9,235 | $ | 9,372 |
(a) | Excludes
PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing. |
(b) | At December 31, 2019, 2018 and 2017, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $961 million, $2.6 billion and $4.3 billion, respectively. These amounts have been excluded based upon the government guarantee. |
(c) | Net
charge-offs/(recoveries) and the net charge-off/(recovery) rates for the years ended December 31, 2019, 2018 and 2017, excluded $151 million, $187 million and $86 million, respectively, of write-offs in the PCI portfolio. These write-offs decreased the allowance for loan losses for PCI loans. Refer to Summary of changes in the allowance for credit losses on page 117 for further information on PCI write-offs. |
(d) | Excludes
the impact of PCI loans. For the years ended December 31, 2019, 2018 and 2017, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of (0.15)%, (0.02)% and 0.14%, respectively; (2) residential mortgage of (0.03)%, (0.14)% and (0.01)%, respectively; (3) |
64 | JPMorgan
Chase & Co./2019 Form 10-K |
(e) | At December 31, 2019, 2018 and 2017,
excluded mortgage loans insured by U.S. government agencies of $1.7 billion, $4.1 billion and $6.2 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee. |
(f) | Excludes PCI loans. The 30+ day delinquency rate for PCI loans was 8.44%, 9.16% and 10.13% at December 31, 2019, 2018 and 2017, respectively. |
(g) | Excluding
net charge-offs of $467 million related to the student loan portfolio transfer, the total net charge-off rates for the full year 2017 would have been 1.10%. |
Selected metrics | |||||||||
As of or for the year ended December 31, | |||||||||
(in
billions, except ratios and where otherwise noted) | 2019 | 2018 | 2017 | ||||||
Business Metrics | |||||||||
CCB households (in millions) | 62.6 | 61.7 | 61.1 | ||||||
Number
of branches | 4,976 | 5,036 | 5,130 | ||||||
Active digital customers (in thousands)(a) | 52,421 | 49,254 | 46,694 | ||||||
Active
mobile customers (in thousands)(b) | 37,297 | 33,260 | 30,056 | ||||||
Debit and credit card sales volume | $ | 1,114.4 | $ | 1,016.9 | $ | 916.9 | |||
Consumer
& Business Banking | |||||||||
Average deposits | $ | 678.9 | $ | 656.5 | $ | 625.6 | |||
Deposit margin | 2.49 | % | 2.38 | % | 1.98 | % | |||
Business
banking origination volume | $ | 6.6 | $ | 6.7 | $ | 7.3 | |||
Client investment assets | 358.0 | 282.5 | 273.3 | ||||||
Home
Lending | |||||||||
Mortgage origination volume by channel | |||||||||
Retail | $ | 51.0 | $ | 38.3 | $ | 40.3 | |||
Correspondent
| 54.2 | 41.1 | 57.3 | ||||||
Total mortgage origination volume(c) | $ | 105.2 | $ | 79.4 | $ | 97.6 | |||
Total
loans serviced (period-end) | $ | 761.4 | $ | 789.8 | $ | 816.1 | |||
Third-party mortgage loans serviced (period-end) | 520.8 | 519.6 | 553.5 | ||||||
MSR
carrying value (period-end) | 4.7 | 6.1 | 6.0 | ||||||
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) | 0.90 | % | 1.17 | % | 1.08 | % | |||
MSR
revenue multiple(d) | 2.65 | x | 3.34 | x | 3.09x | ||||
Card, excluding Commercial Card | |||||||||
Credit
card sales volume | $ | 762.8 | $ | 692.4 | $ | 622.2 | |||
New accounts opened (in millions) | 7.8 | 7.8 | 8.4 | ||||||
Card
Services | |||||||||
Net revenue rate | 11.52 | % | 11.27 | % | 10.57 | % | |||
Merchant
Services | |||||||||
Merchant processing volume | $ | 1,511.5 | $ | 1,366.1 | $ | 1,191.7 | |||
Auto | |||||||||
Loan
and lease origination volume | $ | 34.0 | $ | 31.8 | $ | 33.3 | |||
Average Auto operating lease assets | 21.6 | 18.8 | 15.2 |
(a) | Users
of all web and/or mobile platforms who have logged in within the past 90 days. |
(b) | Users of all mobile platforms who have logged in within the past 90 days. |
(c) | Firmwide mortgage origination volume was $115.9 billion, $86.9 billion and $107.6 billion for the years ended December 31, 2019, 2018
and 2017, respectively. |
(d) | Represents the ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) divided by the ratio of loan servicing-related revenue to third-party mortgage loans serviced (average). |
JPMorgan Chase & Co./2019 Form 10-K | 65 |
CORPORATE & INVESTMENT BANK |
The Corporate & Investment Bank, which consists of Banking and Markets & Securities Services, offers a broad suite of investment banking, market-making, prime brokerage, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, government and municipal entities. Banking offers a full range of investment
banking products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, as well as loan origination and syndication. Banking also includes Treasury Services, which provides transaction services, consisting of cash management and liquidity solutions. Markets & Securities Services is a global market-maker in cash securities and derivative instruments, and also offers sophisticated risk management solutions, prime brokerage, and research. Markets & Securities Services also includes Securities Services, a leading global custodian which provides custody, fund accounting and administration, and securities lending products principally for asset managers, insurance companies and public and private investment funds. |
Selected
income statement data | |||||||||||
Year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Revenue | |||||||||||
Investment
banking fees | $ | 7,575 | $ | 7,473 | $ | 7,356 | |||||
Principal transactions | 14,396 | 12,271 | 10,873 | ||||||||
Lending-
and deposit-related fees | 1,518 | 1,497 | 1,531 | ||||||||
Asset management, administration and commissions | 4,545 | 4,488 | 4,207 | ||||||||
All
other income | 1,108 | 1,239 | 572 | ||||||||
Noninterest revenue | 29,142 | 26,968 | 24,539 | ||||||||
Net
interest income | 9,156 | 9,480 | 10,118 | ||||||||
Total net revenue(a) | 38,298 | 36,448 | 34,657 | ||||||||
Provision
for credit losses | 277 | (60 | ) | (45 | ) | ||||||
Noninterest
expense | |||||||||||
Compensation expense | 10,618 | 10,215 | 9,531 | ||||||||
Noncompensation
expense | 10,901 | 10,703 | 9,876 | ||||||||
Total noninterest expense | 21,519 | 20,918 | 19,407 | ||||||||
Income
before income tax expense | 16,502 | 15,590 | 15,295 | ||||||||
Income tax expense | 4,580 | 3,817 | 4,482 | ||||||||
Net
income | $ | 11,922 | $ | 11,773 | $ | 10,813 |
(a) | Includes
tax-equivalent adjustments, predominantly due to income tax credits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; and tax-exempt income from municipal bonds of $2.3 billion, $1.7 billion and $2.4 billion for the years ended December 31, 2019, 2018 and 2017, respectively. |
Selected
income statement data | |||||||||||
Year ended December 31, | |||||||||||
(in millions, except ratios) | 2019 | 2018 | 2017 | ||||||||
Financial ratios | |||||||||||
Return
on equity | 14 | % | 16 | % | 14 | % | |||||
Overhead ratio | 56 | 57 | 56 | ||||||||
Compensation
expense as percentage of total net revenue | 28 | 28 | 28 | ||||||||
Revenue by business | |||||||||||
Investment
Banking | $ | 7,215 | $ | 6,987 | $ | 6,852 | |||||
Treasury Services | 4,565 | 4,697 | 4,172 | ||||||||
Lending | 1,331 | 1,298 | 1,429 | ||||||||
Total
Banking | 13,111 | 12,982 | 12,453 | ||||||||
Fixed Income Markets | 14,418 | 12,706 | 12,812 | ||||||||
Equity
Markets | 6,494 | 6,888 | 5,703 | ||||||||
Securities Services | 4,154 | 4,245 | 3,917 | ||||||||
Credit
Adjustments & Other(a) | 121 | (373 | ) | (228 | ) | ||||||
Total Markets & Securities Services | 25,187 | 23,466 | 22,204 | ||||||||
Total
net revenue | $ | 38,298 | $ | 36,448 | $ | 34,657 |
(a) | Includes
credit valuation adjustments (“CVA”) managed centrally within CIB and funding valuation adjustments (“FVA”) on derivatives, which are primarily reported in principal transactions revenue. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets. Refer to Notes 2, 3 and 24 for additional information. |
• | Investment Banking revenue was $7.2 billion, up 3%, with higher debt underwriting fees, largely offset by lower advisory and equity underwriting fees. The Firm maintained its #1 ranking for Global Investment Banking fees with overall share gains, according to Dealogic. |
– | Debt underwriting fees were $3.5
billion, up 8%, reflecting wallet share gains and increased activity in investment-grade and high-yield bonds. |
– | Advisory fees were $2.4 billion, down 5%, and Equity underwriting fees were $1.7 billion, down 1%, driven by a decline in industry-wide fees despite wallet share gains. |
• | Treasury
Services revenue was $4.6 billion, down 3%, driven by deposit margin compression predominantly offset by higher balances and fee growth. |
• | Lending revenue was $1.3 billion, up 3%, with higher net interest income largely offset by losses on hedges of accrual loans. |
66 | JPMorgan
Chase & Co./2019 Form 10-K |
• | Fixed
Income Markets revenue was $14.4 billion, up 13%, reflecting an overall strong performance, notably in Securitized Products. The increase in 2019 also reflected the impact of challenging market conditions in Credit and Rates in the fourth quarter of 2018. |
• | Equity Markets revenue was $6.5 billion, down 6%, compared to a strong prior year, driven by lower client activity in derivatives partially offset by higher client activity in Cash Equities. |
• | Securities
Services revenue was $4.2 billion, down 2%, driven by deposit margin compression and the impact of a business exit largely offset by organic growth. |
• | Credit Adjustments & Other was a gain of $121 million reflecting tighter funding spreads on derivatives, compared with a loss of $373 million in the prior year. |
JPMorgan Chase & Co./2019 Form 10-K | 67 |
Selected metrics | |||||||||||
As of or for the year ended December 31, (in
millions, except headcount) | |||||||||||
2019 | 2018 | 2017 | |||||||||
Selected balance sheet data (period-end) | |||||||||||
Assets | $ | 908,153 | $ | 903,051 | $ | 826,384 | |||||
Loans: | |||||||||||
Loans
retained(a) | 121,733 | 129,389 | 108,765 | ||||||||
Loans held-for-sale and loans at fair value | 10,112 | 13,050 | 4,321 | ||||||||
Total
loans | 131,845 | 142,439 | 113,086 | ||||||||
Core loans | 131,672 | 142,122 | 112,754 | ||||||||
Equity | 80,000 | 70,000 | 70,000 | ||||||||
Selected
balance sheet data (average) | |||||||||||
Assets | $ | 985,544 | $ | 922,758 | $ | 857,060 | |||||
Trading
assets-debt and equity instruments | 404,363 | 349,169 | 342,124 | ||||||||
Trading assets-derivative receivables | 48,196 | 60,552 | 56,466 | ||||||||
Loans: | |||||||||||
Loans
retained(a) | 122,371 | 114,417 | 108,368 | ||||||||
Loans held-for-sale and loans at fair value | 8,609 | 6,412 | 4,995 | ||||||||
Total
loans | 130,980 | 120,829 | 113,363 | ||||||||
Core loans | 130,810 | 120,560 | 113,006 | ||||||||
Equity | 80,000 | 70,000 | 70,000 | ||||||||
Headcount | 55,991 | 54,480 | 51,181 |
(a) | Loans
retained includes credit portfolio loans, loans held by consolidated Firm-administered multi-seller conduits, trade finance loans, other held-for-investment loans and overdrafts. |
Selected metrics | |||||||||||
As
of or for the year ended December 31, (in millions, except ratios) | |||||||||||
2019 | 2018 | 2017 | |||||||||
Credit data and quality statistics | |||||||||||
Net
charge-offs/(recoveries) | $ | 183 | $ | 93 | $ | 71 | |||||
Nonperforming assets: | |||||||||||
Nonaccrual
loans: | |||||||||||
Nonaccrual loans retained(a) | 308 | 443 | 812 | ||||||||
Nonaccrual
loans held-for-sale and loans at fair value | 95 | 220 | — | ||||||||
Total nonaccrual loans | 403 | 663 | 812 | ||||||||
Derivative
receivables | 30 | 60 | 130 | ||||||||
Assets acquired in loan satisfactions | 70 | 57 | 85 | ||||||||
Total
nonperforming assets | 503 | 780 | 1,027 | ||||||||
Allowance for credit losses: | |||||||||||
Allowance
for loan losses | 1,202 | 1,199 | 1,379 | ||||||||
Allowance for lending-related commitments | 848 | 754 | 727 | ||||||||
Total
allowance for credit losses | 2,050 | 1,953 | 2,106 | ||||||||
Net charge-off/(recovery) rate(b) | 0.15 | % | 0.08 | % | 0.07 | % | |||||
Allowance
for loan losses to period-end loans retained | 0.99 | 0.93 | 1.27 | ||||||||
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(c) | 1.31 | 1.24 | 1.92 | ||||||||
Allowance
for loan losses to nonaccrual loans retained(a) | 390 | 271 | 170 | ||||||||
Nonaccrual loans to total period-end loans | 0.31 | 0.47 | 0.72 |
(a) | Allowance
for loan losses of $110 million, $174 million and $316 million were held against these nonaccrual loans at December 31, 2019, 2018 and 2017, respectively. |
(b) | Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate. |
(c) | Management
uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB’s allowance coverage ratio. |
Investment banking fees | |||||||||||
Year
ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Advisory | $ | 2,377 | $ | 2,509 | $ | 2,150 | |||||
Equity
underwriting | 1,666 | 1,684 | 1,468 | ||||||||
Debt underwriting(a) | 3,532 | 3,280 | 3,738 | ||||||||
Total
investment banking fees | $ | 7,575 | $ | 7,473 | $ | 7,356 |
(a) | Represents
long-term debt and loan syndications. |
68 | JPMorgan Chase & Co./2019 Form 10-K |
League
table results – wallet share | ||||||||||||||
2019 | 2018 | 2017 | ||||||||||||
Year ended December 31, | Rank | Share | Rank | Share | Rank | Share | ||||||||
Based
on fees(a) | ||||||||||||||
M&A(b) | ||||||||||||||
Global | # | 2 | 9.2 | # | 2 | 8.7 | # | 2 | 8.4 | |||||
U.S. | 2 | 9.4 | 2 | 8.9 | 2 | 9.0 | ||||||||
Equity
and equity-related(c) | ||||||||||||||
Global | 1 | 9.4 | 1 | 9.0 | 2 | 7.1 | ||||||||
U.S. | 1 | 13.4 | 1 | 12.3 | 1 | 11.5 | ||||||||
Long-term
debt(d) | ||||||||||||||
Global | 1 | 7.8 | 1 | 7.2 | 1 | 7.8 | ||||||||
U.S. | 1 | 12.0 | 1 | 11.2 | 2 | 11.1 | ||||||||
Loan
syndications | ||||||||||||||
Global | 1 | 10.1 | 1 | 9.7 | 1 | 9.3 | ||||||||
U.S. | 1 | 12.8 | 1 | 12.3 | 1 | 10.9 | ||||||||
Global
investment banking fees(e) | # | 1 | 9.0 | # | 1 | 8.6 | # | 1 | 8.1 |
(a) | Source:
Dealogic as of January 2, 2020. Reflects the ranking of revenue wallet and market share. |
(b) | Global M&A excludes any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S. |
(c) | Global equity and equity-related ranking includes rights offerings and Chinese A-Shares. |
(d) | Long-term
debt rankings include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”); and exclude money market, short-term debt, and U.S. municipal securities. |
(e) | Global investment banking fees exclude money market, short-term debt and shelf deals. |
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Year
ended December 31, (in millions, except where otherwise noted) | Fixed Income Markets | Equity Markets | Total Markets | Fixed Income Markets | Equity Markets | Total Markets | Fixed Income Markets | Equity Markets | Total
Markets | ||||||||||||||||||||
Principal transactions | $ | 8,786 | $ | 5,739 | $ | 14,525 | $ | 7,560 | $ | 5,566 | $ | 13,126 | $ | 7,393 | $ | 3,855 | $ | 11,248 | |||||||||||
Lending-
and deposit-related fees | 198 | 7 | 205 | 197 | 6 | 203 | 191 | 6 | 197 | ||||||||||||||||||||
Asset
management, administration and commissions | 407 | 1,775 | 2,182 | 410 | 1,794 | 2,204 | 390 | 1,635 | 2,025 | ||||||||||||||||||||
All
other income | 872 | 8 | 880 | 952 | 22 | 974 | 436 | (21 | ) | 415 | |||||||||||||||||||
Noninterest
revenue | 10,263 | 7,529 | 17,792 | 9,119 | 7,388 | 16,507 | 8,410 | 5,475 | 13,885 | ||||||||||||||||||||
Net
interest income(a) | 4,155 | (1,035 | ) | 3,120 | 3,587 | (500 | ) | 3,087 | 4,402 | 228 | 4,630 | ||||||||||||||||||
Total
net revenue | $ | 14,418 | $ | 6,494 | $ | 20,912 | $ | 12,706 | $ | 6,888 | $ | 19,594 | $ | 12,812 | $ | 5,703 | $ | 18,515 | |||||||||||
Loss
days(b) | 1 | 5 | 4 |
(a) | The decline in Markets net interest income in 2018 was driven by higher funding costs. |
(b) | Loss
days represent the number of days for which Markets posted losses. The loss days determined under this measure differ from the disclosure of daily market risk-related gains and losses for the Firm in the value-at-risk (“VaR”) back-testing discussion on pages 121–123. |
JPMorgan Chase & Co./2019 Form 10-K | 69 |
Selected
metrics | |||||||||||
As of or for the year ended December 31, (in millions, except where otherwise noted) | 2019 | 2018 | 2017 | ||||||||
Assets
under custody (“AUC”) by asset class (period-end) (in billions): | |||||||||||
Fixed Income | $ | 13,498 | $ | 12,440 | $ | 13,043 | |||||
Equity | 10,100 | 8,078 | 7,863 | ||||||||
Other(a) | 3,233 | 2,699 | 2,563 | ||||||||
Total
AUC | $ | 26,831 | $ | 23,217 | $ | 23,469 | |||||
Client deposits and other third party liabilities (average)(b) | $ | 464,770 | $ | 434,422 | $ | 408,911 |
(a) |
(b) | Client deposits and other third-party liabilities pertain to the Treasury Services and Securities Services businesses. |
International
metrics | |||||||||||
As of or for the year ended December 31, (in millions, except where otherwise noted) | 2019 | 2018(c) | 2017(c) | ||||||||
Total
net revenue(a) | |||||||||||
Europe/Middle East/Africa | $ | 11,718 | $ | 12,260 | $ | 11,590 | |||||
Asia-Pacific | 5,330 | 5,077 | 4,313 | ||||||||
Latin
America/Caribbean | 1,549 | 1,473 | 1,232 | ||||||||
Total international net revenue | 18,597 | 18,810 | 17,135 | ||||||||
North
America | 19,701 | 17,638 | 17,522 | ||||||||
Total net revenue | $ | 38,298 | $ | 36,448 | $ | 34,657 | |||||
Loans
retained (period-end)(a) | |||||||||||
Europe/Middle East/Africa | $ | 23,056 | $ | 24,842 | $ | 23,689 | |||||
Asia-Pacific | 15,144 | 17,192 | 15,385 | ||||||||
Latin
America/Caribbean | 6,189 | 6,515 | 5,895 | ||||||||
Total international loans | 44,389 | 48,549 | 44,969 | ||||||||
North
America | 77,344 | 80,840 | 63,796 | ||||||||
Total loans retained | $ | 121,733 | $ | 129,389 | $ | 108,765 | |||||
Client
deposits and other third-party liabilities (average)(b) | |||||||||||
Europe/Middle East/Africa | $ | 174,477 | $ | 162,846 | $ | 154,654 | |||||
Asia-Pacific | 90,364 | 82,867 | 76,673 | ||||||||
Latin
America/Caribbean | 29,027 | 26,668 | 25,490 | ||||||||
Total international | $ | 293,868 | $ | 272,381 | $ | 256,817 | |||||
North
America | 170,902 | 162,041 | 152,094 | ||||||||
Total client deposits and other third-party liabilities | $ | 464,770 | $ | 434,422 | $ | 408,911 | |||||
AUC
(period-end)(b) (in billions) | |||||||||||
North America | $ | 16,855 | $ | 14,359 | $ | 13,971 | |||||
All
other regions | 9,976 | 8,858 | 9,498 | ||||||||
Total AUC | $ | 26,831 | $ | 23,217 | $ | 23,469 |
(a) | Total
net revenue and loans retained (excluding loans held-for-sale and loans at fair value) are based on the location of the trading desk, booking location, or domicile of the client, as applicable. |
(b) | Client deposits and other third-party liabilities pertaining to the Treasury Services and Securities Services businesses, and AUC, are based on the domicile of the client. |
(c) | The prior period amounts have been revised to conform with the current period presentation. |
70 | JPMorgan
Chase & Co./2019 Form 10-K |
COMMERCIAL BANKING |
Commercial Banking provides comprehensive financial solutions, including lending, treasury services, investment banking and asset management products
across three primary client segments: Middle Market Banking, Corporate Client Banking and Commercial Real Estate Banking. Other includes amounts not aligned with a primary client segment. Middle Market Banking covers small business and midsized corporations, local governments and nonprofit clients. Corporate Client Banking covers large corporations. Commercial Real Estate Banking covers investors, developers, and owners of multifamily, office, retail, industrial and affordable housing properties. |
Selected
income statement data | |||||||||||
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Revenue | |||||||||||
Lending-
and deposit-related fees | $ | 913 | $ | 870 | $ | 919 | |||||
All other income(a) | 1,517 | 1,473 | 1,603 | ||||||||
Noninterest
revenue | 2,430 | 2,343 | 2,522 | ||||||||
Net interest income | 6,554 | 6,716 | 6,083 | ||||||||
Total
net revenue(b) | 8,984 | 9,059 | 8,605 | ||||||||
Provision
for credit losses | 296 | 129 | (276 | ) | |||||||
Noninterest
expense | |||||||||||
Compensation expense | 1,785 | 1,694 | 1,534 | ||||||||
Noncompensation
expense | 1,715 | 1,692 | 1,793 | ||||||||
Total noninterest expense | 3,500 | 3,386 | 3,327 | ||||||||
Income
before income tax expense | 5,188 | 5,544 | 5,554 | ||||||||
Income tax expense | 1,264 | 1,307 | 2,015 | ||||||||
Net
income | $ | 3,924 | $ | 4,237 | $ | 3,539 |
(a) | Effective
in the first quarter of 2019, includes revenue from investment banking products, commercial card transactions and asset management fees. The prior period amounts have been revised to conform with the current period presentation. |
(b) | Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities and in entities established for rehabilitation of historic properties, as well as tax-exempt income related to municipal financing activities of $460 million, $444 million and $699 million for the years ended December 31,
2019, 2018 and 2017, respectively. |
JPMorgan
Chase & Co./2019 Form 10-K | 71 |
CB product revenue consists of the following: | ||||
Lending includes a variety of financing alternatives, which are primarily provided on a secured basis; collateral includes receivables, inventory, equipment, real estate or other assets.
Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, and standby letters of credit. | ||||
Treasury services includes revenue from a broad range of products and services that enable CB clients to manage payments and receipts, as well as invest and manage funds. | ||||
Investment banking includes revenue from a range of products providing CB clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through advisory, equity underwriting, and loan syndications. Revenue from Fixed Income and Equity Markets products used by CB clients is also included. | ||||
Other product
revenue primarily includes tax-equivalent adjustments generated from Community Development Banking activities and certain income derived from principal transactions. |
Selected income statement data (continued) | |||||||||||
Year ended December 31, (in
millions, except ratios) | 2019 | 2018 | 2017 | ||||||||
Revenue by product | |||||||||||
Lending | $ | 4,057 | $ | 4,049 | $ | 4,094 | |||||
Treasury
services | 3,920 | 4,074 | 3,444 | ||||||||
Investment banking(a) | 919 | 852 | 805 | ||||||||
Other | 88 | 84 | 262 | ||||||||
Total
Commercial Banking net revenue | $ | 8,984 | $ | 9,059 | $ | 8,605 | |||||
Investment
banking revenue, gross(b) | $ | 2,744 | $ | 2,491 | $ | 2,385 | |||||
Revenue
by client segment | |||||||||||
Middle Market Banking | $ | 3,702 | $ | 3,708 | $ | 3,341 | |||||
Corporate
Client Banking | 2,994 | 2,984 | 2,727 | ||||||||
Commercial Real Estate Banking(c) | 2,169 | 2,249 | 2,416 | ||||||||
Other(c) | 119 | 118 | 121 | ||||||||
Total
Commercial Banking net revenue | $ | 8,984 | $ | 9,059 | $ | 8,605 | |||||
Financial
ratios | |||||||||||
Return on equity | 17 | % | 20 | % | 17 | % | |||||
Overhead
ratio | 39 | 37 | 39 |
(a) | Includes CB’s share of revenue from investment banking products sold to CB clients through the CIB. |
(b) | Refer
to page 60 for a discussion of revenue sharing. |
(c) | Effective in the first quarter of 2019, client segment data includes Commercial Real Estate Banking which comprises the former Commercial Term Lending and Real Estate Banking client segments, and Community Development Banking (previously part of Other). The prior period amounts have been revised to conform with the current period presentation. |
72 | JPMorgan
Chase & Co./2019 Form 10-K |
Selected metrics | |||||||||||
As of or for the year ended December 31, (in millions, except headcount) | 2019 | 2018 | 2017 | ||||||||
Selected
balance sheet data (period-end) | |||||||||||
Total assets | $ | 220,514 | $ | 220,229 | $ | 221,228 | |||||
Loans: | |||||||||||
Loans
retained | 207,287 | 204,219 | 202,400 | ||||||||
Loans held-for-sale and loans at fair value | 1,009 | 1,978 | 1,286 | ||||||||
Total
loans | $ | 208,296 | $ | 206,197 | $ | 203,686 | |||||
Core loans | 208,181 | 206,039 | 203,469 | ||||||||
Equity | 22,000 | 20,000 | 20,000 | ||||||||
Period-end
loans by client segment | |||||||||||
Middle Market Banking | $ | 54,188 | $ | 56,656 | $ | 56,965 | |||||
Corporate
Client Banking | 51,165 | 48,343 | 46,963 | ||||||||
Commercial Real Estate Banking(a) | 101,951 | 100,088 | 98,297 | ||||||||
Other(a) | 992 | 1,110 | 1,461 | ||||||||
Total
Commercial Banking loans | $ | 208,296 | $ | 206,197 | $ | 203,686 | |||||
Selected
balance sheet data (average) | |||||||||||
Total assets | $ | 218,896 | $ | 218,259 | $ | 217,047 | |||||
Loans: | |||||||||||
Loans
retained | 206,837 | 204,243 | 197,203 | ||||||||
Loans held-for-sale and loans at fair value | 1,082 | 1,258 | 909 | ||||||||
Total
loans | $ | 207,919 | $ | 205,501 | $ | 198,112 | |||||
Core loans | 207,787 | 205,320 | 197,846 | ||||||||
Client
deposits and other third-party liabilities | 172,734 | 170,901 | 177,018 | ||||||||
Equity | 22,000 | 20,000 | 20,000 | ||||||||
Average
loans by client segment | |||||||||||
Middle Market Banking | $ | 55,690 | $ | 57,092 | $ | 55,474 | |||||
Corporate
Client Banking | 50,360 | 47,780 | 46,037 | ||||||||
Commercial Real Estate Banking(a) | 100,884 | 99,243 | 95,038 | ||||||||
Other(a) | 985 | 1,386 | 1,563 | ||||||||
Total
Commercial Banking loans | $ | 207,919 | $ | 205,501 | $ | 198,112 | |||||
Headcount | 11,629 | 11,042 | 10,061 |
(a) | Effective
in the first quarter of 2019, client segment data includes Commercial Real Estate Banking which comprises the former Commercial Term Lending and Real Estate Banking client segments, and Community Development Banking (previously part of Other). The prior period amounts have been revised to conform with the current period presentation. |
Selected metrics | |||||||||||
As
of or for the year ended December 31, (in millions, except ratios) | 2019 | 2018 | 2017 | ||||||||
Credit data and quality statistics | |||||||||||
Net charge-offs/(recoveries) | $ | 160 | $ | 53 | $ | 39 | |||||
Nonperforming
assets | |||||||||||
Nonaccrual loans: | |||||||||||
Nonaccrual loans retained(a) | 498 | 511 | 617 | ||||||||
Nonaccrual
loans held-for-sale and loans at fair value | — | — | — | ||||||||
Total nonaccrual loans | 498 | 511 | 617 | ||||||||
Assets
acquired in loan satisfactions | 25 | 2 | 3 | ||||||||
Total nonperforming assets | 523 | 513 | 620 | ||||||||
Allowance
for credit losses: | |||||||||||
Allowance for loan losses | 2,780 | 2,682 | 2,558 | ||||||||
Allowance
for lending-related commitments | 293 | 254 | 300 | ||||||||
Total allowance for credit losses | 3,073 | 2,936 | 2,858 | ||||||||
Net
charge-off/(recovery) rate(b) | 0.08 | % | 0.03 | % | 0.02 | % | |||||
Allowance for loan losses to period-end loans retained | 1.34 | 1.31 | 1.26 | ||||||||
Allowance
for loan losses to nonaccrual loans retained(a) | 558 | 525 | 415 | ||||||||
Nonaccrual loans to period-end total loans | 0.24 | 0.25 | 0.30 |
(a) | Allowance
for loan losses of $114 million, $92 million and $92 million was held against nonaccrual loans retained at December 31, 2019, 2018 and 2017, respectively. |
(b) | Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate. |
JPMorgan
Chase & Co./2019 Form 10-K | 73 |
ASSET & WEALTH MANAGEMENT |
Asset
& Wealth Management, with client assets of $3.2 trillion, is a global leader in investment and wealth management. AWM clients include institutions, high-net-worth individuals and retail investors in major markets throughout the world. AWM offers investment management across most major asset classes including equities, fixed income, alternatives and money market funds. AWM also offers multi-asset investment management, providing solutions for a broad range of clients’ investment needs. For Wealth Management clients, AWM also provides retirement products and services, brokerage and banking services including trusts and estates, loans, mortgages and deposits. The majority of AWM’s client assets are in actively managed portfolios. |
Selected
income statement data | |||||||||
Year ended December 31, (in millions, except ratios and headcount) | 2019 | 2018 | 2017 | ||||||
Revenue | |||||||||
Asset
management, administration and commissions | $ | 10,212 | $ | 10,171 | $ | 9,856 | |||
All other income | 604 | 368 | 600 | ||||||
Noninterest
revenue | 10,816 | 10,539 | 10,456 | ||||||
Net interest income | 3,500 | 3,537 | 3,379 | ||||||
Total
net revenue | 14,316 | 14,076 | 13,835 | ||||||
Provision for credit losses | 61 | 53 | 39 | ||||||
Noninterest
expense | |||||||||
Compensation expense | 5,705 | 5,495 | 5,317 | ||||||
Noncompensation expense | 4,810 | 4,858 | 4,901 | ||||||
Total
noninterest expense | 10,515 | 10,353 | 10,218 | ||||||
Income before income tax expense | 3,740 | 3,670 | 3,578 | ||||||
Income
tax expense | 907 | 817 | 1,241 | ||||||
Net income | $ | 2,833 | $ | 2,853 | $ | 2,337 | |||
Revenue
by line of business | |||||||||
Asset Management | $ | 7,254 | $ | 7,163 | $ | 7,257 | |||
Wealth
Management | 7,062 | 6,913 | 6,578 | ||||||
Total net revenue | $ | 14,316 | $ | 14,076 | $ | 13,835 | |||
Financial
ratios | |||||||||
Return on common equity | 26 | % | 31 | % | 25 | % | |||
Overhead ratio | 73 | 74 | 74 | ||||||
Pre-tax
margin ratio: | |||||||||
Asset Management | 26 | 26 | 22 | ||||||
Wealth Management | 26 | 26 | 30 | ||||||
Asset
& Wealth Management | 26 | 26 | 26 | ||||||
Headcount | 24,191 | 23,920 | 22,975 | ||||||
Number
of Wealth Management client advisors | 2,890 | 2,865 | 2,605 |
74 | JPMorgan
Chase & Co./2019 Form 10-K |
AWM’s lines of business consist of the following: | ||||
Asset Management provides comprehensive global investment services, including asset management, pension analytics, asset-liability management and active risk-budgeting strategies. | ||||
Wealth Management offers investment advice and wealth management,
including investment management, capital markets and risk management, tax and estate planning, banking, lending and specialty-wealth advisory services. |
AWM’s client segments consist of the following: | ||||
Private Banking clients include high- and ultra-high-net-worth individuals, families, money managers, business owners and small corporations worldwide. | ||||
Institutional clients include both corporate and public institutions, endowments, foundations, nonprofit organizations and governments
worldwide. | ||||
Retail clients include financial intermediaries and individual investors. |
Asset Management has two high-level measures of its overall fund performance. | ||||
• Percentage of mutual fund assets under management in funds rated 4- or 5-star: Mutual fund rating services rank funds based on their risk-adjusted performance over various periods. A 5-star rating is the best rating and represents the top 10% of industry-wide ranked funds. A 4-star rating
represents the next 22.5% of industry-wide ranked funds. A 3-star rating represents the next 35% of industry-wide ranked funds. A 2-star rating represents the next 22.5% of industry-wide ranked funds. A 1-star rating is the worst rating and represents the bottom 10% of industry-wide ranked funds. The “overall Morningstar rating” is derived from a weighted average of the performance associated with a fund’s three-, five- and ten-year (if applicable) Morningstar Rating metrics. For U.S. domiciled funds, separate star ratings are given at the individual share class level. The Nomura “star rating” is based on three-year risk-adjusted performance only. Funds with fewer than three years of history are not rated and hence excluded from this analysis. All ratings, the assigned peer categories
and the asset values used to derive this analysis are sourced from these fund rating providers mentioned in footnote (a). The data providers re-denominate the asset values into U.S. dollars. This % of AUM is based on star ratings at the share class level for U.S. domiciled funds, and at a “primary share class” level to represent the star rating of all other funds except for Japan where Nomura provides ratings at the fund level. The “primary share class”, as defined by Morningstar, denotes the share class recommended as being the best proxy for the portfolio and in most cases will be the most retail version (based upon annual management charge, minimum investment, currency and other factors). The performance data could have been different if all funds/accounts would have been included. Past performance is not indicative of future results. | ||||
•
Percentage of mutual fund assets under management in funds ranked in the 1st or 2nd quartile (one, three and five years): All quartile rankings, the assigned peer categories and the asset values used to derive this analysis are sourced from the fund ranking providers mentioned in footnote (b). Quartile rankings are done on the net-of-fee absolute return of each fund. The data providers re-denominate the asset values into U.S. dollars. This % of AUM is based on fund performance and associated peer rankings at the share class level for U.S. domiciled funds and at the “primary share class” level or fund level for all other funds. The “primary share class”, as defined by Morningstar, denotes the share class recommended as being the best proxy for the portfolio and in most cases will be the most retail version (based upon annual management charge, minimum investment, currency and other factors). Where peer group
rankings given for a fund are in more than one “primary share class” territory both rankings are included to reflect local market competitiveness. The performance data could have been different if all funds/accounts would have been included. Past performance is not indicative of future results. |
Selected metrics | |||||||||
As
of or for the year ended December 31, (in millions, except ranking data and ratios) | 2019 | 2018 | 2017 | ||||||
% of JPM mutual fund assets rated as 4- or 5-star(a) | 61 | % | 58 | % | 60 | % | |||
%
of JPM mutual fund assets ranked in 1st or 2nd quartile:(b) | |||||||||
1 year | 59 | 68 | 64 | ||||||
3
years | 77 | 73 | 75 | ||||||
5 years | 75 | 85 | 83 | ||||||
Selected
balance sheet data (period-end)(c) | |||||||||
Total assets | $ | 182,004 | $ | 170,024 | $ | 151,909 | |||
Loans | 160,535 | 147,632 | 130,640 | ||||||
Core
loans | 160,535 | 147,632 | 130,640 | ||||||
Deposits | 147,804 | 138,546 | 146,407 | ||||||
Equity | 10,500 | 9,000 | 9,000 | ||||||
Selected
balance sheet data (average)(c) | |||||||||
Total assets | $ | 170,764 | $ | 160,269 | $ | 144,206 | |||
Loans | 149,655 | 138,622 | 123,464 | ||||||
Core
loans | 149,655 | 138,622 | 123,464 | ||||||
Deposits | 140,118 | 137,272 | 148,982 | ||||||
Equity | 10,500 | 9,000 | 9,000 | ||||||
Credit
data and quality statistics(c) | |||||||||
Net charge-offs | $ | 31 | $ | 10 | $ | 14 | |||
Nonaccrual
loans | 116 | 263 | 375 | ||||||
Allowance for credit losses: | |||||||||
Allowance for loan losses | 354 | 326 | 290 | ||||||
Allowance
for lending-related commitments | 19 | 16 | 10 | ||||||
Total allowance for credit losses | 373 | 342 | 300 | ||||||
Net
charge-off rate | 0.02 | % | 0.01 | % | 0.01 | % | |||
Allowance for loan losses to period-end loans | 0.22 | 0.22 | 0.22 | ||||||
Allowance
for loan losses to nonaccrual loans | 305 | 124 | 77 | ||||||
Nonaccrual loans to period-end loans | 0.07 | 0.18 | 0.29 |
(a) | Represents
the Nomura “star rating” for Japan domiciled funds and Morningstar for all other domiciled funds. Includes only Asset Management retail open-ended mutual funds that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds. |
(b) | Quartile ranking sourced from Lipper, Morningstar, Nomura and Fund Doctor based on country of domicile. Includes only Asset Management retail open-ended mutual funds that are ranked by the aforementioned sources. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds. |
(c) | Loans,
deposits and related credit data and quality statistics relate to the Wealth Management business. |
JPMorgan Chase & Co./2019 Form 10-K | 75 |
Client assets | |||||||||
December
31, (in billions) | 2019 | 2018 | 2017 | ||||||
Assets by asset class | |||||||||
Liquidity | $ | 542 | $ | 480 | $ | 459 | |||
Fixed
income | 602 | 464 | 474 | ||||||
Equity | 474 | 384 | 428 | ||||||
Multi-asset
and alternatives | 746 | 659 | 673 | ||||||
Total assets under management | 2,364 | 1,987 | 2,034 | ||||||
Custody/brokerage/ administration/deposits | 862 | 746 | 755 | ||||||
Total
client assets | $ | 3,226 | $ | 2,733 | $ | 2,789 | |||
Memo: | |||||||||
Alternatives
client assets(a) | $ | 185 | $ | 171 | $ | 166 | |||
Assets
by client segment | |||||||||
Private Banking | $ | 672 | $ | 552 | $ | 526 | |||
Institutional | 1,074 | 926 | 968 | ||||||
Retail | 618 | 509 | 540 | ||||||
Total
assets under management | $ | 2,364 | $ | 1,987 | $ | 2,034 | |||
Private
Banking | $ | 1,504 | $ | 1,274 | $ | 1,256 | |||
Institutional | 1,099 | 946 | 990 | ||||||
Retail | 623 | 513 | 543 | ||||||
Total
client assets | $ | 3,226 | $ | 2,733 | $ | 2,789 |
(a) | Represents assets under management, as well as client balances in brokerage accounts. |
Client
assets (continued) | |||||||||
Year ended December 31, (in billions) | 2019 | 2018 | 2017 | ||||||
Assets under management rollforward | |||||||||
Beginning
balance | $ | 1,987 | $ | 2,034 | $ | 1,771 | |||
Net asset flows: | |||||||||
Liquidity | 60 | 31 | 9 | ||||||
Fixed
income | 106 | (1 | ) | 36 | |||||
Equity | (10 | ) | 2 | (11 | ) | ||||
Multi-asset
and alternatives | 4 | 24 | 43 | ||||||
Market/performance/other impacts | 217 | (103 | ) | 186 | |||||
Ending
balance, December 31 | $ | 2,364 | $ | 1,987 | $ | 2,034 | |||
Client
assets rollforward | |||||||||
Beginning balance | $ | 2,733 | $ | 2,789 | $ | 2,453 | |||
Net
asset flows | 178 | 88 | 93 | ||||||
Market/performance/other impacts | 315 | (144 | ) | 243 | |||||
Ending
balance, December 31 | $ | 3,226 | $ | 2,733 | $ | 2,789 |
International
metrics | |||||||||
Year ended December 31, (in billions, except where otherwise noted) | 2019 | 2018 | 2017 | ||||||
Total net revenue (in millions)(a) | |||||||||
Europe/Middle East/Africa(b) | $ | 2,869 | $ | 2,850 | $ | 2,837 | |||
Asia-Pacific(b) | 1,509 | 1,538 | 1,405 | ||||||
Latin
America/Caribbean(b) | 724 | 755 | 702 | ||||||
Total international net revenue | 5,102 | 5,143 | 4,944 | ||||||
North
America | 9,214 | 8,933 | 8,891 | ||||||
Total net revenue | $ | 14,316 | $ | 14,076 | $ | 13,835 | |||
Assets
under management | |||||||||
Europe/Middle East/Africa(b) | $ | 428 | $ | 366 | $ | 393 | |||
Asia-Pacific(b) | 192 | 163 | 161 | ||||||
Latin
America/Caribbean(b) | 62 | 51 | 51 | ||||||
Total international assets under management | 682 | 580 | 605 | ||||||
North
America | 1,682 | 1,407 | 1,429 | ||||||
Total assets under management | $ | 2,364 | $ | 1,987 | $ | 2,034 | |||
Client
assets | |||||||||
Europe/Middle East/Africa(b) | $ | 520 | $ | 440 | $ | 466 | |||
Asia-Pacific(b) | 272 | 226 | 230 | ||||||
Latin
America/Caribbean(b) | 147 | 125 | 124 | ||||||
Total international client assets | 939 | 791 | 820 | ||||||
North
America | 2,287 | 1,942 | 1,969 | ||||||
Total client assets | $ | 3,226 | $ | 2,733 | $ | 2,789 |
(a) | Regional revenue is based on the domicile of the client. |
(b) | The prior period amounts have been revised to conform with the current period presentation. |
76 | JPMorgan
Chase & Co./2019 Form 10-K |
CORPORATE |
The Corporate segment consists of Treasury and Chief Investment Office and Other Corporate, which includes corporate staff functions and expense that is centrally
managed. Treasury and CIO is predominantly responsible for measuring, monitoring, reporting and managing the Firm’s liquidity, funding, capital, structural interest rate and foreign exchange risks. The major Other Corporate functions include Real Estate, Technology, Legal, Corporate Finance, Human Resources, Internal Audit, Risk Management, Compliance, Control Management, Corporate Responsibility and various Other Corporate groups. |
Selected income statement and balance sheet data | |||||||||||
Year
ended December 31, (in millions, except headcount) | 2019 | 2018 | 2017 | ||||||||
Revenue | |||||||||||
Principal transactions | $ | (461 | ) | $ | (426 | ) | $ | 284 | |||
Investment
securities gains/(losses) | 258 | (395 | ) | (66 | ) | ||||||
All other income(a) | 89 | 558 | 867 | ||||||||
Noninterest
revenue | (114 | ) | (263 | ) | 1,085 | ||||||
Net interest income | 1,325 | 135 | 55 | ||||||||
Total
net revenue(b) | 1,211 | (128 | ) | 1,140 | |||||||
Provision
for credit losses | (1 | ) | (4 | ) | — | ||||||
Noninterest
expense(c) | 1,067 | 902 | 501 | ||||||||
Income/(loss) before income tax expense/(benefit) | 145 | (1,026 | ) | 639 | |||||||
Income
tax expense/(benefit) | (966 | ) | 215 | 2,282 | |||||||
Net income/(loss) | $ | 1,111 | $ | (1,241 | ) | $ | (1,643 | ) | |||
Total
net revenue | |||||||||||
Treasury and CIO | 2,032 | 510 | 566 | ||||||||
Other
Corporate | (821 | ) | (638 | ) | 574 | ||||||
Total net revenue | $ | 1,211 | $ | (128 | ) | $ | 1,140 | ||||
Net
income/(loss) | |||||||||||
Treasury and CIO | 1,394 | (69 | ) | 60 | |||||||
Other
Corporate | (283 | ) | (1,172 | ) | (1,703 | ) | |||||
Total net income/(loss) | $ | 1,111 | $ | (1,241 | ) | $ | (1,643 | ) | |||
Total
assets (period-end) | $ | 837,618 | $ | 771,787 | $ | 781,478 | |||||
Loans (period-end) | 1,649 | 1,597 | 1,653 | ||||||||
Core
loans(d) | 1,649 | 1,597 | 1,653 | ||||||||
Headcount | 38,033 | 37,145 | 34,601 |
(a) | Included
revenue related to a legal settlement of $645 million for the year ended December 31, 2017. |
(b) | Included tax-equivalent adjustments, driven by tax-exempt income from municipal bonds, of $314 million, $382 million and $905 million for the years ended December 31, 2019, 2018 and 2017, respectively. The decrease in taxable-equivalent adjustments for the year ended
December 31, 2018, reflects the impact of the TCJA. |
(c) | Included a net legal benefit of $(214) million, $(241) million and $(593) million for the years ended December 31, 2019, 2018 and 2017, respectively. |
(d) | Average
core loans were $1.7 billion, $1.7 billion and $1.6 billion for the years ended December 31, 2019, 2018 and 2017, respectively. |
• | investment
securities gains, compared with losses in the prior year, due to the repositioning of the investment securities portfolio, and |
• | lower net markdowns on certain legacy private equity investments, |
• | market-driven impacts on certain Corporate investments, and |
• | higher
losses on cash deployment transactions which were more than offset by the related net interest income earned on those transactions. |
JPMorgan Chase & Co./2019 Form 10-K | 77 |
Selected
income statement and balance sheet data | |||||||||||
As of or for the year ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Investment securities gains/(losses) | $ | 258 | $ | (395 | ) | $ | (78 | ) | |||
Available-for-sale
(“AFS”) investment securities (average) | 283,205 | 203,449 | 219,345 | ||||||||
Held-to-maturity (“HTM”) investment securities (average) | 34,939 | 31,747 | 47,927 | ||||||||
Investment
securities portfolio (average) | 318,144 | 235,196 | 267,272 | ||||||||
AFS investment securities (period-end) | 348,876 | 228,681 | 200,247 | ||||||||
HTM
investment securities (period-end) | 47,540 | 31,434 | 47,733 | ||||||||
Investment securities portfolio (period–end) | 396,416 | 260,115 | 247,980 |
78 | JPMorgan
Chase & Co./2019 Form 10-K |
FIRMWIDE RISK MANAGEMENT |
• | Acceptance of responsibility, including identification and escalation of risk issues, by all individuals within the Firm; |
• | Ownership
of risk identification, assessment, data and management within each of the LOBs and Corporate; and |
• | Firmwide structures for risk governance. |
• | Strategic risk is the risk to earnings, capital, liquidity or reputation associated with poorly designed or failed business plans or inadequate response to changes in the operating environment. |
• | Credit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss
of principal or a reduction in expected returns on investments, including consumer credit risk, wholesale credit risk, and investment portfolio risk. |
• | Market risk is the risk associated with the effect of changes in market factors, such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term. |
• | Operational risk is the risk associated with
an adverse outcome resulting from inadequate or failed internal processes or systems; human factors; or external events impacting the Firm’s processes or systems; it includes compliance, conduct, legal, and estimations and model risk. |
JPMorgan Chase & Co./2019 Form 10-K | 79 |
80 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 81 |
82 | JPMorgan
Chase & Co./2019 Form 10-K |
Risk
governance and oversight functions | Page |
Strategic risk | 84 |
Capital risk | 85–92 |
Liquidity risk | 93–98 |
Reputation risk | 99 |
Consumer credit risk | 103–107 |
Wholesale
credit risk | 108–115 |
Investment portfolio risk | 118 |
Market risk | 119–126 |
Country risk | 127–128 |
Operational risk | 129–135 |
Compliance risk | 132 |
Conduct
risk | 133 |
Legal risk | 134 |
Estimations and Model risk | 135 |
JPMorgan Chase & Co./2019 Form 10-K | 83 |
STRATEGIC RISK MANAGEMENT |
84 | JPMorgan Chase & Co./2019 Form 10-K |
CAPITAL
RISK MANAGEMENT |
• | Defining, monitoring and reporting capital
risk metrics; |
• | Establishing, calibrating and monitoring capital risk limits and indicators, including capital risk appetite; |
• | Developing a process to classify, monitor and report limit breaches; and |
• | Performing an independent assessment of the Firm’s capital management activities, including
changes made to the contingency capital plan described below. |
• | Maintain
sufficient capital in order to continue to build and invest in the Firm’s businesses through the cycle and in stressed environments; |
• | Retain flexibility to take advantage of future investment opportunities; |
• | Promote the Firm’s ability to serve as a source of strength to its subsidiaries; |
• | Ensure
the Firm operates above the minimum regulatory capital ratios as well as maintain “well-capitalized” status for the Firm and its insured depository institution (“IDI”) subsidiaries at all times under applicable regulatory capital requirements; |
• | Meet capital distribution objectives; and |
• | Maintain sufficient capital resources to operate throughout a resolution period in accordance with the Firm’s preferred resolution
strategy. |
JPMorgan
Chase & Co./2019 Form 10-K | 85 |
86 | JPMorgan
Chase & Co./2019 Form 10-K |
2019 | 2018 | |||
Fully
Phased-In: | ||||
Method 1 | 2.50 | % | 2.50 | % |
Method 2 | 3.50 | % | 3.50 | % |
Transitional(a) | N/A | 2.625 | % |
(a) | The
GSIB surcharge was subject to transition provisions (in 25% increments) through the end of 2018. |
JPMorgan
Chase & Co./2019 Form 10-K | 87 |
(in millions) | Standardized | Advanced | Minimum capital ratios | Standardized(b) | Advanced(b) | Minimum
capital ratios | ||||||||||||||||
Risk-based capital metrics: | ||||||||||||||||||||||
CET1
capital | $ | 187,753 | $ | 187,753 | $ | 183,474 | $ | 183,474 | ||||||||||||||
Tier
1 capital | 214,432 | 214,432 | 209,093 | 209,093 | ||||||||||||||||||
Total
capital | 242,589 | 232,112 | 237,511 | 227,435 | ||||||||||||||||||
Risk-weighted
assets | 1,515,869 | 1,397,878 | 1,528,916 | 1,421,205 | ||||||||||||||||||
CET1
capital ratio | 12.4 | % | 13.4 | % | 10.5 | % | 12.0 | % | 12.9 | % | 9.0 | % | ||||||||||
Tier
1 capital ratio | 14.1 | 15.3 | 12.0 | 13.7 | 14.7 | 10.5 | ||||||||||||||||
Total
capital ratio | 16.0 | 16.6 | 14.0 | 15.5 | 16.0 | 12.5 | ||||||||||||||||
Leverage-based
capital metrics: | ||||||||||||||||||||||
Adjusted average assets(a) | $ | 2,730,239 | $ | 2,730,239 | $ | 2,589,887 | $ | 2,589,887 | ||||||||||||||
Tier
1 leverage ratio | 7.9 | % | 7.9 | % | 4.0 | % | 8.1 | % | 8.1 | % | 4.0 | % | ||||||||||
Total
leverage exposure | NA | $ | 3,423,431 | NA | $ | 3,269,988 | ||||||||||||||||
SLR | NA | 6.3 | % | 5.0 | % | (c) | NA | 6.4 | % | 5.0 | % | (c) |
(a) | Adjusted
average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets. |
(b) | The Firm’s capital ratios as of December 31, 2018 were equivalent whether calculated on a transitional or fully phased-in basis. |
(c) | Represents minimum SLR requirement of 3.0%, as well as supplementary
leverage buffer of 2.0%. |
88 | JPMorgan Chase & Co./2019 Form 10-K |
(in millions) | ||||||
Total
stockholders’ equity | $ | 261,330 | $ | 256,515 | ||
Less: Preferred stock | 26,993 | 26,068 | ||||
Common stockholders’ equity | 234,337 | 230,447 | ||||
Less: | ||||||
Goodwill | 47,823 | 47,471 | ||||
Other
intangible assets | 819 | 748 | ||||
Other CET1 capital adjustments | 323 | 1,034 | ||||
Add: | ||||||
Certain
deferred tax liabilities(a) | 2,381 | 2,280 | ||||
Standardized/Advanced CET1 capital | 187,753 | 183,474 | ||||
Preferred stock | 26,993 | 26,068 | ||||
Less:
Other Tier 1 adjustments | 314 | 449 | ||||
Standardized/Advanced Tier 1 capital | 214,432 | 209,093 | ||||
Long-term debt and other instruments qualifying as Tier 2 capital | 13,733 | 13,772 | ||||
Qualifying
allowance for credit losses | 14,314 | 14,500 | ||||
Other | 110 | 146 | ||||
Standardized Tier 2 capital | 28,157 | 28,418 | ||||
Standardized
Total capital | 242,589 | 237,511 | ||||
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital | (10,477 | ) | (10,076 | ) | ||
Advanced Tier 2 capital | 17,680 | 18,342 | ||||
Advanced
Total capital | $ | 232,112 | $ | 227,435 |
(a) | Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating
CET1 capital. |
Year Ended December 31, (in millions) | 2019 | ||
Standardized/Advanced
CET1 capital at December 31, 2018 | $ | 183,474 | |
Net income applicable to common equity | 34,844 | ||
Dividends declared on common stock | (10,897 | ) | |
Net purchase of treasury stock | (22,555 | ) | |
Changes
in additional paid-in capital | (640 | ) | |
Changes related to AOCI | 2,904 | ||
Adjustment related to DVA(a) | 1,103 | ||
Changes related to other CET1 capital adjustments | (480 | ) | |
Change
in Standardized/Advanced CET1 capital | 4,279 | ||
Standardized/Advanced CET1 capital at | 187,753 | ||
Standardized/Advanced Tier 1 capital at | 209,093 | ||
Change
in CET1 capital | 4,279 | ||
Net issuance of noncumulative perpetual preferred stock | 925 | ||
Other | 135 | ||
Change in Standardized/Advanced Tier 1 capital | 5,339 | ||
Standardized/Advanced
Tier 1 capital at | 214,432 | ||
Standardized Tier 2 capital at December 31, 2018 | 28,418 | ||
Change in long-term debt and other instruments qualifying as Tier 2 | (39 | ) | |
Change
in qualifying allowance for credit losses | (186 | ) | |
Other | (36 | ) | |
Change in Standardized Tier 2 capital | (261 | ) | |
Standardized Tier 2 capital at December 31, 2019 | 28,157 | ||
Standardized
Total capital at December 31, 2019 | 242,589 | ||
Advanced Tier 2 capital at December 31, 2018 | 18,342 | ||
Change in long-term debt and other instruments qualifying as Tier 2 | (39 | ) | |
Change in qualifying allowance for credit losses | (587 | ) | |
Other | (36 | ) | |
Change
in Advanced Tier 2 capital | (662 | ) | |
Advanced Tier 2 capital at December 31, 2019 | 17,680 | ||
Advanced Total capital at December 31, 2019 | $ | 232,112 |
(a) | Includes
DVA related to structured notes recorded in AOCI. |
JPMorgan Chase & Co./2019 Form 10-K | 89 |
Standardized | Advanced | |||||||||||||||||||||
Year
ended December 31, 2019 (in millions) | Credit risk RWA | Market risk RWA | Total RWA | Credit risk RWA | Market risk RWA | Operational risk RWA | Total RWA | |||||||||||||||
$ | 1,423,053 | $ | 105,863 | $ | 1,528,916 | $ | 926,647 | $ | 105,976 | $ | 388,582 | $ | 1,421,205 | |||||||||
Model
& data changes(a) | (6,406 | ) | (24,433 | ) | (30,839 | ) | (34,584 | ) | (24,433 | ) | — | (59,017 | ) | |||||||||
Portfolio
runoff(b) | (5,800 | ) | — | (5,800 | ) | (5,500 | ) | — | — | (5,500 | ) | |||||||||||
Movement
in portfolio levels(c) | 29,373 | (5,781 | ) | 23,592 | 46,385 | (5,891 | ) | 696 | 41,190 | |||||||||||||
Changes
in RWA | 17,167 | (30,214 | ) | (13,047 | ) | 6,301 | (30,324 | ) | 696 | (23,327 | ) | |||||||||||
$ | 1,440,220 | $ | 75,649 | $ | 1,515,869 | $ | 932,948 | $ | 75,652 | $ | 389,278 | $ | 1,397,878 |
(a) | Model
& data changes refer to material movements in levels of RWA as a result of revised methodologies and/or treatment per regulatory guidance (exclusive of rule changes); and an update to the wholesale credit risk Advanced Approach parameters. |
(b) | Portfolio runoff for credit risk RWA primarily reflects reduced risk from position rolloffs in legacy portfolios in Home Lending. |
(c) | Movement in portfolio
levels (inclusive of rule changes) refers to: changes in book size, composition, credit quality, and market movements for credit risk RWA; changes in position and market movements for market risk RWA; and updates to cumulative losses for operational risk RWA. |
(in
millions, except ratio) | ||||||
Tier 1 capital | $ | 214,432 | $ | 209,093 | ||
Total
average assets | 2,777,270 | $ | 2,636,505 | |||
Less: Adjustments for deductions from Tier 1 capital | 47,031 | 46,618 | ||||
Total adjusted average assets(a) | 2,730,239 | 2,589,887 | ||||
Off-balance
sheet exposures(b) | 693,192 | 680,101 | ||||
Total leverage exposure | $ | 3,423,431 | $ | 3,269,988 | ||
SLR | 6.3 | % | 6.4 | % |
(a) | Adjusted
average assets, for purposes of calculating the SLR, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets. |
(b) | Off-balance sheet exposures are calculated as the average of the three month-end spot balances during the reporting quarter. |
Line of business equity (Allocated capital) | ||||||||||
December 31, | ||||||||||
(in
billions) | 2020 | 2019 | 2018 | |||||||
Consumer & Community Banking | $ | 52.0 | $ | 52.0 | $ | 51.0 | ||||
Corporate
& Investment Bank | 80.0 | 80.0 | 70.0 | |||||||
Commercial Banking | 22.0 | 22.0 | 20.0 | |||||||
Asset
& Wealth Management | 10.5 | 10.5 | 9.0 | |||||||
Corporate(a) | 67.1 | 69.8 | 80.4 | |||||||
Total
common stockholders’ equity | $ | 231.6 | $ | 234.3 | $ | 230.4 |
(a) | Includes the $2.7 billion
(after-tax) impact to retained earnings upon the adoption of CECL on January 1, 2020. |
90 | JPMorgan Chase & Co./2019 Form 10-K |
Year
ended December 31, | 2019 | 2018 | 2017 | |||||
Common dividend payout ratio | 31 | % | 30 | % | 33 | % |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||||||
Total number of shares of common stock repurchased | 213.0 | 181.5 | 166.6 | |||||||||
Aggregate
purchase price of common stock repurchases | $ | 24,121 | $ | 19,983 | $ | 15,410 |
(in billions, except ratio) | Eligible external TLAC | Eligible
LTD | ||||
Total eligible TLAC & LTD | $ | 386.4 | $ | 161.8 | ||
% of RWA | 25.5 | % | 10.7 | % | ||
Minimum requirement
| 23.0 | 9.5 | ||||
Surplus/(shortfall) | $ | 37.7 | $ | 17.8 | ||
%
of total leverage exposure | 11.3 | % | 4.7 | % | ||
Minimum requirement | 9.5 | 4.5 | ||||
Surplus/(shortfall) | $ | 61.2 | $ | 7.8 |
JPMorgan Chase & Co./2019 Form 10-K | 91 |
(in millions) | Actual | Minimum | ||||
Net Capital | $ | 21,050 | $ | 3,751 |
(in millions, except ratios) | Estimated | Minimum ratios | |||
Total capital | $ | 52,983 | |||
CET1
ratio | 16.5 | % | 4.5 | % | |
Total capital ratio | 21.3 | % | 8.0 | % |
92 | JPMorgan
Chase & Co./2019 Form 10-K |
LIQUIDITY RISK MANAGEMENT |
• | Defining, monitoring and reporting liquidity risk metrics; |
• | Establishing and monitoring limits and indicators, including Liquidity Risk Appetite;
|
• | Developing a process to classify, monitor and report limit breaches; |
• | Performing an independent review of liquidity risk management processes; |
• | Monitoring and reporting internal firmwide and legal entity liquidity stress tests as well
as regulatory defined liquidity stress tests; |
• | Approving or escalating for review new or updated liquidity stress assumptions; and |
• | Monitoring liquidity positions, balance sheet variances and funding activities; |
• | Ensure
that the Firm’s core businesses and material legal entities are able to operate in support of client needs and meet contractual and contingent financial obligations through normal economic cycles as well as during stress events, and |
• | Manage an optimal funding mix and availability of liquidity sources. |
• | Optimize
liquidity sources and uses; |
• | Monitor exposures; |
• | Identify constraints on the transfer of liquidity between the Firm’s legal entities; and |
• | Maintain the appropriate amount of surplus liquidity
at a firmwide and legal entity level, where relevant. |
• | Analyzing and understanding the liquidity characteristics of the assets and liabilities of the Firm, LOBs and legal entities, taking into account legal, regulatory, and operational restrictions; |
• | Developing internal
liquidity stress testing assumptions; |
• | Defining and monitoring firmwide and legal entity-specific liquidity strategies, policies, reporting and contingency funding plans; |
• | Managing liquidity within the Firm’s approved liquidity risk appetite tolerances and limits; |
• | Managing
compliance with regulatory requirements related to funding and liquidity risk; and |
• | Setting transfer pricing in accordance with underlying liquidity characteristics of balance sheet assets and liabilities as well as certain off-balance sheet items. |
• | Varying levels of access to unsecured and secured funding markets, |
• | Estimated non-contractual and contingent cash outflows, and |
• | Potential
impediments to the availability and transferability of liquidity between jurisdictions and material legal entities such as regulatory, legal or other restrictions. |
JPMorgan Chase & Co./2019 Form 10-K | 93 |
Three
months ended | |||||||||
Average amount (in millions) | |||||||||
HQLA | |||||||||
Eligible cash(a) | $ | 203,296 | $ | 199,757 | $ | 297,069 | |||
Eligible
securities(b)(c) | 341,990 | 337,704 | 232,201 | ||||||
Total HQLA(d) | $ | 545,286 | $ | 537,461 | $ | 529,270 | |||
Net
cash outflows | $ | 469,402 | $ | 468,452 | $ | 467,704 | |||
LCR | 116 | % | 115 | % | 113 | % | |||
Net
excess HQLA (d) | $ | 75,884 | $ | 69,009 | $ | 61,566 |
(a) | Represents cash on deposit at central banks, primarily
the Federal Reserve Banks. |
(b) | Predominantly U.S. Treasuries, U.S. GSE and government agency MBS, and sovereign bonds net of applicable haircuts under the LCR rule. |
(c) | HQLA eligible securities may be reported in securities borrowed or purchased under resale agreements, trading assets, or investment securities on the Firm’s Consolidated balance sheets. |
(d) | Excludes
average excess HQLA at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates. |
94 | JPMorgan
Chase & Co./2019 Form 10-K |
As of or for the year ended December 31, | Average | ||||||||||||
(in
millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Consumer & Community Banking | $ | 718,416 | $ | 678,854 | $ | 693,550 | $ | 670,388 | |||||
Corporate
& Investment Bank | 511,843 | 482,084 | 515,913 | 477,250 | |||||||||
Commercial Banking | 184,115 | 170,859 | 172,666 | 170,822 | |||||||||
Asset
& Wealth Management | 147,804 | 138,546 | 140,118 | 137,272 | |||||||||
Corporate | 253 | 323 | 820 | 729 | |||||||||
Total
Firm | $ | 1,562,431 | $ | 1,470,666 | $ | 1,523,067 | $ | 1,456,461 |
As
of December 31, (in billions except ratios) | ||||||
2019 | 2018 | |||||
Deposits | $ | 1,562.4 | $ | 1,470.7 | ||
Deposits
as a % of total liabilities | 64 | % | 62 | % | ||
Loans | 959.8 | 984.6 | ||||
Loans-to-deposits ratio | 61 | % | 67 | % |
JPMorgan Chase & Co./2019 Form 10-K | 95 |
Sources
of funds (excluding deposits) | |||||||||||||
As of or for the year ended December 31, | Average | ||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Commercial
paper | $ | 14,754 | $ | 30,059 | $ | 22,977 | $ | 27,834 | |||||
Other borrowed
funds | 7,544 | 8,789 | 10,369 | 11,369 | |||||||||
Total short-term unsecured funding | $ | 22,298 | $ | 38,848 | $ | 33,346 | $ | 39,203 | |||||
Securities
sold under agreements to repurchase(a) | $ | 175,709 | $ | 171,975 | $ | 217,807 | $ | 177,629 | |||||
Securities
loaned(a) | 5,983 | 9,481 | 8,816 | 10,692 | |||||||||
Other borrowed funds(b) | 18,622 | 30,428 | 26,050 | 24,320 | |||||||||
Obligations
of Firm-administered multi-seller conduits(c) | 9,223 | 4,843 | 10,929 | 3,396 | |||||||||
Total short-term secured funding | $ | 209,537 | $ | 216,727 | $ | 263,602 | $ | 216,037 | |||||
Senior
notes | $ | 166,185 | $ | 162,733 | $ | 168,546 | $ | 153,162 | |||||
Trust preferred
securities | — | — | — | 471 | |||||||||
Subordinated debt | 17,591 | 16,743 | 17,387 | 16,178 | |||||||||
Structured
notes(d) | 74,724 | 53,090 | 65,487 | 49,640 | |||||||||
Total long-term unsecured funding | $ | 258,500 | $ | 232,566 | $ | 251,420 | $ | 219,451 | |||||
Credit
card securitization(c) | $ | 6,461 | $ | 13,404 | $ | 9,707 | $ | 15,900 | |||||
FHLB
advances | 28,635 | 44,455 | 34,143 | 52,121 | |||||||||
Other long-term secured funding(e) | 4,363 | 5,010 | 4,643 | 4,842 | |||||||||
Total
long-term secured funding | $ | 39,459 | $ | 62,869 | $ | 48,493 | $ | 72,863 | |||||
Preferred
stock(f) | $ | 26,993 | $ | 26,068 | $ | 27,511 | $ | 26,249 | |||||
Common
stockholders’ equity(f) | $ | 234,337 | $ | 230,447 | $ | 232,907 | $ | 229,222 |
(a) | Primarily
consists of short-term securities loaned or sold under agreements to repurchase. |
(b) | There were no FHLB advances with original maturities of less than one year as of December 31, 2019. As of December 31, 2018, includes FHLB advances with original maturities of less than one year of $11.4 billion. |
(c) | Included
in beneficial interests issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets. |
(d) | Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company. |
(e) | Includes long-term structured notes which are secured. |
(f) | Refer to Capital Risk
Management on pages 85–92, Consolidated statements of changes in stockholders’ equity on page 149, and Note 21 and Note 22 for additional information on preferred stock and common stockholders’ equity. |
96 | JPMorgan Chase & Co./2019 Form 10-K |
Long-term
unsecured funding | |||||||||||||
Year ended December 31, | 2019 | 2018 | 2019 | 2018 | |||||||||
(Notional in millions) | Parent
Company | ||||||||||||
Issuance | |||||||||||||
Senior notes issued in the U.S. market | $ | 14,000 | $ | 22,000 | $ | 1,750 | $ | 9,562 | |||||
Senior
notes issued in non-U.S. markets | 5,867 | 1,502 | — | — | |||||||||
Total senior notes | 19,867 | 23,502 | 1,750 | 9,562 | |||||||||
Structured
notes(a) | 5,844 | 2,444 | 33,563 | 25,410 | |||||||||
Total long-term unsecured funding – issuance | $ | 25,711 | $ | 25,946 | $ | 35,313 | $ | 34,972 | |||||
Maturities/redemptions | |||||||||||||
Senior
notes | $ | 18,098 | $ | 19,141 | $ | 5,367 | $ | 4,466 | |||||
Subordinated debt | 183 | 136 | — | — | |||||||||
Structured
notes | 2,944 | 2,678 | 19,271 | 15,049 | |||||||||
Total long-term unsecured funding – maturities/redemptions | $ | 21,225 | $ | 21,955 | $ | 24,638 | $ | 19,515 |
(a) | Includes
certain TLAC-eligible long-term unsecured debt issued by the Parent Company. |
Long-term
secured funding | |||||||||||||
Year ended December 31, | Issuance | Maturities/Redemptions | |||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Credit
card securitization | $ | — | $ | 1,396 | $ | 6,975 | $ | 9,250 | |||||
FHLB advances | — | 9,000 | 15,817 | 25,159 | |||||||||
Other
long-term secured funding(a) | 204 | 377 | 927 | 289 | |||||||||
Total long-term secured funding | $ | 204 | $ | 10,773 | $ | 23,719 | $ | 34,698 |
(a) | Includes
long-term structured notes which are secured. |
JPMorgan Chase & Co./2019 Form 10-K | 97 |
JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A.(a) | J.P. Morgan Securities LLC J.P.
Morgan Securities plc | |||||||||
Long-term issuer | Short-term issuer | Outlook | Long-term issuer | Short-term issuer | Outlook | Long-term issuer | Short-term issuer | Outlook | |||
Moody’s
Investors Service | A2 | P-1 | Stable | Aa2 | P-1 | Stable | Aa3 | P-1 | Stable | ||
Standard & Poor’s | A- | A-2 | Stable | A+ | A-1 | Stable | A+ | A-1 | Stable | ||
Fitch
Ratings | AA- | F1+ | Stable | AA | F1+ | Stable | AA | F1+ | Stable |
(a) | On
May 18, 2019, Chase Bank USA, N.A. merged with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A. as the surviving bank. The credit rating for JPMorgan Chase Bank, N.A. reflects the credit rating of the merged entity. |
98 | JPMorgan
Chase & Co./2019 Form 10-K |
REPUTATION RISK MANAGEMENT |
• | Establishing a Firmwide Reputation Risk Governance policy and standards consistent with the reputation risk framework |
• | Managing
the governance infrastructure and processes that support consistent identification, escalation, management and monitoring of reputation risk issues Firmwide |
• | Providing guidance to LOB Reputation Risk Offices (“RRO”), as appropriate |
JPMorgan
Chase & Co./2019 Form 10-K | 99 |
CREDIT AND INVESTMENT RISK MANAGEMENT |
• | Establishing a credit risk policy framework |
• | Monitoring, measuring and managing credit risk across all portfolio
segments, including transaction and exposure approval |
• | Setting industry and geographic concentration limits, as appropriate, and establishing underwriting guidelines |
• | Assigning and managing credit authorities in connection with the approval of credit exposure |
• | Managing criticized exposures
and delinquent loans |
• | Estimating credit losses and ensuring appropriate credit risk-based capital management |
100 | JPMorgan Chase & Co./2019 Form 10-K |
• | Loan underwriting and credit approval process |
• | Loan syndications and participations |
• | Loan
sales and securitizations |
• | Credit derivatives |
• | Master netting agreements |
• | Collateral and other risk-reduction techniques |
• | Independently validating or changing the risk grades assigned to exposures in the Firm’s wholesale and commercial-oriented retail credit portfolios, and assessing the timeliness of risk grade changes initiated by responsible business units; and |
• | Evaluating the effectiveness of business units’ credit management processes, including the adequacy of credit analyses and risk grading/LGD
rationales, proper monitoring and management of credit exposures, and compliance with applicable grading policies and underwriting guidelines. |
JPMorgan Chase & Co./2019 Form 10-K | 101 |
CREDIT
PORTFOLIO |
Total
credit portfolio | |||||||||||||
December 31, (in millions) | Credit exposure | Nonperforming(d)(e) | |||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Loans
retained | $ | 945,601 | $ | 969,415 | $ | 3,983 | $ | 4,611 | |||||
Loans
held-for-sale | 7,064 | 11,988 | 7 | — | |||||||||
Loans at fair value | 7,104 | 3,151 | 90 | 220 | |||||||||
Total
loans – reported | 959,769 | 984,554 | 4,080 | 4,831 | |||||||||
Derivative receivables | 49,766 | 54,213 | 30 | 60 | |||||||||
Receivables
from customers and other(a) | 33,706 | 30,217 | — | — | |||||||||
Total credit-related assets | 1,043,241 | 1,068,984 | 4,110 | 4,891 | |||||||||
Assets
acquired in loan satisfactions | |||||||||||||
Real estate owned | NA | NA | 344 | 269 | |||||||||
Other | NA | NA | 43 | 30 | |||||||||
Total assets
acquired in loan satisfactions | NA | NA | 387 | 299 | |||||||||
Lending-related commitments | 1,106,247 | 1,039,258 | 474 | 469 | |||||||||
Total
credit portfolio | $ | 2,149,488 | $ | 2,108,242 | $ | 4,971 | $ | 5,659 | |||||
Credit
derivatives used in credit portfolio management activities(b) | $ | (18,030 | ) | $ | (12,682 | ) | $ | — | $ | — | |||
Liquid
securities and other cash collateral held against derivatives(c) | (16,009 | ) | (15,322 | ) | NA | NA |
Year
ended December 31, (in millions, except ratios) | 2019 | 2018 | |||||
Net charge-offs | $ | 5,629 | $ | 4,856 | |||
Average retained loans | |||||||
Loans
| 941,919 | 936,829 | |||||
Loans – reported, excluding residential real estate PCI loans | 919,702 | 909,386 | |||||
Net
charge-off rates | |||||||
Loans | 0.60 | % | 0.52 | % | |||
Loans – excluding PCI | 0.61 | 0.53 |
(a) | Receivables
from customers and other primarily represents brokerage-related held-for-investment customer receivables. |
(b) | Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. Refer to Credit derivatives on page 115 and Note 5 for additional information. |
(c) | Includes
collateral related to derivative instruments where appropriate legal opinions have not been either sought or obtained with respect to master netting agreements. |
(d) | Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing. |
(e) | At December 31, 2019 and 2018, nonperforming
assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $961 million and $2.6 billion, respectively, and real estate owned (“REO”) insured by U.S. government agencies of $41 million and $75 million, respectively. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”). |
102 | JPMorgan
Chase & Co./2019 Form 10-K |
CONSUMER CREDIT PORTFOLIO |
JPMorgan
Chase & Co./2019 Form 10-K | 103 |
Consumer
credit portfolio | ||||||||||||||||||||||||||
As of or for the year ended December 31, (in millions, except ratios) | Credit exposure | Nonaccrual loans(f)(g) | Net charge-offs/(recoveries)(h) | Net charge-off/(recovery) rate(h)(i) | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Consumer,
excluding credit card | ||||||||||||||||||||||||||
Loans, excluding PCI loans
and loans held-for-sale | ||||||||||||||||||||||||||
Residential mortgage | $ | 199,037 | $ | 231,078 | $ | 1,618 | $ | 1,765 | $ | (44 | ) | $ | (291 | ) | (0.02 | )% | (0.13 | )% | ||||||||
Home
equity | 23,917 | 28,340 | 1,162 | 1,323 | (46 | ) | (5 | ) | (0.18 | ) | (0.02 | ) | ||||||||||||||
Auto(a)(b) | 61,522 | 63,573 | 113 | 128 | 206 | 243 | 0.33 | 0.38 | ||||||||||||||||||
Consumer
& Business Banking(b)(c) | 27,199 | 26,612 | 247 | 245 | 296 | 236 | 1.11 | 0.90 | ||||||||||||||||||
Total
loans, excluding PCI loans and loans held-for-sale | 311,675 | 349,603 | 3,140 | 3,461 | 412 | 183 | 0.13 | 0.05 | ||||||||||||||||||
Loans
– PCI | ||||||||||||||||||||||||||
Home equity | 7,377 | 8,963 | NA | NA | NA | NA | NA | NA | ||||||||||||||||||
Prime
mortgage | 3,965 | 4,690 | NA | NA | NA | NA | NA | NA | ||||||||||||||||||
Subprime
mortgage | 1,740 | 1,945 | NA | NA | NA | NA | NA | NA | ||||||||||||||||||
Option
ARMs | 7,281 | 8,436 | NA | NA | NA | NA | NA | NA | ||||||||||||||||||
Total
loans – PCI | 20,363 | 24,034 | NA | NA | NA | NA | NA | NA | ||||||||||||||||||
Total
loans – retained | 332,038 | 373,637 | 3,140 | 3,461 | 412 | 183 | 0.12 | 0.05 | ||||||||||||||||||
Loans
held-for-sale | 3,002 | 95 | 2 | — | NA | NA | NA | NA | ||||||||||||||||||
Total
consumer, excluding credit card loans | 335,040 | 373,732 | 3,142 | 3,461 | 412 | 183 | 0.12 | 0.05 | ||||||||||||||||||
Lending-related
commitments(d) | 51,412 | 46,066 | ||||||||||||||||||||||||
Receivables
from customers | — | 154 | ||||||||||||||||||||||||
Total
consumer exposure, excluding credit card | 386,452 | 419,952 | ||||||||||||||||||||||||
Credit
Card | ||||||||||||||||||||||||||
Loans retained(e) | 168,924 | 156,616 | — | — | 4,848 | 4,518 | 3.10 | 3.10 | ||||||||||||||||||
Loans
held-for-sale | — | 16 | — | — | NA | NA | NA | NA | ||||||||||||||||||
Total
credit card loans | 168,924 | 156,632 | — | — | 4,848 | 4,518 | 3.10 | 3.10 | ||||||||||||||||||
Lending-related
commitments(d) | 650,720 | 605,379 | ||||||||||||||||||||||||
Total
credit card exposure | 819,644 | 762,011 | ||||||||||||||||||||||||
Total
consumer credit portfolio | $ | 1,206,096 | $ | 1,181,963 | $ | 3,142 | $ | 3,461 | $ | 5,260 | $ | 4,701 | 1.04 | % | 0.90 | % | ||||||||||
Memo:
Total consumer credit portfolio, excluding PCI | $ | 1,185,733 | $ | 1,157,929 | $ | 3,142 | $ | 3,461 | $ | 5,260 | $ | 4,701 | 1.09 | % | 0.95 | % |
(a) | At
December 31, 2019 and 2018, excluded operating lease assets of $22.8 billion and $20.5 billion, respectively. These operating lease assets are included in other assets on the Firm’s Consolidated balance sheets. Refer to Note 18 for further information. |
(b) | Includes certain business banking and auto dealer risk-rated loans for which the wholesale methodology is applied for determining the allowance for loan losses;
these loans are managed by CCB, and therefore, for consistency in presentation, are included within the consumer portfolio. |
(c) | Predominantly includes Business Banking loans. |
(d) | Credit card and home equity lending-related commitments represent the total available lines of credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit would be used at the same time. For credit card commitments, and if certain conditions are met, home equity commitments, the Firm
can reduce or cancel these lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. Refer to Note 28 for further information. |
(e) | Includes billed interest and fees net of an allowance for uncollectible interest and fees. |
(f) | At December 31, 2019 and 2018,
nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $961 million and $2.6 billion, respectively. These amounts have been excluded from nonaccrual loans based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status, as permitted by regulatory guidance issued by the FFIEC. |
(g) | Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing. |
(h) | Net
charge-offs/(recoveries) and net charge-off/(recovery) rates excluded write-offs in the PCI portfolio of $151 million and $187 million for the years ended December 31, 2019 and 2018, respectively. These write-offs decreased the allowance for loan losses for PCI loans. Refer to Allowance for Credit Losses on pages 116–117 for further information. |
(i) | Average consumer loans held-for-sale were $2.9
billion and $387 million for the years ended December 31, 2019 and 2018, respectively. These amounts were excluded when calculating net charge-off/(recovery) rates. |
104 | JPMorgan Chase & Co./2019 Form 10-K |
(in millions) | ||||||
Current | $ | 1,280 | $ | 2,884 | ||
30-89
days past due | 695 | 1,528 | ||||
90 or more days past due | 961 | 2,600 | ||||
Total government guaranteed loans | $ | 2,936 | $ | 7,012 |
JPMorgan Chase & Co./2019 Form 10-K | 105 |
Summary
of PCI loans lifetime principal loss estimates | |||||||||||||||
Lifetime loss estimates(a) | Life-to-date liquidation losses(b) | ||||||||||||||
December 31, (in billions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Home
equity | $ | 13.9 | $ | 14.1 | $ | 13.0 | $ | 13.0 | |||||||
Prime
mortgage | 4.1 | 4.1 | 3.9 | 3.9 | |||||||||||
Subprime mortgage | 3.4 | 3.3 | 3.2 | 3.2 | |||||||||||
Option
ARMs | 10.3 | 10.3 | 10.0 | 9.9 | |||||||||||
Total | $ | 31.7 | $ | 31.8 | $ | 30.1 | $ | 30.0 |
(a) | Includes
the original nonaccretable difference established in purchase accounting of $30.5 billion for principal losses plus additional principal losses recognized subsequent to acquisition through the provision and allowance for loan losses. The remaining nonaccretable difference for principal losses was $466 million and $512 million at December 31, 2019 and 2018, respectively. |
(b) | Represents both realization of loss
upon loan resolution and any principal forgiven upon modification. |
2019 | 2018 | |||||||||||
December
31, (in millions) | Retained loans | Nonaccrual retained loans(d) | Retained loans | Nonaccrual retained loans(d) | ||||||||
Modified residential real estate loans, excluding PCI loans(a)(b) | ||||||||||||
Residential
mortgage | $ | 4,005 | $ | 1,367 | $ | 4,565 | $ | 1,459 | ||||
Home equity | 1,921 | 965 | 2,058 | 963 | ||||||||
Total
modified residential real estate loans, excluding PCI loans | $ | 5,926 | $ | 2,332 | $ | 6,623 | $ | 2,422 | ||||
Modified PCI loans(c) | ||||||||||||
Home
equity | $ | 1,986 | NA | $ | 2,086 | NA | ||||||
Prime mortgage | 2,825 | NA | 3,179 | NA | ||||||||
Subprime
mortgage | 1,869 | NA | 2,041 | NA | ||||||||
Option ARMs | 5,692 | NA | 6,410 | NA | ||||||||
Total
modified PCI loans | $ | 12,372 | NA | $ | 13,716 | NA |
(a) | Amounts represent
the carrying value of modified residential real estate loans. |
(b) | At December 31, 2019 and 2018, $14 million and $4.1 billion, respectively, of loans modified subsequent to repurchase from Ginnie Mae in accordance with the standards of the appropriate government agency (i.e., Federal Housing Administration (“FHA”), U.S. Department of Veterans Affairs (“VA”), Rural Housing Service of the U.S. Department of Agriculture (“RHS”)) are not
included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure. Refer to Note 14 for additional information about sales of loans in securitization transactions with Ginnie Mae. |
(c) | Amounts represent the unpaid principal balance of modified PCI loans. |
(d) | As of December 31,
2019 and 2018, nonaccrual loans included $1.9 billion and $2.0 billion, respectively, of troubled debt restructurings (“TDRs”) for which the borrowers were less than 90 days past due. Refer to Note 12 for additional information about loans modified in a TDR that are on nonaccrual status. |
106 | JPMorgan
Chase & Co./2019 Form 10-K |
Nonperforming
assets(a) | |||||||
December 31, (in millions) | 2019 | 2018 | |||||
Nonaccrual loans(b) | |||||||
Residential
real estate | $ | 2,782 | $ | 3,088 | |||
Other consumer | 360 | 373 | |||||
Total
nonaccrual loans | 3,142 | 3,461 | |||||
Assets acquired in loan satisfactions | |||||||
Real estate owned(c) | 214 | 196 | |||||
Other | 24 | 30 | |||||
Total
assets acquired in loan satisfactions | 238 | 226 | |||||
Total nonperforming assets | $ | 3,380 | $ | 3,687 |
(a) | At
December 31, 2019 and 2018, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $961 million and $2.6 billion, respectively, and real estate owned (“REO”) insured by U.S. government agencies of $41 million and $75 million, respectively. These amounts have been excluded based upon the government guarantee. |
(b) | Excludes
PCI loans, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of individual loans within the pools, is not meaningful. The Firm is recognizing interest income on each pool of loans as each of the pools is performing. |
(c) | The prior period amount has been revised to conform with the current period presentation. |
Nonaccrual loan activity | |||||||
Year ended December 31, | |||||||
(in
millions) | 2019 | 2018 | |||||
Beginning balance | $ | 3,461 | $ | 4,209 | |||
Additions | 2,210 | 2,799 | |||||
Reductions: | |||||||
Principal
payments and other(a) | 1,026 | 1,407 | |||||
Charge-offs | 421 | 468 | |||||
Returned to performing status | 834 | 1,399 | |||||
Foreclosures
and other liquidations | 248 | 273 | |||||
Total reductions | 2,529 | 3,547 | |||||
Net changes | (319 | ) | (748 | ) | |||
Ending
balance | $ | 3,142 | $ | 3,461 |
(a) | Other reductions includes loan sales. |
JPMorgan
Chase & Co./2019 Form 10-K | 107 |
WHOLESALE CREDIT PORTFOLIO |
Wholesale
credit portfolio | |||||||||||||
December 31, (in millions) | Credit exposure | Nonperforming | |||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Loans retained | $ | 444,639 | $ | 439,162 | $ | 843 | $ | 1,150 | |||||
Loans
held-for-sale | 4,062 | 11,877 | 5 | — | |||||||||
Loans at fair value | 7,104 | 3,151 | 90 | 220 | |||||||||
Loans
– reported | 455,805 | 454,190 | 938 | 1,370 | |||||||||
Derivative receivables | 49,766 | 54,213 | 30 | 60 | |||||||||
Receivables
from customers and other(a) | 33,706 | 30,063 | — | — | |||||||||
Total wholesale credit-related assets | 539,277 | 538,466 | 968 | 1,430 | |||||||||
Assets
acquired in loan satisfactions | |||||||||||||
Real estate owned | NA | NA | 130 | 73 | |||||||||
Other | NA | NA | 19 | — | |||||||||
Total assets
acquired in loan satisfactions | NA | NA | 149 | 73 | |||||||||
Lending-related commitments | 404,115 | 387,813 | 474 | 469 | |||||||||
Total
wholesale credit portfolio | $ | 943,392 | $ | 926,279 | $ | 1,591 | $ | 1,972 | |||||
Credit
derivatives used in credit portfolio management activities(b) | $ | (18,030 | ) | $ | (12,682 | ) | $ | — | $ | — | |||
Liquid
securities and other cash collateral held against derivatives | (16,009 | ) | (15,322 | ) | NA | NA |
(a) | Receivables from customers
and other include $33.7 billion and $30.1 billion of brokerage-related held-for-investment customer receivables at December 31, 2019 and 2018, respectively, to clients in CIB and AWM; these are classified in accrued interest and accounts receivable on the Consolidated balance sheets. |
(b) | Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures;
these derivatives do not qualify for hedge accounting under U.S. GAAP. Refer to Credit derivatives on page 115 and Note 5 for additional information. |
108 | JPMorgan Chase & Co./2019 Form 10-K |
Wholesale
credit exposure – maturity and ratings profile | ||||||||||||||||||||||||||
Maturity profile(d) | Ratings profile | |||||||||||||||||||||||||
Due
in 1 year or less | Due after 1 year through 5 years | Due after 5 years | Total | Total | Total % of
IG | |||||||||||||||||||||
December 31, 2019 (in millions, except ratios) | Investment-grade | Noninvestment-grade | ||||||||||||||||||||||||
Loans retained | $ | 128,430 | $ | 209,397 | $ | 106,812 | $ | 444,639 | $ | 344,199 | $ | 100,440 | $ | 444,639 | 77 | % | ||||||||||
Derivative
receivables | 49,766 | 49,766 | ||||||||||||||||||||||||
Less: Liquid
securities and other cash collateral held against derivatives | (16,009 | ) | (16,009 | ) | ||||||||||||||||||||||
Total
derivative receivables, net of all collateral | 6,561 | 6,960 | 20,236 | 33,757 | 26,966 | 6,791 | 33,757 | 80 | ||||||||||||||||||
Lending-related
commitments | 77,298 | 314,281 | 12,536 | 404,115 | 288,864 | 115,251 | 404,115 | 71 | ||||||||||||||||||
Subtotal | 212,289 | 530,638 | 139,584 | 882,511 | 660,029 | 222,482 | 882,511 | 75 | ||||||||||||||||||
Loans
held-for-sale and loans at fair value(a) | 11,166 | 11,166 | ||||||||||||||||||||||||
Receivables
from customers and other | 33,706 | 33,706 | ||||||||||||||||||||||||
Total
exposure – net of liquid securities and other cash collateral held against derivatives | $ | 927,383 | $ | 927,383 | ||||||||||||||||||||||
Credit
derivatives used in credit portfolio management activities(b)(c) | $ | (4,912 | ) | $ | (10,031 | ) | $ | (3,087 | ) | $ | (18,030 | ) | $ | (16,276 | ) | $ | (1,754 | ) | $ | (18,030 | ) | 90 | % |
Maturity
profile(d) | Ratings profile | |||||||||||||||||||||||||
Due in 1 year or less | Due after 1 year through 5 years | Due after 5 years | Total | Total | Total
% of IG | |||||||||||||||||||||
December 31, 2018 (in millions, except ratios) | Investment-grade | Noninvestment-grade | ||||||||||||||||||||||||
Loans retained | $ | 138,458 | $ | 196,974 | $ | 103,730 | $ | 439,162 | $ | 339,729 | $ | 99,433 | $ | 439,162 | 77 | % | ||||||||||
Derivative
receivables | 54,213 | 54,213 | ||||||||||||||||||||||||
Less: Liquid
securities and other cash collateral held against derivatives | (15,322 | ) | (15,322 | ) | ||||||||||||||||||||||
Total
derivative receivables, net of all collateral | 11,038 | 9,169 | 18,684 | 38,891 | 31,794 | 7,097 | 38,891 | 82 | ||||||||||||||||||
Lending-related
commitments | 79,400 | 294,855 | 13,558 | 387,813 | 288,724 | 99,089 | 387,813 | 74 | ||||||||||||||||||
Subtotal | 228,896 | 500,998 | 135,972 | 865,866 | 660,247 | 205,619 | 865,866 | 76 | ||||||||||||||||||
Loans
held-for-sale and loans at fair value(a) | 15,028 | 15,028 | ||||||||||||||||||||||||
Receivables
from customers and other | 30,063 | 30,063 | ||||||||||||||||||||||||
Total
exposure – net of liquid securities and other cash collateral held against derivatives | $ | 910,957 | $ | 910,957 | ||||||||||||||||||||||
Credit
derivatives used in credit portfolio management activities (b)(c) | $ | (447 | ) | $ | (9,318 | ) | $ | (2,917 | ) | $ | (12,682 | ) | $ | (11,213 | ) | $ | (1,469 | ) | $ | (12,682 | ) | 88 | % |
(a) | Represents
loans held-for-sale, primarily related to syndicated loans and loans transferred from the retained portfolio, and loans at fair value. |
(b) | These derivatives do not qualify for hedge accounting under U.S. GAAP. |
(c) | The notional amounts are presented on a net basis by underlying reference entity and the ratings profile shown is based on the ratings of the reference entity on which protection has been purchased. Predominantly all of the credit derivatives entered into by the Firm where it has purchased protection used
in credit portfolio management activities are executed with investment-grade counterparties. |
(d) | The maturity profile of retained loans, lending-related commitments and derivative receivables is based on remaining contractual maturity. Derivative contracts that are in a receivable position at December 31, 2019, may become payable prior to maturity based on their cash flow profile or changes in market conditions. |
JPMorgan Chase & Co./2019 Form 10-K | 109 |
Wholesale
credit exposure – industries(a) | |||||||||||||||||||||||||||
Selected metrics | |||||||||||||||||||||||||||
30
days or more past due and accruing loans | Net charge-offs/ (recoveries) | Credit derivative hedges(g) | Liquid securities and other cash collateral held against derivative receivables | ||||||||||||||||||||||||
Noninvestment-grade | |||||||||||||||||||||||||||
Credit exposure(f) | Investment-
grade | Noncriticized | Criticized performing | Criticized nonperforming | |||||||||||||||||||||||
As of or for the year ended December 31, 2019 (in millions) | |||||||||||||||||||||||||||
Real Estate | $ | 149,267 | $ | 121,283 | $ | 26,534 | $ | 1,401 | $ | 49 | $ | 98 | $ | 12 | $ | (100 | ) | $ | — | ||||||||
Individuals
and Individual Entities(b) | 102,292 | 90,865 | 11,219 | 171 | 37 | 386 | 28 | — | (641 | ) | |||||||||||||||||
Consumer
& Retail | 99,331 | 57,587 | 39,524 | 2,062 | 158 | 80 | 112 | (235 | ) | (11 | ) | ||||||||||||||||
Technology,
Media & Telecommunications | 59,021 | 35,602 | 20,368 | 2,923 | 128 | 13 | 26 | (658 | ) | (17 | ) | ||||||||||||||||
Industrials | 58,250 | 38,760 | 18,264 | 1,050 | 176 | 161 | 41 | (746 | ) | (9 | ) | ||||||||||||||||
Asset
Managers | 51,775 | 45,208 | 6,550 | 4 | 13 | 18 | — | — | (4,785 | ) | |||||||||||||||||
Banks
& Finance Cos | 50,091 | 34,599 | 14,692 | 795 | 5 | — | — | (834 | ) | (2,112 | ) | ||||||||||||||||
Healthcare | 46,638 | 36,231 | 9,248 | 1,074 | 85 | 79 | 6 | (405 | ) | (145 | ) | ||||||||||||||||
Oil
& Gas | 41,570 | 22,221 | 17,780 | 992 | 577 | — | 98 | (429 | ) | (10 | ) | ||||||||||||||||
Utilities | 34,753 | 22,196 | 12,246 | 301 | 10 | 1 | 39 | (414 | ) | (50 | ) | ||||||||||||||||
State
& Municipal Govt(c) | 26,697 | 26,195 | 502 | — | — | 29 | — | — | (46 | ) | |||||||||||||||||
Automotive | 17,317 | 10,000 | 6,759 | 558 | — | 5 | — | (194 | ) | — | |||||||||||||||||
Chemicals
& Plastics | 17,276 | 11,984 | 5,080 | 212 | — | 3 | — | (10 | ) | (13 | ) | ||||||||||||||||
Metals
& Mining | 15,337 | 7,020 | 7,620 | 658 | 39 | 1 | (1 | ) | (33 | ) | (6 | ) | |||||||||||||||
Central
Govt | 14,843 | 14,502 | 341 | — | — | — | — | (9,018 | ) | (1,963 | ) | ||||||||||||||||
Transportation | 13,917 | 8,644 | 4,863 | 347 | 63 | 29 | 7 | (37 | ) | (37 | ) | ||||||||||||||||
Insurance | 12,202 | 9,413 | 2,768 | 17 | 4 | 3 | — | (36 | ) | (1,998 | ) | ||||||||||||||||
Securities
Firms | 7,335 | 5,969 | 1,339 | 27 | — | — | — | (48 | ) | (3,201 | ) | ||||||||||||||||
Financial
Markets Infrastructure | 4,116 | 3,969 | 147 | — | — | — | — | — | (6 | ) | |||||||||||||||||
All
other(d) | 76,492 | 72,565 | 3,548 | 376 | 3 | 4 | 1 | (4,833 | ) | (959 | ) | ||||||||||||||||
Subtotal | $ | 898,520 | $ | 674,813 | $ | 209,392 | $ | 12,968 | $ | 1,347 | $ | 910 | $ | 369 | $ | (18,030 | ) | $ | (16,009 | ) | |||||||
Loans
held-for-sale and loans at fair value | 11,166 | ||||||||||||||||||||||||||
Receivables from customers and other | 33,706 | ||||||||||||||||||||||||||
Total(e) | $ | 943,392 |
110 | JPMorgan
Chase & Co./2019 Form 10-K |
Selected
metrics | |||||||||||||||||||||||||||
30 days or more past due and accruing loans | Net charge-offs/ (recoveries) | Credit derivative hedges(g) | Liquid
securities and other cash collateral held against derivative receivables | ||||||||||||||||||||||||
Noninvestment-grade | |||||||||||||||||||||||||||
Credit exposure(f) | Investment- grade | Noncriticized | Criticized
performing | Criticized nonperforming | |||||||||||||||||||||||
As of or for the year ended December 31, 2018 (in millions) | |||||||||||||||||||||||||||
Real Estate | $ | 143,316 | $ | 117,988 | $ | 24,174 | $ | 1,019 | $ | 135 | $ | 70 | $ | (20 | ) | $ | (2 | ) | $ | (1 | ) | ||||||
Individuals
and Individual Entities(b) | 97,077 | 86,581 | 10,164 | 174 | 158 | 703 | 12 | — | (915 | ) | |||||||||||||||||
Consumer
& Retail | 94,815 | 60,678 | 31,901 | 2,033 | 203 | 43 | 55 | (248 | ) | (14 | ) | ||||||||||||||||
Technology,
Media & Telecommunications | 72,646 | 46,334 | 24,081 | 2,170 | 61 | 8 | 12 | (1,011 | ) | (12 | ) | ||||||||||||||||
Industrials | 58,528 | 38,487 | 18,594 | 1,311 | 136 | 171 | 20 | (207 | ) | (29 | ) | ||||||||||||||||
Asset
Managers | 42,807 | 36,722 | 6,067 | 4 | 14 | 10 | — | — | (5,829 | ) | |||||||||||||||||
Banks
& Finance Cos | 49,920 | 34,120 | 15,496 | 299 | 5 | 11 | — | (575 | ) | (2,290 | ) | ||||||||||||||||
Healthcare | 48,142 | 36,687 | 10,625 | 761 | 69 | 23 | (5 | ) | (150 | ) | (133 | ) | |||||||||||||||
Oil
& Gas | 42,600 | 23,356 | 17,451 | 1,158 | 635 | 6 | 36 | (248 | ) | — | |||||||||||||||||
Utilities | 28,172 | 23,558 | 4,326 | 138 | 150 | — | 38 | (142 | ) | (60 | ) | ||||||||||||||||
State
& Municipal Govt(c) | 27,351 | 26,746 | 603 | 2 | — | 18 | (1 | ) | — | (42 | ) | ||||||||||||||||
Automotive | 17,339 | 9,637 | 7,310 | 392 | — | 1 | — | (125 | ) | — | |||||||||||||||||
Chemicals
& Plastics | 16,035 | 11,490 | 4,427 | 118 | — | 4 | — | — | — | ||||||||||||||||||
Metals
& Mining | 15,359 | 8,188 | 6,767 | 385 | 19 | 1 | — | (174 | ) | (22 | ) | ||||||||||||||||
Central
Govt | 18,456 | 18,251 | 124 | 81 | — | 4 | — | (7,994 | ) | (2,130 | ) | ||||||||||||||||
Transportation | 15,660 | 10,508 | 4,699 | 393 | 60 | 21 | 6 | (31 | ) | (112 | ) | ||||||||||||||||
Insurance | 12,639 | 9,777 | 2,830 | — | 32 | — | — | (36 | ) | (2,080 | ) | ||||||||||||||||
Securities
Firms | 4,558 | 3,099 | 1,459 | — | — | — | — | (158 | ) | (823 | ) | ||||||||||||||||
Financial
Markets Infrastructure | 7,484 | 6,746 | 738 | — | — | — | — | — | (26 | ) | |||||||||||||||||
All
other(d) | 68,284 | 64,664 | 3,606 | 12 | 2 | 2 | 2 | (1,581 | ) | (804 | ) | ||||||||||||||||
Subtotal | $ | 881,188 | $ | 673,617 | $ | 195,442 | $ | 10,450 | $ | 1,679 | $ | 1,096 | $ | 155 | $ | (12,682 | ) | $ | (15,322 | ) | |||||||
Loans
held-for-sale and loans at fair value | 15,028 | ||||||||||||||||||||||||||
Receivables from customers and other | 30,063 | ||||||||||||||||||||||||||
Total(e) | $ | 926,279 |
(a) | The
industry rankings presented in the table as of December 31, 2018, are based on the industry rankings of the corresponding exposures at December 31, 2019, not actual rankings of such exposures at December 31, 2018. |
(b) | Individuals and Individual Entities predominantly consists of Wealth Management clients within AWM and includes exposure to personal investment companies and personal
and testamentary trusts. |
(c) | In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at December 31, 2019 and 2018, noted above, the Firm held: $6.5 billion and $7.8 billion, respectively, of trading assets; $29.8 billion and $37.7 billion, respectively, of AFS securities; and $4.8 billion
at both periods of held-to-maturity (“HTM”) securities, issued by U.S. state and municipal governments. Refer to Note 2 and Note 10 for further information. |
(d) | All other includes: SPEs and Private education and civic organizations, representing approximately 92% and 8%, respectively, at both December 31, 2019 and
2018. |
(e) | Excludes cash placed with banks of $254.0 billion and $268.1 billion, at December 31, 2019 and 2018, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks. |
(f) | Credit
exposure is net of risk participations and excludes the benefit of credit derivatives used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables. |
(g) | Represents the net notional amounts of protection purchased and sold through credit derivatives used to manage the credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. The All other category includes purchased credit protection on certain credit indices. |
JPMorgan
Chase & Co./2019 Form 10-K | 111 |
(in millions, except ratios) | Loans
and Lending-related Commitments | Derivative Receivables | Credit exposure | % Investment-grade | % Drawn(c) | |||||||||||||
Multifamily(a) | $ | 86,326 | $ | 58 | $ | 86,384 | 91 | % | 92 | % | ||||||||
Other | 62,322 | 561 | 62,883 | 68 | 59 | |||||||||||||
Total
Real Estate Exposure(b) | 148,648 | 619 | 149,267 | 81 | 78 | |||||||||||||
(in millions, except ratios) | Loans and Lending-related Commitments | Derivative Receivables | Credit exposure | % Investment- grade | % Drawn(c) | |||||||||||||
Multifamily(a) | $ | 85,683 | $ | 33 | $ | 85,716 | 89 | % | 92 | % | ||||||||
Other | 57,469 | 131 | 57,600 | 72 | 63 | |||||||||||||
Total
Real Estate Exposure(b) | 143,152 | 164 | 143,316 | 82 | 81 |
(a) | Multifamily
exposure is largely in California. |
(b) | Real Estate exposure is predominantly secured; unsecured exposure is largely investment-grade. |
(c) | Represents drawn exposure as a percentage of credit exposure. |
Wholesale nonaccrual loan activity | |||||||
Year
ended December 31, (in millions) | 2019 | 2018 | |||||
Beginning balance | $ | 1,370 | $ | 1,734 | |||
Additions | 2,141 | 1,188 | |||||
Reductions: | |||||||
Paydowns
and other | 1,435 | 692 | |||||
Gross charge-offs | 376 | 299 | |||||
Returned to performing status | 556 | 234 | |||||
Sales | 206 | 327 | |||||
Total
reductions | 2,573 | 1,552 | |||||
Net changes | (432 | ) | (364 | ) | |||
Ending balance | $ | 938 | $ | 1,370 |
Wholesale net charge-offs/(recoveries) | ||||||
Year ended December 31, (in millions, except ratios) | 2019 | 2018 | ||||
Loans
– reported | ||||||
Average loans retained | $ | 435,876 | $ | 416,828 | ||
Gross charge-offs | 411 | 313 | ||||
Gross
recoveries | (42 | ) | (158 | ) | ||
Net charge-offs/(recoveries) | 369 | 155 | ||||
Net charge-off/(recovery) rate | 0.08 | % | 0.04 | % |
112 | JPMorgan
Chase & Co./2019 Form 10-K |
Derivative receivables | ||||||
December 31, (in millions) | 2019 | 2018 | ||||
Total, net of cash collateral | $ | 49,766 | $ | 54,213 | ||
Liquid
securities and other cash collateral held against derivative receivables(a) | (16,009 | ) | (15,322 | ) | ||
Total, net of all collateral | $ | 33,757 | $ | 38,891 |
(a) | Includes
collateral related to derivative instruments where appropriate legal opinions have not been either sought or obtained with respect to master netting agreements. |
JPMorgan Chase & Co./2019 Form 10-K | 113 |
Ratings profile of derivative receivables | |||||||||||
Internal
rating equivalent | 2019 | 2018 | |||||||||
December 31, (in millions, except ratios) | Exposure net of all collateral | % of exposure net of all collateral | Exposure net of all collateral | % of exposure net of all collateral | |||||||
AAA/Aaa
to AA-/Aa3 | $ | 8,347 | 25 | % | $ | 11,831 | 31 | % | |||
A+/A1 to A-/A3 | 5,471 | 16 | 7,428 | 19 | |||||||
BBB+/Baa1
to BBB-/Baa3 | 13,148 | 39 | 12,536 | 32 | |||||||
BB+/Ba1 to B-/B3 | 6,225 | 18 | 6,373 | 16 | |||||||
CCC+/Caa1
and below | 566 | 2 | 723 | 2 | |||||||
Total | $ | 33,757 | 100 | % | $ | 38,891 | 100 | % |
114 | JPMorgan
Chase & Co./2019 Form 10-K |
Credit derivatives used in credit portfolio management activities | |||||||
Notional amount
of protection purchased and sold (a) | |||||||
December 31, (in millions) | 2019 | 2018 | |||||
Credit derivatives used to manage: | |||||||
Loans and lending-related commitments | $ | 2,047 | $ | 1,272 | |||
Derivative
receivables | 15,983 | 11,410 | |||||
Credit derivatives used in credit portfolio management activities | $ | 18,030 | $ | 12,682 |
(a) | Amounts
are presented net, considering the Firm’s net protection purchased or sold with respect to each underlying reference entity or index. |
JPMorgan
Chase & Co./2019 Form 10-K | 115 |
ALLOWANCE FOR CREDIT LOSSES |
• | an $800 million reduction in the CCB allowance for loan losses, which included $650 million in the PCI residential real estate portfolio, reflecting continued improvement in home prices and delinquencies; $100 million in the non credit-impaired residential real estate portfolio; and $50 million in the business banking portfolio; as well as |
• | a $151 million reduction for
write-offs of PCI loans, |
• | a $500 million addition to the allowance for loan losses in the credit card portfolio reflecting loan growth and higher loss rates as newer vintages season and become a larger part of the portfolio, and |
• | a $251 million addition in the wholesale allowance for credit losses driven by select client downgrades. |
116 | JPMorgan Chase & Co./2019 Form 10-K |
Summary
of changes in the allowance for credit losses | |||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||
Year ended December 31, | Consumer, excluding credit card | Credit
card | Wholesale | Total | Consumer, excluding credit card | Credit card | Wholesale | Total | |||||||||||||||||
(in millions, except ratios) | |||||||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||||
Beginning
balance at January 1, | $ | 4,146 | $ | 5,184 | $ | 4,115 | $ | 13,445 | $ | 4,579 | $ | 4,884 | $ | 4,141 | $ | 13,604 | |||||||||
Gross
charge-offs | 963 | 5,436 | 411 | 6,810 | 1,025 | 5,011 | 313 | 6,349 | |||||||||||||||||
Gross
recoveries | (551 | ) | (588 | ) | (42 | ) | (1,181 | ) | (842 | ) | (493 | ) | (158 | ) | (1,493 | ) | |||||||||
Net
charge-offs | 412 | 4,848 | 369 | 5,629 | 183 | 4,518 | 155 | 4,856 | |||||||||||||||||
Write-offs
of PCI loans(a) | 151 | — | — | 151 | 187 | — | — | 187 | |||||||||||||||||
Provision
for loan losses | (383 | ) | 5,348 | 484 | 5,449 | (63 | ) | 4,818 | 130 | 4,885 | |||||||||||||||
Other | (1 | ) | (1 | ) | 11 | 9 | — | — | (1 | ) | (1 | ) | |||||||||||||
Ending
balance at December 31, | $ | 3,199 | $ | 5,683 | $ | 4,241 | $ | 13,123 | $ | 4,146 | $ | 5,184 | $ | 4,115 | $ | 13,445 | |||||||||
Impairment
methodology | |||||||||||||||||||||||||
Asset-specific(b) | $ | 136 | $ | 477 | $ | 234 | $ | 847 | $ | 196 | $ | 440 | $ | 297 | $ | 933 | |||||||||
Formula-based | 2,076 | 5,206 | 4,007 | 11,289 | 2,162 | 4,744 | 3,818 | 10,724 | |||||||||||||||||
PCI | 987 | — | — | 987 | 1,788 | — | — | 1,788 | |||||||||||||||||
Total
allowance for loan losses | $ | 3,199 | $ | 5,683 | $ | 4,241 | $ | 13,123 | $ | 4,146 | $ | 5,184 | $ | 4,115 | $ | 13,445 | |||||||||
Allowance
for lending-related commitments | |||||||||||||||||||||||||
Beginning balance at January 1, | $ | 33 | $ | — | $ | 1,022 | $ | 1,055 | $ | 33 | $ | — | $ | 1,035 | $ | 1,068 | |||||||||
Provision
for lending-related commitments | — | — | 136 | 136 | — | — | (14 | ) | (14 | ) | |||||||||||||||
Other | — | — | — | — | — | — | 1 | 1 | |||||||||||||||||
Ending
balance at December 31, | $ | 33 | $ | — | $ | 1,158 | $ | 1,191 | $ | 33 | $ | — | $ | 1,022 | $ | 1,055 | |||||||||
Impairment
methodology | |||||||||||||||||||||||||
Asset-specific | $ | — | $ | — | $ | 102 | $ | 102 | $ | — | $ | — | $ | 99 | $ | 99 | |||||||||
Formula-based | 33 | — | 1,056 | 1,089 | 33 | — | 923 | 956 | |||||||||||||||||
Total
allowance for lending-related commitments(c) | $ | 33 | $ | — | $ | 1,158 | $ | 1,191 | $ | 33 | $ | — | $ | 1,022 | $ | 1,055 | |||||||||
Total
allowance for credit losses | $ | 3,232 | $ | 5,683 | $ | 5,399 | $ | 14,314 | $ | 4,179 | $ | 5,184 | $ | 5,137 | $ | 14,500 | |||||||||
Memo: | |||||||||||||||||||||||||
Retained
loans, end of period | $ | 332,038 | $ | 168,924 | $ | 444,639 | $ | 945,601 | $ | 373,637 | $ | 156,616 | $ | 439,162 | $ | 969,415 | |||||||||
Retained
loans, average | 349,724 | 156,319 | 435,876 | 941,919 | 374,395 | 145,606 | 416,828 | 936,829 | |||||||||||||||||
PCI
loans, end of period | 20,363 | — | — | 20,363 | 24,034 | — | 3 | 24,037 | |||||||||||||||||
Credit
ratios | |||||||||||||||||||||||||
Allowance for loan losses to retained loans | 0.96 | % | 3.36 | % | 0.95 | % | 1.39 | % | 1.11 | % | 3.31 | % | 0.94 | % | 1.39 | % | |||||||||
Allowance
for loan losses to retained nonaccrual loans(d) | 102 | NM | 503 | 329 | 120 | NM | 358 | 292 | |||||||||||||||||
Allowance
for loan losses to retained nonaccrual loans excluding credit card | 102 | NM | 503 | 187 | 120 | NM | 358 | 179 | |||||||||||||||||
Net
charge-off rates | 0.12 | 3.10 | 0.08 | 0.60 | 0.05 | 3.10 | 0.04 | 0.52 | |||||||||||||||||
Credit
ratios, excluding residential real estate PCI loans | |||||||||||||||||||||||||
Allowance for loan losses to retained loans | 0.71 | 3.36 | 0.95 | 1.31 | 0.67 | 3.31 | 0.94 | 1.23 | |||||||||||||||||
Allowance
for loan losses to retained nonaccrual loans(d) | 70 | NM | 503 | 305 | 68 | NM | 358 | 253 | |||||||||||||||||
Allowance
for loan losses to retained nonaccrual loans excluding credit card | 70 | NM | 503 | 162 | 68 | NM | 358 | 140 | |||||||||||||||||
Net
charge-off rates | 0.13 | % | 3.10 | % | 0.08 | % | 0.61 | % | 0.05 | % | 3.10 | % | 0.04 | % | 0.53 | % |
Note: | In
the table above, the financial measures which exclude the impact of PCI loans are non-GAAP financial measures. |
(a) | Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool. |
(b) | Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified
in a TDR. The asset-specific credit card allowance for loan losses modified in a TDR is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates. |
(c) | The allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets. |
(d) | The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance. |
JPMorgan
Chase & Co./2019 Form 10-K | 117 |
INVESTMENT PORTFOLIO RISK MANAGEMENT |
118 | JPMorgan Chase & Co./2019 Form 10-K |
MARKET
RISK MANAGEMENT |
• | Establishing a market risk policy framework |
• | Independently measuring, monitoring and controlling LOB, Corporate, and Firmwide market risk |
• | Defining, approving and monitoring of limits |
• | Performing
stress testing and qualitative risk assessments |
• | Value-at-risk (VaR) |
• | Stress testing |
• | Profit
and loss drawdowns |
• | Earnings-at-risk |
• | Other sensitivity-based measures |
JPMorgan Chase & Co./2019 Form 10-K | 119 |
LOBs
and Corporate | Predominant business activities | Related market risks | Positions included in Risk Management VaR | Positions included in earnings-at-risk | Positions included in other sensitivity-based measures |
CCB | • Services mortgage loans • Originates loans and takes deposits | • Risk
from changes in the probability of newly originated mortgage commitments closing• Interest rate risk and prepayment risk | • Mortgage commitments, classified as derivatives• Warehouse loans, classified as trading assets – debt instruments• MSRs• Hedges of mortgage commitments, warehouse loans and MSRs, classified as derivatives• Interest-only securities, classified as trading assets debt instruments, and
related hedges, classified as derivatives• Fair value option elected liabilities | • Retained loan portfolio• Deposits | |
CIB | • Makes markets and services clients across fixed income, foreign exchange, equities and commodities• Originates loans and takes deposits | • Risk
of loss from adverse movements in market prices and implied volatilities across interest rate, foreign exchange, credit, commodity and equity instruments• Basis and correlation risk from changes in the way asset values move relative to one another • Interest rate risk and prepayment risk | • Trading assets/liabilities – debt and marketable equity instruments, and derivatives, including hedges of the retained loan portfolio• Certain securities purchased, loaned or sold under resale agreements and securities borrowed• Fair
value option elected liabilities• Derivative CVA and associated hedges• Marketable equity investments | • Retained loan portfolio• Deposits | • Privately held equity and other investments measured at fair value• Derivatives FVA and fair value option elected liabilities DVA |
CB | • Originates
loans and takes deposits | • Interest rate risk and prepayment risk | • Marketable equity investments(a) | • Retained loan portfolio• Deposits | |
AWM | • Provides initial capital investments in products such as mutual
funds and capital invested alongside third-party investors• Originates loans and takes deposits | • Risk from adverse movements in market factors (e.g., rates and credit spreads)• Interest rate risk and prepayment risk | • Debt securities held in advance of distribution to clients, classified as trading assets - debt instruments(a) | • Retained loan portfolio• Deposits | • Initial
seed capital investments and related hedges, classified as derivatives• Capital invested alongside third-party investors, typically in privately distributed collective vehicles managed by AWM (i.e., co-investments) |
Corporate | • Manages the Firm’s liquidity, funding, capital, structural interest rate and foreign exchange risks | • Structural interest rate risk from the Firm’s traditional banking activities• Structural non-USD foreign exchange risks | • Derivative
positions measured at fair value through noninterest revenue in earnings• Marketable equity investments | • Deposits with banks• Investment securities portfolio and related interest rate hedges• Long-term debt and related interest rate hedges | • Privately held equity and other investments measured at fair value• Foreign exchange exposure related to Firm-issued non-USD long-term debt (“LTD”)
and related hedges |
(a) | The AWM and CB contributions to Firmwide average VaR were not material for the year ended December 31, 2019 and 2018. |
120 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan
Chase & Co./2019 Form 10-K | 121 |
Total VaR | |||||||||||||||||||||||||
As
of or for the year ended December 31, | 2019 | 2018 | |||||||||||||||||||||||
(in millions) | Avg. | Min | Max | Avg. | Min | Max | |||||||||||||||||||
CIB
trading VaR by risk type | |||||||||||||||||||||||||
Fixed
income | $ | 40 | $ | 31 | $ | 50 | $ | 33 | $ | 25 | $ | 46 | |||||||||||||
Foreign
exchange | 7 | 4 | 15 | 6 | 3 | 15 | |||||||||||||||||||
Equities | 20 | 13 | 31 | 17 | 13 | 26 | |||||||||||||||||||
Commodities
and other | 8 | 6 | 12 | 8 | 4 | 13 | |||||||||||||||||||
Diversification
benefit to CIB trading VaR | (33 | ) | (a) | NM | (b) | NM | (b) | (26 | ) | (a) | NM | (b) | NM | (b) | |||||||||||
CIB
trading VaR | 42 | 29 | (b) | 61 | (b) | 38 | 26 | (b) | 58 | (b) | |||||||||||||||
Credit
portfolio VaR | 5 | 3 | 7 | 3 | 3 | 4 | |||||||||||||||||||
Diversification
benefit to CIB VaR | (5 | ) | (a) | NM | (b) | NM | (b) | (2 | ) | (a) | NM | (b) | NM | (b) | |||||||||||
CIB
VaR | 42 | 29 | (b) | 63 | (b) | 39 | 26 | (b) | 59 | (b) | |||||||||||||||
CCB
VaR | 5 | 1 | 11 | 1 | — | 3 | |||||||||||||||||||
Corporate
and other LOB VaR | 10 | 9 | 13 | 12 | 9 | 14 | |||||||||||||||||||
Diversification
benefit to other VaR | (4 | ) | (a) | NM | (b) | NM | (b) | (1 | ) | (a) | NM | (b) | NM | (b) | |||||||||||
Other
VaR | 11 | 8 | (b) | 17 | (b) | 12 | 9 | (b) | 14 | (b) | |||||||||||||||
Diversification
benefit to CIB and other VaR | (10 | ) | (a) | NM | (b) | NM | (b) | (10 | ) | (a) | NM | (b) | NM | (b) | |||||||||||
Total
VaR | $ | 43 | $ | 30 | (b) | $ | 65 | (b) | $ | 41 | $ | 28 | (b) | $ | 62 | (b) |
(a) | Average
portfolio VaR is less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects that the risks are not perfectly correlated. |
(b) | Diversification benefit represents the difference between the total VaR and each reported level and the sum of its individual components. Diversification benefit reflects the non-additive nature of VaR due to imperfect correlation across LOBs, Corporate, and risk types. The maximum and minimum VaR for each portfolio may have occurred on different trading days than the components and consequently diversification benefit is not meaningful. |
122 | JPMorgan Chase & Co./2019 Form 10-K |
First Quarter 2019 | Second Quarter 2019 | Third Quarter 2019 | Fourth Quarter 2019 |
JPMorgan
Chase & Co./2019 Form 10-K | 123 |
• | Differences in timing among the maturity or repricing of assets, liabilities and off-balance sheet instruments |
• | Differences in the amounts of assets, liabilities and off-balance sheet instruments that are maturing or
repricing at the same time |
• | Differences in the amounts by which short-term and long-term market interest rates change (for example, changes in the slope of the yield curve) |
• | The impact of changes in the maturity of various assets, liabilities or off-balance sheet instruments as interest rates change |
124 | JPMorgan Chase & Co./2019 Form 10-K |
• | The impact on exposures as a result of instantaneous
changes in interest rates from baseline rates. |
• | Forecasted balance sheet, as well as modeled prepayment and reinvestment behavior, but do not include assumptions about actions that could be taken by the Firm in response to any such instantaneous rate changes. Mortgage prepayment assumptions are based on the interest rates used in the scenarios compared with underlying contractual rates, the time since origination, and other factors which are updated periodically based on historical experience. |
• | The
pricing sensitivity of deposits, using normalized deposit betas which represent the amount by which deposit rates paid could change upon a given change in market interest rates over the cycle. The deposit rates paid in these scenarios differ from actual deposit rates paid, particularly for retail deposits, due to repricing lags and other factors. |
December 31, (in billions) | 2019 | 2018 | |||||
Parallel shift: | |||||||
+100
bps shift in rates | $ | 0.3 | $ | 0.9 | |||
-100 bps shift in rates | (2.0 | ) | (2.1 | ) | |||
Steeper
yield curve: | |||||||
+100 bps shift in long-term rates | 1.2 | 0.5 | |||||
-100 bps shift in short-term rates | (0.2 | ) | (1.2 | ) | |||
Flatter
yield curve: | |||||||
+100 bps shift in short-term rates | (0.9 | ) | 0.4 | ||||
-100 bps shift in long-term rates | (1.8 | ) | (0.9 | ) |
December 31, (in billions) | 2019 | 2018 | |||||
Parallel shift: | |||||||
+100
bps shift in rates | $ | 0.5 | $ | 0.5 | |||
Flatter yield curve: | |||||||
+100 bps shift in short-term rates | 0.5 | 0.5 |
JPMorgan Chase & Co./2019 Form 10-K | 125 |
Year ended December 31, Gain/(loss) (in millions) | |||||||||||
Activity | Description | Sensitivity
measure | 2019 | 2018 | |||||||
Investment activities(a) | |||||||||||
Investment
management activities | Consists of seed capital and related hedges; and fund co-investments | 10% decline in market value | $ | (68 | ) | $ | (102 | ) | |||
Other investments | Consists
of privately held equity and other investments held at fair value | 10% decline in market value | (192 | ) | (218 | ) | |||||
Funding
activities | |||||||||||
Non-USD LTD cross-currency basis | Represents the basis risk on derivatives used to hedge the foreign exchange risk on the non-USD LTD(b) | 1
basis point parallel tightening of cross currency basis | (17 | ) | (13 | ) | |||||
Non-USD LTD hedges foreign currency (“FX”) exposure | Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges(b) | 10% depreciation of currency | 15 | 17 | |||||||
Derivatives
– funding spread risk | Impact of changes in the spread related to derivatives FVA | 1 basis point parallel increase in spread | (5 | ) | (4 | ) | |||||
Fair value option elected liabilities – funding spread risk | Impact
of changes in the spread related to fair value option elected liabilities DVA(b) | 1 basis point parallel increase in spread | 29 | 30 | |||||||
Fair value option elected liabilities –interest rate sensitivity | Interest rate sensitivity on fair value option liabilities
resulting from a change in the Firm’s own credit spread(b) | 1 basis point parallel increase in spread | (2 | ) | 1 |
(a) | Excludes equity securities without readily determinable fair values that are measured under the measurement
alternative. Refer to Note 2 for additional information. |
(b) | Impact recognized through OCI. |
126 | JPMorgan Chase & Co./2019 Form 10-K |
COUNTRY
RISK MANAGEMENT |
• | Establishing policies, procedures and standards consistent with a comprehensive country risk framework |
• | Assigning sovereign ratings, assessing country risks and establishing risk tolerance relative to a country |
• | Measuring and monitoring
country risk exposure and stress across the Firm |
• | Managing and approving country limits and reporting trends and limit breaches to senior management |
• | Developing surveillance tools, such as signaling models and ratings indicators, for early identification of potential country risk concerns |
• | Providing
country risk scenario analysis |
• | Lending exposures are measured at the total committed amount (funded and unfunded), net of the allowance for credit losses and eligible cash and marketable securities collateral received |
• | Deposits
are measured as the cash balances placed with central and commercial banks |
• | Securities financing exposures are measured at their receivable balance, net of eligible collateral received |
• | Debt and equity securities are measured at the fair value of all positions, including both long and short positions |
• | Counterparty
exposure on derivative receivables is measured at the derivative’s fair value, net of the fair value of the eligible collateral received |
• | Credit derivatives protection purchased and sold is reported based on the underlying reference entity and is measured at the notional amount of protection purchased or sold, net of the fair value of the recognized derivative receivable or payable. Credit derivatives protection purchased and sold in the Firm’s market-making activities is measured on a net basis, as such activities often result in selling and purchasing protection related to the same underlying reference entity; this reflects the manner in which the Firm manages these exposures |
JPMorgan
Chase & Co./2019 Form 10-K | 127 |
Top
20 country exposures (excluding the U.S.)(a) | ||||||||||||||||
December 31, (in billions) | 2019 | 2018(e) | ||||||||||||||
Lending and deposits(b) | Trading and investing(c) | Other(d) | Total
exposure | Total exposure | ||||||||||||
Germany | $ | 45.8 | $ | 5.4 | $ | 0.4 | $ | 51.6 | $ | 62.1 | ||||||
Japan | 35.5 | 8.0 | 0.3 | 43.8 | 29.1 | |||||||||||
United
Kingdom | 31.0 | 9.9 | 1.5 | 42.4 | 40.7 | |||||||||||
China | 11.3 | 6.5 | 1.4 | 19.2 | 19.3 | |||||||||||
Switzerland | 10.9 | 0.8 | 6.6 | 18.3 | 12.8 | |||||||||||
France | 10.7 | 6.5 | 0.9 | 18.1 | 17.9 | |||||||||||
Canada | 12.0 | 1.1 | 0.1 | 13.2 | 14.3 | |||||||||||
Luxembourg | 12.1 | 0.8 | — | 12.9 | 11.0 | |||||||||||
Australia | 6.9 | 4.8 | — | 11.7 | 13.0 | |||||||||||
India | 4.6 | 3.6 | 3.1 | 11.3 | 11.8 | |||||||||||
Netherlands | 4.4 | 0.8 | 3.8 | 9.0 | 5.8 | |||||||||||
Brazil | 4.8 | 2.4 | — | 7.2 | 7.3 | |||||||||||
Singapore | 4.3 | 1.6 | 0.9 | 6.8 | 6.8 | |||||||||||
Italy | 2.4 | 4.2 | 0.2 | 6.8 | 6.4 | |||||||||||
South
Korea | 4.5 | 1.8 | 0.1 | 6.4 | 7.6 | |||||||||||
Spain | 3.2 | 2.6 | — | 5.8 | 5.1 | |||||||||||
Saudi
Arabia | 4.7 | 0.5 | — | 5.2 | 5.3 | |||||||||||
Hong Kong SAR | 2.6 | 1.7 | 0.8 | 5.1 | 5.4 | |||||||||||
Mexico | 3.9 | 0.8 | — | 4.7 | 5.5 | |||||||||||
Malaysia | 1.8 | 0.8 | 0.8 | 3.4 | 4.3 |
(a) | Top
20 country exposures reflect approximately 88% and 87% of total Firmwide non-U.S. exposure, where exposure is attributed to a specific country, at December 31, 2019 and 2018, respectively. |
(b) | Lending and deposits includes loans and accrued interest receivable (net of eligible collateral and
the allowance for loan losses), deposits with banks (including central banks), acceptances, other monetary assets, issued letters of credit net of participations, and unused commitments to extend credit. Excludes intra-day and operating exposures, such as those from settlement and clearing activities. |
(c) | Includes market-making inventory, AFS securities, and counterparty exposure on derivative and securities financings net of eligible collateral and hedging. Includes exposure from single reference entity (“single-name”), index and other multiple reference entity transactions for which one or more of the underlying reference entities is in a country listed in the above table. |
(d) | Predominantly
includes physical commodity inventory. |
(e) | The country rankings presented in the table as of December 31, 2018, are based on the country rankings of the corresponding exposures at December 31, 2019, not actual rankings of such exposures at December 31, 2018. |
128 | JPMorgan
Chase & Co./2019 Form 10-K |
OPERATIONAL RISK MANAGEMENT |
JPMorgan Chase & Co./2019 Form 10-K | 129 |
• | Cyber Defense & Fraud |
• | Data Management, Protection & Privacy |
• | Identity
& Access Management |
• | Governance & Controls |
• | Production Management & Resiliency |
• | Software & Platform Enablement |
130 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 131 |
COMPLIANCE RISK MANAGEMENT |
132 | JPMorgan Chase & Co./2019 Form 10-K |
CONDUCT
RISK MANAGEMENT |
JPMorgan Chase & Co./2019 Form 10-K | 133 |
LEGAL RISK MANAGEMENT |
• | managing actual and potential litigation and enforcement matters, including internal reviews and investigations related to such matters |
• | advising on products and services, including contract negotiation and documentation |
• | advising
on offering and marketing documents and new business initiatives |
• | managing dispute resolution |
• | interpreting existing laws, rules and regulations, and advising on changes thereto |
• | advising on advocacy in connection with contemplated and proposed laws, rules and regulations, and |
• | providing
legal advice to the LOBs and Corporate, in alignment with the lines of defense described under Firmwide Risk Management on pages 79–83. |
134 | JPMorgan Chase & Co./2019 Form 10-K |
ESTIMATIONS
AND MODEL RISK MANAGEMENT |
JPMorgan
Chase & Co./2019 Form 10-K | 135 |
CRITICAL ACCOUNTING ESTIMATES USED BY THE FIRM |
• | A combined 5%
decline in housing prices and a 100 basis point increase in unemployment rates from expectations could imply: |
◦ | an increase to modeled credit loss estimates of approximately $250 million for PCI loans. |
◦ | an increase to modeled annual credit loss estimates of approximately $50 million for residential real estate loans, excluding PCI loans. |
• | For
credit card loans, a 100 basis point increase in unemployment rates from expectations could imply an increase to modeled annual credit loss estimates of approximately $850 million. |
• | An increase in probability of default (“PD”) factors consistent with a one-notch downgrade in the Firm’s internal risk ratings for its entire wholesale loan portfolio could imply an increase in the Firm’s modeled credit loss estimates of approximately $1.6 billion. |
• | A
100 basis point increase in estimated loss given default (“LGD”) for the Firm’s entire wholesale loan portfolio could imply an increase in the Firm’s modeled credit loss estimates of approximately $200 million. |
136 | JPMorgan Chase & Co./2019 Form 10-K |
December 31, 2019 (in billions, except ratios) | Total assets
at fair value | Total level 3 assets | |||||
Trading debt and equity instruments | $ | 361.3 | $ | 3.4 | |||
Derivative receivables(a) | 49.7 | 4.7 | |||||
Trading
assets | 411.0 | 8.1 | |||||
AFS securities | 350.7 | — | |||||
Loans | 7.1 | — | |||||
MSRs | 4.7 | 4.7 | |||||
Other | 29.3 | 0.7 | |||||
Total
assets measured at fair value on a recurring basis | 802.8 | 13.5 | |||||
Total assets measured at fair value on a nonrecurring basis | 4.8 | 1.3 | |||||
Total
assets measured at fair value | $ | 807.6 | $ | 14.8 | |||
Total Firm assets | $ | 2,687.4 | |||||
Level
3 assets as a percentage of total Firm assets(a) | 0.6 | % | |||||
Level 3 assets as a percentage of total Firm assets at fair value(a) | 1.8 | % |
(a) | For
purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the $4.7 billion of derivative receivables classified as level 3 does not reflect the netting adjustment as such netting is not relevant to a presentation based on the transparency of inputs to the valuation of an asset. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral. |
JPMorgan Chase & Co./2019 Form
10-K | 137 |
138 | JPMorgan Chase & Co./2019 Form 10-K |
ACCOUNTING
AND REPORTING DEVELOPMENTS |
Financial Accounting Standards Board (“FASB”) Standards Adopted during 2019 | ||||
Standard | Summary of guidance
| Effects on financial statements | ||
Leases Issued February 2016 | • Requires lessees to recognize all leases longer than twelve months on the Consolidated balance sheets as a lease liability with a corresponding right-of-use asset. • Requires
lessees and lessors to classify most leases using principles similar to existing lease accounting, but eliminates the “bright line” classification tests. • Expands qualitative and quantitative leasing disclosures. | • Adopted January 1, 2019.• The Firm elected the available practical expedient to not reassess whether existing contracts contain a lease or whether classification or unamortized initial lease costs would be different under the new lease guidance. The Firm elected
the modified retrospective transition method, through a cumulative-effect adjustment to retained earnings without revising prior periods.• Refer to Note 18 for further information. |
JPMorgan Chase & Co./2019 Form 10-K | 139 |
FASB Standards Issued but not adopted as of December 31, 2019 | ||||
Standard | Summary
of guidance | Effects on financial statements | ||
Financial Instruments – Credit Losses (“CECL”) Issued June 2016 | • Establishes a single allowance framework for all financial assets carried at amortized cost and certain
off-balance sheet credit exposures. This framework requires that management’s estimate reflects credit losses over the full remaining expected life and considers expected future changes in macroeconomic conditions. • Eliminates existing guidance for PCI loans, and requires recognition of the nonaccretable difference as an increase to the allowance for expected credit losses on financial assets purchased with more than insignificant credit deterioration since origination, with a corresponding increase in the recorded investment of the related loans. • Requires inclusion of expected recoveries, limited to the cumulative amount of prior write-offs, when estimating the allowance for credit losses for in scope financial assets (including collateral dependent assets). • Amends existing impairment guidance for AFS securities to incorporate
an allowance, which will allow for reversals of credit impairments in the event that the credit of an issuer improves. • Requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption. | • Adopted January 1, 2020.• The adoption of this guidance resulted in a net increase to the allowance for credit losses of $4.3 billion and a decrease to retained earnings of $2.7 billion, primarily driven by Card. Under the CECL framework, the Firm estimates losses over a two-year forecast period using the weighted-average of a range of macroeconomic scenarios (established on a
Firmwide basis), and then reverts to longer term historical loss experience to estimate losses over more extended periods.• The Firm elected to phase-in the impact to retained earnings of $2.7 billion to regulatory capital, at 25 percent per year in each of 2020 to 2023 (“CECL transitional period”). Based on the Firm’s capital as of December 31, 2019, the estimated impact to the Standardized CET1 capital ratio will be a reduction of approximately 4 bps for each transitional year.• As permitted by the guidance, the Firm elected the fair value option for certain securities financing agreements. The difference between their carrying amount and fair value was immaterial and was recorded as part of the Firm’s cumulative-effect adjustment.• Refer
to Note 1 for further information. | ||
Goodwill Issued January 2017 | • Requires recognition of an impairment loss when the estimated fair value of a reporting unit falls below its carrying value. • Eliminates the requirement that an impairment loss be recognized only if the estimated implied fair value of the goodwill is below its carrying value. | • Adopted January 1, 2020.• No
impact upon adoption as the guidance is to be applied prospectively. |
140 | JPMorgan Chase & Co./2019 Form 10-K |
FORWARD-LOOKING
STATEMENTS |
• | Local, regional and global business, economic and political conditions and geopolitical events; |
• | Changes
in laws and regulatory requirements, including capital and liquidity requirements affecting the Firm’s businesses, and the ability of the Firm to address those requirements; |
• | Heightened regulatory and governmental oversight and scrutiny of JPMorgan Chase’s business practices, including dealings with retail customers; |
• | Changes in trade, monetary and fiscal policies and laws; |
• | Changes
in income tax laws and regulations; |
• | Securities and capital markets behavior, including changes in market liquidity and volatility; |
• | Changes in investor sentiment or consumer spending or savings behavior; |
• | Ability of the Firm to manage effectively its capital and liquidity, including
approval of its capital plans by banking regulators; |
• | Changes in credit ratings assigned to the Firm or its subsidiaries; |
• | Damage to the Firm’s reputation; |
• | Ability of the Firm to appropriately address
social, environmental and sustainability concerns that may arise from its business activities; |
• | Ability of the Firm to deal effectively with an economic slowdown or other economic or market disruption, including, but not limited to, in the interest rate environment; |
• | Technology changes instituted by the Firm, its counterparties or competitors; |
• | The
effectiveness of the Firm’s control agenda; |
• | Ability of the Firm to develop or discontinue products and services, and the extent to which products or services previously sold by the Firm (including but not limited to mortgages and asset-backed securities) require the Firm to incur liabilities or absorb losses not contemplated at their initiation or origination; |
• | Acceptance of the Firm’s new and existing products and services by the marketplace and the ability of the Firm to innovate and to increase market share; |
• | Ability
of the Firm to attract and retain qualified employees; |
• | Ability of the Firm to control expenses; |
• | Competitive pressures; |
• | Changes in the credit quality of the Firm’s clients, customers and counterparties; |
• | Adequacy
of the Firm’s risk management framework, disclosure controls and procedures and internal control over financial reporting; |
• | Adverse judicial or regulatory proceedings; |
• | Changes in applicable accounting policies, including the introduction of new accounting standards; |
• | Ability of the Firm
to determine accurate values of certain assets and liabilities; |
• | Occurrence of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, pandemics or outbreaks of hostilities, or the effects of climate change, and the Firm’s ability to deal effectively with disruptions caused by the foregoing; |
• | Ability of the Firm to maintain the security of its financial, accounting, technology, data processing and other operational systems and facilities; |
• | Ability
of the Firm to withstand disruptions that may be caused by any failure of its operational systems or those of third parties; |
• | Ability of the Firm to effectively defend itself against cyberattacks and other attempts by unauthorized parties to access information of the Firm or its customers or to disrupt the Firm’s systems; and |
• | The other risks and uncertainties detailed in Part I, Item 1A: Risk Factors in the JPMorgan Chase’s 2019 Form 10-K. |
JPMorgan Chase & Co./2019 Form 10-K | 141 |
142 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan
Chase & Co./2019 Form 10-K | 143 |
144 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 145 |
Year ended December 31, (in millions, except per share data) | 2019 | 2018 | 2017 | ||||||||
Revenue | |||||||||||
Investment
banking fees | $ | i 7,501 | $ | i 7,550 | $ | i 7,412 | |||||
Principal
transactions | i 14,018 | i 12,059 | i 11,347 | ||||||||
Lending-
and deposit-related fees | i 6,369 | i 6,052 | i 5,933 | ||||||||
Asset
management, administration and commissions | i 17,165 | i 17,118 | i 16,287 | ||||||||
Investment
securities gains/(losses) | i 258 | ( i 395 | ) | ( i 66 | ) | ||||||
Mortgage
fees and related income | i 2,036 | i 1,254 | i 1,616 | ||||||||
Card
income | i 5,304 | i 4,989 | i 4,433 | ||||||||
Other
income | i 5,731 | i 5,343 | i 3,646 | ||||||||
Noninterest
revenue | i 58,382 | i 53,970 | i 50,608 | ||||||||
Interest
income(a) | i 84,040 | i 76,100 | i 63,971 | ||||||||
Interest
expense(a) | i 26,795 | i 21,041 | i 13,874 | ||||||||
Net
interest income | i 57,245 | i 55,059 | i 50,097 | ||||||||
Total
net revenue | i 115,627 | i 109,029 | i 100,705 | ||||||||
Provision
for credit losses | i 5,585 | i 4,871 | i 5,290 | ||||||||
Noninterest
expense | |||||||||||
Compensation expense | i 34,155 | i 33,117 | i 31,208 | ||||||||
Occupancy
expense | i 4,322 | i 3,952 | i 3,723 | ||||||||
Technology,
communications and equipment expense | i 9,821 | i 8,802 | i 7,715 | ||||||||
Professional
and outside services | i 8,533 | i 8,502 | i 7,890 | ||||||||
Marketing | i 3,579 | i 3,290 | i 2,900 | ||||||||
Other
expense | i 5,087 | i 5,731 | i 6,079 | ||||||||
Total
noninterest expense | i 65,497 | i 63,394 | i 59,515 | ||||||||
Income
before income tax expense | i 44,545 | i 40,764 | i 35,900 | ||||||||
Income
tax expense | i 8,114 | i 8,290 | i 11,459 | ||||||||
Net
income | $ | i 36,431 | $ | i 32,474 | $ | i 24,441 | |||||
Net
income applicable to common stockholders | $ | i 34,642 | $ | i 30,709 | $ | i 22,567 | |||||
Net
income per common share data | |||||||||||
Basic earnings per share | $ | i 10.75 | $ | i 9.04 | $ | i 6.35 | |||||
Diluted
earnings per share | i 10.72 | i 9.00 | i 6.31 | ||||||||
Weighted-average
basic shares | i 3,221.5 | i 3,396.4 | i 3,551.6 | ||||||||
Weighted-average
diluted shares | i 3,230.4 | i 3,414.0 | i 3,576.8 |
(a) | In
the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation. Refer to Note 7 for additional information. |
146 | JPMorgan
Chase & Co./2019 Form 10-K |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||||||
Net
income | $ | i 36,431 | $ | i 32,474 | $ | i 24,441 | ||||||
Other
comprehensive income/(loss), after–tax | ||||||||||||
Unrealized gains/(losses) on investment securities | i 2,855 | ( i 1,858 | ) | i 640 | ||||||||
Translation
adjustments, net of hedges | i 20 | i 20 | ( i 306 | ) | ||||||||
Fair
value hedges | i 30 | ( i 107 | ) | NA | ||||||||
Cash
flow hedges | i 172 | ( i 201 | ) | i 176 | ||||||||
Defined
benefit pension and OPEB plans | i 964 | ( i 373 | ) | i 738 | ||||||||
DVA
on fair value option elected liabilities | ( i 965 | ) | i 1,043 | ( i 192 | ) | |||||||
Total
other comprehensive income/(loss), after–tax | i 3,076 | ( i 1,476 | ) | i 1,056 | ||||||||
Comprehensive
income | $ | i 39,507 | $ | i 30,998 | $ | i 25,497 |
JPMorgan Chase & Co./2019 Form 10-K | 147 |
December
31, (in millions, except share data) | 2019 | 2018 | |||||
Assets | |||||||
Cash and due from banks | $ | i 21,704 | $ | i 22,324 | |||
Deposits
with banks | i 241,927 | i 256,469 | |||||
Federal
funds sold and securities purchased under resale agreements (included $14,561 and $13,235 at fair value) | i 249,157 | i 321,588 | |||||
Securities
borrowed (included $6,237 and $5,105 at fair value) | i 139,758 | i 111,995 | |||||
Trading
assets (included assets pledged of $111,522 and $89,073) | i 411,103 | i 413,714 | |||||
Investment
securities (included $350,699 and $230,394 at fair value and assets pledged of $10,325 and $11,432) | i 398,239 | i 261,828 | |||||
Loans
(included $7,104 and $3,151 at fair value) | i 959,769 | i 984,554 | |||||
Allowance
for loan losses | ( i 13,123 | ) | ( i 13,445 | ) | |||
Loans,
net of allowance for loan losses | i 946,646 | i 971,109 | |||||
Accrued
interest and accounts receivable | i 72,861 | i 73,200 | |||||
Premises
and equipment | i 25,813 | i 14,934 | |||||
Goodwill,
MSRs and other intangible assets | i 53,341 | i 54,349 | |||||
Other
assets (included $9,111 and $9,630 at fair value and assets pledged of $3,349 and $3,457) | i 126,830 | i 121,022 | |||||
Total
assets(a) | $ | i 2,687,379 | $ | i 2,622,532 | |||
Liabilities | |||||||
Deposits
(included $28,589 and $23,217 at fair value) | $ | i 1,562,431 | $ | i 1,470,666 | |||
Federal
funds purchased and securities loaned or sold under repurchase agreements (included $549 and $935 at fair value) | i 183,675 | i 182,320 | |||||
Short-term
borrowings (included $5,920 and $7,130 at fair value) | i 40,920 | i 69,276 | |||||
Trading
liabilities | i 119,277 | i 144,773 | |||||
Accounts
payable and other liabilities (included $3,728 and $3,269 at fair value) | i 210,407 | i 196,710 | |||||
Beneficial
interests issued by consolidated VIEs (included $36 and $28 at fair value) | i 17,841 | i 20,241 | |||||
Long-term
debt (included $75,745 and $54,886 at fair value) | i 291,498 | i 282,031 | |||||
Total
liabilities(a) | i 2,426,049 | i 2,366,017 | |||||
Commitments
and contingencies (refer to Notes 28, 29 and 30) | i | i | |||||
Stockholders’
equity | |||||||
Preferred stock ($1 par value; authorized 200,000,000 shares: issued 2,699,250 and 2,606,750 shares) | i 26,993 | i 26,068 | |||||
Common
stock ($1 par value; authorized 9,000,000,000 shares; issued 4,104,933,895 shares) | i 4,105 | i 4,105 | |||||
Additional
paid-in capital | i 88,522 | i 89,162 | |||||
Retained
earnings | i 223,211 | i 199,202 | |||||
Accumulated
other comprehensive income/loss | i 1,569 | ( i 1,507 | ) | ||||
Shares
held in restricted stock units (“RSU”) trust, at cost (472,953 shares) | ( i 21 | ) | ( i 21 | ) | |||
Treasury
stock, at cost (1,020,912,567 and 829,167,674 shares) | ( i 83,049 | ) | ( i 60,494 | ) | |||
Total
stockholders’ equity | i 261,330 | i 256,515 | |||||
Total
liabilities and stockholders’ equity | $ | i 2,687,379 | $ | i 2,622,532 |
(a) | The
following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at December 31, 2019 and 2018. The assets of the consolidated VIEs are used to settle the liabilities of those entities. The holders of the beneficial interests do not have recourse to the general credit of JPMorgan Chase. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. Refer to Note 14 for a further discussion. |
December
31, (in millions) | 2019 | 2018 | |||||
Assets | |||||||
Trading assets | $ | i 2,633 | $ | i 1,966 | |||
Loans | i 42,931 | i 59,456 | |||||
All
other assets | i 881 | i 1,013 | |||||
Total
assets | $ | i 46,445 | $ | i 62,435 | |||
Liabilities | |||||||
Beneficial
interests issued by consolidated VIEs | $ | i 17,841 | $ | i 20,241 | |||
All
other liabilities | i 447 | i 312 | |||||
Total
liabilities | $ | i 18,288 | $ | i 20,553 |
148 | JPMorgan Chase & Co./2019 Form 10-K |
Year
ended December 31, (in millions, except per share data) | 2019 | 2018 | 2017 | |||||||||
Preferred stock | ||||||||||||
Balance
at January 1 | $ | i 26,068 | $ | i 26,068 | $ | i 26,068 | ||||||
Issuance
| i 5,000 | i 1,696 | i 1,258 | |||||||||
Redemption
| ( i 4,075 | ) | ( i 1,696 | ) | ( i 1,258 | ) | ||||||
Balance
at December 31 | i 26,993 | i 26,068 | i 26,068 | |||||||||
Common
stock | ||||||||||||
Balance at January 1 and December 31 | i 4,105 | i 4,105 | i 4,105 | |||||||||
Additional
paid-in capital | ||||||||||||
Balance at January 1 | i 89,162 | i 90,579 | i 91,627 | |||||||||
Shares
issued and commitments to issue common stock for employee share-based compensation awards, and related tax effects | ( i 591 | ) | ( i 738 | ) | ( i 734 | ) | ||||||
Other | ( i 49 | ) | ( i 679 | ) | ( i 314 | ) | ||||||
Balance
at December 31 | i 88,522 | i 89,162 | i 90,579 | |||||||||
Retained
earnings | ||||||||||||
Balance at January 1 | i 199,202 | i 177,676 | i 162,440 | |||||||||
Cumulative
effect of change in accounting principles | i 62 | ( i 183 | ) | i — | ||||||||
Net
income | i 36,431 | i 32,474 | i 24,441 | |||||||||
Dividends
declared: | ||||||||||||
Preferred stock | ( i 1,587 | ) | ( i 1,551 | ) | ( i 1,663 | ) | ||||||
Common
stock ($3.40, $2.72 and $2.12 per share for 2019, 2018 and 2017, respectively) | ( i 10,897 | ) | ( i 9,214 | ) | ( i 7,542 | ) | ||||||
Balance
at December 31 | i 223,211 | i 199,202 | i 177,676 | |||||||||
Accumulated
other comprehensive income | ||||||||||||
Balance at January 1 | ( i 1,507 | ) | ( i 119 | ) | ( i 1,175 | ) | ||||||
Cumulative
effect of change in accounting principles | i — | i 88 | i — | |||||||||
Other
comprehensive income/(loss), after-tax | i 3,076 | ( i 1,476 | ) | i 1,056 | ||||||||
Balance
at December 31 | i 1,569 | ( i 1,507 | ) | ( i 119 | ) | |||||||
Shares
held in RSU Trust, at cost | ||||||||||||
Balance at January 1 and December 31 | ( i 21 | ) | ( i 21 | ) | ( i 21 | ) | ||||||
Treasury
stock, at cost | ||||||||||||
Balance at January 1 | ( i 60,494 | ) | ( i 42,595 | ) | ( i 28,854 | ) | ||||||
Repurchase | ( i 24,121 | ) | ( i 19,983 | ) | ( i 15,410 | ) | ||||||
Reissuance | i 1,566 | i 2,084 | i 1,669 | |||||||||
Balance
at December 31 | ( i 83,049 | ) | ( i 60,494 | ) | ( i 42,595 | ) | ||||||
Total
stockholders’ equity | $ | i 261,330 | $ | i 256,515 | $ | i 255,693 |
JPMorgan Chase & Co./2019 Form 10-K | 149 |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Operating activities | |||||||||||
Net income | $ | i 36,431 | $ | i 32,474 | $ | i 24,441 | |||||
Adjustments
to reconcile net income to net cash provided by/(used in) operating activities: | |||||||||||
Provision for credit losses | i 5,585 | i 4,871 | i 5,290 | ||||||||
Depreciation
and amortization | i 8,368 | i 7,791 | i 6,179 | ||||||||
Deferred
tax expense | i 949 | i 1,721 | i 2,312 | ||||||||
Other | i 1,996 | i 2,717 | i 2,136 | ||||||||
Originations
and purchases of loans held-for-sale | ( i 70,980 | ) | ( i 102,141 | ) | ( i 94,628 | ) | |||||
Proceeds
from sales, securitizations and paydowns of loans held-for-sale | i 79,182 | i 93,453 | i 93,270 | ||||||||
Net
change in: | |||||||||||
Trading assets | ( i 652 | ) | ( i 38,371 | ) | i 5,673 | ||||||
Securities
borrowed | ( i 27,631 | ) | ( i 6,861 | ) | ( i 8,653 | ) | |||||
Accrued
interest and accounts receivable | ( i 78 | ) | ( i 5,849 | ) | ( i 15,868 | ) | |||||
Other
assets | ( i 17,949 | ) | ( i 8,833 | ) | i 3,982 | ||||||
Trading
liabilities | ( i 14,516 | ) | i 18,290 | ( i 26,256 | ) | ||||||
Accounts
payable and other liabilities | ( i 352 | ) | i 14,630 | ( i 16,508 | ) | ||||||
Other
operating adjustments | i 5,693 | i 295 | i 7,803 | ||||||||
Net
cash provided by/(used in) operating activities | i 6,046 | i 14,187 | ( i 10,827 | ) | |||||||
Investing
activities | |||||||||||
Net change in: | |||||||||||
Federal funds sold and securities purchased under resale agreements | i 72,396 | ( i 123,201 | ) | i 31,448 | |||||||
Held-to-maturity
securities: | |||||||||||
Proceeds from paydowns and maturities | i 3,423 | i 2,945 | i 4,563 | ||||||||
Purchases | ( i 13,427 | ) | ( i 9,368 | ) | ( i 2,349 | ) | |||||
Available-for-sale
securities: | |||||||||||
Proceeds from paydowns and maturities | i 52,200 | i 37,401 | i 56,117 | ||||||||
Proceeds
from sales | i 70,181 | i 46,067 | i 90,201 | ||||||||
Purchases | ( i 242,149 | ) | ( i 95,091 | ) | ( i 105,309 | ) | |||||
Proceeds
from sales and securitizations of loans held-for-investment | i 62,095 | i 29,826 | i 15,791 | ||||||||
Other
changes in loans, net | ( i 53,697 | ) | ( i 81,586 | ) | ( i 61,650 | ) | |||||
All
other investing activities, net | ( i 5,035 | ) | ( i 4,986 | ) | ( i 563 | ) | |||||
Net
cash provided by/(used in) investing activities | ( i 54,013 | ) | ( i 197,993 | ) | i 28,249 | ||||||
Financing
activities | |||||||||||
Net change in: | |||||||||||
Deposits | i 101,002 | i 26,728 | i 57,022 | ||||||||
Federal
funds purchased and securities loaned or sold under repurchase agreements | i 1,347 | i 23,415 | ( i 6,739 | ) | |||||||
Short-term
borrowings | ( i 28,561 | ) | i 18,476 | i 16,540 | |||||||
Beneficial
interests issued by consolidated VIEs | i 4,289 | i 1,712 | ( i 1,377 | ) | |||||||
Proceeds
from long-term borrowings | i 61,085 | i 71,662 | i 56,271 | ||||||||
Payments
of long-term borrowings | ( i 69,610 | ) | ( i 76,313 | ) | ( i 83,079 | ) | |||||
Proceeds
from issuance of preferred stock | i 5,000 | i 1,696 | i 1,258 | ||||||||
Redemption
of preferred stock | ( i 4,075 | ) | ( i 1,696 | ) | ( i 1,258 | ) | |||||
Treasury
stock repurchased | ( i 24,001 | ) | ( i 19,983 | ) | ( i 15,410 | ) | |||||
Dividends
paid | ( i 12,343 | ) | ( i 10,109 | ) | ( i 8,993 | ) | |||||
All
other financing activities, net | ( i 1,146 | ) | ( i 1,430 | ) | i 407 | ||||||
Net
cash provided by financing activities | i 32,987 | i 34,158 | i 14,642 | ||||||||
Effect
of exchange rate changes on cash and due from banks and deposits with banks | ( i 182 | ) | ( i 2,863 | ) | i 8,086 | ||||||
Net
increase/(decrease) in cash and due from banks and deposits with banks | ( i 15,162 | ) | ( i 152,511 | ) | i 40,150 | ||||||
Cash
and due from banks and deposits with banks at the beginning of the period | i 278,793 | i 431,304 | i 391,154 | ||||||||
Cash
and due from banks and deposits with banks at the end of the period | $ | i 263,631 | $ | i 278,793 | $ | i 431,304 | |||||
Cash
interest paid | $ | i 29,918 | $ | i 21,152 | $ | i 14,153 | |||||
Cash
income taxes paid, net | i 5,624 | i 3,542 | i 4,325 |
150 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan
Chase & Co./2019 Form 10-K | 151 |
152 | JPMorgan Chase & Co./2019 Form 10-K |
(in billions) | CECL adoption impact | ||||||||
Allowance
for credit losses | |||||||||
Consumer, excluding credit card | $ | i 3.2 | $ | i 0.2 | $ | i 3.4 | |||
Credit
card | i 5.7 | i 5.5 | i 11.2 | ||||||
Wholesale | i 5.4 | ( i 1.4 | ) | i 4.0 | |||||
Firmwide | $ | i 14.3 | $ | i 4.3 | $ | i 18.6 | |||
Retained
earnings | |||||||||
Firmwide allowance increase | $ | i 4.3 | |||||||
Balance
sheet reclassification(a) | ( i 0.8 | ) | |||||||
Total
pre-tax impact | i 3.5 | ||||||||
Tax
effect | ( i 0.8 | ) | |||||||
Decrease
to retained earnings | $ | i 2.7 |
(a) | Represents
the recognition of the nonaccretable difference on purchased credit deteriorated assets and the Firm's election to recognize the reserve for uncollectible accrued interest on credit card loans in the allowance, both of which resulted in a corresponding increase to loans. |
Fair
value measurement | Note 2 | page 154 | |
Fair value option | Note 3 | page 175 | |
Derivative instruments | Note 5 | page 180 | |
Noninterest revenue and noninterest expense | Note
6 | page 195 | |
Interest income and Interest expense | Note 7 | page 198 | |
Pension and other postretirement employee benefit plans | Note 8 | page 199 | |
Employee share-based incentives | Note 9 | page
206 | |
Investment securities | Note 10 | page 208 | |
Securities financing activities | Note 11 | page 214 | |
Loans | Note 12 | page 217 | |
Allowance
for credit losses | Note 13 | page 237 | |
Variable interest entities | Note 14 | page 242 | |
Goodwill and Mortgage servicing rights | Note 15 | page 250 | |
Premises and equipment | Note
16 | page 254 | |
Leases | Note 18 | page 254 | |
Long-term debt | Note 20 | page 257 | |
Income taxes | Note 25 | page
265 | |
Off–balance sheet lending-related financial instruments, guarantees and other commitments | Note 28 | page 272 | |
Litigation | Note 30 | page 279 |
JPMorgan
Chase & Co./2019 Form 10-K | 153 |
• | Liquidity
valuation adjustments are considered where an observable external price or valuation parameter exists but is of lower reliability, potentially due to lower market activity. Liquidity valuation adjustments are made based on current market conditions. Factors that may be considered in determining the liquidity adjustment include analysis of: (1) the estimated bid-offer spread for the instrument being traded; (2) alternative pricing points for similar instruments in active markets; and (3) the range of reasonable values that the price or parameter could take. |
• | The Firm manages certain portfolios of financial instruments on the basis of net open risk exposure and, as permitted
by U.S. GAAP, has elected to estimate the fair value of such portfolios on the basis of a transfer of the entire net open risk position in an orderly transaction. Where this is the case, valuation adjustments may be necessary to reflect the cost of exiting a larger-than-normal market-size net open risk position. Where applied, such adjustments are based on factors that a relevant market participant would consider in the transfer of the net open risk position, including the size of the adverse market move that is likely to occur during the period required to reduce the net open risk position to a normal market-size. |
• | Uncertainty adjustments related to unobservable parameters may be made when positions are valued using prices or input parameters
to valuation models that are unobservable due to a lack of market activity or because they cannot be implied from observable market data. Such prices or parameters must be estimated and are, therefore, subject to management judgment. |
154 | JPMorgan Chase & Co./2019 Form 10-K |
• | Where appropriate, the Firm also applies adjustments to its estimates of fair value in order to appropriately reflect counterparty credit quality (CVA), the Firm’s own creditworthiness (DVA) and the impact of funding (FVA), using a consistent framework across the Firm. Refer
to Credit and funding adjustments on page 171 of this Note for more information on such adjustments. |
• | Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
• | Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
• | Level
3 – one or more inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
JPMorgan Chase & Co./2019 Form 10-K | 155 |
Product/instrument | Valuation methodology | Classifications in the valuation hierarchy | |
Securities financing agreements | Valuations
are based on discounted cash flows, which consider: | Predominantly level 2 | |
• Derivative features: refer to the discussion of derivatives below for further information. | |||
• Market rates for the respective maturity | |||
• Collateral characteristics | |||
Loans and lending-related commitments — wholesale | |||
Loans carried at fair value (e.g.,
trading loans and non-trading loans) and associated lending-related commitments | Where observable market data is available, valuations are based on: | Level 2 or 3 | |
• Observed market prices (circumstances are infrequent) | |||
• Relevant broker quotes | |||
• Observed market prices for similar instruments | |||
Where
observable market data is unavailable or limited, valuations are based on discounted cash flows, which consider the following: | |||
• Credit spreads derived from the cost of CDS; or benchmark credit curves developed by the Firm, by industry and credit rating | |||
• Prepayment speed | |||
• Collateral characteristics | |||
Loans
— consumer | |||
Trading loans — conforming residential mortgage loans expected to be sold | Fair value is based on observable prices for mortgage-backed securities with similar collateral and incorporates adjustments to these prices to account for differences between the securities and the value of the underlying loans, which include credit characteristics, portfolio composition, and liquidity. | Predominantly level 2 | |
Investment
and trading securities | Quoted market prices | Level 1 | |
In the absence of quoted market prices, securities are valued based on: | Level 2 or 3 | ||
• Observable market prices for similar securities | |||
• Relevant broker
quotes | |||
• Discounted cash flows | |||
In addition, the following inputs to discounted cash flows are used for the following products: | |||
Mortgage- and asset-backed securities specific inputs: | |||
• Collateral
characteristics | |||
• Deal-specific payment and loss allocations | |||
• Current market assumptions related to yield, prepayment speed, conditional default rates and loss severity | |||
Collateralized loan obligations (“CLOs”) specific inputs: | |||
• Collateral
characteristics | |||
• Deal-specific payment and loss allocations | |||
• Expected prepayment speed, conditional default rates, loss severity | |||
• Credit spreads | |||
• Credit
rating data | |||
Physical commodities | Valued using observable market prices or data. | Level 1 or 2 |
156 | JPMorgan Chase & Co./2019 Form 10-K |
Product/instrument | Valuation
methodology | Classifications in the valuation hierarchy |
Derivatives | Exchange-traded derivatives that are actively traded and valued using the exchange price. | Level 1 |
Derivatives that are valued using models such as the Black-Scholes option pricing model, simulation models, or a combination of models that may use observable or unobservable valuation inputs as well as considering the contractual terms. The key valuation inputs used will depend on the type of derivative and the nature of the underlying instruments and may include equity
prices, commodity prices, interest rate yield curves, foreign exchange rates, volatilities, correlations, CDS spreads and recovery rates. Additionally, the credit quality of the counterparty and of the Firm as well as market funding levels may also be considered. | Level 2 or 3 | |
In addition, specific inputs used for derivatives that are valued based on models with significant unobservable inputs are as follows: | ||
Structured credit derivatives specific inputs include: | ||
• CDS
spreads and recovery rates | ||
• Credit correlation between the underlying debt instruments | ||
Equity option specific inputs include: | ||
• Forward equity price | ||
• Equity
volatility | ||
• Equity correlation | ||
• Equity-FX correlation | ||
• Equity-IR correlation | ||
Interest
rate and FX exotic options specific inputs include: | ||
• Interest rate volatility | ||
• Interest rate spread volatility | ||
• Interest rate correlation | ||
• Foreign
exchange correlation | ||
• Interest rate-FX correlation | ||
Commodity derivatives specific inputs include: | ||
• Commodity volatility | ||
• Forward
commodity price | ||
Additionally, adjustments are made to reflect counterparty credit quality (CVA) and the impact of funding (FVA). Refer to page 171 of this Note. | ||
Mortgage servicing rights | Refer to Mortgage servicing rights in Note 15. | Level
3 |
Private equity direct investments | Fair value is estimated using all available information; the range of potential inputs include: | Level 2 or 3 |
• Transaction prices | ||
• Trading multiples of comparable public companies | ||
• Operating performance of the underlying portfolio
company | ||
• Adjustments as required, since comparable public companies are not identical to the company being valued, and for company-specific issues and lack of liquidity. | ||
• Additional available inputs relevant to the investment. | ||
Fund investments (e.g., mutual/collective investment funds, private equity funds, hedge funds, and real estate funds) | Net
asset value | |
• NAV is supported by the ability to redeem and purchase at the NAV level. | Level 1 | |
• Adjustments to the NAV as required, for restrictions on redemption (e.g., lock-up periods or withdrawal limitations) or where observable activity is limited. | Level 2 or 3(a) | |
Beneficial
interests issued by consolidated VIEs | Valued using observable market information, where available. | Level 2 or 3 |
In the absence of observable market information, valuations are based on the fair value of the underlying assets held by the VIE. |
(a) | Excludes certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient. |
JPMorgan
Chase & Co./2019 Form 10-K | 157 |
Product/instrument | Valuation methodology | Classification in the valuation hierarchy | |
Structured notes (included in deposits, short-term
borrowings and long-term debt) | • Valuations are based on discounted cash flow analyses that consider the embedded derivative and the terms and payment structure of the note. • The embedded derivative features are considered using models such as the Black-Scholes option pricing model, simulation models, or a combination of models that may use observable or unobservable valuation inputs, depending on the embedded derivative. The specific inputs used vary according to the nature of the embedded derivative features, as described in the discussion above regarding derivatives valuation. Adjustments are then made to this base valuation to reflect the Firm’s own credit risk (DVA). Refer to page 171 of this Note. | Level 2 or 3 | |
158 | JPMorgan
Chase & Co./2019 Form 10-K |
Assets and liabilities measured at fair value on a recurring basis | |||||||||||||||||
Fair
value hierarchy | |||||||||||||||||
December 31, 2019 (in millions) | Level 1 | Level 2 | Level 3 | Derivative netting adjustments(f) | Total
fair value | ||||||||||||
Federal funds sold and securities purchased under resale agreements | $ | i — | $ | i 14,561 | $ | i — | $ | — | $ | i 14,561 | |||||||
Securities
borrowed | i — | i 6,237 | i — | — | i 6,237 | ||||||||||||
Trading
assets: | |||||||||||||||||
Debt instruments: | |||||||||||||||||
Mortgage-backed
securities: | |||||||||||||||||
U.S. GSEs and government agencies(a) | i — | i 44,510 | i 797 | — | i 45,307 | ||||||||||||
Residential
– nonagency | i — | i 1,977 | i 23 | — | i 2,000 | ||||||||||||
Commercial
– nonagency | i — | i 1,486 | i 4 | — | i 1,490 | ||||||||||||
Total
mortgage-backed securities | i — | i 47,973 | i 824 | — | i 48,797 | ||||||||||||
U.S.
Treasury, GSEs and government agencies(a) | i 78,289 | i 10,295 | i — | — | i 88,584 | ||||||||||||
Obligations
of U.S. states and municipalities | i — | i 6,468 | i 10 | — | i 6,478 | ||||||||||||
Certificates
of deposit, bankers’ acceptances and commercial paper | i — | i 252 | i — | — | i 252 | ||||||||||||
Non-U.S.
government debt securities | i 26,600 | i 27,169 | i 155 | — | i 53,924 | ||||||||||||
Corporate
debt securities | i — | i 17,956 | i 558 | — | i 18,514 | ||||||||||||
Loans(b) | i — | i 47,047 | i 1,382 | — | i 48,429 | ||||||||||||
Asset-backed
securities | i — | i 2,593 | i 37 | — | i 2,630 | ||||||||||||
Total
debt instruments | i 104,889 | i 159,753 | i 2,966 | — | i 267,608 | ||||||||||||
Equity
securities | i 71,890 | i 244 | i 196 | — | i 72,330 | ||||||||||||
Physical
commodities(c) | i 3,638 | i 3,579 | i — | — | i 7,217 | ||||||||||||
Other | i — | i 13,896 | i 232 | — | i 14,128 | ||||||||||||
Total
debt and equity instruments(d) | i 180,417 | i 177,472 | i 3,394 | — | i 361,283 | ||||||||||||
Derivative
receivables: | |||||||||||||||||
Interest rate | i 721 | i 311,173 | i 1,400 | ( i 285,873 | ) | i 27,421 | |||||||||||
Credit | i — | i 14,252 | i 624 | ( i 14,175 | ) | i 701 | |||||||||||
Foreign
exchange | i 117 | i 137,938 | i 432 | ( i 129,482 | ) | i 9,005 | |||||||||||
Equity | i — | i 43,642 | i 2,085 | ( i 39,250 | ) | i 6,477 | |||||||||||
Commodity | i — | i 17,058 | i 184 | ( i 11,080 | ) | i 6,162 | |||||||||||
Total
derivative receivables | i 838 | i 524,063 | i 4,725 | ( i 479,860 | ) | i 49,766 | |||||||||||
Total
trading assets(e) | i 181,255 | i 701,535 | i 8,119 | ( i 479,860 | ) | i 411,049 | |||||||||||
Available-for-sale
securities: | |||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||
U.S.
GSEs and government agencies(a) | i — | i 110,117 | i — | — | i 110,117 | ||||||||||||
Residential
– nonagency | i — | i 12,989 | i 1 | — | i 12,990 | ||||||||||||
Commercial
– nonagency | i — | i 5,188 | i — | — | i 5,188 | ||||||||||||
Total
mortgage-backed securities | i — | i 128,294 | i 1 | — | i 128,295 | ||||||||||||
U.S.
Treasury and government agencies | i 139,436 | i — | i — | — | i 139,436 | ||||||||||||
Obligations
of U.S. states and municipalities | i — | i 29,810 | i — | — | i 29,810 | ||||||||||||
Certificates
of deposit | i — | i 77 | i — | — | i 77 | ||||||||||||
Non-U.S.
government debt securities | i 12,966 | i 8,821 | i — | — | i 21,787 | ||||||||||||
Corporate
debt securities | i — | i 845 | i — | — | i 845 | ||||||||||||
Asset-backed
securities: | |||||||||||||||||
Collateralized loan obligations | i — | i 24,991 | i — | — | i 24,991 | ||||||||||||
Other | i — | i 5,458 | i — | — | i 5,458 | ||||||||||||
Total
available-for-sale securities | i 152,402 | i 198,296 | i 1 | — | i 350,699 | ||||||||||||
Loans | i — | i 7,104 | i — | — | i 7,104 | ||||||||||||
Mortgage
servicing rights | i — | i — | i 4,699 | — | i 4,699 | ||||||||||||
Other
assets(e) | i 7,305 | i 452 | i 724 | — | i 8,481 | ||||||||||||
Total
assets measured at fair value on a recurring basis | $ | i 340,962 | $ | i 928,185 | $ | i 13,543 | $ | ( i 479,860 | ) | $ | i 802,830 | ||||||
Deposits | $ | i — | $ | i 25,229 | $ | i 3,360 | $ | — | $ | i 28,589 | |||||||
Federal
funds purchased and securities loaned or sold under repurchase agreements | i — | i 549 | i — | — | i 549 | ||||||||||||
Short-term
borrowings | i — | i 4,246 | i 1,674 | — | i 5,920 | ||||||||||||
Trading
liabilities: | |||||||||||||||||
Debt and equity instruments(d) | i 59,047 | i 16,481 | i 41 | — | i 75,569 | ||||||||||||
Derivative
payables: | |||||||||||||||||
Interest rate | i 795 | i 276,746 | i 1,732 | ( i 270,670 | ) | i 8,603 | |||||||||||
Credit | i — | i 14,358 | i 763 | ( i 13,469 | ) | i 1,652 | |||||||||||
Foreign
exchange | i 109 | i 143,960 | i 1,039 | ( i 131,950 | ) | i 13,158 | |||||||||||
Equity | i — | i 47,261 | i 5,480 | ( i 40,204 | ) | i 12,537 | |||||||||||
Commodity | i — | i 19,685 | i 200 | ( i 12,127 | ) | i 7,758 | |||||||||||
Total
derivative payables | i 904 | i 502,010 | i 9,214 | ( i 468,420 | ) | i 43,708 | |||||||||||
Total
trading liabilities | i 59,951 | i 518,491 | i 9,255 | ( i 468,420 | ) | i 119,277 | |||||||||||
Accounts
payable and other liabilities | i 3,231 | i 452 | i 45 | — | i 3,728 | ||||||||||||
Beneficial
interests issued by consolidated VIEs | i — | i 36 | i — | — | i 36 | ||||||||||||
Long-term
debt | i — | i 52,406 | i 23,339 | — | i 75,745 | ||||||||||||
Total
liabilities measured at fair value on a recurring basis | $ | i 63,182 | $ | i 601,409 | $ | i 37,673 | $ | ( i 468,420 | ) | $ | i 233,844 |
JPMorgan
Chase & Co./2019 Form 10-K | 159 |
Fair value hierarchy | ||||||||||||||||||
December
31, 2018 (in millions) | Level 1 | Level 2 | Level 3 | Derivative netting adjustments(f) | Total fair value | |||||||||||||
Federal funds sold and securities purchased under resale agreements | $ | i — | $ | i 13,235 | $ | i — | $ | — | $ | i 13,235 | ||||||||
Securities
borrowed | i — | i 5,105 | i — | — | i 5,105 | |||||||||||||
Trading
assets: | ||||||||||||||||||
Debt instruments: | ||||||||||||||||||
Mortgage-backed
securities: | ||||||||||||||||||
U.S. GSEs and government agencies(a) | i — | i 76,249 | i 549 | — | i 76,798 | |||||||||||||
Residential
– nonagency | i — | i 1,798 | i 64 | — | i 1,862 | |||||||||||||
Commercial
– nonagency | i — | i 1,501 | i 11 | — | i 1,512 | |||||||||||||
Total
mortgage-backed securities | i — | i 79,548 | i 624 | — | i 80,172 | |||||||||||||
U.S.
Treasury, GSEs and government agencies(a) | i 51,477 | i 7,702 | i — | — | i 59,179 | |||||||||||||
Obligations
of U.S. states and municipalities | i — | i 7,121 | i 689 | — | i 7,810 | |||||||||||||
Certificates
of deposit, bankers’ acceptances and commercial paper | i — | i 1,214 | i — | — | i 1,214 | |||||||||||||
Non-U.S.
government debt securities | i 27,878 | i 27,056 | i 155 | — | i 55,089 | |||||||||||||
Corporate
debt securities | i — | i 18,655 | i 334 | — | i 18,989 | |||||||||||||
Loans(b) | i — | i 40,047 | i 1,706 | — | i 41,753 | |||||||||||||
Asset-backed
securities | i — | i 2,756 | i 127 | — | i 2,883 | |||||||||||||
Total
debt instruments | i 79,355 | i 184,099 | i 3,635 | — | i 267,089 | |||||||||||||
Equity
securities | i 71,119 | i 482 | i 232 | — | i 71,833 | |||||||||||||
Physical
commodities(c) | i 5,182 | i 1,855 | i — | — | i 7,037 | |||||||||||||
Other | i — | i 13,192 | i 301 | — | i 13,493 | |||||||||||||
Total
debt and equity instruments(d) | i 155,656 | i 199,628 | i 4,168 | — | i 359,452 | |||||||||||||
Derivative
receivables: | ||||||||||||||||||
Interest
rate | i 682 | i 266,380 | i 1,642 | ( i 245,490 | ) | i 23,214 | ||||||||||||
Credit | i — | i 19,235 | i 860 | ( i 19,483 | ) | i 612 | ||||||||||||
Foreign
exchange | i 771 | i 166,238 | i 676 | ( i 154,235 | ) | i 13,450 | ||||||||||||
Equity | i — | i 46,777 | i 2,508 | ( i 39,339 | ) | i 9,946 | ||||||||||||
Commodity | i — | i 20,339 | i 131 | ( i 13,479 | ) | i 6,991 | ||||||||||||
Total
derivative receivables | i 1,453 | i 518,969 | i 5,817 | ( i 472,026 | ) | i 54,213 | ||||||||||||
Total
trading assets(e) | i 157,109 | i 718,597 | i 9,985 | ( i 472,026 | ) | i 413,665 | ||||||||||||
Available-for-sale
securities: | ||||||||||||||||||
Mortgage-backed
securities: | ||||||||||||||||||
U.S.
GSEs and government agencies(a) | i — | i 68,646 | i — | — | i 68,646 | |||||||||||||
Residential
– nonagency | i — | i 8,519 | i 1 | — | i 8,520 | |||||||||||||
Commercial
– nonagency | i — | i 6,654 | i — | — | i 6,654 | |||||||||||||
Total
mortgage-backed securities | i — | i 83,819 | i 1 | — | i 83,820 | |||||||||||||
U.S.
Treasury and government agencies | i 56,059 | i — | i — | — | i 56,059 | |||||||||||||
Obligations
of U.S. states and municipalities | i — | i 37,723 | i — | — | i 37,723 | |||||||||||||
Certificates
of deposit | i — | i 75 | i — | — | i 75 | |||||||||||||
Non-U.S.
government debt securities | i 15,313 | i 8,789 | i — | — | i 24,102 | |||||||||||||
Corporate
debt securities | i — | i 1,918 | i — | — | i 1,918 | |||||||||||||
Asset-backed
securities: | — | — | — | — | — | |||||||||||||
Collateralized
loan obligations | i — | i 19,437 | i — | — | i 19,437 | |||||||||||||
Other | i — | i 7,260 | i — | — | i 7,260 | |||||||||||||
Total
available-for-sale securities | i 71,372 | i 159,021 | i 1 | — | i 230,394 | |||||||||||||
Loans | i — | i 3,029 | i 122 | — | i 3,151 | |||||||||||||
Mortgage
servicing rights | i — | i — | i 6,130 | — | i 6,130 | |||||||||||||
Other
assets(e) | i 7,810 | i 195 | i 927 | — | i 8,932 | |||||||||||||
Total
assets measured at fair value on a recurring basis | $ | i 236,291 | $ | i 899,182 | $ | i 17,165 | $ | ( i 472,026 | ) | $ | i 680,612 | |||||||
Deposits | $ | i — | $ | i 19,048 | $ | i 4,169 | $ | — | $ | i 23,217 | ||||||||
Federal
funds purchased and securities loaned or sold under repurchase agreements | i — | i 935 | i — | — | i 935 | |||||||||||||
Short-term
borrowings | i — | i 5,607 | i 1,523 | — | i 7,130 | |||||||||||||
Trading
liabilities: | ||||||||||||||||||
Debt
and equity instruments(d) | i 80,199 | i 22,755 | i 50 | — | i 103,004 | |||||||||||||
Derivative
payables: | ||||||||||||||||||
Interest
rate | i 1,526 | i 239,576 | i 1,680 | ( i 234,998 | ) | i 7,784 | ||||||||||||
Credit | i — | i 19,309 | i 967 | ( i 18,609 | ) | i 1,667 | ||||||||||||
Foreign
exchange | i 695 | i 163,549 | i 973 | ( i 152,432 | ) | i 12,785 | ||||||||||||
Equity | i — | i 46,462 | i 4,733 | ( i 41,034 | ) | i 10,161 | ||||||||||||
Commodity | i — | i 21,158 | i 1,260 | ( i 13,046 | ) | i 9,372 | ||||||||||||
Total
derivative payables | i 2,221 | i 490,054 | i 9,613 | ( i 460,119 | ) | i 41,769 | ||||||||||||
Total
trading liabilities | i 82,420 | i 512,809 | i 9,663 | ( i 460,119 | ) | i 144,773 | ||||||||||||
Accounts
payable and other liabilities | i 3,063 | i 196 | i 10 | — | i 3,269 | |||||||||||||
Beneficial
interests issued by consolidated VIEs | i — | i 27 | i 1 | — | i 28 | |||||||||||||
Long-term
debt | i — | i 35,468 | i 19,418 | — | i 54,886 | |||||||||||||
Total
liabilities measured at fair value on a recurring basis | $ | i 85,483 | $ | i 574,090 | $ | i 34,784 | $ | ( i 460,119 | ) | $ | i 234,238 |
(a) | At
December 31, 2019 and 2018, included total U.S. GSE obligations of $ i 104.5 billion and $ i 92.3
billion, respectively, which were mortgage-related. |
(b) | At December 31, 2019 and 2018, included within trading loans were $ i 19.8
billion and $ i 13.2 billion, respectively, of residential first-lien mortgages, and $ i 3.4
billion and $ i 2.3 billion, respectively, of commercial first-lien mortgages. Residential mortgage loans include conforming mortgage loans originated with the intent to sell to U.S. GSEs and government agencies of $ i 13.6
billion and $ i 7.6 billion, respectively. |
(c) | Physical commodities inventories are generally accounted for at the lower
of cost or net realizable value. “Net realizable value” is a term defined in U.S. GAAP as not exceeding fair value less costs to sell (“transaction costs”). Transaction costs for the Firm’s physical commodities inventories are either not applicable or immaterial to the value of the inventory. Therefore, net realizable value approximates fair value for the Firm’s physical commodities inventories. When fair value hedging has been applied (or when net realizable value is below cost), the carrying value of physical commodities |
160 | JPMorgan Chase & Co./2019 Form
10-K |
(d) | Balances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but not yet purchased (short positions). |
(e) | Certain
investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not required to be classified in the fair value hierarchy. At December 31, 2019 and 2018, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were $ i 684
million and $ i 747 million, respectively. Included in these balances at December 31, 2019 and 2018, were trading assets of $ i 54
million and $ i 49 million, respectively, and other assets of $ i 630
million and $ i 698 million, respectively. |
(f) | As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral
received and paid when a legally enforceable master netting agreement exists. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral. |
JPMorgan Chase & Co./2019 Form 10-K | 161 |
162 | JPMorgan Chase & Co./2019 Form 10-K |
Level
3 inputs(a) | ||||||||||
Product/Instrument | Fair value (in millions) | Principal valuation technique | Unobservable
inputs(g) | Range of input values | Weighted average | |||||
Residential mortgage-backed securities and loans(b) | $ | i 976 | Discounted
cash flows | Yield | i 2% | – | i 18% | i 6% | ||
Prepayment
speed | i 0% | – | i 26% | i 13% | ||||||
Conditional
default rate | i 0% | – | i 5% | i 0% | ||||||
Loss
severity | i 0% | – | i 100% | i 5% | ||||||
Commercial
mortgage-backed securities and loans(c) | i 99 | Market
comparables | Price | $ i 0 | – | $ i 100 | $ i 79 | |||
Obligations
of U.S. states and municipalities | i 10 | Market
comparables | Price | $ i 71 | – | $ i 100 | $ i 95 | |||
Corporate
debt securities | i 558 | Market
comparables | Price | $ i 4 | – | $ i 112 | $ i 72 | |||
Loans(d) | i 193 | Discounted
cash flows | Yield | i 5% | – | i 28% | i 8% | |||
i 939 | Market
comparables | Price | $ i 2 | – | $ i 116 | $ i 70 | ||||
Asset-backed
securities | i 37 | Market
comparables | Price | $ i 1 | – | $ i 102 | $ i 71 | |||
Net
interest rate derivatives | ( i 395 | ) | Option
pricing | Interest rate volatility | i 6% | – | i 44% | |||
Interest
rate spread volatility | 20bps | – | 30bps | |||||||
Interest rate correlation | ( i 65)% | – | i 94% | |||||||
IR-FX
correlation | ( i 58)% | – | i 40% | |||||||
i 63 | Discounted
cash flows | Prepayment speed | i 4% | – | i 30% | |||||
Net
credit derivatives | ( i 174 | ) | Discounted
cash flows | Credit correlation | i 31% | – | i 59% | |||
Credit
spread | 3bps | – | 1,308bps | |||||||
Recovery rate | i 15% | – | i 70% | |||||||
Conditional
default rate | i 2% | – | i 18% | |||||||
Loss
severity | i 100% | |||||||||
i 35 | Market
comparables | Price | $ i 1 | – | $ i 115 | |||||
Net
foreign exchange derivatives | ( i 469 | ) | Option
pricing | IR-FX correlation | ( i 58)% | – | i 65% | |||
( i 138 | ) | Discounted
cash flows | Prepayment speed | i 9% | ||||||
Net
equity derivatives | ( i 3,395 | ) | Option
pricing | Forward equity price(h) | i 92% | – | i 105% | |||
Equity
volatility | i 9% | – | i 93% | |||||||
Equity
correlation | i 10% | – | i 97% | |||||||
Equity-FX
correlation | ( i 81)% | – | i 60% | |||||||
Equity-IR
correlation | i 25% | – | i 35% | |||||||
Net
commodity derivatives | ( i 16 | ) | Option
pricing | Forward commodity price | $39 | – | $ 76 per barrel | |||
Commodity volatility | i 5% | – | i 105% | |||||||
Commodity
correlation | ( i 48)% | – | i 95% | |||||||
MSRs | i 4,699 | Discounted
cash flows | Refer to Note 15 | |||||||
Other assets | i 222 | Discounted
cash flows | Credit spread | 45bps | 45bps | |||||
Yield | i 12% | i 12% | ||||||||
i 734 | Market
comparables | Price | $ i 17 | – | $ i 117 | $ i 37 | ||||
Long-term
debt, short-term borrowings, and deposits(e) | i 28,373 | Option
pricing | Interest rate volatility | i 6% | – | i 44% | ||||
Interest
rate correlation | ( i 65)% | – | i 94% | |||||||
IR-FX
correlation | ( i 58)% | – | i 40% | |||||||
Equity
correlation | i 10% | – | i 97% | |||||||
Equity-FX
correlation | ( i 81)% | – | i 60% | |||||||
Equity-IR
correlation | i 25% | – | i 35% | |||||||
Other
level 3 assets and liabilities, net(f) | i 265 |
(a) | The
categories presented in the table have been aggregated based upon the product type, which may differ from their classification on the Consolidated balance sheets. Furthermore, the inputs presented for each valuation technique in the table are, in some cases, not applicable to every instrument valued using the technique as the characteristics of the instruments can differ. |
(b) | Comprises U.S. GSEs and government agency securities of $ i 797
million, nonagency securities of $ i 24 million and trading
loans of $ i 155 million. |
(c) | Comprises
nonagency securities of $ i 4 million and trading loans of $ i 95
million. |
(d) | Comprises trading loans. |
(e) | Long-term debt, short-term borrowings and deposits include structured notes issued by the Firm that are financial instruments that typically contain embedded derivatives. The estimation of the fair value of structured notes includes the derivative features embedded within the instrument. The significant unobservable inputs are broadly consistent with those presented for derivative receivables. |
(f) | Includes
level 3 assets and liabilities that are insignificant both individually and in aggregate. |
(g) | Price is a significant unobservable input for certain instruments. When quoted market prices are not readily available, reliance is generally placed on price-based internal valuation techniques. The price input is expressed assuming a par value of $ i 100. |
(h) | Forward
equity price is expressed as a percentage of the current equity price. |
JPMorgan Chase & Co./2019 Form 10-K | 163 |
164 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 165 |
Fair
value measurements using significant unobservable inputs | |||||||||||||||||||||||||||||||||
Year ended December 31, 2019 (in millions) | Fair value at January 1, 2019 | Total realized/unrealized gains/(losses) | Transfers
into level 3(h) | Transfers (out of) level 3(h) | Fair value at Dec. 31, 2019 | Change in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2019 | |||||||||||||||||||||||||||
Purchases(f) | Sales | Settlements(g) | |||||||||||||||||||||||||||||||
Assets:(a) | |||||||||||||||||||||||||||||||||
Trading
assets: | |||||||||||||||||||||||||||||||||
Debt
instruments: | |||||||||||||||||||||||||||||||||
Mortgage-backed
securities: | |||||||||||||||||||||||||||||||||
U.S.
GSEs and government agencies | $ | i 549 | $ | ( i 62 | ) | $ | i 773 | $ | ( i 310 | ) | $ | ( i 134 | ) | $ | i 1 | $ | ( i 20 | ) | $ | i 797 | $ | ( i 58 | ) | ||||||||||
Residential
– nonagency | i 64 | i 25 | i 83 | ( i 86 | ) | ( i 20 | ) | i 15 | ( i 58 | ) | i 23 | i 2 | |||||||||||||||||||||
Commercial
– nonagency | i 11 | i 2 | i 20 | ( i 26 | ) | ( i 14 | ) | i 15 | ( i 4 | ) | i 4 | i 1 | |||||||||||||||||||||
Total
mortgage-backed securities | i 624 | ( i 35 | ) | i 876 | ( i 422 | ) | ( i 168 | ) | i 31 | ( i 82 | ) | i 824 | ( i 55 | ) | |||||||||||||||||||
U.S.
Treasury, GSEs and government agencies | i — | i — | i — | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||
Obligations
of U.S. states and municipalities | i 689 | i 13 | i 85 | ( i 159 | ) | ( i 8 | ) | i — | ( i 610 | ) | i 10 | i 13 | |||||||||||||||||||||
Non-U.S.
government debt securities | i 155 | i 1 | i 290 | ( i 287 | ) | i — | i 14 | ( i 18 | ) | i 155 | i 4 | ||||||||||||||||||||||
Corporate
debt securities | i 334 | i 47 | i 437 | ( i 247 | ) | ( i 52 | ) | i 112 | ( i 73 | ) | i 558 | i 40 | |||||||||||||||||||||
Loans | i 1,706 | i 132 | i 727 | ( i 708 | ) | ( i 562 | ) | i 625 | ( i 538 | ) | i 1,382 | i 51 | |||||||||||||||||||||
Asset-backed
securities | i 127 | i — | i 37 | ( i 93 | ) | ( i 40 | ) | i 28 | ( i 22 | ) | i 37 | ( i 3 | ) | ||||||||||||||||||||
Total
debt instruments | i 3,635 | i 158 | i 2,452 | ( i 1,916 | ) | ( i 830 | ) | i 810 | ( i 1,343 | ) | i 2,966 | i 50 | |||||||||||||||||||||
Equity
securities | i 232 | ( i 41 | ) | i 58 | ( i 103 | ) | ( i 22 | ) | i 181 | ( i 109 | ) | i 196 | ( i 18 | ) | |||||||||||||||||||
Other | i 301 | ( i 36 | ) | i 50 | ( i 26 | ) | ( i 54 | ) | i 2 | ( i 5 | ) | i 232 | i 91 | ||||||||||||||||||||
Total
trading assets – debt and equity instruments | i 4,168 | i 81 | (c) | i 2,560 | ( i 2,045 | ) | ( i 906 | ) | i 993 | ( i 1,457 | ) | i 3,394 | i 123 | (c) | |||||||||||||||||||
Net
derivative receivables:(b) | |||||||||||||||||||||||||||||||||
Interest
rate | ( i 38 | ) | ( i 394 | ) | i 109 | ( i 125 | ) | i 5 | ( i 7 | ) | i 118 | ( i 332 | ) | ( i 599 | ) | ||||||||||||||||||
Credit | ( i 107 | ) | ( i 36 | ) | i 20 | ( i 9 | ) | i 8 | i 29 | ( i 44 | ) | ( i 139 | ) | ( i 127 | ) | ||||||||||||||||||
Foreign
exchange | ( i 297 | ) | ( i 551 | ) | i 17 | ( i 67 | ) | i 312 | ( i 22 | ) | i 1 | ( i 607 | ) | ( i 380 | ) | ||||||||||||||||||
Equity | ( i 2,225 | ) | ( i 310 | ) | i 397 | ( i 573 | ) | ( i 503 | ) | ( i 405 | ) | i 224 | ( i 3,395 | ) | ( i 1,608 | ) | |||||||||||||||||
Commodity | ( i 1,129 | ) | i 497 | i 36 | ( i 348 | ) | i 89 | ( i 6 | ) | i 845 | ( i 16 | ) | i 130 | ||||||||||||||||||||
Total
net derivative receivables | ( i 3,796 | ) | ( i 794 | ) | (c) | i 579 | ( i 1,122 | ) | ( i 89 | ) | ( i 411 | ) | i 1,144 | ( i 4,489 | ) | ( i 2,584 | ) | (c) | |||||||||||||||
Available-for-sale
securities: | |||||||||||||||||||||||||||||||||
Mortgage-backed
securities | i 1 | i — | i — | i — | i — | i — | i — | i 1 | i — | ||||||||||||||||||||||||
Asset-backed
securities | i — | i — | i — | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||
Total
available-for-sale securities | i 1 | i — | i — | i — | i — | i — | i — | i 1 | i — | ||||||||||||||||||||||||
Loans | i 122 | i 4 | (c) | i — | i — | ( i 125 | ) | i — | ( i 1 | ) | i — | i — | |||||||||||||||||||||
Mortgage
servicing rights | i 6,130 | ( i 1,180 | ) | (d) | i 1,489 | ( i 789 | ) | ( i 951 | ) | i — | i — | i 4,699 | ( i 1,180 | ) | (d) | ||||||||||||||||||
Other
assets | i 927 | ( i 198 | ) | (c) | i 194 | ( i 165 | ) | ( i 33 | ) | i 6 | ( i 7 | ) | i 724 | ( i 180 | ) | (c) | |||||||||||||||||
Fair
value measurements using significant unobservable inputs | |||||||||||||||||||||||||||||||||
Year ended December 31, 2019 (in millions) | Fair value at January 1, 2019 | Total realized/unrealized (gains)/losses | Transfers
(out of) level 3(h) | Fair value at Dec. 31, 2019 | Change in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2019 | ||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements(g) | Transfers
into level 3(h) | |||||||||||||||||||||||||||||
Liabilities:(a) | |||||||||||||||||||||||||||||||||
Deposits | $ | i 4,169 | $ | i 278 | (c)(e) | $ | i — | $ | i — | $ | i 916 | $ | ( i 806 | ) | $ | i 12 | $ | ( i 1,209 | ) | $ | i 3,360 | $ | i 307 | (c)(e) | |||||||||
Short-term
borrowings | i 1,523 | i 229 | (c)(e) | i — | i — | i 3,441 | ( i 3,356 | ) | i 85 | ( i 248 | ) | i 1,674 | i 155 | (c)(e) | |||||||||||||||||||
Trading
liabilities – debt and equity instruments | i 50 | i 2 | (c) | ( i 22 | ) | i 41 | i — | i 1 | i 16 | ( i 47 | ) | i 41 | i 3 | (c) | |||||||||||||||||||
Accounts
payable and other liabilities | i 10 | ( i 2 | ) | (c) | ( i 84 | ) | i 115 | i — | i — | i 6 | i — | i 45 | i 29 | (c) | |||||||||||||||||||
Beneficial
interests issued by consolidated VIEs | i 1 | ( i 1 | ) | (c) | i — | i — | i — | i — | i — | i — | i — | i — | |||||||||||||||||||||
Long-term
debt | i 19,418 | i 2,815 | (c)(e) | i — | i — | i 10,441 | ( i 8,538 | ) | i 651 | ( i 1,448 | ) | i 23,339 | i 2,822 | (c)(e) |
166 | JPMorgan
Chase & Co./2019 Form 10-K |
Fair
value measurements using significant unobservable inputs | |||||||||||||||||||||||||||||||||
Year ended December 31, 2018 (in millions) | Fair value at January 1, 2018 | Total realized/unrealized gains/(losses) | Transfers
(out of) level 3(h) | Fair value at Dec. 31, 2018 | Change in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2018 | ||||||||||||||||||||||||||||
Purchases(f) | Sales | Settlements(g) | Transfers
into level 3(h) | ||||||||||||||||||||||||||||||
Assets:(a) | |||||||||||||||||||||||||||||||||
Trading
assets: | |||||||||||||||||||||||||||||||||
Debt
instruments: | |||||||||||||||||||||||||||||||||
Mortgage-backed
securities: | |||||||||||||||||||||||||||||||||
U.S.
GSEs and government agencies | $ | i 307 | $ | ( i 23 | ) | $ | i 478 | $ | ( i 164 | ) | $ | ( i 73 | ) | $ | i 94 | $ | ( i 70 | ) | $ | i 549 | $ | ( i 21 | ) | ||||||||||
Residential
– nonagency | i 60 | ( i 2 | ) | i 78 | ( i 50 | ) | ( i 7 | ) | i 59 | ( i 74 | ) | i 64 | i 1 | ||||||||||||||||||||
Commercial
– nonagency | i 11 | i 2 | i 18 | ( i 18 | ) | ( i 17 | ) | i 36 | ( i 21 | ) | i 11 | ( i 2 | ) | ||||||||||||||||||||
Total
mortgage-backed securities | i 378 | ( i 23 | ) | i 574 | ( i 232 | ) | ( i 97 | ) | i 189 | ( i 165 | ) | i 624 | ( i 22 | ) | |||||||||||||||||||
U.S.
Treasury, GSEs and government agencies | i 1 | i — | i — | i — | i — | i — | ( i 1 | ) | i — | i — | |||||||||||||||||||||||
Obligations
of U.S. states and municipalities | i 744 | ( i 17 | ) | i 112 | ( i 70 | ) | ( i 80 | ) | i — | i — | i 689 | ( i 17 | ) | ||||||||||||||||||||
Non-U.S.
government debt securities | i 78 | ( i 22 | ) | i 459 | ( i 277 | ) | ( i 12 | ) | i 23 | ( i 94 | ) | i 155 | ( i 9 | ) | |||||||||||||||||||
Corporate
debt securities | i 312 | ( i 18 | ) | i 364 | ( i 309 | ) | ( i 48 | ) | i 262 | ( i 229 | ) | i 334 | ( i 1 | ) | |||||||||||||||||||
Loans | i 2,719 | i 26 | i 1,364 | ( i 1,793 | ) | ( i 658 | ) | i 813 | ( i 765 | ) | i 1,706 | ( i 1 | ) | ||||||||||||||||||||
Asset-backed
securities | i 153 | i 28 | i 98 | ( i 41 | ) | ( i 55 | ) | i 45 | ( i 101 | ) | i 127 | i 22 | |||||||||||||||||||||
Total
debt instruments | i 4,385 | ( i 26 | ) | i 2,971 | ( i 2,722 | ) | ( i 950 | ) | i 1,332 | ( i 1,355 | ) | i 3,635 | ( i 28 | ) | |||||||||||||||||||
Equity
securities | i 295 | ( i 40 | ) | i 118 | ( i 120 | ) | ( i 1 | ) | i 107 | ( i 127 | ) | i 232 | i 9 | ||||||||||||||||||||
Other | i 690 | ( i 285 | ) | i 55 | ( i 40 | ) | ( i 118 | ) | i 3 | ( i 4 | ) | i 301 | ( i 301 | ) | |||||||||||||||||||
Total
trading assets – debt and equity instruments | i 5,370 | ( i 351 | ) | (c) | i 3,144 | ( i 2,882 | ) | ( i 1,069 | ) | i 1,442 | ( i 1,486 | ) | i 4,168 | ( i 320 | ) | (c) | |||||||||||||||||
Net
derivative receivables:(b) | |||||||||||||||||||||||||||||||||
Interest
rate | i 264 | i 150 | i 107 | ( i 133 | ) | ( i 430 | ) | ( i 15 | ) | i 19 | ( i 38 | ) | i 187 | ||||||||||||||||||||
Credit | ( i 35 | ) | ( i 40 | ) | i 5 | ( i 7 | ) | ( i 57 | ) | i 4 | i 23 | ( i 107 | ) | ( i 28 | ) | ||||||||||||||||||
Foreign
exchange | ( i 396 | ) | i 103 | i 52 | ( i 20 | ) | i 30 | ( i 108 | ) | i 42 | ( i 297 | ) | ( i 63 | ) | |||||||||||||||||||
Equity | ( i 3,409 | ) | i 198 | i 1,676 | ( i 2,208 | ) | i 1,805 | ( i 617 | ) | i 330 | ( i 2,225 | ) | i 561 | ||||||||||||||||||||
Commodity | ( i 674 | ) | ( i 73 | ) | i 1 | ( i 72 | ) | ( i 301 | ) | i 7 | ( i 17 | ) | ( i 1,129 | ) | i 146 | ||||||||||||||||||
Total
net derivative receivables | ( i 4,250 | ) | i 338 | (c) | i 1,841 | ( i 2,440 | ) | i 1,047 | ( i 729 | ) | i 397 | ( i 3,796 | ) | i 803 | (c) | ||||||||||||||||||
Available-for-sale
securities: | |||||||||||||||||||||||||||||||||
Mortgage-backed
securities | i 1 | i — | i — | i — | i — | i — | i — | i 1 | i — | ||||||||||||||||||||||||
Asset-backed
securities | i 276 | i 1 | i — | i — | ( i 277 | ) | i — | i — | i — | i — | |||||||||||||||||||||||
Total
available-for-sale securities | i 277 | i 1 | (i) | i — | i — | ( i 277 | ) | i — | i — | i 1 | i — | ||||||||||||||||||||||
Loans | i 276 | ( i 7 | ) | (c) | i 123 | i — | ( i 196 | ) | i — | ( i 74 | ) | i 122 | ( i 7 | ) | (c) | ||||||||||||||||||
Mortgage
servicing rights | i 6,030 | i 230 | (d) | i 1,246 | ( i 636 | ) | ( i 740 | ) | i — | i — | i 6,130 | i 230 | (d) | ||||||||||||||||||||
Other
assets | i 1,265 | ( i 328 | ) | (c) | i 61 | ( i 37 | ) | ( i 37 | ) | i 4 | ( i 1 | ) | i 927 | ( i 340 | ) | (c) | |||||||||||||||||
Fair
value measurements using significant unobservable inputs | |||||||||||||||||||||||||||||||||
Year ended December 31, 2018 (in millions) | Fair value at January 1, 2018 | Total realized/unrealized (gains)/losses | Transfers
(out of) level 3(h) | Fair value at Dec. 31, 2018 | Change in unrealized (gains)/losses related to financial instruments held at Dec. 31, 2018 | ||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements(g) | Transfers
into level 3(h) | |||||||||||||||||||||||||||||
Liabilities:(a) | |||||||||||||||||||||||||||||||||
Deposits | $ | i 4,142 | $ | ( i 136 | ) | (c)(e) | $ | i — | $ | i — | $ | i 1,437 | $ | ( i 736 | ) | $ | i 2 | $ | ( i 540 | ) | $ | i 4,169 | $ | ( i 204 | ) | (c)(e) | |||||||
Short-term
borrowings | i 1,665 | ( i 329 | ) | (c)(e) | i — | i — | i 3,455 | ( i 3,388 | ) | i 272 | ( i 152 | ) | i 1,523 | ( i 131 | ) | (c)(e) | |||||||||||||||||
Trading
liabilities – debt and equity instruments | i 39 | i 19 | (c) | ( i 99 | ) | i 114 | i — | ( i 1 | ) | i 14 | ( i 36 | ) | i 50 | i 16 | (c) | ||||||||||||||||||
Accounts
payable and other liabilities | i 13 | i — | ( i 12 | ) | i 5 | i — | i — | i 4 | i — | i 10 | i — | ||||||||||||||||||||||
Beneficial
interests issued by consolidated VIEs | i 39 | i — | i — | i 1 | i — | ( i 39 | ) | i — | i — | i 1 | i — | ||||||||||||||||||||||
Long-term
debt | i 16,125 | ( i 1,169 | ) | (c)(e) | i — | i — | i 11,919 | ( i 7,769 | ) | i 1,143 | ( i 831 | ) | i 19,418 | ( i 1,385 | ) | (c)(e) |
JPMorgan
Chase & Co./2019 Form 10-K | 167 |
Fair
value measurements using significant unobservable inputs | ||||||||||||||||||||||||||||||||||||
Year ended December 31, 2017 (in millions) | Fair value at January 1, 2017 | Total realized/unrealized gains/(losses) | Transfers
(out of) level 3(h) | Fair value at | Change in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2017 | |||||||||||||||||||||||||||||||
Purchases(f) | Sales | Settlements(g) | Transfers
into level 3(h) | |||||||||||||||||||||||||||||||||
Assets:(a) | ||||||||||||||||||||||||||||||||||||
Trading
assets: | ||||||||||||||||||||||||||||||||||||
Debt
instruments: | ||||||||||||||||||||||||||||||||||||
Mortgage-backed
securities: | ||||||||||||||||||||||||||||||||||||
U.S.
GSEs and government agencies | $ | i 392 | $ | ( i 11 | ) | $ | i 161 | $ | ( i 171 | ) | $ | ( i 70 | ) | $ | i 49 | $ | ( i 43 | ) | $ | i 307 | $ | ( i 20 | ) | |||||||||||||
Residential
– nonagency | i 83 | i 19 | i 53 | ( i 30 | ) | ( i 64 | ) | i 132 | ( i 133 | ) | i 60 | i 11 | ||||||||||||||||||||||||
Commercial
– nonagency | i 17 | i 9 | i 27 | ( i 44 | ) | ( i 13 | ) | i 64 | ( i 49 | ) | i 11 | i 1 | ||||||||||||||||||||||||
Total
mortgage-backed securities | i 492 | i 17 | i 241 | ( i 245 | ) | ( i 147 | ) | i 245 | ( i 225 | ) | i 378 | ( i 8 | ) | |||||||||||||||||||||||
U.S.
Treasury, GSEs and government agencies | i — | i — | i — | i — | i — | i 1 | i — | i 1 | i — | |||||||||||||||||||||||||||
Obligations
of U.S. states and municipalities | i 649 | i 18 | i 152 | ( i 70 | ) | ( i 5 | ) | i — | i — | i 744 | i 15 | |||||||||||||||||||||||||
Non-U.S.
government debt securities | i 46 | i — | i 559 | ( i 518 | ) | i — | i 62 | ( i 71 | ) | i 78 | i — | |||||||||||||||||||||||||
Corporate
debt securities | i 576 | i 11 | i 872 | ( i 612 | ) | ( i 497 | ) | i 157 | ( i 195 | ) | i 312 | i 18 | ||||||||||||||||||||||||
Loans | i 4,837 | i 333 | i 2,389 | ( i 2,832 | ) | ( i 1,323 | ) | i 806 | ( i 1,491 | ) | i 2,719 | i 43 | ||||||||||||||||||||||||
Asset-backed
securities | i 302 | i 32 | i 354 | ( i 356 | ) | ( i 56 | ) | i 75 | ( i 198 | ) | i 153 | i — | ||||||||||||||||||||||||
Total
debt instruments | i 6,902 | i 411 | i 4,567 | ( i 4,633 | ) | ( i 2,028 | ) | i 1,346 | ( i 2,180 | ) | i 4,385 | i 68 | ||||||||||||||||||||||||
Equity
securities | i 231 | i 39 | i 176 | ( i 148 | ) | ( i 4 | ) | i 59 | ( i 58 | ) | i 295 | i 21 | ||||||||||||||||||||||||
Other | i 761 | i 100 | i 30 | ( i 46 | ) | ( i 162 | ) | i 17 | ( i 10 | ) | i 690 | i 39 | ||||||||||||||||||||||||
Total
trading assets – debt and equity instruments | i 7,894 | i 550 | (c) | i 4,773 | ( i 4,827 | ) | ( i 2,194 | ) | i 1,422 | ( i 2,248 | ) | i 5,370 | i 128 | (c) | ||||||||||||||||||||||
Net
derivative receivables:(b) | ||||||||||||||||||||||||||||||||||||
Interest
rate | i 1,263 | i 72 | i 60 | ( i 82 | ) | ( i 1,040 | ) | ( i 8 | ) | ( i 1 | ) | i 264 | ( i 473 | ) | ||||||||||||||||||||||
Credit | i 98 | ( i 164 | ) | i 1 | ( i 6 | ) | i — | i 77 | ( i 41 | ) | ( i 35 | ) | i 32 | |||||||||||||||||||||||
Foreign
exchange | ( i 1,384 | ) | i 43 | i 13 | ( i 10 | ) | i 854 | ( i 61 | ) | i 149 | ( i 396 | ) | i 42 | |||||||||||||||||||||||
Equity | ( i 2,252 | ) | ( i 417 | ) | i 1,116 | ( i 551 | ) | ( i 245 | ) | ( i 1,482 | ) | i 422 | ( i 3,409 | ) | ( i 161 | ) | ||||||||||||||||||||
Commodity | ( i 85 | ) | ( i 149 | ) | i — | i — | ( i 433 | ) | ( i 6 | ) | ( i 1 | ) | ( i 674 | ) | ( i 718 | ) | ||||||||||||||||||||
Total
net derivative receivables | ( i 2,360 | ) | ( i 615 | ) | (c) | i 1,190 | ( i 649 | ) | ( i 864 | ) | ( i 1,480 | ) | i 528 | ( i 4,250 | ) | ( i 1,278 | ) | (c) | ||||||||||||||||||
Available-for-sale
securities: | ||||||||||||||||||||||||||||||||||||
Mortgage-backed
securities | i 1 | i — | i — | i — | i — | i — | i — | i 1 | i — | |||||||||||||||||||||||||||
Asset-backed
securities | i 663 | i 15 | i — | ( i 50 | ) | ( i 352 | ) | i — | i — | i 276 | i 14 | |||||||||||||||||||||||||
Total
available-for-sale securities | i 664 | i 15 | (i) | i — | ( i 50 | ) | ( i 352 | ) | i — | i — | i 277 | i 14 | (i) | |||||||||||||||||||||||
Loans | i 570 | i 35 | (c) | i — | ( i 26 | ) | ( i 303 | ) | i — | i — | i 276 | i 3 | (c) | |||||||||||||||||||||||
Mortgage
servicing rights | i 6,096 | ( i 232 | ) | (d) | i 1,103 | ( i 140 | ) | ( i 797 | ) | i — | i — | i 6,030 | ( i 232 | ) | (d) | |||||||||||||||||||||
Other
assets | i 2,223 | i 244 | (c) | i 66 | ( i 177 | ) | ( i 870 | ) | i — | ( i 221 | ) | i 1,265 | i 74 | (c) | ||||||||||||||||||||||
Fair
value measurements using significant unobservable inputs | ||||||||||||||||||||||||||||||||||||
Year ended December 31, 2017 (in millions) | Fair value at January 1, 2017 | Total realized/unrealized (gains)/losses | Transfers
into level 3(h) | Transfers (out of) level 3(h) | Fair value at Dec. 31, 2017 | Change in unrealized (gains)/losses related to financial instruments held at Dec. 31, 2017 | ||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements(g) | |||||||||||||||||||||||||||||||||
Liabilities:(a) | ||||||||||||||||||||||||||||||||||||
Deposits | $ | i 2,117 | $ | i 152 | (c)(e) | $ | i — | $ | i — | $ | i 3,027 | $ | ( i 291 | ) | $ | i 11 | $ | ( i 874 | ) | $ | i 4,142 | $ | i 198 | (c)(e) | ||||||||||||
Short-term
borrowings | i 1,134 | i 42 | (c)(e) | i — | i — | i 3,289 | ( i 2,748 | ) | i 150 | ( i 202 | ) | i 1,665 | i 7 | (c)(e) | ||||||||||||||||||||||
Trading
liabilities – debt and equity instruments | i 43 | ( i 3 | ) | (c) | ( i 46 | ) | i 48 | i — | i 3 | i 3 | ( i 9 | ) | i 39 | i — | ||||||||||||||||||||||
Accounts
payable and other liabilities | i 13 | ( i 2 | ) | (c) | ( i 1 | ) | i — | i — | i 3 | i — | i — | i 13 | ( i 2 | ) | (c) | |||||||||||||||||||||
Beneficial
interests issued by consolidated VIEs | i 48 | i 2 | (c) | ( i 122 | ) | i 39 | i — | ( i 6 | ) | i 78 | i — | i 39 | i — | |||||||||||||||||||||||
Long-term
debt | i 12,850 | i 1,067 | (c)(e) | i — | i — | i 12,458 | ( i 10,985 | ) | i 1,660 | ( i 925 | ) | i 16,125 | i 552 | (c)(e) |
168 | JPMorgan
Chase & Co./2019 Form 10-K |
(a) | Level 3 assets as a percentage of total Firm assets accounted for at fair value (including assets measured at fair value on a nonrecurring basis) were i 2%,
i 3% and i 3%
at December 31, 2019, 2018 and 2017, respectively. Level 3 liabilities as a percentage of total Firm liabilities accounted for at fair value (including liabilities measured at fair value on a nonrecurring basis) were i 16%, i 15%
and i 15% at December 31, 2019, 2018 and 2017, respectively. |
(b) | All
level 3 derivatives are presented on a net basis, irrespective of underlying counterparty. |
(c) | Predominantly reported in principal transactions revenue, except for changes in fair value for CCB mortgage loans, and lending-related commitments originated with the intent to sell, and mortgage loan purchase commitments, which are reported in mortgage fees and related income. |
(d) | Changes in fair value for MSRs are reported in mortgage fees and related income. |
(e) | Realized
(gains)/losses due to DVA for fair value option elected liabilities are reported in principal transactions revenue, and they were not material for the years ended December 31, 2019, 2018 and 2017, respectively. Unrealized (gains)/losses are reported in OCI, and they were $ i 319
million, $( i 277) million and $( i 48)
million for the years ended December 31, 2019, 2018 and 2017, respectively. |
(f) | Loan originations are included in purchases. |
(g) | Includes financial assets and liabilities that have matured, been partially or fully repaid, impacts of modifications, deconsolidation associated with beneficial interests in VIEs and other items. |
(h) | All
transfers into and/or out of level 3 are based on changes in the observability and/or significance of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur. |
(i) | Realized gains/(losses) on AFS securities, as well as other-than-temporary impairment (“OTTI”) losses that are recorded in earnings, are reported in investment securities gains/(losses). Unrealized gains/(losses) are reported in OCI. There were i no
realized gains/(losses) and foreign exchange hedge accounting adjustments recorded in income on AFS securities for the years ended December 31, 2019 and 2017, respectively and $ i 1 million recorded
for the year ended December 31, 2018. There were i no unrealized gains/(losses) recorded on AFS securities in OCI for the years ended December 31, 2019 and
2018, respectively and $ i 15 million recorded for the year ended December 31, 2017. |
• | $ i 993
million of total debt and equity instruments, the majority of which were trading loans, driven by a decrease in observability. |
• | $ i 904
million of gross equity derivative payables as a result of a decrease in observability and an increase in the significance of unobservable inputs. |
• | $ i 1.5
billion of total debt and equity instruments, the majority of which were obligations of U.S. states and municipalities and trading loans, driven by an increase in observability. |
• | $ i 1.1
billion of gross equity derivative receivables and $ i 1.3 billion of gross equity derivative payables as a result of an increase in observability
and a decrease in the significance of unobservable inputs. |
• | $ i 962
million of gross commodities derivative payables as a result of an increase in observability. |
• | $ i 1.2
billion of deposits as a result of an increase in observability and a decrease in the significance of unobservable inputs. |
• | $ i 1.4
billion of long-term debt as a result of an increase in observability and a decrease in the significance of unobservable inputs. |
• | $ i 1.4
billion of total debt and equity instruments, the majority of which were trading loans, driven by a decrease in observability. |
• | $ i 1.0
billion of gross equity derivative receivables and $ i 1.6 billion of gross equity derivative payables as a result of a decrease in observability and an increase in the
significance of unobservable inputs. |
• | $ i 1.1 billion of
long-term debt driven by a decrease in observability and an increase in the significance of unobservable inputs for certain structured notes. |
• | $ i 1.5
billion of total debt and equity instruments, the majority of which were trading loans, driven by an increase in observability. |
• | $ i 1.2
billion of gross equity derivative receivables and $ i 1.5 billion of gross equity derivative payables as a result of an increase in observability
and a decrease in the significance of unobservable inputs. |
• | $ i 1.0
billion of gross equity derivative receivables and $ i 2.5 billion of gross equity derivative payables as a result of a decrease in observability and an increase in the
significance of unobservable inputs. |
• | $ i 1.7 billion of
long-term debt driven by a decrease in observability and an increase in the significance of unobservable inputs for certain structured notes. |
• | $ i 1.5
billion of trading loans driven by an increase in observability. |
• | $ i 1.2
billion of gross equity derivative payables as a result of an increase in observability and a decrease in the significance of unobservable inputs. |
JPMorgan Chase & Co./2019 Form 10-K | 169 |
• | $ i 2.1
billion of net losses on assets largely due to MSRs reflecting faster prepayment speeds on lower rates. Refer to Note 15 for additional information on MSRs. |
• | $ i 3.3
billion of net losses on liabilities predominantly driven by market movements in long-term debt. |
• | $ i 1.6
billion of net gains on liabilities largely driven by market movements in long-term debt. |
• | $ i 1.3
billion of net losses on liabilities predominantly driven by market movements in long-term debt. |
170 | JPMorgan Chase & Co./2019 Form 10-K |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Credit
and funding adjustments: | |||||||||||
Derivatives CVA | $ | i 241 | $ | i 193 | $ | i 802 | |||||
Derivatives
FVA | i 199 | ( i 74 | ) | ( i 295 | ) |
JPMorgan
Chase & Co./2019 Form 10-K | 171 |
Fair
value hierarchy | Total fair value | |||||||||||||
December 31, 2019 (in millions) | Level 1 | Level 2 | Level 3 | |||||||||||
Loans | $ | i — | $ | i 3,462 | (b) | $ | i 269 | (c) | $ | i 3,731 | ||||
Other
assets(a) | i — | i 14 | i 1,029 | i 1,043 | ||||||||||
Total
assets measured at fair value on a nonrecurring basis | $ | i — | $ | i 3,476 | $ | i 1,298 | $ | i 4,774 |
Fair
value hierarchy | Total fair value | |||||||||||||
December 31, 2018 (in millions) | Level 1 | Level 2 | Level 3 | |||||||||||
Loans | $ | i — | $ | i 273 | $ | i 264 | $ | i 537 | ||||||
Other
assets | i — | i 8 | i 815 | i 823 | ||||||||||
Total
assets measured at fair value on a nonrecurring basis | $ | i — | $ | i 281 | $ | i 1,079 | $ | i 1,360 |
December
31, (in millions) | 2019 | 2018 | 2017 | |||||||||
Loans | $ | ( i 274 | ) | (a) | $ | ( i 68 | ) | $ | ( i 159 | ) | ||
Other
assets | i 168 | (b) | i 132 | (b) | ( i 148 | ) | ||||||
Accounts
payable and other liabilities | i — | i — | ( i 1 | ) | ||||||||
Total
nonrecurring fair value gains/(losses) | $ | ( i 106 | ) | $ | i 64 | $ | ( i 308 | ) |
172 | JPMorgan
Chase & Co./2019 Form 10-K |
As of or for the year ended December 31, | ||||||
(in
millions) | 2019 | 2018 | ||||
Other assets | ||||||
Carrying value | $ | i 2,441 | $ | i 1,510 | ||
Upward
carrying value changes(a) | i 229 | i 309 | ||||
Downward
carrying value changes/impairment(b) | ( i 42 | ) | ( i 160 | ) |
(a) | The
cumulative upward carrying value changes between January 1, 2018 and December 31, 2019 were $ i 528 million. |
(b) | The
cumulative downward carrying value changes/impairment between January 1, 2018 and December 31, 2019 were $( i 200) million. |
JPMorgan
Chase & Co./2019 Form 10-K | 173 |
Estimated fair value hierarchy | Estimated fair value hierarchy | ||||||||||||||||||||||||||||||
(in billions) | Carrying
value | Level 1 | Level 2 | Level 3 | Total estimated fair value | Carrying value | Level 1 | Level 2 | Level 3 | Total estimated fair
value | |||||||||||||||||||||
Financial assets | |||||||||||||||||||||||||||||||
Cash
and due from banks | $ | i 21.7 | $ | i 21.7 | $ | i — | $ | i — | $ | i 21.7 | $ | i 22.3 | $ | i 22.3 | $ | i — | $ | i — | $ | i 22.3 | |||||||||||
Deposits
with banks | i 241.9 | i 241.9 | i — | i — | i 241.9 | i 256.5 | i 256.5 | i — | i — | i 256.5 | |||||||||||||||||||||
Accrued
interest and accounts receivable | i 71.3 | i — | i 71.2 | i 0.1 | i 71.3 | i 72.0 | i — | i 71.9 | i 0.1 | i 72.0 | |||||||||||||||||||||
Federal
funds sold and securities purchased under resale agreements | i 234.6 | i — | i 234.6 | i — | i 234.6 | i 308.4 | i — | i 308.4 | i — | i 308.4 | |||||||||||||||||||||
Securities
borrowed | i 133.5 | i — | i 133.5 | i — | i 133.5 | i 106.9 | i — | i 106.9 | i — | i 106.9 | |||||||||||||||||||||
Investment
securities, held-to-maturity | i 47.5 | i 0.1 | i 48.8 | i — | i 48.9 | i 31.4 | i — | i 31.5 | i — | i 31.5 | |||||||||||||||||||||
Loans,
net of allowance for loan losses(a) | i 939.5 | i — | i 214.1 | i 734.9 | i 949.0 | i 968.0 | i — | i 241.5 | i 728.5 | i 970.0 | |||||||||||||||||||||
Other | i 61.3 | i — | i 60.6 | i 0.8 | i 61.4 | i 60.5 | i — | i 59.6 | i 1.0 | i 60.6 | |||||||||||||||||||||
Financial
liabilities | |||||||||||||||||||||||||||||||
Deposits | $ | i 1,533.8 | $ | i — | $ | i 1,534.1 | $ | i — | $ | i 1,534.1 | $ | i 1,447.4 | $ | i — | $ | i 1,447.5 | $ | i — | $ | i 1,447.5 | |||||||||||
Federal
funds purchased and securities loaned or sold under repurchase agreements | i 183.1 | i — | i 183.1 | i — | i 183.1 | i 181.4 | i — | i 181.4 | i — | i 181.4 | |||||||||||||||||||||
Short-term
borrowings | i 35.0 | i — | i 35.0 | i — | i 35.0 | i 62.1 | i — | i 62.1 | i — | i 62.1 | |||||||||||||||||||||
Accounts
payable and other liabilities | i 164.0 | i 0.1 | i 160.0 | i 3.5 | i 163.6 | i 160.6 | i 0.2 | i 157.0 | i 3.0 | i 160.2 | |||||||||||||||||||||
Beneficial
interests issued by consolidated VIEs | i 17.8 | i — | i 17.9 | i — | i 17.9 | i 20.2 | i — | i 20.2 | i — | i 20.2 | |||||||||||||||||||||
Long-term
debt and junior subordinated deferrable interest debentures | i 215.5 | i — | i 218.3 | i 3.5 | i 221.8 | i 227.1 | i — | i 224.6 | i 3.3 | i 227.9 |
(a) | Fair
value is typically estimated using a discounted cash flow model that incorporates the characteristics of the underlying loans (including principal, contractual interest rate and contractual fees) and other key inputs, including expected lifetime credit losses, interest rates, prepayment rates, and primary origination or secondary market spreads. For certain loans, the fair value is measured based on the value of the underlying collateral. The difference between the estimated fair value and carrying value of a financial asset or liability is the result of the different methodologies used to determine fair value as compared with carrying value. For example, credit losses are estimated for a financial asset’s remaining life in a fair value calculation but are estimated for a loss emergence period in the allowance for loan losses calculation; future loan income (interest and fees) is incorporated in a fair value calculation but is generally not considered in the allowance
for loan losses. |
Estimated fair value hierarchy | Estimated fair value hierarchy | ||||||||||||||||||||||||||||||
(in billions) | Carrying
value(a) | Level 1 | Level 2 | Level 3 | Total estimated fair value | Carrying value(a) | Level 1 | Level 2 | Level 3 | Total estimated fair value(b) | |||||||||||||||||||||
Wholesale
lending-related commitments | $ | i 1.2 | $ | i — | $ | i — | $ | i 1.9 | $ | i 1.9 | $ | i 1.0 | $ | i — | $ | i — | $ | i 2.2 | $ | i 2.2 |
(a) | Excludes
the current carrying values of the guarantee liability and the offsetting asset, each of which is recognized at fair value at the inception of the guarantees. |
(b) | The prior period amounts have been revised to conform with the current period presentation. |
174 | JPMorgan Chase & Co./2019 Form 10-K |
• | Loans purchased or originated as part of securitization warehousing activity, subject to bifurcation accounting, or managed on a fair value basis, including lending-related commitments |
• | Certain securities financing agreements, such as those with an embedded derivative and/or a maturity of greater than one year |
• | Owned
beneficial interests in securitized financial assets that contain embedded credit derivatives, which would otherwise be required to be separately accounted for as a derivative instrument |
• | Structured notes, which are predominantly financial instruments that contain embedded derivatives, that are issued as part of client-driven activities |
• | Certain long-term beneficial interests issued by CIB’s consolidated
securitization trusts where the underlying assets are carried at fair value |
JPMorgan Chase & Co./2019 Form 10-K | 175 |
2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||
December
31, (in millions) | Principal transactions | All other income | Total changes in fair value recorded(e) | Principal transactions | All other income | Total changes in fair value recorded(e) | Principal transactions | All
other income | Total changes in fair value recorded(e) | |||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | $ | ( i 36 | ) | $ | i — | $ | ( i 36 | ) | $ | ( i 35 | ) | $ | i — | $ | ( i 35 | ) | $ | ( i 97 | ) | $ | i — | $ | ( i 97 | ) | ||||||||
Securities
borrowed | i 133 | i — | i 133 | i 22 | i — | i 22 | i 50 | i — | i 50 | |||||||||||||||||||||||
Trading
assets: | ||||||||||||||||||||||||||||||||
Debt
and equity instruments, excluding loans | i 2,482 | ( i 1 | ) | (c) | i 2,481 | ( i 1,680 | ) | i 1 | (c) | ( i 1,679 | ) | i 1,943 | i 2 | (c) | i 1,945 | |||||||||||||||||
Loans
reported as trading assets: | ||||||||||||||||||||||||||||||||
Changes
in instrument-specific credit risk | i 763 | i 2 | (c) | i 765 | i 414 | i 1 | (c) | i 415 | i 330 | i 14 | (c) | i 344 | ||||||||||||||||||||
Other
changes in fair value | i 254 | i 1,224 | (c) | i 1,478 | i 160 | i 185 | (c) | i 345 | i 217 | i 747 | (c) | i 964 | ||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||
Changes
in instrument-specific credit risk | ( i 26 | ) | i — | ( i 26 | ) | ( i 1 | ) | i — | ( i 1 | ) | ( i 1 | ) | i — | ( i 1 | ) | |||||||||||||||||
Other
changes in fair value | i 1 | i — | i 1 | ( i 1 | ) | i — | ( i 1 | ) | ( i 12 | ) | i 3 | (c) | ( i 9 | ) | ||||||||||||||||||
Other
assets | i 5 | i 6 | (d) | i 11 | i 5 | ( i 45 | ) | (d) | ( i 40 | ) | i 11 | ( i 55 | ) | (d) | ( i 44 | ) | ||||||||||||||||
Deposits(a) | ( i 1,730 | ) | i — | ( i 1,730 | ) | i 181 | i — | i 181 | ( i 533 | ) | i — | ( i 533 | ) | |||||||||||||||||||
Federal
funds purchased and securities loaned or sold under repurchase agreements | ( i 8 | ) | i — | ( i 8 | ) | i 11 | i — | i 11 | i 11 | i — | i 11 | |||||||||||||||||||||
Short-term
borrowings(a) | ( i 693 | ) | i — | ( i 693 | ) | i 862 | i — | i 862 | ( i 747 | ) | i — | ( i 747 | ) | |||||||||||||||||||
Trading
liabilities | i 6 | i — | i 6 | i 1 | i — | i 1 | ( i 1 | ) | i — | ( i 1 | ) | |||||||||||||||||||||
Other
liabilities | ( i 16 | ) | i — | ( i 16 | ) | i — | i — | i — | i — | i — | i — | |||||||||||||||||||||
Long-term
debt(a)(b) | ( i 6,173 | ) | i 1 | (c) | ( i 6,172 | ) | i 2,695 | i — | i 2,695 | ( i 2,022 | ) | i — | ( i 2,022 | ) |
(a) | Unrealized
gains/(losses) due to instrument-specific credit risk (DVA) for liabilities for which the fair value option has been elected is recorded in OCI, while realized gains/(losses) are recorded in principal transactions revenue. Realized gains/(losses) due to instrument-specific credit risk recorded in principal transactions revenue were not material for the years ended December 31, 2019, 2018 and 2017. |
(b) | Long-term debt measured at fair value predominantly relates to structured notes. Although the risk associated with the structured notes is actively managed, the gains/(losses) reported in this table
do not include the income statement impact of the risk management instruments used to manage such risk. |
(c) | Reported in mortgage fees and related income. |
(d) | Reported in other income. |
(e) | Changes
in fair value exclude contractual interest, which is included in interest income and interest expense for all instruments other than hybrid financial instruments. Refer to Note 7 for further information regarding interest income and interest expense. |
• | Loans and lending-related commitments: For
floating-rate instruments, all changes in value are attributed to instrument-specific credit risk. For fixed-rate instruments, an allocation of the changes in value for the period is made between those changes in value that are interest rate-related and changes in value that are credit-related. Allocations are generally based on an analysis of borrower-specific credit spread and recovery information, where available, or benchmarking to similar entities or industries. |
• | Long-term debt: Changes in value attributable to instrument-specific credit risk were derived principally from observable changes in the Firm’s credit spread
as observed in the bond market. |
• | Securities financing agreements: Generally, for these types of agreements, there is a requirement that collateral be maintained with a market value equal to or in excess of the principal amount loaned; as a result, there would be no adjustment or an immaterial adjustment for instrument-specific credit risk related to these agreements. |
176 | JPMorgan
Chase & Co./2019 Form 10-K |
2019 | 2018 | ||||||||||||||||||||
December
31, (in millions) | Contractual principal outstanding | Fair value | Fair value over/(under) contractual principal outstanding | Contractual principal outstanding | Fair value | Fair value over/(under) contractual principal outstanding | |||||||||||||||
Loans(a) | |||||||||||||||||||||
Nonaccrual
loans | |||||||||||||||||||||
Loans reported as trading assets | $ | i 3,717 | $ | i 1,111 | $ | ( i 2,606 | ) | $ | i 4,240 | $ | i 1,350 | $ | ( i 2,890 | ) | |||||||
Loans | i 178 | i 139 | ( i 39 | ) | i 39 | i — | ( i 39 | ) | |||||||||||||
Subtotal | i 3,895 | i 1,250 | ( i 2,645 | ) | i 4,279 | i 1,350 | ( i 2,929 | ) | |||||||||||||
All
other performing loans | |||||||||||||||||||||
Loans reported as trading assets | i 48,570 | i 47,318 | ( i 1,252 | ) | i 42,215 | i 40,403 | ( i 1,812 | ) | |||||||||||||
Loans | i 7,046 | i 6,965 | ( i 81 | ) | i 3,186 | i 3,151 | ( i 35 | ) | |||||||||||||
Total
loans | $ | i 59,511 | $ | i 55,533 | $ | ( i 3,978 | ) | $ | i 49,680 | $ | i 44,904 | $ | ( i 4,776 | ) | |||||||
Long-term
debt | |||||||||||||||||||||
Principal-protected debt | $ | i 40,124 | (c) | $ | i 39,246 | $ | ( i 878 | ) | $ | i 32,674 | (c) | $ | i 28,718 | $ | ( i 3,956 | ) | |||||
Nonprincipal-protected
debt(b) | NA | i 36,499 | NA | NA | i 26,168 | NA | |||||||||||||||
Total
long-term debt | NA | $ | i 75,745 | NA | NA | $ | i 54,886 | NA | |||||||||||||
Long-term
beneficial interests | |||||||||||||||||||||
Nonprincipal-protected debt(b) | NA | $ | i 36 | NA | NA | $ | i 28 | NA | |||||||||||||
Total
long-term beneficial interests | NA | $ | i 36 | NA | NA | $ | i 28 | NA |
(a) | There
were i no performing loans that were ninety days or more past due as of December 31, 2019 and 2018. |
(b) | Remaining
contractual principal is not applicable to nonprincipal-protected structured notes and long-term beneficial interests. Unlike principal-protected structured notes and long-term beneficial interests, for which the Firm is obligated to return a stated amount of principal at maturity, nonprincipal-protected structured notes and long-term beneficial interests do not obligate the Firm to return a stated amount of principal at maturity, but for structured notes to return an amount based on the performance of an underlying variable or derivative feature embedded in the note. However, investors are exposed to the credit risk of the Firm as issuer for both nonprincipal-protected and principal-protected notes. |
(c) | Where
the Firm issues principal-protected zero-coupon or discount notes, the balance reflects the contractual principal payment at maturity or, if applicable, the contractual principal payment at the Firm’s next call date. |
(in millions) | Long-term debt | Short-term borrowings | Deposits | Total | Long-term debt | Short-term borrowings | Deposits | Total | |||||||||||||||||
Risk
exposure | |||||||||||||||||||||||||
Interest rate | $ | i 35,470 | $ | i 34 | $ | i 16,692 | $ | i 52,196 | $ | i 24,137 | $ | i 62 | $ | i 12,372 | $ | i 36,571 | |||||||||
Credit | i 5,715 | i 875 | i — | i 6,590 | i 4,009 | i 995 | i — | i 5,004 | |||||||||||||||||
Foreign
exchange | i 3,862 | i 48 | i 5 | i 3,915 | i 3,169 | i 157 | i 38 | i 3,364 | |||||||||||||||||
Equity | i 29,294 | i 4,852 | i 8,177 | i 42,323 | i 21,382 | i 5,422 | i 7,368 | i 34,172 | |||||||||||||||||
Commodity | i 472 | i 32 | i 1,454 | i 1,958 | i 372 | i 34 | i 1,207 | i 1,613 | |||||||||||||||||
Total
structured notes | $ | i 74,813 | $ | i 5,841 | $ | i 26,328 | $ | i 106,982 | $ | i 53,069 | $ | i 6,670 | $ | i 20,985 | $ | i 80,724 |
JPMorgan
Chase & Co./2019 Form 10-K | 177 |
178 | JPMorgan Chase & Co./2019 Form 10-K |
2019 | 2018 | |||||||||||||||||||||||||
Credit
exposure(g) | On-balance sheet | Off-balance sheet(h) | Credit exposure(g) | On-balance sheet | Off-balance sheet(h) | |||||||||||||||||||||
December 31, (in millions) | Loans | Derivatives | Loans | Derivatives | ||||||||||||||||||||||
Consumer,
excluding credit card | $ | i 386,452 | $ | i 335,040 | $ | — | $ | i 51,412 | $ | i 419,798 | $ | i 373,732 | $ | — | $ | i 46,066 | ||||||||||
Receivables
from customers | i — | — | — | — | i 154 | — | — | — | ||||||||||||||||||
Total
Consumer, excluding credit card | i 386,452 | i 335,040 | — | i 51,412 | i 419,952 | i 373,732 | — | i 46,066 | ||||||||||||||||||
Credit
card | i 819,644 | i 168,924 | — | i 650,720 | i 762,011 | i 156,632 | — | i 605,379 | ||||||||||||||||||
Total
consumer-related | i 1,206,096 | i 503,964 | — | i 702,132 | i 1,181,963 | i 530,364 | — | i 651,445 | ||||||||||||||||||
Wholesale-related(a) | ||||||||||||||||||||||||||
Real
Estate | i 149,267 | i 116,244 | i 619 | i 32,404 | i 143,316 | i 115,737 | i 164 | i 27,415 | ||||||||||||||||||
Individuals
and Individual Entities(b) | i 102,292 | i 91,980 | i 694 | i 9,618 | i 97,077 | i 86,586 | i 1,017 | i 9,474 | ||||||||||||||||||
Consumer
& Retail | i 99,331 | i 30,879 | i 1,424 | i 67,028 | i 94,815 | i 36,921 | i 1,093 | i 56,801 | ||||||||||||||||||
Technology,
Media & Telecommunications | i 59,021 | i 14,680 | i 2,766 | i 41,575 | i 72,646 | i 16,980 | i 2,667 | i 52,999 | ||||||||||||||||||
Industrials | i 58,250 | i 19,096 | i 878 | i 38,276 | i 58,528 | i 19,126 | i 958 | i 38,444 | ||||||||||||||||||
Asset
Managers | i 51,775 | i 23,939 | i 7,160 | i 20,676 | i 42,807 | i 16,806 | i 9,033 | i 16,968 | ||||||||||||||||||
Banks
& Finance Cos | i 50,091 | i 30,639 | i 5,165 | i 14,287 | i 49,920 | i 28,825 | i 5,903 | i 15,192 | ||||||||||||||||||
Healthcare | i 46,638 | i 13,951 | i 2,078 | i 30,609 | i 48,142 | i 16,347 | i 1,874 | i 29,921 | ||||||||||||||||||
Oil
& Gas | i 41,570 | i 13,064 | i 852 | i 27,654 | i 42,600 | i 13,008 | i 559 | i 29,033 | ||||||||||||||||||
Utilities | i 34,753 | i 5,085 | i 2,573 | i 27,095 | i 28,172 | i 5,591 | i 1,740 | i 20,841 | ||||||||||||||||||
State
& Municipal Govt(c) | i 26,697 | i 9,924 | i 2,000 | i 14,773 | i 27,351 | i 10,319 | i 2,000 | i 15,032 | ||||||||||||||||||
Automotive | i 17,317 | i 5,408 | i 368 | i 11,541 | i 17,339 | i 5,170 | i 399 | i 11,770 | ||||||||||||||||||
Chemicals
& Plastics | i 17,276 | i 4,710 | i 459 | i 12,107 | i 16,035 | i 4,902 | i 181 | i 10,952 | ||||||||||||||||||
Metals
& Mining | i 15,337 | i 5,202 | i 402 | i 9,733 | i 15,359 | i 5,370 | i 488 | i 9,501 | ||||||||||||||||||
Central
Govt | i 14,843 | i 2,818 | i 10,477 | i 1,548 | i 18,456 | i 3,867 | i 12,869 | i 1,720 | ||||||||||||||||||
Transportation | i 13,917 | i 4,804 | i 715 | i 8,398 | i 15,660 | i 6,391 | i 1,102 | i 8,167 | ||||||||||||||||||
Insurance | i 12,202 | i 1,269 | i 2,282 | i 8,651 | i 12,639 | i 1,356 | i 2,569 | i 8,714 | ||||||||||||||||||
Securities
Firms | i 7,335 | i 752 | i 4,507 | i 2,076 | i 4,558 | i 645 | i 2,029 | i 1,884 | ||||||||||||||||||
Financial
Markets Infrastructure | i 4,116 | i 9 | i 2,482 | i 1,625 | i 7,484 | i 18 | i 5,941 | i 1,525 | ||||||||||||||||||
All
other(d) | i 76,492 | i 50,186 | i 1,865 | i 24,441 | i 68,284 | i 45,197 | i 1,627 | i 21,460 | ||||||||||||||||||
Subtotal | i 898,520 | i 444,639 | i 49,766 | i 404,115 | i 881,188 | i 439,162 | i 54,213 | i 387,813 | ||||||||||||||||||
Loans
held-for-sale and loans at fair value | i 11,166 | i 11,166 | — | — | i 15,028 | i 15,028 | — | — | ||||||||||||||||||
Receivables
from customers and other(e) | i 33,706 | — | — | — | i 30,063 | — | — | — | ||||||||||||||||||
Total
wholesale-related | i 943,392 | i 455,805 | i 49,766 | i 404,115 | i 926,279 | i 454,190 | i 54,213 | i 387,813 | ||||||||||||||||||
Total
exposure(f)(g) | $ | i 2,149,488 | $ | i 959,769 | $ | i 49,766 | $ | i 1,106,247 | $ | i 2,108,242 | $ | i 984,554 | $ | i 54,213 | $ | i 1,039,258 |
(a) | The
industry rankings presented in the table as of December 31, 2018, are based on the industry rankings of the corresponding exposures at December 31, 2019, not actual rankings of such exposures at December 31, 2018. |
(b) | Individuals and Individual Entities predominantly consists of Wealth Management clients within AWM and includes exposure to personal investment companies and personal and testamentary trusts. |
(c) | In
addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at December 31, 2019 and 2018, noted above, the Firm held: $ i 6.5 billion and $ i 7.8
billion, respectively, of trading assets; $ i 29.8 billion and $ i 37.7
billion, respectively, of AFS securities; and $ i 4.8 billion at both periods of held-to-maturity (“HTM”) securities, issued by U.S. state and municipal governments. Refer to Note 2 and Note 10 for further information. |
(d) | All
other includes: SPEs and Private education and civic organizations, representing approximately i 92% and i 8%,
respectively, at both December 31, 2019 and 2018. Refer to Note 14 for more information on exposures to SPEs. |
(e) | Receivables from customers primarily represent held-for-investment margin loans to brokerage clients in CIB and AWM that are collateralized by assets maintained in the clients’ brokerage accounts (e.g., cash on deposit, liquid and readily marketable debt or equity securities), as such no allowance is held against these receivables. To manage its credit risk the Firm establishes margin requirements
and monitors the required margin levels on an ongoing basis, and requires clients to deposit additional cash or other collateral, or to reduce positions, when appropriate. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets. |
(f) | Excludes cash placed with banks of $ i 254.0 billion
and $ i 268.1 billion, at December 31, 2019 and 2018, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks. |
(g) | Credit
exposure is net of risk participations and excludes the benefit of credit derivatives used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables. |
(h) | Represents lending-related financial instruments. |
JPMorgan Chase &
Co./2019 Form 10-K | 179 |
180 | JPMorgan
Chase & Co./2019 Form 10-K |
JPMorgan
Chase & Co./2019 Form 10-K | 181 |
Type
of Derivative | Use of Derivative | Designation and disclosure | Affected segment or unit | Page reference |
Manage specifically identified risk exposures in qualifying hedge accounting relationships: | ||||
• Interest rate | Hedge fixed rate assets and liabilities | Fair
value hedge | Corporate | 188 |
• Interest rate | Hedge floating-rate assets and liabilities | Cash flow hedge | Corporate | 190 |
• Foreign exchange | Hedge foreign currency-denominated assets and liabilities | Fair value hedge | Corporate | 188 |
• Foreign
exchange | Hedge foreign currency-denominated forecasted revenue and expense | Cash flow hedge | Corporate | 190 |
• Foreign exchange | Hedge the value of the Firm’s investments in non-U.S. dollar functional currency entities | Net investment hedge | Corporate | 191 |
• Commodity
| Hedge commodity inventory | Fair value hedge | CIB | 188 |
Manage specifically identified risk exposures not designated in qualifying hedge accounting relationships: | ||||
• Interest rate | Manage the risk associated with mortgage commitments, warehouse loans and MSRs | Specified
risk management | CCB | 191 |
• Credit | Manage the credit risk associated with wholesale lending exposures | Specified risk management | CIB | 191 |
• Interest rate and foreign exchange | Manage the risk associated with certain other specified assets and liabilities | Specified
risk management | Corporate | 191 |
Market-making derivatives and other activities: | ||||
• Various | Market-making and related risk management | Market-making and other | CIB | 191 |
• Various | Other
derivatives | Market-making and other | CIB, AWM, Corporate | 191 |
182 | JPMorgan Chase & Co./2019 Form 10-K |
Notional
amounts(b) | |||||||
December 31, (in billions) | 2019 | 2018 | |||||
Interest rate contracts | |||||||
Swaps | $ | i 21,228 | $ | i 21,763 | |||
Futures
and forwards | i 3,152 | i 3,562 | |||||
Written
options | i 3,938 | i 3,997 | |||||
Purchased
options | i 4,361 | i 4,322 | |||||
Total
interest rate contracts | i 32,679 | i 33,644 | |||||
Credit
derivatives(a) | i 1,242 | i 1,501 | |||||
Foreign
exchange contracts | |||||||
Cross-currency swaps | i 3,604 | i 3,548 | |||||
Spot,
futures and forwards | i 5,577 | i 5,871 | |||||
Written
options | i 700 | i 835 | |||||
Purchased
options | i 718 | i 830 | |||||
Total
foreign exchange contracts | i 10,599 | i 11,084 | |||||
Equity
contracts | |||||||
Swaps | i 406 | i 346 | |||||
Futures
and forwards | i 142 | i 101 | |||||
Written
options | i 646 | i 528 | |||||
Purchased
options | i 611 | i 490 | |||||
Total
equity contracts | i 1,805 | i 1,465 | |||||
Commodity
contracts | |||||||
Swaps | i 147 | i 134 | |||||
Spot,
futures and forwards | i 211 | i 156 | |||||
Written
options | i 135 | i 135 | |||||
Purchased
options | i 124 | i 120 | |||||
Total
commodity contracts | i 617 | i 545 | |||||
Total
derivative notional amounts | $ | i 46,942 | $ | i 48,239 |
(a)
| Refer to the Credit derivatives discussion on pages 191–194 for more information on volumes and types of credit derivative contracts. |
(b) | Represents the sum of gross long and gross short third-party notional derivative contracts. |
JPMorgan Chase & Co./2019 Form 10-K | 183 |
Free-standing
derivative receivables and payables(a) | |||||||||||||||||||||||||||||||
Gross derivative receivables | Gross
derivative payables | ||||||||||||||||||||||||||||||
December 31, 2019 (in millions) | Not designated as hedges | Designated as hedges | Total derivative receivables | Net derivative receivables(b) | Not
designated as hedges | Designated as hedges | Total derivative payables | Net derivative payables(b) | |||||||||||||||||||||||
Trading assets and liabilities | |||||||||||||||||||||||||||||||
Interest
rate | $ | i 312,451 | $ | i 843 | $ | i 313,294 | $ | i 27,421 | $ | i 279,272 | $ | i 1 | $ | i 279,273 | $ | i 8,603 | |||||||||||||||
Credit | i 14,876 | i — | i 14,876 | i 701 | i 15,121 | i — | i 15,121 | i 1,652 | |||||||||||||||||||||||
Foreign
exchange | i 138,179 | i 308 | i 138,487 | i 9,005 | i 144,125 | i 983 | i 145,108 | i 13,158 | |||||||||||||||||||||||
Equity | i 45,727 | i — | i 45,727 | i 6,477 | i 52,741 | i — | i 52,741 | i 12,537 | |||||||||||||||||||||||
Commodity | i 16,914 | i 328 | i 17,242 | i 6,162 | i 19,736 | i 149 | i 19,885 | i 7,758 | |||||||||||||||||||||||
Total
fair value of trading assets and liabilities | $ | i 528,147 | $ | i 1,479 | $ | i 529,626 | $ | i 49,766 | $ | i 510,995 | $ | i 1,133 | $ | i 512,128 | $ | i 43,708 | |||||||||||||||
Gross
derivative receivables | Gross derivative payables | ||||||||||||||||||||||||||||||
December 31, 2018 (in millions) | Not designated as hedges | Designated as hedges | Total derivative receivables | Net
derivative receivables(b) | Not designated as hedges | Designated as hedges | Total derivative payables | Net derivative payables(b) | |||||||||||||||||||||||
Trading assets and liabilities | |||||||||||||||||||||||||||||||
Interest
rate | $ | i 267,871 | $ | i 833 | $ | i 268,704 | $ | i 23,214 | $ | i 242,782 | $ | i — | $ | i 242,782 | $ | i 7,784 | |||||||||||||||
Credit | i 20,095 | i — | i 20,095 | i 612 | i 20,276 | i — | i 20,276 | i 1,667 | |||||||||||||||||||||||
Foreign
exchange | i 167,057 | i 628 | i 167,685 | i 13,450 | i 164,392 | i 825 | i 165,217 | i 12,785 | |||||||||||||||||||||||
Equity | i 49,285 | i — | i 49,285 | i 9,946 | i 51,195 | i — | i 51,195 | i 10,161 | |||||||||||||||||||||||
Commodity | i 20,223 | i 247 | i 20,470 | i 6,991 | i 22,297 | i 121 | i 22,418 | i 9,372 | |||||||||||||||||||||||
Total
fair value of trading assets and liabilities | $ | i 524,531 | $ | i 1,708 | $ | i 526,239 | $ | i 54,213 | $ | i 500,942 | $ | i 946 | $ | i 501,888 | $ | i 41,769 |
(a) | Balances
exclude structured notes for which the fair value option has been elected. Refer to Note 3 for further information. |
(b) | As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral receivables and payables when a legally enforceable master netting agreement exists. |
184 | JPMorgan
Chase & Co./2019 Form 10-K |
• | collateral that consists of non-cash financial instruments (generally U.S. government and agency securities and other G7 government securities) and cash collateral held at third-party custodians, which are shown separately as “Collateral not nettable on the Consolidated balance sheets” in the tables below, up to the fair value exposure amount; |
• | the
amount of collateral held or transferred that exceeds the fair value exposure at the individual counterparty level, as of the date presented, which is excluded from the tables below; and |
• | collateral held or transferred that relates to derivative receivables or payables where an appropriate legal opinion has not been either sought or obtained with respect to the master netting agreement, which is excluded from the tables below. |
2019 | 2018 | |||||||||||||||||||||||
December
31, (in millions) | Gross derivative receivables | Amounts netted on the Consolidated balance sheets | Net derivative receivables | Gross derivative receivables | Amounts netted on the Consolidated balance sheets | Net derivative receivables | ||||||||||||||||||
U.S. GAAP nettable derivative receivables | ||||||||||||||||||||||||
Interest
rate contracts: | ||||||||||||||||||||||||
OTC | $ | i 299,205 | $ | ( i 276,255 | ) | $ | i 22,950 | $ | i 258,227 | $ | ( i 239,498 | ) | $ | i 18,729 | ||||||||||
OTC–cleared | i 9,442 | ( i 9,360 | ) | i 82 | i 6,404 | ( i 5,856 | ) | i 548 | ||||||||||||||||
Exchange-traded(a) | i 347 | ( i 258 | ) | i 89 | i 322 | ( i 136 | ) | i 186 | ||||||||||||||||
Total
interest rate contracts | i 308,994 | ( i 285,873 | ) | i 23,121 | i 264,953 | ( i 245,490 | ) | i 19,463 | ||||||||||||||||
Credit
contracts: | ||||||||||||||||||||||||
OTC | i 10,743 | ( i 10,317 | ) | i 426 | i 12,648 | ( i 12,261 | ) | i 387 | ||||||||||||||||
OTC–cleared | i 3,864 | ( i 3,858 | ) | i 6 | i 7,267 | ( i 7,222 | ) | i 45 | ||||||||||||||||
Total
credit contracts | i 14,607 | ( i 14,175 | ) | i 432 | i 19,915 | ( i 19,483 | ) | i 432 | ||||||||||||||||
Foreign
exchange contracts: | ||||||||||||||||||||||||
OTC | i 136,252 | ( i 129,324 | ) | i 6,928 | i 163,862 | ( i 153,988 | ) | i 9,874 | ||||||||||||||||
OTC–cleared | i 185 | ( i 152 | ) | i 33 | i 235 | ( i 226 | ) | i 9 | ||||||||||||||||
Exchange-traded(a) | i 10 | ( i 6 | ) | i 4 | i 32 | ( i 21 | ) | i 11 | ||||||||||||||||
Total
foreign exchange contracts | i 136,447 | ( i 129,482 | ) | i 6,965 | i 164,129 | ( i 154,235 | ) | i 9,894 | ||||||||||||||||
Equity
contracts: | ||||||||||||||||||||||||
OTC | i 23,106 | ( i 20,820 | ) | i 2,286 | i 26,178 | ( i 23,879 | ) | i 2,299 | ||||||||||||||||
Exchange-traded(a) | i 19,654 | ( i 18,430 | ) | i 1,224 | i 18,876 | ( i 15,460 | ) | i 3,416 | ||||||||||||||||
Total
equity contracts | i 42,760 | ( i 39,250 | ) | i 3,510 | i 45,054 | ( i 39,339 | ) | i 5,715 | ||||||||||||||||
Commodity
contracts: | ||||||||||||||||||||||||
OTC | i 7,093 | ( i 5,149 | ) | i 1,944 | i 7,448 | ( i 5,261 | ) | i 2,187 | ||||||||||||||||
OTC–cleared | i 28 | ( i 28 | ) | i — | i — | i — | i — | |||||||||||||||||
Exchange-traded(a) | i 6,154 | ( i 5,903 | ) | i 251 | i 8,815 | ( i 8,218 | ) | i 597 | ||||||||||||||||
Total
commodity contracts | i 13,275 | ( i 11,080 | ) | i 2,195 | i 16,263 | ( i 13,479 | ) | i 2,784 | ||||||||||||||||
Derivative
receivables with appropriate legal opinion | i 516,083 | ( i 479,860 | ) | i 36,223 | (d) | i 510,314 | ( i 472,026 | ) | i 38,288 | (d) | ||||||||||||||
Derivative
receivables where an appropriate legal opinion has not been either sought or obtained | i 13,543 | i 13,543 | i 15,925 | i 15,925 | ||||||||||||||||||||
Total
derivative receivables recognized on the Consolidated balance sheets | $ | i 529,626 | $ | i 49,766 | $ | i 526,239 | $ | i 54,213 | ||||||||||||||||
Collateral
not nettable on the Consolidated balance sheets(b)(c) | ( i 14,226 | ) | ( i 13,046 | ) | ||||||||||||||||||||
Net
amounts | $ | i 35,540 | $ | i 41,167 |
JPMorgan
Chase & Co./2019 Form 10-K | 185 |
2019 | 2018 | |||||||||||||||||||||||
December
31, (in millions) | Gross derivative payables | Amounts netted on the Consolidated balance sheets | Net derivative payables | Gross derivative payables | Amounts netted on the Consolidated balance sheets | Net derivative payables | ||||||||||||||||||
U.S. GAAP nettable derivative payables | ||||||||||||||||||||||||
Interest
rate contracts: | ||||||||||||||||||||||||
OTC | $ | i 267,311 | $ | ( i 260,229 | ) | $ | i 7,082 | $ | i 233,404 | $ | ( i 228,369 | ) | $ | i 5,035 | ||||||||||
OTC–cleared | i 10,217 | ( i 10,138 | ) | i 79 | i 7,163 | ( i 6,494 | ) | i 669 | ||||||||||||||||
Exchange-traded(a) | i 365 | ( i 303 | ) | i 62 | i 210 | ( i 135 | ) | i 75 | ||||||||||||||||
Total
interest rate contracts | i 277,893 | ( i 270,670 | ) | i 7,223 | i 240,777 | ( i 234,998 | ) | i 5,779 | ||||||||||||||||
Credit
contracts: | ||||||||||||||||||||||||
OTC | i 11,570 | ( i 10,080 | ) | i 1,490 | i 13,412 | ( i 11,895 | ) | i 1,517 | ||||||||||||||||
OTC–cleared | i 3,390 | ( i 3,389 | ) | i 1 | i 6,716 | ( i 6,714 | ) | i 2 | ||||||||||||||||
Total
credit contracts | i 14,960 | ( i 13,469 | ) | i 1,491 | i 20,128 | ( i 18,609 | ) | i 1,519 | ||||||||||||||||
Foreign
exchange contracts: | ||||||||||||||||||||||||
OTC | i 142,360 | ( i 131,792 | ) | i 10,568 | i 160,930 | ( i 152,161 | ) | i 8,769 | ||||||||||||||||
OTC–cleared | i 186 | ( i 152 | ) | i 34 | i 274 | ( i 268 | ) | i 6 | ||||||||||||||||
Exchange-traded(a) | i 12 | ( i 6 | ) | i 6 | i 16 | ( i 3 | ) | i 13 | ||||||||||||||||
Total
foreign exchange contracts | i 142,558 | ( i 131,950 | ) | i 10,608 | i 161,220 | ( i 152,432 | ) | i 8,788 | ||||||||||||||||
Equity
contracts: | ||||||||||||||||||||||||
OTC | i 27,594 | ( i 21,778 | ) | i 5,816 | i 29,437 | ( i 25,544 | ) | i 3,893 | ||||||||||||||||
Exchange-traded(a) | i 20,216 | ( i 18,426 | ) | i 1,790 | i 16,285 | ( i 15,490 | ) | i 795 | ||||||||||||||||
Total
equity contracts | i 47,810 | ( i 40,204 | ) | i 7,606 | i 45,722 | ( i 41,034 | ) | i 4,688 | ||||||||||||||||
Commodity
contracts: | ||||||||||||||||||||||||
OTC | i 8,714 | ( i 6,235 | ) | i 2,479 | i 8,930 | ( i 4,838 | ) | i 4,092 | ||||||||||||||||
OTC–cleared | i 30 | ( i 30 | ) | i — | i — | i — | i — | |||||||||||||||||
Exchange-traded(a) | i 6,012 | ( i 5,862 | ) | i 150 | i 8,259 | ( i 8,208 | ) | i 51 | ||||||||||||||||
Total
commodity contracts | i 14,756 | ( i 12,127 | ) | i 2,629 | i 17,189 | ( i 13,046 | ) | i 4,143 | ||||||||||||||||
Derivative
payables with appropriate legal opinion | i 497,977 | ( i 468,420 | ) | i 29,557 | (d) | i 485,036 | ( i 460,119 | ) | i 24,917 | (d) | ||||||||||||||
Derivative
payables where an appropriate legal opinion has not been either sought or obtained | i 14,151 | i 14,151 | i 16,852 | i 16,852 | ||||||||||||||||||||
Total
derivative payables recognized on the Consolidated balance sheets | $ | i 512,128 | $ | i 43,708 | $ | i 501,888 | $ | i 41,769 | ||||||||||||||||
Collateral
not nettable on the Consolidated balance sheets(b)(c) | ( i 7,896 | ) | ( i 4,449 | ) | ||||||||||||||||||||
Net
amounts | $ | i 35,812 | $ | i 37,320 |
(a) | Exchange-traded
derivative balances that relate to futures contracts are settled daily. |
(b) | Represents liquid security collateral as well as cash collateral held at third-party custodians related to derivative instruments where an appropriate legal opinion has been obtained. For some counterparties, the collateral amounts of financial instruments may exceed the derivative receivables and derivative payables balances. Where this is the case, the total amount reported is limited to the net derivative receivables and net derivative payables balances with that counterparty. |
(c) | Derivative
collateral relates only to OTC and OTC-cleared derivative instruments. |
(d) | Net derivatives receivable included cash collateral netted of $ i 65.9 billion and $ i 55.2
billion at December 31, 2019 and 2018, respectively. Net derivatives payable included cash collateral netted of $ i 54.4 billion and $ i 43.3
billion at December 31, 2019 and 2018, respectively. Derivative cash collateral relates to OTC and OTC-cleared derivative instruments. |
186 | JPMorgan Chase & Co./2019 Form 10-K |
OTC and OTC-cleared
derivative payables containing downgrade triggers | |||||||||
December 31, (in millions) | 2019 | 2018 | |||||||
Aggregate fair value of net derivative payables | $ | i 14,819 | $ | i 9,396 | |||||
Collateral
posted | i 13,329 | i 8,907 |
Liquidity
impact of downgrade triggers on OTC and OTC-cleared derivatives | |||||||||||||
2019 | 2018 | ||||||||||||
December 31, (in millions) | Single-notch downgrade | Two-notch downgrade | Single-notch downgrade | Two-notch downgrade | |||||||||
Amount
of additional collateral to be posted upon downgrade(a) | $ | i 189 | $ | i 1,467 | $ | i 76 | $ | i 947 | |||||
Amount
required to settle contracts with termination triggers upon downgrade(b) | i 104 | i 1,398 | i 172 | i 764 |
(a) | Includes
the additional collateral to be posted for initial margin. |
(b) | Amounts represent fair values of derivative payables, and do not reflect collateral posted. |
JPMorgan
Chase & Co./2019 Form 10-K | 187 |
Gains/(losses)
recorded in income | Income statement impact of excluded components(f) | OCI impact | ||||||||||||||||||
Year ended December 31, 2019 (in millions) | Derivatives | Hedged items | Income statement impact | Amortization
approach | Changes in fair value | Derivatives - Gains/(losses) recorded in OCI(g) | ||||||||||||||
Contract type | ||||||||||||||||||||
Interest
rate(a)(b) | $ | i 3,204 | $ | ( i 2,373 | ) | $ | i 831 | $ | i — | $ | i 828 | $ | i — | |||||||
Foreign
exchange(c) | i 154 | i 328 | i 482 | ( i 866 | ) | i 482 | i 39 | |||||||||||||
Commodity(d) | ( i 77 | ) | i 148 | i 71 | i — | i 63 | i — | |||||||||||||
Total | $ | i 3,281 | $ | ( i 1,897 | ) | $ | i 1,384 | $ | ( i 866 | ) | $ | i 1,373 | $ | i 39 | ||||||
Gains/(losses)
recorded in income | Income statement impact of excluded components(f) | OCI impact | ||||||||||||||||||
Year ended December 31, 2018 (in millions) | Derivatives | Hedged items | Income statement impact | Amortization
approach | Changes in fair value | Derivatives - Gains/(losses) recorded in OCI(g) | ||||||||||||||
Contract type | ||||||||||||||||||||
Interest
rate(a)(b) | $ | ( i 1,145 | ) | $ | i 1,782 | $ | i 637 | $ | i — | $ | i 623 | $ | i — | |||||||
Foreign
exchange(c) | i 1,092 | ( i 616 | ) | i 476 | ( i 566 | ) | i 476 | ( i 140 | ) | |||||||||||
Commodity(d) | i 789 | ( i 754 | ) | i 35 | i — | i 26 | i — | |||||||||||||
Total | $ | i 736 | $ | i 412 | $ | i 1,148 | $ | ( i 566 | ) | $ | i 1,125 | $ | ( i 140 | ) | ||||||
Gains/(losses)
recorded in income | Income statement impact due to: | |||||||||||||||||||
Year ended December 31, 2017 (in millions) | Derivatives | Hedged items | Income statement impact | Hedge ineffectiveness(e) | Excluded
components(f) | |||||||||||||||
Contract type | ||||||||||||||||||||
Interest
rate(a)(b) | $ | ( i 481 | ) | $ | i 1,359 | $ | i 878 | $ | ( i 18 | ) | $ | i 896 | ||||||||
Foreign
exchange(c) | ( i 3,509 | ) | i 3,507 | ( i 2 | ) | i — | ( i 2 | ) | ||||||||||||
Commodity(d) | ( i 1,275 | ) | i 1,348 | i 73 | i 29 | i 44 | ||||||||||||||
Total | $ | ( i 5,265 | ) | $ | i 6,214 | $ | i 949 | $ | i 11 | $ | i 938 |
(a) | Primarily
consists of hedges of the benchmark (e.g., London Interbank Offered Rate (“LIBOR”)) interest rate risk of fixed-rate long-term debt and AFS securities. Gains and losses were recorded in net interest income. |
(b) | Excludes the amortization expense associated with the inception hedge accounting adjustment applied to the hedged item. This expense is recorded in net interest income and substantially offsets the income statement impact of the excluded components. Also excludes the accrual of interest on interest rate swaps and the related hedged items. |
(c) | Primarily
consists of hedges of the foreign currency risk of long-term debt and AFS securities for changes in spot foreign currency rates. Gains and losses related to the derivatives and the hedged items due to changes in foreign currency rates and the income statement impact of excluded components were recorded primarily in principal transactions revenue and net interest income. |
(d) | Consists of overall fair value hedges of physical commodities inventories that are generally carried at the lower of cost or net realizable value (net realizable value approximates fair value). Gains and losses were recorded in principal transactions revenue. |
(e) | Hedge
ineffectiveness is the amount by which the gain or loss on the designated derivative instrument does not exactly offset the gain or loss on the hedged item attributable to the hedged risk. |
(f) | The assessment of hedge effectiveness excludes certain components of the changes in fair values of the derivatives and hedged items such as forward points on foreign exchange forward contracts, time values and cross-currency basis spreads. Excluded components may impact earnings either through amortization of the initial amount over the life of the derivative or through fair value changes recognized in the current period. |
(g) | Represents
the change in value of amounts excluded from the assessment of effectiveness under the amortization approach, predominantly cross-currency basis spreads. The amount excluded at inception of the hedge is recognized in earnings over the life of the derivative. |
188 | JPMorgan Chase & Co./2019 Form 10-K |
Carrying amount of the hedged items(a)(b) | Cumulative
amount of fair value hedging adjustments included in the carrying amount of hedged items: | |||||||||||||
December 31, 2019 (in millions) | Active hedging relationships | Discontinued hedging relationships(d) | Total | |||||||||||
Assets | ||||||||||||||
Investment
securities - AFS | $ | i 125,860 | (c) | $ | i 2,110 | $ | i 278 | $ | i 2,388 | |||||
Liabilities | ||||||||||||||
Long-term
debt | $ | i 157,545 | $ | i 6,719 | $ | i 161 | $ | i 6,880 | ||||||
Beneficial
interests issued by consolidated VIEs | i 2,365 | i — | ( i 8 | ) | ( i 8 | ) | ||||||||
Carrying
amount of the hedged items(a)(b) | Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items: | |||||||||||||
December 31, 2018 (in millions) | Active hedging relationships | Discontinued hedging relationships(d) | Total | |||||||||||
Assets | ||||||||||||||
Investment
securities - AFS | $ | i 55,313 | (c) | $ | ( i 1,105 | ) | $ | i 381 | $ | ( i 724 | ) | |||
Liabilities | ||||||||||||||
Long-term
debt | $ | i 139,915 | $ | i 141 | $ | i 8 | $ | i 149 | ||||||
Beneficial
interests issued by consolidated VIEs | i 6,987 | i — | ( i 33 | ) | ( i 33 | ) |
(a) | Excludes
physical commodities with a carrying value of $ i 6.5 billion and $ i 6.8
billion at December 31, 2019 and 2018, respectively, to which the Firm applies fair value hedge accounting. As a result of the application of hedge accounting, these inventories are carried at fair value, thus recognizing unrealized gains and losses in current periods. Since the Firm exits these positions at fair value, there is no incremental impact to net income in future periods. |
(b) | Excludes hedged items where only foreign currency risk is the designated hedged risk, as basis adjustments related to foreign currency hedges will not reverse through the income statement in future periods. At December
31, 2019 and 2018, the carrying amount excluded for available-for-sale securities is $ i 14.9 billion and $ i 14.6
billion, respectively, and for long-term debt is $ i 2.8 billion and $ i 7.3
billion, respectively. |
(c) | Carrying amount represents the amortized cost. |
(d) | Represents hedged items no longer designated in qualifying fair value hedging relationships for which an associated basis adjustment exists at the balance sheet date. |
JPMorgan
Chase & Co./2019 Form 10-K | 189 |
Derivatives
gains/(losses) recorded in income and other comprehensive income/(loss) | |||||||||
Year ended December 31, 2019 (in millions) | Amounts reclassified from AOCI to income | Amounts recorded in OCI | Total change in OCI for period | ||||||
Contract type | |||||||||
Interest
rate(a) | $ | ( i 28 | ) | $ | ( i 3 | ) | $ | i 25 | |
Foreign
exchange(b) | ( i 75 | ) | i 125 | i 200 | |||||
Total | $ | ( i 103 | ) | $ | i 122 | $ | i 225 |
Derivatives
gains/(losses) recorded in income and other comprehensive income/(loss) | |||||||||
Year ended December 31, 2018 (in millions) | Amounts reclassified from AOCI to income | Amounts recorded in OCI | Total change in OCI for period | ||||||
Contract type | |||||||||
Interest
rate(a) | $ | i 44 | $ | ( i 44 | ) | $ | ( i 88 | ) | |
Foreign
exchange(b) | ( i 26 | ) | ( i 201 | ) | ( i 175 | ) | |||
Total | $ | i 18 | $ | ( i 245 | ) | $ | ( i 263 | ) | |
Derivatives
gains/(losses) recorded in income and other comprehensive income/(loss) | |||||||||
Year ended December 31, 2017 (in millions) | Amounts reclassified from AOCI to income | Amounts recorded in OCI(c) | Total change in OCI for period | ||||||
Contract type | |||||||||
Interest
rate(a) | $ | ( i 17 | ) | $ | i 12 | $ | i 29 | ||
Foreign
exchange(b) | ( i 117 | ) | i 135 | i 252 | |||||
Total | $ | ( i 134 | ) | $ | i 147 | $ | i 281 |
(a) | Primarily
consists of hedges of LIBOR-indexed floating-rate assets and floating-rate liabilities. Gains and losses were recorded in net interest income. |
(b) | Primarily consists of hedges of the foreign currency risk of non-U.S. dollar-denominated revenue and expense. The income statement classification of gains and losses follows the hedged item – primarily noninterest revenue and compensation expense. |
(c) | Represents the effective portion of changes in value of the related hedging derivative. Hedge ineffectiveness is the amount
by which the cumulative gain or loss on the designated derivative instrument exceeds the present value of the cumulative expected change in cash flows on the hedged item attributable to the hedged risk. The Firm did not recognize any ineffectiveness on cash flow hedges during 2017. |
190 | JPMorgan Chase & Co./2019 Form 10-K |
2019 | 2018 | 2017 | ||||||
Year
ended December 31, (in millions) | Amounts recorded in income(a)(b) | Amounts recorded in OCI | Amounts recorded in income(a)(b) | Amounts recorded in OCI | Amounts recorded in income(a)(b) | Amounts recorded
in OCI(c) | ||
Foreign exchange derivatives | $ i 72 | $ i 64 | $ i 11 | $ i 1,219 | $( i 152) | $( i 1,244) |
(a) | Certain
components of hedging derivatives are permitted to be excluded from the assessment of hedge effectiveness, such as forward points on foreign exchange forward contracts. The Firm elects to record changes in fair value of these amounts directly in other income. |
(b) | Excludes amounts reclassified from AOCI to income on the sale or liquidation of hedged entities. The Firm reclassified net pre-tax gains/(losses) of $ i 18
million to other income, $( i 17) million and $ i 50
million to other expense related to the liquidation of certain legal entities during the years ended December 31, 2019, 2018 and 2017, respectively. Refer to Note 24 for further information. |
(c) | Represents the effective portion of changes in value of the related hedging derivative. The Firm did not recognize any ineffectiveness
on net investment hedges directly in income during 2017. |
Derivatives gains/(losses) recorded in income | |||||||||||
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Contract type | |||||||||||
Interest
rate(a) | $ | i 1,491 | $ | i 79 | $ | i 331 | |||||
Credit(b) | ( i 30 | ) | ( i 21 | ) | ( i 74 | ) | |||||
Foreign
exchange(c) | ( i 5 | ) | i 117 | ( i 107 | ) | ||||||
Total | $ | i 1,456 | $ | i 175 | $ | i 150 |
(a) | Primarily
represents interest rate derivatives used to hedge the interest rate risk inherent in mortgage commitments, warehouse loans and MSRs, as well as written commitments to originate warehouse loans. Gains and losses were recorded predominantly in mortgage fees and related income. |
(b) | Relates to credit derivatives used to mitigate credit risk associated with lending exposures in the Firm’s wholesale businesses. These derivatives do not include credit derivatives used to mitigate counterparty credit risk arising from derivative receivables, which is included in gains and losses on derivatives related to market-making activities and other derivatives. Gains and losses were recorded in principal transactions revenue. |
(c) | Primarily
relates to derivatives used to mitigate foreign exchange risk of specified foreign currency-denominated assets and liabilities. Gains and losses were recorded in principal transactions revenue. |
JPMorgan
Chase & Co./2019 Form 10-K | 191 |
192 | JPMorgan
Chase & Co./2019 Form 10-K |
Total
credit derivatives and credit-related notes | |||||||||||||||
Maximum payout/Notional amount | |||||||||||||||
Protection sold | Protection
purchased with identical underlyings(b) | Net protection (sold)/purchased(c) | Other protection purchased(d) | ||||||||||||
December 31, 2019 (in millions) | |||||||||||||||
Credit derivatives | |||||||||||||||
Credit
default swaps | $ | ( i 562,338 | ) | $ | i 571,892 | $ | i 9,554 | $ | i 3,936 | ||||||
Other
credit derivatives(a) | ( i 44,929 | ) | i 52,007 | i 7,078 | i 7,364 | ||||||||||
Total
credit derivatives | ( i 607,267 | ) | i 623,899 | i 16,632 | i 11,300 | ||||||||||
Credit-related
notes | i — | i — | i — | i 9,606 | |||||||||||
Total | $ | ( i 607,267 | ) | $ | i 623,899 | $ | i 16,632 | $ | i 20,906 | ||||||
Maximum
payout/Notional amount | |||||||||||||||
Protection sold | Protection purchased with identical underlyings(b) | Net protection (sold)/purchased(c) | Other protection purchased(d) | ||||||||||||
December 31, 2018 (in millions) | |||||||||||||||
Credit
derivatives | |||||||||||||||
Credit default swaps | $ | ( i 697,220 | ) | $ | i 707,282 | $ | i 10,062 | $ | i 4,053 | ||||||
Other
credit derivatives(a) | ( i 41,244 | ) | i 42,484 | i 1,240 | i 8,488 | ||||||||||
Total
credit derivatives | ( i 738,464 | ) | i 749,766 | i 11,302 | i 12,541 | ||||||||||
Credit-related
notes | i — | i — | i — | i 8,425 | |||||||||||
Total | $ | ( i 738,464 | ) | $ | i 749,766 | $ | i 11,302 | $ | i 20,966 |
(a) | Other credit derivatives predominantly consist of credit swap options and total return swaps. |
(b) | Represents the total notional amount of protection purchased where the underlying reference instrument is identical to the reference instrument on protection sold; the notional amount of protection purchased for each individual identical underlying reference instrument may be greater or lower than the notional amount of protection sold. |
(c) | Does
not take into account the fair value of the reference obligation at the time of settlement, which would generally reduce the amount the seller of protection pays to the buyer of protection in determining settlement value. |
(d) | Represents protection purchased by the Firm on referenced instruments (single-name, portfolio or index) where the Firm has not sold any protection on the identical reference instrument. |
JPMorgan
Chase & Co./2019 Form 10-K | 193 |
Protection sold – credit derivatives and credit-related notes ratings(a)/maturity
profile | |||||||||||||||||||||||||||
(in millions) | <1 year | 1–5 years | >5 years | Total
notional amount | Fair value of receivables(b) | Fair value of payables(b) | Net fair value | ||||||||||||||||||||
Risk rating of reference entity | |||||||||||||||||||||||||||
Investment-grade | $ | ( i 114,460 | ) | $ | ( i 311,407 | ) | $ | ( i 42,129 | ) | $ | ( i 467,996 | ) | $ | i 6,153 | $ | ( i 911 | ) | $ | i 5,242 | ||||||||
Noninvestment-grade | ( i 41,661 | ) | ( i 87,769 | ) | ( i 9,841 | ) | ( i 139,271 | ) | i 4,281 | ( i 2,882 | ) | i 1,399 | |||||||||||||||
Total | $ | ( i 156,121 | ) | $ | ( i 399,176 | ) | $ | ( i 51,970 | ) | $ | ( i 607,267 | ) | $ | i 10,434 | $ | ( i 3,793 | ) | $ | i 6,641 |
(in millions) | <1 year | 1–5 years | >5 years | Total notional amount | Fair value of receivables(b) | Fair value of
payables(b) | Net fair value | ||||||||||||||||||||
Risk rating of reference entity | |||||||||||||||||||||||||||
Investment-grade | $ | ( i 115,443 | ) | $ | ( i 402,325 | ) | $ | ( i 43,611 | ) | $ | ( i 561,379 | ) | $ | i 5,720 | $ | ( i 2,791 | ) | $ | i 2,929 | ||||||||
Noninvestment-grade | ( i 45,897 | ) | ( i 119,348 | ) | ( i 11,840 | ) | ( i 177,085 | ) | i 4,719 | ( i 5,660 | ) | ( i 941 | ) | ||||||||||||||
Total | $ | ( i 161,340 | ) | $ | ( i 521,673 | ) | $ | ( i 55,451 | ) | $ | ( i 738,464 | ) | $ | i 10,439 | $ | ( i 8,451 | ) | $ | i 1,988 |
(a) | The
ratings scale is primarily based on external credit ratings defined by S&P and Moody’s. |
(b) | Amounts are shown on a gross basis, before the benefit of legally enforceable master netting agreements and cash collateral received by the Firm. |
194 | JPMorgan
Chase & Co./2019 Form 10-K |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Underwriting | |||||||||||
Equity | $ | i 1,648 | $ | i 1,684 | $ | i 1,466 | |||||
Debt | i 3,513 | i 3,347 | i 3,802 | ||||||||
Total
underwriting | i 5,161 | i 5,031 | i 5,268 | ||||||||
Advisory | i 2,340 | i 2,519 | i 2,144 | ||||||||
Total
investment banking fees | $ | i 7,501 | $ | i 7,550 | $ | i 7,412 |
• | the bid-offer spread, which is the difference between the price at which a market participant is willing and able to sell an instrument to the Firm and the price at which another market participant is willing and able to buy it from the Firm, and vice versa; and
|
• | realized and unrealized gains and losses on financial instruments and commodities transactions, including those accounted for under the fair value option, primarily used in client-driven market-making activities, and on private equity investments. |
– | Realized gains and losses result from the sale of instruments, closing out or termination of transactions, or interim cash payments. |
– | Unrealized
gains and losses result from changes in valuation. |
• | derivatives designated in qualifying hedge accounting relationships, primarily fair value hedges of commodity and foreign exchange risk;
|
• | derivatives used for specific risk management purposes, primarily to mitigate credit risk and foreign exchange risk. |
JPMorgan
Chase & Co./2019 Form 10-K | 195 |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Trading
revenue by instrument type | |||||||||||
Interest rate | $ | i 2,552 | $ | i 1,961 | $ | i 2,479 | |||||
Credit | i 1,611 | i 1,395 | i 1,329 | ||||||||
Foreign
exchange | i 3,171 | i 3,222 | i 2,746 | ||||||||
Equity | i 5,812 | i 4,924 | i 3,873 | ||||||||
Commodity | i 1,122 | i 906 | i 661 | ||||||||
Total
trading revenue | i 14,268 | i 12,408 | i 11,088 | ||||||||
Private
equity gains/(losses) | ( i 250 | ) | ( i 349 | ) | i 259 | ||||||
Principal
transactions | $ | i 14,018 | $ | i 12,059 | $ | i 11,347 |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Lending-related
fees | $ | i 1,184 | $ | i 1,117 | $ | i 1,110 | |||||
Deposit-related
fees | i 5,185 | i 4,935 | i 4,823 | ||||||||
Total
lending- and deposit-related fees | $ | i 6,369 | $ | i 6,052 | $ | i 5,933 |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Asset
management fees | |||||||||||
Investment management fees(a) | $ | i 10,865 | $ | i 10,768 | $ | i 10,434 | |||||
All
other asset management fees(b) | i 315 | i 270 | i 296 | ||||||||
Total
asset management fees | i 11,180 | i 11,038 | i 10,730 | ||||||||
Total
administration fees(c) | i 2,197 | i 2,179 | i 2,029 | ||||||||
Commissions
and other fees | |||||||||||
Brokerage commissions(d) | i 2,439 | i 2,505 | i 2,239 | ||||||||
All
other commissions and fees | i 1,349 | i 1,396 | i 1,289 | ||||||||
Total
commissions and fees | i 3,788 | i 3,901 | i 3,528 | ||||||||
Total
asset management, administration and commissions | $ | i 17,165 | $ | i 17,118 | $ | i 16,287 |
(a) | Represents
fees earned from managing assets on behalf of the Firm’s clients, including investors in Firm-sponsored funds and owners of separately managed investment accounts. |
(b) | Represents fees for services that are ancillary to investment management services, such as commissions earned on the sales or distribution of mutual funds to clients. These fees are recorded as revenue at the time the service is rendered or, in the case of certain distribution fees based on the underlying fund’s asset value and/or investor redemption, recorded over time as the investor remains in the fund or upon investor redemption. |
(c) | Predominantly
includes fees for custody, securities lending, funds services and securities clearance. These fees are recorded as revenue over the period in which the related service is provided. |
(d) | Represents commissions earned when the Firm acts as a broker, by facilitating its clients’ purchases and sales of securities and other financial instruments. Brokerage commissions are collected and recognized as revenue upon occurrence of the client transaction. The Firm reports certain costs paid to third-party clearing houses and exchanges net against commission revenue. |
196 | JPMorgan Chase & Co./2019 Form 10-K |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Interchange and merchant processing income | $ | i 20,370 | $ | i 18,808 | $ | i 17,080 | |||||
Reward
costs and partner payments | ( i 14,312 | ) | ( i 13,074 | ) | (b) | ( i 10,820 | ) | ||||
Other
card income(a) | ( i 754 | ) | ( i 745 | ) | ( i 1,827 | ) | |||||
Total
card income | $ | i 5,304 | $ | i 4,989 | $ | i 4,433 |
(a) | Predominantly
represents account origination costs and annual fees, which are deferred and recognized on a straight-line basis over a i 12-month period. |
(b) | Includes
an adjustment to the credit card rewards liability of approximately $ i 330 million, recorded in the second quarter of 2018. |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Legal expense/(benefit) | $ | i 239 | $ | i 72 | $ | ( i 35 | ) | ||||
FDIC-related
expense | i 457 | i 1,239 | i 1,492 |
JPMorgan
Chase & Co./2019 Form 10-K | 197 |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||
Interest income | |||||||||
Loans(a) | $ | i 50,375 | $ | i 47,620 | $ | i 41,008 | |||
Taxable
securities | i 7,962 | i 5,653 | i 5,534 | ||||||
Non-taxable
securities(b) | i 1,329 | i 1,595 | i 1,848 | ||||||
Total
investment securities(a) | i 9,291 | i 7,248 | i 7,382 | ||||||
Trading
assets - debt instruments | i 10,800 | i 8,703 | i 7,610 | ||||||
Federal
funds sold and securities purchased under resale agreements | i 6,146 | i 3,819 | i 2,327 | ||||||
Securities
borrowed(c) | i 1,574 | i 913 | i 94 | ||||||
Deposits
with banks | i 3,887 | i 5,907 | i 4,238 | ||||||
All
other interest-earning assets(c)(d) | i 1,967 | i 1,890 | i 1,312 | ||||||
Total
interest income(c) | $ | i 84,040 | $ | i 76,100 | $ | i 63,971 | |||
Interest
expense | |||||||||
Interest bearing deposits | $ | i 8,957 | $ | i 5,973 | $ | i 2,857 | |||
Federal
funds purchased and securities loaned or sold under repurchase agreements | i 4,630 | i 3,066 | i 1,611 | ||||||
Short-term
borrowings(e) | i 1,248 | i 1,144 | i 481 | ||||||
Trading
liabilities - debt and all other interest-bearing liabilities(c)(f) | i 2,585 | i 2,387 | i 1,669 | ||||||
Long-term
debt | i 8,807 | i 7,978 | i 6,753 | ||||||
Beneficial
interest issued by consolidated VIEs | i 568 | i 493 | i 503 | ||||||
Total
interest expense(c) | $ | i 26,795 | $ | i 21,041 | $ | i 13,874 | |||
Net
interest income | $ | i 57,245 | $ | i 55,059 | $ | i 50,097 | |||
Provision
for credit losses | i 5,585 | i 4,871 | i 5,290 | ||||||
Net
interest income after provision for credit losses | $ | i 51,660 | $ | i 50,188 | $ | i 44,807 |
(a) | Includes
the amortization/accretion of unearned income (e.g., purchase premiums/discounts, net deferred fees/costs, etc.). |
(b) | Represents securities that are tax-exempt for U.S. federal income tax purposes. |
(c) | In the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting
interest income and expense for certain prime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation. |
(d) | Includes interest earned on prime brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets, which are classified in other assets on the Consolidated balance sheets. |
(e) | Includes
commercial paper. |
(f) | Other interest-bearing liabilities includes interest expense on prime brokerage-related customer payables. |
198 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 199 |
As
of or for the year ended December 31, | Defined benefit pension plans | OPEB plans | |||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Change in benefit obligation | |||||||||||||||
Benefit
obligation, beginning of year | $ | ( i 15,512 | ) | $ | ( i 16,700 | ) | $ | ( i 612 | ) | $ | ( i 684 | ) | |||
Benefits
earned during the year | ( i 356 | ) | ( i 354 | ) | i — | i — | |||||||||
Interest
cost on benefit obligations | ( i 596 | ) | ( i 556 | ) | ( i 24 | ) | ( i 24 | ) | |||||||
Plan
amendments | ( i 5 | ) | ( i 29 | ) | i — | i — | |||||||||
Plan
curtailment | i — | i 123 | i — | i — | |||||||||||
Employee
contributions | ( i 8 | ) | ( i 7 | ) | ( i 14 | ) | ( i 15 | ) | |||||||
Net
gain/(loss) | ( i 1,296 | ) | (g) | i 938 | (g) | ( i 51 | ) | i 40 | |||||||
Benefits
paid | i 820 | i 873 | i 67 | i 69 | |||||||||||
Plan
settlements | i — | i 15 | i — | i — | |||||||||||
Foreign
exchange impact and other | ( i 116 | ) | i 185 | ( i 2 | ) | i 2 | |||||||||
Benefit
obligation, end of year(a) | $ | ( i 17,069 | ) | $ | ( i 15,512 | ) | $ | ( i 636 | ) | $ | ( i 612 | ) | |||
Change
in plan assets | |||||||||||||||
Fair value of plan assets, beginning of year | $ | i 18,052 | $ | i 19,603 | $ | i 2,633 | $ | i 2,757 | |||||||
Actual
return on plan assets | i 2,932 | ( i 548 | ) | i 454 | ( i 28 | ) | |||||||||
Firm
contributions | i 80 | i 75 | i 2 | i 2 | |||||||||||
Employee
contributions | i 8 | i 7 | i 14 | i 15 | |||||||||||
Benefits
paid | ( i 820 | ) | ( i 873 | ) | ( i 110 | ) | ( i 113 | ) | |||||||
Plan
settlements | i — | ( i 15 | ) | i — | i — | ||||||||||
Foreign
exchange impact and other | i 121 | ( i 197 | ) | i — | i — | ||||||||||
Fair
value of plan assets, end of year (a)(b) | $ | i 20,373 | $ | i 18,052 | $ | i 2,993 | $ | i 2,633 | |||||||
Net
funded status (c)(d) | $ | i 3,304 | $ | i 2,540 | $ | i 2,357 | $ | i 2,021 | |||||||
Accumulated
benefit obligation, end of year | $ | ( i 17,047 | ) | $ | ( i 15,494 | ) | NA | NA | |||||||
Pretax
pension and OPEB amounts recorded in AOCI | |||||||||||||||
Net gain/(loss) | $ | ( i 2,260 | ) | $ | ( i 3,134 | ) | $ | i 470 | $ | i 184 | |||||
Prior
service credit/(cost) | ( i 26 | ) | ( i 23 | ) | i — | i — | |||||||||
Accumulated
other comprehensive income/(loss), pretax, end of year | $ | ( i 2,286 | ) | $ | ( i 3,157 | ) | $ | i 470 | $ | i 184 | |||||
Weighted-average
actuarial assumptions used to determine benefit obligations | |||||||||||||||
Discount rate (e) | 0.20 - 3.30% | 0.60 - 4.30 % | i 3.20 | % | i 4.20 | % | |||||||||
Rate
of compensation increase (e) | 2.25 - 3.00 | 2.25 – 3.00 | NA | NA | |||||||||||
Interest crediting rate(e) | 1.78
- 4.65% | 1.81 - 4.90% | NA | NA | |||||||||||
Health care cost trend rate(f) | |||||||||||||||
Assumed for next year | NA | NA | i 5.00 | i 5.00 | |||||||||||
Ultimate | NA | NA | i 5.00 | i 5.00 | |||||||||||
Year
when rate will reach ultimate | NA | NA | i 2020 | i 2019 |
(a) | At
December 31, 2019 and 2018, included non-U.S. benefit obligations of $( i 3.8) billion and $( i 3.3)
billion, and plan assets of $ i 4.0 billion and $ i 3.5
billion, respectively, predominantly in the U.K. |
(b) | At December 31, 2019 and 2018, defined benefit pension plan amounts that were not measured at fair value included $ i 1.3
billion and $ i 340 million, respectively, of accrued receivables, and $ i 1.7
billion and $ i 503 million, respectively, of accrued liabilities. |
(c) | Represents plans with
an aggregate overfunded balance of $ i 6.3 billion and $ i 5.1
billion at December 31, 2019 and 2018, respectively, and plans with an aggregate underfunded balance of $ i 618 million and $ i 547
million at December 31, 2019 and 2018, respectively. |
(d) | For pension plans with a projected benefit obligation exceeding plan assets, the projected benefit obligation and fair value of plan assets was $ i 1.5
billion and $ i 885 million at December 31, 2019, respectively and $ i 1.3
billion and $ i 762 million at December 31, 2018, respectively. For pension plans with an accumulated benefit obligation exceeding plan assets, the accumulated benefit obligation and fair value of plan
assets was $ i 1.4 billion and $ i 885
million at December 31, 2019, respectively, and $ i 1.3 billion and $ i 762
million at December 31, 2018, respectively. For OPEB plans with a projected benefit obligation exceeding plan assets, the projected benefit obligation was $ i 43 million
and $ i 26 million at December 31, 2019 and 2018, respectively, and they had i no
plan assets. |
(e) | For the U.S. defined benefit pension plans, the discount rate assumption was i 3.30%
and i 4.30%, and the interest crediting rate was i 4.65%
and i 4.90%, for 2019 and 2018, respectively. The rate of compensation increase was not applicable to the U.S. plan in 2019 due to the Plan Freeze, and was i 2.30%
in 2018. The rate of compensation increase presented in the table for 2019 applies to the non-U.S. plans. |
(f) | Excludes participants whose benefits under the plan are capped. |
(g) | At December 31, 2019 and 2018, the gain/(loss) was primarily attributable to the change in the discount rate. |
200 | JPMorgan
Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 201 |
Pension
plans | OPEB plans | ||||||||||||||||||
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||
Components
of net periodic benefit cost | |||||||||||||||||||
Benefits earned during the year | $ | i 356 | $ | i 354 | $ | i 330 | $ | i — | $ | i — | $ | i — | |||||||
Interest
cost on benefit obligations | i 596 | i 556 | i 598 | i 24 | i 24 | i 28 | |||||||||||||
Expected
return on plan assets | ( i 915 | ) | ( i 981 | ) | ( i 968 | ) | ( i 112 | ) | ( i 103 | ) | ( i 97 | ) | |||||||
Amortization: | |||||||||||||||||||
Net
(gain)/loss | i 167 | i 103 | i 250 | i — | i — | i — | |||||||||||||
Prior
service (credit)/cost | i 3 | ( i 23 | ) | ( i 36 | ) | i — | i — | i — | |||||||||||
Curtailment
(gain)/loss | i — | i 21 | i — | i — | i — | i — | |||||||||||||
Settlement
(gain)/loss | i — | i 2 | i 2 | i — | i — | i — | |||||||||||||
Net
periodic defined benefit cost(a) | $ | i 207 | $ | i 32 | $ | i 176 | $ | ( i 88 | ) | $ | ( i 79 | ) | $ | ( i 69 | ) | ||||
Other
defined benefit pension plans(b) | i 25 | i 20 | i 24 | NA | NA | NA | |||||||||||||
Total
defined benefit plans | $ | i 232 | $ | i 52 | $ | i 200 | $ | ( i 88 | ) | $ | ( i 79 | ) | $ | ( i 69 | ) | ||||
Total
defined contribution plans | i 952 | i 872 | i 814 | NA | NA | NA | |||||||||||||
Total
pension and OPEB cost included in noninterest expense | $ | i 1,184 | $ | i 924 | $ | i 1,014 | $ | ( i 88 | ) | $ | ( i 79 | ) | $ | ( i 69 | ) | ||||
Changes
in plan assets and benefit obligations recognized in other comprehensive income | |||||||||||||||||||
Prior service (credit)/cost arising during the year | i 5 | i 29 | i — | i — | i — | i — | |||||||||||||
Net
(gain)/loss arising during the year | ( i 719 | ) | i 467 | ( i 669 | ) | ( i 286 | ) | i 91 | ( i 133 | ) | |||||||||
Amortization
of net loss | ( i 167 | ) | ( i 103 | ) | ( i 250 | ) | i — | i — | i — | ||||||||||
Amortization
of prior service (cost)/credit | ( i 3 | ) | i 23 | i 36 | i — | i — | i — | ||||||||||||
Curtailment
gain/(loss) | i — | ( i 21 | ) | i — | i — | i — | i — | ||||||||||||
Settlement
gain/(loss) | i — | ( i 2 | ) | ( i 2 | ) | i — | i — | i — | |||||||||||
Foreign
exchange impact and other | i 13 | ( i 30 | ) | i 54 | i — | ( i 4 | ) | i — | |||||||||||
Total
recognized in other comprehensive income | $ | ( i 871 | ) | $ | i 363 | $ | ( i 831 | ) | $ | ( i 286 | ) | $ | i 87 | $ | ( i 133 | ) | |||
Total
recognized in net periodic benefit cost and other comprehensive income | $ | ( i 664 | ) | $ | i 395 | $ | ( i 655 | ) | $ | ( i 374 | ) | $ | i 8 | $ | ( i 202 | ) | |||
Weighted-average
assumptions used to determine net periodic benefit costs | |||||||||||||||||||
Discount rate(c) | 0.60 - 4.30% | 0.60 - 4.50 % | 0.60 - 4.30 % | i 4.20 | % | i 3.70 | % | i 4.20 | % | ||||||||||
Expected
long-term rate of return on plan assets (c) | 0.00 - 5.50 | 0.70 - 5.50 | 0.70 - 6.00 | i 4.30 | i 4.00 | i 5.00 | |||||||||||||
Rate
of compensation increase (c) | 2.25 - 3.00 | 2.25 - 3.00 | 2.25 - 3.00 | NA | NA | NA | |||||||||||||
Interest crediting rate(c) | 1.81
- 4.90% | 1.81- 4.90% | 1.81- 4.90% | NA | NA | NA | |||||||||||||
Health care
cost trend rate(d) | |||||||||||||||||||
Assumed for next year | NA | NA | NA | i 5.00 | i 5.00 | i 5.00 | |||||||||||||
Ultimate | NA | NA | NA | i 5.00 | i 5.00 | i 5.00 | |||||||||||||
Year
when rate will reach ultimate | NA | NA | NA | i 2019 | i 2018 | i 2017 |
(a) | Benefits
earned during the year are reported in compensation expense; all other components of net periodic defined benefit costs are reported within other expense in the Consolidated statements of income. |
(b) | Includes various defined benefit pension plans which are individually immaterial. |
(c) | The rate assumptions for the U.S. defined benefit pension plans are at the upper end of the range, except for the rate of compensation increase, which was i 2.30%
for 2019, 2018 and 2017, respectively. |
(d) | Excludes participants whose benefits under the plan are capped. |
202 | JPMorgan
Chase & Co./2019 Form 10-K |
(in millions) | Defined benefit pension and OPEB plan expense | Benefit
obligation | |||||
Expected long-term rate of return | $ | i 57 | NA | ||||
Discount
rate | $ | i 6 | $ | i 544 |
JPMorgan Chase & Co./2019 Form 10-K | 203 |
Defined benefit pension plans(a) | OPEB plan(d) | ||||||||||||||||
Asset | %
of plan assets | Asset | % of plan assets | ||||||||||||||
December 31, | Allocation | 2019 | 2018 | Allocation | 2019 | 2018 | |||||||||||
Asset
class | |||||||||||||||||
Debt securities(b) | 42-100% | i 74 | % | i 48 | % | 30-70% | i 60 | % | i 61 | % | |||||||
Equity
securities | 0-40 | i 16 | i 37 | 30-70 | i 40 | i 39 | |||||||||||
Real
estate | 0-6 | i 1 | i 2 | i — | i — | i — | |||||||||||
Alternatives
(c) | 0-24 | i 9 | i 13 | i — | i — | i — | |||||||||||
Total | i 100 | % | i 100 | % | i 100 | % | i 100 | % | i 100 | % | i 100 | % |
(a) | Represents
the U.S. defined benefit pension plan only, as that is the most significant plan. |
(b) | Debt securities primarily includes cash and cash equivalents, corporate debt, U.S. federal, state, local and non-U.S. government, asset-backed and mortgage-backed securities. |
(c) | Alternatives primarily include limited partnerships. |
(d) | Represents
the U.S. OPEB plan only, as the U.K. OPEB plan is unfunded. |
Pension
and OPEB plan assets and liabilities measured at fair value | |||||||||||||||||||||||||||||||
Defined benefit pension plans | |||||||||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||||||||
December
31, (in millions) | Level 1 | Level 2 | Level 3 | Total fair value | Level 1 | Level 2 | Level
3 | Total fair value | |||||||||||||||||||||||
Cash and cash equivalents | $ | i 157 | $ | i 1 | $ | i — | $ | i 158 | $ | i 343 | $ | i 1 | $ | i — | $ | i 344 | |||||||||||||||
Equity
securities | i 3,240 | i 184 | i 2 | i 3,426 | i 5,342 | i 162 | i 2 | i 5,506 | |||||||||||||||||||||||
Collective
investment funds(a) | i 265 | i — | i — | i 265 | i 161 | i — | i — | i 161 | |||||||||||||||||||||||
Limited
partnerships(b) | i 187 | i — | i — | i 187 | i 40 | i — | i — | i 40 | |||||||||||||||||||||||
Corporate
debt securities(c) | i — | i 7,090 | i 2 | i 7,092 | i — | i 3,540 | i 3 | i 3,543 | |||||||||||||||||||||||
U.S.
federal, state, local and non-U.S. government debt securities | i 1,790 | i 1,054 | i — | i 2,844 | i 1,191 | i 743 | i — | i 1,934 | |||||||||||||||||||||||
Mortgage-backed
securities | i 314 | i 701 | i 4 | i 1,019 | i 82 | i 272 | i 3 | i 357 | |||||||||||||||||||||||
Derivative
receivables | i — | i 337 | i — | i 337 | i — | i 143 | i — | i 143 | |||||||||||||||||||||||
Other(d) | i 785 | i 132 | i 250 | i 1,167 | i 885 | i 80 | i 302 | i 1,267 | |||||||||||||||||||||||
Total
assets measured at fair value(e) | $ | i 6,738 | $ | i 9,499 | $ | i 258 | $ | i 16,495 | $ | i 8,044 | $ | i 4,941 | $ | i 310 | $ | i 13,295 | |||||||||||||||
Derivative
payables | $ | i — | $ | ( i 118 | ) | $ | i — | $ | ( i 118 | ) | $ | i — | $ | ( i 96 | ) | $ | i — | $ | ( i 96 | ) | |||||||||||
Total
liabilities measured at fair value(e) | $ | i — | $ | ( i 118 | ) | $ | i — | $ | ( i 118 | ) | $ | i — | $ | ( i 96 | ) | $ | i — | $ | ( i 96 | ) |
(a) | At
December 31, 2019 and 2018, collective investment funds primarily included a mix of short-term investment funds, U.S. and non-U.S. equity investments (including index) and real estate funds. |
(b) | Unfunded commitments to purchase limited partnership investments for the plans were $ i 451
million and $ i 521 million for 2019 and 2018, respectively. |
(c) | Corporate
debt securities include debt securities of U.S. and non-U.S. corporations. |
(d) | Other consists primarily of mutual funds, money market funds and participating annuity contracts. Mutual funds and money market funds are primarily classified within level 1 of the fair value hierarchy given they are valued using market observable prices. Participating annuity contracts are classified within level 3 of the fair value hierarchy due to a lack of market mechanisms for transferring each policy and surrender restrictions. |
(e) | At
December 31, 2019 and 2018, excludes $ i 4.4 billion and $ i 5.0
billion of certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient, which are not required to be classified in the fair value hierarchy, $ i 1.3 billion and $ i 340
million of defined benefit pension plan receivables for investments sold and dividends and interest receivables, $ i 1.7 billion and $ i 479
million of defined benefit pension plan payables for investments purchased, and $ i 25 million and $ i 24
million of other liabilities, respectively. |
204 | JPMorgan Chase & Co./2019 Form 10-K |
Changes
in level 3 fair value measurements using significant unobservable inputs | ||||||||||||||||||||||||
(in millions) | Fair value, Beginning balance | Actual return on plan assets | Purchases,
sales and settlements, net(b) | Transfers in and/or out of level 3 | Fair value, Ending balance | |||||||||||||||||||
Realized gains/(losses) | Unrealized gains/(losses)(b) | |||||||||||||||||||||||
Year ended December 31, 2019 U.S.
defined benefit pension plan Annuity contracts and other (a) | $ | i 310 | $ | i — | $ | i 31 | $ | ( i 85 | ) | $ | i 2 | $ | i 258 | |||||||||||
U.S.
OPEB plan COLI policies | $ | i 2,072 | $ | i — | $ | i 401 | $ | ( i 42 | ) | $ | i — | $ | i 2,431 | |||||||||||
Year
ended December 31, 2018 U.S. defined benefit pension plan Annuity contracts and other (a) | $ | i 310 | $ | i — | $ | i — | $ | ( i 1 | ) | $ | i 1 | $ | i 310 | |||||||||||
U.S.
OPEB plan COLI policies | $ | i 2,157 | $ | i — | $ | ( i 42 | ) | $ | ( i 43 | ) | $ | i — | $ | i 2,072 |
(a) | Substantially
all are participating annuity contracts. |
(b) | The prior period amounts have been revised to conform with the current period presentation. |
Year ended December 31, (in millions) | Defined benefit pension plans | OPEB
before Medicare Part D subsidy | Medicare Part D subsidy | ||||||||||
2020 | $ | i 1,030 | $ | i 59 | $ | i 1 | |||||||
2021 | i 1,020 | i 57 | i 1 | ||||||||||
2022 | i 1,020 | i 54 | i — | ||||||||||
2023 | i 980 | i 52 | i — | ||||||||||
2024 | i 970 | i 50 | i — | ||||||||||
Years
2025–2029 | i 4,613 | i 211 | i 1 |
JPMorgan
Chase & Co./2019 Form 10-K | 205 |
206 | JPMorgan
Chase & Co./2019 Form 10-K |
RSUs/PSUs | SARs/Options | |||||||||||||||||
Year
ended December 31, 2019 | Number of units | Weighted-average grant date fair value | Number of awards | Weighted-average exercise price | Weighted-average remaining contractual
life (in years) | Aggregate intrinsic value | ||||||||||||
(in thousands, except weighted-average data, and where otherwise stated) | ||||||||||||||||||
Outstanding, January 1 | i 58,809 | $ | i 85.04 | i 12,463 | $ | i 41.46 | ||||||||||||
Granted | i 23,811 | i 99.79 | i 18 | i 111.01 | ||||||||||||||
Exercised
or vested | ( i 28,754 | ) | i 69.98 | ( i 6,923 | ) | i 41.50 | ||||||||||||
Forfeited | ( i 1,627 | ) | i 98.58 | i — | i — | |||||||||||||
Canceled | NA | NA | ( i 31 | ) | i 89.71 | |||||||||||||
Outstanding,
December 31 | i 52,239 | $ | i 99.62 | i 5,527 | $ | i 41.36 | i 1.9 | $ | i 539,071 | |||||||||
Exercisable,
December 31 | NA | NA | i 5,522 | i 41.29 | i 1.9 | i 538,971 |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||||||
Cost
of prior grants of RSUs, PSUs, SARs and employee stock options that are amortized over their applicable vesting periods | $ | i 1,141 | $ | i 1,241 | $ | i 1,125 | ||||||
Accrual
of estimated costs of share-based awards to be granted in future periods including those to full-career eligible employees | i 1,115 | i 1,081 | i 945 | |||||||||
Total
noncash compensation expense related to employee share-based incentive plans | $ | i 2,256 | $ | i 2,322 | $ | i 2,070 |
JPMorgan Chase & Co./2019 Form 10-K | 207 |
208 | JPMorgan Chase & Co./2019 Form 10-K |
2019 | 2018 | ||||||||||||||||||||||||||
December
31, (in millions) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||||||||
Available-for-sale
securities | |||||||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||
U.S.
GSEs and government agencies(a) | $ | i 107,811 | $ | i 2,395 | $ | i 89 | $ | i 110,117 | $ | i 69,026 | $ | i 594 | $ | i 974 | $ | i 68,646 | |||||||||||
Residential: | |||||||||||||||||||||||||||
U.S | i 10,223 | i 233 | i 6 | i 10,450 | i 5,877 | i 79 | i 31 | i 5,925 | |||||||||||||||||||
Non-U.S. | i 2,477 | i 64 | i 1 | i 2,540 | i 2,529 | i 72 | i 6 | i 2,595 | |||||||||||||||||||
Commercial | i 5,137 | i 64 | i 13 | i 5,188 | i 6,758 | i 43 | i 147 | i 6,654 | |||||||||||||||||||
Total
mortgage-backed securities | i 125,648 | i 2,756 | i 109 | i 128,295 | i 84,190 | i 788 | i 1,158 | i 83,820 | |||||||||||||||||||
U.S.
Treasury and government agencies | i 139,162 | i 449 | i 175 | i 139,436 | i 55,771 | i 366 | i 78 | i 56,059 | |||||||||||||||||||
Obligations
of U.S. states and municipalities | i 27,693 | i 2,118 | i 1 | i 29,810 | i 36,221 | i 1,582 | i 80 | i 37,723 | |||||||||||||||||||
Certificates
of deposit | i 77 | i — | i — | i 77 | i 75 | i — | i — | i 75 | |||||||||||||||||||
Non-U.S.
government debt securities | i 21,427 | i 377 | i 17 | i 21,787 | i 23,771 | i 351 | i 20 | i 24,102 | |||||||||||||||||||
Corporate
debt securities | i 823 | i 22 | i — | i 845 | i 1,904 | i 23 | i 9 | i 1,918 | |||||||||||||||||||
Asset-backed
securities: | |||||||||||||||||||||||||||
Collateralized loan obligations | i 25,038 | i 9 | i 56 | i 24,991 | i 19,612 | i 1 | i 176 | i 19,437 | |||||||||||||||||||
Other | i 5,438 | i 40 | i 20 | i 5,458 | i 7,225 | i 57 | i 22 | i 7,260 | |||||||||||||||||||
Total
available-for-sale securities | i 345,306 | i 5,771 | i 378 | i 350,699 | i 228,769 | i 3,168 | i 1,543 | i 230,394 | |||||||||||||||||||
Held-to-maturity
securities | |||||||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||
U.S.
GSEs and government agencies(a) | i 36,523 | i 1,165 | i 62 | i 37,626 | i 26,610 | i 134 | i 200 | i 26,544 | |||||||||||||||||||
Total
mortgage-backed securities | i 36,523 | i 1,165 | i 62 | i 37,626 | i 26,610 | i 134 | i 200 | i 26,544 | |||||||||||||||||||
U.S.
Treasury and government agencies | i 51 | i — | i 1 | i 50 | i — | i — | i — | i — | |||||||||||||||||||
Obligations
of U.S. states and municipalities | i 4,797 | i 299 | i — | i 5,096 | i 4,824 | i 105 | i 15 | i 4,914 | |||||||||||||||||||
Asset-backed
securities: | |||||||||||||||||||||||||||
Collateralized loan obligations | i 6,169 | i — | i — | i 6,169 | i — | i — | i — | i — | |||||||||||||||||||
Total
held-to-maturity securities | i 47,540 | i 1,464 | i 63 | i 48,941 | i 31,434 | i 239 | i 215 | i 31,458 | |||||||||||||||||||
Total
investment securities | $ | i 392,846 | $ | i 7,235 | $ | i 441 | $ | i 399,640 | $ | i 260,203 | $ | i 3,407 | $ | i 1,758 | $ | i 261,852 |
(a) | Includes
AFS U.S. GSE obligations with fair values of $ i 78.5 billion and $ i 50.7
billion, and HTM U.S. GSE obligations with amortized cost of $ i 31.6 billion and $ i 20.9
billion, at December 31, 2019 and 2018, respectively. As of December 31, 2019, mortgage-backed securities issued by Fannie Mae and Freddie Mac each exceeded 10% of JPMorgan Chase’s total stockholders’ equity; the amortized cost and fair value of such securities were $ i 69.4
billion and $ i 71.4 billion, and $ i 38.7
billion and $ i 39.6 billion, respectively. |
JPMorgan
Chase & Co./2019 Form 10-K | 209 |
Investment securities with gross unrealized losses | |||||||||||||||||||
Less
than 12 months | 12 months or more | ||||||||||||||||||
December 31, 2019 (in millions) | Fair value | Gross unrealized losses | Fair value | Gross unrealized losses | Total
fair value | Total gross unrealized losses | |||||||||||||
Available-for-sale securities | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||
U.S.
GSEs and government agencies | $ | i 16,966 | $ | i 53 | $ | i 3,058 | $ | i 36 | $ | i 20,024 | $ | i 89 | |||||||
Residential: | |||||||||||||||||||
U.S | i 1,072 | i 3 | i 423 | i 3 | i 1,495 | i 6 | |||||||||||||
Non-U.S. | i 13 | i — | i 420 | i 1 | i 433 | i 1 | |||||||||||||
Commercial | i 1,287 | i 12 | i 199 | i 1 | i 1,486 | i 13 | |||||||||||||
Total
mortgage-backed securities | i 19,338 | i 68 | i 4,100 | i 41 | i 23,438 | i 109 | |||||||||||||
U.S.
Treasury and government agencies | i 23,003 | i 145 | i 5,695 | i 30 | i 28,698 | i 175 | |||||||||||||
Obligations
of U.S. states and municipalities | i 186 | i 1 | i — | i — | i 186 | i 1 | |||||||||||||
Certificates
of deposit | i 77 | i — | i — | i — | i 77 | i — | |||||||||||||
Non-U.S.
government debt securities | i 3,970 | i 13 | i 1,406 | i 4 | i 5,376 | i 17 | |||||||||||||
Corporate
debt securities | i — | i — | i — | i — | i — | i — | |||||||||||||
Asset-backed
securities: | |||||||||||||||||||
Collateralized loan obligations | i 10,364 | i 11 | i 7,756 | i 45 | i 18,120 | i 56 | |||||||||||||
Other | i 1,639 | i 9 | i 753 | i 11 | i 2,392 | i 20 | |||||||||||||
Total
available-for-sale securities | i 58,577 | i 247 | i 19,710 | i 131 | i 78,287 | i 378 | |||||||||||||
Held-to-maturity
securities | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||
U.S.
GSEs and government agencies | i 5,186 | i 62 | i 81 | i — | i 5,267 | i 62 | |||||||||||||
Total
mortgage-backed securities | i 5,186 | i 62 | i 81 | i — | i 5,267 | i 62 | |||||||||||||
U.S.
Treasury and government agencies | i 50 | i 1 | i — | i — | i 50 | i 1 | |||||||||||||
Obligations
of U.S. states and municipalities | i — | i — | i — | i — | i — | i — | |||||||||||||
Asset-backed
securities: | |||||||||||||||||||
Collateralized loan obligations | i 3,421 | i — | i 1,375 | i — | i 4,796 | i — | |||||||||||||
Total
held-to-maturity securities | i 8,657 | i 63 | i 1,456 | i — | i 10,113 | i 63 | |||||||||||||
Total
investment securities with gross unrealized losses | $ | i 67,234 | $ | i 310 | $ | i 21,166 | $ | i 131 | $ | i 88,400 | $ | i 441 |
210 | JPMorgan
Chase & Co./2019 Form 10-K |
Investment securities with gross unrealized losses | |||||||||||||
Less than 12 months | 12
months or more | ||||||||||||
December 31, 2018 (in millions) | Fair value | Gross unrealized losses | Fair value | Gross unrealized losses | Total fair value | Total gross unrealized losses | |||||||
Available-for-sale
securities | |||||||||||||
Mortgage-backed securities: | |||||||||||||
U.S.
GSEs and government agencies | i 17,656 | i 318 | i 22,728 | i 656 | i 40,384 | i 974 | |||||||
Residential: | |||||||||||||
U.S. | i 623 | i 4 | i 1,445 | i 27 | i 2,068 | i 31 | |||||||
Non-U.S. | i 907 | i 5 | i 165 | i 1 | i 1,072 | i 6 | |||||||
Commercial | i 974 | i 6 | i 3,172 | i 141 | i 4,146 | i 147 | |||||||
Total
mortgage-backed securities | i 20,160 | i 333 | i 27,510 | i 825 | i 47,670 | i 1,158 | |||||||
U.S.
Treasury and government agencies | i 4,792 | i 7 | i 2,391 | i 71 | i 7,183 | i 78 | |||||||
Obligations
of U.S. states and municipalities | i 1,808 | i 15 | i 2,477 | i 65 | i 4,285 | i 80 | |||||||
Certificates
of deposit | i 75 | i — | i — | i — | i 75 | i — | |||||||
Non-U.S.
government debt securities | i 3,123 | i 5 | i 1,937 | i 15 | i 5,060 | i 20 | |||||||
Corporate
debt securities | i 478 | i 8 | i 37 | i 1 | i 515 | i 9 | |||||||
Asset-backed
securities: | |||||||||||||
Collateralized loan obligations | i 18,681 | i 176 | i — | i — | i 18,681 | i 176 | |||||||
Other | i 1,208 | i 6 | i 2,354 | i 16 | i 3,562 | i 22 | |||||||
Total
available-for-sale securities | i 50,325 | i 550 | i 36,706 | i 993 | i 87,031 | i 1,543 | |||||||
Held-to-maturity
securities | |||||||||||||
Mortgage-backed securities: | |||||||||||||
U.S.
GSEs and government agencies | i 4,385 | i 23 | i 7,082 | i 177 | i 11,467 | i 200 | |||||||
Total
mortgage-backed securities | i 4,385 | i 23 | i 7,082 | i 177 | i 11,467 | i 200 | |||||||
Obligations
of U.S. states and municipalities | i 12 | i — | i 1,114 | i 15 | i 1,126 | i 15 | |||||||
Total
held-to-maturity securities | i 4,397 | i 23 | i 8,196 | i 192 | i 12,593 | i 215 | |||||||
Total
investment securities with gross unrealized losses | i 54,722 | i 573 | i 44,902 | i 1,185 | i 99,624 | i 1,758 |
JPMorgan
Chase & Co./2019 Form 10-K | 211 |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Realized
gains | $ | i 650 | $ | i 211 | $ | i 1,013 | |||||
Realized
losses | ( i 392 | ) | ( i 606 | ) | ( i 1,072 | ) | |||||
OTTI
losses(a) | i — | i — | ( i 7 | ) | |||||||
Net
investment securities gains/(losses) | i 258 | ( i 395 | ) | ( i 66 | ) |
(a) | Represents
OTTI losses recognized in income on investment securities the Firm intends to sell. Excludes realized losses on securities sold of $ i 22 million and $ i 6
million for the years ended December 31, 2018 and 2017, respectively, that had been previously reported as an OTTI loss due to the intention to sell the securities. |
212 | JPMorgan Chase & Co./2019 Form 10-K |
By
remaining maturity December 31, 2019 (in millions) | Due in one year or less | Due after one year through five years | Due after five years through 10 years | Due after 10 years(b) | Total | ||||||||||||||
Available-for-sale
securities | |||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||
Amortized
cost | $ | i 1 | $ | i 58 | $ | i 11,073 | $ | i 114,516 | $ | i 125,648 | |||||||||
Fair
value | i 1 | i 58 | i 11,251 | i 116,985 | i 128,295 | ||||||||||||||
Average
yield(a) | i 1.99 | % | i 2.78 | % | i 2.76 | % | i 3.40 | % | i 3.34 | % | |||||||||
U.S.
Treasury and government agencies | |||||||||||||||||||
Amortized cost | $ | i 10,687 | $ | i 92,805 | $ | i 26,353 | $ | i 9,317 | $ | i 139,162 | |||||||||
Fair
value | i 10,700 | i 93,039 | i 26,446 | i 9,251 | i 139,436 | ||||||||||||||
Average
yield(a) | i 1.82 | % | i 1.84 | % | i 1.90 | % | i 1.98 | % | i 1.86 | % | |||||||||
Obligations
of U.S. states and municipalities | |||||||||||||||||||
Amortized cost | $ | i 123 | $ | i 193 | $ | i 825 | $ | i 26,552 | $ | i 27,693 | |||||||||
Fair
value | i 124 | i 202 | i 883 | i 28,601 | i 29,810 | ||||||||||||||
Average
yield(a) | i 4.13 | % | i 4.68 | % | i 5.28 | % | i 4.86 | % | i 4.87 | % | |||||||||
Certificates
of deposit | |||||||||||||||||||
Amortized cost | $ | i 77 | $ | i — | $ | i — | $ | i — | $ | i 77 | |||||||||
Fair
value | i 77 | i — | i — | i — | i 77 | ||||||||||||||
Average
yield(a) | i 0.50 | % | i — | % | i — | % | i — | % | i 0.50 | % | |||||||||
Non-U.S.
government debt securities | |||||||||||||||||||
Amortized cost | $ | i 6,672 | $ | i 11,544 | $ | i 2,898 | $ | i 313 | $ | i 21,427 | |||||||||
Fair
value | i 6,682 | i 11,791 | i 3,001 | i 313 | i 21,787 | ||||||||||||||
Average
yield(a) | i 2.17 | % | i 1.84 | % | i 1.29 | % | i 1.67 | % | i 1.87 | % | |||||||||
Corporate
debt securities | |||||||||||||||||||
Amortized cost | $ | i 205 | $ | i 206 | $ | i 412 | $ | i — | $ | i 823 | |||||||||
Fair
value | i 207 | i 212 | i 426 | i — | i 845 | ||||||||||||||
Average
yield(a) | i 4.49 | % | i 4.14 | % | i 3.50 | % | i — | % | i 3.91 | % | |||||||||
Asset-backed
securities | |||||||||||||||||||
Amortized cost | $ | i 17 | $ | i 2,352 | $ | i 7,184 | $ | i 20,923 | $ | i 30,476 | |||||||||
Fair
value | i 17 | i 2,353 | i 7,177 | i 20,902 | i 30,449 | ||||||||||||||
Average
yield(a) | i 0.62 | % | i 2.78 | % | i 2.86 | % | i 2.77 | % | i 2.79 | % | |||||||||
Total
available-for-sale securities | |||||||||||||||||||
Amortized cost | $ | i 17,782 | $ | i 107,158 | $ | i 48,745 | $ | i 171,621 | $ | i 345,306 | |||||||||
Fair
value | i 17,808 | i 107,655 | i 49,184 | i 176,052 | i 350,699 | ||||||||||||||
Average
yield(a) | i 1.99 | % | i 1.87 | % | i 2.27 | % | i 3.47 | % | i 2.73 | % | |||||||||
Held-to-maturity
securities | |||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||
Amortized
Cost | $ | i — | $ | i — | $ | i 5,850 | $ | i 30,673 | $ | i 36,523 | |||||||||
Fair
value | i — | i — | i 6,114 | i 31,512 | i 37,626 | ||||||||||||||
Average
yield(a) | i — | % | i — | % | i 3.06 | % | i 3.10 | % | i 3.10 | % | |||||||||
U.S.
Treasury and government agencies | |||||||||||||||||||
Amortized cost | $ | i — | $ | i 51 | $ | i — | $ | i — | $ | i 51 | |||||||||
Fair
value | i — | i 50 | i — | i — | i 50 | ||||||||||||||
Average
yield(a) | i — | % | i 1.47 | % | i — | % | i — | % | i 1.47 | % | |||||||||
Obligations
of U.S. states and municipalities | |||||||||||||||||||
Amortized cost | $ | i — | $ | i — | $ | i 99 | $ | i 4,698 | $ | i 4,797 | |||||||||
Fair
value | i — | i — | i 106 | i 4,990 | i 5,096 | ||||||||||||||
Average
yield(a) | i — | % | i — | % | i 3.91 | % | i 4.04 | % | i 4.04 | % | |||||||||
Asset-backed
securities | |||||||||||||||||||
Amortized cost | $ | i — | $ | i — | $ | i 5,296 | $ | i 873 | $ | i 6,169 | |||||||||
Fair
value | i — | i — | i 5,296 | i 873 | i 6,169 | ||||||||||||||
Average
yield(a) | i — | % | i — | % | i 3.19 | % | i 3.11 | % | i 3.18 | % | |||||||||
Total
held-to-maturity securities | |||||||||||||||||||
Amortized cost | $ | i — | $ | i 51 | $ | i 11,245 | $ | i 36,244 | $ | i 47,540 | |||||||||
Fair
value | i — | i 50 | i 11,516 | i 37,375 | i 48,941 | ||||||||||||||
Average
yield(a) | i — | % | i 1.47 | % | i 3.13 | % | i 3.23 | % | i 3.20 | % |
(a) | Average
yield is computed using the effective yield of each security owned at the end of the period, weighted based on the amortized cost of each security. The effective yield considers the contractual coupon, amortization of premiums and accretion of discounts, and the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable. The effective yield excludes unscheduled principal prepayments; and accordingly, actual maturities of securities may differ from their contractual or expected maturities as certain securities may be prepaid. |
(b) | Substantially
all of the Firm’s U.S. residential MBS and collateralized mortgage obligations are due in i 10 years or more, based on contractual maturity. The estimated weighted-average life, which reflects anticipated future prepayments, is approximately i 6
years for agency residential MBS, i 3 years for agency residential collateralized mortgage obligations and i 3
years for nonagency residential collateralized mortgage obligations. |
JPMorgan Chase & Co./2019 Form 10-K | 213 |
214 | JPMorgan
Chase & Co./2019 Form 10-K |
2019 | |||||||||||||||
December 31, (in millions) | Gross
amounts | Amounts netted on the Consolidated balance sheets | Amounts presented on the Consolidated balance sheets | Amounts not nettable on the Consolidated balance sheets(b) | Net amounts(c) | ||||||||||
Assets | |||||||||||||||
Securities
purchased under resale agreements | $ | i 628,609 | $ | ( i 379,463 | ) | $ | i 249,146 | $ | ( i 233,818 | ) | $ | i 15,328 | |||
Securities
borrowed | i 166,718 | ( i 26,960 | ) | i 139,758 | ( i 104,990 | ) | i 34,768 | ||||||||
Liabilities | |||||||||||||||
Securities
sold under repurchase agreements | $ | i 555,172 | $ | ( i 379,463 | ) | $ | i 175,709 | $ | ( i 151,566 | ) | $ | i 24,143 | |||
Securities
loaned and other(a) | i 36,649 | ( i 26,960 | ) | i 9,689 | ( i 9,654 | ) | i 35 |
2018 | |||||||||||||||
December
31, (in millions) | Gross amounts | Amounts netted on the Consolidated balance sheets | Amounts presented on the Consolidated balance sheets | Amounts not nettable on the Consolidated balance sheets(b) | Net amounts(c) | ||||||||||
Assets | |||||||||||||||
Securities
purchased under resale agreements | $ | i 691,116 | $ | ( i 369,612 | ) | $ | i 321,504 | $ | ( i 308,854 | ) | $ | i 12,650 | |||
Securities
borrowed | i 132,955 | ( i 20,960 | ) | i 111,995 | ( i 79,747 | ) | i 32,248 | ||||||||
Liabilities | |||||||||||||||
Securities
sold under repurchase agreements | $ | i 541,587 | $ | ( i 369,612 | ) | $ | i 171,975 | $ | ( i 149,125 | ) | $ | i 22,850 | |||
Securities
loaned and other(a) | i 33,700 | ( i 20,960 | ) | i 12,740 | ( i 12,358 | ) | i 382 |
(a) | Includes
securities-for-securities lending agreements of $ i 3.7 billion and $ i 3.3
billion at December 31, 2019 and 2018, respectively, accounted for at fair value, where the Firm is acting as lender. In the Consolidated balance sheets, the Firm recognizes the securities received at fair value within other assets and the obligation to return those securities within accounts payable and other liabilities. |
(b) | In some cases, collateral exchanged with a counterparty exceeds the net asset or liability balance with that counterparty. In such cases, the amounts reported in this column are limited to the related
net asset or liability with that counterparty. |
(c) | Includes securities financing agreements that provide collateral rights, but where an appropriate legal opinion with respect to the master netting agreement has not been either sought or obtained. At December 31, 2019 and 2018, included $ i 11.0
billion and $ i 7.9 billion, respectively, of securities purchased under resale agreements; $ i 31.9
billion and $ i 30.3 billion, respectively, of securities borrowed; $ i 22.7
billion and $ i 21.5 billion, respectively, of securities sold under repurchase agreements; and $ i 7
million and $ i 25 million, respectively, of securities loaned and other. |
JPMorgan
Chase & Co./2019 Form 10-K | 215 |
Gross liability balance | |||||||||||||||
2019 | 2018 | ||||||||||||||
December
31, (in millions) | Securities sold under repurchase agreements | Securities loaned and other | Securities sold under repurchase agreements | Securities loaned and other | |||||||||||
Mortgage-backed securities: | |||||||||||||||
U.S.
GSEs and government agencies | $ | i 34,119 | $ | i — | $ | i 34,311 | (a) | $ | i — | ||||||
Residential
- nonagency | i 1,239 | i — | i 2,165 | i — | |||||||||||
Commercial
- nonagency | i 1,612 | i — | i 1,390 | i — | |||||||||||
U.S.
Treasury, GSEs and government agencies | i 334,398 | i 29 | i 317,578 | (a) | i 69 | ||||||||||
Obligations
of U.S. states and municipalities | i 1,181 | i — | i 1,150 | i — | |||||||||||
Non-U.S.
government debt | i 145,548 | i 1,528 | i 154,900 | i 4,313 | |||||||||||
Corporate
debt securities | i 13,826 | i 1,580 | i 13,898 | i 428 | |||||||||||
Asset-backed
securities | i 1,794 | i — | i 3,867 | i — | |||||||||||
Equity
securities | i 21,455 | i 33,512 | i 12,328 | i 28,890 | |||||||||||
Total | $ | i 555,172 | $ | i 36,649 | $ | i 541,587 | $ | i 33,700 |
(a) | The
prior period amounts have been revised to conform with the current period presentation. |
Remaining contractual maturity of the agreements | |||||||||||||||||
Overnight and continuous | Greater
than 90 days | ||||||||||||||||
2019 (in millions) | Up to 30 days | 30 – 90 days | Total | ||||||||||||||
Total securities sold under repurchase agreements | $ | i 225,134 | $ | i 199,870 | $ | i 57,305 | $ | i 72,863 | $ | i 555,172 | |||||||
Total
securities loaned and other | i 32,028 | i 1,706 | i 937 | i 1,978 | i 36,649 |
Remaining
contractual maturity of the agreements | |||||||||||||||||
Overnight and continuous | Greater than 90 days | ||||||||||||||||
2018 (in millions) | Up to 30 days | 30
– 90 days | Total | ||||||||||||||
Total securities sold under repurchase agreements | $ | i 247,579 | $ | i 174,971 | $ | i 71,637 | $ | i 47,400 | $ | i 541,587 | |||||||
Total
securities loaned and other | i 28,402 | i 997 | i 2,132 | i 2,169 | i 33,700 |
216 | JPMorgan
Chase & Co./2019 Form 10-K |
• | Originated or purchased loans held-for-investment (i.e., “retained”), other than PCI loans |
• | Loans held-for-sale |
• | Loans
at fair value |
• | PCI loans held-for-investment |
• | Loans modified in a TDR that are determined to be collateral-dependent. |
• | Loans to borrowers who have experienced an event that suggests a loss is either known or highly certain are subject to accelerated charge-off standards (e.g., residential real estate and auto loans are charged off within 60 days of receiving notification
of a bankruptcy filing). |
• | Auto loans upon repossession of the automobile. |
JPMorgan Chase & Co./2019 Form 10-K | 217 |
218 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019
Form 10-K | 219 |
Consumer, excluding credit card(a) | Credit card | Wholesale(f) | ||
Residential
real estate – excluding PCI • Residential mortgage(b) • Home equity(c) Other consumer loans(d) • Auto • Consumer & Business Banking(e) Residential real estate – PCI • Home equity • Prime mortgage • Subprime mortgage • Option ARMs | •
Credit card loans | • Commercial and industrial • Real estate • Financial institutions • Governments & Agencies • Other(g) |
(a) | Includes loans held in CCB, scored prime mortgage and scored home equity loans held in AWM and scored prime mortgage loans held in
Corporate. |
(b) | Predominantly includes prime loans (including option ARMs). |
(c) | Includes senior and junior lien home equity loans. |
(d) | Includes certain business banking and auto dealer risk-rated loans for which the wholesale methodology is applied
for determining the allowance for loan losses; these loans are managed by CCB, and therefore, for consistency in presentation, are included with the other consumer loan classes. |
(e) | Predominantly includes Business Banking loans. |
(f) | Includes loans held in CIB, CB, AWM and Corporate. Excludes scored prime mortgage and scored home equity loans held in AWM and scored prime mortgage loans held in Corporate. Classes are internally defined and may not align with regulatory definitions. |
(g) | Includes
loans to: individuals and individual entities (predominantly consists of Wealth Management clients within AWM and includes loans to personal investment companies and personal and testamentary trusts), SPEs and Private education and civic organizations. Refer to Note 14 for more information on SPEs. |
Consumer, excluding credit card | Credit card(a) | Wholesale | Total | |||||||||||||||||
(in millions) | ||||||||||||||||||||
Retained | $ | i 332,038 | $ | i 168,924 | $ | i 444,639 | $ | i 945,601 | (b) | |||||||||||
Held-for-sale | i 3,002 | i — | i 4,062 | i 7,064 | ||||||||||||||||
At
fair value | i — | i — | i 7,104 | i 7,104 | ||||||||||||||||
Total | $ | i 335,040 | $ | i 168,924 | $ | i 455,805 | $ | i 959,769 | ||||||||||||
Consumer, excluding credit card | Credit card(a) | Wholesale | Total | |||||||||||||||||
(in millions) | ||||||||||||||||||||
Retained | $ | i 373,637 | $ | i 156,616 | $ | i 439,162 | $ | i 969,415 | (b) | |||||||||||
Held-for-sale | i 95 | i 16 | i 11,877 | i 11,988 | ||||||||||||||||
At
fair value | i — | i — | i 3,151 | i 3,151 | ||||||||||||||||
Total | $ | i 373,732 | $ | i 156,632 | $ | i 454,190 | $ | i 984,554 |
(a) | Includes
accrued interest and fees net of an allowance for the uncollectible portion of accrued interest and fee income. |
(b) | Loans (other than PCI loans and those for which the fair value option has been elected) are presented net of unamortized discounts and premiums and net deferred loan fees or costs. These amounts were not material as of December 31, 2019 and 2018. |
220 | JPMorgan
Chase & Co./2019 Form 10-K |
2019 | ||||||||||||||||||||
Year
ended December 31, (in millions) | Consumer, excluding credit card | Credit card | Wholesale | Total | ||||||||||||||||
Purchases | $ | i 1,282 | (a)(b) | $ | i — | $ | i 1,291 | $ | i 2,573 | |||||||||||
Sales | i 30,484 | i — | i 23,435 | i 53,919 | ||||||||||||||||
Retained
loans reclassified to held-for-sale | i 9,188 | i — | i 2,371 | i 11,559 |
2018 | ||||||||||||||||||||
Year
ended December 31, (in millions) | Consumer, excluding credit card | Credit card | Wholesale | Total | ||||||||||||||||
Purchases | $ | i 2,543 | (a)(b) | $ | i — | $ | i 2,354 | $ | i 4,897 | |||||||||||
Sales | i 9,984 | i — | i 16,741 | i 26,725 | ||||||||||||||||
Retained
loans reclassified to held-for-sale | i 36 | i — | i 2,276 | i 2,312 |
2017 | ||||||||||||||||||||
Year
ended December 31, (in millions) | Consumer, excluding credit card | Credit card | Wholesale | Total | ||||||||||||||||
Purchases | $ | i 3,461 | (a)(b) | $ | i — | $ | i 1,799 | $ | i 5,260 | |||||||||||
Sales | i 3,405 | i — | i 11,063 | i 14,468 | ||||||||||||||||
Retained
loans reclassified to held-for-sale | i 6,340 | (c) | i — | i 1,229 | i 7,569 |
(a) | Purchases
predominantly represent the Firm’s voluntary repurchase of certain delinquent loans from loan pools as permitted by Government National Mortgage Association (“Ginnie Mae”) guidelines. The Firm typically elects to repurchase these delinquent loans as it continues to service them and/or manage the foreclosure process in accordance with applicable requirements of Ginnie Mae, FHA, RHS, and/or VA. |
(b) | Excludes purchases of retained loans sourced through the correspondent origination channel and underwritten in accordance with the Firm’s standards. Such purchases were $ i 16.6
billion, $ i 18.6 billion and $ i 23.5
billion for the years ended December 31, 2019, 2018 and 2017, respectively. |
(c) | Includes the Firm’s student loan portfolio which was sold in 2017. |
JPMorgan Chase & Co./2019 Form 10-K | 221 |
December
31, (in millions) | 2019 | 2018 | ||||
Residential real estate – excluding PCI | ||||||
Residential mortgage | $ | i 199,037 | $ | i 231,078 | ||
Home
equity | i 23,917 | i 28,340 | ||||
Other
consumer loans | ||||||
Auto | i 61,522 | i 63,573 | ||||
Consumer
& Business Banking | i 27,199 | i 26,612 | ||||
Residential
real estate – PCI | ||||||
Home equity | i 7,377 | i 8,963 | ||||
Prime
mortgage | i 3,965 | i 4,690 | ||||
Subprime
mortgage | i 1,740 | i 1,945 | ||||
Option
ARMs | i 7,281 | i 8,436 | ||||
Total
retained loans | $ | i 332,038 | $ | i 373,637 |
• | For
residential real estate loans, including both non-PCI and PCI portfolios, the current estimated LTV ratio, or the combined LTV ratio in the case of junior lien loans, is an indicator of the potential loss severity in the event of default. Additionally, LTV or combined LTV ratios can provide insight into a borrower’s continued willingness to pay, as the delinquency rate of high-LTV loans tends to be greater than that for loans where the borrower has equity in the collateral. The geographic distribution of the loan collateral also provides insight as to the credit quality of the portfolio, as factors such as the regional economy, home price changes and specific events such as natural disasters, will affect credit quality. The borrower’s current or “refreshed” FICO score is a secondary credit quality indicator for certain loans, as FICO scores are an indication of the borrower’s credit payment history. Thus, a loan to a borrower with a low FICO score (less than
660 ) is considered to be of higher risk than a loan to a borrower with a higher FICO score. Further, a loan to a borrower with a high LTV ratio and a low FICO score is at greater risk of default than a loan to a borrower that has both a high LTV ratio and a high FICO score. |
• | For scored auto and scored business banking loans, geographic distribution is an indicator of the credit performance of the portfolio. Similar to residential real estate loans, geographic distribution provides insights into the portfolio performance based on regional economic activity and events. |
• | Risk-rated
business banking and auto loans are similar to wholesale loans in that the primary credit quality indicators are the internal risk ratings that are assigned to the loan and whether the loans are considered to be criticized and/or nonaccrual. Risk ratings are reviewed on a regular and ongoing basis by Credit Risk Management and are adjusted as necessary for updated information about borrowers’ ability to fulfill their obligations. Refer to page 234 of this Note for further information about risk-rated wholesale loan credit quality indicators. |
222 | JPMorgan
Chase & Co./2019 Form 10-K |
Residential
real estate – excluding PCI loans | ||||||||||||||||||||
December 31, (in millions, except ratios) | Residential mortgage | Home equity | Total
residential real estate – excluding PCI | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Loan delinquency(a) | ||||||||||||||||||||
Current | $ | i 198,024 | $ | i 225,899 | $ | i 23,385 | $ | i 27,611 | $ | i 221,409 | $ | i 253,510 | ||||||||
30–149
days past due | i 604 | i 2,763 | i 336 | i 453 | i 940 | i 3,216 | ||||||||||||||
150
or more days past due | i 409 | i 2,416 | i 196 | i 276 | i 605 | i 2,692 | ||||||||||||||
Total
retained loans | $ | i 199,037 | $ | i 231,078 | $ | i 23,917 | $ | i 28,340 | $ | i 222,954 | $ | i 259,418 | ||||||||
%
of 30+ days past due to total retained loans(b) | i 0.49 | % | i 0.48 | % | i 2.22 | % | i 2.57 | % | i 0.67 | % | i 0.71 | % | ||||||||
90
or more days past due and government guaranteed(c) | $ | i 38 | $ | i 2,541 | i — | i — | $ | i 38 | $ | i 2,541 | ||||||||||
Nonaccrual
loans | i 1,618 | i 1,765 | i 1,162 | i 1,323 | i 2,780 | i 3,088 | ||||||||||||||
Current
estimated LTV ratios(d)(e) | ||||||||||||||||||||
Greater than 125% and refreshed FICO scores: | ||||||||||||||||||||
Equal
to or greater than 660 | $ | i 18 | $ | i 25 | $ | i 4 | $ | i 6 | $ | i 22 | $ | i 31 | ||||||||
Less
than 660 | i 8 | i 13 | i 1 | i 1 | i 9 | i 14 | ||||||||||||||
101%
to 125% and refreshed FICO scores: | ||||||||||||||||||||
Equal to or greater than 660 | i 31 | i 37 | i 56 | i 111 | i 87 | i 148 | ||||||||||||||
Less
than 660 | i 35 | i 53 | i 19 | i 38 | i 54 | i 91 | ||||||||||||||
80%
to 100% and refreshed FICO scores: | ||||||||||||||||||||
Equal to or greater than 660 | i 5,013 | i 3,977 | i 606 | i 986 | i 5,619 | i 4,963 | ||||||||||||||
Less
than 660 | i 207 | i 281 | i 191 | i 326 | i 398 | i 607 | ||||||||||||||
Less
than 80% and refreshed FICO scores: | ||||||||||||||||||||
Equal to or greater than 660 | i 186,972 | i 212,505 | i 19,597 | i 22,632 | i 206,569 | i 235,137 | ||||||||||||||
Less
than 660 | i 6,001 | i 6,457 | i 2,776 | i 3,355 | i 8,777 | i 9,812 | ||||||||||||||
No
FICO/LTV available | i 689 | i 813 | i 667 | i 885 | i 1,356 | i 1,698 | ||||||||||||||
U.S.
government-guaranteed | i 63 | i 6,917 | i — | i — | i 63 | i 6,917 | ||||||||||||||
Total
retained loans | $ | i 199,037 | $ | i 231,078 | $ | i 23,917 | $ | i 28,340 | $ | i 222,954 | $ | i 259,418 | ||||||||
Geographic
region(f) | ||||||||||||||||||||
California | $ | i 66,278 | $ | i 74,759 | $ | i 4,831 | $ | i 5,695 | $ | i 71,109 | $ | i 80,454 | ||||||||
New
York | i 25,706 | i 28,847 | i 4,885 | i 5,769 | i 30,591 | i 34,616 | ||||||||||||||
Illinois | i 13,204 | i 15,249 | i 1,788 | i 2,131 | i 14,992 | i 17,380 | ||||||||||||||
Texas | i 12,601 | i 13,769 | i 1,599 | i 1,819 | i 14,200 | i 15,588 | ||||||||||||||
Florida | i 10,454 | i 10,704 | i 1,325 | i 1,575 | i 11,779 | i 12,279 | ||||||||||||||
Washington | i 7,708 | i 8,304 | i 720 | i 869 | i 8,428 | i 9,173 | ||||||||||||||
Colorado | i 7,777 | i 8,140 | i 444 | i 521 | i 8,221 | i 8,661 | ||||||||||||||
New
Jersey | i 5,792 | i 7,302 | i 1,394 | i 1,642 | i 7,186 | i 8,944 | ||||||||||||||
Massachusetts | i 5,596 | i 6,574 | i 202 | i 236 | i 5,798 | i 6,810 | ||||||||||||||
Arizona | i 3,929 | i 4,434 | i 932 | i 1,158 | i 4,861 | i 5,592 | ||||||||||||||
All
other(g) | i 39,992 | i 52,996 | i 5,797 | i 6,925 | i 45,789 | i 59,921 | ||||||||||||||
Total
retained loans | $ | i 199,037 | $ | i 231,078 | $ | i 23,917 | $ | i 28,340 | $ | i 222,954 | $ | i 259,418 |
(a) | Individual
delinquency classifications include mortgage loans insured by U.S. government agencies as follows: current included $ i 17
million and $ i 2.8 billion; 30–149
days past due included $ i 20 million and $ i 2.1
billion; and 150 or more days past due included $ i 26
million and $ i 2.0 billion at December 31,
2019 and 2018, respectively. |
(b) | At December 31, 2019 and 2018, residential mortgage loans excluded mortgage loans insured by U.S. government agencies of $ i 46
million and $ i 4.1 billion, respectively, that are 30 or more days
past due. These amounts have been excluded based upon the government guarantee. |
(c) | These balances are excluded from nonaccrual loans as the loans are guaranteed by U.S government agencies. Typically the principal balance of the loans is insured and interest is guaranteed at a specified reimbursement rate subject to meeting agreed-upon servicing guidelines. At December 31, 2019 and 2018, these balances included $ i 34
million and $ i 999 million, respectively,
of loans that are no longer accruing interest based on the agreed-upon servicing guidelines. For the remaining balance, interest is being accrued at the guaranteed reimbursement rate. There were i no
loans that were not guaranteed by U.S. government agencies that are 90 or more days past due and still accruing interest at December 31, 2019 and 2018. |
(d) | Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do
not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property. |
(e) | Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis. |
(f) | The geographic regions presented in the table are ordered based on the
magnitude of the corresponding loan balances at December 31, 2019. |
(g) | At December 31, 2019 and 2018, included mortgage loans insured by U.S. government agencies of $ i 63
million and $ i 6.9 billion, respectively. These amounts have been excluded from the geographic regions
presented based upon the government guarantee. |
JPMorgan Chase & Co./2019 Form 10-K | 223 |
Total loans | Total
30+ day delinquency rate | |||||||||||
December 31, (in millions except ratios) | 2019 | 2018 | 2019 | 2018 | ||||||||
HELOCs:(a) | ||||||||||||
Within
the revolving period(b) | $ | i 5,488 | $ | i 5,608 | i 0.35 | % | i 0.25 | % | ||||
Beyond
the revolving period | i 8,724 | i 11,286 | i 2.48 | i 2.80 | ||||||||
HELOANs | i 754 | i 1,030 | i 2.52 | i 2.82 | ||||||||
Total | $ | i 14,966 | $ | i 17,924 | i 1.70 | % | i 2.00 | % |
December
31, (in millions) | Residential mortgage | Home equity | Total residential real estate – excluding PCI | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Impaired
loans | |||||||||||||||||||||
With an allowance | $ | i 2,851 | $ | i 3,381 | $ | i 1,042 | $ | i 1,151 | $ | i 3,893 | $ | i 4,532 | |||||||||
Without
an allowance(a) | i 1,154 | i 1,184 | i 879 | i 907 | i 2,033 | i 2,091 | |||||||||||||||
Total
impaired loans(b)(c) | $ | i 4,005 | $ | i 4,565 | $ | i 1,921 | $ | i 2,058 | $ | i 5,926 | $ | i 6,623 | |||||||||
Allowance
for loan losses related to impaired loans | $ | i 52 | $ | i 88 | $ | i 13 | $ | i 45 | $ | i 65 | $ | i 133 | |||||||||
Unpaid
principal balance of impaired loans(d) | i 5,438 | i 6,207 | i 3,301 | i 3,531 | i 8,739 | i 9,738 | |||||||||||||||
Impaired
loans on nonaccrual status(e) | i 1,367 | i 1,459 | i 965 | i 963 | i 2,332 | i 2,422 |
(a) | Represents
collateral-dependent residential real estate loans that are charged off to the fair value of the underlying collateral less costs to sell. The Firm reports, in accordance with regulatory guidance, residential real estate loans that have been discharged under Chapter 7 bankruptcy and not reaffirmed by the borrower (“Chapter 7 loans”) as collateral-dependent nonaccrual TDRs, regardless of their delinquency status. At December 31, 2019, Chapter 7 residential real estate loans included approximately i 9%
of residential mortgages and approximately i 7% of home equity that were 30 days or more past due. |
(b) | At
December 31, 2019 and 2018, $ i 14 million and $ i 4.1
billion, respectively, of loans modified subsequent to repurchase from Ginnie Mae in accordance with the standards of the appropriate government agency (i.e., FHA, VA, RHS) are not included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure. |
(c) | Predominantly all impaired loans in the table above are in the U.S. |
(d) | Represents
the contractual amount of principal owed at December 31, 2019 and 2018. The unpaid principal balance differs from the impaired loan balances due to various factors including charge-offs, net deferred loan fees or costs, and unamortized discounts or premiums on purchased loans. |
(e) | As of December 31, 2019 and 2018, nonaccrual loans included $ i 1.9
billion and $ i 2.0 billion, respectively, of TDRs for which the borrowers were less than 90 days past due. Refer to the Loan accounting framework on pages 217–219 of this Note for additional information
about loans modified in a TDR that are on nonaccrual status. |
224 | JPMorgan Chase & Co./2019 Form 10-K |
Year ended December 31, (in
millions) | Average impaired loans | Interest income on impaired loans(a) | Interest income on impaired loans on a cash basis(a) | ||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||
Residential
mortgage | $ | i 4,307 | $ | i 5,082 | $ | i 5,797 | $ | i 224 | $ | i 257 | $ | i 287 | $ | i 68 | $ | i 75 | $ | i 75 | |||||||||||
Home
equity | i 2,007 | i 2,123 | i 2,222 | i 132 | i 131 | i 127 | i 83 | i 84 | i 80 | ||||||||||||||||||||
Total
residential real estate – excluding PCI | $ | i 6,314 | $ | i 7,205 | $ | i 8,019 | $ | i 356 | $ | i 388 | $ | i 414 | $ | i 151 | $ | i 159 | $ | i 155 |
(a) | Generally,
interest income on loans modified in TDRs is recognized on a cash basis until the borrower has made a minimum of i six payments under the new terms, unless the loan is deemed to be collateral-dependent. |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||
Residential mortgage | $ | i 234 | $ | i 401 | $ | i 373 | |||
Home
equity | i 256 | i 335 | i 383 | ||||||
Total
residential real estate – excluding PCI | $ | i 490 | $ | i 736 | $ | i 756 |
Year
ended December 31, | Residential mortgage | Home equity | Total residential real estate – excluding PCI | ||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||
Number
of loans approved for a trial modification | i 2,105 | i 2,570 | i 1,283 | i 3,767 | i 4,605 | (c) | i 5,765 | (c) | i 5,872 | i 7,175 | (c) | i 7,048 | (c) | ||||||||||
Number
of loans permanently modified | i 1,448 | i 2,907 | i 2,628 | i 3,470 | i 4,946 | i 5,624 | i 4,918 | i 7,853 | i 8,252 | ||||||||||||||
Concession
granted:(a) | |||||||||||||||||||||||
Interest
rate reduction | i 66 | % | i 40 | % | i 63 | % | i 81 | % | i 62 | % | i 59 | % | i 77 | % | i 54 | % | i 60 | % | |||||
Term
or payment extension | i 90 | i 55 | i 72 | i 64 | i 66 | i 69 | i 71 | i 62 | i 70 | ||||||||||||||
Principal
and/or interest deferred | i 26 | i 44 | i 15 | i 7 | i 20 | i 10 | i 13 | i 29 | i 12 | ||||||||||||||
Principal
forgiveness | i 6 | i 8 | i 16 | i 5 | i 7 | i 13 | i 5 | i 7 | i 14 | ||||||||||||||
Other(b) | i 45 | i 38 | i 33 | i 70 | i 58 | i 31 | i 63 | i 51 | i 32 |
(a) | Represents
concessions granted in permanent modifications as a percentage of the number of loans permanently modified. The sum of the percentages exceeds i 100% because predominantly all of the modifications include more than one type of concession. Concessions offered on trial modifications are generally consistent with those granted on permanent modifications. |
(b) | Includes
variable interest rate to fixed interest rate modifications for the years ended December 31, 2019, 2018 and 2017. Also includes forbearances that meet the definition of a TDR for the years ended December 31, 2019 and 2018. Forbearances suspend or reduce monthly payments for a specific period of time to address a temporary hardship. |
(c) | The
prior period amounts have been revised to conform with the current period presentation. This revision also impacted home equity impaired loans and new TDRs in this note, as well as loans by impairment methodology in Note 13. |
JPMorgan Chase & Co./2019 Form 10-K | 225 |
Year
ended December 31, (in millions, except weighted-average data) | Residential mortgage | Home equity | Total residential real estate – excluding PCI | ||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||
Weighted-average
interest rate of loans with interest rate reductions – before TDR | i 5.88 | % | i 5.65 | % | i 5.15 | % | i 5.53 | % | i 5.39 | % | i 4.94 | % | i 5.68 | % | i 5.50 | % | i 5.06 | % | |||||||||||
Weighted-average
interest rate of loans with interest rate reductions – after TDR | i 4.21 | i 3.80 | i 2.99 | i 3.53 | i 3.46 | i 2.64 | i 3.81 | i 3.60 | i 2.83 | ||||||||||||||||||||
Weighted-average
remaining contractual term (in years) of loans with term or payment extensions – before TDR | i 21 | i 24 | i 24 | i 19 | i 19 | i 21 | i 20 | i 21 | i 23 | ||||||||||||||||||||
Weighted-average
remaining contractual term (in years) of loans with term or payment extensions – after TDR | i 39 | i 38 | i 38 | i 40 | i 39 | i 39 | i 39 | i 38 | i 38 | ||||||||||||||||||||
Charge-offs
recognized upon permanent modification | $ | i 1 | $ | i 1 | $ | i 2 | $ | i — | $ | i 1 | $ | i 1 | $ | i 1 | $ | i 2 | $ | i 3 | |||||||||||
Principal
deferred | i 15 | i 21 | i 12 | i 4 | i 9 | i 10 | i 19 | i 30 | i 22 | ||||||||||||||||||||
Principal
forgiven | i 4 | i 10 | i 20 | i 3 | i 7 | i 13 | i 7 | i 17 | i 33 | ||||||||||||||||||||
Balance
of loans that redefaulted within one year of permanent modification(a) | $ | i 107 | $ | i 97 | $ | i 124 | $ | i 59 | $ | i 64 | $ | i 56 | $ | i 166 | $ | i 161 | $ | i 180 |
(a) | Represents
loans permanently modified in TDRs that experienced a payment default in the periods presented, and for which the payment default occurred within i one year of the modification. The dollar amounts presented represent the balance of such loans at the end of the reporting period in which such loans defaulted. For residential real estate loans modified in TDRs, payment default is deemed to occur when the loan becomes i two
contractual payments past due. In the event that a modified loan redefaults, it is probable that the loan will ultimately be liquidated through foreclosure or another similar type of liquidation transaction. Redefaults of loans modified within the last i 12 months may not be representative of ultimate redefault levels. |
226 | JPMorgan
Chase & Co./2019 Form 10-K |
December
31, (in millions, except ratios) | Auto | Consumer & Business Banking | Total other consumer | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Loan
delinquency | ||||||||||||||||||||
Current | $ | i 60,944 | $ | i 62,984 | $ | i 26,842 | $ | i 26,249 | $ | i 87,786 | $ | i 89,233 | ||||||||
30–119
days past due | i 578 | i 589 | i 240 | i 252 | i 818 | i 841 | ||||||||||||||
120
or more days past due | i — | i — | i 117 | i 111 | i 117 | i 111 | ||||||||||||||
Total
retained loans | $ | i 61,522 | $ | i 63,573 | $ | i 27,199 | $ | i 26,612 | $ | i 88,721 | $ | i 90,185 | ||||||||
%
of 30+ days past due to total retained loans | i 0.94 | % | i 0.93 | % | i 1.31 | % | i 1.36 | % | i 1.05 | % | i 1.06 | % | ||||||||
Nonaccrual
loans(a) | i 113 | i 128 | i 247 | i 245 | i 360 | i 373 | ||||||||||||||
Geographic
region(b) | ||||||||||||||||||||
California | $ | i 8,081 | $ | i 8,330 | $ | i 5,902 | $ | i 5,520 | $ | i 13,983 | $ | i 13,850 | ||||||||
Texas | i 6,804 | i 6,531 | i 3,110 | i 2,993 | i 9,914 | i 9,524 | ||||||||||||||
New
York | i 3,639 | i 3,863 | i 4,432 | i 4,381 | i 8,071 | i 8,244 | ||||||||||||||
Illinois | i 3,360 | i 3,716 | i 1,745 | i 2,046 | i 5,105 | i 5,762 | ||||||||||||||
Florida | i 3,262 | i 3,256 | i 1,609 | i 1,502 | i 4,871 | i 4,758 | ||||||||||||||
Arizona | i 2,024 | i 2,084 | i 1,276 | i 1,491 | i 3,300 | i 3,575 | ||||||||||||||
Ohio | i 1,986 | i 1,973 | i 1,139 | i 1,305 | i 3,125 | i 3,278 | ||||||||||||||
New
Jersey | i 1,905 | i 1,981 | i 798 | i 723 | i 2,703 | i 2,704 | ||||||||||||||
Michigan | i 1,215 | i 1,357 | i 1,253 | i 1,329 | i 2,468 | i 2,686 | ||||||||||||||
Louisiana | i 1,617 | i 1,587 | i 741 | i 860 | i 2,358 | i 2,447 | ||||||||||||||
All
other | i 27,629 | i 28,895 | i 5,194 | i 4,462 | i 32,823 | i 33,357 | ||||||||||||||
Total
retained loans | $ | i 61,522 | $ | i 63,573 | $ | i 27,199 | $ | i 26,612 | $ | i 88,721 | $ | i 90,185 | ||||||||
Loans
by risk ratings(c) | ||||||||||||||||||||
Noncriticized | $ | i 14,178 | $ | i 15,749 | $ | i 19,156 | $ | i 18,743 | $ | i 33,334 | $ | i 34,492 | ||||||||
Criticized
performing | i 360 | i 273 | i 727 | i 751 | i 1,087 | i 1,024 | ||||||||||||||
Criticized
nonaccrual | i — | i — | i 198 | i 191 | i 198 | i 191 |
(a) | There
were i no loans that were 90 or more days past due and still accruing interest at December 31, 2019 and December 31, 2018. |
(b) | The
geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at December 31, 2019. |
(c) | For risk-rated business banking and auto loans, the primary credit quality indicator is the internal risk rating of the loan, including whether the loans are considered to be criticized and/or nonaccrual. |
JPMorgan Chase & Co./2019 Form 10-K | 227 |
December
31, (in millions) | 2019 | 2018 | ||||
Impaired loans | ||||||
With an allowance | $ | i 227 | $ | i 222 | ||
Without
an allowance(a) | i 19 | i 29 | ||||
Total
impaired loans(b)(c) | $ | i 246 | $ | i 251 | ||
Allowance
for loan losses related to impaired loans | $ | i 71 | $ | i 63 | ||
Unpaid
principal balance of impaired loans(d) | i 342 | i 355 | ||||
Impaired
loans on nonaccrual status | i 224 | i 229 |
(a) | When
discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged off and/or there have been interest payments received and applied to the loan balance. |
(b) | Predominantly all other consumer impaired loans are in the U.S. |
(c) | Other consumer average impaired loans were $ i 246
million, $ i 275 million and $ i 427
million for the years ended December 31, 2019, 2018 and 2017, respectively. The related interest income on impaired loans, including those on a cash basis, was not material for the years ended December 31, 2019, 2018 and 2017. |
(d) | Represents the contractual amount of principal owed at December 31,
2019 and 2018. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs, interest payments received and applied to the principal balance, net deferred loan fees or costs and unamortized discounts or premiums on purchased loans. |
228 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan
Chase & Co./2019 Form 10-K | 229 |
December
31, (in millions, except ratios) | Home equity | Prime mortgage | Subprime mortgage | Option ARMs | Total PCI | |||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
Carrying
value(a) | $ | i 7,377 | $ | i 8,963 | $ | i 3,965 | $ | i 4,690 | $ | i 1,740 | $ | i 1,945 | $ | i 7,281 | $ | i 8,436 | $ | i 20,363 | $ | i 24,034 | ||||||||||||||
Loan
delinquency (based on unpaid principal balance) | ||||||||||||||||||||||||||||||||||
Current | $ | i 7,203 | $ | i 8,624 | $ | i 3,593 | $ | i 4,226 | $ | i 1,864 | $ | i 2,033 | $ | i 6,606 | $ | i 7,592 | $ | i 19,266 | $ | i 22,475 | ||||||||||||||
30–149
days past due | i 217 | i 278 | i 219 | i 259 | i 230 | i 286 | i 356 | i 398 | i 1,022 | i 1,221 | ||||||||||||||||||||||||
150
or more days past due | i 148 | i 242 | i 172 | i 223 | i 101 | i 123 | i 333 | i 457 | i 754 | i 1,045 | ||||||||||||||||||||||||
Total
loans | $ | i 7,568 | $ | i 9,144 | $ | i 3,984 | $ | i 4,708 | $ | i 2,195 | $ | i 2,442 | $ | i 7,295 | $ | i 8,447 | $ | i 21,042 | $ | i 24,741 | ||||||||||||||
%
of 30+ days past due to total loans | i 4.82 | % | i 5.69 | % | i 9.81 | % | i 10.24 | % | i 15.08 | % | i 16.75 | % | i 9.44 | % | i 10.12 | % | i 8.44 | % | i 9.16 | % | ||||||||||||||
Current
estimated LTV ratios (based on unpaid principal balance)(b)(c) | ||||||||||||||||||||||||||||||||||
Greater
than 125% and refreshed FICO scores: | ||||||||||||||||||||||||||||||||||
Equal to or greater than
660 | $ | i 12 | $ | i 17 | $ | i 2 | $ | i 1 | $ | i — | $ | i — | $ | i 1 | $ | i 3 | $ | i 15 | $ | i 21 | ||||||||||||||
Less
than 660 | i 9 | i 13 | i 6 | i 7 | i 7 | i 9 | i 7 | i 7 | i 29 | i 36 | ||||||||||||||||||||||||
101%
to 125% and refreshed FICO scores: | ||||||||||||||||||||||||||||||||||
Equal
to or greater than 660 | i 86 | i 135 | i 3 | i 6 | i 6 | i 4 | i 14 | i 17 | i 109 | i 162 | ||||||||||||||||||||||||
Less
than 660 | i 39 | i 65 | i 17 | i 22 | i 20 | i 35 | i 18 | i 33 | i 94 | i 155 | ||||||||||||||||||||||||
80%
to 100% and refreshed FICO scores: | ||||||||||||||||||||||||||||||||||
Equal
to or greater than 660 | i 588 | i 805 | i 47 | i 75 | i 47 | i 54 | i 85 | i 119 | i 767 | i 1,053 | ||||||||||||||||||||||||
Less
than 660 | i 261 | i 388 | i 65 | i 112 | i 100 | i 161 | i 113 | i 190 | i 539 | i 851 | ||||||||||||||||||||||||
Lower
than 80% and refreshed FICO scores: | ||||||||||||||||||||||||||||||||||
Equal
to or greater than 660 | i 4,803 | i 5,548 | i 2,429 | i 2,689 | i 784 | i 739 | i 4,710 | i 5,111 | i 12,726 | i 14,087 | ||||||||||||||||||||||||
Less
than 660 | i 1,562 | i 1,908 | i 1,250 | i 1,568 | i 1,136 | i 1,327 | i 2,093 | i 2,622 | i 6,041 | i 7,425 | ||||||||||||||||||||||||
No
FICO/LTV available | i 208 | i 265 | i 165 | i 228 | i 95 | i 113 | i 254 | i 345 | i 722 | i 951 | ||||||||||||||||||||||||
Total
unpaid principal balance | $ | i 7,568 | $ | i 9,144 | $ | i 3,984 | $ | i 4,708 | $ | i 2,195 | $ | i 2,442 | $ | i 7,295 | $ | i 8,447 | $ | i 21,042 | $ | i 24,741 | ||||||||||||||
Geographic
region (based on unpaid principal balance)(d) | ||||||||||||||||||||||||||||||||||
California | $ | i 4,475 | $ | i 5,420 | $ | i 2,166 | $ | i 2,578 | $ | i 531 | $ | i 593 | $ | i 4,189 | $ | i 4,798 | $ | i 11,361 | $ | i 13,389 | ||||||||||||||
Florida | i 833 | i 976 | i 288 | i 332 | i 212 | i 234 | i 604 | i 713 | i 1,937 | i 2,255 | ||||||||||||||||||||||||
New
York | i 451 | i 525 | i 324 | i 365 | i 245 | i 268 | i 441 | i 502 | i 1,461 | i 1,660 | ||||||||||||||||||||||||
Illinois | i 200 | i 233 | i 134 | i 154 | i 113 | i 123 | i 175 | i 199 | i 622 | i 709 | ||||||||||||||||||||||||
Washington | i 326 | i 419 | i 80 | i 98 | i 37 | i 44 | i 143 | i 177 | i 586 | i 738 | ||||||||||||||||||||||||
New
Jersey | i 174 | i 210 | i 112 | i 134 | i 78 | i 88 | i 219 | i 258 | i 583 | i 690 | ||||||||||||||||||||||||
Massachusetts | i 53 | i 65 | i 97 | i 113 | i 67 | i 73 | i 206 | i 240 | i 423 | i 491 | ||||||||||||||||||||||||
Maryland | i 40 | i 48 | i 86 | i 95 | i 87 | i 96 | i 157 | i 178 | i 370 | i 417 | ||||||||||||||||||||||||
Virginia | i 44 | i 54 | i 77 | i 91 | i 33 | i 37 | i 180 | i 211 | i 334 | i 393 | ||||||||||||||||||||||||
Arizona | i 130 | i 165 | i 57 | i 69 | i 37 | i 43 | i 93 | i 112 | i 317 | i 389 | ||||||||||||||||||||||||
All
other | i 842 | i 1,029 | i 563 | i 679 | i 755 | i 843 | i 888 | i 1,059 | i 3,048 | i 3,610 | ||||||||||||||||||||||||
Total
unpaid principal balance | $ | i 7,568 | $ | i 9,144 | $ | i 3,984 | $ | i 4,708 | $ | i 2,195 | $ | i 2,442 | $ | i 7,295 | $ | i 8,447 | $ | i 21,042 | $ | i 24,741 |
(a) | Carrying
value includes the effect of fair value adjustments that were applied to the consumer PCI portfolio at the date of acquisition. |
(b) | Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers
all available lien positions, as well as unused lines, related to the property. |
(c) | Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis. |
(d) | The geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at December 31, 2019. |
230 | JPMorgan
Chase & Co./2019 Form 10-K |
December
31, (in millions, except ratios) | Total loans | Total 30+ day delinquency rate | ||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
HELOCs:(a)(b) | $ | i 5,337 | $ | i 6,531 | i 3.52 | % | i 4.00 | % | ||||
HELOANs | i 220 | i 280 | i 3.64 | i 3.57 | ||||||||
Total | $ | i 5,557 | $ | i 6,811 | i 3.53 | % | i 3.98 | % |
(a) | In
general, these HELOCs are revolving loans for a i 10-year period, after which time the HELOC converts to an interest-only loan with a balloon payment at the end of the loan’s term. Substantially all HELOCs are beyond the revolving
period. |
(b) | Includes loans modified into fixed rate amortizing loans. |
Year
ended December 31, (in millions, except ratios) | Total PCI | ||||||||||
2019 | 2018 | 2017 | |||||||||
Beginning balance | $ | i 8,422 | $ | i 11,159 | $ | i 11,768 | |||||
Accretion
into interest income | ( i 1,093 | ) | ( i 1,249 | ) | ( i 1,396 | ) | |||||
Changes
in interest rates on variable-rate loans | ( i 575 | ) | ( i 109 | ) | i 503 | ||||||
Other
changes in expected cash flows(a) | ( i 589 | ) | ( i 1,379 | ) | i 284 | ||||||
Balance
at December 31 | $ | i 6,165 | $ | i 8,422 | $ | i 11,159 | |||||
Accretable
yield percentage | i 5.28 | % | i 4.92 | % | i 4.53 | % |
(a) | Other
changes in expected cash flows may vary from period to period as the Firm continues to refine its cash flow model, for example cash flows expected to be collected due to the impact of modifications and changes in prepayment assumptions. |
JPMorgan Chase & Co./2019 Form 10-K | 231 |
As of or for the year ended December 31, (in millions, except ratios) | 2019 | 2018 | ||||
Net charge-offs | $ | i 4,848 | $ | i 4,518 | ||
Net
charge-off rate | i 3.10 | % | i 3.10 | % | ||
Loan
delinquency | ||||||
Current and less than 30 days past due and still accruing | $ | i 165,767 | $ | i 153,746 | ||
30–89
days past due and still accruing | i 1,550 | i 1,426 | ||||
90
or more days past due and still accruing | i 1,607 | i 1,444 | ||||
Total
retained loans | $ | i 168,924 | $ | i 156,616 | ||
Loan
delinquency ratios | ||||||
% of 30+ days past due to total retained loans | i 1.87 | % | i 1.83 | % | ||
%
of 90+ days past due to total retained loans | i 0.95 | i 0.92 | ||||
Geographic
region(a) | ||||||
California | $ | i 25,783 | $ | i 23,757 | ||
Texas | i 16,728 | i 15,085 | ||||
New
York | i 14,544 | i 13,601 | ||||
Florida | i 10,830 | i 9,770 | ||||
Illinois | i 9,579 | i 8,938 | ||||
New
Jersey | i 7,165 | i 6,739 | ||||
Ohio | i 5,406 | i 5,094 | ||||
Pennsylvania | i 5,245 | i 4,996 | ||||
Colorado | i 4,763 | i 4,309 | ||||
Michigan | i 4,164 | i 3,912 | ||||
All
other | i 64,717 | i 60,415 | ||||
Total
retained loans | $ | i 168,924 | $ | i 156,616 | ||
Percentage
of portfolio based on carrying value with estimated refreshed FICO scores | ||||||
Equal to or greater than 660 | i 84.0 | % | i 84.2 | % | ||
Less
than 660 | i 15.4 | i 15.0 | ||||
No
FICO available | i 0.6 | i 0.8 |
(a) | The
geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at December 31, 2019. |
232 | JPMorgan Chase & Co./2019 Form 10-K |
December 31, (in millions) | 2019 | 2018 | ||||
Impaired
credit card loans with an allowance(a)(b)(c) | $ | i 1,452 | $ | i 1,319 | ||
Allowance
for loan losses related to impaired credit card loans | i 477 | i 440 |
(a) | The
carrying value and the unpaid principal balance are the same for credit card impaired loans. |
(b) | There were no impaired loans without an allowance. |
(c) | Predominantly all impaired credit card loans are in the U.S. |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||
Average impaired credit card loans | $ | i 1,389 | $ | i 1,260 | $ | i 1,214 | |||
Interest
income on impaired credit card loans | i 72 | i 65 | i 59 |
Year ended December 31, (in millions, except weighted-average data) | 2019 | 2018 | 2017 | |||||||
Weighted-average
interest rate of loans – before TDR | i 19.07 | % | i 17.98 | % | i 16.58 | % | ||||
Weighted-average
interest rate of loans – after TDR | i 4.70 | i 5.16 | i 4.88 | |||||||
Loans
that redefaulted within one year of modification(a) | $ | i 148 | $ | i 116 | $ | i 93 |
(a) | Represents
loans modified in TDRs that experienced a payment default in the periods presented, and for which the payment default occurred within i one year of the modification. The amounts presented represent the balance of such loans as of the end of the quarter in which they defaulted. |
JPMorgan
Chase & Co./2019 Form 10-K | 233 |
234 | JPMorgan Chase & Co./2019 Form 10-K |
As
of or for the year ended December 31, (in millions, except ratios) | Commercial and industrial | Real estate | Financial institutions | Governments & Agencies | Other(d) | Total retained loans | |||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||||
Loans
by risk ratings | |||||||||||||||||||||||||||||||||||||||||
Investment-grade | $ | i 60,700 | $ | i 73,497 | $ | i 101,354 | $ | i 100,107 | $ | i 40,263 | $ | i 32,178 | $ | i 12,616 | $ | i 13,984 | $ | i 129,266 | $ | i 119,963 | $ | i 344,199 | $ | i 339,729 | |||||||||||||||||
Noninvestment-
grade: | |||||||||||||||||||||||||||||||||||||||||
Noncriticized | i 51,356 | i 51,720 | i 13,841 | i 14,876 | i 15,768 | i 15,316 | i 126 | i 201 | i 12,411 | i 11,478 | i 93,502 | i 93,591 | |||||||||||||||||||||||||||||
Criticized
performing | i 4,071 | i 3,738 | i 1,001 | i 620 | i 574 | i 150 | i — | i 2 | i 449 | i 182 | i 6,095 | i 4,692 | |||||||||||||||||||||||||||||
Criticized
nonaccrual | i 752 | i 851 | i 48 | i 134 | i 3 | i 4 | i — | i — | i 40 | i 161 | i 843 | i 1,150 | |||||||||||||||||||||||||||||
Total
noninvestment- grade | i 56,179 | i 56,309 | i 14,890 | i 15,630 | i 16,345 | i 15,470 | i 126 | i 203 | i 12,900 | i 11,821 | i 100,440 | i 99,433 | |||||||||||||||||||||||||||||
Total
retained loans | $ | i 116,879 | $ | i 129,806 | $ | i 116,244 | $ | i 115,737 | $ | i 56,608 | $ | i 47,648 | $ | i 12,742 | $ | i 14,187 | $ | i 142,166 | $ | i 131,784 | $ | i 444,639 | $ | i 439,162 | |||||||||||||||||
%
of total criticized to total retained loans | i 4.13 | % | i 3.54 | % | i 0.90 | % | i 0.65 | % | i 1.02 | % | i 0.32 | % | i — | i 0.01 | % | i 0.34 | % | i 0.26 | % | i 1.56 | % | i 1.33 | % | ||||||||||||||||||
%
of criticized nonaccrual to total retained loans | i 0.64 | i 0.66 | i 0.04 | i 0.12 | i 0.01 | i 0.01 | i — | i — | i 0.03 | i 0.12 | i 0.19 | i 0.26 | |||||||||||||||||||||||||||||
Loans
by geographic distribution(a) | |||||||||||||||||||||||||||||||||||||||||
Total
non-U.S. | $ | i 28,253 | $ | i 29,572 | $ | i 4,123 | $ | i 2,967 | $ | i 16,800 | $ | i 18,524 | $ | i 2,232 | $ | i 3,150 | $ | i 49,966 | $ | i 48,433 | $ | i 101,374 | $ | i 102,646 | |||||||||||||||||
Total
U.S. | i 88,626 | i 100,234 | i 112,121 | i 112,770 | i 39,808 | i 29,124 | i 10,510 | i 11,037 | i 92,200 | i 83,351 | i 343,265 | i 336,516 | |||||||||||||||||||||||||||||
Total
retained loans | $ | i 116,879 | $ | i 129,806 | $ | i 116,244 | $ | i 115,737 | $ | i 56,608 | $ | i 47,648 | $ | i 12,742 | $ | i 14,187 | $ | i 142,166 | $ | i 131,784 | $ | i 444,639 | $ | i 439,162 | |||||||||||||||||
Net
charge-offs/(recoveries) | $ | i 329 | $ | i 165 | $ | i 12 | $ | ( i 20 | ) | $ | i — | $ | i — | $ | i — | $ | i — | $ | i 28 | $ | i 10 | $ | i 369 | $ | i 155 | ||||||||||||||||
%
of net charge-offs/(recoveries) to end-of-period retained loans | i 0.28 | % | i 0.13 | % | i 0.01 | % | ( i 0.02 | )% | i — | % | i — | i — | % | i — | % | i 0.02 | % | i 0.01 | % | i 0.08 | % | i 0.04 | % | ||||||||||||||||||
Loan
delinquency(b) | |||||||||||||||||||||||||||||||||||||||||
Current
and less than 30 days past due and still accruing | $ | i 115,753 | $ | i 128,678 | $ | i 116,098 | $ | i 115,533 | $ | i 56,583 | $ | i 47,622 | $ | i 12,713 | $ | i 14,165 | $ | i 141,739 | $ | i 130,918 | $ | i 442,886 | $ | i 436,916 | |||||||||||||||||
30–89
days past due and still accruing | i 339 | i 109 | i 94 | i 67 | i 20 | i 12 | i 28 | i 18 | i 387 | i 702 | i 868 | i 908 | |||||||||||||||||||||||||||||
90
or more days past due and still accruing(c) | i 35 | i 168 | i 4 | i 3 | i 2 | i 10 | i 1 | i 4 | i — | i 3 | i 42 | i 188 | |||||||||||||||||||||||||||||
Criticized
nonaccrual | i 752 | i 851 | i 48 | i 134 | i 3 | i 4 | i — | i — | i 40 | i 161 | i 843 | i 1,150 | |||||||||||||||||||||||||||||
Total
retained loans | $ | i 116,879 | $ | i 129,806 | $ | i 116,244 | $ | i 115,737 | $ | i 56,608 | $ | i 47,648 | $ | i 12,742 | $ | i 14,187 | $ | i 142,166 | $ | i 131,784 | $ | i 444,639 | $ | i 439,162 |
(a) | The
U.S. and non-U.S. distribution is determined based predominantly on the domicile of the borrower. |
(b) | The credit quality of wholesale loans is assessed primarily through ongoing review and monitoring of an obligor’s ability to meet contractual obligations rather than relying on the past due status, which is generally a lagging indicator of credit quality. |
(c) | Represents loans that are considered well-collateralized and therefore still accruing interest. |
(d) | Other
includes individuals and individual entities (predominantly consists of Wealth Management clients within AWM and includes loans to personal investment companies and personal and testamentary trusts), SPEs and Private education and civic organizations. Refer to Note 14 for more information on SPEs. |
JPMorgan Chase & Co./2019 Form 10-K | 235 |
December 31, (in
millions, except ratios) | Multifamily | Other Commercial | Total real estate loans | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Real
estate retained loans | $ | i 79,402 | $ | i 79,184 | $ | i 36,842 | $ | i 36,553 | $ | i 116,244 | $ | i 115,737 | ||||||||
Criticized | i 407 | i 388 | i 642 | i 366 | i 1,049 | i 754 | ||||||||||||||
%
of total criticized to total real estate retained loans | i 0.51 | % | i 0.49 | % | i 1.74 | % | i 1.00 | % | i 0.90 | % | i 0.65 | % | ||||||||
Criticized
nonaccrual | $ | i 38 | $ | i 57 | $ | i 10 | $ | i 77 | $ | i 48 | $ | i 134 | ||||||||
%
of criticized nonaccrual loans to total real estate retained loans | i 0.05 | % | i 0.07 | % | i 0.03 | % | i 0.21 | % | i 0.04 | % | i 0.12 | % |
December
31, (in millions) | Commercial and industrial | Real estate | Financial institutions | Other | Total retained loans | |||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||
Impaired
loans | ||||||||||||||||||||||||||||||||||||
With
an allowance | $ | i 637 | $ | i 807 | $ | i 49 | $ | i 107 | $ | i 3 | $ | i 4 | $ | i 42 | $ | i 152 | $ | i 731 | $ | i 1,070 | ||||||||||||||||
Without
an allowance(a) | i 177 | i 140 | i — | i 27 | i — | i — | i 4 | i 13 | i 181 | i 180 | ||||||||||||||||||||||||||
Total impaired
loans | $ | i 814 | $ | i 947 | $ | i 49 | $ | i 134 | $ | i 3 | $ | i 4 | $ | i 46 | $ | i 165 | $ | i 912 | (c) | $ | i 1,250 | (c) | ||||||||||||||
Allowance
for loan losses related to impaired loans | $ | i 221 | $ | i 252 | $ | i 9 | $ | i 25 | $ | i 1 | $ | i 1 | $ | i 3 | $ | i 19 | $ | i 234 | $ | i 297 | ||||||||||||||||
Unpaid
principal balance of impaired loans(b) | i 974 | i 1,043 | i 72 | i 203 | i 4 | i 4 | i 54 | i 473 | i 1,104 | i 1,723 |
(a) | When
the discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged-off and/or there have been interest payments received and applied to the loan balance. |
(b) | Represents the contractual amount of principal owed at December 31, 2019 and 2018. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs; interest payments received and applied
to the carrying value; net deferred loan fees or costs; and unamortized discount or premiums on purchased loans. |
(c) | Based upon the domicile of the borrower, largely consists of loans in the U.S. |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||
Commercial and industrial | $ | i 1,086 | $ | i 1,027 | $ | i 1,256 | |||
Real
estate | i 94 | i 133 | i 165 | ||||||
Financial
institutions | i 11 | i 57 | i 48 | ||||||
Other | i 168 | i 199 | i 241 | ||||||
Total(a) | $ | i 1,359 | $ | i 1,416 | $ | i 1,710 |
(a) | The
related interest income on accruing impaired loans and interest income recognized on a cash basis were not material for the years ended December 31, 2019, 2018 and 2017. |
236 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 237 |
238 | JPMorgan
Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 239 |
(Table
continued on next page) | ||||||||||||||||
2019 | ||||||||||||||||
Year ended December 31, (in millions) | Consumer, excluding
credit card | Credit card | Wholesale | Total | ||||||||||||
Allowance for loan losses | ||||||||||||||||
Beginning
balance at January 1, | $ | i 4,146 | $ | i 5,184 | $ | i 4,115 | $ | i 13,445 | ||||||||
Gross
charge-offs | i 963 | i 5,436 | i 411 | i 6,810 | ||||||||||||
Gross
recoveries | ( i 551 | ) | ( i 588 | ) | ( i 42 | ) | ( i 1,181 | ) | ||||||||
Net
charge-offs | i 412 | i 4,848 | i 369 | i 5,629 | ||||||||||||
Write-offs
of PCI loans(a) | i 151 | i — | i — | i 151 | ||||||||||||
Provision
for loan losses | ( i 383 | ) | i 5,348 | i 484 | i 5,449 | |||||||||||
Other | ( i 1 | ) | ( i 1 | ) | i 11 | i 9 | ||||||||||
Ending
balance at December 31, | $ | i 3,199 | $ | i 5,683 | $ | i 4,241 | $ | i 13,123 | ||||||||
Allowance
for loan losses by impairment methodology | ||||||||||||||||
Asset-specific(b) | $ | i 136 | $ | i 477 | (c) | $ | i 234 | $ | i 847 | |||||||
Formula-based | i 2,076 | i 5,206 | i 4,007 | i 11,289 | ||||||||||||
PCI | i 987 | i — | i — | i 987 | ||||||||||||
Total
allowance for loan losses | $ | i 3,199 | $ | i 5,683 | $ | i 4,241 | $ | i 13,123 | ||||||||
Loans
by impairment methodology | ||||||||||||||||
Asset-specific | $ | i 6,172 | $ | i 1,452 | $ | i 912 | $ | i 8,536 | ||||||||
Formula-based | i 305,503 | i 167,472 | i 443,727 | i 916,702 | ||||||||||||
PCI | i 20,363 | i — | i — | i 20,363 | ||||||||||||
Total
retained loans | $ | i 332,038 | $ | i 168,924 | $ | i 444,639 | $ | i 945,601 | ||||||||
Impaired
collateral-dependent loans | ||||||||||||||||
Net charge-offs | $ | i 57 | $ | i — | $ | i 25 | $ | i 82 | ||||||||
Loans
measured at fair value of collateral less cost to sell | i 2,059 | i — | i 81 | i 2,140 | ||||||||||||
Allowance
for lending-related commitments | ||||||||||||||||
Beginning balance at January 1, | $ | i 33 | $ | i — | $ | i 1,022 | $ | i 1,055 | ||||||||
Provision
for lending-related commitments | i — | i — | i 136 | i 136 | ||||||||||||
Other | i — | i — | i — | i — | ||||||||||||
Ending
balance at December 31, | $ | i 33 | $ | i — | $ | i 1,158 | $ | i 1,191 | ||||||||
Allowance
for lending-related commitments by impairment methodology | ||||||||||||||||
Asset-specific | $ | i — | $ | i — | $ | i 102 | $ | i 102 | ||||||||
Formula-based | i 33 | i — | i 1,056 | i 1,089 | ||||||||||||
Total
allowance for lending-related commitments | $ | i 33 | $ | i — | $ | i 1,158 | $ | i 1,191 | ||||||||
Lending-related
commitments by impairment methodology | ||||||||||||||||
Asset-specific | $ | i — | $ | i — | $ | i 474 | $ | i 474 | ||||||||
Formula-based | i 51,412 | i 650,720 | i 403,641 | i 1,105,773 | ||||||||||||
Total
lending-related commitments | $ | i 51,412 | $ | i 650,720 | $ | i 404,115 | $ | i 1,106,247 |
(a) | Write-offs
of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool. |
(b) | Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a TDR. |
(c) | The asset-specific credit card allowance for loan losses is related to loans that have been modified in a TDR;
such allowance is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates. |
240 | JPMorgan Chase & Co./2019 Form 10-K |
(table
continued from previous page) | |||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||
Consumer, excluding
credit card | Credit card | Wholesale | Total | Consumer, excluding credit card | Credit card | Wholesale | Total | ||||||||||||||||||||||||
$ | i 4,579 | $ | i 4,884 | $ | i 4,141 | $ | i 13,604 | $ | i 5,198 | $ | i 4,034 | $ | i 4,544 | $ | i 13,776 | ||||||||||||||||
i 1,025 | i 5,011 | i 313 | i 6,349 | i 1,779 | i 4,521 | i 212 | i 6,512 | ||||||||||||||||||||||||
( i 842 | ) | ( i 493 | ) | ( i 158 | ) | ( i 1,493 | ) | ( i 634 | ) | ( i 398 | ) | ( i 93 | ) | ( i 1,125 | ) | ||||||||||||||||
i 183 | i 4,518 | i 155 | i 4,856 | i 1,145 | i 4,123 | i 119 | i 5,387 | ||||||||||||||||||||||||
i 187 | i — | i — | i 187 | i 86 | i — | i — | i 86 | ||||||||||||||||||||||||
( i 63 | ) | i 4,818 | i 130 | i 4,885 | i 613 | i 4,973 | ( i 286 | ) | i 5,300 | ||||||||||||||||||||||
i — | i — | ( i 1 | ) | ( i 1 | ) | ( i 1 | ) | i — | i 2 | i 1 | |||||||||||||||||||||
$ | i 4,146 | $ | i 5,184 | $ | i 4,115 | $ | i 13,445 | $ | i 4,579 | $ | i 4,884 | $ | i 4,141 | $ | i 13,604 | ||||||||||||||||
$ | i 196 | $ | i 440 | (c) | $ | i 297 | $ | i 933 | $ | i 246 | $ | i 383 | (c) | $ | i 461 | $ | i 1,090 | ||||||||||||||
i 2,162 | i 4,744 | i 3,818 | i 10,724 | i 2,108 | i 4,501 | i 3,680 | i 10,289 | ||||||||||||||||||||||||
i 1,788 | i — | i — | i 1,788 | i 2,225 | i — | i — | i 2,225 | ||||||||||||||||||||||||
$ | i 4,146 | $ | i 5,184 | $ | i 4,115 | $ | i 13,445 | $ | i 4,579 | $ | i 4,884 | $ | i 4,141 | $ | i 13,604 | ||||||||||||||||
$ | i 6,874 | $ | i 1,319 | $ | i 1,250 | $ | i 9,443 | $ | i 8,078 | $ | i 1,215 | $ | i 1,867 | $ | i 11,160 | ||||||||||||||||
i 342,729 | i 155,297 | i 437,909 | i 935,935 | i 333,899 | i 148,172 | i 401,028 | i 883,099 | ||||||||||||||||||||||||
i 24,034 | i — | i 3 | i 24,037 | i 30,576 | i — | i 3 | i 30,579 | ||||||||||||||||||||||||
$ | i 373,637 | $ | i 156,616 | $ | i 439,162 | $ | i 969,415 | $ | i 372,553 | $ | i 149,387 | $ | i 402,898 | $ | i 924,838 | ||||||||||||||||
$ | i 24 | $ | i — | $ | i 21 | $ | i 45 | $ | i 64 | $ | i — | $ | i 31 | $ | i 95 | ||||||||||||||||
i 2,080 | i — | i 202 | i 2,282 | i 2,133 | i — | i 233 | i 2,366 | ||||||||||||||||||||||||
$ | i 33 | $ | i — | $ | i 1,035 | $ | i 1,068 | $ | i 26 | $ | i — | $ | i 1,052 | $ | i 1,078 | ||||||||||||||||
i — | i — | ( i 14 | ) | ( i 14 | ) | i 7 | i — | ( i 17 | ) | ( i 10 | ) | ||||||||||||||||||||
i — | i — | i 1 | i 1 | i — | i — | i — | i — | ||||||||||||||||||||||||
$ | i 33 | $ | i — | $ | i 1,022 | $ | i 1,055 | $ | i 33 | $ | i — | $ | i 1,035 | $ | i 1,068 | ||||||||||||||||
$ | i — | $ | i — | $ | i 99 | $ | i 99 | $ | i — | $ | i — | $ | i 187 | $ | i 187 | ||||||||||||||||
i 33 | i — | i 923 | i 956 | i 33 | i — | i 848 | i 881 | ||||||||||||||||||||||||
$ | i 33 | $ | i — | $ | i 1,022 | $ | i 1,055 | $ | i 33 | $ | i — | $ | i 1,035 | $ | i 1,068 | ||||||||||||||||
$ | i — | $ | i — | $ | i 469 | $ | i 469 | $ | i — | $ | i — | $ | i 731 | $ | i 731 | ||||||||||||||||
i 46,066 | i 605,379 | i 387,344 | i 1,038,789 | i 48,553 | i 572,831 | i 369,367 | i 990,751 | ||||||||||||||||||||||||
$ | i 46,066 | $ | i 605,379 | $ | i 387,813 | $ | i 1,039,258 | $ | i 48,553 | $ | i 572,831 | $ | i 370,098 | $ | i 991,482 |
JPMorgan
Chase & Co./2019 Form 10-K | 241 |
Line of Business | Transaction
Type | Activity | 2019 Form 10-K page references |
CCB | Credit card securitization trusts | Securitization of originated credit card receivables | 242–243 |
Mortgage securitization trusts | Servicing and securitization of both originated and purchased residential mortgages | 243–245 | |
CIB | Mortgage
and other securitization trusts | Securitization of both originated and purchased residential and commercial mortgages, and other consumer loans | 243–245 |
Multi-seller conduits | Assist clients in accessing the financial markets in a cost-efficient manner and structures transactions to meet investor needs | 245 | |
Municipal bond vehicles | Financing of municipal bond investments | 245–246 |
• | Asset & Wealth Management: AWM sponsors and manages certain funds that are deemed VIEs. As asset manager of the funds, AWM earns a fee based on assets managed; the fee varies with each fund’s investment objective and is competitively priced. For fund entities that qualify as VIEs, AWM’s interests are, in certain cases, considered to be significant variable interests that result in consolidation of the financial results of these entities. |
• | Commercial
Banking: CB provides financing and lending-related services to a wide spectrum of clients, including certain third-party-sponsored entities that may meet the definition of a VIE. CB does not control the activities of these entities and does not consolidate these entities. CB’s maximum loss exposure, regardless of whether the entity is a VIE, is generally limited to loans and lending-related commitments which are reported and disclosed in the same manner as any other third-party transaction. |
• | Corporate: Corporate is involved with entities that may meet
the definition of VIEs; however these entities are generally subject to specialized investment company accounting, which does not require the consolidation of investments, including VIEs. In addition, Treasury and CIO invest in securities generally issued by third parties which may meet the definition of VIEs (e.g., issuers of asset-backed securities). In general, the Firm does not have the power to direct the significant activities of these entities and therefore does not consolidate these entities. Refer to Note 10 for further information on the Firm’s investment securities portfolio. |
242 | JPMorgan Chase & Co./2019 Form 10-K |
Principal
amount outstanding | JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e) | |||||||||||||||||||||
December 31, 2019 (in millions) | Total assets held by securitization VIEs | Assets held in consolidated securitization VIEs | Assets held in nonconsolidated securitization VIEs with continuing involvement | Trading
assets | Investment securities | Other financial assets | Total interests held by JPMorgan Chase | |||||||||||||||
Securitization-related(a) | ||||||||||||||||||||||
Residential
mortgage: | ||||||||||||||||||||||
Prime/Alt-A and option ARMs | $ | i 60,348 | $ | i 2,796 | $ | i 48,734 | $ | i 535 | $ | i 625 | $ | i — | $ | i 1,160 | ||||||||
Subprime | i 14,661 | i — | i 13,490 | i 7 | i — | i — | i 7 | |||||||||||||||
Commercial
and other(b) | i 111,903 | i — | i 80,878 | i 785 | i 773 | i 241 | i 1,799 | |||||||||||||||
Total | $ | i 186,912 | $ | i 2,796 | $ | i 143,102 | $ | i 1,327 | $ | i 1,398 | $ | i 241 | $ | i 2,966 |
Principal
amount outstanding | JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e) | |||||||||||||||||||||
December 31, 2018 (in millions) | Total assets held by securitization VIEs | Assets held in consolidated securitization VIEs | Assets held in nonconsolidated securitization VIEs with continuing involvement | Trading
assets | Investment securities | Other financial assets | Total interests held by JPMorgan Chase | |||||||||||||||
Securitization-related(a) | ||||||||||||||||||||||
Residential
mortgage: | ||||||||||||||||||||||
Prime/Alt-A and option ARMs | $ | i 63,350 | $ | i 3,237 | $ | i 50,679 | $ | i 623 | $ | i 647 | $ | i — | $ | i 1,270 | ||||||||
Subprime | i 16,729 | i 32 | i 15,434 | i 53 | i — | i — | i 53 | |||||||||||||||
Commercial
and other(b) | i 102,961 | i — | i 79,387 | i 783 | i 801 | i 210 | i 1,794 | |||||||||||||||
Total | $ | i 183,040 | $ | i 3,269 | $ | i 145,500 | $ | i 1,459 | $ | i 1,448 | $ | i 210 | $ | i 3,117 |
(a) | Excludes
U.S. GSEs and government agency securitizations and re-securitizations, which are not Firm-sponsored. Refer to pages 248–249 of this Note for information on the Firm’s loan sales and securitization activity related to U.S. GSEs and government agencies. |
(b) | Consists of securities backed by commercial real estate loans and non-mortgage-related consumer receivables purchased from third parties. |
(c) | Excludes the following: retained servicing (refer to Note 15
for a discussion of MSRs); securities retained from loan sales and securitization activity related to U.S. GSEs and government agencies; interest rate and foreign exchange derivatives primarily used to manage interest rate and foreign exchange risks of securitization entities (refer to Note 5 for further information on derivatives); senior and subordinated securities of $ i 106
million and $ i 94 million, respectively, at December 31, 2019, and $ i 87
million and $ i 28 million, respectively, at December 31, 2018, which the Firm purchased in connection with CIB’s secondary market-making activities. |
(d) | Includes
interests held in re-securitization transactions. |
(e) | As of December 31, 2019 and 2018, i 63%
and i 60%, respectively, of the Firm’s retained securitization interests, which are predominantly carried at fair value and include amounts required to be held pursuant to credit risk retention rules, were risk-rated “A” or better, on an S&P-equivalent basis. The retained interests in prime residential mortgages consisted of $ i 1.1
billion and $ i 1.3 billion of investment-grade, and $ i 72
million and $ i 16 million of noninvestment-grade at December 31, 2019 and 2018, respectively. The retained interests in commercial
and other securitizations trusts consisted of $ i 1.2 billion of investment-grade for both periods, and $ i 575
million and $ i 623 million of noninvestment-grade retained interests at December 31, 2019 and 2018, respectively. |
JPMorgan
Chase & Co./2019 Form 10-K | 243 |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||
Transfers of securities to VIEs | ||||||||
U.S.
GSEs and government agencies | i 25,852 | i 15,532 | i 12,617 |
244 | JPMorgan
Chase & Co./2019 Form 10-K |
Nonconsolidated re-securitization VIEs | |||||
December 31, (in millions) | 2019 | 2018 | |||
U.S.
GSEs and government agencies | |||||
Interest in VIEs | i 2,928 | i 3,058 |
JPMorgan Chase & Co./2019 Form 10-K | 245 |
Assets | Liabilities | |||||||||||||||||||||
December
31, 2019 (in millions) | Trading assets | Loans | Other(b) | Total assets(c) | Beneficial interests in VIE assets(d) | Other(e) | Total
liabilities | |||||||||||||||
VIE program type | ||||||||||||||||||||||
Firm-sponsored credit card trusts | $ | i — | $ | i 14,986 | $ | i 266 | $ | i 15,252 | $ | i 6,461 | $ | i 6 | $ | i 6,467 | ||||||||
Firm-administered
multi-seller conduits | i 1 | i 25,183 | i 355 | i 25,539 | i 9,223 | i 36 | i 9,259 | |||||||||||||||
Municipal
bond vehicles | i 1,903 | i — | i 4 | i 1,907 | i 1,881 | i 3 | i 1,884 | |||||||||||||||
Mortgage
securitization entities(a) | i 66 | i 2,762 | i 64 | i 2,892 | i 276 | i 130 | i 406 | |||||||||||||||
Other | i 663 | i — | i 192 | i 855 | i — | i 272 | i 272 | |||||||||||||||
Total | $ | i 2,633 | $ | i 42,931 | $ | i 881 | $ | i 46,445 | $ | i 17,841 | $ | i 447 | $ | i 18,288 | ||||||||
Assets | Liabilities | |||||||||||||||||||||
December
31, 2018 (in millions) | Trading assets | Loans | Other(b) | Total assets(c) | Beneficial interests in VIE assets(d) | Other(e) | Total
liabilities | |||||||||||||||
VIE program type | ||||||||||||||||||||||
Firm-sponsored credit card trusts | $ | i — | $ | i 31,760 | $ | i 491 | $ | i 32,251 | $ | i 13,404 | $ | i 12 | $ | i 13,416 | ||||||||
Firm-administered
multi-seller conduits | i — | i 24,411 | i 300 | i 24,711 | i 4,842 | i 33 | i 4,875 | |||||||||||||||
Municipal
bond vehicles | i 1,779 | i — | i 4 | i 1,783 | i 1,685 | i 3 | i 1,688 | |||||||||||||||
Mortgage
securitization entities(a) | i 53 | i 3,285 | i 40 | i 3,378 | i 308 | i 161 | i 469 | |||||||||||||||
Other | i 134 | i — | i 178 | i 312 | i 2 | i 103 | i 105 | |||||||||||||||
Total | $ | i 1,966 | $ | i 59,456 | $ | i 1,013 | $ | i 62,435 | $ | i 20,241 | $ | i 312 | $ | i 20,553 |
(a) | Includes
residential and commercial mortgage securitizations. |
(b) | Includes assets classified as cash and other assets on the Consolidated balance sheets. |
(c) | The assets of the consolidated VIEs included in the program types above are used to settle the liabilities of those entities. The assets and liabilities include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. |
(d) | The
interest-bearing beneficial interest liabilities issued by consolidated VIEs are classified in the line item on the Consolidated balance sheets titled, “Beneficial interests issued by consolidated variable interest entities.” The holders of these beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. Included in beneficial interests in VIE assets are long-term beneficial interests of $ i 6.7
billion and $ i 13.7 billion at December 31, 2019 and 2018, respectively. Refer to Note 20 for additional information on interest-bearing long-term
beneficial interests. |
(e) | Includes liabilities classified as accounts payable and other liabilities on the Consolidated balance sheets. |
246 | JPMorgan Chase
& Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 247 |
2019 | 2018 | 2017 | ||||||||||||||||||
Year
ended December 31, (in millions) | Residential mortgage(e) | Commercial and other(f) | Residential mortgage(e) | Commercial and other(f) | Residential mortgage(e) | Commercial
and other(f) | ||||||||||||||
Principal securitized | $ | i 9,957 | $ | i 9,390 | $ | i 6,431 | $ | i 10,159 | $ | i 5,532 | $ | i 10,252 | ||||||||
All
cash flows during the period:(a) | ||||||||||||||||||||
Proceeds received from loan sales as financial instruments(b)(c) | $ | i 10,238 | $ | i 9,544 | $ | i 6,449 | $ | i 10,218 | $ | i 5,661 | $ | i 10,340 | ||||||||
Servicing
fees collected(d) | i 287 | i 2 | i 319 | i 2 | i 338 | i 3 | ||||||||||||||
Cash
flows received on interests | i 507 | i 237 | i 411 | i 301 | i 463 | i 918 |
(a) | Excludes
re-securitization transactions. |
(b) | Predominantly includes Level 2 assets. |
(c) | The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale. |
(d) | The prior period amounts have been revised to conform with the current period presentation. |
(e) | Includes
prime mortgages only. Excludes loan securitization activity related to U.S. GSEs and government agencies. |
(f) | Includes commercial mortgage and other consumer loans. |
Year
ended December 31, | 2019 | 2018 | 2017 | ||||||
Residential mortgage retained interest: | |||||||||
Weighted-average life (in years) | i 4.8 | i 7.6 | i 4.8 | ||||||
Weighted-average
discount rate | i 7.4 | % | i 3.6 | % | i 2.9 | % | |||
Commercial
mortgage retained interest: | |||||||||
Weighted-average life (in years) | i 6.4 | i 5.3 | i 7.1 | ||||||
Weighted-average
discount rate | i 4.1 | % | i 4.0 | % | i 4.4 | % |
248 | JPMorgan
Chase & Co./2019 Form 10-K |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||
Carrying value of loans sold | $ | i 92,349 | $ | i 44,609 | $ | i 64,542 | |||
Proceeds
received from loan sales as cash | $ | i 73 | $ | i 9 | $ | i 117 | |||
Proceeds
from loan sales as securities(a)(b) | i 91,422 | i 43,671 | i 63,542 | ||||||
Total
proceeds received from loan sales(c) | $ | i 91,495 | $ | i 43,680 | $ | i 63,659 | |||
Gains/(losses)
on loan sales(d)(e) | $ | i 499 | $ | ( i 93 | ) | $ | i 163 |
(a) | Includes
securities from U.S. GSEs and Ginnie Mae that are generally sold shortly after receipt or retained as part of the Firm’s investment securities portfolio. |
(b) | Included in level 2 assets. |
(c) | Excludes the value of MSRs retained upon the sale of loans. |
(d) | Gains/(losses) on loan sales include
the value of MSRs. |
(e) | The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale. |
December
31, (in millions) | 2019 | 2018 | ||||
Loans repurchased or option to repurchase(a) | $ | i 2,941 | $ | i 7,021 | ||
Real
estate owned | i 41 | i 75 | ||||
Foreclosed
government-guaranteed residential mortgage loans(b) | i 198 | i 361 |
(a) | Predominantly
all of these amounts relate to loans that have been repurchased from Ginnie Mae loan pools. |
(b) | Relates to voluntary repurchases of loans, which are included in accrued interest and accounts receivable. |
Securitized assets | 90 days past
due | Net liquidation losses(a) | ||||||||||||||||||
As of or for the year ended December 31, (in millions) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Securitized
loans | ||||||||||||||||||||
Residential mortgage: | ||||||||||||||||||||
Prime/
Alt-A & option ARMs | $ | i 48,734 | $ | i 50,679 | $ | i 2,449 | $ | i 3,354 | $ | i 579 | $ | i 610 | ||||||||
Subprime | i 13,490 | i 15,434 | i 1,813 | i 2,478 | i 532 | ( i 169 | ) | |||||||||||||
Commercial
and other | i 80,878 | i 79,387 | i 187 | i 225 | i 445 | i 280 | ||||||||||||||
Total
loans securitized | $ | i 143,102 | $ | i 145,500 | $ | i 4,449 | $ | i 6,057 | $ | i 1,556 | $ | i 721 |
(a) | Includes
liquidation gains as a result of private label mortgage settlement payments during the first quarter of 2018, which were reflected as asset recoveries by trustees. |
JPMorgan Chase & Co./2019 Form 10-K | 249 |
December 31, (in millions) | 2019 | 2018 | 2017 | ||||||
Consumer & Community Banking | $ | i 31,041 | $ | i 30,984 | $ | i 31,013 | |||
Corporate
& Investment Bank | i 6,942 | i 6,770 | i 6,776 | ||||||
Commercial
Banking | i 2,982 | i 2,860 | i 2,860 | ||||||
Asset
& Wealth Management | i 6,858 | i 6,857 | i 6,858 | ||||||
Total
goodwill | $ | i 47,823 | $ | i 47,471 | $ | i 47,507 |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
Balance at beginning
of period | $ | i 47,471 | $ | i 47,507 | $ | i 47,288 | |||||
Changes
during the period from: | |||||||||||
Business combinations(a) | i 349 | i — | i 199 | ||||||||
Other(b) | i 3 | ( i 36 | ) | i 20 | |||||||
Balance
at December 31, | $ | i 47,823 | $ | i 47,471 | $ | i 47,507 |
(a) | For
2019, represents goodwill associated with the acquisition of InstaMed. This goodwill was allocated to CIB, CB and CCB. For 2017, represents CCB goodwill in connection with an acquisition. |
(b) | Primarily relates to foreign currency adjustments. |
250 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 251 |
As of or for the year ended December 31, (in millions, except where otherwise noted) | 2019 | 2018 | 2017 | |||||||||
Fair
value at beginning of period | $ | i 6,130 | $ | i 6,030 | $ | i 6,096 | ||||||
MSR
activity: | ||||||||||||
Originations of MSRs | i 1,384 | i 931 | i 1,103 | |||||||||
Purchase
of MSRs | i 105 | i 315 | i — | |||||||||
Disposition
of MSRs(a) | ( i 789 | ) | ( i 636 | ) | ( i 140 | ) | ||||||
Net
additions | i 700 | i 610 | i 963 | |||||||||
Changes
due to collection/realization of expected cash flows | ( i 951 | ) | ( i 740 | ) | ( i 797 | ) | ||||||
Changes
in valuation due to inputs and assumptions: | ||||||||||||
Changes due to market interest rates and other(b) | ( i 893 | ) | i 300 | ( i 202 | ) | |||||||
Changes
in valuation due to other inputs and assumptions: | ||||||||||||
Projected cash flows (e.g., cost to service) | ( i 333 | ) | (e) | i 15 | ( i 102 | ) | ||||||
Discount
rates | i 153 | i 24 | ( i 19 | ) | ||||||||
Prepayment
model changes and other(c) | ( i 107 | ) | ( i 109 | ) | i 91 | |||||||
Total
changes in valuation due to other inputs and assumptions | ( i 287 | ) | ( i 70 | ) | ( i 30 | ) | ||||||
Total
changes in valuation due to inputs and assumptions | ( i 1,180 | ) | i 230 | ( i 232 | ) | |||||||
Fair
value at December 31, | $ | i 4,699 | $ | i 6,130 | $ | i 6,030 | ||||||
Change
in unrealized gains/(losses) included in income related to MSRs held at December 31, | $ | ( i 1,180 | ) | $ | i 230 | $ | ( i 232 | ) | ||||
Contractual
service fees, late fees and other ancillary fees included in income | i 1,639 | i 1,778 | i 1,886 | |||||||||
Third-party
mortgage loans serviced at December 31, (in billions) | i 522.0 | i 521.0 | i 555.0 | |||||||||
Servicer
advances, net of an allowance for uncollectible amounts, at December 31, (in billions)(d) | i 2.0 | i 3.0 | i 4.0 |
(a) | Includes
excess MSRs transferred to agency-sponsored trusts in exchange for stripped mortgage backed securities (“SMBS”). In each transaction, a portion of the SMBS was acquired by third parties at the transaction date; the Firm acquired the remaining balance of those SMBS as trading securities. |
(b) | Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments. |
(c) | Represents changes in prepayments other than those
attributable to changes in market interest rates. |
(d) | Represents amounts the Firm pays as the servicer (e.g., scheduled principal and interest, taxes and insurance), which will generally be reimbursed within a short period of time after the advance from future cash flows from the trust or the underlying loans. The Firm’s credit risk associated with these servicer advances is minimal because reimbursement of the advances is typically senior to all cash payments to investors. In addition, the Firm maintains the right to stop payment to investors if the collateral is insufficient to cover the advance. However, certain of these servicer advances may not be recoverable if they were not made in accordance with applicable rules and agreements. |
(e) | The
decrease in projected cash flows was largely related to default servicing assumption updates. |
252 | JPMorgan Chase & Co./2019 Form 10-K |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||||
CCB
mortgage fees and related income | |||||||||||
Net production revenue | $ | i 1,618 | $ | i 268 | $ | i 636 | |||||
Net
mortgage servicing revenue: | |||||||||||
Operating revenue: | |||||||||||
Loan
servicing revenue | i 1,533 | i 1,835 | i 2,014 | ||||||||
Changes
in MSR asset fair value due to collection/realization of expected cash flows | ( i 951 | ) | ( i 740 | ) | ( i 795 | ) | |||||
Total
operating revenue | i 582 | i 1,095 | i 1,219 | ||||||||
Risk
management: | |||||||||||
Changes in MSR asset fair value due to market interest rates and other(a) | ( i 893 | ) | i 300 | ( i 202 | ) | ||||||
Other
changes in MSR asset fair value due to other inputs and assumptions in model(b) | ( i 287 | ) | ( i 70 | ) | ( i 30 | ) | |||||
Change
in derivative fair value and other | i 1,015 | ( i 341 | ) | ( i 10 | ) | ||||||
Total
risk management | ( i 165 | ) | ( i 111 | ) | ( i 242 | ) | |||||
Total
net mortgage servicing revenue | i 417 | i 984 | i 977 | ||||||||
Total
CCB mortgage fees and related income | i 2,035 | i 1,252 | i 1,613 | ||||||||
All
other | i 1 | i 2 | i 3 | ||||||||
Mortgage
fees and related income | $ | i 2,036 | $ | i 1,254 | $ | i 1,616 |
(a) | Represents
both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments. |
(b) | Represents the aggregate impact of changes in model inputs and assumptions such as projected cash flows (e.g., cost to service), discount rates and changes in prepayments other than those attributable to changes in market interest rates (e.g., changes in prepayments due to changes in home prices). |
December 31, (in millions, except rates) | 2019 | 2018 | |||||
Weighted-average
prepayment speed assumption (constant prepayment rate) | i 11.67 | % | i 8.78 | % | |||
Impact
on fair value of 10% adverse change | $ | ( i 200 | ) | $ | ( i 205 | ) | |
Impact
on fair value of 20% adverse change | ( i 384 | ) | ( i 397 | ) | |||
Weighted-average
option adjusted spread(a)(b) | i 7.93 | % | i 7.87 | % | |||
Impact
on fair value of 100 basis points adverse change | $ | ( i 169 | ) | $ | ( i 235 | ) | |
Impact
on fair value of 200 basis points adverse change | ( i 326 | ) | ( i 452 | ) |
(a) | Includes
the impact of operational risk and regulatory capital. |
(b) | The prior period amount has been revised to conform with the current period presentation. |
JPMorgan Chase & Co./2019 Form 10-K | 253 |
December 31, (in millions) | 2019 | 2018 | ||||||
U.S.
offices | ||||||||
Noninterest-bearing (included $22,637 and $17,204 at fair value)(a)(b) | $ | i 395,667 | $ | i 386,709 | ||||
Interest-bearing
(included $2,534 and $2,487 at fair value)(a)(b) | i 876,156 | i 813,881 | ||||||
Total
deposits in U.S. offices | i 1,271,823 | i 1,200,590 | ||||||
Non-U.S.
offices | ||||||||
Noninterest-bearing (included $1,980 and $2,367 at fair value)(a)(b) | i 20,087 | i 21,459 | ||||||
Interest-bearing
(included $1,438 and $1,159 at fair value)(a)(b) | i 270,521 | i 248,617 | ||||||
Total
deposits in non-U.S. offices | i 290,608 | i 270,076 | ||||||
Total
deposits | $ | i 1,562,431 | $ | i 1,470,666 |
(a) | Includes
structured notes classified as deposits for which the fair value option has been elected. Refer to Note 3 for further discussion. |
(b) | In the second quarter of 2019, the Firm reclassified balances related to certain structured notes from interest-bearing to noninterest-bearing deposits as the associated returns are recorded in principal transactions revenue and not in net interest income. This change was applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation. |
December 31, (in millions) | 2019 | 2018 | ||||||
U.S.
offices | $ | i 44,127 | $ | i 25,119 | ||||
Non-U.S.
offices | i 50,840 | i 41,661 | ||||||
Total | $ | i 94,967 | $ | i 66,780 |
(in millions) | ||||||||||||
U.S. | Non-U.S. | Total | ||||||||||
2020 | $ | i 60,614 | $ | i 49,443 | $ | i 110,057 | ||||||
2021 | i 3,700 | i 123 | i 3,823 | |||||||||
2022 | i 709 | i 89 | i 798 | |||||||||
2023 | i 175 | i 13 | i 188 | |||||||||
2024 | i 534 | i 357 | i 891 | |||||||||
After
5 years | i 301 | i 39 | i 340 | |||||||||
Total | $ | i 66,033 | $ | i 50,064 | $ | i 116,097 |
254 | JPMorgan Chase & Co./2019 Form 10-K |
December 31, (in millions, except where otherwise noted) | |||
2019 | |||
Right-of-use assets | $ | i 8,190 | |
Lease
liabilities | i 8,505 | ||
Weighted average remaining lease term (in years) | i 8.8 | ||
Weighted
average discount rate | i 3.68 | % | |
Supplemental cash flow information | |||
Cash
paid for amounts included in the measurement of lease liabilities - operating cash flows | $ | i 1,572 | |
Supplemental non-cash information | |||
Right-of-use assets obtained in exchange for operating lease
obligations | $ | i 1,413 | |
Year
ended December 31, (in millions) | 2019 | ||
Rental expense | |||
Gross rental expense | $ | i 2,057 | |
Sublease
rental income | ( i 184 | ) | |
Net rental expense | $ | i 1,873 |
Year ended December 31, (in millions) | |||
2020 | $ | i 1,604 | |
2021 | i 1,447 | ||
2022 | i 1,257 | ||
2023 | i 1,081 | ||
2024 | i 944 | ||
After
2024 | i 3,757 | ||
Total future minimum lease payments | i 10,090 | ||
Less:
Imputed interest | ( i 1,585 | ) | |
Total | $ | i 8,505 |
December 31, (in millions) | 2019 | 2018 | |||||
Carrying value of assets subject to operating leases, net of accumulated depreciation | $ | i 23,587 | $ | i 21,428 | |||
Accumulated
depreciation | i 6,121 | i 5,303 |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||||
Operating
lease income | $ | i 5,455 | $ | i 4,540 | $ | i 3,611 | ||||
Depreciation
expense | i 4,157 | i 3,522 | i 2,808 |
Year ended December 31, (in millions) | |||
2020 | $ | i 4,168 | |
2021 | i 2,733 | ||
2022 | i 1,025 | ||
2023 | i 86 | ||
2024 | i 37 | ||
After
2024 | i 52 | ||
Total future minimum lease receipts | $ | i 8,101 |
JPMorgan
Chase & Co./2019 Form 10-K | 255 |
December 31, (in millions) | 2019 | 2018 | ||||||
Brokerage payables | $ | i 118,375 | $ | i 114,794 | ||||
Other
payables and liabilities(a) | i 92,032 | i 81,916 | ||||||
Total
accounts payable and other liabilities | $ | i 210,407 | $ | i 196,710 |
(a) | Includes
credit card rewards liability of $ i 6.4 billion and $ i 5.8 billion
at December 31, 2019 and 2018, respectively. |
256 | JPMorgan Chase & Co./2019 Form 10-K |
By
remaining maturity at December 31, (in millions, except rates) | 2019 | 2018 | |||||||||||||||||||
Under 1 year | 1-5 years | After
5 years | Total | Total | |||||||||||||||||
Parent company | |||||||||||||||||||||
Senior
debt: | Fixed rate | $ | i 13,580 | $ | i 51,982 | $ | i 95,636 | $ | i 161,198 | $ | i 145,820 | ||||||||||
Variable
rate | i 2,788 | i 12,708 | i 3,119 | i 18,615 | i 22,978 | ||||||||||||||||
Interest
rates(a) | 0.15-4.95% | 0.50-4.63% | 0.45-6.40% | 0.15-6.40% | 0.17-6.40% | ||||||||||||||||
Subordinated
debt: | Fixed rate | $ | i — | $ | i 5,109 | $ | i 10,046 | $ | i 15,155 | $ | i 14,308 | ||||||||||
Variable
rate | i — | i — | i 9 | i 9 | i 9 | ||||||||||||||||
Interest
rates(a) | — | % | 3.38-3.88% | 3.63-8.00% | 3.38-8.00% | 3.38-8.53% | |||||||||||||||
Subtotal | $ | i 16,368 | $ | i 69,799 | $ | i 108,810 | $ | i 194,977 | $ | i 183,115 | |||||||||||
Federal
Home Loan Banks advances: | Fixed rate | $ | i 4 | $ | i 35 | $ | i 96 | $ | i 135 | $ | i 155 | ||||||||||
Variable
rate | i 9,500 | i 19,000 | i — | i 28,500 | i 44,300 | ||||||||||||||||
Interest
rates(a) | 1.88-2.18% | 1.67-2.24% | — | % | 1.67-2.24% | 2.36-2.96% | |||||||||||||||
Senior
debt: | Fixed rate | $ | i 761 | $ | i 6,955 | $ | i 11,881 | $ | i 19,597 | $ | i 16,434 | ||||||||||
Variable
rate | i 11,650 | i 24,938 | i 9,273 | i 45,861 | i 35,601 | ||||||||||||||||
Interest
rates(a) | 7.50 | % | 2.15-9.43% | 1.00-7.50% | 1.00-9.43% | 1.00-7.50% | |||||||||||||||
Subordinated
debt: | Fixed rate | $ | i — | $ | i 305 | $ | i — | $ | i 305 | $ | i 301 | ||||||||||
Variable
rate | i — | i — | i — | i — | i — | ||||||||||||||||
Interest
rates(a) | — | % | 8.25 | % | — | % | 8.25 | % | 8.25 | % | |||||||||||
Subtotal | $ | i 21,915 | $ | i 51,233 | $ | i 21,250 | $ | i 94,398 | $ | i 96,791 | |||||||||||
Junior
subordinated debt: | Fixed rate | $ | i — | $ | i — | $ | i 693 | $ | i 693 | $ | i 659 | ||||||||||
Variable
rate | i — | i — | i 1,430 | i 1,430 | i 1,466 | ||||||||||||||||
Interest
rates(a) | — | % | — | % | 2.41-8.75% | 2.41-8.75% | 3.04-8.75% | ||||||||||||||
Subtotal | $ | i — | $ | i — | $ | i 2,123 | $ | i 2,123 | $ | i 2,125 | |||||||||||
Total
long-term debt(b)(c)(d) | $ | i 38,283 | $ | i 121,032 | $ | i 132,183 | $ | i 291,498 | (f)(g) | $ | i 282,031 | ||||||||||
Long-term
beneficial interests: | |||||||||||||||||||||
Fixed rate | $ | i 1,621 | $ | i 1,369 | $ | i — | $ | i 2,990 | $ | i 7,611 | |||||||||||
Variable
rate | i 900 | i 2,572 | i 276 | i 3,748 | i 6,103 | ||||||||||||||||
Interest
rates | 1.49-2.19% | 0.00-2.77% | 0.84-4.06% | 0.00-4.06% | 0.00-4.62% | ||||||||||||||||
Total
long-term beneficial interests(e) | $ | i 2,521 | $ | i 3,941 | $ | i 276 | $ | i 6,738 | $ | i 13,714 |
(a) | The
interest rates shown are the range of contractual rates in effect at December 31, 2019 and 2018, respectively, including non-U.S. dollar fixed- and variable-rate issuances, which excludes the effects of the associated derivative instruments used in hedge accounting relationships, if applicable. The use of these derivative instruments modifies the Firm’s exposure to the contractual interest rates disclosed in the table above. Including the effects of the hedge accounting derivatives, the range of modified rates in effect at December 31, 2019, for total long-term debt was ( i 0.02)%
to i 9.43%, versus the contractual range of i 0.15%
to i 9.43% presented in the table above. The interest rate ranges shown exclude structured notes accounted for at fair value. |
(b) | Included long-term debt of $ i 32.0
billion and $ i 47.7 billion secured by assets totaling $ i 186.1 billion and $ i 207.0
billion at December 31, 2019 and 2018, respectively. The amount of long-term debt secured by assets does not include amounts related to hybrid instruments. |
(c) | Included $ i 75.7
billion and $ i 54.9 billion of long-term debt accounted for at fair value at December 31, 2019 and 2018, respectively. |
(d) | Included
$ i 13.6 billion and $ i 11.2 billion of outstanding zero-coupon notes at December 31,
2019 and 2018, respectively. The aggregate principal amount of these notes at their respective maturities is $ i 39.3 billion and $ i 37.4
billion, respectively. The aggregate principal amount reflects the contractual principal payment at maturity, which may exceed the contractual principal payment at the Firm’s next call date, if applicable. |
(e) | Included on the Consolidated balance sheets in beneficial interests issued by consolidated VIEs. Also included $ i 36
million and $ i 28 million accounted for at fair value at December 31, 2019 and 2018, respectively. Excluded short-term commercial paper and other short-term beneficial interests of $ i 11.1
billion and $ i 6.5 billion at December 31, 2019 and 2018, respectively. |
(f) | At
December 31, 2019, long-term debt in the aggregate of $ i 141.3 billion was redeemable at the option of JPMorgan Chase, in whole or in part, prior to maturity, based on the terms specified in the respective instruments. |
(g) | The aggregate carrying
values of debt that matures in each of the five years subsequent to 2019 is $ i 38.3 billion in 2020, $ i 45.8
billion in 2021, $ i 19.6 billion in 2022, $ i 29.7
billion in 2023 and $ i 25.9 billion in 2024. |
JPMorgan Chase & Co./2019 Form 10-K | 257 |
258 | JPMorgan Chase & Co./2019 Form 10-K |
Shares(a) | Carrying
value (in millions) | Issue date | Contractual rate in effect at December 31, 2019 | Earliest redemption date(b) | Floating annualized rate of three-month LIBOR/Term SOFR plus: | Dividend declared per share(c) | |||||||||||||||
December
31, | December 31, | Year ended December 31, | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2017 | |||||||||||||||
Fixed-rate: | |||||||||||||||||||||
Series
P | i — | i 90,000 | $ | i — | $ | i 900 | i 2/5/2013 | i — | % | i 3/1/2018 | NA | $ i 545.00 | $ i 545.00 | $ i 545.00 | |||||||
Series
T | i — | i 92,500 | i — | i 925 | i 1/30/2014 | i — | i 3/1/2019 | NA | i 167.50 | i 670.00 | i 670.00 | ||||||||||
Series
W | i — | i 88,000 | i — | i 880 | i 6/23/2014 | i — | i 9/1/2019 | NA | i 472.50 | i 630.00 | i 630.00 | ||||||||||
Series
Y | i 143,000 | i 143,000 | i 1,430 | i 1,430 | i 2/12/2015 | i 6.125 | i 3/1/2020 | NA | i 612.52 | i 612.52 | i 612.52 | ||||||||||
Series
AA | i 142,500 | i 142,500 | i 1,425 | i 1,425 | i 6/4/2015 | i 6.100 | i 9/1/2020 | NA | i 610.00 | i 610.00 | i 610.00 | ||||||||||
Series
BB | i 115,000 | i 115,000 | i 1,150 | i 1,150 | i 7/29/2015 | i 6.150 | i 9/1/2020 | NA | i 615.00 | i 615.00 | i 615.00 | ||||||||||
Series
DD | i 169,625 | i 169,625 | i 1,696 | i 1,696 | i 9/21/2018 | i 5.750 | i 12/1/2023 | NA | i 575.00 | i 111.81 | i — | ||||||||||
Series
EE | i 185,000 | i — | i 1,850 | i — | i 1/24/2019 | i 6.000 | i 3/1/2024 | NA | i 511.67 | i — | i — | (d) | |||||||||
Series
GG | i 90,000 | i — | i 900 | i — | i 11/7/2019 | i 4.750 | i 12/1/2024 | NA | i — | i — | i — | (e) | |||||||||
Fixed-to-floating-rate: | |||||||||||||||||||||
Series
I | i 293,375 | i 430,375 | i 2,934 | i 4,304 | i 4/23/2008 | LIBOR
+ 3.47% | i 4/30/2018 | LIBOR + 3.47% | $ i 593.23 | $ i 646.38 | $ i 790.00 | (f) | |||||||||
Series
Q | i 150,000 | i 150,000 | i 1,500 | i 1,500 | i 4/23/2013 | i 5.150 | i 5/1/2023 | LIBOR
+ 3.25 | i 515.00 | i 515.00 | i 515.00 | ||||||||||
Series
R | i 150,000 | i 150,000 | i 1,500 | i 1,500 | i 7/29/2013 | i 6.000 | i 8/1/2023 | LIBOR
+ 3.30 | i 600.00 | i 600.00 | i 600.00 | ||||||||||
Series
S | i 200,000 | i 200,000 | i 2,000 | i 2,000 | i 1/22/2014 | i 6.750 | i 2/1/2024 | LIBOR
+ 3.78 | i 675.00 | i 675.00 | i 675.00 | ||||||||||
Series
U | i 100,000 | i 100,000 | i 1,000 | i 1,000 | i 3/10/2014 | i 6.125 | i 4/30/2024 | LIBOR
+ 3.33 | i 612.50 | i 612.50 | i 612.50 | ||||||||||
Series
V | i 250,000 | i 250,000 | i 2,500 | i 2,500 | i 6/9/2014 | LIBOR
+ 3.32% | i 7/1/2019 | LIBOR + 3.32 | i 534.09 | i 500.00 | i 500.00 | (g) | |||||||||
Series
X | i 160,000 | i 160,000 | i 1,600 | i 1,600 | i 9/23/2014 | i 6.100 | i 10/1/2024 | LIBOR
+ 3.33 | i 610.00 | i 610.00 | i 610.00 | ||||||||||
Series
Z | i 200,000 | i 200,000 | i 2,000 | i 2,000 | i 4/21/2015 | i 5.300 | i 5/1/2020 | LIBOR
+ 3.80 | i 530.00 | i 530.00 | i 530.00 | ||||||||||
Series
CC | i 125,750 | i 125,750 | i 1,258 | i 1,258 | i 10/20/2017 | i 4.625 | i 11/1/2022 | LIBOR
+ 2.58 | i 462.50 | i 462.50 | i 129.76 | ||||||||||
Series
FF | i 225,000 | i — | i 2,250 | i — | i 7/31/2019 | i 5.000 | i 8/1/2024 | SOFR
+ 3.38 | i 251.39 | i — | i — | (h) | |||||||||
Total
preferred stock | i 2,699,250 | i 2,606,750 | $ | i 26,993 | $ | i 26,068 |
(a) | Represented
by depositary shares. |
(b) | Fixed-to-floating rate notes convert to a floating rate at the earliest redemption date. |
(c) | Dividends are declared quarterly. Dividends are payable quarterly on fixed-rate preferred stock. Dividends are payable semiannually on fixed-to-floating-rate preferred stock while at a fixed rate, and payable quarterly after converting to a floating rate. |
(d) | Dividends
in the amount of $ i 211.67 per share were declared on April 12, 2019 and include dividends from the original issue date of January 24, 2019 through May 31, 2019. Dividends in the amount of $ i 150.00
per share were declared thereafter on July 10, 2019 and October 9, 2019. |
(e) | i No dividends were declared for Series GG from the
original issue date of November 7, 2019 through December 31, 2019. |
(f) | The dividend rate for Series I preferred stock became floating and payable quarterly starting on April 30, 2018; prior to which the dividend rate was fixed at i 7.90%
or $ i 395.00 per share payable semi annually. |
(g) | The dividend rate for Series V preferred stock became floating and payable quarterly starting on July 1, 2019;
prior to which the dividend rate was fixed at i 5% or $ i 250.00
per share payable semi annually. The Firm declared a dividend of $ i 144.11 and $ i 139.98
per share on outstanding Series V preferred stock on August 15, 2019 and November 15, 2019, respectively. |
(h) | Dividends in the amount of $ i 126.39
per share were declared on September 9, 2019 and include dividends from the original issue date of July 31, 2019 through October 31, 2019. Dividends in the amount of $ i 125.00 per share were declared thereafter on December 10, 2019. |
JPMorgan Chase & Co./2019 Form 10-K | 259 |
260 | JPMorgan Chase & Co./2019 Form 10-K |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | |||
Total issued – balance at January 1 | i 4,104.9 | i 4,104.9 | i 4,104.9 | |||
Treasury
– balance at January 1 | ( i 829.1 | ) | ( i 679.6 | ) | ( i 543.7 | ) |
Repurchase | ( i 213.0 | ) | ( i 181.5 | ) | ( i 166.6 | ) |
Reissuance: | ||||||
Employee
benefits and compensation plans | i 20.4 | i 21.7 | i 24.5 | |||
Warrant
exercise | i — | i 9.4 | i 5.4 | |||
Employee
stock purchase plans | i 0.8 | i 0.9 | i 0.8 | |||
Total
reissuance | i 21.2 | i 32.0 | i 30.7 | |||
Total
treasury – balance at December 31 | ( i 1,020.9 | ) | ( i 829.1 | ) | ( i 679.6 | ) |
Outstanding
at December 31 | i 3,084.0 | i 3,275.8 | i 3,425.3 |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||||||
Total number of shares of common stock repurchased | i 213.0 | i 181.5 | i 166.6 | |||||||||
Aggregate
purchase price of common stock repurchases | $ | i 24,121 | $ | i 19,983 | $ | i 15,410 |
JPMorgan
Chase & Co./2019 Form 10-K | 261 |
Year ended December 31, (in millions, except per share amounts) | 2019 | 2018 | 2017 | ||||||
Basic
earnings per share | |||||||||
Net income | $ | i 36,431 | $ | i 32,474 | $ | i 24,441 | |||
Less:
Preferred stock dividends | i 1,587 | i 1,551 | i 1,663 | ||||||
Net
income applicable to common equity | i 34,844 | i 30,923 | i 22,778 | ||||||
Less:
Dividends and undistributed earnings allocated to participating securities | i 202 | i 214 | i 211 | ||||||
Net
income applicable to common stockholders | $ | i 34,642 | $ | i 30,709 | $ | i 22,567 | |||
Total
weighted-average basic shares outstanding | i 3,221.5 | i 3,396.4 | i 3,551.6 | ||||||
Net
income per share | $ | i 10.75 | $ | i 9.04 | $ | i 6.35 | |||
Diluted
earnings per share | |||||||||
Net income applicable to common stockholders | $ | i 34,642 | $ | i 30,709 | $ | i 22,567 | |||
Total
weighted-average basic shares outstanding | i 3,221.5 | i 3,396.4 | i 3,551.6 | ||||||
Add:
Dilutive impact of SARs and employee stock options, unvested PSUs and non-dividend-earning RSUs, and warrants | i 8.9 | i 17.6 | i 25.2 | ||||||
Total
weighted-average diluted shares outstanding | i 3,230.4 | i 3,414.0 | i 3,576.8 | ||||||
Net
income per share | $ | i 10.72 | $ | i 9.00 | $ | i 6.31 |
262 | JPMorgan
Chase & Co./2019 Form 10-K |
Year
ended December 31, (in millions) | Unrealized gains/(losses) on investment securities | Translation adjustments, net of hedges | Fair value hedges | Cash flow hedges | Defined
benefit pension and OPEB plans | DVA on fair value option elected liabilities | Accumulated other comprehensive income/(loss) | |||||||||||||||||||||||||||||
Balance at December 31, 2016 | $ | i 1,524 | $ | ( i 164 | ) | NA | $ | ( i 100 | ) | $ | ( i 2,259 | ) | $ | ( i 176 | ) | $ | ( i 1,175 | ) | ||||||||||||||||||
Net
change | i 640 | ( i 306 | ) | NA | i 176 | i 738 | ( i 192 | ) | i 1,056 | |||||||||||||||||||||||||||
Balance
at December 31, 2017 | $ | i 2,164 | $ | ( i 470 | ) | $ | i — | $ | i 76 | $ | ( i 1,521 | ) | $ | ( i 368 | ) | $ | ( i 119 | ) | ||||||||||||||||||
Cumulative
effect of changes in accounting principles:(a) | i 896 | ( i 277 | ) | ( i 54 | ) | i 16 | ( i 414 | ) | ( i 79 | ) | i 88 | |||||||||||||||||||||||||
Net
change | ( i 1,858 | ) | i 20 | ( i 107 | ) | ( i 201 | ) | ( i 373 | ) | i 1,043 | ( i 1,476 | ) | ||||||||||||||||||||||||
Balance
at December 31, 2018 | $ | i 1,202 | $ | ( i 727 | ) | $ | ( i 161 | ) | $ | ( i 109 | ) | $ | ( i 2,308 | ) | $ | i 596 | $ | ( i 1,507 | ) | |||||||||||||||||
Net
change | i 2,855 | i 20 | i 30 | i 172 | i 964 | ( i 965 | ) | i 3,076 | ||||||||||||||||||||||||||||
Balance
at December 31, 2019 | $ | i 4,057 | $ | ( i 707 | ) | $ | ( i 131 | ) | $ | i 63 | $ | ( i 1,344 | ) | $ | ( i 369 | ) | $ | i 1,569 |
(a) | Represents
the adjustment to AOCI as a result of the accounting standards adopted in the first quarter of 2018. Refer to Note 1 for additional information. |
JPMorgan Chase & Co./2019 Form 10-K | 263 |
2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||
Year
ended December 31, (in millions) | Pre-tax | Tax effect | After-tax | Pre-tax | Tax effect | After-tax | Pre-tax | Tax
effect | After-tax | ||||||||||||||||||||||||||
Unrealized gains/(losses) on investment securities: | |||||||||||||||||||||||||||||||||||
Net
unrealized gains/(losses) arising during the period | $ | i 4,025 | $ | ( i 974 | ) | $ | i 3,051 | $ | ( i 2,825 | ) | $ | i 665 | $ | ( i 2,160 | ) | $ | i 944 | $ | ( i 346 | ) | $ | i 598 | |||||||||||||
Reclassification
adjustment for realized (gains)/losses included in net income(a) | ( i 258 | ) | i 62 | ( i 196 | ) | i 395 | ( i 93 | ) | i 302 | i 66 | ( i 24 | ) | i 42 | ||||||||||||||||||||||
Net
change | i 3,767 | ( i 912 | ) | i 2,855 | ( i 2,430 | ) | i 572 | ( i 1,858 | ) | i 1,010 | ( i 370 | ) | i 640 | ||||||||||||||||||||||
Translation
adjustments(b): | |||||||||||||||||||||||||||||||||||
Translation | ( i 49 | ) | i 33 | ( i 16 | ) | ( i 1,078 | ) | i 156 | ( i 922 | ) | i 1,313 | ( i 801 | ) | i 512 | |||||||||||||||||||||
Hedges | i 46 | ( i 10 | ) | i 36 | i 1,236 | ( i 294 | ) | i 942 | ( i 1,294 | ) | i 476 | ( i 818 | ) | ||||||||||||||||||||||
Net
change | ( i 3 | ) | i 23 | i 20 | i 158 | ( i 138 | ) | i 20 | i 19 | ( i 325 | ) | ( i 306 | ) | ||||||||||||||||||||||
Fair
value hedges, net change(c): | i 39 | ( i 9 | ) | i 30 | ( i 140 | ) | i 33 | ( i 107 | ) | NA | NA | NA | |||||||||||||||||||||||
Cash
flow hedges: | |||||||||||||||||||||||||||||||||||
Net
unrealized gains/(losses) arising during the period | i 122 | ( i 28 | ) | i 94 | ( i 245 | ) | i 58 | ( i 187 | ) | i 147 | ( i 55 | ) | i 92 | ||||||||||||||||||||||
Reclassification
adjustment for realized (gains)/losses included in net income(d) | i 103 | ( i 25 | ) | i 78 | ( i 18 | ) | i 4 | ( i 14 | ) | i 134 | ( i 50 | ) | i 84 | ||||||||||||||||||||||
Net
change | i 225 | ( i 53 | ) | i 172 | ( i 263 | ) | i 62 | ( i 201 | ) | i 281 | ( i 105 | ) | i 176 | ||||||||||||||||||||||
Defined
benefit pension and OPEB plans: | |||||||||||||||||||||||||||||||||||
Prior
service credit/(cost) arising during the period | ( i 5 | ) | i 1 | ( i 4 | ) | ( i 29 | ) | i 7 | ( i 22 | ) | i — | i — | i — | ||||||||||||||||||||||
Net
gain/(loss) arising during the period | i 1,005 | ( i 169 | ) | i 836 | ( i 558 | ) | i 102 | ( i 456 | ) | i 802 | ( i 160 | ) | i 642 | ||||||||||||||||||||||
Reclassification
adjustments included in net income(e): | |||||||||||||||||||||||||||||||||||
Amortization
of net loss | i 167 | ( i 36 | ) | i 131 | i 103 | ( i 24 | ) | i 79 | i 250 | ( i 90 | ) | i 160 | |||||||||||||||||||||||
Amortization
of prior service cost/(credit) | i 3 | ( i 1 | ) | i 2 | ( i 23 | ) | i 6 | ( i 17 | ) | ( i 36 | ) | i 13 | ( i 23 | ) | |||||||||||||||||||||
Curtailment
(gain)/loss | i — | i — | i — | i 21 | ( i 5 | ) | i 16 | i — | i — | i — | |||||||||||||||||||||||||
Settlement
(gain)/loss | i — | i — | i — | i 2 | i — | i 2 | i 2 | ( i 1 | ) | i 1 | |||||||||||||||||||||||||
Foreign
exchange and other | ( i 13 | ) | i 12 | ( i 1 | ) | i 34 | ( i 9 | ) | i 25 | ( i 54 | ) | i 12 | ( i 42 | ) | |||||||||||||||||||||
Net
change | i 1,157 | ( i 193 | ) | i 964 | ( i 450 | ) | i 77 | ( i 373 | ) | i 964 | ( i 226 | ) | i 738 | ||||||||||||||||||||||
DVA
on fair value option elected liabilities, net change: | $ | ( i 1,264 | ) | $ | i 299 | $ | ( i 965 | ) | $ | i 1,364 | $ | ( i 321 | ) | $ | i 1,043 | $ | ( i 303 | ) | $ | i 111 | $ | ( i 192 | ) | ||||||||||||
Total
other comprehensive income/(loss) | $ | i 3,921 | $ | ( i 845 | ) | $ | i 3,076 | $ | ( i 1,761 | ) | $ | i 285 | $ | ( i 1,476 | ) | $ | i 1,971 | $ | ( i 915 | ) | $ | i 1,056 |
(a) | The
pre-tax amount is reported in investment securities gains/(losses) in the Consolidated statements of income. |
(b) | Reclassifications of pre-tax realized gains/(losses) on translation adjustments and related hedges are reported in other income/expense in the Consolidated statements of income. During the year ended December 31, 2019, the Firm reclassified net pre-tax gains of $ i 7
million to other income and $ i 1 million to other expense, respectively. These amounts, which related to the
liquidation of certain legal entities, are comprised of $ i 18 million related to net investment hedge gains and$ i 10
million related to cumulative translation adjustments. During the year ended December 31, 2018, the Firm reclassified a net pre-tax loss of $ i 168
million to other expense related to the liquidation of certain legal entities, $ i 17 million
related to net investment hedge losses and $ i 151 million related to cumulative translation adjustments. During the year ended
December 31, 2017, the Firm reclassified a net pre-tax loss of $ i 25
million to other expense related to the liquidation of a legal entity, $ i 50 million related to net investment
hedge gains and $ i 75 million related to cumulative translation adjustments. |
(c) | Represents
changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads, which are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income. The initial cost of cross-currency basis spreads is recognized in earnings as part of the accrual of interest on the cross-currency swap. |
(d) | The pre-tax amounts are primarily recorded in noninterest revenue, net interest income and compensation expense in the Consolidated statements of income. |
(e) | The pre-tax
amount is reported in other expense in the Consolidated statements of income. |
264 | JPMorgan Chase & Co./2019 Form 10-K |
Effective tax rate | ||||||||||
Year
ended December 31, | 2019 | 2018 | 2017 | |||||||
Statutory U.S. federal tax rate | i 21.0 | % | i 21.0 | % | i 35.0 | % | ||||
Increase/(decrease)
in tax rate resulting from: | ||||||||||
U.S. state and local income taxes, net of U.S. federal income tax benefit | i 3.5 | i 4.0 | i 2.2 | |||||||
Tax-exempt
income | ( i 1.4 | ) | ( i 1.5 | ) | ( i 3.3 | ) | ||||
Non-U.S.
earnings | i 1.8 | i 0.6 | ( i 3.1 | ) | (a) | |||||
Business
tax credits | ( i 4.4 | ) | ( i 3.5 | ) | ( i 4.2 | ) | ||||
Tax
audit resolutions | ( i 2.3 | ) | ( i 0.1 | ) | ( i 0.3 | ) | ||||
Impact
of the TCJA | i — | ( i 0.7 | ) | i 5.4 | ||||||
Other,
net | i — | i 0.5 | i 0.2 | |||||||
Effective
tax rate | i 18.2 | % | i 20.3 | % | i 31.9 | % |
(a) | Predominantly
includes earnings of U.K. subsidiaries that were deemed to be reinvested indefinitely through December 31, 2017. |
JPMorgan Chase & Co./2019 Form 10-K | 265 |
Income tax expense/(benefit) | ||||||||||||
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||||||
Current
income tax expense/(benefit) | ||||||||||||
U.S. federal | $ | i 3,284 | $ | i 2,854 | $ | i 5,718 | ||||||
Non-U.S. | i 2,103 | i 2,077 | i 2,400 | |||||||||
U.S.
state and local | i 1,778 | i 1,638 | i 1,029 | |||||||||
Total
current income tax expense/(benefit) | i 7,165 | i 6,569 | i 9,147 | |||||||||
Deferred
income tax expense/(benefit) | ||||||||||||
U.S. federal | i 709 | i 1,359 | i 2,174 | |||||||||
Non-U.S. | i 20 | ( i 93 | ) | ( i 144 | ) | |||||||
U.S.
state and local | i 220 | i 455 | i 282 | |||||||||
Total
deferred income tax expense/(benefit) | i 949 | i 1,721 | i 2,312 | |||||||||
Total
income tax expense | $ | i 8,114 | $ | i 8,290 | $ | i 11,459 |
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||||||
U.S. | $ | i 36,670 | $ | i 33,052 | $ | i 27,103 | ||||||
Non-U.S.(a) | i 7,875 | i 7,712 | i 8,797 | |||||||||
Income
before income tax expense | $ | i 44,545 | $ | i 40,764 | $ | i 35,900 |
(a) | For
purposes of this table, non-U.S. income is defined as income generated from operations located outside the U.S. |
266 | JPMorgan
Chase & Co./2019 Form 10-K |
December 31, (in millions) | 2019 | 2018 | ||||||
Deferred
tax assets | ||||||||
Allowance for loan losses | $ | i 3,400 | $ | i 3,433 | ||||
Employee
benefits | i 1,039 | i 1,129 | ||||||
Accrued
expenses and other | i 2,767 | i 2,701 | ||||||
Non-U.S.
operations | i 949 | i 629 | ||||||
Tax
attribute carryforwards | i 605 | i 163 | ||||||
Gross
deferred tax assets | i 8,760 | i 8,055 | ||||||
Valuation
allowance | ( i 557 | ) | ( i 89 | ) | ||||
Deferred
tax assets, net of valuation allowance | $ | i 8,203 | $ | i 7,966 | ||||
Deferred
tax liabilities | ||||||||
Depreciation and amortization | $ | i 2,852 | $ | i 2,533 | ||||
Mortgage
servicing rights, net of hedges | i 2,354 | i 2,586 | ||||||
Leasing
transactions | i 5,598 | i 4,719 | ||||||
Other,
net | i 4,683 | i 3,713 | ||||||
Gross
deferred tax liabilities | i 15,487 | i 13,551 | ||||||
Net
deferred tax (liabilities)/assets | $ | ( i 7,284 | ) | $ | ( i 5,585 | ) |
Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||||||
Balance at January 1, | $ | i 4,861 | $ | i 4,747 | $ | i 3,450 | ||||||
Increases
based on tax positions related to the current period | i 871 | i 980 | i 1,355 | |||||||||
Increases
based on tax positions related to prior periods | i 10 | i 649 | i 626 | |||||||||
Decreases
based on tax positions related to prior periods | ( i 706 | ) | ( i 1,249 | ) | ( i 350 | ) | ||||||
Decreases
related to cash settlements with taxing authorities | ( i 1,012 | ) | ( i 266 | ) | ( i 334 | ) | ||||||
Balance
at December 31, | $ | i 4,024 | $ | i 4,861 | $ | i 4,747 |
JPMorgan Chase & Co./2019 Form 10-K | 267 |
Periods under examination | Status | |||
JPMorgan Chase – U.S. | 2011 – 2013 | Field Examination
completed; JPMorgan Chase intends to file amended returns | ||
JPMorgan Chase – U.S. | 2014 - 2016 | Field Examination | ||
JPMorgan Chase – New York State | 2012 - 2014 | Field Examination | ||
JPMorgan Chase – New York City | 2012
- 2014 | Field Examination | ||
JPMorgan Chase – California | 2011 – 2012 | Field Examination | ||
JPMorgan Chase – U.K. | 2006 – 2017 | Field examination of certain select entities |
268 | JPMorgan
Chase & Co./2019 Form 10-K |
December
31, (in billions) | 2019 | 2018 | ||||
Cash reserves – Federal Reserve Banks | $ | i 26.6 | $ | i 22.1 | ||
Segregated
for the benefit of securities and cleared derivative customers | i 16.0 | i 14.6 | ||||
Cash
reserves at non-U.S. central banks and held for other general purposes | i 3.9 | i 4.1 | ||||
Total
restricted cash(a) | $ | i 46.5 | $ | i 40.8 |
(a) | Comprises
$ i 45.3 billion and $ i 39.6
billion in deposits with banks as of December 31, 2019 and 2018, respectively, and $ i 1.2 billion in cash and due from banks as of December 31, 2019 and 2018,
on the Consolidated balance sheets. |
• | Cash and securities pledged with clearing organizations for the benefit of customers of $ i 24.7
billion and $ i 20.6 billion, respectively. |
• | Securities with a fair value of $ i 8.8
billion and $ i 9.7 billion, respectively, were also restricted in relation to customer activity. |
JPMorgan Chase & Co./2019 Form 10-K | 269 |
Minimum capital ratios | Well-capitalized ratios | ||||||
BHC(a)(e)(f) | IDI(b)(e)(f) | BHC(c)
| IDI(d) | ||||
Capital ratios | |||||||
CET1 | i 10.5 | % | i 7.0 | % | N/A | i 6.5 | % |
Tier
1 | i 12.0 | i 8.5 | i 6.0 | i 8.0 | |||
Total | i 14.0 | i 10.5 | i 10.0 | i 10.0 | |||
Tier
1 leverage | i 4.0 | i 4.0 | N/A | i 5.0 | |||
SLR | i 5.0 | i 6.0 | N/A | i 6.0 |
(a) | Represents the minimum capital ratios applicable to the Firm under Basel III. The CET1 minimum capital ratio includes a capital conservation buffer of i 2.5%
and GSIB surcharge of i 3.5% as calculated under Method 2. |
(b) | Represents requirements
for JPMorgan Chase’s IDI subsidiaries. The CET1 minimum capital ratio includes a capital conservation buffer of i 2.5% that is applicable to the IDI subsidiaries.
The IDI subsidiaries are not subject to the GSIB surcharge. |
(c) | Represents requirements for bank holding companies pursuant to regulations issued by the Federal Reserve. |
(d) | Represents requirements for IDI subsidiaries pursuant to regulations issued under the FDIC Improvement Act.
|
(e) | For the period ended December 31, 2018, the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm were i 9.0%,
i 10.5%, i 12.5%,
and i 4.0% and the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm’s IDI subsidiaries were i 6.375%,
i 7.875%, i 9.875%,
and i 4.0%, respectively. |
(f) | Represents minimum SLR requirement of 3.0%, as well as, supplementary
leverage buffers of 2.0% and 3.0% for BHC and IDI, respectively. |
270 | JPMorgan Chase & Co./2019 Form 10-K |
December
31, 2019 (in millions, except ratios) | Basel III Standardized Fully Phased-In | Basel III Advanced Fully Phased-In | |||||||||||
JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A. | JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A. | ||||||||||
Regulatory
capital | |||||||||||||
CET1 capital | $ | i 187,753 | $ | i 206,848 | $ | i 187,753 | $ | i 206,848 | |||||
Tier
1 capital | i 214,432 | i 206,851 | i 214,432 | i 206,851 | |||||||||
Total
capital | i 242,589 | i 224,390 | i 232,112 | i 214,091 | |||||||||
Assets | |||||||||||||
Risk-weighted | i 1,515,869 | i 1,457,689 | i 1,397,878 | i 1,269,991 | |||||||||
Adjusted
average(a) | i 2,730,239 | i 2,353,432 | i 2,730,239 | i 2,353,432 | |||||||||
Capital
ratios(b) | |||||||||||||
CET1 | i 12.4 | % | i 14.2 | % | i 13.4 | % | i 16.3 | % | |||||
Tier
1 | i 14.1 | i 14.2 | i 15.3 | i 16.3 | |||||||||
Total | i 16.0 | i 15.4 | i 16.6 | i 16.9 | |||||||||
Tier
1 leverage(c) | i 7.9 | i 8.8 | i 7.9 | i 8.8 |
December
31, 2018 (in millions, except ratios) | Basel III Standardized Transitional | Basel III Advanced Transitional | |||||||||||
JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A.(d) | JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A.(d) | ||||||||||
Regulatory
capital | |||||||||||||
CET1 capital | $ | i 183,474 | $ | i 211,671 | $ | i 183,474 | $ | i 211,671 | |||||
Tier
1 capital | i 209,093 | i 211,671 | i 209,093 | i 211,671 | |||||||||
Total
capital | i 237,511 | i 229,952 | i 227,435 | i 220,025 | |||||||||
Assets | |||||||||||||
Risk-weighted | i 1,528,916 | i 1,446,529 | i 1,421,205 | i 1,283,146 | |||||||||
Adjusted
average(a) | i 2,589,887 | i 2,250,480 | i 2,589,887 | i 2,250,480 | |||||||||
Capital
ratios(b) | |||||||||||||
CET1 | i 12.0 | % | i 14.6 | % | i 12.9 | % | i 16.5 | % | |||||
Tier
1 | i 13.7 | i 14.6 | i 14.7 | i 16.5 | |||||||||
Total | i 15.5 | i 15.9 | i 16.0 | i 17.1 | |||||||||
Tier
1 leverage(c) | i 8.1 | i 9.4 | i 8.1 | i 9.4 |
(a) | Adjusted
average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets. |
(b) | For each of the risk-based capital ratios, the capital adequacy of the Firm and JPMorgan Chase Bank, N.A. is evaluated against the lower of the two ratios as calculated under Basel III approaches (Standardized or Advanced). |
(c) | The
Tier 1 leverage ratio is not a risk-based measure of capital. |
(d) | On May 18, 2019, Chase Bank USA, N.A. merged with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A as the surviving entity. The December 31, 2018 amounts reported for JPMorgan Chase Bank, N.A. retrospectively reflect the impact of the merger. |
Basel III Advanced Fully Phased-In | Basel III Advanced Fully Phased-In | |||||||||||
(in millions, except ratios) | JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A. | JPMorgan
Chase & Co. | JPMorgan Chase Bank, N.A.(a) | ||||||||
Total leverage exposure | i 3,423,431 | $ | i 3,044,509 | $ | i 3,269,988 | $ | i 2,915,541 | |||||
SLR | i 6.3 | % | i 6.8 | % | i 6.4 | % | i 7.3 | % |
(a) | On
May 18, 2019, Chase Bank USA, N.A. merged with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A as the surviving entity. The December 31, 2018 amounts reported for JPMorgan Chase Bank, N.A. retrospectively reflect the impact of the merger. |
JPMorgan Chase & Co./2019 Form 10-K | 271 |
272 | JPMorgan Chase & Co./2019 Form 10-K |
Off–balance
sheet lending-related financial instruments, guarantees and other commitments | ||||||||||||||||||||||||||
Contractual amount | Carrying value(g) | |||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||
By
remaining maturity at December 31, (in millions) | Expires in 1 year or less | Expires after 1 year through 3 years | Expires after 3 years through 5 years | Expires after 5 years | Total | Total | ||||||||||||||||||||
Lending-related | ||||||||||||||||||||||||||
Consumer,
excluding credit card: | ||||||||||||||||||||||||||
Home equity | $ | i 680 | $ | i 1,187 | $ | i 2,548 | $ | i 16,704 | $ | i 21,119 | $ | i 20,901 | $ | i 12 | $ | i 12 | ||||||||||
Residential
mortgage(a) | i 9,086 | i — | i — | i 12 | i 9,098 | i 5,481 | i — | i — | ||||||||||||||||||
Auto | i 8,296 | i 600 | i 197 | i 195 | i 9,288 | i 8,011 | i 2 | i 2 | ||||||||||||||||||
Consumer
& Business Banking | i 9,994 | i 646 | i 105 | i 1,162 | i 11,907 | i 11,673 | i 19 | i 19 | ||||||||||||||||||
Total
consumer, excluding credit card | i 28,056 | i 2,433 | i 2,850 | i 18,073 | i 51,412 | i 46,066 | i 33 | i 33 | ||||||||||||||||||
Credit
card | i 650,720 | i — | i — | i — | i 650,720 | i 605,379 | i — | i — | ||||||||||||||||||
Total
consumer(b) | i 678,776 | i 2,433 | i 2,850 | i 18,073 | i 702,132 | i 651,445 | i 33 | i 33 | ||||||||||||||||||
Wholesale: | ||||||||||||||||||||||||||
Other
unfunded commitments to extend credit(c) | i 58,645 | i 129,414 | i 168,400 | i 10,791 | i 367,250 | i 351,490 | i 938 | i 852 | ||||||||||||||||||
Standby
letters of credit and other financial guarantees(c) | i 15,919 | i 11,127 | i 5,117 | i 1,745 | i 33,908 | i 33,498 | i 618 | i 521 | ||||||||||||||||||
Other
letters of credit(c) | i 2,734 | i 183 | i 40 | i — | i 2,957 | i 2,825 | i 4 | i 3 | ||||||||||||||||||
Total
wholesale(b) | i 77,298 | i 140,724 | i 173,557 | i 12,536 | i 404,115 | i 387,813 | i 1,560 | i 1,376 | ||||||||||||||||||
Total
lending-related | $ | i 756,074 | $ | i 143,157 | $ | i 176,407 | $ | i 30,609 | $ | i 1,106,247 | $ | i 1,039,258 | $ | i 1,593 | $ | i 1,409 | ||||||||||
Other
guarantees and commitments | ||||||||||||||||||||||||||
Securities lending indemnification agreements and guarantees(d) | $ | i 204,827 | $ | i — | $ | i — | $ | i — | $ | i 204,827 | $ | i 186,077 | $ | i — | $ | i — | ||||||||||
Derivatives
qualifying as guarantees | i 1,403 | i 144 | i 11,299 | i 40,243 | i 53,089 | i 55,271 | i 159 | i 367 | ||||||||||||||||||
Unsettled
resale and securities borrowed agreements | i 117,203 | i 748 | i — | i — | i 117,951 | i 102,008 | i — | i — | ||||||||||||||||||
Unsettled
repurchase and securities loaned agreements | i 72,790 | i 561 | i — | i — | i 73,351 | i 57,732 | i — | i — | ||||||||||||||||||
Loan
sale and securitization-related indemnifications: | ||||||||||||||||||||||||||
Mortgage repurchase liability | NA | NA | NA | NA | NA | NA | i 59 | i 89 | ||||||||||||||||||
Loans
sold with recourse | NA | NA | NA | NA | i 944 | i 1,019 | i 27 | i 30 | ||||||||||||||||||
Exchange
& clearing house guarantees and commitments(e) | i 206,432 | i — | i — | i — | i 206,432 | i 58,960 | i — | i — | ||||||||||||||||||
Other
guarantees and commitments (f) | i 2,684 | i 841 | i 293 | i 3,399 | i 7,217 | i 8,183 | ( i 73 | ) | ( i 73 | ) |
(a) | Includes
certain commitments to purchase loans from correspondents. |
(b) | Predominantly all consumer and wholesale lending-related commitments are in the U.S. |
(c) | At December 31, 2019 and 2018, reflected the contractual amount net of risk participations totaling $ i 76
million and $ i 282 million, respectively, for other unfunded commitments to extend credit; $ i 9.8
billion and $ i 10.4 billion, respectively, for standby letters of credit and other financial guarantees; and $ i 546
million and $ i 385 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations. |
(d) | At
December 31, 2019 and 2018, collateral held by the Firm in support of securities lending indemnification agreements was $ i 216.2 billion and $ i 195.6
billion, respectively. Securities lending collateral primarily consists of cash, G7 government securities, and securities issued by U.S. GSEs and government agencies. |
(e) | At December 31, 2019 and 2018, includes guarantees to the Fixed Income Clearing Corporation under the sponsored member repo program and commitments and guarantees associated with the Firm’s membership in certain clearing houses. |
(f) | At
December 31, 2019 and 2018, primarily includes letters of credit hedged by derivative transactions and managed on a market risk basis, and unfunded commitments related to institutional lending. Additionally, includes unfunded commitments predominantly related to certain tax-oriented equity investments. |
(g) | For lending-related products, the carrying value
represents the allowance for lending-related commitments and the guarantee liability; for derivative-related products, the carrying value represents the fair value. |
JPMorgan Chase & Co./2019 Form 10-K | 273 |
2019 | 2018 | ||||||||||||||||||
December
31, (in millions) | Standby letters of credit and other financial guarantees | Other letters of credit | Standby letters of credit and other financial guarantees | Other letters of credit | |||||||||||||||
Investment-grade(a) | $ | i 26,647 | $ | i 2,136 | $ | i 26,420 | $ | i 2,079 | |||||||||||
Noninvestment-grade(a) | i 7,261 | i 821 | i 7,078 | i 746 | |||||||||||||||
Total
contractual amount | $ | i 33,908 | $ | i 2,957 | $ | i 33,498 | $ | i 2,825 | |||||||||||
Allowance
for lending-related commitments | $ | i 216 | $ | i 4 | $ | i 167 | $ | i 3 | |||||||||||
Guarantee
liability | i 402 | i — | i 354 | i — | |||||||||||||||
Total
carrying value | $ | i 618 | $ | i 4 | $ | i 521 | $ | i 3 | |||||||||||
Commitments
with collateral | $ | i 17,582 | $ | i 726 | $ | i 17,400 | $ | i 583 |
(a) | The
ratings scale is based on the Firm’s internal risk ratings. Refer to Note 12 for further information on internal risk ratings. |
274 | JPMorgan Chase & Co./2019 Form 10-K |
(in millions) | |||||||
Notional
amounts | |||||||
Derivative guarantees | $ | i 53,089 | $ | i 55,271 | |||
Stable
value contracts with contractually limited exposure | i 28,877 | i 28,637 | |||||
Maximum
exposure of stable value contracts with contractually limited exposure | i 2,967 | i 2,963 | |||||
Fair
value | |||||||
Derivative payables | i 159 | i 367 |
JPMorgan Chase & Co./2019 Form 10-K | 275 |
276 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 277 |
December 31, (in billions) | 2019 | 2018 | ||||||
Assets
that may be sold or repledged or otherwise used by secured parties | $ | i 125.2 | $ | i 104.0 | ||||
Assets
that may not be sold or repledged or otherwise used by secured parties | i 80.2 | i 83.7 | ||||||
Assets
pledged at Federal Reserve banks and FHLBs | i 478.9 | i 475.3 | ||||||
Total
pledged assets | $ | i 684.3 | $ | i 663.0 |
December
31, (in billions) | 2019 | 2018 | ||||||
Investment securities | $ | i 35.9 | $ | i 59.5 | ||||
Loans | i 460.4 | i 440.1 | ||||||
Trading
assets and other | i 188.0 | i 163.4 | ||||||
Total
pledged assets | $ | i 684.3 | $ | i 663.0 |
December 31, (in billions) | 2019 | 2018 | ||||||
Collateral permitted to be sold or repledged, delivered, or otherwise used | $ | i 1,282.5 | $ | i 1,245.3 | ||||
Collateral
sold, repledged, delivered or otherwise used | i 1,000.5 | i 998.3 |
278 | JPMorgan
Chase & Co./2019 Form 10-K |
• | the number, variety and varying stages of the proceedings, including the fact that many are in preliminary stages, |
• | the
existence in many such proceedings of multiple defendants, including the Firm, whose share of liability (if any) has yet to be determined, |
• | the numerous yet-unresolved issues in many of the proceedings, including issues regarding class certification and the scope of many of the claims, and |
• | the attendant uncertainty of the various potential outcomes of such proceedings, including where the Firm has made assumptions concerning future rulings by the court or other adjudicator, or about the behavior or incentives
of adverse parties or regulatory authorities, and those assumptions prove to be incorrect. |
JPMorgan Chase & Co./2019 Form 10-K | 279 |
280 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan
Chase & Co./2019 Form 10-K | 281 |
As of or for the year ended December 31, (in millions) | Revenue(c) | Expense(d) | Income
before income tax expense | Net income | Total assets | ||||||||||||||||
2019 | |||||||||||||||||||||
Europe/Middle
East/Africa | $ | i 15,902 | $ | i 9,977 | $ | i 5,925 | $ | i 4,084 | $ | i 388,353 | (e) | ||||||||||
Asia-Pacific | i 7,270 | i 5,014 | i 2,256 | i 1,511 | i 183,408 | ||||||||||||||||
Latin
America/Caribbean | i 2,411 | i 1,561 | i 850 | i 613 | i 47,836 | ||||||||||||||||
Total
international | i 25,583 | i 16,552 | i 9,031 | i 6,208 | i 619,597 | ||||||||||||||||
North
America(a) | i 90,044 | i 54,530 | i 35,514 | i 30,223 | i 2,067,782 | ||||||||||||||||
Total | $ | i 115,627 | $ | i 71,082 | $ | i 44,545 | $ | i 36,431 | $ | i 2,687,379 | |||||||||||
2018(b) | |||||||||||||||||||||
Europe/Middle
East/Africa | $ | i 16,468 | $ | i 10,033 | $ | i 6,435 | $ | i 4,583 | $ | i 426,129 | (e) | ||||||||||
Asia-Pacific | i 6,997 | i 4,877 | i 2,120 | i 1,491 | i 171,637 | ||||||||||||||||
Latin
America/Caribbean | i 2,365 | i 1,301 | i 1,064 | i 745 | i 43,870 | ||||||||||||||||
Total
international | i 25,830 | i 16,211 | i 9,619 | i 6,819 | i 641,636 | ||||||||||||||||
North
America(a) | i 83,199 | i 52,054 | i 31,145 | i 25,655 | i 1,980,896 | ||||||||||||||||
Total | $ | i 109,029 | $ | i 68,265 | $ | i 40,764 | $ | i 32,474 | $ | i 2,622,532 | |||||||||||
2017(b) | |||||||||||||||||||||
Europe/Middle
East/Africa | $ | i 15,505 | $ | i 9,235 | $ | i 6,270 | $ | i 4,320 | $ | i 409,204 | (e) | ||||||||||
Asia-Pacific | i 5,835 | i 4,523 | i 1,312 | i 725 | i 163,823 | ||||||||||||||||
Latin
America/Caribbean | i 1,959 | i 1,527 | i 432 | i 274 | i 42,403 | ||||||||||||||||
Total
international | i 23,299 | i 15,285 | i 8,014 | i 5,319 | i 615,430 | ||||||||||||||||
North
America(a) | i 77,406 | i 49,520 | i 27,886 | i 19,122 | i 1,918,170 | ||||||||||||||||
Total | $ | i 100,705 | $ | i 64,805 | $ | i 35,900 | $ | i 24,441 | $ | i 2,533,600 |
(a) | Substantially
reflects the U.S. |
(b) | The prior period amounts have been revised to conform with the current period presentation. |
(c) | Revenue is composed of net interest income and noninterest revenue. |
(d) | Expense is composed of noninterest expense and the provision for credit losses. |
(e) | Total
assets for the U.K. were approximately $ i 305 billion, $ i 297 billion, and $ i 310
billion at December 31, 2019, 2018 and 2017, respectively. |
282 | JPMorgan Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 283 |
(Table
continued on next page) | ||||||||||||||||||||||||||||||||||||||||
As
of or for the year ended December 31, (in millions, except ratios) | Consumer & Community Banking | Corporate & Investment Bank | Commercial Banking | Asset & Wealth Management | ||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||
Noninterest
revenue | $ | i 18,642 | $ | i 16,260 | $ | i 14,710 | $ | i 29,142 | $ | i 26,968 | $ | i 24,539 | $ | i 2,430 | $ | i 2,343 | $ | i 2,522 | $ | i 10,816 | $ | i 10,539 | $ | i 10,456 | ||||||||||||||||
Net
interest income | i 37,241 | i 35,819 | i 31,775 | i 9,156 | i 9,480 | i 10,118 | i 6,554 | i 6,716 | i 6,083 | i 3,500 | i 3,537 | i 3,379 | ||||||||||||||||||||||||||||
Total
net revenue | i 55,883 | i 52,079 | i 46,485 | i 38,298 | i 36,448 | i 34,657 | i 8,984 | i 9,059 | i 8,605 | i 14,316 | i 14,076 | i 13,835 | ||||||||||||||||||||||||||||
Provision
for credit losses | i 4,952 | i 4,753 | i 5,572 | i 277 | ( i 60 | ) | ( i 45 | ) | i 296 | i 129 | ( i 276 | ) | i 61 | i 53 | i 39 | |||||||||||||||||||||||||
Noninterest
expense | i 28,896 | i 27,835 | i 26,062 | i 21,519 | i 20,918 | i 19,407 | i 3,500 | i 3,386 | i 3,327 | i 10,515 | i 10,353 | i 10,218 | ||||||||||||||||||||||||||||
Income/(loss)
before income tax expense/(benefit) | i 22,035 | i 19,491 | i 14,851 | i 16,502 | i 15,590 | i 15,295 | i 5,188 | i 5,544 | i 5,554 | i 3,740 | i 3,670 | i 3,578 | ||||||||||||||||||||||||||||
Income
tax expense/(benefit) | i 5,394 | i 4,639 | i 5,456 | i 4,580 | i 3,817 | i 4,482 | i 1,264 | i 1,307 | i 2,015 | i 907 | i 817 | i 1,241 | ||||||||||||||||||||||||||||
Net
income/(loss) | $ | i 16,641 | $ | i 14,852 | $ | i 9,395 | $ | i 11,922 | $ | i 11,773 | $ | i 10,813 | $ | i 3,924 | $ | i 4,237 | $ | i 3,539 | $ | i 2,833 | $ | i 2,853 | $ | i 2,337 | ||||||||||||||||
Average
equity | $ | i 52,000 | $ | i 51,000 | $ | i 51,000 | $ | i 80,000 | $ | i 70,000 | $ | i 70,000 | $ | i 22,000 | $ | i 20,000 | $ | i 20,000 | $ | i 10,500 | $ | i 9,000 | $ | i 9,000 | ||||||||||||||||
Total
assets | i 539,090 | i 557,441 | i 552,601 | i 908,153 | i 903,051 | i 826,384 | i 220,514 | i 220,229 | i 221,228 | i 182,004 | i 170,024 | i 151,909 | ||||||||||||||||||||||||||||
Return
on equity | i 31 | % | i 28 | % | i 17 | % | i 14 | % | i 16 | % | i 14 | % | i 17 | % | i 20 | % | i 17 | % | i 26 | % | i 31 | % | i 25 | % | ||||||||||||||||
Overhead
ratio | i 52 | i 53 | i 56 | i 56 | i 57 | i 56 | i 39 | i 37 | i 39 | i 73 | i 74 | i 74 |
284 | JPMorgan
Chase & Co./2019 Form 10-K |
(Table
continued from previous page) | |||||||||||||||||||||||||||||||
As of or for the year ended December 31, (in millions, except ratios) | Corporate | Reconciling
Items(a) | Total | ||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||
Noninterest
revenue | $ | ( i 114 | ) | $ | ( i 263 | ) | $ | i 1,085 | $ | ( i 2,534 | ) | $ | ( i 1,877 | ) | $ | ( i 2,704 | ) | (b) | $ | i 58,382 | $ | i 53,970 | $ | i 50,608 | |||||||
Net
interest income | i 1,325 | i 135 | i 55 | ( i 531 | ) | ( i 628 | ) | ( i 1,313 | ) | i 57,245 | i 55,059 | i 50,097 | |||||||||||||||||||
Total
net revenue | i 1,211 | ( i 128 | ) | i 1,140 | ( i 3,065 | ) | ( i 2,505 | ) | ( i 4,017 | ) | i 115,627 | i 109,029 | i 100,705 | ||||||||||||||||||
Provision
for credit losses | ( i 1 | ) | ( i 4 | ) | i — | i — | i — | i — | i 5,585 | i 4,871 | i 5,290 | ||||||||||||||||||||
Noninterest
expense | i 1,067 | i 902 | i 501 | i — | i — | i — | i 65,497 | i 63,394 | i 59,515 | ||||||||||||||||||||||
Income/(loss)
before income tax expense/(benefit) | i 145 | ( i 1,026 | ) | i 639 | ( i 3,065 | ) | ( i 2,505 | ) | ( i 4,017 | ) | i 44,545 | i 40,764 | i 35,900 | ||||||||||||||||||
Income
tax expense/(benefit) | ( i 966 | ) | i 215 | i 2,282 | ( i 3,065 | ) | ( i 2,505 | ) | ( i 4,017 | ) | (b) | i 8,114 | i 8,290 | i 11,459 | |||||||||||||||||
Net
income/(loss) | $ | i 1,111 | $ | ( i 1,241 | ) | $ | ( i 1,643 | ) | $ | i — | $ | i — | $ | i — | $ | i 36,431 | $ | i 32,474 | $ | i 24,441 | |||||||||||
Average
equity | $ | i 68,407 | $ | i 79,222 | $ | i 80,350 | $ | i — | $ | i — | $ | i — | $ | i 232,907 | $ | i 229,222 | $ | i 230,350 | |||||||||||||
Total
assets | i 837,618 | i 771,787 | i 781,478 | NA | NA | NA | i 2,687,379 | i 2,622,532 | i 2,533,600 | ||||||||||||||||||||||
Return
on equity | NM | NM | NM | NM | NM | NM | i 15 | % | i 13 | % | i 10 | % | |||||||||||||||||||
Overhead
ratio | NM | NM | NM | NM | NM | NM | i 57 | i 58 | i 59 |
(a) | Segment
results on a managed basis reflect revenue on a FTE basis with the corresponding income tax impact recorded within income tax expense/(benefit). These adjustments are eliminated in reconciling items to arrive at the Firm’s reported U.S. GAAP results. |
(b) | Included $ i 375
million related to tax-oriented investments as a result of the enactment of the TCJA. |
JPMorgan Chase & Co./2019 Form 10-K | 285 |
Statements
of income and comprehensive income | ||||||||||||
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||||||
Income | ||||||||||||
Dividends
from subsidiaries and affiliates: | ||||||||||||
Bank and bank holding company | $ | i 26,000 | $ | i 32,501 | $ | i 13,000 | ||||||
Non-bank(a) | i — | i 2 | i 540 | |||||||||
Interest
income from subsidiaries | i 223 | i 216 | i 72 | |||||||||
Other
interest income | i — | i — | i 41 | |||||||||
Other
income from subsidiaries: | ||||||||||||
Bank and bank holding company | i 2,738 | i 515 | i 1,553 | |||||||||
Non-bank | i 197 | ( i 444 | ) | ( i 88 | ) | |||||||
Other
income | ( i 1,731 | ) | i 888 | ( i 623 | ) | |||||||
Total
income | i 27,427 | i 33,678 | i 14,495 | |||||||||
Expense | ||||||||||||
Interest
expense to subsidiaries and affiliates(a) | ( i 5,303 | ) | i 2,291 | i 400 | ||||||||
Other
interest expense | i 13,246 | i 4,581 | i 5,202 | |||||||||
Noninterest
expense | i 1,992 | i 1,793 | ( i 1,897 | ) | ||||||||
Total
expense | i 9,935 | i 8,665 | i 3,705 | |||||||||
Income
before income tax benefit and undistributed net income of subsidiaries | i 17,492 | i 25,013 | i 10,790 | |||||||||
Income
tax benefit | i 2,033 | i 1,838 | i 1,007 | |||||||||
Equity
in undistributed net income of subsidiaries | i 16,906 | i 5,623 | i 12,644 | |||||||||
Net
income | $ | i 36,431 | $ | i 32,474 | $ | i 24,441 | ||||||
Other
comprehensive income, net | i 3,076 | ( i 1,476 | ) | i 1,056 | ||||||||
Comprehensive
income | $ | i 39,507 | $ | i 30,998 | $ | i 25,497 |
Balance
sheets | ||||||||
December 31, (in millions) | 2019 | 2018 | ||||||
Assets | ||||||||
Cash
and due from banks | $ | i 32 | $ | i 55 | ||||
Deposits
with banking subsidiaries | i 5,309 | i 5,315 | ||||||
Trading
assets | i 3,011 | i 3,304 | ||||||
Advances
to, and receivables from, subsidiaries: | ||||||||
Bank and bank holding company | i 2,358 | i 3,334 | ||||||
Non-bank | i 84 | i 74 | ||||||
Investments
(at equity) in subsidiaries and affiliates: | ||||||||
Bank and bank holding company | i 471,207 | i 449,628 | ||||||
Non-bank | i 1,044 | i 1,077 | ||||||
Other
assets | i 10,699 | i 10,478 | ||||||
Total
assets | $ | i 493,744 | $ | i 473,265 | ||||
Liabilities
and stockholders’ equity | ||||||||
Borrowings from, and payables to, subsidiaries and affiliates(a) | $ | i 23,410 | $ | i 20,017 | ||||
Short-term
borrowings | i 2,616 | i 2,672 | ||||||
Other
liabilities | i 9,288 | i 8,821 | ||||||
Long-term
debt(b)(c) | i 197,100 | i 185,240 | ||||||
Total
liabilities(c) | i 232,414 | i 216,750 | ||||||
Total
stockholders’ equity | i 261,330 | i 256,515 | ||||||
Total
liabilities and stockholders’ equity | $ | i 493,744 | $ | i 473,265 |
Statements
of cash flows | ||||||||||||
Year ended December 31, (in millions) | 2019 | 2018 | 2017 | |||||||||
Operating
activities | ||||||||||||
Net income | $ | i 36,431 | $ | i 32,474 | $ | i 24,441 | ||||||
Less:
Net income of subsidiaries and affiliates(a) | i 42,906 | i 38,125 | i 26,185 | |||||||||
Parent
company net loss | ( i 6,475 | ) | ( i 5,651 | ) | ( i 1,744 | ) | ||||||
Cash
dividends from subsidiaries and affiliates(a) | i 26,000 | i 32,501 | i 13,540 | |||||||||
Other
operating adjustments | i 9,862 | ( i 4,400 | ) | i 4,635 | ||||||||
Net
cash provided by/(used in) operating activities | i 29,387 | i 22,450 | i 16,431 | |||||||||
Investing
activities | ||||||||||||
Net change in: | ||||||||||||
Other
changes in loans, net | i — | i — | i 78 | |||||||||
Advances
to and investments in subsidiaries and affiliates, net | ( i 6 | ) | (e) | i 8,036 | ( i 280 | ) | ||||||
All
other investing activities, net | i 71 | i 63 | i 49 | |||||||||
Net
cash provided by/(used in) investing activities | i 65 | i 8,099 | ( i 153 | ) | ||||||||
Financing
activities | ||||||||||||
Net change in: | ||||||||||||
Borrowings
from subsidiaries and affiliates(a) | i 2,941 | ( i 2,273 | ) | i 13,862 | ||||||||
Short-term
borrowings | ( i 56 | ) | ( i 678 | ) | ( i 481 | ) | ||||||
Proceeds
from long-term borrowings | i 25,569 | i 25,845 | i 25,855 | |||||||||
Payments
of long-term borrowings | ( i 21,226 | ) | ( i 21,956 | ) | ( i 29,812 | ) | ||||||
Proceeds
from issuance of preferred stock | i 5,000 | i 1,696 | i 1,258 | |||||||||
Redemption
of preferred stock | ( i 4,075 | ) | ( i 1,696 | ) | ( i 1,258 | ) | ||||||
Treasury
stock repurchased | ( i 24,001 | ) | ( i 19,983 | ) | ( i 15,410 | ) | ||||||
Dividends
paid | ( i 12,343 | ) | ( i 10,109 | ) | ( i 8,993 | ) | ||||||
All
other financing activities, net | ( i 1,290 | ) | ( i 1,526 | ) | ( i 1,361 | ) | ||||||
Net
cash used in financing activities | ( i 29,481 | ) | ( i 30,680 | ) | ( i 16,340 | ) | ||||||
Net
decrease in cash and due from banks and deposits with banking subsidiaries | ( i 29 | ) | ( i 131 | ) | ( i 62 | ) | ||||||
Cash
and due from banks and deposits with banking subsidiaries at the beginning of the year | i 5,370 | i 5,501 | i 5,563 | |||||||||
Cash
and due from banks and deposits with banking subsidiaries at the end of the year | $ | i 5,341 | $ | i 5,370 | $ | i 5,501 | ||||||
Cash
interest paid | $ | i 7,957 | $ | i 6,911 | $ | i 5,426 | ||||||
Cash
income taxes paid, net(d) | i 3,910 | i 1,782 | i 1,775 |
(a) | Affiliates
include trusts that issued guaranteed capital debt securities (“issuer trusts”). |
(b) | At December 31, 2019, long-term debt that contractually matures in 2020 through 2024 totaled $ i 16.4
billion, $ i 20.4 billion, $ i 12.7
billion, $ i 18.6 billion, and $ i 18.2
billion, respectively. |
(c) | Refer to Notes 20 and 28 for information regarding the Parent Company’s guarantees of its subsidiaries’ obligations. |
(d) | Represents payments, net of refunds, made by the Parent Company to various taxing authorities and includes taxes paid on behalf of certain of its subsidiaries
that are subsequently reimbursed. The reimbursements were $ i 6.4 billion, $ i 1.2
billion, and $ i 4.1 billion for the years ended December 31, 2019, 2018, and 2017, respectively. |
(e) | As
a result of the merger of Chase Bank USA, N.A. with and into JPMorgan Chase Bank, N.A., JPMorgan Chase Bank, N.A. distributed $ i 13.5 billion to the Parent company as a return of capital, which the Parent company contributed to the IHC. |
286 | JPMorgan
Chase & Co./2019 Form 10-K |
As
of or for the period ended | 2019 | 2018 | |||||||||||||||||||||||||
(in millions, except per share, ratio, headcount data and where otherwise noted) | 4th quarter | 3rd quarter | 2nd quarter | 1st quarter | 4th quarter | 3rd
quarter | 2nd quarter | 1st quarter | |||||||||||||||||||
Selected income statement data | |||||||||||||||||||||||||||
Total
net revenue | $ | 28,331 | $ | 29,341 | $ | 28,832 | $ | 29,123 | $ | 26,109 | $ | 27,260 | $ | 27,753 | $ | 27,907 | |||||||||||
Total
noninterest expense | 16,339 | 16,422 | 16,341 | 16,395 | 15,720 | 15,623 | 15,971 | 16,080 | |||||||||||||||||||
Pre-provision
profit | 11,992 | 12,919 | 12,491 | 12,728 | 10,389 | 11,637 | 11,782 | 11,827 | |||||||||||||||||||
Provision
for credit losses | 1,427 | 1,514 | 1,149 | 1,495 | 1,548 | 948 | 1,210 | 1,165 | |||||||||||||||||||
Income
before income tax expense | 10,565 | 11,405 | 11,342 | 11,233 | 8,841 | 10,689 | 10,572 | 10,662 | |||||||||||||||||||
Income
tax expense | 2,045 | 2,325 | 1,690 | 2,054 | 1,775 | 2,309 | 2,256 | 1,950 | |||||||||||||||||||
Net
income | $ | 8,520 | $ | 9,080 | $ | 9,652 | $ | 9,179 | $ | 7,066 | $ | 8,380 | $ | 8,316 | $ | 8,712 | |||||||||||
Earnings
per share data | |||||||||||||||||||||||||||
Net income: Basic | $ | 2.58 | $ | 2.69 | $ | 2.83 | $ | 2.65 | $ | 1.99 | $ | 2.35 | $ | 2.31 | $ | 2.38 | |||||||||||
Diluted | 2.57 | 2.68 | 2.82 | 2.65 | 1.98 | 2.34 | 2.29 | 2.37 | |||||||||||||||||||
Average
shares: Basic | 3,140.7 | 3,198.5 | 3,250.6 | 3,298.0 | 3,335.8 | 3,376.1 | 3,415.2 | 3,458.3 | |||||||||||||||||||
Diluted | 3,148.5 | 3,207.2 | 3,259.7 | 3,308.2 | 3,347.3 | 3,394.3 | 3,434.7 | 3,479.5 | |||||||||||||||||||
Market
and per common share data | |||||||||||||||||||||||||||
Market capitalization | $ | 429,913 | $ | 369,133 | $ | 357,479 | $ | 328,387 | $ | 319,780 | $ | 375,239 | $ | 350,204 | $ | 374,423 | |||||||||||
Common
shares at period-end | 3,084.0 | 3,136.5 | 3,197.5 | 3,244.0 | 3,275.8 | 3,325.4 | 3,360.9 | 3,404.8 | |||||||||||||||||||
Book
value per share | 75.98 | 75.24 | 73.88 | 71.78 | 70.35 | 69.52 | 68.85 | 67.59 | |||||||||||||||||||
TBVPS(a) | 60.98 | 60.48 | 59.52 | 57.62 | 56.33 | 55.68 | 55.14 | 54.05 | |||||||||||||||||||
Cash
dividends declared per share | 0.90 | 0.90 | 0.80 | 0.80 | 0.80 | 0.80 | 0.56 | 0.56 | |||||||||||||||||||
Selected
ratios and metrics | |||||||||||||||||||||||||||
ROE(b) | 14 | % | 15 | % | 16 | % | 16 | % | 12 | % | 14 | % | 14 | % | 15 | % | |||||||||||
ROTCE(a)(b) | 17 | 18 | 20 | 19 | 14 | 17 | 17 | 19 | |||||||||||||||||||
ROA(b) | 1.22 | 1.30 | 1.41 | 1.39 | 1.06 | 1.28 | 1.28 | 1.37 | |||||||||||||||||||
Overhead
ratio | 58 | 56 | 57 | 56 | 60 | 57 | 58 | 58 | |||||||||||||||||||
Loans-to-deposits
ratio | 61 | 62 | 63 | 64 | 67 | 65 | 65 | 63 | |||||||||||||||||||
LCR
(average)(c) | 116 | 115 | 113 | 111 | 113 | 115 | 115 | 115 | |||||||||||||||||||
CET1
capital ratio(d) | 12.4 | 12.3 | 12.2 | 12.1 | 12.0 | 12.0 | 12.0 | 11.8 | |||||||||||||||||||
Tier
1 capital ratio(d) | 14.1 | 14.1 | 14.0 | 13.8 | 13.7 | 13.6 | 13.6 | 13.5 | |||||||||||||||||||
Total
capital ratio(d) | 16.0 | 15.9 | 15.8 | 15.7 | 15.5 | 15.4 | 15.5 | 15.3 | |||||||||||||||||||
Tier
1 leverage ratio(d) | 7.9 | 7.9 | 8.0 | 8.1 | 8.1 | 8.2 | 8.2 | 8.2 | |||||||||||||||||||
SLR(e) | 6.3 | 6.3 | 6.4 | 6.4 | 6.4 | 6.5 | 6.5 | 6.5 | |||||||||||||||||||
Selected
balance sheet data (period-end) | |||||||||||||||||||||||||||
Trading assets | $ | 411,103 | $ | 495,875 | $ | 523,373 | $ | 533,402 | $ | 413,714 | $ | 419,827 | $ | 418,799 | $ | 412,282 | |||||||||||
Investment
Securities | 398,239 | 394,251 | 307,264 | 267,365 | $ | 261,828 | 231,398 | 233,015 | 238,188 | ||||||||||||||||||
Loans | 959,769 | 945,218 | 956,889 | 956,245 | $ | 984,554 | 954,318 | 948,414 | 934,424 | ||||||||||||||||||
Core
loans | 916,144 | 899,572 | 908,971 | 905,943 | 931,856 | 899,006 | 889,433 | 870,536 | |||||||||||||||||||
Average
core loans | 903,707 | 900,567 | 905,786 | 916,567 | 907,271 | 894,279 | 877,640 | 861,089 | |||||||||||||||||||
Total
assets | 2,687,379 | 2,764,661 | 2,727,379 | 2,737,188 | 2,622,532 | 2,615,183 | 2,590,050 | 2,609,785 | |||||||||||||||||||
Deposits | 1,562,431 | 1,525,261 | 1,524,361 | 1,493,441 | 1,470,666 | 1,458,762 | 1,452,122 | 1,486,961 | |||||||||||||||||||
Long-term
debt | 291,498 | 296,472 | 288,869 | 290,893 | 282,031 | 270,124 | 273,114 | 274,449 | |||||||||||||||||||
Common
stockholders’ equity | 234,337 | 235,985 | 236,222 | 232,844 | 230,447 | 231,192 | 231,390 | 230,133 | |||||||||||||||||||
Total
stockholders’ equity | 261,330 | 264,348 | 263,215 | 259,837 | 256,515 | 258,956 | 257,458 | 256,201 | |||||||||||||||||||
Headcount | 256,981 | 257,444 | 254,983 | 255,998 | 256,105 | 255,313 | 252,942 | 253,707 | |||||||||||||||||||
Credit
quality metrics | |||||||||||||||||||||||||||
Allowance for credit losses | $ | 14,314 | $ | 14,400 | $ | 14,295 | $ | 14,591 | $ | 14,500 | $ | 14,225 | $ | 14,367 | $ | 14,482 | |||||||||||
Allowance
for loan losses to total retained loans | 1.39 | % | 1.42 | % | 1.39 | % | 1.43 | % | 1.39 | % | 1.39 | % | 1.41 | % | 1.44 | % | |||||||||||
Allowance
for loan losses to retained loans excluding purchased credit-impaired loans(f) | 1.31 | 1.32 | 1.28 | 1.28 | 1.23 | 1.23 | 1.22 | 1.25 | |||||||||||||||||||
Nonperforming
assets | $ | 4,497 | $ | 5,343 | $ | 5,260 | $ | 5,616 | $ | 5,190 | $ | 5,034 | $ | 5,767 | $ | 6,364 | |||||||||||
Net
charge-offs | 1,494 | 1,371 | 1,403 | 1,361 | 1,236 | 1,033 | 1,252 | 1,335 | |||||||||||||||||||
Net
charge-off rate | 0.63 | % | 0.58 | % | 0.60 | % | 0.58 | % | 0.52 | % | 0.43 | % | 0.54 | % | 0.59 | % |
(a) | TBVPS
and ROTCE are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 57–59 for further discussion of these measures. |
(b) | Quarterly ratios are based upon annualized amounts. |
(c) | The percentage represents the Firm’s reported average LCR. |
(d) | The
Basel III capital rules became fully phased-in effective January 1, 2019. Prior to this date, the required capital measures were subject to the transitional rules which, as of December 31, 2018 and September 30, 2018, were the same on a fully phased-in and transitional basis. Refer to Capital Risk Management on pages 85–92 for additional information on these measures. |
(e) | The Basel III rule for the SLR became fully phased-in effective January 1, 2018. Refer to Capital Risk Management on pages
85–92 for additional information on these measures. |
(f) | This ratio is a non-GAAP financial measure as it excludes the impact of residential real estate PCI loans. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 57–59, and the Allowance for credit losses on pages 116–117 for further discussion of this measure. |
JPMorgan
Chase & Co./2019 Form 10-K | 287 |
(Table
continued on next page) | |||||||||||
(Unaudited) | 2019 | ||||||||||
Year ended December 31, (Taxable-equivalent interest and rates; in millions, except rates) | Average balance | Interest(h) | Rate | ||||||||
Assets | |||||||||||
Deposits
with banks | $ | 280,004 | $ | 3,887 | 1.39 | % | |||||
Federal funds sold and securities purchased under resale agreements | 275,429 | 6,146 | 2.23 | ||||||||
Securities
borrowed(a) | 131,291 | 1,574 | 1.20 | ||||||||
Trading assets – debt instruments(a) | 334,269 | 10,848 | 3.25 | ||||||||
Taxable
securities | 284,127 | 7,962 | 2.80 | ||||||||
Non-taxable securities(b) | 35,748 | 1,655 | 4.63 | ||||||||
Total
investment securities | 319,875 | 9,617 | 3.01 | (j) | |||||||
Loans | 954,539 | 50,532 | (i) | 5.29 | |||||||
All
other interest-earning assets(a)(c) | 50,084 | 1,967 | 3.93 | ||||||||
Total interest-earning assets(a) | 2,345,491 | 84,571 | 3.61 | ||||||||
Allowance
for loan losses | (13,331 | ) | |||||||||
Cash and due from banks | 20,645 | ||||||||||
Trading
assets – equity and other instruments(a) | 114,323 | ||||||||||
Trading assets – derivative receivables | 53,786 | ||||||||||
Goodwill,
MSRs and other intangible assets | 53,683 | ||||||||||
All other noninterest-earning assets | 167,244 | ||||||||||
Total
assets | $ | 2,741,841 | |||||||||
Liabilities | |||||||||||
Interest-bearing
deposits(a) | $ | 1,115,848 | $ | 8,957 | 0.80 | % | |||||
Federal funds purchased and securities loaned or sold under repurchase agreements | 227,994 | 4,630 | 2.03 | ||||||||
Short-term
borrowings(a)(d) | 52,426 | 1,248 | 2.38 | ||||||||
Trading liabilities – debt and all other interest-bearing liabilities(a)(e)(f) | 182,105 | 2,585 | 1.42 | ||||||||
Beneficial
interests issued by consolidated VIEs | 22,501 | 568 | 2.52 | ||||||||
Long-term debt(a) | 247,968 | 8,807 | 3.55 | ||||||||
Total
interest-bearing liabilities(a) | 1,848,842 | 26,795 | 1.45 | ||||||||
Noninterest-bearing deposits(a) | 407,219 | ||||||||||
Trading
liabilities – equity and other instruments(a)(f) | 31,085 | ||||||||||
Trading liabilities – derivative payables | 42,560 | ||||||||||
All
other liabilities, including the allowance for lending-related commitments(a) | 151,717 | ||||||||||
Total liabilities | 2,481,423 | ||||||||||
Stockholders’
equity | |||||||||||
Preferred stock | 27,511 | ||||||||||
Common
stockholders’ equity | 232,907 | ||||||||||
Total stockholders’ equity | 260,418 | (g) | |||||||||
Total
liabilities and stockholders’ equity | $ | 2,741,841 | |||||||||
Interest rate spread(a) | 2.16 | % | |||||||||
Net
interest income and net yield on interest-earning assets(a) | $ | 57,776 | 2.46 |
(a) | In
the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. In addition, the Firm reclassified balances related to certain instruments and structured notes from interest-earning/bearing to noninterest-earning/bearing assets and liabilities as the associated returns are recorded in principal transactions revenue and not in net interest income. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation. |
(b) | Represents
securities that are tax-exempt for U.S. federal income tax purposes. |
(c) | Includes prime brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets, which are classified in other assets on the Consolidated Balance Sheets. |
(d) | Includes commercial paper. |
(e) | All
other interest-bearing liabilities include prime brokerage-related customer payables. |
288 | JPMorgan Chase & Co./2019 Form 10-K |
(Table
continued from previous page) | ||||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||
Average balance | Interest(h) | Rate | Average balance | Interest(h) | Rate | |||||||||||||||||
$ | 405,514 | $ | 5,907 | 1.46 | % | $ | 439,663 | $ | 4,238 | 0.96 | % | |||||||||||
217,150 | 3,819 | 1.76 | 191,820 | 2,327 | 1.21 | |||||||||||||||||
115,082 | 913 | 0.79 | 95,324 | 94 | 0.10 | |||||||||||||||||
244,771 | 8,763 | 3.58 | 227,588 | 7,714 | 3.39 | |||||||||||||||||
194,232 | 5,653 | 2.91 | 223,592 | 5,534 | 2.48 | |||||||||||||||||
42,456 | 1,987 | 4.68 | 45,086 | 2,769 | 6.14 | |||||||||||||||||
236,688 | 7,640 | 3.23 | (j) | 268,678 | 8,303 | 3.09 | (j) | |||||||||||||||
944,885 | 47,796 | (i) | 5.06 | 906,397 | 41,296 | (i) | 4.56 | |||||||||||||||
48,818 | 1,890 | 3.87 | 41,504 | 1,312 | 3.16 | |||||||||||||||||
2,212,908 | 76,728 | 3.47 | 2,170,974 | 65,284 | 3.01 | |||||||||||||||||
(13,269 | ) | (13,453 | ) | |||||||||||||||||||
21,694 | 20,432 | |||||||||||||||||||||
118,152 | 125,530 | |||||||||||||||||||||
60,734 | 59,588 | |||||||||||||||||||||
54,669 | 53,999 | |||||||||||||||||||||
154,010 | 138,992 | |||||||||||||||||||||
$ | 2,608,898 | $ | 2,556,062 | |||||||||||||||||||
$ | 1,045,037 | $ | 5,973 | 0.57 | % | $ | 1,006,184 | $ | 2,857 | 0.28 | % | |||||||||||
189,282 | 3,066 | 1.62 | 187,386 | 1,611 | 0.86 | |||||||||||||||||
54,993 | 1,144 | 2.08 | 38,095 | 481 | 1.26 | |||||||||||||||||
177,788 | 2,387 | 1.34 | 171,731 | 1,669 | 0.97 | |||||||||||||||||
21,079 | 493 | 2.34 | 32,457 | 503 | 1.55 | |||||||||||||||||
243,246 | 7,978 | 3.28 | 263,928 | 6,753 | 2.56 | |||||||||||||||||
1,731,425 | 21,041 | 1.22 | 1,699,781 | 13,874 | 0.82 | |||||||||||||||||
411,424 | 411,202 | |||||||||||||||||||||
34,667 | 21,104 | |||||||||||||||||||||
43,075 | 44,122 | |||||||||||||||||||||
132,836 | 123,291 | |||||||||||||||||||||
2,353,427 | 2,299,500 | |||||||||||||||||||||
26,249 | 26,212 | |||||||||||||||||||||
229,222 | 230,350 | |||||||||||||||||||||
255,471 | (g) | 256,562 | (g) | |||||||||||||||||||
$ | 2,608,898 | $ | 2,556,062 | |||||||||||||||||||
2.25 | % | 2.19 | % | |||||||||||||||||||
$ | 55,687 | 2.52 | $ | 51,410 | 2.37 |
(f) | The
combined balance of trading liabilities – debt and equity instruments was $101.0 billion, $107.0 billion and $90.7 billion for the years ended December 31, 2019, 2018 and 2017, respectively. |
(g) | The ratio of average stockholders’ equity to average assets was 9.5%, 9.8% and 10.0% for the years ended December 31, 2019,
2018 and 2017, respectively. |
(h) | Interest includes the effect of related hedging derivatives. Taxable-equivalent
amounts are used where applicable. |
(i) | Fees and commissions on loans included in loan interest amounted to $1.2 billion each for the years ended December 31, 2019 and 2018, and $1.0 billion for 2017. |
(j) | The
annualized rate for securities based on amortized cost was 3.05%, 3.25% and 3.13% for the years ended December 31, 2019, 2018 and 2017, respectively, and does not give effect to changes in fair value that are reflected in AOCI. |
JPMorgan Chase & Co./2019 Form 10-K | 289 |
(Table
continued on next page) | |||||||||
2019 | |||||||||
(Unaudited) Year ended December 31, (Taxable-equivalent interest and rates; in millions, except rates) | Average balance | Interest | Rate | ||||||
Interest-earning
assets | |||||||||
Deposits with banks: | |||||||||
U.S. | $ | 165,066 | $ | 3,588 | 2.17 | % | |||
Non-U.S. | 114,938 | 299 | 0.26 | ||||||
Federal
funds sold and securities purchased under resale agreements: | |||||||||
U.S. | 150,205 | 4,068 | 2.71 | ||||||
Non-U.S. | 125,224 | 2,078 | 1.66 | ||||||
Securities
borrowed:(a) | |||||||||
U.S. | 92,625 | 1,423 | 1.54 | ||||||
Non-U.S. | 38,666 | 151 | 0.39 | ||||||
Trading
assets – debt instruments: | |||||||||
U.S. | 223,270 | 7,125 | 3.19 | ||||||
Non-U.S. | 110,999 | 3,723 | 3.35 | ||||||
Investment
securities: | |||||||||
U.S. | 287,961 | 8,963 | 3.11 | ||||||
Non-U.S. | 31,914 | 654 | 2.05 | ||||||
Loans: | |||||||||
U.S. | 875,869 | 48,097 | 5.49 | ||||||
Non-U.S. | 78,670 | 2,435 | 3.10 | ||||||
All
other interest-earning assets, predominantly U.S.(a) | 50,084 | 1,967 | 3.93 | ||||||
Total interest-earning assets(a) | 2,345,491 | 84,571 | 3.61 | ||||||
Interest-bearing
liabilities | |||||||||
Interest-bearing deposits: | |||||||||
U.S. | 850,493 | 6,896 | 0.81 | ||||||
Non-U.S. | 265,355 | 2,061 | 0.78 | ||||||
Federal
funds purchased and securities loaned or sold under repurchase agreements: | |||||||||
U.S. | 164,284 | 3,989 | 2.43 | ||||||
Non-U.S. | 63,710 | 641 | 1.01 | ||||||
Trading
liabilities – debt, short-term and all other interest-bearing liabilities:(a)(b) | |||||||||
U.S. | 147,247 | 2,574 | 1.75 | ||||||
Non-U.S. | 87,284 | 1,259 | 1.44 | ||||||
Beneficial
interests issued by consolidated VIEs, predominantly U.S. | 22,501 | 568 | 2.52 | ||||||
Long-term debt: | |||||||||
U.S. | 241,914 | 8,766 | 3.62 | ||||||
Non-U.S. | 6,054 | 41 | 0.68 | ||||||
Intercompany
funding: | |||||||||
U.S. | (42,947 | ) | (1,414 | ) | — | ||||
Non-U.S. | 42,947 | 1,414 | — | ||||||
Total
interest-bearing liabilities(a) | 1,848,842 | 26,795 | 1.45 | ||||||
Noninterest-bearing liabilities(c) | 496,649 | ||||||||
Total
investable funds | $ | 2,345,491 | $ | 26,795 | 1.14 | % | |||
Net interest income and net yield: | $ | 57,776 | 2.46 | % | |||||
U.S. | 52,217 | 2.86 | |||||||
Non-U.S. | 5,559 | 1.07 | |||||||
Percentage
of total assets and liabilities attributable to non-U.S. operations: | |||||||||
Assets | 24.5 | ||||||||
Liabilities | 22.1 |
(a) | In
the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation. |
(b) | Includes commercial paper. |
(c) | Represents
the amount of noninterest-bearing liabilities funding interest-earning assets. |
290 | JPMorgan Chase & Co./2019 Form 10-K |
(Table
continued from previous page) | ||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||
Average balance | Interest | Rate | Average
balance | Interest | Rate | |||||||||||||||
$ | 305,117 | $ | 5,703 | 1.87 | % | $ | 366,814 | $ | 4,093 | 1.12 | % | |||||||||
100,397 | 204 | 0.20 | 72,849 | 145 | 0.20 | |||||||||||||||
102,144 | 2,427 | 2.38 | 90,879 | 1,360 | 1.50 | |||||||||||||||
115,006 | 1,392 | 1.21 | 100,941 | 967 | 0.96 | |||||||||||||||
77,027 | 825 | 1.07 | 68,110 | 65 | 0.11 | |||||||||||||||
38,055 | 88 | 0.23 | 27,214 | 29 | 0.11 | |||||||||||||||
140,221 | 5,068 | 3.61 | 128,157 | 4,186 | 3.27 | |||||||||||||||
104,550 | 3,695 | 3.53 | 99,431 | 3,528 | 3.55 | |||||||||||||||
200,883 | 6,943 | 3.46 | 223,140 | 7,490 | 3.36 | |||||||||||||||
35,805 | 697 | 1.95 | 45,538 | 813 | 1.79 | |||||||||||||||
864,149 | 45,395 | 5.25 | 832,608 | 39,439 | 4.74 | |||||||||||||||
80,736 | 2,401 | 2.97 | 73,789 | 1,857 | 2.52 | |||||||||||||||
48,818 | 1,890 | 3.87 | 41,504 | 1,312 | 3.16 | |||||||||||||||
2,212,908 | 76,728 | 3.47 | 2,170,974 | 65,284 | 3.01 | |||||||||||||||
802,786 | 4,562 | 0.57 | 769,596 | 2,223 | 0.29 | |||||||||||||||
242,251 | 1,411 | 0.58 | 236,588 | 634 | 0.27 | |||||||||||||||
117,754 | 2,562 | 2.18 | 115,574 | 1,349 | 1.17 | |||||||||||||||
71,528 | 504 | 0.70 | 71,812 | 262 | 0.37 | |||||||||||||||
147,512 | 2,225 | 1.51 | 134,826 | 927 | 0.69 | |||||||||||||||
85,269 | 1,306 | 1.53 | 75,000 | 1,223 | 1.63 | |||||||||||||||
21,079 | 493 | 2.34 | 32,457 | 503 | 1.55 | |||||||||||||||
239,718 | 7,954 | 3.32 | 262,817 | 6,745 | 2.57 | |||||||||||||||
3,528 | 24 | 0.68 | 1,111 | 8 | 0.72 | |||||||||||||||
(51,933 | ) | (746 | ) | — | (2,874 | ) | (25 | ) | — | |||||||||||
51,933 | 746 | — | 2,874 | 25 | — | |||||||||||||||
1,731,425 | 21,041 | 1.22 | 1,699,781 | 13,874 | 0.82 | |||||||||||||||
481,483 | 471,193 | |||||||||||||||||||
$ | 2,212,908 | $ | 21,041 | 0.95 | % | $ | 2,170,974 | $ | 13,874 | 0.64 | % | |||||||||
$ | 55,687 | 2.52 | % | $ | 51,410 | 2.37 | % | |||||||||||||
50,236 | 2.95 | 46,059 | 2.69 | |||||||||||||||||
5,451 | 1.05 | 5,351 | 1.16 | |||||||||||||||||
24.7 | 22.5 | |||||||||||||||||||
22.3 | 21.1 |
JPMorgan
Chase & Co./2019 Form 10-K | 291 |
2019
versus 2018 | 2018 versus 2017 | ||||||||||||||||||||||
(Unaudited) | Increase/(decrease) due to change in: | Increase/(decrease) due to change in: | |||||||||||||||||||||
Year ended December 31, (On a taxable-equivalent basis; in millions) | Volume | Rate | Net change | Volume | Rate | Net change | |||||||||||||||||
Interest-earning
assets | |||||||||||||||||||||||
Deposits with banks: | |||||||||||||||||||||||
U.S. | $ | (3,030 | ) | $ | 915 | $ | (2,115 | ) | $ | (1,141 | ) | $ | 2,751 | $ | 1,610 | ||||||||
Non-U.S. | 35 | 60 | 95 | 59 | — | 59 | |||||||||||||||||
Federal
funds sold and securities purchased under resale agreements: | |||||||||||||||||||||||
U.S. | 1,304 | 337 | 1,641 | 267 | 800 | 1,067 | |||||||||||||||||
Non-U.S. | 168 | 518 | 686 | 173 | 252 | 425 | |||||||||||||||||
Securities
borrowed:(a) | |||||||||||||||||||||||
U.S. | 236 | 362 | 598 | 106 | 654 | 760 | |||||||||||||||||
Non-U.S. | 2 | 61 | 63 | 26 | 33 | 59 | |||||||||||||||||
Trading
assets – debt instruments: | |||||||||||||||||||||||
U.S. | 2,646 | (589 | ) | 2,057 | 446 | 436 | 882 | ||||||||||||||||
Non-U.S. | 216 | (188 | ) | 28 | 187 | (20 | ) | 167 | |||||||||||||||
Investment
securities: | |||||||||||||||||||||||
U.S. | 2,723 | (703 | ) | 2,020 | (770 | ) | 223 | (547 | ) | ||||||||||||||
Non-U.S. | (79 | ) | 36 | (43 | ) | (189 | ) | 73 | (116 | ) | |||||||||||||
Loans: | |||||||||||||||||||||||
U.S. | 628 | 2,074 | 2,702 | 1,710 | 4,246 | 5,956 | |||||||||||||||||
Non-U.S. | (71 | ) | 105 | 34 | 212 | 332 | 544 | ||||||||||||||||
All
other interest-earning assets, predominantly U.S.(a) | 48 | 29 | 77 | 283 | 295 | 578 | |||||||||||||||||
Change
in interest income(a) | 4,826 | 3,017 | 7,843 | 1,369 | 10,075 | 11,444 | |||||||||||||||||
Interest-bearing
liabilities | |||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||
U.S. | 407 | 1,927 | 2,334 | 184 | 2,155 | 2,339 | |||||||||||||||||
Non-U.S. | 165 | 485 | 650 | 44 | 733 | 777 | |||||||||||||||||
Federal
funds purchased and securities loaned or sold under repurchase agreements: | |||||||||||||||||||||||
U.S. | 1,133 | 294 | 1,427 | 46 | 1,167 | 1,213 | |||||||||||||||||
Non-U.S. | (85 | ) | 222 | 137 | 5 | 237 | 242 | ||||||||||||||||
Trading
liabilities – debt, short-term and all other interest-bearing liabilities: (a)(b) | |||||||||||||||||||||||
U.S. | (5 | ) | 354 | 349 | 203 | 1,095 | 1,298 | ||||||||||||||||
Non-U.S. | 30 | (77 | ) | (47 | ) | 158 | (75 | ) | 83 | ||||||||||||||
Beneficial
interests issued by consolidated VIEs, predominantly U.S. | 37 | 38 | 75 | (266 | ) | 256 | (10 | ) | |||||||||||||||
Long-term
debt: | |||||||||||||||||||||||
U.S. | 93 | 719 | 812 | (762 | ) | 1,971 | 1,209 | ||||||||||||||||
Non-U.S. | 17 | — | 17 | 16 | — | 16 | |||||||||||||||||
Intercompany
funding: | |||||||||||||||||||||||
U.S. | 293 | (961 | ) | (668 | ) | (704 | ) | (17 | ) | (721 | ) | ||||||||||||
Non-U.S. | (293 | ) | 961 | 668 | 704 | 17 | 721 | ||||||||||||||||
Change
in interest expense(a) | 1,792 | 3,962 | 5,754 | (372 | ) | 7,539 | 7,167 | ||||||||||||||||
Change
in net interest income | $ | 3,034 | $ | (945 | ) | $ | 2,089 | $ | 1,741 | $ | 2,536 | $ | 4,277 |
(a) | In
the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation. |
(b) | Includes commercial paper. |
292 | JPMorgan
Chase & Co./2019 Form 10-K |
JPMorgan Chase & Co./2019 Form 10-K | 293 |
294 | JPMorgan
Chase & Co./2019 Form 10-K |
• | All wholesale nonaccrual loans |
• | All TDRs (both wholesale and consumer), including ones that have returned to accrual status |
JPMorgan Chase & Co./2019 Form 10-K | 295 |
• | Interchange
income: Fees earned by credit and debit card issuers on sales transactions. |
• | Reward costs: The cost to the Firm for points earned by cardholders enrolled in credit card rewards programs. |
• | Partner payments: Payments to co-brand credit card partners based on the cost of loyalty program rewards earned by cardholders on credit card transactions. |
296 | JPMorgan Chase & Co./2019 Form 10-K |
• | the
bid-offer spread, which is the difference between the price at which a market participant is willing and able to sell an instrument to the Firm and the price at which another market participant is willing and able to buy it from the Firm, and vice versa; and |
• | realized and unrealized gains and losses on financial instruments and commodities transactions, including those accounted for under the fair value option, primarily used in client-driven market-making activities, and on private equity investments. |
– | Realized
gains and losses result from the sale of instruments, closing out or termination of transactions, or interim cash payments. |
– | Unrealized gains and losses result from changes in valuation. |
• | derivatives designated in qualifying hedge accounting relationships, primarily fair value hedges of commodity and foreign exchange risk; |
• | derivatives used for specific risk management purposes, primarily to mitigate credit risk and foreign exchange risk. |
JPMorgan
Chase & Co./2019 Form 10-K | 297 |
298 | JPMorgan
Chase & Co./2019 Form 10-K |
JPMorgan
Chase & Co./2019 Form 10-K | 299 |
2017 | |||||||
(Unaudited) December 31, (in millions) | Amortized cost | Fair
value | |||||
Available-for-sale securities | |||||||
Mortgage-backed securities: U.S. GSEs and government agencies | $ | 69,879 | $ | 70,280 | |||
U.S.
Treasury and government agencies | 22,510 | 22,745 | |||||
All other AFS securities | 106,352 | 109,200 | |||||
Total available-for-sale securities | $ | 198,741 | $ | 202,225 | |||
Held-to-maturity
securities | |||||||
Mortgage-backed securities: U.S. GSEs and government agencies | 27,577 | 28,095 | |||||
All other HTM securities | 20,156 | 20,557 | |||||
Total
held-to-maturity securities | $ | 47,733 | $ | 48,652 | |||
Total investment securities | $ | 246,474 | $ | 250,877 |
300 |
(Unaudited) December
31, (in millions) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
U.S. consumer, excluding credit card loans | |||||||||||||||
Residential
mortgage | $ | 215,025 | $ | 246,244 | $ | 236,157 | $ | 215,178 | $ | 192,714 | |||||
Home
equity | 31,294 | 37,303 | 44,249 | 51,965 | 60,548 | ||||||||||
Auto | 61,522 | 63,573 | 66,242 | 65,814 | 60,255 | ||||||||||
Other | 27,199 | 26,612 | 26,033 | 31,687 | 31,304 | ||||||||||
Total
U.S. consumer, excluding credit card loans | 335,040 | 373,732 | 372,681 | 364,644 | 344,821 | ||||||||||
Credit card Loans | |||||||||||||||
U.S.
credit card loans | 168,787 | 156,312 | 149,107 | 141,447 | 131,132 | ||||||||||
Non-U.S. credit card loans | 137 | 320 | 404 | 369 | 331 | ||||||||||
Total
credit card loans | 168,924 | 156,632 | 149,511 | 141,816 | 131,463 | ||||||||||
Total consumer loans | 503,964 | 530,364 | 522,192 | 506,460 | 476,284 | ||||||||||
U.S.
wholesale loans | |||||||||||||||
Commercial and industrial | 90,706 | 111,208 | 93,522 | 91,393 | 83,739 | ||||||||||
Real
estate | 117,949 | 115,401 | 112,562 | 104,268 | 90,836 | ||||||||||
Financial institutions | 39,925 | 29,165 | 23,819 | 20,499 | 12,708 | ||||||||||
Governments
& Agencies | 10,510 | 11,037 | 12,603 | 12,655 | 9,838 | ||||||||||
Other | 93,495 | 83,386 | 69,602 | 66,363 | 67,925 | ||||||||||
Total
U.S. wholesale loans | 352,585 | 350,197 | 312,108 | 295,178 | 265,046 | ||||||||||
Non-U.S. wholesale loans | |||||||||||||||
Commercial
and industrial | 29,423 | 30,450 | 29,233 | 31,340 | 30,385 | ||||||||||
Real estate | 4,601 | 3,397 | 3,302 | 3,975 | 4,577 | ||||||||||
Financial
institutions | 16,894 | 18,563 | 16,845 | 15,196 | 17,188 | ||||||||||
Governments & Agencies | 2,321 | 3,150 | 2,906 | 3,726 | 1,788 | ||||||||||
Other | 49,981 | 48,433 | 44,111 | 38,890 | 42,031 | ||||||||||
Total
non-U.S. wholesale loans | 103,220 | 103,993 | 96,397 | 93,127 | 95,969 | ||||||||||
Total wholesale loans | |||||||||||||||
Commercial
and industrial | 120,129 | 141,658 | 122,755 | 122,733 | 114,124 | ||||||||||
Real estate | 122,550 | 118,798 | 115,864 | 108,243 | 95,413 | ||||||||||
Financial
institutions | 56,819 | 47,728 | 40,664 | 35,695 | 29,896 | ||||||||||
Governments & Agencies | 12,831 | 14,187 | 15,509 | 16,381 | 11,626 | ||||||||||
Other | 143,476 | 131,819 | 113,713 | 105,253 | 109,956 | ||||||||||
Total
wholesale loans | 455,805 | 454,190 | 408,505 | 388,305 | 361,015 | ||||||||||
Total loans(a) | $ | 959,769 | $ | 984,554 | $ | 930,697 | $ | 894,765 | $ | 837,299 | |||||
Memo: | |||||||||||||||
Loans
held-for-sale | $ | 7,064 | $ | 11,988 | $ | 3,351 | $ | 2,628 | $ | 1,646 | |||||
Loans
at fair value | 7,104 | 3,151 | 2,508 | 2,230 | 2,861 | ||||||||||
Total loans held-for-sale and loans at fair value | $ | 14,168 | $ | 15,139 | $ | 5,859 | $ | 4,858 | $ | 4,507 |
(a) | Loans
(other than purchased credit-impaired loans and those for which the fair value option have been elected) are presented net of unamortized discounts and premiums and net deferred loan fees or costs. These amounts were not material as of December 31, 2019, 2018, 2017, 2016 and 2015. |
301 |
(Unaudited) December
31, 2019 (in millions) | Within 1 year (a) | 1-5 years | After 5 years | Total | |||||||||||
U.S. | |||||||||||||||
Commercial
and industrial | $ | 15,300 | $ | 66,970 | $ | 8,436 | $ | 90,706 | |||||||
Real
estate | 5,922 | 25,976 | 86,051 | 117,949 | |||||||||||
Financial institutions | 21,185 | 18,282 | 458 | 39,925 | |||||||||||
Governments
& Agencies | 1,106 | 3,541 | 5,863 | 10,510 | |||||||||||
Other | 32,433 | 58,615 | 2,447 | 93,495 | |||||||||||
Total
U.S. | 75,946 | 173,384 | 103,255 | 352,585 | |||||||||||
Non-U.S. | |||||||||||||||
Commercial
and industrial | 10,537 | 15,991 | 2,895 | 29,423 | |||||||||||
Real estate | 1,008 | 3,497 | 96 | 4,601 | |||||||||||
Financial
institutions | 9,367 | 7,503 | 24 | 16,894 | |||||||||||
Governments & Agencies | 278 | 1,336 | 707 | 2,321 | |||||||||||
Other | 33,194 | 15,411 | 1,376 | 49,981 | |||||||||||
Total
non-U.S. | 54,384 | 43,738 | 5,098 | 103,220 | |||||||||||
Total wholesale loans | $ | 130,330 | $ | 217,122 | $ | 108,353 | $ | 455,805 | |||||||
Loans
at fixed interest rates | $ | 15,090 | $ | 11,393 | |||||||||||
Loans at variable interest rates | 202,032 | 96,960 | |||||||||||||
Total
wholesale loans | $ | 217,122 | $ | 108,353 |
(a) | Includes
demand loans and overdrafts. |
(Unaudited) December
31, (in millions) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Nonperforming assets | |||||||||||||||||||
U.S.
nonaccrual loans: | |||||||||||||||||||
Consumer, excluding credit card loans | $ | 3,142 | $ | 3,461 | $ | 4,209 | $ | 4,820 | $ | 5,413 | |||||||||
Credit
card loans | — | — | — | — | — | ||||||||||||||
Total
U.S. nonaccrual consumer loans | 3,142 | 3,461 | 4,209 | 4,820 | 5,413 | ||||||||||||||
Wholesale: | |||||||||||||||||||
Commercial
and industrial | 636 | 624 | 703 | 1,145 | 315 | ||||||||||||||
Real
estate | 53 | 212 | 95 | 148 | 175 | ||||||||||||||
Financial
institutions | 3 | 4 | 2 | 4 | 4 | ||||||||||||||
Governments
& Agencies | — | — | — | — | — | ||||||||||||||
Other | 34 | 89 | 137 | 198 | 86 | ||||||||||||||
Total
U.S. wholesale nonaccrual loans | 726 | 929 | 937 | 1,495 | 580 | ||||||||||||||
Total
U.S. nonaccrual loans | 3,868 | 4,390 | 5,146 | 6,315 | 5,993 | ||||||||||||||
Non-U.S.
nonaccrual loans: | |||||||||||||||||||
Consumer, excluding credit card loans | — | — | — | — | — | ||||||||||||||
Credit
card loans | — | — | — | — | — | ||||||||||||||
Total
non-U.S. nonaccrual consumer loans | — | — | — | — | — | ||||||||||||||
Wholesale: | |||||||||||||||||||
Commercial
and industrial | 207 | 358 | 654 | 454 | 314 | ||||||||||||||
Real
estate | — | 12 | 41 | 52 | 63 | ||||||||||||||
Financial
institutions | — | — | — | 5 | 6 | ||||||||||||||
Governments
& Agencies | — | — | — | — | — | ||||||||||||||
Other | 5 | 71 | 102 | 57 | 53 | ||||||||||||||
Total
non-U.S. wholesale nonaccrual loans | 212 | 441 | 797 | 568 | 436 | ||||||||||||||
Total
non-U.S. nonaccrual loans | 212 | 441 | 797 | 568 | 436 | ||||||||||||||
Total
nonaccrual loans | 4,080 | 4,831 | 5,943 | 6,883 | 6,429 | ||||||||||||||
Derivative
receivables | 30 | 60 | 130 | 223 | 204 | ||||||||||||||
Assets
acquired in loan satisfactions | 387 | 299 | 353 | 429 | 401 | ||||||||||||||
Nonperforming
assets | $ | 4,497 | $ | 5,190 | $ | 6,426 | $ | 7,535 | $ | 7,034 | |||||||||
Memo: | |||||||||||||||||||
Loans
held-for-sale | $ | 7 | $ | — | $ | — | $ | 162 | $ | 101 | |||||||||
Loans
at fair value | 90 | 220 | — | — | 25 | ||||||||||||||
Total
loans held-for-sale and loans at fair value | $ | 97 | $ | 220 | $ | — | $ | 162 | $ | 126 |
302 |
(Unaudited) December
31, (in millions) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
Contractually past-due loans(a) | ||||||||||||||||||||
U.S.
loans: | ||||||||||||||||||||
Consumer, excluding credit card loans(b) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Credit
card loans | 1,605 | 1,442 | 1,378 | 1,143 | 944 | |||||||||||||||
Total
U.S. consumer loans | 1,605 | 1,442 | 1,378 | 1,143 | 944 | |||||||||||||||
Wholesale: | ||||||||||||||||||||
Commercial
and industrial | 34 | 167 | 107 | 86 | 6 | |||||||||||||||
Real
estate | 4 | 3 | 12 | 2 | 15 | |||||||||||||||
Financial
institutions | 2 | 8 | 14 | 12 | 1 | |||||||||||||||
Governments
& Agencies | — | 4 | 4 | 4 | 6 | |||||||||||||||
Other | 1 | 2 | 2 | 19 | 28 | |||||||||||||||
Total
U.S. wholesale loans | 41 | 184 | 139 | 123 | 56 | |||||||||||||||
Total
U.S. loans | 1,646 | 1,626 | 1,517 | 1,266 | 1,000 | |||||||||||||||
Non-U.S.
loans: | ||||||||||||||||||||
Consumer, excluding credit card loans | — | — | — | — | — | |||||||||||||||
Credit
card loans | 2 | 3 | 1 | 2 | — | |||||||||||||||
Total
non-U.S. consumer loans | 2 | 3 | 1 | 2 | — | |||||||||||||||
Wholesale: | ||||||||||||||||||||
Commercial
and industrial | 1 | 1 | 1 | — | 1 | |||||||||||||||
Real
estate | — | — | — | — | — | |||||||||||||||
Financial
institutions | — | 2 | 1 | 9 | 10 | |||||||||||||||
Governments
& Agencies | — | — | — | — | — | |||||||||||||||
Other | — | 1 | — | — | — | |||||||||||||||
Total
non-U.S. wholesale loans | 1 | 4 | 2 | 9 | 11 | |||||||||||||||
Total
non-U.S. loans | 3 | 7 | 3 | 11 | 11 | |||||||||||||||
Total
contractually past due loans | $ | 1,649 | $ | 1,633 | $ | 1,520 | $ | 1,277 | $ | 1,011 |
(a) | Represents
accruing loans past-due 90 days or more as to principal and interest, which are not characterized as nonaccrual loans. Excludes PCI loans which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of individual loans within the pools, is not meaningful. The Firm is recognizing interest income on each pool of loans as each of the pools is performing. |
(b) | At December 31, 2019, 2018, 2017, 2016
and 2015, excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $193 million, $1.6 billion, $2.7 billion, $2.7 billion and $2.8 billion, respectively. At December 31, 2016 and 2015, student loans insured by U.S. government agencies under the Federal Family Education Loan Program of $263 million and $290 million, respectively, were also excluded prior to sale of
the student loan portfolio in 2017. These amounts have been excluded from the nonaccrual loans based upon the government guarantee. |
(Unaudited) December 31, (in millions) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Accruing
restructured loans(a) | |||||||||||||||||||
U.S.: | |||||||||||||||||||
Consumer,
excluding credit card loans | $ | 3,616 | $ | 4,185 | $ | 4,993 | $ | 5,561 | $ | 5,980 | |||||||||
Credit
card loans(b) | 1,452 | 1,319 | 1,215 | 1,240 | 1,465 | ||||||||||||||
Total
U.S. consumer loans | 5,068 | 5,504 | 6,208 | 6,801 | 7,445 | ||||||||||||||
Wholesale: | |||||||||||||||||||
Commercial
and industrial | 32 | 50 | 32 | 34 | 12 | ||||||||||||||
Real
estate | 1 | 3 | 5 | 11 | 28 | ||||||||||||||
Financial
institutions | — | — | 79 | — | — | ||||||||||||||
Other | 1 | 5 | — | 4 | — | ||||||||||||||
Total
U.S. wholesale loans | 34 | 58 | 116 | 49 | 40 | ||||||||||||||
Total
U.S. | 5,102 | 5,562 | 6,324 | 6,850 | 7,485 | ||||||||||||||
Non-U.S.: | |||||||||||||||||||
Consumer,
excluding credit card loans | — | — | — | — | — | ||||||||||||||
Credit
card loans(b) | — | — | — | — | — | ||||||||||||||
Total
non-U.S. consumer loans | — | — | — | — | — | ||||||||||||||
Wholesale: | |||||||||||||||||||
Commercial
and industrial | 32 | 45 | 10 | 17 | — | ||||||||||||||
Real
estate | — | — | — | — | — | ||||||||||||||
Financial
institutions | — | — | 11 | — | — | ||||||||||||||
Other | 3 | — | — | — | — | ||||||||||||||
Total
non-U.S. wholesale loans | 35 | 45 | 21 | 17 | — | ||||||||||||||
Total
non-U.S. | 35 | 45 | 21 | 17 | — | ||||||||||||||
Total
accruing restructured notes | $ | 5,137 | $ | 5,607 | $ | 6,345 | $ | 6,867 | $ | 7,485 |
(a) | Represents
performing loans modified in TDRs in which an economic concession was granted by the Firm and the borrower has demonstrated its ability to repay the loans according to the terms of the restructuring. As defined in U.S. GAAP, concessions include the reduction of interest rates or the deferral of interest or principal payments, resulting from deterioration in the borrowers’ financial condition. Excludes nonaccrual assets and contractually past-due assets, which are included in the sections above. |
(b) | Includes credit card loans that have been modified in a TDR. |
303 |
(Unaudited) Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||
Nonaccrual loans | |||||||||
U.S.: | |||||||||
Consumer, excluding credit card: | |||||||||
Gross
amount of interest that would have been recorded at the original terms | $ | 266 | $ | 318 | $ | 367 | |||
Interest that was recognized in income | (176 | ) | (187 | ) | (175 | ) | |||
Total
U.S. consumer, excluding credit card | 90 | 131 | 192 | ||||||
Credit card: | |||||||||
Gross amount of interest that would have been recorded at the original terms | — | — | — | ||||||
Interest
that was recognized in income | — | — | — | ||||||
Total U.S. credit card | — | — | — | ||||||
Total
U.S. consumer | 90 | 131 | 192 | ||||||
Wholesale: | |||||||||
Gross amount of interest that would have been recorded at the original terms | 53 | 51 | 46 | ||||||
Interest
that was recognized in income | (24 | ) | (16 | ) | (30 | ) | |||
Total U.S. wholesale | 29 | 35 | 16 | ||||||
Negative
impact — U.S. | 119 | 166 | 208 | ||||||
Non-U.S.: | |||||||||
Consumer, excluding credit card: | |||||||||
Gross
amount of interest that would have been recorded at the original terms | — | — | — | ||||||
Interest that was recognized in income | — | — | — | ||||||
Total
non-U.S. consumer, excluding credit card | — | — | — | ||||||
Credit card: | |||||||||
Gross amount of interest that would have been recorded at the original terms | — | — | — | ||||||
Interest
that was recognized in income | — | — | — | ||||||
Total non-U.S. credit card | — | — | — | ||||||
Total
non-U.S. consumer | — | — | — | ||||||
Wholesale: | |||||||||
Gross amount of interest that would have been recorded at the original terms | 12 | 13 | 24 | ||||||
Interest
that was recognized in income | (5 | ) | (3 | ) | (12 | ) | |||
Total non-U.S. wholesale | 7 | 10 | 12 | ||||||
Negative
impact — non-U.S. | 7 | 10 | 12 | ||||||
Total negative impact on interest income | $ | 126 | $ | 176 | $ | 220 |
304 |
(Unaudited) Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | ||||||
Accruing restructured loans | |||||||||
U.S.: | |||||||||
Consumer, excluding
credit card: | |||||||||
Gross amount of interest that would have been recorded at the original terms | $ | 283 | $ | 329 | $ | 401 | |||
Interest
that was recognized in income | (194 | ) | (217 | ) | (245 | ) | |||
Total U.S. consumer, excluding credit card | 89 | 112 | 156 | ||||||
Credit
card: | |||||||||
Gross amount of interest that would have been recorded at the original terms | 265 | 227 | 202 | ||||||
Interest that was recognized in income | (72 | ) | (65 | ) | (59 | ) | |||
Total
U.S. credit card | 193 | 162 | 143 | ||||||
Total U.S. consumer | 282 | 274 | 299 | ||||||
Wholesale: | |||||||||
Gross
amount of interest that would have been recorded at the original terms | 1 | 4 | 13 | ||||||
Interest that was recognized in income | (1 | ) | (4 | ) | (13 | ) | |||
Total
U.S. wholesale | — | — | — | ||||||
Negative impact — U.S. | 282 | 274 | 299 | ||||||
Non-U.S.: | |||||||||
Consumer,
excluding credit card: | |||||||||
Gross amount of interest that would have been recorded at the original terms | — | — | — | ||||||
Interest that was recognized in income | — | — | — | ||||||
Total
non-U.S. consumer, excluding credit card | — | — | — | ||||||
Credit card: | |||||||||
Gross amount of interest that would have been recorded at the original terms | — | — | — | ||||||
Interest
that was recognized in income | — | — | — | ||||||
Total non-U.S. credit card | — | — | — | ||||||
Total
non-U.S. consumer | — | — | — | ||||||
Wholesale: | |||||||||
Gross amount of interest that would have been recorded at the original terms | — | — | — | ||||||
Interest
that was recognized in income | — | — | — | ||||||
Total non-U.S. wholesale | — | — | — | ||||||
Negative
impact — non-U.S. | — | — | — | ||||||
Total negative impact on interest income | $ | 282 | $ | 274 | $ | 299 |
305 |
Cross-border
outstandings exceeding 0.75% of total assets | |||||||||||||||||||||||||
(Unaudited) (in millions) | December 31, | Governments | Banks | Other(a) | Net local country assets | Total cross-border
outstandings(c) | Commitments(d) | Total exposure | |||||||||||||||||
Germany | 2019 | $ | 9,757 | $ | 4,175 | $ | 8,709 | $ | 12,143 | $ | 34,784 | $ | 54,817 | $ | 89,601 | ||||||||||
2018 | 12,793 | 7,769 | 15,393 | 30,054 | (b) | 66,009 | (b) | 67,973 | 133,982 | (b) | |||||||||||||||
2017 | 17,751 | 5,357 | 12,320 | 20,117 | 55,545 | 65,333 | 120,878 | ||||||||||||||||||
Cayman
Islands | 2019 | $ | 15 | $ | 367 | $ | 89,124 | $ | — | $ | 89,506 | $ | 114,398 | $ | 203,904 | ||||||||||
2018 | 1 | 308 | 105,857 | 20 | 106,186 | 45,073 | 151,259 | ||||||||||||||||||
2017 | 5 | 462 | 61,268 | 58 | 61,793 | 12,361 | 74,154 | ||||||||||||||||||
Japan | 2019 | $ | 191 | $ | 4,863 | $ | 3,495 | $ | 45,654 | $ | 54,203 | $ | 42,049 | $ | 96,252 | ||||||||||
2018 | 282 | 9,803 | 4,167 | 41,948 | (b) | 56,200 | (b) | 51,901 | 108,101 | (b) | |||||||||||||||
2017 | 1,082 | 17,159 | 12,239 | 25,229 | 55,709 | 52,928 | 108,637 | ||||||||||||||||||
France | 2019 | $ | 9,445 | $ | 5,294 | $ | 12,746 | $ | 2,697 | $ | 30,182 | $ | 107,178 | $ | 137,360 | ||||||||||
2018 | 12,556 | 3,499 | 21,571 | 2,771 | 40,397 | 105,845 | 146,242 | ||||||||||||||||||
2017 | 12,975 | 7,083 | 15,329 | 2,471 | 37,858 | 83,572 | 121,430 | ||||||||||||||||||
Italy | 2019 | $ | 10,567 | $ | 2,192 | $ | 6,095 | $ | 881 | $ | 19,735 | $ | 49,456 | $ | 69,191 | ||||||||||
2018 | 9,401 | 4,098 | 5,145 | 1,375 | 20,019 | 61,326 | 81,345 | ||||||||||||||||||
2017 | 11,516 | 4,524 | 4,499 | 611 | 21,150 | 61,005 | 82,155 | ||||||||||||||||||
Ireland | 2019 | $ | 381 | $ | 319 | $ | 18,061 | $ | — | $ | 18,761 | $ | 9,520 | $ | 28,281 | ||||||||||
2018 | 185 | 45 | 19,439 | — | 19,669 | 5,585 | 25,254 | ||||||||||||||||||
2017 | 630 | 318 | 19,630 | — | 20,578 | 5,728 | 26,306 |
(a) | Consists
primarily of non-banking financial institutions. |
(b) | The prior period amounts have been revised to conform with the current period presentation. |
(c) | Outstandings include loans and accrued interest receivable, interest-bearing deposits with banks, acceptances, resale agreements, other monetary assets, cross-border trading debt and equity instruments, fair value of foreign exchange and derivative contracts, and local country assets,
net of local country liabilities. The amounts associated with foreign exchange and derivative contracts are presented after taking into account the impact of legally enforceable master netting agreements. |
(d) | Commitments include outstanding letters of credit, undrawn commitments to extend credit, and the gross notional value of credit derivatives where JPMorgan Chase is a protection seller. |
306 |
Allowance for loan losses | |||||||||||||||
(Unaudited) Year
ended December 31, (in millions) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Balance at beginning of year | $ | 13,445 | $ | 13,604 | $ | 13,776 | $ | 13,555 | $ | 14,185 | |||||
U.S.
charge-offs | |||||||||||||||
U.S. consumer, excluding credit card | 963 | 1,025 | 1,779 | 1,500 | 1,658 | ||||||||||
U.S.
credit card | 5,436 | 5,011 | 4,521 | 3,799 | 3,475 | ||||||||||
Total U.S. consumer charge-offs | 6,399 | 6,036 | 6,300 | 5,299 | 5,133 | ||||||||||
U.S.
wholesale: | |||||||||||||||
Commercial and industrial | 273 | 161 | 87 | 240 | 63 | ||||||||||
Real
estate | 12 | 3 | 3 | 7 | 6 | ||||||||||
Financial institutions | — | — | — | — | 5 | ||||||||||
Governments
& Agencies | — | — | 5 | — | — | ||||||||||
Other | 16 | 97 | 19 | 13 | 6 | ||||||||||
Total
U.S. wholesale charge-offs | 301 | 261 | 114 | 260 | 80 | ||||||||||
Total U.S. charge-offs | 6,700 | 6,297 | 6,414 | 5,559 | 5,213 | ||||||||||
Non-U.S.
charge-offs | |||||||||||||||
Non-U.S. consumer, excluding credit card | — | — | — | — | — | ||||||||||
Non-U.S.
credit card | — | — | — | — | 13 | ||||||||||
Total non-U.S. consumer charge-offs | — | — | — | — | 13 | ||||||||||
Non-U.S.
wholesale: | |||||||||||||||
Commercial and industrial | 75 | 51 | 89 | 134 | 5 | ||||||||||
Real
estate | — | — | — | 1 | — | ||||||||||
Financial institutions | — | — | 7 | 1 | — | ||||||||||
Governments
& Agencies | — | — | — | — | — | ||||||||||
Other | 35 | 1 | 2 | 2 | 10 | ||||||||||
Total
non-U.S. wholesale charge-offs | 110 | 52 | 98 | 138 | 15 | ||||||||||
Total non-U.S. charge-offs | 110 | 52 | 98 | 138 | 28 | ||||||||||
Total
charge-offs | 6,810 | 6,349 | 6,512 | 5,697 | 5,241 | ||||||||||
U.S. recoveries | |||||||||||||||
U.S.
consumer, excluding credit card | (551 | ) | (842 | ) | (634 | ) | (591 | ) | (704 | ) | |||||
U.S. credit card | (588 | ) | (493 | ) | (398 | ) | (357 | ) | (364 | ) | |||||
Total
U.S. consumer recoveries | (1,139 | ) | (1,335 | ) | (1,032 | ) | (948 | ) | (1,068 | ) | |||||
U.S. wholesale: | |||||||||||||||
Commercial
and industrial | (15 | ) | (45 | ) | (55 | ) | (10 | ) | (32 | ) | |||||
Real estate | (1 | ) | (23 | ) | (6 | ) | (15 | ) | (20 | ) | |||||
Financial
institutions | — | — | — | (3 | ) | (8 | ) | ||||||||
Governments & Agencies | — | — | — | (1 | ) | (8 | ) | ||||||||
Other | (18 | ) | (44 | ) | (15 | ) | (3 | ) | (3 | ) | |||||
Total
U.S. wholesale recoveries | (34 | ) | (112 | ) | (76 | ) | (32 | ) | (71 | ) | |||||
Total U.S. recoveries | (1,173 | ) | (1,447 | ) | (1,108 | ) | (980 | ) | (1,139 | ) | |||||
Non-U.S.
recoveries | |||||||||||||||
Non-U.S. consumer, excluding credit card | — | — | — | — | — | ||||||||||
Non-U.S.
credit card | — | — | — | — | (2 | ) | |||||||||
Total non-U.S. consumer recoveries | — | — | — | — | (2 | ) | |||||||||
Non-U.S.
wholesale: | |||||||||||||||
Commercial and industrial | (4 | ) | (2 | ) | (4 | ) | (18 | ) | (10 | ) | |||||
Real
estate | — | — | (1 | ) | — | — | |||||||||
Financial institutions | — | — | (1 | ) | — | (2 | ) | ||||||||
Governments
& Agencies | — | — | — | — | — | ||||||||||
Other | (4 | ) | (44 | ) | (11 | ) | (7 | ) | (2 | ) | |||||
Total
non-U.S. wholesale recoveries | (8 | ) | (46 | ) | (17 | ) | (25 | ) | (14 | ) | |||||
Total non-U.S. recoveries | (8 | ) | (46 | ) | (17 | ) | (25 | ) | (16 | ) | |||||
Total
recoveries | (1,181 | ) | (1,493 | ) | (1,125 | ) | (1,005 | ) | (1,155 | ) | |||||
Net charge-offs | 5,629 | 4,856 | 5,387 | 4,692 | 4,086 | ||||||||||
Write-offs
of PCI loans(a) | 151 | 187 | 86 | 156 | 208 | ||||||||||
Provision for loan losses | 5,449 | 4,885 | 5,300 | 5,080 | 3,663 | ||||||||||
Other | 9 | (1 | ) | 1 | (11 | ) | 1 | ||||||||
Balance
at year-end | $ | 13,123 | $ | 13,445 | $ | 13,604 | $ | 13,776 | $ | 13,555 |
(a) | Write-offs
of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool. |
307 |
(Unaudited) Year ended December 31, (in millions) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Balance
at beginning of year | $ | 1,055 | $ | 1,068 | $ | 1,078 | $ | 786 | $ | 622 | |||||
Provision
for lending-related commitments | 136 | (14 | ) | (10 | ) | 281 | 164 | ||||||||
Other | — | 1 | — | 11 | — | ||||||||||
Balance
at year-end | $ | 1,191 | $ | 1,055 | $ | 1,068 | $ | 1,078 | $ | 786 |
Loan
loss analysis | |||||||||||||||
(Unaudited) As of or for the year ended December 31, (in millions, except ratios) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Balances | |||||||||||||||
Loans
– average | $ | 954,539 | $ | 944,885 | $ | 906,397 | $ | 866,378 | $ | 787,318 | |||||
Loans
– year-end | 959,769 | 984,554 | 930,697 | 894,765 | 837,299 | ||||||||||
Net charge-offs | 5,629 | 4,856 | 5,387 | 4,692 | 4,086 | ||||||||||
Allowance
for loan losses: | |||||||||||||||
U.S. | $ | 12,303 | $ | 12,692 | $ | 12,552 | $ | 12,738 | $ | 12,704 | |||||
Non-U.S. | 820 | 753 | 1,052 | 1,038 | 851 | ||||||||||
Total
allowance for loan losses | $ | 13,123 | $ | 13,445 | $ | 13,604 | $ | 13,776 | $ | 13,555 | |||||
Nonaccrual
loans | $ | 4,080 | $ | 4,831 | $ | 5,943 | $ | 6,883 | $ | 6,429 | |||||
Ratios | |||||||||||||||
Net
charge-offs to: | |||||||||||||||
Loans retained – average | 0.60 | % | 0.52 | % | 0.60 | % | 0.54 | % | 0.52 | % | |||||
Allowance
for loan losses | 42.89 | 36.12 | 39.60 | 34.06 | 30.14 | ||||||||||
Allowance for loan losses to: | |||||||||||||||
Loans
retained – year-end(a) | 1.39 | 1.39 | 1.47 | 1.55 | 1.63 | ||||||||||
Nonaccrual loans retained | 329 | 292 | 229 | 205 | 215 |
(a) | The
allowance for loan losses as a percentage of retained loans declined from 2015 to 2019, due to overall improvement in credit quality. Refer to Provision for credit losses on page 50 for a more detailed discussion of the 2018 through 2019 provision for credit losses. |
308 |
(Unaudited) Year ended December 31, | Average balances | Average
interest rates | ||||||||||||||||||
(in millions, except interest rates) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||
U.S.
offices | ||||||||||||||||||||
Noninterest-bearing(a) | $ | 386,116 | $ | 391,325 | $ | 393,877 | — | % | — | % | — | % | ||||||||
Interest-bearing | ||||||||||||||||||||
Demand(b) | 195,350 | 177,403 | 162,985 | 1.42 | 1.09 | 0.50 | ||||||||||||||
Savings(c) | 602,728 | 585,885 | 559,654 | 0.46 | 0.32 | 0.15 | ||||||||||||||
Time(a) | 52,415 | 39,498 | 46,957 | 2.56 | 1.94 | 1.16 | ||||||||||||||
Total
interest-bearing deposits(a) | 850,493 | 802,786 | 769,596 | 0.81 | 0.57 | 0.29 | ||||||||||||||
Total
deposits in U.S. offices | 1,236,609 | 1,194,111 | 1,163,473 | 0.56 | 0.38 | 0.19 | ||||||||||||||
Non-U.S.
offices | ||||||||||||||||||||
Noninterest-bearing(a) | 21,103 | 20,099 | 17,325 | — | — | — | ||||||||||||||
Interest-bearing | ||||||||||||||||||||
Demand | 217,979 | 210,978 | 213,733 | 0.59 | 0.45 | 0.18 | ||||||||||||||
Savings | — | — | — | NM | NM | NM | ||||||||||||||
Time(a) | 47,376 | 31,273 | 22,855 | 1.64 | 1.48 | 1.11 | ||||||||||||||
Total
interest-bearing deposits(a) | 265,355 | 242,251 | 236,588 | 0.78 | 0.58 | 0.27 | ||||||||||||||
Total
deposits in non-U.S. offices | 286,458 | 262,350 | 253,913 | 0.72 | 0.54 | 0.25 | ||||||||||||||
Total
deposits | $ | 1,523,067 | $ | 1,456,461 | $ | 1,417,386 | 0.59 | % | 0.41 | % | 0.20 | % |
(a) | In
the second quarter of 2019, the Firm reclassified balances related to certain structured notes from interest-bearing to noninterest-bearing deposits as the associated returns are recorded in principal transactions revenue and not in net interest income. This change was applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation. |
(b) | Includes Negotiable Order of Withdrawal (“NOW”) accounts, and certain trust accounts. |
(c) | Includes Money Market Deposit Accounts
(“MMDAs”). |
(Unaudited) By
remaining maturity at (in millions) | Three months or less | Over three months but within six months | Over six months but within 12 months | Over 12 months | Total | ||||||||||||||
U.S.
time certificates of deposit ($100,000 or more) | $ | 15,759 | $ | 15,249 | $ | 7,252 | $ | 1,294 | $ | 39,554 |
309 |
(Unaudited) As of or for the year ended December 31, (in millions, except rates) | 2019 | 2018 | 2017 | ||||||||
Federal
funds purchased and securities loaned or sold under repurchase agreements: | |||||||||||
Balance at year-end | $ | 183,675 | $ | 182,320 | $ | 158,916 | |||||
Average
daily balance during the year | 227,994 | 189,282 | 187,386 | ||||||||
Maximum month-end balance | 251,829 | 201,340 | 205,286 | ||||||||
Weighted-average
rate at December 31 | 1.77 | % | 2.18 | % | 1.03 | % | |||||
Weighted-average rate during the year | 2.03 | 1.62 | 0.86 | ||||||||
Commercial
paper: | |||||||||||
Balance at year-end | $ | 14,754 | $ | 30,059 | $ | 24,186 | |||||
Average
daily balance during the year | 22,977 | 27,834 | 19,920 | ||||||||
Maximum month-end balance | 30,007 | 30,470 | 24,934 | ||||||||
Weighted-average
rate at December 31 | 2.16 | % | 2.71 | % | 1.59 | % | |||||
Weighted-average rate during the year | 2.66 | 2.27 | 1.39 | ||||||||
Other
borrowed funds:(a) | |||||||||||
Balance at year-end | $ | 73,312 | $ | 101,513 | $ | 87,652 | |||||
Average
daily balance during the year | 106,348 | 108,436 | 96,331 | ||||||||
Maximum month-end balance | 128,488 | 125,544 | 107,157 | ||||||||
Weighted-average
rate at December 31 | 1.85 | % | 2.23 | % | 2.09 | % | |||||
Weighted-average rate during the year | 2.05 | 2.06 | 1.98 | ||||||||
Short-term
beneficial interests:(b) | |||||||||||
Commercial paper and other borrowed funds: | |||||||||||
Balance
at year-end | $ | 11,103 | $ | 6,527 | $ | 4,310 | |||||
Average daily balance during the year | 12,511 | 4,756 | 5,327 | ||||||||
Maximum
month-end balance | 16,016 | 6,527 | 7,573 | ||||||||
Weighted-average rate at December 31 | 1.92 | % | 2.53 | % | 1.50 | % | |||||
Weighted-average
rate during the year | 2.39 | 2.10 | 1.07 |
(a) | Includes interest-bearing securities sold but not yet purchased of $47.1 billion, $62.3
billion and $60.0 billion at December 31, 2019, 2018 and 2017, respectively. |
(b) | Included on the Consolidated balance sheets in beneficial interests issued by consolidated VIEs. |
310 |
JPMorgan Chase & Co. (Registrant) | |
By: /s/ JAMES DIMON | |
Chairman and Chief Executive Officer) | |
Capacity | Date | |||
/s/
JAMES DIMON | Director, Chairman and Chief Executive Officer (Principal Executive Officer) | |||
/s/
LINDA B. BAMMANN | Director | |||
/s/
JAMES A. BELL | Director | |||
/s/
STEPHEN B. BURKE | Director | |||
/s/
TODD A. COMBS | Director | |||
/s/
JAMES S. CROWN | Director | |||
/s/
TIMOTHY P. FLYNN | Director | |||
/s/
MELLODY HOBSON | Director | |||
Director | ||||
/s/
MICHAEL A. NEAL | Director | |||
/s/
LEE R. RAYMOND | Director | |||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||
/s/
NICOLE GILES | Managing Director and Firmwide Controller (Principal Accounting Officer) | |||
311 |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/16/24 JPMorgan Chase & Co. 10-K 12/31/23 245:67M 2/21/23 JPMorgan Chase & Co. 10-K 12/31/22 222:69M 2/22/22 JPMorgan Chase & Co. 10-K 12/31/21 219:66M 2/23/21 JPMorgan Chase & Co. 10-K 12/31/20 220:68M 2/11/21 JPMorgan Chase & Co. 424B2 1:600K Donnelley … Solutions/FA 2/09/21 JPMorgan Chase & Co. 424B2 1:600K Donnelley … Solutions/FA 2/01/21 JPMorgan Chase & Co. 424B2 1:616K Donnelley … Solutions/FA 1/28/21 JPMorgan Chase & Co. 424B2 1:580K Donnelley … Solutions/FA 11/16/20 JPMorgan Chase & Co. 424B2 1:640K Donnelley … Solutions/FA 11/12/20 JPMorgan Chase & Co. 424B2 1:575K Donnelley … Solutions/FA 9/11/20 JPMorgan Chase & Co. 424B2 1:593K Donnelley … Solutions/FA 9/09/20 JPMorgan Chase & Co. 424B2 1:595K Donnelley … Solutions/FA |